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PleadingHeader for numbered pleading paperP@n   $] X X` hp x (#%'0*,.8135@8:<19=~9>iB;?^<reference<;#FxX  Pg9CXP#itemizeX1=&V 8F ` hp xr#FxX  Pg9CXP#header2>I ` hp x`    #FxX  Pg9CXP# heading 3?F` hp x #FxX  Pg9CXP# 2RC@O;>%?U?KAfooter!@!!#d\  PCP#Times New RomanTimes New Roman BoldTimes New RomanTimes New Roman BoldSymbolLine Printer 16.67cpiLetter Gothic BoldTimes New RomanTimes New Roman BoldSymbolLine Printer 16.67cpiLetter Gothic BoldTimes New Roman ItalicTimes New RomanTimes New Roman BoldSymbolLine Printer 16.67cpiLetter Gothic BoldTimes New Roman ItalicCourier"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxd2FJKCKE*v,H"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDddddddfx6X@`7X@8wC;,t=Xw PE37XPRomanTimes New Roman BoldSymbolLine Printer 16.67cpiLetter Gothic BoldTimes N",tB^ f ^;C]ddCCCdCCCCddddddddddCCY~~vCN~sk~CCCddCYdYdYCdd88d8ddddJN8ddddYYdYd4dddddCddddddddd8YYYYYY~Y~Y~Y~YC8C8C8C8ddddddddddYdddddsdXdXXXddx|X~d~d|XdddddddC8ddddCdoddd|8|H~d<|8dtddddHHdlLlLlLkd|H|8~ddddddddXXXd~ddkd~ddxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddzzdddvooChdF"dhd9dCCzCddoddCdYds]zUvdYYCCCCz~ozoY~NYdYC8YooYdYzsdzdd~YYzozzz~CdzYzzzzCCdddddddzCsdYC\   pxtll\tll@\@\`L2C^  Њ APBefore the  X-[  FEDERAL COMMUNICATIONS COMMISSION ă`5(#FFCC 94144 *Washington, D.C. 20554 l  Xv-X` hp x (#%'0*,.8135@8:9 X-ԍ See Murray Petition at 48.K It also could dramatically increase complexity and transaction costs at and after the auction. Finally, we believe that dividing the spectrum into 40 MHz blocks as requested by Time Warner would be inefficient for many applications and would foreclose innovative niche services.  X|-655. The record indicates significant concern that a 20 MHz block may not provide sufficient spectrum to enable a PCS provider to compete effectively with other PCS licensees operating on 30 MHz spectrum blocks or with other commercial mobile radio service  X7-providers. Some parties argue that 20 MHz will provide sufficient capacity in the long run.`?79 X~&-ԍ See Point Petition at 2; Nextel Petition at 58.` However, APC argues that with only 20 MHz, there could be a significantly larger portion of" G ?0*((b" each service area where the licensee has no usable spectrum due to the presence of microwave  X-incumbents.M@9 Xb-ԍ See APC Comments at 11. M The presence of fixed microwave links requires that, on the average, a licensee with 20 MHz initially will have to relocate more microwave links than a 30 MHz license before PCS service can begin, which could significantly delay the commencement of service and increase the upfront cost of initiating service. In addition, APC states that the ability of a microwave incumbent to delay or extract a premium for relocating its link because its  Xv-microwave path fully blocks service diminishes significantly with a 30 MHz spectrum block.MAvy9 X -ԍ See APC Comments at 10. M While incumbent microwave links are 20 MHz wide, we feel that the advantages of being able to work around specific links with a 30 MHz block outweigh the additional transaction costs which result from not matching the incumbent fixed microwave assignments identically.  X -756. Other parties support the notion that a 30 MHz block will help new PCS entrants  X -compete more effectively with existing wireless and wireline providers.B *9 X-ԍ See PCS Action Comments at 4; INS Petition at 6; Letter from PacBell to the FCC (April 28, 1994). We also believe that limiting one licensee to 20 MHz could be a disadvantage for future competition. The ability to provide a complete package of mobile voice and data services could become a significant competitive advantage in the future. Such a package of wireless services, however, may  X-require more than 20 MHz of spectrum.SC9 X-ԍ See PCS Action Comments at 4. S Other services may require less spectrum and are better suited to the 10 MHz blocks.  XK-857. Due in large part to these concerns, the investment community has stated that financing would be much more difficult to obtain for the licensees on the 20 MHz block than  X-on the other blocks.tDu9 XC-ԍ See Transcripts of the PCS Public Forum at 439449 (April 11, 1994).t These handicaps are of particular concern to us because the 20 MHz  X-block was proposed to be reserved for designated entities.yEv& 9 X-ԍ In the Notice of Proposed Rule Making in the competitive bidding proceeding, PP Docket No. 93253, 8 FCC Rcd 7635 (1993) (competitive bidding), the Commission indicated that it would consider setting aside Blocks C and D for small businesses, rural telephone companies, and businesses owned by minorities or women. Reconciliation Act  6002(a), 107  X#-Stat. at 389. See H.R. Rep. No. 103213, 103d Cong., 1st Sess. at 482484 (1993)  Xj$-(Conference Report); H.R. Rep. No. 103111, 103d Cong., 1st Sess. at 255 (1993).y The competitive handicaps of a 20 MHz block relative to 30 MHz blocks would not have served our goal of providing a viable competitive opportunity for designated entities. "dE0*((b"Ԍ X-958. Increasing the third license from a 20 MHz block to a 30 MHz block appears to eliminate any competitive disadvantages stemming from the band plan. The A, B and C blocks each will have a roughly equivalent portion of its service area completely blocked by incumbent microwave users in any geographic area. As a result, the costs and delay due to incumbent relocation should be similar on each of the blocks. This change should also reduce the difficulty faced by the C block licensee in obtaining financing. We conclude, therefore, that three equal sized 30 MHz blocks will facilitate competition and the rapid development and implementation of the fullest range of PCS services and ensure that PCS is more fully competitive with other mobile radio services. Accordingly, we are changing the single 20 MHz license to a 30 MHz license.  X -:59. Time Warner petitioned us to allocate 40 MHz blocks in order to promote rapid introduction of service and to enhance the ability a wide range of services in competition with  X -existing wireless and wireline providers.NF 9 XN-ԍ See Time Warner Petition at 2.N While we believe that some new entrants may need to acquire 40 MHz to fully realize their business plans, requiring all applicants to purchase 40 MHz in all areas would not serve our goal of giving potential licensees the ability to determine the amount of spectrum they need for particular services, nor would it maximize competition. Companies that desire to provide service using 40 MHz can do so through aggregation at the auction or afterwards. Providing a combination of 30 MHz and 10 licenses MHz provides the benefits of 40 MHz licenses, without restricting the options of firms nor affecting competition.  X-;60. Consistent with our decision to formulate a flexible definition of PCS, we  X-allocated four 10 MHz blocks in the Second Report and Order that could serve a variety of  X-needs.]Gy9 X-ԍ See Second Report and Order at  24.] We continue to believe that 10 MHz blocks, both on their own and in combination with the 30 MHz blocks or with each other, are useful to support a variety of PCS services. Throughout this proceeding, several parties have indicated that 10 MHz blocks would be  X-suitable for providing services ranging from specialized or "niche" applications to services  X|-comparable to those now provided by cellular systems.H|*9 XW-ԍ AMT/DSST states that specialized services can meet unserved demand for PCS and  X@ -that 10 MHz will be sufficient for some applications. See AMT/DSST Comments at 4. See  X)!-also CTIA Comments at 10; Murray Comments at 34; and Nextel Reply at 4; Transcripts of the PCS Public Forum at 43 (April 11, 1994). In addition, the 10 MHz blocks will be beneficial both for cellular licensees, who have limited eligibility for PCS participation in region, and possibly also for augmenting SMR. Finally, commenters discussed the desire to aggregate the 10 MHz blocks with the larger blocks in order to increase capacity for PCS  X -services in heavy demand areas.dI 9 Xg'-ԍ See PCS Action Reply at 2; Time Warner Reply at 24.d " G I0*((zb"Ԍ X-ԙ<61. For these reasons, we believe the public interest is best served by continuing the allocation of licenses on 10 MHz channel blocks in addition to the 30 MHz licenses. We must limit the number of 10 MHz blocks to three for any given area, however. We are constrained because we also want to reserve spectrum for other uses such as MSS and unlicensed PCS. Allowing the flexibility to aggregate spectrum blocks of different size will help ensure that efficient providers succeed. We believe that 120 MHz will provide sufficient spectrum to promote competition rapidly and that flexibility in the provision of service will provide incentives for efficient use of the spectrum.  X1-=62. In sum, we believe that a band plan that provides for three 30 MHz licenses and three 10 MHz licenses, all in the lower band, compared to our earlier plan, will better ensure that PCS services are available promptly and competitively to the American public.  X -3. Aggregation and Disaggregation  X ->63. A number of petitioners request clarification of, or changes to, our policies regarding the aggregation or subdivision of PCS spectrum and PCS service areas. In the  Xy-Second Report and Order, we limited any party's ability to aggregate PCs spectrum to an  Xb-attributable interest in 40 MHz.cJb9 X-ԍ See Second Report and Order at  61.c Companies that were deemed to hold attributable interests in cellular license(s) covering 10 percent or more of the population in a PCS service area  X4-were limited to holding a single 10 MHz PCS license in that area.FK4y9 X^-ԍ Id. at  106.F We did not address the issue of whether we would allow disaggregation of spectrum.  X-?64. Comcast requests clarification that the 40 MHz aggregation limit applies only to  X-PCS spectrum.KL*9 X-ԍ See Comcast Petition at 15.K PNSC submits that certain PCS licensees should be permitted to aggregate more spectrum than that allowed under the current plan. It recommends that BTA licensees in areas with populations between 200,000 and 999,999 be permitted to aggregate up to 60 MHz and that cellular carriers serving markets with populations of one million or less be permitted to aggregate up to 20 MHz. PNSC further urges that no limit be set on aggregation of spectrum in areas with populations less than 200,000. PNSC questions the viability of seven PCS licensees and states that rural BTA licensees should be permitted to aggregate  X7-more spectrum because they are at a competitive disadvantage visavis MTA licensees. IM79 X#-ԍ See PNSC Petition at 58.I It contends that if we do not raise the aggregation limit, we should adopt a channeling plan that provides for three 30 MHz MTA licenses, with one setaside for designated entities, and three 10 MHz BTA licenses, with one setaside for designated entities. "M0*((;b"Ԍ X-@65. PCS Action and Time Warner request that PCS licensees be permitted to aggregate up to 40 MHz of spectrum in the lower band through leasing, joint ventures,  X-consortia, or other means.iN9 XK-ԍ See PCS Action Petition at 39; Time Warner Petition at 8.i They contend that this would eliminate the need for licensees to use more expensive equipment capable of operating in both the upper and lower bands. CTIA does not object to the overall 40 MHz limit on PCS ownership. However, it requests that cellular licensees be subject to the 40 MHz limit and that they be allowed to acquire up to 15 MHz of PCS spectrum. Thus, CTIA argues that, in addition to the right to bid on a 10 MHz channel, cellular operators should be permitted to acquire an additional 5 MHz either through  XH-bidding and subsequent divestiture or after the auction.IOHy9 Xr -ԍ See CTIA Petition at iii.I BellSouth and Point suggest a uniform 45 MHz aggregation limit that would apply to the total spectrum used by an entity for all the mobile communications services it provides in a given area, including, cellular,  X -SMR, widearea SMR and PCS.eP *9 X-ԍ See BellSouth Petition at 1517; Point Petition at 3.e BellSouth argues that the current approach limits cellular providers to an additional 10 MHz of PCS or a total of 35 MHz of spectrum while enhanced  X -SMRs can acquire up to 40 MHz of PCS spectrum or a total of 59 MHz of spectrum.VQ 9 Xa-ԍ See BellSouth Petition at 1517.V  X -  X -A66. Decision. We believe that the 40 MHz limit for PCS spectrum is appropriate. No new information has been presented to indicate that each licensee in a market would require more than 40 MHz to provide broadband PCS service. Although at least one party argued that this limit should be amended to allow greater aggregation in rural areas, we do not  XK-believe that greater aggregation is needed.LRK9 X-ԍ See PNSC Petition at 8. L In particular, the demand in rural areas is expected to be sufficiently low that there should be no need for more than 40 MHz by any one provider. If demand in rural areas is not sufficient to meet than 40 MHz of spectrum to one entity, it would be preferable to have additional competitors serve these customers rather than to license more than 40 MHz of spectrum to one entity.  X-B67. One of our goals in this proceeding is to promote competitive delivery of wireless services. As a result, we feel that not only is an overall cap on PCS spectrum important to prohibit excessive spectrum aggregation, but that a comparable separate limit should be placed on cellular providers since they already hold 25 MHz of clear spectrum and already have a large number of existing wireless customers. To ensure competitive parity, cellular carriers will be subject to an overall spectrum cap of 35 MHz for their combined PCS and cellular spectrum. We are persuaded by the argument, raised by a number of parties, that because of cellular's "headstart" in the wireless telephone market, existing infrastructure and large base of customers, cellular carriers might be able to dominate the wireless market if they receive more" = R0*((b"  X-than 10 MHz of PCS spectrum.S9 Xy-ԍ See Letter from PCS Action to the FCC (May 27, 1994). Many other parties, including one company with existing cellular holdings, expressed concern that allowing inregion cellular carriers to acquire additional spectrum would lead to a market dominated by  X4-cellular carriers. See Letter from US West to the FCC (June 1, 1994); Letter from MCI to the FCC (May 26, 1994); Letter from Time Warner to the FCC (May 27, 1994). We also recognize that new entrants face a possibly lengthy process to relocate existing microwave users so they can use all of their spectrum. Cellular carriers already have 25 MHz of clear spectrum in operation whereas new entrants may have to relocate microwave users to gain access to that much spectrum, even if they acquire 40  X-MHz at the auction. In addition, we are concerned that additional spectrum acquired by cellular entities may reduce the amount of spectrum available to new entrants and increase the costs to new entrants. To promote the ability of new entrants to acquire spectrum and rapidly begin service as strong competitors to inregion cellular carriers, we have decided to continue to permit cellular carriers to acquire and hold only a single 10 MHz license in any PCS  X1-service area where they are considered inregion. (See Cellular Eligibility section infra). However, because we realize that as competitive PCS offerings are implemented, the market advantages enjoyed by cellular carriers should decrease, we will allow cellular carriers to acquire an additional 5 MHz after January 1, 2000. This will allow cellular carriers to acquire the same total amount of spectrum (40 MHz) as other entities. Limiting inregion cellular carriers to 10 MHz of PCS spectrum for five years will not disadvantage them relative to the new entrants who must contend with microwave relocation over their entire spectrum block(s) and do not necessarily have an established customer base or comparable  Xy-infrastructure advantages.Ty9 XG-ԍ Because we are prohibiting spectrum disaggregation until the year 2000, cellular entities will have an opportunity to acquire 5 MHz of additional spectrum at that time.  XK-C68. We reject the contention BellSouth and Point that the aggregation limit be raised to 45 MHz to permit cellular entities to acquire an additional 20 MHz. If we were to allow such aggregation to 45 MHz through the disaggregation of 30 MHz blocks, the number of full service competitors could be reduced to the detriment of realizing the goals we have set forth for PCS. If we were to allow aggregation to 45 MHz through the aggregation of 10 MHz blocks, there would not be enough blocks to assure both full cellular participation and the participation of other parties who desire 10 MHz licenses. We conclude that 40 MHz remains an appropriate limit on PCS spectrum because it protects the competitive structure, provides sufficient spectrum for efficient provision of wireless services, and encourages a wide diversity of firms to participate in the industry. Furthermore, we are seeking comment in another proceeding as to whether and how our aggregation limit may be applied uniformly to all mobile communications providers. We find that extending the PCS spectrum aggregation limit to include other mobile services, such as SMR and widearea SMR services, is beyond"7T0*(({b" the scope of this proceeding. We therefore intend to address issues relating to spectrum  X-aggregation across other commercial mobile radio services in a separate proceeding.U9 Xb-ԍ See Further Notice of Proposed Rule Making, GN Docket No. 93252, FCC 94100, released May 20, 1994.  X-D69. Although, as stated above, we believe spectrum disaggregation should be permitted, we are concerned that initially, there may be anticompetitive incentives to disaggregate spectrum. Two or three entities might purchase a viable 30 MHz license and disaggregate it to reduce the number of new entrants. Thus, we will permit disaggregation of spectrum by any licensee only after it meets the five year construction requirement. The five year point will allow the PCS market to take shape. Entities desiring to use small amounts of spectrum before the prohibition on disaggregation ends can either purchase the 10 MHz blocks of spectrum if they wish to provide service using less than 30 MHz or enter into joint ventures or resale arrangements to facilitate their access to spectrum. We expect to conduct a further proceeding to specify the rules for spectrum disaggregation, which will also explore the possibility of permitting disaggregation for other commercial mobile radio services.  X -E70. We agree with the suggestions of the petitioners and responding parties that PCS entities should eventually be permitted to disaggregate spectrum. We feel that, in the future, disaggregation will complement the three 30 MHz and three 10 MHz channel plan by allowing subdivision of spectrum blocks where service providers find that economic or other conditions warrant it. Allowing spectrum disaggregation, even if it is prohibited until the first construction benchmark, will provide appropriate incentives for service providers to conserve their use of spectrum and to invest in spectrum conserving technologies. Because PCS licensees have paid for the use of the spectrum and have the ability to sell it in the future, they should be especially sensitive to the value of the resource they are using and will be motivated to ensure that it is used in the most valuable way.  X-F71. In determining the appropriate placement of the 10 MHz blocks within the lower band, we seek to promote the development of an efficient market structure and to ensure that no subset of license has any inherent competitive disadvantage due to placement of licenses in the band plan. In particular, we must consider the benefits of aggregating the 30 MHz blocks with the 10 MHz blocks compared to the benefits of aggregating the 10 MHz blocks themselves. Interspersing the 10 MHz blocks between each 30 MHz block facilitates aggregation to 40 MHz by allowing combination of each contiguous 30 MHz and 10 MHz license pair. This also facilitates relocations of the existing fixed microwave operations by matching fixed microwave channels with PCS channels. This will keep to a minimum the number of parties responsible for each relocation which will reduce relocation negotiation, timing and costs. On the other hand, keeping all 10 MHz licenses contiguous would allow more efficient aggregation of these licenses as a substitute strategy for obtaining one of the three 30 MHz block. We conclude that interspersing the 10 MHz licenses between the 30 MHz licenses to permit efficient aggregation up to 40 MHz should the market favor that"#bU0*((e"b" outcome is the best approach. Recognizing that aggregation of the 10 MHz licenses may be attractive to some parties, however, we are also making two of the 10 MHz licenses contiguous so as to permit this aggregation to 20 MHz, should some parties favor 20 MHz  X-over 30 MHz. (See Cellular Eligibility infra.)  X-4. Service Areas  Xv-  X_-G72. In the Second Report and Order, we specified that the two 30 MHz blocks would be licensed on an MTA basis. We also specified that the 20 MHz block and four 10 MHz  X1-blocks would be licensed on a BTA basis.]V19 X -ԍ See Second Report and Order at  76.] We adopted this plan to promote the rapid deployment and ubiquitous coverage of PCS and felt that these areas would follow the natural  X -flow of commerce.EW y9 X--ԍ Id. at  73.E  X -H73. A number of petitioners request changes in the service areas designated for PCS blocks. Pegasus, for example, requests that the Commission adopt a Mayaguez/AguadillaPonce BTA separate from the San Juan BTA. Pegasus argues that Puerto Rico should  X-comprise two BTAs because the two areas are split geographically by mountains.LX*9 Xk-ԍ See Pegasus Petition at 12.L In addition, DWMP points out that some rural BTAs are larger than a small MTA and that it would be unreasonable to ask a rural PCS provider to meet the construction requirements in  XK-these sparselypopulated areas. DWMP requests that we specify smaller service areas.SYK9 X-ԍ See DWMP Petition at 3. S Other parties, such as Killen and NTCA, favor use of the MSA/RSA service areas that are  X-used for cellular licenses.Z9 XZ-ԍ See Killen Petition at 13, NCTA Petition at 18. There are 306 Metropolitan  XC-Statistical Areas (MSAs) and 428 Rural Service Areas (RSAs). See 47 C.F.R. 22.2. Point Communications states that either BTAs or the cellular MSA/RSA service areas should be used for PCS, arguing that all PCS should be licensed on  X-the same service area basis.J[& 9 X -ԍ See Point Petition at 24.J CTIA and Nextel suggest that all licensing be based on BTA  X-service areas.j\ 9 X`#-ԍ See CTIA Petition at 910, Nextel Petition at 1113.j Nextel believes that MTA service areas will result in poor buildout and lack  X-of service in rural locations.P] 9 X%-ԍ See Nextel Petition at 12.P BellSouth submits that the six 20 MHz blocks it suggested"9]0*((b"  X-should be licensed on a BTA basis.M^9 Xy-ԍ See BellSouth Petition at 17.M BellSouth argues that MTAs are inappropriate because they would result in a lack of parity among competitors, and uniform initial spectrum blocks  X-and service areas would encourage competition and give effect to market forces.  X-I74. At the PCS Public Forum held on April 11 and 12, 1994, Dr. C. J. Waylon of GTE submitted that MTA coverage offers large geographic service areas that would enhance  Xv-competition with existing cellular service providers.x_vy9 X -ԍ See Transcripts of the PCS Public Forum at 8283 (April 11, 1994). x Mark Roberts of Alex Brown and Co.  X_-also voiced support for the larger MTA service areas.v`_*9 X: -ԍ See Transcripts of the PCS Public Forum at 439 (April 11, 1994).v However, some parties, such as George Murray, felt that all blocks should be licensed on a BTA basis to provide an  X1-opportunity for small entrants to compete on an equal footing with other PCS providers.Ka19 X-ԍ See Murray Petition at 48.K  X -J75. Decision. We have decided to retain the geographic license areas definitions for  X -PCS licenses, adopted in our Second Report and Order. We reject the arguments that all licenses should have the same geographic scope, as in NTIA's proposal to use the Department  X -of Commerce Economic Areas.db 9 X-ԍ See Letter from NTIA to the FCC at 2 (May 31, 1994).d We also reject a redrawing of the boundaries along cellular  X -MSA/RSA lines as proposed by Killen, NTCA, and Point.xc = 9 X-ԍ See Killen Petition at 13; NTCA Petition at 18; Point Petition at 24.x  Xy-K76. We reject the use of cellular MSA/RSA boundaries for a number of reasons. The ten year history of the cellular industry provides evidence generally that these service areas have been too small for the efficient provision of regional or nationwide mobile service. The large transaction costs to aggregate MSAs and RSAs that have been incurred over the past ten years in the cellular industry have frequently been directed towards geographic aggregation to provide wider service areas for consumers and to lower costs of providing service. Rather than forcing replication of this costly and timeconsuming process, we are beginning with larger service areas, which we expect to minimize the need for costly postauction transactions. We also hope to spur market competition from new PCS providers by starting  X-with larger initial geographic service areas to alleviate the cellular headstart advantage.d 9 XI$-ԍ CTIA states that as of yearend 1993, cellular companies served more than 16 million subscribers and had invested nearly $14 billion in building their systems. Letter from CTIA to the FCC (April 29, 1994). We realize that the MTA and BTA license boundaries do not coincide with existing cellular"qd0*((b" license boundaries, but feel that the costs imposed by these different license boundaries will be outweighed by the benefits of larger initial service areas. We are cognizant of problems created by overlaps between the PCS and cellular service areas, and provide some relief from  X-these problems. (See Cellular Eligibility, infra.)  