Federal Communications Commission
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Washington, D.C. 20554
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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).
March 12, 1997
Report WT 97-12 WIRELESS TELECOMMUNICATIONS ACTION
Today the FCC released rules to govern the future operation and licensing of the 220
MHz radio service. Licensees authorized in the 220 MHz service will be able to provide both
voice and data communications. Licensees may offer commercial communications services or
may use the spectrum for their own internal use. The Commission stated that these rules will
enable the FCC to continue to promote the development of advanced radio technologies, while
making the widest variety of mobile communications services available to the American public.
In the Order adopted February 19, the Commission also adopted competitive bidding rules to
award 220 MHz licenses.
The Commission will return the pending mutually exclusive applications for the four
Phase I non-commercial, nationwide licenses and make the channels associated with these
applications available for both commercial and non-commercial uses. Phase II nationwide
licenses will be awarded through competitive bidding.
The FCC will also assign Phase II, non-nationwide 220 MHz channels as follows:
Fifty channels in 175 geographic areas defined as Economic Areas by the Bureau of Economic
Analysis, Department of Commerce (``EA licenses'') and 75 channels in the geographic areas
defined by six ``Regional Economic Area Groupings'' (``Regional licenses'').
The FCC will provide for a 10-year license term for EA and Regional licensees, and will require EA and Regional licensees to meet five- and ten-year
The FCC modified its existing 220 MHz rules with regard to certain technical and
operational matters as follows:
The FCC will allow Phase I and Phase II, nationwide and non-nationwide 220 MHz licensees to operate fixed stations and paging systems without the requirement that such use be on an ancillary basis to land mobile operations.
The FCC will allow licensees using the 220-222 MHz band for geophysical telemetry operations to operate fixed stations on a temporary basis, without the requirement
that such use be ancillary to land mobile operations, and on a secondary basis to Phase I and
Phase II licensees authorized to operate on 220 MHz channels on a primary basis.
Competitive Bidding Rules
The FCC will award a total of three nationwide, 30 regional, and 875 EA licenses in the Phase II 220 MHz service. These licenses will be awarded through a single simultaneous multiple round auction. Both incumbents and new entrants are eligible to bid for all nationwide, regional, and EA licenses.
The Wireless Telecommunications Bureau will, by Public Notice prior to the auction, announce the deadline for filing short-form applications and upfront payments, and other particulars regarding auction procedures.
Small businesses will be eligible for bidding credits and an installment payment plan.
Small businesses that, together with affiliates and controlling principals, have average
gross revenues that are not more than $15 million for the preceding three years will be
eligible for a 10 percent bidding credit on any Phase II 220 MHz license. Very small
businesses that, together with affiliates and controlling principals, have average gross
revenues that are not more than $3 million for the preceding three years will be eligible
for a 25 percent bidding credit on any Phase II 220 MHz license.
Partitioning and Disaggregation
The FCC will permit any holder of a Phase II 220 MHz license to partition portions of its authorization with eligible parties. In a Fifth Notice of Proposed Rulemaking, the Commission seeks comment on various issues related to partitioning and on whether to permit disaggregation of 220 MHz spectrum.
Action by the Commission February 19, 1997 by Third Report & Order and Fifth
Notice of Proposed Rulemaking (FCC 97-57). Chairman Hundt approving in part, dissenting
in part, Commissioners Quello, Ness, and Chong. Chairman Hundt, Commissioners Ness
and Chong issuing separate statements.
News Media contact: Audrey Spivack at (202) 418-0654
Wireless Telecommunications Bureau contacts: Marty Liebman and Mary Woytek at (202) 418-1310, and Frank Stilwell at (202) 418-0660.
Released: March 12, 1997
Re: Amendment of Part 90 of the Commission's Rules to Provide for the Use of the 220-222 MHz
Frequency Band by the Private Land Mobile Radio Service (PR Docket No. 89-552); Implementation
of Sections 3(n) and 332 of the Communications Act -- Regulatory Treatment of Mobile Services (GN
Docket No. 93-252); and Implementation of Sections 309(j) of the Communications Act --
Competitive Bidding 220-222 MHz (PP Docket No. 93-253).
