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Before the
Federal Communications Commission
Washington, D.C. 20554


In the Matter of

Service Rules for the 746-764 and
776-794 MHz Bands, and
Revisions to Part 27 of the
Commission's Rules
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WT Docket No. 99-168


FIRST REPORT AND ORDER

   Adopted:  January 6, 2000	Released:  January 7, 2000

By the Commission: Commissioner Ness issuing a separate statement; Commissioner Furchtgott-Roth approving in part and dissenting in part and issuing a separate statement.




TABLE OF CONTENTS

		Paragraph
I.		INTRODUCTION AND EXECUTIVE SUMMARY	1
II.	BACKGROUND	5
III.	SERVICE RULES	8
		A.	In General		8
				1.		Spectrum Management Considerations	9
				2.		Band Plan	26
						a.		General Considerations	26
		B.	Licensing Rules	43
				1.		Regulatory Status	44
				2.		Eligibility and Use Restrictions; Spectrum Aggregation	47
				3.		Size of Service Areas for Geographic Area Licensing	54
				4.		Foreign Ownership Restrictions	62
				5.		License Terms; Renewal Expectancy	66
				6.		Performance Requirements	69
				7.		Disaggregation and Partitioning of Licenses	73
				8.		Public Notice of Initial Applications; Petitions to Deny	79
		C.	Operating Rules	81
				1.		Applicability of General Common Carrier Obligations; Forbearance	82
				2.		Equal Employment Opportunity	89
		D.	Technical Rules	93
				1.		In-Band Interference Control	94
				2.		Out-of-Band and Spurious Emission Limits	98
				3.		RF Safety/Power Limits	108
				4.		Special Considerations for Use of Channels 65, 66, and 67	112
		E.	Competitive Bidding	121
				1.		Statutory Requirements	121
				2.		Incorporation by Reference of Part 1 Standardized Auction Rules	128
				3.		Small Business Definitions	131
IV.	PROTECTION OF TELEVISION SERVICES	137
		A.	Negotiations with Incumbent Broadcast Licensees	142
V.	CANADIAN AND MEXICAN BORDER REGIONS	146
VI.	PROCEDURAL MATTERS AND ORDERING CLAUSES	147
Appendix A: 	LIST OF PARTIES
Appendix B:  FINAL RULES
Appendix C:  GEOGRAPHIC LICENSING MAP