X-L77. We also are rejecting the suggestion that all licenses should have the same geographic scope whether MTAs (as proposed by PCS Action), BTAs (as proposed by BellSouth, CTIA, and Nextel) or Department of Commerce Economic Areas (proposed by  XH-NTIA). While identical geographic areas may impose more initial competitive parity, we do not believe that this will maximize competitiveness and participation in the provision of PCS services. Licensing all blocks on an MTA basis might increase competitiveness with cellular, but it would limit the ability of cellular companies and designated entities to participate in the provision of PCS. Cellular companies could be restricted because of overlaps with MTAs that might not occur with BTAs. Designated entities are likely to be better able to finance the construction of PCS across a BTA than an MTA. Thus, by licensing some blocks on a BTA basis, we comply with Congress' directive that we prescribe area designations that promote economic opportunity for a wide variety of applicants, including small businesses, rural  Xy-telephone companies, and business owned by members of minority groups and women.Qey9 X-ԍ See 47 U.S.C.  309 (j)(4)(C).Q  XK-M78. We therefore continue to feel that a combination of MTA and BTA licenses will give licensees the opportunity to select and combine service areas and promote broad participation in the provision of PCS services by firms of various sizes. Licensing two of the 30 MHz blocks on an MTA basis will permit these licensees to operate in large service areas which will facilitate interoperability and roaming across wide geographic areas. Licensing the third 30 MHz block on a BTA basis will not preclude such efficiencies because of the ability to aggregate licenses geographically. In addition, in much the same way as the variety of spectrum block sizes allows various strategies, the variety of geographic sizes will allow firms to determine the optimal geographic strategy they wish to pursue. This will also help us to  X|-meet the statutory objectives of disseminating licenses to a wide variety of licensees.f|y9 X-ԍ See 47 U.S.C.  309(j)(3)(B). See also Alliance Petition at 23; Columbia Petition at 23; NTCA Petition at 3; RCA Petition at 2, 7; Intelco Petition at 7. In addition, allocating four of the six licenses on a BTA basis addresses the concern that rural buildout would not occur with MTA licenses.  X -N79. Finally, we concur with Pegasus' suggestion with regard to the Puerto Rico service area and will provide two separate BTA service areas in Puerto Rico, one for Mayaguez/AguadillaPonce and the other for San Juan. This action recognizes the difficulties  X-created by the mountain range separating these two areas. No parties opposed this request  X -and we find this adjustment to be in the public interest.Lg 9 X'-ԍ See Pegasus Petition at 10. L" g0*((b"Ԍ X-ԙ5. Geographic Partitioning  X-O80. In its petition, McCaw asks us to permit applicants to subdivide PCS blocks and  X-service areas.Qh9 X4-ԍ See McCaw Comments at 224.Q McCaw states that this would allow parties to bid jointly for PCS BTA and MTA licenses, and then subdivide the PCS operating authority on either a geographic or spectrum basis. It states that this approach would diminish the disadvantages created by using MTAs and BTAs rather than the significantly smaller cellular MSA and RSA service areas. This would allow cellular entities to offer PCS services in areas where they do not provide cellular service and yet would not qualify for licensing in the entire PCS service area.  X -P81. Several parties responding to the petitions favor allowing partitioning of PCS service areas. For example, AIDE, CTIA and McCaw state that geographic and spectrum partitioning will promote efficient use of the spectrum and will encourage service in rural  X -areas.ti y9 X-ԍ See AIDE Comments at 5; CTIA Comments at 16; McCaw Comments at 224.t AMT submits that partitioning will offer flexibility to PCS providers.Hj *9 X-ԍ See AMT Comments at 23.H GTE states that partitioning will expedite the introduction of new services, promote participation in PCS,  X -and allow PCS to serve niche markets.Ok 9 X3-ԍ See GTE Comments at 910.O Finally, CUC recommends that the Commission allow partitioning only within a specified time after licensing to ensure universal deployment  Xy-of PCS and prevent licensees from warehousing spectrum that they do not intend to utilize. Gly9 X-ԍ See CUC Comments at 12.G  XK-Q82. Other responding parties oppose allowing geographic partitioning. For example, GCI and MCI argue that interested parties should form consortia to provide uniform service  X-across areas instead of dividing the allotments._m= 9 X -ԍ See GCI Comments at 1516; MCI comments at 35._ GCI, MCI and Nextel argue that allowing geographic partitioning would inject additional variables into the initial auction process and  X-complicate the development of an orderly postauction market.yn 9 X!-ԍ See GCI Comments at 1516; MCI comments at 35; Nextel Comments at 1314.y MCI contends that to avoid manipulation and evasion of the construction requirements, voluntary partitioning should be limited to geographic sizes no smaller than a BTA with no less than 10 MHz of spectrum,  X-pending examination of the feasibility of smaller partitions in a separate rule making.Ho 9 X%-ԍ See MCI Comments at 35.H "!Po0*((b"Ԍ X- R83. Decision. We agree with the parties that oppose permitting geographic partitioning at this time. We find that there is a significant risk that partitioning can be used to circumvent construction requirements. While there may be efficiency enhancing geographic partitions, much of the benefit can be obtained through other arrangements that do  X-not raise the same concerns about circumvention of our construction rules.yp9 X-ԍ See GCI Comments at 1516; MCI Comments at 35; Nextel Comments at 1314.y On balance, we conclude that we should not adopt a policy allowing general geographic partitioning, but recognize that the balance may be different for particular groups of service providers, such as rural telephone companies or to create PCS ownership opportunities for companies owned by minorities or women. Therefore, we will consider the issue of geographic partitioning for rural telephone companies and other designated entities in our forthcoming Order, to adopt  X -specific competitive bidding rules for broadband PCS in PP Docket No. 93253.q y9 XD -ԍ We recognize that we stated in an earlier order that the issue of geographic partitioning by rural telephone companies would be addressed in this order, but we now  X-believe that this issue should be addressed with other issues regarding designated entities. See  X-Second Report and Order in PP Docket No. 93253 at  243. There we will address other designated entity preferences and will rely on the record in both proceedings in making our final determinations on this matter. Also, we will address whether we should recover the unserved PCS areas at the end of the tenyear construction period, in a later proceeding after we have had an opportunity to assess the scope of system buildouts.  X-6. Unlicensed Devices  Xb-S84. In developing a band plan for PCS, we have had to weigh the spectrum requirements of licensed PCS with the amount of spectrum allocated for unlicensed PCS. For reasons described above, the new band plan moves all of licensed PCS to the lower band. As a result of this change, we have had to reduce the amount of spectrum available for the operation of unlicensed PCS devices from 40 to 20 MHz. This is the amount of spectrum we originally proposed for unlicensed devices. Despite having less spectrum available for unlicensed PCS devices in the near term, we believe the new band plan will have an overall positive effect for consumers in terms of the diversity and utility of unlicensed devices available on the market, as well as the rapid deployment of competitive licensed PCS Services.  Xe-T85. One reason we reach this conclusion is that even without this change it is unlikely that the 20 MHz reallocated to licensed from unlicensed would have been used in the near term for unlicensed. The spectrum at 1890 to 1910 MHz was regarded as less desirable than the 20 MHz retained for unlicensed PCS at 19101930 MHz because it contains significantly  X -more microwave incumbents.~r 9 X&-ԍ See Transcripts of the PCS Public Forum at 1112 (April 12, 1994):  ~ Our expectation was that unlicensed devices first would operate on the 19101930 MHz spectrum because the cost of clearing this spectrum is""r0*((<b" significantly less. Licensed PCS providers, by contrast, provide ample evidence in the record that they are ready to begin the relocation of microwave incumbents in the lower band and provide service in the near term and can use the spectrum from 18901910 MHz rapidly. Thus, consumers are more likely to obtain immediate benefits if we allocate this spectrum to licensed PCS rather than for unlicensed PCS devices.  Xv-U86. Another benefit of the new band plan is that the licensed and unlicensed PCS spectrum will be located in close proximity on the lower band. Consumers will have more choices for equipment that operates on both unlicensed and licensed PCS bands, and will not have to buy higherpriced equipment that operates on both the lower and upper PCS bands to have available the full array of service options with a single piece of equipment. Finally, we intend that the initial 20 MHz allocation for unlicensed PCS devices meet the near term  X -spectrum requirements for unlicensed devices.s 9 Xe -ԍ We agree that both unlicensed asynchronous and isochronous devices may need  XN-additional spectrum in the near future. See Transcripts of the PCS Public Forum at 10 (April 12, 1994). To consider the longterm spectrum requirements of unlicensed PCS devices, we intend to issue a Notice of Proposed Rule Making in the near future to identify additional spectrum for unlicensed PCS devices.  X-V87. For the reasons set forth above, therefore, we conclude that consumers and manufacturers of equipment intended for use on the unlicensed band will benefit from the new band plan. This does not diminish our concern that there be sufficient spectrum allocated for unlicensed PCS devices to accommodate expected demand, and therefore as noted above, we are committed to instituting a further rule making for this purpose to meet the long term requirements for unlicensed PCS devices, including those potential unlicensed uses that may not be accommodated readily in the initial 20 MHz allocation.  X-B. Private Use  X-W88. In their petitions, UTC and APCO request that we set aside a portion of the licensed PCS spectrum for private PCS operations such as public safety or internal company  X|-use.^t|K9 Xx-ԍ See UTC Petition at 24; APCO Petition at 46.^ UTC argues that essential public services and private industries require advanced mobile/portable communications capabilities that cannot be provided by commercial PCS. Further, UTC states that the current rules preclude the development of such private systems. UTC also states that for private users: 1) 10 MHz channels are too large for a single licensee's requirements; 2) the construction requirements are impractical and inappropriate; 3) the service areas do not correspond to the service territories of private entities; and  X-4) competitive bidding is inappropriate for public safety and private systems.Hu9 X&-ԍ See UTC Petition at 24.H APCO agrees, and argues that public safety agencies need spectrum for new lifesaving"#u0*((b" communications technologies that will not, and cannot, be provided by carrierbased services such as PCS. APCO states that Congress repeatedly has mandated that radio services that are necessary for the safety of life and property deserve special consideration in the allocation of  X-spectrum.Iv9 X4-ԍ See APCO Petition at 46.I   X-X89. Several parties, including APC, MCI, Sprint, PCIA and TDS, oppose allocation of  Xv-PCS spectrum for the private use of utilities and publicsafety organizations.wvy9 X -ԍ See APC Comments at 3; MCI Comments at 6; Sprint Comments at 56; PCIA Reply at 2; TDS Comments at 13. These parties argue that private organizations will have full access to unlicensed PCS and that PCS licensees will have incentives to structure systems for the internal use of private organizations. Sprint states that reducing the amount of spectrum available for commercial PCS licenses would compromise the competitiveness and viability of PCS. Sprint also notes that providing emerging technology spectrum for private use would not provide auction revenue for the government. On the other hand, API and ITA support a separate spectrum allocation for "private PCS" systems, arguing that many private communications operations cannot be  X -transferred to public systems due to service reliability concerns.]x 9 X-ԍ See API Comments at 89; ITA Comments at 45.]  X-Y90. Decision. We agree with the parties who argue that both commercial PCS service and unlicensed PCS devices will be able to meet many of the communications requirements of private entities. The PCS licensees will be permitted to tailor specific service applications to the particular needs of individual organizational customers. Any such service applications, of course, must be consistent with policies we have established for the regulation of commercial  X-mobile radio services under Title II of the Communications Act.y 9 X-ԍ See CMRS Second Report and Order, 9 FCC Rcd at 1439 n.130: XX` ` The terms and conditions for different classes of customers may, of course, vary. Whether such differences are lawful would be a question of whether there is unreasonable discrimination under Section 202(a) of the [Communications] Act. In the case of individualized or customized service offerings made by CMRS providers to individual customers, it is our intent to classify and regulate such offerings as CMRS, regardless of whether such offerings would be treated as common carriage under existing case law, if the service falls within the definition of CMRS.x`  Such applications could include the use of dedicated capacity. Where such arrangements might not be satisfactory, entities desiring spectrum solely for internal private use could, of course, bid for licensed PCS"$y0*((b"  X-spectrum individually or as a group intending to share the licensed facilities.tz9 Xy-ԍ We also note that, while broadband PCS is presumptively classified as a Commercial Mobile Radio Service (CMRS), parties acquiring licenses may request Private Mobile Radio  XK-Service (PMRS) classification if they meet our requirements. See CMRS Second Report and  X4-Order at  39.t Companies that value private use of the spectrum highly could win a license at auction; otherwise they could contract with a licensee to provide the services they need, or procure such services from resellers. Moreover, as many commenters argue, we believe that setting aside spectrum for private interests would not help us achieve the goals set forth for PCS, and at the same time, could detrimentally affect competitive service provision and the efficient allocation of scarce spectrum resources. Also, the extent to which additional spectrum is required for private and public safety use is being considered in a separate proceeding that addresses allocation of  XH-spectrum below 5 GHz transferred from Federal government use.!{vH49 X--ԍ See Notice of Inquiry, ET Docket No. 9432, 9 FCC Rcd 2175 (1994). This  X-proceeding addresses, inter alia, a Petition for Rule Making filed by the Coalition of Private Users of Emerging Multimedia Technologies (COPE) for the development of an "Advanced Private Communications Service," using 75 of the 200 MHz to be transferred to our jurisdiction from Federal government spectrum in compliance with the terms of the Omnibus Budget Reconciliation Act of 1993.! Accordingly, we will deny UTC's and APCO's requests that we set aside a portion of the spectrum allocated to PCS exclusively for private PCS operations.  X -C. Mobile Satellite Services (MSS) Issues  X - Z91. AMSC, Comsat, and TRW argue for preservation of the 21802200 MHz band  X -for future allocation to MSS.| r 9 X-ԍ The 1992 World Administrative Radio Conference of the International Telecommunications Union (WARC92) allocated 80 MHz of spectrum to MSS in the bands 19702010 MHz and 21602200 MHz while retaining the existing fixed and mobile allocations in those bands. Petitions from MSS interests seek removal of the PCS allocation from the 21802200 MHz band to preserve the option of allocating that band domestically to MSS. In 20 MHz (the 19701980 MHz and 21602170 MHz bands) of this spectrum, MSS is limited to Region II (generally countries in the Western Hemisphere); in the remaining 60 MHz (1980 X)!-2010 MHz and 21702200 MHz), the MSS allocation is worldwide. In the Second Report  X"-and Order, the Commission allocated 20 MHz (21802200 MHz) of this spectrum to PCS and  X"-retained the existing U.S. allocations in the remaining 60 MHz (the bands 19701990 MHz and 21602180 MHz were held in reserve for future emerging technologies, and the existing broadcast auxiliary allocation was maintained in the 19902010 MHz band). The WARC92 allocation pairs 21802200 MHz for transmission from the satellite (downlink) with 19902010 MHz for transmission from subscribers (uplink).  The petitioners oppose allocation of spectrum to PCS that has been allocated internationally to MSS, contending that such allocation is inconsistent with the"%|0*((jb" United States' support for these allocations at WARC92 and impedes the introduction of global MSS. In their comments, AMSC claims that since sharing between MSS and the Broadcast Auxiliary Service in the 19902010 MHz band may be possible, the MSS paired  X-frequencies at 21802200 MHz should not be allocated to PCS.L}9 X4-ԍ See AMSC Petition at 23, 6.L Comsat and TRW argue  X-that the Notice did not propose to consider allocation to PCS of the 21802200 MHz band and  X-that parties were therefore denied the opportunity to comment fully on this issue.h~y9 X-ԍ See Comsat Petition at 23, 1522; TRW Petition at 12.h TRW argues that we should reallocate the entire 19702010 MHz and 21602200 MHz bands to MSS to match the international allocations. To preserve at least the worldwide MSS allocations, TRW suggests that the four 10 MHz PCS blocks in the 21302150 MHz and  X1-21802200 MHz bands be relocated to the 21102150 MHz band.H1*9 X -ԍ See TRW Petition at 26.H Motorola also filed a petition stating that, while it supports allocation of sufficient spectrum for terrestrial PCS, the Commission should initiate a separate proceeding to identify and allocate additional spectrum  X -outside the PCS bands for MSS.K 9 Xx-ԍ See Motorola Petition at 3.K  X -[92. Most responding parties oppose the petitioners' requests that additional spectrum be reserved for MSS. MCI, Sprint, UTC, API and Bell Atlantic oppose reallocating any of the PCS spectrum to MSS. API and UTC state that while MSS can offer a wide range of valuable services, an adequate spectrum reserve for the development of MSS has been  Xb-established and no more should be allocated.]b9 X-ԍ See API Comments at 89; UTC Comments at 67.] MCI states that, to the extent the Commission believes there may be a future need for additional MSS spectrum, the Commission should  X4-initiate a separate proceeding to identify and allocate other bands for MSS.F4= 9 X"-ԍ See MCI Comments at 6.F UTC argues  X-that the over 100 MHz allocated for MSS is more than sufficient.# 9 X-ԍ UTC observes that 63 MHz of spectrum is allocated domestically for MSS at 15441559/1645.51660.5 MHz and 16101626.5/2483.52500 MHz and that 40 MHz can be used  X!-for MSS at 19701990/21602180 MHz. See UTC Comments at 67.# It contends that the petitioners' real concern appears to be that there should be sufficient spectrum to accommodate all potential MSS applicants rather than that the overall allocation to MSS is insufficient to meet expected demand. Sprint and Bell Atlantic support the allocation of 120"&q0*((b" MHz for broadband PCS and oppose reallocating any of that spectrum to MSS. Sprint states  X-that to do so would compromise the competitiveness and ultimate viability of PCS.k9 Xb-ԍ See Sprint Comments at 56; Bell Atlantic Comments at 810.k  X-\93. In reply comments, TRW, AMSC, Comsat, and LQSS support reallocation of the 21802200 MHz band from PCS to MSS. Comsat and LQSS agree with TRW that we could  X-substitute other spectrum for PCS to replace the 19802200 MHz band.my9 X-ԍ See Comsat Reply at 46; LQSS Reply at 14; TRW Reply at 25.m AMSC opposes expansion of the PCS proceeding to include the possible allocation of the 19902010 MHz band to MSS. It argues that the current allocation of this band to broadcast auxiliary operations is necessary, that these frequencies are already congested and that there currently is  X1-no evidence that sharing between broadcast auxiliary operations and MSS would be feasible.G1*9 X -ԍ See AMSTV Reply at 15.G  X -]94. Decision. We recognize the potential value of MSS as a service provider to rural areas that may not be economically served by PCS. We have thus given the petitions of MSS interests, including the various alternatives they suggest, careful consideration. Having been instrumental in obtaining the international MSS allocations at WARC92, we would not wish unnecessarily to reduce our flexibility to implement those allocations in the U.S. On the other hand, we must also recognize the large potential value of PCS which is a matter of record in  Xy-this proceeding.y9 X-ԍ PCIA, The Yankee Group, EMCI, and BIS Strategic Decisions all presented demand studies at the PCS Public Forum on April 11, 1994 that showed significant demand for PCS services. In addition, also at the PCS Public Forum, Dr. Jerry Hausman pointed to stock market valuations for SMR companies to support his assertion that there will be significant demand for wireless services in the future. It should be noted that these MSS bands are also allocated internationally to fixed and mobile services. PCS, as we have broadly defined it, fits within the international definition of fixed and mobile services and is thus consistent with international agreements on the use of this spectrum. Because spectrum is a limited resource, we find that to satisfy our goal of allocating sufficient spectrum for a competitive PCS service, we must allocate to PCS a portion of the spectrum internationally designated for MSS. We believe the new plan we are adopting today strikes an appropriate balance between these two services and will provide maximum benefits to U.S. consumers.  X-^95. We disagree with the assertion of Comsat and TRW that we provided insufficient notice and opportunity for comment on the possibility that we might allocate a portion of the  X|-internationally designated MSS spectrum to PCS. The PCS Notice sought comment on a wide range of allocation options for licensed PCS ranging from three to five spectrum blocks"e'0 0*((b"  X-of from 20 to 40 MHz each.9 Xy-ԍ See Notice of Proposed Rule Making and Tentative Decision, GEN Docket No. 90 Xb-314, ET Docket No. 92100, 7 FCC Rcd 5676, 5692 (1992). Several of the possible combinations of block size and number of blocks would require the use of spectrum in the bands designated internationally  X-for MSS, and at least one option (i.e., five blocks of 40 MHz each) would require virtually all  X-of that spectrum.lb9 X-ԍ See Second Report and Order at  34, 36.l We specifically called attention to the fact that some of these options would necessarily require the use of spectrum in other emerging technologies bands, and we did not exclude emerging technologies bands that had been designated internationally for  Xv-worldwide or Region II MSS.?v9 X: -ԍ Id. at  40.? Thus, contrary to petitioners' contentions, we believe that parties were given adequate notice of the possibility that our final PCS allocation could include some or even all of the internationally allocated MSS spectrum in these bands.  X -_96. Under the new band plan, the entire allocation to broadband PCS is located in the  X -18501990 MHz band. The 21802200 MHz band, which was allocated to PCS in the Second  X -Report and Order has been returned to reserve status for future allocation potentially to MSS, as requested by the MSS interests. Our new band plan, however, removes an equal amount of spectrum from potential consideration for MSS in the band 19701990 MHz band, 10 MHz of which can be used for Region II MSS service. We believe that our new band plan accommodates the future potential of MSS more fully than our original plan and therefore  Xy-addresses the concerns of a majority of the MSS industry.y9 X-ԍ See Letter from Motorola to the FCC (May 25, 1994); Letter from MSS Spectrum Coalition to the FCC (May 27, 1994).  XK-`97. By shifting the PCS allocation out of the 21802200 MHz band we have preserved the option of allocating some or all of that spectrum to MSS in the future. This preserves 50 MHz of the 60 MHz allocated worldwide and thus fits more closely with our international agreements. Twenty MHz of this worldwide MSS spectrum is paired with spectrum inside the current broadcast auxiliary band. In the future, this spectrum could potentially be reallocated for MSS use on a shared basis, if feasible, or exclusively, if suitable replacement spectrum could be found for broadcast auxiliary service. It is our intent to initiate a proceeding to investigate these additional allocation possibilities in the near future, with the purpose of accommodating MSS operations within the remaining internationally designated bands, while at the same time maintaining sufficient spectrum for broadcast auxiliary use. We also intend to pursue additional international allocations for MSS at  XN-WRC95.N^ 9 X]&-ԍ See Preparation for International Telecommunication Union World Radio  XF'-Communication Conferences, IC Docket No. 9431, FCC 9496, released May 5, 1994."N( 0*((b"Ԍ X-ԙ i IV. OWNERSHIP RULES AND CELLULAR ELIGIBILITY ă  X-a98. In the Second Report and Order, the Commission recognized that permitting cellular licensees to participate in PCS could foster rapid development of PCS by taking advantage of cellular providers' expertise, economies of scope between PCS and cellular  X-service, and existing infrastructures.d9 X-ԍ See Second Report and Order at  106.d The Commission also recognized that new entrants would foster competition and expressed concern about potential anticompetitive conduct by  X_-parties with cellular and PCS interests in the same geographic area.g_y9 X -ԍ  Id. at  101, 105.g To balance these competing interests, we permitted cellular licensees to obtain PCS licenses outside of their cellular service areas, but restricted them each to one 10 MHz PCS license within their respective cellular service areas.  