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A. 1. a.(1)(a) i) a),X0Í Í,X0Í Í,0Í Í,0Í Í,XÍ.,XÍ.,Í.,Í. .,., US#:}D4PXP#     X` hp x (#%'0*,.8135@8:<     #:}D4PXP#  .,., US#:}D4PXP#2I yO-   X-     x Federal Communications Commission`(# FCC 96284 ă #C\  P6QP#v3 Before the à FEDERAL COMMUNICATIONS COMMISSION  yOGWashington, D. C. 20554 ă  X -#XP\  P6QXP#  X-In the Matter of hh@) x` `  hh@)  X-Interconnection and Resale Obligations@)  X-Pertaining to` `  hh@)h CC Docket No. 9454  X-Commercial Mobile Radio Serviceshh@)  XQ - SECOND REPORT AND ORDER * AND THIRD NOTICE OF PROPOSED RULEMAKINGTP  X -  Adopted: June 27, 1996; Released: August 13, 1996 Comment Date: October 4, 1996 Reply Date: November 22, 1996  X- By the Commission: Commissioner Chong issuing a statement.  Xk-  TABLE OF CONTENTS  X=-`( (##X\  P6G;P##C\  P6QP#Paragraph #Xj\  P6G;XP#у  X&-  X-X` hp x (#%'0*,.8135@8:-Statement at 23. In order to promote competition, commenters support the idea of prohibiting CMRS providers from discriminating with respect to the availability or terms of roaming  X -agreements.   {O-#C\  P6QP#э See APC Comments at 78; Comcast Comments at 2022; Pacific Comments at 3; Sprint Venture  {Oj-Comments at 1518; U.S. Airwaves Reply Comments at 11; March 1996 PCIA Ex Parte at 4.  Commenters further state that we should not mandate particular technology or standards, and that the burden of developing and implementing any technology necessary to  X -permit roaming should lie with the party seeking a roaming agreement. v {O-#C\  P6QP#э See APC Comments at 89; Sprint Venture Comments at 19; Pacific Reply Comments at 45; Hausman  {O -Affidavit at 6; March 1996 PCIA Ex Parte at 3.  Xy- C. Decision  XK-x 10. At the outset, we note that Sections 201(b) and 202(a) of the Communications Act apply to CMRS providers and govern the provision of common carrier communications"40*&&aa*"  X-services. {Oy-#C\  P6QP#э See 47 U.S.C.  332(c)(1) (CMRS providers are subject to duties of common carriers, including Sections 201 and 202). We reject BellSouth's argument that roaming is merely a billing arrangement and  X-not a common carrier service.p" yO-#C\  P6QP#э BellSouth Reply Comments at 15.p We have held that certain billing and collection services  X-offered by local exchange carriers (LECs) to interexchange carriers (IXCs) are not common carriage because such services do "not allow customers of the service . . . to communicate or transmit intelligence of their own design and choosing," and because such services can be  X-offered by noncommunications entities such as credit card companies. yO -#C\  P6QP#э Detariffing of Billing and Collection Services, CC Docket No. 8588, Report and Order, 102 F.C.C.2d  {O -1150, on recon., 1 FCC Rcd 445 (1986). Roaming capability, by contrast, gives end users access to a foreign network in order to communicate messages of their own choosing. We therefore agree with those commenters that argue that roaming is a  XH-common carrier service.2H  {O-#C\  P6QP#э See APC Comments at 8; Sprint Venture Comments at 1516; CTIA Reply Comments at 1718; Pacific Reply Comments at 34; U.S. Airwaves Reply Comments at 11. As commenters point out, roaming satisfies the statutory elements of CMRS, and is thus a common carrier service, because it is (1) an interconnected mobile service (2) offered for profit (3) in such a manner as to be available to a substantial portion of the public. 47  {O'-U.S.C.  332(d)(1). 2 We also note that we have authority to impose a roaming requirement in the public interest pursuant to our license conditioning authority under  X -Sections 303(r) and 309 of the Act.eZ  {O-#C\  P6QP#э See WBEN, Inc. v. United States, 396 F.2d 601, 61719 (2d Cir.), cert. denied sub nom. WBEN, Inc. v. FCC, 393 U.S. 914 (1968); Upjohn Co. v. FDA, 811 F.2d 1583 (D.C. Cir. 1987); Committee for Effective Cellular Rules v. FCC, 53 F.3d 1309, 131820 (D.C. Cir. 1995).e  X -x 11. The record submitted in response to the Second NPRM demonstrates that roaming capability is widely available to cellular subscribers, is highly valued by those subscribers, and is one of the industry's fastest growing sources of revenue. For example, roaming income accounted for 13.6 percent of cellular industry revenues during the last six months of 1994 and was growing at 42 percent per year, despite the fact that many carriers charged premium  X{-prices to roamers.j { yO -#C\  P6QP#э Hausman Affidavit at 34.j Furthermore, when APC in the Washington/Baltimore area became the first licensee in the nation to offer broadband PCS service, its largest cellular competitor  XM-concentrated its advertising campaign on the unavailability of roaming to APC's customers.!Mr {Op#-#C\  P6QP#э See, e.g., Washington Post, Nov. 29, 1995, at B5; see also Hausman Statement at 34; March 1996 PCIA  {O:$-Ex Parte at 2. Such activity indicates that roaming capability may be a key competitive consideration in the"6!0*&&aaf" wireless marketplace, and that newer entrants may be at a competitive disadvantage visavis incumbent wireless carriers if their subscribers have no ability to roam on other networks. Having said that, we recognize that roaming regulation may impose significant costs and burdens on CMRS providers and that we should narrowly tailor our actions to avoid placing an undue burden on such providers.  Xv-x 12. Based on comments in the record and the experience of the first broadband PCS licensee to begin service, we conclude that the public interest will be served by extending our  XH-existing manual roaming rule, which is part of our cellular service rules,q"H {O -#C\  P6QP#э See 47 C.F.R.  22.901.q to obligate all CMRS licensees competing in the mass market for realtime, twoway voice services and to protect the subscribers of all carriers offering such services. That group consists of cellular, broadband PCS and covered SMR providers. These "covered SMR providers" include two classes of SMR licensees. The first consists of 800 MHz and 900 MHz SMR licensees that  X -hold geographic area licenses.