Federal Communications Commission DA 07-674 Federal Communications Commission 2006 Biennial Regulatory Review WT Docket No. 06-156 Wireless Telecommunications Bureau Staff Report February 14, 2007 Federal Communications Commission DA 07-674 2 I. OVERVIEW 1. Section 11 of the Communications Act of 1934, as amended, requires the Commission: (i) to review biennially its regulations that apply to operations or activities of telecommunications service providers; and (ii) to determine whether those regulations are “no longer in the public interest as the result of meaningful economic competition between providers of such service.”1 This Staff Report summarizes the findings of the staff’s review of the Federal Communications Commission’s rules implicated by Section 11 that are within the purview of the Wireless Telecommunications Bureau (WTB), i.e., rules that apply to the activities or operations of wireless telecommunications carriers. Accompanying this report is a detailed analysis that identifies each rule part under review, explains the purpose, benefits, and disadvantages of the particular rule or rule part, and lists any staff recommendation for retaining, modifying, or repealing rules within that part. II. SCOPE OF REVIEW 2. This review builds upon the Staff Report completed as part of the 2004 Biennial Regulatory Review.2 As in the 2004 Biennial Review Staff Report,3 this Report summarizes staff’s review of the Commission rules that affect wireless telecommunications carriers, the status of ongoing and recent initiatives, and recommendations on whether specific rules should be retained, modified, or repealed. The staff’s recommendations are reported in more detail in the attached rule part analysis,4 which also summarizes the comments that were submitted in response to the Commission’s August 10, 2006 Public Notice initiating this Biennial Review.5 In conducting this Section 11 review, staff considered: (1) the purpose of the rule; (2) the advantages of the rule; (3) the disadvantages of the rule; and (4) the impact competitive developments may have had on the need for the rule. 3. In addition to evaluating rules that affect wireless telecommunications carriers on the basis of whether they are “no longer necessary in the public interest as the result of meaningful competition,” WTB staff has taken the opportunity to consider whether any such rules should be streamlined, modified, or eliminated for reasons other than those related to competitive developments that fall within the scope of Section 11 review. Thus, although not required to do so under Section 11, staff has reviewed whether 1 47 U.S.C. § 161. 2 See 2004 Biennial Regulatory Review, WT Docket No. 04-180, Wireless Telecommunications Bureau Staff Report, 20 FCC Rcd 124 (WTB 2005) (2004 Biennial Review Staff Report). 3 See generally 2004 Biennial Review Staff Report. 4 See Appendix III. 5 See “The Commission Seeks Public Comment in the 2006 Biennial Review of Telecommunications Regulations,” Attachment, “Rule Parts Containing Regulations Administered by the Wireless Telecommunications Bureau (WTB), WT Docket No. 06-156, Public Notice, 21 FCC Rcd 9422 (2006 Biennial Review Public Notice). Federal Communications Commission DA 07-674 3 circumstances other than the development of meaningful economic competition (e.g., technological change since the adoption of the rule, inconsistency in regulation of similarly situated services, reduction of regulatory burdens) justify streamlining, modification, or repeal of particular rules. 4. Once the Commission has made its determinations with respect to the recommendations in this report, staff expects that the Commission would initiate proceedings to modify or eliminate selected rules. These proceedings would conform to Commission procedural rules and the Administrative Procedure Act. Some of these proceedings have been initiated already, while we anticipate that others will be initiated in the next year. 5. The Wireless Telecommunications Bureau is responsible for licensing and regulating all wireless communications services other than unlicensed devices, public safety, broadcast and satellite services. Wireless communications services include commercially provided services such as cellular, Personal Communications Services (PCS), and paging, as well as fixed and private radio services. 6. The functions of the Bureau largely derive from Title III of the Communications Act, which governs licensing of spectrum in general and wireless services in particular.6 The vast majority of the Commission’s regulations affecting wireless carriers consist of: (1) allocation and service rules; (2) procedural rules concerning licensing and auctions; and (3) technical and operational rules. 7. The market for wireless carriers has changed dramatically in recent years as a result of entry by new wireless competitors, substantial growth, and increased competition in the wireless market. In 1993, Congress granted authority to the Commission to award wireless licenses by auction.7 Since that time, the Commission has conducted 66 spectrum auctions for services such as broadband and narrowband PCS, Specialized Mobile Radio (SMR), Wireless Communications Service (WCS), Local Multipoint Distribution Service (LMDS), Multichannel Video Distribution and Data Service (MVDDS), Advanced Wireless Services (AWS), and numerous other fixed and mobile wireless services.8 These auctions have resulted in a dramatic increase in the number of competing wireless service providers. In its Eleventh CMRS Competition Report, released on September 29, 2006, the Commission concluded that there is effective competition in the Commercial Mobile Radio Services (CMRS) marketplace, which continues to benefit consumers in the form of price competition and competition to provide innovative and improved service offerings.9 6 See generally 47 U.S.C. Title III. 7 Omnibus Budget Reconciliation Act of 1993, Pub. Law No. 103-66, 107 Stat. 312. See 47 U.S.C. § 309(j). Congress expanded the Commission’s authority to assign licenses by competitive bidding in the Balanced Budget Act of 1997. Pub. L. No. 105-33, Title III, 111 Stat. 251 (1997). 8 See http://www.fcc.gov/wtb/auctions. 9 See generally In the Matter of Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report and Analysis of Competitive Market Conditions with Respect (continued....) Federal Communications Commission DA 07-674 4 8. As a result of increased wireless licensing and new competition, the Commission has substantially deregulated many aspects of wireless services. The Commission has adopted a number of policies and rule changes to streamline application processing and reduce regulatory burdens, as discussed below. The dynamic and rapidly evolving nature of the wireless industry continues to make it important for the Commission to review its wireless regulations on a regular basis. 9. On August 10, 2006, the Commission issued a Public Notice seeking comment on the rules and regulations within its purview under the 2006 Biennial Review.10 The Bureau has reviewed the following rule parts implicated by Section 11 that affect wireless telecommunications carriers:11 Part 1 – Practice and Procedure – In addition to containing the procedural rules of general applicability to all Commission licensees, contains certain rules that explicitly address wireless telecommunications applications and proceedings (Subpart F) and procedures relating to competitive bidding (Subpart Q). Part 17 – Construction, Marking, and Lighting of Antenna Structures – Contains rules pertaining to the construction, marking, lighting, registration, and notification relating to radio antenna structures used for provision of wireless radio services. Part 20 – Commercial Mobile Radio Services – Contains rules applicable to CMRS providers, including rules relating to citizenship, interconnection to facilities of local exchange carriers, roaming, hearing aid compatibility, Title II obligations, and 911 service. Part 22 – Public Mobile Services – Contains rules governing domestic, commercial mobile services, including the cellular telephone service, that are authorized to provide radio telecommunication services to the public. Part 24 – Personal Communications Services – Contains rules applicable to general licensing and application filing requirements, technical standards, and operations for narrowband and broadband Personal Communications Services licensees. Part 27 – Wireless Communications Services – Contains rules governing the provision of miscellaneous wireless communications services on various frequency bands allocated for flexible use pursuant to Section 303(y) of the Communications Act. (...continued from previous page) to Commercial Mobile Services, Eleventh Report, FCC 06-142 (rel. Sept. 29, 2006) (Eleventh CMRS Competition Report). There has been a dramatic increase in the number of competing wireless providers since the first annual report on CMRS competition was issued in 1996. 10 See 2006 Biennial Review Public Notice, 21 FCC Rcd 9422. 11 Id. The rule parts are discussed herein as set forth as in Title 47 of the Code of Federal Regulations. For streamlining purposes, this Staff Report does not, infra, cite each specific C.F.R. provision (e.g., 47 C.F.R. Part 1 or 47 C.F.R. § 1.923) for the particular Part or rule discussed herein. Federal Communications Commission DA 07-674 5 Part 80 – Stations in the Maritime Service – Contains licensing, technical, and operational rules for various maritime radio services. Part 90 – Private Land Mobile Radio Services – Contains rules applicable to general licensing and application filing requirements, technical standards, and operations for Specialized Mobile Radio and other commercial, private, and public safety licensees. Part 95 – Personal Radio Service – Contains licensing, technical, and operational rules for the commercial 218-219 MHz Service, individuals needing land mobile licenses, and other personal radio uses such as medical telemetry devices. Part 101 – Fixed Microwave Services – Contains licensing, technical, and operational rules for private and common carrier terrestrial fixed point-to-point microwave services, including rules or subparts governing the 24 GHz Service, 39 GHz Service, the 70/80/90 GHz bands, Local Television Transmission Service, Local Multipoint Distribution Service, Multiple Address Systems, Multichannel Video Distribution and Data Service, and Digital Electronic Message Service. 10. In response to the Public Notice, the Commission received two comments and one reply comment related to these rule parts. III. RECENT AND ONGOING ACTIVITIES 11. During the past two years, the Bureau has engaged in a number of major initiatives to streamline and eliminate unnecessary rules affecting wireless services. (a) Procedures For Participation of Federally Recognized Indian Tribes and Native Hawaiian Organizations Under the Nationwide Programmatic Agreement 12. On October 6, 2005, the Commission issued a Declaratory Ruling interpreting the provisions in the Nationwide Programmatic Agreement For Review of Effects On Historic Properties For Certain Undertakings Approved By The Federal Communications Commission that govern participation of Indian tribes and Native Hawaiian Organizations (“NHOs”).12 The Declaratory Ruling established a process for addressing situations where a federally recognized Indian tribe or NHO has not responded to efforts by the applicant and the Commission to determine whether the Indian tribe or NHO has an interest in participating in the review of proposed construction of communications towers and antennas. 12 In the Matter of Clarification of Procedures for Participation of Federally Recognized Indian Tribes and Native Hawaiian Organizations Under the Nationwide Programmatic Agreement, Declaratory Ruling, 20 FCC Rcd 16092 (2005). Federal Communications Commission DA 07-674 6 (b) Spectrum Leasing 13. In 2004, the Commission adopted the Secondary Markets 2nd Report and Order, which further streamlined the processing of certain spectrum leasing and transfer/assignment applications and authorized licensees to make spectrum available to third-party users on a “private commons” basis.13 (c) Upper 700 MHz Guard Band Proceeding 14. In September 2006, the Commission adopted a Notice of Proposed Rule Making that seeks comment on several service rule changes that may provide greater flexibility to 700 MHz Guard Bands licensees, while maintaining adequate interference protection for public safety licensees.14 Among other things, the Commission asked commenters to discuss whether: (1) the FCC’s spectrum leasing rules should be extended to the Guard Bands; (2) the Commission should take steps to increase band manager flexibility for incumbents and prospective licensees; (3) the prohibition on deploying cellular architectures within the Guard Bands should be eliminated; and (4) the current Adjacent Channel Power (out of band emission) limits in the Guard Bands should be changed. The Commission also sought comment on proposals for re-licensing the Guard Bands licenses that were returned from Nextel. (d) Streamlining and Harmonization Biennial Review Proceeding 15. In July 2005, the Commission adopted a Report and Order and Further Notice of Proposed Rule Making that streamlines and harmonizes the Part 1, 22, 24, 27, and 90 rules to clarify spectrum rights and obligations and optimize flexibility for wireless service licensees.15 For example, the Commission relaxed the rules to classify as a minor modification the deletion of frequencies and transmitter sites from a multi-site authorization under Part 90. It also eliminated the transmitter output power limits under Part 24 and removed or modified several additional licensing provisions. In the Further Notice, the Commission sought comment on potential changes to the broadband PCS radiated power limits. 13 In the Matter of Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets, WT Docket No. 00-230, Second Report and Order, Order on Reconsideration, and Second Further Notice of Proposed Rulemaking, 19 FCC Rcd 17503 ( 2004) (Secondary Markets 2nd Report and Order). 14 Former Nextel Communications, Inc. Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the Commission s Rules Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, Notice of Proposed Rule Making, FCC 06-133, WT Docket Nos. 06-169, 96-86 (rel. Sept. 8, 2006). 