Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Amendment of Part 90 of the ) PR Docket No. 93-61 Commission's Rules to Adopt ) Regulations for Automatic Vehicle ) Monitoring Systems ) ORDER ON RECONSIDERATION OF THE SECOND REPORT AND ORDER Adopted: January 15, 1999 Released: January 21, 1999 By the Commission: I. INTRODUCTION 1. In this Order, we deny the Petition of Hennepin County, Minnesota ("Hennepin" or the "County") for Partial Reconsideration of the Commission's Second Report and Order in the above-captioned proceeding. In the Second Report and Order, the Commission adopted rules governing competitive bidding for multilateration Location and Monitoring Service (LMS) frequencies. 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 multilateration LMS by competitive bidding or auction. 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 competitive bidding. The Association of Public-Safety Communications Officials-International, Inc. ("APCO") filed comments supporting Hennepin's Petition. Comtrak and Teletrac License, Inc. ("Teletrac") filed oppositions to the Petition to which Hennepin replied. II. BACKGROUND 2. LMS is a service that uses advanced radio technologies operating in the 902-928 MHz frequency band to support transportation functions. Multilateration LMS technology is used to locate vehicles or other objects throughout a wide geographic area. 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. 3. 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 auctionable. 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 subscriber-based services and competitive bidding would promote certain policy objectives. Subsequently, Congress enacted the Balanced Budget Act of 1997 (the "Budget Act"), which amended Section 309(j) by expanding the Commission's auction authority. The Commission is now required to assign licenses by competitive bidding whenever applications for spectrum use are mutually exclusive unless an express exemption applies. 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 non-commercial educational broadcast stations and public broadcast stations. 4. 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, requires it to assign licenses for multilateration LMS by competitive bidding. 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 otherwise. III. DISCUSSION 5. 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 applicants intending to use LMS frequencies for public safety purposes. Hennepin states that it seeks a LMS license to enhance the effectiveness of its public safety services to protect the life, health, and property of approximately 1.1 million people in the State of Minnesota. Hennepin asserts that it intends to use LMS technology to improve its capabilities in two areas: (1) emergency vehicle location and (2) community corrections. Hennepin contends that, if granted a LMS license, it would use LMS technology to locate and dispatch emergency vehicles such as ambulances, fire trucks, police cars, and snowplows. Hennepin also claims that it would use LMS to help enforce court-ordered location restrictions on criminal offenders. Hennepin maintains that if it is not granted an exemption from the competitive bidding process and is, instead, forced to compete for LMS spectrum at auction, it will be unable to obtain a license and ensure adequate and reliable public safety services. 6. 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 a specific category of service -- "public safety radio services." 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, LMS is not an auction-exempt "public safety radio service." Rather, the Commission determined, in 1995, that LMS spectrum was auctionable. 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 purposes does not make LMS a "public safety radio service." 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. 7. Hennepin argues that Congress did not intend the public safety exemption from competitive bidding to apply only to specifically allocated public safety spectrum. 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 title." Hennepin contends that to be consistent with legislative intent as expressed in the Conference Report, the exemption must extend beyond specific spectrum allocations for public safety and encompass any license for spectrum that meets the criteria of Section 309(j)(2) of the Act. 8. 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 case-by-case determinations of eligibility for auction exemptions. 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-exempt services. 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. 9. In the LMS Report and Order, the Commission specifically determined to assign licenses for multilateration LMS frequencies through competitive bidding and did not choose to allocate any portion of the 902-928 MHz band to public safety services. 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 time. 10. Hennepin argues that the Commission should evaluate spectrum use on a case-by-case basis and allow non-commercial applicants, proposing a public safety use of LMS spectrum, to obtain licenses without engaging in competitive bidding. 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 Commission. Under this scenario, the Commission would have authority to auction only those licenses not desired by public safety entities. 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 Communications Act. 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. 11. 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 Reexamination 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 reserved for public broadcasting. We note that we have not yet made a determination concerning the applicability of that exemption. 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 to "public safety radio services." We will make a separate determination concerning the scope of the public safety radio services exemption in an upcoming proceeding. 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 safety service providers with greater access to new technologies. Hennepin contends that because only the 902-928 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 access to LMS technology. 13. 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 150-170 MHz and 450-470 MHz bands have been reserved for public safety service providers and may be assigned for LMS. In addition, Hennepin may participate in the Commission's ongoing proceeding to allocate the 5.850-5.925 GHz band to Dedicated Short Range Communications ("DSRC") of Intelligent Transportation Systems ("ITS") as well as in the rule making relating to the use and licensing of frequencies in the 746-806 MHz public safety band. 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 process to their customers, i.e., the County. 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 public entities. 14. 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), 303(r) and 309(j), the petition for reconsideration filed in response to the Second Report and Order IS DENIED, as provided herein. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary