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P7P *8wC;,[AXw P7XP+7zC;,"ZXz_ p^7X,TdY,+S P7P-SdY,"AL_ p^7&/6uC;,;/Xu&_ x$&7XXd.4wC;,VXw*0 xM7X0V"G($,hG P7hP1H<!, ,< P7,P&2z-b81,;b&_ x$&7X33m=6,#R&m P7&P 4y.f81,"f_ p^7&51k=6,;W &k&_ x$&7&X`%O,(,{O P7P)x/c81,c P7P ?xxx,vhx6Nh ;XHxSxSxSxSxSxo8o8o8]A]A]A]Af8f8f8xSxSxSxSxxSfJfJN:*LS8JSSSSS.4}}S2S}2JJS88SS]]8J2t^^\\^^ee*2 Y4 X' #Xw P7[AXP# Federal Communications Commission FCC 98157 #c P7P## P7+SP# # P7+SP# #Xw P7[AXP# ` `  ,hh]  X'c( Before thecW FEDERAL COMMUNICATIONS COMMISSION MWashington, D.C. 20554  Y4c ` `  ,hh] )  Y_4In the Matter of hh] ) ` `  ,hh] ) Y14Amendment of Part 90 of the hh] ) ppPR Docket No. 9361  Y 4Commission's Rules to Adopt hh] )  Y 4Regulations for Automatic Vehicle $F )  Y 4Monitoring Systems ,hh] )  Y 4` `  ,hh] ) ` `  ,hh] ) ` `  ,hh] ) ` `  ,hh] )   Xb' )SECOND REPORT AND ORDER  XK'ă  X4' Adopted: July 9, 1998 ,hh]pp&Released: July 14, 1998 By the Commission:  Y4M TABLE OF CONTENTS ă  Y4`(# Paragraph ă  Y4 I.INTRODUCTIONp"(#11׃  Yg4II.EXECUTIVE SUMMARYp"(#2  Y94III.BACKGROUNDp"(#3  Y 4IV. COMPETITIVE BIDDING FOR MULTILATERATION LICENSES SECOND REPORT AND ORDER  Y 4` ` A. Auctionability of the LMS Frequency Bandp"(#8   Y"4` ` B.  Competitive Bidding Design and Procedures  Y#4` `  1.,Applicability of the Part 1 Competitive Bidding Rulesp"(# 11  Yj$4` `  2.,Reserve Price or Minimum Opening Bidsp`"(#14  YS%4` `  3.,Competitive Bidding Designp`"(#15 ` `  , "%'0*((aa9%"Ԍ Y4ԙ` ` C. Treatment of Designated Entities  Y4` `  1.,Eligibility for Small Business Provisionsp`"(#17  Y4` `  ,a.hh]Small Business Size Standards p`"(#18  Y4` `  ,b.hh]Attribution of Gross Revenuesp`"(#21  Y4` `  2.,Sufficiency of Designated Entity Provisionsp`"(#28 ` `  Yv4` ` D. Partitioning and Disaggregation and Unjust Enrichment Provisionsp`"(#32 ` `   Y14V.CONCLUSION p`"(#42  Y 4VI.PROCEDURAL MATTERS p`"(#43   Y 4` ` A. Final Regulatory Flexibility Analysisp`"(#43  Y 4` ` B. Initial Paperwork Reduction Act of 1995 Analysisp`"(#44  Yy4` ` C. Ordering Clausesp`"(#46  YK4` ` D. Contacts for Further Informationp`"(#49 APPENDIX A PARTIES FILING COMMENTS AND REPLY COMMENTS APPENDIX B REGULATORY FLEXIBILITY ACT APPENDIX C FINAL RULES  Y4  Y|4BZ I. INTRODUCTION ă  YO41. 11In this Second Report and Order, we adopt rules and procedures governing  Y:4competitive bidding for multilateration Location and Monitoring Service (LMS) frequencies.  Y#4As proposed in the LMS Further Notice,m\# xP'ԍAmendment of Part 90 of the Commission's Rules to Adopt Regulations for Automatic Vehicle  zPd 'Monitoring Systems, Memorandum Opinion and Order and Further Notice of Proposed Rule Making, PR Docket  zP.!'No. 9361, 12 FCC Rcd 13942 (1997) ("LMS Further Notice"). m we conclude that the LMS auction should be "#0*&&aa"Ԍ Y4conducted pursuant to the recently adopted Part 1 general competitive bidding rules.& zPy'ԍSee generally Amendment of Part 1 of the Commission's Rules Competitive Bidding Procedures, WT Docket No. 9782, Allocation of Spectrum Below 5 GHz Transferred from Federal Government Use, ET  zP 'Docket No. 9432, Third Report and Order and Second Further Notice of Proposed Rule Making, 13 FCC Rcd  zP'374 (1997) (modified by Erratum, DA 98419 (rel. March 2, 1998)) ("Part 1 Third Report and Order").  In addition, we establish small business definitions for multilateration LMS.  Y4: II. EXECUTIVE SUMMARY ă 2. 2 In our decision today, we take a number of steps to simplify and streamline competitive bidding for LMS systems. What follows is a synopsis of the major aspects of our decision.  Y 4XX` ` We adopt the general competitive bidding rules and procedures of Part 1 for the LMS auction. (#`  Y 4 ` ` As noted in the Part 1 Third Report and Order, the Wireless Telecommunications Bureau has delegated authority to determine the  Y 4appropriate auction design and auction procedures. (#`  Y}4` ` We adopt bidding credits for eligible small businesses. "Small businesses" with revenues not to exceed $15 million are eligible for a 25 percent bidding credit, and "very small businesses" with average annual gross revenues not to exceed $3 million are eligible for a 35 percent bidding credit. (#`  Y 4X X` ` LMS licensees will be allowed to partition their geographic licenses and disaggregate portions of their spectrum.(#`  Y4XX` ` A qualified small business that applies to partition or disaggregate its license to a nonsmall business entity will be required to repay any benefits it received from special small business provisions as a condition of approval. (#`  Xi'X (# 6YIII. BACKGROUND "$0*&&aa"Ԍ Y4 3. In the LMS Report and Order, we established rules governing the licensing of the  Y4LMS in the 902928 MHz frequency band.+\ xPd'ԍAmendment of Part 90 of the Commission's Rules to Adopt Regulations for Automatic Vehicle  zP,'Monitoring Systems, Report and Order, PR Docket No. 9361, 10 FCC Rcd 4695 (1995) ("LMS Report and  zP'Order"). + LMS refers to advanced radio technologies designed to support the nation's transportation infrastructure and to facilitate the growth of  Y4Intelligent Transportation Systems.jZ xPZ'ԍThe term "Intelligent Transportation System," or "Intelligent Vehicle Highway System," refers to the collection of advanced radio technologies that, among other things, is intended to improve the efficiency and  zP 'safety of our nation's highways.  LMS Report and Order at 4698,  5 n.9. j We created a new Subpart M in Part 90 of the Commission's Rules for Transportation Infrastructure Radio Services, which included LMS and like services.  Ya44. The Commission defined two types of LMS systems -- multilateration and non-multilateration. Multilateration LMS systems are designed to locate vehicles or other objects by measuring the difference in time of arrival, or difference in phase, of signals transmitted from a unit to a number of fixed points, or from a number of fixed points to the unit to be located. Such systems generally use spread-spectrum technology to locate vehicles  Y 4throughout a wide geographic area. Multilateration technology is used, for example, by trucking companies to track individual vehicles, by municipalities to pinpoint the location of their buses, and by private entrepreneurs developing subscriber-based services for recovery  Y 4of stolen vehicles.s  zPh'ԍ LMS Report and Order, 10 FCC Rcd at 469798, 4703,  14.s The Commission defined non-multilateration systems as LMS systems that employ any technology other than multilateration technology. The Commission noted that unlike a multilateration system, which determines the location of a vehicle or object over a wide area, a typical non-multilateration system uses narrowband technology whereby an electronic device placed in a vehicle transfers information to and from that vehicle when the vehicle passes near one of the system's stations. Examples of non-multilateration LMS systems include automated toll collection devices and systems used by railway companies to  Y4monitor the location of railroad cars.: zPY'ԍId.:  Y45. LMS operates in the 902-928 MHz frequency band.qZ2  xP!'