#X Z yO-#C\  P6QP#э The Commission is now in the process of issuing geographic area licenses in the 900 MHz service based on the results of the 900 MHz auction completed in April 1996. Auctioning of geographic area licenses in the 800 MHz SMR band will commence following the conclusion of our rulemaking in PR Docket No. 930144.  The second covers incumbent wide area SMR licensees, defined as licensees who have obtained extended implementation authorizations in the 800 MHz or 900 MHz SMR service, either by waiver or under Section 90.629 of our rules. Within each of these classes, "covered SMR providers" includes only licensees that offer realtime, twoway switched voice service that is interconnected with the public switched network, either on a standalone basis or packaged with other telecommunications services. This is the same group of SMR licensees to which we have applied our recently adopted rule governing  X4-restrictions on resale.$4z {O_-#C\  P6QP#э See Resale Order at para. 19 & Appendix C.  X-x 13. Under the rule that we adopt today, cellular, broadband PCS, and covered SMR licensees are required to provide manual roaming to any subscriber of any of these services who is using a handset that is technically capable of accessing the licensee's system. The rule does not require licensees to modify their systems in order to provide service to any end user. Some commenters argue that amending the existing rule in this manner is unnecessary because cellular systems cannot distinguish between a cellular subscriber using a cellularonly handset and a PCS subscriber using a dualmode handset, and therefore the existing rule  Xe-effectively protects PCS as well as cellular roamers.%e  {O"#-#C\  P6QP#э See CTIA Comments at 1920; AT&T Reply Comments at 11. As other commenters observe,"e %0*&&aa"  X-however, the current rule on its face extends only to cellular subscribers.-& {Oy-#C\  P6QP#э See BellSouth Comments at 5; GTE Comments at 15; Pacific Comments at 4; RCC Comments at 5;  {OC-Pacific Reply Comments at 67; U.S. Airwaves Reply Comments at 11; March 1996 PCIA Ex Parte at 4.- To avoid any uncertainty, our action today clarifies that any subscriber to any covered service with a technically cellularcompatible handset has the same right as a cellular subscriber to manually roam on cellular systems. Furthermore, our existing rule does not obligate broadband PCS and covered SMR licensees. We are applying the manual roaming rule to these categories of CMRS licensees in order to ensure regulatory parity and to promote competition in the wireless market by enhancing all such carriers' abilities to compete. Since our action today furthers the public interest by facilitating the widespread availability of roaming, we make compliance with the rule we adopt today a condition of cellular, broadband PCS and covered SMR licenses under Sections 303(r) and 309 of the Act.  X -x 14. By contrast, the record does not establish that ubiquitous roaming capability is important to the competitive success or utility of mobile services other than those offered by  X -cellular, broadband PCS and covered SMR providers.' $ {O-#C\  P6QP#э See InFlight Comments at 45 (arguing that roaming is inapplicable to airtoground service because all of the licensees provide nationwide coverage). We therefore conclude that our action today shall be limited to such licensees. In particular, because they do not compete substantially with cellular and broadband PCS providers, local SMR licensees offering mainly dispatch services to specialized customers in a noncellular system configuration, as well as licensees offering only data, oneway, or stored voice services on an interconnected basis, are not covered by the roaming rule we adopt today. We believe that the costs of applying the roaming rule to their operations would outweigh the benefits. Not the least of these costs is that applying the policy might give them an incentive to eliminate their interconnection with  X-the public switched network, which would not be in the public interest.p(~ {OL-#C\  P6QP#э See AMTA Comments at 67.p Of course, any SMR provider that is not interconnected to the public switched network does not offer CMRS, and therefore is not subject to the roaming rule. Allegations that particular practices by noncovered CMRS providers are unjust, unreasonable or otherwise in violation of the Communications Act would be grounds for complaint under Section 208 of that Act.  X|-  III. FURTHER NOTICE OF PROPOSED RULEMAKING ĐTP  XN- A. CarriertoCarrier Roaming  X -x15. Our previous notice of proposed rulemaking concerning roaming was released more than one year ago. At that point, our initial broadband PCS auctions had just been"  (0*&&aa[" conducted and licenses were not yet issued. The business plans of companies entering the market for broadband PCS services were in their formative stages. No dual band or dual mode phones were yet available, and no broadband PCS provider had experience trying to negotiate a roaming agreement. The comments we received largely reflected the nascent nature of the market's development. Most commenters supported our tentative decision to leave roaming to market forces while monitoring its progress. Relatively few commenters (mostly new entrants) advocated the need for regulation that would promote automatic roaming. Since the record predated the operation of nearly all broadband PCS systems, it could not demonstrate the failure of the market to ensure the widespread availability of automatic roaming arrangements. Overall, the record yielded by the initial comments was inconclusive. In the interim, market activity has accelerated. Several broadband PCS systems are now operational, and others are expected to become so in short order. Dual mode phones  X -will be available in a few months.)