WPC~ 2BJZ Courier3|j >Hx6X@`7X@HP LaserJet 4_230_1HPLAS4.PRS 4x  @\oeX@2[E6 Z{v X-#XP\  P6QXP#HP LaserJet 4_230_1HPLAS4.PRS 4d  @8;\oe@3|j a8DocumentgDocument Style StyleXX` `  ` 2xpkkha4DocumentgDocument Style Style . a6DocumentgDocument Style Style GX  a5DocumentgDocument Style Style }X(# a2DocumentgDocument Style Style<o   ?  A.  2vt  .a7DocumentgDocument Style StyleyXX` ` (#` BibliogrphyBibliography:X (# a1Right ParRight-Aligned Paragraph Numbers:`S@ I.  X(# a2Right ParRight-Aligned Paragraph Numbers C @` A. ` ` (#` 2   V  a3DocumentgDocument Style Style B b  ?  1.  a3Right ParRight-Aligned Paragraph Numbers L! ` ` @P 1. ` `  (# a4Right ParRight-Aligned Paragraph Numbers Uj` `  @ a. ` (# a5Right ParRight-Aligned Paragraph Numbers _o` `  @h(1)  hh#(#h 2m    m a6Right ParRight-Aligned Paragraph Numbersh` `  hh#@$(a) hh#((# a7Right ParRight-Aligned Paragraph NumberspfJ` `  hh#(@*i) (h-(# a8Right ParRight-Aligned Paragraph NumbersyW"3!` `  hh#(-@p/a) -pp2(#p Tech InitInitialize Technical Style. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technical2+ o}a1DocumentgDocument Style Style\s0  zN8F I. ׃  a5TechnicalTechnical Document Style)WD (1) . a6TechnicalTechnical Document Style)D (a) . a2TechnicalTechnical Document Style<6  ?  A.   2]la3TechnicalTechnical Document Style9Wg  2  1.   a4TechnicalTechnical Document Style8bv{ 2  a.   a1TechnicalTechnical Document StyleF!<  ?  I.   a7TechnicalTechnical Document Style(@D i) . 2F$3ea8TechnicalTechnical Document Style(D a) . Doc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8::?~Q;@i<A^8>reference>;#FxX  Pg9CXP#itemizeX1?&V 8F ` hp xr#FxX  Pg9CXP#header2@I ` hp x`    #FxX  Pg9CXP# heading 3AF` hp x #FxX  Pg9CXP# 2BBO?CrADAErBfooter!B!!#d\  PCP#a2AgendaCa1AgendaAgenda ItemsD7D yP ) I. a3AgendaE2JKBK EDUG\G"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxd"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDddddddA.SSxSSJJSJS+SSSSS8SSSSSSSSS.xJxJxJxJxJorJiJiJiJiJ8.8.8.8.{SxSxSxSxS{S{S{S{SxSxJ{SxSxSxS{S`SxIxSxIqIqIrSrS{dgIiSiSgIxSxSxSxSxS{S{S8.SSSS8Sz]SSuSg/ga Xy-ԍ API Comments at 12.> Leaco indicates that the spectrum can be used for a variety of interactive video, voice, and data services. Leaco opposes rules limiting use of the band only to specific services, urging that the Commission allow the various GWCS services to develop before considering any  X-allocations for specific services.>ya X-ԍ Leaco Comments at 6.> Bell Atlantic states that a flexible use approach would allow use of this spectrum for wireless local loop services, interactive video services, dispatch  Xv-services, data services, and others not yet developed.Fv*a XQ -ԍ Bell Atlantic Comments at 2.F InFlight seeks to use the spectrum to provide nationwide multichannel live audio and video programming service to commercial  XH-airline passengers.BHa X-ԍ InFlight Comments at 1.B In earlier comments, Tadiran proposed that 46604685 MHz be used for  X1-inbuilding communications.T1a Xn-ԍ Tadiran Comments to First NPRM at 2.T   X -  10. Comments opposing the GWCS, and proposing the allocation of the spectrum to specific services, were filed by API, APCO, and MSTV. API, representing the oil and gas industry, proposes that the 46604685 MHz band be allocated for primary fixed use and  X -narrowband channels to replace , to a limited extent, loss of the narrowband allocation from the 2 GHz bands to Personal Communications Services (PCS). API states that telecommunications facilities such as pointtopoint and pointtomultipoint systems in the Private OperationalFixed Microwave Service are used to support the search for, production,  Xb-safe pipeline transmission, processing, and delivery of oil and gas products.?b= a XP-ԍ API Comments at 911.? TIA and Alcatel  XK-support API's proposal in reply comments.UK a X-ԍ TIA Reply Comments; Alcatel Reply Comments.U APCO also proposes designating the band for specific uses, in particular urging that at least a portion of the band be designated for public  X-safety mobile and aeronautical video operations. APCO states that public safety agencies do not currently have any dedicated channels for live "bird's eye view" video operations, and this  X-capability would be valuable in various emergency situations.= a X?#-ԍ APCO Comments at 3.= MSTV contends that the 46604685 MHz band could best be used to support advanced broadcast auxiliary operations. It requests that the band be allocated to wideband advanced digital video services and"P0*(("  X-terrestrial fixed and mobile auxiliary operations.Ca Xy-ԍ MSTV Reply Comments at 7.C ATI proposes that the band be allocated in  X-whole or in part for use as a return channel by wireless cable providers.> ya X-ԍ ATI Comments at 45.>  X- 11. Commenters opposing GWCS contend that GWCS is technically unsound and will retard innovation in the use of this spectrum. MSTV argues that GWCS will be plagued by  X-interference problems caused from the operation of mutuallyincompatible services.C!*a Xh -ԍ MSTV Reply Comments at 3.C Opposition commenters also contend that auctioning GWCS spectrum would be unlawful. API, APCO, and MSTV argue that utilizing auctions involving a variety of fixed and mobile services would be an improper means of allocating spectrum, because auctions are permitted under Section 309(j) of the Act only to assign licenses among mutually exclusive applicants,  X -not to determine spectrum allocations.o" a X-ԍ API Comments at 5; APCO Comments at 2; MSTV Reply Comments at 3, 6.o They also question whether auctions necessarily lead to the "highest and best use" of the spectrum. API submits that only commercial users have subscriber bases to meet proposed construction requirements and to provide funds for auction bids, while private users would not ordinarily be able to compete. API asserts that the Commission's proposal would force private users to rely on commercial providers who cannot adequately meet the needs of private users during emergencies, and generally offer more  X-expensive and less suitable communications, or no service at all in some remote areas.>#a X-ԍ API Comments at 59.> APCO contends that the use of auctions deprives state and local government public safety agencies of any opportunity to obtain new radio spectrum for critical police, fire, emergency medical, and other communications systems, because these agencies will never be able to  X4-compete with forprofit commercial entities for spectrum.=$4= a X"-ԍ APCO Comments at 2.=  X-  X- 12. Decision. We will adopt the proposed General Wireless Communications Service  X-for the 46604685 MHz block, largely as proposed in the Second NPRM. Under GWCS, licensees may provide any Fixed or Mobile service except Broadcast services, Radiolocation services, and Satellite services, including the Mobile Satellite Service. This flexible, broadly defined service should accommodate a wide variety of potential Fixed and Mobile service uses, including all of those identified by the commenters, such as voice, video, and data transmission, private microwave, broadcast auxiliary, and groundtoair voice and video. The flexibility of GWCS should also help make frequencies available for new technologies and services, including those that have been mentioned in the current comments and those that may be developed in the years ahead. In addition, as a service category that is not limited to"7 $0*((" specific past and current uses, but is available for the implementation of future technologies, we expect that GWCS will encourage research and investment to invent, develop, and market new technologies, and spur their deployment to serve consumers. We are not persuaded by arguments of some commenters that this spectrum would be better employed by assignments to specific current and planned services. The flexible GWCS approach should permit a range of qualified uses, including those preferred by each of the commenters, while permitting new technologies and services to emerge and encouraging efficient use of this spectrum.  XH- 13. Under the Reconciliation Act, the spectrum reallocated from Federal Government use is to be allocated and assigned to public use under a plan that makes frequencies available  X -for new technologies and services, and stimulates the development of such technologies.% a X -ԍ Section 115(b)(2) of the Telecommunications Authorization Act of 1992, codified at 47 U.S.C.  925(b)(2). We believe that the General Wireless Communications Service will foster the accomplishment of these goals. The record in this proceeding demonstrates that there are several new technologies and services that might make effective use of this spectrum. The flexibility of GWCS permits a wide variety of such uses to be made of this spectrum, including all the technologies and services proposed in the comments. Entities seeking to introduce these new technologies and services would have the opportunity to obtain spectrum necessary to do so. GWCS will give such new technologies the opportunity to prove themselves in competition with others in the marketplace.  X4- 14. GWCS should also foster efficient use of the spectrum. Each licensee will have the opportunity and the incentive to make efficient use of the spectrum licenses it obtains. A licensee will not be constrained to employ the spectrum for a single use. Instead, the flexibility of GWCS will encourage licensees to find ways to use the spectrum for the variety of services allowed under the license, either for its private use or to meet current and future needs of its subscribers. The most valuable uses of this spectrum also may differ in urban and rural parts of the Nation, or in regions with different industries, and may change over time. The flexibility of GWCS will permit licensees to adapt to these circumstances without the need for Commission intervention, further contributing to efficient use.  XN-15. Of equal importance, GWCS will accommodate and spur the development of new technologies and services. The Fixed and Mobile allocation and the GWCS service category will provide a block of spectrum that will accommodate a broad range of new technologies and services, with a minimum of administrative restrictions and requirements. Inventors and entrepreneurs seeking frequencies for future technologies and services will not need to bring their proposals for use of this spectrum to the Commission and succeed in the process of obtaining changes in allocation or assignment. Rather, they will have the opportunity to negotiate with GWCS licensees to provide the new technology or service, based on the market value of current uses. If a new technology or service can make better, more efficient use of the spectrum, licensees are likely to migrate quickly to that use, especially in the"#b%0*((e"" competitive market that we expect will emerge.  X-16. Commenters have not persuaded us that limiting assignments to any of their specific proposed uses of the spectrum would better meet the goals of the Reconciliation Act, the Communications Act, and the public interest. Restricting the 46604685 MHz spectrum to defined uses or services, such as the specific uses proposed by various commenters, would tend to reduce the attractiveness of this spectrum for new technologies and services. Assignment of the block exclusively to broadcast auxiliary service (BAS), as requested by MSTV, would preclude the use of the spectrum for the new services proposed in the comments, and from any future alternative technology or use that might be developed. Similarly, the request of API and other commenters to assign portions of this spectrum exclusively to fixed microwave systems would have the effect of barring its use for new technologies and services. Moreover, the representations of API that additional spectrum is needed to accommodate fixed microwave systems that will be displaced by PCS is not persuasive. This topic was the focus of much consideration in our proceeding identifying  X -spectrum for emerging technologies& a X -ԍ Redevelopment of Spectrum to Encourage Innovation in the Use of New Telecommunications Technologies, ET Docket No. 929, 8 FCC Rcd 6495 (1993). and a recent NTIA study projects that spectrum needs for long haul fixed microwave systems will remain constant or decrease slowly, and that  Xy-spectrum above 15 GHz can accommodate users displaced by PCS.'yba X-ԍ U.S. National Spectrum Requirements, U.S. Department of Commerce, NTIA Special Publication 9431, March 1995. Commenters have provided no substantive support to demonstrate that sufficient spectrum for relocation has not been identified. We similarly find no evidentiary basis for API's claim that its proposed allocation of the band to private fixed users is justified by any public safety needs that are not  X-adequately met by current allocations.J(a X-ԍ See API Comments at 4, 8. J  X-17. Moreover, as we discussed above, GWCS is flexible enough to permit these specific uses, as well as the other uses identified in the comments. If GWCS spectrum assignment applications submitted by qualified parties now seeking servicespecific allocations are not mutually exclusive, those parties will be granted licenses to provide the specific services they wish to provide, as well as other permissible GWCS services. In the event the spectrum is assigned by auction because of mutual exclusivity, they will also be able to participate and seek to obtain licenses. Private users such as the oil and gas industry companies API represents are often large, wellcapitalized businesses. API presents no persuasive evidence that private users will be unable to acquire spectrum by auction to satisfy any unmet needs. For example, these companies can seek to win licenses at auction and share or sell the spectrum they don't need for their own operations. There is also no reason to expect that commercial providers will be unwilling to provide the services and facilities private users require, including emergency services. If this spectrum is auctioned, we would" (0*((" expect that winning bidders would compete eagerly to provide service to private users in a costeffective manner.   X-18. We also believe that any interference issues that may arise among GWCS licensees can be satisfactorily resolved by general noninterference standards and technical rules. We have eliminated many potential sources of unacceptable interference by barring use of GWCS for Broadcast services, Radiolocation services, and Satellite services. Licensees for GWCS should be able to provide other qualified Fixed and Mobile services without unacceptable interference with other users of this or other spectrum. In addition, the grant of each GWCS license will be made subject to the condition that the licensee not cause unacceptable interference with any other licensee or service. Failure to abide by this condition will render the licensee subject to fines, damages, or forfeiture of the license. We are adopting technical rules similar to those in place for PCS. To the extent it proves necessary, we can consider whether revisions to those rules are warranted after GWCS licenses are assigned.  X-19. We find no merit in arguments that the Fixed and Mobile allocation of this spectrum itself, and establishment of the flexible GWCS designation for assigning this  Xb-spectrum, are unlawful. As we discussed in the First Report and Order, the Communications Act authorizes and Commission precedent supports allocating frequencies to more than one  X4-radiocommunication service, and assigning licenses for use by a broadly defined service.X)4a X-ԍ First Report and Order, at paras. 4154.X  X- The Commission is required by the National Telecommunications and Information Administration Organization Act (NTIAO Act) to issue regulations to allocate the 50megahertz of spectrum that the Secretary of Commerce identified and recommended for immediate reallocation from Federal Government use no later than 18 months from enactment  X-of the Reconciliation Act.*ya X-ԍ Section 115(a) of the National Telecommunications and Information Administration Organization Act, 47 U.S.C.  925(a) (NTIAO Act). For purposes of this portion of the NTIAO Act, the term "allocation" is defined as "an entry in the National Table of Frequency Allocations of a given  X-frequency band for the purpose of its use by one or more radiocommunication services."b+a XW-ԍ Section 111(1) of the NTIAO Act, 47 U.S.C.  921(1). b The Table of Frequency Allocations often contains allocations to more than one type of  Xe-serviceI,ea X"-ԍ See 47 C.F.R.  2.106.I and such allocations are specifically authorized in this instance by the NTIAO Act. Therefore, our allocation of the 46604685 MHz band to Fixed and Mobile Services is permissible and consistent with established practice.  X -20. We believe that such an allocation is consistent with the Commission's obligations under the Communications Act. The Commission has broad authority under the" u,0*((Z" Communications Act to allocate spectrum. Our authority derives from Section 303 of the  X-Communications Act, which provides:C-a Xb-ԍ 47 U.S.C.  303(a)(c)C XExcept as otherwise provided in this Act, the Commission from time to time, as public convenience, interest, or necessity requires shall  X(a) Classify radio stations;  X(b) Prescribe the nature of the service to be rendered by each class of licensed stations and each station within any class;  X(c) Assign bands of frequencies to the various classes of stations, and assign frequencies for each individual station ....  Nothing in the language of Section 303 establishes or suggests any limitation or restriction on the Commission's discretion to prescribe the nature of the service to be rendered over radio frequencies or authority to assign (or allocate) frequencies to the various classes of stations. Moreover, nothing in the language of Section 303 or its legislative history suggests that the Commission is prohibited from assigning spectrum to stations for more than one permissible use, or otherwise limits the Commission's discretion in making spectrum allocations that it  X4-deems to serve the public interest..H4ya X^-ԍ We acknowledge that certain other sections of the Communications Act reflect the fact that Congress expected the Commission to utilize some amount of spectrum for particular  X0-types of services. See, e.g., 47 U.S.C.  309(b) (referring to fixed pointtopoint microwave stations, industrial radio positioning stations, and aeronautical stations); 47 U.S.C.  319 (distinguishing between amateur stations, mobile stations, public coast stations, privately owned fixed microwave stations, common carrier stations, and broadcast stations). Nevertheless, these sections cannot be read to limit the Commission's discretion to permit the use of some spectrum for more broadly defined services. With respect to allocation decisions, courts have accorded  X-"substantial deference" to Commission determinations.A/ a XW-ԍ See National Ass'n of Regulatory Util. Comm'ners v. FCC, 525 F.2d 630, 636 (D.C.  X@ -Cir.), cert. denied, 425 U.S. 992 (1976); see also Telocator Network of America v. FCC, 691  X)!-F.2d 525, 549 (D.C.Cir. 1982). A  X-21. Commission precedent also supports the permissibility of allocating spectrum in a manner that allows for its use by a broadly defined service. In 1986, the Commission allocated 2 megahertz of spectrum for a new General Purpose Mobile Service (GPMS)" /0*((S"  X-accessible to all land mobile, maritime mobile, and aeronautical mobile uses.F0a Xy-ԍ Amendment of Parts 2 and 22 of the Commission's Rules Relative to Cellular  Xb-Communications System, Report and Order, GEN Docket Nos. 841231, 841233, 841234, 2  XK-FCC Rcd 1825, 1841 (1986), recon. denied, 2 FCC Rcd 6830 (1987).F In that  X-instance, the Commission found that the GPMS allocation served the public interest.<1Ka X-ԍ Id. at 1840.< The Commission rejected claims that such an allocation was unlawful, noting that "[n]othing in Sections 303(a)(c) suggests the Commission is not permitted to take into account marketplace forces when exercising its spectrum allocation responsibilities under the public interest  X-standard."2a X: -ԍ Id. at 1839. We note that this flexible use spectrum was never licensed. We ultimately reallocated this spectrum for narrowband PCS. Our current approach is also similar to that taken in our Emerging Technologies proceeding, ET Docket No. 929. In that proceeding, the Commission allocated 220 megahertz of spectrum to the Fixed and Mobile services and identified it for use by emerging  XH-technologies. Later, we permitted PCS providers to use 140 megahertz of this spectrum.3Ha X-ԍ See generally Amendment of the Commission's Rules to Establish New Personal Communications Services, GEN Docket No. 90314, Memorandum Opinion and Order, 9 FCC Rcd 5031 (1994). We disagree with the contention made by some commenters that the current approach differs from  X -that applied in allocating spectrum for PCS.4  a X-ԍ A broad variety of services are permitted under PCS. See Section 24.3 of the Commission's Rules, which permits PCS licensees to "provide any mobile communications service on their assigned spectrum. Fixed services may be provided only if they are ancillary to mobile operations. Broadcasting as defined by the Communications Act is prohibited." 47 C.F.R.  24.3. While we envision service rules designed to accommodate a variety of uses, as with PCS, we conclude that the action we take in this Order fulfills our responsibility to employ a regulatory structure that provides for use of the spectrum that is in the public interest.  X -22. Moreover, our allocation and service designation decisions are not so broad as to permit use of the 46604685 MHz band for any purpose. Allocation to the Fixed and Mobile services and designation to GWCS will allow licensees to use the spectrum to provide any Fixed service, including Aeronautical Fixed, fixed pointtopoint, and fixed pointtomultipoint systems, and any Mobile service, including Aeronautical mobile, Land mobile, or Maritime mobile service as long as those services meet the interference rules established for GWCS. The allocation does not, however, allow licensees to use the spectrum for Broadcast services, Radiolocation services, or any Satellite services, including the Broadcast or Mobile Satellite" n40*(("  X-Service.5a Xy-ԍ We note that Broadcast Auxiliary services are not considered a Broadcasting service as  Xb-defined in Section 2.1 of our Rules, 47 C.F.R.  2.1.   X-  X- 23.  Footnote US245 . In the Second NPRM we noted that in addition to the Fixed and Mobile service allocation we have adopted in the First Report and Order, 46604685  X-MHz is allocated on a coprimary basis for nongovernment fixedsatellite service (FSS) spacetoEarth links, with use limited to international intercontinental systems and subject to a casebycase electromagnetic analysis in accordance with US footnote 245 of the Table of  Xa-Frequency Allocations. In the NOI in this proceeding we had requested comment on the necessity of maintaining the US245 restrictions on FSS use of this band, considering that it  X3-would no longer be available for Federal Government use.S63ba XF -ԍ NOI, 9 FCC Rcd at 2177, n.23.S We received no comments  X -addressing this issue in response to the NOI. To facilitate the shared use of this band, we  X -proposed in the Second NPRM to maintain the restrictions set forth in US footnote 245 on use of 46604685 MHz and requested comments on this proposal. Commenters seeking the elimination of this restriction were asked to describe fully how FSS service use would be compatible with Fixed and Mobile GWCS services.  X -` `  X-24. We received only one comment regarding our proposal to retain US footnote 245  X{-of the Table of Frequency Allocations, in order to facilitate shared use of this band.R7{a X?-ԍ See Second NPRM at para. 61.R PCIA states that the retention of footnote US 245, which restricts fixedsatellite spacetoEarth links,  XM-is necessary to prevent interference to terrestrial based mobile services.F8Ma X-ԍ PCIA Comments at 3.hh,F We will adopt our  X6-proposal in the Second NPRM and retain the restriction in this footnote.   X-25.  Public Safety. Under the NTIAO Act, the Commission's plan for allocating and assigning former Federal Government spectrum must contain appropriate provisions to ensure not only the availability of frequencies for new services, but also "the safety of life and  X-property in accordance with the policies of Section 1 of the [Communications Act]"y9ua X -ԍ Section 115(b)(2)(C) of the NTIAO Act, codified at 47 U.S.C.  925(b)(2)(C).y In the current record, APCO proposes designating at least a portion of the 46604685 MHz band for public safety mobile and aeronautical video operations. APCO asserts that law enforcement and other public safety agencies do not currently have any dedicated channels for live "bird's  Xi-eye view" video operations, which it says would be valuable for emergency situations.=:i& a X@&-ԍ APCO Comments at 3.= "R :0*(("Ԍ X-26. We are firmly committed to ensuring that wireless and wired communications resources are deployed to promote the safety of life and property, as well as to carry out the other public interest goals of the Communications Act. The FCC and NTIA recently formed a Public Safety Wireless Advisory Committee to prepare a report on operational, technical and spectrum requirements of Federal, state and local public safety entities through the year  X-2010.;a X-ԍ See Letter from Director, Office of Management and Budget to Chariman, FCC, June 2, 1995 approving request for Public Safety Wireless Advisory Committee. This Committee is expected to begin its work in the very near future. The plan we are developing for the 200 MHz or more of Federal Government spectrum scheduled to be reallocated to nonGovernment use over the next 10 years will contain provisions to address how the reallocated Federal Government spectrum can best be used to satisfy unmet national safety needs. We are directed by statute to submit and implement this plan one year after  X -receipt of NTIA's Spectrum Reallocation Final Report, in early 1996.w< ba X--ԍ See Section 115(b) of the NTIAO Act, codified at 47 U.S.C.  925(b).w  X -27. The current record does not, however, provide a sound basis for concluding that any or all of the 46604685 MHz band should be assigned as APCO suggests. In its comments requesting a dedicated channel for public safety mobile and aeronautical video operations, APCO recognizes that public safety video operations are now possible through  X-frequency sharing with amateurs and broadcasters.==a XT-ԍ APCO Comments at 3.= It also suggests that the public safety  Xy-needs it identifies may be met by priority access to some video channels.9>ya X-ԍ Id. at 4.9 Moreover, it is unclear whether these needs, to the extent they are not currently met and could not be met using current broadcast auxiliary allocations, require nationwide channel assignments. APCO's request appears to be based primarily on the needs of the Los Angeles County Sheriff's Department. The extent of the need for public safety mobile and aeronautical video channels in other parts of the Nation is unclear.  X-28. It is our hope and intent that the gaps we have identified in the current record regarding the scope of public safety needs for additional wireless spectrum, and how those needs might best and most efficiently be met, will spur public safety organizations and other interested parties to work together to help us develop an effective plan for using wireless communications to meet any unmet and future public safety needs. The FCCNTIA Public  Xe-Safety Wireless Advisory Committee will offer one useful forum for such efforts. One of the tasks undertaken by the advisory committee will be to identify spectrum for federal, state, and local public safety use. As part of that process, the advisory committee may explore potential public safety uses of the 46354660 MHz band. We expect to begin proceedings in the near future to allocate and establish rules for assigning this band, which consists of reallocated Federal Government spectrum which is scheduled to become available in January 1997. This"u>0*((Z"  X-band is directly adjacent to the 46604685 MHz band we are designating to GWCS in this Order and thus has essentially the same technical characteristics and potential uses. The record in the proceeding to allocate and assign the 46354660 MHz band should also provide information useful for developing an overall plan for allocating and assigning the reallocated Federal Government spectrum.  X-  Xv- B. Use of Spectrum  XH-29. Background. We expect that the General Wireless Communications Service will benefit the public by providing licensees the opportunity to use the spectrum in a variety of  X -ways they find appropriate. In the Second NPRM, we tentatively concluded that it is likely that these uses will principally involve the provision of subscriberbased services. Based on this conclusion, we proposed to use competitive bidding as the assignment method for this spectrum if mutually exclusive applications are filed. Section 309(j)(2)(A) of the Communications Act provides that competitive bidding may be used by the Commission to assign spectrum if the "principal use" of the spectrum involves, or is reasonably likely to involve, the transmission or reception of communications signals to subscribers for  Xy-compensation.?ya X-ԍ See 47 U.S.C.  309(j)(2)(A). See also Implementation of Section 309(j) of the Communications Act Competitive Bidding, Second Report and Order, PP Docket No. 93 X-253, 9 FCC Rcd 2348, 2353 para. 30, (1994) (Competitive Bidding Second Report and  X-Order), recon ., Second Memorandum Opinion and Order, 9 FCC Rcd 7245 (1994)  X-(Competitive Bidding Reconsideration Order).  XK-30. In the Competitive Bidding Second Report and Order, we established a general framework for evaluating whether particular service classifications can be considered to be used principally for the provision of subscriberbased services. We concluded therein that we will determine principal use by comparing the amount of nonsubscription use made by the licensees in a service as a class with the amount of subscriberbased use "on the basis of  X-information throughput, time, or spectrum."r@a X-ԍ Id., 9 FCC Rcd at 2354. Given the fact that "there is no way to anticipate . . . all of the possible uses of the electromagnetic spectrum", we explicitly retained the discretion to use  Xx-any of these measurement criteria in evaluating particular service classifications. Id. at 2354,   n.21.r We found that the competitive bidding assignment method is permissible if "at least a majority of the use of a Commission regulated  X-service or class of service [is] for service to subscribers for compensation."FA a X#-ԍ Id. at 2354, para. 32.F In arriving at this approach, we rejected the notion that we must examine individual applications to  X|-determine each licensee's intended use of the spectrum. In the Second NPRM we sought comment regarding whether that general framework should be used with regard to the"e: A0*(("  X-assignment of spectrum in the 46604685 MHz band.Ba Xy-ԍ See Competitive Bidding Second Report and Order, 9 FCC Rcd at 235354, paras. 3036.  X-31. Based on the record, we tentatively concluded in the Second NPRM that the principal use of this spectrum under our proposed General Wireless Communications Service would involve, or was reasonably likely to involve, the receipt by the licensee of compensation from subscribers in return for enabling those subscribers to receive or transmit  Xv-communications signals.ICvba X -ԍ Second NPRM, at para. 66.I These subscriberbased services include interactive wireless cable and other wireless data, voice, and interactive services. A number of commenters also proposed uses of this spectrum that would not be subscriberbased, such as for broadcast auxiliary services. Accordingly, we requested further comment on this tentative conclusion. Commenters addressing this issue were requested to describe fully the service that they contemplated for the spectrum, whether the service would be Fixed or Mobile, and whether it would be private (for a licensee's internal use), commercial (subscriberbased), or noncommon carriage but subscriberbased.  X -32. To help us make an accurate determination regarding the extent to which this spectrum will be used for subscriberbased services, we also requested that commenters describe their spectrum needs and provide an indication of the degree of competition expected within a particular geographic service area. Commenters were also expected to describe as accurately as possible the types of geographic areas in which they would anticipate operating  X4-(e.g., rural, urban, top 50 markets), since the likelihood of subscriber use may vary among geographic areas.   X- 33. Comments. Most commenters say that the principal use of this spectrum will be subscriptionbased. A few of the commenters disagree with that conclusion. PCIA asserts that there is no record in this proceeding to support the conclusion that the band would be used  X-primarily for subscriberbased services.=Da Xn-ԍ PCIA Comments at 3.= MSTV concurs, and states that among potential uses of GWCS only one, wireless cable, qualifies as a subscriber service. It claims there is no evidence in the record to support the conclusion that a majority of the band's uses will be subscriberbased, and that a mere assumption that this will be so does not satisfy the  XN-"reasonable likelihood" standard.EENa X#-ԍ MSTV Reply Comments at 56.E UTC also states that the only evidence in the record that the principal use of the spectrum will be for subscriberbased services are the comments of  X -entities that expressed interest in using it for interactive video or wireless cable.<F ua XF'-ԍ UTC Comments at 6.<" & F0*(("Ԍ X-ԙ!34. In contrast, Bell Atlantic and Leaco state that the band is likely to be used for  X-such consumeroriented applications as interactive video, and voice and data services.]Ga Xb-ԍ Bell Atlantic Comments at 3; Leaco Comments at 67.] ATI  X-also foresees the use of this band for subscriberbased wireless cable services.<Hya X-ԍ ATI Comments at 2.< InFlight's proposed groundtoair video and audio service would also apparently be provided to subscribing airline passengers or the airlines themselves.  Xv-"35. The only comments responding to our request for information regarding spectrum needs, the degree of competition in geographic service areas, or the geographic areas in which operations are likely to be established, were filed by Leaco and InFlight. Leaco says it operates in rural areas of New Mexico and Texas and could use all 25 megahertz of the block to provide wireless voice, data, and video services in this region. It does not anticipate any  X -competing licensees in those areas.>I *a X-ԍ Leaco Comments at 7.> InFlight states that it plans to seek a nationwide license and indicates that other companies may compete in providing nationwide groundtoair  X -services.HJ a Xa-ԍ InFlight Reply Comments at 7.H  X -#36. Decision. We believe it is likely that the principal use of this band will be for subscription services. A majority of the commenters support this view and indicate that they anticipate using GWCS spectrum for various types of wireless video, audio, and data transmission services, wireless cable, or for groundtoair video. All of these services are likely to be subscriberbased and there may well be several entities seeking spectrum to compete in providing these services. Entities wishing to provide subscriberbased services also appear likely, at least in some cases, to seek nationwide licenses. For example, InFlight states that it requires a nationwide license to provide groundtoair video. We agree with InFlight's assertion that it may well face competitors who also wish to provide services to subscribing airlines and their passengers, and those competitors are also likely to seek nationwide licenses for portions of the 46604685 MHz block.  X-$37. By contrast, it is uncertain that nonsubscriberbased users will seek or obtain  X|-GWCS spectrum. APCO indicates that GWCS would not accommodate the video operations  Xe-of public safety agencies and others.=Kea X#-ԍ APCO Comments at 4.= These views reinforce the likelihood that GWCS licensees are likely to provide primarily subscriberbased services. We reject the contention from PCIA and MSTV that the evidence in the record is not sufficient to support a finding that the principal use of a GWCS service in the 46604685 MHz band would be subscriber" = K0*(("ԫ X-based services, and that GWCS would not be used primarily for such services.HLa Xy-ԍ MSTV Reply Comments at 6, n.7.H PCIA and MSTV provide no basis for this conclusion and, as we have discussed, the record strongly supports the conclusion that GWCS will principally be used for subscriberbased services such as wireless cable, other voice, data, and video services, and groundtoair video.  X- C. Assignment Method  X_-%38. Background. Sections 309(j)(1) and 309(j)(2) of the Communications ActRM_ya X -ԍ 47 U.S.C.  309(j)(1), 309(j)(2).R permit auctions where mutually exclusive applications for initial licenses or construction permits are accepted for filing by the Commission and where the principal use of the spectrum will involve or is reasonably likely to involve the receipt by the licensee of  X -compensation from subscribers in return for enabling those subscribers to receive or transmit  X -communications signals. As we explained above, we believe that the principal use of this  X -spectrum will meet these requirements.MN *a X-ԍ Based on this conclusion, we need not consider the comments of Ladybug Mountain PCS Corp. which recommends that, if the principal use of the spectrum does not involve subscriberbased services, the Commission should use comparative hearings rather than random selection to grant licenses. M In addition, Section 309(j)(2)(B) requires the Commission, before it may adopt the use of auctions to award licenses, to determine that use of competitive bidding will promote the objectives described in Sections 1 and 309(j)(3) of the Communications Act.  Xb-&39. In the Second NPRM, we tentatively concluded that the use of competitive  XK-bidding to assign licenses in the 46604685 MHz band would promote these objectives.IOKa X-ԍ Second NPRM, at para. 69.I We explained that auctioning licenses in this band is likely to lead to more speedy initiation of services than would use of comparative hearings, and that auctions will place licenses in the hands of those who value the spectrum most highly. Thus, competitive bidding would promote the availability, to all the people of the United States, of a rapid, efficient, nationwide, and worldwide telecommunications system with adequate facilities at reasonable charges, satisfying the objectives of Section 1 and Section 309(j)(3) of the Communications Act.  X|-'40. We also requested comments on other possible assignment methods.MP|G a Xt%-ԍ Second NPRM, at paras. 7075.M For example, if the principal use of the spectrum is found to be subscriberbased services, the only alternative to competitive bidding would be comparative hearings. On the other hand, we"N P0*((" noted that if the principal use will not involve subscriberbased services, the Commission has discretion in cases of mutually exclusive applications to employ either lotteries or comparative hearings to assign licenses. We tentatively concluded that, in the latter case, a lottery system would be preferable to comparative hearings because it would expedite the grant of licenses  X-and be capable of resulting in the provision of adequate service to users.KQa X-ԍ Second Notice, at para. 75.K   Xv- (41. Comments. We have already discussed comments addressing whether GWCS  X_-meets the initial statutory requirements for assignment by auction. As we have explained, the principal use of spectrum is reasonably likely to involve subscriberbased services, and thus GWCS is eligible for assignment by competitive bidding as well as by comparative hearings, in cases where mutually exclusive applications are filed. Most commenters apparently assume that mutually exclusive applications will be filed and that auctions should be used to assign  X -licenses.nR ya X-ԍ See, e.g., SBA Comments at 13; Bell Atlantic Comments at 13.n None of the comments proposes the use of comparative hearings rather than auctions in the event that mutually exclusive applications are filed for GWCS licenses. Leaco  X -states that it is not opposed to the competitive bidding process in general.S *a X-ԍ Leaco Comments at 7. Leaco does request several revisions to the proposed auction  X-rules to ensure that rural areas obtain service. See e.g., para. 56 infra. UTC questions whether auctions will lead to more rapid deployment of new technologies and services than other licensing schemes, in view of the fact that the PCS systems that were licensed by auction are not operational yet, and argues that the Interactive Video Data Service auction indicates that auction winners do not necessarily have an incentive to deploy service or new  XK-technology rapidly.<TKa X-ԍ UTC Comments at 7.