ԍThe definition of LMS also includes existing Automatic Vehicle Monitoring operations below 512 MHz. Unlike other LMS operations, LMS systems below 512 MHz may neither offer service to the public nor  zPM#'provide service on a commercial basis. See LMS Report and Order, 10 FCC Rcd at 4738,  86.q The band is allocated for primary use by Federal Government radiolocation systems. Next in order of priority are Industrial, Scientific and Medical devices. Federal Government fixed and mobile and LMS"T 0*&&aa5"  Y4systems are secondary to both of these uses. The remaining uses of the 902-928 MHz band include licensed amateur radio operations and unlicensed Part 15 equipment, both of which are secondary to all other uses of the band. Part 15 low power devices include, but are not limited to, those used for automatic meter reading, inventory control, package tracking and shipping control, alarm services, local area networks, internet access and cordless telephones. The amateur radio service is used by technically inclined private citizens to  Yv4engage in self-training, information exchange and radio experimentation. In the LMS Report  Ya4and Order, the Commission recognized the important contribution to the public provided by Part 15 technologies and amateur radio operators and sought to develop a band plan that  Y54would maximize the ability of these services to coexist with LMS systems.i5 zP 'ԍLMS Report and Order, 10 FCC Rcd at 4714,  34.i  Y 4 6. The Commission adopted the LMS Report and Order with an eye toward minimizing potential interference within and among the various users of the 902-928 MHz band. The Commission's band plan accordingly permits secondary operations across the entire band by users of unlicensed Part 15 devices and amateur licensees. At the same time, the band plan separates non-multilateration from multilateration LMS systems in all but one  Y4subband so as to avert interference. The LMS Report and Order also established limitations on LMS systems' interconnection with the public switched network and set forth a number of technical requirements intended to ensure successful coexistence of all the services authorized to operate in the band. We have also resolved issues raised by petitioners on  Y<4reconsideration. <Z zP^'ԍSee Amendment of Part 90 of the Commission's Rules to Adopt Regulations for Automatic Vehicle  zP('Monitoring Systems, Order on Reconsideration, PR Docket No. 9361, 11 FCC Rcd 16905 (1996) ("Order on  zP'Reconsideration"); see also LMS Further Notice, 12 FCC Rcd at 13942. Specifically, the Order on  zP'Reconsideration resolved issues regarding incumbent LMS licensees that were afforded grandfathered status. These issues involved interference testing, accommodation of secondary uses in the 902928 MHz band, emission masks, frequency tolerance, type acceptance and site relocation with respect to grandfathered licenses,  zP'as well as extension of the construction deadline applicable to grandfathered licensees. The LMS Further Notice clarified issues such as interconnection limitations, operational parameters for nonmultilateration systems, treatment of other users of the 902928 MHz band, the structure of the spectrum allocation plan, geographic service areas, and the licensing of wideband forward links.   Y4 7. Background. In the LMS Further Notice, the Commission sought comment on,  Y4inter alia, the appropriate competitive bidding methodology and procedures for LMS,  Y4establishment of small business definitions, whether the gross revenues of all controlling interests and affiliates should be attributed to the small business, sufficiency of small business provisions to promote participation, whether licensees should be allowed to partition their licenses and disaggregate portions of their spectrum, and the appropriate form of unjust enrichment provisions. Comments and reply comments were filed by two commenters: Teletrac, Inc. ("Teletrac") and Comtrak. "Z 0*&&aa4"Ԍ Y4  Y4? IV. COMPETITIVE BIDDING FOR MULTILATERATION LMS LICENSES  X'+SECOND REPORT AND ORDER ă  X' A.` ` Auctionability of the LMS Frequency Bands  Yw4 8. Background. In the LMS Report and Order, the Commission decided to use competitive bidding to select from among mutually exclusive applications for multilateration  YK4LMS licenses.s K zP 'ԍLMS Report and Order, 10 FCC Rcd at 472526,  5457.s The Commission reached this decision based on its conclusion that the statutory criteria for use of competitive bidding, set forth in Section 309(j) of the  Y 4Communications Act, were satisfied.D  Z zP( 'ԍId. ` ` D More specifically, the Commission found that (1) its decision to offer multilateration LMS licenses on an exclusive basis makes it likely that mutually exclusive applications for such licenses will be filed; (2) multilateration LMS licenses will be used principally to offer for-profit, subscriber-based services; and (3) the use of competitive bidding for these licenses will promote the public interest objectives set forth  Y 4in Section 309(j)(3).;  zPG'ԍId. ;  Y|49.ؠ AUCBLTY  Discussion. Since release of the LMS Report and Order, Congress enacted the Balanced Budget Act of 1997 which extended and expanded the Commission's auction  YP4authority. P~ zP'X` hp x (#%'0*,.8135@8: zPK'ԍPart 1 Third Report and Order, 13 FCC Rcd at 41718,  73.t Therefore, we emphasize that bidders will be subject to the ownership  Y4disclosure requirements set forth in Section 1.2112 of our rules.Q?Z zP'ԍSee 47 C.F.R.  1.2112.Q  Y427.ؠ Comtrak argues that the Commission's definition of "affiliate" does not provide clear guidance on whether an institutional investor and its affiliates should be considered  Y_4affiliates of the small business for purposes of attributing gross revenues.@@_ zP 'ԍId. at 8.@ Comtrak suggests providing a clear definition of what constitutes control, including examples of the kinds of financial investments that will cause an investor or its affiliates to become affiliates of the  Y 4small business applicant.bA ~ zPI'ԍ#c P7P#Id. b Teletrac supports greater clarity in the rules but believes that  Y 4further definitional pronouncements will not provide sufficient clarity.B  xP'ԍ#c P7P#Teletrac Reply Comments at 2.#&m P7 #R&P#ќ Teletrac instead suggests administrative procedures in order to provide preliminary determinations of  Y 4affiliation status before the auction begins.C  zP&'ԍ#c P7P#Teletrac Comments at 15; see also Teletrac Reply Comments at 23. In the Part 1 proceeding, we examined our affiliation rules and adopted a uniform definition of the term "affiliate" for all future  Y 4auctions.|D 2  zP'ԍSee Part 1 Third Report and Order, 13 FCC Rcd at 392,  2627.| We have found that this definition, which also contains detailed discussion and examples of relevant terms such as "control" and "identity of interest," has proven workable  Yy4and is broad enough to address a wide variety of business structures.FEy  zP'ԍId. at  27.F In particular, this  Yb4definition has helped to ensure that businesses seeking small business status are truly small.:FbV  zPi'ԍId.: This definition also allows entities themselves to make an appropriate preliminary determination of affiliation status without the assistance of administrative procedures. Therefore, we believe that the definition adequately addresses the concerns of the commenters. As a result, any change to the definition is not warranted.  X4` ` 2. Sufficiency of Designated Entity Provisions   Y4"F0*&&aa"Ԍ Y428.