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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Amendment of the Commission's Rules) WT Docket No. 97-81 Regarding Multiple Address Systems) FURTHER NOTICE OF PROPOSED RULE MAKING AND ORDER Adopted: May 18, 1999 Released: July 1, 1999 Comment Date: 60 days after Federal Register publication Reply Comment Date: 90 days after Federal Register publication By the Commission: TABLE OF CONTENTS Paragraph I. INTRODUCTION 1 II. EXECUTIVE SUMMARY 2 III. BACKGROUND 3 IV. DISCUSSION A. Spectrum Allocation 8 1. Background 8 2. Proposals in the Notice 9 B. The Impact of the Balanced Budget Act of 1997 14 1. Authority to Employ Competitive Bidding Procedures 16 2. Exemptions from Competitive Bidding 18 3. Licensing in the 928/952/956 MHz Bands 21 C. Frequency Set-Aside for Services Exempt from Competitive Bidding 22 D. Resolution of Mutually Exclusive Applications for Services Exempt from Competitive Bidding 24 E. Competitive Bidding Procedures 25 F. Suspension of Acceptance and Processing of Applications 28 V. CONCLUSION 32 VI. PROCEDURAL MATTERS A. Ex Parte Rules - - Permit-But-Disclose Proceeding 33 B. Initial Regulatory Flexibility Analysis 34 C. Initial Paperwork Reduction Act of 1995 Analysis 35 D. Comment Dates 36 E. Further Information 40 VII. ORDERING CLAUSES 41 APPENDIX A: Initial Regulatory Flexibility Analysis I. INTRODUCTION 1. In this Further Notice of Proposed Rule Making and Order ("Further Notice"), we address the impact of the Balanced Budget Act of 1997 on the Commission's ongoing Multiple Address Systems ("MAS") rule making proceeding. Our objective is to supplement the record received in response to the Notice of Proposed Rule Making in this docket. We believe that the ultimate resolution of the issues in this ongoing proceeding will benefit from further discussion in light of the revisions to the Communications Act of 1934, as amended, ("Communications Act") by the Balanced Budget Act. We seek comment, therefore, on the effect of the new statutory language in Section 309(j) of the Communications Act on the proposals set forth in the Notice. II. EXECUTIVE SUMMARY 2. This Further Notice is intended to refine certain of the Commission's outstanding proposals in this proceeding. These refinements are intended to comport with statutory requirements established as a result of the Balanced Budget Act subsequent to the adoption of the Notice. Our goal in this proceeding continues to be to facilitate the further development and implementation of MAS. The following is a synopsis of our major proposals and actions taken herein. This Further Notice:  Examines the impact of the Balanced Budget Act on the proposal in the Notice to allocate the 932/941 MHz and 928/959 MHz bands for subscriber-based services and to award initial licenses for these bands through competitive bidding.  Seeks comment on whether passage of the Balanced Budget Act has affected the proposal in the Notice to reserve five channel pairs in the 932/941 MHz MAS bands for Federal Government/public safety use.  Seeks comment on whether passage of the Balanced Budget Act has affected the proposal in the Notice to reserve the 928/952/956 MHz MAS bands exclusively for private, internal use and to continue to issue licenses for these bands on a site-by-site basis.  Seeks comment on how to resolve mutually exclusive MAS applications received from parties exempted from the competitive bidding process, assuming that we reserve channels in either the 932/941 MHz or 928/952/956 MHz bands, or both, for public safety radio services.  Seeks comment on specific size standards to be applied to the small business definition, and the offering of "tiered bidding credits" for the different sizes of small businesses.  Immediately suspends the acceptance and processing of applications in the 928/952/956 MHz bands, regardless of the type of service proposed by the applicant, except certain pending applications, applications for minor modifications (as defined herein), and applications for license assignment or transfer of control during the pendency of this rule making. III. BACKGROUND 3. Historically, the primary users of MAS spectrum have been the power, petroleum and security industries for various alarm, control, interrogation and status reporting requirements, and the paging industry for control of multiple paging transmitters in the same general geographic area. In 1989, the Commission allocated forty 12.5-kilohertz channel pairs in the 932-932.5 MHz and 941-941.5 MHz bands (932/941 MHz bands) for both Federal Government and non-Governmental point-to-multipoint use. The Interdepartment Radio Advisory Committee (IRAC) of the National Telecommunications and Information Administration (NTIA) was to coordinate Governmental and non-Governmental use. By Public Notice, the Commission stated it would open five two-day filing windows for licenses authorizing use of these bands during January and February, 1992, and thereafter license applications on a first-come, first-served basis. In the event we received mutually exclusive applications, we indicated that lotteries would be used to select among applicants. In response to the series of filing windows, over 50,000 applications were filed for the available forty 12.5- kilohertz channel pairs in these bands. 