I. INTRODUCTION AND EXECUTIVE SUMMARY
1. By this Report and Order we adopt service rules for licensing the commercial use of the 746-764 MHz and 776-794 MHz bands-bands that have been reallocated, by Congressional direction, from their previous use solely for the broadcasting service.1  The service rules adopted today govern the predominant portion of these bands-thirty of the thirty-six megahertz reallocated for commercial use.  A subsequent Report and Order will adopt service rules, including licensing, technical, and operational rules, for the remaining six megahertz.2  We believe that, under these rules, these bands can be used to provide a wide range of advanced wireless services.  The revised spectrum allocation, which enabled the provision of Fixed, Mobile, and Broadcasting services on these bands, subject to the particular requirements of the service rules, was adopted in our Reallocation Report and Order.3  The rules we adopt today are aimed at enabling the broadest possible use of this spectrum, consistent with sound spectrum management and the Congressional mandate that the receipts from auctioning this spectrum be deposited into the Treasury by September 30, 2000.4  
2. This Report and Order is our first decision guided by the principles enunciated in our recent Spectrum Reallocation Policy Statement.5  Based on those principles, the record developed in this proceeding, and our own review of technical issues, we find that a flexible, market-based approach is the most appropriate method for determining service rules in this band. We also conclude that, in the circumstances of these spectrum bands, the establishment of sub-bands will best ensure that a variety of spectrum management priorities are realized, including protection of public safety operations from interference.  In this Report and Order we adopt service, licensing and auction rules for the thirty megahertz of spectrum that are separated from public safety spectrum by Guard Bands totaling six megahertz. Rapidly expanding demand for wireless voice and data services, as well as projections of international demand and the increased spectrum necessary to support wideband applications to be implemented with next generation technologies,6 confirm that these bands should be structured to enable their efficient and intensive use for wireless services and technologies.  New broadcast-type services that can be provided within the technical parameters adopted here are also permissible in these bands.  To comport with the range of potential service applications on these bands, and our intended use of Part 27 as a basic regulatory framework for service rules governing other bands, we have also recast the structure of the Part 27 rules to reflect their revised scope.  
3. More specifically, we are today making the following determinations for licensing and operations in this spectrum:
* We are providing for two license bands - one of 20 megahertz and one of 10 megahertz - that address the increasing demand for broadband wireless access capacity, including both fixed and mobile next generation applications.  The 20 megahertz segment, consisting of paired 10 megahertz blocks, offers bidders a significantly large block of spectrum that should be desirable for providers of advanced wireless services.  The 10 megahertz segment, consisting of paired 5 megahertz blocks, should prove of interest to parties in the record who desire spectrum to deploy innovative wireless technologies, including high-speed Internet access, that do not require as much spectrum.  New broadcasting operations that are consistent with our technical rules could also utilize some or all of these blocks.  Finally, we are permitting parties interested in acquiring both licenses in an area to win both in the auction. 
* We also are providing for two paired Guard Bands - one of 4 megahertz and one of 2 megahertz - located immediately adjacent to public safety spectrum.  These bands are necessary to protect public safety users from interference.  Consistent with the Congress's intent, we have provided protection to public safety users by establishing "Guard Bands" immediately adjacent to public safety bands, and in our subsequent Report and Order will adopt technical standards and service rules for the Guard Bands.  To ensure that public safety licensees in adjacent bands can operate free of interference, we intend to adopt more stringent interference protection standards for these Guard Bands than we adopt in this Report and Order for the larger segments that do not directly abut public safety spectrum. 
* We will auction licenses for the larger spectrum blocks on the basis of six Economic Area Groupings (EAGs) throughout the country.  These relatively large regions should allow for significant economies of scale to help reduce costs and increase efficiencies.  We also will allow bidders to aggregate these regional licenses into nationwide licenses.  To further our overall policy goals of implementing innovative auction techniques to increase bidder flexibility, we also are directing the Wireless Telecommunications Bureau to implement, if operationally feasible, a new optional bidding procedure.   This procedure would cap bid withdrawal payments on a nationwide aggregation of licenses for a bidder who commits at the outset to bid solely on that nationwide aggregation.  Finally, to increase options for the provision of service to otherwise unserved geographic areas, we also will allow licensees to partition and disaggregate their licenses in the post-auction market. 
* The service rules also provide for application licensing, technical and operational requirements, and competitive bidding.  We also have determined how best to maximize the scope of practicable flexibility afforded licensees in this spectrum, consistent with our review of flexible use allocations required by Section 303(y) of the Act,7 and with the technical and other service rules that govern the range of services enabled.  
* Finally, we adopt standards to assure protection of the approximately 100 existing conventional television stations that will continue to operate on these bands during the transition to digital television (DTV), and to safeguard public safety operations on adjacent bands. 
4. We expect these service rules will enable a significant number of existing and potential wireless service providers to pursue these bands, potentially to deploy new methods of providing high speed Internet access in competition with digital subscriber loop (DSL) and cable modem operators.  These bands are also suitable for new fixed wireless service in underserved areas, as well as next generation, high-speed mobile services.  Because the record indicates a wide range of possible technical approaches to serving the expanding demand for wireless services, we have sought to establish an open regulatory framework with the potential to accommodate both existing and future technologies.  This framework permits new broadcast-type services that are consistent with the technical rules essential to fostering efficient development of wireless services in this band, and sound spectrum management.  By setting the scope of our flexible service rules to enable the most efficient and intensive use of this spectrum, we believe we have fully satisfied our statutory spectrum management responsibilities. 
II. BACKGROUND
5. The 746-806 MHz band at issue here has historically been used exclusively by television stations (Channels 60-69). Incumbent conventional television broadcasters are permitted by statute to continue operations in this band until their markets are converted to digital television.8  The Balanced Budget Act of 1997 directed the Commission to reallocate this spectrum for public safety and commercial use by December 31, 1997, 9 and to commence competitive bidding for the commercial licenses on the reallocated spectrum after January 1, 2001.10  In November 1999, Congress enacted a consolidated appropriations statute that revises the latter instruction.11  This legislation accelerates the schedule for auction of the commercial spectrum bands, and requires that the proceeds from the auction of these bands be deposited in the U.S. Treasury by September 30, 2000.
6. In the Reallocation Report and Order, adopted December 31, 1997, we implemented the specific spectrum management decisions enacted by Section 3004 of the Balanced Budget Act of 199712 by adding Fixed and Mobile services to the Broadcasting allocation in the 746-806 MHz band.  We designated Channels 60-62 and 65-67 for commercial use, and designated Channels 63, 64, 68, and 69 for the exclusive use of public safety.  We also declined to adopt additional protections for low-power TV and TV translator stations beyond those adopted in the DTV Proceeding.13  We stated that no new applications would be considered for the provision of analog TV service in Channels 60-69, but that current applicants, at a later date, would be afforded an opportunity to amend their applications to seek channels below Channel 60. We subsequently denied petitions that sought reconsideration of these decisions to grant no new licenses for TV service on these channels, and the decision to provide no additional protection to low-power TV and TV translator stations.14 
7. In the NPRM in this proceeding, we sought comment on various service rule issues necessary to conduct an auction, including licensing, operational, technical, and competitive bidding rules.15  The Report and Order we adopt here addresses these issues and will enable the auctions process to commence expeditiously, consistent with the statutory deadline set by Congress.
III. SERVICE RULES
A. In General
8.  The NPRM sought comment both on broad spectrum management issues16 and on the unique technical issues raised by the reallocation of this band.  In this Report and Order, we initially address the broad question of whether our service rules for these bands should implement flexible use at the inter-service level by providing for sharing of these bands between incumbent conventional, full-power television broadcasting licensees and the range of possible broadcasting and wireless services.17  After this discussion, we turn to the specific service rule decisions required by this proceeding.
1. Spectrum Management Considerations	
9. Background.  In the NPRM, we emphasized our continued interest in the broader aspects of spectrum management, noting the potential for new technologies to blur technical and regulatory distinctions and affect the balance between licensee discretion and regulatory requirements.18  We also sought comment on the extent to which flexible use allocations that juxtapose such technically dissimilar services as wireless and conventional broadcasting might raise new issues.  Such additional issues might include whether and how to apply service-specific statutory requirements in this context, how to consistently apply service rules for this spectrum band and other Parts of our Rules, and, more broadly, how these service rules should provide for implementation of next generation wireless technology.19  We recognized that proposals involving a broad range of services make our review of flexible use allocations under Section 303(y) especially important,20 and sought comment on the extent to which the spectrum could and should be made available for private mobile and fixed radio service.21  We noted the statutory provisions that potentially bear on our spectrum management decisions for these bands, including Sections 303(y), 309, 337, broadcast-specific statutory provisions such as Sections 312(a)(7) and 315,22 and Section 713 (captioning regulations), and Section 255 (accessibility of telecommunications equipment and services).23
10. Section 303(y) reflects Congressional concern that proposals for the flexible use of spectrum have the potential, if not thoroughly considered, to create interference between services and discourage investment and technical innovation.24  That section requires the Commission to make a positive determination that such issues have been considered, and that these potential problems will not be realized, before it approves such flexible use of spectrum allocations-i.e., allocation or service rules that enable the licensing of multiple services, as the term "service" is used in the Table of Allocations, on the same frequency band.  We make the determinations required by Section 303(y) below, at paras. 20-25. 
11. Many commenters assert that renewed conventional television operations on these bands would create such a wide range of interference difficulties as to effectively preclude other, non-broadcast wireless applications.  Motorola states that it is not possible to "craft service rules that will permit efficient operation of advanced mobile systems and traditional wide area broadcast systems in the same geographic area," and warns of "unrealizable" business plans.25  Motorola and AirTouch contend that this view is supported by experience with sharing in the Channel 14-20 television band, 26 and Motorola also refers to the rule changes we adopted for the 2.5 GHz MMDS spectrum to allow licensees the flexibility to provide broadcasting and wireless applications.27 US WEST cautions against renewed broadcast use of the band, stating that the interference caused by full-power broadcast services would deter necessary investment in new services and systems.28
12. Interference from conventional television broadcast services concerns parties who seek additional spectrum to provide next generation wireless services, whether fixed or mobile.  AirTouch states that sharing between mobile and new broadcast uses "would necessitate further segmentation of the band, thus limiting the Commission's ability to designate spectrum blocks of sufficient size to facilitate reliable mobile services."29  Bell Atlantic Mobile asserts the 700 MHz band is uniquely suited for 3G mobile services, and asks us to reserve these bands for 3G terrestrial mobile service, citing demand projections prepared by the WRC-2000 advisory committee.30  Metricom, which provides wireless Internet access, opposes conventional broadcast television service, as does RTG, which contemplates both fixed and mobile services.31
13. A few commenters advocate inter-service, wideband "flexible use," and seek service rules sufficiently flexible to enable conventional full-service television broadcast operations, or "hybrid" services with comparable technical characteristics.  Advocates of enabling such full-service conventional television service include MSTV and TWDC, which assert that there are few locations in the crowded radio spectrum with sufficient bandwidth for terrestrial broadband services, especially a "hybrid broadband and mobile service."32  NTA contends that the objective of these service rules should be to have 10 to 12 analog channels in translator-dependent areas, to reflect new program sources as well as to extend DTV signals.33 
14. Commenters also specifically address the "flexible use" findings that the Commission is required to make under Section 303(y).  Several commenters ascribe the WCS auction results, and the subsequent slow pace of WCS service activation, to excessively flexible service rules.34  To avoid a recurrence, they argue that we should limit flexibility in both the inter-service and intra-service aspects.  With regard to inter-service flexibility, they contend we should exclude conventional television broadcast from these bands, i.e., prohibit "flexible use" between distinct services in the sense that "service" is used in the Table of Allocations.  With regard to intra-service flexibility, they assert that we should not permit unbounded flexibility even within the context of wireless service, but should instead create a stable regulatory framework-a band plan and related rules-that encourages investment and service innovation.35  Metricom, while not opposing those views, raises a more specifically focussed concern, urging us not to retreat from the existing scope of operational flexibility contained in the Part 27 service rules.  Metricom asserts that flexibility with regard to bandwidth, channelization, and other technical variables affecting the structure of its Ricochet(tm) service was essential to its expeditious activation.36 