X -b99. For the purposes of its PCS rules, the Commission defined an attributable cellular  X -interest as ownership of 20 or more percent of a cellular license.l *9 X-ԍ See Second Report and Order at  107108.l If an entity has attributable cellular interests in a license or licenses individually or jointly covering 10 or more percent of the population in a PCS service area, then that entity would be restricted to one 10 MHz PCS license in that area. If an entity holds interests of less than 20 percent in a cellular license, these interests are not considered attributable and the population covered by that cellular license area is not counted towards the 10 percent population threshold. If an  XK-entity holds attributable cellular interests, i.e., interests of 20 percent or more, in licenses that individually or jointly cover less than 10 percent of the population in a PCS service area, that entity may hold licenses for up to 40 MHz of PCS spectrum in that PCS service area. Entities that have attributable interests that put them over the 10 percent population overlap threshold in a PCS service area are deemed "in market" cellular entities and as such may only  X-hold 10 MHz of PCS spectrum in that PCS service area.T9 Xd-ԍ Id. at  104110.T  X-c100. The 20 percent attribution rule applies on a cumulative basis to all parties with ownership interests in cellular operations. Thus, for example, if four participants in a PCS venture each have an ownership interest of 5 percent in the same cellular licensee serving more than 10 percent of the population of a BTA, the PCS venture in which they all have an interest is deemed to have a 20 percent cellular ownership interest and is restricted to one 10  X7-MHz frequency block in that BTA.U79 Xt%-ԍ Id.at  107 and n.93.U However, if the four parties to a PCS application each own 5 percent interests in four different cellular licensees, each of which serves 10 or more percent of the BTA, together they are not restricted to one 10 MHz block because they do not" )= 0*((b" exceed the 20 percent attribution threshold as to any single cellular license. Therefore, in the latter instance, the parties are permitted to purchase a full 40 MHz PCS spectrum block.  X-d101. Twentyfour parties petitioned for reconsideration of various aspects of the cellular eligibility rules and the general attribution standard used for invoking our PCS  X-ownership limits.G9 X-ԍ Petitioners addressing eligibility and attribution issues include: Alliance, APC, Bell Atlantic, CCIMR, Columbia, Comcast, Concord, CTIA, Florida Cellular, GCI, GTE, INS, MCI, McCaw, NYNEX, OPASTCO, Pacific Telecom, PMN, PNSC, Radiofone, Sprint, Time Warner, TDS, Intelco and US West.G The petitioners address: 1) eligibility of cellular licensees; 2) the 20 percent attribution standard; 3) the 10 percent population standard; 4) postauction compliance by cellular licensees with the ownership restrictions; 5) exemptions from the eligibility restrictions for certain cellular providers; and 6) the interests that should be deemed attributable for purposes of calculating ownership and control of a PCS or cellular license.  X -A. Eligibility of Cellular Licensees for PCS Licenses  X -e102. Six parties advocate eliminating all eligibility restrictions on cellular providers. 49 X-ԍ See Bell Atlantic Petition at 4; McCaw Petition at 3; NYNEX Comments at 56; Radiofone Petition at 1215; TDS Petition at 3; USTA Comments at 5. Fourteen parties agree with the concept that there should be some restrictions on cellular  X -participation in PCS. 9 X&-ԍ See AIDE Comments at 18; Cablevision Comments at 68; CIS Comments at 1; Concord Petition at 2; CTIA Petition at 14; Florida Cellular Petition at 5; GCI Petition at 58; GTE Petition at 25; MCI Petition at 1; PCS Action Comments at 1315; PNSC Petition at 910; Sprint Petition at 910; Time Warner Reply at 68; U.S. West Petition at 16, 26.  These latter parties' positions range from agreeing with the standards  X-of the Second Report and Order to arguing for different measures of both coverage and ownership to favoring different standards entirely, but these parties all accept the idea that  Xb-there should be limitations on cellular entities holding PCS licenses.3b: 9 XM-ԍ Id.3  X4-f103. We have decided to retain restrictions on cellular participation in PCS. In making this decision, we are aware of the benefits that the cellular industry has to offer PCS,  X-as TDS and McCaw note,[ 9 X#-ԍ See TDS Petition at 3; McCaw Petition at 3.[ including capital, economies of scope, and experience and expertise in the provision of mobile communications services. For this reason, we will continue to allow cellular participation in PCS. In addition, we will make some changes in  X-the specific standards of the Second Report and Order, but we remain convinced that restrictions on inmarket cellular providers are necessary to achieve our goal of maximizing"*0*((pb" the number of new viable and vigorous competitors. In reaching this conclusion we do not assume that inmarket cellular providers will engage in illegal anticompetitive behavior. We agree with the assertion of Dan Kelley of Hatfield Associates that our goal in crafting these rules should not be to prevent anticompetitive behavior which may or may not materialize, but  X-rather, to promote competition.w9 X-ԍ See Transcripts of the PCS Public Forum at 389, (April 11, 1994). w Bell Atlantic's assertion that we should not restrict cellular participants because we have no basis for assuming that cellular providers will behave anticompetitively in the PCS market, does not address our goal of promoting vigorous new  X_-competition._y9 X -Ѝ See Bell Atlantic Petition at 4; see also Second Report and Order at  5, 108. Similarly, McCaw's arguments that existing cellular providers have minimal market penetration do not respond to our desire to provide consumers with as many  X1-competitive choices as possible.H1*9 X -ԍ See McCaw Petition at 3.H We conclude that the public interest would be best served by maximizing the number of viable new entrants in a given market.  X -g104. Finally, while some petitioners, such as Radiofone, point out that SMR and MSS  X -providers are not subject to the same eligibility restrictions as cellular providers,P 9 Xa-ԍ See Radiofone Petition at 1215.P only U.S.  X -West affirmatively requests that the eligibility restrictions of the Second Report and Order be  X -extended to widearea SMR services.M 9 X-ԍ See U.S. West Petition at 16.M US West claims that widearea SMR is competitive with PCS and cellular services and asserts that the competitive concerns that apply to cellular systems also apply to widearea SMR operations. AIDE and Time Warner agree with U.S. West that cellular eligibility limitations should also apply to widearea SMR providers,  XK-because widearea SMRs are expected to compete with cellular and PCS.bK= 9 X9-ԍ See AIDE Comments at 18; Time Warner Reply at 68.b Nextel, however,  X4-opposes the application of cellular eligibility restrictions to widearea SMR systems.H4 9 X-ԍ See Nextel Reply at 89.H It states that extending the eligibility restrictions to widearea SMR systems is beyond the scope of this proceeding and that widearea SMR operation is too new and too small to have the capability of behaving anticompetitively. We agree with Nextel that imposing eligibility restrictions is beyond the scope of this proceeding. We are, therefore, addressing in another  X-proceeding 9 X%-ԍ See Further Notice of Proposed Rule Making, GN Docket No. 93252, FCC 94100, released May 20, 1994. the eligibility of widearea SMRs and other commercial radio services to participate in PCS."+90*((b"Ԍ X-ԙB. Attribution Rules  X-h105. In the Notice of Proposed Rule Making in this proceeding, we noted our expectation that PCS and cellular licensees serving the same area will compete on price and quality of service. We therefore stated that competitive benefits might be reduced if cellular licensees are permitted to acquire PCS licenses within their service areas and proposed an outright prohibition on crossownership of PCS licenses by entities with cellular interests, except that ownership interests of less than one percent (or less than five percent for publicly  XH-traded companies) would not be considered.H9 X -ԍ See Notice of Proposed Rule Making, GEN Docket No. 90314, 7 FCC Rcd. 5676, 5703 n.46 (citing 47 C.F.R.  22.921(b)). In the Second Report and Order, we found this approach too restrictive. Although we still sought to avoid the potential for undue market power by entities with significant existing market share, we balanced that goal against  X -recognition of the expertise that cellular licensees would bring to PCS markets.^ b9 X-ԍ See Second Report and Order at  108.^ We also noted that many entities possess noncontrolling interests in cellular licensees exceeding 5 percent but, due to the noncontrolling nature of their equity interests, create little potential  X -for anticompetitive behavior.R 9 X-ԍ Id. at  107.R  X-i106. We therefore adopted a simple, brightline 20 percent crossownership attribution standard, pursuant to which entities with 20 percent or greater ownership of a cellular operator were limited to one 10 MHz BTA license for broadband PCS in the same region as their  XK-attributable cellular interests.K9 X-ԍ Id. at  107, 108; Section 24.204 of the Commission's Rules.  We did not distinguish between different types of ownership such as voting and nonvoting stock and general and limited partnership interests. We noted, however, that while a clear 20 percent ownership threshold may be more administratively efficient, a concern remained that some parties with cellular ownership interests will use our rules as an opportunity to control local cellular licensees while retaining less than 20 percent ownership. Since such occurrences would undermine our intent to limit cellular ownership in PCS, we said that we would review carefully this decision, and we explicitly put parties on notice that we would reconsider this limit if our intent to ensure competition between cellular  X-and PCS would be undermined under the ownership rules adopted in the Second Report and  X|-Order.T|u9 X#-ԍ Id. at  109110.T  XN-j107.  With respect to ownership interests in multiple PCS licensees in a single market, we adopted a 5 percent attribution threshold for purposes of the 40 MHz PCS spectrum limit and for purposes of determining cellular ownership in a PCS licensee. We stated that PCS" ,& 0*((b"  X-ownership interests of 5 percent or more will be attributed to the holder of the interest.N9 Xy-ԍ Id. at n.62, n.92.N In adopting this standard, we cited similar marketbased concerns, noting our desire to "ensure that [no entity] is able to exert undue market power through partial ownership in multiple  X-PCS licensees in a single service area."Ky9 X-ԍ Id. at  61.K The 5 percent threshold is consistent with the  X-ownership thresholds we apply to cellular and broadcast licensees.g*9 X -ԍ See 47 C.F.R.  22.902(b)(5), 73.3555, note (2).g We did not find any potential advantages possessed by any existing PCS licensees inasmuch as there are no such licensees. Similarly, we did not discuss the need to accommodate settlements among PCS licensees resulting in noncontrolling interests of between 5 and 20 percent because there are no such settlements in the PCS context. We therefore adopted this 5 percent limit for application to PCS multiple ownership, whereas it appeared too restrictive in the cellularPCS  X -crossownership context given the realities of existing historical cellular settlements.^ 9 X-ԍ See Second Report and Order at  107.^  X -k108. Twelve parties petitioned for reconsideration of the cellular ownership attribution  X -standard. 9 X-ԍ Petitioners include: Alliance, Bell Atlantic, Columbia, NYNEX, Pacific Telecom, PMN, CCIMR, Comcast, CTIA, GCI, PCS Action and Time Warner. The petitioners recommend the following alternatives: 1) raising the 20 percent level of permissible ownership in cellular licensees; 2) attribution based on control rather than ownership; 3) applying an affiliation standard like that in our telcocable crossownership rules; 4) applying an attribution standard based on the rules used to enforce our alien ownership restrictions under Section 310 of the Communications Act; and 5) applying the same attribution rules to PCS as those we apply to broadcast interests.  X4-l109. Decision. We continue to believe that the PCS and cellular ownership  X-attribution decisions we adopted in the Second Report and Order, with certain modifications, are appropriate and strike a reasonable balance between promoting vigorous competition and the advantages of allowing experienced mobile communications operators such as cellular licensees to participate as PCS licensees. We disagree with those parties, such as Bell Atlantic and GCI, that suggest the same 20 percent attribution limits should apply to  X-cellular/PCS crossownership and to PCS multiple ownership.l& 9 X#-ԍ See Bell Atlantic Petition at 4; GCI Comments at 911.l Generally, we would prefer to use the 5 percent standard for all crossownership situations, to maximize competition. We are adopting an attribution threshold of 5 percent for multiple PCS ownership purposes to prevent any party from exerting market power through substantial partial ownership in"e- 0*((1b"  X-multiple PCS licensees in the same service area.]9 Xy-ԍ See Second Report and Order at  29.] We see no countervailing reason to risk reducing competition by raising this 5 percent limit for PCS multiple ownership limits. Moreover, the 5 percent threshold is consistent with ownership thresholds we apply to cellular and broadcasting.  X-m110. Such a strict rule for PCS/cellular crossownership, however, would not recognize the history of cellular licensing. The 20 percent ownership attribution standard for cellular operators was adopted, in part, because settlements during the initial phase of cellular  XH-licensing resulted in partial and often noncontrolling interests in those licensees.FHy9 Xr -ԍ Id. at  107.F In light of this history, we believe it would be unfair and unduly restrictive to place the same 5 percent limit on cellular/PCS crossownership. For this reason, we decided to allow a 20 percent cellular ownership interest. Further, we believe that given the nature of these settlement agreements, permitting this level of ownership will not decrease the incentives for competition. Therefore we will not require divestiture to a lower level of ownership. The 20 percent standard permits many entities with partial, noncontrolling cellular interests to participate in PCS. In adopting the 20 percent standard, we recognized that participation by cellular operators in PCS would offer benefits that include promoting early development of PCS by taking advantage of cellular providers' expertise and permitting attainment of  Xb-economies of scope between PCS and cellular service and existing infrastructure.Gb*9 X=-ԍ Id. at  104. G We therefore are making an exception to our usual treatment of crossownership for purposes of cellularPCS crossownership.  X-n111. We disagree with those entities such as CTIA that argue for a higher cellular  X-ownership attribution threshold such as 35 percent.H9 X{-ԍ See CTIA Petition at iv.H PCS Action states that if our PCS attribution standard were raised to CTIA's proposed 35 percent, a consortium of NYNEX, Bell Atlantic and Bell South, each holding 33 percent of the consortium, could hold all the 30 MHz MTA licenses in the areas covered by the three parties' CGSAs. According to PCS Action, this would amount to cellular control of PCS services in the entire East Coast and  X|-South. PCS Action concludes by advocating retention of the current standard.Q|9 X"-ԍ See PCS Action Comments at 1617.Q We believe  Xe-that 20 percent is the proper standard. A higher attribution threshold (i.e., above 20 percent) for all incumbent cellular entities would tend to suppress competition, because the licensee would have economic incentives not to compete vigorously against competitors in which it holds a substantial equity interest. We conclude that these standards, with exceptions" .= 0*((b" discussed below related to certain designated entities, remain appropriate, and accordingly we affirm them.  X-o112. A number of parties, including Alliance, Bell Atlantic, Columbia, NYNEX, Pacific Telecom and PMN, request that we amend the attribution standard to base it on case X-bycase determinations of control rather than the 20 percent attribution standard.9 X-ԍ See Alliance Petition at 78; Bell Atlantic Petition at 45; Columbia Petition at 67; NYNEX Petition at 45, 1315; Pacific Telecom Petition at 5. Alliance and others contend that 20 percent is too restrictive and unnecessarily limits participation in  X_-PCS by entities that have only passive interests in cellular systems._b9 Xr -ԍ See Alliance Petition at 7; Columbia Petition at 67; CTIA Petition at 20; NYNEX Petition at 1315; Pacific Telecom Petition at 5. Bell Atlantic and  XH-NYNEX also advocate examining only legal control.mH9 X-ԍ See Bell Atlantic Petition at 5; NYNEX Petition at 45, 1315.m Bell Atlantic argues that this standard should apply to both cellular/PCS and PCS/PCS ownership. NYNEX argues that a standard based upon control would ensure that cellular carriers and local exchange carriers are able to provide needed capital and expertise to PCS. CCIMR advocates applying broadcast ownership attribution standards, arguing that these rules distinguish between ownership and  X -control and are as easy to administer as the 20 percent attribution standard.H 9 X3-ԍ See CCIMR Petition at 11.H  X -p113. Our goals here include ensuring that the holder of the PCS license has strong  X-incentives to compete against the cellular licensees in the same geographic market. ^ 9 X-ԍ See Policy Statement and Order, GEN Docket 90314, 6 FCC Rcd 6601 (1991),  X-Notice of Proposed Rule Making and Tentative Decision, GEN Docket 90314, 7 FCC Rcd  Xq-5676, 5690, 5704 (1992).  A PCS licensee that has a large equity stake (i.e., more than 20 percent) in a cellular license in the same area has less incentive to compete vigorously against its own equity interest in a cellular provider, even though it may not exercise legal control over the cellular licensee. We believe that our attribution rules provide the right balance between maximizing competition and  X-allowing cellular entities to bring their expertise to PCS.^ 9 X!-ԍ See Second Report and Order at  108.^ We therefore will not adopt a rule that would require us to find that a party had a "controlling interest" in a cellular licensee before it would be prohibited from investing in a PCS licensee in the same area. Such a rule could substantially delay the licensing of PCS and would not serve our goal of promoting vigorous competition between PCS and cellular licensees in the same area. We believe the brightline rules we are adopting will result in a faster, less burdensome licensing process. "/0*((ob"Ԍ X-q114. We also reject the suggestion by Time Warner that we prohibit all "affiliations" between cellular and PCS licensees in the same market, along the lines of our telcocable  X-crossownership rules.I9 XK-ԍ See 47 C.F.R.  63.54.I These rules, which are even more restrictive than our broadcast attribution rules, would not provide the flexibility to recognize the history of settlement agreements in cellular licensing and would not allow us to draw on the experience and expertise provided by cellular providers who have low equity stakes. They also might have the effect of restricting contracts between PCS licensees and companies financing their equipment and the buildout of their PCS systems, which could seriously impair rapid investment in and deployment of PCS systems.  X -r115. Comcast recommends that we adopt the attributable ownership standard used to apply the alien ownership restrictions of Section 310(b) of the Communications Act, along  X -with policies found in the broadcast rules.P y9 X-ԍ See Comcast Petition at 3, 1215.P Comcast notes that these alien ownership provisions recognize both voting and nonvoting stock in determining percentage of ownership. Comcast also suggests that we adopt the "multiplier" policies of our broadcast  X -ownership rules. *9 X-ԍ See 47 C.F.R.  73.3555, note (2). See also Comcast Petition at 3, 1215. Comcast claims that the use of these standards together, because they are clear and welldefined, would help a potential PCS investor decide whether to invest in PCS.  Xb-s116. We disagree that the alien ownership rules provide a clearer guide than our present attribution standards. Because the alien ownership restrictions set forth in section 310(b) of the Communications Act were created specifically to avoid an undue concentration of foreign influence in the direction of entities involved in communications, the attribution thresholds defined in that section are more complicated than the 5 percent/20 percent bright line thresholds which we have adopted here. Further, unlike our rules in the broadcast context, we will not allow use of a "multiplier" in the case of multitiered entities; the interest of the subsidiary is attributed in full to the parent. We agree, however, that both voting and nonvoting stock should be included in determining percentage of ownership of PCS and cellular entities.  Xe-t117. In determining attributable interests for the purposes of both the 20 percent cellular/PCS crossownership rule and the 5 percent PCS/PCS multiple ownership rule, we agree with some of the parties that some clarifications and modifications to our attribution rules are warranted. Our attribution rules must be simple for applicants to understand because they are essential to enforcement of our PCS spectrum cap and our PCS/cellular  X-crossownership rules. In the Second Report and Order, we stated that we would consider all equity ownership, including voting and nonvoting stock and limited partnership interests, in calculating the percentages of attributable ownership interest in a PCS or cellular licensee. We explained that we would count these interests even if they did not confer on the holder"!00*(( b" meaningful participation, because the public interest would best be served by a "brightline" test. We continue to believe that our ownership rules should be clear and easy to administer, and, to that end, we will provide further clarification about which of our ownership rules from the broadcast regime will be applied to PCS. We decline to adopt the full panoply of attribution rules that we apply in the broadcast and in the telco/cable contexts because we believe that the restrictions we are adopting will be sufficient to prevent undue influence and preserve competition.  XH-u118. We clarify that, for purposes of these ownership rules, controlling interests per se are attributable. As in other contexts, "control" means not only majority equity ownership, but includes any general partnership interest, or any means of actual working control over the operation of the licensee, in whatever manner exercised. We will rely on existing case law  X -for making control determinations where such issues arise.n 9 Xe -ԍ See e.g., Intermountain Microwave, 24 RR 983 (1963); Cellular Control Notice, 1  XN-FCC Rcd 3 (1986); News International, PLC, 97 FCC 2d 349 (1984); Loraine Journal v.  X7-FCC, 351 F.2d 824, 828 (D.C. Cir. 1965), cert. denied, 383 U.S. 967 (1966).n  X -v119. We also clarify that PCS equity investments of 5 percent or more, and cellular  X -equity investments of 20 percent or more, also are attributable. K9 X-ԍ Attribution for cellular purposes also means overlap of the CGSA with at least 10 percent of the population of the PCS market (BTA or MTA). These equity interests are attributable because they support our goals of developing a competitive PCS service and reducing the incentive for any entity to retard the capability of the new PCS licensee to compete with the cellular or any other PCS licensee in which the entity has an attributable interest. Specifically, the following equity investments will be counted: voting stock, non X4-voting stock, and limited partnership interests. 49 X-ԍ Thus, in a stock company, PCS and cellular interests of 5 or 20 percent, respectively, of the total outstanding stock as well as interests of 5 or 20 percent, respectively, of the outstanding voting stock will be attributable.  The percentage of ownership interest in a limited partnership will be based on the partner's economic interest in the partnership. Therefore, the Commission will assess the percentage of the partner's capital contribution as well as the percentage of profits and losses allocated to the partner. As noted above, general partnership interests are deemed attributable regardless of equity percentage because of the control conferred on general partners by the nature of their interest. The following  X-investments are not attributable for multiple or crossownership purposes: debt interests, including loans secured by the equipment used in the licensed system, and equity interests below the 20 percent and 5 percent thresholds. These interests are of less consequence to or independent of the entity's performance and therefore provide little incentive to delay or dilute the participation of the new PCS license in the market. In addition, consistent with other multiple and crossownership attribution standard, convertible debt instruments or"71h 0*((b" options with rights of conversion to equity interests shall not be attributed unless and until conversion is effected.  X-w120. We also clarify that the interests of a cellular or PCS licensee, or entity in control of a licensee, are attributed to the officers and directors of that entity. We remain concerned about the ability of such individuals to exert influence over companies in which they have significant managerial responsibility. Therefore, if an officer of a company wishes to invest in a PCS market, he or she may only do so if this company itself could make the same investment in compliance with our rules.   X -x121. We also will not allow an exemption for minority investors in companies controlled by a single majority shareholder. Although these rules are used in the broadcast area to exempt from attribution entities not believed to be able to exercise control over a licensee, in the context of PCS we believe that not allowing use of a "multiplier" serves our goal of maximizing competition. These rules will help ensure against undue influence, short of control, by minority stockholders and distant stockholders in parent or intermediate corporations.  Xb-y122. Through an ongoing proceeding concerning multiple ownership of commercial mobile radio service (CMRS) licensees, we will address whether we should change our rules to restrict or attribute resale, management agreements or other ownership arrangements that  X-could confer possible anticompetitive incentives on parties with multiple CMRS interests.9 X-ԍ We will issue a notice requesting comment on these issues as part of our current proceeding regarding CMRS, in GN Docket No. 93252. This proceeding will examine whether and to what extent such arrangements could be used to exert control over more spectrum than is permitted under our PCS spectrum cap (40 MHz) or  X-the proposed CMRS spectrum cap.3b9 X-ԍ Id.3  X-  X-C. Attribution Rules for Certain Designated Entities  X|-z123. Several petitioners request that we exempt from the cellular eligibility restrictions certain classes of cellular owners, such as rural telephone companies or other designated entities. INS, TDS, Intelco and OPASTCO all request us to exempt rural telephone companies from the cellular eligibility restrictions. INS, for example, argues that most rural telephone companies are merely passive investors in cellular licensees, incapable of exercising market power. It argues that PCS could be introduced in rural areas more rapidly through  X-consortia of rural telephone companies.l9 X%-ԍ See INS Petition at 12. See also TDS Petition at 36.l OPASTCO argues that Congress directed the Commission to ensure that opportunities exist for rural telephone companies, among others, to participate in spectrumbased services and that the current cellular eligibility rules exclude" 20*((b"  X-meaningful participation in PCS for many rural telephone companies.L9 Xy-ԍ See OPASTCO Petition at 18.L Similarly, Intelco contends that rural telephone companies should not be prohibited from bringing PCS to less populated areas simply because they previously invested in cellular licenses serving such  X-areas.Ly9 X-ԍ See Intelco Petition at 48.L USTA argues that all cellular eligibility limits should be eliminated on the grounds that such limits will restrict the full participation of small and midsized cellular providers,  X-who are more likely to bring full PCS service to underserved areas.G*9 Xh -ԍ See USTA Comments at 5.G   X_-{124. Most commenting parties generally favor exemptions for rural telephone companies and consortia led by designated entities. For example, CUC argues that rural telephone companies are most likely to deploy PCS in rural and remote areas and therefore  X -should be encouraged to do so.F 9 X-ԍ See CUC Comments at 3.F RCA contends that the cellular interests of rural telephone  X -companies cannot exercise market power.E 9 X@-ԍ See RCA Reply at 12.E NRTA states that the Congress intended to ensure that new technologies are available to the residents of less populated areas, and that applying the cellular eligibility restrictions to rural telephone companies that hold significant  X -but noncontrolling interests in cellular licenses is incompatible with the intent of Congress.F = 9 X-ԍ See NRTA Reply at 15.F  X-|125. Decision. We agree with INS, OPASTCO, TDS and Intelco that relaxing the  Xy-cellular eligibility restrictions is appropriate for designated entities.+y 9 X-ԍ The Commission will provide further guidance as to what constitutes a small business, rural telephone company and a business owned by a member of a minority group or a woman for purposes of 47 U.S.C.  309(j)in a forthcoming order in PP Docket No. 93253.+ We recognize that many designated entities are merely passive investors in cellular operators and, because of their size, are unlikely to influence pricing decisions. In addition, we seek to address Congress' goal of encouraging the participation of designated entities in the auction process and in the provision of spectrumbased services. We believe that designated entities which have some interests in cellular operations may be especially effective PCS competitors because of their cellular experience. This will help ensure that service is brought quickly to underserved areas and that designated entities become viable competitors. In particular, we believe that rural telephone companies and some small cellular companies, due to their existing infrastructure, are uniquely positioned rapidly to introduce PCS services into their service areas or adjacent areas. However, we are not exempting designated entities entirely"3q0*((b" from the cellular eligibility rules, because such an exemption could foreclose from competition from a new PCS entrant. To the extent that designated entities are involved in the control of cellular services, we remain concerned that there is potential for some of these parties to compete less vigorously in the nascent PCS industry. In balancing these interests, we conclude that increasing the cellular attribution threshold for designated entities from 20 percent to 40 percent, if noncontrolling, would be appropriate and would further the Congressional mandate noted above. Accordingly, we will permit a designated entity to hold a noncontrolling equity interest of up to 40 percent in a cellular licensee without being subject to the cellular PCS eligibility restrictions.  X -}126. AIDE and Comcast support exempting from the PCS eligibility restrictions those cellular entities with minority interests in consortia controlled by designated entities. AIDE states that such an exemption would serve the Congressional intent that designated entities  X -have opportunities to participate in PCS.s 9 XN-ԍ See AIDE Comments at 79; see also Comcast Petition at 1819.s Murray supports the recommendation of the FCC's Small Business Advisory Committee that only parties that form alliances with  X -designated entities be exempt from eligibility restrictions.K y9 X-ԍ See Murray Comments at 78.K Cablevision, on the other hand, opposes an exemption for cellular parties that participate with designated entities in PCS. Cablevision argues that the potential for the cellular provider to exercise undue influence over the PCS licensee is too great to be ignored given the superior knowledge and experience of  XK-the cellular provider.NK*9 X&-ԍ See Cablevision Comments at 5.N  X-~127. We have decided to increase the cellular attribution threshold from 20 percent to 40 percent for any entity proposing to invest in businesses controlled by members of minority groups and/or women. An entity may hold up to a 40 percent interest in cellular licensees before its cellular interests will be deemed attributable, but must limit its participation in a PCS licensee controlled by women or minority group members to a noncontrolling interest. We believe that this action will encourage entities with attributable cellular interests to make noncontrolling investments in businesses owned by minorities and/or women, furthering Congress' objective of ensuring the participation of these entities in the competitive bidding process by encouraging an alternative source of financing. The record indicates that the main challenge that minorities and women face when seeking to participate in telecommunications  X7-licensing is ready access to capital.]79 X#-ԍ See, e.g., Report of the FCC Small Business Advisory Committee to the Federal  X$-Communications Commission Regarding GEN Docket 90314, 8 FCC Rcd 782628 (1993);  X%-Second Report and Order, PP Docket No. 93253, FCC 9461, released April 20, 1994. ] Investments by cellular providers in these designated"74G 0*((b" entities should increase the entities chances for success in the auctions and later in service competition by providing access to capital and valuable industry experience.  X-128. We are not, as requested by Comcast and AIDE, granting a blanket exemption to inregion cellular parties with 40 percent or greater equity or control to participate in consortia that include designated entities. Such an exemption would allow a cellular entity to control a cellular license and create the potential for the entity to influence the PCS licensee to compete less vigorously. As Cablevision observes, the potential for a cellular entity to exercise undue influence over the PCS licensee, especially absent limits on the control exercised by the cellular carrier over the designated entity and its own cellular license, is too great, given the  X -superior knowledge and experience of cellular providers.N 9 X -ԍ See Cablevision Comments at 5.N Therefore, we have relaxed the cellular attribution standard to permit entities that hold up to 40 percent noncontrolling equity in cellular licensees in the same service area to make noncontrolling investments in PCS licensees controlled by woman or minorityowned businesses. Because their investment will be noncontrolling in both the PCS and cellular license, the threat to competition is diminished. We believe that this relaxed standard encourages availability of capital to PCS businesses owned by women and minorities, yet guards against the dominance of these designated entities by entities which also control a cellular license in the same service area.  XK-129. Comcast requests that the Commission exempt nonwireline cellular carriers from the cellular eligibility rules. Comcast asserts that we have focused too narrowly on wireless competition in devising the cellular eligibility rules. Comcast argues that PCS is a competitor to the wireline "local loop" service of local exchange carriers (LECs) and that one 10 MHz block is not adequate to provide service that is competitive to the wireline local loop. Comcast argues that nonwireline cellular providers have not posed competitive problems, and therefore should be allowed full participation in PCS.  X-130. Bell Atlantic opposes Comcast's request that we exempt nonwireline cellular providers from the PCS eligibility restrictions. Bell Atlantic argues that Comcast is merely  Xe-trying to improve its competitive position by this request.Pey9 X-ԍ See Bell Atlantic Comments at 4.P PMN agrees that nonwireline  XN-cellular carriers should not be entitled to special treatment.FN*9 X)!-ԍ See PMN Comments at 7.F  X - 131. We deny Comcast's request that we exempt nonwireline cellular carriers from  X -the PCS attribution rules. Comcast's arguments, which we considered in the Second Report  X-and Order, could impair successful achievement of our goal of creating the maximum number of new competitors. " 50*((b"Ԍ X-132. We believe that these important modifications will increase the efficacy of our cellular eligibility rules by guarding against the improper exercise of market power by cellular providers through controlling interests in PCS systems overlapping their cellular coverage areas. We believe that these changes will better address our concerns regarding reduced competition without unnecessarily restricting the ability of cellular providers to participate in PCS, and will provide further incentives for investment in and participation by designated entities in PCS.  XH-D. Population Standard  X1-  X -133.  When we adopted regulations restricting the eligibility of certain cellular licensees to hold PCS licenses within their cellular service areas, we noted assertions that  X -cellular operators might have unfair competitive advantages over PCS licensees.l 9 Xe -ԍ See Second Report and Order at  101, 105, 108.l On the other hand, we also noted the valuable contributions that the expertise of cellular providers could provide to the PCS industry. Finally, we noted that, because of different geographic licensing boundaries for cellular and PCS, there was a potential for excluding cellular providers from PCS markets even though the degree of overlap was minimal. We decided that such an exclusion was neither fair nor desirable for maximizing competition. In resolving these conflicting interests, the Commission adopted the 20 percent ownership attribution rule to define cellular ownership for purposes of the PCS rules. For entities at or exceeding 20 percent ownership, we applied a 10 percent population coverage overlap test to determine  X-whether the cellular licensee would be restricted to a single 10 MHz PCS license.Oy9 XG-ԍ Id. at  104, 108.O  X-134. Florida Cellular, PNSC and CTIA request higher population coverage overlap thresholds. Florida Cellular states that the coverage threshold should be raised to 20 percent  X-so that cellular carriers can compete with PCS carriers in providing mobile services.S*9 X-ԍ See Florida Cellular Petition at 5.S PNSC requests a 20 to 30 percent threshold, claiming that a 10 percent threshold is unduly harsh and  X-unjustified.J9 X -ԍ See PNSC Petition at 910.J CTIA argues for a 40 percent overlap threshold and provides a market analysis based on the merger guidelines of the Department of Justice and the Federal Trade Commission to support its claim that this degree of coverage overlap will not result in  XN-anticompetitive conduct.HN9 X$-ԍ See CTIA Petition at 20.H Radiofone also objects to the 10 percent population threshold.PN= 9 X<&-ԍ See Radiofone Petition at 1215.P "76 0*((b"Ԍ X-135. Cablevision responds that the petitioners requesting a revision of the cellular eligibility rules raise no new facts or arguments and that their petitions therefore should be denied. Cablevision states that the Commission's finding that broadband PCS and cellular  X-will compete justifies maintaining the cellular eligibility rules adopted in the Second Report  X-and Order.P9 X-ԍ See Cablevision Comments at 67.P AIDE agrees, arguing that cellular providers are unlikely to be aggressive in  X-introducing PCS services in their service area.Ky9 X-ԍ See AIDE Comments at 1820.K Similarly, CIS argues that any relaxation of the current rules would allow Regional Bell Operating Companies (RBOCs) and large LECs  X_-with cellular holdings to dominate the PCS market to the exclusion of smaller operators.H_*9 X: -ԍ See CIS Comments at 45.H PCS Action also opposes the requests for changes to the current cellular eligibility threshold,  X1-arguing that the current standards appropriately limit cellular participation in PCS.Q19 X-ԍ See PCS Action Comments at 1315.Q Finally, Time Warner finds that our cellular eligibility rules strike an appropriate balance between  X -preventing anticompetitive behavior and allowing cellular providers to participate in PCS.K 9 X@-ԍ See Time Warner Reply at 6.K  X -136. Decision. We have decided to retain the 10 percent population overlap threshold  X -adopted in the Second Report and Order. Our goal is to provide for entry into the PCS market for the maximum number of viable competitors. We remain concerned about the potential for cellular operators to exercise market power and to reduce the number of viable competitors in the PCS market. We believe that the 10 percent population overlap figure is justified and should foster robust competition and prevent competitive abuse. Balancing the potential benefits of the participation in PCS of cellular providers and the potential harms of reduced competition, we are convinced that the 10 percent coverage threshold is appropriate. With this limit we have ensured the opportunity for the emergence of the maximum number of competitors that the market will support for 90 percent of the population. Increasing this limit beyond 10 percent would create greater risk that consumers would be denied the benefit of vigorously competing service providers. We also believe that this threshold is an important means of encouraging new entrants in each area, thereby enhancing competition. On balance, we conclude that the 10 percent population coverage threshold promotes competition among licensees serving a significant percentage of the population, while providing some recognition of the overlaps that will result from the different licensing areas for PCS and cellular. In addition, as discussed below, we will allow divestiture for those entities with CGSA/PCS service area population overlaps between 10 and 20 percent. In reaffirming our 10 percent threshold, we reject proposals to adopt a national population measure or to use a multiplier formula. " 7= 0*((b"Ԍ X-137. Concord, GCI and MCI argue that coverage of the national population is a better measure of market dominance than coverage of population within a PCS service area. Concord states that the 10 percent overlap standard will preclude many small and midsize local exchange carriers with partial interests in cellular carriers from participating in PCS. It recommends an eligibility threshold of 1 percent coverage of the national population to ensure that large cellular providers are not able to dominate the market. Concord argues that this  Xv-standard would allow small and midsize LECs to participate in PCS.Jv9 X-ԍ See Concord Petition at 2.J GCI and MCI advocate barring the largest cellular providers from bidding on at least one of the 30 MHz blocks of PCS spectrum. MCI claims that consumer welfare will be served best by barring any cellular provider with more than 10 percent coverage of the nation's population from at  X -least one of the 30 MHz blocks.H y9 XD -ԍ See MCI Petition at 15.H GCI agrees, claiming that the bidding power of the largest cellular providers will allow cellular providers either to capture the nationwide PCS market or  X -at least to prevent any other licensee from doing so.H *9 X-ԍ See GCI Petition at 58.H NYNEX specifically opposes the petitions by MCI and GCI, and asserts that all limitations on cellular participation should be  X -eliminated.J 9 XJ-ԍ See NYNEX Comments at 56.J PacBell argues against the national population standard proposed by GTE and  X -Sprint, and asserts that the 10 percent rule is clear on its face.M 9 X-ԍ See PacBell Comments at 910.M  Xy-138. We do not believe that a national population test would achieve our goal of providing the maximum number of new competitors in each market. PCS is being licensed on a local and regional, not national basis. A cellular entity who operates in one city but has no presence in another city would be a new competitor in the latter city. We seek to encourage that entity's PCS participation in the second city, because of the likelihood that the experience and economics it brings from its cellular business will stimulate PCS development in the market and promote vigorous competition to other PCS licensees.  X-139. Two petitioners, GTE and Sprint, recommend a formula for determining eligibility. They suggest multiplying the percentage overlap of the population in the PCS and cellular service areas by the percentage ownership in the cellular provider, to arrive at an "effective POP" figure. Under this formula, an entity owning 25 percent of a cellular provider that covered 20 percent of the population of the PCS service area would have a 5 percent effective POP figure. GTE suggests that a effective population overlap of 20 percent  X7-would be an appropriate eligibility threshold,H7= 9 X%'-ԍ See GTE Petition at 25.H and Sprint advocates a 20 to 30 percent"78 0*((b"  X-figure.L9 Xy-ԍ See Sprint Petition at 910.L These petitioners argue that this approach would allow companies to bid for MTA licenses in service areas where they hold only insulated, minority interests in cellular providers in the service area. They also contend that this approach would enhance the opportunities of independent rural and suburban telephone companies to participate in PCS.  X-140. We do not believe that this "effective POP" attribution rule would achieve our goal of maximizing the number of new competitors. Under this rule, an entity could have a majority equity interest in cellular licenses covering 40 percent of the population in that service area and remain eligible for 40 MHz of PCS spectrum. This would result in fewer competitive choices for 40 percent of the consumers in that market. This would not achieve our goal of maximizing competitive choices for as many consumers as possible.  X -E. PostAuction Divestiture  X -141. In the Second Report and Order we limited PCS participation by inmarket cellular licensees to one 10 MHz PCS license. In its petition for reconsideration, McCaw requests that cellular carriers be permitted to bid for PCS licenses, and to bring their ownership into compliance with the restrictions if they obtain a PCS license for more than  Xb-one 10 MHz block.Jby9 X-ԍ See McCaw Petition at 56.J This suggestion was supported in replies by Ameritech, Bell Atlantic,  XK-Cablevision, Comcast, CTIA, GTE, Sprint, TDS and US West. K*9 X&-ԍ See Ameritech Reply at 12; Bell Atlantic Reply at 89; Cablevision Comments at 78; Comcast Petition at 1617; CTIA Comments at 14; GTE Comments at 89; Sprint Reply at 47; TDS Comments at 10; US West Reply at 12.   X-142. Decision. We concur with these parties that it would be reasonable to permit incumbent cellular operators, in certain defined circumstances, to divest their cellular interests in order to become PCS licensees. These operators could become eligible for 40 MHz of PCS spectrum by either reducing population overlap or ownership levels to below the standards discussed above. Either could be accomplished before the auction, but that would involve selling the cellular interests on an assumption that the operator would be the successful bidder for a 30 MHz license. "e90*((b"  X-143. We also agree with other commenters, including APC, PCS Action and Time  X-Warner,9 Xb-ԍ See APC Reply at 1011; PCS Action Comments at 1516; Time Warner Reply at 68. that allowing unlimited divestiture of the cellular interest after the auction raises  X-concerns that abuses could occur during or after the bidding process.b9 X-ԍ See Letter from APC to the FCC at 2 (May 31, 1994); Letter from PCS Action to the FCC at 2 (May 27, 1994). If afforded an unlimited opportunity to divest, cellular operators with significant areas of overlap could have incentives to use the bidding process to forestall licensing of new competitors in the market, because the cellular operator would be in control of both a cellular system and one of the three or four possible 30 MHz broadband PCS licenses. There are instances, however, in which such abuses are unlikely to occur. A cellular operator with less than 20 percent population coverage in the PCS service areas would have little incentive to risk incurring penalties for abusing the bidding process when PCS offers greater potential to serve the entire MTA or BTA. These cellular operators have more to gain by broadening their customer base by offering competitive PCS services in place of their overlapping cellular interests in excess of 10 percent than they do by abusing the bidding process to forestall competition. Operators with population overlaps in excess of 20 percent have increasingly greater incentives not to start competitive PCS businesses.  X-144. We conclude that it is appropriate to allow cellular operators to divest themselves of attributable cellular interests that do not comply with the cellular/PCS cross ownership restriction after winning more than 10 MHz of PCS spectrum in the PCS auctions, provided that the divestiture occurs within the short time frame we set forth below. However, because a cellular operator with significant overlaps may have incentives to delay the rapid introduction of PCS service, we will permit cellular divestiture only for cellular operators that serve less than 20 percent of the PCS service area. If the overlap consists of several cellular licenses, the incumbent may sell some of the licenses and keep others if the result is in compliance with the attribution and population overlap thresholds. This will help achieve our goals of rapid introduction of PCS service and competitive delivery because those entities with cellular operations near a PCS service area may be able to combine the operation into a single efficient operation that would benefit consumers.  Xe- 145. We have decided to allow the postauction partial sale of attributable cellular interests so that entities may come into compliance with the cellular eligibility rules. Procedurally, we will require that a PCS applicant that meets the criteria for postauction divestiture submit with the PCS license application (shortform) a statement that, if successful in obtaining more than 10 MHz of spectrum, it will come into complete compliance with the" :0*((=b"  X-cellular/PCS crossownership restriction within 90 days of the PCS license grant.9 Xy-ԍ The Commission shortly will adopt competitive bidding rules applicable to broadband  Xb-PCS. See Second Report and Order, PP Docket No. 93253, FCC 9461, released April 20, 1994. If more than 10 MHz is obtained, the longform application for PCS licensing must be accompanied by a signed statement from the applicant that the cellular property causing the applicant to be in excess of the 10 percent population overlap, or enough equity to bring the entity into compliance with our attribution threshold, will be divested within 90 days of the PCS license grant to bring ownership interest below the permitted attributable ownership limits. If the PCS applicant is otherwise qualified, the PCS application will be granted subject to a condition that the PCS licensee come into compliance with the PCS/cellular crossownership rule within 90 days of grant.  X -146. As a condition of its PCS license, within 90 days of PCS license grant the PCS licensee must certify to the Commission that the applicant and all parties to the application have come into compliance with our PCScellular crossownership rules. If the PCS licensee fails to submit this certification within 90 days, we will invoke the condition on the PCS license, cancelling it immediately and retaining all monies tendered. In addition, we may investigate whether the certifications on divestiture are evidence of misrepresentations that call into question the party's qualification to hold its cellular license. The PCS licensee may divest the prohibited interest to an interim independent trustee if a buyer has not been secured in the required time frame as long as the applicant has no interest in or control of the trustee, and the trustee may dispose of the license as it sees fit.  X-  V. CONSTRUCTION REQUIREMENTS l  X-lU147. In the Second Report and Order, we stated our expectations that broadband PCS would be a highly competitive industry and that licensees would have the incentive to construct facilities to meet the demand for service in their licensed areas. We concluded that specific channel loading requirements are unnecessary; however, we required licensees to meet specified construction benchmarks to ensure efficient spectrum utilization and service to the public. Specifically, we required licensees to offer service to onethird of the population in their service area within five years of licensing, twothirds of the population in their service area within seven years, and 90 percent of the population within ten years. We stated that failure to meet these requirements would result in forfeiture of the license and the licensee  X -would be ineligible to regain it. K9 X$-ԍ #Xj\  P6G; XP#See Second Report and Order at  132134. ";0*((b"  X-148. Petitioners' Requests. Several petitioners request reconsideration of the construction requirements and submit a variety of alternatives. In its petition, PacBell supports the fiveyear and sevenyear service area requirements but requests that we eliminate the tenyear, 90 percent population coverage requirement, arguing that the 90 percent coverage requirement is too stringent in view of the PCS power limits. PacBell also argues that a PCS licensee should not have to forfeit its license if it does not meet the construction  Xv-requirements.sv9 X-ԍ See PacBell Petition at 5. See also UTC Petition at 6.s PCIA also opposes the 90 percent population coverage requirement and similarly argues that licensees should not have to forfeit their license if they fail to meet the  XH-construction requirements.GHy9 Xr -ԍ See PCIA Petition at 6.G Mebtel and RCA also oppose the requirements, arguing that the  X1-requirements will adversely affect designated entities.^1*9 X -ԍ See Mebtel Petition at 3; RCA Petition at 12.^ Mebtel recommends that designated entities be allowed ten years to provide service to onethird of the population of their service  X -area and fifteen years to provide service to twothirds of that population.I 9 X-ԍ See Mebtel Petition at 3.I  X -149. Some parties, including Alliance and Columbia, recommend that areas unserved for five years be relicensed to a second party in a manner similar to relicensing of cellular  X -unserved areas. 