NEWSReport No. DC 95 86 ACTION IN DOCKET CASE June 15, 1995 STRATEGY FOR MORE EFFICIENT USE OF PLMR SPECTRUM ADOPTED; COMMENTS SOUGHT ON INTRODUCTION OF MARKET BASED INCENTIVES (PR DOCKET 92-235) The Commission has adopted a regulatory strategy which seeks to promote more efficient use of the existing private land mobile radio (PLMR) spectrum allocations below 800 MHz. It has also asked for comments on how certain market-based incentives such as exclusivity with the right to lease excess capacity, spectrum user fees, and competitive bidding may be introduced into these PLMR bands to promote more efficient use of this spectrum. The Commission began this proceeding in 1992 to explore options to promote more effective and efficient use of the PLMR spectrum bands. Although the immediate problem was frequency congestion, the Commission's broader objective was to develop a regulatory strategy to promote more efficient use of the existing spectrum allocations to satisfy future private land mobile telecommunications requirements. In order to achieve its objective of increasing the efficiency of the PLMR frequency bands, the Commission has adopted the following changes to its rules:  Established a narrowband (NB) channel plan based on current channel centers. Generally, channels will be listed every 7.5 kHz in the 150-174 MHz VHF band and every 6.25 kHz in the 421-430, 450-470, and 470-512 MHz UHF bands. Users will have the flexibility of aggregating up to the equivalent of 4 NB channels provided that spectrum- efficient technology is employed (e.g. 4-TDMA in 25 kHz). This approach will enable users to employ the most spectrally-efficient technology available, while causing the least amount of disruption to their own and other existing operations. This channeling plan establishes a channelization framework that is flexible and technology-neutral.  Adopted a transition plan in which users will not be required to replace existing systems; rather, the transition to narrowband equipment will be managed by type accepting only increasingly efficient equipment over the next ten years. The dates for the type acceptance rules adopted are: (over) - 2 - August 1, 1996- New type accepted equipment must be designed to operate on channels of 12.5 kHz or less or on 25 kHz channels if the narrowband efficiency standard is met (multi-mode equipment that operates on 25 kHz channels will be allowed if it is also capable of operating on 12.5 kHz and/or narrower channels). January 1, 2005 - New type accepted equipment must be designed to operate on channels of 6.25 kHz or less or on channels up to 25 kHz if the narrowband efficiency standard is met (multi-mode equipment that operates on 25 kHz and 12.5 kHz channels will be allowed if it is also capable of operating on 6.25 kHz or narrower channels). This transition plan will provide users with flexibility to choose the equipment and a transition schedule that best fulfills their technical and financial objectives. It also provides manufacturers with incentives to develop and market narrowband equivalent technology.  Provided the industry with three months to negotiate and submit a consensus consolidation proposal. Consolidation of the service groups will provide for more efficient allocation of the increased capacity created by the introduction of more efficient technology. The Commission indicates that two to four broad categories, including one for Public Safety users, appears reasonable. If no acceptable consensus plan is submitted within the allotted time, the Commission will devise and adopt a service consolidation plan based on the record.  Imposed limits on allowable effective radiated power (ERP)/antenna height combinations of new stations based on the size of each stations service area. These new limits are based on the "safe harbor" tables submitted in this proceeding by the Land Mobile Communications Council. This action will reduce the incidence of over-powered systems, reduce background noise, and provide technical flexibility. Further, these new standards will increase channel re-use, thereby increasing spectrum efficiency. - 3 - A Further Notice of Proposed Rule Making explores additional proposed methods to promote more efficient and effective use of the PLMR bands. The Commission noted that introducing market-based incentives into these bands will help to encourage more efficient spectrum use while allowing users to make equipment choices which best address their needs by attaching an economic cost to inefficient use of the spectrum. Although the Commission does not presently have statutory authority to implement user fees or competitive bidding in these bands, the Commission seeks comment on the following three options:  Introducing exclusivity on channels in the PLMR bands, and permitting the leasing of excess capacity on these exclusive channels. The Commission stated that offering users the option of exclusivity with the right to lease excess capacity if the licensee agrees to convert to narrowband technology by a specified date will promote the use of more efficient technologies such as trunking and TDMA. In addition, affording users the opportunity to obtain exclusivity will enable them to benefit directly from the increased capacity which results from their conversion to more efficient technologies, thus encouraging more rapid transition to narrowband technology.  Implementing a system of user fees in all PLMR bands to encourage licensees to make the most efficient and effective use of the spectrum. Under this approach, users would pay a fee based on the estimated value of the spectrum. The spectrum fee would be calculated based on the area and population covered, and the amount of spectrum used. This type of a user fee structure would attach an economic cost to inefficient spectrum use, thereby potentially motivating users to use the spectrum more efficiently. The Commission proposes to exempt public safety users from any user fees.  Introducing competitive bidding into all PLMR bands as an alternative to user fees. Specifically, the Commission seeks comment on a proposal to create geographic overlay licenses and use competitive bidding as the assignment mechanism for these overlay licenses. As with the user fee proposal, the Commission proposes to exempt public safety users from any competitive bidding structure. Action by the Commission June 15, 1995, by Report and Order and Further Notice of Proposed Rulemaking (FCC 95-255). Chairman Hundt, Commissioners Quello, Barrett, Ness and Chong. -FCC- News Media contact: Stacey Reuben Mesa at (202) 418-0654 Wireless Telecommunications Bureau contact: Ira Keltz at (202) 418-0680