ؠ  Background. In the LMS Further Notice, the Commission solicited comments on whether small business provisions should be offered to multilateration LMS small business entities to further the Commission's goal of ensuring the participation of small businesses in  Y4the LMS auction and in the provision of multilateration LMS service.iG zP6'ԍLMS Further Notice, 12 FCC Rcd at 13970,  75. i  Y4  Y429.ؠ Discussion. Comtrak asserts that to facilitate the participation of small businesses, the Commission should modify its buildout deadlines to allow all LMS licensees to satisfy their construction requirements by providing coverage to onethird of the EA's population within five years of initial license grant and twothirds of the population within  Y34ten years.NH3Z xP> 'ԍComtrak Reply Comments at 6. N In the alternative, Comtrak requests that small business LMS licensees be  Y 4granted the proposed extended buildout period.:I  zP'ԍId.: Comtrak states that construction  Y 4requirements have a direct impact on the level of competition in the industry.@J | zP2'ԍId. at 7.@ Unless an auction winner were an incumbent LMS provider, Comtrak asserts, it would be almost impossible for the auction winner to meet the one year deadline for more than a few EAs  Y 4without raising a prohibitive amount of initial capital.:K  zP'ԍId.: Thus, Comtrak claims that the current construction rules favor incumbents and reduce potential competition from new  Y4entrants.aL zP'ԍId.#Xx6X@DQ^X@#a On the other hand, Teletrac indicates support for strict enforcement of the one Y{4year construction deadline.LM{I  xPu'ԍTeletrac Comments at 1013.L Teletrac asserts that forcing EA licensees to either construct or return licensed spectrum within one year would deter speculation, and would limit delays  YM4before LMS service is made available to the public.:NM  zP'ԍId.:  Y430.ؠ  We believe that it is appropriate to extend the amount of time for LMS auction winners to satisfy their construction requirements. The oneyear requirement adopted in the  Y4LMS Report and Order and then retained in the LMS Further Notice was based on our rules for sitelicensed systems. We are not persuaded that a oneyear requirement is necessary to deter speculators. We agree with Comtrak that a one year buildout period is too short for all multilateration LMS licensees, not just for small businesses. In addition, although LMS auction winners will have the exclusive right to provide multilateration LMS service within"k N0*&&aa" their licensed EA, the frequency spectrum will still be shared with other services. In fact,  Y4the 902928 MHz band is already heavily used by other licensed and unlicensed services for a wide variety of purposes. Consequently, even if a multilateration LMS licensee fails to buildout its system, the possibility that the spectrum will go underutilized is negligible. Further, location services are being developed using alternative technologies, such as Global Positioning Satellite (GPS) systems, suggesting that service to the public will not be greatly delayed by allowing LMS licensees the option of constructing over a longer period. Thus, we modify our construction requirements for all multilateration LMS licensees. We will require that multilateration LMS EAlicensees construct and place in operation a sufficient number of base stations that utilize multilateration technology to provide multilateration location service to onethird of the EA's population within five years of initial license grant, and two thirds of the population within ten years. In demonstrating compliance with the construction and coverage requirements, we will allow licensees to individually determine an appropriate field strength for reliable service, taking into account the technologies employed in their system design and other relevant technical factors. At the five and tenyear benchmarks, licensees will be required to file with the Commission a map and other supporting documentation showing compliance with the coverage requirements. 31.ؠ We received no comments on whether small business provisions are sufficient to ensure the opportunity for businesses owned by minorities and women and rural telephone  Y44companies to participate in th eprovision of spectrumbased services. We remain committed to meeting the statutory objectives of promoting economic opportunity and competition, avoiding excessive concentration of licenses, and ensuring access to new and innovative technologies 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. Commenters submitted no suggestions, evidence, or data to support race or genderbased auction provisions. Therefore, we conclude that we do not have a sufficient record to support such special provisions at this time under the current standard of judicial review. We believe the bidding credits for small businesses, as detailed above, will provide small businesses with a meaningful opportunity to obtain LMS licenses. Moreover, many minority and womenowned entities are small businesses and will therefore qualify for  Y74special provisions. As noted in the Part 1 Third Report and Order, we have commenced a series of studies to examine barriers encountered by minorities and women in the auctions process and have planned other studies to examine the experiences of small, minority and  Y4womenowned businesses in the auctions process.yO{ Ym!4#Xw P7[AXP#э#c P7P# Part 1 Third Report and Order, 13 FCC Rcd at 386,  15 and n. 36, citing, e.g., Section 257  zPV"'Proceeding to Identify and Eliminate Market Entry Barriers for Small Business (Report), FCC 97164 (rel. May 8, 1997).y We also believe that our standardization,  Y4through the Part 1 Third Report and Order, of the rules regarding eligible entities, unjust enrichment, and bidding credits will assist small, minority and womenowned businesses"  O0*&&aa;" because the resulting predictability will facilitate the business planning and capital fundraising  Y4process.P Yb4#Xw P7[AXP#э#c P7P# See Part 1 Third Report and Order, 13 FCC Rcd at 386,  14.  Y4 ` `  ,hh]  X' D.` ` Partitioning and Disaggregation and Unjust Enrichment Provisions ` `  Yv432.   Background. Partitioning and disaggregation are methods of subdividing the operating authority for a market area. Licensees that partition create a geographic subdivision of their market area, whereas licensees that disaggregate subdivide spectrum over their entire market area. The Commission has previously adopted or proposed to adopt partitioning and disaggregation rules for many of the Commercial Mobile Radio Services (CMRS). For example, we initially authorized licensees in the broadband Personal Communications Service (PCS), the Wireless Communications Service (WCS), and the 800 MHz and 900 MHz Specialized Mobile Radio (SMR) services to partition their license areas  Y 4or disaggregate their spectrum.QP y zP'ԍSee Geographic Partitioning and Spectrum Disaggregation by Commercial Mobile Radio Services  zP'Licensees, WT Docket No. 96148, Report and Order, 11 FCC Rcd 21831, 21843 and 2184748,  13 and 24  zP|'(1996) ("Partitioning and Disaggregation Report and Order"); Amendment of the Commission's Rules to  zPF'Establish Part 27, the Wireless Communications Service, Report and Order, 12 FCC Rcd 10785, 1083439  zP'(1997) ("Wireless Communications Service Report and Order"); and Amendment of Part 90 of the Commission's  zP'Rules to Facilitate Future Development of SMR Systems in the 800 MHz Frequency Band, Second Report and  zP'Order, 12 FCC Rcd 19079, 19134, 19137 and 19139,  156, 165 and 174 (1997) ("800 MHz SMR Second  zPn'Report and Order").#Xx6X@DQ^X@# We extended our partitioning provisions to include winners of our upcoming auction of geographic area paging licenses and sought comment on allowing  Y4disaggregation for paging licensees.RZ  xP'ԍRevision of Part 22 and Part 90 of the Commission's Rules to Facilitate Future Development of Paging  zP'Systems, WT Docket No. 9618, Second Report and Order and Further Notice of Proposed Rulemaking, 12  xPd'FCC Rcd 2732, 2817 and 2824,  192 and 212 (1997).#Xx6X@DQ^X@#ш We have also proposed the adoption of partitioning and disaggregation authority for licensees in the Cellular Radiotelephone Service, the General  Yb4Wireless Communications Service (GWCS), the narrowband PCS service,<Sb  zP'ԍSee Geographic Partitioning and Spectrum Disaggregation by Commercial Mobile Radio Service  zP'Licensees, WT Docket No. 96148, Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 21831 (1996); Amendment of the Commission's Rules to Establish New Personal Communications  zP"!'Services, Narrowband PCS, Report and Order and Further Notice of Proposed Rulemaking, 12 FCC Rcd 12972,  xP!'1301418 (1997).#Xx6X@DQ^X@#< and the 220222  YK4MHz service.TZzKi zPe$'ԍSee Amendment of Part 90 of the Commission's Rules to Provide for the Use of the 220222 MHz Band by the Private Land Mobile Radio Service, Implementation of Sections 3(n) and 332 of the Communications Act, Regulatory Treatment of Mobile Services, Implementation of Section 309(j) of the"%S0*&&&"  zP'Communications ActCompetitive Bidding, Third Report and Order; Fifth Notice of Proposed Rulemaking, 12  xPZ'FCC Rcd 10943, 11074,  308 (199#c P7P#7). In the 220222 MHz service, we decided to allow partitioning of 220 MHZ Phase II geographic licenses and sought comment on rules to implement that authority. 12 FCC Rcd at 11074, 11080,  308,  322. We also sought comment on whether partitioning of 220 MHz Phase I nationwide licenses should be permitted in a manner similar to the rules for partitioning we have adopted for broadband PCS licensees. Finally, we sought comment on whether all Phase I and Phase II 220 MHz licensees should be  xPB'permitted to disaggregate their license spectrum. 12 FCC Rcd at 11080,  322. #x6X@8;^X@#"K T0*&&aa"Ԍ Y4ԙ 33. Consistent with these actions, in the LMS Further Notice we proposed to allow  Y4multilateration LMS licensees to partition their geographic license area and disaggregate  Y4portions of their spectrum.hU  zP 'ԍLMS Further Notice, 12 FCC Rcd at 13971,  77.h Further, we tentatively concluded that a qualified small business that applies to partition or disaggregate its license to a nonsmall business entity  Y4should be required to repay any benefits it received from special small business provisions.hV zP 'ԍLMS Further Notice, 12 FCC Rcd at 13971,  78.h We sought comment on the type of unjust enrichment requirements that should be placed as a condition for approval of an application to partition or disaggregate a license, and on how  Ya4such unjust enrichment amounts should be calculated.aWa.  zP@'ԍId.#Xx6X@DQ^X@#a Finally, we tentatively concluded that if a small business licensee partitions or disaggregates to another qualified small business that would not qualify for the same level of bidding credit, the transferring licensee should be  Y 4required to repay a portion of the benefit it received.aX  zP'ԍId.#Xx6X@DQ^X@#a  Y 4!34. Discussion.  We adopt our proposal to allow multilateration LMS licensees to partition their geographic license areas and disaggregate portions of their spectrum in the same general manner as for licensees in other CMRS services where we have adopted partitioning and disaggregation. We will permit multilateration LMS licensees to partition or disaggregate to any party eligible to be a multilateration LMS licensee. Further, we will permit partitioning along any service area defined by the parties. We conclude that these decisions will permit marketplace forces to determine the most suitable service areas, and will further the goal of regulatory parity among CMRS services.  Y4"35. Comtrak, the only party that commented on these issues, supports our proposal  Y4to allow partitioning and disaggregation.zYR  zP #'ԍSee Comtrak Comments at 67.#Xx6X@DQ^X@#z Comtrak states that partitioning and disaggregation will allow small business auction winners to customize their LMS systems in a"Y0*&&aa"  Y4manner that will best address their business plans.nZ xPy'ԍComtrak Comments at 6.#Xx6X@DQ^X@#n We agree that this will allow auction winners to customize their LMS systems and will help remove entry barriers for small  Y4businesses.[^X zP'ԍSee Partitioning and Disaggregation Report and Order, 11 FCC Rcd at 21831 (1996); Wireless  zP'Communications Service Report and Order, 12 FCC Rcd at 1083439 (1997); and 800 MHz SMR Second Report  zPo'and Order, 12 FCC Rcd 19079, 1912753 (1997).#Xx6X@DQ^X@#ц  Y4  Y4#36. To ensure that partitioning and disaggregation do not result in circumvention of our LMS construction requirements, we adopt the dual construction requirements for partitioning and the construction certification procedure for disaggregation used in the  Y_4broadband PCS service.\_~ zP 'ԍSee Partitioning and Disaggregation Report and Order, 11 FCC Rcd at 21857, 21865,  42 and 63  xPX'(1996).#Xx6X@DQ^X@# Under the first option for partitioning, we will require that the partitionee certify that it will meet the same coverage requirements as the original licensee for its partitioned market. If the partitionee fails to meet its coverage requirement, the license for the partitioned area will automatically cancel without further Commission action. Under the second option, the original licensee certifies that it has already met or will meet its  Y 4 coverage requirement. Further, we will require parties seeking Commission approval of an LMS disaggregation agreement to include a certification as to which party will be responsible for meeting the construction requirements.  Y4$37. As discussed above, we will permit partitioning along any service area defined by the parties. To this end, the Commission requires sufficient information to maintain our licensing records. Therefore, consistent with our treatment of the WCS and 800 MHz and 900 MHz SMR services, partitioning applicants will be required to submit, as separate attachments to the partial assignment application, a description of the partitioned service area and a calculation of the population of the partitioned service area and licensed market. The partitioned service area must be defined by coordinate points at every three degrees along the  Y4partitioned service area agreed to by both parties, unless county lines are followed. These geographical coordinates must be specified in degrees, minutes and seconds to the nearest second of latitude and longitude, and must be based upon the 1927 North American Datum (NAD27). Applicants also may supply geographical coordinates based on 1983 North American Datum (NAD83) in addition to those required based on NAD27. This coordinate data should be supplied as an attachment to the partial assignment application, and maps need not be supplied. In cases where county lines are being utilized, applicants need only list the  YN4specific counties that make up the newly partitioned area.']N zP$'ԍSee Wireless Communications Service Report and Order, 12 FCC Rcd at 10837,  98 (1997); and 800  zP%'MHz SMR Second Report and Order, 12 FCC Rcd at 19137,  166 (1997).