< UTC does not, however, appear to propose comparative hearings.  X-)42. Decision. We conclude that, in cases of mutuallyexclusive applications, GWCS  X-spectrum should be assigned by auction, as we tentatively concluded in the Second NPRM. Based on our experience with comparative hearings, lotteries, and auctions, we believe that auctions will in this case achieve the statutory objectives of Section 309(j)(3) of the Communications Act.  X-*43. Section 309(j)(3) of the Communications Act sets forth Congress's four objectives  X|-for competitive bidding, as follows:LU|ua X#-ԍ See 47 C.F.R  309(j)(3).L X(A) the development and rapid deployment of new technologies, products, and services for the benefit of the public, including those residing in rural areas, without administrative or judicial delays; (#" & U0*(("ԌX(B) promoting economic opportunity and competition and ensuring that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women;(# X(C) recovery for the public of a portion of the value of the public spectrum made available for commercial use and avoidance of unjust enrichment through the methods employed to award uses of that resource; and(# X(D) efficient and intensive use of the electromagnetic spectrum.(#  X -+44. We believe that using a system of competitive bidding for assignments in the 46604685 MHz band will promote these four objectives. First, our experience with the use of auctions to award licenses to provide both narrowband and broadband PCS demonstrates that auctions will, more quickly than other licensing schemes, lead to the development and rapid deployment of new technologies, products, and services, thus satisfying the objective expressed in Section 309(j)(3)(A). UTC's suggestion that the Commission has no experience to declare that auctions will lead to more rapid deployment of service or technology, because PCS systems are not operational yet, ignores the advantages of auctions over comparative hearings and lotteries. The licensing of PCS has proceeded far more rapidly than would have  X-been the case if we had used comparative hearings or lotteries.Va X-ԍ See, e.g., "FCC Grants 99 Licenses for Broadband Personal Communications Services in Major Trading Areas," FCC News Release, June 23, 1995. We expect that an auction of GWCS spectrum will produce similar benefits in assigning spectrum to qualified licensees as quickly as possible.  X-,45. Second, we have in this Order adopted competitive bidding rules that will advance the objectives of Section 309(j)(3)(B) relating to the promotion of economic opportunity and the dissemination of licenses among a wide variety of applicants. These rules include the channelization of the block, limitations on ownership, geographic license areas,  Xe-and provisions for partitioning of licenses.   X7--46. Third, use of auctions to assign 46604685 MHz band licenses clearly advances the goals of Section 309(j)(3)(C) by enabling us to recover for the public a portion of the value of the public spectrum and avoid problems of unjust enrichment. Finally, as we stated  X-in the Competitive Bidding Second Report and Order, auctions tend "to reinforce the desire of licensees to make efficient and intensive use of . . . spectrum. Auctions make explicit what others are willing to pay to use the spectrum, and the licensees' need to recoup the outofpocket expenditure for a license should provide additional motivation to get the most value"!bV0*(( "  X-out of the spectrum."oWa Xy-ԍ Competitive Bidding Second Report and Order, 9 FCC Rcd at 2358.o We anticipate that the system of competitive bidding we are adopting in this Order will lead to the issuance of licenses to those parties who value the licenses most highly and who thus can be expected to make efficient and intensive use of the spectrum, as contemplated by Section 309(j)(3)(D).   X-.47. One important aspect of any assignment method is determining whether  Xv-applications are mutually exclusive. In the Second NPRM, we proposed to use a 30day filing window or other application cutoff method to allow for competing applications. We also sought comment on whether some other type of filing system would be more appropriate for determining whether initial applications are mutually exclusive. None of the commenters addresses this issue, except UTC, or suggests alternatives to the proposed 30day filing window. UTC expresses no opinion as to the allocation of the 46604685 MHz band, but contends that the GWCS proposal constitutes "allocation by auction," which it opposes. UTC further contends that the proposed 30day filing window represents one aspect of an attempt to encourage the filing of mutually exclusive applications, a precondition of auctions, rather  X -than proposing solutions to avoid mutual exclusivity.CX ya X-ԍ UTC Comments at 7. C We have discussed the rationale and legal basis for allocating this spectrum to Fixed and Mobile services and for designating it for  Xy-the GWCS in the Second Notice and elsewhere in this Report and Order. UTC does not propose any other application method or period, and we believe that the 30day filing window will provide a fair and reasonable opportunity for entities seeking to obtain GWCS licenses. We will adopt the 30day filing window as proposed for GWCS applications.  X-    X- D. Channelization; Aggregation  X-  X-/48. Background. In the Second NPRM, we proposed that the 46604685 MHz band be licensed in five blocks, each of which would be 5 megahertz wide. We also proposed to permit licensees to obtain multiple 5 megahertz blocks. Based on available information about the likely services to be provided in this band, we tentatively concluded that no licensee would need more than 15 megahertz in a single market area. Therefore, we proposed to limit a single entity from obtaining more than three of these blocks in a single geographic licensing area. We also proposed that, regardless of the specific service to be provided, this spectrum will not count against the 45 megahertz spectrum cap that applies to certain commercial mobile radio service (CMRS) licensees, noting that the equipment to provide service competitive with CMRS is not now available for this higher frequency band, and that this allocation for single, unpaired bands is not likely to be competitive with other twoway  X-CMRS services using paired frequency bands in the near future.Y*a X%-ԍ Implementation of Sections 3(n) and 332 of the Communications Act Regulatory Treatment of Mobile Services, Third Report and Order, GN Docket No. 93252, 9 FCC Rcd  X'-7988, 810910, para. 263 (1994), recon. pending. The spectrum cap currently applies to"'X0*(('" broadband personal communications services, specialized mobile radio services, and cellular services. "bY0*(("Ԍ  X-049. Comments. Leaco, opposing our limitation proposal, states that a limit on the amount of GWCS spectrum used for interactive video would be detrimental to rural providers  X-seeking to use the technology for the provision of interactive video services in rural areas.?Zba X-ԍ Leaco Comments at 10.? Bell Atlantic also supports setting no limits on the number of blocks bidders may acquire. It also agrees that this spectrum should not be counted against the 45 MHz spectrum cap that  Xv-applies to certain CMRS licensees.H[va X: -ԍ Bell Atlantic Comments at 34.H In contrast, ATI and WCAI support a 10 megahertz limit that is stricter than the 15 megahertz limit proposed by the Commission. ATI and WCAI contend that a 10 megahertz limit would assure that there are at least three wireless cable  X1-service providers in each geographic area.T\1a X-ԍ ATI Comments at 24; WCAI Comments at 57.T  X -  X -150.  Decision. We adopt the proposed channelization plan consisting of five 5 megahertz blocks. We also adopt the proposed aggregation limit of 15 megahertz of spectrum that may be obtained by a single entity. This limit will ensure that at least two competing entities will be able to provide GWCSbased services in each license area, helping achieve the statutory goals of encouraging competition and avoiding excessive concentration of licenses. At the same time, this 15 megahertz limit should permit licensees to acquire adequate spectrum to provide effective services. The 10 MHz limit proposed by ATI and WCAI is based on the assumption that only wireless cable providers will operate under GWCS and is, therefore, overly restrictive. The 15 megahertz aggregation limit will permit this level of competition while allowing flexibility that may be useful for some service plans, now and in the future. We believe further that competition may well be possible in many rural areas. Leaco presents no evidence to support a need for permitting the monopolization of this spectrum by rural telephone companies, and we expect encouraging competition will be beneficial, not detrimental to rural customers. We also adopt our tentative conclusion not to count this spectrum against the 45 megahertz spectrum cap that applies to certain CMRS  X-licenses. As we indicated in the Second NPRM, we do not expect that it will be feasible to offer GWCS services that are competitive with existing and planned CMRS services in the near future. As wireless technology and services develop, however, we may consider revisions to the CMRS spectrum cap, other spectrum aggregation rules, and standards for review of mergers or acquisitions that may affect the concentration of spectrum, in order to ensure vigorous competition in wireless services and to implement the Communications Act.  X -  X - E. License Areas  X- "u\0*((<"Ԍ X-251. Background. Under our Fixed and Mobile allocation, we proposed that all  X-licenses issued be based on 51 Major Trading Areas (MTA) and MTAlike areas..] a Xb-ԍ MTAs are defined in the Rand McNally 1992 Commercial Atlas & Marketing Guide 3639 (123d ed. 1992). There are 47 MTAs, as defined by Rand McNally. Following the approach we have taken with regard to other services in which we have used MTA license  X-areas, we proposed in the Second NPRM to separate Alaska from the Seattle, Washington, MTA so that Alaska would be licensed as a separate MTAlike area. We also proposed to license separately the following additional MTAlike areas:  X -X` hp x (#%'0*,.8135@8:`_a X-ԍ ATI Comments at 34.> PCIA believes that it may be more appropriate to use the Economic Areas (EAs) developed by the Bureau of Economic Analysis (BEA), Department of Commerce. PCIA  X1-states that EAs better approximate the natural radio usage patterns of users.?a1ya X[ -ԍ PCIA Comments at 4. ?  X -554. Leaco submits that under specific circumstances (i.e., in rural areas where competition does not exist) market forces do not ensure that spectrum is awarded to those who value it most. By auctioning large market areas, Leaco argues, the Commission lumps rural areas, where auctions might not be required because of the lack of mutually exclusive applications, with highly competitive urban areas where mutually exclusive applications are  X-sure to exist. Leaco suggests that licenses be awarded using cellular MSAs and RSAs.?b*a Xk-ԍ Leaco Comments at 11.? For those providers serving larger areas, adjacent geographic areas could be consolidated. WCAI also supports the use of MSA and RSAs, stating that before an MTA can be partitioned, it must be acquired at auction. WCAI argues that it is asking too much of an entity that contemplates providing a local service to expect it to make the financial commitment necessary to acquire an MTA, even if that entity can then recoup part of its cost through partitioning. It is more reasonable to provide for smaller licensing areas, while affording those  X-that desire to serve larger areas the opportunity to accumulate contiguous areas.?ca X{-ԍ WCAI Comments at 79.? While deferring to the FCC's discretion to award spectrum on an MTA basis, the U.S. Small Business Administration "generally supports awards of licenses on a Basic Trading Area (BTA) basis because it requires less capital to obtain a license and construct an operational  X-system.";da X!-ԍ SBA Comment at 3.;     Xe-655. Only Bell Atlantic and InFlight support MTAs. In reply comments, InFlight contends that partitioning will meet the objective that proponents of small service areas desire, and that it would be inequitable to award GWCS licenses to serve smaller areas than MTAs because those interested in applying for a nationwide license have no option but GWCS, while those interested in mobile GWCS in rural areas have the option of applying for" = d0*(("  X-PCS licenses.Hea Xy-ԍ InFlight Reply Comments at 6.H Bell Atlantic states that the Commission's proposal to base license areas on MTAs has proved successful to date in the PCS arena and should be adopted here as well,  X-along with partitioning.Ffya X-ԍ Bell Atlantic Comments at 4.F  V-  X-  756. Decision. We will issue GWCS licenses based on EAlike geographic areas. Use of the smaller EA areas, as created and maintained by the U.S. Department of Commerce's Bureau of Economic Affairs, appears to be more consistent with the likely uses of GWCS licenses than use of MTAs and will increase opportunities for small businesses and other designated entities to obtain GWCS licenses. We agree with PCIA that the BEA Economic Areas approximate the natural radio usage patterns of users, as the boundaries of those areas are based on local area economic activity, local interindustry economic relationships, and internal population movements such as commuting patterns. Use of EAs will in addition address Leaco's concerns, facilitating the provision of wireless GWCS services in rural areas. EAbased licenses also avoid the copyright problems and issues associated with MTAs. With the 172 EAs, plus 3 EAlike areas for Guam and the Northern Marianas, Puerto Rico and the United States Virgin Islands, and American Samoa, we will be awarding 875 licenses (five 5 MHz blocks in 175 EAs), more than three times as many licenses as would have been awarded using MTAbased regions. As the comments indicate, this change will allow more opportunities for designated entities to obtain licenses, and at lower cost for each license. We do not believe use of EAs will be unfair to licensees seeking to provide regional or nationwide service. Those entities will have the opportunity to aggregate licenses to serve those areas, and we are adopting bidding procedures that should be fair to small and large bidders alike.  X-857. The complete list of EA and EAlike areas is shown in Appendix C. The five 5 MHz blocks will be designated as Blocks A through E: Block A (46604665 MHz), Block B (46654670 MHz), Block C (46704675 MHz) , Block D (46754680 MHz) and Block E (46804685 MHz). This configuration of licenses should contribute to competition and flexibility in use of these licenses.  Xe-  XN-F. Eligibility  X -958. Background . In the Second NPRM, we proposed, in the event we determined that it is reasonably likely that GWCS services would be commercial services, that there be no restrictions on eligibility to apply for licenses in this band other than those foreign  X-ownership restrictions that apply to CMRS and common carrier fixed system licensees,@g*a X%-ԍ 47 U.S.C.  310(b).@ and the restriction on foreign governments or their representatives related to the holding of " g0*(("  X-private mobile radio service licenses.@ha Xy-ԍ 47 U.S.C.  310(a).@ Although rural telephone companies would be eligible, we did not propose to treat them differently than other applicants. We sought comment on these proposals. We also requested that commenters seeking spectrum for noncommercial services (either private mobile radio services or private fixed services) provide as complete information as possible regarding eligibility restrictions that should apply.   Xv-:59. Comments. Bell Atlantic, the only commenter addressing these issues, supports the proposal to impose no categorical restrictions on license eligibility in this band, reasoning that an open policy will help ensure that the entire industry can apply its entrepreneurial  X1-talents to the most innovative use of this spectrum.Fi1ya X[ -ԍ Bell Atlantic Comments at 4.F  X -;60. Decision. We adopt our proposed broad eligibility standards for GWCS applications. Opening the GWCS market to a wide range of applicants will permit and encourage entrepreneurial efforts to develop new technologies and services, while helping to ensure the highest and best use of this spectrum.  X- G. Competitive Bidding Issues  Xb-<61. In the Second NPRM, we proposed to use auctions to issue licenses for GWCS services in the 46604685 MHz band that meet the statutory auction criteria. We sought comment on a wide range of issues related to competitive bidding.  X-1. Competitive Bidding Design  V-` ` a. General Competitive Bidding Principles   X-=62. The Competitive Bidding Second Report and Order, as modified by the  X-Competitive Bidding Reconsideration Order, established the criteria to be used in selecting which auction design method to use for each particular auctionable service. Generally, we concluded that awarding licenses to those parties who value them most highly will foster Congress's policy objectives. In this regard, we noted that since a bidder's ability to introduce valuable new services and to deploy them quickly, intensively, and efficiently increases the value of a license to that bidder, an auction design that awards licenses to those bidders with the greatest willingness to pay tends to promote the development and rapid deployment of  X-new services and the efficient and intensive use of the spectrum.j*a X$-ԍ See Competitive Bidding Second Report and Order, 9 FCC Rcd at 236061, para. 70.  X ->63. Based on this analysis, we concluded that, where the licenses to be auctioned are interdependent and their value is expected to be high, simultaneous multiple round auctions"!j0*(( "  X-would best achieve the Commission's goals for competitive bidding.Vka Xy-ԍ See id. at 2367, paras. 109111.V We also noted, however, that simultaneous multiple round auctions may not be appropriate for all licenses. For example, where there is less interdependence among licenses, there is less benefit to auctioning them simultaneously. Similarly, we explained that, when the values of particular licenses to be auctioned are low relative to the costs of conducting a simultaneous multiple round auction, we may consider auction designs that are relatively simple, with low  Xv-administrative costs and minimal costs to the auction participants.Vlvya X -ԍ See id. at 2367, paras. 112113.V  VH-` ` b. Competitive Bidding Methodology for Licenses in the 46604685 MHz Band  X -?64. Background. In the Second NPRM, we proposed to use simultaneous multiple round bidding for licensing of the proposed 5 MHzwide MTA spectrum blocks. Based on the record and our experience with the auctioning of other licenses, we expected that such licenses would be of sufficient value to warrant the use of simultaneous auctions. We also expressed the view that the value of these licenses for certain contemplated uses would be significantly interdependent because of the desirability of aggregation across spectrum blocks and geographic regions. We also tentatively proposed to auction all licenses simultaneously, because of the relatively high value and significant interdependence of the licenses. We asked commenters to address these tentative conclusions and whether any other competitive bidding designs might be more appropriate for the licensing of this spectrum.  X-@65. Comments. InFlight, the only commenter addressing these issues, supports awarding GWCS licenses in a single, simultaneous auction, in order to provide incentives for  X-companies desiring to provide nationwide service to apply for a GWCS license.Hm*a X-ԍ InFlight Reply Comments at 8.H  X-A66. Decision. We will adopt the tentative conclusion in the Second NPRM and auction this spectrum by simultaneous multiple round bidding. This bidding methodology will allow bidders to express the value of the interdependency among licenses better than if licenses are auctioned separately. Moreover, simultaneous multiple round bidding will provide bidders with the opportunity to pursue backup strategies that enable them most efficiently to obtain the license combinations which satisfy their service needs. Simultaneous multiple round bidding is thus most likely to award GWCS licenses to bidders who value them the most highly and who are most likely to deploy new technologies and services rapidly. We reserve the discretion to hold one or more auctions. In addition, we reserve the discretion to test alternative procedures. We will announce by Public Notice before each auction the competitive bidding design to be employed in a particular auction.  