$  {Oe -#C\  P6QP#э See Letter from Mark J. Golden, Vice President, Industry Relations, PCIA to Michael Wack, Deputy  {O/-Chief, Policy Division, Wireless Telecommunications Bureau, dated June 20, 1996 (June 1996 PCIA Ex Parte) at Attachment 2 (press report of manufacturer's announcement of the availability of a dual mode PCS/cellular handset in JulySeptember 1996 time frame). The technical standards necessary to render cellular and certain PCS network technologies interoperable for automatic roaming purposes appear to  X -have been developed.*  {O#-#C\  P6QP#э See id. at Attachment 1 (TIA Document PN3212, "Internetworking/Interoperability Between DCS1900  yO-and IS41 Based MAPs for 1800 MHz Personal Communications Systems"); "Position of the North American Interest Group," filed as Attachment to Letter from Gary K. Jones, Omnipoint Corporation, to William F. Caton,  {O}-Acting Secretary, FCC, dated June 18, 1996, at 39 (Omnipoint Ex Parte). The North American Interest Group  {OG-is an organization comprised of member companies of the GSM MoU Association. Id. at 1 n.1. We understand that roaming negotiations between PCS and cellular carriers have begun in some markets.  Xy-x16. The inconclusiveness of the original record does not present a basis for us to adopt automatic roaming rules. The record does persuade us, however, of the need to seek uptodate information on events of the past year concerning automatic roaming issues. Evidence indicates that the views of interested parties on automatic roaming issues have evolved significantly since our last action on such issues. Entities that have obtained broadband PCS licenses or recently submitted winning bids in broadband PCS auctions have  X-urged us to examine automatic roaming issues more thoroughly.+j  {O -#C\  P6QP#э See, e.g., Omnipoint Ex Parte at 1 ("cellular carriers in the United States should negotiate in good faith  yO -with the licensed PCS carriers to accomplish PCS to cellular roaming"); Letter from Allen Salmasi, Chairman and Chief Executive Officer, NextWave Telecom, Inc., to William F. Caton, Acting Secretary, FCC, dated June 18, 1996 (recommending that the Commission refresh the record on automatic roaming issues and consider adopting guidelines that would require cellular and PCS providers to provide nondiscriminatory access to their networks but would not impose additional technical requirements or costs on such providers).  Another, more established, entity in the wireless marketplace recently made a detailed presentation of its view that Commission action on automatic roaming would be premature and could harm the" +0*&&aaS"  X-development of wireless services.=, {Oy-#C\  P6QP#э See Letter from Kathleen Q. Abernathy, Vice President, Federal Regulatory, AirTouch Communications,  {OC-to William F. Caton, Acting Secretary, FCC, dated June 20, 1996 (June 20, 1996 AirTouch Ex Parte).= There also appears to have been a significant shifting of  X-positions by some commenters.2-$ {O-#C\  P6QP#э E.g., compare PCIA Comments at 79 (Commission action on roaming is undesirable) with June 1996  {O-PCIA Ex Parte  at 2 (cellular carriers should not be permitted to treat PCS carriers differently than cellular  {OR-carriers); compare   Pacific Comments at 3 (Commission action on roaming is necessary) with Letter from Gina Harrison, Director, Federal Regulatory Relations, Pacific Telesis Group Washington, to William F. Caton,  {O-Acting Secretary, FCC, dated June 25, 1996 (June 1996 Pacific Ex Parte) (informing Commission that Pacific has "ceased actively urging the Commission to adopt a mandatory roaming rule").2 In general, the record raises the question whether, during the broadband PCS buildout period, market conditions may create economic incentives for certain CMRS carriers to discriminate unreasonably in the provision of roaming, or to otherwise engage in unjust or unreasonable practices with regard to roaming.  Xv-x17. Some commenters contend that the need to jump start competition by emerging wireless providers, especially PCS providers, is too great to rely on clarification of statutory obligations in afterthefact adjudicatory proceedings, such as complaint proceedings under  X1-Section 208 of the Act.j.1 yO-#C\  P6QP#э 47 U.S.C.  208.j Such commenters are arguing, essentially, that a proactive Commission posture toward roaming at this time, including defining in advance the obligations of licensees to provide automatic roaming, will promote competition and thereby eliminate the need for regulation in the long run. On the other hand, the record contains thoughtful arguments that the regulation of automatic roaming is unnecessary and may distort  X -the development of wireless services./ 4  {O-#C\  P6QP#э See, e.g., Owen Declaration at 2426; June 20, 1996 AirTouch Ex Parte. Given the importance that we attach to ensuring the widespread availability of roaming, and the inconclusiveness of the current record, we conclude that we should request additional comment on whether it would serve the public interest to adopt rules governing the provision of automatic roaming service by CMRS providers to other CMRS providers.  X4-x18. Our consideration of automatic roaming issues is framed by three general questions. First, is there a need for Commission action? Second, if we are persuaded that regulation would serve the public interest, what specific action should be taken? Third, what are the disadvantages of such action, especially as to network costs and additional burdens on providers, particularly smaller providers?  X- x19. Some commenters indicate that new entrants may need access to originating and terminating roaming agreements in order to begin competing immediately and effectively with their relatively more established counterparts, and that market forces alone may not ensure"| /0*&&aa" that such arrangements will be widely available in the near term. They claim that incumbent CMRS providers have the market power and the economic incentive to deny roaming  X-agreements to new entrants.0 {OK-#C\  P6QP#э See, e.g., APC Comments at 7; Hausman Affidavit at 68; March 1996 PCIA Ex Parte at 23. On the other hand, AT&T argues that this incentive exists only when both A and B Block cellular licensees in a market also hold cellular licenses in a PCS  X-provider's home market, and that such dual overlap occurs only rarely.1Z {O-#C\  P6QP#э AT&T Ex Parte at 68 (dual overlap occurs in only 3.2% of market pairs involving top 30 cellular markets, and 4.0% of market pairs involving top 50 cellular markets). Carriers also argue that they have strong incentives to enter into roaming agreements to get revenues. We note as well that the geographic scope of broadband PCS licenses may reduce the importance of roaming to ensuring the ability of PCS providers to compete. Most roaming appears to occur  XH-in adjacent markets.2ZH {O -#C\  P6QP#э See Letter from Kathleen Q. Abernathy, Vice President, Federal Regulatory, AirTouch Communications, to William F. Caton, Acting Secretary, FCC, dated June 24, 1996, at Attachment (calculation showing that over 60 percent of AirTouch subscribers' roaming minutes of use occurred in adjacent markets).  The relatively limited geographic scope of cellular service areas prompted cellular carriers to compete for customers based on the extent of their roaming  X -networks and their roaming rates and features. In contrast, broadband PCS license areas are  X -significantly larger than cellular. Accordingly, broadband PCS customers can go much further distances without roaming. This raises the question of whether broadband PCS providers need to be able to offer automatic roaming arrangements in order to be able to compete. We seek comment on this issue.  X-x20. We also seek comment on whether incumbent wireless providers have an incentive to, and will, deny roaming agreements to other providers. We note that there is no specific evidence in the record of unreasonable discrimination against PCS licensees concerning the provision of roaming. To the contrary, there is evidence that some PCS providers believe they will be able to negotiate roaming agreements successfully without an  X-automatic roaming rule.}3 {O-#C\  P6QP#э See June 1996 Pacific Ex Parte. } However, it is still early in the process. Many PCS licensees are just starting to construct their systems. Dualmode handsets are just becoming available. We seek evidence of the denial of agreements, or unreasonable discrimination in the provision of agreements, to the extent it exists. We also seek comment on the likelihood of discrimination among wireless carriers belonging to partnerships, joint ventures, and other alliances among cellular carriers. We seek comment on whether the geographic extent of a carrier's license holdings (in particular, carriers whose cellular and/or PCS holdings give them essentially nationwide, facilitiesbased operating "footprints") affects its incentive to enter into roaming  Xe-agreements with smaller competitors in a way that merits a roaming requirement.4eh  {O~%-#C\  P6QP#э See Vanguard Comments at 910; Hausman Statement at 23. We seek"e 40*&&aa" comment, too, on whether requiring carriers to enter into roaming agreements will affect the value of these carriers' nationwide footprints.  X-x21. We seek comment on whether new entrants currently have viable options to obtain automatic roaming if incumbent cellular providers unreasonably deny such agreements. We note that although the deployment of multiple CMRS networks will, in the long run, increase the number of parties with which roaming agreements can be obtained in any area, such networks will not be widely available during the construction period of broadband PCS. We seek comment on the timing of such construction period. AT&T argues that, to the extent this is a problem at all, a PCS carrier can obtain roaming service during the buildout period in any market by entering into a contractual agreement with a cellular carrier that  X -already possesses a roaming agreement in that market.5  {O| -#C\  P6QP#э AT&T Ex Parte at 46; see also CTIA Comments at 20. Pacific responds that this approach may be administratively cumbersome, financially costly, and potentially inconsistent with the  X -way roaming agreements are written.6 Z {O-#C\  P6QP#э Hausman Statement at 1; see also Pacific Reply Comments at 7. We seek comment on whether AT&T's proposal for new entrants to "piggyback" on existing roaming arrangements is a reasonable means for carriers to obtain roaming capability.  Xy-x22. To the extent that a basis for Commission action on automatic roaming is established, we seek comment on what the nature of that action should be. For example, should we, as a condition of license, require cellular, broadband PCS and covered SMR providers which enter into roaming agreements with other such providers to make like agreements available to similarly situated providers, where technically compatible handsets are being used, under nondiscriminatory rates, terms and conditions? Such a rule could prevent established carriers from entering into favorable roaming agreements only with selected providers and unreasonably denying such agreements to other similarly situated carriers. We clarify that such a rule would need to recognize that not all carriers are similarly  X-situated.7 {OG-#C\  P6QP#э See RCA Comments at 78; RCC Comments at 5; Sprint Venture Comments at 16. Thus, such a rule need not require carriers to offer roaming agreements to all other carriers on the same terms and conditions, or even to offer roaming service to any carrier at all. We seek comment on the question of whether a covered CMRS provider that enters into a roaming agreement with another CMRS provider, however, should be required to offer like roaming agreements to other similarly situated providers upon reasonable request, without  X7-unreasonably discriminating on rates, terms, and conditions. We seek information and comment on the cost and burden of such a requirement.  