#Xx6X@DQ^X@#'"N4 ]0*&&aa["Ԍ  Y4%38. We find that it is unnecessary to require a party that wishes to disaggregate to retain a minimum amount of spectrum. Consistent with our treatment of the broadband PCS,  Y4WCS and 800 MHz and 900 MHz SMR services, we will allow disaggregating parties to negotiate channelization plans among themselves as a part of their disaggregation  Y4agreements.^^ zP'ԍSee Partitioning and Disaggregation Report and Order, 11 FCC Rcd at 21860,  49 (1996); Wireless  zP'Communications Service Report and Order, 12 FCC Rcd at 10837,  99 (1997); and 800 MHz SMR Second  zP'Report and Order, 12 FCC Rcd at 1914142,  183 (1997).#Xx6X@DQ^X@#ћ Likewise, we find that it is unnecessary to adopt a limit on the maximum amount of spectrum that licensees may disaggregate. It is more appropriate for the marketplace to determine the amount of spectrum that should be disaggregated. LMS  YH4licensees shall be permitted to disaggregate spectrum without limitation on the overall size of the disaggregation as long as such disaggregation is otherwise consistent with our rules.  Y 4&39. Consistent with our treatment of the broadband PCS, WCS and 800 MHz and  Y 4900 MHz SMR services, we will permit combined partitioning and disaggregation._^  zP'ԍSee Partitioning and Disaggregation Report and Order, 11 FCC Rcd at 21866,  66 (1996); Wireless  zPU'Communications Service Report and Order, 12 FCC Rcd at 10839,  102 (1997); and 800 MHz SMR Second  zP'Report and Order, 12 FCC Rcd at 19150,  217 (1997).#Xx6X@DQ^X@#љ This will allow LMS licensees the flexibility to design the types of agreements they desire, and will advance the goals of providing competitive service offerings, encouraging new market entrants and ensuring quality service to the public. In the event that there is a conflict in the application of the partitioning and disaggregation rules, the partitioning rules should prevail. '40. Regarding possible unjust enrichment through partitioning or disaggregation, we adopt our tentative conclusion that when a small business entity applies to partition its license or disaggregate spectrum, unjust enrichment rules must exist in order to ensure that nonsmall business entities cannot take indirect advantage of our small business incentives. Comtrak agrees with this principal and suggests that we adopt unjust enrichment rules  Y4patterned on those adopted for the 800 MHz SMR auction.n` xP'ԍComtrak Comments at 7.#Xx6X@DQ^X@#n  Y4 (41.ؠRESTRICT2 We no longer need to establish a separate unjust enrichment requirement for approving partitioning and disaggregation in LMS because we have adopted a uniform  Y4requirement in Part 1, Subpart Q of our rules for all services.~a zP"'ԍSee Part 1 Third Report and Order, 13 FCC Rcd at 40506,  50.~ Accordingly, we will use  Y|4the Part 1 unjust enrichment provisions for LMS.\b|6  zPc%'ԍSee C.F.R.  1.2111(e)(1)(2).\ These rules are similar to unjust"| b0*&&aa" enrichment rules adopted for the 800 MHz Specialized Mobile Radio auction for determining the actual proportion of bidding credit to be refunded and, consistent with Comtrak's suggestions, reduce the amount of unjust enrichment payments due on transfer based upon  Y4the amount of time the initial license has been held. In addition, when a combination of partitioning and disaggregation is proposed, we will use both the population of the partitioned  Y4area and the amount of spectrum disaggregated to make these pro rata calculations.c  xP'ԍFor example, if an LMS licensee that availed itself of a bidding credit and a nonqualifying partitionee/disaggregatee were to agree on a 20 percent disaggregation of spectrum over 30 percent of the population of the licensed service area, an unjust enrichment payment of six percent (.20 x .30) of the bidding  xP^ 'credit would be required.#Xx6X@DQ^X@#Ѽ  Xa' bV. CONCLUSION ă  YJ4   Y34)42. INFO  The actions we take in this Second Report and Order will ensure that competitive bidding for LMS licenses is conducted under the recently streamlined procedures adopted in Part 1, Subpart Q, and consistent with our procedures for all auctionable services. In addition, we establish small business definitions, adopt bidding credits, and approve partitioning and disaggregation provisions for multilateration LMS. We believe that these steps will facilitate the rapid deployment of LMS and will ensure the participation of small businesses in the auction process.  Xf' K1 V $FI I. PROCEDURAL MATTERS ă  X8' A.` ` Regulatory Flexibility Act  Y 4 *43.ؠ RESTRICT2 COMMENTS  The Final Regulatory Flexibility analysis, pursuant to the Regulatory Flexibility  Y4Act, see 5 U.S.C. Section 604, is contained in Appendix B.  X' B. ` ` Initial Paperwork Reduction Act of 1995 Analysis  Y4 COMMENTS  +44.ؠRESTRICT2 This Second Report and Order contains either a proposed or modified information collection. As part of its continuing effort to reduce paperwork burdens, we invite the general public and other Federal Agencies to take this opportunity to comment on  YV4the information collections contained in this Second Report and Order, as required by the Paperwork Reduction Act of 1995, Pub. L. No. 10413. Public and agency comments are  Y*4due 60 days after publication of the Second Report and Order in the Federal Register. Comments should address: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected;" c0*&&aa;" and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.  Y4 COMMENTS  ,45.ؠRESTRICT2 In addition to filing comments on the information collections contained in this  Y4Second Report and Order with the Secretary, a copy of any comments on the information collections should be submitted to Judy Boley, Federal Communications Commission, Room 234, 1919 M Street, N.W., Washington, DC 20554, or via the Internet to jboley@fcc.gov.   X3' C.` ` Ordering Clauses  Y 4 -46.ؠRESTRICT2 Accordingly, IT IS ORDERED that Part 90 of the Commission's Rules IS AMENDED as specified in Appendix C, effective 60 days after publication in the Federal Register. IT IS FURTHER ORDERED that Section 90.365(d) of the Commission's Rules IS AMENDED as specified in Appendix C, effective 170 days after publication in the Federal Register.  X4 .47.ؠRESTRICT2  ORDERS Authority for issuance of this Second Report and Order is contained in Sections 4(i), 257, 303(r), and 309(j) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 257, 303(r), and 309(j).  XO'  X84  /48. IT IS FURTHER ORDERED that the Commission's Office of Public Affairs,  X!4Reference Operations Division, SHALL SEND a copy of this Second Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.RESTRICT2 "c0*&&aa"  X' D.` ` Contacts for Further Information  X4 INFO  049.ؠRESTRICT2 For further information concerning this Second Report and Order, contact Kenneth Burnley at (202) 4180660 (Auctions and Industry Analysis Division, Wireless Telecommunications Bureau). For additional information concerning the information  Xx4collections contained in this Second Report and Order contact Judy Boley at 2024180214, or via the Internet at jboley@fcc.gov.  