V!-` ` c. Combinatorial Bidding"!m0*(( "Ԍ  X-B67. Combinatorial bidding is an auction method which allows applicants to bid for  X-multiple licenses as allornothing packages, e.g., all licenses nationwide on a particular spectrum block, with the licenses awarded as a package if the combinatorial bid is greater  X-than the sum of the high bids on the individual licenses in the package.na X-ԍ Competitive Bidding Second Report and Order, 9 FCC Rcd at 236667, paras. 98115. In the Competitive  X-Bidding Second Report and Order, we recognized the potential benefits of combinatorial bidding in facilitating aggregations, but expressed concern about the complexity and cost of combinatorial bidding and the potential of such auctions to award licenses in combinations even though they may be of greater value if awarded separately. The advantage of combinatorial bidding is that it might be structured to award spectrum as either multiple or aggregated packages, based on the most valued use. The disadvantages are the complexity and cost of such bidding, and the potential that the procedures chosen will award licenses in  X -combinations even though they might be of greater value if awarded separately.o ya X-ԍ See Competitive Bidding Second Report and Order, 9 FCC Rcd at 236667, paras. 98115.  X -C68. In the Second NPRM, we sought comments on whether to allow combinatorial bidding for GWCS services, because it may be necessary or at least highly desirable that  X-spectrum used for some services (e.g., airground service) be licensed to the same entity nationwide. While geographic aggregation is generally facilitated in a simultaneous auction, a business plan that depends critically on winning every regional license on a particular block nationwide may be at a disadvantage absent combinatorial bidding even if it represents the  X4-highestvalued use of the spectrum.Lp4a X-ԍ Second NPRM at paras. 8992.L We discussed in the Second NPRM methods to overcome this difficulty, such as allowing the submission of combinatorial bids for all local licenses on the same spectrum blocks, but limiting combinatorial bids to nationwide aggregations in order to address concerns that unlimited combinatorial bidding might prove overly complex. We also discussed methods of addressing "free rider" situations that might result in licenses being assigned to those who value the licenses most highly. We suggested, for example, requiring a 5 percent bidding premium for a combinatorial, nationwide bid to be  X-accepted.@qa X!-ԍ Id. at para. 91.@ We also requested comment on other auction designs, such as the "Electronic Interactive Combinatorial Auction" (EICA) using the "Adaptive User Selection Mechanism"  Xe-(AUSM) as developed by Banks, Ledyard, and Porter and proposed by NTIA.reua X$-ԍ J. Banks, J. Ledyard & D. Porter, "Allocating Uncertain and Unresponsive Resources:  Xt%-An Experimental Approach," 20 Rand Journal of Economics 1 (1989). Ex parte  X]&-submission of NTIA, Feb. 28, 1994. See also Competitive Bidding Second Report and Order, 9 FCC Rcd at 236566, paras. 99105. "e r0*(("Ԍ  X-  D69. Comments.  InFlight, the only commenter addressing these issues, supports combinatorial bidding as necessary to allow participation by applicants desiring to provide a nationwide service. InFlight also proposes that any applicant requiring a nationwide license be permitted to bid for a generic license, without specifying the channel block (or blocks) on which service would be provided. Under this proposal, the applicant for a nationwide license to operate on a single channel block would be the winning bidder if its bid was one of the top five bids when judged against the nationwide aggregated bids for each of the five GWCS channel blocks. InFlight explains that this approach would reduce the risk that a nationwide applicant would be subject to a anticompetitive blocking action by a competitor, who otherwise might only need to bid on a single local license from the channels specified by the  X -nationwide applicant to succeed in blocking the applicant's bid.Ks a X~ -ԍ InFlight Reply Comments at 811.K  X -E70. InFlight also contends that this approach would reduce any "free rider" benefits that otherwise might accrue to an applicant for a nationwide license under combinatorial bidding, because other bidders would not know on which channel block (or blocks) the  X-combinatorial bidder would operate if it submits a winning bid.Ltya X-ԍ InFlight Reply Comments at 910. L  Xd-F71. Decision. We do not adopt combinatorial bidding, but will establish reduced bid withdrawal penalties for entities seeking nationwide licenses that should achieve results similar to combinatorial bidding, with far less uncertainty and complexity. The record in this proceeding does not, in our view, provide a sound basis for adopting combinatorial bidding. The only comments on this issue were submitted as reply comments by InFlight. These comments do not address adequately the practical problems with implementing combinatorial  X-bidding for which we sought comment in the Second NPRM. The comments do not, for example, address the issue of whether we should limit combinatorial bids to nationwide licenses, in order to reduce the complexity of the auction, or whether a bidding premium should be required of combinatorial bidders, or whether "standby queue" mechanisms should  X~-be employed.Vu~*a XY-ԍ See Second NPRM, at paras. 9192V Of greatest significance, the record does not provide an adequate basis for concluding that any specific combinatorial bidding scheme would not be biased toward either individual or combinatorial bidders, resulting in an inefficient outcome.  X"-G72. We also conclude that the increased risk a bidder faces in seeking to aggregate individual EA licenses in order to offer a nationwide service can be addressed by reducing  X-the withdrawal penalty for the nationwide bidder. As we discussed in the Second NPRM, geographic aggregation is generally facilitated in a simultaneous auction, but a bidder whose business plan depends critically on winning every license on a particular block nationwide may nonetheless be at a disadvantage. This problem could arise because of the increased risk"!u0*(( " a nationwide aggregator may face if the total price of the aggregation rises above its value to that bidder, but the bidder is not outbid on all its high bids. The nationwide aggregator may then be forced either to withdraw its remaining high bids late in the auction, possibly incurring a bid withdrawal penalty, or to pay too much for the remaining licenses. This risk could discourage nationwide bidders from fully expressing the value of nationwide  X-aggregations, causing the spectrum to go to lower valued uses. Iva X-ԍ Second NPRM, at para. 90.I  X_-H73. One way to address this concern is to modify auction rules to limit the risk associated with bid withdrawal for those seeking nationwide aggregations, while still discouraging insincere bidding. To accomplish this, we will limit the withdrawal penalty for nationwide bidders to 5 percent of the aggregate withdrawn bids. The withdrawal penalty would be calculated as the difference between the sum of the withdrawn bids and the sum of the subsequent high bids on the withdrawn licenses up to a maximum of 5 percent of the  X -withdrawn bids.w ya X-ԍ This 5 percent cap on the bid withdrawal penalty will only apply to withdrawn bids on licenses that are part of the nationwide aggregation. Calculating the penalty in this way will reduce the expected penalty because bidders will "get credit" for the amounts by which subsequent high bids exceed the prices at which bids are withdrawn. To discourage insincere bidding, nationwide bidders would be required to declare the number of nationwide aggregations for which they will bid and to be active in every round of bidding on sufficient licenses to create the number of declared aggregations. We describe these and other modifications to bid withdrawal penalties and auction activity rules for nationwide aggregations in Appendix E. While these changes to the withdrawal and activity rules must be somewhat complex to ensure a fair and efficient auction, they should nonetheless be far simpler and easier to administer than combinatorial bidding. This approach should also permit a speedier auction, especially because, as we pointed out above, no detailed, practicable combinatorial bidding plan has been proposed or developed in this proceeding.  V-` ` d. Bidding Procedures  X|-I74. Background. We also sought comment in the Second NPRM on bidding procedures to be used in the 46604685 MHz auctions, including bid increments, duration of bidding rounds, stopping rules, and activity rules. Assuming that we would use simultaneous multiple round auctions, we generally proposed to use the same or similar bidding procedures  X -to those used in simultaneous multiple round bidding for MTAbased PCS licenses.x a X#-ԍ See, e.g., Competitive Bidding Fifth Report and Order, 9 FCC Rcd at 554156, recon.,  X$-Competitive Bidding Fourth Memorandum Opinion and Order, 9 FCC Rcd at 685964. We sought comment on whether any variations on these procedures should be adopted for licenses in the 46604685 MHz band. "x0*(("Ԍ X-J75. Comments; Decision. None of the comments addresses these bidding procedures issues, except with respect to designated entities, as we discuss in the next section of this Order. Based upon our successful experience in auctioning PCS spectrum and the absence of any dispute concerning the efficacy of the bidding procedures used there, we will adopt essentially the same procedures for GWCS licenses. We will describe these procedures briefly in this section of the Order. Additional, more detailed information on bidding procedures and other auction information will be made public prior to the auction.  XH-2. Procedural and Payment Issues  X -K76. In the Competitive Bidding Second Report and Order, as modified by the  X -Competitive Bidding Reconsideration Order, the Commission established general procedural, payment, and penalty rules for auctions, but also stated that such rules may be modified on a  X -servicespecific basis.y a XN-ԍ See Competitive Bidding Reconsideration Order, 9 FCC Rcd at 724950, paras. 2326. As discussed below, we will generally follow the procedural,  X -payment, and penalty rules established in Subpart Q of Part 1 of the Commission's Rules.Ez ya X-ԍ 47 C.F.R Part 1, Subpart Q.E  V-` ` a. Upfront Payments  Xb-L77. As in the case of other auctionable services, we will require participants in the 46604685 MHz auction to tender to the Commission, in advance of the auction, a substantial upfront payment as a condition of bidding in order to ensure that only serious, qualified  X-bidders participate in auctions and to ensure payment of the penalty (discussed infra) in the event of bid withdrawal or default. For GWCS, we adopt the standard upfront payment formula of $0.02 per pop per MHz for the largest combination of MHzpops a bidder anticipates bidding on in any single round of bidding. We do not find it necessary to set a minimum upfront payment for these licenses.  V-` ` b. Down Payment and Full Payment for Licenses Awarded by Competitive  V|-` `  Bidding   XN-M78. The Competitive Bidding Second Report and Order generally required successful bidders to tender a 20 percent down payment on their bids to discourage default between the  X -auction and licensing and to ensure payment of the penalty if such default occurs.U{ *a X"-ԍ Id. at 238182, paras. 190192.U We concluded that a 20 percent down payment was appropriate to ensure that auction winners have the necessary financial capabilities to complete payment for the license and to pay for the costs of constructing a system, while at the same time not being so onerous as to hinder growth and diminish access. We adopt this 20 percent downpayment requirement for 46604685 MHz GWCS licenses. Winning bidders will thus be required to supplement their upfront"!{0*(( " payments with a down payment sufficient to bring their total deposits up to 20 percent of their winning bid(s).    X-` ` c. Bid Withdrawal, Default, and Disqualification  Xx-N79. We adopt the bid withdrawal, default, and disqualification rules for 46604685 MHz licensing based on the procedures established in our general competitive bidding  XJ-rules.J|Ja X -ԍ See 47 C.F.R.  1.2109.J Under these procedures, any bidder who withdraws a high bid during an auction before the Commission declares bidding closed, or defaults by failing to remit the required down payment within the prescribed time, will be required to reimburse the Commission in the amount of the difference between its high bid and the amount of the winning bid the next time the license is offered by the Commission, if the subsequent winning bid is lower. One exception, as we discussed above, is that we will limit the bid withdrawal payments for  X -nationwide bidders to 5 percent of the withdrawn bids. See  75 supra. A defaulting auction winner will be assessed an additional amount of three percent of the subsequent winning bid or three percent of the amount of the defaulting bid, whichever is less. In the event that an auction winner defaults or is otherwise disqualified, we will reauction the license either to  Xd-existing or new applicants. The Commission will retain discretion, however, to offer the license to the next highest bidder at its final bid level if the default occurs within five business days of the close of bidding.  X-3. Regulatory Safeguards  V-` ` a. Unjust Enrichment Provisions  X-O80. The Reconciliation Act directs the Commission to "require such transfer disclosures and antitrafficking restrictions and payment schedules as may be necessary to prevent unjust enrichment as a result of the methods employed to issue licenses and  Xg-permits."G}gya X-ԍ 47 U.S.C.  309(j)(4)(E). G We will adopt the transfer disclosure requirements contained in Section 1.2111(a) of our rules for all 46604685 MHz licenses obtained through the competitive bidding process. In addition, we adopt the specific rules governing unjust enrichment by designated entities, discussed below, as proposed in the Notice. Generally, applicants transferring their licenses within three years after the initial license grant will be required to file, together with their transfer application, the associated contracts for sale, option agreements, management agreements, and all other documents disclosing the total consideration received in return for the transfer of its license. "! *}0*(( "Ԍ V-` ` b. Performance Requirements  X-P81. The Reconciliation Act requires the Commission to "include performance requirements, such as appropriate deadlines and penalties for performance failures, to ensure prompt delivery of service to rural areas, to prevent stockpiling or warehousing of spectrum by licensees or permittees, and to promote investment in and rapid deployment of new  Xv-technologies and services."F~va X-ԍ 47 U.S.C.  309(j)(4)(B).F In the Competitive Bidding Second Report and Order, we decided that it was unnecessary and undesirable to impose additional performance requirements, beyond those already provided in the service rules, for all auctionable services.  X1-G1ya X[ -ԍ 9 FCC Rcd at 2386, para. 219.G Our 46604685 MHz service rules contain specific performance requirements, such as the requirement to construct and provide service within a specific period of time. Thus, we do not adopt any additional performance requirements for competitive bidding purposes.  V -` ` c. Rules Prohibiting Collusion  X -Q82. In the Competitive Bidding docket, we adopted special rules prohibiting collusive  X-conduct in the context of competitive bidding.*a Xk-ԍ 47 C.F.R.  1.2105(c). Competitive Bidding Second Report and Order, 9 FCC Rcd  XT-238688, paras. 221226; Competitive Bidding Reconsideration Order, 9 FCC Rcd at 7254,  X=-paras. 5053; Implementation of Section 309(j) of the Communications Act Competitive  X&-Bidding, Memorandum Opinion and Order, PP Docket 93253, 9 FCC Rcd 7684, 768789, paras. 812 (1994). We indicated that such rules would serve the objectives of the Reconciliation Act by preventing parties, especially the largest firms, from agreeing in advance to bidding strategies that divide the market according to their strategic interests and disadvantage other bidders. We will apply these rules to the 46604685 MHz service. Under these procedures, bidders will be required to identify on their applications all parties with whom they have entered into any consortium arrangements, joint ventures, partnerships, or other agreements or understandings that relate to the competitive bidding process. Bidders will also be required to certify that they have not entered into any explicit or implicit agreements, arrangements, or understandings with any parties, other than those identified, regarding the amount of their bid, bidding strategies or the particular properties on which they will or will not bid.  X|-4. Designated Entities ` `  hh,  VN-` ` a. Introduction  X -R83. In authorizing the Commission to use competitive bidding, Congress directed the Commission to advance various objectives and consider several alternative methods for" ! 0*(([" achieving them. Specifically, the statute provides that, in establishing eligibility criteria and bidding methodologies, the Commission shall "promot[e] economic opportunity and competition and ensur[e] that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants, including small businesses, rural telephone  X-companies, and businesses owned by members of minority groups and women."Fa X-ԍ 47 U.S.C.  309(j)(3)(B).F Small businesses, rural telephone companies and businesses owned by minorities and/or women are  X_-collectively referred to as "designated entities."_ya X -ԍ Competitive Bidding Second Report and Order, 9 FCC Rcd at 2388, para. 227. Section 309(j)(4)(A) provides that the Commission "shall consider alternative payment schedules and methods of calculation, including lump sums or guaranteed installment payments, with or without royalty payments or  X -other schedules or methods . . . and combinations of such schedules and methods."F *a X-ԍ 47 U.S.C.  309(j)(4)(A).F The statute also requires the Commission to "ensure that small businesses, rural telephone companies, and businesses owned by members of minority groups and women are given the  X -opportunity to participate in the provision of spectrumbased services."L a Xa-ԍ 47 U.S.C.  309(j)(4)(D).L To achieve that goal, the statute indicates that the Commission should "consider the use of tax certificates,  X -bidding preferences, and other procedures."3 a X-ԍ Id.3  Xy-S84. In the Competitive Bidding docket, we established eligibility criteria and general rules that would govern the award of special provisions for designated entities We also enumerated several possible special provisions that could be applied to designated entities in particular services, including installment payments, spectrum setasides, bidding credits, and tax certificates. In addition, we set forth rules to prevent unjust enrichment by designated entities seeking to transfer licenses obtained through use of one of these special provisions.  X-T85. In keeping with the general parameters set forth in the Competitive Bidding  X-docket, we proposed in the Second NPRM specific measures and eligibility criteria for designated entities in the 46604685 MHz service, designed to ensure that such entities are given the opportunity to participate both in the competitive bidding process and in the provision of service in the 46604685 MHz band. We sought comment on these proposals, and specifically on identifying special provisions tailored to the unique characteristics of the service or services that might be offered in the 46604685 MHz band, in order to create meaningful incentives and opportunities in the service for small businesses and businesses owned by minorities and/or women. " "= 0*(("Ԍ X-U86. In the Second NPRM, we discussed and sought comment on these special provisions for designated entities: X1) for businesses owned by women and minorities we proposed that installment payments be available on all licenses and that a bidding credit of 25 percent be available on one of the five proposed spectrum blocks; (# X2) for small business we sought comment on allowing a reduced down payment requirement coupled with installment payments; (# X3) we did not believe that special preferences are needed to ensure adequate participation of rural telephone companies; (# X4) we sought comments on reducing upfront payments to encourage participation in the auction, particularly by all eligible designated entities; and(# X5) we sought comment on whether and how to designate one 5 MHz spectrum block as an "entrepreneurs' block." (# We also discussed and solicited comments on issues of the eligibility criteria for designated entities and provisions to prevent unjust enrichment by trafficking in licenses acquired through the use of bidding credits or installment payments.  