The Commission has decided in this Third Report and Order (Order) that 220 MHz licensees aggregating contiguous 5 kHz channels to form channels wider than 5 kHz must adhere to a government-mandated spectrum efficiency standard. This standard arbitrarily requires licensees offering voice services to employ equipment that provides at least one voice channel per 5 KHz channel of bandwidth. For data services, licensees are required to employ equipment that operates at a data rate of at least 4,800 bits per second per 5 KHz channel of bandwidth.
The imposition of such a standard is inappropriate, unnecessary, and will have the effect of severely
limiting users' equipment choices and will cause a costly delay in the provision of competitive
services to the public. I dissent from this section of the Order.
Regulatory intervention is the opposite of free market forces. In this Order we claim to be
voting for free market forces in the form of competitive bidding, but in fact we're preserving the
mantle of regulatory intervention in the guise of a mandated efficency standard.
I believe the Commission should instead adhere to a consistent approach to spectrum policy
that relies on market-based mechanisms to ensure that spectrum is used to benefit the public. Under
this approach, the Commission without exception should seek to promote competition over
monopoly and provide users with the maximum flexibility to rapidly respond to consumer demand
and technological innovation Such a policy in this case would mean that 220 MHz licensees should
be given broad flexibility to aggregate channels wider than 5 kHz using any technology they deem
appropriate to offer any service they believe the market demands. Licensees should be subject only
to the minimum technical restrictions necessary to prevent interference with the operations of
neighboring licensees and to protect public health.
A government-mandated efficiency standard is unnecessary to promote spectrum efficiency
in this band for several reasons. First, additional spectrum in this band will be awarded through
competitive bidding. In addition, licensees in this band have the ability to sell their licenses to other
parties. One of the primary advantages of this market-based freedom is that in addition to awarding
licenses to those who value them most highly, auctions and tradability impose economic incentives
on licensees to use spectrum as efficiently as possible. Where spectrum is freely tradable, licensees
have the incentive and the ability to determine the most efficient tradeoffs between acquiring more
spectrum and using more efficient equipment. By mandating an efficiency standard here, we are
eliminating the ability of users' to deploy the highest quality, lowest cost equipment that will best
meet consumer needs. This view is affirmed by equipment manufacturers and service providers alike
who have argued in this proceeding that the imposition of an efficiency standard will arbitrarily limit
the ability of 220 MHz licensees to select affordable equipment that will enable them to offer the
services consumers demand. Moreover, an efficiency standard will impair the ability of 220 MHz
licensees to compete with service providers in other bands who are not subject to similar technical
restrictions and will therefore benefit from a more competitive equipment market where they can
select the highest quality, lowest cost and most efficient technology from competing manufacturers.
Second, the band plan adopted in this Order already recognizes the Commission's earlier
policy of promoting spectrally efficient, narrowband technology in the 220-222 MHz band, and thus
a spectrum efficiency standard is unnecessary to fulfill that commitment. The Commission
originally reallocated the 220 MHz band in 1988 to encourage the development of spectrally
efficient technologies. The service rules and channelization plan subsequently adopted in 1991 were
designed to afford spectrally efficient narrowband technology "an opportunity to gain acceptance
in the marketplace." This goal, which may have been appropriate in a preauction environment, is
no longer necessary where licensees will acquire additional spectrum through a market-based auction
process and must face the opportunity cost of inefficient use. Nonetheless, in this Order, the
Commission leaves unchanged the original allocation of 100 channels assigned on non-contiguous
basis in Phase I. This allocation will ensure that Phase I licensees who have made substantial
investments in existing 5 KHz equipment will be able to expand their operations without substantial
investment in new equipment. There is no legitimate reason, however, to place additional
restrictions on users of this spectrum in order to protect manufacturers of 5 KHz equipment from
facing competition in this band.
Third, the spectrum efficiency standard mandated in this Order will have the likely effect of
delaying the ability of licensees to provide new competitive services that meet the needs of
consumers. The efficiency standard will severely limit the ability of 220 Mhz licensees to provide
services that require channels wider than 5 kHz. For example, the Order nominally allows 220 MHz
licensees to provide a variety of services including paging on a primary basis; but the efficiency
standard we impose is not currently achievable by paging systems and thus, paging is effectively
precluded from this band until the efficiency standard sunsets in 2001. As a result, licensees will
be forced to make costly and inefficient equipment decisions that will delay the provision of
The decision to impose an efficiency standard in this band represents an unnecessary departure from the Commission's move towards a market-based spectrum policy. It arbitrarily limits licensees' flexibility to provide a variety of services to the public and effectively dictates licensees technology choices. The imposition of this standard will cost users the benefits of a competitive equipment market and will deny consumers the benefits of the rapid introduction of competitive new services.
Commissioner Susan Ness
Re: Use of the 220-222 MHz Band, PR Docket No. 89-552
Today we close a decade-long initiative to license services using spectrum-efficient technologies
in the 220-222 MHz band. Our decision removes restrictions on the types of technology that can
be used, increases the flexibility of licensees to provide any fixed or mobile services, allows for
the expeditious licensing of remaining spectrum by competitive bidding, and furthers our
statutory mandate to encourage development of new and spectrally efficient technologies.
I disagree with those who advocate allowing only the current 5 kHz channel plan. The better
approach is the one we take here to introduce flexibility for the channels and allow the newer
technologies to be implemented by placing the channel bandwidth decision with the bidders and
the marketplace. The channels will be auctioned in either adjacent or non-adjacent groups based
upon the former channeling plan. Bidders may purchase, trade, aggregate, or partition in any
fashion they wish. We also propose to permit spectrum disaggregation. Using these tools,
licensees will be able to obtain the specific channel bandwidth(s) they desire.
In the Notice, we tentatively concluded that allowing channel aggregation should be accompanied by a spectral efficiency requirement at least equivalent to that obtained through 5 kHz channelization. The requirement here is based upon the one adopted unanimously last year in our Refarming proceeding, Docket 92-235. It is technology-neutral, attainable, flexible, and will sunset in five years.
Continuing to use the 220 MHz band as a commercial testbed for spectrum-efficient technologies
furthers the purposes set out in our competitive bidding authority, Section 309(j) of the
Communications Act. This Act requires, among other things, that we "protect the public interest
in the use of the spectrum" and promote its "efficient and intensive use."
This Congressional directive within our competitive bidding authority is, of course, consistent
with the goals and requirements expressed elsewhere in the Act. For example, Section 7 requires
that we encourage (not merely permit) the provision of new technologies to the public.
Similarly, Section 303(g) requires that we "study new uses for radio" and "generally encourage
the larger and more effective use of radio in the public interest."
Congress would not have charged us separately to ensure efficient spectrum use if competitive
bidding itself was sufficient to attain this objective. Competitive bidding provides an incentive
for economically efficient service, but does not necessarily result in use of the most spectral
Because we have not imposed an efficiency requirement in other auctionable bands, the need is
more compelling to continue the experiment in this small two-megahertz wide band. Here,
licensees can experiment with spectrally-efficient, state-of-the-art technologies without
interfering with older, less efficient ones.
Dale Hatfield, in his 1995 paper "The Economic Impact of Refarming" -- submitted in our
Refarming proceeding -- demonstrates the value of spectrum efficiency. Hatfield explains that
increasing efficiency to 5 kHz (from 7.5 and 6.25 kHz) in just the 150 and 450 MHz private
bands would increase the number of available paired channels by 32 percent, resulting in the
creation of over 8,000 service jobs and thousands more manufacturing jobs. Hatfield estimates
that in an auction, the additional spectrum capacity would have a value in the billions of dollars.
Even if wildly optimistic, a fraction of this predicted benefit would be of continuing value to the
Providers employing less spectrally-efficient technologies have the universe of other bands from which to choose. Some of these bands will also be available to competitive bidding within the same timeframe as the 220 MHz band. I have not supported an efficiency rule for other commercial bands, believing that marketplace forces should be relied upon for establishing the balance between efficient spectrum use and cost of service. However, allowing this testbed to continue for five years in a technologically-neutral fashion furthers the goals established by Congress, harms no potential service provider, and has great potential to benefit the public.