X 4 ` `  hhCFEDERAL COMMUNICATIONS COMMISSION ` `  hhCMagalie Roman Salas ` `  hhCSecretary "}c0*&&aa"  X'U APPENDIX A\  X'PARTIES FILING COMMENTS AND REPLY COMMENTS  X4  X' Comments 1. Teletrac, Inc. (Teletrac) 2. Comtrak  X ' Reply Comments  X '  X 4 1. Teletrac, Inc. (Teletrac) 2. Comtrak  X ' "yc0*&&aa"  X'UAPPENDIX B ă  X4 Final Regulatory Flexibility Analysis  V47Second Report and OrderĐ\  Xv4As required by the Regulatory Flexibility Act (RFA),cZvh {O'#]\  PCP#э See 5 U.S.C.  603. The RFA, see 5 U.S.C.  601 et. seq.#x6X@KX@##]\  PCP#, has been amended by the Contract With America Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). an Initial Regulatory Flexibility  X_4Analysis (IRFA) was incorporated in the Memorandum Opinion and Order and Further  XJ4Notice of Proposed Rule Making.\Jh yO '#]\  PCP#э Amendment of Part 90 of the Commission's Rules to Adopt Regulations for Automatic Vehicle  {O 'Monitoring Systems, Memorandum Opinion and Order and Further Notice of Proposed Rule Making, PR Docket  {Ow'No. 9361, 12 FCC Rcd 13942, 13981 (1997) ("Further Notice").  The Commission sought written public comment on the  X54proposals in the Further Notice, including comment on the IRFA. The comments received are discussed below. This present Final Regulatory Flexibility Analysis (FRFA) conforms to  X 4the RFA.u h {O'#]\  PCP#э See 5 U.S.C.  604. u ` `  X 4 A.XNeed for, and objectives of, the Second Report and Order in WT Docket No. (# 9361:  X 4  X4The provisions adopted in the Second Report and Order enhance the efficiency of the competitive bidding process and promote use of the 902928 band for the multilateration Location and Monitoring Service (LMS). The adopted provisions are intended to establish a system of competitive bidding for choosing among certain applications for initial licenses, and to carry out statutory mandates that certain designated entities, including small businesses, are afforded an opportunity to participate in the competitive bidding process and in the provision of multilateration LMS services. The adopted provisions are based on the competitive bidding authority of Section 309(j) of the Communications Act of 1934, as amended, 47 U.S.C.  309(j), which authorized the Commission to use auctions to select from among mutually exclusive initial applications in certain services, including multilateration LMS.  X' B.XSummary of significant issues raised by public comments in response to the IRFA:(#  XW4 There were no comments filed directly in response to the IRFA; however, the  X)4Commission received 2 comments in response to the Further Notice. This FRFA analyzes the")0*&&aa"" modifications adopted in response to those comments, and their possible economic impact on  X4small entities. See detailed discussion in Section E, infra.  X' C.XDescription and estimate of the number of small entities to which rules will apply:(#  X4 The RFA directs agencies to provide a description of and, where feasible, an estimate  Xa4of the number of small entities that may be affected by our rules.jah yO'#]\  PCP#э 5 U.S.C.  603(b)(3). j The RFA generally defines the term "small entity " as having the same meaning as the terms "small business,"  X34"small organization," and "small governmental jurisdiction."s3Xh {O< '#]\  PCP#э Id.  601(6). s In addition, the term "small business" has the same meaning as the term "small business concern" under the Small  X 4Business Act.Y h yO'#]\  PCP#э 5 U.S.C.  601(3) (incorporating by reference the definition of "small business concern" in 15 U.S.C. 632). Pursuant to the RFA, the statutory definition of a small business applies "unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register." 5 U.S.C.  601(3).Y A small business concern is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria  X 4established by the Small Business Administration (SBA).  h yO"'#]\  PCP#э Small Business Act, 15 U.S.C.  632 (1996). A small organization is generally "any notforprofit enterprise which is independently owned and operated and is not dominant  X 4in its field."j * h yO'#]\  PCP#э 5 U.S.C.  601(4). j Nationwide, as of 1992, there were approximately 275,801 small organizations.  h yO'#]\  PCP#э 1992 Economic Census, U.S. Bureau of the Census, Table 6 (special tabulation of data under contract to Office of Advocacy of the U.S. Small Business Administration). "Small governmental jurisdiction" generally means "governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than  Xd450,000." dh yO>'#]\  PCP##]\  PCP#э 5 U.S.C.  601(5). As of 1992, there were approximately 85,006 such jurisdictions in the United  XM4States. Mh yO!'#]\  PCP#э U.S. Dept. of Commerce, Bureau of the Census, "1992 Census of Governments." This number includes 38,978 counties, cities, and towns; of these, 37,566, or 96  X64percent, have populations of fewer than 50,000.` 6Ih {O0$'#]\  PCP#э Id.` The Census Bureau estimates that this ratio is approximately accurate for all governmental entities. Thus, of the 85,006 governmental entities, we estimate that 81,600 (91 percent) are small entities. Below, we further describe" 0*&&aa6" and estimate the number of small entity licensees and regulatees that may be affected by the rules.   The SBA has developed a definition of small entities applicable to LMS licensees. Therefore, the applicable definition under SBA rules of a small entity is the definition under the rules applicable to radiotelephone (wireless) companies. This provides that a small entity  Xv4is a radiotelephone company employing no more than 1,500 persons.y vh yO'#]\  PCP#э 13 C.F.R.  121.201, SIC code 4812. y According to the Bureau of the Census, only twelve radiotelephone firms out of a total of 1,178 such firms  XH4which operated during 1992 had 1,000 or more employees.HXh {OQ '#]\  PCP#э 1992 Census, Series UC92S1, at Table 5, SIC code 4812. Therefore, using such data, even if all twelve of these firms were LMS companies, nearly all such carriers were small businesses under the SBA's definition. As a practical matter, there are only a handful of existing LMS licensees those being those licensed under the former Automatic Vehicle Monitoring service.   X 4 In the Second Report and Order, the Commission has adopted more refined definitions for small business categories. The definition of a "small business" is an entity with average annual gross revenues for the preceding three years not to exceed $15 million. The definition of a "very small business" is an entity with average annual gross revenues for the preceding three years not to exceed $3 million. We are seeking SBA approval for these new LMS size  XM4standards.oMh {O'ԍ See also Second Report and Order, supra at n. 47. o  X4 As noted in the Second Report and Order, there are 528 licenses to be awarded in the upcoming auction. New entrants could obtain multilateration LMS licenses through the competitive bidding procedure, and take the opportunity to partition and/or disaggregate a license or obtain an additional license through partitioning or disaggregation. Additionally, entities that are neither incumbent licensees nor geographic area licensees could enter the market by obtaining a multilateration LMS license through partitioning or disaggregation. The Commission cannot estimate how many licensees or potential licensees could take the opportunity to partition and/or disaggregate a license or obtain a license through partitioning and/or disaggregation, because it has not yet determined the size or number of multilateration LMS licenses that will be granted in the future. Therefore, the number of small entities that will be affected is unknown. Given the fact that no reliable estimate of the total number of future multilateration LMS licensees can be made, the Commission assumes for purposes of this FRFA that all of the licenses will be awarded to small businesses. It is also possible that a significant number of the potential"0*&&aa" licensees who could take the opportunity to partition and/or disaggregate a license or who could obtain a license through partitioning and/or disaggregation will be small entities.  X' D.XSummary of the projected reporting, recordkeeping, and other compliance requirements:(#  X4  Xv4The rules and provisions adopted in the Second Report and Order include the possibility of new reporting and recordkeeping requirements for a number of small business entities, as follows:  X 41. Competitive Bidding Applications. LMS license applicants will be subject to reporting and recordkeeping requirements to comply with the competitive bidding rules. Specifically, applicants will apply for LMS licenses by filing a shortform application (FCC Form 175), and will file a longform application (FCC Form 601) at the conclusion of the auction. Additionally, entities seeking treatment as small businesses will need to submit information pertaining to the gross revenues of the small business applicant and its affiliates and certain investors in the applicant. Such entities will also need to maintain supporting documentation at their principal place of business.  XM42. Construction Requirements. The proposals in the Second Report and Order include reporting and recordkeeping requirements for new LMS licensees to establish  X!4compliance with the coverage requirements.k!h {O'ԍ See Second Report and Order, supra at  30.k This includes, for example, the requirement that licensees file with the Commission a map and other supporting documentation at the five and tenyear construction benchmarks.  X4  X43. Geographic Partitioning and Spectrum Disaggregation. The proposals in the  X4Second Report and Order include reporting and recordkeeping requirements for small businesses seeking licenses through the proposed partitioning and disaggregation rules. The information requirements would be used to determine whether the licensee is a qualifying entity to obtain partitioned or disaggregated spectrum. This information will be a onetime filing by any applicant requesting such a license. The information will be submitted on the FCC Forms 490 (or 430 and/or 603 filed as one package under cover of the Form 490) which are currently in use and have already received OMB clearance. The Commission estimates that the average burden on the applicant is three hours for the information necessary to complete these forms. The Commission estimates that 75 percent of the respondents, which may include small businesses, will contract out the burden of responding. The Commission estimates that it will take approximately 30 minutes to coordinate information with those contractors. The remaining 25 percent of respondents, which may include small businesses, are estimated to employ inhouse staff to provide the information. Applicants, including small businesses, filing the package under cover of FCC Form 490 electronically will incur a"#Z0*&&aa!" $2.30 per minute online charge. Online time would amount to no more than 30 minutes. The Commission estimates that 75 percent of the applicants may file electronically. The Commission estimates that applicants contracting out the information would use an attorney or engineer, with an average cost of $200 per hour, to prepare the information.  X4  X' E.XSteps taken to minimize significant economic impact on small entities, and significant alternatives considered: (#  X_4  XH4 The Second Report and Order adopts certain provisions for smaller entities designed to ensure that such entities have the opportunity to participate in the competitive bidding process and in the provision of multilateration LMS services. These proposals will affect small businesses that avail themselves of these provisions, including small businesses currently holding multilateration LMS licenses that choose to partition and/or disaggregate and small businesses that may acquire licenses through partitioning and/or disaggregation. The small business definitions are intended to accommodate the broadest cross section of small businesses because it will include, at a minimum, all entities recognized as small businesses in the LMS contexts for which we have either adopted or proposed small businesses definitions. The Commission anticipates that most LMS licensees will fit the definition of small business or very small business.  X641.` ` Small Business Definitions and Bidding Credits Commenters favor establishing a "small business" definition for the multilateration  X4LMS.h yOj'ԍ#c P7P#Teletrac Comments at 15; Comtrak Comments at 5.#&m P7 [&P#Ѯ Comtrak recommends that the Commission adopt two small business categories in the LMS auction: (1) a "small business" category, for businesses with average gross revenues  X4of over $3 million but not to exceed $10 million; and (2) a "very small business" category,  X4for businesses with average gross revenues not to exceed $3 million.Xh yO'ԍ#c P7P#Comtrak Comments at 4.#&m P7 [&P#ѕ Comtrak suggests that these categories be based on the gross revenues of the business for the three years preceding  X~4the filing of the entity's application.a~h {O'ԍ#c P7P#Id.a Comtrak also argues that the Commission should avoid the Small Business Administration's definition of a small business and, as it has done in previous auctions, rely solely on gross revenues, and not the number of employees, for the  X94purpose of determining an entity's eligibility for small incentives.9zh {Od#'ԍ#c P7P##c P7P#Id. at 5.#c P7P#ѵ Comtrak also"9 0*&&aa8" recommends bidding credits of 25 percent for small businesses and 35 percent for very small  X4businesses.h {Ob'ԍ#c P7P#Id. at 6.#c P7P#ю These provisions were adopted.  X4 2.` ` Attribution of Gross Revenues and Affiliates Comtrak suggests that the Commission establish a clear definition of what constitutes control, including examples of the kinds of financial investments that will cause an investor  X_4or its affiliates to become affiliates of the small business applicant.b_Zh {Oj 'ԍ#c P7P#Id. b Teletrac urges the Commission to augment the Part 1, Subpart Q rules with administrative procedures to provide  X14preliminary determinations of affiliation status before the auction begins.g1h {O 'ԍ#c P7P#Id.g Teletrac argues that even the most carefully crafted rules cannot anticipate every form of control and business  X 4relationship.q ~h yO2'ԍ#c P7P#Teletrac Comments at 16. q  X 4The Commission adopted a "controlling interest" standard as the general attribution rule for all future auctions. The Commission has found that these definitions, which also contain detailed discussions and examples of relevant terms such as "control" and "identity of interest," has proven workable and is broad enough to address a wide variety of business structures. The Commission believes that these definitions are consistent with its proposals in  Xb4the Part 1 Third Report and Order.dbh {O!'