X-x23. Sprint Venture argues that providers should be permitted to offer roaming agreements to affiliates on different terms and conditions than to nonaffiliates, reasoning that"~70*&&aa" a roaming arrangement with an affiliate may be part of a greater agreement that affords other  X-benefits to the provider.8 {Ob-#C\  P6QP#э Sprint Venture Comments at 16 n.23; see also BellSouth Reply Comments at 16; AT&T Ex Parte at 12. Comcast, however, contends that major carriers' practice of offering discriminatorily favorable roaming rates to their affiliates has had a serious  X-detrimental effect on the competitive position of carriers without extensive affiliations.k9Z yO-#C\  P6QP#э Comcast Comments at 2122.k We seek comment on whether a carrier should be able to offer a more favorable rate to its affiliates. Similarly, we seek comment on whether a carrier should be able to offer a lower rate to a geographically proximate carrier. We seek comment on whether, as a general matter, it would serve the public interest to require carriers to make roaming service available to other carriers pursuant to oneway agreements under the same terms and conditions as  X1-under reciprocal agreements.~:1 {O -#C\  P6QP#э See Sprint Venture Comments at 17 n.24.~ We seek comment on whether carriers should be permitted to refuse to enter into automatic roaming agreements with other facilitiesbased carriers in their markets. We seek comment on the advantages and disadvantages of a rule that would facilitate such "inregion" roaming. We seek comment on how inregion roaming may affect carriers' incentives to build out their networks. We also seek comment on how an exception that permits carriers to deny roaming agreements to inregion competitors could be administered, given the different geographic scope of cellular, broadband PCS and covered SMR licenses and operations.  Xb-x24. Cellnet of Ohio claims that licensed, facilitiesbased carriers often discriminate against resellers with regard to the provision of roaming services, and typically will not enter into roaming agreements with resellers at all. Cellnet of Ohio argues that special rules are  X-necessary to protect the right of resellers to enter into roaming agreements.;| {OJ-#C\  P6QP#э See Cellnet of Ohio Comments at 14; see also Cable & Wireless Reply Comments at 11. We do not propose to regulate the prices that carriers may charge resellers (or anyone else) for roaming, other than perhaps to prohibit discrimination in the prices charged to similarly situated carriers. We seek comment, however, on the additional costs and burdens that may be imposed on facilitiesbased carriers if they are required to separately enter into agreements with multiple resellers. We also seek comment on what, if any, benefits might be generated by enabling resellers to obtain roaming agreements.  Xe-x25. One of the principal reasons for our tentative conclusion in the Second NPRM to monitor the development of roaming, rather than to propose rules at that time, was our concern that technical factors might render compliance with rules unduly costly for providers, or that our rules might inadvertently impede technological progress. Based on the comments that we received, we are not persuaded that a roaming rule would have such an effect unless" ;0*&&aay" it required direct interconnection of networks for the continuation of calls in progress. While handoff of calls in progress is available at this time in some cellular markets, it is much less  X-widespread than originating and terminating access.y< {OK-#C\  P6QP#э See Sprint Venture Comments at 15.y More importantly, the record does not indicate that broadband PCS or cellular providers need to be able to obtain "continuation of calls in progress" roaming capability in order to compete. For these reasons, we do not  X-propose to require continuation of calls in progress.=Z {O-#C\  P6QP#э See Pacific Reply Comments at 23; see also Sprint Venture Comments at 18. We seek additional technical information on this subject, and request comment on our analysis.  XH-x26. We seek comment on whether and how rules governing automatic roaming could be at odds with our general policy of allowing market forces, rather than regulation, to shape the development of wireless technologies. Our goal would be to make any rule we adopt consistent with such a policy. For example, under such a rule, if systems used different technologies or operated on different frequencies, we believe the carrier seeking to enable its subscribers to roam on another system would have the burden of developing and implementing any technology necessary to achieve that result. Furthermore, on the basis of the existing record, we believe any automatic roaming rule should be sufficiently flexible to  X-permit a carrier to change its technology for legitimate business reasons (e.g., increasing capacity, spectrum efficiency, fraud control or the deployment of enhanced features) without any obligation to make its system accessible to roamers using different technologies, to the  XM-extent such a technology change is otherwise permitted by our rules.x>M {O-#C\  P6QP#э See, e.g., 47 C.F.R.  22.933.x A carrier could not, however, introduce features into its system in order to obstruct service to roamers from systems using otherwise compatible technologies. We seek comment on this analysis.  X-x27. Requiring nondiscrimination in roaming agreements would, theoretically, generate certain benefits. However, there also are potential downsides to imposing an automatic roaming requirement. First, imposing such a requirement is inconsistent with our general policy of allowing market forces, rather than regulation, to shape the development of wireless services. Similarly, it could be viewed as at odds with Congress' goal in adopting the Telecommunications Act of 1996 of creating a "procompetitive, deregulatory national policy  Xg-framework" for the United States telecommunications industry.?g~ yO!-#C\  P6QP#э S. Conf. Rep. No. 104230, 104th Cong., 2d Sess. 1 (1996). Does the importance of roaming and the potential for discrimination warrant a departure from our general competitive, deregulatory approach to wireless?  X -x28. Second, as discussed above, cellular carriers compete vigorously on the basis of" ?0*&&aay" their roaming services. If we adopt an automatic roaming nondiscrimination requirement, will carriers still be able to differentiate their roaming services? If they cannot, will this lessen competition in the wireless market? Also, what impact will a roaming requirement have on the development of new and improved roaming features?  X-x29. Third, the imposition of an automatic roaming requirement could be costly and burdensome. There are currently approximately 1,400 cellular systems; we anticipate that broadband PCS and covered SMR providers, once licensed, will expand that number appreciably. What network and administrative costs are associated with entering into and maintaining roaming agreements among all such carriers? Will carriers, particularly smaller carriers, be able to absorb these costs or to recover them from their customers or other  X -carriers? In this regard, we emphasize that we are not considering requiring carriers to upgrade their networks or implement any technology solely to enable roamers on different  X -frequencies or with different air interface devices to complete calls on their systems.u@  {ON-#C\  P6QP#э See paras. 2526, supra.u Similarly, we are not considering requiring carriers to interconnect their networks to ensure  X -that calls in progress can continue.qA Z {O-#C\  P6QP#э See para. 25, supra.q  Xy-x30. Finally, some commenters argue that a roaming requirement would unduly expose  Xb-CMRS providers to losses due to fraud,Bb {O-#C\  P6QP#э See AirTouch Comments at 1314; Alltel Comments at 3; CTIA Comments at 2122; RCC Comments at 5; Vanguard Comments at 9 n.22. or that fraud cannot be controlled without direct  XK-interconnection of switches.pCKF {OB-#C\  P6QP#э See Nextel Comments at 7.p We seek further comment on these arguments. We note that cellular carriers have exercised various options to protect themselves under the existing manual roaming rule, such as requiring manual roamers to supply a valid credit card  X-number.mD {O-#C\  P6QP#э See RCC Comments at 5.m We seek comment on whether similar protective measures would be available and equally effective if an automatic roaming rule is adopted. We also seek comment on whether carriers could include in their agreements with other carriers provisions to suspend roaming service in case of fraud, or other appropriate antifraud provisions, so long as they do so on a  X-nondiscriminatory basis,wEj  {O"-#C\  P6QP#э See Pacific Reply Comments at 8.w and whether a particular carrier that poses an unusually high risk of fraud (for example, a carrier that is located in an area where fraud is especially prevalent or that is known to have poor mechanisms for fraud control) could for that reason be differently treated with respect to the terms of a roaming agreement."e E0*&&aa1"Ԍ X-ԙ B. Sunset  X-x31. Pacific's expert argues that roaming regulations should apply only for a transitional period. At the end of the transitional period, he states, the rules will become unnecessary because competition will have developed to the point that market forces will  X-cause roaming to become available where it is economically efficient.F {O-#C\  P6QP#э Hausman Affidavit at 3; see also Hausman Statement at 5.  X_-x32. We agree with this analysis. We believe that once broadband PCS providers' buildout periods are completed, sufficient wireless capacity will be available in the market and, as a result, any roaming regulations, whether manual or automatic, likely will become superfluous. We believe that, given the availability of sufficient capacity, a carrier would not have either the incentive or the ability to unreasonably deny manual roaming to an individual subscriber, or to unreasonably refuse to enter into an automatic roaming agreement with another CMRS provider, because some other carrier in its service area would be willing to do  X -so. We anticipate, due to our broadband PCS buildout requirement,qG Z {O-#C\  P6QP#э See 47 C.F.R.  24.203.q that the market for cellular, broadband PCS and covered SMR services will be substantially competitive within  X-five years after we complete the initial round of licensing broadband PCS providers. We therefore believe that any action taken concerning automatic roaming should sunset five years after we award the last group of initial licenses for currently allocated broadband PCS spectrum. We seek comment on this issue. We also seek comment on whether, for the same reasons, the manual roaming rule we adopt today also should sunset at the expiration of this fiveyear period. We note that this is the same sunset period that we recently adopted for our resale rule, and that the commencement of the fiveyear period will be announced by Public  X-Notice.tH {O-#C\  P6QP#э See Resale Order at para. 24.t  X- C. Other Issues  X-x 33. In order to provide automatic roaming and adequately protect itself against fraud, a carrier would have to make arrangements with a subscriber's home system to verify the  Xe-validity of the subscriber's account. In the Second NPRM, we noted that such arrangements, as well as other arrangements that may be necessary for subscribers to use special features while roaming, may implicate concerns relating to subscriber privacy and carrier control over  X"-proprietary information, and we requested comment on these issues.xI"~ {OQ$-#C\  P6QP#э Second NPRM, 10 FCC Rcd at 10694.x Since that time, however, Congress has amended the Communications Act by adding a new Section 222," I0*&&aay" which generally prohibits a carrier that obtains proprietary information from another carrier for purposes of providing a telecommunications service from using that information for any  X-other purpose.mJ yOK-#C\  P6QP#э 47 U.S.C.  222(b).m We tentatively conclude that the treatment of roamingrelated access to  X-proprietary information is governed by Section 222.VKZX {O-#C\  P6QP#э See Implementation of the Telecommunications Act of 1996: Telecommunications Carriers' Use of Customer Proprietary Network Information and Other Customer Information, CC Docket No. 96115, Notice of Proposed Rulemaking, FCC 96221 (released May 17, 1996).V We seek comment on this analysis.  