15 Biennial Regulatory Review -- Amendment of Parts 1, 22, 24, 27, and 90 to Streamline and Harmonize Various Rules Affecting Wireless Radio Services, Report and Order and Further Notice of Proposed Rule Making, WT Docket No. 03-264, 20 FCC Rcd 13900 (2005). Federal Communications Commission DA 07-674 7 (e) Air-Ground Proceeding 16. On December 15, 2004, the Commission adopted a Report and Order that substantially revises the rules governing the Air-Ground Radiotelephone Service.16 Among other things, the Commission decided to offer nationwide licenses for the four megahertz of commercial air-ground spectrum in three alternative band plan configurations. The Commission decided that, in the event mutually exclusive applications were accepted for filing, it would award to winning bidders in an auction the licenses comprising the band plan that received the highest aggregate gross bid. On December 8, 2005, in response to petitions for reconsideration of the 2004 Report and Order, the Commission adopted a Reconsideration Order clarifying, inter alia, that stratospheric platforms, such as high-altitude balloons, may be used to provide air-ground services.17 In a Report and Order of the same date, the Commission adopted competitive bidding rules for the 800 MHz commercial and 400 MHz general aviation air-ground services, including size standards for determining small business eligibility for bidding credits in the 800 MHz commercial air-ground service.18 An auction was held for the 800 MHz licenses (Auction No. 65) ending June 6, 2006,19 and the Commission granted licenses to the winning bidders on October 31, 2006 under call signs WQFX728 and WQFX729.20 (f) Part 22 Non-Cellular Services 17. As part of the Report and Order regarding the Air-Ground Radiotelephone Service discussed in the preceding paragraph, the Commission also streamlined certain non-cellular Part 22 Public Mobile Services rules that were found no longer to be warranted.21 For example, the Commission removed the requirement that Part 22 16 See Amendment of Part 22 of the Commission's Rules To Benefit the Consumers of Air-Ground Telecommunications Services; Biennial Regulatory Review--Amendment of Parts 1, 22, and 90 of the Commission's Rules; Amendment of Parts 1 and 22 of the Commission's Rules To Adopt Competitive Bidding Rules for Commercial and General Aviation Air-Ground Radiotelephone Service; Application of Verizon Airfone Inc. for Renewal of 800 MHz Air-Ground Radiotelephone License, Call Sign KNKG804, Report and Order and Notice of Proposed Rule Making, WT Docket Nos. 03-103, 05-42, 20 FCC Rcd 4403 (2005); See FCC News Release, FCC Paves the Way for New Broadband Services in the Air, WT Docket Nos. 03-103, 05-42, 2004 WL 2913399 (F.C.C.), (rel. Dec. 15, 2004). 17 See Amendment of Part 22 of the Commission's Rules To Benefit the Consumers of Air-Ground Telecommunications Services; Biennial Regulatory Review--Amendment of Parts 1, 22, and 90 of the Commission's Rules; Amendment of Parts 1 and 22 of the Commission's Rules To Adopt Competitive Bidding Rules for Commercial and General Aviation Air-Ground Radiotelephone Service; Application of Verizon Airfone Inc. for Renewal of 800 MHz Air-Ground Radiotelephone License, Call Sign KNKG804, Order on Reconsideration and Report and Order, WT Docket Nos. 03-103, 05-42, 20 FCC Rcd 19663 (2005). 18 Id. 19 See "Wireless Telecommunications Bureau Grants 800 MHz Air-Ground Licenses," Public Notice, DA 06-2254, 21 FCC Rcd 13022 (WTB rel. Oct. 31, 2006). 20 See FCC File Nos. 0002653156 and 0002658043. 21 Amendment of Part 22 of the Commission's Rules To Benefit the Consumers of Air-Ground Telecommunications Services; Biennial Regulatory Review--Amendment of Parts 1, 22, and 90 of the (continued....) Federal Communications Commission DA 07-674 8 licensees be common carriers, modified rules governing the provision of dispatch service by paging licensees, and recodified certain Part 22 rules to Part 1 to provide uniform methods for the calculation of terrain elevation and distance for most wireless services. (g) Rural Proceeding 18. In July 2004, the Commission adopted a Report and Order and Further Notice of Proposed Rule Making designed to facilitate the deployment of wireless services in rural areas. Among other things, the Commission: defined “rural areas” for wireless services; decided to continue to establish licensing areas on a case-by-case basis; modified certain rules to facilitate increased access to capital for rural licensees; and modified certain technical and licensing requirements to promote cost-effective coverage to rural areas.22 In the FNPRM portion of the item, the Commission sought comment on additional ways to foster access to spectrum and deployment of services in rural areas. There were also two Petitions for Reconsideration filed addressing specific construction requirements and power limits.23 (h) M-LMS Proceeding 19. On March 1, 2006, the Commission adopted a Notice of Proposed Rulemaking (Notice) as part of its reexamination of the regulations governing the use of the multilateration Location and Monitoring Service (M-LMS) spectrum (i.e., 904-909.75 MHz and 919.75-928 MHz) that is shared with various users, including Part 15 unlicensed devices, amateurs and Federal Government operations. 24 Specifically, the Notice seeks comments on the following issues: (1) whether M-LMS licensees in the 902-928 MHz band should be afforded additional flexibility in the type of service they provide (i.e., not be restricted to systems that must primarily transmit status and instructional messages relate to the location or monitoring functions of that system); (2) whether to remove the restriction on real-time interconnection to the public switched (...continued from previous page) Commission's Rules; Amendment of Parts 1 and 22 of the Commission's Rules To Adopt Competitive Bidding Rules for Commercial and General Aviation Air-Ground Radiotelephone Service; Application of Verizon Airfone Inc. for Renewal of 800 MHz Air-Ground Radiotelephone License, Call Sign KNKG804, Report and Order and Notice of Proposed Rule Making, WT Docket Nos. 03-103, 05-42, 20 FCC Rcd 4403 (2005). 22 Facilitating the Provision of Spectrum-Based Services to Rural Areas and Promoting Opportunities for Rural Telephone Companies to Provide Spectrum-Based Services; 2000 Biennial Regulatory Review Spectrum Aggregation Limits for Commercial Mobile Radio Services; Increasing Flexibility to Promote Access to and the Efficient and Intensive Use of Spectrum and the Widespread Deployment of Wireless Services, and to Facilitate Capital Formation, Report and Order and Further Notice of Proposed Rulemaking, WT Docket Nos. 02-381, 01-14, and 03-202, 19 FCC Rcd 19078 (2004) (Rural R&O and FNPRM). 23 See Petition for Partial Reconsideration and/or Clarification filed by Airwave Wireless, LLC and GW Wireless, Inc. (Jan. 14, 2005); Petition for Reconsideration filed by Powerwave Technologies, Inc. (Jan. 14, 2005). 24 Amendment of the Commission’s Part 90 Rules in the 904-909.75 and 919.75-928 MHz Bands, Notice of Proposed Rulemaking, 21 FCC Rcd 2809 (2006). Federal Communications Commission DA 07-674 9 network; (3) whether to adopt stricter technical and/or power limits for M-LMS licensees to ensure that flexibility for these licensees does not increase interference to unlicensed devices; (4) whether to adopt its tentative conclusion that it would be in the public interest to retain the Part 15 safe harbor, which provides that unlicensed and amateur operations that comply with certain technical parameters will not be considered to be causing harmful interference to M-LMS systems; (5) whether to eliminate restrictions on the aggregation of spectrum that permit a licensee to aggregate two, but not all three M- LMS spectrum blocks, for a total of 8 megahertz out of the 14 megahertz in this band; and (6) whether to eliminate the requirement that M-LMS licensees conduct field tests on their systems to ensure that they do not cause unacceptable interference to Part 15 devices. (i) 70/80/90 GHz Proceeding 20. In 2004 and 2005, the Commission took further steps in its establishment of a flexible and innovative regulatory framework for the 70/80/90 GHz bands that does not require traditional Part 101 frequency coordination among non-Federal Government users.25 Under this approach, as originally adopted in 2003, the Commission will issue an unlimited number of non-exclusive nationwide licenses to non-Federal Government entities for the 12.9 gigahertz of spectrum allocated for commercial use. These licenses serve as a prerequisite for registering individual point-to-point links in the 70/80/90 GHz bands, which are allocated on a shared basis with Federal Government users. On September 29, 2004, the Wireless Telecommunications Bureau released an Order announcing the appointment of three private entities as independent database managers responsible for the design and management of the third-party link registration system for the bands.26 On February 3, 2005, the Wireless Telecommunications Bureau announced a permanent process for registering links in the bands.27 On March 3, 2005, the Commission released a Memorandum Opinion and Order that modified the rules to: require interference analyses prior to registering all new or modified links in the 71-76 GHz and 81-86 GHz bands; eliminate the band segmentation and loading requirements and relax the efficiency requirement to 0.125 bits per second (bps)/Hertz (Hz); and accommodate smaller (18”), less expensive antennas by lowering the minimum antenna gain requirement to 43 dBi and 1.2 degree half-power beamwidth.28 25 See Allocation and Service Rules for the 71-76 GHz, 81-86 GHz and 92-95 GHz Bands, WT Docket No. 02-146, Report and Order, 18 FCC Rcd 23318 (2003). 26 See Allocation and Service Rules for the 71-76 GHz, 81-86 GHz and 92-95 GHz Bands, WT Docket No. 02-146, Order, 19 FCC Rcd 20524 (WTB BD 2004). See also Wireless Telecommunications Bureau Opens Filing Window for Proposals to Develop and Manage Independent Database of Site Registrations by Licensees in the 71-76 GHz, 81-86 GHz and 92-95 GHz Bands, Public Notice, 19 FCC Rcd 4597 (WTB BD 2004). 27 See WTB Announces Permanent Process for Registering Links in the 71-76 GHz, 81-86 GHz, and 92-95 GHz Bands, Public Notice, 20 FCC Rcd 2261 (WTB 2005). 28 See Allocation and Service Rules for the 71-76 GHz, 81-86 GHz and 92-95 GHz Bands, WT Docket No. 02-146, Memorandum Opinion and Order, 20 FCC Rcd 4889 (2005). Federal Communications Commission DA 07-674 10 (j) BRS-EBS Proceeding 21. On July 29, 2004, the Commission released a Report and Order and Further Notice of Proposed Rulemaking that transforms the rules governing the Multipoint Distribution Service (MDS) and the Instructional Television Fixed Service (ITFS) in order to encourage the deployment of broadband services by commercial and educational entities.29 To better reflect the forward-looking vision for these services, the Commission renamed MDS the Broadband Radio Service (BRS) and ITFS the Educational Broadband Service (EBS). The Commission created a new band plan for 2495-2690 MHz that eliminates the use of interleaved channels by BRS and EBS licensees and creates distinct band segments for high power operations, such as one-way video transmission, and low power operations, such as two-way fixed and mobile broadband applications. The Commission also established a mechanism for transition from the existing band configuration to the new band plan. BRS and EBS providers will have a three-year period during which they may propose transition plans for relocating existing facilities of all other licensees within the same Major Economic Area (MEA) to new spectrum assignments in the revised band plan. In addition, the Commission deleted Part 21 and Subpart I of Part 74, and consolidated the rules for BRS and EBS into Part 27 of the Commission’s Rules. On April 27, 2006, the Commission released a Third Memorandum Opinion and Order and Second Report and Order in this proceeding.30 Among other things, the Commission changed the transition size area from MEA to Basic Trading Area, and decided to permit licensees to self-transition if a proponent has not come forward by 30 months after the effective date of the amended rules. (k) AWS Proceedings 22. In 2004 through 2006, the Commission took several steps to build on its establishment of a flexible-use licensing framework under Part 27 for the first 90 megahertz of Advanced Wireless Service spectrum (“AWS-1”), consisting of 1710-1755 and 2110-2155 MHz.31 Separately, in 2004, the Commission allocated spectrum in the 1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz bands for fixed and mobile use, designated it for AWS (“AWS-2”), and proposed service rules for this 20 megahertz of additional AWS spectrum under the Part 27 flexible use regime.32 In 2005, 29 See Amendment of Parts 1, 21, 73, 74 and 101 of the Commission’s Rules to Facilitate the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150-2162 and 2500-2690 MHz Bands, et al.; WT Docket No. 03-66, Report and Order and Further Notice of Proposed Rulemaking, 19 FCC Rcd 14165 (2004). 30 Amendment of Parts 1, 21, 73, 74 and 101 of the Commission’s Rules to Facilitate the Provision of Fixed and Mobile Broadband Access, Educational and Other Advanced Services in the 2150-2162 and 2500-2690 MHz Bands, Third Memorandum Opinion and Order and Second Report and Order, WT Docket No. 03- 66, 21 FCC Rcd. 5606 (2006) (BRS/EBS 3rd MO&O). 31 See Service Rules for Advanced Wireless Services in the 1.7 GHz and 2.1 GHz Bands, WT Docket No. 02-353, Report and Order, 18 FCC Rcd 25162 (2003); modified by Order on Reconsideration, 20 FCC Rcd 14058 (2005) (codified at 47 C.F.R. Part 27, Subpart L). 32 See Amendment of Part 2 of the Commission’s Rules to Allocate Spectrum Below 3 GHz for Mobile and Fixed Services to Support the Introduction of New Advanced Wireless Services, Including Third (continued....) Federal Communications Commission DA 07-674 11 the Commission allocated an additional 20 MHz of spectrum at 2155-2175 MHz (“AWS- 3”) suitable for AWS uses, and modified its rules for the AWS-1 band to provide additional opportunities for smaller and rural wireless carriers to access this spectrum.33 In 2006, the Commission established procedures by which new AWS licensees may relocate incumbent BRS and Fixed Microwave Service (FS) operations in spectrum that has been allocated for AWS, and established cost sharing obligations for AWS and Mobile Satellite Service (MSS) entrants that benefit from the relocation of FS and BRS operations in these bands.34 In addition, on September 18, 2006, the Commission completed the auction of AWS-1 licenses in the 1710-1755 MHz and 2110-2155 MHz bands (Auction No. 66), in which 104 winning bidders won a total of 1,087 licenses.35 The Commission has granted over two-thirds of the applications submitted by winners in Auction No. 66, issuing 942 licenses,36 and is currently reviewing the remaining applications. (l) Commercial Spectrum Enhancement Act (CSEA) Proceeding 23. The Commercial Spectrum Enhancement Act (CSEA) established a mechanism to use spectrum auction proceeds to reimburse federal agencies operating in the 1710-1755 MHz bands and certain other frequency bands for the cost of relocating operations.37 The 1710-1755 MHz band is identified by CSEA as government transfer spectrum for which auction proceeds must be placed in a trust fund established to reimburse federal agencies operating on those frequencies for the cost of relocating to (...continued from previous page) Generation Wireless Systems, ET Docket No. 00-258, Sixth Report and Order, Third Memorandum Opinion and Order, and Fifth Memorandum Opinion and Order, 19 FCC Rcd 20720 (2004);.Service Rules for Advanced Wireless Services in the 1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz Bands, WT Docket No. 04-356, Notice of Proposed Rule Making, 19 FCC Rcd 19263 (2004). 33 See Amendment of Part 2 of the Commission's Rules to Allocate Spectrum Below 3 GHz for Mobile and Fixed Services to Support the Introduction of New Advanced Wireless Services, including Third Generation Wireless Systems, ET Docket No. 00-258, Eighth Report and Order, Fifth Notice of Proposed Rulemaking and Order, 20 FCC Rcd 15866 (2005) (“AWS Eighth Report and Order” and “AWS Fifth Notice”); Service Rules for Advanced Wireless Services in the 1.7 GHz and 2.1 GHz Bands, WT Docket No. 02-353, Order on Reconsideration, 20 FCC Rcd 14058 (2005). 34 See Amendment of Part 2 of the Commission’s Rules to Allocate Spectrum Below 3 GHz for Mobile and Fixed Service to Support the Introduction of New Advanced Wireless Services, including Third Generation Wireless Systems, ET Docket No. 00-258, Service Rules for Advances Wireless Services in the 1.7 GHz and 2.1 GHz Bands, WT Docket No. 02-353, Ninth Report and Order and Order, 21 FCC Rcd 4473 (2006) (recon. pending) (AWS Relocation and Cost Sharing Report and Order). 35 See Auction of Advanced Wireless Services Closes, Public Notice, DA 06-1882 (rel. Sept. 20, 2006). See also FCC web site,http://wireless.fcc.gov/auctions/default.htm?job=auction_summary&id=66, for additional information. 36 See Wireless Telecommunications Bureau Grants Advanced Wireless Service Licenses, Public Notices, DA 06-2408 (WTB rel. Nov. 29, 2006), DA 06-2179 (WTB rel. Dec. 18, 2006) and DA 07-285 (WTB rel. Jan. 29, 2007). 37 Commercial Spectrum Enhancement Act, Pub. L. No. 108-494, 118 Stat. 3986, Title II (2004). Federal Communications Commission DA 07-674 12 other bands. On June 14, 2005, the Commission released a Declaratory Ruling and Notice of Proposed Rulemaking seeking comment on the rules and procedures needed to comply with CSEA, including any changes needed to implement the requirement that the proceeds of an auction of spectrum subject to CSEA equal at least 110 percent of the total estimated relocation costs.38 On January 24, 2006, the Commission released a Report and Order adopting modifications to its competitive bidding rules in light of CSEA.39 Among other things, the Commission modified its reserve price rule to provide that, for any auction of “eligible frequencies” requiring the recovery of estimated relocation costs pursuant to CSEA, the Commission will establish a reserve price(s) pursuant to which the total cash proceeds shall equal at least 110 percent of the total estimated relocation costs provided to the Commission pursuant to CSEA. (m) Designated Entity Proceeding 24. On February 3, 2006, the Commission released a Further Notice of Proposed Rulemaking which sought comment on whether the Commission should make any changes to its competitive bidding rules as they relate to designated entities.40 On April 25, 2006, the Commission adopted a Second Report and Order, which modified the Commission’s rules for determining the eligibility of applicants for designated entity benefits in the context of competitive bidding.41 Among other things, the Commission adopted rules to limit the award of designated entity benefits to any applicant or licensee that has “impermissible material relationships” or an “attributable material relationship” created by certain agreements with one or more other entities for the lease or resale (including under a wholesale arrangement) of its spectrum capacity. At the same time the Commission released a Second Further Notice of Proposed Rule Making seeking comment on a variety of additional measures that might further augment the effectiveness of the rules to enhance the Commission’s ability to ensure that the recipients of designated entity benefits are limited to those entities and for those purposes that Congress intended.42 On June 2, 2006, the Commission released an Order on 38 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission's Competitive Bidding Rules and Procedures, Declaratory Ruling and Notice of Proposed Rulemaking, 20 FCC Rcd 11268 (2005). 39 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission's Competitive Bidding Rules and Procedures, Report and Order, 21 FCC Rcd 891 (2006). 40 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission's Competitive Bidding Rules and Procedures, Further Notice of Proposed Rulemaking, 21 FCC Rcd 1753 (2006). 41 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, Second Report and Order, 21 FCC Rcd 4753 (2006). 42 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, Second Further Notice of Proposed Rule Making, 21 FCC Rcd 4753 (2006). Federal Communications Commission DA 07-674 13 Reconsideration of the Second Report &Order clarifying, on its own motion, certain aspects of the Second Report & Order.43 IV. SUMMARY OF BIENNIAL REGULATORY REVIEW 25. Pursuant to Section 11, the Bureau has determined, based on its own review and on comments received in this proceeding, that there are some areas in which the development of meaningful competition among wireless telecommunications providers may warrant changing or eliminating regulations. As summarized below, the staff recommends revising or eliminating a number of several specific rules, either as part of various efforts already underway or as part of newly initiated proceedings.44 Review/Revision/Streamlining Efforts Already Under Way 26. The Commission already is in the process of considering revisions or possible elimination of numerous rules relating to wireless radio services. These efforts include revisions guided by competitive developments contemplated by Section 11 as well as streamlining efforts that fall outside the scope of Section 11. They are briefly summarized below. 27. Parts 1, 22, 24, 27, and 90. The Commission is currently considering what kind of mechanisms—such as performance requirements, partitioning and disaggregation, and re-licensing—might further promote the provision of wireless radio services to rural areas as well as to ensure that spectrum ultimately continues to be put to its highest use.45 28. Section 20.11 rules relating to intercarrier compensation. The Commission currently is exploring ways of reforming its intercarrier compensation rules, including the rules set forth in Section 20.11. It is examining the existing patchwork of interconnection rules and seeking to adopt an approach that minimizes the need for regulatory intervention.46 43 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, Order on Reconsideration of the Second Report and Order, 21 FCC Rcd 4753 (2006). 44 For a detailed discussion of the staff’s rule part analysis, including a discussion of each of the comments filed in this Biennial Review proceeding and the staff’s recommendations, see Appendix III, infra. 45 See Rural R&O and FNPRM, 19 FCC Rcd 19078 (2004). 46 See Developing a Unified Intercarrier Compensation Regime, CC Docket No. 01-92, Notice of Proposed Rulemaking, 16 FCC Rcd 9610 (2001); See Developing a Unified Intercarrier Compensation Regime, CC Docket No. 01-92, Notice of Proposed Rulemaking, 20 FCC Rcd. 4685 (2005); Public Notice, “Comment Sought on Missoula Intercarrier Compensation Reform Plan,” CC Docket No. 01-92, 21 FCC Rcd 8524 (2006). Federal Communications Commission DA 07-674 14 29. Section 20.12(c) rules relating to CMRS carrier “roaming” obligations. The Commission is examining whether, in light of competitive and other developments, it should eliminate the manual roaming rule applicable to CMRS carriers.47 30. Parts 22, 24, and 27. The Commission is currently considering whether to modify the current Parts 22, 24 and 27 radiated power limits for certain commercial mobile services.48 31. Part 27. The Commission is currently considering whether to revise the Part 27 service rules applicable to existing and prospective Upper 700 MHz Guard Bands licensees.49 32. Part 52 Rules. The Commission is currently considering the impact of its rule regarding wireline to wireless local number portability on small entities.50 33. Part 80 Rules. The Commission is currently considering whether to permit VPC and AMTS licensees to provide private mobile radio service to units on land.51 34. Part 90 – The Commission is currently considering a proposal to defer or eliminate the requirement in Section 90.203(j)(5) of the rules that certain applications for equipment authorizations received on or after January 1, 2005 specify 6.25 kHz capability.52 The Commission is currently re-examining the M-LMS rules as indicated above.53 47 See Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers, WT Docket No. 05-265, Memorandum Opinion & Order and Notice of Proposed Rulemaking, 20 FCC Rcd 15047(2005). 48 See Streamlining NPRM, 19 FCC Rcd 708 (2004). 49 See Former Nextel Communications, Inc. Upper 700 MHz Guard Band Licenses and Revisions to Part 27 of the Commission s Rules Development of Operational, Technical and Spectrum Requirements for Meeting Federal, State and Local Public Safety Communications Requirements Through the Year 2010, Notice of Proposed Rule Making, WT Docket Nos. 06-169, 96-86 (rel. Sept. 8, 2006). 50 See “Federal Communications Commission Seeks Comment on Initial Regulatory Flexibility Analysis in Telephone Number Portability Proceeding,” Public Notice, CC Docket No. 95-116, 20 FCC Rcd 8616 (2005). 51 See Maritel, Inc. and Mobex Network Services, LLC, Petitions for Rule Making to Amend the Commission’s Rules to Provide Additional Flexibility for AMTS and VHF Public Coast Station Licensees, Notice of Proposed Rule Making, WT Docket No. 04-257, RM-10743, 19 FCC Rcd 15225 (2004). 52 See Implementation of Sections 309(j) and 337 of the Communications Act of 1934 as Amended; Promotion of Spectrum Efficient Technologies on Certain Part 90 Frequencies, Third Memorandum Opinion and Order, Third Further Notice of Proposed Rule Making, and Order, WT Docket No. 99-87, RM-9332, 19 FCC Rcd 25045 (2004). 53 Amendment of the Commission’s Part 90 Rules in the 904-909.75 and 919.75-928 MHz Bands, Notice of Proposed Rulemaking, 21 FCC Rcd 2809 (2006). Federal Communications Commission DA 07-674 15 Proceedings that Staff Recommends Be Initiated in Order To Modify or Repeal Current Rules 35. In response to the comments received or as a result of ongoing review of the rules within the purview of the Bureau, staff recommends initiating a new proceeding or proceedings to consider modifying or eliminating the following rules. The modifications proposed below generally involve streamlining procedural, technical, and operational rules for reasons that fall outside the scope of Section 11 review. 36. Section 1.2111(a) filing requirements for applications for transfers of control or assignment of licenses. Staff continues to recommend that the Commission consider revising section 1.2111(a) to eliminate the requirement that an applicant seeking approval for a transfer of control or assignment of a license within three years of receiving the license through competitive bidding file transaction documents with the Commission. In addition, since the staff made its initial recommendation, the Commission has adopted rules governing secondary market transfers that, with the exception of transfers involving designated entities, generally do not require that the parties to the transfer file transaction documents with the Commission. Staff's proposal to revise section 1.2111(a) is therefore consistent with the Commission's recent approach of generally not requiring parties transferring licenses to file transaction documents with the Commission. 37. Part 17 rules. WTB staff recommends that the Commission institute a proceeding to examine the Part 17 rules to modify or eliminate, without compromising public safety goals, any rules which create unnecessary administrative burdens or are apt to confuse owners and licensees who attempt to comply with our Part 17 rules. PCIA filed comments suggesting changes to the following Part 17 Rules: Sections 17.4(e)-(g), 17.6(c), 17.23, 17.47(b) and 17.57.54 38. Section 20.6. Staff recommends that section 20.6 be removed from the Code of Federal Regulations. Section 20.6(f) provides that the rule has already sunset as of January 1, 2003. 39. Section 20.12 as it relates to wireless resale. Staff recommends that paragraph (b) of this Section (and the last sentence of paragraph (a) defining the scope of paragraph (b)) be removed. Section 20.12(b)(3) provides that the rule has already sunset as of November 24, 2002.55 40. Section 20.20. Staff recommends that section 20.20 be removed from the Code of Federal Regulations. Section 20.20(f) provides that the rule has already sunset as of January 1, 2002. 54 Comments of PCIA – The Wireless Infrastructure Association (PCIA) filed September 15, 2006. 55 See also “Notice Commencement of Five-Year Period Preceding Termination of Resale Rule Applicable to Certain Covered Commercial Mobile Radio Service Providers,” CC Docket No. 94-54, Public Notice, 13 FCC Rcd 17427 (1998). Federal Communications Commission DA 07-674 16 41. The staff also recommends removing the fixed microwave relocation rules for Personal Communications Services (PCS) in sections 24.239-24.253 and to amend sections 101.69-101.81 to remove the 1850-1990 MHz band because these rules have reached their sunset.56 56 47 C.F.R. §§ 24.239-24.253, 101.69-101.81. Federal Communications Commission DA 07-674 17 APPENDIX I: RULE PART ANALYSIS PART 1 – PRACTICE AND PROCEDURE PART 1, SUBPART F – WIRELESS TELECOMMUNICATIONS SERVICES APPLICATIONS AND PROCEDURES Description Part 1, subpart F sets forth procedural rules governing the filing of applications and the issuance of wireless licenses.57 The rules cover all of the basic types of applications associated with wireless licensing, including initial applications, amendments and modifications, waiver requests, requests for special temporary authorization, assignment and transfer applications, and renewals. In addition, subpart F includes rules concerning public notices, petitions to deny, dismissal of applications, and termination of licenses. The subpart F rules were adopted as part of the 1998 Biennial Regulatory Review in the Universal Licensing proceeding, WT Docket No. 98-20.58 The Commission initiated this proceeding in connection with the implementation of the Universal Licensing System (ULS), an integrated, automated system for electronic filing and processing of wireless applications. In the Universal Licensing proceeding, the Commission consolidated and streamlined its procedural rules into subpart F, which replaced numerous service-specific rules that had previously applied to different wireless services. In addition, the Commission adopted new standardized application forms designed for use in ULS, and adopted rules requiring all wireless telecommunications carriers, as well as certain other classes of wireless licensees, to file applications electronically.59 The Commission made minor changes to those rules in the 1999 reconsideration of the ULS Report and Order.60 Purpose The purpose of subpart F is to: (1) establish uniform procedures for the licensing of all wireless services; (2) minimize filing requirements; and (3) ensure the collection of reliable information from applicants and licensees. 57 47 C.F.R. Part 1, subpart F. 58 Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95, 97, and 101 of the Commission’s Rules to Facilitate the Development and Use of the Universal Licensing System in the Wireless Telecommunications Service, WT Docket No. 98-20, Report and Order, 13 FCC Rcd 21027 (1998) (ULS Report and Order). 59 47 C.F.R. §1.913. 