15. Discussion.  After careful consideration, we will not adopt service rules that would permit the sharing of this band by conventional television and wireless services.  The inherent interference difficulties presented by sharing between these dissimilar services require that we orient our service rules to one service or the other, if efficient and intensive use of this spectrum is to be realized.  Based on the predominant interest in fixed and mobile wireless services expressed in the record, we will adopt service rules primarily oriented toward fulfilling the need for a variety of wireless services on these bands.  The rules are not structured to establish particular service configurations.  Rather, the service rules allow licensees to make determinations respecting the services provided and technologies to be used, including provision of new broadcast-type services so long as those services comply with our technical rules.37
16. Our recent Spectrum Reallocation Policy Statement identifies as a Commission objective the development of a variety of mechanisms to make spectrum markets more efficient, including flexible service rules and innovative assignment mechanisms. In this proceeding, we find that such flexibility cannot extend to opening these bands to both conventional television and wireless services. Establishing regulatory flexibility sufficient to accommodate conventional television broadcasting would impose disproportionate, offsetting burdens on wireless services, constraining their technical effectiveness and, consequently, their economic practicability.38  This conclusion is supported by the record.  AirTouch, for example, asserts that the inherent conflicts between such disparate services "will require burdensome interference protection requirements that will prevent efficient spectrum use and compromise service to the public."39  Sharing with conventional broadcasting services is also opposed by AMTA, APCO, Motorola, PCIA, RTG, and US WEST.40  AMTA asserts that protective co-channel and adjacent channel standards designed to prevent land mobile interference to television operations in the 470-512 MHz band severely limited both the number of markets in which spectrum was available for land mobile use, and the area in which operations could be conducted within those markets.  According to AMTA, transplanting similar sharing criteria to this band would severely limit provision of wireless services.41 
17. We find that the contrasting technical characteristics of conventional television broadcasting, using power levels authorized by Part 73, and wireless services effectively preclude the development of interference rules that would enable the practicable provision of both sets of services on this spectrum.42  The interference problem arises from the disparity between the two services' characteristic power levels, and between their transmitter tower heights.43  Any substantial disproportion between the power levels of services sharing a spectrum band creates much greater interference difficulties for the lower-power service than when sharing or adjacent-band services operate at comparable power levels. The disparity between television transmitter tower heights and those used by typical wireless providers adds to the difficulty by accentuating the power of the more powerful service. Even at considerable distance from the higher-power service's transmitter, its signal is still strong enough, due in part to the effect of tower height, to make a receiver designed for a nearer, lower-power service vulnerable to interference.44  These effects are recognized by the Commission's Rules establishing minimum distance separation requirements between conventional television facilities using the same channel and between facilities using adjacent channels.45
18. Establishing standards to manage the inherent interference between such dissimilar transmissions as conventional television and wireless services would create substantial spectrum inefficiencies in a band where efficiency is especially important because of the band's suitability for uses ranging from wideband mobile communications to innovative, fixed wireless Internet access services and new broadcast-type services.46  If, for example, we applied standards for the protection of incumbent television licensees on this band to protect new television licensees operating at power levels authorized by Part 73, we would curtail to negligible levels the potential of this band for wireless service.  The efficient and intensive use of  spectrum resources47 is critical to facilitating new wireless technologies that have the potential to provide innovative new services and, as well, to serve underserved areas with both narrowband and broadband services.48  The record in this proceeding demonstrates diverse and substantial demand for expanded wireless broadband spectrum-for uses ranging from the implementation of next generation applications as extensions of existing mobile and fixed uses, to the implementation of various innovative stand-alone technologies.49  The innovations expected from the transition to DTV have been and will continue to be accommodated on the bands dedicated for television broadcasting.
19. Although we have determined to orient our technical and service rules primarily to enable the efficient and intensive use of these bands for wireless service, we will nonetheless allow any broadcast-type services consistent with the Table of Allocations that meet those rules. This approach will allow the broadest degree of flexibility possible, consistent with technical interference limits and their economic consequences here. 
20. Section 303(y) Review.  Section 303(y) requires the Commission to make affirmative findings before permitting flexible use as part of the allocations process.  Specifically, we are required to determine that such flexibility: (1) is consistent with international agreements; (2) would be in the public interest; (3) would not deter investment in communications services or systems, or technology development; and (4) would not result in harmful interference among users.50 We find that the flexible allocation we adopted in the allocation Report and Order satisfies the standards of Section 303(y).
21. In the Reallocation Report and Order, we preserved the allocation of these bands to broadcasting, but recognized that sharing the spectrum between broadcasting and wireless services presented technical issues.51  Metricom and other commenters assert that the fundamental purpose of flexible regulation would be defeated, and Section 303(y) would be violated, by an attempt to reconcile the very different interference rules associated with conventional broadcasting and broadband wireless communications.52 Because we agree that service rules permitting television service based on conventional (Part 73 and Part 74) technical standards are not in the public interest, and have determined against that approach, we need not consider whether that approach to flexible use violates Section 303(y).  
22. We do, however, undertake Section 303(y) review with respect to our decision to allow broadcasting that complies with Part 27 technical rules.  We have determined that this inter-service aspect of our decision fully satisfies the requirements of Section 303(y).  The revised entry in our Table of Allocations continues this band's previous use for broadcast service, and is consistent with international agreements.53  As for the findings required by Section 303(y)(2), we find that no additional interference will be created by this approach to inter-service flexibility, because new broadcast-type services on these bands will be required to comply fully with the same technical requirements applied to wireless services.  In that regard, our technical rules are transparent, and include no provisions to accommodate conventional broadcasting.  For this reason, we anticipate no adverse investment or innovation effects on wireless services.  In these circumstances, we find that permitting new broadcast-type use on these bands by the flexible use plan adopted here is in the public interest, and otherwise satisfies the review required by Section 303(y).
23. Some commenters have construed the scope of the Section 303(y) review requirement to reach beyond an inter-service interpretation of that mandate.  These parties assert that the findings required by Section 303(y) are required to be made when the Commission adopts intra-service rules sufficiently flexible to enable a range of technical and regulatory characteristics within a specific service allocation.  Specifically, they assert that Section 303(y) requires us to limit licensees using these 700 MHz commercial spectrum bands, or some portion of them, to specific technical or regulatory categories of wireless service, e.g., specialized mobile radio (SMR) or terrestrial mobile applications.  Southern, for example, while supporting a more flexible use for half the spectrum at issue, contends the public interest finding mandated by Section 303(y)(2)(A) requires the Commission to designate 18 Megahertz exclusively for SMR use.54  AirTouch similarly invokes the public interest finding to assert that the demand for second- and third-generation mobile services, the spectrum needed to meet such demand, and the technical characteristics of the 700 MHz band, together demonstrate that the public interest is served by designation of these bands exclusively for terrestrial mobile use.55  In addition, Metricom urges us not to diminish the existing flexibility of Part 27 with regard to channelization and other service rules that enable the flexible configuration of a particular service.56
24.  We interpret the Section 303(y) review requirement as applicable to flexible use determinations by the Commission that would enable the sharing of specific spectrum bands by services treated as distinct by the international and domestic allocations process.  Our review of flexible use under Section 303(y) is limited to regulatory decisions that would enable such inter-service flexibility.57  We disagree with commenters that assert that the Commission is required to make the affirmative findings required by Section 303(y) as a precondition to adoption of flexible intra-service regulations. That statutory provision confers authority to "allocate electromagnetic spectrum so as to provide flexibility of use," but does not address domestic assignments or operational regulations.  Nevertheless, while we find that its requirements apply directly and explicitly to our service allocation decisions, we here also consider these criteria under our broader public interest mandates in the statute, when making decisions that may affect the broader allocation through service rules. 
25. The Part 27 provisions referred to generally by Metricom enable the type of operational flexibility that, while important to individual licensees, does not involve the type of inter-service regulations that, in our view, might potentially be inconsistent with the terms of Section 303(y). These regulations confer discretion on licensees at the level of individual system implementation, and pose minimal if any potential for interference or discouragement of investment.  Thus, while our broad statutory mandate requires that our service and other rules (e.g., competitive bidding regulations) fulfill the general public interest standard as well as enumerated legislative purposes,58 we find further that, under Section 303(y), our various non-allocative, intra-service regulations meet the statutory criteria to provide such flexibility of use. 
2. Band Plan 
26. Background.  In the NPRM, we sought comment on several aspects of spectrum management, including the extent to which the pace of technical change may affect the desirable balance between licensee discretion and the extent of technical and operational regulations,59 and how investment generally, and specifically for new and innovative technologies and services, would be affected by service rules. The NPRM also sought comment on the effect of different approaches to these bands upon interference to other services,60 and how the Commission's auction processes should reflect and implement the spectrum management decisions.61  
27. Several commenters urge us to auction a single, 36 megahertz license.  A single, 36 megahertz license would, Metricom contends, leave the details of flexible use, including management of interference between distinct services, to be determined by the licensee.62  MSTV similarly asserts that a unitary license would leave issues arising from the coordination of services, including the development of methods for sharing spectrum that do not unfairly burden specific services, to the licensee.63  AirTouch also advocates a single, 36 megahertz license, though it would designate the entire band for terrestrial mobile services, predicated on substantially expanded spectrum needs for the implementation of next generation broadband wireless services.64  Cisco contends that a single, 36 megahertz license would better enable use of these bands for efficient fixed wireless applications without precluding mobile services, and asserts that discrete sub-bands are not necessary to protect adjacent public safety uses.65
28. Several other commenters, including AMTA, FreeSpace, Motorola, PCIA, Intek, and US WEST, support a more structured approach to band management.66 Some of these commenters argue for division of the band into comparatively modest spectrum segments, configured to flexibly enable a range of new and existing narrowband technologies, and propose division of the 36 megahertz into several bands with varying degrees of flexibility.  In this latter category, for example, Motorola has proposed an overall band plan that configures two 1.5 megahertz band pairs, adjacent to the public safety spectrum bands, designated for the licensing of systems to band managers, and divides the remainder of the band into sub-bands intended to support a range of expanded wireless fixed and mobile services.67  Others seek larger spectrum blocks; Southern, for example, argues that 18 megahertz should be designated for SMR service, and the remainder for flexible use.68  
29. Several commenters assert that the failure to establish at least a minimal regulatory framework for services offered on these bands will seriously compromise the overall public benefits from these bands.69 AMTA, for example, while asserting that relaxed regulation has encouraged innovative technologies and service offerings, also notes that the FCC is properly concerned that "unbridled regulatory flexibility not have the contrary effect of permitting harmful interference among users, deterring investment in communications systems or services or technological development, or otherwise not serve the public interest."70  PCIA believes that a service allocation that is too flexible will deter investment in communications services and systems and technology.71 
30.  Discussion.  We will adopt a band plan that establishes a 20 megahertz segment (two paired, 10 megahertz blocks), a 10 megahertz segment (two paired, 5 megahertz blocks), and two small, also paired, Guard Bands of 1 and 2 megahertz adjacent to the established public safety bands.  The two larger band segments are not subject to eligibility requirements.  The regulatory and technical standards applicable to the smaller Guard Band segments will be resolved in the subsequent Report and Order.
31. We decline to grant a unitary, 36 megahertz license.  As an initial matter, we do not consider it desirable, in light of the record regarding the potential for interference to public safety users, to leave determination of the internal framework of these bands, including the structure of Guard Bands, to a single commercial entity.  More broadly, in light of the range of technologies, services, and spectrum needs asserted by commenters, we find that the best course is to adopt a band plan that will allow bidders to pursue licenses that are less than the full 36 megahertz, but will allow bidders to aggregate a substantial portion of the band.  In that way, the marketplace forces operating through the auction process, rather than regulatory fiat, will determine which of the multitude of service proposals will actually be implemented.72  In addition, given the relatively small amount of bandwidth presently available, we must achieve a balance between the configuration of bands for broad groups of services, and preserving overall licensee flexibility in technical and service application choices.  
32. Our band plan is presented graphically in the diagram below.  Our subsequent description includes the specific public interest basis for each of the plan's several components.

33. Protecting Public Safety Operations Through Guard Bands.  Consistent with the legislative history of Section 337,73 a primary goal of our band plan structure is to ensure that activation of services in these 36 Megahertz of spectrum will not impair public safety operations in the former channels 63-64 and 68-69 through harmful interference.  The Conference Report states that the Commission should ensure that public safety service licensees in the 746-806 MHz band "continue to operate free of interference from any new commercial licensees."74 The importance attached to interference protection by the Congress is emphasized by APCO, the NCC, and the International Association of Firefighters.75  In addition, Motorola has recognized this concern in its band plan proposal, which establishes Guard Bands at the extremities of the commercial use bands to insulate the adjacent public safety bands from stronger commercial service emissions in the central segments of these bands.76  Other commenters, though proposing different approaches, have also recognized the public safety priority.77  Accordingly, we wish to ensure that the public safety bands are protected from interference, given that such spectrum will be used by local, state and Federal agencies for the protection of life, health, or property.  This is a core function of this Commission under Section 1 and Section 337(f)(1) of the Communications Act.78
34. We agree with commenters who contend that Guard Bands are the best way to ensure protection for public safety uses. In this Report and Order, we establish four sub-bands, two each of 1 and 2 megahertz, designated as Guard Bands in the diagram, in order to protect the immediately adjoining public safety licensees on Channels 63, 64, 68, and 69 from harmful interference. We will require licensees on these Guard Bands to minimize interference to public safety licensees through technical and operational measures to be determined in the subsequent Report and Order.  While protecting adjacent public safety bands from harmful interference, the sub-bands we establish here will allow for effective and valued use of the spectrum, consistent with sound spectrum management, rather than the creation of Guard Band spectrum of little use.  To that end, we find it is appropriate to establish two 1 megahertz sub-bands at 746 MHz and 776 MHz, to allow for a paired block, and similarly to establish two paired 2 megahertz sub-bands, at 762 and 792 MHz, to provide further protection for public safety bands and to encourage the effective and valued use of the Guard Band spectrum.
35. Paired sub-bands of 10 megahertz (5 megahertz pairs) and 20 megahertz (10 megahertz pairs).  We have determined to divide each of the two remaining 15 megahertz bands into a 5 megahertz and 10 megahertz segment, to be auctioned as paired bands of 5+5 and 10+10 megahertz. The division into these spectrum blocks furthers several spectrum management goals.  
36. The two paired 5 megahertz segments appear well-suited to the expressed preferences of new technology advocates, and, depending on the technology adopted will enable some data services, including Internet access. Five megahertz segments, paired as a 10 megahertz segment, enable a single wideband CDMA channel, which is sufficient to provide some forms of Internet access.79 FreeSpace initially sought 8 megahertz of spectrum, and subsequently proposed 6 megahertz in four 1.5 megahertz paired channels.80 AT&T Wireless is reportedly using some elements of its Project Angel to develop a new wireless data service, to compete against wireless data access service provided by, e.g., MCI (reselling Metricom service).81 Similarly, the Japanese Communications Research Laboratory, applying a new transmission system to existing Personal Handyphone System technology, which employs TDD transmission to serve approximately six million customers, reportedly has demonstrated a high-speed (384 kbps) transmission system for multimedia communications to wireless mobile terminals.82
37. The size and placement of the two 5 megahertz segments achieves other spectrum management goals as well.  As the diagram illustrates, this structure reduces the number of existing television channels, and thus of incumbent television licensees, to which a new licensee's operations would potentially cause co-channel interference, compared with equal 7.5 megahertz segments.  In addition, we believe that our approach furthers the development and deployment of many services using these segments, but particularly accommodates firms seeking to negotiate accelerated transition agreements with incumbent television licensees.  Such firms may likely confront a simpler negotiation process, because the alignment of these segments with existing television channels requires them to negotiate with fewer co-channel incumbents in many areas.  Also, because the new license will directly overlap with the spectrum assignment of only a single incumbent television station, this alignment reduces the "free rider" problem created when third parties benefit from others' negotiations. Nor is any offsetting burden created for entities interested in the 10 megahertz segments, as compared to an equal division into 7.5 megahertz segments. Entities interested in providing services consistent with these spectrum blocks thus benefit from a reduced burden of expense and delay in achieving full use of their licensed spectrum.83  
38. The wider, 10 megahertz segments should enable a broader range of broadband services, including Internet access at higher speeds.  A 10 megahertz segment, for example, is sufficient to provide two bidirectional 384 kb/s mobile data streams per sector, as well as smaller-capacity services, using high-tier cellular and PCS technologies consistent with 3G service classifications.84  Commenters such as Bell Atlantic and AirTouch assert that a large block of spectrum is needed to support 3G mobile telephony.85 Lucent, in describing the suitability of the 700 MHz band for 3G services, notes that the 5 megahertz minimum bandwidth increment is necessary to support the broadest range of 3G technologies,86 and the greater flexibility of larger bandwidth segments could be used to satisfy the asymmetric characteristics of data services.  These wider segments will enable substantial augmentation of existing CMRS systems, whether for expansion into provision of next generation services under the 3G service classification or some other approach less directly linked to existing systems.  They also have the potential to support new systems in appropriate circumstances, as US WEST states.87
39. We recognize assertions by Cisco and others that establishing any sub-bands reduces spectrum efficiencies achieved by aggregation and creates more frequency boundaries between licensees that require interference management.88 We believe our decision here is appropriate, however. First, encouraging a variety of technologies and entrants is an important spectrum management goal. Subdividing the 36 megahertz of available spectrum will make it more likely that start-ups and companies that are not highly capitalized will have the opportunity to pursue spectrum.  Second, our auction rules allow bidders to aggregate these band segments.  This allows entities that believe they need to acquire a larger amount of spectrum than that available in the individual licenses to do so.  Third, our choice of two licenses, rather than a single license, adds only one interference boundary as a constraint on spectrum efficiencies.  While Cisco suggests that its approach to broadband Internet access would encourage the provision of such access to less densely developed areas, other parties that favor large spectrum block approaches generally do not suggest that a single large block is necessary to accommodate such important spectrum management goals. In the circumstances presented here, we conclude that our band plan, rather than a 30 or 36 megahertz license, best fulfills our statutory spectrum management responsibility.  
40. Paired-Band Architecture.  To achieve effective flexibility, without constraining new technologies and services, the band plan designates the lower and upper 18 megahertz segments for distinct power limits, consistent with traditional practice for paired mobile services and the requests of providers such as AirTouch, AMTA, and US WEST.89  We establish different power limits for the lower frequency segment and the higher frequency segment.  These limits reflect and optimize the efficient use of spectrum for the expected predominant use of each segment.  Thus, power limits for the lower frequency band segment reflect its expected primary use for higher-power base station transmissions received by control, mobile and portable stations; in contrast, we have set power limits for the higher frequency band segment at levels that optimize its efficient use for the lower-power transmissions from control, mobile and portable stations that will be received by base stations. This approach enables more efficient spectrum use, by minimizing the "near-far" interference problem that arises in more extreme form by the juxtaposition of television transmission with land mobile services.  Our Part 27 rules enable fixed services on either segment.90 
41. We recognize that advocates of lower power, TDD transmission seek smaller, unpaired sub-bands, and emission standards configured to encourage that mode of transmission.91  FreeSpace and other parties support the configuration of sub-bands and emission limits for TDD applications, and assert their preference for unpaired spectrum bands.92  Lower power technologies provide a range of voice and data services by flexibly using a single, contiguous band for asymmetric up- and down-link access.93  ArrayComm notes a trade press prediction that NTT will rely on TDD-based systems rather than W-CDMA to deploy the first commercial 3G systems, and submits a spectral efficiency comparison between various wireless technologies.94
42. The majority of commenters note, however, that Frequency Division Duplex (FDD), which is the most commonly-used transmission procedure for PCS, cellular, and other mobile telephony applications, requires paired spectrum.  Pairing of these bands under these circumstances will facilitate the auction procedure, by not requiring bidders seeking paired bands to prepare multiple bids.  In sum, because paired bands are essential to these technologies, while technologies using unpaired spectrum can operate on paired segments if the segments are large enough, we conclude that the post-auction unpairing of this spectrum creates less of an overall problem for the expeditious activation of these bands than would the need to pursue post-auction pairing, if our rules did not initially establish a paired configuration.
B. Licensing Rules
43. In the NPRM we sought comment on licensing rules for a full range of possible licensees, consistent with our stated intention to permit as much flexibility in the use of this spectrum as is consistent with the requirements of Section 303(y) of the Act.   In the interests of flexibility and optimum spectrum use, we have enabled the provision of any service in this Order, so long as the licensee complies with the technical rules governing spectrum use.  The following discussion addresses licensing rules for uses of this spectrum other than new broadcast-type services.95  
1. Regulatory Status
44. Background.  In the NPRM, we sought comment on whether to apply the existing licensing framework established in Part 27 for Wireless Communications Service (WCS)96 to the 746-764 MHz and 776-794 MHz bands.97  Part 27 accords licensees the flexibility to provide any fixed, mobile or radiolocation service contained in the non-government column of Table of Allocations in Part 2 of the Commission's Rules98 for this spectrum, and provides, inter alia: (i) the limitation of eligibility requirements to foreign ownership restrictions set forth in Section 310 of the Communications Act; (ii) the exclusion of WCS spectrum holdings from application of the CMRS spectrum cap; (iii) flexibility to partition geographic service areas and disaggregate spectrum blocks; (iv) determination of regulatory status by a licensee's designation in its long-form application; and (v) with some exceptions, incorporation of the competitive bidding rules set forth in Part 1 of the Commission's Rules.99
45. Noting in the NPRM that the licensing framework for Part 27 permits applicants to request common carrier status as well as non-common carrier status under a single license,100 we proposed to authorize licensees in the 746-764 MHz and 776-794 MHz bands to provide a variety or combination of fixed and mobile, common carrier and non-common carrier, and broadcast services, anywhere within their licensed areas at any time, consistent with the regulatory status specified by the licensee in its long form application (Form 601) and with applicable interference protection requirements.  We tentatively concluded that this approach was likely to achieve efficiencies in the licensing and administrative process.  In this regard, we sought comment in the NPRM on the need to modify Form 601 or any other appropriate form(s) to account for the flexibility of use permitted for these bands.  Several parties advocating regulatory neutrality in administering this spectrum endorsed our proposal.101  TWDC, for example, contends that traditional regulatory requirements can disadvantage one class of participants and can discourage experimentation and the development of new services.102
46. Discussion.  To fulfill our enforcement obligations and ensure compliance with the statutory requirements of Titles II and III of the Communications Act, we will require applicants to identify whether they seek to provide common carrier services or other services permitted under the final rules adopted in this proceeding.  However, licensees in the 747-762 MHz and 777-792 MHz bands will not be required to describe the specific services they seek to provide but only to designate the regulatory status of the services.103  To facilitate this result, we have amended item 35 of the Form 601 to add the broadcast option.  Licensees also will be required to notify the Commission within 30 days of service changes that alter the regulatory status of their services. When the change results in the discontinuance, reduction, or impairment of the existing service, a different approach may apply, depending on the nature of the service affected.104
2. Eligibility and Use Restrictions; Spectrum Aggregation
47. Background.  Sections 27.12 and 27.302 of the Commission's Rules105 impose no restrictions on eligibility, other than the foreign ownership restrictions set forth in Section 310 of the Communications Act.106  Our proposal to impose no additional eligibility requirements is endorsed by several parties.107  We also proposed to impose no restrictions on the amount of spectrum that any one licensee may obtain in the 746-764 MHz and 776-794 MHz bands in the same licensed geographic service area.  We received conflicting responses to this portion of our proposal.108
48. With respect to out-of-band spectrum aggregation, we noted in the NPRM that the 746-764 MHz and 776-794 MHz bands may be used for mobile services comparable to the cellular, broadband Personal Communications Service (PCS), and Specialized Mobile Radio (SMR) spectrum for which the CMRS spectrum cap was devised.109  The CMRS spectrum cap in Section 20.6 of the Commission's Rules governs the amount of CMRS spectrum that can be licensed to a single entity within a particular geographic area.  Under Section 20.6, a single entity may acquire attributable interests in the licenses of broadband PCS, cellular, and SMR services that cumulatively do not exceed 45 megahertz of spectrum within the same geographic area. 110  In rural geographic areas, an entity may acquire as much as 55 megahertz of spectrum.  The CMRS spectrum cap is intended to preclude licensees from aggregating sufficient amounts of CMRS spectrum in a single geographic area to enable them, singly or in combination with other licensees, to exclude competitors, reduce the quantity or quality of services provided, or increase prices to the detriment of customers.111  In the NPRM we inquired whether CMRS provided on the 746-764 MHz and 776-794 MHz bands should be exempt from the CMRS spectrum cap.112  This proposal was supported by a number of commenters,113 although others argued for subjecting these bands to the CMRS spectrum cap.114
49. Discussion.  We will impose no restrictions on eligibility for a license in the 747-762 MHz and 777-792 MHz bands.  Thus,  no prospective licensee will be barred from participation in the auction or from post-auction acquisition of a license for this spectrum based on its status as a provider of cable services, for example, or of telephone or other telecommunications services. We believe that opening this spectrum to as wide a range of applicants as possible will encourage entrepreneurial efforts to develop new technologies and services, while helping to ensure the most efficient use of the spectrum.115
50. We have pursued a policy of flexible use for the 747-762 MHz and 777-792 MHz bands.  We are particularly concerned that eligibility restrictions could impede efficient development of this spectrum. Were we to exclude all incumbent providers of services that could compete with services that could be provided  using this spectrum, we would exclude virtually every major telecommunications service provider active today.  We anticipate that use of this spectrum will offer incumbent providers of both wireline and wireless services an opportunity to augment their existing services and systems, rather than to act in an anticompetitive manner, for example, by warehousing the spectrum acquired.
51. With respect to the CMRS spectrum cap, we noted in the NPRM that the 746-764 MHz and 776-794 MHz bands may be used for mobile services comparable to the cellular, broadband PCS, and SMR spectrum for which the CMRS spectrum cap was devised.  Recognizing that the spectrum cap limits were set on the basis of the particular amount of spectrum (180 megahertz) available at that time for CMRS, we indicated in the Spectrum Cap Report and Order that we would evaluate whether the cap should apply, or be adjusted, at the time that we made more spectrum available for CMRS.116  It has been our expectation that, as we made more spectrum available for CMRS services, we would either adjust the cap upward or refrain from including the new spectrum within the scope of the cap.
52. Consistent with our proposal in the NPRM, we have determined that the 747-762 MHz and 777-792 MHz bands, if used to provide CMRS, should not count against the 45/55 megahertz spectrum cap.  In our recent biennial review of the CMRS spectrum cap, we declined to increase the cap, except in those rural areas in which we determined that an increase was necessary to facilitate the deployment of CMRS.117  We believe that the presence of the CMRS spectrum cap for the existing 180 megahertz of CMRS spectrum provides a sufficient safeguard against consolidation of spectrum to refrain from extending the cap to the 747-762 MHz and 777-792 MHz bands.  We also are interested in facilitating the use of these bands for next generation applications that would benefit from those economies of scale provided by licensing on a national or large regional basis.  In addition, it is not clear that this spectrum will be used primarily or even substantially for CMRS services or that the services that are provided will be competitive with CMRS.  The spectrum is presently encumbered and is likely to remain so, to at least some extent, until 2006.  In no part of the country is this band totally unencumbered; in certain parts of the country, particularly metropolitan areas, very little of this band is presently available.  In light of the present level of encumbrance and the extended transition period provided for incumbent television broadcasters to move out of the band, it would not make sense to count this spectrum against the current cap.
53.  Finally, our decision furthers the public interest better than including this spectrum in the cap and then adjusting the cap upward.  That course would permit reconsolidation within the present CMRS bands.  We note that our approach here is consistent with that in other bands for which we have adopted very flexible allocations and service rules.118  As we indicated in the Spectrum Cap Report and Order, reconsolidation would prompt concern about reductions in competition and attendant increases in prices and diminution in the quality of services provided.119  We deem it appropriate to provide additional spectrum for incumbent providers to implement broadband CMRS services, provided this can be accomplished without sacrificing the substantial benefits that the public has realized from competition in CMRS services.  We believe that excluding this spectrum from the cap will not result in any additional concentration, or reduce competition in the CMRS marketplace.  Correspondingly, keeping the cap in place on present CMRS bands, at least for the time being, will help to ensure that the competitive market structure is maintained.
3. Size of Service Areas for Geographic Area Licensing
54. Background.  In the past, Part 27 spectrum has been licensed based on one of two kinds of service areas:120 twelve Regional Economic Area Groupings (REAs)121 or 52 Major Economic Areas (MEAs).  REAs and MEAs are based on the 172 Economic Areas (EAs) defined by the U.S. Department of Commerce, as modified by the Commission.  Licensing Part 27 spectrum using REAs and MEAs allowed us to balance various specific competing needs.122   In the 220 MHz auction, we auctioned spectrum in six Economic Area Groupings (EAGs) which were also based on EAs as defined by the Department of Commerce.123 In the NPRM, we requested comment on the type of service area or areas that should be used to license the 746-764 MHz and 776-794 MHz bands. 
55. The majority of commenters tended to recommend larger geographic sizes for this spectrum band.124   Those parties advocating CMRS use for the spectrum generally tended to recommend larger geographic areas.  They contend that the trend in the marketplace toward the development of nationwide footprints by CMRS carriers demonstrates that CMRS is increasingly a nationwide service and should be licensed on that basis.125  Some companies proposing innovative technologies argued for a nationwide license divided into narrow bands at different frequencies, which would enable them to bypass incumbent TV stations.126  A larger geographic licensing area, it is argued, would also allow these new service providers to build-out over large regions reaching rural areas in a cost-effective manner by taking advantage of the long-distance propagation characteristics of this UHF band.127  Other reasons given by commenters for larger geographic area licensing include the economies of scale needed to lower equipment costs128 and to deploy innovative services rapidly;129 advantages in facilitating interoperability and standards;130 the simplification of interference coordination;131 and lowered-cost pricing plans by minimizing roaming costs132 or allowing for single-rate pricing plans.133  A few commenters argued for much smaller geographic licensing areas (172 EAs or smaller) in order to be affordable for rural areas,134 to enable reuse of existing tower sites,135 or to better serve smaller market areas.136 
56. Discussion.  We have determined to license both the 20 megahertz and the 10 megahertz licenses according to the six Economic Areas Groupings (EAGs).137  We believe that auctioning both licenses on the same geographic basis will enable aggregation into a 30 megahertz band needed for certain applications, for example, for high-speed data.
57. In reaching our conclusion on the appropriate service area size for this spectrum, we have considered several factors.  First, we have assessed the use or uses to which this spectrum is likely to be put and determined the geographic scope that, based on the record, would best facilitate rapid deployment.138  Second, Section 309(j) of the Communications Act includes as objectives for competitive bidding the avoidance of excessive concentration of licenses and the dissemination of licenses among a wide variety of applicants.139  Third, we are mindful of our statutory obligation to conduct the auction for the 746-764 MHz and 776-794 MHz bands to ensure that all proceeds are deposited by September 30, 2000140 and of our experience in previous auctions, which has shown that simultaneous multiple-round auctions for a larger number of licenses are more complex and take longer to complete than similar auctions involving fewer licenses.  Fourth, while individual parties will be able as part of the auction process to aggregate service areas141 or to join bidding consortia to obtain spectrum rights to areas smaller than the Commission's licensing areas, there are risks and costs associated with attempting to do either.  This is particularly true when there are a large number of small geographic areas.  Thus, we think the best approach is for the Commission to attempt to determine as a starting point the most efficiently sized geographic areas.  Finally, as discussed below, to the extent that our decision does not result in optimally sized initial areas for all licensees, we are also allowing for post-auction partitioning and aggregation of licenses for those bidders whose business plans require smaller or larger geographic areas. These rules should allow post-auction transactions to facilitate the most efficient distribution of licenses. 
58. We concur with the comments advocating that we use the same geographic licensing areas for various segments of the band to permit flexibility in the use of this spectrum.  For instance, as Cisco argues, regardless of the geographic area, having both licenses (10 and 20 megahertz) auctioned for the same sized regions would enable aggregation into a 30 megahertz band in a particular region.  This bandwidth is needed for certain applications, especially as a third pipe for broadband connection to the Internet.142  Recognizing the significance this capability would add to the flexible uses for this spectrum, we have determined to license both the 20 megahertz and the 10 megahertz licenses according to the same license areas and have opted for the six Economic Areas Groupings (EAGs).
59. In reaching the decision for two sets of six EAG licenses (twelve total), we have ruled out MEAs or EAs recognizing the overall advantages of larger-sized areas for this band:
* To provide optimum opportunity for alternative aggregation approaches to suit a wide variety of possible services and business plans such as building a nationwide footprint or acquiring both licenses in a particular region.143

* To allow the growth of existing technologies while encouraging the development of new applications. When areas are inefficiently small, the costs of aggregation during or after the auction in terms of delay and transaction costs may harm both service providers and customers alike.144

* To take advantage of opportunities afforded by economies of scale: for developing standard protocols for particular applications and for manufacturing equipment to operate at specific frequencies of the spectrum.145

* To help address the problems associated with incumbent TV stations in this band, which operate in fairly large areas protected from interference.  To license new spectrum in smaller areas would create many situations in which the protection zone would overlap the incumbent license areas or create the need for complicated protection agreements.

* To facilitate conducting the auction in a timely manner.

60. These large geographic areas would readily allow aggregation into a nationwide service area and would enable multiple parties to bid on this spectrum for the provision of high-speed wireless data services.  Given the existing build-out of CMRS carriers on a national level, new providers entering this competitive market or existing carriers adding new services to their growing customer base may wish to aggregate either the 10 or 20 megahertz regional licenses into a nationwide footprint.146  Others, following the Cisco proposal, for exclusively fixed high-speed wireless data, may wish to aggregate the two bands within a single region to increase bandwidth to the 30 megahertz to provide high-speed Internet access, resulting in different service providers for different regions.147  However, in light of the variety of potential services proposed in the record, including for emerging technologies or next-generation applications, the most desirable or efficient scale of service area varies according to the business plans of the particular commenting party.  Some may need less spectrum as well as smaller geographic area.148 
61. In addition, we conclude that the six EAGs, as opposed to a nationwide license, will more easily allow partitioning where appropriate to serve the needs of smaller users and rural communities.  Partitioning - which could be conditionally agreed upon prior to the auction or arranged post-auction - will also allow start-ups and rural-based companies additional opportunities to acquire spectrum for the provision of service.149  Thus, we decide to use EAGs for all licenses but allow licensees to partition them into smaller areas, as well as to aggregate them into larger geographic areas.  This approach should provide maximum flexibility to the parties to adjust their operating area most efficiently given marketplace and technological needs.
4. Foreign Ownership Restrictions
62. Background.  In the NPRM, we proposed means for implementing the foreign ownership provisions set forth in Sections 310(a) and 310(b) of the Communications Act.150  Section 310(a) prohibits any foreign government or representative from holding a station license.  Section 310(b) prohibits certain defined foreign ownership interests in broadcast, common carrier, aeronautical en route or aeronautical fixed radio station licenses.  One comment, supporting our proposal, was received on this portion of the NPRM.151 
63. Discussion.  We have determined that Section 27.12 of the Commission's Rules, which implements Section 310 of the Act,152 should apply to applicants for licenses in the 747-762 MHz and 777-792 MHz bands.  A nonbroadcast applicant requesting authorization only for non-common carrier services will be subject to Section 310(a) but not to the additional prohibitions of Section 310(b).  An applicant requesting authorization for common carrier services will be subject to both Section 310(a) and Section 310(b).
64. In the case of Multipoint Distribution Service (MDS), satellite service, or Local Multipoint Distribution Service (LMDS), the Commission requires an applicant electing non-common carrier status to submit the same information that common carrier applicants submit to address the alien ownership restrictions under Section 310(b) of the Act.153  In light of Part 27 licensees' ability to provide common carrier and non-common carrier services, Commission rules require all licensees, even non-common carriers, to report alien ownership on a consistent basis, to enable the Commission to monitor compliance more effectively.  As we proposed in the NPRM, we will follow the same approach in the case of applicants for the 747-762 MHz and 777-792 MHz spectrum.  Common carriers and non-common carriers will not be subject to varied reporting obligations, but will be required to file changes in foreign ownership information to the extent required by Part 27 of our Rules.  By establishing parity in reporting obligations, however, we do not establish a single substantive standard for compliance.  Thus, we do not and would not disqualify an applicant requesting authorization exclusively to provide non-common carrier services from a license simply because its citizenship information would disqualify it from a common carrier license.
65. The statutory foreign ownership restrictions are applicable to licensees to the extent they apply to a particular service being offered in the 747-762 MHz and 777-792 MHz  bands.However, we note that, in response to the World Trade Organization (WTO) Basic Telecommunications Agreement, we have liberalized our policy concerning foreign ownership of common carrier radio licensees under Section 310(b)(4).  We now presume that ownership by entities from countries that are WTO members serves the public interest.  Ownership by entities from countries that are not WTO members continues to be subject to the "effective competitive opportunities" test established by the Commission. 154
5. License Term; Renewal Expectancy
66. Background.  In the NPRM we proposed to adopt the license term and renewal provisions in Part 27 of the Commission's Rules, for other than new broadcast-type services.  Section 27.13 limits the license term to 10 years from the date of original issuance or renewal.155  Section 27.14(c) establishes a licensee's right to a  renewal expectancy.156  Most commenters addressing the issue endorsed this approach.157  However, one commenter, in addressing the issue of performance requirements, expressed concern that new licensees might not be able to comply with performance requirements in some markets, given the continued existence of incumbent broadcasters until 2006.158
67. Discussion.  The Communications Act imposes no time limit on licenses issued by the Commission, other than those for broadcast services, which are limited to an eight-year license term.159  Although we proposed a ten-year license term in the NPRM, we are concerned that the continued existence of incumbent broadcasters in the licensed spectrum may retard a licensee's development and use of the spectrum.  Thus, we are modifying the license term as it relates to the 747-762 MHz and 777-792 MHz bands, to accommodate licensees' need for additional time to develop and use this spectrum, in light of its continued use by broadcasters until 2006. Based on our estimate that an average of eight years additional time is a reasonable time period in which to comply with the performance requirements set forth below,160 we have determined that a license issued to a winning bidder for this spectrum will extend eight years beyond the year 2006, the date as of which incumbent broadcasters are required to have relocated to other portions of the spectrum, that is, until January 1, 2014, for a total of approximately 14 years. 161  However, if a licensee commences new broadcast-type operations on or before January 1, 2006, the licensee will be required to seek renewal of its license at the end of the eight-year term following commencement of such broadcast operations. 
68. We adopt these license provisions for all licensees in the 747-762 MHz and 777-792 MHz bands, as well as the right to a renewal expectancy established in Section 27.14(b), for nonbroadcast services.  In the event that a license is partitioned or disaggregated, as discussed below, any partitionee or disaggregatee is authorized to hold its license for the remainder of the original licensee's term, and the partitionee or disaggregatee may obtain a renewal expectancy on the same basis as other licensees in the band.  All licensees meeting the substantial service requirement discussed below will be deemed to have met this element of the renewal expectancy requirement regardless of which of the construction options, described below, the licensee has chosen.  This approach is appropriate because a licensee, through partitioning, should not be able to confer greater rights than it was awarded under the terms of its license grant.162  In addition, we conclude that, to claim a renewal expectancy, a renewal applicant involved in a comparative renewal proceeding must include, at a minimum, the showing required in Section 27.14(b) of the Commission's Rules. 163
6. Performance Requirements
69. Background.  In the NPRM, we proposed to adopt the performance requirement in Section 27.14(a) of the Commission's rules for licensees in the 746-764 and 776-794 bands.164  Section 27.14(a) requires licensees to provide "substantial service" to their service area within 10 years of being licensed.165 A failure to meet this requirement results in forfeiture of the license and in the licensee's ineligibility to regain the license.  Although our proposal received general support, one commenter expressed concern that the continued existence of incumbent broadcasters may make it difficult for new licensees to comply with these performance requirements in some markets.166
70. Discussion.  In light of the incumbents issue identified by one commenter, we are amending the performance requirement in Section 27.14(a) of the Commission's Rules as it relates to the 747-762 MHz and 777-792 MHz bands.  Under the amended performance requirement, a licensee must provide "substantial service" to its service area no later than January 1, 2014, i.e., eight years after 2006, the date as of which incumbent broadcasters are required to have relocated to other portions of the spectrum.167
The Part 27 Report and Order provided several examples of "safe harbors" that would demonstrate substantial service, which we will apply to licensees in the 747-762 MHz and 777-792 MHz bands.168  The "substantial service" construction requirement provides licensees with the flexibility to offer the full range of services under the allocations table and accommodate new and innovative services.169  Licensees in the 747-762 MHz and 777-792 MHz bands may avail themselves of any of the following "safe harbors" for the 747-762 MHz and 777-792 MHz bands.  First, for a licensee that chooses to offer fixed, point-to-point services, the construction of four permanent links per one million people in its licensed service area at the license-renewal mark would constitute substantial service.  Second, for a licensee that chooses to offer mobile services or fixed, point-to-multipoint services, a demonstration of coverage for 20 percent of the population of its licensed service area at the license-renewal mark would constitute substantial service. We encourage licensees, however, to build out not only in urban areas and areas of high density population but in rural areas as well, or to partition their license to allow others to do so.

71.   However, a licensee that limits buildout to urban areas and areas with high density population, will not necessarily be ensured of license renewal, even if otherwise compliant with the construction benchmarks.  We believe that the "substantial service" standard requires the licensee to buildout in rural areas as well .
72. We conclude that the buildout requirement we are imposing for this spectrum fulfills our obligations under Section 309(j)(4)(B) of the Act,170 and that the auction rules for this spectrum, together with the service rules adopted in this proceeding, and our overall competition and universal service policies, constitute effective safeguards and performance requirements for licensing this spectrum.  However, we reserve the right to review our construction requirements in the future if we receive complaints related to Section 309(j)(4)(B), or if a reassessment is warranted because spectrum is being warehoused or is otherwise not being used despite demand.  We will also reserve the right to impose additional, more stringent construction requirements on licenses in the future in the event that actual anticompetitive or universal service problems develop.
7. Disaggregation and Partitioning of Licenses
73. Background.  In the NPRM, we proposed to permit licensees in the 746-764 MHz and 776-794 MHz bands to partition their service areas and to disaggregate their spectrum, and tentatively concluded that geographic partitioning and spectrum disaggregation can result in efficient spectrum use and economic opportunity for a wide variety of applicants, including small business, rural telephone, minority-owned, and women-owned applicants, as required by Section 309(j)(4)(C) of the Communications Act.171  Although there is general support for our proposal to permit disaggregation and partitioning on these bands, several commenters argue that disaggregation and partitioning are rare and that they thus provide little opportunity for small entities to enter the market for telecommunications services.172
74. Discussion.  We continue to believe it advisable to permit licensees in the 747-762 MHz and 777-792 MHz bands to partition their service areas and to disaggregate their spectrum.  Despite assertions to the contrary, we believe that adopting this approach will improve smaller entities' ability to overcome entry barriers through the creation of smaller licenses that require less capital, and will thereby facilitate greater participation by rural telephone companies and other smaller entities, including those owned by minorities and women.173  With respect to the 10 and 20 megahertz licenses, to be auctioned on an EAG basis, there is an opportunity to partition into smaller regions.  This allows bidders for the 10 and 20 megahertz licenses maximum flexibility to partition the service areas so as to provide a particular type of service for a particular service area.  As a corollary to this approach,  we have also provided bidding credits to encourage participation in the development of this spectrum by rural telephone companies and small businesses.
75. Section 27.15 of the Commission's Rules,174 to which licensees in the 747-762 MHz and 777-792 MHz bands will be subject, permits licensees to partition their licensed geographic service areas or disaggregate their licensed spectrum at any time following the grant of their licenses.175  We will permit geographic partitioning of any service area defined by the partitioner and partitionee, spectrum disaggregation without restriction on the amount of spectrum to be disaggregated and combined partitioning and disaggregation.176  Pursuant to Section 27.15, the partitioning licensee must include with its request a description of the partitioned service area and calculations of the population of the partitioned service area and the licensed geographic service area,177 and will be subject to the provisions against unjust enrichment set forth in Section 27.15(c).178 
76. As we proposed in the NPRM, parties to partitioning agreements may choose between two options for satisfying the construction requirement.179 Under the first option, the partitioner and partitionee would each certify that it will independently satisfy the substantial service requirement for its respective partitioned area.  If a licensee fails to meet its substantial service requirement during the relevant license term, the non-performing licensee's authorization will be subject to cancellation at the end of the license term.  Under the second option, the partitioner can certify that it has met or will meet the substantial service requirement for the entire market.  If the partitioner fails to meet the substantial service standard during the relevant license term, only its license will be subject to cancellation at the end of the license term; the partitionee's license will not be affected by the failure.  
77. We offer these two options to partitioning parties because we believe that Part 27 licensees in the 747-762 MHz and 777-792 MHz bands may be motivated to enter into partitioning arrangements for different reasons and under various circumstances.  For example, a licensee might be motivated to partition its license in order to reduce its construction costs.  In that case, the original licensee would have less population to cover in order to meet its substantial service requirement and might find the first option more attractive.  Under another scenario, a licensee that has met or is close to meeting its substantial service requirement may be approached by another entity interested in serving a niche market in a portion of the service area.  Under these circumstances, the second option may seem more attractive to the parties.  In either instance, the public interest is advanced by permitting that flexibility, in terms of service areas and niche markets, conducive to optimizing the viability and value of the licenses partitioned, while precluding circumvention of our construction requirements.180
78. In addition, we will allow parties to disaggregation agreements to choose between two options for satisfying the construction requirement.181  Under the first option, the disaggregator and disaggregatee would certify that each will share responsibility for meeting the substantial service requirement for the geographic service area.  If the parties choose this option, both parties' performance will be evaluated at the end of the relevant license term, and both licenses could be subject to cancellation, should the requirement not be met.  The second option allows the parties to agree that either the disaggregator or the disaggregatee will be responsible for meeting the substantial service requirement for the geographic service area.  If the parties choose this option, and the party responsible for meeting the construction requirement fails to do so, only the license of the non-performing party will be subject to cancellation.  As with partitioned licenses, providing these options preserves the public interest in developing the spectrum to the same degree as that required had the disaggregation (or partitioning) not occurred.182
8. Public Notice of Initial Applications; Petitions to Deny
79. Background.  Section 309(b) and Section 309(c) of the Communications Act require public notice for initial applications, and substantial amendments thereof.183  These requirements provide that no such application shall be granted earlier than 30 days following the issuance of public notice by the Commission, and that the Commission may not require petitions to deny such applications to be filed earlier than 30 days following the public notice.  The same provision also grants the Commission the authority to impose public notice requirements for other licenses, even though the statute does not require public notice.  However, the administrative procedures for spectrum auctions adopted in Section 3008 of the Balanced Budget Act of 1997184 and Consolidated Appropriations Act185 permit the Commission to shorten notice periods in the auction context to five days for petitions to deny and seven days for public notice, notwithstanding the provisions of Section 309(b) of the Communications Act.  In the Part 1 Third Report and Order,186 the Commission exercised this statutory authority by amending Section 1.2108(b) and Section 1.2108(c) of the Commission's Rules187 to provide for a five-day period for filing petitions to deny and a seven-day public notice period for all auctionable services.  We received no comments on our proposal to adopt these deadlines for services in the 746-764 MHz and 776-794 MHz spectrum bands.
80. Discussion.  We have determined to adopt for this spectrum the seven-day notice requirement for initial applications and the five-day deadline for petitions to deny.  An applicant filing for both common carrier and non-common carrier authorizations in a single license and wishing to make subsequent status changes will also be subject to the seven-day public notice requirement.
C. Operating Rules
81. In the NPRM, we proposed to subject licensees in the 746-764 MHz and 776-794 MHz bands to the Part 27 rules that govern operations, subject to any modifications adopted in this proceeding. We proposed operating rules for a full range of possible licensees, consistent  with our stated intention to permit as much flexibility in the use of this spectrum as is consistent with the requirements of Section 303(y) of the Act.  The following discussion focuses on operating rules for licensees in the 747-762 MHz and 777-792 MHz bands to the extent that they offer common carrier services on these bands. We do not purport to survey at this time the range of statutory and regulatory provisions that may be relevant to any new service offerings on this band that qualify as new broadcast-type services.188
1. Applicability of General Common Carrier Obligations; Forbearance
82. Background.  In the NPRM, we reviewed our decisions respecting forbearance from the requirements of the Communications Act and interpreted the potential effect of these decisions on fixed common carrier services provided on the 746-764 MHz and 776-794 MHz bands.  We noted that we have exercised our authority under Section 332(c)(1)(A) of the Communications Act to forbear for CMRS from certain of the obligations imposed on common carriers by Title II of the Communications Act, such as the filing of tariffs and intercarrier contracts and maintenance of certain records. 189  We have also extended the deadline for CMRS providers to support service provider local number portability (LNP) until November 24, 2002,190 and have forborne from requiring CMRS providers to file tariffs for most international services, and from applying most of Section 226 of the Act, relating to telephone operator services.191  We noted that we have also exercised our expanded forbearance authority192 in the case of wireline carriers, for the "complete detariffing" of interstate, interexchange services offered by non-dominant interexchange carriers. 193  In addition, we have eliminated Part 41 requirements applicable to franks,194 as well as the prior approval requirements for most pro forma transfer applications involving telecommunications carriers.195
83. We also noted that, in the 47 GHz Notice, which proposed service rules for spectrum bands allocated to both fixed and mobile services, we sought comment on whether the exercise of our Section 332(c)(1)(A) forbearance authority with respect to CMRS, in the CMRS Second Report and Order, should be extended to fixed wireless service carriers.196  We sought comment in the NPRM for this proceeding on whether we should exercise our authority under Section 10 of the Act to forbear, in a similar fashion, from applying to non-CMRS licensees of this spectrum the specific Title II requirements that the Commission has previously determined not to apply to CMRS licensees.  However, cognizant of the fact that it will take longer for us to conduct a forbearance analysis than to adopt service rules for the 746-764 MHz and 776-794 MHz bands, we proposed an interim solution for non-CMRS licensees of these bands.  Section 214(a) of the Communications Act197 requires that no common carrier may discontinue, reduce, or impair service without Commission approval.  We proposed a discontinuance provision that is consistent with common carrier obligations set forth in Subpart E of Part 1 and in Parts 61 through Part 64 of the Commission's Rules.198  We also proposed to apply other parts of the Commission's Rules to ensure compliance of fixed service common carriers operating in the 746-764 MHz and 776-794 MHz bands with Title II of the Communications Act. 
84. AirTouch supports the Commission's Part 27 approach to Title II forbearance.199  AMTA urges the Commission to forbear from imposing its Title II common carrier obligations on non-CMRS licensees and on CMRS licensees that have been exempted from E911 and number portability requirements.  AMTA argues that these carriers serve a more specialized business-oriented market oriented principally toward dispatch services and lack those technical capabilities that would permit them to compete in the broader CMRS marketplace.200  
85. Discussion.  Pursuant to our prior exercise of authority under Section 332(c)(1)(A) to forbear for CMRS from certain of the obligations imposed on common carriers by Title II of the Communications Act, common carriers classified as CMRS, including those providing mobile services in the 747-762 MHz and 777-792 MHz bands, will not be required to file contracts of service, seek authority for interlocking directors,201 or submit applications for new facilities or discontinuance of existing facilities, and are prohibited from filing tariffs for interstate service to their customers or for interstate access service.  CMRS providers on this spectrum will be required to support service provider LNP by November 24, 2002.  Such providers also will not be required to file tariffs for most international services or be subject to most of Section 226 of the Act, relating to telephone operator services.  In addition, CMRS providers in the 747-762 MHz and 777-792 MHz bands will be subject to the Commission's complete detariffing of interstate, interexchange services offered by non-dominant interexchange carriers, to our elimination of Part 41 requirements applicable to franks, and to our elimination of the prior approval requirements for most pro forma transfer applications involving telecommunications carriers.
86. Although we solicited comment on the proper application of our forbearance authority with respect to this spectrum, we received no comments on the appropriate interpretation of the forbearance criteria in this context and no proposals concerning additional forbearance from specific regulatory provisions otherwise applicable to fixed service providers operating on this spectrum.  We continue to invite suggestions on ways in which we can alleviate or streamline regulations that would otherwise be applicable to fixed services provided on this spectrum.  In the NPRM we specifically addressed the requirements of Section 214(a) as they apply to licensees in the 747-762 MHz and 777-792 MHz bands that voluntarily discontinue, reduce, or impair service to a community or part of a community and are subject to the prior authorization requirement in Section 63.71 of the Commission's Rules.202  Subsequent to issuance of the NPRM, we amended Section 63.71 to provide for the automatic grant of a nondominant common carrier's application for discontinuance after 31 days.203  We are adopting this approach for fixed service common carriers here, to ensure comparable regulatory treatment between wireline providers and fixed wireless providers operating on the 747-762 MHz and 777-792 MHz bands. 204
87. As we indicated in the NPRM, a non-common carrier licensee in the 747-762 MHz and 777-792 MHz bands that voluntarily discontinues, reduces, or impairs service to a community or part of a community will be required to give written notice to the Commission within seven days. However, neither a fixed service common carrier, nor a non-common carrier licensee need surrender its license for cancellation, if "discontinuance" is merely a change in common carrier or non-common carrier status.
88. We do not find that the Commission's network reliability requirements will apply to fixed service common carrier licensees on this spectrum.  Thus, if the service provided by a fixed service common carrier licensee is involuntarily discontinued, reduced, or impaired for a period exceeding 48 hours, the licensee must promptly notify the Commission, in writing, of the reasons for the discontinuance, reduction, or impairment of service, including a statement indicating when normal service is to be resumed. When normal service is resumed, the licensee must promptly notify the Commission.
2. Equal Employment Opportunity 
89. Background. In the NPRM, we noted that Part 27 does not include an explicit Equal Employment Opportunity (EEO) provision.205  We also noted that Parts 24 (PCS) and Part 26 (General Wireless Communications Service) similarly lack an EEO provision although specific EEO provisions exist in other parts of our Rules.206  We noted that we had initiated a rulemaking on our Part 73 EEO rules and sought comment on whether there are any reasons not to apply Part 73 rules to conventional broadcasters operating in these spectrum bands and licensed under Part 27.  As to non-broadcast services on these bands, we invited comment on whether we should include a separate EEO provision in Part 27 and, if so, which of our EEO rules we should adopt.207  No commenter addressed this issue.
90. Discussion. An applicant's EEO requirements will depend on the type of service the applicant chooses to provide.  As previously stated, in the interests of flexibility and optimum spectrum use, we have enabled the provision of any service identified in Section 27.2 of the Commission's Rules208 and this Order, so long as the licensee complies with the technical rules governing spectrum use.  The Commission's EEO Rules are service-specific; different EEO Rules govern different services.  Our modified FCC Form 601 requires an applicant to choose one, or several, of four regulatory statuses: (a) common carrier, (b) non-common carrier, (c) private, internal communications, or (d) broadcast.209  An applicant's election on its FCC Form 601 will determine the EEO Rules that apply to the applicant.
91. Allowing a licensee to self-characterize its regulatory status in this proceeding is consistent with the flexible approach that the Commission took in the DBS NPRM.210  The Commission in the DBS NPRM proposed that DBS (direct broadcast satellite) service licensees have the choice of providing service on a broadcast, common carrier, or non-broadcast, non-common carrier basis with an applicant's self-characterization determinant of the applicable EEO rules.  Licensees in the 700 MHz spectrum have the choice of providing any service authorized under Section 27.2 of the Commission's Rules211 so long as the licensee complies with the technical rules governing spectrum use.212 
92. We therefore conclude that that an applicant's EEO requirements are determined by the type of service an applicant chooses to provide.  All commercial mobile radio service (CMRS) providers are subject to the Commission's EEO requirements,213 for example, see Parts 22 and 90 of our rules.214 Similarly, a licensee that provides broadcast service will be subject to the Commission's EEO Rules contained in Section 73.2080.215  We also note that commercial mobile service providers are generally subject to the Commission's common carrier EEO obligations.216
D. Technical Rules
93. All licensees in the 747-762 MHz and 777-792 MHz bands, including licensees who acquire their licenses through partitioning or disaggregation, will be subject to the general provisions of Part 27 relating to equipment authorization, frequency stability, antenna structures and air navigation, international coordination, environmental requirements, quiet zones, and disturbance of AM broadcast antenna patterns.217 In addition, the following technical rules will apply to these licensees.
1. In-Band Interference Control
94. Background.  As we noted in the NPRM, a broad range of services and technologies will operate on this spectrum, and their nature will affect the potential for interference between licensees operating on the same spectrum in adjacent service areas.  We noted that in other frequency bands various means have been employed to avoid interference when we have permitted flexibility in services and technologies.  We tentatively concluded that either a coordination218 or a field strength219 method could provide a satisfactory means of controlling harmful interference between systems in the 746-764 MHz and 776-794 MHz bands.  We observed that a general coordination requirement may minimize the potential for interference to coordinated facilities, but may also impose unnecessary coordination costs for facilities with a low potential for interference and increase the potential for undesirable strategic or anti-competitive behavior.220  We also noted, however, that a field strength limit, while reducing the need for coordination by giving licensees the ability to unilaterally deploy facilities in boundary areas as long as the limit is met, may not provide sufficient assurance against interference to such facilities.  We sought comment on the advantages and disadvantages of both approaches, and on any other approaches that would minimize interference among co-channel licensees.
95. No commenter favors the coordination approach for controlling in-band interference, but AirTouch and SBC endorse the use of the field strength method.  AirTouch indicates that the field strength method is "particularly appropriate" for terrestrial mobile services in larger geographic areas."221  SBC concludes that the field strength method is "the more efficient method of reducing the risk of interference across service areas," and suggests that licensees in adjacent service areas should be permitted to agree to alternative field strengths along their mutual border.222
96. Discussion.  We agree with commenters that the field strength limit approach should be used to control co-channel interference in this band.  That approach provides established, objective criteria for controlling in-band interference, and gives licensees the ability to construct and operate facilities in boundary areas so long as the limit is met.  As discussed in the NPRM, a coordination approach, on the other hand, could impose unnecessary coordination costs for facilities that are not likely to cause interference, and could lead to possible anti-competitive activities.  Furthermore, nothing in the record suggests that use of a field strength method would not provide adequate protection against co-channel interference. Therefore, we will require licensees to limit signals from all base and fixed stations operating in the 747-762 MHz band to a particular predicted or measured field strength at the licensee's geographic border.
97. Although commenters agree on the appropriateness of a field strength approach, they did not provide any guidance as to the proper field strength.  In both 800 MHz EA-based and 900 MHz MTA-based SMR licensing,223 we employed a 40 dBu/m field strength at the geographic border.  Because the types of services that will be provided in the 700 MHz band are likely to be similar to the types of services permitted in the 800 and 900 MHz bands,224 and because of its proximity to these bands, we conclude that the appropriate field strength for the control of in-band interference in the 700 MHz band is 40 dBu/m.225  We believe that use of the field strength procedure will satisfy the requirement in Section 337(d)(1) that the Commission establish "interference limits at the boundaries of the spectrum block and service area."226 The use of this procedure should enable licensees to deploy their facilities effectively, while minimizing interference to co-channel licensees in adjacent geographic areas.  Finally, we agree with SBC's suggestion to permit licensees in adjoining areas to agree to alternate field strengths at their common border and therefore adopt this approach.  It will provide licensees increased flexibility in implementing their systems without increasing the risk of harmful interference. 
2. Out-of-Band and Spurious Emission Limits
98. Background.  We noted in the NPRM that different kinds of technical criteria may be used to limit out-of-band and spurious emissions designed to protect services outside the licensee's assigned spectrum.  We also noted Congress's concern,227 with ensuring that "public safety service licensees continue to operate free of interference from any new commercial licensees."  We therefore proposed that licensees operating in the 746-764 MHz and 776-794 MHz bands be required to attenuate the power below the transmitter power (P) by at least 43 + 10 log10 (P) dB, or 80 decibels, whichever is less ("43 + 10 log P"), for any emission on all frequencies outside the licensee's authorized spectrum -- except for emissions that fall within the GPS band, which is addressed in Section III.D.4, below.228
99. Several commenters support our proposal that licensees in the 746-764 MHz and 776-794 MHz bands be required to comply with the 43 + 10 log P attenuation requirement.229  APCO, however, points out that interference exists in the 800 MHz band from "low-site, low-power commercial systems [that] are intermixed in a common area and operate on adjacent frequencies to public safety systems."230  Motorola notes that such adjacent channel interference exists even though 800 MHz technologies are providing out-of-band emission characteristics "superior" to the 43 + 10 log P requirement.231  Motorola identifies several possible interference scenarios that could occur when both commercial and public safety base transmissions originate in the 746-776 MHz band (the "lower band") and commercial and public safety mobile transmissions originate in the 776-806 MHz band (the "upper band") -- e.g., potential interference from commercial base transmitters to public safety mobile receivers at the 764 MHz interface and potential interference from public safety base transmitters to commercial base receivers at the 776 MHz interface.232  
100. In recent ex parte filings, a number of parties addressed the subject of out-of-bound emissions ("OOBE").  For example, Motorola asserts that because of the interference scenario that exists at the 764 MHz interface,233 emissions from non-coordinated commercial base stations should be attenuated to -57 dBm in the first 6.25 kHz channel of the 764-776 MHz public safety band.234  FreeSpace supports a requirement that a Guard Band licensee attenuate its out-of-band emissions by a factor of not less than 87 + 10 log P in a 6.25 kHz bandwidth.235  Bell Atlantic takes issue with Motorola's proposal, and believes that the Commission should establish an OOBE limit that is comparable to the 43 + 10 log P limit applied elsewhere in our rules for other commercial services.236  Lucent, in comments attached by Bell Atlantic, indicates that the limits proposed by Motorola to protect public safety are "excessive," and concludes that the level of attenuation demanded by Motorola would "place an unwarranted burden on the CMRS provider, significantly reduce the useable spectrum, and reduce the value of the spectrum to potential bidders."  Lucent suggests that we consider interference parameters that are consistent with those currently applied to other commercial services.237 
101. Motorola subsequently suggests that switching both the commercial and public safety transmit bands, so that mobile transmissions originate in the lower band and base transmissions originate in the upper band, "would provide better protection to public safety services."238 Motorola supports the following interference limits under its "reverse band" proposal:  (1) limiting emissions from commercial base transmitters operating in the upper band to -57 dBm per 6.25 kHz into the 794-806 MHz public safety band;239 (2) limiting emissions from commercial base transmitters operating in the upper band to -62 dBm per 6.25 kHz into the 764-776 MHz band;240 and (3) limiting emissions from commercial mobile transmitters operating in the lower band to -35 dBm per 6.25 kHz into the 764-776 MHz band.241  APCO opposes the reversal of the commercial and public safety bands because it would impact the ability to "integrate 700 MHz public safety radio systems with the substantial number of public safety radio systems operating above 806 MHz."242  US WEST argues that the standards proposed by Motorola could "adversely affect commercial licensees' ability to utilize the spectrum won at auction."243 
102. The Federal Law Enforcement Wireless Users Group (FLEWUG), which consists of law enforcement and public safety officials from numerous federal agencies, recommends the following attenuation values to protect public safety receivers in the 764-776 MHz and 794-806 MHz bands:  (1) for transmitters with power levels above 1 watt:  65 + 10 log P dB; and (2) for transmitters with power levels below 1 watt: 65 dBc (db relative to the carrier).244  Motorola, commenting on the FLEWUG proposal, and citing its earlier analysis, states that the 65 + 10 log P limit is only appropriate at the interface where commercial mobiles could cause interference to public safety base station receivers.245  Motorola believes that the 87 + 10 log P protection limit it proposed for the interface where base-to-mobile interference could occur "results in the appropriate protection for public safety."246  Motorola also points out differences between its analysis and FLEWUG analysis of the mobile-to-mobile interference scenario that exists at the 776 MHz interface when the 746-764 MHz band is used for base transmissions and the 776-794 MHz band is used for mobile transmissions, but notes that under its reversed band plan this "extremely severe interference problem" would not exist.247  The National Telecommunications and Information Administration (NTIA) provides a technical analysis of the interference scenarios that could exist between commercial and public safety operations in the 700 MHz band, and concludes that, in order to protect public safety receivers, we should:  (1) require that out-of-band emissions from commercial transmitters operating in the upper band be attenuated by 65 + 10 log P into the 764-776 MHz public safety band, and by 70 + 10 log P into the 794-806 MHz public safety band; and (2) require that out-of-band emissions from commercial transmitters operating in the lower band be attenuated by 80 + 10 log P into the 764-776 MHz and 794-806 MHz public safety bands248
103. Discussion.  We conclude that licensees operating in the 747-762 MHz and 777-792 MHz bands should, at a minimum, be required to attenuate the power below the transmitter power (P) by at least 43 + 10 log10 (P) dB for any emission on all frequencies outside the licensee's authorized spectrum -- except for emissions that fall within the GPS band, which is addressed in Section III.D.4, below.  We also provide additional measures of interference protection to operations in the public safety bands, as described below.
104. In establishing OOBE limits in the 700 MHz service, we are guided by Congress's concern that public safety service licensees be able to operate free of harmful interference from new commercial licensees.  Parties to this proceeding also have made convincing engineering showings of the potential for interference to public safety licensees from commercial users in adjacent bands, and those showings are supported by independent evidence of increasing instances of actual interference between commercial and public safety operations in other parts of the spectrum, principally the 800 MHz band.249  Against this backdrop, we recognize the need to adopt technical rules that provide adequate protection to public safety entities operating in this band.  We are mindful, however, that Congress also intended that we establish rules that will enable viable commercial operations here.  Thus, while we might set extremely stringent OOBE limits in an effort to afford maximum protection to public safety licensees, we conclude that, as a practical matter, at some point, the incremental benefits to protection of public safety from ever higher OOBE limits would be outweighed by the adverse effects on the commercial usefulness of the spectrum.  Moreover, even the most stringent OOBE limits do not guarantee there will never be any interference under any circumstance between commercial and public safety licensees.  We conclude, therefore, that we should set OOBE limits that, while achieving the primary goal of protecting public safety, also strike a reasonable balance between protecting  public safety and maintaining the commercial viability of this band.  As explained below, we adopt OOBE limits for 30 megahertz licensees in the 700 MHz band that we believe will satisfy these dual objectives.
105. Some commenters believe that we should provide OOBE limits in line with the 43 + 10 log P limits currently used to provide interference protection in other wireless services.250  Motorola believes that the appropriate OOBE limit needed to protect public safety receivers from commercial base stations, which will operate in the 747-762 MHz band,251 is a requirement to attenuate the power below transmitter power (P) operating in that spectrum by at least 87 + 10 log P dB per 6.25 kHz in the 764-776 MHz public safety band.252  NTIA, however, favors an 80 + 10 log P attenuation of commercial base station transmissions in the 747-762 MHz band to protect public safety receivers in both the 764-776 MHz and 794-806 MHz public safety bands, and FLEWUG supports a 65 + 10 log P dB attenuation requirement to protect public safety receivers in these bands.  Similarly, Bell Atlantic, Lucent, and US WEST urge the adoption of a lower OOBE limit, arguing that Motorola's recommended limit could inhibit the utility of the spectrum for commercial use.  As noted above, based on the record, we are persuaded that we should adopt an OOBE limit higher than 43 + 10 log P in order to provide adequate protection to public safety.  On the other hand, we are not persuaded that the 87 + 10 log P recommended by Motorola is necessary, and are concerned about the negative impact that standard could have on the viability of 30 megahertz systems operating in the 747-762 MHz band.  While we believe that an OOBE limit in line with the 65 + 10 log P standard proposed by FLEWUG and others might well protect public safety licensees, we adopt a more conservative OOBE limit of 76 + 10 log P for emissions from 30 megahertz base station transmitters into the 764-776 MHz and 794-806 MHz public safety bands.253  We conclude that this limit strikes the proper balance among the competing recommendations of the various parties, is closely in line with 80 + 10 log P standard recommended by NTIA, and will adequately protect public safety while maintaining the viability of the band for 30 megahertz users.
106. With regard to the appropriate OOBE limit for mobile and portable transmitters, which will operate in the 777-792 MHz band, FLEWUG supports the adoption of a 65 +10 log P standard for mobiles transmitters.  Motorola concurs with this OOBE limit for emissions from mobile transmissions into the 794-806 MHz public safety band.  NTIA favors a 65 + 10 log P requirement for emissions into the 764-776 MHz public safety band, but supports a 70 + 10 log P standard for emissions into the 794-806 MHz band.  Again, our goal is to adopt OOBE limits that will adequately protect public safety while enabling viable commercial operations.  We therefore adopt a requirement to attenuate the power of mobile and portable transmitters operating in that spectrum by at least 65 + 10 log P dB per 6.25 kHz in the 764-776 MHz and 794-806 MHz public safety bands.  We find that compliance with a more stringent OOBE limit could make it difficult to produce mobile and portable equipment to meet our base station standard while maintaining commercial viability in the 700 MHz spectrum band.254  In particular, the amount of frequency separation that would be required between a 30 megahertz mobile or portable transmission and the public safety bands if a more stringent standard were required could be so great that a significant portion of the 30 megahertz spectrum might become unusable.  Because we permit fixed operations in the 777-792 MHz band, we also address the adoption of an OOBE limit for fixed equipment operating in this band.  If fixed transmissions are employed in the 777-792 MHz band, then interference to public safety operations in the 764-776 MHz band from such transmissions would resemble the type of interference to that band that could occur from base stations transmitting in the 746-764 MHz band (and for which we have adopted a 76 + 10 log P standard).  In addition, Motorola indicates that if fixed operation is permitted in the band designated for mobile and portable transmissions, then a "base-to-base" interference scenario would occur, and that a 92 + 10 log P standard should be applied in this instance.255  We conclude that, to protect public safety operations from fixed equipment operating in the 777-792 MHz band, we should adopt the standard we have adopted for emissions from base stations operating in the 747-762 MHz band, i.e., a requirement to attenuate the power of fixed transmitters operating in the 747-762 MHz band by at least 76 + 10 log P dB per 6.25 kHz in the 764-776 MHz and 794-806 MHz public safety bands,.
107. Finally, we decide that where an emission from a 30 megahertz transmitter is found to cause harmful interference to public safety operations, at our discretion, we may require greater out-of-band attenuation from such transmitters.256  In conclusion, while no OOBE limits can guarantee non-interference to public safety operations, we believe that the OOBE limits we adopt herein will limit such occurrences, and that in adopting these limits we have satisfied the Congressional concern to ensure that public safety licensees are protected from interference.
3. RF Safety/Power Limits
108. Background.  Section 27.52 of the Commission's Rules257 subjects licensees and manufacturers to the RF radiation exposure requirements specified in Sections 1.1307(b), 2.1091, and 2.1093 of the Commission's Rules, which list the services and devices for which an environmental evaluation must be performed.258  In adopting the rule, we concluded that routine environmental evaluations for RF exposure are required for applicants desiring to use the following types of transmitters:  (1) fixed operations, including base stations and radiolocation transmitters, when the effective radiated power (ERP) is greater than 1,000 watts; (2) all portable devices; and (3) mobile devices, if the ERP of the device, in its normal configuration, will be 1.5 watts or greater.259  In the NPRM, we proposed to treat services and devices in the 746-764 MHz and 776-794 MHz bands in a manner comparable to other services and devices that have similar operating characteristics, and tentatively concluded that the requirements in Section 27.52 for licensees in the 2.3 GHz band should apply to licensees in the 746-764 MHz and 776-794 MHz bands.  SBC supports this approach.260  In the NPRM we did not propose specific power limits for operations in the 746-776 MHz and 776-794 MHz bands. 
109. Discussion.  With respect to RF Safety, we adopt a threshold of 1000 w ERP for categorical exclusion from routine evaluation for RF exposure for base and fixed stations.  As in the 2.3 GHz band, where we adopted an identical standard, this threshold recognizes the flexibility with respect to use, power, location, and other factors accorded licensees operating in this band.  We determine that this power limit should be appropriate to ensure compliance with our RF exposure standards for most situations.261  
110. Although we are adopting a maximum power limit of 30 w ERP for mobile transmitters in the 777-792 MHz band, the threshold for routine evaluation of these devices for RF safety purposes shall be 1.5 w or greater in conformance with Section 2.1091 of our Rules.262  For portable devices in these bands, we adopt a maximum power limit of 3 w ERP with the provision that these devices be evaluated for RF exposure in compliance with Section 2.1093 of our Rules.263  Thus we will modify Sections 1.1307(b), 2.1091, and 2.1093 of the Commission's Rules264 to include potential services and devices developed for use in the 747-762 MHz and 777-792 MHz bands.  As we have previously stated, we are providing guidance on acceptable methods of evaluating compliance with the Commission's RF exposure limits in OET Bulletin No. 65, which has replaced OST Bulletin No. 65.265
111. Turning to power limits, we adopt power limits that will provide for base-to-mobile and fixed-to-fixed communication in the 747-762 MHz band, and for mobile-to-base and fixed-to-fixed communication in the 777-792 MHz band.  Specifically, we adopt the following power limits:  (1) for base stations and fixed stations operating in the 747-762 MHz band, an ERP no greater than 1,000 watts and an antenna height above average terrain (HAAT) no greater than 305 m;266 (2) for mobile, fixed, and control stations operating in 777-792 MHz band, an ERP no greater than 30 watts; and (3) for portable stations operating in 777-792 MHz band, an ERP no greater than 3 watts.  We believe that the adoption of these power limits will facilitate both mobile and fixed service operations in the 700 MHz band.  The 1000 w ERP power limit for base and fixed stations operating in the 747-762 MHz band should enable satisfactory coverage for commercial systems operating in this band.  The 30 w ERP power limit for mobile, fixed, and control stations in the 777-792 MHz band is the power limit adopted for mobile and control station operation in the 700 MHz public safety band.  And the 3 w ERP power limit for portable stations in the 777-792 MHz band is consistent with the power limit adopted for portables in the 700 MHz public safety band.
4. Special Considerations for Use of Channels 65, 66, and 67 
112. Background. The second harmonic transmissions267 of services that will be operating on TV channels 65-67 fall within a band used for radionavigation in the Global Navigation Satellite System (GNSS), which includes the Global Positioning System (GPS) at 1563.42-1587.42 MHz. 268  To protect this system and to ensure that equipment that operates in these bands does not cause radio interference to the GNSS,269 particularly when that system is used for precision approach and landing, NTIA recommended270 that the following out-of-band emission limits from fixed and mobile transmitters operating in the 746-764 MHz and 776-794 MHz bands be applied to all spurious emissions, including second harmonic emissions in the 1559-1610 frequency range:  (1) for wideband emissions, -70 dBW/MHz equivalent isotropically radiated power (EIRP); and (2) for narrowband emissions,271 -80 dBW/700 Hz.  NTIA also proposed the adoption of the DTV out-of-band limit of -110 dBc for emissions in the 1559-1610 MHz band from broadcast transmitters operating in the 746-764 MHz and 776-794 MHz bands.  Thus, in the NPRM we sought comment on the risk of harmonic interference to GNSS operations from systems licensed in the 776-794 MHz bands, and whether the emissions limits recommended by NTIA would provide the necessary protection for GNSS systems from anticipated fixed and mobile operations in these bands. 
113. In addition, we sought comment on the impact of imposing the out-of-band emission limits proposed by NTIA on the design of equipment for use in the 776-794 MHz band.  Noting that stringent OOBE"272 limits are generally more difficult to meet for mobile and hand-held transmitters than for base and control stations or for fixed service stations, we sought information on how our proposal might affect the cost, size, weight, and battery life for handheld or portable equipment, and whether the proposal could severely curtail the availability of the 36 megahertz of spectrum designated by Congress for commercial use.273 
114. In response to the NPRM AirTouch states generally that the proposed OOBE limits could affect the production of portable units and thereby affect the availability of the commercial 700 MHz spectrum.274  In detailed comments, the U.S. GPS Industry Council ("USGPS"), on the other hand, asserts that the proposed OOBE standards do not sufficiently protect GPS receivers from the second harmonic emissions of systems operating in the 776-794 MHz band.275  USGPS contends that NTIA levels were developed solely to protect aircraft GPS receivers from interference from MSS Mobile Earth Terminals (METs) operating in the 1-3 GHz band.276  According to USGPS, if these levels are adopted for different types of services, "each one of those services would endanger the availability of GPS by itself, raising the noise floor above the level that GPS receivers can operate . . . and the cumulative effect from all services operating at emissions of -70/80 dBW/MHz would be devastating for critical safety-of-life GPS applications."277  USGPS argues that the only default level that can safely be established at this time, "absent case-by-case independent studies," is a wideband out-of-band emission threshold limit of -100 dBW/MHz"278 
115. Discussion.  Like the concerns we addressed above in balancing public safety and commercial interests, we are similarly committed to ensuring that the GNSS is protected adequately against interference without adopting OOBE limits on equipment operating in the 777-792 MHz band that could effectively prohibit the use of this band by new 30 megahertz licensees.  Rather, we seek to enable such licensees to implement new services in a timely manner.  As discussed below, we believe that the proposed OOBE limits provide the appropriate balance to meet the needs of both of these competing requirements.  Thus, we adopt the following OOBE limits for all spurious emissions, including harmonics, that fall within the 1559-1610 frequency range, from equipment operating in the 747-762 MHz and 777-792 MHz bands:  (1) for wideband emissions, -70 dBW/MHz equivalent isotropically radiated power (EIRP); and (2) for discrete emissions of less than 700 Hz bandwidth, an absolute EIRP limit of -80 dBW.  Outside of emissions into the 1559-1610 MHz RNSS band, the OOBE standards adopted in Section III.D.2 will apply.
116. We are concerned about critical safety-of-life applications of GPS, particularly those systems that will use GPS for aeronautical radionavigation, and seek to ensure that the rules we adopt in this proceeding do not adversely affect these operations.  NTIA, which represents the Federal Government's positions on spectrum management matters, has suggested specific OOBE limits for equipment operating in this band that it believes will sufficiently protect aeronautical radionavigation operations.  We agree with NTIA that the proposed OOBE limits will "ensure that fixed and mobile equipment will not cause radio frequency interference to the GNSS when those systems are used for precision approach and landing" and we adopt NTIA's recommendations.279   
117. We reject USGPS's argument that our proposed emission limits are insufficient to protect GPS operations.280  Similar arguments were raised by USGPS in a proceeding regarding an application by AirTouch Satellite Services U.S., Inc. for a license to construct and operate mobile earth terminals transmitting in the 1.6 GHz band.  Consistent with the International Bureau's October 4, 1999 Order,281 we find that the degree of precision needed to provide position updates for planes moving at high speeds is more rigorous than the precision that is needed for other GPS uses.  Although GPS has and will be used for a variety of non-aeronautical safety-of-life applications, USGPS has not established that such other uses of GPS will require the high level of protection from unwanted signals that we are adopting herein, much less a greater level of protection.  We thus conclude that USGPS has not justified a need for a more stringent standard.   
118. With regard to the tests USGPS conducted to determine the effects of unwanted emissions into the GPS band from emitters complying with the proposed limits, we believe that USGPS has not sufficiently demonstrated that signals from emitters meeting the proposed emission limits will cause interference to GPS receivers that will affect the ability of such GPS receivers to perform their functions.282  We recognize that in certain scenarios a 700 MHz emitter and a GPS receiver could be placed in very close proximity and that this could result in interference to the GPS receiver.  We do not believe, however, that it is in the public interest to protect GPS receivers in every such possible scenario.  Our analysis must be based on reasonable assumptions of emitter-receiver proximity.  Specifically, we must balance the needs of competing requirements of the spectrum.  In this case we must balance the needs of users of GNSS and future users of the 700 MHz band.  We conclude that our proposed OOBE limit will be sufficient to protect critical GPS operations.
119. Contrary to USGPS' argument, we also find that our proposed -70 dBW/MHz wideband OOBE limit is not inconsistent with the United States' position in the ITU-R study group activities.  Our decision in this proceeding is consistent with the decisions adopted on this matter internationally.  Should future actions internationally result in conflicts between the decision we adopt here and international positions, we would consider those differences as part of a separate, future proceeding, if appropriate. 
120. USGPS also asks us to adopt a harmonized spectrum policy that considers the cumulative impact on the GPS noise floor from all relevant services.  The protection of GPS, as with all services, is an ongoing obligation of this agency.  Nonetheless, even if we undertook a study to analyze the effects of various services on GPS, we believe it would be difficult to identify and consider all relevant services, as well as all possible future services.  Therefore, we conclude that the protection of GPS is better handled on a case-by-case basis, in the context of each relevant proceeding.  In this proceeding we have considered all relevant technical findings of interested parties and believe we have come to a reasonable balance -- protecting GPS operations while proceeding expeditiously to make this spectrum available to the public.
E. Competitive Bidding 
1. Statutory Requirements 
121. Background.  Most of the auctions the Commission has conducted to date have been simultaneous multiple-round auctions.  In Section 3002 of the Balanced Budget Act, Congress directed the Commission to "provide for the design and conduct (for purposes of testing) of competitive bidding using a contingent combinatorial bidding system that permits prospective bidders to bid on combinations or groups of licenses in a single bid and to enter multiple alternative bids within a single bidding round."283 In the NPRM, we sought comment on whether the auction of the 746-764 MHz and 776-794 MHz bands may present a suitable context for such combinatorial procedures, especially if our service rules provide for broadcast services.  We also asked commenters to consider whether, absent the application of combinatorial rules, the existing standardized auction rules in Part 1 are adequate.284  In addition, we sought comment on whether our statutory obligations prohibited public safety entities from participating in the auction of licenses for this spectrum.285
122. Those commenters who addressed the issue believe the auction of licenses for the 746-764 MHz and 776-794 MHz bands presents a suitable context for using a combinatorial bidding system.  AirTouch contends that while combinatorial bidding is not essential, it is suitable for the auction of the 746-764 MHz and 776-794 MHz bands.286  KM and MSTV also support the use of combinatorial bidding, but MSTV suggests as well allowing consortia of potential service providers to participate in the auction, with the expectation that, if a consortium won, the spectrum could be divided pursuant to a predetermined plan to accommodate the needs of each individual member.  This would address the difficulties caused to some providers by the pairing of frequency blocks. 287  
123. On the issue of public safety participation, we received little comment.  APCO asserts that there is no rational reason to prevent a public safety entity from participating in the auction, and Southern similarly contends that public safety uses should be permitted, with public safety applicants subject to the same rules as commercial applicants.288
124. Discussion.  We will not use combinatorial bidding procedures for the 747-762 MHz and 777-792 MHz bands, although we believe that such procedures may well have certain benefits in the auction of licenses for these bands.  The primary benefit is that combinatorial bidding allows bidders to bid on licenses in packages rather than single units.  This allows bidders to better express the value of any synergies that may exist among licenses.  In this context, for example, it would be possible for a bidder to bid on several geographic area licenses as a package or on channels as either paired or unpaired. To date we have not yet tested or employed combinatorial bidding, which involves numerous complications for both the Commission and bidders.  Consistent with Congress' directive, we are actively developing theoretical and applied combinatorial bidding approaches, but we have not yet completed the development of a practical means of implementing such an auction design.  We therefore find that we should not use this complex and untested auction design for the 747-762 MHz and 777-792 MHz bands, especially in light of the statutory deadline imposed here.289 
125. We believe our existing competitive bidding rules generally will be adequate for the auction of licenses for all permitted uses in the 747-762 MHz and 777-792 MHz bands.  As explained above, we have adopted a geographic area licensing scheme for licenses in these bands that we believe is appropriate in light of the services that may be provided consistent with our rules.  There is nothing in the Commission's rules that would prevent any parties from participating as part of a consortium of service providers, so long as the consortium observes the Commission's rules.  Section 1.2105(a) of the Commission's rules requires that applicants that have entered into consortia identify a