X-x!34. Bell Atlantic and Bell Atlantic NYNEX ask us to preempt state regulation of  Xv-roaming.Lvz yO -#C\  P6QP#э Bell Atlantic Comments at 9; Bell Atlantic NYNEX Reply Comments at 46. Neither these parties nor any other commenters, however, supply any evidence that states have attempted to regulate roaming. We therefore see no basis for addressing the issue of preemption at this time. We note, however, that any automatic roaming rules would apply to both interstate and intrastate roaming if they were made a condition of license pursuant to Sections 303(r) and 309 of the Act. We further note that the states are preempted by statute from any regulation of intrastate roaming that would constitute the regulation of  X -CMRS entry or rates.3M  yO-#C\  P6QP#э 47 U.S.C.  332(c)(3). A state may regulate CMRS rates if, upon the state's petition, we find that certain  {Oo-conditions are satisfied. Id. To date, we have not made any such finding for any state.3 We seek comment on this analysis.  X -x"35. Finally, Comcast proposes that we facilitate interoperability among CMRS systems by implementing governmentindustry joint studies through the Office of Engineering  X-and Technology.oNd  yO-#C\  P6QP#э Comcast Comments at 23 n.66. o Comcast's proposal is beyond the scope of this proceeding, and we do not address it herein. We plan to address issues of interconnectivity and interoperability generally in a rulemaking proceeding that we will commence in the near future to implement Section  XK-256 of the Communications Act.jOK  yO-#C\  P6QP#э 47 U.S.C.  256. j  X- IV. CONCLUSION ă  X-x#36. We conclude that, under current market conditions, the widespread availability of roaming capability on cellular, broadband PCS and covered SMR networks promotes the public interest in nationwide, ubiquitous, and competitive telecommunications service, and that, under current market conditions, market forces alone may not always produce such a  X-result. We therefore require cellular, broadband PCS and covered SMR licensees to provide" O0*&&aao"  X-manual roaming service upon reasonable request to any subscriber to any of these services whose handset is capable of accessing their systems. We also seek comment on whether we should adopt rules governing cellular, broadband PCS and covered SMR providers' obligations  X-to provide automatic roaming service.   Xv- X V. PROCEDURAL MATTERS #Xw P7XP#у  XH- A. Filing Procedures  X -  PARA203 x $37. Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the  X -Commission's Rules,qP  yO| -#C\  P6QP#э 47 C.F.R.  1.415, 1.419.q interested parties may file comments on or before October 4, 1996, and  X -reply comments on or before November 22, 1996. To file formally in this proceeding, you must file an original and four copies of all comments, reply comments, and supporting comments. If you want each Commissioner to receive a personal copy of your comments, you must file an original plus eight copies. You should send comments and reply comments to the Office of the Secretary, Federal Communications Commission, Washington D.C. 20554. A copy of each filing also should be sent to International Transcription Service (ITS), 2100 M Street, N.W., Suite 140, Washington, D.C. 20037, (202) 8573800, and to Rita McDonald, Federal Communications Commission, Wireless Telecommunications Bureau (WTB), Policy Division, 2025 M Street, N.W., Room 5202, Washington, D.C. 20554. Comments and reply comments will be available for public inspection during regular business hours in the Reference Center of the Federal Communications Commission, 1919 M Street, N.W., Room 239, Washington, D.C. 20054.  X-x%38. Parties are encouraged to submit comments and reply comments on diskette. Such diskette submissions would be in addition to and not a substitute for the formal filing requirements presented above. Parties submitting diskettes should submit them to Rita McDonald of the WTB Policy Division. Such a submission should be on a 3.5 inch diskette formatted in an IBM compatible form using WordPerfect 5.1 for Windows software. The diskette should be submitted in "read only" mode, and should be clearly labelled with the party's name, the proceeding (CC Docket No. 9454), the type of pleading (comment or reply comment) and the date of submission.  X-x &39. This is a nonrestricted notice and comment rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided they are  X -disclosed as provided in Commission Rules.Q X {O$-#C\  P6QP#э See generally 47 C.F.R.  1.1202, 1.1203, 1.1206(a). x"!Q0*&&aa "Ԍ X- B. Regulatory Flexibility Act  X-x '40. As required by Sections 603 and 604 of the Regulatory Flexibility Act,lR yOK-#C\  P6QP#э 5 U.S.C.  603, 604.l the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) and an Initial Regulatory Flexibility Analysis (IRFA) of the expected impact on small entities of the rules adopted and proposed in this document. The FRFA and IRFA are set forth in Appendices B and C of this document, respectively. Written public comments are requested on the IRFA. These comments must be filed in accordance with the same filing deadlines as comments on the rest of the Notice, but they must have a separate and distinct heading designating them as responses to the Initial Regulatory Flexibility Analysis. The Secretary shall send a copy of this Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration in accordance with paragraph 603(a) of the Regulatory Flexibility Act.  