60 Amendment of Parts 0, 1, 13, 22, 24 26, 27, 80, 87, 90, 95, 97, and 101 of the Commission's Rules to Facilitate the Development and Use of the Universal Licensing System in the Wireless Telecommunications Service, Memorandum Opinion and Order on Reconsideration, 14 FCC Rcd 11476 (1999). Federal Communications Commission DA 07-674 18 Analysis Status of Competition As noted above, the Part 1, subpart F rules pertain to procedural requirements relating to the many wireless radio services regulated pursuant to other specific rule parts addressed in our rule part analysis. Accordingly, we do not address here the status of competition in specific wireless radio services, but instead will address this issue in the context of rule parts affecting particular services, discussed infra. Advantages Consolidating the wireless procedural rules into a single subpart provides greater clarity, consistency, and predictability to the licensing process than the prior array of sometimes inconsistent service-specific rules, forms, and procedures. This lessens the filing burden on applicants, and also facilitates more rapid and efficient processing by the Commission. Disadvantages The requirement of electronic filing for all wireless telecommunications carriers imposes certain technical burdens and costs. In addition, the general procedural rules contained in subpart F impose administrative burdens on wireless applicants and licensees that are inherent to the licensing process. Recent Efforts On May 15, 2003, the Commission adopted the Secondary Markets Report and Order and Further Notice of Proposed Rulemaking, which among other things provided for more streamlined approval procedures (using ULS) relating to assignment and transfer applications for many Wireless Radio Service license authorizations under section 1.948.61 In the following year, on July 8, 2004, the Commission adopted the Secondary Markets Second Report and Order and Second Further Notice of Proposed Rulemaking, which provided streamlined approval procedures for all Wireless Radio Services and made immediate (i.e., overnight) approval procedures available for certain of these applications to the extent they did not raise potential public interest concerns that merited additional Commission review.62 To implement these processing changes, the 61 See Promoting Efficient Use of Spectrum Through Elimination of Barriers In the Matter of Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets, WT Docket No. 00-230, Report and Order and Further Notice of Proposed Rulemaking, 18 FCC Rcd 20604 (2003). 62 See Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets, WT Docket No. 00-230, Second Report and Order, Order on Reconsideration, and Second Further Notice of Proposed Rulemaking, 19 FCC Rcd 17503 (2004). Federal Communications Commission DA 07-674 19 Commission in July 2005 revised its Form 603 to enable immediate processing of qualifying applications.63 On July 8, 2004, the Commission adopted the Rural R&O and FNPRM, adopting measures to facilitate the deployment of wireless services in rural areas including the elimination of the cellular cross-interest rule in RSAs and an increase in permissible power levels for base stations in certain wireless services that are located in rural areas or that provide coverage to otherwise unserved areas.64 In lieu of the cellular cross interest rule, the Commission adopted new reporting requirements in section 1.919 for use in conjunction with a case-by-case approach to reviewing substantial transfers or assignments. In the Further Notice portion of the item, the Commission sought comment on additional ways to foster access to spectrum and deployment of services in rural areas. On July 22, 2005, the Commission adopted a Report and Order and Further Notice of Proposed Rule Making that streamlines and harmonizes the Part 1, 22, 24, 27, and 90 rules to clarify spectrum rights and obligations and optimize flexibility for wireless service licensees.65 For example, the Commission amended sections 1.927, 1.929 and 1.939 regarding the filing of transfers of control, the classification of major vs. minor modifications and the process for filing petitions to deny, respectively. Comments No comments were filed with respect to this subpart. Recommendation The Part 1, subpart F rules establish general procedural requirements applicable to our many different wireless services, and do not contain substantive rules affecting any particular service. As such, the need and purposes for these rules are not directly affected by competitive developments that guide our Section 11 analysis. Accordingly, pursuant to our Section 11 biennial review, we do not find that this rule subpart is “no longer necessary in the public interest as the result of meaningful economic competition between providers of such [telecommunications] service.” 63 See Wireless Telecommunications Bureau Announces Changes to the Universal Licensing System to Implement the Commission’s Immediate Approval Procedures for Wireless License Assignments and Transfers, Public Notice, DA 05-2226 (rel. July 29, 2005). 64 Rural R&O and FNPRM, 19 FCC Rcd 19078 (2004). 65 Biennial Regulatory Review -- Amendment of Parts 1, 22, 24, 27, and 90 to Streamline and Harmonize Various Rules Affecting Wireless Radio Services, Report and Order and Further Notice of Proposed Rule Making, WT Docket No. 03-264, 20 FCC Rcd 13900 (2005). Federal Communications Commission DA 07-674 20 PART 1, SUBPART I – PROCEDURES IMPLEMENTING THE NATIONAL ENVIRONMENTAL POLICY ACT OF 1969 Description Part 1, Subpart I of the Commission’s rules66 implements the requirements of the National Environmental Policy Act (NEPA)67 as well as a series of other federal environmental laws, including the Endangered Species Act of 1973, as amended,68 the National Historic Preservation Act of 1966 (NHPA),69 the Wilderness Act of 1964, as amended,70 statutory provisions relating to Indian religious sites,71 and the Wildlife Refuge Laws.72 In addition, the Commission’s environmental rules implement Executive Orders regarding flood plains and wetlands regulation.73 By statute and regulations of the Council on Environmental Quality (CEQ),74 the Commission is responsible for ensuring compliance with these laws. The rules identify certain special issues for consideration, including the impact of high-intensity white lights on towers in residential neighborhoods75 and the effect of radio frequency emissions on the human environment.76 Purpose The purpose of the Commission’s environmental rules is to implement NEPA, other federal environmental laws, and Executive Orders, and to identify those sensitive environmental issues which Commission licensees, applicants, and certain third parties must address. The Commission complies with NEPA by requiring its licensees to assess and, if found, report the potential environmental consequences of their proposed projects. If certain actions, such as the construction of a tower, might affect the environment in one or more of the ways described in the rules, the licensee or applicant is required to consider the potential environmental effects of its project, describe those potential effects 66 The Commission’s environmental rules are codified at 47 C.F.R. §§ 1.1301-1.1319. 67 42 U.S.C. §§ 4321-4347. 68 16 U.S.C. §§ 1531-1543. 69 16 U.S.C. §§ 470 et seq. 70 16 U.S.C. §§ 1131-1136. 71 42 U.S.C. § 1996. 72 16 U.S.C. § 668dd. 73 See Executive Order 11988, 42 Fed Reg. 26,951 (May 24, 1977), reprinted as amended in 42 U.S.C. § 4321 note (floodplains); Executive Order 11990, 42 Fed Reg. 26,961 (May 24, 1977), reprinted as amended in 42 U.S.C. § 4321 note (wetlands). 74 40 C.F.R. §§ 1500-1508. 75 47 C.F.R. § 1.1307(a)(8). 76 47 C.F.R. § 1.1307(b). Federal Communications Commission DA 07-674 21 in an environmental assessment (EA), and file that document with the Commission.77 The Commission has concluded that actions not identified in its rules are categorically excluded from environmental review.78 The Commission’s environmental rules explain what information is required in an EA,79 the methods for the public to file objections to EAs,80 and those situations in which a full environmental impact statement must be completed,81 as required by NEPA. Comments The Navajo Nation requests that the Commission work with the Bureau of Indian Affairs (“BIA”) to eliminate BIA approval for collocations and certain other telecommunications projects.82 Moreover, the Navajo Nation also requests that Commission regulations be modified to facilitate and encourage collocations within existing utility (electric, water, sewer, telephone) rights-of-way on tribal lands.83 Recommendations The Part 1, subpart I rules are beyond the scope of the Biennial Review proceeding. These Commission rules implement NEPA,84 as well as other federal environmental laws and executive orders.85 The rules were not promulgated under the Communications Act of 1934, as amended, and therefore are not part of the Biennial Review.86 It is worth noting, however, that the Nationwide Programmatic Agreement For Review of Effects On Historic Properties For Certain Undertakings Approved By The Federal Communications Commission (“NPA”) includes exemptions and other provisions that 77 47 C.F.R. § 1.1307(a). 78 47 C.F.R. § 1.1306. 79 See 47 C.F.R. §§ 1.1308, 1.1311. 80 47 C.F.R. § 1.1313. 81 47 C.F.R. §§ 1.1314-1.1319. 82 Navajo Nation comments at 6. 83 Id. 84 See 47 C.F.R. § 1.1301 (stating that provisions of Part 1, Subpart I of the Commission’s rules implement Subchapter I of NEPA). 85 47 C.F.R. § 1.1307(a). 86 Section 11 of the Communications Act instructs the Commission to review “all regulations issued under this Act . . .” 47 U.S.C. § 161 (emphasis added). Federal Communications Commission DA 07-674 22 are similar to much of what the Navajo Nation requests. Section I.D. of the NPA permits an Indian tribe, at its election, to adopt the provisions of the NPA for use on tribal lands.87 87 47 C.F.R. Part 1, Appendix C, Section I.D. Federal Communications Commission DA 07-674 23 PART 1, SUBPART Q – COMPETITIVE BIDDING PROCEEDINGS Description Subpart Q implements section 309(j) of the Communications Act of 1934, as added by the Omnibus Budget Reconciliation Act of 199388 and amended by the Balanced Budget Act of 1997.89 Subpart Q sets forth rules governing the mechanisms and procedures for competitive bidding to assign spectrum licenses. Purpose The purpose of subpart Q is to establish a uniform set of competitive bidding rules and procedures for use in licensing of all services that are subject to licensing by auction. The rules in this subpart: (1) describe which services are subject to competitive bidding; (2) provide competitive bidding mechanisms and design options; (3) establish application, disclosure and certification procedures for short- and long-form applications; and (4) specify down payment, withdrawal and default mechanisms. In addition, subpart Q contains rules by which the Commission determines eligibility for “designated entity” (i.e., small business) status, and includes a schedule of bidding credits for which designated entities may qualify in those auctions in which special provisions are made for designated entities.90 The purpose of these provisions is to implement section 309(j)(3)(B) of the Act, which states that an objective of designing and implementing the competitive bidding system is to “promot[e] economic opportunity and competition and ensur[e] that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration in licenses and disseminating licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women.”91 Analysis Status of Competition As noted above, the Part 1, subpart Q rules pertain to procedural requirements relating to the many wireless radio services regulated pursuant to other specific rule parts addressed in our rule part analysis. Accordingly, we do not address here the status of competition in specific wireless radio services, but instead will address this issue in the context of rule parts affecting particular services, discussed infra. 88 See Omnibus Budget Reconciliation Act of 1993, Pub. Law No. 103-66 (1993). 89 See Balanced Budget Act of 1997, Pub. Law No. 105-33, § 3002, 111 Stat. 251 (1997) (amending 47 U.S.C. § 309(j)). 90 In service-specific rule making proceedings, the Commission continues to establish the appropriate size standards for each auctionable service. 91 47 U.S.C. § 309(j)(3)(B). Federal Communications Commission DA 07-674 24 Advantages The subpart Q competitive bidding rules establish procedures for the efficient licensing of spectrum. Use of auction procedures allows for substantially faster licensing and lower costs than alternative licensing methods such as comparative hearings, and is more likely to result in the award of licenses to those entities that are most likely to put spectrum to effective and efficient use. Auction rules also enable the Commission to recover a portion of the value of the spectrum for the benefit of the public. Subpart Q is the result of the Commission’s consolidation of its auction rules in the Part 1 rulemaking proceeding, WT Docket No. 97-82. Prior to the Part 1 proceeding, the Commission implemented service-specific auction rules for each new auctioned service. Consolidating the auction rules in Part 1 has resulted in more consistency and predictability in the auctions process from service to service. Disadvantages The auction rules in this subpart impose certain transaction costs on auction participants (aside from the obligation on the winning bidder to pay the amount bid). These auction- related costs may be somewhat higher than the cost of filing a lottery application but significantly less than the cost of a comparative hearing.92 In addition, certain aspects of the auctions process (e.g., setting of minimum opening bid amounts, bid increments, and bidding credit levels) still require service-specific notice and comment prior to each individual auction. Recent Efforts In the Part 1 Order on Reconsideration of the Fifth Report and Order, the Commission modified its rules governing attribution of gross revenues for purposes of determining designated entity eligibility. Specifically, the Commission exempted the gross revenues of the affiliates of a rural telephone cooperative’s officers and directors from attribution to the applicant if certain specified conditions are met. The Commission also clarified that, in calculating an applicant’s gross revenues under the controlling interest standard, it will not attribute to the applicant the personal net worth, including personal income, of its officers and directors. 93 In the Second Order on Reconsideration of the Part 1 Fifth Report and Order 94, the Commission revised one element of the exemption from its attribution rule for officers and directors of rural telephone cooperatives to permit a rural telephone cooperative applicant (or its controlling interest) to demonstrate either that it is 92 See FCC Report to Congress on Spectrum Auctions, WT Docket No. 97-150, Report, FCC 97-353, Section III, at 8 (rel. October 9, 1997) (citing studies estimating costs of $800 per application under the lottery system and $130,000 per application under the comparative hearing process). 93 Amendment of Part 1 of the Commission’s Rules – Competitive Bidding Procedures, Second Order on Reconsideration of the Third Report and Order and Order on Reconsideration of the Fifth Report and Order, 18 FCC Rcd 10180 (2003). 