9 X-ԍ See Alliance Petition at 6; Columbia Petition at 5; Intelco Petition at 47; PCIA Petition at 6. RCA recommends a similar approach, but with a sevenyear period before  X-relicensing.H& 9 Xg-ԍ See RCA Petition at 67.H Columbia argues that the use of the "cellular fillin" model would allow the market to determine the development of PCS. Alliance and Columbia both argue that the fillin approach would be more equitable to the licensee and more administratively efficient than  XK-the current population coverage requirements.cK 9 X-ԍ See Alliance Petition at 6; Columbia Petition at 5.c Columbia also contends that standards for ascertaining the service area of a PCS system are vague and therefore the Commission's  X-license forfeiture policy will be unenforceable.K 9 XV"-ԍ See Columbia Petition at 5.K  X-150. PNSC recommends excluding all BTA blocks from the construction  X-requirements, and Southwestern Bell recommends excluding the 10 MHz BTA blocks.k99 X&-ԍ See PNSC Petition at 10; Southwestern Bell Petition at 27.k "<0*((b" PNSC recommends a construction requirement for BTA licensees of 20 percent population coverage in five years, 30 percent in seven, and 50 percent in ten years. Southwestern Bell argues that 10 MHz licensees will not be able to provide the same scope of services or realize the same economies of scale as licensees of larger spectrum blocks and recommends that nonaggregated 10 MHz licensees be required to meet only a 25 percent population coverage requirement within ten years.  X_-151. Other parties propose other modifications to the population coverage requirements. Sprint recommends permitting cellular PCS providers to count existing cellular  X1-population coverage toward the PCS requirements.J19 X -ԍ See Sprint Petition at 14.J BellSouth recommends eliminating the population coverage requirements entirely and simply requiring a licensee to build a system  X -within a fiveyear period.N y9 X--ԍ See BellSouth Petition at iii.N Motorola argues that the current construction schedule, together with the stringent penalty of forfeiture, will limit the development of pedestrian and inbuilding PCS because licensees will face many economic hurdles and pedestrian PCS would cost more to implement. Motorola requests that we adopt a flexible plan that permits licensees to specify a construction plan with which they must comply to accommodate different system configurations and different coverage situations. Motorola argues that, at a minimum, the license forfeiture policy should be tempered by providing an opportunity for the licensee to demonstrate that its service is satisfactory, regardless of the overall population  XK-coverage attained.MK*9 X&-ԍ See Motorola Petition at 56.M  X-152. Responses. A number of parties expressed support for the existing construction requirements. For example, GCI and NYNEX recommend that the Commission maintain its  X-construction requirements to ensure delivery of PCS services as quickly as possible.^9 X{-ԍ See GCI Comments at 13; NYNEX Comments at 89.^ NYNEX contends that PCS applicants can adjust their bids in the auction process to reflect the difficulties of meeting construction requirements in each market. Northern Telecom also expresses support for the Commission's construction requirements, but proposes that the definition of population served include rural residents where they work or shop, and that the  X|-Commission develop guidelines for waivers of the construction requirements.R|9 X"-ԍ See Northern Telecom Reply at 69.R On the other hand, CUC opposes overall relaxation of the construction requirements, arguing that relaxation would delay PCS implementation. It does support adoption of a waiver standard and relaxing the construction requirements in rural areas. CUC further argues that the Commission should not relax its construction requirements if the licensee has the option of partitioning its service" == 0*((b"  X-area.F9 Xy-ԍ See CUC Comments at 7.F AIDE argues that if we allow markets to be partitioned, each partitioned market  X-should be subject to independent construction requirements.Gy9 X-ԍ See AIDE Comments at 5.G PacBell opposes Sprint's suggestion that cellular carriers be permitted to include their existing coverage in meeting PCS  X-coverage requirements.J*9 X-ԍ See PacBell Comments at 8.J  X-153. MCI asserts that some relaxation of the construction requirements is necessary if  Xv-base and mobile power limits are not substantially increased.Gv9 X -ԍ See MCI Comments at 17.G US West opposes the 90 percent construction requirement, asserting that 90 percent coverage will increase the cost of PCS fourfold compared to a 67 percent population coverage requirement. It states that a stringent construction requirement is not necessary to prevent warehousing of spectrum because the spectrum will be purchased at auction. As part of its filing, US West submits an analysis of nine large western BTAs that indicates that increasing population coverage from 67 to 75 percent results in only a moderate increase in the geographic area that must be served. On the other hand, increasing population from 75 to 90 percent results in a very large  X -increase in the geographic area that must be covered.I 9 X-ԍ See US West Reply at 79.I  X-154. Decision. We believe that PCS will be a highly competitive service and that licensees will have incentives to construct facilities to meet the service demands in their licensed service areas. Further, we believe that our use of competitive bidding for PCS licensing and the restrictions on the amount of spectrum that a licensee may control in a geographic area will limit the likelihood that spectrum will be warehoused. Nevertheless, we continue to believe that minimum construction requirements are necessary to ensure that PCS service is made available to as many communities as possible and that the spectrum is used effectively. We note that the Reconciliation Act amendments require the Commission to  X-impose performance requirements.v= 9 X -ԍ See 47 U.S.C.  309(i)(4)(B), as amended by the Reconciliation Act.v While we agree with GCI, NYNEX, and others that construction requirements are needed to ensure service in a timely fashion, we also agree that relaxation of the requirements is desirable to ensure an economical deployment of the service  X-to promote opportunities for PCS "niche" services, and to facilitate a competitive market.^ 9 X2%-ԍ See GCI Comments at 13; NYNEX Comments at 89.^ "|> 0*((nb"Ԍ X-155. Accordingly, we are amending the construction requirements as follows. All 30 MHz broadband PCS licensees will be required to construct facilities that provide coverage to onethird of the population of their service area within five years of initial license grant and to twothirds of the population of their service area within ten years. We will require the 10 MHz licensees to meet a single construction requirement of providing coverage to onefourth of the population of their service area within five years; or alternatively, they may submit an acceptable showing to the Commission demonstrating that they are providing substantial service. We recognize that these requirements are less than the requirement for narrowband PCS licensees, but we believe this difference is appropriate given the higher expected  X1-construction costs involved for broadband PCS.;19 X -ԍ The construction requirements for narrowband PCS are set forth in Memorandum  X -Opinion and Order, GEN Docket No. 90314 and ET Docket No. 92100, 9 FCC Rcd 1309,  X| -13131314,  2734 (1994), recon. pending.; Moreover, since licensees must purchase their licenses, they will have added economic incentives to construct their systems as rapidly as possible and introduce service to a significant percentage of the population. In this regard, we also believe that these relaxed construction requirements may increase the viability and value of some broadband licenses, especially those in less densely populated service areas. Finally, since most areas are already served by cellular and SMR providers, we believe it unnecessary to require PCS licensees to provide identical or similar services to areas where it is uneconomic to do so. With regard to the 10 MHz licensees, we believe that the reduced construction requirement will make these licenses more attractive to applicants intending to provide residential, cuttingedge niche services or services to business and educational campuses where the population may be small except during business or school hours.  X-156. At the fiveyear benchmark we will require all licensees, and again at the 10year benchmark for 30 MHz licensees, to file a map and other supporting documentation showing compliance with the construction requirements. Licensees failing to meet the population coverage requirements described above will be subject to the license forfeiture  X-penalties adopted in the Second Report and Order.lK9 X-ԍ See Second Report and Order at  133134.l We recognize that even with these requirements, factors such as incumbent microwave operation or sparse population density in some instances could make compliance difficult. In instances where the circumstances are unique and the public interest would be served, the Commission will consider waiving the  Xe-requirements on a casebycase basis.le9 X"-ԍ See WAIT Radio v. FCC, 418 F.2d 1153 (D.C. Cir. 1969).l These revised construction requirements will ensure efficient spectrum utilization and promote significant nationwide coverage without imposing substantial cost penalties on licensees that serve less densely populated areas. In this regard,"7?0*((b" we believe that these changes generally address the concerns of those parties that suggested  X-lowering the construction requirements for designated entities or for BTA service areas.q9 Xb-ԍ We will also allow the licensee to use, if they choose to do so, the 2000 census to determine the 10year construction requirement, rather than the 1990 census specified in the  X4-Second Report and Order. This change ensures that licensees will not be required to meet benchmarks based on obsolete data.q  X-157. We also recognize the desirability of encouraging more than one provider to serve a diverse geographic area, and note that resale of a licensee's geographic area to other entities, subject to the licensee's control, is not prohibited by our rules. Accordingly, we recognize that licensees may resell spectrum, and believe that this will facilitate the deployment of PCS. Whether or not the licensee enters into resale arrangements, it will be responsible for insuring that the coverage requirement and all the other requirements of our rules are met. The reseller will not be a separate licensee, but rather, will operate subject to the control of the licensee. We believe that resale will encourage service provision, particularly to rural areas, and allow smaller, predominantly rural companies to participate in PCS. We intend to examine in another proceeding whether resale arrangements confer  X -attributable interests on the reseller. See Section IV, supra.  X -158. In summary, our relaxed construction requirements will foster provision of PCS services and will promote diversity in their provision. Permitting licensees to resell service subareas, subject to the licensee's control, will permit smaller, rural companies to provide PCS without participating in the competitive bidding process. Finally, we intend to monitor closely the development of PCS in rural and other underserved areas and, if necessary, will readdress these construction requirements to ensure that our goals for wide area service are met.  X- e VI. TECHNICAL STANDARDS ĐlU  X-A. Roaming and Interoperability Standards  X|-159. In the Second Report and Order, the Commission provided maximum flexibility in technical standards to allow PCS to develop in the most rapid, economically feasible and diverse manner. Specific technical standards were prescribed only to the extent necessary to avoid harmful interference. The Commission recognized that several industry technical and standards groups were addressing matters related to PCS technical standards. It encouraged those groups to consider ways of ensuring that PCS users, service providers, and equipment manufacturers could incorporate roaming, interoperability and other important features in the most efficient and least costly manner, noting that PCS will be more useful to the extent that users are not limited by geography or by their ability to use their equipment with different systems. "!@40*(( b"Ԍ X-ԙ160. Petitioners' Requests. NCS, Motorola, and TIA request that we reconsider our  X-decision not to adopt PCS interoperability requirements.9 Xb-ԍ Texas Emergency also requests that we adopt a uniform standard for enhanced emergency 911 services. These matters are addressed in Section VI.E. NCS requests that we adopt standards to ensure interoperability and nationwide roaming. It argues that such standards are  X-needed for national security and emergency preparedness purposes.Fb9 X-ԍ See NCS Petition at 2.F Motorola and TIA recommend that we require all equipment used by licensed PCS operators to meet interoperability standards developed by a standards body accredited by the American National  Xv-Standards Institute (ANSI).Kv9 X: -ԍ See Motorola Petition at 3.K Motorola argues that interoperability standards will promote international acceptance of U.S. PCS technology and encourage competition between PCS licensees, since consumers could use the same equipment regardless of the licensee to which they subscribe. TIA states that technical standards are needed to ensure that PCS services are  X -provided at the most competitive prices.F 9 X-ԍ See TIA Petition at 3.F  X -161. Responses. Most responding parties oppose the petitioners' requests that we adopt PCS technical standards. For example, APC, GTE and Northern Telecom express concern that the development of ANSIapproved technical standards would delay the  X -implementation of PCS. u9 X-ԍ See APC Comments at 1517; GTE Comments at 1314; Northern Telecom Comments at 69. MCI and Nextel argue that mandatory standards would inhibit technical advances that would enable licensees to deliver a broad range of services to the  Xy-public.dy 9 X9-ԍ See MCI Comments at 2122; Nextel Comments at 1516.d  XK-162. Decision. We continue to believe that a flexible approach, applying only those  X4-standards necessary to prevent interference, is appropriate. As indicated in the Second Report  X-and Order, this will allow PCS to develop in the most rapid, economically feasible and  X-diverse manner.l 9 Xw"-ԍ See Second Report and Order at  135138.l We agree with NCS and others that interoperability for PCS is an important and beneficial goal. We believe, however, that acceptable interoperability is likely to emerge between PCS licenses in a timely manner without our intervention. Our decisions to provide for large regional MTA licenses, to move all PCS licenses to the lower band, and to permit further aggregation of spectrum blocks across geographic regions all foster wide"Aq0*((b"ԫarea roaming and interoperability. In addition, competitive bidding for PCS licenses will facilitate the development of regional or nationwide systems.  X-163. We also are aware that the industry is now working aggressively to complete several voluntary interoperability standards for PCS in a timely manner. We strongly support these efforts and continue to encourage the industry's work in this area. The availability of interoperability standards will deliver important benefits to consumers and help achieve our objectives of universality, competitive delivery of PCS, that includes the ability of consumers to switch between PCS systems at low cost, and competitive markets for PCS equipment.  X -164. Interoperability, not only nationwide on one block but also between PCS spectrum blocks, should be in the business interest of all PCS providers. Such broad interoperability will increase the economies of scale in manufacturing PCS equipment such as handsets, will made consumers more likely to subscribe to PCS because they can easily move from carrier to carrier without having to purchase new handsets, and will make it easier for PCS licensees to aggregate blocks of PCS spectrum up to 40 MHz and to create widearea or national PCS systems. For these reasons, we believe that it is in the public interest for the industry eventually to achieve compatible interoperability standards for all PCS spectrum blocks. Nevertheless, we understand that the industry is not yet ready to arrive at any standard. In addition, we do not want to discourage innovation in designing PCS services. Therefore, at this time we are not mandating that the industry arrive at a single interoperability standard across all PCS spectrum blocks.  X-165. We intend to monitor the industry's progress in developing and implementing  X-PCS technical standards.9 XQ-ԍ We will be conducting a comprehensive review of the CMRS market on an annual  X:-basis. See CMRS Second Report and Order . In that context we may review PCS interoperability and standardization issues. In particular, we hope, that some of the standards proposed for PCS will be adopted or near completion at the time of the broadband PCS auction. If we find that the development of PCS technology is not proceeding in a manner that will accommodate roaming and interoperability, we may revisit this issue and consider what actions the Commission may take to facilitate the more rapid development of appropriate standards. Finally, to facilitate international acceptance of U.S. PCS technology, we will be receptive to requests seeking our endorsement of completed ANSI standards, provided that such endorsement does not limit the flexibility of PCS licensees to select standards and technologies best suited to their needs.  X-B. PCS Power Limits  X -166. In the Second Report and Order, the Commission established a maximum e.i.r.p. of 100 watts and a maximum antenna height above average terrain (HAAT) of 300 meters for"!BK0*(( b"  X-PCS base stations.9 Xy-ԍ See Section 24.231 of the Commission's Rules. Antenna heights up to 2000 meters are permitted with a corresponding reduction in power. The Commission recognized that most PCS experimental systems operated at a maximum power of 10watts e.i.r.p., but adopted a limit of 100watts e.i.r.p. for base stations to permit additional flexibility in the design of PCS systems. It also specified a maximum power limit of 2 watts e.i.r.p. for mobile units.  X-167. Petitioners' Requests. Eleven parties filed petitions for reconsideration requesting increases in the PCS power limits. APC, Ameritech, MCI, Motorola, Northern Telecom, PacBell, PacTel, PCIA, Sprint, Time Warner and US West argue that higherpowered PCS base stations should be permitted. The majority of these petitioners request that  X1-the power limit of a PCS base station be increased to 1640 watts e.i.r.p._1b9 XD -ԍ Many of the petitioners request the power be increased to 1000 watts e.r.p., which is equivalent to 1640 watts e.i.r.p. By comparison, the cellular rules permit the power of a base  X-station to be up to 500 watts e.r.p. See 47 C.F.R.  22.904. Equivalent isotropically radiated power is the product of the power supplied to the antenna and the antenna gain in a given direction relative to an isotropic antenna. Effective radiated power is the product of the power supplied to the antenna and its gain relative to a halfwave dipole in a given direction.  X-See 47 C.F.R.  2.1. These parties state that permitting higher power will allow PCS providers to use large cells and deploy advanced technologies, take advantage of high gain antenna technology, more effectively compete with cellular, and better cover rural areas. Time Warner and PacBell recommend that no limit be placed on power and argue that the 100 watt limit will not allow economic deployment of  X -PCS.g 9 X-ԍ See Time Warner Petition at 13; PacBell Petition at 13.g  X-168. In requesting an increase in the power limit, PacBell and Northern Telecom indicate that most base stations would actually operate using low power transmitters coupled  Xb-with high gain, directional antenna systems that boost the radiated signal levels.jb: 9 XM-ԍ See PacBell Petition at 3; Northern Telecom Petition at 5.j Ameritech, MCI, Sprint, US West and others also support the use of highgain antenna technology. They submit that the same antennas are also used to receive signals from subscriber units, amplifying the level of the received signal. Thus, a low power transmitter using a high gain antenna at the base station permits the system to remain "balanced," allowing low power subscriber units to communicate with the base station over the larger coverage area provided  X-by the higher radiated base station power.  9 Xt%-ԍ See Ameritech Petition at 2; MCI Petition at 2; Sprint Petition at 15; US West Petition at 1213. The petitioners, for example APC, Northern Telecom, and PacBell, argue that human exposure to radio frequency energy (RF) can be"C 0*((b" controlled through the design of the base station and the requirements of the current regulation of biohazards can be met independent of the overall transmitter power limit set by  X-the Commission.H 9 XK-ԍ Increasing the separation between individuals and the antenna, using high gain antennas at the base station, and other techniques can be used to meet limits on human RF  X-exposure. See APC Petition at 67; Northern Telecom Petition at 5; PacBell Petition at 4.H  X-169. In their petitions, MCI and PCIA also request that we increase the maximum  X-power limit for certain types of mobile and portable units from 2 to 20watts e.i.r.p.g K9 X -ԍ A power of 20 watts e.i.r.p. is equivalent to 12 watts e.r.p.g They argue that this would permit the use of higher power for PCS vehicularmounted units and special types of nonhandheld equipment such as pay telephones installed at special events, emergency restoration telephone systems, and telephones installed in areas where landline  X1-facilities are not available or justifiable due to intermittent use.\ 19 X-ԍ See MCI Petition at 78; PCIA Petition at 8.\  X -170. Responses. The majority of the responding parties support the petitioners'  X -requests that the power limit be raised.  9 XJ-ԍ See APC Comments at 2021; Bell Atlantic Comments at 14; CUC Comments at 12; GCI Comments at 23; MCI Comments at 1819; Murray Comments at 6; Northern Telecom Comments at 36; Omnipoint Comments at 4, 13; and PacBell Comments at 13. These parties state that operation at higher power levels would decrease the number of base stations required for coverage, especially in sparsely populated areas. They further submit that the larger coverage area provided by higher power operation will also facilitate compliance with the construction requirements, thereby lowering operating costs.  Xb-171. On the other hand, AT&T indicates that the European Telecommunications Standards Institute (ETSI) recently rejected a similar proposal for increased power for the  X4-"DCS 1800" standard,40 9 X-ԍ DCS 1800, which operates in the 1800 MHz region of the spectrum, is an extension of the panEuropean digital cellular standard, "Global System for Mobile Communications" (GSM). and limited base station transmitter output power to 40 watts and mobile transmitter power to 1watt. AT&T argues that an increase in base station power limits is unnecessary without a corresponding increase in handset power limits, which leads to more expensive handsets that are heavier, have a shorter battery life, and interfere with other  X-electronics.D9 X<&-ԍ See AT&T Reply at 6.D Apple and Rolm request that we limit the e.i.r.p. of all transmitters operating on channels adjacent to the unlicensed band to no more than 2watts to limit interference to"Dd0*((b"  X-unlicensed devices.a9 Xy-ԍ See Apple Comments at 45; Rolm Reply at 2.a Nextel states that higher power limits would only encourage PCS  X-providers to duplicate cellular service rather than develop new services.Jy9 X-ԍ See Nextel Comments at 15.J TDS, UTC and others argue that any increase in the power limit should not result in increased interference  X-from PCS systems to other radio services.x*9 X-ԍ See e.g., TDS Supplemental Comments at 12; UTC Comments at 1416.x API opposes increasing the power level of  X-subscriber units absent strict coordination requirements.F9 X0 -ԍ See API Comments at 4.F  Xv- 172. Decision. We believe that increasing the maximum base station power limit to 1640 watts e.i.r.p. will improve PCS licensees' ability to configure their systems to best serve the needs of their customers and to compete with other mobile services such as cellular and widearea SMR. Higher power will allow individual PCS base stations to serve larger geographic areas more effectively. We believe that the ability to serve larger geographic areas will also promote our goal of service to less populated areas. The flexibility to use higher power will provide PCS system operators greater flexibility in determining system  X -architecture, i.e., the number of base stations deployed to serve a given area, based on service demands rather than adequate coverage considerations. This change will also facilitate the use of new technologies, such as highgain, directional antennas, as well as potential improvements to the design of subscriber products. We do not agree with Apple and Rolm that PCS operations on channels adjacent to the unlicensed spectrum should be limited to two watts. We see no reason to restrict licensed PCS operations to afford additional protection to unlicensed devices. Such a limit would be detrimental to licensed PCS services and unfairly disadvantage blocks A and C that are adjacent to the unlicensed spectrum. In addition, we note that unlicensed operations will be relatively short range and therefore can be designed to resist adjacent channel interference. Accordingly, we are amending the rules to allow PCS base stations to operate with up to 1640 watts e.i.r.p. We are also amending PCS power/HAAT coordination distance requirements to reflect this increased maximum power level.  X-173. While we believe that the power limit for base stations should be increased to 1640 watts e.i.r.p., this increase in power should not be used in such a manner that the resulting PCS system becomes unbalanced so that mobile units are unable to communicate with the base station. To ensure balanced basetomobile and mobiletobase communications, we are also limiting the transmitter output power of the base station to 100watts. By limiting the transmitter output power as well as e.i.r.p., we intend to promote the use of the high gain, directional antennas to achieve the larger coverage areas sought by the petitioners. "E0*((Zb"Ԍ X-174. We disagree with those parties requesting higher power for certain mobile and  X-portable units. A lower power output limit minimizes exposure to radio frequency energy, see  X-infra Section VIII. Further, we agree with API that increasing the power output limit for subscriber units would necessitate unreasonably stringent and unenforceable coordination requirements. Unless the location of such higher power mobile units could be strictly controlled, interference could result to fixed microwave operations and/or to other PCS systems in adjacent service areas. For these reasons, we are not increasing the maximum power limit for mobile and portable PCS transmitters as requested by MCI and PCIA.  