X -  X -C. Authority   X-x (41.AUTHORITY This action is taken pursuant to Sections 1, 4(i), 4(j), 201, 202, 303(r), 309, 332, and 403 of the Communications Act, 47 U.S.C.  151, 154(i), 154(j), 201, 202, 303(r), 309, 332, 403.  X4- D. Further Information   X-x )42.FURTHERINFO For further information regarding this Order, contact Jeffrey Steinberg of the Wireless Telecommunications Bureau Policy Division, at 2024181310.  X-  X-   X-0VI. ORDERING CLAUSES ׃  X|-x *43.ؠORDERINGCLAUSESנAccordingly, IT IS ORDERED that the rule amendments appearing at Appendix  Xe-D and discussed  herein ARE ADOPTED and SHALL BE EFFECTIVE sixty days following publication in the Federal Register. x` `  hh@hpp  xx 0(#(#Xx` `  hh@hpp  xx 0(#(#Xx` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhWilliam F. Caton x` `  hhActing Secretary x` `  "#XR0*&&aae""  X-   )APPENDIX A ׃  X- Parties Filing Comments  X-T P 1. AirTouch Communications, Inc. (AirTouch) 2. All Cellular, Inc. 3. Alltel Mobile Communications, Inc. (Alltel) 4. American Mobile Telecommunications Association, Inc. (AMTA) 5. American Personal Communications (APC) 6. American Tel Group 7. Ameritech 8. AT&T Corporation (AT&T) 9. Bell Atlantic Mobile Systems, Inc. (Bell Atlantic)  X -10. BellSouth Corporation, BellSouth Telecommunications, Inc., BellSouth Cellular Corp. (#(#X (BellSouth) 11. Cellnet Communications, Inc. 12. Cellnet of Ohio, Inc. (Cellnet of Ohio) 13. Cellular Service, Inc. and ComTech Mobile Telephone Company (CSI/ComTech) 14. Cellular Telecommunications Industry Association (CTIA) 15. Comcast Cellular Communications, Inc. (Comcast) 16. Connecticut Telephone and Communication Systems, Inc. (Connecticut Telephone) 17. E.F. Johnson Company (E.F Johnson) 18. Frontier Cellular Holding Inc. (Frontier) 19. General Communication, Inc. (GCI) 20. General Services Administration (GSA) 21. Geotek Communications, Inc. (Geotek) 22. GTE Service Corporation (GTE) 23. Horizon Cellular Telephone Company (Horizon) 24. InFlight Phone Corporation (InFlight) 25. Information Technology Association of America (ITAA) 26. WorldCom, Inc. d/b/a LDDS WorldCom (LDDS) 27. MCI Telecommunications Corporation (MCI) 28. MobileMedia Communications, Inc. (MobileMedia) 29. MobileOne 30. Molasky, Andrew M. 31. National Telephone Cooperative Association (NTCA) 32. National Wireless Resellers Association (NWRA) 33. New Par  X"-34. New York Telephone Company, New England Telephone & Telegraph Company, and (#(#X NYNEX Mobile Communications Company (NYNEX) 35. Nextel Communications, Inc. (Nextel) 36. Pacific Telesis Mobile Services and Pacific Bell Mobile Services (Pacific)"Q%R0*&&aa $"Ԍ37. Paging Network, Inc. (PageNet) 38. PCS Primeco, L.P. (PCS Primeco) 39. Personal Communications Industry Association (PCIA) 40. Rural Cellular Association (RCA) 41. Rural Cellular Coalition (RCC) 42. San Diego Cellular Communications, Inc. 43. SNET Cellular, Inc. (SNET) 44. The Southern Company (Southern) 45. Southwestern Bell Mobile Systems, Inc. (SBMS) 46. Sprint Telecommunications Venture (Sprint Venture) 47. Telecommunications Resellers Association (TRA) 48. Time Warner Telecommunications (Time Warner) 49. Vanguard Cellular Systems, Inc. (Vanguard) 50. Western Wireless Corporation (Western) 51. WJG Maritel Corporation (WJG Maritel)  X- Parties Filing Reply Comments ă 1. AirTouch 2. Allnet Communication Services, Inc. (Allnet) 3. AMTA 4. Ameritech 5. AT&T 6. Bell Atlantic NYNEX Mobile, Inc. (Bell Atlantic NYNEX) 7. BellSouth 8. Cable & Wireless, Inc. (Cable & Wireless) 9. People of the State of California and the Public Utilities Commission of California (California) 10. CSI/ComTech 11. CTIA 12. Connecticut Telephone 13. E.F. Johnson 14. GSA 15. Geotek 16. GTE 17. InFlight 18. MCI 19. National Association of Regulatory Utility Commissioners (NARUC) 20. NWRA 21. New Par 22. Nextel 23. Pacific Bell Mobile Services (Pacific)"Q%R0*&&aa $"Ԍ24. PageNet 25. PCS Primeco 26. PCIA 27. SNET 28. Southern 29. SBMS 30. Sprint Venture 31. TRA 32. U.S. AirWaves Inc. (U.S. AirWaves) 33. Vanguard 34. Waterway Communication System, Inc. (Watercom)  X -   " R0*&&aa "  X-  ) APPENDIX B Final Regulatory Flexibility Analysis  X- xAs required by Section 603 of the Regulatory Flexibility Act, 5 U.S.C.  603 (RFA),  X-an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Second Notice of  Xv-Proposed Rulemaking in this proceeding (Second NPRM). The Commission sought written  Xa-public comments on the proposals in the Second NPRM, including on the IRFA. The  XL-Commission's Final Regulatory Flexibility Analysis (FRFA) in this Second Report and Order conforms to the RFA, as amended by the Contract With America Advancement Act of 1996,  X -Pub. L. No. 104121, 110 Stat. 847 (1996) (CWAAA).S  yO -#C\  P6QP#э Subtitle II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996  {Oa -(SBREFA), codified at 5 U.S.C.  601 et seq.  X - I.xNeed for and Purpose of this Action:  X - xIn this decision, the Commission extends its existing rule under which cellular licensees are required to provide manual roaming service upon request to subscribers in good standing of any cellular carrier. Under the rule adopted in this decision, cellular, broadband personal communications services (PCS), and certain specialized mobile radio (SMR) licensees must provide manual roaming service upon request to subscribers in good standing of all such carriers, provided the subscriber is using a handset that is technically capable of accessing the licensee's system. This action will ensure that customers of all providers competing in the mass market for twoway, realtime, interconnected switched voice service have an equal opportunity to obtain manual roaming service, if they are using technically compatible equipment. In this way, the rule will promote the development of competition by ensuring that newer entrants to the market, as well as competitors without extensive affiliations, are not competitively disadvantaged by the inability of their subscribers to roam.  X- II.XxSummary of Issues Raised by the Public Comments in Response t