Report No. DC-2647         ACTION IN DOCKET CASE            August 25, 1994


      COMMISSION AMENDS RULES CONCERNING THE LICENSING OF RESPONSE
       CHANNELS, ATTRIBUTION, AND PUERTO RICO SERVICE AREA IN THE
                         NARROWBAND PCS SERVICE
            (GEN DOCKET NO. 90-314 AND ET DOCKET NO. 92-100)


     The FCC has amended its rules concerning the licensing of
response channels in the narrowband personal communications
service (PCS).  The Commission also modified its attribution rule
with regard to narrowband PCS licenses in future application
proceedings and revised its local service area definition to
provide two service areas in Puerto Rico.  The Commission
believes these changes will improve the fairness of the licensing
process for narrowband PCS and provide for more effective use of
the narrowband PCS spectrum. 

     Previously, in the First Report and Order (R&O), the
Commission allocated three megahertz of spectrum at 900 MHz for
the narrowband PCS service, made two of the three megahertz
available for immediate licensing, and adopted rules to govern
narrowband PCS operation.  The Commission designated eight 12.5
kHz response channels for use by existing common carrier (Part
22) and private (Part 90) paging licensees.  (Response channels
provide existing paging systems with two-way capability,
including acknowledgement of a page and advanced messaging
capability.)

     In the Memorandum Opinion and Order (MO&O), the Commission
designated four of the eight response channels for Major Trading
Area (MTA) licensing and four for Basic Trading Area (BTA)
licensing.  The Commission also restricted eligibility for these
channels to paging licensees authorized under Part 22 or Part 90
as of the June 24, 1993, adoption date of the R&O.  The
Commission stated that to be eligible for a response channel
license, the existing paging licensee must operate at least one
base station in the MTA or BTA for which it requests a license. 
Finally, the Commission limited each licensee to two paging
response channels per geographic area.


                           (over)

                            - 2 -

     In response to a petition for further reconsideration filed
by the National Association of Business and Educational Radio,
Inc., the Commission: 1) based eligibility on an existing base
station's service area; 2) allowed paging licensees
authorized as of the auction application deadline for response
channels to compete in the auction; and 3) limited licensees to
two response channels per geographic area for two years after
licensing.  

     Additionally, on its own motion, the Commission clarified
its attribution rule with regard to indirect ownership of
narrowband PCS licenses to include a "multiplier" to determine
effective ownership interest in future application proceedings;
and divided Puerto Rico into two BTAs, instead of a single BTA.

     With respect to the attribution rule, the Commission
concluded that a multiplier, which takes account of ownership
interests held by intervening parties, would better facilitate a
competitive narrowband PCS market than the prior rule, which took
account only of ownership interests in an entity holding a
narrowband PCS license.  Under the multiplier rule, ownership
interests are attributable if, when multiplied together, they
equal or exceed five percent.  For example, if Party A has a non-
controlling ownership interest of 40 percent in Company B, which
in turn has a non-controlling ownership interest of 40 percent in
Company C, the narrowband PCS licensee, then Party A's effective
ownership interest in Company C is 16 percent, and is
attributable.

     With regard to Puerto Rico, the Commission decided that it
is desirable to modify the local service area in the same manner
as was done in broadband PCS.  The Commission concluded that the
patterns of local trade caused by the mountainous terrain of
Puerto Rico and the relatively large population of the island
support dividing it into two BTAs. 

     Action by the Commission August 16, 1994, by Second
Memorandum Opinion and Order (FCC 94-218).  Chairman Hundt,
Commissioners Quello, Barrett, Ness, and Chong.

  -FCC-

     News Media contact: Patricia A. Chew at (202) 418-0500;
Office of Engineering and Technology contact: Tom Mooring at
(202) 653-8114.