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In the Second Report and Order, the Commission adopted rules governing competitive bidding for multilateration Location and  X-Monitoring Service (LMS) frequencies.3\  yOW-ԍxAmendment of Part 90 of the Commission's Rules to Adopt Regulations for Automatic Vehicle  {O-Monitoring Systems, Second Report and Order, PR Docket No. 9361, FCC 98157 (1998) ("LMS Second Report  {O-and Order").3 Specifically, the Commission determined that Section 309(j) of the Communications Act, as amended by the Balanced Budget Act of 1997, requires the Commission to assign licenses from among mutually exclusive applications for  X-multilateration LMS by competitive bidding or auction.]  {O6-ԍxLMS Second Report and Order at  9.] Hennepin requests that the Commission amend its LMS rules to grant exemption from the bidding process, pursuant to Section 309(j)(2) of the Act, to applicants intending to use LMS frequencies for public safety purposes, thus permitting the County to obtain a LMS license without participating in  X=-competitive bidding.=~  yOl#-ԍxWe note that Hennepin has also filed an application to acquire unassigned frequencies for public safety  yO4$-use pursuant to Section 337(c) of the Communications Act. Application for License Pursuant to  337 of the  {O$-Communications Act of 1934 filed by Hennepin on January 11, 1999; 47 U.S.C.  337(c). See also Hennepin Reply at 67. We do not address here the merits of Hennepin's assertion that it meets the Section 337(c)  {O&-requirements for obtaining spectrum without engaging in competitive bidding. See License Communications"&0*''&"  {O-Services, Inc., South Bay Regional Public Communications Authority, Paging Systems, Inc., Memorandum  {OZ-Opinion and Order, FCC 98162 (rel. July 30, 1998). Ģ The Association of PublicSafety Communications Officials"=$0*''II{"ԫInternational, Inc. ("APCO") filed comments supporting Hennepin's Petition. Comtrak and Teletrac License, Inc. ("Teletrac") filed oppositions to the Petition to which Hennepin replied.  X2 II.BACKGROUND  X22.` ` LMS is a service that uses advanced radio technologies operating in the 902 Xv2928 MHz frequency band to support transportation functions.v$ {OK (ԍLMS Second Report and Order at  3,  5. The definition of LMS also includes existing Automatic  {O (Vehicle Monitoring operations below 512 MHz. Id. at  5 n.7. Multilateration LMS  X_2technology is used to locate vehicles or other objects throughout a wide geographic area.r_ {O (ԍThe Commission has defined two types of LMS systems multilateration and nonmultilateration. LMS  {OZ(Second Report and Order at  4. In this Order, we address only the licensing of multilateration systems. Multilateration LMS systems track vehicles or other objects by measuring the difference in time of arrival, or difference in phase, of signals transmitted from a unit to a number of fixed points, or from a number of fixed  {O(points to the unit to be located. LMS Second Report and Order at  4. r For example, multilateration LMS systems are used by municipalities to pinpoint the location of their buses or police cars, by trucking companies to track individual vehicles, and by private entrepreneurs to recover stolen vehicles.  X 23.` ` In the LMS Report and Order, released in 1995, the Commission determined that use of competitive bidding for distribution of LMS licenses met the general statutory criteria set forth in Section 309(j) of the Act and that LMS licenses were therefore  X 2auctionable.D\ 6  yO(ԍ Amendment of Part 90 of the Commission's Rules to Adopt Regulations for Automatic Vehicle  {OX(Monitoring Systems, Report and Order, PR Docket No. 9361, 10 FCC Rcd 4695, 472527,  5457 (1995)  {O"(("LMS Report and Order").D At that time, Section 309(j) of the Act gave the Commission authority to use competitive bidding to grant mutually exclusive licenses only if the "principal use" of the spectrum was to offer subscriberbased services and competitive bidding would promote  Xd2certain policy objectives.BdZ  {Oo(ԍ47 U.S.C.  309(j). Specifically, at the time of the LMS Report and Order, 47 U.S.C.  309(j) read as follows: (j) Use of Competitive Bidding.  yO!((1) General Authority. If mutually exclusive applications are accepted for filing for any initial license (#(# or construction permit which will involve a use of the electromagnetic spectrum described in paragraph (2), then the Commission shall have the authority, subject to paragraph (10), to grant such license or permit to a qualified applicant through the use of a system of competitive bidding that meets the requirements of this subsection."$0*%%$"Ԍ yO((2) Uses To Which Bidding May Apply. A use of the electromagnetic spectrum is described in this (#(# paragraph if the Commission determines that  yO (  (A) the principal use of such spectrum will involve, or is reasonably likely to involve, the licensee receiving compensation from subscribers in return for which the licensee ` ` (i) enables those subscribers to receive communications signals that are transmitted utilizing frequencies on which the licensee is licensed to operate; or ` ` (ii) enables those subscribers to transmit directly communications signals utilizing frequencies on which the licensee is licensed to operate; and  (B) a system of competitive bidding will promote the objectives described in paragraph (3). Subsequently, Congress enacted the Balanced Budget Act of 1997"d0*%%II" (the "Budget Act"), which amended Section 309(j) by expanding the Commission's auction  X2authority. yO2 (ԍBalanced Budget Act of 1997, P.L. 10533,  3002, 111 Stat. 251 (1997) ("Budget Act") (amending 47 U.S.C.  309(j)). The Commission is now required to assign licenses by competitive bidding whenever   applications for spectrum use are mutually exclusive unless an express exemption  X2applies.   yO\(ԍ47 U.S.C.  309(j)(1). Section 309(j), as amended by the Budget Act, provides: (j) Use of Competitive Bidding. (1) General Authority. If, consistent with the obligations described in paragraph (6)(E), mutually exclusive applications are accepted for any initial license or construction permit, then, except as provided in paragraph (2), the Commission shall grant the license or permit to a qualified applicant through a system of competitive bidding that meets the requirements of this subsection. (2) Exemptions. The competitive bidding authority granted by this subsection shall not apply to licenses or construction permits issued by the Commission  (A) for public safety radio services, including private internal radio services used by State and local  yOd( governments and nongovernment entities and including emergency road services provided by not(#(#  forprofit organizations, that ` ` (i) are used to protect the safety of life, health, or property; and ` ` (ii) are not made commercially available to the public;  yO( (B) for initial licenses or construction permits for digital television service given to existing (#(#  terrestrial broadcast licensees to replace their analog television service licenses; or  (C) for stations described in Section 397(6) of this Act. Section 309(j)(2) of the Act specifies only three types of licenses that are exempt from the auction process: (1) licenses for public safety radio services; (2) initial licenses for digital television service, and (3) licenses for noncommercial educational broadcast stations  Xv2and public broadcast stations.J v8 yO_(ԍ47 U.S.C.  309(j)(2).J  XH24.` ` In the LMS Second Report and Order, the Commission determined that its expanded auction authority under Section 309(j) of the Act, as amended by the Budget Act,"3 0*%%II4"  X2requires it to assign licenses for multilateration LMS by competitive bidding.  yOy(ԍ Specifically, the Commission stated that: ` ` . . . the Budget Act provides that all licenses and construction permits for which mutually exclusive applications are accepted, with certain exemptions not relevant here, shall be granted by means of competitive bidding. We therefore believe that we lack discretion to resolve mutually exclusive LMS license applications by any means other than competitive bidding. Accordingly, we find that the Budget Act's amendments to Section 309(j) of the Act direct us to assign licenses for multilateration LMS by competitive  {O(bidding. LMS Second Report and Order at  9.x`  The Commission further concluded that the LMS auction, to be held on February 23, 1999, would follow the general competitive bidding procedures of Subpart Q of Part 1 of the Commission's rules, as amended by the Part 1 proceedings, unless specifically indicated  X2otherwise.e  {O (ԍLMS Second Report and Order at  1112.e  Xv2 III.DISCUSSION  XH25.` ` In its petition, Hennepin requests that the Commission amend its rules to grant exemption from the competitive bidding process, pursuant to Section 309(j)(2) of the Act, to  X 2applicants intending to use LMS frequencies for public safety purposes.A  ,  yO(ԍPetition at iii.A Hennepin states that it seeks a LMS license to enhance the effectiveness of its public safety services to protect  X 2the life, health, and property of approximately 1.1 million people in the State of Minnesota.  {OY(ԍId. at 12. Hennepin states that there are 45 cities and one township in Hennepin County and that the  {O#(County is the most populous of Minnesota's 87 counties. Id. at 2. Hennepin asserts that it intends to use LMS technology to improve its capabilities in two  X 2areas: (1) emergency vehicle location and (2) community corrections.B  {O(ԍId. at 23.B Hennepin contends that, if granted a LMS license, it would use LMS technology to locate and dispatch  X2emergency vehicles such as ambulances, fire trucks, police cars, and snowplows.B {O(ԍId. at 34.B Hennepin also claims that it would use LMS to help enforce courtordered location restrictions on  Xb2criminal offenders.@b< {OO#(ԍId. at 4.@ Hennepin maintains that if it is not granted an exemption from the"b0*%%IIr" competitive bidding process and is, instead, forced to compete for LMS spectrum at auction, it  X2will be unable to obtain a license and ensure adequate and reliable public safety services.A {Ob(ԍId. at 13.A  X26.` ` We decline to amend our rules to grant potential licensees, such as Hennepin, an exemption from the LMS auction simply because such applicants seek to use LMS frequencies for public safety services. Section 309(j)(2)(A) exempts from auction licenses for  Xv2a specific category of service "public safety radio services."MvZ yO (ԍ47 U.S.C.  309(j)(2)(A).M Importantly, "public safety radio services" does not refer to an individual applicant's proposed use of the spectrum but includes frequencies allocated by the Commission to public safety uses. This method of allocating spectrum specifically for use by eligible public safety entities seeks to ensure that the needs of all public safety entities are met rather than the needs of only those with the resources to seek special relief from the Commission. As Teletrac and Comtrak point out,  X 2LMS is not an auctionexempt "public safety radio service."  {O(ԍTeletrac Opposition at 4; Comtrak Opposition at 5 (citing the LMS Report and Order at  56). Rather, the Commission  X 2determined, in 1995, that LMS spectrum was auctionable.g | {O(ԍLMS Report and Order at 472527,  5557.g The public safety radio services exemption does not entitle individual users to remove licenses from auctions licensing simply by claiming a public safety use. The fact that LMS frequencies may be used for public safety  X2purposes does not make LMS a "public safety radio service."T {OO(ԍSee Teletrac Opposition at 4.T Spectrum, such as LMS, that is allocated for commercial use and has already been determined to be auctionable may not be acquired outside of the competitive bidding process merely because an entity later asserts it also has public safety uses.  X27.` ` Hennepin argues that Congress did not intend the public safety exemption from  X2competitive bidding to apply only to specifically allocated public safety spectrum.? yOW(ԍPetition at 9.? In support of this contention, Hennepin refers to a statement in the Conference Report to the Budget Act that "the public safety radio services exemption described herein is much broader than the explicit definition for 'public safety services' contained in section 3004 of this  X2title."0  {O#(ԍId. (quoting from H.R. Conf. Rep. No. 105217, 105th Cong., 1st Sess. at 572 (1997)). Hennepin contends that to be consistent with legislative intent as expressed in the Conference Report, the exemption must extend beyond specific spectrum allocations for" 0*%%IIL" public safety and encompass any license for spectrum that meets the criteria of Section  X2309(j)(2) of the Act.E yOb(ԍPetition at 9.E  X28.` ` We acknowledge that the public safety radio services exemption is broader than the definition for "public safety services." Contrary to Hennepin's claims, however, it does not follow that Congress intended the exemption to apply to any spectrum license that any individual applicant chooses to use for public safety purposes. We agree with Teletrac that in amending Section 309(j), Congress did not establish a system of casebycase determinations  XH2of eligibility for auction exemptions.JHX yOQ (ԍTeletrac Opposition at 3.J Section 309(j) represents a policy determination that, in general, license assignment is best accomplished through a system of competitive bidding. In the Budget Act, Congress defined the "public safety radio services" exemption of Section 309(j)(2) to be broader than the definition for "public safety services" to permit entities, in addition to those defined as providing "public safety services," to be providers of auction X 2exempt services."  {On(ԍSee H.R. Conf. Rep. No. 105217, 105th Cong., 1st Sess. at 572 (1997) (stating that the public safety radio services exemption includes, for example, private internal radio services used by utilities and railroads as well as radio services used by notforprofit organizations that offer emergency road services, such as the American Automobile Association (AAA)). There is no evidence that Congress intended to permit individual license applicants claiming a public safety use to nullify previous Commission determinations that services, such as LMS, are auctionable.  Xy29.` ` In the LMS Report and Order, the Commission specifically determined to assign licenses for multilateration LMS frequencies through competitive bidding and did not  XM2choose to allocate any portion of the 902928 MHz band to public safety services.hM {O(ԍLMS Report and Order at 472527,  5457. h In fact, no public safety services provider raised the issue of designating this portion of the spectrum for public safety use in the allocation proceeding. Hennepin, itself, did not even raise the public safety issue nor did it participate throughout the Commission's LMS rule making proceeding until the filing of its petition for reconsideration, shortly before auction. We therefore decline to set aside LMS spectrum specifically for public safety purposes at this  X2time.Xd  yO!(ԍBoth Hennepin and APCO argue that the Commission should set aside some portion of the LMS spectrum for assignment to public safety agencies, outside of the auction process. Petition at 15; APCO Comments at 23.  " 0*%%II "Ԍ X210.` ` Hennepin argues that the Commission should evaluate spectrum use on a casebycase basis and allow noncommercial applicants, proposing a public safety use of LMS  X2spectrum, to obtain licenses without engaging in competitive bidding.M yOK(ԍPetition at 8 and iii.M Hennepin's interpretation of Section 309(j) of the Act would permit any entity seeking to provide public safety services to prevail against all other mutually exclusive applicants in securing spectrum designated for auction. As Comtrak points out, such an interpretation would, in effect, give public safety service providers a "right of refusal" over any spectrum made available by the  X_2Commission.I_X yOh (ԍComtrak Opposition at 3.I Under this scenario, the Commission would have authority to auction only  XH2those licenses not desired by public safety entities.S H {O (ԍSee Comtrak Opposition at 2.S Consequently, spectrum would be freely available to certain entities on demand, and the Commission, as well as other applicants, would not know in advance which licenses are available for auction, thereby creating indeterminable delays in deployment of the spectrum, contrary to the mandate of the  X 2Communications Act.! z yO(ԍ We agree with Comtrak's argument that Hennepin's interpretation of the public safety exemption would permit all entities identified in the legislative history of the Budget Act as using "public safety radio services," such as railroads, utilities, and the American Automobile Association, to obtain licenses for spectrum outside of the auction process thereby creating a slippery slope in terms of the number of LMS license applicants  {O7(that would qualify for exemption. Comtrak Opposition at 3; see H.R. Conf. Rep. No. 105217, 105th Cong., 1st Sess. at 572 (1997). Moreover, permitting public safety entities to override the designation of spectrum as auctionable would undermine the Commission's expanded auction authority under the Budget Act.  X211.` ` Hennepin argues that the application of the public safety radio services exemption to the LMS auction is analogous to the Commission's consideration of the exemption for public broadcast stations in Section 309(j)(2)(C) of the Act. In the  VK2Reexamination of the Comparative Standards for Noncommercial Educational Applicants proceeding, the Commission has under consideration the exemption from competitive bidding for noncommercial and public broadcast stations that apply for stations on channels not  X2reserved for public broadcasting."  {O (ԍReexamination of the Comparative Standards for Noncommercial Educational Applicants, Further Notice  {Ou!(of Proposed Rule Making, MM Docket No. 9531, FCC 98269 (rel. October 21, 1998); see also  Implementation of Section 309(j) of the Communications Act Competitive Bidding for Commercial Broadcast  {O#(and Instructional Television Fixed Service Licenses, First Report and Order, MM Docket No. 97234, 13 FCC Rcd 15920 (1998).  