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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




(PR Docket 89-552, GN Docket 93-252, PP Docket 93-253)

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.

Nationwide Licensing

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.

Non-Nationwide Licensing

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 construction benchmarks.

Other Issues

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.

- FCC -

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.

Partial Dissent


Chairman Reed E. Hundt

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 competitive services.

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.

Separate Statement


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 efficient technology.

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 American public.

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

Separate Statement

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 other conditions.

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.