4. On August 10, 1993, the Omnibus Budget Reconciliation Act of 1993 ("Budget Act") added Section 309(j) to the Communications Act. Under the Budget Act, Section 309(j) permitted the Commission, for certain classes of licenses, to employ competitive bidding procedures to choose among mutually exclusive applications for initial license grants or authorizations. Specifically, the Commission was authorized to grant licenses by competitive bidding if the "principal use" of the spectrum to be auctioned was to provide "subscriber based services," and if auctioning would promote the public interest objectives stated in Section 309(j)(3). As a result, the Commission commenced a proceeding to examine whether licenses for various services should be assigned by competitive bidding. Based on the record in that proceeding and the requirements of the statute, the Competitive Bidding Second Report and Order established rules governing the types of services and licenses that may be subject to auctions. In that context, the Commission determined at that time that MAS, part of the Private Operational Fixed Microwave ("POFM") service, did not qualify as subscriber-based and, therefore, should not be subject to competitive bidding. Thus, the Commission decided that it would not be appropriate to use competitive bidding for the award of those POFM MAS licenses for which 50,000-plus applications were pending, even in the event of mutual exclusivity. Subsequently, the Commission undertook a preliminary examination of the pending applications and ascertained that the vast majority were filed by applicants seemingly proposing to use their licenses principally to provide subscriber- based service. 5. Because of the overwhelming interest in commercial operations of MAS facilities and the substantial number of applications filed for the 932/941 MHz bands, the Commission was concerned that the analysis made in the Competitive Bidding docket regarding MAS might be inaccurate. As a result, in February 1997, the Commission issued the Notice to reexamine current and future uses of, and demand for, MAS spectrum. The Notice sought to determine the appropriate method of license distribution for the numerous pending applications. It also sought to establish a streamlined regulatory framework that would provide licensees sufficient flexibility to meet the public's MAS needs. The Notice reached tentative conclusions, and sought comment on, as described more fully below, issues relating to the authority to use competitive bidding, the allocation of the MAS bands, site-based versus geographic area licensing, particularly where the principal use of the spectrum would involve, or was reasonably likely to involve, "subscriber-based" services, service areas, operational and technical flexibility, the treatment of incumbents, spectrum block size, partitioning and disaggregation, construction requirements, regulatory status, the establishment of a public safety set-aside, and the disposition of previously-filed applications. The Notice also temporarily suspended the acceptance and processing of some MAS applications pending resolution of the issues in the proceeding. 6. On August 5, 1997, the President signed the Balanced Budget Act. The Balanced Budget Act, inter alia, eliminated the Commission's authority to issue licenses or permits by random selection after July 1, 1997, with the exception of licenses or permits for noncommercial educational radio and television stations. Because the Balanced Budget Act eliminated our authority to use lotteries, and new licensing rules had yet to be finalized, the Public Safety and Private Wireless Division and the Commercial Wireless Division of the Wireless Telecommunications Bureau dismissed the pending 50,000-plus pending MAS applications to use the 932/941 MHz bands. In addition, the Balanced Budget Act amended Section 309(j) of the Communications Act to require the Commission to award mutually exclusive applications for initial licenses or permits using competitive bidding procedures, with very limited exceptions. Specifically, Section 309(j) now provides that competitive bidding must be employed in instances of mutually exclusive applications, while exempting certain licenses, most notably those for "public safety radio services." "Public safety radio services" include "private internal radio services used by State and local governments and non-government entities and including emergency road services provided by not-for-profit organizations, that -- (i) are used to protect the safety of life, health, or property; and (ii) are not made commercially available to the public." 7. The comments received in response to the Notice generally support the Commission's proposals, particularly those advocating simplified licensing procedures and increased operational and technical flexibility for MAS licensees. The comments were divided, however, regarding the proposal to award licenses by a system of competitive bidding. Although the Commission received thorough and diverse public input in response to the Notice, we believe that the issues in this proceeding cannot be decided fairly solely on the basis of the record compiled in response to the Notice, because parties have not been afforded an opportunity to assess the impact of the Balanced Budget Act on the Commission's outstanding proposals for MAS spectrum. Notably, the Balanced Budget Act has altered the criteria for determining whether or not applications for a particular service or class of frequencies are subject to competitive bidding. As a result, we believe that the public interest would be furthered by giving interested parties, particularly the predominant users of MAS spectrum, a further opportunity to comment. For example, as stated in the Notice, a review of the Commission's licensing database has determined that many of the channels in the 928/952/956 MHz bands are used to provide services that may potentially be covered by the public safety auction exemption in the Balanced Budget Act. Hence, we believe that a further opportunity for comment will result in a more comprehensive record on which to base decisions regarding the future licensing of MAS spectrum. IV. DISCUSSION A. Spectrum Allocation 1. Background 8. Initially, in establishing the MAS service, the Commission allocated twenty 25-kilohertz channel pairs in the 928-929 MHz and 952-953 MHz bands for exclusive, private use by Power Radio Service eligibles for energy distribution automation. The Commission later allocated fourteen 25-kilohertz channel pairs in the same bands and eight 25-kilohertz unpaired channels in the 956 MHz band for private MAS operations by all entities eligible for the POFM Service under former Part 94 of the Rules. It also allocated six 25-kilohertz paired channels in the 928 and 959 MHz bands for common carrier Domestic Public Land Mobile (DPLM) use under Part 22 of our Rules for control of wide-area paging networks. The Commission instituted sharing criteria to facilitate the efficient use of this allocation approach. Specifically, if the MAS channels available under the POFM service have been licensed in a given area, Part 101 eligibles may apply for MAS channels allocated for DPLM operations, and vice versa. In 1988, the Commission established a standard mileage separation and reduced the channel spacing from 25 kilohertz to 12.5 kilohertz, in an effort to increase spectrum efficiency and reduce regulatory burdens. Finally, as noted earlier, the Commission made forty 12.5-kilohertz channel pairs in the 932-932.5 MHz and 941-941.5 MHz bands available for both Federal Government and non-Governmental use. 2. Proposals in the Notice 9. As described more fully in the paragraphs that follow, the Notice proposed a variety of changes for the MAS spectrum allocation. The Commission proposed to designate most of the spectrum in the 932/941 MHz bands and all of the spectrum in the 928/959 MHz bands for subscriber-based services, and to use competitive bidding to choose among mutually exclusive applications for licenses in these bands. The Commission also proposed to designate the 928/952/956 MHz bands exclusively for private, internal use, and not utilize competitive bidding to select among mutually exclusive applications in these bands. 10. Pursuant to Section 309(j)(6)(E) of the Communications Act, the Commission has an "obligation in the public interest to continue to use engineering solutions, negotiation, threshold qualifications, service regulations, and other means in order to avoid mutual exclusivity in application and licensing proceedings." The Commission previously has interpreted Section 309(j)(6)(E) to impose an obligation to attempt to avoid mutual exclusivity in defining licensing schemes for commercial services only when it would further the public interest goals of Section 309(j)(3) of the Communications Act. In the Notice, the Commission considered the Section 309(j)(3) public interest goals and tentatively concluded that the proposed change in the MAS licensing scheme comports with those objectives. Subsequent to the Notice, Congress highlighted in the Balanced Budget Act the Commission's obligation under Section 309(j)(6)(E) by referencing that obligation in the general auction authority provision. The Commission recently sought comment on whether that reference changes the scope or content of the Commission's obligation under Section 309(j)(6)(E). 11. 932/941 MHz Bands. The first category of MAS spectrum, consisting of one megahertz of paired spectrum in the 932-932.5 MHz and 941-941.5 MHz bands is available for both Federal Government and non-Governmental use. These 12.5-kilohertz channels are authorized for both common carrier and private radio use on a co-primary basis. According to the FCC's licensing databases, only two Federal Government licensees utilize these bands. No non-Governmental users are licensed on these bands, and, as noted above, over 50,000 applications for non-Governmental use of these bands were dismissed. In the Notice, the Commission proposed to allocate these bands for subscriber-based uses. It based this proposal on the fact that the majority of applicants seemingly proposed to use their licenses to offer subscriber-based services. Based on its tentative conclusion that the 932/941 MHz bands would be used by licensees seeking to provide subscriber-based services, the Commission proposed to use competitive bidding procedures to select between mutually exclusive initial applications for MAS licenses in these bands. The Commission also proposed to set aside five of the 40 channel pairs in these bands for public safety/Federal Government use and to issue these licenses on a first come, first served basis. 12. 928/959 MHz Bands. The second category of MAS spectrum, consisting of 300 kilohertz of paired spectrum in the 928.85-929 MHz and 959.85-960 MHz bands (928/959 MHz bands), is allocated for, and used primarily by, common carrier licensees under Part 22 of our Rules, and may also be used for private radio licensees pursuant to certain sharing criteria. In the Notice, the Commission tentatively concluded that because the majority use of these bands is for the provision of subscriber-based services, the 928/959 MHz bands should be designated for such services. Because of the current and foreseen subscriber-based use of these channels, the Commission proposed to use competitive bidding procedures to select among mutually exclusive initial applications for licenses in these bands. 13. 928/952/956 MHz Bands. The third category of MAS spectrum, consisting of 1.7 megahertz of paired spectrum in the 928-928.85 and 952-952.85 MHz bands and 200 kilohertz of unpaired spectrum in the 956.25-956.45 MHz bands (928/952/956 MHz bands), is allocated for, and used primarily by, private radio licensees, and may be used by common carriers pursuant to certain sharing criteria. While some of these private radio licensees share some or all of their capacity on a for-profit, third-party, private carrier basis, the Commission tentatively concluded that the majority of the channels in these bands are used for private systems to satisfy internal communications needs. In the Notice, therefore, we proposed to designate the 928/952/956 MHz bands exclusively for private, internal use. Under this approach, further subscriber-based use of these channels by future licensees, whether on a private carrier basis or through sharing with common carrier licensees, would be prohibited. However, the Commission would grandfather existing subscriber- based services currently being provided on these MAS frequencies. B. The Impact of the Balanced Budget Act of 1997 14. In February, 1998, Microwave Data Systems, Inc. (MDS) filed an ex parte presentation urging the Commission to commence licensing in the 932/941 MHz bands. We agree with MDS that it is important for the Commission to license this spectrum as expeditiously as feasible. The purpose of the release of this Further Notice is to expedite the resolution of outstanding issues so that the Commission can commence such licensing. Therefore, we believe that the adoption of this Further Notice is responsive to MDS' request. Insofar as MDS seeks immediate licensing of these bands without regard to the conclusion of this proceeding, its request is denied. 15. The Commission proposed in the Notice to choose among mutually exclusive initial applications for use of the 932/941 and 928/959 MHz bands through a system of competitive bidding. The Commission did not propose at that time to use competitive bidding to issue initial licenses for the 928/952/956 MHz bands because of its tentative conclusion that the majority of these channels are used by private systems to satisfy internal communications needs. We now assess the impact of the passage of the Balanced Budget Act on these proposals and tentative conclusions. 1. Authority to Employ Competitive Bidding Procedures 16. The Commission premised its initial proposal regarding the use of competitive bidding for licenses for MAS spectrum on the former language of Section 309(j) of the Communications Act. As stated above, the former language of Section 309(j) provided that mutually exclusive applications for initial licenses or construction permits would be subject to competitive bidding if: (1) the principal use of the spectrum involved, or was reasonably likely to involve, the provision of subscriber-based services; and (2) a system of competitive bidding would promote the objectives of Section 309(j)(3). Significantly, the Balanced Budget Act revised Section 309(j) to change the criteria for determining auctionability of spectrum, removing the requirement that the principal use of the spectrum be for subscription-based services. As a result, we believe that it is both appropriate and necessary for us to revisit the outstanding proposals for the use of competitive bidding procedures for MAS spectrum to ensure that such approaches are consistent with the statutory criteria. 17. The current language of Section 309(j)(1) provides that "[i]f, consistent with the obligations described in paragraph (6)(E), mutually exclusive applications are accepted for any initial license or construction permit, then, except as provided in paragraph (2), the Commission shall grant the license or permit to a qualified applicant through a system of competitive bidding that meets the requirements of this subsection." As noted above, we are currently examining the issue of whether the Balanced Budget Act has changed the scope of the Commission's obligation under Section 309(j)(6)(E). We seek comment on whether the new reference to Section 309(j)(6)(E) in the general auction authority provision has any effect on our tentative conclusion in the Notice that it is in the public interest to use competitive bidding to resolve mutually exclusive applications for initial MAS licenses. 2. Exemptions from Competitive Bidding 18. The remaining issue, therefore, is whether or not the auction exemptions set forth in Section 309(j)(2) apply to MAS spectrum. We note first that the exemptions for digital television service and educational broadcasting clearly do not apply. The most relevant exemption is for "public safety radio services" which are defined to include "private internal radio services used by State and local governments and non-government entities and including emergency road services provided by not-for-profit organizations, that -- (i) are used to protect the safety of life, health, or property; and (ii) are not made commercially available to the public." The Conference Report expands on this class of services, lending support for a conclusion that the "public safety radio services" exemption applies to a broader class of services than what the Commission traditionally has considered as falling under the Public Safety category. It states that the exemption includes "private internal radio services" used by utilities, railroads, metropolitan transit systems, pipelines, private ambulances, volunteer fire departments, and radio services used by not-for-profit organizations that offer emergency road services, such as the American Automobile Association (AAA). 19. 932/941 MHz and 928/959 MHz bands. We tentatively conclude that the proposed use of the 932/941 MHz bands and the current MAS use of the 928/959 MHz bands do not fall within the auction exemption for public safety radio services. Regarding the 932/941 MHz bands, we note that the substantial majority of dismissed applications apparently did not propose the use of these channels for the provision of public safety radio services. Moreover, as we have noted throughout this proceeding, a majority of the dismissed applications for these bands proposed the offering of services of a commercial nature. Further, the Commission has never allocated these 932/941 MHz bands specifically for public safety radio services. Meanwhile, Part 22 commercial mobile radio service (CMRS) licensees are the primary users of the 928/959 MHz bands and utilize their MAS spectrum for operational control of their public mobile base transmitters. We tentatively conclude, therefore, that licensing of the 932/941 MHz bands and the 928/959 MHz bands for MAS services does not come within the "public safety radio services" exemption from competitive bidding and, thus, we continue to believe that competitive bidding should be the means by which licenses are issued for these bands. Moreover, we believe that the Balanced Budget Act now requires us to use competitive bidding for these bands. We seek comment on this tentative conclusion. 20. 928/952/956 MHz bands. Because some of the current services provided by MAS licensees on the 928/952/956 MHz bands may fall into the broader exemption class, we seek comment on the level of representation of "public safety radio services," as defined in the Balanced Budget Act, among current uses of the 928/952/956 MHz bands. If it appears that the broader "public safety radio services" category reflects the current dominant use of these bands, we seek comment on allocating part, or all, of the 928/952/956 MHz bands for such "public safety radio services." If we adopt such an allocation, while we would prohibit all future licensees from offering services not meeting this criteria, we seek comment on whether the Commission should grandfather all existing services currently being provided in these bands. 3. Licensing in the 928/952/956 MHz Bands 21. We seek comment on the licensing approach that should be adopted for the 928/952/956 MHz bands. We tentatively conclude that site-by-site licensing should be maintained if we reserve the bands exclusively for "public safety radio services." However, if we ultimately conclude that the current and foreseeable use of these bands does not comport with that statutory definition and we do not restrict eligibility for these bands accordingly, our tentative conclusion is that we would be required to grant licenses for use of these bands through a system of competitive bidding. In such instance, we propose to adopt a system of geographic area licensing. We have concluded in other services that licensing based on pre-defined service areas poses significant advantages over site-based licensing because of the greater operational flexibility it affords licensees, its inherent ability to simplify system expansion, and its easing of the administrative burden on the Commission. We seek comment on these conclusions and proposals. C. Frequency Set-Aside for Services Exempt from Competitive Bidding 22. Although we do not tentatively conclude that the 932/941 MHz bands should be reserved for public safety radio services, we note that the Notice proposed to set aside five of the 40 channel pairs for public safety/Federal Government use. In general, commenters expressed support for this proposal. We believe such an approach may effectively afford both public safety and non-public safety users access to these unencumbered bands and further the Congressional intent of increasing the public safety community's access to frequencies without having to compete in an auction. We seek comment, therefore, on whether we should retain this proposal. We also seek comment on how we should determine eligibility for such a set-aside. For example, should we use the traditional public safety service categories outlined in the Commission's Rules, or should we expand eligibility to encompass those services that fall under the "public safety radio service" definition provided for in the Balanced Budget Act's categorical exemption from competitive bidding? We also seek comment on the need for this set-aside if we decide to reserve part or all of the 928/952/956 MHz bands for "public safety radio service" use, as addressed above. 23. In the absence of a five-channel set-aside in the 932/941 MHz bands for public safety/Federal Government use, we seek comment on how we should treat an application for the 932/941 MHz bands that proposes a "public safety radio service." We believe that such an applicant would be required to participate in competitive bidding because the spectrum would not be allocated specifically for public safety radio services. We do not interpret the Balanced Budget Act to mandate that when a public safety radio service applicant seeks a license, it may choose whatever segment of the spectrum it desires, and by applying for the license, remove those frequencies from the competitive bidding process. Such a result would complicate the spectrum licensing process and foster an environment of uncertainty among all other prospective licensees. We seek comment on the impact of this interpretation. D. Resolution of Mutually Exclusive Applications for Services Exempt from Competitive Bidding 24. In the event that the Commission reserves channels on either the 932/941 MHz or 928/952/956 MHz bands, or both, for public safety radio services that are exempt from competitive bidding, we tentatively conclude that licensing on a first-come, first-served basis would be the most effective licensing approach. Under such an approach, we believe that the incidents of mutual exclusivity would be rare because the site- based applications would be frequency coordinated prior to their filing with the Commission and subject to a filing window. Nonetheless, because it is possible that mutual exclusivity could arise, we seek comment on how we should resolve mutual exclusivity in such instances. As noted previously, the Balanced Budget Act terminated the Commission's authority to use lotteries to choose among mutually exclusive applications. We are therefore foreclosed from adopting our proposal in the Notice to use random selection in the event that we receive mutually exclusive applications for licenses to use channels in a public-safety/Federal Government set- aside. In this regard, we seek comment on a proposal offered by Microwave Data Systems ("MDS") that if mutually exclusive applications are filed, the Commission should grant all applications that reach the coordinator on the day that the mutual exclusivity is created, provided that they are in order, and that the licensees be required to share the channels under whatever private arrangements they negotiate. We also seek comment on other possible alternatives. E. Competitive Bidding Procedures 25. In the Notice, the Commission sought comment generally on establishment of a "small business" definition for MAS. In this Further Notice, we seek comment on the specific size standards that should be applied to any small business definition we decide to adopt for the MAS service. In the Part 1 Third Report and Order, we amended our general competitive bidding rules to establish a uniform set of provisions for all auctionable services, which allows us to conduct our auctions in a consistent, efficient, and effective manner. We amended our general rules governing auction methodology and procedures to reflect changes made to the auction process through service-specific rules. However, we also decided in that proceeding to continue our practice of defining small business size standards on a service-specific basis. Based on the record established in the Part 1 proceeding, we will prescribe designated entity provisions that will govern the MAS service. 26. In the Competitive Bidding Second MO&O, we also indicated that we would establish definitions for "small business" on a service-by-service basis. For example, the Commission adopted a $40 million small business definition for both narrowband and broadband PCS, and the Multipoint Distribution Service (MDS). For the 900 MHz Specialized Mobile Radio Service and the 800 MHz Specialized Mobile Radio Service, however, the Commission, used a two-tiered approach, adopting a definition of "small" businesses (the applicant, together with attributable investors and affiliates, has average gross revenues for the three preceding years of $15 million or less) and "very small" businesses (the applicant, including attributable investors and affiliates, must have average gross revenues for the three preceding years of $3 million or less). We seek comment on whether we should apply one of the existing "small business" definitions to the MAS service, or whether we should adopt a new definition. We specifically propose to define a small business as an entity with average annual gross revenues for the preceding three years not to exceed $15 million. We also propose to define a very small business as an entity with average annual gross revenues for the preceding three years not to exceed $3 million. These definitions match those adopted for the 800 MHz Specialized Mobile Radio, 900 MHz Specialized Mobile Radio and Phase II 220 MHz services, which have been approved in those contexts by the Small Business Administration. The Small Business Administration has approved the proposed definitions in this Further Notice. Commenters should also discuss the level of capital commitment that is likely to be required to purchase an MAS license at auction and create a viable business. Our goal, should we adopt a definition and associated special provision(s) for small businesses, will be to ensure the participation of small businesses in the auction and in the provision of service. 27. We also seek comment on the possibility of offering "tiered" bidding credits for different sizes of small businesses. We note that small businesses may vary in their ability to raise capital depending on their size and gross revenues. By offering different levels of bidding credits depending on the size of the small business, we could increase the likelihood that the full range of small businesses would be able to participate in an auction and potentially provide service. We therefore propose to establish two levels of bidding credits, consistent with levels adopted in the Part 1 proceeding. As we stated in the Part 1 proceeding, we believe that bidding credits will enable small businesses to successfully compete in future auctions. Accordingly, we propose that small businesses receive a 25 percent bidding credit and that very small businesses receive a 35 percent bidding credit. Bidding credits for small businesses are not cumulative. We believe that tiered bidding credits can help achieve our statutory objective under Section 309(j)(3)(B) by providing varying sizes of small businesses with a meaningful opportunity to participate in the auction of MAS spectrum. We seek comment on this proposal. F. Suspension of Acceptance and Processing of Applications 28. In light of our actions described above, we will maintain the current suspension of the acceptance of MAS applications for new licenses, amendments, or modifications for the 932/941 MHz and 928/959 MHz bands. Further, effective as of the date of the release of this Further Notice, we suspend the acceptance of all MAS applications for new licenses, amendments, or modifications for the 928/952/956 MHz bands. Unlike the suspension ordered in the Notice, applications for the 928/952/956 MHz bands will not be accepted, regardless of the type of service proposed by the applicant. We are expanding the suspension on the filing of applications for the 928/952/956 MHz bands due to the uncertainty regarding whether to employ geographic area licensing and auctions for these bands. This suspension is effective until further notice and applies to applications received on or after the date of the release of this Further Notice. Any such applications received after this deadline will be returned as unacceptable for filing. We take this action to permit the orderly and effective resolution of the issues in this proceeding. We find that this suspension is in the public interest because absent such action, applications could limit the effectiveness of the decisions made and the standards developed in this proceeding. Further, we note that this action is consistent with the approach we have taken in all other existing services where we have proposed to adopt geographic area licensing and auction rules. 29. Notwithstanding this suspension, we will continue to accept and process all MAS applications for minor modifications or for license assignment or transfer of control under existing procedures. This exception will also apply to amendments to applications for minor modifications. This exception should permit modifications that can improve the efficiency of incumbent MAS operations without affecting the effective and orderly resolution of the issues in this proceeding. 30. With respect to MAS applications for new licenses, amendments, or non-minor modifications which were filed prior to the applicable deadlines (stated above for all applications for the 928/952/956 MHz bands, and February 19, 1997, for the original suspension) and remain pending, we will process such applications provided that (1) they are not mutually exclusive with other applications as of the deadlines stated above, and (2) the relevant period for filing competing applications has expired as of the deadlines stated above. We believe that this approach gives the appropriate consideration to those applicants who filed applications prior to our proposed changes and whose applications are not subject to competing applications. Previously- filed applications not meeting the above criteria will be held in abeyance until the conclusion of this proceeding. We will determine later, in accordance with such new rules as are adopted, whether to process or return any such pending applications. 31. These actions are procedural in nature and therefore not subject to the notice and comment, and effective date requirements of the Administrative Procedure Act (APA). Moreover, good cause exists for proceeding in this manner in that doing otherwise would be impractical, unnecessary, and contrary to the public interest because compliance with the APA provisions would undercut the purpose of the interim measures. V. CONCLUSION 32. In this Further Notice, we seek comment, inter alia, on the impact of the Balanced Budget Act on our proposals in the Notice to allocate the 932/941 MHz and 928/959 MHz bands for subscriber-based services, to award initial licenses for the 932/941 MHz and 928/959 MHz bands through competitive bidding, and to reserve five channel pairs in the 932/941 MHz bands for federal government/public safety use. In addition, we seek comment on the impact of the Balanced Budget Act on our proposal in the Notice to reserve the 928/952/956 MHz bands exclusively for private, internal use and to continue issuing licenses for these bands on a site-by-site basis. We also seek comment in this Further Notice on interpreting the "public safety radio service" exemption established by the Balanced Budget Act and its impact upon this proceeding. Finally, this Further Notice immediately suspends the acceptance and processing of MAS applications, regardless of the type of service proposed by the applicant. This suspension is effective as of the date of the release of this Further Notice. These actions are intended to establish a flexible regulatory framework for MAS that will, among other things, provide opportunities for continued development of competitive new service offerings by allowing flexible use of the spectrum, expedite market entry through streamlined licensing procedures, and promote technological innovation by eliminating unnecessary regulatory burdens. VI. PROCEDURAL MATTERS A. Ex Parte Rules -- Permit-But-Disclose Proceeding 33. This is a permit-but-disclose rule making proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided they are disclosed as provided in Commission rules. See generally 47 C.F.R.  1.1202, 1.1203, and 1.1206. B. Initial Regulatory Flexibility Analysis 34. With respect to this present Further Notice, an Initial Regulatory Flexibility Analysis (IRFA), see generally 5 U.S.C.  603, is contained in Appendix A. The IRFA addresses the expected impact on small entities of the proposals made in this document, and requests written comments on these proposals. To fulfill the mandate of the Contract with America Advancement Act of 1996 (Pub. L. No. 104-121, 110 Stat. 847 (1996)) regarding the subsequent Final Regulatory Flexibility Analysis in this proceeding, we ask a number of questions in IRFA regarding the prevalence of small businesses in the Multiple Address System industry. Comments on the IRFA must be filed in accordance with the same filing deadlines as comments regarding this Further Notice, and must have a separate and distinct heading designating them as responsive to the IRFA. The Office of Public Affairs, Performance Operations Division shall send a copy of this Further Notice, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration in accordance with Section 603(a) of the Regulatory Flexibility Act, Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C.  601 et seq. (1981). C. Initial Paperwork Reduction Act of 1995 Analysis 35. This Further Notice contains a proposed information collection. As part of the Commission's continuing effort to reduce paperwork burdens, we invite the general public, the Office of Management and Budget (OMB), and other agencies to take this opportunity to comment on the information collections contained in this Further Notice, as required by the Paperwork Reduction Act of 1995, Pub. L. No. 104-13. Public and agency comments are due at the same time as other comments on this Further Notice; OMB comments are due 60 days after the publication of this Further Notice in the Federal Register. Comments should address: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to both of the following: Dorothy Conway, Federal Communications Commission, Room 3-C306, 445 12th St., S.W., Washington, DC 20554, or via the Internet to dconway@fcc.gov, and Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 -- 17th Street, N.W., Washington DC 20503, or via the Internet to fain_t@al.eop.gov. For additional information regarding the information collections contained herein, contact Dorothy Conway, above. D. Comment Dates 36. Pursuant to Sections 1.415 and 1.419 of the Commission's rules, 47 C.F.R.  1.415, 1.419, written comments by the public are due on or before 60 days after a summary of this Further Notice is published in the Federal Register. Reply comments are due on or before 90 days after this summary is published in the Federal Register. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. Reg. 24,121 (1998). 37. Comments filed through the ECFS can be sent as an electronic file via the Internet to . Only one copy of an electronic submission must be filed. In completing the transmittal screen, commenters should include their full name, Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment by Internet e-mail. To get filing instructions for e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, and should include the following words in the body of the message, "get form