APPENDIX A I. Part 22 of Chapter I of Title 47 of the Code of Federal Regulations is amended as follows: Part 22 -- PUBLIC MOBILE SERVICES 1. The authority citation for Part 22 continues to read as follows: AUTHORITY: Sections 4, 303, 309, and 332, 48 Stat. 1066, 1082, as amended, 47 U.S.C  154, 303, 309, and 332, unless otherwise noted. 2. Section 22.99 is revised by inserting the following definitions (in alphabetical order), and revising the definition for the term "unserved area", to read as follows:  22.99 Definitions. * * * * * Paging geographic area authorization. An authorization conveying the exclusive right to establish and expand one or more stations throughout a paging geographic area or, in the case of a partitioned geographic area, throughout a specified portion of a paging geographic area, on a specified channel allocated for assignment in the Paging and Radiotelephone Service. These are subject to the conditions that no interference may be caused to existing co-channel stations operated by other licensees within the paging geographic area and that no interference may be caused to existing or proposed co-channel stations of other licensees in adjoining paging geographic areas. Paging geographic areas. Standard geographic areas used by the FCC for administrative convenience in the licensing of stations to operate on channels allocated for assignment in the Paging and Radiotelephone Service. See  22.503(b). * * * * * Unserved area. With regard to a channel block allocated for assignment in the Cellular Radiotelephone Service: geographic area in the District of Columbia, or any State, Territory or possession of the United States of America that is not within the CGSA of any cellular system authorized to transmit on that channel block. With regard to a channel allocated for assignment in the Paging and Radiotelephone Service: geographic area within the District of Columbia, or any State, Territory or possession of the United States of America that is not within the service contour of any base transmitter in any station authorized to transmit on that channel. * * * * * 3. The title of Subpart B is amended to read as follows: Subpart B-Licensing Requirements and Procedures 4. A new heading is added immediately preceding Section 22.101 to read as follows: APPLICATIONS AND NOTIFICATIONS 5. Section 22.115 is amended by revising the introductory text of paragraph (a) to read as follows:  22.115 Content of applications. * * * * * (a) Site-specific requirements. The following requirements apply to all Public Mobile Service applications that involve specific transmitting antenna sites. * * * * * 6. Section 22.123 is amended by revising paragraphs (e)(1) and (e)(2), to read as follows:  22.123 Classification of filings as major or minor. * * * * * (e) * * * (1) Request that a paging geographic area authorization be issued to the filer on a requested channel; (2) Request an authorization that would establish for the filer a new fixed transmission path or service area (a new station) on a requested channel, unless the new service area would be totally within a paging geographic area for which the filer holds the paging geographic area authorization for the requested channel; * * * * * 7. Section 22.129 is amended by adding paragraph (e), to read as follows:  22.129 Agreements to dismiss applications, amendments, and pleadings. * * * * * (e) Notwithstanding the provisions of this section, any payments made or received in exchange for withdrawing a short-form application for an FCC authorization awarded through competitive bidding shall be subject to the restrictions set forth in section  1.2105(c) of this chapter. 8. Section 22.131 is amended by revising paragraphs (c)(4)(ii)(A) and (c)(4)(ii)(B), and by adding a new paragraph (d)(2)(v), to read as follows:  22.131 Procedures for mutually exclusive applications. * * * * * (c) * * * (4) * * * (ii) * * * (A) If all of the mutually exclusive applications in a 30-day notice and cut-off filing group are applications for initial authorization, the FCC administers competitive bidding procedures in accordance with  22.201 through  22.227 and Subpart Q of Part 1 of this chapter, as applicable. After such procedures, the application of the successful bidder may be granted and the other applications may be dismissed without prejudice. (B) If any of the mutually exclusive applications in a 30-day notice and cut-off filing group is an application for modification, the Commission may attempt to resolve the mutual exclusivity by facilitating a settlement between the applicants. If a settlement is not reached within a reasonable time, the FCC may designate all applications in the filing group for comparative consideration in a hearing. In this event, the result of the hearing disposes all of the applications in the filing group. * * * * * (d) * * * (2) * * * (v) Any "short-form" application (filed on FCC Form 175) requesting a new paging geographic area authorization. * * * * * 9. Section 22.165 is amended by revising paragraph (d)(1) to read as follows:  22.165 Additional transmitters for existing systems. * * * * * (d) * * * (1) The interfering contours of the additional transmitter(s) must be totally encompassed by the composite interfering contour of the existing station (or stations under common control of the applicant) on the same channel, except that this limitation does not apply to nationwide network paging stations or in-building radiation systems. * * * * * 10. New Sections 22.201 through 22.227 are added and a new heading for these sections is added immediately preceding Section 22.201, to read as follows: COMPETITIVE BIDDING PROCEDURES  22.201 Scope of competitive bidding rules. Sections 22.201 through 22.227, inclusive (and, unless otherwise specified in this part, the procedures set forth in Part 1, Subpart Q, of this chapter), apply only to competitive bidding ("auction") procedures for authorizations as follows: (a) paging geographic area authorizations issued pursuant to this part or to Part 90 of this chapter. (b) [reserved]  22.203 Competitive bidding design for paging licensing. A simultaneous multiple round auction will be used to choose from among mutually exclusive initial applications for paging geographic area authorizations, unless the FCC specifies otherwise by Public Notice prior to the competitive bidding procedure.  22.205 Competitive bidding mechanisms. (a) Sequencing. The FCC will establish and may vary the sequence in which paging geographic area authorizations are auctioned. (b) Grouping. The FCC will determine which licenses will be auctioned simultaneously or in combination based on interdependency and administrative circumstances. (c) Minimum Bid Increments. The FCC may, by public announcement before or during an auction, require minimum bid increments in dollar or percentage terms. (d) Stopping Rules. The FCC may establish stopping rules before or during an auction in order to terminate the auction within a reasonable time. (e) Activity Rules. The FCC may establish activity rules which require a minimum amount of bidding activity. In the event that the FCC establishes an activity rule in connection with a simultaneous multiple round auction, each bidder may request waivers of such rule during the auction. The FCC may, by public announcement either before or during an auction, specify or vary the number of waivers available to each bidder.  22.207 Withdrawal, default, and disqualification payments. The FCC will impose payments on bidders who withdraw high bids during the course of an auction, who default on payments due after an auction terminates, or who are disqualified. When the FCC conducts a simultaneous multiple round auction, payments will be calculated as set forth in  1.2104(g) and 1.2109 of this chapter. When the amount of such a payment cannot be determined, a deposit of up to 20 percent of the amount bid on the license will be required.  22.209 Bidding applications (FCC Form 175 and 175-S Short-form). Each applicant to participate in competitive bidding for paging geographic area authorizations must submit an application (FCC Forms 175 and 175-S) pursuant to the provisions of  1.2105 of this chapter.  22.211 Submission of upfront payments and down payments. (a) The FCC will require applicants to submit an upfront payment prior to the start of a paging auction. The amount of the upfront payment for each geographic area license auctioned and the procedures for submitting it will be set forth by the Wireless Telecommunications Bureau in a Public Notice in accordance with  1.2106 of this chapter. (b) Each winning bidder in a paging auction must submit a down payment to the FCC in an amount sufficient to bring its total deposits up to 20 percent of its winning bid. All winning bidders except small businesses will be required to make such payment within ten business days following the release of a Public Notice announcing the close of bidding. Small businesses must bring their deposits up to 10 percent of their winning bids within ten business days following the release of a Public Notice announcing the close of bidding, and must pay an additional 10 percent prior to licensing, by a date and time to be specified by Public Notice.  22.213 Long-form applications (FCC Form 600). Each successful bidder for a paging geographic area authorization must submit a "long-form" application (FCC Form 600) within ten business days after being notified by Public Notice that it is the winning bidder. Applications for paging geographic area authorizations on FCC Form 600 must be submitted in accordance with  1.2107 of this chapter, all applicable procedures set forth in the rules in this part, and any applicable Public Notices that the FCC may issue in connection with an auction. After an auction, the FCC will not accept long-form applications for paging geographic area authorizations from anyone other than the auction winners and parties seeking partitioned licenses pursuant to agreements with auction winners under  22.221 of this chapter.  22.215 Authorization grant, denial, default, and disqualification. (a) Each winning bidder, except those eligible for installment payments, will be required to pay the full balance of its winning bid within ten business days following Public Notice that the FCC is prepared to award the authorization. (b) A bidder that withdraws its bid subsequent to the close of bidding, defaults on a payment due, or is disqualified, is subject to the payments specified in  22.207,  1.2104(g), or  1.2109 of this chapter, as applicable.  22.217 Bidding credits for small businesses. (a) A winning bidder that qualifies as a small business or a consortium of small businesses as defined in  22.223(b)(1)(i) may use a bidding credit of 15 percent to lower the cost of its winning bid. A winning bidder that qualifies as a small business or a consortium of small businesses as defined in  22.223(b)(1)(ii) may use a bidding credit of ten percent to lower the cost of its winning bid. (b) Unjust Enrichment. (1) If a small business that utilizes a bidding credit under this section seeks to transfer control or assign an authorization to an entity that is not a small business under  22.223(b)(1), or seeks to make any other change in ownership that would result in the licensee losing eligibility as a small business, the small business must seek FCC approval and reimburse the U.S. government for the amount of the bidding credit (plus interest at the rate imposed for installment financing at the time the license was awarded), as a condition of approval of such assignment, transfer, or other ownership change. (2) If a small business that utilizes a bidding credit under this section seeks to transfer control or assign an authorization to a small business meeting the eligibility standards for a lower bidding credit, or seeks to make any other change in ownership that would result in the licensee qualifying for a lower bidding credit under this section, the licensee must seek FCC approval and reimburse the U.S. government for the difference between the amount of the bidding credit obtained by the licensee and the bidding credit for which the assignee, transferee, or licensee is eligible under this section (plus interest at the rate imposed for installment financing at the time the license was awarded), as a condition of the approval of such assignment, transfer, or other ownership change. (3) The amount of payments made pursuant to paragraphs (b)(1) and (b)(2) of this section will be reduced over time as follows: A transfer in the first two years of the license term will result in a forfeiture of 100 percent of the value of the bidding credit (or the difference between the bidding credit obtained by the original licensee and the bidding credit for which the post-transfer licensee is eligible); in year 3 of the license term the payment will be 75 percent; in year 4 the payment will be 50 percent; and in year 5 the payment will be 25 percent, after which there will be no assessment.  22.219 Installment payments for licenses won by small businesses. (a) Each licensee that qualifies as a small business under  22.223(b)(1) may pay the remaining 80 percent of the net auction price for the license in installment payments over the term of the authorization. Interest charges shall be fixed at the time of licensing at a rate equal to the rate for ten-year U.S. Treasury obligations plus 2.5 percent. An eligible licensee may make interest-only payments for two years. Payments of interest and principal shall be amortized over the remaining eight years of the license term. (b) Late Installment Payment. (1) Any licensee that submits a scheduled installment payment more than 15 days late will be charged a late payment fee equal to 5 percent of the amount of the past due payment. (2) Payments will be applied in the following order: late charges, interest charges, principal payments. (c) Unjust Enrichment. (1) If a licensee that utilizes installment financing under this section seeks to assign or transfer control of its license to an entity not meeting the eligibility standards for installment financing, the licensee must seek FCC approval and make full payment of the remaining unpaid principal and unpaid interest accrued through the date of assignment or transfer as a condition of FCC approval. (2) If a licensee that utilizes installment financing under this section seeks to make any change in ownership structure that would result in the licensee losing eligibility for installment payments, the licensee shall first seek FCC approval before making such a change in ownership structure and must make full payment of the remaining unpaid principal and unpaid interest accrued through the date of such change in ownership structure as a condition of FCC approval.  22.221 Eligibility for partitioned licenses. If partitioned licenses are being applied for in conjunction with a license(s) to be awarded through competitive bidding procedures -- (a) The applicable procedures for filing short-form applications and for submitting upfront payments and down payments contained in this chapter shall be followed by the applicant, who must disclose as part of its short-form application all parties to agreement(s) with or among other entities to partition the license pursuant to this section, if won at auction (see 47 CFR 1.2105(a)(2)(viii)); (b) Each party to an agreement to partition the license must file a long-form application (FCC Form 600) for its respective, mutually agreed-upon geographic area together with the application for the remainder of the MTA or EA filed by the auction winner. (c) If the partitioned license is being applied for as a partial assignment of the MTA or EA license following grant of the initial license, request for authorization for partial assignment of a license shall be made pursuant to  22.137.  22.223 Definitions concerning competitive bidding process. (a) Scope. The definitions in this section apply to  22.201 through 22.227, unless otherwise specified in those sections. (b) Small Business; Consortium of Small Businesses. (1) A small business is an entity that either: (i) together with its affiliates and controlling principals has average gross revenues that are not more than $3 million for the preceding three years; or (ii) together with its affiliates and controlling principals has average gross revenues that are not more than $15 million for the preceding three years. (2) For purposes of determining whether an entity meets either the $3 million or $15 million average annual gross revenues size standard set forth in paragraph (b)(1), the gross revenues of the entity, its affiliates, and controlling principals shall be considered on a cumulative basis and aggregated. (3) A consortium of small businesses is a conglomerate organization formed as a joint venture between or among mutually independent business firms, each of which individually satisfies the definition of a small business in paragraph (b)(1). Each individual member must establish its eligibility as a small business, as defined in this section. Where an applicant (or licensee) is a consortium of small businesses, the gross revenues of each small business shall not be aggregated. (c) Gross Revenues. Gross revenues shall mean all income received by an entity, whether earned or passive, before any deductions are made for costs of doing business (e.g., cost of goods sold). Gross revenues are evidenced by audited financial statements for the relevant number of calendar or fiscal years preceding the filing of the applicant's short-form application. If an entity was not in existence for all or part of the relevant period, gross revenues shall be evidenced by the audited financial statements of the entity's predecessor-in-interest or, if there is no identifiable predecessor-in-interest, unaudited financial statements certified by the applicant as accurate. When an applicant does not otherwise use audited financial statements, its gross revenues may be certified by its chief financial officer or its equivalent. (d) Affiliate. (1) Basis for Affiliation. An individual or entity is an affiliate of an applicant if such individual or entity: (i) Directly or indirectly controls or has the power to control the applicant, or (ii) Is directly or indirectly controlled by the applicant, or (iii) Is directly or indirectly controlled by a third party or parties who also control or have the power to control the applicant, or (iv) Has an "identity of interest" with the applicant. (2) Nature of control in determining affiliation. (i) Every business concern is considered to have one or more parties who directly or indirectly control or have the power to control it. Control may be affirmative or negative and it is immaterial whether it is exercised so long as the power to control exists. Example for paragraph (d)(2)(i). An applicant owning 50 percent of the voting stock of another concern would have negative power to control such concern since such party can block any action of the other stockholders. Also, the bylaws of a corporation may permit a stockholder with less than 50 percent of the voting stock to block any actions taken by the other stockholders in the other entity. Affiliation exists when the applicant has the power to control a concern while at the same time another person, or persons, are in control of the concern at the will of the party or parties with the power of control. (ii) Control can arise through stock ownership; occupancy of director, officer or key employee positions; contractual or other business relations; or combinations of these and other factors. A key employee is an employee who, because of his/her position in the concern, has a critical influence in or substantive control over the operations or management of the concern. (iii) Control can arise through management positions if the voting stock is so widely distributed that no effective control can be established. Example for paragraph (d)(2)(iii). In a corporation where the officers and directors own various size blocks of stock totaling 40 percent of the corporation's voting stock, but no officer or director has a block sufficient to give him/her control or the power to control and the remaining 60 percent is widely distributed with no individual stockholder having a stock interest greater than 10 percent, management has the power to control. If persons with such management control of the other entity are controlling principals of the applicant, the other entity will be deemed an affiliate of the applicant. (3) Identity of interest between and among persons. Affiliation can arise between or among two or more persons with an identity of interest, such as members of the same family or persons with common investments. In determining if the applicant controls or is controlled by a concern, persons with an identity of interest will be treated as though they were one person. (i) Spousal Affiliation. Both spouses are deemed to own or control or have the power to control interests owned or controlled by either of them, unless they are subject to a legal separation recognized by a court of competent jurisdiction in the United States. (ii) Kinship Affiliation. Immediate family members will be presumed to own or control or have the power to control interests owned or controlled by other immediate family members. In this context "immediate family member" means father, mother, husband, wife, son, daughter, brother, sister, father- or mother-in-law, son- or daughter-in-law, brother- or sister-in-law, step-father, or -mother, step-brother, or -sister, step-son, or -daughter, half-brother or -sister. This presumption may be rebutted by showing that: (A) The family members are estranged, (B) The family ties are remote, or (C) The family members are not closely involved with each other in business matters. Example for paragraph (d)(3)(ii). A owns a controlling interest in Corporation X. A's sister-in-law, B, has a controlling interest in a paging geographic area authorization application. Because A and B have a presumptive kinship affiliation, A's interest in Corporation X is attributable to B, and thus to the applicant, unless B rebuts the presumption with the necessary showing. (4) Affiliation through stock ownership. (i) An applicant is presumed to control or have the power to control a concern if he/she owns or controls or has the power to control 50 percent or more of its voting stock. (ii) An applicant is presumed to control or have the power to control a concern even though he/she owns, controls, or has the power to control less than 50 percent of the concern's voting stock, if the block of stock he/she owns, controls, or has the power to control is large as compared with any other outstanding block of stock. (iii) If two or more persons each owns, controls or has the power to control less than 50 percent of the voting stock of a concern, such minority holdings are equal or approximately equal in size, and the aggregate of these minority holdings is large as compared with any other stock holding, the presumption arises that each one of these persons individually controls or has the power to control the concern; however, such presumption may be rebutted by a showing that such control or power to control, in fact, does not exist. (5) Affiliation arising under stock options, convertible debentures, and agreements to merge. Stock options, convertible debentures, and agreements to merge (including agreements in principle) are generally considered to have a present effect on the power to control the concern. Therefore, in making a size determination, such options, debentures, and agreements will generally be treated as though the rights held thereunder had been exercised. However, neither an affiliate nor an applicant can use such options and debentures to appear to terminate its control over another concern before it actually does so. Example 1 for paragraph (d)(5). If company B holds an option to purchase a controlling interest in company A, who holds a controlling interest in a paging geographic area authorization application, the situation is treated as though company B had exercised its rights and had become owner of a controlling interest in company A. The gross revenues of company B must be taken into account in determining the size of the applicant. Example 2 for paragraph (d)(5). If a large company, BigCo, holds 70% (70 of 100 outstanding shares) of the voting stock of company A, who holds a controlling interest in a paging geographic area authorization application, and gives a third party, SmallCo, an option to purchase 50 of the 70 shares owned by BigCo, BigCo will be deemed to be an affiliate of company A, and thus the applicant, until SmallCo actually exercises its options to purchase such shares. In order to prevent BigCo from circumventing the intent of the rule which requires such options to be considered on a fully diluted basis, the option is not considered to have present effect in this case. Example 3 for paragraph (d)(5). If company A has entered into an agreement to merge with company B in the future, the situation is treated as though the merger has taken place. (6) Affiliation under voting trusts. (i) Stock interests held in trust shall be deemed controlled by any person who holds or shares the power to vote such stock, to any person who has the sole power to sell such stock, and to any person who has the right to revoke the trust at will or to replace the trustee at will. (ii) If a trustee has a familial, personal or extra-trust business relationship to the grantor or the beneficiary, the stock interests held in trust will be deemed controlled by the grantor or beneficiary, as appropriate. (iii) If the primary purpose of a voting trust, or similar agreement, is to separate voting power from beneficial ownership of voting stock for the purpose of shifting control of or the power to control a concern in order that such concern or another concern may meet the Commission's size standards, such voting trust shall not be considered valid for this purpose regardless of whether it is or is not recognized within the appropriate jurisdiction. (7) Affiliation through common management. Affiliation generally arises where officers, directors, or key employees serve as the majority or otherwise as the controlling element of the board of directors and/or the management of another entity. (8) Affiliation through common facilities. Affiliation generally arises where one concern shares office space and/or employees and/or other facilities with another concern, particularly where such concerns are in the same or related industry or field of operations, or where such concerns were formerly affiliated, and through these sharing arrangements one concern has control, or potential control, of the other concern. (9) Affiliation through contractual relationships. Affiliation generally arises where one concern is dependent upon another concern for contracts and business to such a degree that one concern has control, or potential control, of the other concern. (10) Affiliation under joint venture arrangements. (i) A joint venture for size determination purposes is an association of concerns and/or individuals, with interests in any degree or proportion, formed by contract, express or implied, to engage in and carry out a single, specific business venture for joint profit for which purpose they combine their efforts, property, money, skill and knowledge, but not on a continuing or permanent basis for conducting business generally. The determination whether an entity is a joint venture is based upon the facts of the business operation, regardless of how the business operation may be designated by the parties involved. An agreement to share profits/losses proportionate to each party's contribution to the business operation is a significant factor in determining whether the business operation is a joint venture. (ii) The parties to a joint venture are considered to be affiliated with each other.  22.225 Certifications, disclosures, records maintenance and audits. (a) Short-Form Applications: Certifications and Disclosure. In addition to certifications and disclosures required by Part 1, Subpart Q, of this chapter, each applicant for a paging license which qualifies as a small business or consortium of small businesses shall append the following information as an exhibit to its FCC Form 175: (1) The identity of the applicant's controlling principals and affiliates, and, if a consortium of small businesses, the members in the joint venture; and (2) The applicant's gross revenues, computed in accordance with  22.223. (b) Long Form Applications: Certifications and Disclosure. Each applicant submitting a long-form application for a paging geographic area authorization and qualifying as a small business shall, in an exhibit to its long-form application: (1) Disclose separately and in the aggregate the gross revenues, computed in accordance with  22.223, for each of the following: the applicant, the applicant's affiliates, the applicant's controlling principals, and, if a consortium of small businesses, the members of the joint venture; (2) List and summarize all agreements or other instruments (with appropriate references to specific provisions in the text of such agreements and instruments) that support the applicant's eligibility as a small business under  22.217 through 22.223, including the establishment of de facto and de jure control; such agreements and instruments include, but are not limited to, articles of incorporation and bylaws, shareholder agreements, voting or other trust agreements, franchise agreements, and any other relevant agreements, including letters of intent, oral or written; and (3) List and summarize any investor protection agreements, including rights of first refusal, supermajority clauses, options, veto rights, and rights to hire and fire employees and to appoint members to boards of directors or management committees. (c) Records Maintenance. All winning bidders qualifying as small businesses shall maintain at their principal place of business an updated file of ownership, revenue, and asset information, including any documents necessary to establish eligibility as a small business and/or consortium of small businesses under  22.223. Licensees (and their successors-in-interest) shall maintain such files for the term of the license. Applicants that do not obtain the license(s) for which they applied shall maintain such files until the grant of such license(s) is final, or one year from the date of the filing of their short-form application (FCC Form 175), whichever is earlier. (d) Audits. (1) Applicants and licensees claiming eligibility as a small business or consortium of small businesses under  22.217 through 22.223 shall be subject to audits by the Commission. Selection for audit may be random, on information, or on the basis of other factors. (2) Consent to such audits is part of the certification included in the short-form application (FCC Form 175). Such consent shall include consent to the audit of the applicant's or licensee's books, documents and other material (including accounting procedures and practices) regardless of form or type, sufficient to confirm that such applicant's or licensee's representations are, and remain, accurate. Such consent shall include inspection at all reasonable times of the facilities, or parts thereof, engaged in providing and transacting business, or keeping records regarding licensed paging service and shall also include consent to the interview of principals, employees, customers and suppliers of the applicant or licensee. (e) Definitions. The terms affiliate, small business, consortium of small businesses, and gross revenues, used in this section are defined in  22.223.  22.227 Petitions to deny and limitations on settlements. (a) Procedures regarding petitions to deny long-form applications in the paging service will be governed by  1.2108(b) through 1.2108(d) of this chapter,  22.130, and  90.163. (b) The consideration that an individual or an entity will be permitted to receive for agreeing to withdraw an application or a petition to deny will be limited by the provisions set forth in  22.129,  90.162, and  1.2105(c) of this chapter. 11. Section 22.313 is amended by revising paragraphs (a)(4), (a)(5) and (a)(6) to read as follows:  22.313 Station identification. * * * * * (a) * * * (4) Stations using Basic Exchange Telephone Radio Systems in the Rural Radiotelephone Service; (5) Nationwide network paging stations operating on 931 MHz channels; or, (6) Stations operating pursuant to paging geographic area authorizations. * * * * * 12. Section 22.352 is amended by revising the introductory paragraph to read as follows:  22.352 Protection from interference. Public Mobile Services stations operating in accordance with FCC rules that provide technical channel assignment criteria for the radio service and channels involved, all other applicable FCC rules, and the terms and conditions of their authorizations are normally considered to be non-interfering. If the FCC determines, however, that interference that significantly interrupts or degrades a radio service is being caused, it may, in accordance with the provisions of Sections 303(f) and 316 of the Communications Act of 1934, as amended, (47 U.S.C.  303(f), 316), require modifications to any Public Mobile station as necessary to eliminate such interference. * * * * * 13. A new Section 22.503 is added, to read as follows:  22.503 Paging geographic area authorizations. The FCC considers applications for and issues paging geographic area authorizations in the Paging and Radiotelephone Service in accordance with the rules in this section. Each paging geographic area authorization contains conditions requiring compliance with paragraphs (h) and (i) of this section. (a) Channels. The FCC may issue a paging geographic area authorization for any channel listed in  22.531 of this part or for any channel pair listed in  22.561 of this part. (b) Paging geographic areas. The paging geographic areas are as follows: (1) The Nationwide paging geographic area comprises the District of Columbia and all States, Territories and possessions of the United States of America. (2) The Major Trading Areas (MTAs) as defined in the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd Edition, at pages 38-39, with the following changes and additions: (i) The Seattle paging geographic area does not include Alaska. (ii) Alaska is a paging geographic area. (iii) Guam and the Northern Mariana Islands (combined) are a paging geographic area. (iv) Puerto Rico and the United States Virgin Islands (combined) are a paging geographic area. (v) American Samoa is a paging geographic area. (3) The Economic Areas (EAs), as defined by the Department of Commerce, Bureau of Economic Analysis. See "Final Redefinition of the BEA Economic Areas", 60 FR 13114 (March 10, 1995). (c) Availability. The FCC may determine whether to issue a paging geographic area authorization for any specific channel or channel pair in any specific paging geographic area. The FCC may replace existing site specific authorizations for facilities on a channel or channel pair located in a paging geographic area with a paging geographic area authorization for that channel or channel pair, if in its sole discretion, the FCC determines that the public interest would be served by such replacement. (d) Filing windows. The FCC accepts applications for paging geographic area authorizations only during filing windows. The FCC issues Public Notices announcing in advance the dates of the filing windows, and the specific paging geographic areas and channels for which applications may be accepted. (e) One grant per geographic area. The FCC may grant one and only one application for a paging geographic area authorization for any specific channel or channel pair in any specific paging geographic area defined in paragraph (b) of this section. Selection from among mutually exclusive applications for a paging geographic area authorization will be made in accordance with the procedures in  22.131 and 22.200 through 22.299. If after the selection process but prior to filing a "long form" application, a successful bidder decides to partition the paging geographic area, the FCC may require and accept multiple "long form" applications from the consortium members. (f) Exclusive right to expand. During the term of a paging geographic area authorization, the FCC does not accept, from anyone other than the paging geographic area licensee, any major application for authorization to operate a facility that would serve unserved area within the paging geographic area specified in that paging geographic area authorization, on the channel specified in that paging geographic area authorization, unless any extension of the interfering contour of the proposed facility falls: (1) within the composite interfering contour of another licensee; or, (2) into unserved area and the paging geographic area licensee consents to such extension. (g) Subsequent applications not accepted. During the term of a paging geographic area authorization, the FCC does not accept any application for authorization relating to a facility that is or would be located within the paging geographic area specified in that paging geographic area authorization, on the channel specified in that paging geographic area authorization, except in the following situations: (1) FCC grant of an application authorizing the construction of the facility could have a significant environmental effect as defined by  1.1307 of this chapter. See  22.115(a)(5). (2) Specific international coordination procedures are required, prior to assignment of a channel to the facility, pursuant to a treaty or other agreement between the United States government and the government of Canada or Mexico. See  22.169. (3) The paging geographic area licensee or another licensee of a system within the paging geographic area applies to assign its authorization or for FCC consent to a transfer of control. (h) Adjacent geographic area coordination required. Before constructing a facility for which the interfering contour (as defined in  22.537 or  22.567, as appropriate for the channel involved) would extend into another paging geographic area, a paging geographic area licensee must obtain the consent of the relevant co-channel paging geographic area licensee, if any, into whose area the interfering contour would extend. In the event that there is no co-channel paging geographic area licensee from whom to obtain consent in the area into which the interfering contour would extend, the facility may be constructed and operated subject to the condition that, at such time as the FCC issues a paging geographic area license for that adjacent geographic area, either consent must be obtained or the facility modified or eliminated such that the interfering contour no longer extends into the adjacent geographic area. (i) Protection of existing service. All facilities constructed and operated pursuant to a paging geographic area authorization must provide co-channel interference protection in accordance with  22.537 or  22.567, as appropriate for the channel involved, to all co-channel facilities of other licensees within the paging geographic area that were authorized on [insert effective date of this rule] and have remained authorized continuously since that date. (j) Site location restriction. The transmitting antenna of each facility constructed and operated pursuant to a paging geographic area authorization must be located within the paging geographic area specified in the authorization. (k) Coverage requirements. Failure by a paging geographic area licensee to meet either of the coverage requirements in paragraphs (k)(1) and (k)(2), or alternatively, the substantial service requirement in paragraph (k)(3), may result in automatic termination or non-renewal of a paging geographic area license. For the purpose of this paragraph, to "cover" area means to include geographic area within the composite of the service contour(s) determined by the methods of  22.537 or 22.567, as appropriate for the particular channel involved. Licensees may determine the population of geographic areas included within their service contours using either the 1990 census or the 2000 census, but not both. (1) No later than three years after the initial grant of a paging geographic area authorization, the licensee must construct or otherwise acquire and operate sufficient facilities to cover one third of the population in the paging geographic area. The licensee must notify the FCC (FCC Form 489), no later than 15 days after the end of the three year period, either that it has satisfied this requirement or that it plans to satisfy the alternative requirement to provide substantial service in accordance with paragraph (k)(3). (2) No later than five years after the initial grant of a paging geographic area authorization, the licensee must construct or otherwise acquire and operate sufficient facilities to cover two thirds of the population in the paging geographic area. The licensee must notify the FCC (FCC Form 489), no later than 15 days after the end of the five year period, either that it has satisfied this requirement or that it has satisfied the alternative requirement to provide substantial service in accordance with paragraph (k)(3). (3) As an alternative to the coverage requirements of paragraphs (k)(1) and (k)(2), the paging geographic area licensee may demonstrate that, no later than five years after the initial grant of its paging geographic area authorization, it provides substantial service to the paging geographic area. "Substantial service" means service that is sound, favorable, and substantially above a level of mediocre service that would barely warrant renewal. 14. Section 22.507 is amended by revising it in its entirety to read as follows:  22.507 Number of transmitters per station. This section concerns the number of transmitters licensed under each station authorization in the Paging and Radiotelephone Service, other than paging geographic area authorizations. (a) Operationally related transmitters. Each station must have at least one transmitter. There is no limit to the number of transmitters that a station may comprise. However, transmitters within a station should be operationally related and/or should serve the same general geographical area. Operationally related transmitters are those that operate together as a system (e.g. trunked systems, simulcast systems), rather than independently. (b) Split of large systems. The FCC may split wide-area systems into two or more stations for administrative convenience. Except for nationwide paging and other operationally related transmitters, transmitters that are widely separated geographically are not licensed under a single authorization. (c) Consolidation of separate stations. The FCC may consolidate separately authorized stations upon request (FCC Form 600) of the licensee, if appropriate under paragraph (a) of this section. (d) Replacement of site-by-site authorizations with single authorization. After a paging geographic area authorization for a channel has been issued, the FCC may, on its own motion, replace the authorization(s) of any other licensee (for facilities located within that paging geographic area on that channel) with a single replacement authorization. 15. Section 22.529 is revised in its entirety to read as follows:  22.529 Application requirements for the Paging and Radiotelephone Service. In addition to information required by Subparts B and D of this part, applications for authorization in the Paging and Radiotelephone Service must contain the applicable information and data described in this section. (a) Administrative information. The following information, associated with Form FCC 600, Schedule A, is required as indicated. Each application of any type, including applications for paging geographic area authorizations, must contain one and only one Schedule A. (1) The purpose of the filing is required for each application of any type. (2) The geographic area designator, channel and geographic area name are required only for each application for a paging geographic area authorization. (3) The FCC control point number, if any, the location (street address, city or town, state), the telephone number and an indication of the desired database action are required only for each application proposing to add or delete a control point. (4) The FCC location number, file number and location (street address, city or town, state) of authorized facilities that have not been constructed are required only for each application requesting an extension of time to construct those facilities. (b) Technical data. The following data, associated with FCC Form 600, Schedule B, are required as indicated for each application that is not an application for a paging geographic area authorization. Applications for a paging geographic area authorization must not contain Schedule B. Other type of applications may contain as many Schedule Bs as are necessary for the intended purpose. (1) For each transmitting antenna site to be added, deleted or modified, the following are required: an indication of the desired database action, the FCC location number, if any, the street address or other description of the transmitting antenna site, the city, county and state, the geographical coordinates (latitude and longitude), correct to ñ1 second, of the transmitting antenna site (NAD 27 required, NAD 83 optional), and in the case of a proposed relocation of a transmitting antenna, the FCC location number and geographical coordinates, correct to ñ1 second, of the current transmitting antenna site, and an indication of the datum (NAD 27 or NAD 83) to which the geographical coordinates of the current location are referenced. (2) For each transmitting antenna site to be added, deleted or modified, the following supplementary information is required: an indication as to whether or not the transmitting antenna site is within 200 kilometers (124 miles) of the U.S.-Mexico border, and an indication as to whether or not the transmitting antenna site is North of Line A or East of Line C. Line A and Line C are defined in  2.1 of this chapter. For each adjacent geographic area within 200 kilometers (124 miles) of each transmitting antenna site to be added, deleted or modified, the geographic area designator and name, and the shortest distance (in kilometers) to the boundary of that geographic area. (3) For each antenna to be added, deleted or modified, the following is required: an indication of the desired database action, an indication of whether the antenna already exists or is merely proposed, the FCC antenna number, if any, the type of antenna (e.g. collinear, Yagi, half-wave, corner reflector, panel, etc.), the name of the antenna manufacturer and the model number of the antenna, the height (in meters) above average terrain of the center of radiation of the antenna, the beamwidth of the main lobe of the horizontal radiation pattern of the electric field of the antenna, the height (in meters) to the tip of the antenna above ground level, a polar plot of the horizontal gain pattern of the antenna, the antenna gain in the maximum lobe and the electric field polarization of the wave emitted by the antenna when installed as proposed. (i) For each transmitter to be added, deleted or modified, the following is required: the FCC transmitter number, if any, an indication of the desired database action, the center frequency of the requested channel, the transmitter classification (e.g. base, fixed mobile), the designator for any non-standard emission type to be used, including bandwidth and modulation type, and the maximum effective radiated power. (ii) For each of the eight cardinal radials, the antenna height above the average elevation along the radial, and the effective radiated power of each transmitter in the direction of the radial. (iii) For each transmitter proposed to transmit on a channel reserved for point-to-multipoint operation involving transmission to four or more points of communications (i.e. base transmitters), the following is required for each point of communication: an indication of the desired database action, the FCC transmitter number or other key indicator (e.g. I, II, III, IV), the location (city or town, state), and the geographical coordinates (latitude and longitude, NAD 27). 16. Section 22.531 is amended by revising the heading preceding it, the heading and introductory text, and adding a new paragraph (f), to read as follows: PAGING OPERATION  22.531 Channels for paging operation. The following channels are allocated for assignment to base transmitters that provide paging service, either individually or collectively under a paging geographic area authorization. Unless otherwise indicated, all channels have a bandwidth of 20 kHz and are designated by their center frequencies in MegaHertz. * * * * * (f) For the purpose of issuing paging geographic area authorizations, the paging geographic areas used for the UHF channels are the MTAs (see  22.503(b)(2)), and the paging geographic areas used for the low and high VHF channels are the EAs (see  22.503(b)(3)). 17. Section 22.539 is amended by revising paragraph (e) to read as follows:  22.539 Additional channel policies. * * * * * (e) Additional transmitters on same channel. Notwithstanding other provisions of this section, the following applications are not considered to be requests for an additional paging channel: (1) Applications for transmitters to be located in the same geographic area as an authorized station controlled by the applicant, and to operate on the same paging channel; (2) Applications for transmitters to be located within a paging geographic area for which the applicant holds the paging geographic area authorization for the requested channel; and, (3) Applications for paging geographic area authorizations. * * * * * 18. Section 22.551 is revised in its entirety to read as follows:  22.551 Nationwide network paging service. The rules in this section govern the application for and provision of nationwide network paging service on the channels reserved specifically for such service in  22.531(b). (a) Nationwide network providers; organizers. If and when a nationwide network paging channel becomes available for assignment, the FCC will issue a Public Notice inviting applications from eligibles seeking to provide or organize a nationwide network paging service. The Public Notice will provide complete details regarding application requirements and procedures. (b) Licensing. The FCC may issue a paging geographic area authorization to the nationwide network provider or organizer. All transmissions of nationwide network messages on the channels reserved for such service in  22.531(b) are authorized solely under the authorization(s) of the nationwide network provider or organizer, notwithstanding whether or not the messages pass through facilities owned, operated or licensed to affiliated local carriers. 19. Section 22.559 is amended by revising the heading and introductory text to read as follows:  22.559 Paging application requirements. In addition to information required by Subparts B and D and  22.529, applications for authorization to operate a paging transmitter on the channels listed in  22.531, other than applications for a paging geographic area authorization, must contain the applicable supplementary information described in this section. * * * * * 20. Section 22.561 is amended by revising the introductory text to read as follows:  22.561 Channels for one-way or two-way mobile operation. The following channels are allocated for paired assignment to transmitters that provide (or support other transmitters that provide) one-way or two-way public land mobile service, either individually or collectively under a paging geographic area authorization. The paging geographic areas used for these channels are the EAs (see  22.503(b)(3)). These channels may be assigned for use by mobile or base transmitters as indicated, and or by fixed transmitters (including control, repeater or other fixed transmitters). The mobile channels may also be assigned for use by base or fixed transmitters under certain circumstances (see  22.567(h)). Unless otherwise indicated, all channels have a bandwidth of 20 kHz and are designated by their center frequencies in MegaHertz. * * * * * 21. Section 22.569 is amended by revising paragraph (d) to read as follows:  22.569 Additional channel policies. * * * * * (d) Additional transmitters on same channel. Notwithstanding other provisions of this section, the following applications are not considered to be requests for an additional channel: (1) Applications for transmitters to be located in the same geographic area as an authorized station controlled by the applicant, and to operate on the same paging channel; (2) Applications for transmitters to be located within a paging geographic area for which the applicant holds the paging geographic area authorization for the requested channel; and, (3) Applications for paging geographic area authorizations. * * * * * 22. Section 22.589 is amended by revising the introductory text to read as follows:  22.589 One-way or two-way application requirements. In addition to information required by Subparts B and D and  22.529, applications for authorization to operate a paging transmitter on the channels listed in  22.531, other than applications for a paging geographic area authorization, must contain the applicable supplementary information described in this section. * * * * * 23. Section 22.717 is amended by removing paragraph (c). 24. A new section 22.721 is added, to read as follows:  22.721 Geographic area authorizations. Eligible persons may apply for a paging geographic area authorization in the Rural Radiotelephone Service, on the channel pairs listed in  22.725, by following the procedures and requirements set forth in  22.503 for paging geographic area authorizations. 25. A new section 22.723 is added, to read as follows:  22.723 Secondary site-by-site authorizations. Authorizations for new facilities (including new sites and additional channel pairs for existing sites) in the Rural Radiotelephone Service (including BETRS facilities) may be granted after [insert effective date] only on the condition that such authorizations shall be secondary to any existing or future co-channel paging geographic area authorization in the Paging and Radiotelephone Service or the Rural Radiotelephone Service. If the paging geographic area licensee notifies the Rural Radiotelephone Service licensee that operation of a co-channel secondary facility must be discontinued because it may cause interference to existing or planned facilities, the Rural Radiotelephone Service licensee must discontinue operation of that facility on the particular channel pair involved no later than six months after such notice. II. Part 90 of Chapter I of Title 47 of the Code of Federal Regulations is amended as follows: 1. The authority citation for Part 90 continues to read as follows: AUTHORITY: Sections 4, 303, 309, and 332, 48 Stat. 1066, 1082, as amended; 47 U.S.C  154, 303, 309, and 332, unless otherwise noted. 2. Section 90.162 is amended by adding paragraph (f), to read as follows:  90.162 Agreements to dismiss applications, amendments, or pleadings * * * * * (f) Notwithstanding the provisions of this section, any payments made or received in exchange for withdrawing a short-form application for an FCC authorization awarded through competitive bidding shall be subject to the restrictions set forth in section  1.2105(c) of this chapter. 3. A new Section 90.493 is added, as follows:  90.493 Paging operations on exclusive channels in the 929-930 MHz band. Paging operations on the exclusive channels in the 929-930 MHz band are subject to the rules set forth in this section. (a) Exclusive channels. The center frequencies of the channels in the 929-930 MHz band that may be assigned on an exclusive basis are as follows: 929.0125, 929.1125, 929.1375, 929.1875, 929.2125, 929.2375, 929.2875, 929.3125, 929.3375, 929.3625, 929.3875, 929.4125, 929.4375, 929.4625, 929.4875, 929.5125, 929.5375, 929.5625, 929.5875, 929.6125, 929.6375, 929.6625, 929.6875, 929.7125, 929.7375, 929.7625, 929.7875, 929.8125, 929.8375, 929.8625, 929.8875, 929.9125, 929.9375, 929.9625, and 929.9875 MHz. (b) Part 22 licensing, construction and operation rules apply. Licensing, construction and operation of paging stations on the exclusive channels in the 929-930 MHz band are subject to the application filing, licensing procedure, auction procedure, construction, operation and notification rules and requirements that are set forth in Part 22 of this chapter for paging stations operating in the 931-932 MHz band, instead of procedures elsewhere in this part. (c) Part 22 power limits apply; type acceptance required. Paging operations on the exclusive channels in the 929-930 MHz band are subject to the transmitting power limits set forth in Part 22 of this chapter for paging stations operating in the 931-932 MHz band, instead of power limits elsewhere in this part. Transmitters used on the exclusive channels in the 929-930 MHz band must be of a type accepted under either Part 22 of this chapter or this part (or both). 4. Section 90.494 is amended by revising the heading, paragraphs (a), (f) and (g), to read as follows:  90.494 Paging operations on shared channels in the 929-930 MHz band. (a) This section applies to licensing of paging stations on the shared (non-exclusive) channels in the 929-930 MHz band. The center frequencies of these channels are listed in paragraph (b). * * * * * (f) The effective radiated power for base stations providing paging service on the shared channels must not exceed 3500 Watts. (g) Licenses may be granted on these shared paging channels only for expansion (addition of new sites or relocation of existing sites) or other modification, assignment or transfer of control of existing, licensed private (including Special Emergency Radio Service) or commercial paging systems, and for new private (including Special Emergency Radio Service), internal-use paging systems. Any application for authority to operate a new commercial paging system on any of these shared channels is unacceptable for filing. 5. Section 90.495 is removed. 6. Section 90.496 is removed. APPENDIX B COMMENTS -- March 18, 1996 1. Ace Communications (Ace) 2. AirTouch Paging (AirTouch) 3. American Panging Inc. (API) 4. Ameritech Mobile Services, Inc. (Ameritech) 5. Ameritel Paging, Inc. (Ameritel) Anserphone of Natchez, Inc. CommNet Paging, Inc. Metro/Delta, Inc. Oregon Telephone Corporation Paging Systems Management, Inc. Professional Answering Service, Inc. Radio Paging Service Radiofone, Inc. RCC Paging, Inc. Sema-Phoon, Inc. Teletouch Communications, Inc. Ventures in Paging L.C. Clifford D. and Barbara J. Moeller d/b/a Valley Answering Service 6. A+ Communications, Inc. 7. A+ Network, Inc. 8. Arch Communications Group (Arch) Westlink Communications 9. ATS Mobile Telephone, Inc. (ATS) 10. AT&T Wireless Services, Inc. (AT&T Wireless) 11. Baker's Electronics and Communications, Inc. (Baker's) 12. Baldwin Telecom, Inc. (Baldwin) Amery Telephone Company 13. Wayne J. Balkenhol 14. Benkelman Telephone Company (Benkelman) Wauneta Telephone Company 15. Border to Border Communications, Inc. (Border) 16. Caraway Communications (Caraway) 17. Chequamegon Telephone Cooperative, Inc. (Chequamegon) 18. Alan Coles 20. Communications Sales and Service, Inc. (CSS) 21. Comp Comm, Inc. 22. Consolidated Communications Mobile Services, Inc. (CCMS) 23. Datafon II, Inc. (Datafon) Zipcall Long Distance, Inc. 24. Diamond Page Partnerships (Diamond) AmericaOne Northwest Pager Metro Paging West Virginia Pager PagerOne 25. Gary Duncan 26. Roy N. Elliott 27. Federal Trade Commission (FTC) 28. HEI Communications, Inc. (HEI) 29. Frederick W. Hiort, Jr. d/b/a B&B Beepers (Hiort) 30. Huffman Communications (Huffman) 31. InterDigital Communications Corporation (InterDigital) 32. Liberty Cellular, Inc. (Liberty) 33. Mashell Connect, Inc. (Mashell) 34. Metamora Telephone Company, Inc. (Metamora) 35. Metrocall, Inc. 36. Paul Mihm 37. MobileMedia Communications, Inc. (MobileMedia) 38. Mobile Telecommunications Technologies Corp. (MTel) 39. Mobilfone Service, Inc. (Mobilfone) 40. Edward E. Muzzio III 41. Brian S. Neal 42. Nucla-Naturita Telephone Company (Nucla-Naturita) 43. Olympic Radio 44. Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO) 45. Pacific Bell (Pacific) 46. PageAmerica Group, Inc. (PageAmerica) 47. Page Hawaii Lubbock Radio Paging Service, Inc. WT Services, Inc. d/b/a Panhandle Paging Mobile Phone of Texas, Inc. 48. PageMart, Inc. (PageMart) 49. PagePrompt U.S.A. (PagePrompt) 50. Paging Associates, Inc. 51. Paging Network, Inc. (PageNet) 52. Paging Partners, Corp. 53. Pass Word, Inc. 54. Marguerite Perry 55. Personal Communications Industry Association (PCIA) 56. Pigeon Telephone Company, Inc. (Pigeon) 57. Porter Communications, Inc. (Porter) 58. Preferred Networks, Inc. (PNI) 59. Priority Communications, Inc. (Priority) 60. ProNet Inc. (ProNet) 61. Puerto Rico Telephone Company 62. Radiofone, Inc. 63. Catherine Reaves 64. Karl A. Rinker d/b/a Rinker Communications (Rinker) 65. Rule Radiophone Service, Inc. (Rule) Robert R. Rule d/b/a Rule Communications 66. Donald M. Sarrat 67. Ted Shelly 68. Small Business in Telecommuncations (SBT) 69. SMR Systems, Inc. (SMR) 70. Source One Wireless, Inc. (Source One) 71. Supercom, Inc. 72. Sunbelt Transmission Corporation (Sunbelt) Snider Communications Corporation 73. TeleBEEPER of New Mexico, Inc. (TeleBEEPER) 74. Teletouch Licenses, Inc. (Teletouch) 75. Total Tele-Page of Nebraska, Inc. (Total Tele-Page) 76. Tri-State Radio Paging, Inc. (Tri-State Radio) 77. United Paging Resources 78. United States Telephone Association (USTA) 79. Ann Von Duerring 80. Genevieve T. Wenski 81. Western Radio Services, Co., Inc. 82. Wilkinson County Telephone Company, Inc. (Wilkinson) 83. Jon D. Word (Word) Pioneer Telephone Cooperative, Inc. REPLY COMMENTS -- April 2, 1996 1. Arch Communications Group Westlink Communications 2. A+ Network, Inc. 3. A+ Communications, Inc. 4. AirTouch Paging (AirTouch) 5. American Paging, Inc. (API) 6. Ameritech Mobile Services, Inc. (Ameritech) 7. Ameritel Paging, Inc. (Ameritel) Anserphone of Natchez, Inc. CommNet Paging, Inc. Metro/Delta, Inc. Oregon Telephone Corporation Paging Systems Management, Inc. Professional Answering Service, Inc. Radio Paging Service Radiofone, Inc. RCC Paging, Inc. Sema-Phoon, Inc. Teletouch Communications, Inc. Ventures in Paging L.C. Clifford D. and Barbara J. Moeller d/b/a Valley Answering Service 8. Emery Telephone Company 9. MobileMedia Communications, Inc. (MobileMedia) 10. Metrocall, Inc. 11. Nucla-Naturita Telephone Company (Nucla-Naturita) 12. Paging Network, Inc. (PageNet) 13. Page Hawaii Lubbock Radio Paging Service, Inc. WT Services, Inc. d/b/a Panhandle Paging Mobile Phone of Texas, Inc. 14. Paging Partners, Corp. 15. ProNet Inc. (ProNet) 16. Small Business in Telecommuncations (SBT) 17. Teletouch Licenses, Inc. (Teletouch) EX PARTE COMMENTS 1. Advanced Electronics, Inc. -- filed December 31, 1996 2. AirTouch -- filed May 15, 1996 3. AirTouch -- filed August 15, 1996 4. AirTouch -- filed September 13, 1996 5. AirTouch and Arch -- filed February 11, 1997 6. Motorola -- filed August 13, 1996 7. Puerto Rico Telephone Company -- filed July 24, 1996 and September 6, 1996 8. Teletouch Licenses, Inc. (Teletouch) -- filed December 6, 1996 APPENDIX C Final Regulatory Flexibility Analysis Second Report and Order As required by Section 603 of the Regulatory Flexibility Act, 5 U.S.C.  603 (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rulemaking (Notice) in WT Docket No. 96-18. The Commission sought written public comment on the proposals in the Notice, including the IRFA. The Commission's Final Regulatory Flexibility Analysis in this Second Report and Order conforms to the RFA, as amended by the Contract With America Advancement Act of 1996. A. Need for and Purpose of this Action: In this Second Report and Order the Commission adopts rules to establish geographic area licensing and competitive bidding for Common Carrier Paging (CCP) and exclusive 929 MHz Private Carrier Paging (PCP) services. These rules are adopted to establish a flexible regulatory scheme for paging services, which will promote efficient licensing and competition in the Commercial Mobile Radio Services (CMRS) marketplace. The competitive bidding rules adopted in the Second Report and Order are pursuant to Section 309(j) of the Communications Act of 1934, as amended (Communications Act), which grants authority to the Commission to use auctions to select among mutually exclusive applications for initial licenses for subscriber-based services. B. Summary of Issues Raised in Response to the Initial Regulatory Flexibility Analysis: Several commenters submitted comments in response to the IRFA. These commenters contend that the Commission did not assess how the proposals for market area licensing and competitive bidding will impact small businesses; that market area licensing will alleviate some administrative burdens but the savings will mainly be seen by the largest paging operators; and that market area licensing will impose administrative burdens and additional costs on small businesses. In addition to the comments specifically submitted in response to the IRFA, several commenters raised issues in their comments to the Notice regarding the effects of the proposals in the Notice on small businesses. These commenters do not support geographic area licensing for the exclusive 929 MHz and 931 MHz paging channels. These commenters contend that geographic area licensing would be disruptive to existing licensees, as well as to the public, without providing any overriding benefit. The Commission addresses these issues in the Second Report and Order, and concludes that geographic area licensing using Major Trading Areas (MTAs) as the geographic area for these bands, is in the public interest. The Commission also observes that small businesses will be able to use bidding credits and installment payments in order to compete with larger entities in the auction process. Additionally, several commenters are opposed to geographic area licensing for the 35-36 MHz, 43-44 MHz, 152-159 MHz, and 454-460 MHz bands and claim that geographic area licensing would prevent the continued growth of small paging businesses. Several commenters are also opposed to geographic area licensing for other services, such as Basic Exchange Telecommunications Radio Service (BETRS). Commenters argue that it is not in the public interest to use competitive bidding to select between applications for BETRS and paging, as this may leave some rural areas without any local exchange service. Commenters contend that requiring local exchange carriers to bid for BETRS spectrum would defy the requirements in the Communications Act for universal service and would jeopardize the Commission's goal to increase subscriber penetration. The Commission addresses these issues in the Second Report and Order, and concludes that geographic area licensing, using Economic Areas (EAs) as the geographic area for these bands, is in the public interest. The Commission notes that EAs, which are smaller than MTAs, will provide more opportunities for small paging businesses. The Commission also observes that small businesses will be able to use bidding credits and installment payments in order to compete with larger entities in the auction process. The Commission concludes that rural areas will not be deprived of service because existing BETRS systems will remain in place and the new partitioning rules adopted in the Second Report and Order will allow BETRS operators to enter into partitioning agreements with the geographic area paging licensees. Additionally, the Commission notes that BETRS operators will be able to obtain additional sites on a secondary basis. Commenters are also opposed to geographic licensing for the shared channels and request that the Commission maintain the present system of site-by-site licensing for these channels. The commenters observe that these channels are predominantly used by small businesses. The Commission finds that the concerns raised by these commenters regarding the shared channels are well-founded and therefore declines to impose geographic area licensing for the shared channels. C. Description and Number of Small Entities Involved The rules adopted in this Second Report and Order will apply to current paging operators and new entrants into the paging market. Under these rules, exclusive 929 MHz paging licenses and licenses for all CCP channels will be granted on a market area basis, instead of site-by-site, and mutually exclusive applications will be resolved through competitive bidding procedures. In order to ensure the more meaningful participation of small business entities in the auction for mutually exclusive geographic area paging licenses the Commission has adopted a two-tier definition of small businesses. A small business will be defined for these purposes as either (1) an entity that, together with its affiliates and controlling principals, has average gross revenues for the three preceding years of not more than $3 million, or (2) an entity that, together with affiliates and controlling principals, has average gross revenues for the three preceding years of not more than $15 million. The Small Business Administration (SBA) has not yet approved this definition for paging services. The Commission will utilize the SBA's definition applicable to radiotelephone companies, i.e., an entity employing less than 1,500 persons. The Commission anticipates that a total of 16,630 non-nationwide geographic area licenses will be auctioned. The geographic area licenses subject to auction will consist of 2,550 MTA licenses and 14,080 EA licenses. In addition to the 47 Rand McNally MTAs, the Commission is adding three MTAs for the U.S. territories of (1) Guam and the Northern Mariana Islands, (2) Puerto Rico and the U.S. Virgin Islands, and (3) American Samoa. The Commission is also licensing Alaska as a single MTA separate from the Seattle MTA. There will be a total of 51 MTA licenses auctioned for each non-nationwide 931 MHz and exclusive 929 MHz channel. Auctions of paging licenses have not yet been held, and there is no basis to determine the number of licenses that will be awarded to small entities. Given the fact that nearly all radiotelephone companies have fewer than 1,000 employees, and that no reliable estimate of the number of prospective paging licensees can be made, the Commission assumes, for purposes of the evaluations and conclusions in this Final Regulatory Flexibility Analysis, that all the auctioned 16,630 geographic area paging licenses will be awarded to small entities, as that term is defined by the SBA. D. Summary of Projected Reporting, Recordkeeping and Other Compliance Requirements: Geographic area paging licensees may be required to report information concerning the location of their transmission sites under some circumstances, although generally they will not be required to file applications on a site-by-site basis. Additionally, geographic area license applicants will be subject to reporting and recordkeeping requirements to comply with the competitive bidding rules. Specifically, applicants will apply for paging license auctions by filing a short-form application (FCC Form 175). Winning bidders will file a long-form application (FCC Form 600) at the conclusion of the auction. Additionally, entities seeking treatment as small businesses will need to submit information pertaining to the gross revenues of the small business applicant and its affiliates and controlling principals. Such entities will also need to maintain supporting documentation at their principal place of business. Section 309(j)(4)(E) of the Communications Act directs the Commission to "require such transfer disclosures and anti-trafficking restrictions and payment schedules as may be necessary to prevent unjust enrichment as a result of the methods employed to issue licenses and permits." The Commission adopted safeguards designed to ensure that the requirements of this section are satisfied, including a transfer disclosure requirement for paging licenses obtained through the competitive bidding process. An applicant seeking approval for a transfer of control or assignment of a license within three years of receiving a new license through a competitive bidding procedure must, together with its application for transfer of control or assignment, file with the Commission a statement indicating that its license was obtained through competitive bidding. Such applicant must also file with the Commission the associated contracts for sale, option agreements, management agreements, or other documents disclosing the total consideration that the applicant would receive in return for the transfer or assignment of its license. With respect to small businesses, the Commission has adopted unjust enrichment provisions to deter speculation and participation in the licensing process by those who do not intend to offer service to the public, or who intend to use the competitive bidding process to obtain a license at a lower cost than they would otherwise have to pay and to later sell it at a profit, and to ensure that large businesses do not become the unintended beneficiaries of measures meant to help small firms. Small business licensees seeking to transfer their licenses to entities which do not qualify as small businesses (or which qualify for a lower bidding credit), as a condition of approval of the transfer, must remit to the government a payment equal to a portion of the value of the benefit conferred by the government. Finally, applicants and licensees claiming eligibility for competitive bidding as a small business are subject to audits by the Commission. Selection for audit may be random, on information, or on the basis of other factors. Consent to such audit is part of the certification included in the short-form application (FCC Form 175). E. Steps Taken to Minimize Burdens on Small Entities: Section 309(j)(3)(B) of the Communications Act provides that in establishing eligibility criteria and bidding methodologies the Commission shall, inter alia, promote economic opportunity and competition and ensure that new and innovative technologies are readily accessible by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women. Section 309(j)(4)(A) provides that in order to promote such objectives, the Commission shall consider alternative payment schedules and methods of calculation, including lump sums or guaranteed installment payments, with or without royalty payments, or other schedules or methods. In awarding geographic area paging licenses the Commission is committed to meeting the statutory objectives of promoting economic opportunity and competition, of avoiding excessive concentration of licenses, and of ensuring access to new and innovative technologies by disseminating licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women. The Commission finds that it is appropriate to establish special provisions in the paging rules for competitive bidding by small businesses. The Commission believes that small businesses applying for paging licenses should be entitled to bidding credits and should be permitted to pay their bids in installments. In order to ensure the more meaningful participation of small business entities in paging auctions, the Commission has adopted a two-tiered definition of small businesses. This approach will give qualifying small businesses bidding flexibility. A small business will be defined as either (1) an entity that, together with its affiliates and controlling principals, has average gross revenues for the three preceding years of not more than $3 million, or (2) an entity that, together with affiliates and controlling principals, has average gross revenues for the three preceding years of not more than $15 million. The Commission will require that in order for an applicant to qualify as a small business, qualifying small business principals must maintain control of the applicant. The Commission has established bidding credits consistent with the two-tiered definition of a small business. Small businesses that, together with affiliates and controlling principals, have average gross revenues for the three preceding years of not more than $3 million will receive a 15 percent bidding credit. Small businesses that, together with affiliates and controlling principals, have average gross revenues for the three preceding years of not more than $15 million will receive a bidding credit of 10 percent. Additionally, licensees who qualify as small businesses in the geographic area paging license auction will be entitled to pay their winning bid amount in quarterly installments over the term of the license, with interest charges to be fixed at the time of licensing at a rate equal to the rate for ten-year U.S. Treasury obligations plus 2.5 percent. Licensees who qualify for this installment payment plan will be permitted to make interest-only payments for the first two years of the license term. Timely payment of all installments will be a condition of the license grant, and failure to make such timely payments will be grounds for revocation of the license. The Commission is also extending geographic partitioning of MTA and EA license areas to all entities eligible to be paging licensees. The Commission believes that this provision will allow paging licensees to tailor their business strategies and allow them to use the spectrum more efficiently, will allow more entities to participate in the provision of paging services, and will facilitate market entry by small entities that have the ability to provide service only to a limited population. Additionally, the Commission is maintaining the current site-by-site licensing procedure for the shared channels. F. Significant Alternatives Considered and Rejected: The Commission considered and rejected a proposal for geographic area licensing using MTAs for all licenses. Commenters opposed this proposal, contending that MTAs were too large for the smaller paging systems. The Commission believes that the advantages of geographic area licensing -- flexibility, enhanced regulatory symmetry with other CMRS, and eliminating the inefficiencies in the licensing process -- are applicable to the UHF and VHFchannels, particularly for regional paging services offered on these bands. Based on the record in this proceeding, the Commission concludes that EAs would be more appropriate than MTAs for the paging channels below 931 MHz. The Commission agrees with the commenters that the geographical definition used should correspond as much as possible to the geographic area that the paging licensees seek to serve, and concludes that EAs, which are smaller than MTAs, would facilitate the ability of paging operators of smaller systems to participate in geographic area licensing. Additionally, the Commission considered and rejected converting all or some of the shared channels to exclusive use and implementing geographic area licensing. The Commission also considered and rejected limiting the number of licensees on the shared channels. In the Notice, the Commission asked for comment on whether to (1) convert the shared channels to exclusive use and implement geographic licensing; (2) limit the number of licenses per shared channel and use competitive bidding to choose among applications once the limit is reached; or (3) retain the status quo. Most commenters opposed geographic area licensing for the shared channels, because paging systems on these channels are smaller paging systems, not wide-area systems. The Commission observed that smaller paging systems have been able to utilize these channels effectively on a shared basis. Most of the commenters requested that the Commission maintain the present system of site-by-site licensing. The Commission noted that attempting to superimpose a geographic licensing scheme on channels that have historically been shared could cause significant disruption to existing operations. Additionally, the Commission declined to adopt a cap on licensing shared channels, or to convert certain shared channels to exclusive licensing. The difficulty with a licensing cap, as noted by several commenters, is that it is the amount of time a paging channel is used and the transmission equipment and protocol used, not the number of licensees, that determines the capacity limits of a channel. The Commission was also concerned that picking certain shared channels to be designated as exclusive would only cause greater pressure on the remaining shared channels and therefore could limit opportunities for entry by smaller systems. The Commission concluded that the shared channels should not be converted to exclusive use, and the number of licensees should not be limited in order to provide continued opportunities for paging operators, particularly small businesses. With respect to competitive bidding rules, the Commission considered using a market-by-market stopping rule, which many commenters favored in order to facilitate bringing an earlier end to the auction and permitting the earlier close of uncontested markets. The Commission adopted instead a hybrid simultaneous/license-by-license stopping rule, which combines the advantages of a simultaneous stopping rule and a license-by-license stopping rule. This approach will prevent the auction from being unreasonably long while also preserving bidders' flexibility to pursue back up strategies and acquire licenses that are consistent with their business plans. The Commission also considered allowing small businesses that are winning bidders to pay a lower down payment than non-small businesses. The Commission concluded, however, that all winning bidders should pay a down payment of 20 percent of their winning bids. The Commission believes that a substantial down payment is necessary to ensure that winning bidders have the financial capability of building out their systems, and will provide stronger assurance against defaults than a reduced down payment. Increasing the amount of the bidder's funds at risk in the event of default discourages insincere bidding and therefore increases the likelihood that licenses are awarded to parties who are best able to serve the public. The Commission also believes that a 20 percent down payment should cover the required payments in the unlikely event of default. The Commission requested comment on whether, in addition to small business provisions, separate provisions should be adopted for minority- and women-owned entities. Few comments were received on this issue, and commenters failed to provide record evidence of discrimination sufficient to support race-based provisions under the strict scrutiny standard of judicial review. The Commission is also concerned that the record would not support gender-based provisions under intermediate scrutiny. Balancing its obligation to provide opportunities for women- and minority-owned businesses to participate in spectrum-based services against its statutory duties to facilitate the rapid delivery of new services to the American consumer and promote efficient use of the spectrum, the Commission concluded that it should not delay paging service auctions for the amount of time it would take to adduce sufficient evidence to support race- and gender-based provisions. The Commission believes that most minority- and women-owned businesses will be able to take advantage of the specific provisions that it has adopted for small businesses. The Commission proposed, with respect to installment payments, that small businesses with not more than $3 million in average gross revenues for the preceding three years be permitted to make interest-only payments for the first five years of the license term, while small businesses with not more than $15 million in average gross revenues for the preceding three years be permitted to make interest-only payments during the first two years. The Commission concluded, however, that all licensees qualifying for installment payments should be allowed to make interest-only payments only for the first two years of the license term. The Commission declined to adopt a longer interest-only period for small businesses with average gross revenues of not more than $3 million. The Commission believes that the two-year interest-only period provides small businesses with the appropriate level of financing to overcome difficulties in attracting capital. Given that additional financial assistance is being made available to very small businesses in the form of a 15 percent bidding credit, the Commission does not think a longer interest-only period is needed. The Commission sought comment on the need, if any, for a reduced upfront payment for entities qualifying as a small business. The Commission did not, however, adopt reduced upfront payment rules for small businesses participating in the paging license auction because it believes that a uniform upfront payment provision for all bidders in the auction is necessary in order to deter speculation and to ensure that only sincere bidders participate in the auction. Finally, the Commission considered but elected not to adopt a spectrum set-aside for entrepreneurs. In the Notice, the Commission tentatively concluded that it was not necessary to adopt an entrepreneurs' block for paging license auctions, and most commenters opposed the creation of an entrepreneurs' block or other form of spectrum set-aside for paging license auctions. The Commission believes that the large number of licenses of different sizes that will be available in the paging auctions should allow for extensive participation of small businesses without an entrepreneurs' block. Moreover, the Commission believes that the special provisions for small businesses that it has adopted, including installment payments and tiered bidding credits, will give small businesses a significant opportunity to acquire paging licenses through auctions. G. Report to Congress The Commission shall send a copy of this Final Regulatory Flexibility Analysis, along with this Second Report and Order, in a report to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C.  801(a)(1)(A). A copy of this Final Regulatory Flexibility Analysis will also be published in the Federal Register. APPENDIX D Initial Regulatory Flexibility Analysis Further Notice of Proposed Rulemaking As required by Section 603 of the Regulatory Flexibility Act, 5 U.S.C.  603 (RFA), the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the expected impact on small entities of the policies and rules proposed in this Further Notice of Proposed Rulemaking (FNPRM). Written public comments are requested on the IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the Further Notice of Proposed Rulemaking. A. Reason for Action This rulemaking proceeding was initiated to secure comment on proposals for establishing a regulatory scheme for the common carrier paging (CCP) and private carrier paging (PCP) services which would promote efficient licensing and competition in the commercial mobile radio marketplace. The Commission seeks further comment on several issues: whether nationwide licenses should be subject to coverage requirements, how bidding credits and installment payments should be treated in cases where small businesses wish to partition their licenses, how build-out requirements and license term are affected in cases of geographic partitioning by paging market area licensees, whether spectrum disaggregation is feasible for paging licensees, and revisions to the current FCC Form 600 and the application procedures for licenses on the shared channels to reduce paging application fraud. B. Objectives The Second Report and Order grants 26 nationwide geographic area licenses to nationwide paging licensees, but does not impose any additional coverage beyond what the nationwide licensees have already achieved. There are no coverage requirements imposed on the non-nationwide geographic area licensees. In the FNPRM the Commission seeks comment on whether coverage requirements are appropriate. In the Second Report and Order the Commission allows all licensees, including small business licensees, to partition at any time to another eligible entity. In the FNPRM the Commission proposes that unjust enrichment provisions should apply when a small business licensee has benefitted from the small business provisions in the auction rules and then partitions a portion of the license area to another entity that would not qualify for such benefits, or would qualify for a lower bidding credit. Without the unjust enrichment provisions on such transactions, a small business could benefit from special bidding provisions and then become unjustly enriched by immediately partitioning a portion of the license area to parties that do not qualify for such benefits. The objective of this proposal is to prevent unjust enrichment. In the FNPRM the Commission seeks comment on build-out requirements and license term for partitioned geographic area licenses (including nationwide licenses). The Commission also seeks comment on whether nationwide licensees should be permitted to partition their license area, build-out requirements for partitioned nationwide licenses, and the license term of partitioned nationwide licenses. In the FNPRM the Commission seeks comment on whether spectrum disaggregation would be feasible for paging, and how much spectrum a paging licensee should be permitted to disaggregate. The Commission seeks comment on build-out requirements and license term for disaggregated geographic area licenses. If spectrum disaggregation is feasible in paging it may facilitate the efficient use of spectrum, increase competition, and expedite service to the public. The Commission also seeks comment on paging application fraud, an issue raised by the Federal Trade Commission. Specifically, the Commission seeks comment on whether the current FCC Form 600 should be revised to warn paging applicants of the risk of application fraud, and whether application preparation services should be required to certify that the applicant has received information regarding the Commission's rules and the obligations of licensees. Additionally, commenters are invited to address whether the frequency coordinator should implement additional procedures to reduce fraudulent or speculative paging applications. The objective of these proposals is to inform consumers of the rules and the prevalence of paging application fraud and thus reduce fraud and speculation. C. Legal Basis The proposed action is authorized under Sections 4(i), 257, 303(r), and 309(j) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 257, 303(r), and 309(j). D. Reporting, Recordkeeping, and Other Compliance Requirements Nationwide Channels. The proposals in the FNPRM include the possibility of imposing reporting and recordkeeping requirements for the nationwide geographic area licensees to establish compliance with the coverage requirements, if coverage requirements are adopted. Geographic Partitioning and Spectrum Disaggregation. The proposals in the FNPRM include the possibility of imposing reporting and recordkeeping requirements for small businesses seeking licenses through the proposed partitioning and disaggregation rules. The information requirements would be used to determine if the licensee is a qualifying entity to obtain a partitioned license or disaggregated spectrum. This information will be a one-time filing by any applicant requesting such a license. The information will be submitted on the FCC Forms 490 (or 430 and/or 600 filed as one package under cover of the Form 490) which are currently in use and have already received OMB clearance. The Commission estimates that the average burden on the applicant is three hours for the information necessary to complete these forms. The Commission estimates that 75 percent of the respondents (which may include small businesses) will contract out the burden of responding. The Commission estimates that it will take approximately 30 minutes to coordinate information with those contractors. The remaining 25 percent of respondents (which may include small businesses) are estimated to employ in-house staff to provide the information. Applicants (including small businesses) filing the package under cover of FCC Form 490 electronically will incur a $2.30 per minute on-line charge. On-line time would amount to no more than 30 minutes. The Commission estimates that 75 percent of the applicants may file electronically. The Commission estimates that applicants contracting out the information would use an attorney or engineer (average of $200 per hour) to prepare the information. It is also possible that small business partitioners and disaggregators will be required to repay, on an accelerated basis, a portion of the outstanding principal balance owed under an installment payment plan. If unjust enrichment rules are applied to small businesses that partition or disaggregate to non-small businesses, or to small businesses qualifying for a lower bidding credit, small businesses may be required to reimburse the United States government for all or a portion of the special competitive bidding benefits they have received. This could include accelerated payment of bidding credits, unpaid principal, and accrued unpaid interest. It is also possible that each party to a partitioning or disaggregation transfer could be required to guarantee all or a portion of the partitioner's or disaggregator's original auctions-related obligation in the event of default or bankruptcy by any of the parties. Shared Channels. The proposals in the FNPRM do not include the possibility of imposing reporting and recordkeeping requirements for small businesses seeking licenses for shared channels. The FNPRM seeks comment on whether the current FCC Form 600 application should be revised to warn applicants of the risk of application fraud; whether application preparation services should be required to certify that the applicant has received information regarding the Commission's rules; and whether the frequency coordinator should be required to implement additional procedures in the coordination process to reduce the likelihood of fraudulent applications. These proposals would, if implemented, furnish additional information to applicants. None of these proposals would impose reporting or recordkeeping requirements on small businesses. E. Federal Rules which Overlap, Duplicate or Conflict with These Rules None. F. Description and Number of Small Entities Involved Nationwide Channels. The rule changes discussed in the FNPRM with respect to implementing coverage requirements for the 26 nationwide licenses will probably not directly affect small businesses because nationwide licensees are probably not small businesses. However, if all 26 nationwide licenses are held by small businesses, the rule change would not affect more than 26 small businesses. Geographic Partitioning and Spectrum Disaggregation. The partitioning and disaggregation rule changes proposed in this proceeding will affect all small businesses which avail themselves of these rule changes, including small businesses currently holding paging licenses who choose to partition and/or disaggregate and small businesses who may acquire licenses through partitioning and/or disaggregation. The Commission is required to estimate in its Final Regulatory Flexibility Analysis the number of small entities to which a rule will apply, provide a description of such entities, and assess the impact of the rule on such entities. To assist the Commission in this analysis, commenters are requested to provide information regarding how many total entities, existing and potential, would be affected by the proposed rules in the FNPRM. In particular, the Commission seeks estimates of how many such entities will be considered small businesses. As explained in the Final Regulatory Flexibility Analysis for the Second Report and Order, the Commission is utilizing the SBA definition applicable to radiotelephone companies, i.e., an entity employing less than 1,500 persons. The Commission seeks comment on whether this definition is appropriate for paging licensees in this context. Additionally, the Commission requests each commenter to identify whether it is a small business under this definition. If a commenter is a subsidiary of another entity, this information should be provided for both the subsidiary and the parent corporation or entity. The Commission estimates that the approximately 600 current paging carriers could take the opportunity to partition and/or disaggregate a license or obtain an additional license through partitioning or disaggregation. New entrants could obtain paging licenses through the competitive bidding procedure, and take the opportunity to partition and/or disaggregate a license or obtain an additional license through partitioning or disaggregation. Additionally, entities that are neither incumbent licensees nor geographic area licensees could enter the market by obtaining a paging license through partitioning or disaggregation. The Commission estimates that up to approximately 50,000 licensees or potential licensees could take the opportunity to partition and/or disaggregate a license or obtain a license through partitioning and/or disaggregation. This number is based on the total current estimate of paging carriers (approximately 600) and non-nationwide geographic area licenses to be awarded (16,630) and an estimate that each license will probably not be partitioned and/or disaggregated to more than three parties. Given the fact that nearly all radiotelephone companies have fewer than 1,000 employees, and that no reliable estimate of the number of future paging licensees can be made, the Commission assumes for purposes of this IRFA that all of the licenses will be awarded to small businesses. It is possible that a significant number of the up to approximately 50,000 licensees or potential licensees who could take the opportunity to partition and/or disaggregate a license or who could obtain a license through partitioning and/or disaggregation will be small businesses. Shared Channels. The rule changes proposed in the FNPRM with respect to adding information to the FCC Form 600 to warn prospective applicants about paging application fraud would probably not have an impact on any small business or other entity applying for a paging license on a shared channel. The proposed changes to the paging license application are intended to warn consumers about the prevalence of application fraud. G. Significant Alternatives Minimizing the Impact on Small Entities Consistent with the Stated Objectives The Commission seeks comment on whether coverage requirements should be imposed for the nationwide geographic area licensees. Any significant alternatives presented in the comments will be considered. Coverage requirements for the nationwide geographic area licensees, if adopted, would probably not affect small businesses. With respect to partitioning, the Commission seeks comment on whether nationwide licensees should be permitted to partition their license area, build-out requirements for partitioned nationwide licenses, and license term of partitioned nationwide licenses. For MTA and EA geographic area licenses, the Commission proposes that unjust enrichment provisions should apply when a licensee has benefitted from the small business provisions in the auction rules and partitions a portion of the geographic license area to another entity that would not qualify for such benefits. The alternative to applying the unjust enrichment provisions would be to allow an entity who had benefitted from the special bidding provisions for small businesses to become unjustly enriched by partitioning a portion of their license area to parties that do not qualify for such benefits. The Commission also seeks comment on build-out requirements and license term for partitioned MTA and EA geographic area licenses. The Commission seeks comment on whether spectrum disaggregation would be feasible for paging, and how much spectrum a paging licensee should be permitted to disaggregate. The Commission seeks comment on build-out requirements and license term for disaggregated geographic area licenses. If spectrum disaggregation is feasible in paging it may facilitate the efficient use of spectrum, increase competition, and expedite service to the public. The Commission also seeks comment on an issue raised by the Federal Trade Commission in comments regarding paging application fraud. Specifically, the Commission seeks comment on whether the current FCC Form 600 should be revised to warn applicants of the risk of application fraud, and whether application preparation services should be required to certify that the applicant has received information regarding the Commission's rules and the obligations of licensees. Commenters are invited to address whether the frequency coordinator should implement additional procedures to reduce fraudulent or speculative paging applications. The alternative to revising the application and/or the coordination process would be to allow application mill fraud which may affect many unwitting consumers. The FNPRM solicits comment on a variety of alternatives discussed herein. Any significant alternatives presented in the comments will be considered.