March 12, 1997
of Commissioner Rachelle B. Chong
Re: Amendment of Part 90 of the Commission's Rules to Provide for the Use of the 220-222 MHz Band by the Private Land Mobile Radio Service, PR Docket No. 89-552,
RM-8506, Third Report and Order; Fifth Notice of Proposed Rulemaking
I support our decision today to provide 220 MHz licensees with more flexibility in the types of services that they can provide with their spectrum.(1) I believe that this decision will allow 220 MHz licensees to compete more effectively in the wireless communications marketplace and will broaden the array of services for customers.
In order to facilitate the provision of certain of those services, I also supported our decision to allow 220 MHz licensees to aggregate 5 kHz channels into channels of larger bandwidth. However, precisely because we have decided to allow such aggregation, I believe it is important, as we tentatively concluded in the Notice, to require licensees choosing to aggregate channels to maintain a degree of spectrum efficiency at least equivalent to that obtained through 5 kHz channelization. I write separately to set forth my reasoning for supporting adoption of a spectrum efficiency standard for this band and to explain why I respectfully disagree with the arguments raised by my dissenting colleague. I emphasize that my decision to support such a standard is limited to the unique circumstances of this service.
My dissenting colleague argues that licensees who will acquire this spectrum at auction will have incentive to use the spectrum as efficiently as possible. I agree that licensees acquiring 220 MHz spectrum at auction will have incentives to use their spectrum in an economically efficient manner. The most economically efficient result, however, does not necessarily require the use of the most spectrally efficient technology. While I generally prefer that the market drives the technology choice in wireless services such as this one, I believe that the equities of the situation mitigate in favor of the adoption of a limited spectrum efficiency standard.
As background, we reallocated the 220-222 MHz band from the Amateur Radio
Service to private and federal government land mobile use in 1988.(2) In doing so, we specifically
dedicated this 2 MHz of spectrum for the development of spectrally efficient narrowband
technology. In addition, we stated at that time that, "[w]e are convinced that in order for
narrowband land mobile technology to flourish, it must be afforded a reasonable opportunity
to gain full acceptance in the market place [sic]."(3) In furtherance of this policy, we
channelized the 2 MHz into 200 5 kHz channel pairs.(4)
In spite of our good intentions and the best efforts of several manufacturers,
narrowband technology has not yet had a real opportunity to gain acceptance in the
marketplace. First, there were a number of delays associated with the Commission's adoption
of service rules and issuance of licenses in the 220 MHz band.(5) Even after the licenses were
issued, the new licensees were reluctant to invest in the narrowband technology and construct
their systems because of a pending lawsuit challenging certain aspects of the Commission's
licensing procedures in the 220-222 MHz band.(6) In recognition of these problems and delays,
the Commission extended the 220 MHz construction deadline five times -- with the last
deadline expiring August, 1996.(7)
I believe that because we specifically set aside this band for the development of
spectrally efficient technology, and some licensees and manufacturers relied our set aside
decision, we should honor our commitment to spectrum efficiency in this band. That being
said, I acknowledge that narrowband technology is not the only type of spectrally efficient
technology. Because I did not want to preclude other spectrally efficient types of technologies
that require wider bandwidths from being used in the 220 MHz band, I supported the decision
to allow channel aggregation and the use of non-narrowband technologies, so long as the
licensee choosing to aggregate channels also maintains a level of spectrum efficiency.
My dissenting colleague argues that the efficiency standard will surely limit the ability
of 220 MHz licensees to provide services that require channels wider than 5 kHz and will
effectively preclude paging services. I disagree. In establishing the spectrum efficiency
standard, we tried to choose an efficiency level that would promote efficiency, but would still
be reasonably attainable by manufacturers. The standard we chose -- for voice, 1 voice
channel per 5 kHz, and for data, 4800 bits per second per 5 kHz -- meets both of these criteria.
This standard is similar to the standard that we recently adopted in our refarming decision.(8) It
appears that it is a standard that can be met by both of the current narrowband manufacturers
and in fact has been exceeded threefold by one of the manufacturers.(9) Moreover, the data
standard is one that other types of technologies, including TDMA and some new paging
technologies, should be able to meet, if there is enough available spectrum at 220 MHz.(10) In
addition, we provided that a manufacturer may obtain type acceptance for 220 MHz
equipment that does not meet the voice or data efficiency standard if they can meet certain
Although I believe that we should adopt a spectrum efficiency standard today, I do not
believe that we should retain the spectrum efficiency standard indefinitely. For this reason, I
supported a five year sunset date for the spectrum efficiency standard. I believe that this time
period will provide a fair opportunity for spectrally efficient technologies to develop in the
band and gain acceptance in the marketplace. Moreover, with the fast pace of wireless
technological development, it is my hope that by the year 2002, the spectrum efficiency
standard we adopt today will have long since been exceeded.
1. 1 Our decision today allows 220 MHz licensees to provide one and two way paging and fixed services on a primary basis, in addition to the land mobile services they are currently allowed to provide.
2. Amendment of Part 2 of the Commission's Rules Regarding the Allocation of the 216-225 MHz Band, GEN Docket No. 87-14, Report and Order, 3 FCC Rcd 5287 (1988).
3. Id. at 5289.
4. Amendment of Part 90 of the Commission's Rules to Provide for the Use of the 220-222 MHz Band by the Private Land Mobile Radio Services, PR Docket No. 89-552, Report and Order, 6 FCC Rcd 2356 (1991).
5. Although we reallocated the spectrum in 1988, we did not actually issue any service rules for the 220-222 MHz band until 1991. Id. Although we began accepting license applications almost immediately, within one month of opening the application window, the staff imposed a freeze on the filing of all applications (which continued in place until last year). Acceptance of 220-222 MHz Private Land Mobile Applications, 6 FCC Rcd 3333 (1991). We held lotteries for non-nationwide and nationwide licenses in 1992 and 1993, respectively, and issued the last licenses in 1995. Public Notice, Commission Announces Lottery for Rank Ordering of 220-222 MHz Private Land Mobile "Local" Channels, 7 FCC Rcd 6378 (1992); Public Notice, Commission Announces Lottery to Select Commercial Nationwide 220-222 MHz Private Land Mobile Licensees, DA 93-159 (rel. Feb. 16, 1993), 58 Fed. Reg. 09174 (Feb. 19, 1993).
6. See Evans v. FCC, Order, per curiam, Case No. 92-1317 (D.C. Cir. Mar. 18, 1994). This suit was filed in July, 1992, and the case was settled in March, 1994.
7. Amendment of Part 90 of the Commission's Rules to Provide for the Use of the 220-222 MHz Band by the Private Land Mobile Radio Service, PR Docket No. 89-552, Second Report and Order, 11 FCC Rcd 3668 (1996).
8. Replacement of Part 90 by Part 88 to Revise the Private Land Mobile Radio Services and Modify the Policies Governing Them and Examination of Exclusivity and Frequency Assignment Policies of the Private Land Mobile Radio Services, PR Docket No. 92-235, Amendment of the Commission's Rules Concerning Maritime Communications, PR Docket No. 92-257, Memorandum Opinion and Order, FCC 96-492 (rel. Dec. 30, 1996) (Refarming Reconsideration Order).
9. 9 Securicor Radiocoms Limited ("Securicor") is reporting that its current system is operating at 14.4 kb/s. Securicor, Ex Parte Submission, PR Docket 89-552, GN Docket 93-252, and PP Docket 93-252, filed November 12, 1996; SEA, Inc. ("SEA") proposed a data rate of 4,800 b/s. SEA Comments at 17.
10. 10 Cellular and 800 MHz SMR digital TDMA equipment are operating at a data rate of 48,600 b/s for a 30 kHz channel. This translates to 8,100 b/s for a 5 kHz channel and meets our 220 MHz data standard. In addition, Motorola is reported to have developed a paging technology, Inflexion, which is expected to have a data rate of 112,000 b/s for a 50 kHz channel. This translates to 11,200 b/s for a 5 kHz channel, a number far in excess of our efficiency standard.