94 Amendment of Part 1 of the Competitive Bidding Rules ? Competitive Bidding Procedures, Second Order on Reconsideration of the Part 1 Fifth Report and Order, 20 FCC Rcd 1942 (2005). Federal Communications Commission DA 07-674 25 eligible for tax-exempt status pursuant to Section 501(c)(12) of the Internal Revenue Code95 or that it adheres to the cooperative principles enumerated in Puget Sound Plywood, Inc. v. Commissioner of Internal Revenue Service (“Puget Sound”).96 On June 14, 2005, the Commission released a Declaratory Ruling and Notice of Proposed Rulemaking seeking comment on the rules and procedures needed to comply with the Commercial Spectrum Enhancement Act (CSEA).97 CSEA established a mechanism to use spectrum auction proceeds to reimburse federal agencies operating in the 1710-1755 MHz bands and certain other frequency bands for the cost of relocating operations.98 The 1710-1755 MHz band is identified by CSEA as government transfer spectrum for which auction proceeds must be placed in a trust fund established to reimburse federal agencies operating on those frequencies for the cost of relocating to other bands. On January 24, 2006, the Commission released a Report and Order adopting modifications to its competitive bidding rules in light of CSEA.99 Among other things, the Commission modified its reserve price rule to provide that, for any auction of “eligible frequencies” requiring the recovery of estimated relocation costs pursuant to CSEA, the Commission will establish a reserve price(s) pursuant to which the total cash proceeds shall equal at least 110 percent of the total estimated relocation costs provided to the Commission pursuant to CSEA. In a Second Report and Order, the Commission modified its rules regarding eligibility for designated entity benefits for applicants or licensees that have agreements that constitute “material relationships.” 100 Specifically, except as grandfathered, the Commission determined that an applicant or licensee that has agreements pursuant to which, on a cumulative basis, it may lease (under either spectrum manager or de facto transfer leasing arrangements) or resell (including under wholesale agreements) more than 50 percent of the spectrum capacity of any individual license, is considered to have entered into an “impermissible material relationship.” Such impermissible material relationships will render such entity ineligible for the award of designated entity benefits in the context of competitive bidding and will, in secondary markets, result in the imposition of unjust enrichment obligations on a license-by-license basis. 95 26 U.S.C. § 501(c)(12). 96 Puget Sound Plywood, Inc. v. Commissioner of the Internal Revenue Service, 44 T.C. 305 (1965) (“Puget Sound”). 97 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission's Competitive Bidding Rules and Procedures, Declaratory Ruling and Notice of Proposed Rulemaking, 20 FCC Rcd 11268 (2005). 98 Commercial Spectrum Enhancement Act, Pub. L. No. 108-494, 118 Stat. 3986, Title II (2004). 99 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission's Competitive Bidding Rules and Procedures, Report and Order, 21 FCC Rcd 891 (2006). 100 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, Second Report and Order, 21 FCC Rcd 4753 (2006). Federal Communications Commission DA 07-674 26 In addition, an applicant or licensee that has agreements pursuant to which, on a cumulative basis, it may lease (under either spectrum manager or de facto transfer leasing arrangements) or resell (including under wholesale agreements) more than 25 percent of the spectrum capacity of any individual license to any individual entity, including entities and individuals attributable to that entity, is considered to have an “attributable material relationship.” The attributable material relationship with that entity will be attributed to the applicant or licensee for purposes of determining that applicant’s or licensee’s eligibility for designated entity benefits in the context of competitive bidding and will, in secondary market transactions, be factored into an assessment of whether there are any unjust enrichment obligations applicable on a license-by-license basis. The Commission also adopted stricter unjust enrichment rules. By extending the unjust enrichment period from five to ten years, the Commission determined that it would increase the chance that the designated entity will develop to become a competitive service provider for the benefit of the public. Pursuant to the revised schedule, for the first five years of the license term, if a designated entity loses its eligibility for a bidding credit, or seeks to assign or transfer control of a license or enter into a de facto transfer lease with an entity that would not qualify for the same level of bidding credits, 100 percent of the bidding credit, plus interest, would be owed. For years six and seven of the license term, 75 percent of the bidding credit, plus interest, would be owed. For years eight and nine, 50 percent of the bidding credit, plus interest, would be owed, and for year ten, 25 percent of the bidding credit, plus interest, would be owed. In addition to revising the unjust enrichment payment schedule, the Second Report and Order imposed a requirement that the Commission must be reimbursed for the entire bidding credit amount owed, plus interest, if a designated entity loses its eligibility for a bidding credit for any reason, including but not limited to, entering into an “impermissible material relationship” or an “attributable material relationship,” seeking to assign or transfer control of a license, or entering into a de facto transfer lease with an entity that is not eligible for bidding credits prior to the filing of the notification informing the Commission that the construction requirements applicable at the end of the license term have been met.101 In light of the record in this proceeding, including the requests of various parties to conduct a further inquiry, the Commission also released a Second Further Notice of Proposed Rule Making seeking comment on whether the 101 Licensees may, under section 1.946(e) of our rules, request an extension of time to meet the applicable construction requirements. 47 C.F.R. § 1.946(e). Additionally, licensees may also request a waiver of the construction requirement, and this request must meet the requirements of section 1.925 of our rules. 47 C.F.R § 1.925. We note that we will undertake careful scrutiny of requests for extension of the construction requirements filed by designated entities consistent with our rules, obligations under the Communications Act, and legal precedent, and that we will consider, as part of our review, whether the extension request is an effort to defeat the objectives of our designated entity program. If a designated entity is successful in obtaining an extension of the construction requirements beyond the initial license term, the requirement that the Commission must be reimbursed for the entire bidding credit amount, plus interest, prior to the filing of the notification informing the Commission that the applicable construction requirements will continue to apply until such notifications are filed. Federal Communications Commission DA 07-674 27 Commission should adopt additional restrictions to further safeguard the benefits reserved for designated entities.102 Since release of the Second Report and Order, several parties submitted filings in this docket addressing various aspects of the order, including, among other issues, how the Commission has defined material relationships, whether the Commission should apply the revised unjust enrichment schedule to licenses issued prior to the release of its decision, and whether the new rules should apply to the AWS auction. On June 2, 2006, the Commission released an Order on Reconsideration of the Second Report and Order clarifying, on its own motion, certain aspects of the Second Report and Order.103 The Order on Reconsideration effectively addressed the merits of many of the Petitioners’ claims, including their claims that the Second Report and Order’s provisions relating to the leasing and resale of spectrum and the revisions to the unjust enrichment rules violated the Administrative Procedure Act’s notice and comment provisions. The Commission also clarified that the ten-year unjust enrichment schedule applies only to licenses that are granted after the release of the Second Report and Order. On June 6, 2006, Council Tree and two other parties filed a Petition for Review in the U.S. Court of Appeals for the Third Circuit challenging the revised designated entity rules adopted in the Second Report and Order. The Petition for Review is currently pending in the Third Circuit. Since the release of the 2004 Biennial Review, the Commission has concluded a number of spectrum auctions for wireless services. On February 15, 2005, the Commission completed the auction for 242 broadband Personal Communication Service (PCS) licenses (“Auction No. 58”). In this auction, 24 winning bidders won a total of 217 licenses. On July 26, 2005, the Commission completed the auction of five Lower 700 MHz band C block (710-716/740-746 MHz) licenses (Auction No. 60), in which three winning bidders won the five licenses. On December 7, 2005, the Commission completed the auction of 22 Multichannel Video Distribution and Data Service (“MVDDS”) licenses (Auction No. 63). In this auction, three winning bidders won a total of 22 licenses. On June 2, 2006, the Commission completed the auction of new nationwide commercial Air-Ground Radiotelephone Service licenses (Auction No. 65). In this auction, two winning bidders won a total of two licenses. On September 18, 2006, the Commission completed an auction of 90 MHz of AWS spectrum in the 1710-1755 MHz and 2110-2155 MHz bands (Auction No. 66). In this auction, 104 winning bidders won a total of 1,087 licenses. In addition, on February 7, 2007, the Commission commenced an auction of 64 1.4 GHz band licenses in the paired 1392-1395 MHz and 1432-1435 MHz bands, and in the unpaired 1390-1392 MHz band. 102 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, Second Further Notice of Proposed Rule Making, 21 FCC Rcd 4753 (2006). 103 Implementation of the Commercial Spectrum Enhancement Act and Modernization of the Commission’s Competitive Bidding Rules and Procedures, Order on Reconsideration of the Second Report and Order, 21 FCC Rcd 4753 (2006). Federal Communications Commission DA 07-674 28 Comments No comments were filed with respect to this rule part. Recommendation The Part 1, subpart Q rules only pertain to general procedural requirements relating to competitive bidding in various different wireless services, and not to the substantive rules affecting any particular service. Accordingly, we do not find that this rule subpart is “no longer necessary in the public interest as the result of meaningful economic competition between providers of such [telecommunications] service.” While staff generally determines that the Part 1, subpart Q rules remain necessary in the public interest, staff continues to recommend, as part of its Section 11 analysis, that the Commission consider revising section 1.2111(a) to eliminate the requirement that an applicant seeking approval for a transfer of control or assignment of a license within three years of receiving the license through competitive bidding file transaction documents with the Commission. In the 2002 Biennial Regulatory Review, staff concluded that the section 1.2111(a) requirement is no longer necessary for a number of reasons. The Commission adopted section 1.2111(a) at the outset of the auction program to accumulate the data necessary to evaluate its auction designs and judge whether winning bids were reflective of the true market value of the licenses.104 However, in the eight years since the rule was adopted, staff indicated that the Commission had developed extensive experience with auctions and auction design, so that collection of this data no longer appeared to be needed to monitor the effectiveness of the Commission’s auction designs. Moreover, staff believed that because the value of licenses changes with time and circumstances, fluctuations in secondary market values from the original auction price are not reliable indicators of whether licenses were sold for their “market value” at auction. Staff also believed that the rule was over-inclusive because it required parties engaged in many routine transfers and assignments to provide documentation that was not needed for the Commission to conduct its public interest review of those transactions. Finally, staff concluded that the provision appeared to be unnecessary to the application of the Commission’s designated entity unjust enrichment provisions. Section 1.2111(a) requires disclosure that focuses on the monetary or other consideration received for the transfer or assignment of licenses. However, determining whether unjust enrichment is owed with respect to bidding credits or installment payments is based on the eligibility of the transferee or assignee for the bidding credits or installment payments, which is a question of attribution of gross revenues based on principles of control rather than on the secondary market price of the license. 104 See Implementation of Section 309(j) of the Communications Act - Competitive Bidding, PP Docket No. 93-253, Second Report and Order, 9 FCC Rcd 2348, 2385 ¶ 214 (citing H.R. Rep. No. 103-111 at 257) (1994). Federal Communications Commission DA 07-674 29 For the reasons discussed in the 2002 Biennial Review Staff Report, staff also recommended in the 2004 Biennial Regulatory Review Staff Report revising section 1.2111(a). In addition, since the staff made its initial recommendation, the Commission has adopted rules governing secondary market transfers that, with the exception of transfers involving designated entities, generally do not require that the parties to the transfer file transaction documents with the Commission. Staff's proposal to revise section 1.2111(a) is therefore consistent with the Commission's recent approach of generally not requiring parties transferring licenses to file transaction documents with the Commission. By its recommendation, staff does not intend to propose any limitation on the Commission’s authority under section 308(b) of the Act to require disclosure of specific transaction information, including contract documents and the transaction price, in any transfer or assignment proceeding in which the Commission needs such information to conduct its public interest review, or to determine eligibility for designated entity provisions or applicability of unjust enrichment payments. Federal Communications Commission DA 07-674 30 PART 1, SUBPART X – SPECTRUM LEASING Description Part 1, Subpart X,105 establishes rules to enable spectrum users to gain access to licensed spectrum by entering into different types of spectrum leasing arrangements with licensees in most Wireless Radio Services. Depending on the specific aspects of a particular proposed spectrum leasing arrangement, these rules permit licensees and spectrum lessees to enter into the arrangement either through streamlined or immediate processing procedures (as discussed below). Purpose Part 1, Subpart X rules are intended to significantly expand and enhance secondary markets to permit spectrum to flow more freely among users and uses in response to economic demand, to the extent consistent with our public interest objectives, including the Commission’s policies that promote competition. These rules allow more flexible use of spectrum by licensees and other spectrum users, better define licensees’ and spectrum users’ rights and responsibilities, enable use of spectrum across various dimensions (frequency, space and time), promote the efficient use of spectrum, and provide for continued technological advances. Analysis Status of Competition Since the Part 1, Subpart X, spectrum leasing rules became effective in 2004,106 spectrum lessees have gained access to spectrum in hundreds of different spectrum leasing arrangements in a variety of Wireless Radio Services, including Cellular Service, broadband Personal Communications Service (PCS), Specialized Mobile Radio (SMR), Broadband Radio Service (BRS), Educational Broadband Service (BRS), and the 39 GHz Service. The spectrum leasing rules facilitate competition among wireless service providers. Advantages These spectrum leasing rules are intended for the express purpose of promoting efficient use of spectrum through the elimination of barriers to the development of secondary 105 47 C.F.R. Part 1, Subpart X. 106 See Wireless Telecommunications Bureau Announces FCC Form 603-T is Available and Provides Guidance Regarding the Interim Process for Filing Spectrum Leasing Notifications and Applications, Public Notice, DA 04-252 (rel. Feb. 2, 2004). In 2006, the Commission implemented procedures permitting immediate processing of qualifying spectrum leasing arrangements. See Wireless Telecommunications Bureau Announces FCC Form 608 is Available for Filing Spectrum Leasing Notifications and Applications and Private Commons Arrangements, Public Notice, DA 06-1723 (rel. Aug. 28, 2006). Federal Communications Commission DA 07-674 31 markets. These flexible policies promote greater reliance on the marketplace to expand the scope of available wireless services and devices, leading to more efficient and dynamic use of the important spectrum resource to the ultimate benefit of consumers. Facilitating these types of secondary market arrangements enhance and complement our efforts to encourage the development of broadband services, promote increased facilities- based competition among service providers, enhance economic opportunities and access for the provision of communications services by designated entities, and enable development of additional and innovative services in rural areas. Disadvantages The Part 1, Subpart X rules impose some administrative burden on licensees and spectrum lessees in order to ensure their compliance with the Commission’s rules applicable to spectrum leasing arrangements. Recent Efforts In 2003, in the Secondary Markets Report and Order in WT Docket No. 00-230, the Commission took action to remove unnecessary regulatory barriers to the development of secondary markets in spectrum usage rights, and created Part 1, Subpart X107 to permit licensees and spectrum lessees to enter into spectrum leasing arrangements using streamlined processing procedures. The rules are designed to ensure that any such arrangement is consistent with our public interest objectives, which include ensuring that any such arrangement would not cause competitive harm.108 In 2004, the Commission created Form 603T to implement these streamlined processing procedures (in the Universal Licensing System). Later in 2004, the Commission adopted the Secondary Markets 2nd Report and Order, which provided for immediate (i.e., overnight) processing of certain qualifying spectrum leasing arrangements, and also authorized licensees to make spectrum available to third-party users on a “private commons” basis.109 In 2006, the Commission implemented its overnight processing procedures through issuance of new Form 608. Comments No comments were filed with respect to this rule part. 107 In the Matter of Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets, WT Docket No. 00-230, Report and Order and Further Notice of Proposed Rulemaking, 18 FCC Rcd 20604 (2003) (Secondary Markets Report and Order). 108 See id. at ¶¶ 116-119, 147 (establishing policies and procedures to ensure that spectrum leasing arrangements do not contravene Commission policies that promote facilities-based competition and guard against the harmful effects of anticompetitive conduct). 109 In the Matter of Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets, WT Docket No. 00-230, Second Report and Order, Order on Reconsideration, and Second Further Notice of Proposed Rulemaking, 19 FCC Rcd 17503 (2004) (Secondary Markets 2nd Report and Order). Federal Communications Commission DA 07-674 32 Recommendation Staff recommends retention of these rules, as they are intended to foster competition. Accordingly, pursuant to our Section 11 biennial review, we do not find that this rule subpart is “no longer necessary in the public interest as the result of meaningful economic competition between providers of such [telecommunications] service.” However, we will continue to be receptive to further careful examination of these rules for potential repeal or modification in the future. Federal Communications Commission DA 07-674 33 PART 17 – CONSTRUCTION, MARKING, AND LIGHTING OF ANTENNA STRUCTURES Description Part 17, which implements Section 303(q) of the Communications Act of 1934, as amended,110 establishes the procedures by which the Commission registers and assigns painting and lighting requirements to those antenna structures that may pose a physical hazard to aircraft.111 The rules require registration, evaluation, and approval by the Commission, in conjunction with the recommendations of the Federal Aviation Administration (FAA), of any proposed construction or modification of an antenna structure that is a potential hazard to aircraft. The rules also require tower owners to paint and light their antenna structures as necessary to protect air navigation. The Antenna Structure Registration procedures set forth in Part 17 are distinct from the FCC’s licensing functions. The registration of an antenna structure that affects air navigation is a pre-condition to FCC licensing of radio facilities at a particular site.112 Purpose Part 17 rules ensure that tower owners do not construct structures that may pose a hazard to air navigation, and FCC licensees do not site facilities on such structures until the antenna structures comply with federal aviation safety requirements. Analysis Status of Competition Because the rules in this Part address air navigation safety issues, general competitive developments in the services to which these rules apply do not affect the need for these rules. Advantages These rules are limited to those classes of antenna structures that may reasonably be expected to pose an air safety hazard (generally, antenna structures that are taller than 200 feet or that are in close proximity to airports). Antenna structure owners are responsible for compliance with the rules; thus there is a single point of contact for a particular antenna structure. This eliminates the need for each party on a multi-tenant structure to undertake the registration process. 110 47 U.S.C. § 303(q). 111 47 C.F.R. Part 17. 112 Section 17.5 exempts geographically licensed services from this requirement. See 47 C.F.R. § 17.5. Federal Communications Commission DA 07-674 34 Disadvantages The Part 17 rules may delay the commencement of service when proposed facilities must be studied by the FAA and registered by the Commission prior to construction. Recent Efforts None. Comments PCIA filed comments requesting that the Commission initiate a rulemaking proceeding to modernize and enhance the Part 17 Rules. In support of this request, PCIA attached its Petition for Rulemaking, filed on September 12, 2006, to modernize and clarify Part 17 of the Commission’s Rules. The Petition seeks five rulemaking changes, listed below: 1. PCIA seeks to amend Section 17.47(b) of the rules, which requires quarterly inspections of all automatic or mechanical control devices, indicators, and alarm systems associated with antenna structure lighting to insure that such apparatus is functioning properly, by exempting systems using network operations control (NOC)-based monitoring technology from this requirement. 2. PCIA seeks to amend Sections 17.4(e)-(f) and 17.6(c) of the rules to eliminate the requirement that owners provide tenants with paper copies of FCC Form 854R. Instead, PCIA recommends that the rules should require antenna structure owners to provide the ASR number or some indication that the ASR has been changed or updated, and then permittees and licensees may obtain relevant Form 854R information from the FCC's ASR Online Systems. 3. PCIA seeks to amend Section 17.4(g) of the rules, which provides that the “Antenna Structure Registration Number must be displayed in a conspicuous place so that it is readily visible near the base of the antenna structure.” PCIA would instead clarify the rule to expressly permit posting at the compound fence or gate, on the basis that it is necessary to assure consistent application of the rule to resolve tension between the “readily visible” and “near the base” requirements. 4. PCIA seeks amendment of Section 17.23 of the rules to update a reference to an FAA Circular that has since been revised and superseded. In taking this step to incorporate revised AC 70/7460-IK, effective August 1, 2000, PCIA also seeks to amend the rule to clarify that the lighting and marking specifications assigned to the structure by the FCC upon registration do not change unless the FAA recommends new specifications for the particular structure (i.e., they do not change with new FAA circulars or interpretations). Further, PCIA would specify that any new FAA specifications for the particular structure must be based on changes in height, coordinates, or prior error in data. 5. PCIA seeks amendment of Section 17.57 to change from 24 hours to 5 days the time in which the antenna structure owner must notify the FCC of completion of construction Federal Communications Commission DA 07-674 35 and/or dismantlement. For purposes of internal consistency, PCIA also recommends changing the period for notifying the FCC of changes in height or ownership from “immediately” to 5 days. PCIA’s Petition for Rulemaking has been placed on Public Notice to allow interested persons to file statements opposing or supporting it.113 Recommendation Part 17 rules pertain to air navigation safety issues. As such, competitive developments have not affected the need for this rule part. Accordingly, we do not find that this rule part is “no longer necessary in the public interest as the result of meaningful economic competition between providers of such [telecommunications] service.” While staff generally concludes that Part 17 rules remain necessary in the public interest, it nonetheless also concludes that certain modifications may be in the public interest for reasons other than those related to competitive developments that fall within the scope of Section 11 review. Staff recommends that the Commission initiate a proceeding in part to consider the specific recommendations of PCIA with respect to Part 17. Such a proceeding would examine the Part 17 rules to modify or eliminate, without compromising public safety goals, any rules which create unnecessary administrative burdens or are apt to confuse owners and licensees who attempt to comply with our Part 17 rules. 113 Consumer & Governmental Affairs Bureau Reference Information Center Petition for Rulemakings Filed, Public Notice, Report No. 2794 (rel. October 30, 2006). Federal Communications Commission DA 07-674 36 PART 20 – SECTION 20.6 - CMRS SPECTRUM AGGREGATION LIMIT Description Section 20.6114 limited the amount of broadband PCS, cellular, and commercial SMR spectrum that any entity could control or influence in a significant way in a common geographic area. The rule (commonly known as the “spectrum cap”) further defined the types of ownership and other interests that were attributable under the cap. On December 18, 2001, the Commission adopted a Report and Order that eliminated the spectrum cap effective January 1, 2003.115 The Commission decided that it should move from the use of an inflexible spectrum aggregation limit to case-by-case review of spectrum aggregation involved in the acquisition of spectrum used for mobile telephony.116 The Commission determined, however, that a sunset period was necessary in order to prepare for case-by-case review.117 The sunset period was codified in Section 20.6(f) of the rules.118 The Commission raised the spectrum cap to 55 MHz in all areas for the duration of the rule’s existence to address carriers’ concerns about near-term spectrum capacity constraints in the most constrained urban areas.119 Comments No comments were filed with respect to this rule. Analysis and Recommendation Because this rule has sunset, no further review of the rule is necessary as part of this Biennial Review. Staff recommends that this rule be removed from the Code of Federal Regulations. 114 47 C.F.R. § 20.6. 115 See 2000 Biennial Regulatory Review Spectrum Aggregation Limits for Commercial Mobile Radio Services, WT Docket No. 01-14, Report and Order, 16 FCC Rcd 22668 (2001) (Spectrum Aggregation Limits Order). 116 See Spectrum Aggregation Limits Order, 16 FCC Rcd at 22670-71. 117 See id. at 22669. 118 47 C.F.R. § 20.6(f). 119 See id. at 22669-70. Federal Communications Commission DA 07-674 37 PART 20, SECTION 20.9 – COMMERCIAL MOBILE RADIO SERVICE Description Section 20.9120 sets forth certain mobile services that may be treated as common carriage services and regulated as commercial mobile radio services (CMRS) pursuant to Section 332 of the Communications Act.121 The section also states that a mobile service that does not meet the definition of CMRS is presumed to be a private mobile radio service (PMRS). In addition, the section states: 1) how licensees or applicants in certain services can overcome the presumption that their services are CMRS; and 2) how non-CMRS licensees or applicants can overcome their regulatory treatment as PMRS. Purpose The purpose of section 20.9 is to ensure that parties know which mobile services are regulated as either CMRS or PMRS. The section also provides guidance on how the regulatory presumption of CMRS or PMRS can be overcome. Analysis Status of Competition As detailed in the Eleventh CMRS Competition Report, CMRS providers operate in an environment that is marked by increased competition, innovation, lower prices for consumers, and increased diversity of service offerings.122 Mobile telephony operators experienced strong growth and competitive development and continued to build out their footprints, deploy their networks in an increasing number of markets, expand their digital networks, and develop innovative pricing plans. Competition within the mobile data industry is developing successfully, as evidenced by the multitude of dynamic services, service packages, and pricing plans. Advantages Section 20.9 sets forth how mobile services will be treated as either CMRS or PMRS and provides guidance with respect to how that regulatory presumption can be overcome. Disadvantages Overcoming the CMRS presumptions requires the submission of regulatory filings to the Commission. These filings must be reviewed and approved by the Commission. 120 47 C.F.R. § 20.9. 121 47 U.S.C. § 332. 122 Eleventh CMRS Competition Report, FCC 06-142 at ¶¶ 149-188. Federal Communications Commission DA 07-674 38 Comments No comments were filed with respect to this rule. Recommendation Pursuant to our Section 11 biennial review, staff does not find that this rule is “no longer necessary in the public interest as the result of meaningful economic competition between providers of such [telecommunications] service.” While the staff does not recommend modification or repeal of the rule at this time, it will continue to be receptive to further careful examination of this rule in the future. Federal Communications Commission DA 07-674 39 PART 20, SECTION 20.11 - INTERCONNECTION TO FACILITIES OF LOCAL EXCHANGE CARRIERS Description Section 20.11 codifies section 332(c)(1)(B) of the Act,123 which was enacted by Congress as part of the Omnibus Budget Reconciliation Act of 1993.124 Section 20.11125 provides that local exchange carriers (LECs) must provide reasonable interconnection to commercial mobile radio service (CMRS) providers on request, and that LECs and CMRS providers must each reasonably compensate the other for terminating traffic that originates on their respective facilities. Recent amendments further provide that LECs may not impose compensation obligations on CMRS providers for non-access traffic pursuant to tariffs, and that an incumbent LEC may request interconnection with a CMRS provider and invoke the negotiation and arbitration procedures of section 252 of the Act to reach an agreement. In the Telecommunications Act of 1996, Congress added sections 251 and 252 to the Act. These statutory provisions establish interconnection rights among all telecommunications carriers, and set forth terms and conditions under which interconnection must be provided by one carrier to another.126 While enacting sections 251 and 252, Congress also left section 332(c)(1)(B) of the Act intact. In the 1996 First Local Competition Order, the Commission codified new interconnection rules in Part 51 as part of its implementation of sections 251 and 252.127 The Commission also concluded that, in light of Congress’ retention of section 332(c)(1)(B), the Commission retained separate authority over LEC- CMRS interconnection pursuant to that section.128 Because the Commission viewed sections 251, 252, and 332 of the Act as furthering a common goal with respect to interconnection, the Commission declined at that point to act further on or define the scope of its section 332 interconnection authority, but instead amended section 20.11 to require that LECs and CMRS providers comply with the interconnection rules in Part 51.129 Section 20.11 is organized into five lettered sub-parts. Subsection (a) requires LECs to provide the type of interconnection requested by mobile radio service providers, within reason. Subsection (b) requires LECs and CMRS providers to compensate each other 123 47 U.S.C. § 332(c)(1)(B). 124 See 47 U.S.C. § 332. 125 47 C.F.R. § 20.11. 126 See 47 U.S.C. §§ 251, 252. 127 Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, CC Docket No. 96-68, Interconnection between Local Exchange Carriers and Commercial Mobile Radio Service Providers, First Report and Order, 11 FCC Rcd 15499, 16195 (1996) (Local Competition First Report and Order). 128 Local Competition First Report and Order, 11 FCC Rcd at 16005, ¶ 1023. 129 47 C.F.R. § 20.11(c). See also Local Competition First Report and Order, 11 FCC Rcd at 16195. Federal Communications Commission DA 07-674 40 reasonably for terminating traffic that originates on each other’s facilities. Subsection (c) requires LECs and CMRS providers to comply with the Part 51 interconnection rules. Subsection (d) prohibits LECs from imposing compensation obligations pursuant to tariff. Subsection (e) authorizes incumbent LECs to request and obtain an interconnection agreement through negotiation and arbitration. Purpose The purpose of the LEC-CMRS interconnection rule is to promote competition in the telecommunications market by ensuring that all LECs and CMRS providers provide reasonable interconnection to one another subject to reasonable rates, terms, and conditions. The rule regulates the conduct of LECs with market power in their interconnection relationships with CMRS providers. Historically, some LECs denied or restricted interconnection options available to CMRS providers, or required CMRS providers to compensate the LEC for LEC-originated traffic that terminated on the CMRS provider’s network. Congress enacted section 332(c)(1)(B), and the Commission adopted section 20.11 codifying this provision, in order to curtail such practices. Analysis Status of Competition In the Eleventh CMRS Competition Report, the Commission noted that wireless substitution has grown significantly in recent years. It cited a 2005 National Health Interview Survey that found that 7.8 percent of adults lived in households with only wireless phones in the second half of 2005, up from 5.5 percent in the second half of 2004, and 3.5 percent in the second half of 2003.130 The Commission also noted that, even when not “cutting the cord” completely, consumers increasingly are choosing wireless service over traditional wireline service, particularly for certain uses.131 Advantages Section 20.11 sets forth basic requirements for reasonable and nondiscriminatory interconnection arrangements between LECs and CMRS providers, but does not impose detailed standards or technical requirements. It reduces the potential for anti-competitive behavior, while affording carriers reasonable flexibility with respect to the terms and conditions of interconnection so long as the basic requirements of the rule are adhered to. Recent amendments ensure that any compensation obligations are imposed pursuant to an agreement between the parties. 130 Eleventh CMRS Competition Report, FCC 06-142 at para. 205. 131 Id. at para. 206. Federal Communications Commission DA 07-674 41 Disadvantages Section 20.11 imposes certain transaction costs on carriers to ensure that their interconnection arrangements comply with the rule, and may lead to disputes and litigation between carriers about what constitutes “reasonable” interconnection under the rule. In addition, the overlap between this rule and the Part 51 interconnection rules may cause some duplication of regulatory requirements. Recent amendments requiring compensation solely pursuant to agreement rather than tariff may increase a LEC’s transaction costs of obtaining compensation. Recent Efforts The Commission has continued its examination of how to reform the current system of intercarrier compensation and interconnection, which began with the release of a Notice of Proposed Rulemaking in 2001.132 The purpose of the rulemaking is to examine the existing patchwork of interconnection rules and to seek an approach that minimizes the need for regulatory intervention. In response to the Intercarrier Compensation NPRM, several groups developed comprehensive plans, which the Commission put out for comment in the Intercarrier Compensation FNPRM in 2005.133 In 2006, a newly negotiated industry proposal called the Missoula Plan was also put out for comment.134 On February 24, 2005, the Commission released a decision addressing a petition filed by CMRS petitioners that sought a declaratory ruling that the Commission “reaffirm that wireless termination tariffs are not a proper mechanism for establishing reciprocal compensation arrangements” between LECs and CMRS providers.135 The Commission denied the petition, but amended rule 20.11 to prohibit LECs from imposing compensation obligations on CMRS providers by tariff in the future “in order to make clear [its] preference for contractual arrangements for non-access CMRS traffic.”136 To ensure that incumbent LECs could obtain compensation in the absence of tariffs, the Commission also authorized incumbent LECs to request interconnection with CMRS providers and obtain an agreement through section 252 negotiation and arbitration procedures. It also established interim compensation terms that would apply to traffic during the negotiation and arbitration process. 132 In the Matter of Developing a Unified Intercarrier Compensation Regime, CC Docket No. 01-92, Notice of Proposed Rulemaking, 16 FCC Rcd 9610 (2001) (Intercarrier Compensation NPRM). 133 See Developing a Unified Intercarrier Compensation Regime, CC Docket No. 01-92, Further Notice of Proposed Rulemaking, 20 FCC Rcd 4685 (2005) (Intercarrier Compensation FNPRM). 134 Public Notice, “Comment Sought on Missoula Intercarrier Compensation Reform Plan,” CC Docket No. 01-92, 21 FCC Rcd 8524 (2006). 135 See Developing a Unified Intercarrier Compensation Regime, CC Docket No. 01-92, Petition for Declaratory Ruling of T-Mobile USA, Inc., et al. (filed Sept. 6, 2002); Developing a Unified Intercarrier Compensation Regime, CC Docket No. 01-92, Declaratory Ruling and Report and Order, 20 FCC Rcd 4855 (2005) (T-Mobile Order). 136 T-Mobile Order, 20 FCC Rcd at 4863. Federal Communications Commission DA 07-674 42 Comments No comments were filed with respect to this rule. Recommendation Staff notes that issues relevant to this Biennial Review concerning section 20.11 are within the scope of the pending Intercarrier Compensation rulemaking proceeding (CC Docket No. 01-92). We recommend that the Commission determine in that proceeding whether section 20.11 is necessary in the public interest and, if it is not, to repeal or modify the rule so that it is in the public interest. Federal Communications Commission DA 07-674 43 PART 20, SECTION 20.12 - RESALE Description Section 20.12(b)137 provides that any carrier of Broadband PCS (except those C, D, E, and F block PCS licensees that do not own and control and are not owned and controlled by firms also holding cellular, A or B block licenses), Cellular Radio Telephone Service, or Specialized Mobile Radio (SMR) Services that offers real-time, two-way interconnected voice service with switching capability (“covered CMRS provider”) must permit resale of its services. The resale provision sunset on November 24, 2002.138 Comments No comments were filed with respect to this rule. Analysis and Recommendation Because this rule (paragraph (b) of Section 20.12) is no longer in effect, no review is required as part of this Biennial Review. Staff recommends that paragraph (b) of this Section (and the last sentence of paragraph (a) defining the scope of paragraph (b)) be removed from the Code of Federal Regulations. 137 47 C.F.R. § 20.12(b). 138 See 47 C.F.R. § 20.12(b)(3). See also “Commencement of Five-Year Period Preceding Termination of Resale Rule Applicable to Certain Covered Commercial Mobile Radio Service Providers,” CC Docket No. 94-54, Public Notice, 13 FCC Rcd 17427 (1998). Federal Communications Commission DA 07-674 44 PART 20, SECTION 20.12 - ROAMING Description Roaming occurs when the subscriber of one CMRS provider utilizes the facilities of another CMRS provider with which the subscriber has no direct, pre-existing service or financial relationship to place an outgoing call, to receive an incoming call, or to continue an in-progress call. Roaming can be done “manually,” in which a subscriber establishes a relationship with the host carrier usually by providing a credit card number, or “automatically,” in which the subscriber does nothing more than turn on her telephone. Automatic roaming requires a pre-existing contractual agreement between the host and home carriers. Section 20.12(c)139 provides that any “covered CMRS” carrier must provide mobile radio service upon request to any subscriber in good standing, including roamers, while the subscriber is within any portion of the licensee’s licensed service area, assuming that the subscriber is using technically compatible mobile equipment. The rule only mandates that carriers offer manual roaming, and does not require provision of automatic roaming. The manual roaming rule was adopted in 1996.140 Purpose The purposes of the manual roaming provision are to ensure seamless service to wireless customers who roam out of their home service areas, and to prevent carriers from restricting competition and consumer choice through refusal to provide service to roamers. Analysis Status of Competition Market forces are working to make roaming services, in particular automatic roaming, widely available and increasingly less expensive. Competition in the provision of roaming services has become increasingly competitive over time.141 All the major nationwide carriers as well as many regional and small carriers offer nationwide or nearly nationwide plans and wide-area, single-rate calling plans that include roaming service to their subscribers at no additional charge. Buildout is widespread and continuously expanding. Most cellular carriers have reached automatic roaming agreements among themselves, even though section 20.12 only mandates manual roaming. However, some regional and rural carriers have alleged that they have been unable to enter into roaming 139 47 C.F.R. § 20.12(c). 140 See Interconnection and Resale Obligations Pertaining to Commercial Mobile Radio Services, Second Report and Order and Third Notice of Proposed Rulemaking, 11 FCC Rcd 9462 (1996). 141 See generally Tenth Annual CMRS Competition Report, 20 FCC Rcd 15908 ¶¶ 128-129. Federal Communications Commission DA 07-674 45 agreements with competing nationwide carriers with terms and conditions that they consider to be reasonable. Consumers’ ability to roam may also be limited because they can only roam on networks that use the same technical standard (CDMA, TDMA, GSM, iDEN) as the home carrier. Advantages The manual roaming rule provides a clear standard and is minimally intrusive because it does not require CMRS carriers to reconfigure their systems to support technically incompatible roaming. Disadvantages For carriers, manual roaming obligations impose some administrative and technical burdens associated with caller verification, billing, and similar issues. For consumers, manual roaming often results in higher fees than automatic roaming and has become an option of last resort due to its cumbersome registration process and difficulty of use. Recent Efforts The Commission adopted its manual roaming rule in 1996, and at that time the Commission also issued a Third Notice of Proposed Rulemaking in CC Docket 94-54 asking: (1) whether to sunset the manual roaming rule; and (2) whether to mandate automatic roaming for any carriers.142 On August 28, 2000, the Commission released a Third Report and Order and Memorandum Opinion and Order on Reconsideration, in which it affirmed the existing manual roaming rule, with some modification and clarification.143 On October 4, 2000, the Commission initiated a new rulemaking proceeding in WT Docket 00-193 to consider the impact of technological advances and the rapid expansion of the CMRS market since the 1996 Roaming Order on issues relating to both automatic and manual roaming.144 In August 2005, the Commission issued a Memorandum Opinion and Order that terminated the previous consideration of roaming issues in WT Docket No. 00-193, on the basis that the comments filed and the matters at issue therein were stale due to the passage of time and other regulatory and industry changes that had occurred since the commencement of that proceeding. In a related Notice of Proposed Rulemaking in WT Docket No. 05-265, the Commission initiated a new proceeding to examine CMRS roaming in a manner that takes into account current technological and market conditions.145 Specifically, the Commission 142 Interconnection and Resale Obligations Pertaining to Commercial Mobile Radio Services, Second Report and Order and Third Notice of Proposed Rulemaking, 11 FCC Rcd 9462 (1996). 143 Interconnection and Resale Obligations Pertaining to Commercial Mobile Radio Services, Third Report and Order and Memorandum Opinion and Order on Reconsideration, 15 FCC Rcd 15975 (2000). 144 Automatic and Manual Roaming Obligations Pertaining to Commercial Mobile Radio Service, Notice of Proposed Rulemaking, 15 FCC Rcd 21628 (2000). 145 See Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers, WT Docket No. 05-265, Memorandum Opinion & Order and Notice of Proposed Rulemaking, 20 FCC Rcd 15047 (2005)(Roaming NPRM). Federal Communications Commission DA 07-674 46 requested comment on, among other things, whether it should adopt an automatic roaming provision for any CMRS system and whether it should retain, eliminate, or sunset the existing manual roaming requirement.146 This proceeding remains pending. Comments Navajo Nation filed comments stating that roaming should be universally mandated for services provided via a federally-subsidized telecom project, and there should be no charge for roaming services to customers utilizing services from these projects. In Indian reservation lands, the Navajo Nation asserts that mandatory roaming would result in choices and competitive prices for the consumers. Recommendation Staff notes that issues relevant to this Biennial Review concerning section 20.12 are within the scope of the pending Roaming NPRM.147 We recommend that the Commission determine in that proceeding whether section 20.12 is necessary in the public interest and, if it is not, to repeal or modify the rule so that it is in the public interest. Additionally, we believe the recommendations of the Navajo Nation, because they seek new rules, are outside the scope of the Section 11 review. However, we will incorporate the Navajo Nation’s comments into the record of the pending Roaming NPRM. 146 Id. 147 Id. Federal Communications Commission DA 07-674 47 PART 20, SECTION 20.15 – REQUIREMENTS UNDER TITLE II OF THE COMMUNICATIONS ACT Description Section 20.15 sets forth requirements under Title II of the Communications Act that are applicable to commercial mobile radio service (CMRS) providers. The rule also stipulates the requirements under Title II that do not apply to CMRS carriers. The rule states that CMRS providers are not required to file copies of contracts entered into with other carriers or comply with other reporting requirements, except that CMRS providers that offer broadband service or mobile telephony are required to file reports pursuant to sections 1.7000 and 43.11 of the Commission’s Rules (regarding the Commission’s Form 477 local competition and broadband data gathering program). On November 9, 2004, the Commission adopted an order that changed the rules regarding the local competition and broadband data gathering program. It determined that the Form 477 data gathering program would be extended for five years beyond the formerly designated March 2005 sunset date. The Commission also decided to eliminate reporting thresholds and adopt various modifications to Form 477. Purpose The purpose of the Form 477 data gathering program is to allow the Commission to monitor local telephone competition and broadband deployment. Analysis Status of Competition Because the purpose of the Form 477 data gathering program is to help the Commission monitor the status of local competition and broadband deployment, general competitive developments in the services to which the rule applies do not affect the need for this rule. Advantages The information collected in the Form 477 program helps the Commission and the public understand the extent of local telephone competition and broadband deployment, which is important to the nation’s economic, educational, and social well-being. The improvements adopted in the Commission’s order were necessary to ensure that the Commission may continue to effectively evaluate broadband and local competition developments. Disadvantages The Form 477 data gathering program imposes reporting, record-keeping, and other compliance requirements on CMRS carriers that provide broadband service or mobile telephony. Federal Communications Commission DA 07-674 48 Comments No comments were filed with respect to this rule. Recommendation As noted above, the purpose of the Form 477 data gathering program is to allow the Commission to monitor local telephone competition and broadband deployment. Collecting this information improves the Commission’s ability to develop, evaluate, and revise policy in these rapidly changing areas. Accordingly, pursuant to our Section 11 biennial review, we do not find that this rule is “no longer necessary in the public interest as the result of meaningful economic competition between providers of such [telecommunications] service.” The staff therefore recommends that neither modification nor repeal of these rules is warranted. However, it will continue to be receptive to further careful examination of these rules for potential repeal or modification in the future. Federal Communications Commission DA 07-674 49 PART 20, SECTION 20.18 – 911 SERVICE Description Section 20.18 requires cellular carriers (as delineated in subpart (a) of the rule) to comply with requirements set by the Commission for the implementation of basic and Enhanced 911 services (E911).148 As part of basic 911 service, carriers are required to deliver all 911 calls they receive to local Public Safety Answering Points (PSAPs), including for customers using Text Telephone (TTY) devices. The rule provides for implementation of E911 in two phases. Under Phase I, carriers must provide 911 dispatchers with a callback number and the location of the cell site that received the call. In Phase II, carriers must provide Automatic Location Identification (ALI) capability, subject to specified accuracy and reliability standards, so that the 911 caller’s location can be more accurately determined. Implementation of Phase I was scheduled to begin on April 1, 1998, or within six months of a request by a (PSAP), whichever was later. The Phase II rules took effect on October 1, 2001. Under Phase II, carriers who employ network-based solutions must provide ALI service to at least 50 percent of their coverage area or population within six months of a PSAP request and to 100 percent within 18 months. Carriers employing handset-based technologies must begin deploying ALI-capable handsets by October 1, 2001 and complete deployment (to at least 95 percent of their customers) by December 31, 2005; the carriers must also begin delivering location information to PSAPs within six months of a request. Purpose The purpose of section 20.18 is to enhance public safety and facilitate effective and efficient law enforcement. Almost all PSAPs have the technology to automatically identify the location and number of wireline 911 calls. Prior to the adoption of section 20.18, however, a dispatcher receiving a wireless 911 call could only obtain information regarding the caller’s location and callback number if the caller was able to provide it. Section 20.18 attempts to provide the same reliable and ubiquitous information for both wireless and wireline 911 calls. Analysis Status of Competition Because the purpose of section 20.18 is to enhance public safety and facilitate effective and efficient law enforcement, general competitive developments in the services to which the rule applies do not affect the need for this rule. 148 47 C.F.R. § 20.18. Federal Communications Commission DA 07-674 50 Advantages The E911 rule sets national standards and deadlines to ensure that all cellular carriers throughout the United States will provide E911 services in a timely manner. At the same time, the rule is technologically and competitively neutral because it allows carriers and equipment manufacturers to determine the best method to implement E911 capability. Allowing manufacturers and carriers to adopt the technology of their choice encourages the parties to arrive at a solution that is both effective and cost-efficient. This location technology can also be used for commercial features and services. Disadvantages The E911 rule imposes administrative, technical, and economic costs on carriers who must deploy location technology and transmission capability to comply with the rule. Recent Efforts The Commission continues to promote the deployment of wireless E911 service as rapidly and universally as possible, and to address implementation problems as they arise. The Commission has recognized that requests for waiver of E911 requirements may be justified, but only if appropriately limited, properly supported, and consistent with established waiver standards. In an Order adopted March 22, 2005 and released April 1, 2005, the Commission comprehensively examined and addressed forty requests for relief from the E911 Phase II requirements filed by Tier III wireless carriers.149 Pursuant to the Ensuring Needed Help Arrives Near Callers Employing (ENHANCE) 911 Act of 2004, enacted December 23, 2004,150 the Commission submitted a report to Congress on the deployment of Phase II E911 services by Tier III carriers (submitted March 23, 2005, amended April 1, 2005). Under the ENHANCE 911 Act, the Commission must act within 100 days on petitions filed by Tier III carriers requesting a waiver of the December 31, 2005 95% handset penetration requirement (contained in Section 20.18(g)(1)(v)), and grant such a waiver if “strict enforcement … would result in consumers having decreased access to emergency services.” The standard established under the ENHANCE 911 Act is distinct from the Commission’s rules and established precedent regarding waivers of the E911 requirements. Beginning in late 2004, a number of Tier III carriers have filed for relief under the standard for waiver of the December 31, 2005 95% handset penetration 149 Revision of the Commission’s Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems; E911 Phase II Compliance Deadlines for Tier III Carriers, CC Docket No. 94-102, Order, 20 FCC Rcd 7709, 7709-7710 ¶ 1 (2005). 150 National Telecommunications and Information Administration Organization Act – Amendment, Pub. L. No. 108-494, 118 Stat. 3986 (2004). Federal Communications Commission DA 07-674 51 requirement established under the ENHANCE 911 Act. Based on the particular circumstances presented, the Commission has acted within the 100-day statutory deadline to grant relief to the extent that the carriers have met the statutory standard. Comments No comments were filed with respect to this rule. Recommendation As stated above, the purpose of section 20.18 is to enhance public safety and facilitate effective and efficient law enforcement. Accordingly, pursuant to our Section 11 biennial review, we do not find that this rule is “no longer necessary in the public interest as the result of meaningful economic competition between providers of such [telecommunications] service.” The staff therefore recommends that neither modification nor repeal of these rules is warranted. Federal Communications Commission DA 07-674 52 PART 20, SECTION 20.19 – HEARING AID COMPATIBLE MOBILE HANDSETS Description Section 20.19 requires CMRS providers and manufacturers of wireless phones to comply with guidelines established by the Commission for the implementation of the Hearing Aid Compatibility Act.151 The Commission requires compliance by all such providers and manufacturers to ensure that individuals with hearing disabilities receive the benefits of wireless telecommunications – including emergency, business, and social communications – thereby increasing the value of the wireless network for all Americans. The rules state that a wireless phone is hearing aid compatible if it meets certain performance levels set forth in a technical standard established by the American National Standards Institute (ANSI). For radio frequency (RF) interference, the rules require certain digital wireless phone models to provide reduced RF interference (i.e., meet a “U3” rating under the ANSI standard), and require certain digital wireless phone models to provide telecoil coupling capability (i.e. meet a “U3T” rating under the ANSI standard). To ensure a smooth transition, the Commission adopted a phased approach for manufacturers and carriers to comply with the requirements for the wireless handsets. First, manufacturers and CMRS providers were required to offer at least two handset models meeting a U3 rating for each air interface offered by September 16, 2005. Second, they must ensure that 50% of their handset offerings for each air interface offered meet a U3 rating by February 18, 2008. Third, each manufacturer and CMRS provider was required to offer at least two handset models for each air interface that complies with the Commission’s inductive coupling rules by September 18, 2006. Tier I wireless carriers were additionally required, by September 16, 2006, to make available to consumers, per air interface, five U3-rated handsets, or twenty-five percent of the total number of handsets they offer nationwide. The Commission also adopted rules governing labeling and in-store consumer testing of digital wireless handsets. The rules require packages containing compliant handsets be clearly labeled, and that detailed information be included in the package or product manual. Carriers must provide a means for consumers to test hearing aid-compatible handset models in their owned and operated retail stores. To accommodate small business concerns, the Commission adopted a de minimis exception that exempts, from the Hearing Aid Compatibility requirements, manufacturers or service providers that offer two or fewer digital wireless handset models for any air interface in the U.S. 151 47 C.F.R. § 20.19. Federal Communications Commission DA 07-674 53 This rule section provides that states that adopt Section 20.19 of the Commission’s Rules may enforce the rule. Accordingly, the Commission requires State personnel to attempt to resolve a complaint within thirty days of the filing of a complaint. In instances where a state does not adopt this rule section or fails to act within six months from the filing of a complaint, the Commission will accept complaints. Purpose The purpose of section 20.19 is to facilitate access to telecommunications services for individuals with hearing disabilities, thereby ensuring that individuals with hearing disabilities have access to the same public safety, social, professional, and convenience benefits offered by wireless telecommunications to all Americans. Analysis Status of Competition Because the purpose of section 20.19 is to facilitate access to telecommunications services for individuals with hearing disabilities by providing guidance to manufacturers, service providers, consumers and other members of the telecommunications industry regarding Hearing Aid Compatibility implementation requirements, general competitive developments in the services to which the rule applies do not affect the need for this rule. Advantages Section 20.19 establishes hearing aid compatibility rules and implementation requirements to ensure the universal availability of hearing aid compatible handsets within an established time-frame. Disadvantages Section 20.19 imposes administrative, technical, and economic costs on manufacturers and service providers who must take the necessary steps to comply with the Commission’s rules. Recent Efforts In order to permit digital wireless telecommunications access to every American, the Commission is actively participating in an on-going dialogue with others in the telecommunications industry to achieve this goal. The Commission has been working with such groups as ATIS, CTIA, and FDA. The Commission’s Disability Rights Office and the Consumer Affairs and Outreach Division of the Consumer and Governmental Affairs Bureau have been actively involved in outreach efforts to ensure that consumers are informed of the steps the Commission takes in this area. The Commission recently reconsidered certain aspects of its hearing aid-compatibility rules, modifying obligations of Tier I and TDMA carriers, and clarifying the scope of the de minimis exemption and the