X-V87. Comments. Commenters addressing methods of ensuring that designated entities will participate in an auction of 46604685 MHz spectrum primarily urge that licenses be awarded on geographic areas smaller than MTAs. Leaco states that "[i]f the licenses areas are smaller in size, rural telephone companies like Leaco would be able to acquire licenses  X-without special considerations.">a X -ԍ Leaco Comments at 7.> The SBA supports licenses on a smaller, Basic Trading Area basis because it requires less capital to obtain a license and construct an operational system. It states that "[l]arge service territories generally are appealing to large businesses and small firms have little chance of obtaining the financing needed to bid for MTA licenses  X7-absent special provisions."<7ya Xa -ԍ SBA Comments at 5.< ATI similarly supports smaller license areas than MTAs, and proposes entrepreneurial setasides for small companies in order to "at least allow wireless cable operators to bid for spectrum in competition with other comparably smaller business  X-entities."<*a X$-ԍ ATI Comments at 6.<  X -W88. To the extent that special provisions are needed for designated entities, SBA" #0*(("  X-supports the adoption of bidding credits.=a Xy-ԍ SBA Comments at 6. = SBA and ATI urge in addition that bidding preferences for businesses owned by women and minorities should also extend to small  X-businesses, which are also designated entities.Oya X-ԍ SBA Comments at 6, ATI Comments at 6.O Leaco submits that rural telephone companies  X-should be given all of the bidding preferences awarded to other entities.?*a X-ԍ Leaco Comments at 12.? Although SBA argues that bidding credits should apply to all small businesses, it notes that some differences in preferences for women and minorities may be appropriate to compensate for their greater  Xv-difficulty in attracting capital than other small businesses.>va X -ԍ SBA Comments at 67.> WCAI believes that Congress's intent can best be served by permitting installment payments by small businesses in the same  XH-manner at the Commission did for PCS.=Ha X-ԍ WCAI Comments at 9.=  X -X89. Several commenters also support entrepreneurial blocks, especially if licenses are awarded on an MTA basis. SBA proposes an entrepreneurs' block for which all designated entities would be eligible so long as the entities' net worth was within the $40 million net worth criteria established for the MTA narrowband PCS auction. SBA states that this definition is consistent with definitions adopted by the Commission for other services and approved by the SBA, that it isolates those companies that have significantly greater difficulty in obtaining capital than larger enterprises, and that these companies are sufficiently large that  Xy-they could survive in a competitive wireless communications marketplace.<y= a Xg-ԍ SBA Comments at 6.< ATI and WCAI  Xb-also support $40 million standard used for PCS as appropriate here.Ub a X-ԍ ATI Comments at 67; WCAI Comments at 911.U ATI proposes an  XK-entrepreneurial set aside of at least two 5 megahertz channels.<K a X-ԍ ATI Comments at 6.<  X-Y90. Decision. Our plan to award licenses for the 46604685 MHz band based on EA regions, will substantially enhance the opportunities for designated entities to participate in the GWCS license auction. Partitioning of licenses will further increase the opportunities for designated entities. Based on our experience in the other auctions we have held to date, we are also adopting bidding and payment provisions that will help ensure that the auction assigns licenses to the bidders who value them most highly, while encouraging the participation of designated entities. Specifically, we will permit small business licensees to"$P0*((" make their payments in installments computed at a reasonable rate of interest (the rate for ten year U.S. Treasury obligations plus 2.5 percent). Small businesses will in addition be permitted to make reduced down payments and interestonly payments in the first two years of the license term, and will be allowed a 10 percent bidding credit on all blocks of spectrum. We also adopt rules to prevent unjust enrichment from bidding preferences. We do not adopt an entrepreneurial set aside, but will apply the designated entity bidding preferences to all five spectrum blocks.  XH-X(1) Eligibility for Bidding Credits, Installment Payments, and Reduced Down  X1-` ` Payments(# ` `  X -Z91. We will limit eligibility for bidding credits, installment payments and reduced down payments to small businesses, including those owned by members of minority groups and women. Both the SBA and ATI encouraged the Commission to apply bidding credits to all small businesses. On the basis of this record, we lack the information necessary to set different eligibility criteria for minority and womenowned entities that do not meet our small business size standards in order to achieve the goals of Section 309(j) in the GWCS  Xy-services.ya X-ԍ The SBA proposed bidding credits for women and minorities from that would differ from credits available to small businesses, but provided no detailed support for their proposal. SBA Comments at 67. By providing credits on all blocks, licensing the blocks based on EA geographic areas, and permitting disaggregation and partitioning, we will create substantial opportunities for all small businesses, including those owned by minorities and women. For example, as we pointed out in our NPRM for 900 MHz SMR licensing, U.S. Census Data shows that approximately 99 percent of all womenowned businesses and 99 percent of all minority X-owned businesses generated net receipts of $1 million or less.NKa X-ԍ  Implementation of Section 309(j) of the Communications Act Competitive Bidding, PP Docket No. 93253, Second Report and Order and Second Further Notice of Proposed  X-Rulemaking, FCC 95159, released April 17, 1995, at para. 135, fn. 192, citing Women X-Owned Businesses, WB 871, 1987 Economic Census, p. 144, Table 8; Survey of Minority X-Owned Business Enterprises, MB 874, 1987 Economic Census, pp. 8182, Table 8..N Thus, we will capture the overwhelming majority of minority and womenowned businesses in the small business category.  X-[92. On March 15, 1995, in response to a request filed by Telephone Electronics Corp (TEC) alleging that our rules violated equal protection principles under the Constitution, the  X|-U.S. Circuit Court for the District of Columbia issued an Order stating that "those portions"  Xg-of the Commission's Order  "establishing minority and gender preferences . . . for that auction  XR-shall be stayed pending completion of judicial review."R a X&-ԍ Telephone Electronics Corp. v. FCC, No. 951015 (D.C. Cir. March 15, 1995) (order granting stay). The court explained that TEC had"R%> 0*(("  X-"demonstrated the requisite likelihood of success on the merits."@a Xy-ԍ Id.. at 2.@ The stay, however, was subsequently lifted on May 1, 1995, on TEC's motion, after TEC decided to withdraw its  X-lawsuit.ya X-ԍ Telephone Electronics Corp. v. FCC,, No. 951015 (D.C. Cir March 15, 1995) (order granting dismissal of petition for review). Most recently, the Supreme Court decided in Adarand Constructors, Inc. v. PenaXa X-ԍ 63 U.S.L.W., No. 931841 (U.S. June 12, 1995).X that "all racial classifications . . . must be analyzed by a reviewing court under strict  X-scrutiny.">a X -ԍ 63 U.S.L.W. at 4530.> The Court ruled that any federal program that makes distinctions on the basis of race must serve a compelling governmental interest and must be narrowly tailored to serve  Xx-that interest.Bxua X-ԍ  Id. at 4533.B We believe that the holdings in Adarand and in the TEC case would affect any proposal to incorporate gender and racebased measures into our GWCS auction rules  XL-and could potentially delay the provision of service to the public.lL( a X%-ԍ Under Section 309(j)(3)(A) of the Communications Act, the Commission's design for competitive bidding shall seek to promote "the development and rapid deployment of new technologies, products, and services for the benefit of the public, including those residing in rural areas, without administrative or judicial delays." l The effect of the various actions we have taken to reduce the capital requirements for operating GWCS services should also be of particular benefit to minority and womenowned businesses. Our experience in prior auctions suggests that installment payments are particularly successful in encouraging participation in spectrum licensing by businesses that have difficulty attracting capital, a common condition of minority and womenowned businesses.  X -` `   X -\93. Small Business Definition. The Second NPRM requested comment on whether we should utilize the SBA net worth/net income definition of a small business (a net worth not in excess of $6 million with average net income after Federal income taxes for the preceding  Xf-years not in excess of $2 million) we adopted in the Competitive Bidding Second Report and  XO-OrderOa X!-ԍ See Competitive Bidding Second Report and Order, 9 FCC Rcd at 2390, para. 238.Ċ or, in the alternative, a gross revenue standard like that used in the broadband PCS context (average gross revenues for the three preceding years not in excess of $40 million). We also proposed to apply the same affiliation and attribution rules for calculating revenues  X -that we have previously adopted in the PCS context.  X-]94. Comments. The SBA believes that a definition of small businesses as those with less than $40 million in revenues is appropriate to be consistent with definitions previously"&E0*((" adopted by the SBA and the Commission, as well as to isolate those companies that have significantly greater difficulty in obtaining capital, but also are sufficiently large that they could survive in a competitive wireless communications marketplace. It considers  X-survivability "particularly critical" where, as here, the market is not welldefined.<a X4-ԍ SBA Comments at 6.< ATI proposes that the Commission apply revenue and asset criteria such as those established by  X-the Commission for eligibility to bid for the Block C and F Broadband PCS allocations (i.e., gross revenues of less than $125 million in each of the last two years and total assets of less  X_-than $500 million.)>_ya X -ԍ ATI Comments at 34.> WCAI states that because at least some of the services that may be offered over the band will be PCSlike and require capital expenditure on the same order as  X1-PCS, use of the same eligibility requirements in appropriate.=1*a X -ԍ WCAI Comments at 7.=  X -^95. Decision. Our decision to base GWCS licenses on EAs, rather than the larger MTAs, will substantially reduce the capital costs of acquiring GWCS licenses and constructing operational systems. In this case, however, it seems likely that there will be a greater range of license sizes, from the local EAlike areas to regional and, possibly, national license aggregations. The capital costs of operational GWCS facilities are thus likely to vary widely as well. The flexibility to aggregate or disaggregate licenses may stimulate other license configurations. Overall, the capital requirements of this service may be similar to broadband PCS and we will adopt the small business definition adopted there, namely any firm, together with its attributable investors and affiliates, with average gross revenues for the three preceding years not in excess of $40 million. We also apply to 46604685 MHz applicants the same affiliation and attribution rules for calculating revenues that we have previously adopted in the PCS context.  X-   X-(2) Installment Payments and Down Payments  X-_96. We believe that ensuring the opportunity for small businesses to participate in providing service in the 46604685 MHz band is important for the telecommunications industry. The record in the Competitive Bidding docket indicates that small businesses have  Xe-not become major participants in telecommunications.ea X!-ԍ See Competitive Bidding Fifth Report and Order, 9 FCC Rcd at 5578, para. 108. The record in that docket also shows  XN-that small businesses have particular difficulties obtaining capital.Na X$-ԍ Id. at 5573, para. 97. The findings made and discussion in the Competitive Bidding  Xt%-Fifth Report and Order on this subject are incorporated here by reference. Payment and bidding procedures that reduce capital outlays and risks are thus especially likely to enhance the opportunities and ability of small businesses to participate successfully in spectrum auctions." '& 0*(("  X-As we discussed in the Second NPRM, it appears that installment payments may have been more effective than bidding credits in attracting capital in the regional narrowband PCS auction, possibly because installment payments shift some of the financial risk of future  X-failure to the Government.Ia X4-ԍ Second NPRM at para. 109.I Therefore, we adopt installment payments for any GWCS licensee meeting the definition of a small business.  Xv-`97. Under this approach, small business licensees may elect to pay their winning bid amount (less upfront payments) in installments over the ten year term of the license, with interest charges to be fixed at the time of licensing at a rate equal to the rate for ten year U.S. Treasury obligations plus 2.5 percent. Installment payments would be due quarterly on the anniversary of the day the license was granted. Timely payment of all installments would be a condition of the license grant and failure to make such timely payments would be grounds for revocation of the license.  X -a98. We will also adopt additional payment preferences to further reduce the capital needs of small businesses. Small business licensees will be permitted to make interestonly  X-installment payments during the first two years of the license.ya X-ԍ See, e.g., Competitive Bidding Fifth Report and Order at para. 13839. We also reduce down payments for small businesses to 5 percent of the winning bid due five days after the auction closes and the remaining 5 percent down payment due five days after Public Notice that the license is ready for grant.  X-(3) Bidding Credits  X-b99. In the Second NPRM, we proposed a 25 percent bidding credit on one of the five proposed spectrum blocks for small businesses owned by women and minorities. These bidding credits would be available exclusively to minority and womenowned businesses. We also proposed installment payments for these entities and sought comment on whether installment payments should also be available for small businesses. We did not believe that special preferences were needed to ensure adequate participation of rural telephone companies in the provision of services in this spectrum, in view of the uncertainty concerning what specific uses may emerge in this band, the potential prices that licenses may bring, the effects of provisions for partitioning or leasing spectrum, and the advantages of incumbency and economies of scale that may already benefit rural telephone companies. We sought comment  X -on this analysis.M *a X#-ԍ Second NPRM at para. 104115.M  X-c100. Comments. Leaco urges that, if the Commission uses MTA geographic licensing areas, rural telephone companies should be given all of the bidding preferences awarded to other designated entities, including bidding credits, installment payments, and reduced upfront"!(0*(( "  X-payments.Ba Xy-ԍ Leaco Comments at 1214.B The SBA opines that the same rationale for awarding bidding credits the difficulty in raising capital and the low participation by small business in wireless telecommunications militates against limiting the bidding credit to women and minority enterprises. It supports a 25 percent bidding credit for women and minorities and a 10 percent  X-bidding credit for small businesses.>ya X-ԍ SBA Comments at 67.>  Xv-d101. Decision. We adopt a 10 percent bidding credit for all small businesses. As discussed above, we are adopting installment payments for small business bidders and the small EA geographic licensing areas. These changes will substantially reduce the capital costs of acquiring local GWCS licenses and providing service. Such changes should be of particular benefit to small businesses and rural telcos. In our judgment, these and other provisions of the licensing and auction rules should ensure that small businesses will be able to participate effectively in obtaining GWCS licenses, whether or not those licenses are auctioned.  X -e102. We remain concerned that small businesses, including those owned by women and minorities, will find it difficult to obtain the capital to compete effectively in GWCS auctions against large corporations and small telephone companies, with their potential advantages in incumbency and economies of scale in using existing facilities. To address these inequalities, we will adopt a 10 percent bidding credit for small businesses. This credit is smaller than the 25 percent for a single spectrum block we had proposed originally, and smaller than the credits we have adopted for other services. We find it reasonable in view of other revisions to our proposed rules which will benefit designated entities, including the EAbased license areas and the availability of installment payments. We are also widening the scope of the bidding credit by permitting eligible entities to apply the credit to all GWCS licenses. Taken together, we believe that these bidding preferences will carry out the Congressional intent and provide designated entities, including small businesses owned by women and minorities, with a meaningful opportunity to obtain GWCS licenses.  X-  X|-X(4) Transfer Restrictions and Unjust Enrichment Provisions(#  XN-f103. Restrictions on the transfer or assignment of licenses acquired by designated entities are intended to promote the Congressional intent that designated entities be permitted  X -to participate in the provision of spectrumbased services,P *a X"-ԍ See 47 U.S.C.  309(j)(4)(D).P not simply to profit from  X -trafficking in licenses acquired with the help of bidding preferences. In the Second NPRM, we proposed a payment requirement on transfers of such licenses to entities that are not DEs. DEs seeking to transfer a license to an entity that is not a DE would be required to reimburse the government for the amount of the bidding credit, plus interest at the rate imposed for installment financing at the time the license was awarded, before the transfer would be"!)0*(( " permitted. The amount of the penalty would be reduced over time so that a transfer in the first two years of the license would result in a payment of 100 percent of the value of the bidding credit; in year three of the license term the payment would be 75 percent; in year four the penalty would be 50 percent and in year five the payment would be 25 percent, after  X-which there would be no payment.Ia X-ԍ Second NPRM at para. 110.I  Xv-g104. Decision. There were no comments on this issue. We adopt the proposed transfer restrictions as a reasonable means of ensuring that bidding preferences are used by designated entities as the statute intends. Because the bidding preferences we are adopting apply to all small businesses, the transfer restrictions will similarly apply to small businesses that transfer licenses acquired with the assistance of bidding preferences to entities that are not small businesses under the definition we are adopting for GWCS.   X -(5) Rural Telephone Company Partitions  X -h105. In the Second NPRM we proposed to permit partitioning of MTAbased licenses, to permit licensees to lease the rights to operate a GWCS system within portions of their geographic service area or transfer their license to partition their service areas geographically, allowing another party to be licensed in the partitioned area, subject to Commission  XK-approval.HKya Xu-ԍ Second NPRM at para. 80.H Leaco and SBA both recommended licensing of geographic areas smaller than  X4-MTAs, while also supporting partitioning if MTAs were adopted.U4*a X-ԍ SBA Comments at 3, Leaco Comments at 1011.U Leaco also urges that winning bidders be given the flexibility to subdivide and license the market to another entity  X-regardless of the size of the geographic service areas selected by the Commission.?a X-ԍ Leaco Comments at 13.? We believe that, even with license blocks based on the smaller EA regions, partitioning may help provide additional opportunities for small businesses to participate in providing GWCSbased services to customers. We will therefore adopt partitioning procedures for rural telephone companies similar to those used for cellular licenses and adopted for broadband PCS licenses.  X-We adopt the definition of a rural telephone company in Part 1, Subpart Q of our Rules, viz.,  X|-any local exchange carrier including affiliates with 100,000 access lines or fewer.F|a X"-ԍ 47 C.F.R.  1.2110(b)(3).F  XN-(6) Entrepreneurs' Block  X -i106. Our Second NPRM sought comment on whether to designate one 5 MHz spectrum block as an "entrepreneurs'" block. We were concerned that, even considering the" *= 0*((" special provisions proposed for designated entities, those entities would have difficulties competing for 46604685 MHz licenses against large firms with significant financial  X-resources. We also sought comment on how eligibility for such a block should be defined.La XK-ԍ Second NPRM at para. 11819.L  X-j107. Comments. The SBA favors an entrepreneurs' block open for all designated entities who do not exceed the small company definition established for the MTA narrowband  Xv-PCS auctions.>vya X -ԍ SBA Comments at 56.> ATI proposes an entrepreneurial setaside of at least two 5 MHz, which it says would at least allow wireless cable operators to bid for spectrum in competition with  XH-other comparably smaller business entities.QH*a X# -ԍ ATI Comments at 6, Reply Comments at 4.Q WCAI similarly proposes setting aside two 5 MHz channels, because many of the services contemplated for the band will require more  X -than 5 MHz.? a X-ԍ WCAI Comments at 67.?  X -k108. Decision. We have decided not to adopt an entrepreneurs' block for this band. The large number of GWCS licenses that will be available, the relatively small geographic license areas, the flexibility of license aggregation and partitioning, the installment payment option, and the bidding credits for all blocks should stimulate extensive opportunities for participation in GWCS licensing by designated entities, including small businesses. In addition, due to the range of possible services that licensees may provide, the size of any effective setaside is unclear. WCAI and ATI suggest that a single 5 megahertz block would not be adequate for some GWCS services. To the extent this is the case, a setaside of one 5 megahertz block may be ineffective in facilitating participation of designated entities in GWCS licensing while barring other potential licensees from making efficient use of this band. On the other hand, a larger setaside might make adequate spectrum available for designated entities, but preclude use of the spectrum by other potential licensees seeking to provide other services.  X-l109. A single nationwide setaside may also impede efficient use of this spectrum in different regions of the country where the band may be best suited to different uses. Setasides also would tend to undercut a basic goal of GWCS, that of establishing a flexible spectrum block that will encourage the introduction and development of new technologies and services. A setaside of spectrum for one set of licensees would prevent others from using the spectrum for new technologies and services, while discouraging them from undertaking the necessary research and development.  X-m110. In sum, we believe that bidding credits, installment payment options, and the other approaches we have adopted will generate sufficient incentives to encourage"+0*((;" participation in GWCS licensing by small businesses. Unlike a setaside, they also should not generate the risk of inefficient use of the 46604685 MHz spectrum and of dampening incentives for innovation. ` `  X- H. Technical Rules  Xv- n111. Background. In the Second NPRM we proposed general and minimal technical restrictions that are based on the PCS rules. Specifically, we proposed to limit the field strength at licensees' service area boundaries to 55 dBu unless licensees operating in adjacent  X1-areas agree to higher field strengths along their mutual border.1a X -ԍ The minimum field strength required for a good quality service for mobile reception in an urban environment is 35 dBu (CCIR Report 3585) and the proposed 55 dBu field strength limit allows 20 dB additional for location variability. We stated that licensees would be expected to coordinate their operations at the service area boundaries. Unlike PCS, where we require the power of any emission outside of the licensee's frequency block to be  X iattenuated below the transmitter power (P) by at least 43 plus 10log10(P) or 80 decibels, whichever is less, we did not propose to establish adjacentchannel interference limits at the frequency boundaries between licensees in this band. Instead, we stated that we would encourage licensees to resolve adjacent channel interference problems. We did, however, propose to require licensees to attenuate the power below the transmitter power (P) by at least  Xyi43 plus 10log10(P) or 80 decibels, whichever is less, for any emission at the edges of the 46604685 MHz band. We requested comment on these proposals and any other technical rules that commenters believe are appropriate.  X- o112. Comments. Leaco agrees with our proposed approach to establish flexible technical rules in the GWCS band. However, Leaco argues that rural and urban areas present different requirements and suggests allowing licensees to request waivers of any technical  X-rules adopted.?Ka X-ԍ Leaco Comments at 14.? WCAI echoes the merits of flexible technical standards.=a X-ԍ WCAI Comments at 4.= Bell Atlantic agrees that the PCS rules provide the best model and opposes the specification of a maximum transmitter power restriction as long as licensees do not exceed the maximum permissible  X-field strength at the border of their licensed areas.Fa X!-ԍ Bell Atlantic Comments at 5.F In its comments opposing GWCS, MSTV states that the vagaries of the GWCS service, such as what technical standards will apply and what geographic range is possible, will prevent prospective users from making rational  XN-investment decisions and manufacturers from developing the appropriate equipment.AN^ a X]&-ԍ MSTV Comments at 1314.A "7, 0*((/"Ԍ X- p113. Decision. Based on the record, we are adopting the technical rules as proposed  X-in the Second NPRM. The PCSbased technical rules appear to be the best available rules to govern the GWCS designation. However, we recognize that the technical rules may need to be adjusted to suit the needs of the licensees if the ones we adopt prove to insufficient. As  X-proposed in the Second NPRM, we expect that in the first instance licensees will seek to resolve any interference at their borders among themselves.   X_- I. License Term  X1-q114. Background. The Communications Act allows the Commission to establish a license term of up to 10 years, except for television or radio broadcasting stations, which may  X -have a license term of up to 5 and 7 years, respectively.= a X| -ԍ 47 U.S.C.  307.= For services in the 46604685 MHz band, we proposed to establish a license term of 10 years, with a renewal expectancy  X -similar to that of PCS and cellular telephone licensees. We stated in the Second NPRM that this relatively long license term, combined with a high renewal expectancy, should help provide a stable regulatory environment that will be attractive to investors and, thereby, encourage development of this new frequency band. We noted, however, that commenters have proposed using this band for auxiliary broadcast service and the statute requires that the term of any license for the operation of any auxiliary broadcast station or equipment must be  XK-concurrent with the term of the license for such primary television station.@Kya Xu-ԍ 47 U.S.C.  307(c).@ Therefore, we asked that commenters address whether we should allow differing license terms in this band.  X-r115. Comments; Decision. We received only two comments concerning the license  X-term. Leaco ?*a X-ԍ Leaco Comments at 15.? and MSTV>a X{-ԍ MSTV Comments at 19.> both support a 10 year license term. We adopt a 10 year licensing term for GWCS. This period is supported by the comments and, as we discussed in  X-the Second NPRM, should provide a stable regulatory environment that will attract investors and encourage the development of this new band. We also conclude that a GWCS licensee that provides a broadcast auxiliarytype service will not generally be subject to the limited license term of a radio or television station license. Under Section 307(c), the limitation of a broadcast auxiliary license term to the period of the term of a primary station only applies where the auxiliary license is "for the operation of any auxiliary broadcast station or equipment which can be used only in conjunction with a primary radio, television, or translator station." Broadcast auxiliary operations are generally managed by coordinators on behalf of various eligible broadcast stations, not limited to a primary station. Therefore, the statutory provision that requires a shorter license term will generally not apply, except in the case of an applicant seeking to use GWCS for auxiliary broadcast use by a single station,"-0*((" within the meaning of Section 307(c).  X- J. Construction Requirements  X-s116. Background. In the Second NPRM we acknowledged that the very wide array of potential services that could be offered in this band makes it difficult to develop construction requirements that can be applied fairly and equitably, without skewing the workings of the market. We also recognized our responsibility to ensure that the spectrum we assign is used effectively. Therefore, we proposed to require buildout rules modeled on those adopted for broadband PCS. Specifically, we proposed that within five years, licensees in this band offer service to onethird of the population in the area in which they are licensed. Further, licensees would have to serve twothirds of the population in the area in which they are licensed within ten years of being licensed. We stated that failure by any licensee to meet these construction requirements will result in forfeiture of the license and the licensee will be ineligible to regain it. We requested comment on whether these requirements are appropriate for private radio licensees that may not have to serve particular population segments within their service areas. In addition, we asked for comment on whether the Commission should establish a licensee defined service area, such as a cellular geographic service area (CGSA) which would allow the Commission to license areas to a different party when the existing licensee has not constructed. We stated that such a proposal might encourage licensees to cover a larger geographic area or allow a new licensee to provide a service where the existing licensee believes that it is uneconomical to provide service in that area.  X-t117. Comments. Leaco strongly urges the Commission not to adopt populationbased service benchmarks, arguing that such benchmarks would provide no incentive for licensees to offer service to large rural areas of the country. Leaco instead proposes that construction deadlines be based on geographic area rather than population. Leaco submits that the Congressional requirement to ensure service to rural America can be met only if all licensees are required to relinquish their rights to serve any portion of their licensed markets  Xe-which are unserved at the end of five years.6ea X-ԍ Leaco at 15.6  X7-u118. Bell Atlantic, on the other hand, urges the Commission not to prescribe deadlines for construction. Bell Atlantic states that the successful bidder's incentive to earn a return on its investment as early as possible provides enough incentive to use the spectrum in the most technically and economically efficient manner. Bell Atlantic further asserts that the flexible GWCS allocation policy for this spectrum reduces the need to impose a construction schedule, and that the proposed "aggressive" construction schedule may constrain licensees from using at least part of the spectrum for truly innovative technologies that may require  X"-longer lead times.H"ya X&-ԍ Bell Atlantic Comments at 56.H"".*0*((!"Ԍ  X-v119. PCIA states that the implementation of geographic or population buildout requirements as proposed are inappropriate for private user systems. PCIA asserts that, for private users constructing systems to meet their own needs, it would not be spectrally  X-efficient or cost effective to require that systems be built where there is no need for service.?a X-ԍ PCIA Comments at 45.?   Xv-w120. In reply comments, InFlight states that longer construction deadlines encourage speculators. InFlight proposes that the Commission require that each GWCS licensee provide service to at least 70 percent of the population within its service area within three years of the license grant date and at least 85 percent of the population within five years of the grant  X -data.K ya XD -ԍ InFlight Reply Comments at 35. K   X -x121. Decision. We will adopt the proposed buildout rules, modeled on those adopted  X -for broadband PCS.7 *a X-ԍ [Cite]. 7 These rules will require that within five years licensees in this band offer service to onethird of the population in the area in which they are licensed, and to serve twothirds within ten years of being licensed. These requirements should conform with the Act's direction that we "include performance requirements, such as appropriate deadlines and penalties for performance failures, to ensure prompt delivery of service to rural areas, to prevent stockpiling or warehousing of spectrum by licensees or permittees, and to promote  XK-investment in and rapid deployment of new technologies and services."FKa X-ԍ 47 U.S.C.  309(j)(4)(B).F Our adoption of EAbased licensing areas should largely moot Leaco's concerns that populationbased buildout rules will not ensure that service will be provided in rural areas. We also believe that these rules, with their five and ten year deadlines, provide adequate time for licensees to develop and offer services. They also should not discourage the introduction of new services that can often be expected to use the inplace wireless infrastructure. We will consider waivers or modifications of the buildout rules based on demonstrations that the spectrum is being used efficiently, not warehoused or stockpiled. Failure by any licensee to meet the construction requirements will result in forfeiture of the license and the licensee will be ineligible to regain it. Overall, we believe that the broadband PCSbased standards strike a reasonable balance by allowing flexibility for licensees while implementing the goals and directives of the Act.  X - K. Regulatory Status  X-y122. Background. The Communications Act and Commission rules often apply differing requirements based on the type of service and the regulatory status of licensees. For"/0*((;" example, the Reconciliation Act created new statutory categories for mobile services:  X-commercial mobile radio service (CMRS) and private mobile radio service (PMRS).]a Xb-ԍ 47 U.S.C.  332(d)(1). See also Implementation of Sections 3(n) and 332 of the  XK-Communications Act, Regulatory Treatment of Mobile Services, Second Report and Order,  X4-GN Docket No. 93252, 9 FCC Rcd 1411 (1994) (CMRS Second Report and Order).] The Reconciliation Act provides that CMRS providers are treated as common carriers, but allows  X-the Commission the authority to forbear from applying certain sections of Title II.Ka X-ԍ Specifically, the Commission may forbear from applying any section of Title II, except Sections 201, 202, and 208. Communications Act,  332(c)(1)(A). For Fixed services, the Commission applies a judicial standard for determining whether a licensee  X-is providing a common carrier service.a X# -ԍ See National Association of Regulatory Utility Commissioners v. FCC, 525 F.2d 630,  X -642 (D.C. Cir.), cert. denied, 425 U.S. 999 (1976). The Commission does not have express statutory authority to forbear from applying any provisions of Title II to fixed service common carriers.   XH-z123. The new GWCS category for the 46604685 band would allow licensees to provide a variety or combination of Fixed and Mobile services. Under this service, both Fixed and Mobile applications would be permitted and an individual licensee could provide a  X -number of Fixed and Mobile services. In the Second NPRM, we observed that it may be difficult to determine the regulatory status of GWCS licensees. We proposed to rely on applicants to identify specifically the type of service or services they intend to provide, and require them to include sufficient detail to enable the Commission to determine if the service will be Fixed or Mobile, and whether it will be offered as a commercial mobile radio service, a private mobile radio service, a common carrier Fixed service, or a private Fixed service. We requested comment on the most efficient manner in which to administer the requirements of the Communications Act and our rules, and grant licensees as much operational flexibility as  XK-possible.MK a X{-ԍ Second NPRM at para. 125126.M  X-{124. We also solicited comments on whether the Commission should develop a new application long form for this general allocation or require an applicant to be responsible for filing the appropriate license application based upon the nature of the service designated by the applicant. Based on the showing made in the application form and actual service provided, the licensee would be subject to those rules and statutory requirements that apply to such service. We also requested that commenters address whether it is necessary for the Commission to require licensees to notify the Commission if they change the type of service offered using some or all of their licensed spectrum even though the new use would be  Xe-permissible under our rules.Ie0 a XF'-ԍ Second NPRM at para. 127.I "e0 0*(("Ԍ X-ԙ|125. Comments. The only comments addressing this issue were filed by Leaco. Leaco believes that Commission rules give fairly clear definitions for fixed, mobile, private carrier, or common carrier service. However, mobile services are sometimes used on an ancillary basis as fixed services. Leaco states that, as a practical matter, neither the licensee nor the Commission can easily determine whether cellular mobile phones are being used as a fixed or mobile service. Leaco suggests that licensees initiating a new GWCS service first file a letter notifying the Commission of the proposed service. The notification letter should be filed fifteen days before the licensee files its regular application for service. The Commission, under Leaco's proposal, would have fifteen days to review the licensee's proposal and notify the licensee if the characterization of the service is inaccurate. Leaco reasons that this intermediate step would allow more flexibility and save the licensee and Commission staff  X -time in processing inappropriately filed applications.B a X| -ԍ Leaco Comments at 1617.B  X -}126. Decision. We will adopt the proposed approach of relying on applicants to identify the type of GWCS service or services each will provide, with sufficient detail to enable the Commission to determine the applicant's regulatory status. This approach should allow us to carry out our responsibilities while imposing minimal regulatory requirements upon licensees. Leaco's proposal that licensees seeking to initiate a new GWCS service file a separate letter 15 days prior to its regular application for service would add another procedural step for both licensees and Commission staff. The proposed added step would usually be unnecessary and would tend to delay the offering of new services. We believe that it would be in the public interest to develop an application form for the new service. Leaco's comments convince us that requiring applicants to determine the appropriate application to file based on the intended service offering would cause confusion and administrative burdens for GWCS applicants. By developing a standard application form, we should be able to minimize administrative burdens and delay while collecting necessary information. Consolidating regulatory status matters with other issues that might be raised in applications should also provide a fair opportunity for any party in interest to raise relevant issues in a  X|-petition to deny the application.I|ya X-ԍ See 47 U.S.C.  309(d)I To clarify and simplify the regulatory status of licensees, we will also adopt a presumption that GWCS licenses are providing fixed common carrier services, which appears from the record to be the most likely and common use of this spectrum. This presumption may be rebutted by an appropriate showing. We delegate to the Wireless Telecommunications Bureau authority to develop forms appropriate to collect this data, and to monitor changes in licensee status.  X- L. Licensing Issues  X!-~127. We requested comment in the Second NPRM on whether the Commission is required or should find that it is in the public interest to adopt additional licensing rules in""1*0*((!" order to comply with the statutory requirement that we adopt assignment rules before August 10, 1995. For example, Section 309(b)(1) of the Communications Act requires all applications for common carrier station authorizations (other than minor amendments excepted under Section 309(c)) to be placed on public notice for 30 days prior to grant, and Section 309(d) allows petitions to deny to be filed against such applications during the public notice period. Because some licensees may provide common carrier service, we sought comment on whether the Commission should adopt public notice and petition to deny procedures for some or all applicants in the 46604685 MHz band. If we adopted such procedures, we proposed to use rules similar to those contained in Section 22.130 of our Rules. We also sought comment on whether to adopt rules regarding the amendment of applications and/or license modifications.  X -128. Finally, we requested comments on whether any existing application or regulatory fees would apply if we develop a new service. In addition, we noted that Section 310(d) of the Communications Act provides that no construction permit or station license may be transferred, assigned, or otherwise disposed of without Commission approval based on a finding that the public interest, convenience, and necessity will be served by the transaction. We sought comment on specific rules we should adopt in order to implement this provision of the Communications Act for purposes of licensing services in the 46604685 MHz frequency band.  X4-129. Comments. Leaco states that initial applications for any service in the GWCS band should be subject to the public notice requirements of Section 309(d) of the Act and the transfer/assignment requirements of Section 310(d). It recommends that initial applications for any service in the GWCS band be placed on public notice for 30 days prior to grant to allow interested parties to file petitions to deny, a procedure that would allow the public to comment on whether the proposed service has been properly classified and its regulatory  X-status.?a X#-ԍ Leaco Comments at 17.?  X|-130. Decision. At present, it appears unnecessary to adopt additional license rules for GWCS. We will follow the statutory provisions of Section 309(d) for public notice and other requirements. With respect to other licensing issues, we will consider whether any additional rules are necessary, and what form those rules should take, after we have proceeded with the application and licensing process. We should at that time have a more detailed understanding of the services licensees intend to provide and their regulatory status.  X-` `  hh,V pp IV. ORDERING CLAUSES  X!-131. Accordingly, IT IS ORDERED that Part 26 of the Commission's Rules is added as set forth in the attached Appendix D. This action is taken pursuant to Sections 4(i), 303(r), 309, and 332 of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303(r), 309, and 332."h$2y0*((F#"Ԍ X-ԙ132. IT IS FURTHER ORDERED that the rule changes made herein WILL  X-BECOME EFFECTIVE at the time of their publication in the Federal Register.va Xb-ԍ This Order is adopted pursuant to a statutory requirement that the Commission, by August 9, 1995, allocate and establish licensing rules for 50 megahertz of spectrum that was transferred from Federal Government to private sector use, as required by the Budget Act. Thus, there is good cause to order the rule changes made by this Order to take effect upon Federal Register publication. See 5 U. S. C.  553(d)(3).   X-` ` y V. PROCEDURAL MATTERS ă  X-Final Regulatory Flexibility Analysis   X_-133. A Final Regulatory Flexibility Act Statement is contained in Appendix B of this  XH-Second Report and Order.  X -Contact Persons   X -134. For further information concerning this proceeding, contact Karen Rackley (202) 4180620 or Dan Grosh (202) 4181534, Wireless Telecommunications Bureau, Policy Division.  ~FEDERAL COMMUNICATIONS COMMISSION (# (# (# *William F. Caton (Acting Secretary(#U"30*((U"  X-A APPENDIX A ă   X-J Comments   X- 1. XAmerican Petroleum Institute (API)(#  Xu-2. XAmerican Telecasting Inc. (ATI) (#  X-3. XAssociation for Maximum Service Television, Inc. and Other Major Television  X/-Broadcasting Entities (MSTV) (#  X -4. XAssociation of PublicSafety Communications OfficialsInternational, Inc. (APCO)(#  X -5. XBell Atlantic(#  XF -6. XChief Counsel for Advocacy of the United States Small Business Administration (SBA)(#  X-7. XLadybug Mountain PCS Corp. (#  X]-8. XLeaco Rural Telephone Cooperative, Inc. (Leaco)(#  X-9. XMotorola, Inc. (Motorola) (#  X-10. XPersonal Communications Industry Association (PCIA) (#  Xt-11. XRand McNally & Company (RMC) (#  X-12. XUTC(#  X.-13. XThe Wireless Cable Association International, Inc. (WCAI)(#  X-  X-   Reply Comments   X-1. XAlcatel Network Systems, Inc.(#  X-2. XAmerican Telecasting Inc.(#  X\-3. XInFlight Phone Corporation(#  X -4. XAssociation for Maximum Service Television, Inc. and Other Major Television Broadcast Entities (MSTV)(#  Xs#-5. XTelecommunications Industry Association (#  X$-"$40*((""  X-A APPENDIX B  X-  X-#Xw PE37 DXP#  Final Regulatory Flexibility Analysis ă  X_-I. Need and Purpose of this Action: This action is taken in further response to the Omnibus Budget Reconciliation of 1993 (which the mandated the identification and transfer of spectrum currently allocated for use by the Federal Government which could be allocated for private sector use, and the and the  X -ensuing Preliminary Spectrum Reallocation Report published by the Department of  X -Commerce, which identified such spectrum. The establishment of the General Wireless Communications Service is intended to permit and encourage the introduction of new services and the enhancement of existing services. These new and enhanced services and uses will create new jobs, foster economic growth, and improve access to communications by industry and the public.  XK-II. Summary of Issues Raised by the Public Comments in Response to the Initial  X4-Regulatory Flexibility Analysis: No comments were filed in response to the Initial Regulatory Flexibility Act Statement   X-III. Significant Alternatives Considered and Rejected: Representatives of the public safety community, the fixed microwave community, and the broadcast industry opposed designating the 4 GHz band to the General Wireless Communications Service (GWCS) and asked that the Commission instead the band be  XN-allocated to their own specific existing services. The Second Notice of Proposed Rule Making acknowledged the option of limiting the use of the 46604685 MHz frequency band to specific services, and invited comment on this possibility. However, the Commission finds that the flexible GWCS approach should permit a range of qualified uses, including those preferred by commenters opposed to such an approach, while permitting new technologies and services to emerge and encouraging efficient use of this spectrum, thus best satisfying the goals of the Reconciliation Act. Restricting this spectrum to defined uses or services would tend to reduce the attractiveness of this spectrum for new technologies and services. Moreover, GWCS is flexible enough to permit such specific uses as well as other uses. The Commission finds that it has the legal authority, supported by precedence to allocate the spectrum in this manner and that establishing the GWCS is the option which most satisfies the concerns of the Reconciliation Act while responding to the needs of the public and of existing licensees. "#'50*((%"ԌThe Commission also elects to resolve instances of mutuallyexclusive applications by auction rather than by comparative hearing. The comments filed in this proceeding support assignment of mutuallyexclusive applications by auction and leads to the conclusion that an auction process best comports with the objectives set forth in Section 509(j)(3) of the Communications Act. The Commission's experience indicates that assignment such applications by auction is quicker than other licensing schemes, promotes economic opportunity and the dissemination of licenses among a wide variety of applicants, and enables the Commission to recover for the public a portion of the value of the public spectrum and avoid problems of unjust enrichment.  X -The Second NPRM proposed that all license issued by based on the 51 major trading areas (MTA) and MTAlike areas as a compromise between providing areas small enough to deploy services aimed at rural or relatively rural areas, while providing a large enough area for those licensees that wish to provide widearea or regional service. The majority of GWCS supporters opposed licensing on an MTA basis and proposed smaller license regions. To accommodate the range of possible GWCS uses, the Commission elects to issue GWCS licenses based on three different geographic areas. Two of the five blocs will be assigned as a nationwide license, one will be assigned within five regional license areas, and the remaining two will be assigned based on EAlike geographical areas. The Commission believes that assigning licenses based on a range of geographic areas gives all potential licensees an opportunity to acquire spectrum within a geographic area that suits the natural technical and market area for the intended use. Moreover, the Commission anticipates that by giving licensees substantial flexibility to aggregate or disaggregate geographic regions, we will encourage intensive and efficient use of this spectrum. "60*((" l  X-A APPENDIX C Y Codes and Names for BEA Economic Areas (EAs)  X- (# Codes from 001 to 172 are assigned to the new EAs in approximate geographic order, beginning with 001 in northern Maine, continuing south to Florida, then north to the Great Lakes, and continuing in a serpentine pattern to the West Coast. Except for the Western Oklahoma EA (126), the Northern Michigan EA (058), and the 17 EAs that mainly correspond to consolidated metropolitan statistical areas (CMSAs), each EA is named for the metropolitan area or city that is the node of its largest component economic area (CEA) and that is usually, but not always, the largest metropolitan area or city in the EA. Each CEA consists of a single economic node and the surrounding counties that are economically related to the node. The following list provides EA codes and names. EA boundaries and codes are shown on the map following the list.  EA Code Name 001 Bangor, ME 002 Portland, ME 003 Boston-Worcester-Lawrence- Lowell-Brockton, MA-NH 004 Burlington, VT 005 Albany-Schenectady-Troy, NY 006 Syracuse, NY 007 Rochester, NY 008 Buffalo-Niagara Falls, NY 009 State College, PA 010 New York-No. New Jersey- Long Island, NY-NJ-CT-PA 011 Harrisburg-Lebanon-Carlisle, PA 012 Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD  X!- 013 Washington-Baltimore, hh,VDC-MD-VA-WV 014 Salisbury, MD 015 Richmond-Petersburg, VA 016 Staunton, VA 017 Roanoke, VA "#'70*((%"Ԍ EA Code Name 018 Greensboro-Winston-Salem- ppHigh Point, NC 019 Raleigh-Durham-Chapel Hill, NC  X- 020 Norfolk-Virginia Beach-Newport (#(#ppNews, VA-NC 021 Greenville, NC 022 Fayetteville, NC 023 Charlotte-Gastonia-Rock Hill, ppNC-SC 024 Columbia, SC 025 Wilmington, NC 026 Charleston-North Charleston, SC 027 Augusta-Aiken, GA-SC 028 Savannah, GA 029 Jacksonville, FL 030 Orlando, FL 031 Miami-Fort Lauderdale, FL 032 Fort Myers-Cape Coral, FL 033 Sarasota-Bradenton, FL 034 Tampa-St. Petersburg-Clearwater,  S:&-#&J\  P6Q &P#ppFL H'70*((%$ (7b7((HԌ EA Code Name 035 Tallahassee, FL 036 Dothan, AL 037 Albany, GA 038 Macon, GA 039 Columbus, GA-AL 040 Atlanta, GA 041 Greenville-Spartanburg- Anderson, SC 042 Asheville, NC 043 Chattanooga, TN-GA 044 Knoxville, TN 045 Johnson City-Kingsport-Bristol, TN-VA    046 Hickory-Morganton, NC 047 Lexington, KY 048 Charleston, WV 049 Cincinnati-Hamilton, OH-KY-IN 050 Dayton-Springfield, OH 051 Columbus, OH 052 Wheeling, WV-OH 053 Pittsburgh, PA 054 Erie, PA 055 Cleveland-Akron, OH 056 Toledo, OH 057 Detroit-Ann Arbor-Flint, MI 058 Northern Michigan, MI 059 Green Bay, WI 060 Appleton-Oshkosh-Neenah, WI 061 Traverse City, MI 062 Grand Rapids-Muskegon- Holland, MI 063 Milwaukee-Racine, WI 064 Chicago-Gary-Kenosha, IL-IN-WI 065 Elkhart-Goshen, IN 066 Fort Wayne, IN 067 Indianapolis, IN 068 Champaign-Urbana, IL 069 Evansville-Henderson, IN-KY 070 Louisville, KY-IN 071 Nashville, TN 072 Paducah, KY 073 Memphis, TN-AR-MS 074 Huntsville, AL "&80*((n("Ԍ EA Code Name 075 Tupelo, MS 076 Greenville, MS 077 Jackson, MS 078 Birmingham, AL 079 Montgomery, AL 080 Mobile, AL 081 Pensacola, FL 082 Biloxi-Gulfport-Pascagoula, MS 083 New Orleans, LA 084 Baton Rouge, LA 085 Lafayette, LA 086 Lake Charles, LA 087 Beaumont-Port Arthur, TX 088 Shreveport-Bossier City, LA 089 Monroe, LA 090 Little Rock-North Little Rock, AR 091 Fort Smith, AR-OK 092 Fayetteville-Springdale-Rogers, AR 093 Joplin, MO 094 Springfield, MO 095 Jonesboro, AR 096 St. Louis, MO-IL 097 Springfield, IL 098 Columbia, MO 099 Kansas City, MO-KS 100 Des Moines, IA 101 Peoria-Pekin, IL 102 Davenport-Moline-Rock Island, IA-IL 103 Cedar Rapids, IA 104 Madison, WI 105 La Crosse, WI-MN 106 Rochester, MN 107 Minneapolis-St. Paul, MN-WI 108 Wausau, WI 109 Duluth-Superior, MN-WI 110 Grand Forks, ND-MN 111 Minot, ND 112 Bismarck, ND 113 Fargo-Moorhead, ND-MN 114 Aberdeen, SD 115 Rapid City, SD 116 Sioux Falls, SD 117 Sioux City, IA-NE H&80*((n($'8?8?((HԌ EA Code Name 118 Omaha, NE-IA 119 Lincoln, NE 120 Grand Island, NE 121 North Platte, NE 122 Wichita, KS 123 Topeka, KS 124 Tulsa, OK 125 Oklahoma City, OK 126 Western Oklahoma, OK 127 Dallas-Fort Worth, TX 128 Abilene, TX 129 San Angelo, TX 130 Austin-San Marcos, TX 131 Houston-Galveston-Brazoria, TX 132 Corpus Christi, TX 133 McAllen-Edinburg-Mission, TX 134 San Antonio, TX 135 Odessa-Midland, TX 136 Hobbs, NM 137 Lubbock, TX 138 Amarillo, TX 139 Santa Fe, NM 140 Pueblo, CO 141 Denver-Boulder-Greeley, CO 142 Scottsbluff, NE 143 Casper, WY 144 Billings, MT 145 Great Falls, MT 146 Missoula, MT 147 Spokane, WA 148 Idaho Falls, ID 149 Twin Falls, ID 150 Boise City, ID 151 Reno, NV 152 Salt Lake City-Ogden, UT 153 Las Vegas, NV-AZ 154 Flagstaff, AZ 155 Farmington, NM 156 Albuquerque, NM 157 El Paso, TX 158 Phoenix-Mesa, AZ 159 Tucson, AZ "'90*((O)"Ԍ EA Code Name 160 Los Angeles-Riverside- ppOrange County, CA 161 San Diego, CA 162 Fresno, CA 163 San Francisco-Oakland- ppSan Jose, CA 164 Sacramento-Yolo, CA 165 Redding, CA 166 Eugene-Springfield, OR 167 Portland-Salem, OR-WA 168 Pendleton, OR 169 Richland-Kennewick-Pasco, WA 170 Seattle-Tacoma-Bremerton, WA 171 Anchorage, AK 172 Honolulu, HI H090*(($(9j9cQA((H  S-  Ј   X-A# XP\  P6Q DXP#APPENDIX D ĐlU   Part 1 of Title 47 of the Code of Federal Regulations is amended as follows:  XN-g  PART 1 PRACTICE AND PROCEDURE ĐlU 1. The authority citation for Part 1 continues to read as follows: Authority: 47 U.S.C. 151, 154, 303, and 309(j) unless otherwise noted. 2. New paragraph (a)(8) is added to Section 1.2102 to read as follows:  1.2102 Eligibility of applications for competitive bidding. (a) *** (8) General Wireless Communications Service (GWCS) (see Part 26 of this chapter). * * * * *   X- PART 26 GENERAL WIRELESS COMMUNICATIONS SERVICE ĐlU  X-1. Authority: 47 U.S.C. Sections 154, 301, 302, 303, 309 and 332, unless otherwise noted.  X- 2. Part 26 of Chapter 1 of Title 47 of the Code of Federal Regulations is added to read as follows:  X=- PART 26 GENERAL WIRELESS COMMUNICATIONS SERVICE lU  X- Subpart A General Information ĐlU Sec. 26.1 Basis and purpose. 26.2 Other applicable rule parts. 26.3 Permissible communications. 26.4 Terms and definitions.  X@%-;  Subpart B Applications and Licenses ĐlU 26.11 Initial authorization. "':0*((%"Ԍ  26.12 Eligibility. 26.13 License period. 26.14 Criteria for comparative renewal proceedings.  X-% Subpart C Technical Standards ĐlU 26.51 Equipment authorization. 26.52 RF hazards. 26.53 Emission limits. 26.54 Frequency stability. 26.55 Field strength limits.  X -$ Subpart D Miscellaneous ă  X - 26.101 Multiple ownership restrictions. 26.102 Service areas. 26.103 Frequencies. 26.104 Construction requirements.  XK-l à  X4- Subpart E Competitive Bidding Procedures for GWCS ĐlU 26.201 GWCS subject to competitive bidding. 26.202 Competitive bidding design for GWCS licensing. 26.203 Competitive bidding mechanisms. 26.204 Withdrawal, default and disqualification penalties. 26.205 Bidding application (FCC Form 175 and 175S ShortForm). 26.206 Submission of upfront payments and down payments. 26.207 Long form applications. 26.208 License grant, denial, default, and disqualification. 26.209 Eligibility for partitioned licenses. 26.210 Provisions for small businesses.  X - Subpart F Application, Licensing, and Processing Rules for GWCS ă 26.301 Authorization required. 26.302 Eligibility. 26.303 Formal and informal applications. 26.304 Filing of GWCS applications, fees, and numbers of copies. 26.305 Standard application forms and permissive changes or minor modifications for the  Xh$-  General Wireless Communications Service. 26.306 Miscellaneous forms. 26.307 General application requirements. 26.308 Technical content of applications; maintenance of list of station locations."#';0*((%"Ԍ26.309 Station antenna structures.  X-26.310 Waiver of rules. 26.311 Defective applications. 26.312 Inconsistent or conflicting applications.  X-26.313 Amendment of application for General Wireless Communications xx-  X (#(#  Service filed on FCC Form 175.  Xv-26.314 Amendment of applications for General Wireless Communications xx-  X (#(#  Service (other than applications filed on FCC Form 175). 26.315 Application for temporary authorizations. 26.316 Receipt of application; applications in the General Wireless Communications Service  filed on FCC Form 175 and other applications in the GWCS. 26.317 Public notice period. 26.318 Dismissal and return of applications. 26.319 Ownership changes and agreements to amend or to dismiss applications or pleadings. 26.320 Opposition to applications.  X -26.321 Mutually exclusive applications.V 26.322 Consideration of applications. 26.323 Postauction divestures. 26.324 Transfer of control or assignment of station authorization. 26.325 Extension of time to complete construction. 26.326 Termination of authorization.  X-l ă  X- l l  X-Subpart A General Information lU  X-  26.1 Basis and purpose. This section contains the statutory basis for this part of the rules and provides the purpose for which this part is issued.  X7- (a) Basis. The rules for the general wireless communications service (GWCS) in this part are promulgated under the provisions of the Communications Act of 1934, as amended, that vests authority in the Federal Communications Commission to regulate radio transmission and to issue licenses for radio stations.  X- (b) Purpose. This part states the conditions under which portions of the radio spectrum are made available and licensed for GWCS.  X!- (c) Scope. The rules in this part apply only to stations authorized under this part.  X"-  X#- 26.2 Other applicable rule parts. Other FCC rule parts applicable to licensees in the general wireless communications service include the following:  X)'- (a) Part 0. This part describes the Commission's organization and delegations of authority.")'<0*((%" Part 0 of this chapter also lists available Commission publications, standards and procedures for access to Commission records, and location of Commission Field Offices.  X- (b) Part 1. This part includes rules of practice and procedure for license applications, adjudicatory proceedings, procedures for reconsideration and review of the Commission's actions; provisions concerning violation notices and forfeiture proceedings; and the environmental requirements that, if applicable, must be complied with prior to the initiation of construction.  Xa- (c) Part 2. This part contains the Table of Frequency Allocations and special requirements in international regulations, recommendations, agreements, and treaties. This part also contains standards and procedures concerning the marketing and importation of radio frequency devices, and for obtaining equipment authorization.  X - (d) Part 5. This part contains rules prescribing the manner in which parts of the radio frequency spectrum may be made available for experimentation.  X - (e) Part 17. This part contains requirements for construction, marking and lighting of antenna towers.  X - (f) Part 68. This part contains technical standards for connection of terminal equipment to the telephone network.  X-  Xl- 26.3 Permissible communications. GWCS licensees may provide any fixed or mobile communications service on their assigned spectrum. Broadcasting services, Radiolocation services and satellite services, as defined in 2.1  Ў of this Chapter, are prohibited.  X-  X- 26.4 Terms and definitions.  X-  Assigned Frequency. The center of the frequency band assigned to a station.  X- Authorized Bandwidth. The maximum width of the band of frequencies permitted to be used by a station. This is normally considered to be the necessary or occupied bandwidth, whichever is greater.  XE- Average Terrain. The average elevation of terrain between 3 and 16 kilometers from the antenna site.  X- Effective Radiated Power (e.r.p.) (in a given direction). The product of the power supplied to the antenna and its gain relative to a halfwave dipole in a given direction.  X- Equivalent Isotropically Radiated Power (e.i.r.p.). The product of the power supplied to the antenna and the antenna gain in a given direction relative to an isotropic antenna.  X!- Fixed Service. A radio communication service between specified fixed points.  X"- Fixed Station. A station in the fixed service.  X#- Gross Revenues. Gross revenues shall mean all income received by an entity, whether earned or passive, before any deductions are made for costs of doing business (e.g. cost of goods sold), as evidenced by audited financial statements for the relevant number of calendar years preceding January 1, 1994, or, if audited financial statements were not prepared on a calendar-year basis, for the most recently completed fiscal years preceding the filing of the"='=0*((%" applicant's short-form application (Form 175). For applications filed after December 31, 1995, gross revenues shall be evidenced by audited financial statements for the preceding relevant number of calendar or fiscal years. If an entity was not in existence for all or part of the relevant period, gross revenues shall be evidenced by the audited financial statements of the entity's predecessor-in-interest or, if there is no identifiable predecessor-in-interest,  X-unaudited financial statements certified by the applicant as accurate.   Xv- Land Mobile Service. A mobile service between base stations and land mobile stations, or between land mobile stations.  XJ- Land Mobile Station. A mobile station in the land mobile service capable of surface movement within the geographic limits of a country or continent.  X -  Land Station. A station in the mobile service not intended to be used while in motion.  X - Mobile Service. A radio communication service between mobile and land stations, or between mobile stations.  X - Mobile Station. A station in the mobile service intended to be used while in motion or during halts at unspecified points.  X - National Geodetic Reference System (NGRS): The name given to all geodetic control data contained in the National Geodetic Survey (NGS) data base. (Source: National Geodetic Survey, U.S. Department of Commerce)  Xn- Rural Telephone Company.  A rural telephone company is a local exchange carrier having  XY-100,000 or fewer access lines, including all affiliates.  XD-   Small Business: Consortium of Small Businesses. (1) A small business is an entity that, together with its affiliates and persons or entities that hold interest in such entity and their affiliates, has average annual gross revenues that are not more than $40 million for the preceding three years. (2) A small business consortium is conglomerate organization formed as a joint venture between or among mutually-independent business firms, each of which individually satisfies the definition of a small business.  X-  Total assets. Total assets shall mean the book value (except where generally accepted accounting principles (GAAP) require market valuation) of all property owned by an entity, whether real or personal, tangible or intangible, as evidenced by the most recent audited financial statements.  X-;  Subpart B Applications and Licenses ă  X-l ă  X -  26.11 Initial authorization. (a) An applicant must file an application for an initial authorization in each market and frequency block desired. (b) Blanket licenses are granted for each market and frequency block. Applications for individual sites are not required and will not be accepted.  X7'-  26.12 Eligibility. "7'>0*((%"Ԍ Any entity, other than those precluded by section 310 of the Communications Act of 1934,  X-as amended, 47 U.S.C.  310, is eligible to hold a license under this part.  X-  26.13 License period. Licenses for service areas will be granted for ten year terms from the date of original issuance or renewal.  X_-  26.14 Criteria for comparative renewal proceedings.  X1- A renewal applicant involved in a comparative renewal proceeding shall receive a preference, commonly referred to as a renewal expectancy, which is the most important comparative factor to be considered in the proceeding, if its past record for the relevant license period demonstrates that the renewal applicant: (a) Has provided "substantial" service during its past license term. "Substantial" service is defined as service which is sound, favorable, and substantially above a level of mediocre service which might just minimally warrant renewal; and (b) Has substantially complied with applicable Commission rules, policies and the Communications Act.  X-% Subpart C Technical Standards  X-lU  X-  X- 26.51 Equipment authorization. (a) Each transmitter utilized for operation under this part and each transmitter marketed, as set forth in  2.803 of this chapter, must be of a type that has been authorized by the Commission under its type acceptance procedure. (b) The Commission periodically publishes a list of type accepted equipment, entitled "Radio Equipment List, Equipment Accepted for Licensing." Copies of this list are available for public reference at the Commission's offices in Washington, D.C., at each of its field offices, and may be ordered from its copy contractor. (c) Any manufacturer of radio transmitting equipment to be used in these services may request equipment authorization following the procedures set forth in Subpart J of part 2 of this chapter. Equipment authorization for an individual transmitter may be requested by an applicant for a station authorization by following the procedures set forth in part 2 of this chapter. Such equipment if approved or accepted will not normally be included in the Commission's Radio Equipment List but will be individually enumerated on the station authorization. (d) Applicants for type acceptance of transmitters that operate in these services must determine that the equipment complies with IEEE C95.11991, "IEEE Standards for Safety Levels with Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 3 kHz to 300 GHz" as measured using methods specified in IEEE C95.31991,"#'?0*((%" "Recommended Practice for the Measurement of Potentially Hazardous Electromagnetic Fields RF and Microwave." The applicant for type acceptance is required to submit a statement affirming that the equipment complies with these standards as measured by an approved method and to maintain a record showing the basis for the statement of compliance with IEEE C.95.11991.  X-  Xv- 26.52 RF hazards. (a) Licensees and manufacturers are required to ensure that their facilities and equipment comply with IEEE C95.1-1991 (ANSI/IEEE C95.11992), "Safety Levels with Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 3 kHz to 300 GHz." Measurement methods are specified in IEEE C95.31991, "Recommended Practice for the Measurement of Potentially Hazardous Electromagnetic Fields RF and Microwave." Copies of these standards are available from IEEE Standards Board, 445 Hoes Lane, P.O. Box 1331, Piscataway, NJ 088551331. Telephone: 18006784333. The limits for both "controlled" and "uncontrolled" environments, as defined by IEEE C95.11991, will apply to all GWCS base and mobile stations, as appropriate. The application for equipment authorization must contain a statement confirming compliance with IEEE C95.11991. Technical information showing the basis for this statement must be submitted to the Commission upon request. (b) GWCS handheld devices whose maximum radiated power is 100 milliwatts or less are not required to be evaluated for compliance with ANSI/IEEE SAR (specific absorption rate) requirements, as long as a 2.5 cm separation distance is maintained between the radiating structure and the body of the user. (The ANSI/IEEE standard uses the term "radiated power," meaning input power to the antenna.) (c) For further information on the Commission's environmental rules see  1.1301 through 1.1319 of this chapter.  X-  X- 26.53 Emission limits. (a) The power of any emission at the edges of the 46604685 MHz band shall be attenuated  XNibelow the transmitter power (P) by at least 43 + 10 log10 (P) or 80 decibels, whichever is less. (b) Compliance with these provisions is based on the use of measurement instrumentation employing a resolution bandwidth of 1 MHz or greater. However, in the 1 MHz bands immediately outside and adjacent to the frequency block a resolution bandwidth of at least one percent of the emission bandwidth of the fundamental emission of the transmitter may be employed. The emission bandwidth is defined as the width of the signal between two points, one below the carrier center frequency and one above the carrier center frequency, outside of which all emission are attenuated at least 26 dB below the transmitter power. (c) When measuring the emission limits, the nominal carrier frequency shall be adjusted as close the license's frequency block edges, both upper and lower, as the design permits. (d) The measurements of emission power can be expressed in peak or average values, provided that they are expressed in the same parameters as the transmission power. (e) When an emission outside of the authorized bandwidth causes harmful interference, the Commission may, at its discretion, require greater attenuation than specified in this section. "#'@0*((&"Ԍ X-ԙ  26.54 Frequency stability.  X-  X- The frequency stability shall be sufficient to ensure that the fundamental emission stays within the authorized frequency block.  X-  26.55 Field strength limits.  Xv- The predicted or measured median field strength at any location on the border of the GWCS service area shall not exceed 55 dBu unless licensees operating in adjacent areas agree to a higher field strengths along their mutual borders.  X -  X -  X -F Subpart D Miscellaneous ĐlU  X -  X -  26.101 Multiple ownership restrictions.  X- (a) GWCS licensees shall not have an ownership interest in more than three of the five, 5 megahertz wide channels available in any geographic area. For purposes of this restriction, a GWCS licensee is:  X4- (1) Any institutional investor, as defined in  26. 4, with an ownership interest of ten or more percent in a GWCS license; and (2) Any other person or entity with an ownership interest of five or more percent in a GWCS license. (b) In cases where a party had indirect ownership, through an interest in an intervening entity (or entities) that has ownership in the GWCS license, that indirect ownership shall be attributable if the percentages of ownership at each level, multiplied together, equal five or more percent ownership of the GWCS license, except that if the ownership percentage for an interest in any link in the chain exceeds 50 percent or represents actual control, it shall be treated as if it were a 100 percent interest. Example: Party X has a non-controlling ownership interest of 25 percent in Company Y, which in turn has a non-controlling ownership interest of 10 percent in Company Z, the GWCS licensee. Party X's effective ownership interest in Company Z is Party X's ownership interest in Company Y (25 percent) times Company Y's ownership interest in Company Z (10 percent). Therefore, Party X's effective ownership interest in Company Z is 2.5 percent, and is not attributable. (c) Notwithstanding paragraph (b) of this section, the following interests shall not constitute attributable ownership interests for purposes of paragraph (a) of this section: (1) A limited partnership interest held by an institutional investor (as defined  26.4) where the limited partner is not materially involved, directly or indirectly, in the management or operation of the GWCS holdings of the partnership, and the licensee so certifies. The criteria which would assure adequate insulation for the purposes of this certification require: (i) Prohibiting limited partners from acting as employees of the limited partnership if responsibilities relate to the carrier activities of the licensee;"#'A0*((%"Ԍ (ii) Barring the limited partners from serving as independent contractors; (iii) Restricting communication among limited partners and the general partner regarding day-to-day activities of the licensee; (iv) Empowering the general partner to veto admissions of new general partners; (v) Restricting the circumstances in which the limited partners can remove the general partner; (vi) Prohibiting the limited partners from providing services to the partnership relating to the GWCS holdings of the licensee; and (vii) Stating that the limited partners may not become involved in the management or  X1-operation of the licensee.  X -  X -  26.102 Service areas.  X - GWCS service areas are based on Economic Areas developed by the Bureau of Economic Analysis, Department of Commerce, referred to as "EAs" and three additional EAlike service areas: Guam and the Northern Mariana Islands (combined as one service area), Puerto Rico and the United States Virgin Islands (combined as one service area), and American Samoa.  Xy- (a) Economic Areas. Codes from 001 to 172 are assigned to the EAs in approximate geographic order, beginning with 001 in northern Maine, continuing south to Florida, then north to the Great Lakes, and continuing in a serpentine pattern to the West Coast. Except for the Western Oklahoma EA (126), the Northern Michigan EA (058), and the 17 EAs that mainly correspond to consolidated metropolitan statistical areas (CMSAs), each EA is named for the metropolitan area or city that is the node of its largest component economic area (CEA)and that is usually, but not always, the largest metropolitan area or city in the EA. Each CEA consists of a single economic node and the surrounding counties that are economically related to the node. The following list provides EA codes and names. EA Code Name 001 Bangor, ME 002 Portland, ME 003 Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH 004 Burlington, VT 005 Albany-Schenectady-Troy, NY 006 Syracuse, NY 007 Rochester, NY 008 Buffalo-Niagara Falls, NY 009 State College, PA 010 New York-No. New Jersey-Long Island, NY-NJ-CT-PA 011 Harrisburg-Lebanon-Carlisle, PA 012 Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD 013 Washington-Baltimore, DC-MD-VA-WV "%'B0*((%"Ԍ 014 Salisbury, MD 015 Richmond-Petersburg, VA 016 Staunton, VA 017 Roanoke, VA 018 Greensboro-Winston-Salem-High Point, NC 019 Raleigh-Durham-Chapel Hill, NC 020 Norfolk-Virginia Beach-Newport News, VA-NC 021 Greenville, NC 022 Fayetteville, NC 023 Charlotte-Gastonia-Rock Hill, NC-SC 024 Columbia, SC 025 Wilmington, NC 026 Charleston-North Charleston, SC 027 Augusta-Aiken, GA-SC 028 Savannah, GA 029 Jacksonville, FL 030 Orlando, FL 031 Miami-Fort Lauderdale, FL 032 Fort Myers-Cape Coral, FL 033 Sarasota-Bradenton, FL 034 Tampa-St. Petersburg-Clearwater, FL 035 Tallahassee, FL 036 Dothan, AL 037 Albany, GA 038 Macon, GA 039 Columbus, GA-AL 040 Atlanta, GA 041 Greenville-Spartanburg-Anderson, SC 042 Asheville, NC 043 Chattanooga, TN-GA 044 Knoxville, TN 045 Johnson City-Kingsport-Bristol, TN-VA 046 Hickory-Morganton, NC 047 Lexington, KY 048 Charleston, WV 049 Cincinnati-Hamilton, OH-KY-IN 050 Dayton-Springfield, OH 051 Columbus, OH 052 Wheeling, WV-OH 053 Pittsburgh, PA 054 Erie, PA 055 Cleveland-Akron, OH 056 Toledo, OH 057 Detroit-Ann Arbor-Flint, MI "#'C0*((%"Ԍ 058 Northern Michigan, MI 059 Green Bay, WI 060 Appleton-Oshkosh-Neenah, WI 061 Traverse City, MI 062 Grand Rapids-Muskegon-Holland, MI 063 Milwaukee-Racine, WI 064 Chicago-Gary-Kenosha, IL-IN-WI 065 Elkhart-Goshen, IN 066 Fort Wayne, IN 067 Indianapolis, IN 068 Champaign-Urbana, IL 069 Evansville-Henderson, IN-KY 070 Louisville, KY-IN 071 Nashville, TN 072 Paducah, KY 073 Memphis, TN-AR-MS 074 Huntsville, AL 075 Tupelo, MS 076 Greenville, MS 077 Jackson, MS 078 Birmingham, AL 079 Montgomery, AL 080 Mobile, AL 081 Pensacola, FL 082 Biloxi-Gulfport-Pascagoula, MS 083 New Orleans, LA 084 Baton Rouge, LA 085 Lafayette, LA 086 Lake Charles, LA 087 Beaumont-Port Arthur, TX 088 Shreveport-Bossier City, LA 089 Monroe, LA 090 Little Rock-North Little Rock, AR 091 Fort Smith, AR-OK 092 Fayetteville-Springdale-Rogers, AR 093 Joplin, MO 094 Springfield, MO 095 Jonesboro, AR 096 St. Louis, MO-IL 097 Springfield, IL 098 Columbia, MO 099 Kansas City, MO-KS 100 Des Moines, IA 101 Peoria-Pekin, IL"#'D0*((%"Ԍ 102 Davenport-Moline-Rock Island, IA-IL 103 Cedar Rapids, IA 104 Madison, WI 105 La Crosse, WI-MN 106 Rochester, MN 107 Minneapolis-St. Paul, MN-WI 108 Wausau, WI 109 Duluth-Superior, MN-WI 110 Grand Forks, ND-MN 111 Minot, ND 112 Bismarck, ND 113 Fargo-Moorhead, ND-MN 114 Aberdeen, SD 115 Rapid City, SD 116 Sioux Falls, SD 117 Sioux City, IA-NE 118 Omaha, NE-IA 119 Lincoln, NE 120 Grand Island, NE 121 North Platte, NE 122 Wichita, KS 123 Topeka, KS 124 Tulsa, OK 125 Oklahoma City, OK 126 Western Oklahoma, OK 127 Dallas-Fort Worth, TX 128 Abilene, TX 129 San Angelo, TX 130 Austin-San Marcos, TX 131 Houston-Galveston-Brazoria, TX 132 Corpus Christi, TX 133 McAllen-Edinburg-Mission, TX 134 San Antonio, TX 135 Odessa-Midland, TX 136 Hobbs, NM 137 Lubbock, TX 138 Amarillo, TX 139 Santa Fe, NM 140 Pueblo, CO 141 Denver-Boulder-Greeley, CO 142 Scottsbluff, NE 143 Casper, WY 144 Billings, MT 145 Great Falls, MT"#'E0*((%"Ԍ 146 Missoula, MT 147 Spokane, WA 148 Idaho Falls, ID 149 Twin Falls, ID 150 Boise City, ID 151 Reno, NV 152 Salt Lake City-Ogden, UT 153 Las Vegas, NV-AZ 154 Flagstaff, AZ 155 Farmington, NM 156 Albuquerque, NM 157 El Paso, TX 158 Phoenix-Mesa, AZ 159 Tucson, AZ 160 Los Angeles-Riverside-Orange County, CA 161 San Diego, CA 162 Fresno, CA 163 San Francisco-Oakland-San Jose, CA 164 Sacramento-Yolo, CA 165 Redding, CA 166 Eugene-Springfield, OR 167 Portland-Salem, OR-WA 168 Pendleton, OR 169 Richland-Kennewick-Pasco, WA 170 Seattle-Tacoma-Bremerton, WA 171 Anchorage, AK 172 Honolulu, HI (b) Other eligible areas not included in the Bureau of Economic Analysis's list of EAs include: Guam and the Northern Mariana Islands, Puerto Rico and United States Virgin Islands, and American Samoa.  X -  26.103 Frequencies The following frequencies are available for GWCS in the Economic Areas and other areas described in  26.102 as shown below.   X"- Channel BlockFrequency Band  X#- Block A: 46604665 MHz   Xh$- Block B: 46654670 MHz  XQ%-Block C: 46704675 MHz   X:&- Block D: 46754680 MHz   X#'- Block E: 46804685 MHz  "#'F0*((%"Ԍ` `  X-  26.104 Construction requirements. (a) GWCS licensees shall within five years of initial license grant date offer service to onethird of the population in the area in which they are licensed. Licensees shall serve twothirds of the population in the area in which they are licensed within ten years of initial license grant date. (b) In demonstrating compliance with the above construction requirements, licensees must base their calculations on signal field strengths that ensure reliable service for the technology utilized. Licensees may use any service radius contour formula developed or generally used by industry, provided that such formula is based on the technical characteristics of their system. X` hp x (#%'0*,.8135@8: