Use of Spectrum Bands Above 24 GHz for Mobile Radio Services, 1618-1631 [2018-27975]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 84, Number 24 (Tuesday, February 5, 2019)]
[Rules and Regulations]
[Pages 1618-1631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27975]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 30

[GN Docket No. 14-177; FCC 18-180]


Use of Spectrum Bands Above 24 GHz for Mobile Radio Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission or FCC) adopts rules for specific millimeter wave bands 
above 24 GHz in the Fourth Report and Order. This Order establishes an 
incentive auction that promotes the flexible-use

[[Page 1619]]

wireless service rules that the Commission has adopted for services in 
the Upper 37 GHz (37.6-38.6 GHz), 39 GHz (38.6-40 GHz), and 47 GHz 
(47.2-48.2 GHz) bands by making spectrum available for fifth-generation 
(5G) wireless, Internet of Things, and other advanced services in these 
bands.

DATES: Effective March 7, 2019.

FOR FURTHER INFORMATION CONTACT: Erik Salovaara of the Office of 
Economics and Analytics, Auctions Division, at (202) 418-7582 or 
Erik.Salovaara@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Fourth 
Report and Order (Fourth R&O), GN Docket No. 14-177, FCC 18-180, 
adopted on December 12, 2018, and released on December 12, 2018. The 
complete text of this document is available for public inspection and 
copying from 8 a.m. to 4:30 p.m. Eastern Time (ET) Monday through 
Thursday or from 8 a.m. to 11:30 a.m. ET on Fridays in the FCC 
Reference Information Center, 445 12th Street SW, Room CY-A257, 
Washington, DC 20554. The complete text is available on the 
Commission's website at https://wireless.fcc.gov, or by using the search 
function on the ECFS web page at https://www.fcc.gov/cgb/ecfs/. 
Alternative formats are available to persons with disabilities by 
sending an email to fcc504@fcc.gov or by calling the Consumer & 
Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 
(tty).

Final Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act of 1980, as amended 
(RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Fourth Further Notice of Proposed Rulemaking (4th 
FNPRM) released in August 2018 in this proceeding. The Commission 
sought written public comment on the proposals in the 4th FNPRM, 
including comments on the IRFA. No comments were filed addressing the 
IRFA. This present Final Regulatory Flexibility Analysis (FRFA) 
conforms to the RFA.

Paperwork Reduction Act

    This document does not contain new or modified information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. In addition, therefore, it does not contain 
any new or modified information collection burden for small business 
concerns with fewer than 25 employees, pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4).

Congressional Review Act

    The Commission will send a copy of this Fourth R&O in a report to 
be sent to Congress and the Government Accountability Office pursuant 
to the Congressional Review Act (CRA), see 5 U.S.C. 801(a)(1)(A).

Synopsis

I. Introduction

    1. The Commission takes significant steps to make spectrum 
available for fifth-generation (5G) wireless, Internet of Things (IoT), 
and other advanced services in the Upper 37 GHz (37.6-38.6 GHz), 39 GHz 
(38.6-40 GHz), and 47 GHz (47.2-48.2 GHz) bands. The Commission 
establishes an incentive auction that promotes the flexible-use 
wireless service rules that the Commission has adopted for these bands. 
Under the incentive auction approach and consistent with the 
Commission's statutory authority to conduct incentive auctions, an 
incumbent 39 GHz licensee may choose to relinquish the spectrum usage 
rights provided by its existing licenses in exchange for a share of the 
proceeds from the auction of new licenses. Alternatively, the incumbent 
may choose to receive modified licenses after the auction that are 
consistent with the new band plan and service rules and equivalent to 
its existing authorizations to operate in the 39 GHz band. Ultimately, 
the incentive auction approach that the Commission adopts will enhance 
the opportunity for incumbents and new licensees in the Upper 37 GHz 
and 39 GHz bands to provide valuable next-generation services.
    2. The Commission's decisions, along with specific procedures to be 
adopted in the forthcoming Auction Comment and Auction Procedures 
Public Notices, will enable the Commission to move forward with an 
auction of the Upper 37 GHz, 39 GHz, and 47 GHz bands by the end of 
2019. In combination, the Upper 37 GHz and the 39 GHz bands offer the 
largest amount of contiguous spectrum in the millimeter wave bands for 
flexible-use wireless services--a total of 2,400 megahertz--and the 47 
GHz band will provide an additional 1,000 megahertz of millimeter wave 
spectrum for such services. Together with the pending auctions of 
licenses in the 28 GHz (27.5-28.35 GHz) and 24 GHz (24.25-24.45 GHz, 
24.75-25.25 GHz) bands, the Commission is making substantial progress 
in assigning high-band spectrum for innovative services, and the 
Commission will continue to work towards assigning additional spectrum 
in the mid-band range for the benefit of American consumers.

II. Background

    3. In 2016, the Commission adopted Upper Microwave Flexible Use 
Service (UMFUS) rules for the 28 GHz, Upper 37 GHz, and 39 GHz bands, 
to make available millimeter wave spectrum for 5G. In 2017, the 
Commission expanded the UMFUS rules to cover the 24 GHz and 47 GHz 
bands. In addition to the licensed use opportunities in these bands, 
the Commission made the Lower 37 GHz (37-37.6 GHz) band available for 
non-Federal users through a coordination mechanism with Federal users, 
which the Commission will develop more fully with government and 
industry collaboration. Earlier this year, the Commission sought 
further comment on a proposed coordination mechanism and alternatives. 
The Commission recognizes the importance of the Lower 37 GHz band and 
commits to working with the National Telecommunications and Information 
Administration and other federal agencies to develop a sharing approach 
in 2019.
    4. Existing licenses in the 39 GHz band consist of unpaired 50 
megahertz blocks licensed by Partial Economic Area (PEA) or by 
Rectangular Service Area (RSA), which can cross PEA boundaries or be 
enveloped by them. Commission records show 11 unique incumbent 
licensees hold about 5,880 active licenses in the 39 GHz band (5,590 
PEA licenses and 290 RSA licenses). Measured in terms of ``MHz-pops''--
the product of spectrum bandwidth and covered population, only 
approximately one-third of the 39 GHz band is held in Commission 
inventory and is not authorized for use by any existing license. 
Currently, a number of licenses do not fit geographically into the 
proposed 39 GHz band plan of 100 megahertz licenses by PEA, which 
results in ``encumbered'' licenses. There are two types of encumbered 
licenses: (1) RSA licenses that do not conform to PEA boundaries; and 
(2) PEA licenses that are not authorized to provide service in the 
entire PEA due to an overlapping RSA license, i.e., PEA licenses that 
overlap geographically with pre-existing RSA licenses whose frequency 
assignment they must protect. The Upper 37 GHz and 47 GHz bands 
currently have no commercial terrestrial wireless incumbent licensees.
    5. The Commission has recognized that, with respect to the 39 GHz 
band, ``[h]olding any auction based on this

[[Page 1620]]

fragmented band would likely be inefficient, as bidders would 
reasonably expect to incur significant transaction costs in assembling 
contiguous spectrum post-auction.'' To address this issue, the 2016 
Spectrum Frontiers R&O adopted a voluntary rebanding framework to allow 
incumbent licenses to be reconfigured to the new band plan and service 
areas in an effort to clear the band of encumbrances and enable 
licensees to aggregate licenses for contiguous frequencies. In June 
2018, the Wireless Telecommunications Bureau (Bureau) issued a Public 
Notice announcing that it was accepting license modification 
applications pursuant to this voluntary rebanding process. Since that 
time, however, no applications to authorize such swaps have been 
received. Moreover, conforming existing licenses to the new band plan 
and service areas may be infeasible for incumbent licensees with only 
one pair of 50 megahertz licenses in a particular area, one 50 
megahertz block in a particular area, or an RSA license.
    6. Earlier this year, in the 4th FNPRM, the Commission proposed an 
incentive auction that potentially could clear all existing 39 GHz 
licenses. In addition, the Commission proposed a ``voucher exchange'' 
that would allow incumbents to modify existing spectrum usage rights, 
without increasing them in aggregate. The Commission indicated that 
this framework would make it easier for incumbents with partial license 
holdings to retain existing spectrum usage rights without additional 
license payments. Further, the Commission proposed provisions for a 
mandatory reconfiguration of incumbents' existing spectrum usage 
rights, which an incumbent may choose to accept instead of 
participating in the voluntary incentive auction.

III. Discussion

A. The Need for an Incentive Auction

    7. The Commission will conduct an incentive auction that can clear 
existing 39 GHz licenses and offer new spectrum licenses in the Upper 
37 GHz, 39 GHz, and 47 GHz bands. The incentive auction process that 
the Commission adopts will resolve the persistent difficulties 
presented by the need for existing 39 GHz licenses to be transitioned 
efficiently to the new band plan and possibly to new service areas. 
Absent this process, existing 39 GHz licenses break up blocks of 
spectrum and fragment frequencies across the 39 GHz band, creating 
barriers to the deployment of next-generation services in the band. The 
incentive auction will solve this challenge by offering incumbent 
licensees the opportunity to participate in the auction to relinquish 
their existing licensed spectrum usage rights in exchange for a payment 
determined by the auction and/or to replace existing licenses with new 
licenses for whole blocks that will be assigned contiguous frequencies 
within license areas. Further, for each incumbent that does not wish to 
participate in the auction, the Commission will provide the incumbent 
with modified licenses for contiguous 100 megahertz blocks covering 
full PEAs (with possibly up to one partial PEA), leaving these 
incumbents better able to provide next-generation services. Providing 
these opportunities is necessary to resolve the difficulties presented 
by the existing encumbered and unpaired licenses and to clear the way 
for assignment of a significant number of new licenses for whole blocks 
with contiguous frequencies within PEAs. The incentive auction thereby 
substantially furthers the public interest in making available spectrum 
for the provision of next-generation services.
    8. The Commission's action implements its proposal in the 4th FNPRM 
for an incentive auction that potentially could clear all existing 39 
GHz licenses, assign new licenses under a band plan providing 100 
megahertz blocks by PEA, and provide modified 100 megahertz licenses to 
any incumbents that choose not to participate in the auction. 
Commenters respond favorably to the proposed incentive auction to 
resolve the difficulties presented by existing 39 GHz licenses. 
Consistent with the overall support, commenters also offer suggestions 
about specific details or request clarifications on particular points.
    9. The Commission affirms its conclusion that the Commission has 
authority under the Communications Act to modify existing licenses in a 
manner that will allow for a more efficient auction and to conduct the 
proposed incentive auction for these bands. Commenters agree that the 
proposed auction is ``well within [the Commission's incentive auction] 
authority.'' The statute authorizes the Commission to use an incentive 
auction to encourage licensees to relinquish their holdings voluntarily 
provided that at least two bidders compete to relinquish spectrum usage 
rights. The incentive auction, both as proposed in the 4th FNPRM and 
adopted, is voluntary. Furthermore, the clock phase of the incentive 
auction format the Commission plans to use serves as both a reverse 
auction that will determine the amount of incentive payments as well as 
a forward auction to assign new flexible use licenses. As such, the 
Commission will conduct the auction only if there are two competing 
incumbent participants. As the Commission concluded in the 4th FNPRM, 
and no commenter disputes, as long as more than one incumbent licensee 
commits to relinquish its spectrum usage rights, there will be two 
licensees competing in the reverse auction portion of the incentive 
auction.
    10. The Commission also decides the defining characteristics of the 
incentive auction and the related license modification process that 
will enable deployment of licenses for next-generation services in 
these bands. Because the clock phase of the incentive auction the 
Commission adopts serves as both the reverse and forward auctions, the 
incentive amounts offered to relinquish existing licenses will be based 
on the final clock phase prices in each PEA. As a result, incumbents 
will have the opportunity to replace at no additional cost all existing 
spectrum usage rights equivalent to a full 100 megahertz block with new 
licenses that are offered in the auction and provide equivalent rights. 
Further, the Commission concludes that it is necessary that incumbents 
that choose not to participate in the incentive auction will have their 
licenses modified based on a reconfiguration of their existing spectrum 
usage rights that is more consistent with the current band plan. As in 
the prior broadcast television spectrum incentive auction, and in all 
Commission auctions, the Commission will develop and detail all the 
procedures necessary to implement its decisions in a pre-auction 
process framed by an Auction Comment Public Notice and Auction 
Procedures Public Notice.\1\
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    \1\ In this Fourth R&O, the Commission addresses suggestions and 
requests raised in response to the 4th FNPRM that are relevant to 
its decisions in this Fourth R&O. The Commission leaves for later 
discussion details that are more appropriately addressed later in 
the pre-auction process, such as opening bids. The Commission 
commits to moving forward expeditiously at the Commission level with 
public notices seeking comment and adopting detailed procedures to 
implement the incentive auction, i.e., the ``pre-auction process.''
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B. Band Plan

    11. In the 4th FNPRM, the Commission proposed to modify the 39 GHz 
band plan from seven 200 megahertz channels to fourteen 100 megahertz 
channels, in order to facilitate the repacking of incumbents without 
compromising the band's potential for supporting 5G services. The 
Commission also proposed to

[[Page 1621]]

modify the band plan in the Upper 37 GHz band and the UMFUS portion of 
the 47 GHz band from 200 megahertz to 100 megahertz channels. 
Maintaining the same channel width across these bands would avoid 
creating complexities for bidders should the Commission auction these 
bands together, and would allow the contiguous Upper 37 GHz and 39 GHz 
bands to function effectively as one 2,400 megahertz band of spectrum.
    12. The Commission adopts its proposal, which is supported by 
nearly all commenters, to modify the band plans of the Upper 37 GHz, 39 
GHz, and 47 GHz bands from 200 megahertz channels to 100 megahertz 
channels. The Upper 37 GHz band and the 47 GHz band will now consist of 
ten 100 megahertz channels each, and the 39 GHz band will consist of 
fourteen channels. Modifying the band plan to 100 megahertz blocks 
offers multiple benefits for these bands, including facilitation of the 
repacking of incumbents, consistency with emerging industry and 
international standards, and the potential for uniform channel sizes 
across multiple millimeter wave bands to facilitate secondary market 
transactions and the standardization of equipment. Further, as noted by 
commenters, there are potential positive auction effects that would 
result from standardizing the channel width across the Upper 37 GHz, 39 
GHz, and 47 GHz bands, which will be auctioned together. Further, the 
Commission agrees with the commenters that suggest that adopting a 
uniform channel size for as many millimeter wave bands as possible will 
promote more efficient use of the spectrum.
    13. This new band plan, which is heavily supported by the record, 
will facilitate the rationalization of existing licenses in the 39 GHz 
band and enable greater flexibility for licensees while remaining 
consistent with emerging standards for 5G. Only one commenter, TIA, 
opposes the proposed change to 100 megahertz channels. TIA argues that 
wider channels will better support 5G services and that the previously-
adopted 200 megahertz channels are sufficient to ensure adequate 
opportunities for participation by new entrants, due to the large 
number of channels available. It also offers an alternative to the 4th 
FNPRM's proposal concerning the size of channels. While the Commission 
agrees with TIA that access to wide swathes of spectrum is an important 
goal in support of 5G and other bandwidth-intensive services, as other 
commenters note, licensees would still be able to achieve greater 
bandwidth through aggregation, particularly if the Commission 
facilitates aggregation of contiguous spectrum blocks in its auction 
design.
    14. For the 39 GHz band in particular, using 100 megahertz channels 
will simplify the rationalization process for incumbents and reduce the 
number of existing licenses that are less than a whole channel block 
under the new licensing scheme, given that incumbents generally hold 
non-contiguous paired 50 megahertz blocks (100 megahertz), as opposed 
to the original band plan consisting of 200 megahertz channels. 
Further, adopting a band plan using 100 megahertz building blocks does 
not prevent licensees that prefer channels wider than 100 megahertz 
from bidding on multiple blocks and aggregating spectrum to achieve 
that goal. The 100 megahertz channels the Commission adopts in this 
Fourth R&O will not impede carrier aggregation to achieve greater 
bandwidths, but merely provide additional flexibility, both for 
licensees for whom 100 megahertz is sufficient and for incumbents who 
currently hold licenses in multiples of 100 megahertz. The Commission 
is mindful of the need for multiple 100 megahertz blocks assigned to 
the same carrier to be contiguous and the Commission considers this 
factor in its auction design.

C. Preparing for an Incentive Auction

1. Modifying 39 GHz Licenses Based on Reconfigured Spectrum Usage 
Rights
    15. As the Commission noted in the 4th FNPRM, the Commission has 
authority to modify the holdings of existing licensees ``if in the 
judgment of the Commission such action will promote the public 
interest, convenience, and necessity.'' No commenters dispute the 
Commission's authority generally or with respect to any aspect of 
modifications proposed in the 4th FNPRM.
    16. Prior to the incentive auction, each incumbent will be offered 
a reconfiguration of its existing spectrum usage rights that will 
conform more closely with the new band plan and service areas. Given 
that some incumbent licenses may cover geographic areas that do not 
match the PEA service areas established for the 39 GHz band, the 
reconfiguration may need to combine an incumbent's spectrum rights in 
multiple license areas to create full spectrum blocks where possible, 
retaining at most one partial PEA block. Where such changes are 
unavoidable, the reconfiguration will maintain the overall value of 
spectrum usage rights by quantifying those rights by weighted MHz-Pops, 
as measured pursuant to the procedures established by this Fourth R&O.
    17. In addition, each incumbent will be given an option to choose 
an alternate reconfiguration, subject to certain constraints, in order 
to more closely align the reconfiguration with the incumbent's 
interests, such as current operations. These modifications should leave 
each incumbent licensee better able to offer advanced services by 
providing contiguous frequencies within each PEA, while leaving the 
value of the incumbent's spectrum usage rights unchanged as measured in 
weighted MHz-Pops.\2\ Each incumbent will decide whether to accept the 
modifications (which will take effect after the close of the auction), 
either as proposed by the Commission or an acceptable alternate, or to 
participate in the incentive auction to relinquish their existing 
spectrum usage rights in exchange for a share of the auction proceeds. 
The Commission directs the Wireless Telecommunications Bureau to 
provide each incumbent with a proposed modification implementing its 
decisions and to do so well in advance of the application window for 
the auction.
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    \2\ Existing licensees that choose to accept modified licenses 
remain subject to FCC Rule 30.104(f), which states that existing 39 
GHz licensees are required to make a buildout showing by June 1, 
2024. See 47 CFR 30.104(f). If a licensee with a modified license is 
unable to make that showing by the deadline because of an expansion 
in the boundaries of its service area pursuant to these license 
modifications, that licensee may request relief from the rule, which 
the FCC will consider given the specific facts and circumstances of 
each licensee. The Commission reminds licensees that the FCC will 
grant waiver requests only if the petitioner can demonstrate special 
circumstances that warrant a deviation from the general rule and 
that such a deviation will serve the public interest. Northeast 
Cellular Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990); WAIT 
Radio v. FCC, 459 F.2d 1203 (D.C. Cir. 1972). See also 47 CFR 1.925; 
Wireless Telecommunications Bureau Reminds Licensees of Construction 
Obligations, 32 FCC Rcd 4802 (WTB 2017).
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    18. AT&T and Verizon both ask that the Commission clarify that all 
existing licenses are subject to modification, regardless of whether or 
not an incumbent participates in the incentive auction. All existing 
licenses are subject to change, regardless of the licensee's 
participation in the incentive auction, in order to implement the 
Commission's transition to a new band plan and service rules for the 39 
GHz band.\3\ Though affected by an incumbent's decision whether to 
participate in the incentive auction, the exact form each license will 
take by the end of the

[[Page 1622]]

incentive auction will be determined by the process discussed herein. 
Such modifications will include both frequency reassignments and, in 
many cases, geographical reassignments.
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    \3\ The Commission notes that, ultimately, the Internal Revenue 
Service can determine the tax consequences resulting from direct 
license modifications or participation in an incentive auction.
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    19. Quantifying Existing Spectrum Usage Rights with Weighted MHz-
Pops. As a preliminary matter, an incumbent's total licensed spectrum 
usage rights in each PEA will be measured by adding up the MHz-Pops 
(bandwidth times covered population) for each of an incumbent's 
licenses in each PEA.\4\ To compare MHz-Pops across PEAs, the MHz-Pops 
in each PEA will be weighted using an index calculated using the 
relative prices for spectrum licenses in each PEA in other auctions. 
The Commission proposed a weighting process in the 4th FNPRM. While not 
opposing weighting, commenters disagreed on the best data to use to set 
the relative weights. T-Mobile advocates using price data in imminent 
auctions of licenses for millimeter wave spectrum, in particular the 
auction of 24 GHz spectrum licenses. Verizon objects that any data from 
that auction may be too particular and uncertain to rely upon here, and 
instead it suggests using price data from Auction 1002, the auction for 
600 MHz licenses. AT&T notes the difficulty of arriving at ``correct'' 
weights but does not suggest looking toward any auction in particular.
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    \4\ The incumbent's total spectrum usage rights in a PEA divided 
by the MHz-pops for a full 100 megahertz block (the bandwidth of a 
new block) will indicate the equivalent number of blocks (whole and 
partial) held in the PEA under the new band plan. For RSA licenses, 
the Commission will consider the portion of the RSA license that 
falls within each PEA such that an RSA license that crosses a PEA 
boundary will have the relevant portion of population counted in 
each PEA.
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    20. Data currently available for determining the weights for this 
incentive auction all pertain to licenses for flexible use in spectrum 
below 3 GHz. For instance, when preparing for the incentive auction of 
broadcast television spectrum, the Commission used price data from 
prior auctions to estimate relative price differences across PEAs for 
the television spectrum in 600 MHz. The subsequent prices for new 600 
MHz licenses in that auction provide further data about relative 
differences across PEAs. As noted in the 4th FNPRM, relative spectrum 
license prices among geographic areas can be substantially more similar 
across auctions than the spectrum license prices themselves. The 
Commission notes that the Commission's first auction of flexible use 
licenses for millimeter wave spectrum is currently ongoing and a second 
will follow after the first closes. Additional data regarding the 
prices for licenses in those auctions may be helpful, if available. 
Accordingly, for this incentive auction, the Commission directs the 
Wireless Telecommunications Bureau to set the weights considering the 
relative PEA price data prepared for and resulting from the broadcast 
television spectrum incentive auction, while also taking into account 
any additional Commission data regarding prices for millimeter wave 
spectrum licenses to the extent practicable.
    21. As supported by commenters, 2010 Census data will be used to 
determine the population covered by each license. The two-by-two 
kilometer cell grid methodology employed to determine population in 
particular areas in the broadcast incentive auction will be used to 
calculate the population for licenses for RSAs and for licenses 
covering a full or partial PEA.
    22. To further the Commission's goal of transitioning to the new 
band plan, separate licenses that are held by entities that control or 
are controlled by each other and/or have controlling ownership 
interests in common will be treated as held by one incumbent. For this 
purpose, the Commission will use the definition of ``controlling 
interest'' as an entity with de jure or de facto control that the 
Commission uses with respect to auction applications, specifically the 
rule prohibiting an individual or entity from having a controlling 
interest in more than one application to participate in the auction. 
Further, it may be appropriate to freeze assignments of these licenses 
at a future point.\5\ The Commission directs the Bureau to address 
whether or when it is necessary to freeze assignments of 39 GHz 
licenses prior to calculations of aggregate holdings.
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    \5\ For example, when the FCC finalizes the procedures for 
calculating aggregate holdings, it may be necessary to preclude 
subsequent assignments that might disaggregate those holdings.
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    23. In response to the 4th FNPRM, PVT Networks, Inc. (PVT) presents 
concerns regarding potentially significant consequences of de minimis 
encumbrances to its licenses. PVT holds several licenses, two of which 
are encumbered to an extremely small extent. PVT argues that if an RSA 
encumbrance of a PEA license is so small as to constitute a 
``flyspeck'' or de minimis encumbrance (as calculated by percentage of 
population in a PEA), the encumbered PEA license should be treated as 
unencumbered.
    24. The Commission agrees that it should not permit de minimis 
encumbrances, including PVT's, to present unnecessary challenges to 
incumbents that seek to preserve spectrum usage rights. Where an 
incumbent holds a license that covers virtually the entire population 
in a PEA, the Commission concludes it would be in the public interest 
to allow the licensee to serve the entire license area rather than 
considering it an encumbered block. Consistent with Commission 
precedent that has permitted de minimis modifications to licenses that 
further the public interest, the Commission concludes that incumbent 
licensees with existing licenses that cover at least 99 percent of the 
MHz-Pops in a PEA will be considered as having the equivalent of an 
unencumbered whole block prior to the Commission's reconfiguration.
    25. Optimization to Reconfigure Existing Spectrum Usage Rights. The 
Commission will propose a reconfiguration of each incumbent's holdings 
that will reduce the total number of partial PEA block holdings without 
reducing the incumbent's total weighted MHz-pops across all PEAs, a 
process the Commission referred to as ``mandatory repacking'' in the 
4th FNPRM. As suggested in the 4th FNPRM, once the weighted MHz-pops 
have been calculated for each incumbent's licenses, each incumbent's 
spectrum holdings will be reconfigured using an optimization procedure 
to reduce the number of holdings that are equivalent to less than a 
full 100 megahertz block in a full PEA (i.e., one that covers the 
entire geographic area of the PEA). The Commission anticipates that the 
objective of the optimization process will be to minimize the number of 
weighted MHz-Pops that are left over as unassigned spectrum usage 
rights (``white space''). This will enable the Commission to offer more 
contiguous spectrum in the incentive auction. The optimization would 
ensure that each incumbent's total weighted MHz-pops across all the 
PEAs in which it has holdings would remain unchanged. In addition, each 
incumbent would hold at most one partial PEA block, which would be in a 
PEA in which it has existing holdings. Further, aggregate holdings in a 
PEA only would be reduced down to the greatest integer less than or 
equal to the incumbent's aggregate initial holdings or increased up to 
the least integer greater than or equal to the incumbent's aggregate 
initial holdings. This last constraint implies that only holdings for a 
partial PEA block would be moved across PEAs and that the optimization 
would not modify any license to require service in any PEA in which the 
licensee does not have existing holdings. The Commission directs the 
Bureau to determine the best

[[Page 1623]]

methodology for implementing this optimization process.
    26. The Commission concludes that a licensee's remaining holdings 
for a partial PEA block in one PEA following reconfiguration could 
cover a significant enough percentage of the population such that the 
remaining uncovered portion would qualify as de minimis, entitling the 
licensee to be considered as holding the entire license. That is, where 
after reconfiguration, an incumbent would cover nearly all of the 
population in a PEA, it would be unlikely that any other provider would 
seek to serve the remaining area in that PEA. Under these 
circumstances, the Commission concludes that it is reasonable to adopt 
a five percent de minimis standard for an incumbent's remaining partial 
PEA block following reconfiguration. The Commission finds it is in the 
public interest to adopt this higher standard for the partial PEA 
blocks to ensure that the incumbent licensee has the opportunity to 
serve the entire PEA, rather than leaving the small percentage of the 
population most likely unserved. As all of the details of the 
methodology for reconfiguring holdings are not yet final, the 
Commission directs the Bureau to consider increasing this threshold as 
appropriate when it finalizes the optimization methodology, to no more 
than a total of ten percent.
    27. Configuring Partial PEA Blocks. The Commission intends that the 
license for an incumbent's one partial PEA block will be configured by 
adjusting the incumbent's currently licensed area in the PEA so that it 
corresponds to the incumbent's reconfigured holding in that PEA. For 
example, if an incumbent's partial PEA block covers one-half of the 
MHz-pops in the PEA, and the reconfigured holding in that PEA is one-
quarter the MHz-pops, the partial PEA block will consist of 100 
megahertz covering an area of the PEA fully contained within its 
current license that encompasses 25 percent of the population in that 
PEA. Similarly, if the reconfigured fractional holdings are greater 
than the current MHz-Pops in the PEA, the geographic coverage will be 
adjusted in a manner that fully contains the currently licensed area 
but remains within the boundaries of the PEA. The geography of a 
current encumbered license will be adjusted to conform to an 
incumbent's new fractional holdings, rather than adjusting the 
bandwidth, because the Commission recognizes that licensees of 
millimeter wave spectrum prefer 100 megahertz blocks at a minimum for 
advanced services, and incumbent licensees may better be able to 
provide service in an area closer to the footprints of their original 
licenses. The proposed geographic boundaries for the partial PEA block 
will be as similar as possible to the incumbent's original holdings in 
that PEA, recognizing that the remaining partial PEA block may cover a 
larger or smaller percentage of pops than the existing license.
    28. In addition, a whole PEA block will be removed from the auction 
inventory when providing for licensing partial blocks based on 
reconfigured holdings. As a consequence, licenses for partial PEA 
blocks will be accompanied by unassigned white space in the remainder 
of the block. Licenses for partial PEA blocks will be needed only for 
an incumbent that both chooses to receive modified licenses and that 
chooses not to relinquish its rights to a partial PEA block in exchange 
for an incentive payment. Leaving the rest of the block unassigned will 
help to preserve the structure of the new band plan going forward. 
Although this approach potentially will result in unassigned white 
space, the total white space that will result is extremely low relative 
to the total 39 GHz band. The Commission will seek comment in the 
Auction Comment Public Notice regarding assignment of the remaining 
unassigned white space.
2. Incumbent Options Following Reconfiguration
    29. After the results of the reconfiguration process are announced, 
an incumbent 39 GHz licensee will have three options. It can choose to: 
(1) Have its licenses modified based on the Commission's proposed 
reconfiguration of its holdings; or (2) have its licenses modified 
based on its proposed alternative reconfiguration that yields the same 
or fewer weighted MHz-pops and satisfies certain specified conditions; 
or (3) commit to relinquish its licenses in exchange for an incentive 
payment and/or the ability to bid for new licenses.
    30. Incumbents Not Participating in the Incentive Auction. The 
Commission recognizes that an incumbent licensee may wish not to 
participate in the incentive auction to relinquish its existing 
spectrum usage rights, but may have existing holdings that do not 
correspond to full new blocks; in such cases the licensee may benefit 
from an alternative reconfiguration of its existing licenses. The 
Commission will allow each incumbent, once it reviews the results of 
the Commission's reconfiguration, to propose modifications to its 
existing licenses before it decides whether it will participate in the 
auction. If the incumbent ultimately decides to participate in the 
auction, however, any proposed modifications to its existing licenses 
will not have any effect.
    31. To be an acceptable alternative reconfiguration, the Commission 
anticipates that the incumbent's proposal must satisfy the same 
requirements as the Commission's modification proposal, except that, in 
contrast to the Commission's proposed reconfiguration, an incumbent's 
proposal need not minimize the weighted MHz-Pops remaining as white 
space in the one PEA in which the incumbent is left with the equivalent 
of a partial PEA block. That is, in a proposed reconfiguration, an 
incumbent can hold at most one partial PEA block, which would be in a 
PEA in which it has existing holdings. In addition, proposed 100 
megahertz full PEA licenses must be in PEAs in which it has existing 
holdings. Finally, aggregate holdings in a PEA can only be reduced down 
to the greatest integer less than or equal to the incumbent's aggregate 
initial holdings or increased up to the least integer greater than or 
equal to the incumbent's aggregate initial holdings. If a licensee 
chooses an acceptable alternate reconfiguration proposal, the incumbent 
can indicate that it will not participate in the incentive auction and 
instead opt to have its licenses modified after the auction based on 
its reconfiguration proposal. The Commission directs the Bureau to 
announce the methodology and process for each incumbent to propose 
alternate reconfigurations and to elect how to proceed, and to educate 
incumbents about the process.
    32. Even though an incumbent choosing to have its licenses 
modified, either as configured by the Commission or under an acceptable 
alternative proposal, cannot bid on new licenses in the incentive 
auction, it will be allowed to relinquish the licensed spectrum usage 
rights associated with its single partial PEA block holding in exchange 
for an incentive payment. The payment amount will be determined in the 
auction and will be equivalent to the incumbent's fractional share of 
the block times the final clock phase price of a generic spectrum block 
in that PEA. For example, an incumbent that relinquishes a reconfigured 
partial PEA holding of .6 may receive 60% of the final clock phase 
price for generic blocks in that PEA. If an incumbent relinquishes 
holdings for a partial PEA block, the incentive auction can offer an 
additional full block of spectrum in the auction inventory. An 
incumbent that accepts reconfigured holdings and therefore does not 
fully participate in the incentive auction will not have the

[[Page 1624]]

option of relinquishing any full block licenses in exchange for 
incentive payments however, nor will it be able to bid on new licenses 
in the auction.
    33. An incumbent that chooses not to participate in the auction and 
instead chooses to accept reconfigured holdings, either corresponding 
to the results of the FCC optimization or to an acceptable alternative 
reconfiguration, will have frequency-specific licenses assigned for its 
reconfigured holdings after the incentive auction has concluded. New 
frequencies for the modified licenses will be determined in the 
assignment phase of the incentive auction. Incumbent licensees that 
accept reconfigured holdings will not be permitted to place bids for 
specific frequencies in the assignment phase, however. As described as 
part of the assignment phase, all licensees should be issued licenses 
with contiguous frequencies within a category of a PEA regardless of 
whether they participate in the auction or bid in the assignment phase.
    34. Incumbents Participating in the Incentive Auction. Incumbents 
that commit to relinquishing all of their existing licenses will 
receive ``vouchers'' sufficient to win blocks in the auction equivalent 
to their existing PEA holdings.\6\ Such incumbents do not need to rebid 
on spectrum blocks equivalent to their existing holdings, however, 
unless they want to continue to hold licenses in those areas. 
Participating incumbents can apply the vouchers toward payments for 
blocks in other PEAs and receive a cash incentive payment if the value 
of their vouchers exceeds their net auction obligations. Auction 
participants can also simply relinquish their holdings and choose not 
to bid on any new licenses, in which case they will receive a cash 
incentive payment for their vouchers.
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    \6\ For ease of discussion, the Commission describes incentive 
payments for incumbents relinquishing spectrum usage rights as 
``vouchers.'' See 4th FNPRM at para. 20. Notwithstanding short-hand 
descriptions of the process, incumbents do not ``exchange'' licenses 
for vouchers or at any point receive a ``voucher'' that has any 
independent substance.
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    35. Vouchers for existing holdings in a PEA will be valued at the 
final clock phase price of a generic spectrum block in the PEA. As a 
result, a participating incumbent with holdings equivalent to a full 
block in a PEA can retain the block without making any additional 
payment or can receive an incentive payment equal to the final clock 
phase price of a block in that PEA if it no longer wishes to hold the 
block. The incumbent then will have the option of bidding an additional 
amount in the assignment phase to obtain a particular frequency for its 
new license, but it will receive contiguous frequency blocks within a 
category regardless of whether it makes an additional assignment phase 
bid.
    36. In addition to having the opportunity to modify its existing 
spectrum holdings through participation in the incentive auction, an 
incumbent that chooses to participate in the auction also will be able 
to make pre-bidding exchanges in its existing holdings of partial PEA 
blocks, subject to constraints (described below as ``Round Zero'' of 
the auction). As described below, this will encourage auction 
participation by enabling an incumbent to manage uncertain costs 
associated with retaining spectrum holdings in the incentive auction.

D. Incentive Auction Structure

1. Spectrum Available for New Licenses
    37. Following the choices made by incumbent 39 GHz licensees to 
accept modified licenses based on reconfigured holdings or to 
relinquish their existing spectrum usage rights, the Commission will 
offer new licenses in the incentive auction for all available spectrum 
in the Upper 37 GHz, 39 GHz, and 47 GHz bands.\7\ The available 
spectrum will consist of spectrum throughout these bands, less any 
quantity of spectrum that must be retained to provide non-participating 
incumbents with modified licenses. If all incumbent licensees choose to 
participate, that quantity will be zero and the Commission will offer 
new licenses for 3,400 megahertz of spectrum, or 34 licenses in every 
PEA. New licenses in the auction, whether won by incumbents 
relinquishing existing licenses or by new applicants, will authorize 
only the use of whole spectrum blocks in 100 megahertz blocks.
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    \7\ The Commission does not make any decision regarding 
suggestions to auction licenses for additional bands of spectrum 
with the three bands already identified. Though licenses for the 
Upper 37 GHz, 39 GHz, and 47 GHz bands in one auction will provide 
up to 3,400 megahertz in every PEA for advanced services, various 
commenters encourage the Commission to consider adding other bands. 
For example, commenters argue that because the 42 GHz band is in the 
same tuning range as the Upper 37 GHz and 39 GHz bands, the 
Commission should auction all of these bands together, which would 
generate economies of scale and reduce equipment costs. The 
Commission may consider whether other bands are in fact ready and 
suitable for inclusion in the auction of licenses for these three 
bands, after notice and comment, in the Auction Procedures Public 
Notice.
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2. Eligibility
    38. Any party eligible to hold a license in these bands will be 
eligible, subject to meeting the Commission's application requirements, 
to participate in the auction for new licenses, except for incumbent 39 
GHz licensees that accept modified licenses as reconfigured and decline 
to relinquish all existing licenses. The Commission proposed this 
qualification in the 4th FNPRM. The Commission noted that the contrary 
approach of allowing an incumbent to retain existing licenses that 
might encumber the band while also bidding for whole blocks would 
appear to give incumbents an unfair advantage. Requiring incumbents to 
relinquish all existing licenses as a prerequisite to bidding on new 
licenses will facilitate the assignment of licenses to the entities 
that value them most highly, thus serving the public interest. All 
commenters addressing this issue support this requirement.
3. Round Zero Adjustments to Incumbent Spectrum Usage Rights--Voucher 
Exchange
    39. Prior to round one of the incentive auction clock phase, the 
Commission will offer incumbent licensees that decide to participate in 
the auction a limited opportunity to redistribute their initial voucher 
holdings across the PEAs in which they hold rights for a partial PEA 
block (Round Zero). In the 4th FNPRM, the Commission proposed such a 
``voucher exchange'' to address concerns that an incumbent with 
existing licenses covering RSAs or partial PEAs may face significant 
uncertainty about the cost of obtaining full licenses in the incentive 
auction that cover its current partial PEA block holdings.
    40. More specifically, after the FCC quantifies and aggregates 
existing usage rights in each PEA, an auction participant can exchange 
any vouchers equivalent to a partial PEA block among the PEAs where it 
has such vouchers, subject to two restrictions. First, the total value 
of its holdings, in weighted MHz-Pops using the FCC weights, following 
the exchange must be less than or equal the total weighted MHz-Pops of 
its initial holdings. Second, aggregate holdings in a PEA can only be 
reduced down to the greatest integer less than or equal to its 
aggregate initial holdings or increased up to the least integer greater 
than or equal to its aggregate initial holdings.\8\ As a result,

[[Page 1625]]

an incumbent thus can increase or decrease its vouchers in a PEA by 
strictly less than one, i.e., it may increase a partial holding of 0.5 
to 0.75 or to 1, but cannot increase it to 1.2. No adjustments may be 
made in a PEA in which an incumbent has no existing licenses or has 
spectrum usage rights equivalent to a whole number of whole blocks.
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    \8\ The Commission clarifies, as AT&T requests, that an 
incumbent may adjust its spectrum usage rights without necessarily 
creating an amount equivalent to a whole number of blocks. The 
Commission also proposed limiting the ability of an incumbent to 
make adjustments in a PEA in which all incumbents could not do so. 
4th FNPRM at para. 34. In response, AT&T proposes prioritizing the 
rights of incumbents to make adjustments in such situations. Initial 
analysis of the data indicates that there are no PEAs in which each 
incumbent could not make adjustments that otherwise comply to the 
limitations the Commission proposes. Accordingly, the Commission 
need not adopt any limitation or prioritization for such a scenario.
---------------------------------------------------------------------------

    41. These restrictions are similar to the constraints that the 
Commission contemplates using in the FCC reconfiguration optimization, 
except that in this case incumbents could hold vouchers equivalent to 
partial PEA blocks in more than one of its PEAs. Allowing an incumbent 
in the auction to hold vouchers equivalent to partial PEA blocks 
enables the incumbent to better hedge against uncertainty about auction 
prices relative to the FCC weights. An incumbent in the auction already 
has committed to relinquish its current licenses, so there is no need 
to limit vouchers that are equivalent to partial PEA blocks, in 
contrast to the need to limit reconfigured holdings equivalent to 
partial PEA blocks when the holdings may become the basis for modified 
licenses.
    42. Commenters differ on the question of permitting incumbents to 
redistribute their existing spectrum usage rights prior to bidding for 
new licenses. CCA cautions against the risk of creating unwarranted 
advantages for incumbent licensees. T-Mobile is concerned that 
establishing the process to allow incumbents to adjust their holdings 
prior to the auction will delay the determination of actual auction 
procedures. T-Mobile also raises concerns over the risk that the 
Commission may err in setting the relative weights of incumbent 
holdings in different PEAs. This could inadvertently create windfalls 
for incumbents that incumbents might further amplify through any pre-
auction adjustments. T-Mobile further argues that there is no need to 
allow incumbents to modify their holdings if all the holdings will be 
relinquished in exchange for incentive payments. The Commission finds, 
however, that the limitations the Commission imposes on potential 
modifications will minimize any potentially unfair advantages to 
incumbents in the voluntary exchange.
4. Other Structural Issues
    43. Incumbent Bidding Credits for New Licenses. Incumbents, like 
any other applicant in the Commission's auctions for spectrum licenses, 
may seek designated entity bidding credits as small businesses or rural 
service providers.\9\ In the 4th FNPRM, the Commission noted the 
potential for a scenario in which an incumbent licensee entitled to 
bidding credits for new licenses might participate in the incentive 
auction, win licenses that replace its existing spectrum holdings for 
which it would owe no additional payment, and be entitled to a bidding 
credit. This scenario effectively would leave a surplus payment that 
this incumbent might receive as a cash incentive payment, despite also 
receiving new licenses that replicate its prior holdings. The 
Commission proposed to address this anomaly by crediting such 
incumbents with a bidding credit only with respect to any outstanding 
cash payments for new licenses that offer spectrum usage rights beyond 
its aggregate spectrum usage rights prior to the auction. All 
commenters addressing this issue agree with the Commission's proposal. 
Accordingly, bidding credits for participating incumbent licensees will 
apply only to cash payments for new licenses.
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    \9\ The Commission also offers a bidding credit when a winning 
bidder provides service to qualifying tribal land with a license won 
at auction. 47 CFR 1.2110(f)(3). Commission rules already address 
the possibility that auction proceeds net of both other designated 
entity bidding credits and other commitments reflected in an auction 
reserve price may not be sufficient to pay all tribal land bidding 
credits that winning bidders seek after the auction. 47 CFR 
1.2110(f)(3)(v). In this case, the Commission adopts a net revenue 
requirement for this auction to assure that auction proceeds will be 
sufficient to make all incentive payments owed. Accordingly, the 
Commission specifies that this provision shall apply to the 
incentive auction. Id. (``in any auction with reserve price(s) in 
which the Commission specifies that this provision shall apply''). 
The Commission's action allows tribal land bidding credits to be 
paid in full so long as aggregate auction proceeds net of all 
applicable bidding credits and aggregate incentive payments are 
greater than the total amount of tribal bidding credits sought. If 
not, however, the Commission's action applies established procedures 
for reducing a tribal land bidding credit sought by any incentive 
auction winning bidder in proportion to the ratio of available 
proceeds and the total amount of tribal land bidding credits sought.
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    44. Incumbents Bidding Up Incentive Payments. The Commission noted 
in the 4th FNPRM that the structure of the proposed incentive auction 
appeared to allow incumbents to bid up new licenses in order to 
increase the amounts of corresponding incentive payments. The 
Commission sought comment on this scenario. The Commission agrees with 
commenters that the concern is largely theoretical and that no action 
is needed to address it. Incumbent licensees that bid up new licenses 
will risk winning the new license rather than receiving the 
corresponding incentive payment. That risk should deter insincere 
bidding to increase incentive payments.
    45. Assuring Full Incentive Payments. The Commission sought comment 
in the 4th FNPRM about whether incumbents may relinquish spectrum if 
the demand for new licenses in a PEA may be met without relinquished 
spectrum. The Commission discussed several alternatives for 
prioritizing among incumbent relinquished spectrum blocks, either 
relinquished rights to full 100 megahertz PEA blocks or partial PEA 
blocks, as well as prioritizing Commission-held spectrum blocks. The 
Commission noted that satisfying limited demand with Commission 
spectrum could minimize payments to incumbents. The Commission also 
observed, however, that regardless of ``the proceeds or relinquishments 
in a particular PEA'' the incentive auction could proceed ``[p]rovided 
that the total auction proceeds exceed the total incentive 
payments[.]'' That is, the level of demand in a single PEA need not 
determine whether the Commission can make incentive payments for 
spectrum relinquished in that PEA. Commenters favor the Commission 
making all incentive payments even where incumbent spectrum is not 
needed for new licenses in a particular PEA, i.e., if there is a 
shortfall in demand in that PEA relative to the supply of spectrum made 
available in the auction. The Commission agrees that, so long as the 
total auction proceeds are sufficient, making all incentive payments 
irrespective of the level of demand in each PEA will serve the public 
interest. Accordingly, the Commission will adopt a net revenue 
requirement for this auction that, if met, will ensure that the auction 
proceeds are sufficient to cover all incentive payments.
    46. Making all incentive payments even when demand in a PEA falls 
short of the supply of available blocks serves the public interest in 
several ways. Assuring incumbents that all incentive payments will be 
made, irrespective of the demand in any given PEA, will encourage 
incumbents to relinquish their licenses and participate in the auction, 
which will facilitate the smooth transition of the 39 GHz band. 
Moreover, incumbent auction participants will have greater certainty 
about their respective auction budgets, including incentive payments, 
if they know they will receive a payment for usage rights they wish to 
relinquish,

[[Page 1626]]

rather than being required to retain such rights. Incumbents then will 
be able to bid with more certainty for the licenses they value most 
highly. As a result, the auction will be more likely to assign new 
licenses to bidders that will use the licenses most effectively, 
enhancing benefits to consumers.
    47. Separately, there is an additional public interest benefit to 
ensuring that an incumbent that otherwise chooses to accept modified 
licenses will receive an incentive payment if it also chooses to 
relinquish its spectrum usage rights in its one partial PEA block. 
Providing this assurance makes it more likely that the incumbent will 
relinquish its partial PEA rights, thereby allowing a new license to be 
issued for a full 100 megahertz block covering the entire PEA and 
facilitating the transition to the new 39 GHz band plan. Accordingly, 
the Commission concludes that it will make all incentive payments, so 
long as there are sufficient auction proceeds available.
    48. Incentive payments for relinquished spectrum usage rights in a 
PEA where there is insufficient demand will be low. As the Commission 
noted in the 4th FNPRM, the final clock phase price for a whole block, 
and the corresponding incentive payment, will equal the minimum opening 
bid when demand does not exist for all the available blocks in a PEA. 
Absent demand for all available blocks in a PEA, the price for a whole 
block in the PEA cannot rise above the minimum opening bid. 
Consequently, auction proceeds as low as the sum of all minimum opening 
bids would assure that any shortfall in demand would not prevent making 
all incentive payments in full.
    49. A net revenue requirement to address much higher incentive 
payments could be necessary, however, due to another reason. 
Specifically, auction proceeds otherwise may not be sufficient to make 
all incentive payments in full. In the 4th FNPRM, the Commission sought 
comment on the possibility that bidding credits might reduce auction 
proceeds to less than the amount needed to pay all incentive payments 
owed incumbents.\10\ In response, commenters propose that in such a 
case all incentive payments should be proportionally reduced. The 
Commission concludes, however, that it should instead adopt procedures 
to help assure incumbent auction participants that all incentive 
payments will be paid in full.
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    \10\ Incentive payments will be determined by prices set in the 
auction. Winning bidders eligible for bidding credits, however, will 
pay less than the full auction price. Any such reductions will 
reduce the auction proceeds regardless of the Commission's decision 
to apply bidding credits for incumbent winning bidders only to net 
cash payments.
---------------------------------------------------------------------------

    50. In the broadcast incentive auction, the Commission adopted a 
``final stage rule'' to assure that auction proceeds would be 
sufficient to satisfy specified conditions. In part, that rule 
implemented a net revenue requirement for the auction based on the 
incentive payments set in the auction and that took into account 
bidding credits available to bidders for new licenses. Under such a net 
revenue requirement, the auction will not close unless auction proceeds 
are sufficient to cover all incentive payments owed. The Commission 
will establish procedures in this auction implementing a net revenue 
requirement based on auction bids that will assure that auction 
proceeds are sufficient to cover all incentive payments owed, including 
potential discounts to new licensees that qualify for bidding credits. 
The Commission will specify the procedures through the Auction Comment 
Public Notice and Auction Procedures Public Notice.
    51. Incumbent Upfront Payments. Verizon advocates for crediting 
participating incumbent licensees with upfront payments for existing 
licenses that they agree to relinquish. Verizon appears to suggest that 
an incumbent that might win licenses without making additional cash 
payments for winning bids should be credited with an upfront payment 
sufficient to obtain the bidding eligibility needed to make such 
bid(s). Verizon observes that payment defaults cannot occur if an 
incumbent can cover the auction price with its incentive payment. While 
Verizon is correct about one typical purpose of upfront payments--to 
mitigate against defaults for lack of payment--the Commission notes 
that a winning bidder may default for reasons other than failing to 
make a winning bid payment. Accordingly, the Commission does not grant 
Verizon's request at this time, and it will address upfront payments 
through the Auction Comment Public Notice and the Auction Procedures 
Public Notice.

E. Incentive Auction Bidding

    52. As proposed in the 4th FNPRM, the Commission will use a two-
phase auction procedure. Commenters generally support the proposal for 
how bidding will be conducted. Accordingly, in the first phase, 
participants will bid for generic spectrum blocks by PEA in the Upper 
37, 39, and 47 GHz Bands using an ascending clock auction. The second 
phase will assign frequency-specific licenses to the winners of generic 
blocks in the bands.
1. Auction Clock Phase
    53. In the clock phase of the incentive auction, bidders will 
indicate their demand for quantities of spectrum blocks in two generic 
bidding categories in each PEA. The clock phase will set a uniform 
price for generic blocks in each category in each PEA. Bidding for 
generic spectrum blocks by category will facilitate a speedier auction 
than if bidding were conducted for large numbers of unique licenses 
that nonetheless are reasonably substitutable. Where blocks are 
sufficiently similar, bidders can bid for a quantity of blocks rather 
than bidding separately for unique licenses, enabling the auction to 
reach a clearing price for all available blocks in a shorter time.
    54. Categories of Spectrum Blocks. The Commission will offer 100 
megahertz blocks of spectrum in two bidding categories. The first 
category will consist of generic blocks in the Upper 37 GHz and 39 GHz 
bands. The Commission effectively has treated the Upper 37 GHz and 39 
GHz bands as one contiguous 2,400 megahertz band of spectrum. The bands 
are adjacent. In addition, both are subject to the same service rules 
and operability requirement. Accordingly, it is appropriate to consider 
blocks in these two bands as interchangeable and offer them as one 
category in the auction.
    55. The Commission will offer 100 megahertz blocks of 47 GHz 
spectrum as a second generic bidding category. In contrast to the Upper 
37 GHz and 39 GHz bands, the 47 GHz band is not contiguous with the 
other two and does not share the same operability requirement with 
respect to equipment for using the band. Consequently, the Commission 
will treat 47 GHz blocks distinctly from Upper 37 GHz and 39 GHz blocks 
and offer 47 GHz blocks as a separate category in the auction.
    56. Bidding Process. The rules for bidding in the first phase of 
the forward auction will be similar to those used in the clock portion 
of the forward auction in the broadcast incentive auction and in the 
auction of licenses for 24 GHz spectrum blocks. The clock price for a 
category of blocks in a PEA will increase as long as the demand for 
blocks exceeds the supply of blocks.
    57. Bidding will continue until the number of blocks demanded by 
bidders in each category of generic blocks in each PEA does not exceed 
the number of such blocks available. At that point, bidders demanding 
blocks in a category at the current price will be deemed clock phase 
winning bidders. The

[[Page 1627]]

Commission will determine the exact procedures for clock phase bidding 
in the Auction Comment and Auction Procedures Public Notices.
2. Auction Assignment Phase
    58. As proposed in the 4th FNPRM, the incentive auction will 
include a second phase that will determine the frequencies for licenses 
to be assigned to the winners of generic spectrum blocks. The 
Commission anticipates being able to assign contiguous frequencies 
within a category and a PEA to winners of multiple blocks in a category 
and a PEA. In the assignment phase, winning bidders for generic blocks 
will have an opportunity to submit sealed bids by PEA specifying 
additional amounts, if any, that they would be willing to pay for 
licenses on particular frequencies. Winning clock phase bidders would 
not be required to bid in the assignment phase or otherwise pay more 
than the price for generic blocks in the clock phase and would still be 
assured to have contiguous frequencies assigned to all of their 
licenses in the same category in a PEA. Incumbents that elect to 
receive modified licenses instead of bidding for new licenses in the 
auction will be assigned frequencies in the assignment phase but cannot 
bid for particular frequencies in the assignment phase. The Commission 
will detail the exact procedures for bidding in the assignment phase in 
the Auction Comment Public Notice and Auction Procedures Public Notice. 
The Commission expects that the final procedures will be similar to 
those used in the assignment portion of the auction of licenses for 24 
GHz spectrum blocks.

F. Post-Auction Transition

    59. Incumbents will retain their existing licenses until after the 
auction, when either the existing licenses are modified or 
relinquished, and new licenses are issued. New licenses will be 
assigned based on the results of bidding in the incentive auction.
    60. Existing Secondary Licenses. Diversified Communications, Inc. 
(DCI) asks the Commission to include secondary local television 
transmission service (LTTS) licensees in any transition plan and 
reimbursement program it creates for primary licensees in the band. DCI 
argues that in analogous situations in the past, the Commission has 
made accommodations for secondary services.
    61. It is a well-established principle under Commission precedent 
and its rules that secondary operations cannot cause harmful 
interference to primary operations nor claim protection from harmful 
interference from primary operations. As such, secondary users are not 
entitled to relocation or reimbursement from new entrants. Indeed, as 
T-Mobile points out, in the broadcast incentive auction, the Commission 
specifically considered LPTV and TV translator stations television 
stations ineligible to participate in the reverse auction or to receive 
compensation because they had not been granted primary status. These 
secondary users were later granted compensation rights only by 
Congressional directive. Accordingly, T-Mobile, Verizon, and AT&T argue 
the Commission need not utilize the incentive auction structure to 
reclaim DCI's spectrum rights, pay for DCI's repacking, or reimburse 
its investment in equipment purchased for 39 GHz operations. In 
consideration of the above, the Commission declines to create any 
specific transition plan or reimbursement program for secondary 
operations as part of the 39 GHz auction. Such users were fully aware 
of their secondary status at the time of establishing these secondary 
operations with the knowledge that they would be required to modify 
their operations at any time to protect licensees.

IV. Final Regulatory Flexibility Analysis

    62. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Fourth Further Notice of Proposed Rulemaking (4th 
FNPRM) released in August 2018 in this proceeding. The Commission 
sought written public comment on the proposals in the 4th FNPRM, 
including comments on the IRFA. No comments were filed addressing the 
IRFA. This present Final Regulatory Flexibility Analysis (FRFA) 
conforms to the RFA.

A. Need for, and Objectives of, the Fourth R&O

    63. In the Fourth R&O, the Commission takes major steps to make 
spectrum available for 5G, IoT, and other advanced services in the 
Upper 37 GHz (37.6-38.6 GHz), 39 GHz (38.6-40 GHz), and 47 GHz (47.2-
48.2 GHz) bands. The Commission adopts the proposal set forth in the 
4th FNPRM to conduct an incentive auction that can clear existing 39 
GHz licenses and offer new spectrum licenses in the Upper 37 GHz, 39 
GHz, and 47 GHz bands.
    64. The Fourth R&O also modifies the band plans for the 39 GHz, 
Upper 37 GHz, and 47 GHz bands from 200 megahertz to 100 megahertz 
channels for the part 30 UMFUS. The incentive auction that the 
Commission adopts will promote the flexible-use wireless services rules 
that the Commission has adopted for these bands. Moreover, the 
incentive auction process will resolve the persistent difficulties 
presented by the need for existing 39 GHz licenses to be transitioned 
efficiently to the new band plan and possibly new service areas.
    65. In the Fourth R&O the Commission decides that it will make all 
existing licenses conform more closely with the new band plan and 
service rules by proposing modifications based on reconfigurations to 
each incumbent's spectrum usage rights under existing licenses. The 
reconfiguration will preserve the existing spectrum rights of 
incumbents as much as possible, and where variations are unavoidable, 
maintain overall spectrum usage rights. An incumbent can choose to 
accept the reconfiguration, propose an alternative reconfiguration, or 
instead elect to participate in the auction. An incumbent that chooses 
not to participate in the incentive auction will have frequencies 
assigned for modified licenses based on reconfigured spectrum usage 
rights after the incentive auction has concluded.
    66. The Fourth R&O sets forth details about incumbents that choose 
to participate in the incentive auction. Incumbents that choose to 
participate in the incentive auction will relinquish existing spectrum 
licenses and receive ``vouchers'' sufficient to win blocks in the 
auction equivalent to their existing Partial Economic Area (PEA) 
holdings. A participating incumbent will be able to make pre-bidding 
exchanges in its existing holdings of partial PEA blocks, subject to 
constraints.
    67. The Fourth R&O emphasizes that auction participants do not need 
to rebid on spectrum blocks equivalent to their existing holdings, 
however, but can apply the vouchers toward payments for blocks in other 
PEAs, receiving a cash incentive payment if the value of their vouchers 
exceeds their net auction obligations. Auction participants can also 
simply relinquish their holdings and choose not to bid on any new 
licenses, in which case they will receive a cash incentive payment for 
their vouchers.
    68. The Fourth R&O also adopts the proposal to implement a two-
phase incentive auction that will offer new licenses. In the first 
phase, participants would bid to win generic spectrum blocks using an 
ascending clock auction that would determine a uniform price in each 
category in each PEA. Any party eligible to hold a license in these 
bands will be eligible to participate in the

[[Page 1628]]

auction for new licenses, except for incumbent 39 GHz licensees that 
decline to relinquish existing licenses. The second phase would assign 
specific-frequency licenses by PEA that would aim to ensure contiguity 
within each PEA. Because the spectrum blocks in the Upper 37 GHz and 39 
GHz bands can be treated as largely interchangeable within a PEA, they 
will be offered as one category of generic blocks in a clock auction. 
The Commission will treat 47 GHz blocks distinctly from Upper 37 GHz 
and 39 GHz blocks and offer 47 GHz blocks as a separate category in the 
auction. Winning bidders for generic blocks in the clock phase would 
have an opportunity to submit sealed bids by PEA specifying additional 
amounts, if any, that they would be willing to pay for licenses in the 
PEA on particular frequencies in the assignment phase. Winning clock 
phase bidders would participate in the assignment phase only if they so 
choose. Consequently, they would not be required to bid in the 
assignment phase or otherwise pay more than the price for generic 
blocks in the clock phase. Regardless of participation in the 
assignment phase, the assignment phase would aim to assign contiguous 
frequency blocks within a category in a PEA to a bidder that wins 
multiple blocks. Incumbents that elect to receive modified licenses 
instead of bidding for new licenses in the auction will be assigned 
frequencies in the assignment phase but cannot bid.
    69. Overall, the decisions in the Fourth R&O are designed to 
facilitate broadband deployment, including 5G services, by providing 
opportunities to make it easier for licensees in the band to 
rationalize their existing holdings into contiguous swathes of 
spectrum, and by offering new licenses of contiguous spectrum at 
auction while protecting incumbents' existing spectrum usage rights. 
This will ensure that this spectrum is used efficiently and will foster 
the development of new and innovative technologies and services, as 
well as encourage the growth and development of a wide variety of 
services, ultimately leading to greater benefits to consumers.

B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    70. There were no comments filed that specifically addressed the 
proposed rules and policies presented in the IRFA.

C. Response to Comments by the Chief Counsel for Advocacy of the Small 
Business Administration

    71. Pursuant to the Small Business Jobs Act of 2010, which amended 
the RFA, the Commission is required to respond to any comments filed by 
the Chief Counsel for Advocacy of the Small Business Administration 
(SBA), and to provide a detailed statement of any change made to the 
proposed rules as a result of those comments.
    72. The Chief Counsel did not file any comments in response to the 
proposed rules in this proceeding.

D. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply

    73. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the rules adopted herein. The RFA generally defines the 
term ``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act.'' A ``small business concern'' is one which: (1) Is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the SBA.
    74. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. The Commission's actions, over time, may affect small 
entities that are not easily categorized at present. The Commission 
therefore describes here, at the outset, three broad groups of small 
entities that could be directly affected herein. First, while there are 
industry specific size standards for small businesses that are used in 
the regulatory flexibility analysis, according to data from the SBA's 
Office of Advocacy, in general a small business is an independent 
business having fewer than 500 employees. These types of small 
businesses represent 99.9% of all businesses in the United States which 
translates to 28.8 million businesses.
    75. Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
Nationwide, as of August 2016, there were approximately 356,494 small 
organizations based on registration and tax data filed by nonprofits 
with the Internal Revenue Service (IRS).
    76. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2012 Census of Governments indicate that there 
were 90,056 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number there were 37,132 general purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and 12,184 special purpose governments (independent school 
districts and special districts) with populations of less than 50,000. 
The 2012 U.S. Census Bureau data for most types of governments in the 
local government category show that the majority of these governments 
have populations of less than 50,000. Based on this data, the 
Commission estimates that at least 49,316 local government 
jurisdictions fall in the category of ``small governmental 
jurisdictions.''
    77. Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves. Establishments in this industry have spectrum licenses and 
provide services using that spectrum, such as cellular services, paging 
services, wireless internet access, and wireless video services. The 
appropriate size standard under SBA rules is that such a business is 
small if it has 1,500 or fewer employees. For this industry, U.S. 
Census Bureau data for 2012 show that there were 967 firms that 
operated for the entire year. Of this total, 955 firms had employment 
of 999 or fewer employees and 12 had employment of 1,000 employees or 
more. Thus under this category and the associated size standard, the 
Commission estimates that the majority of wireless telecommunications 
carriers (except satellite) are small entities.
    78. Fixed Microwave Services. Microwave services include common 
carrier, private-operational fixed, and broadcast auxiliary radio 
services. They also include the Upper Microwave Flexible Use Service, 
the Millimeter Wave Service, Local Multipoint Distribution Service 
(LMDS), the Digital Electronic Message Service (DEMS), and the 24 GHz 
Service, where licensees can choose between common carrier and non-
common carrier status. At present, there are approximately 66,680 
common carrier fixed licensees, 69,360 private and public safety 
operational-fixed

[[Page 1629]]

licensees, 20,150 broadcast auxiliary radio licensees, 411 LMDS 
licenses, 33 24 GHz DEMS licenses, 777 39 GHz licenses, and five 24 GHz 
licensees, and 467 Millimeter Wave licenses in the microwave services. 
The Commission has not yet defined a small business with respect to 
microwave services. The closest applicable SBA category is Wireless 
Telecommunications Carriers (except Satellite) and the appropriate size 
standard for this category under SBA rules is that such a business is 
small if it has 1,500 or fewer employees. For this industry, U.S. 
Census Bureau data for 2012 shows that there were 967 firms that 
operated for the entire year. Of this total, 955 had employment of 999 
or fewer, and 12 firms had employment of 1,000 employees or more. Thus 
under this SBA category and the associated standard, the Commission 
estimates that the majority of fixed microwave service licensees can be 
considered small.
    79. The Commission does not have data specifying the number of 
these licensees that have more than 1,500 employees, and thus is unable 
at this time to estimate with greater precision the number of fixed 
microwave service licensees that would qualify as small business 
concerns under the SBA's small business size standard. Consequently, 
the Commission estimates that there are up to 36,708 common carrier 
fixed licensees and up to 59,291 private operational-fixed licensees 
and broadcast auxiliary radio licensees in the microwave services that 
may be small and may be affected by the rules and policies proposed 
herein. The Commission notes, however, that both the common carrier 
microwave fixed and the private operational microwave fixed licensee 
categories includes some large entities.
    80. All Other Telecommunications. The ``All Other 
Telecommunications'' category is comprised of establishments primarily 
engaged in providing specialized telecommunications services, such as 
satellite tracking, communications telemetry, and radar station 
operation. This industry also includes establishments primarily engaged 
in providing satellite terminal stations and associated facilities 
connected with one or more terrestrial systems and capable of 
transmitting telecommunications to, and receiving telecommunications 
from, satellite systems. Establishments providing internet services or 
voice over internet protocol (VoIP) services via client-supplied 
telecommunications connections are also included in this industry.'' 
The SBA has developed a small business size standard for ``All Other 
Telecommunications,'' which consists of all such firms with gross 
annual receipts of $32.5 million or less. For this category, U.S. 
Census Bureau data for 2012 shows that there were a total of 1,442 
firms that operated for the entire year. Of these firms, a total of 
1,400 firms had gross annual receipts of under $25 million and 42 firms 
had gross annual receipts of $25 million to $49, 999,999. Thus, the 
Commission estimates that a majority of ``All Other 
Telecommunications'' firms potentially affected by the Commission's 
actions can be considered small.
    81. Radio and Television Broadcasting and Wireless Communications 
Equipment Manufacturing. This industry comprises establishments 
primarily engaged in manufacturing radio and television broadcast and 
wireless communications equipment. Examples of products made by these 
establishments are: Transmitting and receiving antennas, cable 
television equipment, GPS equipment, pagers, cellular phones, mobile 
communications equipment, and radio and television studio and 
broadcasting equipment.'' The SBA has established a size standard for 
this industry of 1,250 employees or less. U.S. Census Bureau data for 
2012 shows that 841 establishments operated in this industry in that 
year. Of that number, 828 establishments operated with fewer than 1,000 
employees, 7 establishments operated with between 1,000 and 2,499 
employees and 6 establishments operated with 2,500 or more employees. 
Based on this data, the Commission concludes that a majority of 
manufacturers in this industry is small.

E. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    82. The Commission expects the rules adopted in the Fourth R&O will 
impose new or additional reporting or recordkeeping and/or other 
compliance obligations on small entities as well as other applicants 
and licensees. The projected reporting, recordkeeping, and other 
compliance requirements in the Fourth R&O will apply to entities 
slightly differently depending on whether they accept modified 
licenses, relinquish spectrum usage rights entirely, relinquish 
spectrum rights and seek new licenses to continue to operate in the 
band, or are new entrants seeking new licenses. The requirements the 
Commission adopts should benefit small entities by giving them more 
information, more flexibility, and more options for gaining access to 
wireless spectrum.
    83. The Commission has designed the process of applying to 
participate in auctions involving spectrum license auctions generally, 
including the incentive auction, to minimize reporting and compliance 
requirements for applicants, including small business applicants. The 
Commission expects that the filing, recordkeeping and reporting 
requirements associated with the demands described below will require 
small businesses as well as other entities that intend to utilize these 
new UMFUS licenses to use professional, accounting, engineering or 
survey services in order to meet these requirements. Incumbent 
licensees that volunteer to relinquish spectrum usage rights will make 
a binding commitment to do so in a submission to the Commission. 
Parties desiring to participate in an auction for new licenses, 
including incumbents and new entrants, either of which may be small 
entities, will begin by filing streamlined, short-form applications in 
which they certify under penalty of perjury as to their qualifications. 
The Commission will provide detailed instructions for each auction 
applicant to maintain the accuracy of its respective short-form 
application electronically using the FCC Auction Application System 
and/or by direct communication with the Auctions Division. The 
Commission also will provide detailed instructions for any incumbent 
eligible to be paid an incentive payment regarding financial 
information that must be provided to the Commission, as well as 
instructions for any winning bidder for new licenses regarding the 
license application process. As with other winning bidders, any small 
entity that is a winning bidder will be required to comply with paying 
the net amount of its winning bids and electronically submitting a 
properly completed long-form application (FCC Form 601) and required 
exhibits for each license won. A winning bidder claiming eligibility 
for a bidding credit must demonstrate its eligibility in its FCC Form 
601 post-auction application for the bidding credit sought.
    84. Small entities and other applicants for UMFUS licenses will be 
required to file license applications using the Commission's automated 
Universal Licensing System (ULS). ULS is an online electronic filing 
system that also serves as a powerful information tool, one that 
enables potential licensees to research applications, licenses, and 
antenna structures. It also keeps the public informed with weekly 
public notices, FCC rulemakings, processing utilities, and a 
telecommunications glossary. Small entities, like all other

[[Page 1630]]

entities who are UMFUS applicants, must submit long-form license 
applications through ULS using Form 601, FCC Ownership Disclosure 
Information for the Wireless Telecommunications Services using FCC Form 
602, and other appropriate forms.

F. Steps Taken To Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    85. The RFA requires an agency to describe any significant 
alternatives for small businesses that it has considered in reaching 
its approach, which may include the following four alternatives (among 
others): (1) The establishment of differing compliance or reporting 
requirements or timetables that take into account the resources 
available to small entities; (2) the clarification, consolidation, or 
simplification of compliance and reporting requirements under the rule 
for such small entities; (3) the use of performance rather than design 
standards; and (4) an exemption from coverage of the rule, or any part 
thereof, for such small entities.
    86. The Commission believes that the incentive auction mechanism 
adopted in the Fourth R&O will result in both operational and 
administrative cost savings for small entities, as well as other 
participants. At the outset, because participating in the auction is 
voluntary, the Commission allows incumbent licensees, including small 
entities, to have their existing licenses modified instead of having to 
participate in an auction if they so choose. The incentive auction will 
give incumbent licensees, including small entities, an opportunity to 
receive incentive payments for their spectrum licenses that are based 
on a market price, while providing opportunities to obtain additional 
licenses. Moreover, should new licenses match the spectrum usage rights 
of an incumbent's current licenses, the incentive payments will be 
enough so that the incumbents can win new licenses without making 
additional payments, regardless of how high bids for those new licenses 
may go in the auction. Furthermore, adopting a two-phase auction 
procedure will benefit all participants by resulting in a quick 
auction, due to the first clock phase, followed by an assignment phase. 
This benefits small entities, as they may not have the same flexibility 
as larger entities to devote time to participating in the auction. In 
addition, winning bidders do not have to bid in the assignment phase. 
Furthermore, the Commission anticipates being able to assign contiguous 
frequencies within a PEA category, even where a clock phase winning 
bidder does not bid in the assignment phase. This benefits smaller 
entities that otherwise might have difficulty aggregating contiguous 
licenses through transactions in the secondary market. In addition, the 
Commission has adopted bidding credits for applicants for new licenses 
who qualify as small businesses. An entity with average annual gross 
revenues for the preceding three years not exceeding $55 million will 
qualify as a ``small business'' and be eligible to receive a 15 percent 
discount on its winning bid. An entity with average annual gross 
revenues for the preceding three years not exceeding $20 million will 
qualify as a ``very small business'' and be eligible to receive a 25 
percent discount on its winning bid.
    87. The Commission also believes that its actions modifying the 
band plan from 200 megahertz to 100 megahertz channels in the 39 GHz, 
Upper 37 GHz, and 47 GHz bands will help small entities by making 
spectrum available in smaller license sizes that may be more attractive 
to small entities. Similarly, the Commission believes the proposed 
mechanism for auctioning the 39 GHz and Upper 37 GHz bands will 
facilitate access to spectrum by small businesses. Accordingly, the 
Commission does not believe that its adopted changes will have a 
significant economic impact on small entities. Nevertheless, to the 
extent applying the rules equally to all entities results in the cost 
of complying with these burdens being relatively greater for smaller 
businesses than for large ones, this approach is necessary to 
effectuate the purpose of the Communications Act, namely to further the 
efficient use of spectrum and to prevent spectrum warehousing.

V. Ordering Clauses

    88. Accordingly, it is ordered that, pursuant to Sections 4(i), 
201(b), 303, 308, 309, 316, 324, 332, and 337 of the Communications Act 
of 1934, as amended, 47 U.S.C. 154(i), 201(b), 303, 308, 309, 316, 324, 
332, 337, this Fourth Report and Order is hereby adopted.
    89. It is further ordered that the amendments of the Commission's 
rules as set forth below are adopted, effective thirty days from the 
date of publication in the Federal Register.
    90. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Fourth Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.
    91. It is further ordered that the Commission shall send a copy of 
this Fourth Report and Order in a report to be sent to Congress and the 
Government Accountability Office pursuant to the Congressional Review 
Act, see 5 U.S.C. 801(a)(1)(A).

List of Subjects in 47 CFR Parts 1 and 30

    Administrative practice and procedures, Communications common 
carriers.

Federal Communications Commission.
Cecilia Sigmund,
Federal Register Liaison Officer, Office of the Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 1 and 30 as follows:

PART 1--PRACTICE AND PROCEDURE

0
1. The authority citation for part 1 continues to read as follows:

    Authority:  47 U.S.C. 151, 154(i) and (j), 155, 157, 160, 201, 
224, 225, 227, 303, 309, 310, 332, 1403, 1404, 1451, 1452, and 1455.


0
2. Revise Sec.  1.2101 to read as follows:


Sec.  1.2101  Purpose.

    The provisions of Sec. Sec.  1.2101 through 1.2115 implement 
section 309(j) of the Communications Act of 1934, as added by the 
Omnibus Budget Reconciliation Act of 1993 (Pub. L. 103-66) and 
subsequent amendments.

0
3. Add Sec.  1.2115 to read as follows:


Sec.  1.2115  Public notice of incentive auction related procedures.

    The provisions of this subpart may be used to conduct an incentive 
auction pursuant to 47 U.S.C. 309(j)(8)(G), including either or both a 
reverse auction to determine the incentive payment a licensee would be 
willing to accept in exchange for relinquishing spectrum usage rights 
and a forward auction to assign flexible use licenses for any spectrum 
made available as the result of such relinquishments. The Commission 
shall provide public notice of any procedures necessary for the 
implementation of an incentive auction that are not otherwise provided 
for pursuant to the rules of this Subpart. The Commission may do so in 
one or more such public notices. The Commission's procedures may 
include, without limitation:
    (a) Spectrum usage rights relinquishment procedures. The procedures 
pursuant to which a licensee may make an unconditional, irrevocable

[[Page 1631]]

offer to relinquish spectrum usage rights in exchange for an incentive 
payment, including any terms the offer must include and procedures 
pursuant to which the Commission may accept such an offer.
    (b) Information required from a licensee. (1) The procedures for a 
licensee to provide any identifying information and or certifications 
that the Commission may require from any licensee that seeks to 
relinquish spectrum usage rights in the incentive auction.
    (2) The procedures for a licensee that is relinquishing spectrum 
usage rights to provide any financial information that the Commission 
may require to facilitate the disbursement of any incentive payment.

PART 30--UPPER MICROWAVE FLEXIBLE USE SERVICE

0
4. The authority citation for part 30 continues to read as follows:

    Authority:  47 U.S.C. 151, 152, 153, 154, 301, 303, 304, 307, 
309, 310, 316, 332, 1302.


0
5. Amend Sec.  30.4 by redesignating paragraphs (b), (c), (d), and (e) 
as paragraphs (c), (d), (f), and (g) respectively, adding and reserving 
new paragraphs (b) and (e), and revising redesignated paragraphs 
(d)(1), (f), and (g) to read as follows:


Sec.  30.4  Frequencies.

* * * * *
    (b) [Reserved]
* * * * *
    (d) * * *
    (1) New channel plan:

------------------------------------------------------------------------
                                                         Frequency band
                      Channel No.                         limits (MHz)
------------------------------------------------------------------------
1.....................................................     38,600-38,700
2.....................................................     38,700-38,800
3.....................................................     38,800-38,900
4.....................................................     38,900-39,000
5.....................................................     39,000-39,100
6.....................................................     39,100-39,200
7.....................................................     39,200-39,300
8.....................................................     39,300-39,400
9.....................................................     39,400-39,500
10....................................................     39,500-39,600
11....................................................     39,600-39,700
12....................................................     39,700-39,800
13....................................................     39,800-39,900
14....................................................     39,900-40,000
------------------------------------------------------------------------

* * * * *
    (e) [Reserved]
    (f) 37-38.6 GHz band: 37,600-37,700; 37,700-37,800 MHz; 37,800-
37,900 MHz; 37,900-38,000 MHz; 38,000-38,100 MHz; 38,100-38,200 MHz; 
38,200-38,300 MHz; 38,300-38,400 MHz; 38,400-38,500 MHz, and 38,500-
38,600 MHz. The 37,000-37,600 MHz band segment shall be available on a 
site-specific, coordinated shared basis with eligible Federal entities.
    (g) 47.2-48.2 GHz band--47.2-47.3 GHz; 47.3-47.4 GHz; 47.4-47.5 
GHz; 47.5-47.6 GHz; 47.6-47.7 GHz; 47.7-47.8 GHz; 47.8-47.9 GHz; 47.9-
48.0 GHz; 48.0-48.1 GHz; and 48.1-48.2 GHz.

[FR Doc. 2018-27975 Filed 2-4-19; 8:45 am]
 BILLING CODE 6712-01-P