X1-C. Protection of Fixed Microwave Operations  X -175. In the Second Report and Order, the Commission stated that a principal concern in the authorization of PCS in the 2 GHz band is that existing fixed microwave operations be  X -protected.^ 9 XN-ԍ See Second Report and Order at  141.^ It adopted the following approach for providing such protection: 1) required PCS licensees to provide the same level of protection to microwave operations that they currently provide under Part 94 of our Rules and through the use of EIA/TIA Bulletin  X-TSB10E criteria and methodology;y9 X-ԍ Cf. 47 C.F.R.  94.63. We also stated that, as under Part 94 of our rules, other acceptable industrydeveloped interference procedures, such as those developed by the EIA, the Institute of Electrical and Electronics Engineers (IEEE) and the ANSI, may be used in  Xu-performing interference analyses.  See Section 24.237(d) of the Commission's Rules.  2) specified antenna height and power limits for PCS; 3) adopted requirements for PCS licensees to coordinate with fixed microwave operators; and, 4) provided methods for calculating interference from PCS to incumbent microwave  XK-operations.kK9 X-ԍ See Second Report and Order at  141145, 163174.k  X-176. Specifically, in the Second Report and Order, we adopted carriertointerference criteria for protection of short and medium length microwave links of 25 km (about 15 miles) or less. For path lengths longer than 25 km, where reliability is more dependent on the relative noise threshold and faded signal level, we limited the level of an interfering signal to that which would cause a 1 decibel (dB) degradation in the signaltonoise ratio for analog  X-systems or which would cause an increase in biterrorrate (BER) from 10é6 to 10é5 for digital systems. Finally, we endorsed procedures for calculating interference to microwave  X|-operations.|9 X#-ԍ The procedure for calculating the level of PCS signals at microwave receivers requires that the PCS licensee compute the sum of the transmitters' powers from proposed PCS base stations and all portable and mobiles associated with the base stations at each microwave  X~&-receiver within the coordination distance of the base stations. See Second Report and Order,  Xg'-Appendix D. "|F 0*((b"Ԍ X-ԙ177. Petitioners' Requests. Ten parties request reconsideration of issues relating to  X-protection of microwave operations.9 Xb-ԍ The parties requesting reconsideration of these matters include: Alcatel, APC, API, Ameritech, Bell Atlantic, Blooston, Motorola, TIA, PCIA and UTC. Several parties request reconsideration of our decision to use Bulletin TSB10E. These parties request that the Commission adopt newly developed industry standards for protection of fixed microwave stations from PCS. Specifically, Alcatel, APC, API, Ameritech, Motorola, TIA and PCIA recommend using EIA/TIA Bulletin TSB10 X-F when it is completed, instead of the procedures in Appendix D of the Second Report and  Xv-Order.vb9 X -ԍ See Alcatel Petition at 45; APC Petition at 8; API Petition at 6; Ameritech Petition at 23; Motorola Petition at 67; TIA Petition at 611; PCIA Petition 7, 1012. TIA argues that Bulletin TSB10F, when adopted, will likely be the benchmark industry standard for determining PCSmicrowave interference. API supports using TSB10F as the only method, and states that allowing a number of calculation methods is unwise and will create needless uncertainty. Alcatel, Motorola, PCIA, and TIA also request that we clarify the rules to indicate that other appropriate interference procedures developed by the  X -industry may be used.w 9 X-ԍ See Alcatel Petition at 56; APC Petition at 11; TIA Petition at 1011.w A number of the petitioners also suggest specific changes to the  X -procedures in Appendix D of the Second Report and Order.  X -178. Motorola, TIA, and PCIA object to the use of the LongleyRice propagation  X -model that was stipulated for interference calculations at Appendix D of the Second Report  X-and Order.`9 X-ԍ See Second Report and Order at Appendix D.` TIA states that there are technical problems with the use of "urban correction factors" with the LongleyRice model, as adopted by the Commission. Instead, they recommend that an appropriate model accepted by industry be used. For example, Motorola and PCIA argue that the propagation model in TSB10F represents the efforts of all affected  X4-groups and should be adopted.t4^ 9 XC-ԍ See Motorola Petition at 7; TIA Petition at 11; PCIA Petition at 12.t  X-179. Bell Atlantic suggests that we adopt rules to eliminate "excess margin" in  X-microwave systems.! 9 X!-ԍ See Bell Atlantic Petition at 22. Microwave systems are typically designed with additional power or signal strength, called margin, to provide for attenuation of the signal due to changes in propagation or weather conditions that may occur.! It argues that such excess fade margin is not needed for reliable microwave communications and reduces the amount of available spectrum to PCS operators. Bell Atlantic also recommends that we require microwave licensees to upgrade their systems when the change will reduce interference and when the PCS operator is willing to pay for the upgrade. "G0*((ob"Ԍ X-ԙ180. UTC asserts that the current PCS rules are contradictory. It notes that the rules provide for blanket licensing of all transmitters in a service area and at the same time require an engineering analysis before filing an application for a new or modified facility. UTC suggests that Section 24.11 be clarified to state that despite receiving a blanket license, licensees will need separate applications and authorizations for each station to assure that the proposed facility will not cause interference to existing microwave stations. UTC also recommends that we adopt coordination procedures based on Part 21 of our Rules and that all  X_-coordination requests be in writing._9 X-ԍ See UTC Petition at 1617. These procedures are set forth at 47 C.F.R.  22.100. API recommends that we require formal coordination  XH-by a third party.FHy9 Xr -ԍ See API Petition at 7.F  X -181. API requests that we specify sanctions for PCS licensees that cause interference  X -to incumbent fixed microwave operations. Specifically, API recommends that we require PCS  X -entities to cease operation upon notification of interference by a microwave licensee , establish a scale of significant fines and/or forfeitures to deter violations, and make available expedited  X -procedures to ensure that complaints are resolved quickly.F  *9 X-ԍ See API Petition at 8.F Blooston argues that the PCS rules fail to protect common carrier microwave operations in the adjacent 19902110 MHz  X-band and should therefore be reworked to extend this protection.K!9 X-ԍ See Blooston Petition at 2.K  Xb-182. Responses. The responding parties generally support the use of EIA/TIA  XK-Bulletin TSB10F and recommend that we adopt this standard when it is completed."K9 X-ԍ See Alcatel Comments at 24; APC Comments at 22; API Comments at 3; AAR Comments at 34; TIANED Comments at 26; MCI Comments at 1920; TDS Supplemental Comments at 3; PacBell Comments at 34; PCIA Comments at 9. TDS states that although Appendix D may initially be used, improvements involving propagation modeling and urban correction factors need to be addressed. UTC supports giving equal consideration to either the interference standard found in Appendix D or a standard developed by a recognized authority. AAR states that it supports TIA's proposal that we adopt an industry consensus with Bulletin 10F, provided that fixed microwave licensees are provided the same level of protection as under the current standard, Bulletin 10E. PacBell states that we should adopt the OkumuraHata propagation model, arguing that this model provides more realistic estimates. PCIA concurs that the LongleyRice model should not be the only propagation model permitted if the industry can agree on the use of other models. "NH "0*((b"  X-183. Some parties support UTC and API's recommendation that we adopt prior coordination procedures, arguing that this would insure that all potential issues of interference  X-are resolved prior to licensing and deployment.s#9 XK-ԍ See AAR Comments at 4; Alcatel Comments at 3; API Comments at 34. s MCI opposes API's proposal for a formal thirdparty coordination requirement, arguing that such a requirement would create delays in  X-implementing PCS.H$y9 X-ԍ See API Petition at 24.H  Xv-184. Several commenters support Bell Atlantic's proposal to require microwave licensees to upgrade their system when it is shown that an upgrade will reduce interference and the PCS operator is willing to pay for the upgrade. API disagrees with those parties that argue that interference protection margins used for microwave systems are excessive. Alcatel does not oppose elimination of "excess margins," but asserts that neither the Commission nor an industry standards group should define what constitutes an excess margin. It states that instead, these objectives should be determined by individual users through interaction with  X -appropriate frequency coordinators and potentially affected users.I% *9 X-ԍ See Alcatel Reply at 34.I  X -185. UTC supports API's proposal for penalties to deter creation of objectionable interference to microwave users. It argues that such penalties would cause PCS proponents to use caution and would therefore help to avoid interference situations. MCI opposes API's request for sanctions on PCS licensees causing interference. It argues that API's proposal would give microwave licensees undue power to shut down PCS operations merely by notifying the licensee that it has detected objectionable interference.  X-186. Decision. In the Second Report and Order, we stated that with certain modifications, the level of protection provided under Part 94 of our rules and through application of TSB10E criteria and methodology is appropriate and will provide adequate protection to microwave users from PCS operations. We also stated that we would accept the new TSB10F procedures, when adopted by EIA/TIA, for use in demonstrating compliance  X-with our technical standards for PCS to fixed microwave interference.w&9 X -ԍ TSB10F was adopted on May 31, 1994; TIA Telecommunications Systems Bulletin  X!-Number 10F, Interference Criteria for Microwave Systems, May 1994, (TSB10F). On June 1, 1994, TIA submitted a Supplement to Petition for Reconsideration to report that TSB10F is now a standard adopted by an ANSIaccepted body.w Although many parties request that operators be required to use TSB10F exclusively instead of that set out at  Xe-Appendix D of the Second Report and Order, we cannot adopt this standard as the only acceptable method for determining interference to microwave operations from PCS operations until we have had a chance to evaluate its merits and provide it to the public for comment. "7IG &0*((b"  X-Therefore, we will maintain the procedures adopted in the Second Report and Order with  X-some modifications.'v9 Xb-ԍ While we continue to believe the procedures adopted in the Second Report and Order are accurate and reliable, parties may use other methods such as TSB10F as alternative  X4-methods. As indicated in the Second Report and Order, if both the PCS entity and the incumbent microwave entity agree to an alternative criteria for interference protection, then  X-that criterion may be used. See Second Report and Order at n.118. We continue to believe that this flexibility is desirable, in light of the varied technologies that may be used for PCS.  X-187. We concur that a prior coordination procedure is necessary to ensure that  X-potential issues of interference are resolved before deployment of PCS systems.=(9 X[ -ԍ We note that we recently adopted Part 21 coordination procedures in the Emerging Technologies proceeding for 2 GHz microwave facilities that will be relocated to higher  X--bands. See Second Report and Order, ET Docket No. 929, at  60.= We believe that the Part 21 coordination requirements are appropriate for coordination of PCS and microwave facilities. These coordination procedures are generally familiar to the parties involved and are sufficient to address potential interference problems. Accordingly, we will amend the PCS rules to include coordination procedures similar to those contained in Part 21. We note that coordination under Part 21 does not require written notification. We find no reason to require that the PCStomicrowave coordination be treated differently.  X -188. We agree with Bell Atlantic that permitting PCS entities to pay for and upgrade incumbent microwave operation, such as providing better antennas or filters that would prevent interference, would facilitate the implementation of PCS. Specifically it would provide more choices and opportunity for sharing between the two services. However, we believe that mandating such upgrades of the incumbents' facilities would be difficult to regulate. Therefore, we will allow for such upgrades when all parties agree but will not mandate them.  X4-189. We share Bell Atlantic's concern that excess fade margins in incumbent systems will inhibit the ability of PCS entities and microwave operations to share spectrum. However, we also recognize that microwave systems vary in size, complexity and degree of reliability needed. Therefore, we see no way of adopting general rules mandating an acceptable fade margin that would apply fairly in all cases. Accordingly we will not set limits on the amount of allowable fade margin in a microwave system. We suggest, however, that incumbent licensees limit the fade margin in their systems to only that necessary for reliable service so as to help facilitate the implementation of PCS.  Xe-190. Regarding Blooston's assertion that Section 24.233 does not provide protection to common carrier pointtopoint microwave radio service (PPMRS) operations in the 21102130 MHz and 21602180 MHz bands, we note that our Rules contain outofband radiation"7J (0*(({b" limits that must be met by PCS entities. We also note that under our revised allocation PCS is only allocated spectrum in the 18501990 MHz band, so there is 120 MHz of separation between PCS and PPMRS operations.  X-191. With regard to Blooston's request that we require PCS licensees to protect common carrier microwave operations in the adjacent 19902110 MHz band, we note that the  Xv-current PCS rules provide for strict outofband emission limits.^)v9 X-ԍ See Section 24.234 of the Commission's Rules. ^ We believe that these limits are sufficient to protect microwave operations in adjacent bands and, therefore, will not adopt any additional coordination or protection requirements for PCS operations.  X -192. We disagree with UTC that PCS licensees should be required to submit separate applications and obtain separate authorizations for each transmitter in their system. The information that would be submitted on these applications is unnecessary to the Commission, and its filing would be overly burdensome for PCS licensees. We believe that UTC's concerns are adequately addressed through our requirements for coordination.  X-193. Finally, we deny API's request for a rule automatically imposing penalties on PCS operations that interfere with fixed microwave users. We believe that such penalties are  Xb-unnecessary and inappropriate. As we stated in the Second Report and Order, a principal concern in the authorization of PCS in the 2 GHz band is that existing fixed microwave  X4-operations be protected.^*4y9 X^-ԍ See Second Report and Order at  141.^ If interference were to occur, we would expect the PCS licensee to take appropriate action to resolve that interference. In cases where the PCS licensee did not take appropriate action, we believe our current remedies, either forfeitures or revocation of licenses, are sufficient.  X-D. PCStoPCS Interference Standards  X-194. In the Second Report and Order, the Commission established a limit for spurious  X|-emissions appearing outside of the spectrum allocated to PCS.+v|*9 XW-ԍ Spurious emission is defined as an emission on a frequency or frequencies which are outside the necessary bandwidth and the level of which may be reduced without affecting the corresponding transmission of information. Spurious emissions include harmonic emissions, parasitic emissions, intermodulation products and frequency conversion products, but exclude  X"-outofband emissions. See 47 C.F.R.  2.1. See also Section 24.234 of the Commission's Rules. No limit was specified for spurious emissions appearing within the PCS spectrum. The Commission also adopted minimal standards for PCS transmitter frequency stability, stating only that the stability must"NKh +0*((b" be sufficient to ensure that the fundamental emission remains within the authorized frequency  X-block.],9 Xb-ԍ See Section 24.235 of the Commission's Rules.]  X-195. Petitioners' Requests. Motorola and PCIA request reconsideration of several aspects of the PCStoPCS interference standards. First, in order to reduce the potential for interference between adjacent PCS channel blocks, Motorola and PCIA request that the same limit be applied to all spurious emissions appearing outside a licensee's channel block, regardless of whether the emissions appear inside or outside of the bands allocated to PCS. Second, Motorola and PCIA ask that we specify the resolution bandwidth of the  X1-instrumentation used to measure spurious emissions.-1y9 X[ -ԍ PCIA recommends a bandwidth of 1.0 percent of the emission bandwidth. See PCIA Petition at 34; Motorola Petition at 10. Third, Motorola requests clarification as to whether the limit on spurious emissions contained in Section 24.234(a) applies only for  X -type acceptance of the transmitter or to the system as installed.. 9 X-ԍ PCIA also points out that Section 24.234(a) should be corrected to indicate that the  X-symbol "P" refers to "watts." See PCIA Petition at 4. Finally, Motorola asks that we clarify how a manufacturer must show compliance with the frequency stability requirement.  X -196. Responses. APC, Ericsson, and Northern Telecom support the requests for extension of the spurious emission limit to frequencies within the PCS spectrum. Ericsson and Northern Telecom also support the requests to specify the measurement bandwidth for  Xb-spurious emissions./b9 X-ԍ See APC Comments at 23; Ericsson Reply at 24; Northern Telecom Comments at 1011. Apple, Ericsson, and Rolm recommend that even tighter limits be imposed on spurious emissions appearing in the unlicensed PCS bands from licensed PCS transmitters. They state that such limits are needed to reduce potential interference to  X-unlicensed devices._0G 9 X-ԍ See Apple Comments at 45; Ericsson Reply at 3._  X-197. Decision. We concur that limits on spurious emissions outside of the frequency block employed by a PCS licensee are needed to reduce the potential for harmful interference to other PCS operations as well as other radio services operating on spectrum outside of the PCS bands. Accordingly, we are amending the rules to indicate that the spurious emissions limits apply to emissions appearing on all frequencies outside of the frequency block employed by a licensee. We are also clarifying that, when testing to show compliance with the spurious emission limits, the fundamental emission from the transmitter must be located as"eL 00*((b" close the edge of the adjacent band as the transmitter is designed to operate. This will ensure that the emission limits are met under all normal operating conditions.  X-198. We do not agree that the limits for spurious emissions should be further restricted when those emissions fall within the frequency bands allocated for unlicensed PCS devices. Apple, Ericsson and Rolm have not provided information indicating that additional attenuation, beyond that already provided under the rules, is necessary to prevent harmful interference.  X1-199. We agree that the standards for measuring spurious emissions need to be clarified. The measured levels of spurious emissions are dependent, to an extent, on the bandwidth of the measuring instrument. Specifying a minimum resolution bandwidth will eliminate confusion within the rules and provide repeatable measurement results. However, we disagree with PCIA's proposed bandwidth of 1.0 percent of the emission bandwidth. Limits are placed on spurious emissions in order to reduce the potential for causing harmful interference. Ideally, the resolution bandwidth of the measuring instrument should be adjusted as close as possible to the bandwidth of the receiver for which interference protection is being  Xy-provided.1y9 X-ԍ Measurements with a narrower resolution bandwidth would result in lower values for the measured spurious emissions and increase the potential for harmful interference. Near the frequency bands employed for PCS, typical receiver bandwidths can range from tens of kilohertz to several megahertz. Since the resolution bandwidth on most measuring instruments does not go above 1MHz, this is typically the bandwidth employed by  X4-the Commission when measuring spurious emissions above 1000MHz.24b9 XG-ԍ There are a few exceptions to this criteria for some of the narrowband licensed  X0-services, such as the cellular service. See 47 C.F.R.  22.907(j). We believe that the use of a resolution bandwidth of 1MHz is also appropriate for PCS equipment and are amending the rules to add this specification.  X-200. In response to Motorola's question regarding on the applicability of the spurious emissions regulations, these limits apply to both the transmitter, as tested during type acceptance, and the operating system, as installed by the licensee. We recognize that the level of the spurious emissions can be affected by the type of antenna employed by a licensee. It is for this reason, among others, that the Commission also may require a licensee to provide additional attenuation to spurious emissions, even beyond those limits stated in the regulations, when these emissions cause harmful interference to other users of the RF spectrum. We are further clarifying the rules to note that additional attenuation can be required under such circumstances. "M20*((b"  X-201. The measurement procedures for testing frequency stability are already specified  X-in the regulations.I39 Xb-ԍ See 47 C.F.R.  2.995.I As the frequency stability standard requires only that the fundamental emission stay within the authorized frequency block, the transmitter must be tested with the fundamental emission located as close to the edge of the authorized frequency block as the transmitter is designed to operate in order to demonstrate compliance under all normal operating conditions.  X_-E. Enhanced 911 Standards  X1-202. In its petition for reconsideration, Texas Emergency requests that we mandate a single enhanced 911 (E911) standard. It requests that a uniform standard be adopted for all wireless technologies and that PCS licensees be required to provide accurate location information about 911 callers from the outset of service. The term "enhanced 911" generally refers to a 911 emergency system that, among other features, automatically provides 911  X -operators with a caller's exact location without the caller having to provide his or her  X -location.4_ y9 X-ԍ In the existing 911 system, automatic location identification is easily accomplished because the location is known of each telephone in the wired telephone network. Location information is not so easily determined in a wireless network because the caller can be located  X-anywhere in the network's service area. In such networks, however, a caller's location can be approximated by determining which of the network's radio transmitters is communicating with the caller. In the existing cellular system such approximations typically could be accurate only to within a few square miles. No responding parties opposed this request, although several did raise concerns  X-about imposing such requirements. In the Second Report and Order, we indicated that we would address matters relating to enhanced 911 (E-911) capability in PCS, cellular, and other  Xb-mobile services in a future rule making proceeding.^5b 9 X-ԍ See Second Report and Order at  139.^ We note that the development of an E911 standard will necessitate consideration of issues affecting matters beyond PCS and therefore is more appropriately addressed in a separate proceeding. We expect to begin this proceeding shortly and will address Texas Emergency's request at that time.  X-  VII. UNLICENSED PCS ă X-llU  X-A. Spectrum Allocation  X|-203. In the Second Report and Order, the Commission allocated 40 MHz of spectrum for unlicensed PCS devices. The 19001920 MHz band was designated for asynchronous  XN-(primarily data) devices, and the 18901910 MHz and 19201930 MHz band was designated  X7-for isochronous (primarily voice) devices. The Commission concluded that this 40 MHz of"7NQ 50*((b" spectrum would be sufficient to meet the demands of both nomadic and nonnomadic data and voice applications. Further, it noted that this band plan provides both asynchronous and isochronous operations an equal share of the 19101930 MHz band, which has fewer incumbent fixed microwave facilities that must be relocated before full use of the band can be made for unlicensed PCS.  Xv-204. Petitioners' Requests. On September 13, 1993, Apple submitted an "Emergency  X_-Petition" addressing the spectrum allocated for unlicensed data PCS devices.D6 _9 X-ԍ See Apple Petition, passim. Apple's petition was filed three days before the sunshine  X -cutoff date for the filing of ex parte presentations comments in this proceeding. To allow  X -full comment and consideration of the issues raised by Apple, on October 22, 1993, the  X -Commission requested public comment on Apple's petition. In its petition, Apple requested that the more lightly encumbered 19101930 MHz band be allocated for the exclusive use of nomadic data PCS devices and certain nomadic voice devices, including consumer cordless telephones. Apple also requested that an additional 20 MHz of spectrum be allocated adjacent to the 19101930 MHz band for the use of devices that can be coordinated. It further requested that two or more additional 10 MHz bands in the 18501990 MHz band be reserved for at least five years to accommodate retuned microwave incumbents from the licensed and unlicensed PCS bands. In subsequent comments, Apple stated that certain of its initial  X-concerns were rendered moot by the Commission's decision in the Second Report and Order, and its only remaining concern was that the 1910 to 1930 MHz band be allocated for data or asynchronous devices.D Apple argues that since data PCS operations primarily will be nomadic in nature that is, the devices will be mobile in nature and their location cannot be controlled or predicted. Such operations should be allocated the more lightly loaded 1910 to 1930 MHz portion of the spectrum set aside for unlicensed devices. Apple contends that, unlike nomadic data devices, unlicensed voice devices ordinarily will operate through a base station and can be coordinated with existing microwave operations. Due to the greater number of microwave operations that must be moved, Apple states that the current allocation significantly increases the time and cost of  X -implementing nomadic data PCS.7v N9 X-ԍ Id. Apple also suggests that due to the potential for adjacent channel interference, nomadic devices may be required to observe 4 MHz guard bands. It states that this will effectively limit the 10 MHz of easily cleared spectrum available under the Commission's plan to 2 MHz. Apple states that under its plan unlicensed data PCS devices would be given the entire lightly loaded 20 MHz, and therefore would have up to 12 MHz of usable spectrum by employing two 4 MHz guard bands. Apple further argues that allocation of 1890 to 1910 MHz to isochronous voice operations would serve the interests of many voice technologies because of the desirability of contiguous spectrum. Separate petitions supporting Apple's position also were filed by Lace and SpectraLink. "KO70*((b"Ԍ X-205. Responses. Several responding parties oppose the petitioners' requests and support the current allocation scheme for unlicensed voice and data operations. For example, APC, AT&T, HP, Motorola, Northern Telecom and PacBell support the current plan and point out that providing data and voice with equal amounts of the lightly encumbered spectrum is fair and balanced. They argue that the Apple plan would unfairly penalize isochronous voice interests by allocating to them all of the heavily used microwave  Xv-spectrum.8v9 X-ԍ See APC Comments at 57; AT&T Reply at 4; HP Comments at 3; Motorola Reply at 3; Northern Telecom Comments at 34; PacBell Reply at 2. UTAM states that it is neutral on this issue, but points out that Apple's proposed allocation scheme will increase the cost of clearing the isochronous (voice) band and decrease  XH-the cost of clearing the asynchronous (data) band.K9Hb9 X[ -ԍ See UTAM Comments at 1011.K  X -206. BSA, Compaq, Ericsson, Metricom, Microsoft, Rolm and SpectraLink support the petitioners' proposed changes to the unlicensed allocation. BSA and Compaq argue that the Commission's band plan imposes initial costs for clearing the bands for data PCS that are significantly higher than those for Apple's plan. They point out that the manufacturers of devices that may be coordinated with existing facilities can more readily bear the higher costs of band clearing such costs can be absorbed incrementally using the cash flows generated by  X-early deployment.^:9 XT-ԍ See BSA Comments at 59; Compaq Comments at 5.^ Ericsson, Rolm and SpectraLink argue that the longterm spectral efficiency advantages of 20 MHz of contiguous spectrum for voice operations outweigh the  Xb-shortterm band clearing problems.x;b9 X-ԍ See Ericsson Reply at 34; Rolm Reply at 1; SpectraLink Comments at 34.x  X4-207. Decision. As noted above, we have amended the allocation and frequency plan for licensed PCS. Under this reallocation the amount of spectrum provided for unlicensed PCS devices is reduced from 40 to 20 MHz. Specifically, the 20 MHz of unlicensed PCS spectrum at 18901910 MHz is being reallocated to licensed PCS operations. Our decision to reallocate this spectrum preserves the 19101930MHz band for unlicensed devices. We note that this band is the most lightly loaded portion of the PCS spectrum and is the spectrum where most unlicensed equipment was expected to operate initially. Further, since unlicensed operations are restricted to very low power, they should be able to share or "reuse" the available spectrum very efficiently. Accordingly, we believe that this reduction will not have a major effect in the near term on devices that will be able to operate on the unlicensed PCS bands. As noted above, in the near future we will initiate a proceeding to consider allocation of additional spectrum to meet long term spectrum requirements for unlicensed PCS devices. " Pu;0*((yb"  X-208. Taking into account this reduction in the total amount of spectrum available for unlicensed operations, we find that the interests of all concerned parties would be best served by retaining the plan to provide 10 MHz at 19101920 MHz for asynchronous or data devices, and 10 MHz at 19201930 MHz for isochronous or voice devices. We believe that this approach is balanced and treats both voice and data proponents fairly and equitably. We also believe that this approach will encourage the clearing of all existing microwave users from the entire 19101930 MHz band, thereby permitting the rapid introduction of nomadic voice and data devices. Accordingly, we are amending our spectrum plan for unlicensed devices, as indicated above.  X -B. Coordination  X -209. In the Second Report and Order, the Commission designated UTAM as the coordinating body to manage the transition of spectrum from fixed microwave to unlicensed PCS. The Commission conditioned this designation on UTAM's submission and our acceptance of: 1) a funding plan that is equitable to all prospective manufacturers of unlicensed devices, and 2) a plan for band clearing that will permit the implementation of  Xy-nomadic devices, in particular, nomadic data PCS devices, as promptly as possible.]<y9 X-ԍ See Second Report and Order at  88.] We stated that UTAM would be responsible for administering the transition, including negotiating costs of relocation, ensuring that comparable facilities are provided, and resolving disputes of interference to fixed microwave from unlicensed PCS operations. Further, we required that any unlicensed PCS device or system be coordinated through UTAM before being initially deployed or subsequently relocated. We required that all applicants for FCC equipment authorization of unlicensed PCS devices, be participants in UTAM.  X-210. Petitioners' Requests. In its petition, Apple maintains that UTAM does not  X-adequately represent the interests of the unlicensed data community.H=y9 X-ԍ See Apple Petition at 3.H It contends that unless we intervene with additional guidance, UTAM is unlikely to adopt and implement a bandclearing plan that will ensure the earliest possible deployment of nomadic data devices. Apple requests that we remove the specific references to UTAM in the rules and that we state that we will designate another entity if UTAM fails to submit an acceptable funding and bandclearing plan.  X - 211. Apple also requests that we provide for conditional technical approvals of  X-unlicensed nomadic equipment (i.e., equipment that cannot be coordinated) in advance of  X-complete clearing of the spectrum.H>*9 X%-ԍ See Apple Petition at 3.H It further requests that the labeling requirements for unlicensed equipment be eliminated once the spectrum has been cleared and coordination is no" Q>0*((b"  X-longer needed.?9 Xy-ԍ Section 15.311 of the rules requires that unlicensed PCS devices, in addition to the general Part 15 labeling requirements, include a prominently located label with the statement  XK-that installation of the equipment is subject to notification and coordination with UTAM. See Section 15.311 of the Commission's Rules. UTC, in its petition, maintains that the definition of "coordinatable PCS  X-device" is too vague.@49 X-ԍ See UTC Petition at 12. Section 15.303(b) states that a coordinatable PCS device is a PCS device whose geographical area of operation is sufficiently controlled either by necessity of operation with a fixed infrastructure or by disabling mechanisms to allow adequate  X -coordination of its location relative to incumbent fixed microwave facilities. See Section 15.303(b) of the Commission's Rules. UTC also requests that the equipment labels be more specific to let users know that unlicensed devices cannot be relocated without coordination, and that a tollfree number be placed on the label so that users can contact UTAM.  X-212. In its petition, UTAM asks that we clarify whether the burden of determining  Xv-whether a device is coordinatable lies with itself or with the Commission.IAv 9 X-ԍ See UTAM Petition at 34.I UTAM notes  X_-that the rules currently appear to make UTAM responsible for such determinations.9B_: 9 XJ-ԍ Cf. Section 15.307(c) of the Commission's Rules: "An application for certification of a PCS device that is deemed by UTAM, Inc., to be noncoordinatable will not be accepted until the Commission announces that a need for coordination no longer exists."9 It states that the responsibility for determining whether a device is coordinatable should be determined through the Commission's equipment authorization program. UTAM further requests that the rule requiring that it verify the location of coordinatable PCS devices be interpreted to allow such verifications to be made through any method that adequately identifies the location of a  X -device, including the reports of licensed installers.-C 9 XZ-ԍ Section 15.307(d) requires that a coordinatable PCS device include measures to assure that it cannot be activated until its installation at an authorized location is verified by UTAM.  X,-See Section 15.307(d) of the Commission's Rules.- Ericsson, in its petition, requests that we clarify the types of showings that will be necessary to demonstrate compliance with the requirement to either prevent activation of equipment or to disable its use upon relocation  X -without prior coordination with UTAM.D @9 X"-ԍ See Ericsson Petition at 15. See Section 15.307(d),(e) of the Commission's Rules. "yRD0*((b"  X-213. AT&T, in its petition, maintains that the current requirement that the existing Part 15 test procedures be used where applicable, and supplemented by good engineering  X-practice, does not provide sufficient guidance for industry.GE9 XK-ԍ See AT&T Petition at 2.G AT&T requests that the Commission allow the ANSI C63 Committee to develop standard criteria for testing and measuring unlicensed devices.  Xv-214. Responses. AAR, Microsoft and Rolm support Apple's position regarding  X_-UTAM's role as the coordinator for unlicensed devices.pF_y9 X -ԍ See AAR Petition at 7; Microsoft Comments at 1; Rolm Reply at 2.p For example, Rolm believes we should establish measures to provide additional assurances that the interests of all nomadic device proponents, both voice and data, will be protected. Several other parties, including Motorola and Northern Telecom, support our designation of UTAM as the coordinator for  X -unlicensed operations.iG *9 X-ԍ See Motorola Reply at 2; Northern Telecom Comments at 17.i These parties point out that various UTAM members have an interest in marketing data and voice products. They also note that UTAM's membership is open to all and that UTAM has actively solicited participation from the data industry.  X -215. UTC opposes UTAM's request that the requirements regarding verification of the location of coordinatable devices be construed broadly to permit any method of verification,  Xy-including the reports of licensed installers.GHy9 X-ԍ See UTC Comments at 10.G UTC argues that only technological means included in the design of the equipment can provide adequate insurance against unauthorized deployment or relocation. Apple also opposes UTAM's request, arguing that its efforts to broaden the range of allowable disabling techniques appear to be at odds with the  X-Commission's intent to ensure against interference to incumbents.HI9 XZ-ԍ See Apple Comments at 6.H AAR supports UTC's  X-request for more specific labeling.HJ= 9 X-ԍ See AAR Comments at 78.H AAR also maintains that UTAM should be held responsible for verifying the installation or relocation of coordinatable devices at the coordinated locations.  X-216. Ericsson argues that AT&T's claims regarding problems associated with the  X-testing of unlicensed PCS devices are exaggerated.LK 9 X2%-ԍ See Ericsson Comments at 13.L Northern Telecom also opposes AT&T's request, stating that the current rules are adequate to allow products to be developed"|S K0*((nb" and deployed and that awaiting the development of new test procedures would significantly  X-delay implementation.TL9 Xb-ԍ See Northern Telecom Comments at 16.T  X-217. Decision. We continue to believe that our basic approach for regulation of unlicensed PCS devices is appropriate. Based on the record, we continue to find that UTAM is the most suitable entity to act as the coordinator for unlicensed PCS devices. We concur with those parties that indicate that UTAM is making good faith efforts to be open and to include the participation of all interested parties, including representatives of the data community. We do not believe that additional guidance or requirements are needed for UTAM at this time. With regard to Apple's specific request that we eliminate UTAM's designation in the rules, we see no merit in such an approach at this time. We will have ample opportunity to review our decision to designate UTAM as the coordinator for unlicensed devices during our review of its funding and bandclearing plans. If UTAM is found unacceptable as a result of our review process, we can amend our rules at that time to designate another entity.  X-218. With regard to Apple's request that we grant conditional equipment approvals for nomadic devices, it is our intention to consider such approvals at an appropriate future time. When spectrum is available, or soon will be available, for the operation of nomadic devices, we will issue a Public Notice announcing that we will begin accepting and processing applications for certification of nomadic devices. If we accept such applications before the spectrum is fully cleared for use by nomadic devices, the applications will be processed, but the actual grants withheld until an announcement is made that coordination is no longer required. At that time, the grants, if justified, will be immediately issued. We believe that this approach addresses Apple's principal concerns that manufacturers be able to quickly introduce new nomadic equipment.  X-219. We agree with UTC that the labels for coordinatable unlicensed PCS equipment should also indicate that any relocation of the device must also be coordinated through, and approved by, UTAM and should include a tollfree number to assist users in contacting UTAM. This additional information will not impose additional burden on equipment manufacturers and will improve compliance with the coordination requirements for unlicensed PCS devices. We do not agree with UTC that a more rigorous definition of a "coordinatable PCS device" is needed. We continue to believe that the current definition is adequate to protect existing microwave operations from interference. The current definition also provides equipment manufacturers flexibility in designing their equipment to avoid such interference.  X!-220. We understand UTAM's position that the determination of whether and to what degree an unlicensed PCS device is coordinatable may place UTAM in a position of potential conflict of interest with its own members. Nevertheless, UTAM, as the coordinator for unlicensed device use, is responsible for ensuring that such devices do not cause interference"h$TyL0*((F#b" to existing microwave operations. Accordingly, we believe it is entirely reasonable and prudent to require that UTAM make a finding with regard to the degree to which an unlicensed device can be coordinated and deployed. It is our intent that UTAM make such  X-determinations in concert with the requirements of Section 15.307(b) of the rules.M9 X4-ԍ Section 15.307(b) requires UTAM to submit an affidavit with each equipment  X-application, certifying that the applicant is a participating member of UTAM. See Section 15.307(b) of the Commission's Rules. In this regard, we also agree with UTAM that a broad interpretation of the rules for preventing interference by unlicensed devices, such as the requirement for verification that an unlicensed device is being used at an authorized location, is appropriate. This will afford UTAM latitude to develop its own policies and interpretations for the wide range of unlicensed devices that are expected to be developed. We therefore will allow UTAM broad flexibility in establishing the means it uses to fulfill its responsibility for ensuring that unlicensed devices to not interfere with existing microwave operations. Such means could include, where appropriate, the use of authorized installers to ensure that unlicensed devices do not cause interference.  X -221. Further, as part of our equipment authorization process, we will review closely the technical aspects of each unlicensed device. This review will include all technical matters related to the device's ability to be coordinated, as well as, other measures that may be imposed by UTAM on the operation of the device. This review will provide oversight to ensure that such measures developed by UTAM are sufficient to protect existing microwave from harmful interference.  X-222. We agree with Ericsson that some modification of the rules is appropriate to clarify the showings necessary to demonstrate compliance with the activation and disabling requirements of Section 15.307. Accordingly, we are amending the rules to indicate that each application for certification must contain an explanation of all measures for ensuring that the device cannot be activated until installation at its authorized location as verified by UTAM and for automatically disabling the device in the event that it is relocated outside the coordinated geographic area. Such showings shall include all procedural safeguards, such as the mandatory use of licensed technicians to install and relocate the equipment, and a complete description of all technical features controlling activation and disabling of the device. We believe that these showings, in addition with the findings required by UTAM, will be adequate to demonstrate that a device is coordinatable and can be used in a manner that will not cause interference.  X-223. We agree with Ericsson and Northern Telecom that the current test and measurement procedures are adequate and will allow authorization of equipment to commence without delay. We note that the ANSI C63 Committee has already begun work, in cooperation with WINForum, to develop specific procedures for unlicensed PCS equipment. "!UKM0*(( b" We will address specific test and measurement procedures developed by recognized national standards bodies, such as ANSI C63, at such times as they are completed.  X-C. Spectrum Etiquette  X-224. In the Second Report and Order, the Commission adopted technical operating requirements for unlicensed PCS devices. These requirements were based largely on a spectrum "etiquette" developed on a consensus basis by an association of manufacturers and other interested parties known as the WINForum. The Commission made some minor modifications to the WINForum etiquette to take into account the allocation of additional spectrum for unlicensed PCS, to improve spectrum efficiency and to address specific comments and concerns. In particular, it divided the 40 MHz of spectrum for unlicensed devices into two equal 20 MHz allocations; one for isochronous transmissions at 18901900 MHz and 19201930 MHz and one for asynchronous transmissions at 1900-1920 MHz. The Commission adopted WINForum's 1.25 MHz channelization for the 19201930 MHz band, but provided for up to 5 MHz channels in the 18901900 MHz band. The asynchronous spectrum at 19001920 MHz was divided into two 10MHz channels. Separate technical  Xy-requirements were specified for each transmission method.fNy9 X-ԍ See Sections 15.321, 15.323 of the Commission's Rules.f  XK-225. Petitioner's Requests. Several parties request modifications to the technical rules governing unlicensed operations. These parties request changes to the channelization plans for the isochronous and asynchronous bands and raise a variety of other technical concerns regarding the unlicensed spectrum etiquette.  X-226. Motorola requests that we adopt the 1.25 MHz channelization plan for all  X-isochronous spectrum.LOy9 X-ԍ See Motorola Petition at 11.L Motorola asserts that 1.25 MHz channels will help to avoid interference between systems and ensure that no one system or technology monopolizes the spectrum at a given location. Ericsson, Rockwell and Lace request that we impose no channelization on the isochronous spectrum and instead develop a spectrum occupancy  Xe-limit.Pe*9 X@ -ԍ See Ericsson Petition, Appendix I at 5; Rockwell Petition at 3; Lace Petition at 3. They argue that the existing channelization plan disadvantages wideband technologies. Ericsson and Rockwell suggest that we limit the spectrum occupancy for isochronous devices to no more than 50 percent of the available spectrum in each portion of the isochronous band. Lace suggests, as an alternative, limiting channel bandwidths to 2.5 MHz in the isochronous spectrum. Apple requests that we adopt uniform, flexible rules for channelization of all the isochronous spectrum, so as to be fair to all technologies, and  X-requests that the 10 MHz channelization of the asynchronous spectrum be eliminated.HQ9 Xg'-ԍ See Apple Petition at 7.H It"VQ0*((b" argues that this change would facilitate use of wideband signals and enable operation in the middle of the asynchronous spectrum to avoid adjacent channel interference.  X-227. AT&T, Northern Telecom, and WINForum state that the WINForum recommendations regarding the power limits were based on measurements of mean (average)  X-power, rather than the peak power specified in the rules.R9 X-ԍ See AT&T Petition, Attachment B at 6; Northern Telecom Petition at 23; WINForum Petition at 6. The rules currently specify that the peak transmit power of unlicensed PCS devices shall not exceed 100 microwatts multiplied by the squareroot of the emission  X -bandwidth in hertz. See Section 15.319(c)of the Commission's Rules. These parties argue that use of peak power measurements unfairly penalizes certain digital modulation techniques. They request that we base the power limit on mean power and impose a limit of 10 dB on the peak-to-average power ratio. PCIA and Rockwell request that the maximum 10 millisecond  X1-frame period for isochronous systems be increased from 10 to 20 milliseconds.S149 X-ԍ See PCIA Petition at 19, Rockwell Petition at 5. See Section 15.321(e) of the Commission's Rules.  X -228. Apple, Ericsson, Metricom, Rockwell, SpectraLink and WINForum request changes in the method by which devices are required to search for unused channels on which  X -to operate.T 9 XT-ԍ See Apple Petition at 5; Ericsson Petition at 2; Metricom Petition at 3, 5; Rockwell Petition at 7; SpectraLink Petition at 9. This requirement specifies that searches for time/spectrum windows must begin  X -at a particular band edge and search across the band until an unoccupied window is located.lU h 9 X-ԍ See Sections 15.321(b), 15.323(b) of the Commission's Rules.l Apple, Metricom and SpectraLink request that this requirement be deleted. Apple and SpectraLink argue that it increases the potential for adjacent channel interference between unlicensed devices and precludes the use of guard bands at the band edges. Ericsson and Rockwell request that the channel search rule be modified to permit spectrum searches to begin within a range of frequencies inside the band edge. They state that this revision will improve interoperability with the licensed service equipment. WINForum suggests that we remove the channel search rule for the isochronous spectrum. WINForum states that by mandating the same search algorithm for all unlicensed devices, the rule will increase the probability of two devices attempting to seize the open channel. Further, WINForum asserts that requiring all open channel searches to start at the same channel precludes the use of high efficiency multicell frequency reuse architectures because groups of channels can be allocated  X-to specific cells. AT&T, Apple and Ericsson request that we modify the requirement for +3  X-dB accuracy and impose a +6 dB tolerance or onesided 3 dB tolerance in measuring the"W U0*((3b"  X-power to determine whether a channel is occupied.V9 Xy-ԍ See AT&T Petition, Attachment B at 14 and 18; Apple Petition at 7; Ericsson Petition at 12. Motorola suggests we delete the requirement and simply prohibit devices from operating on a channel if the receive power of  X-signals from other transmitters is a specific level above the noise floor.hWb9 X-ԍ See Sections 15.321(c)(6),(8) of the Commission's Rules.h They state that eliminating the accuracy requirement would provide equipment manufacturers additional freedom in system design without increasing interference.  Xv-229. AT&T, Ericsson and Motorola request changes in the etiquette with regard to acknowledgements of transmissions in an isochronous system in order to prevent  XH-monopolization of the spectrum.XH9 X -ԍ See AT&T Petition, Attachment B at 11; Ericsson Petition at 14; Motorola Petition at 14. The rules currently require that an acknowledgement from a system participant must be received by the initiating transmitter within one second or the  X -transmission must cease.cY 9 Xx-ԍ See Section 15.319(c)(4) of the Commission's Rules.c AT&T suggests that we require a transmitter to repeat the channel access criteria whenever transmission temporarily ceases. Ericsson proposes requiring an acknowledgement every 10 seconds, and Motorola recommends every 30 seconds. AT&T, Northern Telecom, SpectraLink and Motorola also ask that we permit control and signaling  X -information to be transmitted for 30 seconds without acknowledgement.Z ^ 9 X-ԍ See AT&T Petition, Attachment B at 12; Northern Telecom Petition at 24; Motorola Petition at 14; SpectraLink Petition at 8. They argue that polling of a group of devices requires more than the one second currently allowed and that battery life considerations for portable devices warrant a longer time for these transmissions.  Xb-230. AT&T, Ericsson, Motorola, Northern Telecom and WINForum request that we  XK-amend the rules to specify use of the WINForum etiquette provisions for duplex operation.[K 9 X-ԍ See AT&T Petition, Attachment B at 14; Ericsson Petition at 1; Motorola Petition at 15; Northern Telecom Petition at 25. The WINForum etiquette only requires one transmitter on a paired channel to search for an unused channel before initiating operation, while the current rules require both transmitters to  X-perform a search.l\9 XI$-ԍ See Sections 15.321(c), 15.323(c) of the Commission's Rules.l These petitioners indicate that, because these devices will use fixed pairings, only one transmitter should be required to perform the search. "XC\0*((b"Ԍ X-231. Northern Telecom requests that we adopt the WINForum provision for  X-multicarrier shared antennas.T]9 Xb-ԍ See Northern Telecom Petition at 24.T The rules currently require that an unlicensed device monitor  X-the time and spectrum windows its transmission is intended to occupy.l^y9 X-ԍ See Sections 15.321(c), 15.323(c) of the Commission's Rules.l Northern Telecom indicates that when multiple systems share the same antenna, transmissions on adjacent channels may be precluded under the monitoring technique specified in the rules. It states that this occurs because systems sharing the same antenna will detect spurious emissions of other systems that are transmitting and thus not use the adjacent channels. Northern states that the WINForum etiquette accommodates use of multiple systems sharing the same antenna by allowing the listenbeforetalk operation to be performed in the intended receive time and spectrum window, rather than the transmit time and spectrum window. Northern Telecom contends that the WINForum approach would be equally effective in preventing interference as that specified in the current rules.  X -232. Ericsson and Northern Telecom state that the frequency stability requirement for  X -variations in temperature should be modified._ *9 X-ԍ See Ericsson Petition at 3; Northern Telecom Petition at 26. The rules require that the frequency stability of the carrier frequency of unlicensed PCS devices be maintained  Xk-within 10 partspermillion (ppm) over a temperature variation of 30o C to +50o C, and  XT-power supply voltage variations of 15 percent. See Sections 15.321(f), 15.323(f) of the Commission's Rules. They argue that the requirement should be  X -relaxed to +10 ppm at stabilized temperature extremes from +10o C to +40o C. Northern Telecom also requests that the voltage component of the frequency stability requirement be  Xy-relaxed to +10 percent of the primary voltage supply. Ericsson and WINForum request that  Xb-we relax the limit for spurious emissions on first adjacent channels by 10dB.c`b 9 X-ԍ See Ericsson Petition at 8; WINForum Petition at 5.c They argue that the current 40 dB attenuation requirement for these emissions is more stringent than is  X4-needed to control interference and increases equipment costs.8a40 9 X-ԍ The rules currently require that emissions between the channel edges and 1.25 MHz above or below the channel be attenuated 40 dB below the reference power level of 112  X -milliwatts. See Sections 15.321(d) and 15.323(d) of the Commission's Rules.8  X-233. Metricom proposes in their petition that we conform the etiquette with the spread  X-spectrum provisions currently in Part 15 for equipment operating in the ISM bands.{b9 XS%-ԍ See Metricom Petition at 3, Section 15.247 of the Commission's Rules.{ In their  X-May 25, 1994 ex parte filing, their proposal was modified to request only a power increase to one watt, a requirement for automatic power control, and permission to use a 200 kHz"Ydb0*((b"  X-bandwidth.nc9 Xy-ԍ See Metricom Ex parte presentation (May 25, 1994).n Metricom argues that this would promote a more competitive and cost effective data PCS service.  X-234. Responses to Petitions. In their response, WINForum and Northern Telecom support Motorola's request that we specify 1.25 MHz channelization for all the isochronous  X-spectrum.ldy9 X-ԍ See WINForum Comments at 3; Northern Telecom Comments at 12.l On the other hand, Omnipoint and Rolm support the elimination of all  Xv-channelization of the isochronous spectrum.`ev*9 XQ -ԍ See Omnipoint Comments at 7; Rolm Comments at 1.` They state that the 1.25 MHz channelization will impede certain wideband technologies. Ericsson opposes changes to the peak power measurement requirement, and claims that permitting a 10 dB peak-to-average ratio will cause  X1-increased interference between unlicensed devices.Kf19 X-ԍ See Ericsson Comments at 8.K Motorola, Northern Telecom and  X -SpectraLink oppose lengthening the frame period.g 9 XW-ԍ See Motorola Reply at 7; Northern Telecom Comments at 14; SpectraLink Comments at 2. They contend that such a change would necessitate longer call setup time.  X -235. Rolm supports deletion of the channel search requirements.Gh & 9 X-ԍ See Rolm Comments at 2.G Omnipoint supports the modification of these rules to allow spectrum searches to begin on a range of  X -frequencies as requested by Ericsson and Rockwell.Li 9 X/-ԍ See Omnipoint Comments at 9.L Ericsson, SpectraLink, and Omnipoint oppose Northern Telecom's request to reinstate the WINForum provision that allows  Xy-monitoring of receive channels for multicarrier shared antennas.jy 9 X-ԍ See Ericsson Comments at 12; SpectraLink Comments at 3; Omnipoint Comments at 11. They claim that this provision undercuts the purpose of the listenbeforetalk provisions of the etiquette, and therefore will degrade the ability of systems to share the spectrum. Motorola opposes  X4-relaxation of the requirement for attenuation of emissions on first adjacent channels.Hk4"9 X$-ԍ See Motorola Reply at 4.H It argues that because of measurement differences, the current 40 dB attenuation requirement for first adjacent channels is close to the WINForum proposal for this standard. "Zk0*((Eb"Ԍ X-236. Decisions. Our initial decision provided spectrum for both wideband and narrowband isochronous applications. We are now, however, reducing the spectrum available for isochronous devices from 20 MHz to 10 MHz. With this reduction, it is important that the remaining spectrum be used as efficiently as possible. In this regard, we agree with Motorola, Northern Telecom and others that a 1.25 MHz channelization plan will foster more efficient spectrum utilization. As indicated by those parties, such a plan will more readily prevent a single user or system from monopolizing the spectrum at a given location. We find that a plan that provides wider channels or no channelization at all could result in inefficient use of the spectrum and preclude other parties from using the spectrum. Further, we do not believe a spectrum occupancy limit, as suggested by some parties, would be practical or enforceable. We believe that a 1.25 MHz channel plan will simplify equipment design and permit better management of spectrum use. Accordingly, we are adopting such a channelization plan for the 10 MHz of isochronous spectrum. If in the future we are presented with information that shows that wider channels can be accommodated without  X -compromising spectrum efficiency or monopolizing the spectrum (i.e., through use of reduced  X -power levels for wideband systems, or establishing a spectrum efficiency standard, etc.), we may revisit this matter.  Xb-237. With regard to the asynchronous band, we note that channelization is not as critical for such transmissions, since asynchronous transmissions will be of very short duration and not occupy the spectrum continuously. Accordingly, we are eliminating the channelization requirements for the asynchronous spectrum.  X-238. We do not agree with WINForum and others that the power specification should be based on mean rather than peak power. Given that a wide variety of modulation methods will be permitted, measurement of mean power could become complex and subject to differing interpretations. This could lead to equipment design uncertainties and potential delays and complications in equipment authorization. We find that measurement of peak power is straightforward and will not unduly penalize any technology. We therefore are not altering the method specified in the rules for measuring the output power of unlicensed PCS devices. With regard to PCIA, Rockwell and Omnipoint's request to increase the frame period, we believe that a longer frame period could potentially reduce spectrum efficiency. We are also unconvinced that an increase in the frame period would improve the likelihood of compatibility with future technical standards for licensed PCS equipment. Therefore, we are not modifying the rules in this regard.  X -239. With regard to the channel search requirements, we are amending the rules to permit a device to begin its search for an unused channel at any point within a range of frequencies from a band edge, as requested by the several petitioners. This will permit manufacturers greater flexibility to use guard bands, if needed, while retaining most of the spectrum efficiency advantages gained by orderly selection of channels. We disagree with WINForum and others that the channel search rule significantly increases the potential for two devices attempting to seize the same channel at the same instant in time. Nor do we believe this requirement impedes the use of coordinated multicell systems. We also agree with the"#'[k0*((%b" petitioners that the existing requirement for accuracy in monitoring signal levels should be deleted. We find that the existing monitoring threshold requirements are sufficient to ensure that unlicensed devices do not interfere with one another.  X-240. We agree with the petitioners that a requirement for periodic acknowledgement of transmissions is necessary to ensure that a device does not monopolize the spectrum. Therefore, we are modifying the etiquette to require an transmitter to receive an acknowledgement of transmissions from a system participant every 30 seconds and to cease transmission if such acknowledgement is not received. We also will permit control and signaling information to be transmitted for 30 seconds without acknowledgement, as requested by several parties.  X -241. With regard to duplex operation, we are persuaded that some changes are appropriate. While we recognize that performing the listenbeforetalk operation at only one transmitter location may increase the potential for interference, we believe that this increase is low and is outweighed by the benefits of simpler, more cost effective equipment design. Therefore, we are incorporating WINForum's provisions for paired duplex channel operation into the rules. We are also persuaded that an exception to the listenbeforetalk provisions is appropriate for systems that employ multicarrier shared antennas. Northern Telecom's proposal to monitor the receive channel rather than the transmit channel should not significantly increase the risk of causing interference to other unlicensed PCS spectrum users and we are amending the rules to allow this approach.  X-242. We agree with Ericsson and Northern Telecom that the frequency stability requirements for unlicensed PCS devices should be relaxed. We believe that unlicensed PCS devices will generally operate under the same the range of temperature and voltage conditions  X-specified for other Part 15 devices.l9 X#-ԍ The Part 15 rules require that the operating frequency of certain unlicensed devices be  X -maintained within 0.01 percent (or 100 ppm) of the device's operating frequency over a  X-temperature range of -20o C to +50oĠC at normal supply voltage, and for variation in the  X-primary voltage of 15 percent at a temperature of +20oĠC. See e.g., Sections 15.231, 15.233 of the Commission's Rules. Accordingly, we are requiring that the operating  X-frequency of unlicensed PCS devices be maintained within +10 ppm over a temperature range  X|-of 20o C to +50o C at normal supply voltage and for variation in the primary voltage of +15  Xe-percent at 20o C. While we note that the stability requirement +10 ppm is more strict than for other Part 15 devices, we believe this is necessary to ensure the proper function of the etiquette. We are also relaxing from 40 dB to 30 dB the limit for suppression of spurious emissions in the first adjacent channels as requested by Ericsson and WINForum. This will reduce equipment costs while still providing adequate interference protection between unlicensed PCS systems. "\l0*((b"Ԍ X-243. We note that Metricom's request to conform the etiquette to match the Part 15 standards for spread spectrum devices was not addressed by other commenters in the proceeding. Further, we observe that Metricom's clarification of its petition was made well after the comment periods had closed and so other parties had little opportunity to respond. We find that Metricom's proposal is inconsistent with the sharing and spectrum efficiency goals that underlie the unlicensed PCS etiquette described by WINForum. We find that WINForum considered factors such as power levels, bandwidth and dynamic power reduction and arrived at appropriate recommendations. Their proposal runs counter to precepts which form the basis of the spectrum etiquette that received broad industry support. Accordingly, we are rejecting Metricom's request.  X -244. Many of the petitioners and responding parties suggest edits in the etiquette language to improve clarity and understanding of the etiquette concepts. Examples of these changes include: clarifying that the period of time to be monitored is the time period immediately prior to initiating a transmission; specifying the starting time for calculating compliance with the monitoring period before reaccessing the same channel for isochronous equipment; and, clarifying that the range of the monitoring period for asynchronous devices must be doubled progressively for each unsuccessful channel access. To the extent that clarifications of various provisions of the etiquette were deemed necessary, they have been incorporated in the amended rules.  X-'  VIII. RADIO FREQUENCY EXPOSURE LIMITS ă  X-245. In the Second Report and Order, the Commission required PCS licensees and equipment to comply with the standards set forth in ANSI/IEEE C95.11992, "Safety Levels with Respect to Human Exposure to Radio Frequency Electromagnetic Fields, 3 kHz to 300  X-GHz" (ANSI/IEEE guidelines).mv9 X -ԍ The Commission stated that these standards will apply to PCS operations pending  X-completion of its complete review of standards for RF exposure. See Notice of Proposed  X-Rule Making, ET Docket No. 9362, 8 FCC Rcd 2849 (1993). The Commission further indicated that any RF exposure standards adopted in the instant proceeding that do not conform with the final rules adopted later in ET Docket No. 9362 will be modified as appropriate. The Commission stated that for purposes of determining compliance with these standards, all handheld PCS equipment will be considered to operate in an "uncontrolled" environment. It also noted that the exclusions for low power devices contained in the ANSI/IEEE guidelines only apply to transmitters operating at 1500 MHz and below. Therefore, the Commission indicated that, pending an interpretation from the IEEE,"7]m0*((]b" PCS equipment must demonstrate compliance with the ANSI/IEEE guidelines for maximum  X-specific absorption rates (SAR).n_9 Xb-ԍ The Commission also indicated that it had requested a formal interpretation from the IEEE as to whether the formula for determining the power threshold for the exclusion from  X4-the standards can be extrapolated up to 2200 MHz. See Letter from Thomas P. Stanley to Andrew G. Salem, IEEE Standards Board (June 2, 1993). This provision exempts a device from the SAR testing requirements, if the device operates with power output below a certain threshold level. Extrapolating the formula for this threshold up to 2200 MHz would allow PCS transmitters to operate with about 330 milliwatts of power.  X-246. Petitioners' Requests. In its petition, PCIA requests that we clarify the rules  X-governing RF exposure from PCS equipment. It notes that the text of the Second Report and  X-Order indicates that handheld PCS devices must comply with the standards for uncontrolled environments, while Section 24.52 of the rules provides that all PCS equipment (which would include base stations as well as handheld units) will be considered to operate in an uncontrolled environment. PCIA submits that the rules should allow use of the less stringent "controlled" environment standards for base stations where appropriate.  X -247. Responses. APC agrees with PCIA that the rules should allow use of the standards for controlled environments for base stations. MCI also supports this request and states that the request to increase the base station power limit would not result in additional risk of harmful exposure to RF radiation. Northern Telecom, in reply comments, submits that, as an interim measure, manufacturers should be allowed to the extrapolate the ANSI/IEEE formula up to the 2 GHz band to determine whether their equipment meets the exclusions for low power devices. It states that due to a lack of testing facilities, a requirement for SAR testing would delay PCS implementation.  X4-248. Decision. We agree with PCIA that the guidelines for RF exposure from PCS  X- base stations should apply according to the type of environment in which the exposure takes place. We also concur with PCIA and others that there is no need to employ the uncontrolled exposure limits in those areas in the vicinity of a PCS base station where there is restricted access by the general public and exposure to the RF field is unlikely. Accordingly, we are amending the rules to include both the uncontrolled and controlled limits for PCS base stations. The definitions of "controlled" and "uncontrolled" environments specified in  X-ANSI/IEEE C95.11992 will govern which limits will apply.xo9 X3"-ԍ See ANSI/IEEE C95.11992, Section 2 (Definitions and Glossary of Terms).x  Xe-249. As noted above, we requested a formal interpretation from the IEEE as to whether the formula for determining the threshold level for the exclusion from the RF exposure standards can be extrapolated to the 2 GHz range. The IEEE radiated power exclusion applies when a 2.5 cm separation distance is maintained between the body and the" ^ o0*((\b" radiating structure. In its response to our request, IEEE stated that, while it cannot predict whether such an extension of the standard would be incorporated into the next revision of C95.1, extrapolation of the current formula to frequencies up to 2.2 GHz would be  X-conservative.p9 X4-ԍ See Letter to Thomas P. Stanley from Eleanor R. Adair, CoChairman, SC4, Standards Coordinating Committee 28, IEEE (October 11, 1993). We therefore are amending the rules to apply the ANSI/IEEE radiated power exclusions for low power devices to PCS devices. In implementing this change, however, we find that it is appropriate to provide an additional margin to ensure that devices approved for operation under the exclusion will comply with any changes to the RF exposure guidelines that may be adopted in the future. Accordingly, we will exclude PCS devices that operate with output power of 100 milliwatts or less from the SAR testing requirements. PCS devices operating at higher powers must be subjected to SAR testing to determine compliance with  X -the RF exposure guidelines.rq_ b9 X--ԍ The methodology for SAR testing is described in numerous technical publications.  X-See e.g., IEEE Recommended Practice for the Measurement of Potentially Hazardous Electromagnetic Fields RF and Microwave, IEEE C95.31991, at  4.6, 4.7 and Appendix  X-C. See also reference list in same publication. Copies of this document can be purchased from the IEEE, at telephone number (800) 678IEEE. A copy may also be inspected at the FCC's Office of Engineering and Technology, Spectrum Engineering Division, (202) 6538169.r  X -}/ IX. CONCLUSION ă  X -250. We are amending our rules as described above to ensure that the American public benefits from new mobile digital voice and data services. We believe that our rules, as amended, will foster rapid development of a competitive market that will provide consumers with access to a diverse array of highquality, lowcost PCS services and products on a widearea basis. With adoption of these amendments, our rules are finalized and we now intend to proceed expeditiously to license broadband PCS services through the competitive bidding process. "_ q0*((Tb"  X-^  X. PROCEDURAL INFORMATION ĐlU  X-251. Regulatory Flexibility Analysis. The analysis required by the Regulatory Flexibility Act of 1980, 5 U.S.C. Section 608, is contained in Appendix C.  X-252.  Ordering Clause. Accordingly, IT IS ORDERED, That Parts 2, 15, and 24 of the Commission's Rules ARE AMENDED as specified in Appendix A, effective 30 days after publication in the Federal Register; except that amendments to Sections 15.311 and 24.204(f)(1), (2), (3)(i), (3)(ii) are effective 90 days after publication in the Federal Register. This action is taken pursuant to Sections 4(i), 7(a), 302, 303(c), 303(f), 303(g), and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. Sections 154(i), 157(a), 302, 303(c), 303(f), 303(g), and 303(r). Furthermore, IT IS ORDERED, That the petitions for reconsideration ARE GRANTED, to the extent described above and DENIED in all other respects.  XK- ` ` FEDERAL COMMUNICATIONS COMMISSION ` ` William F. Caton ` ` Acting Secretary "`q0*((b"  X- Appendix A: Final Rules  X- Parts 2, 15 and 24 of Chapter I of Title 47 of the Code of Federal Regulations are amended as follows:  Xv-   PART 2 FREQUENCY ALLOCATIONS AND RADIO TREATY MATTERS; GENERAL  XH- RULES AND REGULATIONS  1. The authority citation for Part 2 is revised to read as follows:   X -  ! AUTHORITY: Sec. 4, 302, 303, and 307 of the Communications Act of 1934, as amended,  X -47 U.S.C. Sections 154, 302, 303 and 307, unless otherwise noted.   X -2. Section 2.106, the Table of Frequency Allocations, is amended as follows:  Xy- a. In the 18501990 MHz band: remove NG153 from column 5; and in column 6 replace PERSONAL COMMUNICATIONS SERVICES (99) with PERSONAL COMMUNICATIONS SERVICES (24). In the 21102150 and 21602200 MHz bands: remove US331 from column 5; and in column 6 remove PERSONAL COMMUNICATIONS SERVICES (99).  k+- 3'3'Standard'3'3Standard|rJet IIP?ga  HH #H H@;Fܩ@#   "aq0*(( b"  k#- HHht      k#- 2.106 Table of Frequency Allocations * * * * * * *  k+2-  k+- International table || United States table | FCC use designators   k+- Region 1allocation | Region 2allocation | Region 3allocation || Government | NonGovernment | | Specialuse MHz | MHz | MHz || Allocation MHz | Allocation MHz | Rule part(s) | frequencies | | || | | |  k+L - (1) | (2) | (3) || (4) | (5) | (6) | (7)  || | | |  k+x - * * * * * || 18501990 | 18501990 | | || | FIXED. | PERSONAL COMMUNICATIONS | EMERGING || | MOBILE. | SERVICES (24). | TECHNOLOGIES || | | PRIVATE OPERATIONALFIXED |  k+ - || | | MICROWAVE (94). |  k+f- || | | RADIO FREQUENCY DEVICES | || | | (15). | || | | | || | | | || | | | || | | | || | | | || | | | || | | | || | | | || | | | || | | | || | | | || | US331 | |  k+- ||  | | |   k+0-  k+-* * * * * * *"bq$K#K#hhb"  htht   k+-* * * * * * *  k+-   k+- International table || United States table | FCC use designators   k+F- Region 1allocation | Region 2allocation | Region 3allocation || Government | NonGovernment | | Specialuse MHz | MHz | MHz || Allocation MHz | Allocation MHz | Rule part(s) | frequencies | | || | | |  k+- (1) | (2) | (3) || (4) | (5) | (6) | (7)  || | | |  k+4-* * * * * || 21102200 | 21102150 | | || | FIXED. | DOMESTIC PUBLIC FIXED (21).| EMERGING || | MOBILE. | PRIVATE OPERATIONALFIXED | TECHNOLOGIES || | | MICROWAVE (94). | || | | PUBLIC MOBILE (22). | || | | | || | | | || | | | || | | | || | US111 US252 | | || | NG23 NG153 | |  k+- || | | |  || | | | || | 21502160 | | || | FIXED. | MULTIPOINT DISTRIBUTION | || | | (21). | || | | PRIVATE OPERATIONALFIXED | || | NG23 | MICROWAVE (94). |  k+- || | | |  || | | | || | 21602200 | | || | FIXED. | DOMESTIC PUBLIC FIXED | EMERGING || | MOBILE. | (21). | TECHNOLOGIES || | | | || | | | || | | PRIVATE OPERATIONALFIXED | || | | MICROWAVE (94). | || | | PUBLIC MOBILE (22). | || | | | || | | | || | | | || | | | || | | | || US111 US252 US331 | NG23 NG153 | |  k+ - || | | |  k+- * * * * * * * ": cq$K#K#hh&b"  X- '3'3Standard|rJet IIP?g3'3'Standard|rJet IIP?g(htad  ht     X` p x (#%'0*,.8135@8:fX@#e.i.r.p. (W) 5 10 20 50 100 150 200 250 300 500 1000 1500 2000 0.1 90 93 99 110 122 131 139 146 152 173 210 239 263 0.5 96 100 105 116 128 137 145 152 158 179 216 245 269 1 99 103 108 119 131 140 148 155 161 182 219 248 272 2 120 122 126 133 142 148 154 159 164 184 222 250 274 5 154 157 161 168 177 183 189 194 198 213 241 263 282 10 180 183 187 194 203 210 215 220 225 240 268 291 310 20 206 209 213 221 229 236 242 247 251 267 296 318 337 50 241 244 248 255 264 271 277 282 287 302 331 354 374 100 267 270 274 282 291 297 303 308 313 329 358 382 401 200 293 296 300 308 317 324 330 335 340 356 386 409 500 328 331 335 343 352 359 365 370 375 391 421 1000 354 357 361 369 378 385 391 397 402 418 1200 361 364 368 376 385 392 398 404 409 1640 372 375 379 388 397 404 410 416 421  X-#Xj\  P6G; XP# NOTE: If actual value does not match table values, round to the closest higher value on this table. See Section 24.53 for HAAT calculation method.    (e) For microwave paths of 25 kilometers or less, interference determinations shall be based on the C/I criteria set forth in TIA Telecommunications Systems Bulletin 10-F, "Interference Criteria for Microwave Systems," May 1994, (TSB10-F). (f) For microwave paths longer than 25 kilometers, the interference protection criterion shall be such that the interfering signal will not produce more than 1.0 dB degradation of the practical threshold of the microwave receiver for analog systems, or such that the interfering signal will not cause an increase in the bit error rate (BER) from 10E-6 to 10E-5 for digital systems. (g) The development of the C/I ratios and interference criteria specified in paragraphs (e) and (f) of the section and the methods employed to compute the interfering power at the microwave receivers shall follow generally acceptable good engineering practices. The procedures described for computing interfering signal levels in Appendix E of the  X[-Memorandum Opinion and Order, GEN Docket No. 90-314, FCC 94-144 shall be applied. Alternatively, procedures for determining interfering signal levels and other criteria as may be developed by the Electronics Industries Association (EIA), the Institute of Electrical and Electronics Engineers, Inc. (IEEE), the American National Standards Institute (ANSI) or any other recognized authority will be acceptable to the Commission.  X$- "'uq0*((|)b"Ԍ 24.238 Emission limits.  X- (a) On any frequency outside a licensee's frequency block, the power of any emission shall  Xibe attenuated below the transmitter power (P) by at least 43 plus 10 log10 (P) decibels or 80 decibels, whichever is the lesser attenuation. NOTE: The measurements of emission power can be expressed in peak or average values, provided they are expressed in the same parameters as the transmitter power. (b) When an emission outside of the authorized bandwidth causes harmful interference, the Commission may, at its discretion, require greater attenuation than specified in this section. " vq0*(( b"  X- w #Xj\  P6G; XP# Appendix B: List of Parties l  X-l X / hp x (#%'0*,.8135@8: