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, 27688-27713 [E7-9334]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 72, Number 94 (Wednesday, May 16, 2007)]
[Rules and Regulations]
[Pages 27688-27713]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-9334]



[[Page 27687]]

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Part VII





Federal Communications Commission





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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

Federal Register / Vol. 72, No. 94 / Wednesday, May 16, 2007 / Rules 
and Regulations

[[Page 27688]]


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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.

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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 
https://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.
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    \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).
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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.
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    \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).
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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

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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 lic