We note that we have not yet made a determination""0*%%II"  X2concerning the applicability of that exemption.E#Z yOy(ԍImplementation of Section 309(j) of the Communications Act Competitive Bidding for Commercial  {OA(Broadcast and Instructional Television Fixed Service Licenses, First Report and Order, MM Docket No. 97234, 13 FCC Rcd at 1593031,  2425.E On its face, the Section 309(j)(2)(C) exemption differs in kind from the exemption at issue in this proceeding. The Section 309(j)(2)(C) exemption refers to "stations," while the Section 309(j)(2)(A) exemption applies  X2to "public safety radio services."o$ {OV(ԍSee Comtrak Opposition at 56; Teletrac Opposition at 5.o We will make a separate determination concerning the scope of the public safety radio services exemption in an upcoming proceeding.  Xv2 12.` ` Hennepin asserts that granting the County an exemption to obtain a LMS license would be consistent with the Commission's stated policy objective of providing public  XH2safety service providers with greater access to new technologies.@%H| yOu(ԍPetition at 12.@ Hennepin contends that because only the 902928 MHz band is allocated for LMS services, public safety service providers interested in using LMS services must compete in the LMS auction or risk losing  X 2access to LMS technology.:&  {O(ԍId.:  X 213.` ` The Commission recognizes the important contributions made by public safety service providers to the health and safety of the citizens in their communities. Further, the Commission is committed to helping public safety providers meet their needs and believes that it may be possible for Hennepin to achieve its public safety goals in a manner consistent with our rules. We note that frequencies in the 150170 MHz and 450470 MHz bands have  Xb2been reserved for public safety service providers and may be assigned for LMS.V'b yO(ԍ47 C.F.R.  90.20 and 90.355. V In addition, Hennepin may participate in the Commission's ongoing proceeding to allocate the 5.8505.925 GHz band to Dedicated Short Range Communications ("DSRC") of Intelligent Transportation  X2Systems ("ITS")o(.  yO(ԍAmendment of Parts 2 and 90 of the Commission's Rules to Allocate the 5.8505.925 GHz Band to the  {O(Mobile Service for Dedicated Short Range Communications of Intelligent Transportation Services, Notice of  {O (Proposed Rulemaking, ET Docket No. 9895, FCC 98119 (rel. June 11, 1998). Commenters to this proceeding have asserted that the 5.8505.925 GHz frequency band has potential public safety applications. The comment cycle in this proceeding closed on October 13, 1998, however, the Commission will accept latefiled comments.o as well as in the rule making relating to the use and licensing of"(0*%%II"  X2frequencies in the 746806 MHz public safety band.Q) yOy(ԍThe Commission recently reallocated to public safety services 24 MHz of spectrum between 746 and 806 MHz. The Development of Operational, Technical and Spectrum Requirements For Meeting Federal, State and Local Public Safety Agency Communications Requirements Through the Year 2010 and Establishment of  {O(Rules and Requirements For Priority Access Service, First Report and Order and Third Notice of Proposed  {O(Rulemaking, WT Docket No. 96-86, FCC 98-191 (rel. September 29, 1998); 47 U.S.C.  337.Q Alternatively, Hennepin may purchase Global Positioning Satellite equipment to help track its vehicles or rely on commercial LMS service providers. Hennepin argues that commercial LMS service is not cost effective because providers will pass along their cost of obtaining spectrum through the competitive bidding  X2process to their customers, i.e., the County.F*| yO (ԍPetition at 13.F Hennepin also questions the reliability of commercial LMS service providers. Hennepin, however, has not submitted any data showing that commercially available service is more costly or less reliable than that offered directly by  X_2public entities.q+_  {O(ԍSee Teletrac Opposition at n.8; Comtrak Opposition at 78.q  X1214.` ` Accordingly, we reject Hennepin's petition for reconsideration as contrary to the public interest. IT IS ORDERED that, pursuant to the authority granted in Sections 4(i), 303(r) and 309(j) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i),  X 2303(r) and 309(j), the petition for reconsideration filed in response to the Second Report and  X 2Order IS DENIED, as provided herein.  X 2 ` `  ,hhhFEDERAL COMMUNICATIONS COMMISSION ` `  ,hhh ` `  ,hhhMagalie Roman Salas ` `  ,hhhSecretary