[Federal Register: May 16, 2007 (Volume 72, Number 94)] [Rules and Regulations] [Page 27687-27713] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr16my07-26] [[Page 27687]] ----------------------------------------------------------------------- Part VII Federal Communications Commission ----------------------------------------------------------------------- 47 CFR Parts 1, 20, 27 and 90 Service Rules for the 698-806 MHz Band and Revision of the Commission's Rules Regarding Enhanced 911 Emergency Calling Systems, Hearing Aid- Compatible Telephones, and Public Safety Spectrum Requirements; Final Rule [[Page 27688]] ----------------------------------------------------------------------- FEDERAL COMMUNICATIONS COMMISSION 47 CFR Parts 1, 20, 27 and 90 [WT Docket No. 06-150; CC Docket No. 94-102; WT Docket No. 01-309; WT Docket No. 03-264; WT Docket No. 06-169; PS Docket No. 06-229; WT Docket No. 96-86; FCC No. 07-72] Service Rules for the 698-806 MHz Band and Revision of the Commission's Rules Regarding Enhanced 911 Emergency Calling Systems, Hearing Aid-Compatible Telephones, and Public Safety Spectrum Requirements AGENCY: Federal Communications Commission. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: In this document, the Federal Communications Commission (FCC) adopts final rules governing wireless licenses in the 698-806 MHz Band (i.e., the 700 MHz Band). This spectrum is currently occupied by television broadcasters and is being made available for wireless services, including public safety and commercial services, as a result of the digital television (``DTV'') transition. DATES: Effective May 16, 2007, except for the amendments to Sec. Sec. 20.18(a), 27.50(c)(5), and 27.50(c)(8) which contain information collection requirements that have not been approved by the Office of Management and Budget (OMB). The Commission will publish a document in the Federal Register announcing the effective date. ADDRESSES: Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554. FOR FURTHER INFORMATION CONTACT: Paul Moon at (202) 418-1793, paul.moon@fcc.gov, Mobility Division, Wireless Telecommunications Bureau; Paul D'Ari at (202) 418-1550, paul.dari@fcc.gov, Spectrum and Competition Policy Division, Wireless Telecommunications Bureau; John Evanoff at (202) 418-0848, john.evanoff@fcc.gov, Public Safety and Homeland Security Bureau. SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report and Order, WT Docket No. 06-150; CC Docket No. 94-102; WT Docket No. 01-309; WT Docket No. 03-264; WT Docket No. 06-169; PS Docket No. 06- 229; WT Docket No. 96-86, FCC No. 07-72, adopted April 25, 2007 and released April 27, 2007. The full text of the Report and Order is available for public inspection on the Commission's Internet site at http://www.fcc.gov. It is also available for inspection and copying during regular business hours in the FCC Reference Center (Room CY- A257), 445 12th Street, SW., Washington, DC 20554. The full text of this document also may be purchased from the Commission's duplication contractor, Best Copy and Printing Inc., Portals II, 445 12th St., SW., Room CY-B402, Washington, DC 20554; telephone (202) 488-5300; fax (202) 488-5563; e-mail FCC@BCPIWEB.COM. Final Paperwork Reduction Act of 1995 Analysis The Report and Order contains modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under Sec. 3507(d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the new information collection requirements contained in this proceeding. Public and agency comments are due sixty days from publication of a summary of the Report and Order in the Federal Register. Comments should address the following: (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; and (d) ways to minimize the burden of the collection of information on respondents, including the use of automated collection techniques or other forms of information technology. In addition, the Commission notes that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we previously sought specific comment on how the Commission might ``further reduce the information collection burden for small business concerns with fewer than 25 employees.'' In this present document, we have assessed the potential effects of the various policy changes with regard to information collection burdens on small business concerns, and find that there are no results specific to businesses with fewer than 25 employees. We note that the information collections contained in Sec. 20.18(j)(4) are a result of the amendments to Sec. 20.18(a). We also note that Sec. 213 of the Consolidated Appropriations Act 2000 provides that rules governing frequencies in the 746-806 MHz Band become effective immediately upon publication in the Federal Register without regard to certain sections of the Paperwork Reduction Act.\1\ The Commission is therefore not inviting comment on any information collections that concern frequencies in the 746-806 MHz Band. --------------------------------------------------------------------------- \1\ In particular, this exemption extends to the requirements imposed by Chapter 6 of Title 5, United States Code, Section 3 of the Small Business Act (15 U.S.C. 632) and Sections 3507 and 3512 of Title 44, United States Code. Consolidated Appropriations Act 2000, Pub. L. No. 106-113, 113 Stat. 2502, Appendix E, Sec. 213(a)(4)(A)- (B); see 145 Cong. Rec. H12493-94 (Nov. 17, 1999); 47 U.S.C.A. 337 note at Sec. 213(a)(4)(A)-(B). --------------------------------------------------------------------------- Synopsis 1. In this Report and Order, the Commission addresses rules governing wireless licenses in the 698-806 MHz Band (i.e., the 700 MHz Band). This spectrum currently is occupied by television broadcasters in TV Channels 52-69 and is being made available for wireless services, including public safety and commercial services, as a result of the digital television (DTV) transition. The Commission has been considering rules related to the use of this spectrum in three ongoing proceedings: (1) The 700 MHz Commercial Services proceeding,\2\ (2) the 700 MHz Guard Bands proceeding,\3\ and (3) the 700 MHz Public Safety proceeding.\4\ Because decisions on certain issues in the three proceedings are potentially interrelated, the three proceedings are being jointly addressed in the Report and Order. In doing so, the Commission seeks to promote access to 700 MHz Band spectrum and the provision of service to consumers across the county, including in rural areas, as [[Page 27689]] well as opportunities for broadband service for Public Safety users. --------------------------------------------------------------------------- \2\ See Service Rules for the 698-749, 747-762 and 777-792 MHz Bands, WT Docket No. 06-150, Revision of the Commission's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems, CC Docket No. 94-102, and Sec. 68.4(a) of the Commission's Rules Governing Hearing Aid-Compatible Telephones, WT Docket No. 01-309, Notice of Proposed Rule Making, Fourth Further Notice of Proposed Rule Making, and Second Further Notice of Proposed Rule Making, 21 FCC Rcd 9345 (2006). \3\ See Former Nextel Communications, Inc. Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the Commission's Rules, Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, WT Docket Nos. 06-169 and 96-86, Notice of Proposed Rule Making, 21 FCC Rcd 10413 (2006). \4\ See Implementing a Nationwide, Broadband, Interoperable Public Safety Network in the 700 MHz Band, Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, PS Docket 06-229, WT Docket No. 96-86, Ninth Notice of Proposed Rule Making, 21 FCC Rcd 14837 (2006); Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, Eighth Notice of Proposed Rulemaking, WT Docket Nos. 96-86 and 05-157, 21 FCC Rcd 3668 (2006). --------------------------------------------------------------------------- A. 700 MHz Commercial Services 1. Facilitating Access to Spectrum and Provision of Service to Consumers (i) Mix of Geographic Service Area Sizes 2. The FCC finds that providing for a mix of geographic licensing areas in the 700 MHz Band will balance the demand for differently sized licenses demonstrated in the record and enhance access to the spectrum by a variety of potential licensees. In particular, the FCC determines to replace the unassigned Economic Area Groupings (EAGs)-sized license areas, as established in the current band plan, with a mix of geographic licensing areas consisting of Cellular Market Areas (CMAs), Economic Areas (EAs), and Regional Economic Area Groupings (REAGs). These revisions are consistent with the goal of providing greater access to spectrum for small providers and parties in rural areas, and improving the opportunity for a wider range of potential licensees to obtain access to this valuable spectrum. 3. In determining the size of service areas, the FCC has stated as a general principle that it will consider licensing the spectrum over a range of various sized geographic areas, including smaller service areas such as CMAs, where consistent with the record in that proceeding and with other factors that may be relevant to the spectrum. Many commenters, including small and regional service providers and entities that represent rural interests, favor an approach that would provide for a variety of license sizes beyond those in the current band plan. The FCC agrees with those commenters who observe that a revised mix of smaller license sizes would provide a more balanced set of initial licensing opportunities at this time and make available more licenses to match the needs of different potential users. The opportunities afforded by providing licenses with a mix of geographic areas were seen in the results of Auction No. 66 involving Advanced Wireless Services (AWS)-1 licenses, where many different bidders won smaller and mid- sized licenses, such as CMAs and EAs. The same policy of providing a mix of licenses that balances competing interests is appropriate here. These revisions will advance the FCC's statutorily directed goals to promote service to rural areas, promote investment in and the rapid deployment of new technologies and services, avoid the excessive concentration of licenses, and provide for the dissemination of licenses among a wide variety of applicants. 4. The FCC concludes that providing a mix of CMA, EA, and REAG licenses in the 700 MHz Commercial Services spectrum will be an effective means of providing increased access to spectrum, especially in rural areas, while simultaneously meeting other Commission goals. The FCC disagrees with commenters who argue that any changes to smaller area licenses should be limited to the Upper 700 MHz Commercial Services Band, and not be implemented in the Lower 700 MHz Band. 5. Consistent with its earlier findings with respect to license sizes in the Upper and Lower 700 MHz Bands, the FCC declines to adopt nationwide licensing for any of the 700 MHz Commercial Services spectrum blocks. It also declines to adopt service areas smaller than CMAs, such as county-sized areas, or other size areas, including Major Economic Areas (MEAs). Because the band plan for the 700 MHz Commercial Services Band no longer contains EAGs, for the EAs, REAGs, and CMAs the FCC will separately license the Gulf of Mexico with each of the following license divisions: EA licensing area 176; REAG licensing area 12; and Metropolitan Statistical Area (MSA) licensing area 306. The FCC adopts: (i) The same definition of EAs set forth in Sec. 27.6(h) of the rules, currently applicable for AWS-1 spectrum, for EA licenses in the 700 MHz Commercial Services Band; (ii) the same definition of REAGs set forth in Sec. 27.6(h) of the rules, currently applicable for AWS-1 spectrum, for REAG licenses; and (iii) the same definition of Metropolitan Statistical Areas and Rural Service Areas (MSAs/RSAs) set forth in Sec. 27.6(c), currently applicable to Block C of the Lower 700 MHz Band, for CMAs. As the FCC has done in licensing other part 27 services, the Gulf of Mexico service area is comprised of the water area of the Gulf of Mexico starting 12 nautical miles from the U.S. Gulf coast and extending outward. (ii) Secondary Markets 6. The FCC declines to adopt rules that would require 700 MHz Commercial Services Band licensees to make ``good faith'' efforts to negotiate with potential spectrum lessees, either as part of their performance requirements or as part of the criteria associated with license renewal. The FCC believes that such changes are unnecessary given the other measures it is adopting to promote access to spectrum in the 700 MHz Commercial Services Band. These measures involve revising the 700 MHz Commercial Services band plan to include a mix of smaller geographic licensing areas. 7. Most commenters support a decision not to impose a ``good faith'' negotiation obligation on the 700 MHz Commercial Services Band licensees. Some of these commenters argue that such a requirement would be unnecessarily burdensome and could lead to uneconomic decisions. Commenters supporting the adoption of a ``good faith'' requirement argue that the FCC should consider a licensee's secondary markets participation as part of its license renewal process. The FCC notes, however, that its current spectrum leasing rules already provide a licensee with significant incentives to enter into spectrum leasing arrangements because licensees may rely on the activities of its spectrum lessee(s) for purposes of complying with the licensee's construction requirements. The FCC concludes that its decision to adopt a mix of geographic license area sizes, combined with our existing secondary markets rules, are sufficient to promote access to spectrum. Accordingly, the FCC declines to adopt further secondary markets requirements at this time. 2. Auctions-Related Issues (i) Aggregating Licenses 8. The FCC concludes that the public interest would be better served by relying on the existing secondary market to aggregate existing and new licenses rather than attempting to develop new rules and policies for incorporating existing 700 MHz Commercial Services licenses into an auction of new licenses. Parties bidding on new licenses should be able to accurately value those licenses, even absent an opportunity to simultaneously aggregate new with existing licenses. New licenses in the 700 MHz Commercial Services spectrum can be used independently of existing licenses. Applicants will be able to seek any of multiple new licenses, of varying geographic size, to serve any given location. Thus, the value of the new licenses is unlikely to depend significantly upon a party's ability to aggregate existing and new licenses. Moreover, the interests of aggregators are likely to be met in large part by the existing secondary market. Accordingly, the FCC concludes that no new rules or policies are needed to facilitate aggregation of existing and new 700 MHz Commercial Services licenses in order to increase the likelihood that these licenses will be assigned to the [[Page 27690]] parties most likely to put them to their most effective use. (ii) Bidding Preferences 9. The FCC rejects the suggestions of certain commenters that it set aside licenses in the 700 MHz Commercial Services Band auction solely for designated entities and the argument that the FCC adopt a third small business definition to provide for a 35% bidding credit. Consistent with the FCC's tentative conclusion not to adopt Access Spectrum et al.'s band plan proposal and in light of various difficulties in implementing such a bidding credit, the FCC also does not adopt a bidding credit based on providing access to spectrum for 700 MHz public safety services. 10. Although the Communications Act requires that the FCC ensure that ``designated entities'' are given the opportunity to participate in the provision of spectrum-based services and, for such purposes, consider the use of bidding preferences, these preferences can take many forms. In an early attempt to meet these mandates, the FCC set aside blocks of spectrum in the Broadband PCS band to be held by designated entities. The FCC's experience in Broadband PCS auctions and subsequent auctions has demonstrated, however, that bidding credits for designated entities afford such entities substantial opportunity to compete with larger businesses for spectrum licenses and provide spectrum-based services. For example, Auction No. 66 demonstrated very recently that designated entities can succeed in auctions for licenses for valuable spectrum without any set-asides. In Auction No. 66, more than half the winning bidders were designated entities that received discounts on their gross winning bids and designated entities won over twenty percent of the licenses sold. Moreover, setting aside licenses risks denying the licenses to other applicants that may be more likely to use them effectively or efficiently for the benefit of consumers. Potentially excluding such applicants could compromise the FCC's pursuit of various statutory objectives including promoting the development and deployment of new technologies, products, and services for the benefit of the public and promoting efficient and intensive use of the spectrum. (iii) Competitive Bidding and Aggregating New Licenses 11. The FCC's current competitive bidding rules authorize the use of package bidding and the FCC already has utilized a form of package bidding. Consequently, the question before the FCC now is whether it needs to make changes to our competitive bidding rules in order to enable a new form of package bidding for the 700 MHz Commercial Services auction. The FCC concludes that modifications to our current bidding systems, including those suggested by commenters, can be made without modifying its competitive bidding rules. (iv) Modifications to the Tribal Land Bidding Credit 12. No parties provided suggestions for possible modifications to the FCC's tribal land bidding credit rules to promote the deployment of wireless services to tribal lands or addressed the relationship between post-auction credits and the deadline for depositing payments. In light of the record, the FCC concludes that it need not modify the tribal land bidding credit at this time. 3. Additional Rules for Licensees (i) Criteria for Renewal 13. The FCC clarifies that all licensees in the 700 MHz Commercial Services Band seeking renewal of their authorizations at the end of their license term must file a renewal application in accordance with the provisions of Sec. 1.949 of the FCC's rules. Consistent with existing rules, as part of this renewal requirement licensees must demonstrate in their applications that they have provided substantial service during their past license term, which is defined as service that is sound, favorable, and substantially above a level of mediocre service that just might minimally warrant renewal. This requirement is distinct from performance requirements. Substantial service in the renewal context, as opposed to coverage benchmarks established for the performance requirement context, encompasses FCC consideration of a variety of factors including the level and quality of service, whether service was ever interrupted or discontinued, whether service has been provided to rural areas, and any other factors associated with a licensee's level of service to the public. Accordingly, a licensee that meets the applicable performance requirements might nevertheless fail to meet the substantial service standard at renewal. Licensees must demonstrate at renewal that they have substantially complied with all applicable FCC rules, policies, and the Communications Act of 1934, as amended, including any applicable performance requirements. 14. Under the revised Sec. 27.14 of the FCC's rules, the FCC also is eliminating the filing of competing applications to requests for renewal of these 700 MHz licenses. The FCC is mindful of the potential costs and the burdens they impose on both it and licensees. The FCC agrees with comments that such administrative processes ``harken[ ] back to an old era * * * where competitors were known to file `strike' applications against a renewal in the hope of getting a payoff.'' Under the revised Sec. 27.14 of the FCC's rules, the FCC is therefore adopting a process by which 700 MHz Commercial Services Band licenses come back to the FCC for re-auction if a license is not renewed. The existing petition to deny process, coupled with the ability of a petitioner to participate in any subsequent auction to re-license spectrum that is returned to the FCC for lack of renewal, creates sufficient incentives to challenge inferior service or poor qualifications of licensees at renewal. This approach protects the public interest without creating incentives for speculators to file ``strike'' applications. 15. By eliminating the filing of competing applications at renewal, the FCC finds that the concerns raised by the majority of commenters in this proceeding about renewal expectancies are moot. The FCC recognizes that the majority of commenters that addressed renewal issues did not support any changes to the part 27 renewal rules applicable to 700 MHz Commercial Services Band licensees. Moreover, some of these commenters expressed concern that any revision to the rules governing renewal proceedings would eliminate the concept of ``renewal expectancy'' that applied in comparative hearings. Because smaller carriers and rural interests in particular seemed concerned that certain rule changes would place a new burden on carriers ill-equipped to meet it, we have decided to maintain 700 MHz Commercial Services Band licensees' expectations of renewal by eliminating provisions for competing applications. This action provides additional certainty for all 700 MHz Commercial Services Band licensees, and requests by certain commenters to do otherwise could result in additional administrative burdens on licensees that we find not to be in the public interest. (ii) License Terms 16. The FCC revises its rules to provide that initial authorizations for the 700 MHz Commercial Services Band will have a term not to exceed 10 years from February 17, 2009, which is the firm deadline for the DTV transition. Subsequent renewals will be for terms not to exceed 10 years. This revised [[Page 27691]] license term will apply to all licenses in the 700 MHz Commercial Services Band. However, because Sec. 307(c)(1) of the Communications Act provides that a license for operating a broadcast station shall not be granted for a term that exceeds 8 years, the FCC retains the current provision that a part 27 licensee commencing broadcast services will be required to seek renewal of its license for such services at the termination of the eight-year term following commencement of such operations. The FCC does not revise the license term for Guard Band licensees because such revisions fall beyond the scope of the 700 MHz Commercial Services proceeding. 17. The FCC is extending the revised license term to both the already auctioned and unauctioned licenses in the 700 MHz Commercial Services Band. The FCC finds that uniformly extending the license term in this manner provides a level of parity for services within the same band. In addition, this treatment recognizes that band clearing and the resulting unencumbered use of the spectrum in the pre-DTV Act period was tied to a transition scheme that has now been replaced with a firm statutory transition date of February 17, 2009. Specifically, the underlying reason behind the current rule changed with passage of the DTV Act. The FCC previously determined that a definite termination date, e.g., January 1, 2015, was preferable to a discrete term of years following the end of the DTV transition, which at that time was subject to extension on a market-by market basis. The same license terms that were adopted in the Upper 700 MHz First Report and Order were applied to licenses in the Lower 700 MHz Band. However, the DTV Act's uniform deadline for the DTV transition has effectively removed the issue of market-by-market broadcast incumbency. Under these circumstances, the FCC provides a level of uniformity by extending the revised license terms to all licensees in the 700 MHz Commercial Services Band, except for those engaging in broadcast services. 18. The FCC finds that a term not to exceed 10 years from February 17, 2009, should be used for initial authorizations in the 700 MHz Commercial Services Band, and that subsequent renewal terms will be 10 years. A ten-year license term is consistent with most other part 27 services, with the exception of recently auctioned AWS-1 licenses, which we address below, as well as with the license terms for other similar spectrum, such as that used for cellular service and PCS. In addition, this period will offer licensees regulatory certainty and help promote investment in the band. Under the current rules, all licensees would have terms that extend until January 1, 2015, which is only approximately six years from the end of the DTV transition. Thus, licensees that acquire their authorizations in a future auction would have had an initial license term less than ten years, and more likely for a shorter period, i.e., six or seven years, depending on the date of the auction and issuance of the authorizations. In similar fashion, current licensees in the 700 MHz Commercial Services Band would only have approximately six years of access to their spectrum free from broadcasters. The FCC finds that a longer period should be made available to all licensees in order to provide sufficient time for the recovery of costs related to the development and deployment of new services, especially those based on technologies that are more advanced, more expensive, and which may take longer to develop. The 700 MHz Commercial Services Band is a likely band for the use of these more advanced technologies and we are concerned that a license term that expires only six years from the DTV transition provides too short a time period. 19. The FCC declines to increase the length of initial or renewal terms to fifteen years. The FCC disagrees with those commenters who argue that parity with AWS-1 services mandates a fifteen-year term for 700 MHz services. The ``relocation and band clearance issues'' that provided the rationale for the fifteen-year initial licenses for AWS-1 services do not apply here. The date certain of February 17, 2009, for the end of the DTV transition means that spectrum in the 700 MHz Band will be clear for use by 700 MHz Band licensees as of that date. 20. The FCC also disagrees with commenters who argue that the current license term should be retained in order to promote prompt use of the spectrum and with commenters who argue that the current rule should be kept to spur the development of a secondary market. The combination of the FCC decisions in this Report and Order and the FCC's secondary markets policies make it unlikely that this highly valued spectrum will sit unused. The FCC's secondary market spectrum leasing policies focus on promoting spectrum leasing arrangements, and the FCC has taken steps in this Report and Order to improve use of the spectrum, including the provision of a mix of geographic license areas consisting of CMAs, EAs, and REAGs. 21. Finally, because of the specifically applicable statutory limitation, the FCC will retain the current requirement that 700 MHz Commercial Services Band licensees commencing broadcast services will be required to seek renewal of their licenses for such services prior to the termination of the eight-year term following commencement of such operations. As stated above, Sec. 307(c)(1) of the Communications Act provides that licenses granted for operating broadcast stations ``shall be for a term not to exceed 8 years.'' (iii) Power Limits for Lower 700 MHz Band and Upper 700 MHz Commercial Services Band Base Stations 22. The FCC modifies its power limit rules for the Lower 700 MHz Band and the Upper 700 MHz Commercial Services Band in a number of ways. First, the FCC implements a PSD model for defining power limits for base stations operating in the entire 700 MHz Commercial Services Band. The current power limit rules do not specify a bandwidth over which a licensee's power is to be limited, and could be construed to mean that the power limit applies on a ``per emission'' basis. Because some licensees may only transmit one emission within their given bandwidth, while others using technologies with narrower emissions might employ multiple emissions over that bandwidth, construing the power limit to apply on a ``per emission'' basis could allow licensees employing multiple emissions to transmit more total energy in their authorized spectrum blocks than licensees with only one emission in their spectrum blocks. To better accommodate all technologies, the FCC is clarifying that the maximum allowable power levels in the 700 MHz Commercial Services Band are to be defined on a ``per megahertz of spectrum bandwidth'' basis, rather than on a ``per emission'' basis. This clarification will enable higher power signals from wider band technologies, but will not result in a decrease in the total power currently allowed in the band from narrower band technologies. Given this clarification, the FCC is also adopting additional measures to protect against any possible increased risk of interference, especially to 700 MHz public safety users. 23. More specifically, the FCC will allow 700 MHz Commercial Services Band licensees employing bandwidths greater than 1 megahertz to meet a base station power limit of 1 kW/MHz ERP (i.e., no more than 1 kW ERP in any 1 megahertz band segment). Licensees operating with bandwidths of less than one megahertz will, however, continue [[Page 27692]] to be permitted to operate at power levels up to 1 kW ERP over their bandwidth. Thus, for example, a licensee transmitting a signal with a bandwidth of 5 megahertz could employ a power level of 5 kW ERP over the 5 megahertz bandwidth, with each 1 megahertz band segment within the 5 megahertz bandwidth being limited to 1 kW ERP; and a licensee transmitting a signal with a bandwidth of 200 kilohertz could employ a power level of 1 kW ERP over the 200 kilohertz bandwidth. This approach to defining power limits will achieve a degree of technological neutrality by ensuring that all licensees regardless of technology choice have enough power to operate a viable service. This neutrality would not exist if all licensees, regardless of their operating bandwidth, were required to limit their base station power levels to 1 kW ERP per emission. 24. In response to proposals by parties seeking greater power limits for rural area operations, the FCC will permit power levels of up to 2 kW/MHz ERP in rural areas, and consistent with its decision above, the FCC will allow rural licensees operating with bandwidths less than one megahertz to operate at power levels up to 2 kW ERP over their bandwidth. In implementing this decision, the FCC will define rural areas, consistent with the Rural Report and Order, as those counties in the U.S. having a population of fewer than 100 people per square mile, based on the most recently available population statistics from the Bureau of the Census. Increasing the permissible power in rural areas will enable 700 MHz Commercial Services Band licensees operating in such areas to more easily implement their systems; and increasing power levels in rural areas would be consistent with the recent FCC decision to permit rural carriers in the Cellular, AWS, and Broadband PCS services to operate at higher power levels. The FCC notes that in the Rural Report and Order, where the same power increase was adopted, it decided, as a ``cautionary measure,'' to require carriers operating at higher power levels to coordinate with licensees operating within 75 miles of their base stations. Consistent with this decision, the FCC shall require any 700 MHz Commercial Services Band licensee seeking to operate a base station under our rules permitting power levels greater than 1 kW ERP in rural areas to coordinate in advance with all non-public safety 700 MHz licensees authorized to operate within 75 miles of the station and with all 700 MHz Regional Planning Committees that have jurisdiction within 75 miles of the station. 25. As noted above, licensees in the Lower 700 MHz Band are allowed to use up to 50 kW ERP if they do not produce signals exceeding a power flux density (PFD) of 3 mW/m\2\ on the ground within 1 kilometer of the station. A number of commenters expressed views on the appropriateness of the current, maximum 50 kW ERP capability for Lower 700 MHz Band operations. Considering these comments, the FCC makes certain modifications to the power limit rules in the Lower 700 MHz Band. Specifically, the FCC will retain the ability of incumbent C and D Block licensees to employ power levels up to 50 kW ERP. In addition, because the FCC believes that unpaired blocks are conducive to the provision of broadcast-type operations, it shall permit licensees operating in any unpaired block(s) in the Lower 700 MHz Band to operate at a power level of 50 kW ERP as well. However, because the FCC believes that paired blocks are generally more conducive to the provision of mobile services, it shall not extend to new licensees operating in any Lower 700 MHz Band paired blocks the ability to operate at 50 kW ERP. This action helps preserve the flexibility the FCC originally envisioned for the Lower 700 MHz Band, i.e., the use of both broadcast and mobile services in the band, by providing an environment conducive to mobile systems in the paired blocks and an environment conducive to broadcast-type systems in the unpaired blocks. Current and future licensees nevertheless will have the flexibility to implement broadcast-type or mobile systems in any particular block. For example, a licensee may implement a broadcast-type system in a paired block, but rather than a high-power, high-site system, it would have to design a distributed broadcast system. 26. In reaching this decision, the FCC concludes that it would not be appropriate to reduce the power limits of incumbent Lower 700 MHz Band licensees, who acquired their spectrum with the expectation that they would be able to employ 50 kW ERP transmissions in the band. Although the FCC recognizes concerns expressed by certain parties regarding the potential for adjacent band interference into the current unauctioned paired blocks (i.e., the current A and B Blocks) from high power emissions in adjacent incumbent and unauctioned unpaired blocks, the FCC continues to believe that our out-of-band emission limits coupled with the 3 mW/m\2\ PFD requirement will be effective in protecting unauctioned paired blocks from adjacent channel interference. The FCC notes, however, that the 50 kW ERP limit in the Lower 700 MHz Band was based on a traditional broadcast emission, which consists of a single emission within the licensed bandwidth. The FCC never intended that emissions within a single block in the Lower 700 MHz Band exceed 50 kW ERP. Accordingly, the FCC clarifies that the 50 kW ERP limit for the current C and D Blocks, and any additional unpaired block(s) in the Lower 700 MHz Band, is a cap on the average total power of all emissions within the full authorized spectrum of the blocks. For example, a single incumbent C or D Block base station with an emission bandwidth of 1 megahertz could transmit with the full 50 kW ERP, but no other emissions would be permitted in the remaining 5 megahertz of the block. This limit would also apply to the cumulative emissions of both licensees if a 6 megahertz incumbent or unauctioned unpaired block is disaggregated. 27. In implementing this PSD approach to the power limits in both the Lower 700 MHz Band and the Upper 700 MHz Commercial Services Band, the FCC continues to remain concerned that transmissions at higher power levels could potentially cause interference to adjacent channel operations. To mitigate the potential for harmful interference to adjacent channel operations, the FCC requires the following. For Lower 700 MHz Band licensees, if operating with a bandwidth of 1 megahertz or less and a transmitting power greater than 1 kW ERP non-rural or 2 kW ERP rural, or if operating with a bandwidth of more than 1 megahertz and a PSD greater than 1 kW/MHz ERP non-rural or 2 kW/MHz ERP rural, then that licensee must comply with the 3 mW/m\2\ PFD limit. Thus, for example, a non-rural licensee transmitting an 8 kW ERP signal in a 5- megahertz bandwidth or a rural licensee transmitting a 4 kW ERP signal in a 1.25 megahertz bandwidth would have to satisfy the 3 mW/m\2\ PFD limit. However, a licensee transmitting an 800 watt ERP signal in a 200 kilohertz bandwidth or a 4 kW ERP signal in a 5-megahertz bandwidth, or a rural licensee transmitting an 8 kW ERP signal in a 5-megahertz bandwidth, would not have to meet the PFD limit. Because the FCC wishes to remain especially vigilant regarding the potential for interference to public safety operations, it impose the following additional requirement on Commercial Services licensees operating in the Upper 700 MHz Band. Specifically, all Upper 700 MHz Commercial Services Band licensees, [[Page 27693]] both rural and non-rural, transmitting signals at a power levels greater than 1 kW ERP, irrespective of bandwidth, must satisfy the 3 mW/m\2\ PFD limit. Thus, for example, an Upper 700 MHz Commercial Services Band licensee transmitting a 4 kW ERP signal in a 5-megahertz bandwidth would have to meet the PFD limit. (iv) Power Limit Issues in WT Docket No. 03-264 28. The FCC will employ PSD for defining power limits in the 700 MHz Band. The FCC has thus granted the second of CTIA's requests as it applies to the 700 MHz Commercial Services Bands. However, the FCC shall not apply to the 700 MHz Band CTIA's proposal to double power limits in the PCS and AWS-1 bands--i.e., a power increase that would apply in both rural and non-rural areas and would not be accompanied by a PFD limit. CTIA provides no justification for permitting an unrestricted doubling of power levels for the 700 MHz Commercial Services Bands, and the FCC finds no basis for adopting such limits for the band. Instead, as discussed above, the FCC is adopting rules for 700 MHz Band licensees that will allow for a power limit of 1 kW/MHz ERP in non-rural areas and 2 kW/MHz ERP in rural areas. 29. The FCC does, however, find merit in extending to the 700 MHz Commercial Services Band CTIA's proposal to use ``average,'' rather than ``peak'' power in measuring power levels. Although the use of ``average'' power will effectively result in an increase in 700 MHz Band power levels for non-constant envelope technologies, such as CDMA and WCDMA, the ``average'' measurement approach is a more accurate measure of the interference potential for these technologies. The FCC finds that any effective increase in power that would result through the use of an ``average'' measurement approach will be modest, and in any event will be outweighed by the benefit of measuring today's technologies using a more realistic and appropriate technique. 30. For purposes of clarifying the use of the ``average power'' measurement technique, the FCC makes the following determinations. First, the FCC concludes that the technique shall be made during a period of continuous transmission and be based on a measurement using a 1 megahertz resolution bandwidth. Second, the FCC shall restrict the peak-to-average (``PAR'') ratio of the radiated signal to 13 dB. Limiting the PAR to 13 dB strikes a balance between enabling licensees to use modulation schemes with high PARs (such as OFDM) and protecting other licensees from high PAR transmissions. Parties seeking to employ the ``average power'' measurement technique should consult with the FCC Laboratory for guidance on the appropriate averaging method for the particular technology they plan to use. (v) Other Technical Issues 31. The FCC will retain the existing OOBE limits for commercial base stations operating in the Upper 700 MHz Commercial Services Band because it finds these restrictions provide sufficient and appropriate protection to 700 MHz public safety operations. The FCC also declines to impose any technical restrictions on Upper 700 MHz Commercial Services Band licensees to address potential IM interference to 700 MHz public safety operations. The FCC will, however, require Upper 700 MHz Commercial Services Band licensees and 700 MHz public safety entities, upon request from the other, to exchange information about their stations and systems. The FCC is adopting this requirement in order to limit the potential for IM interference to 700 MHz public safety mobile and portable devices from the transmissions of Upper 700 MHz Commercial Service Band base stations. 32. With regard to the argument for the need for increased OOBE limits, the conclusion that the FCC's 76 +10 log P OOBE limit will result in interference to 700 MHz public safety operations is based on the assumption of a 65 dB site isolation figure in analyzing potential interference between commercial base stations and public safety mobile/ portable receivers. However, the FCC rejected this same premise in deciding not to adopt stricter OOBE limits in the Upper 700 MHz Band Third MO&O. In the 800 MHz Report and Order, the FCC decided not adopt stricter OOBE limits to protect 800 MHz public safety operations. The FCC stated, as its rationale for not increasing the existing OOBE limit for the 800 MHz band, that the additional filtering needed to achieve proposed OOBE standards ``would add cost and complexity--but no benefit--to those cells in a system in which, because of their location, or otherwise, unacceptable OOBE interference would not occur'' and the FCC was therefore unwilling to ``impose stronger OOBE limits on every cell of every system in the country; particularly if only a handful of cells in a system might require them.'' The FCC continues to believe that any change to the OOBE limit required for commercial Upper 700 MHz Commercial Services Band base stations is unsupported. (vi) 911/E911 Requirements 33. The FCC concludes that Sec. 20.18(a) should be amended to apply 911/E911 requirements to all commercial mobile radio services (CMRS), including services licensed in the 700 MHz Commercial Services Band and the AWS-1 bands, to the same extent as they apply to wireless services currently listed in the scope provision of Sec. 20.18. Thus, CMRS providers must comply with the 911/E911 requirements solely to the extent that they ``[offer] real-time, two way switched voice service that is interconnected with the public switched network and utilize an in-network-switching facility which enables the provider to reuse frequencies and accomplish seamless hand-offs of subscriber calls'' (hereinafter, the ``Sec. 20.18(a) criteria''). The FCC will continue, however, to exclude MSS from Sec. 20.18 in conformity with the Commission's decision in the E911 Scope Order. 34. The public interest generally requires wireless services meeting the Sec. 20.18(a) criteria to provide 911/E911 service, even if not expressly enumerated. The FCC has observed previously that ``911 service is critical to our Nation's ability to respond to a host of crises,'' and that E911 in particular ``saves lives and property by helping emergency services personnel do their jobs more quickly and efficiently.'' The FCC also takes note of Congress's finding in the Ensuring Needed Help Arrives Near Callers Employing 911 Act of 2004 (ENHANCE 911 Act) that ``for the sake of our Nation's homeland security and public safety, a universal emergency telephone number (911) that is enhanced with the most modern and state-of-the-art telecommunications capabilities possible should be available to all citizens in all regions of the Nation'' and that ``enhanced 911 is a high national priority.'' Accordingly, it is critical that mobile telephone services meeting the Sec. 20.18(a) criteria continue to offer 911 and E911 as they make use of new frequencies. 35. The FCC further finds that commercial mobile radio services meeting the 20.18(a) criteria will also meet the four criteria set forth in the E911 Scope Order.\5\ In particular, the [[Page 27694]] FCC finds that these services are likely to compete with services provided pursuant to cellular, broadband PCS, or 800/900 MHz SMR licenses, and that subscribers will have similar expectations of emergency access from services meeting the Sec. 20.18(a) criteria regardless of what frequencies carriers are using to provide them. Indeed, the FCC has found that for many Americans, ``the ability to call for help in an emergency is the principal reason they own a wireless phone.'' This should be no less true for a consumer calling from a phone utilizing 700 MHz, AWS, or any other spectrum. Further, the FCC finds no support in the record, and consider it unlikely, that additional, terrestrial-based commercial mobile radio services meeting all of the criteria of Sec. 20.18(a) will present any special technical obstacles, as compared to currently deployed services, that would warrant modifications of the 911/E911 requirements. To the extent that such obstacles become apparent as new services are established, appropriate modifications can be considered at that time. The FCC therefore agrees with the commenters that the extension of the 911/E911 requirements under Sec. 20.18 to all commercial mobile radio services meeting the Sec. 20.18(a) criteria is justified by the interest in competitive neutrality as well as by the critical public safety benefits of 911/E911. --------------------------------------------------------------------------- \5\Specifically, the Commission determined that it would consider whether (1) the service offers real-time, two-way voice service that is interconnected to the pubic switched network on either a stand-alone basis or packaged with other telecommunications services; (2) the customers using the service or device have a reasonable expectation of access to 911 and E911 services; (3) the service competes with traditional CMRS or wireline local exchange service; and (4) it is technically and operationally feasible for the service or device to support E911. See Revision of the Commission's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems, CC Docket 94-102, IB Docket No. 99-67, Report and Order and Further Notice of Proposed Rulemaking, 18 FCC Rcd 25340, 25347 ] 18 (2003) (``E911 Scope Order''). --------------------------------------------------------------------------- (vii) Hearing Aid-Compatible Wireless Handsets 36. For reasons similar to those discussed in the E911 section above, the FCC determines that all digital CMRS providers, including providers of such services in the 700 MHz Commercial Services Band and the AWS-1 and BRS/EBS bands, should be subject to hearing aid compatibility requirements under Sec. 20.19 to the extent they offer real-time, two-way switched voice or data service that is interconnected with the public switched network and utilizes an in- network switching facility that enables the provider to reuse frequencies and accomplish seamless hand-offs of subscriber calls. In addition, manufacturers of wireless handsets that are capable of providing such service also should be made subject to the applicable requirements of Sec. 20.19. As discussed below, however, the existence of an established, applicable technical standard is a statutory requirement for imposing hearing aid compatibility requirements. Because no such standard currently exists for any services beyond the broadband PCS, Cellular, and certain SMR bands, the FCC cannot presently impose hearing aid compatibility requirements on additional services. The FCC does commit to bringing all digital CMRS within the scope of the Sec. 20.19 requirements as appropriate technical standards are developed, and we take steps to promote the development of these technical standards, as discussed below. In particular, the FCC establishes a specific timetable for the development of the necessary technical standards for those new services that have governing service rules in place. The FCC amends the rule to reflect these determinations, including its decision that hearing aid compatibility requirements will apply to any CMRS to the extent that it meets the criteria discussed above and there is an established technical standard for hearing aid compatibility applicable to the relevant handsets. 37. Extending hearing aid compatibility requirements to services beyond those currently covered will ensure that comparable service providers and manufacturers will be required to comply with similar hearing aid-compatible handset requirements regardless of the frequency bands on which they operate. Further, end users will be able to expect the full range of functionality found today in mobile phones without having to know the technical details, such as the frequencies on which their phones operate. Moreover, by clarifying the applicability of the hearing aid compatibility rules to these manufacturers and service providers now, the FCC enables them to begin planning to incorporate hearing aid compatibility compliance into their operations at the earliest possible stage, which should also promote a more efficient implementation. The FCC also ensures that the necessary parties become involved in ongoing discussions among the Commission, service providers, standards bodies, and industry representatives to develop additional standards for hearing aid compatibility measurement methods and parametric requirements. 38. The FCC concludes that any CMRS digital service that meets the Sec. 20.19(a) criteria for inclusion should be subject to hearing aid compatibility requirements. The FCC declines, however, to impose hearing aid compatibility obligations on other services and bands at this time. When the FCC imposed the existing hearing aid compatibility obligations on handset manufacturers and service providers in 2003, it simultaneously approved ANSI C63.19 as an established technical standard applicable to the services covered by the rule. Indeed, the FCC noted that the existence of an established technical standard was a statutory requirement for imposing hearing aid compatibility, and further found that this statutory requirement was ``[f]undamental'' to the determination of whether to impose hearing aid compatibility on wireless devices. The FCC therefore finds that an applicable technical standard should be in place when hearing aid compatibility obligations are imposed in the 700 MHz Commercial Services Band and other bands. 39. As noted above, none of the available versions of the current hearing aid compatibility standard cover services in the 700 MHz Commercial Services Band or the AWS-1 or BRS/EBS bands. Nor do they provide tests for some of the technologies anticipated in these bands, such as WiMAX. HIA argues that the ANSI C63.19-2006 standard for the 800 MHz band provides an appropriate framework to measure performance in the 700 MHz Band for purposes of determining hearing aid compatibility, but the record does not establish that the existing standard can be extended to that band without modifications or amendments. Indeed, HIA concedes that modifications to the standard may be necessary, and the Hearing Loss Association of America (HLAA) also supports this conclusion, noting that changes to the standard will be necessary to accommodate emerging technologies. Accordingly, the FCC concludes that it cannot extend specific hearing aid compatibility obligations to emerging bands and services until specific standards that establish the hearing aid compatibility measurement methods and parametric requirements for these additional services' and bands' devices are developed. 40. The FCC will continue to monitor progress to make sure that the adoption of such standards proceeds in a timely manner. If no standards have been adopted within 24 months, the FCC will consider alternative means to implement compatibility requirements, including whether to develop new metrics for compliance entirely and/or whether to extend the C63.19-2006 standard for the 800 MHz Band into the 700 MHz Commercial Services Band, as HIA suggests. The FCC will not at this time establish a schedule for future action regarding bands other than the current 27.1(b) bands because it does not appear to be possible to develop [[Page 27695]] compatibility standards in the absence of service rules. The FCC also notes that there is little or no discussion in the record of extending hearing aid compatibility beyond the 700 MHz Commercial Services Band. The FCC will, however, pursue appropriate action as the nature of services in new bands becomes more defined or we find that an applicable standard has been or can be developed. B. 700 MHz Guard Bands 41. The FCC replaces the Guard Band Manager regime in favor of the spectrum leasing policies and rules adopted in the Secondary Markets proceeding, and removes certain use and eligibility restrictions regarding licensee operations and leasing to affiliates to encourage the most effective and efficient use of the Guard Bands spectrum. While the FCC seeks to provide licensees and spectrum lessees with greater latitude and remove regulatory barriers where possible, it retains the existing Guard Band Manager coordination requirements. 1. Adoption of Secondary Markets Spectrum Leasing Rules 42. Among the FCC's key public interest objectives is to ensure that spectrum is put to its most efficient and effective use, and the FCC has increasingly granted technical and operational flexibility to its licensees to enable them to achieve that goal when it is consistent with preventing unacceptable interference. In adopting the Secondary Markets spectrum leasing policies and rules, the FCC accommodated the demand for significantly broader access to licensed spectrum by enabling a wide array of facilities-based providers to enter into spectrum leasing arrangements with spectrum users. These rules provided licensees with greater ability and incentive to make unused spectrum available to third parties, and thus promoted the provision of new and diverse services and applications. Third parties that could benefit from such spectrum leasing arrangements may include current spectrum operators requiring additional spectrum to meet customer needs over either the short-or long-term, new entrants seeking to provide a niche service and serve a limited area or narrowly targeted end-user market, small businesses trying to deliver services in rural communities, or entities unable or unwilling to participate in spectrum auctions or that otherwise do not have a license through which they can access spectrum to meet consumer or internal operational needs. By adopting the Secondary Markets spectrum leasing model, the FCC sought to establish spectrum leasing policies that allow licensees and spectrum lessees significant flexibility to enter into leasing arrangements that best meet their respective business needs and enable more efficient use of spectrum. 43. The FCC agrees with commenters that the Secondary Markets spectrum leasing model may be more effective than the existing band manager rules in accomplishing the Commission's goals of permitting the efficient and intensive use of spectrum while protecting public safety operations from harmful interference. Although the FCC sought to provide appropriate incentives to encourage greater participation in band manager leasing arrangements, the Guard Band Managers appear to have had limited success in negotiating spectrum user agreements with third parties. In contrast, the steadily increasing number of spectrum leasing arrangements in the other Wireless Radio Services reflects the growing use and acceptance of Secondary Markets spectrum leasing policies by wireless providers and spectrum lessees as an effective method to make spectrum more readily available to additional spectrum users. Since the Secondary Markets spectrum leasing procedures went into effect in February 2004, licensees and spectrum lessees have entered into approximately 1,200 spectrum leasing arrangements. 44. Accordingly, the FCC determines that providing Guard Bands licensees the additional flexibility offered by the Secondary Markets spectrum leasing regime would enhance spectrum usage in the 700 MHz Guard Bands. Specifically, in order to provide maximum flexibility, Guard Band licensees now will have the option of entering into both spectrum manager leasing and de facto transfer leasing arrangements. By permitting Guard Band licensees and spectrum lessees to choose between the two different options, the FCC will afford licensees and spectrum lessees significant flexibility to craft the type of leasing arrangement that best matches their particular needs and the demands of the marketplace. This flexibility could, in turn, help achieve fuller utilization of the spectrum. For example, adopting rules that permit Guard Band licensees to participate in de facto transfer leasing--in which primary responsibility for compliance with statutory and regulatory policies and rules is transferred from licensees to spectrum lessees--could encourage a licensee to enter into a leasing agreement that might otherwise be unattractive due to the level of operational oversight necessary to ensure compliance with the FCC's rules in a specific case. 45. The FCC emphasizes, however, that by affording 700 MHz Guard Band licensees greater flexibility, particularly in the de facto transfer leasing context, it is not minimizing in any way the requirement that these licensees must ensure that adjacent public safety operations are protected from harmful interference. Protection of 700 MHz public safety operations from interference remains the primary goal of the Commission's policies relating to the 700 MHz Guard Bands. The FCC agrees with comments that the Secondary Markets spectrum leasing rules provide sufficient mechanisms to ensure non-interference with spectrum users in the adjacent 700 MHz Public Safety Band. As noted by the BOP proponents, the Secondary Markets spectrum leasing rules provide protection equivalent to the band manager rules. 46. Although the FCC recognizes that the additional flexibility afforded by the de facto transfer spectrum leasing option transfers the primary responsibility for ensuring interference protection to the spectrum lessee, the FCC concludes that public safety users will still be protected from interference under the Secondary Markets spectrum leasing rules. Under this option, 700 MHz Guard Band licensees continue to retain some responsibility for operations encompassed under their license authorizations, and may be held responsible in cases of ongoing violation or other egregious lessee behavior for which licensees have, or should have, knowledge. More importantly, although the FCC expects Guard Band licensees to continue to exercise some oversight of its lessees, the Commission retains direct authority to pursue remedies against lessees under Sec. 503(b) of the Act. Spectrum lessees, whether under a spectrum manager leasing arrangement or a de facto transfer leasing arrangement, must strictly comply with the technical restrictions of the band, and must expressly agree to comply with all applicable Commission rules as a condition of the spectrum leasing arrangement. Regardless of whether the licensee or spectrum lessee holds primary responsibility for compliance with FCC rules, the FCC maintains the ability to take direct and swift action to enforce compliance with its rules. 47. The FCC concludes that it should apply our Secondary Markets spectrum leasing rules to the 700 MHz Guard Bands service. By doing so, the FCC will facilitate more efficient use of the spectrum by licensees and spectrum [[Page 27696]] lessees, and will produce a more market-driven system that should better meet the needs of the public without compromising the FCC's other core public interest goals--specifically, ensuring that public safety operations are protected from harmful interference. Although the FCC sought comment on whether we should permit licensees to choose between the existing Guard Band Managers regime or the Secondary Markets spectrum leasing rules, the FCC concludes that it is unnecessary to also allow licensees the ability to choose between the two leasing models, and thus replace the Guard Band Manager leasing regime with the Secondary Markets spectrum leasing policies and rules. Application of the Secondary Markets rules to all 700 MHz Guard Bands licensees will provide significant additional flexibility and ensure that these licensees are treated similarly to other Wireless Radio Services holding exclusive use licenses and leasing spectrum usage rights. 2. Use and Operational Flexibility 48. In addition to providing licensees and other spectrum users additional flexibility provided under our general Secondary Markets spectrum leasing rules, the FCC concludes that other changes to the 700 MHz Guard Bands rules should be made to promote more efficient and effective use of this spectrum. 49. Band Manager Status. In creating the 700 MHz Guard Bands service, the FCC designated Guard Band Managers as a new class of commercial licensee engaged solely in leasing spectrum to third parties. The FCC agrees with commenters that the FCC should re-evaluate its decision to limit the ability of licensees to act as service providers. The band manager rules and policies that specify that a Guard Band licensee may only act as a spectrum manager unduly restrict the ability of parties to use the spectrum, and may preclude the deployment of services that might otherwise be offered. Depending upon the circumstances, it may be that the Guard Band licensee itself is best positioned to make maximum use of the Guard Bands spectrum. Precluding a licensee from operating as a service provider may prevent access by parties that could make actual use of the band, and hinders, rather than facilitates, the efficient use of the spectrum. The FCC believes that, as long as a 700 MHz Guard Band licensee can fulfill its primary function of effectively managing its licensed spectrum and ensuring that 700 MHz public safety operations are protected from interference, there is little reason to preclude that licensee from also providing service. Accordingly, the FCC will revise its rules to permit licensees to operate as wireless service providers. To the extent that a licensee chooses to provide service, the FCC requires that the licensee update their license information if they plan to switch their regulatory status, and the FCC notes that licensees will be responsible for meeting all other obligations relating to their change in status. 50. Restrictions on Leasing to Affiliates. Similarly, the FCC concludes that it is in the public interest to remove the current restriction precluding any licensee from leasing more than 49.9 percent of its licensed spectrum to affiliates. As in the case of the policy precluding licensees from providing service, the FCC believes that its rule requiring that licensees lease the predominant amount of their spectrum to non-affiliates prevents entities from maximizing use of the spectrum, and hinders the provision of service to end users. This restriction also may prevent licensees and lessees from taking advantage of new technologies. To the extent that the FCC determines that broadband deployment is permissible in one or both of the 700 MHz Guard Bands, the FCC's restrictions that prevent Guard Band Managers from providing service or from leasing any more than 49.9 percent of its license to affiliates would hinder the ability of Guard Band licensees or their affiliates to deploy such service. Restrictions regarding use by the licensee or its affiliates may prevent entities from optimizing the use of the spectrum or entering into Secondary Markets spectrum leasing agreements with adjacent licensees that are not similarly restricted. Accordingly, the FCC eliminates this restriction. 51. Other Lease Restrictions. Under existing policies, 700 MHz Guard Band licensees are prohibited from imposing unduly restrictive requirements in the spectrum user agreements regarding access to, and use of, spectrum. In adopting these band manager rules, the FCC noted that Guard Band Managers would be afforded a considerable amount of latit