ԍId. #&m P7 [&P#d  The Commission rejected Teletrac's suggestion that the Commission augment the Part 1 rules with administrative procedures to provide applicants with preliminary determinations of affiliation status before the auction begins. The Commission believes such procedures are  X4administratively inefficient and would unnecessarily delay the auction of LMS spectrum.rh {OB'ԍ See also Second Report and Order, supra at  27. r  X43.` ` Partitioning and Disaggregation  With respect to partitioning and disaggregation, the Commission concludes that unjust enrichment provisions should apply when a licensee has benefitted from the small business provisions in the auction rules and applies to partition or disaggregate a portion of the geographic license area to another entity that would not qualify for such benefits. The"P2 0*&&aa" alternative to applying the unjust enrichment provisions would be to allow an entity who had benefitted from the special bidding provisions for small businesses to become unjustly enriched by partition or disaggregating a portion of their license area to parties that do not qualify for such benefits.  X' F.Report to Congress:  X_4The Commission shall send a copy of the Second Report and Order, including this FRFA, in a report to Congress pursuant to the Small Business Regulatory Enforcement  X34Fairness Act of 1996. See 5 U.S.C.  801(a)(1)(A). In addition, the Commission will send a  X 4copy of the Second Report and Order, including FRFA, to the Chief Counsel for advocacy of  X 4the Small Business Administration. A copy of the Second Report and Order and this FRFA  X 4(or summary thereof) will be published in the Federal Register. See 5 U.S.C.  604(b).  V 4  X 4  X'  ă" 0*&&aa "  X' vAPPENDIX C FINAL RULES ă  X4  Chapter I of Title 47 of the Code of Federal Regulations, Part 90 is amended as follows:  X' Part 90 Private Land Mobile Radio Services  X_41.` ` The authority citation for Part 90 continues to read as follows:  XH4#Xw P7cXP#  X1' Authority: Secs. 4, 2512, 303, 309, and 332, 48 Stat. 1066, 1082, as amended; 47  X 'U.S.C. 154, 2512, 303, 309 and 332, unless otherwise noted.  X 42.` ` Section 90.155 is amended by revising paragraph (d) to read as follows:  X 4 90.155 Time in which station must be placed in operation .  nl* * * * *\(d) Multilateration LMS EAlicensees, authorized in accordance with Section 90.353, must construct and place in operation a sufficient number of base stations that utilize multilateration technology (see paragraph (e) of this section) to provide multilateration location service to onethird of the EA's population within five years of initial license grant, and two thirds of the population within ten years. In demonstrating compliance with the construction and coverage requirements, the Commission will allow licensees to individually determine an appropriate field strength for reliable service, taking into account the technologies employed in their system design and other relevant technical factors. At the five and ten year benchmarks, licensees will be required to file a map and other supporting documentation showing compliance with the coverage requirements.  X|' q***** ă  X74  3.` ` Section 90.365 is added to read as follows:  X '  X 'Sec. 90.365 Partitioned licenses and disaggregated spectrum.  X4(a) Eligibilityĩ(1) Parties seeking approval for partitioning and disaggregation shall request an authorization for partial assignment of a license pursuant to Section 90.153. (2) Multilateration LMS licensees may apply to partition their licensed geographic service area or disaggregate their licensed spectrum at any time following the grant of their licenses. Multilateration LMS licensees may partition or disaggregate to any party that is also eligible to be a multilateration LMS licensee. Partitioning is permitted along any service area defined by the parties, and spectrum may be disaggregated in any amount. The Commission"Q%!0*&&aar#" will also consider requests for partial assignment of licenses that propose combinations of partitioning and disaggregation.   X4(b) Technical RequirementséIn the case of partitioning, requests for authorization for partial assignment of a license must include, as attachments, a description of the partitioned service area, and a calculation of the population of the partitioned service area and the licensed geographic service area. The partitioned service area shall be defined by coordinate  Xa4points at every three degrees along the partitioned service area unless county lines are followed. The geographic coordinates must be specified in degrees, minutes, and seconds to the nearest second of latitude and longitude and must be based upon the 1927 North American Datum (NAD27). Applicants may supply geographical coordinates based on 1983 North American Datum (NAD83) in addition to those required based on NAD27. In the case  X 4where county lines are utilized, applicants need only list the specific area(s) (through use of  X 4 county names) that constitute the partitioned area.   X 4(c) License term. The license term for a partitioned license area, and for disaggregated spectrum shall be the remainder of the original licensee's license term.   Xd4 (d) Construction requirementsĩ(1) Requirements for partitioning.  (i) Parties seeking authority to partition must meet one of the following construction requirements: (A) The partitionee may certify that it will satisfy the applicable construction requirements for the partitioned license area; or (B) The original licensee may certify that it has or will meet the construction requirement for the entire license area.  (ii) Applications requesting authority to partition must include a certification by each party as to which of the above construction options they select.  (iii) Failure by any partitionee to meet its respective construction requirements will result in the automatic cancellation of the partitioned or disaggregated license without further Commission action.   X4(2) Requirements for disaggregation. Parties seeking authority to disaggregate must submit with their partial assignment application a certification signed by both parties stating which of the parties will be responsible for meeting the construction requirement for the licensed market. Parties may agree to share responsibility for meeting the construction requirements. Parties that accept responsibility for meeting the construction requirements and later fail to do so will be subject to license forfeiture without further Commission action. "S%"0*&&aae#"Ԍ X44.` ` Part 90 is amended by adding a new subpart X to read as follows:  X' Subpart X Competitive Bidding Procedures  X'  90.1101 Location and Monitoring Service subject to competitive bidding.  X4  Xv4 Mutually exclusive initial applications for multilateration Location and Monitoring Service licenses are subject to competitive bidding procedures. The procedures set forth in Part 1, subpart Q of this chapter will apply unless otherwise provided in this part.  X '  90.1103 Designated entities. (a) This section addresses certain issues concerning designated entities in the Location and Monitoring Service (LMS) subject to competitive bidding. Issues that are not addressed in this section are governed by the designated entity provisions in Part 1, Subpart Q of this chapter. X` hp x (#%'0*,.8135@8: