Federal Register, Volume 76 Issue 88 (Friday, May 6, 2011)

[Federal Register Volume 76, Number 88 (Friday, May 6, 2011)]
[Rules and Regulations]
[Pages 26199-26220]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10223]

[[Page 26199]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0 and 20

[WT Docket No. 05-265; FCC 11-52]

Reexamination of Roaming Obligations of Commercial Mobile Radio
Service Providers and Other Providers of Mobile Data Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission (FCC)
adopts a rule that requires facilities-based providers of commercial
mobile data services to offer data roaming arrangements to other such
providers on commercially reasonable terms and conditions, subject to
certain limitations, thereby advancing the Commission's goal of
ensuring that all Americans have access to competitive broadband mobile
data services.

DATES: Effective June 6, 2011, except for Sec. 20.12(e)(2) which
contains information collection requirements that have not been
approved by the Office of Management and Budget (OMB). The Commission
will publish a document in the Federal Register announcing the
effective date of this amendment.

FOR FURTHER INFORMATION CONTACT: Peter Trachtenberg, Wireless
Telecommunications Bureau, (202) 418-7369, e-mail
Peter.Trachtenberg@fcc.gov. For additional information concerning the
Paperwork Reduction Act information collection requirements contained
in this document, send an e-mail to PRA@fcc.gov or contact Judith B.
Herman at 202-418-0214 or via the Internet at Judith-B.Herman@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second
Report and Order in WT Docket No. 05-265; FCC 11-52, adopted April 7,
2011, and released on April 7, 2011. The full text of the Second Report
and Order is available for public inspection and copying during
business hours in the FCC Reference Information Center, Portals II, 445
12th Street, SW., Room CY-A257, Washington, DC 20554. It also may be
purchased from the Commission's duplicating contractor at Portals II,
445 12th Street, SW., Room CY-B402, Washington, DC 20554; the
contractor's Web site, http://www.bcpiweb.com; or by calling (800) 378-
3160, facsimile (202) 488-5563, or e-mail FCC@BCPIWEB.com. Copies of
the public notice also may be obtained via the Commission's Electronic
Comment Filing System (ECFS) by entering the docket number WT Docket
No. 05-265. Additionally, the complete item is available on the Federal
Communications Commission's Web site at http://www.fcc.gov.

Synopsis of the Second Report and Order

I. Introduction

1. In this Second Report and Order (Second R&O), the Commission
promotes consumer access to nationwide mobile broadband service by
adopting a rule that requires facilities-based providers of commercial
mobile data services to offer data roaming arrangements to other such
providers on commercially reasonable terms and conditions, subject to
certain limitations. Widespread availability of data roaming capability
will allow consumers with mobile data plans to remain connected when
they travel outside their own provider's network coverage areas by
using another provider's network, and thus promote connectivity for and
nationwide access to mobile data services such as e-mail and wireless
broadband Internet access. The rule the Commission adopts today also
serves the public interest by promoting investment in and deployment of
mobile broadband networks, consistent with the recommendations of the
National Broadband Plan. The deployment of mobile data networks is
essential to achieve the goal of making broadband connectivity
available everywhere in the United States, and the availability of data
roaming will help ensure the viability of new wireless data network
deployments and thus promote the development of competitive facilities-
based service offerings for the benefit of consumers. Today's actions
will therefore advance the Commission's goal of ensuring that all
Americans have access to competitive broadband mobile data services.
2. The Commission adopts the data roaming rule based on its
authority under the Act, including several provisions of Title III,
which provides the Commission with authority to manage spectrum and
establish and modify license and spectrum usage conditions in the
public interest. This rule will apply to all facilities-based providers
of commercial mobile data services regardless of whether these entities
are also providers of commercial mobile radio service (CMRS). To
resolve disputes arising pursuant to the rule the Commission adopts
here, the Commission provides that parties may file a petition for
declaratory ruling under Section 1.2 of the Commission's rules or file
a formal or informal complaint under the rule established herein
depending on the circumstances specific to each dispute. Also, in order
to facilitate the negotiation of data roaming arrangements, the
Commission provides guidance on factors that the Commission could
consider when evaluating any data roaming disputes that might be
brought before the agency.

II. Discussion

A. The Public Interest in a Data Roaming Rule

3. After carefully considering the arguments in the record, the
Commission concludes that it will serve the public interest to adopt a
data roaming rule. Specifically, the Commission requires providers of
commercial mobile data services to offer data roaming arrangements on
commercially reasonable terms and conditions, subject to specified
limitations as set forth below, pursuant to the Commission's authority
under the Communications Act. The Commission concludes that adopting a
roaming rule tailored for mobile data services will best promote
consumer access to seamless mobile data coverage nationwide,
appropriately balance the incentives for new entrants and incumbent
providers to invest in and deploy advanced networks across the country,
and foster competition among multiple providers in the industry,
consistent with the National Broadband Plan. Broadband deployment is a
key priority for the Commission, and the deployment of commercial
mobile data networks will be essential to achieve the goal of making
broadband connectivity available everywhere in the United States. As
discussed above, the Commission's determination to adopt a commercial
mobile data roaming rule is supported by the overwhelming majority of
commenters and evidence in the record.
4. Commercial mobile data services provided over advanced mobile
broadband technologies have become an increasingly significant part of
the lives of American consumers and the shape of the mobile industry.
Mobile data services increasingly are used for a variety of both
personal and business purposes, including back-up communications during
emergencies and for accessibility. Data traffic has risen sharply over
the past few years as a result of the increased adoption of smartphones
combined with increased data consumption per device. The Commission's
data roaming rule will maximize consumers' ability to use and

[[Page 26200]]

benefit from wireless broadband data services wherever they are by
enhancing the ability of all facilities-based providers, including
small and regional providers, to provide nearly nationwide data
coverage through roaming arrangements.
5. As data services increasingly become the focus of the mobile
wireless services, consumers increasingly expect their providers to
offer competitive broadband data services, and the availability of data
roaming arrangements can be critical to providers remaining competitive
in the mobile services marketplace. The Commission agrees that the
availability of roaming capabilities is and will continue to be a
critical component to enable consumers to have a competitive choice of
facilities-based providers offering nationwide access to commercial
mobile data services. As more and more consumers use mobile devices to
access a wide array of both personal and business services, they have
become more reliant on their devices. These consumers expect to be able
to have access to the full range of services available on their devices
wherever they go. Providers with local or regional service areas need
roaming arrangements to offer nationwide coverage, and there may be
areas where building another network may be economically infeasible or
unrealistic. Even where providers have invested in and built out
broadband networks in a regional service territory, a service
provider's inability to offer roaming easily can deter customers from
subscribing. For example, Cincinnati Bell represents that ``[d]ue to
the limited availability of nationwide roaming partners for 3G and 4G
services, [it] is seeing a steady defection of its customers to the
national carriers even though Cincinnati Bell offers a superior network
in its operating area.'' Availability of such roaming arrangements also
may be particularly important for consumers in rural areas--where
mobile data services may be solely available from small rural
providers. According to BendBroadband, its mobile broadband product is
``not commercially viable for most consumers primarily because we
cannot offer mobility outside of our service area, due to our inability
to secure reasonable rates and terms for data roaming.'' A data roaming
requirement will therefore help to ensure that, as consumers become
increasingly reliant on wireless devices, continuity of spectrum-based
services is preserved across networks and geographic regions.
6. The Commission also concludes that the data roaming rule that
the Commission adopts today will encourage investment in and deployment
of broadband networks by multiple service providers, including large
nationwide providers, regional providers, and small providers. Given
that mobile broadband networks, particularly ``fourth-generation''
networks, are still at an early stage of development, significant
network investment and deployment will also be critical to nationwide
broadband access and for the promotion of competitive choice in
broadband services. This data roaming rule will promote mobile
broadband network deployment, investment, and competition, consistent
with the goals of the National Broadband Plan, by helping to ensure the
viability of new data network deployments.
7. The Commission is persuaded by the evidence that roaming
arrangements help encourage investment by ensuring that providers
wanting to invest in their networks can offer subscribers a competitive
level of mobile network coverage. Roaming arrangements can help provide
greater assurance to service providers that, if they make the
investment to expand or upgrade their facilities, they will be able to
offer competitive service options to their customers through a
combination of local or regional facilities-based service and roaming
arrangements. Sprint and T-Mobile state that data roaming arrangements
will allow service providers to compete more effectively and thus
greater certainty in access to such arrangements will give them ``the
resources and the confidence to continue to invest in their businesses,
including in the construction of new network infrastructure.''
SouthernLINC explains that ``when carriers are considering whether to
invest in the deployment of new technologies and services, the
availability of data roaming assures the carriers that they will be
able to meet customers' expectations of seamless connectivity for these
services. This in turn provides carriers with the certainty they need
to move forward with these much-needed investments.'' NTELOS reports
that its roaming agreement with Sprint led to its ability to upgrade
virtually its entire network to EV-DO Revision A. Clearwire asserts
that a data roaming obligation supports long-term facilities-based
entry into new markets, and that once providers enter into new markets
they will continue to build out networks to contain business costs
associated with roaming. Further, as argued by several commenters
representing rural providers--Blooston Rural Carriers, OPASTCO and
NTCA, RCA, and RTG--the lack of roaming for commercial mobile wireless
services may deter providers from investing in broadband at the exact
time such investment is sorely needed. The Chief Financial Officer of
regional provider Cellular South, for example, states that ``investment
banks and other sources of investment capital are likely to make the
judgment that a small rural or regional carrier that cannot obtain data
roaming agreements with the large national carriers will find it more
difficult to attract and retain customers'' and that ``[s]uch a
judgment would lead to the withholding of investment capital which, in
turn, would hamstring the carrier's efforts to deploy advanced
broadband infrastructure.'' MetroPCS contends that in order to ensure
that smaller, rural and mid-tier carriers invest now in LTE, they need
to know that they will have access to LTE roaming once they have
upgraded.
8. The availability of roaming arrangements can also provide
additional incentives to enter a market by allowing network providers
without a presence in an area a competitive level of local coverage
during the early period of investment and buildout. The Commission
finds that encouraging new entry and local or regional deployments
serves the public interest, given that such network deployments,
particularly when these deployments are coupled with roaming
availability beyond the network service area, would provide consumers
with greater competitive choices in mobile broadband. Previously, the
Commission found that lack of roaming can constitute a significant
hurdle to new competition and can delay or deter entry into a market
because a provider seeking to provide service in a new geographic area,
without the ability to supplement its networks with roaming and whose
initial facilities would necessarily be limited, would be required to
compete with incumbents that had been developing and expanding their
networks for many years.
9. The record in this proceeding supports these findings. Bright
House Networks, for example, contends that a data roaming requirement
would remove a barrier to entry and a Senior Vice President of the
company states that such a requirement would be key to Bright House
investing more. T-Mobile notes that the ability to roam has enabled the
company to ``build a facilities-based footprint over time as its
customer base grows,'' and asserts that a roaming rule will enable it
to ``invest in new facilities in smaller markets that

[[Page 26201]]

would not be economical to build out unless T-Mobile could use roaming
to serve the adjacent more sparsely populated areas,'' and thus promote
rural investment. In addition, according to US Cellular, new wireless
providers entering the wireless marketplace today face far more
daunting prospects than did their predecessors of decades ago unless
they can offer their customers both voice and data roaming on a
seamless nationwide basis. SkyTerra (now LightSquared) states that the
absence of a data roaming obligation can discourage service providers
from entering the market and building upon existing networks. SkyTerra
further states that without a data roaming obligation, its potential
customers would likely be discouraged from purchasing terrestrial-based
services from SkyTerra, especially in the initial stages of SkyTerra's
network build out.
10. Accordingly, the Commission finds that availability of roaming
arrangements helps provide consumers with greater competitive choices
in mobile broadband by encouraging investment and network deployments
and ensuring that providers wanting to invest in their networks or to
enter into a new market can offer subscribers a competitive level of
mobile network coverage and service. By removing barriers to customer
acquisition by providers in smaller or remote areas, the rule the
Commission adopts today will encourage greater use of spectrum and
additional sustainable investment in broadband networks serving these
areas.
11. The Commission finds the roaming rule that the Commission
adopts, discussed in greater detail below, also will provide incentives
for host providers to invest and deploy advanced data networks, and
avoid potential disincentives for those providers to invest. The
Commission agrees with AT&T and Verizon Wireless that there are pro-
competitive benefits that flow from providers differentiating
themselves on the basis of coverage in their licensed service areas,
including in rural and remote areas. The Commission finds that the
terms and scope of the roaming rule that the Commission adopts will
protect these benefits, maintain incentives for host providers to
invest and deploy advanced data networks, and avoid potential
disincentives for those providers to invest. First, host providers will
be paid for providing data roaming service, and the Commission adopts a
general requirement of commercial reasonableness for all roaming terms
and conditions, including rates, rather than a more specific
prescriptive regulation of rates requested by some commenters. This
will give host providers appropriate discretion in the structure and
level of such rates that they offer. As the Commission found in the
Order on Reconsideration, ``the relatively high price of roaming
compared to providing facilities-based service will often be sufficient
to counterbalance the incentive to `piggy back' on another carrier's
network.'' The Commission notes that the pro-investment incentives that
providers will have as a consequence of the high cost of roaming are
reflected in the terms and conditions offered by mobile data service
providers, which commonly include authorizing termination of service or
other actions if a subscriber's roaming on other networks becomes too
large a part of the subscriber's service use. At a minimum, these
roaming limitations demonstrate that providers are unlikely to rely on
roaming arrangements in place of network deployment as the primary
source of their service provision, nor will such arrangements lead to
reduced investment by requesting providers.
12. Finally, as discussed more fully below, the Commission provides
that, if providers bring disputes to the Commission, the Commission
will take into account factors including the impact on buildout
incentives and the extent and nature of providers' existing build-out
in determining the commercial reasonableness of proffered terms. As the
Commission has concluded before, a case-by-case determination of
commercial reasonableness in the event of a dispute preserves
incentives to invest and protects consumers by facilitating their
access to nationwide service.
13. The data roaming rule the Commission adopts today also
adequately addresses AT&T's argument that a data roaming requirement
would weaken host providers' investment incentives by leaving them with
``no control'' over the terms under which they will carry roaming
traffic and thus unable to manage the additional network congestion
caused by such traffic. Under the Commission's data roaming rule,
providers will have the ability to negotiate commercially reasonable
measures to safeguard the quality of service against network congestion
that may result from roaming traffic or to prevent harm to the network.
This rule also includes the ability to offer individualized,
commercially reasonable terms, including rates, and to evaluate a
number of factors on a case-by-case basis in determining commercial
reasonableness. The Commission finds that this approach strikes the
best balance between concerns over the potential for congestion or
other harms from roaming traffic and the significant benefits that data
roaming arrangements can provide to consumers.
14. The Commission rejects arguments by AT&T and Verizon Wireless
that a data roaming rule is unnecessary because data roaming agreements
are occurring without regulation. The Commission finds that providers
have encountered significant difficulties obtaining data roaming
arrangements on advanced ``3G'' data networks, particularly from the
major nationwide providers. For example, Cellular South states that
after constructing its own EVDO facilities in some portions of its
service area, its requests for data roaming on large carriers'
compatible networks were ``rebuffed'' for over a year. OPASTCO and NTCA
state that ``rural wireless carriers' attempts to enter into
negotiations with the nationwide wireless providers for data roaming
agreements are many times rejected out of hand, with a citation to the
lack of a data roaming requirement in the Commission's rules'' and that
``[t]his trend has increased as the mobile wireless industry has begun
to transition to 3G wireless services.''
15. The Commission observes that AT&T has largely refused to
negotiate domestic 3G roaming arrangements until recently, even though
it launched its 3G service in 2005 and was providing coverage to 275
major metropolitan areas in May 2008. For example, RTG has stated that
``collectively, its members have not been able to enter into 3G data
roaming agreements with AT&T.'' In addition, according to RCA, AT&T
indicated ``recently'' that ``it will not negotiate any 3G data roaming
agreements unless it helps to fill-in its nationwide coverage map.''
AT&T itself stated in its Reply Comments filed July 12, 2010 that it
had just ``begun to offer 3G roaming arrangements * * *.'' In mid-
November, 2010, it stated that it was ``actively negotiating'' several
domestic 3G agreements but did not indicate that it had entered into
any such agreements. On March 24, 2011, AT&T filed an ex parte with the
Commission indicating that it had entered into a domestic HSPA+ roaming
agreement, with Mosaic Telecommunications--apparently, its first
roaming agreement for data service above 2.5G.
16. Commenters also assert difficulties reaching agreements with
Verizon Wireless. Cox Communications states that obtaining an initial
response to a request to negotiate a roaming agreement with Verizon
Wireless

[[Page 26202]]

required nearly four months and that negotiations over the terms of
Verizon Wireless's requirement for a nondisclosure agreement consumed
another four months; and thus, actual negotiations over terms and
conditions of a roaming agreement did not even begin for eight months
after Cox's initial request. RTG and RCA assert that Verizon Wireless
has ``told numerous RTG members that it will not enter into EV-DO (3G)
roaming agreements in areas where it already has 3G coverage,'' and
therefore is not open to 3G roaming agreements for customers of smaller
providers that serve areas where Verizon Wireless has its own network
coverage. Although Verizon Wireless indicates that it currently has a
number of EV-DO roaming arrangements with other providers (including
with several providers that it asserts are members of RCA), it had only
nine EV-DO roaming agreements as of April, 2010 even though its EV-DO
network has been in operation since October of 2003 and as of June
2007, covered more than 210 million pops with EV-DO Rev. A. The
Commission notes again the importance of roaming to consumers in rural
areas, where mobile data services may be solely available from small
rural providers, and therefore the past difficulties of rural providers
in obtaining data roaming presents a serious concern.
17. The Commission is also concerned that the recent successes by
some providers in obtaining 3G data roaming agreements or offers may
have been the result of large providers seeking to defuse an issue
under active Commission consideration and may not accurately reflect
the ability of requesting providers to obtain data roaming arrangements
in the future if the Commission were to decide not to adopt any data
roaming rules. For example, although the Commission determined in 2007
that CMRS providers were not entitled to voice roaming within their own
licensed service areas (the ``home roaming'' exclusion) in part because
it contemplated that providers would negotiate home roaming agreements,
the Commission concluded in the Order on Reconsideration that ``the
adoption of an automatic roaming obligation with a home roaming
exclusion appears to have significantly reduced the incentive to make
home roaming available, and will lead to a reduction in the
availability of home roaming arrangements over time.'' Consolidation in
the mobile wireless industry has reduced the number of potential
roaming partners for some of the smaller, regional and rural providers.
In addition, this consolidation may have simultaneously reduced the
incentives of the largest two providers to enter into such arrangements
by reducing their need for reciprocal roaming. The Commission also
notes that AT&T and Verizon Wireless are only now deploying ``fourth-
generation'' Long Term Evolution networks. Based on the record before
it, the Commission finds it likely that these providers will not be
willing to offer roaming arrangements that cover these networks any
time in the near future, except in very limited circumstances. The
Commission agrees with many of the commenters that, given the coverage
of these nationwide providers, there is a serious risk they might halt
the negotiations of roaming on their advanced mobile data networks
altogether in the future in the absence of Commission oversight,
harming competition and consumers. Given these developments in the
mobile services marketplace, and in light of past difficulties that
providers have experienced obtaining data roaming arrangements, the
Commission finds that adopting a balanced, flexible requirement will
help to promote the availability of data roaming in the future. The
Commission notes that the Commission intends to closely monitor further
development of the commercial mobile broadband data marketplace and
stand ready to take additional action if necessary to help ensure that
the Commission's goals in this proceeding are achieved.
18. In sum, the Commission concludes that there are substantial
benefits that will be derived from adoption of the data roaming rule
set forth herein, and that these benefits substantially outweigh the
minimal costs associated with the rule. The Commission reaches this
conclusion even though it is not possible to quantify with precision
the benefits and costs based on the information the Commission has
before it, and even though many of the benefits are not subject to
quantification. Adoption of the rule, which is designed to promote
access to nationwide mobile broadband service and enhance incentives
for providers to invest in deployment of broadband facilities, is
necessary to help ensure that the benefits of mobile broadband services
will be more fully realized. Absent such a rule, there will be a
significant risk that fewer consumers would have nationwide access to
competitive mobile broadband services, and that even voice roaming will
ultimately be rolled back as voice becomes a data application.
19. The benefits of adopting the proposed data roaming obligation
are substantial. The rule promotes the availability of commercially
reasonable data roaming arrangements that might not otherwise be
available. Consistent with the record comments submitted by providers
of all sizes serving a large portion of consumers throughout all parts
of this country, millions of American consumers who otherwise might not
have full access to mobile broadband services will benefit from
adoption of the rule.
20. Furthermore, the Commission finds that the rule will promote
significant investment in facilities-based broadband networks
throughout the country. As discussed above, several providers state
that a data roaming obligation is necessary to provide an acceptable
level of risk for the investment in data capabilities for their
network, as it increases their chances of being able to offer their
subscribers the nationwide coverage needed for a viable product
offering. Based on the information in the record, the Commission
expects that there could be billions of dollars of additional
investment in upgraded facilities and/or expanded coverage, providing
consumers with substantial benefits while also creating thousands of
jobs.
21. With the added investment and deployment of broadband services
by multiple providers, additional benefits will result from increased
competition. As discussed above, several commenters have stated that a
data roaming obligation is necessary for them to provide competitive
services, and enables them to upgrade existing services or build out
facilities-based coverage in new markets. The benefits of competition
include likely lower prices for such services, which will result in
direct consumer surplus as well as greater utilization of broadband
data services. In addition, less expensive mobile broadband services
increase the availability of these services to consumers, which in turn
creates incentives for edge providers to develop innovative new
services that use this capability. Although the benefits cannot be
calculated with precision, a rough estimate is that the benefits from
the increased competition would be in the billions of dollars per year.
22. By comparison with the benefits of adopting a data roaming rule
that promotes the availability of data roaming arrangements, the
Commission finds that the potential costs of adopting the rule that
requires providers to offer data roaming arrangements on

[[Page 26203]]

commercial reasonable terms and conditions are small.
23. As discussed above, the two major opponents of a data roaming
obligation--Verizon Wireless and AT&T--assert that adoption of such an
obligation could discourage investment by providers, particularly in
rural areas, which in turn would reduce mobile broadband availability
and utilization. The rule adopted in this Order, however, allows host
providers to control the terms and conditions of proffered data roaming
arrangements, within a general requirement of commercial
reasonableness. For the reasons stated above, the Commission concludes
that such terms would preserve providers' incentive to invest in their
networks. Indeed, neither AT&T nor Verizon state that they would invest
less under a roaming obligation and therefore do not expect the roaming
rule to reduce the investment of host networks.
24. Another potential cost is the possibility that requesting
providers will substitute roaming for investment in coverage and
accordingly under-invest in deploying new infrastructure. Again,
however, the Commission's rule obligates the host provider only to
offer data roaming on commercially reasonable terms and conditions. As
discussed above, such a standard will provide the requesting provider
with sufficient incentive to invest in facilities, except where doing
so would be economically infeasible or unrealistic regardless of the
availability of roaming agreements. Further, the Commission provides
that the data roaming obligation does not create mandatory resale
obligations.
25. An additional potential cost could result from harm to the host
provider's network that might result from congestion or technical
problems. To enable a host provider to safeguard its quality of service
against network congestion, the order expressly provides that host
providers are permitted to negotiate commercially reasonable measures
to safeguard against network congestion that might result from data
roaming traffic. The host provider thus would have the flexibility to
account for the additional traffic roaming would generate, and
therefore avoid harmful congestion. Similarly, the rule expressly
provides that it is reasonable for a provider not to offer a data
roaming arrangement to a requesting provider that is not
technologically compatible, or where it is not technically feasible to
provide roaming for the particular data service for which roaming is
requested, or where any changes to the host provider's network required
to accommodate roaming are not economically reasonable.
26. Thus, the Commission concludes that there are substantial
benefits that will be derived from adoption of the data roaming rule
set forth herein, and that these benefits substantially outweigh the
minimal costs associated with the rule.

B. Scope and Requirements of the Data Roaming Rule

27. As discussed above, the Commission concludes that the public
interest would be served by adopting a data roaming rule. The
Commission will require that facilities-based providers of commercial
mobile data services offer data roaming arrangements to other such
providers on commercially reasonable terms and conditions, subject to
certain limitations specified below. The Commission determines that the
data roaming rule the Commission adopts should apply to all facilities-
based providers of commercial mobile data services. In establishing
this rule, the Commission seeks to balance various competing interests,
and the Commission finds that it is appropriate to specify certain
grounds on which, under the rule adopted today, providers of commercial
mobile data services can reasonably refuse to offer a data roaming
arrangement. The Commission also clarifies that under the data roaming
rule adopted herein, providers of commercial mobile data roaming
services are permitted to negotiate commercially reasonable measures to
safeguard quality of service against network congestion that may result
from roaming traffic or to prevent harm to their networks. The
Commission discusses the rule and limitations and the standard of
commercial reasonableness in more detail below.
28. Covered Entities. Consistent with the comments addressing the
scope of covered entities, the Commission determines that the data
roaming requirement should apply to all facilities-based providers of
commercial mobile data services. For purposes of data roaming, the
Commission defines a ``commercial mobile data service'' as any mobile
data service that is not interconnected with the public switched
network but is (1) provided for profit; and (2) available to the public
or to such classes of eligible users as to be effectively available to
the public. The scope of the current roaming obligation in Section
20.12 covers the CMRS providers' provision of mobile voice and data
services that are interconnected with the public switched network, as
well as their provision of text messaging and push-to-talk services.
The rule adopted herein will complement the current roaming obligation
in Section 20.12 and cover mobile services that fall outside the scope
of that obligation. Under the Commission's decision today, as long as a
provider provides mobile data services that are for profit and
available to the public or to such classes of eligible users as to be
effectively available to the public, it will be covered by the rule
adopted herein regardless of whether the provider also provides any
CMRS and without regard to the mobile technology it is utilizing to
provide services. Thus, the scope includes MSS/ATC providers that offer
commercial mobile data services that meet these requirements. In
addition, the data roaming rule adopted herein covers all facilities-
based providers of commercial mobile data services, including those
constructing network facilities to offer service on a wholesale basis.
Further, providers of commercial mobile data services are covered
without regard to the devices used to access or receive their services.
This approach is supported by those parties in the record that
commented on this issue, will help to achieve technological neutrality
in the data roaming obligation, and will ensure that the rule the
Commission adopts is adequate in the face of rapid changes in
commercial mobile technology and the commercial mobile ecosystem
overall.
29. Application of the Commercial Mobile Data Roaming Rule. The
rule the Commission adopts today requires all facilities-based
providers of commercial mobile data services to offer data roaming
arrangements to other such providers on commercially reasonable terms
and conditions. As noted above, the Commission concludes that this rule
serves the public interest by promoting connectivity for and nationwide
access to mobile data services and by promoting investment in and
deployment of mobile broadband networks, among other benefits. When a
request for data roaming negotiations is made, as a part of the duty of
providers to offer data roaming arrangements on commercially reasonable
terms and conditions, a would-be host provider has a duty to respond
promptly to the request and avoid actions that unduly delay or
stonewall the course of negotiations regarding that request. The
Commission will determine whether the terms and conditions of a
proffered data roaming arrangement are commercially reasonable on a
case-by-case basis, taking into consideration the totality of the
circumstances.
30. The duty to offer data roaming arrangements on commercially
reasonable terms and conditions is

[[Page 26204]]

subject to certain limitations. In particular: (1) Providers may
negotiate the terms of their roaming arrangements on an individualized
basis; (2) it is reasonable for a provider not to offer a data roaming
arrangement to a requesting provider that is not technologically
compatible; (3) it is reasonable for a provider not to offer a data
roaming arrangement where it is not technically feasible to provide
roaming for the particular data service for which roaming is requested
and any changes to the host provider's network necessary to accommodate
roaming for such data service are not economically reasonable; and (4)
it is reasonable for a provider to condition the effectiveness of a
data roaming arrangement on the requesting provider's provision of
mobile data service to its own subscribers using a generation of
wireless technology comparable to the technology on which the
requesting provider seeks to roam.
31. The Commission concludes that it serves the public interest to
include these limitations in recognition of the particular technical
and policy issues that arise with respect to the provision of data
services. As discussed above, the Commission recognizes that the
commercial mobile broadband data marketplace, particularly 4G
deployment, is still in a critical early stage. It encompasses many
different services offered in conjunction with many different devices
employing wide-ranging technologies and exacting varying network
demands. In light of that continuing evolution, the Commission finds
that the scope the Commission establishes for the roaming rule is
sufficiently flexible to apply to a wide range of ever changing
technologies and commercial contexts, and should afford parties
negotiating commercial mobile data services roaming agreements a solid
framework within which to arrange their negotiations and ultimately
reach agreement on commercially reasonable terms. Below, the Commission
further discusses and clarifies each of these limitations in turn.
32. First, providers may negotiate the terms of their roaming
arrangements on an individualized basis. In other words, providers may
offer data roaming arrangements on commercially reasonable terms and
conditions tailored to individualized circumstances without having to
hold themselves out to serve all comers indiscriminately on the same or
standardized terms. Conduct that unreasonably restrains trade, however,
is not commercially reasonable. As discussed below, the Commission may
consider a range of individualized factors in addressing disputes over
the commercial reasonableness of the terms and conditions of the
proffered data roaming arrangements. Giving providers flexibility to
negotiate the terms of their roaming arrangements on an individualized
basis ensures that the data roaming rule best serves the Commission's
public interest goals discussed herein, and the boundaries of the rule
are narrowly tailored to execute the Commission's spectrum management
duties under the Act.
33. Second, it is commercially reasonable for providers not to
offer a data roaming arrangement to a requesting provider that is not
technologically compatible. The Commission clarifies, however, that
technological compatibility does not necessarily require the same air
interface in the network infrastructure of the two providers.
Technological compatibility can be achieved by using mobile equipment
that can communicate with the host provider's network. For example,
requesting providers that operate on different bands or technologies
than the host might achieve technological compatibility by providing
subscribers with multi-band and multi-mode user devices.
34. Even if providers are technologically compatible, however,
roaming for a particular service may not be feasible for other
technical reasons. Accordingly, it is also commercially reasonable for
a provider to refuse to enter into a data roaming arrangement for a
particular data service where it is not technically feasible to provide
roaming for such service and where any changes to its network that are
necessary to accommodate such data roaming are economically
unreasonable. With regard to these grounds for reasonably refusing to
enter into a roaming arrangement, the Commission disagrees with
commenters that they are too vague or would be too open to
interpretation by providers seeking to delay or deny roaming access. As
noted above, identical conditions already apply to requests for push-
to-talk and text-messaging roaming arrangements. Further, the
Commission finds that these grounds will offer parties negotiating
roaming agreements reasonable flexibility to negotiate terms without,
for example, unduly hampering a host provider with the burden of either
adopting technologies which it has not already adopted in order to
accommodate the requesting provider's technology or undertaking
economically unreasonable changes to its network.
35. Finally, the Commission provides that it is commercially
reasonable for a provider to condition the effectiveness of a roaming
arrangement on the requesting provider's provision of mobile data
service using a generation of wireless technology comparable to the
technology on which the requesting provider seeks to roam. The
Commission notes that as with technological compatibility, this does
not mean that the requesting provider must have exactly the same air
interface as the host provider. Rather, this focuses on capabilities,
including data rates, of the generation of mobile wireless technology
that is being used to provide services to subscribers. Permitting a
service provider to condition the effectiveness of a roaming
arrangement in this circumstance provides additional incentives for the
requesting provider to invest in and upgrade its network to offer
advanced services to its subscribers and ensures that the requesting
provider is not merely reselling the host provider's services. This
limitation prevents providers, for example, from only building a 2G
network, providing their customers with 3G capable handsets, and then
relying on roaming arrangements to provide nationwide 3G coverage, and
thus reasonably addresses concerns raised by AT&T. To prevent undue
delay in negotiations, the Commission clarifies that a host provider
may not decline to enter into a roaming agreement with a requesting
provider on the grounds that the requesting provider is not actually
providing service at the time of the request for negotiations, but may
tie the effectiveness of the agreement to the requesting provider
offering the underlying service to its subscribers with a generation of
wireless technology comparable to the technology on which it would
roam. The Commission finds that incorporating this limitation as part
of the scope of the data roaming rule is in the public interest and
critical to ensuring facilities are deployed, helping to alleviate
concerns about providers merely reselling commercial mobile data
services on other networks. While the Commission agrees that providers
have many different legitimate business and technological reasons for
rolling out services in certain markets and not in others, the
Commission finds that requiring, at a minimum, the underlying service
to be offered by the requesting provider with a generation of wireless
technology comparable to the technology on which it seeks to roam best
balances competing interests of affording data roaming while also
encouraging facilities-based service.

[[Page 26205]]

36. This limitation is also consistent with the Commission's
previous roaming decisions where the Commission has consistently
limited roaming obligations to provisioning of certain services on
technologically compatible networks. The limitation on covered services
coupled with the technologically compatible networks requirement was
sufficient to ensure that the generations of wireless technologies used
were comparable. The commercial mobile data services marketplace,
however, encompasses a broad array of generations of wireless
technology and many different applications--many of which may require
different technical considerations and offer different data speeds.
Some of these also may be more competitively attractive than others.
The Commission seeks to encourage facilities-based offerings of
advanced mobile data services by providers and usage of data roaming
arrangements to supplement such offerings. Accordingly, it serves the
public interest to focus on capabilities, including data rates, of the
generation of mobile wireless technology that is being used to provide
services to subscribers.
37. The Commission declines to adopt certain other requirements
proposed by AT&T, which suggests that, in order to preserve the proper
incentives for investment, the Commission establish an ``equal
network'' rule that would limit data roaming to only providers that use
the same radio technologies and air interfaces and that have
substantial networks of their own. For the reasons discussed above, the
Commission concludes, contrary to AT&T's argument, that providers will
not have heightened incentives under the rule adopted here to scale
back their own deployments and ``free-ride'' on the superior
investments of others.
38. The Commission finds it is unnecessary to adopt a requirement
of identical interfaces. The Commission requires that the air
interfaces be comparable in terms of capabilities, which should achieve
the same benefits as a requirement of identical interfaces while
providing greater technological flexibility in the rule. Further, the
Commission agrees with Leap and RCA that adopting a ``substantial
network'' requirement could be problematic. An inability to negotiate a
roaming arrangement before making a substantial build out could deter
new entrants and small, rural, and mid-sized providers from investing
in broadband at the exact time such investment is sorely needed. The
Commission are concerned that a ``substantial network'' requirement
could hamper or dampen facilities-based build-out in rural areas by
unduly limiting the role of roaming in network buildout. The Commission
also disagrees with AT&T that, absent this requirement, providers will
have heightened incentives to scale back their own deployments and
``free-ride'' on the superior investments of others. As discussed
above, the relatively high price of roaming compared to providing
facilities-based service will often be sufficient to counterbalance the
incentive to scale back deployments in favor of relying on another
provider's network. Further, although the Commission does not find that
lack of ``substantial'' networks deployments is categorically a
commercially reasonable ground for declining to enter into a roaming
arrangement, the Commission may consider the extent and nature of
providers' build-out as one of the relevant factors in determining
whether the proposed terms and conditions of a particular data roaming
arrangement are commercially reasonable.
39. Reasonable safeguards against congestion. With respect to any
issues concerning network capacity, network integrity, or network
security, the Commission notes that under the rule that the Commission
is adopting providers of commercial mobile data services are free to
negotiate commercially reasonable measures to safeguard quality of
service against network congestion that may result from roaming traffic
or to prevent harm to their networks. The Commission expects any
measures, methods, or practices to manage the roaming traffic to be
part of the roaming terms and conditions offered by the host providers
in their roaming arrangements given that once providers enter into a
data roaming arrangement, the arrangement will govern the terms under
which roaming is provided. Any issues arising in connection with the
negotiation of these measures will be resolved in accordance with the
dispute resolution procedures the Commission adopts in this Order. The
Commission notes that reasonable measures to safeguard against network
congestion from roaming traffic are supported by a number of
commenters, and are already a feature of many commercially negotiated
roaming arrangements. The Commission cautions, however, that host
providers may not engage in stonewalling behavior or refuse to
negotiate because of concerns over the impact of roaming traffic on
network congestion.
40. The Commission declines to further detail the specific measures
that may be adopted to safeguard subscriber quality of service, as
proposed by AT&T. As discussed herein, the commercial mobile data
services marketplace encompasses an array of generations of wireless
technology and many different services--many of which may require
different technical considerations in resolving network congestion.
Providers should have significant flexibility to negotiate safeguards
subject to commercial reasonableness, and a dispute over the
reasonableness of any particular measure can be addressed under the
dispute resolution procedures, on a case-by-case basis based on the
totality of circumstances. The Commission does not agree with AT&T that
its approach will lead to ``constant second-guessing'' by the
Commission.
41. The Commission also declines to specify, as suggested by
Clearwire, that data roaming be limited to ``best efforts access'' to
the host provider's network. The Commission does not see the benefit in
prohibiting parties from negotiating other access terms in their
roaming arrangement.
42. Host providers of commercial mobile data roaming services also
are authorized to negotiate commercially reasonable measures to ensure
that data roaming does not compromise the security and integrity of
their networks. The Commission is aware of the risks network operators
face from harmful devices on their networks and note that the
Commission has previously considered the need for providers to protect
their networks when it adopted open platform provisions for the 700 MHz
Band C Block. It would also be appropriate for providers of commercial
mobile data roaming service to take reasonable measures to ensure that
network performance will not be significantly degraded.
43. We emphasize again that we intend to closely monitor further
development of the commercial mobile broadband data marketplace and
stand ready to take additional action if necessary to help ensure that
our goals in this proceeding are achieved.

C. Legal Authority

44. The Commission finds that the Commission has the authority to
require facilities-based providers of commercial mobile data services
to offer data roaming arrangements to other such providers on
commercially reasonable terms and conditions. As discussed above, the
Commission finds that the rule the Commission adopts today serves the
public interest by promoting connectivity for, and nationwide access
to, mobile broadband. By promoting consumer access to advanced wireless
services, the data roaming rule will

[[Page 26206]]

enhance the unique social and economic benefits that a mobile service
provides. The data roaming rule will also serve the public interest by
promoting competition and investment in and deployment of mobile
broadband services. Broadband deployment is a key priority for the
Commission, and the deployment of mobile data networks will be
essential to achieve the goal of making broadband connectivity
available everywhere in the United States. As noted earlier, mobile
broadband networks, particularly ``fourth-generation'' networks, are
still at an early stage of deployment. Both nationwide and non-
nationwide providers have obtained licenses, including AWS and 700 MHz
spectrum licenses, which will be used to provide innovative wireless
data services to consumers. The Commission finds that the availability
of data roaming will help ensure the viability of new data network
deployments and promote the development of competitive service
offerings for the benefit of consumers.
45. The Commission's authority under Title III allows it to adopt
requirements to serve these public interest objectives. Spectrum is a
public resource, and Title III of the Act provides the Commission with
broad authority to manage spectrum, including allocating and assigning
radio spectrum for spectrum based services and modifying spectrum usage
conditions in the public interest. The Commission is charged with
maintaining control ``over all the channels of radio transmission'' in
the United States. Section 301 states that ``[i]t is the purpose of
this Act, among other things, to maintain the control of the United
States over all the channels of radio transmission; and to provide for
the use of such channels, but not the ownership thereof, by persons for
limited periods of time, under licenses granted by Federal authority,
and no such license shall be construed to create any right, beyond the
terms, conditions, and periods of the license.'' The issuance of a
Commission license does not convey any ownership or property interests
in the spectrum and does not provide the licensee with any rights that
can override the Commission's proper exercise of its regulatory power
over the spectrum. Section 316 authorizes the Commission to adopt new
conditions on existing licenses if it determines that such action
``will promote the public interest, convenience, and necessity.''
Further, the Commission may utilize its rulemaking powers to modify
licenses when a new policy is based upon the general characteristics of
an industry. Section 303 provides the Commission with authority to
establish operational obligations for licensees that further the goals
and requirements of the Act if the obligations are in the ``public
convenience, interest, or necessity'' and not inconsistent with other
provisions of law. Section 303 also authorizes the Commission, subject
to what the ``public interest, convenience, or necessity requires,'' to
``[p]rescribe the nature of the service to be rendered by each class of
licensed stations and each station within any class.''
46. The Commission finds that these provisions establish its
authority to adopt rules facilitating roaming with respect to
commercial mobile data services. Specifically, the Commission finds
that it is within its authority to manage spectrum and to impose
conditions on licensees where necessary to promote the public interest,
convenience, and necessity to adopt data roaming rules. As discussed
above, the Commission finds that the data roaming rule the Commission
adopts today serves the public interest by facilitating consumer access
to ubiquitous mobile broadband service. As more and more consumers use
mobile devices to access a wide array of both personal and business
services, they have become more reliant on their devices. These
consumers expect to be able to have access to the full range of
services available on their devices wherever they go. By promoting
connectivity for, and ubiquitous access to, mobile broadband, the rule
the Commission adopts today supports consumer expectations and helps
ensure that consumers are able to fully utilize and benefit from the
availability of wireless broadband data services.
47. As discussed earlier, the data roaming rule the Commission
adopts today also supports the Commission's goal of encouraging
investment and innovation and the efficient use of spectrum. The
Commission agrees with commenters that adopting a data roaming rule
will encourage service providers to invest in and upgrade their
networks to be able to compete with other providers and control their
costs. By encouraging build-out and deployment of advanced data
services, the rule the Commission adopts today helps ensure that
spectrum is being put to its best and most efficient use. Data roaming
also furthers the goals under Section 706(a) and (b) of the
Telecommunications Act of 1996, including encouraging new deployment of
advanced services to all Americans by promoting competition and by
removing barriers to infrastructure investment, including the barriers
to new entrants. The Commission estimated that more than 10 million
Americans live in rural census blocks with two or fewer mobile service
providers. Data roaming will encourage service providers to invest in
and upgrade their networks and to deploy advanced mobile services
ubiquitously, including in rural areas.
48. The Commission disagrees with AT&T and Verizon Wireless's
argument that the Commission lacks authority to impose data roaming
rules because data roaming is a private mobile radio service, as
defined in section 332 of the Act and thus any common carrier
regulation of data roaming is prohibited under the terms of the
statute. Section 332(c)(2) provides that ``a person engaged in the
provision of a service that is a private mobile service shall not * * *
be treated as a common carrier for any purpose * * *'' AT&T and Verizon
Wireless argue that Section 332(c)(2) prohibits the Commission from
imposing any roaming obligation for provisioning of commercial mobile
data services that do not interconnect with the public switched
networks because non-interconnected commercial mobile data services are
not CMRS but private mobile radio service (PMRS). AT&T argues that
roaming obligations clearly amount to common carrier obligations and
that, under the Supreme Court's decision in FCC v. Midwest Video
Corporation (Midwest Video II), such regulations are prohibited. In
Midwest Video II, the Supreme Court found that obligations requiring
cable television systems to allocate channels for educational,
government, public, and leased access users had ``relegated cable
systems, pro tanto, to common-carrier status.'' The Court noted that
the rules required operators to make these channels available on a
first-come non-discriminatory basis, prohibited cable operators from
influencing the content of access programming, and also put limits on
charges for access. The Court found that this ``common carrier status''
violated the Act's prohibition against deeming broadcasters to be
common carriers, because at the time, cable regulations rested on the
FCC's authority to regulate broadcasting. AT&T argues that requiring
carriers to offer data roaming ``on reasonable request, on reasonable
terms and rates, and free from unreasonable discrimination'' would
similarly treat such providers as common carriers in violation of the
prohibition against common carrier treatment in the definition of
``private mobile service.''
49. Contrary to the arguments of AT&T and Verizon Wireless, to
adopt a data roaming rule as discussed herein, the Commission does not
need to

[[Page 26207]]

determine that a mobile service should be classified as CMRS. Section
332 does not bar the Commission from establishing spectrum usage
conditions based upon its Title III authority. As discussed above,
Title III generally provides the Commission with authority to regulate
``radio communications'' and ``transmission of energy by radio.'' Among
other provisions, Title III gives the Commission the authority to
classify radio stations. It also establishes the basic licensing scheme
for radio stations, allowing the Commission to grant, revoke, or modify
licenses. The Commission has imposed operating conditions on licensees
regardless of the type of service they provide.
50. In this Order, the Commission imposes an obligation with
limitations on facilities-based providers of commercial mobile data
services to offer data roaming arrangements to other facilities-based
providers of commercial mobile data services on an individualized case-
by-case basis, subject to a standard of commercial reasonableness as
well as certain specified limitations set forth herein. Imposing such a
requirement is consistent with the Commission's authority to impose
certain operating conditions on any spectrum authorization holders,
including private mobile radio licensees, if it serves the public
interest. The data roaming rule will complement the current roaming
rules applicable to interconnected services, improve efficiency of
spectrum use, encourage competition and increase sharing opportunities
between private mobile services and other services. In particular, the
Commission finds that the rule the Commission adopts today is
consistent with the requirements of sections 332(a)(2)-(4) of the Act.
Sections 332(a)(2)-(4) provide that, in managing the spectrum made
available for use by private mobile services, the Commission shall
consider whether its actions will: improve the efficiency of spectrum
use and reduce the regulatory burden upon spectrum users, based upon
sound engineering principles, user operational requirements, and
marketplace demands; encourage competition and provide services to the
largest feasible number of users; or increase interservice sharing
opportunities between private mobile services and other services. The
Commission finds that, by promoting competition, investment, and new
entry while facilitating consumer access to ubiquitous mobile broadband
service, the rule the Commission adopts today will serve these
objectives.
51. The Commission also finds that the data roaming rules we adopt
do not amount to treating mobile data service providers as ``common
carriers'' under the Act. As AT&T and Verizon Wireless recognize, a
``sine qua non'' of common carrier treatment is ``the undertaking to
carry for all people indifferently. The extent of the obligation the
Commission imposes today is to offer, in certain circumstances,
individually negotiated data roaming arrangements with commercially
reasonable terms and conditions. The rule the Commission adopts will
allow individualized service agreements and will not require providers
to serve all comers indifferently on the same terms and conditions.
Providers can negotiate different terms and conditions on an
individualized basis, including prices, with different parties. The
commercial reasonableness of terms offered to a particular provider may
depend on numerous individualized factors, including the level of
competitive harm in a given market and the benefits to consumers; the
extent and nature of the requesting provider's build-out; whether the
requesting provider is seeking roaming for an area where it is already
providing facilities-based service; and the impact of granting the
request on the incentives for either provider to invest in facilities
and coverage, services, and service quality. In addition, providers may
reasonably choose not to offer a roaming arrangement to a requesting
provider that is not technologically compatible or refuse to enter into
a roaming arrangement where it is not technically feasible to provide
roaming for the service for which it is requested. A provider is not
required to make changes to its network that are economically
unreasonable, and it is reasonable for a provider to condition the
effectiveness of a roaming arrangement on the requesting provider's
provision of mobile data service to its own subscribers using a
generation of wireless technology comparable to the technology on which
the requesting provider seeks to roam. Providers of commercial mobile
data services also are free to negotiate commercially reasonable
measures to safeguard quality of service against network congestion
that may result from roaming traffic or to prevent harm to their
networks. In addition, the rule the Commission adopts does not impose
any form of common carriage rate regulation or obligation on providers
of mobile data services to publicly disclose the rates, terms, and
conditions of their roaming agreements. Under the agreements to which
negotiations may lead, providers will have flexibility with regard to
roaming charges, subject to a general requirement of commercial
reasonableness. Further, actual provisioning of data roaming under
those arrangements and any practices in connection with such
arrangements will be subject to individually negotiated contractual
provisions, unlike a common carrier obligation under Sections 201 and
202 of the Act which covers all charges and practices in connection
with such services. In view of these boundaries, the Commission finds
that the rule the Commission adopts today to execute its spectrum
management duties under the Act does not subject a spectrum-based
commercial mobile data service provider to Title II nor does it treat
these providers as common carriers with respect to their regulatory
status and obligations.
52. Imposition of the Data Roaming Rule under Title III does not
amount to Regulatory Taking. Verizon Wireless argues that imposing data
roaming obligations amounts to a physical and regulatory taking.
Verizon Wireless claims that data roaming is a physical taking of
wireless carriers' property rights in their network infrastructure by
authorizing third parties to occupy the physical space available on
carrier networks at will. Verizon Wireless also claims that data
roaming would constitute a regulatory taking because it would interfere
with licensees' reasonable expectations not to have common carrier
regulations imposed on information services. The Commission disagrees.
Under Section 304 of the Communications Act, the issuance of an FCC
license does not provide the licensee with any rights that can override
the Commission's proper exercise of its regulatory power over the
spectrum: ``[n]o station license shall be granted by the Commission
until the applicant therefore shall have waived any claim to the use of
any particular frequency or of the electromagnetic spectrum as against
the regulatory power of the United States because of the previous use
of the same, whether by license or otherwise.'' Further, under the data
roaming rule, the host provider will be compensated for service it
provides consistent with the commercially reasonable terms it
negotiates in the roaming agreement. There can be no taking if that
compensation is ``just.'' It does not appear to be possible that
compensation could be ``unjust'' if it is commercially reasonable.
Commercially reasonable terms may also include measures that allow the
host provider to safeguard the quality of service and allow measures to

[[Page 26208]]

prevent harm to the host provider's network.
53. Commission's Title II Authority. Several commenters argue that
data roaming is a telecommunications service under Title II. MetroPCS,
for example, asserts that the transmission service provided by a third-
party wireless roaming carrier (the Roaming Partner) to facilitate data
roaming is only telecommunications and that the transmission provided
by the Roaming Partner is functionally equivalent to the
telecommunications services provided for voice roaming. MetroPCS
asserts that ``the separate, severable, non-integrated transmission
service provided by a third-party wireless Roaming Partner is properly
viewed as purely a transmission service that qualifies under long-
standing Commission precedent as `telecommunications' and as a
`telecommunications service.' '' Leap argues that the Commission can
act pursuant to its Title II authority, stating that ``the Commission
could define data roaming as a telecommunications service because
during data roaming, the host carrier is providing pure data
transmission to another carrier.'' The Commission finds that the
Commission need not decide whether data roaming services provisioned in
this manner are or are not telecommunications services. In any case,
the Commission imposes the data roaming rule described herein based on
its authority under Title III.

D. Dispute Resolution

54. To the extent that a complaint proceeding is an appropriate
procedural vehicle to resolve a particular dispute arising out of the
negotiation of a data roaming arrangement, the Commission finds that it
is in the public interest to establish a complaint process similar to
the complaint process available under the current roaming obligations.
Specifically, to ensure consistent Commission processes for resolving
all voice and data roaming disputes where a complaint is the
appropriate procedural vehicle, the Commission will use the procedural
complaint processes established in the Commission's Part 1, Subpart E
rules for data roaming to the extent discussed herein. Disputes will be
resolved based on the totality of the circumstances. The remedy of
damages will not be available for data roaming complaints.
55. Parties may file a formal or informal complaint under the
Commission's Part I, Subpart E rules or file a petition for declaratory
ruling under Section 1.2 of the Commission's rules to resolve any
disputes arising out of the data roaming rule adopted herein. These
procedural mechanisms are currently available for resolving voice
roaming disputes, and the Commission finds that it is in the public
interest to ensure a consistent Commission process for resolving both
voice and data roaming complaints. Moreover, some roaming disputes will
involve both data and voice and are likely to have factual issues
common to both types of roaming. The approach the Commission is taking
allows, but does not require, a party to bring a single proceeding to
address such a dispute, rather than having to bifurcate the matter and
initiate two separate proceedings under two different sets of
procedures. This, in turn, will be more efficient for the parties
involved, as well as for the Commission, and should result in faster
resolution of such disputes.
56. With respect to remedies, the Commission excludes provisions
applicable to damages in this context. The Commission notes that the
remedy of damages after hearing on a complaint is specifically provided
for in Section 209 of the Communications Act and applicable to claims
arising out of Section 208 complaints. This means that if a complaint
alleges violations with respect to both voice and data roaming, damages
potentially are available as a remedy for only the portion of the
complaint that deals with roaming obligations arising out of Sections
201, 202, and 208 of the Act.
57. When roaming-related complaints or petitions for declaratory
ruling are filed, the Commission intends to address them expeditiously.
Further, the Commission notes that the Accelerated Docket procedures,
including pre-complaint mediation, will be available to data roaming
complaints. Several commenters requested use of the Commission's
Accelerated Docket procedures to resolve all roaming complaints.
Although all roaming complaints will not automatically be placed on the
Accelerated Docket, an affected provider can seek consideration of its
complaint under the Commission's Accelerated Docket rules and
procedures where appropriate.
58. The Commission notes that the duty to offer data roaming
arrangements on commercially reasonable terms and conditions will allow
greater flexibility and variation in terms and conditions, as parties
will negotiate their rights and obligations under the agreements. The
Commission expects providers to include any material practices
regarding provisioning of roaming in the agreement (e.g., any practice
to manage roaming traffic in times of congestion) because many disputes
arising out of provisioning of roaming will be subject to the roaming
contract provisions and generally applicable laws. To provide parties
with additional certainty regarding rights and obligations and to
facilitate timely resolution of disputes, the Commission provides the
following clarifications and guidance.
59. During ongoing negotiations, parties can seek Commission
dispute resolution--including a determination whether the host provider
has met its duty. The Commission will consider claims regarding the
commercial reasonableness of the negotiations, providers' conduct, and
the terms and conditions of the proffered data roaming arrangement.
With respect to claims regarding the commercial reasonableness of the
proffered terms and conditions, including prices, the Commission staff
may, in resolving such claims, require both parties to provide to the
Commission their best and final offers (final offers) that were
presented during the negotiation. For example, if negotiations fail to
produce a mutually acceptable set of terms and conditions, including
rates, the Commission staff may require parties to submit on a
confidential basis their final offers, including price, in the form of
a proposed data roaming contract. These submissions would enable
Commission staff, if it so chose, to resolve a particular roaming
dispute in which a violation of Commission rules is found by ordering
the parties to enter into a data roaming agreement pursuant to the
terms of the complainant's commercially reasonable final offer or to
otherwise rely on the submitted offers in determining an appropriate
remedy. In cases where no violation of Commission rules is found, the
complainant would be free, but not obligated, to enter into a roaming
agreement on the proffered terms of the would-be host. The Commission
staff also could order the parties to resume negotiations. The
Commission staff's determination of the appropriate steps in resolving
a particular dispute would depend in part of an assessment of the
actions of both the host provider and the requesting provider.
60. With respect to disputes filed before reaching an agreement
regarding the commercial reasonableness of a would-be host provider's
proffered terms and conditions, the Commission finds that it is in the
public interest to provide a possible avenue for the requesting
provider to obtain data roaming service on an interim basis during the
pendency of the dispute. Accordingly, in a case where a requesting
provider disputes the commercial reasonableness of a roaming
arrangement offered by a would-be host and none of the limitations is

[[Page 26209]]

applicable, the Commission staff may, if requested and in appropriate
circumstances, order the host provider to provide data roaming on its
proffered terms, during the pendency of the dispute, subject to
possible true-up once the roaming agreement is in place. Similarly, if
the Commission staff chooses to require submission of final offers as
discussed above, in appropriate circumstances the Commission staff
could order the host provider to provide data roaming in accordance
with its final offer, subject to possible true-up. The ability to
obtain data roaming service on an interim basis during the pendency of
the dispute would enable the requesting provider's subscribers to
obtain data roaming coverage without undue delay while the Commission
staff considers the dispute. Alternatively, the parties may agree prior
to the filing of the dispute to an interim roaming arrangement that
will govern during the pendency of the dispute. Further, in the event a
would-be host provider violates its duty by actions that unduly delay
or stonewall the course of negotiations, the Commission stands ready to
move expeditiously with fines, forfeitures, and other appropriate
remedies, which should reduce any incentives to delay data roaming
negotiations.
61. After the parties have entered into a data roaming agreement,
the terms of the agreement generally will govern the data roaming
rights and obligations of the parties, and disputes relating to
performance, validity, or interpretation of the agreement will be
subject to review in court under the relevant contract law, with
certain exceptions. For instance, parties may bring before the
Commission a claim that a host provider's conduct during negotiations
violated the federal duty to offer a data roaming arrangement with
commercially reasonable terms and conditions. In addition, the
requesting provider may show that a host provider engaged in undue
delay, or negotiated without any intent to perform. Further, the
Commission provides that a requesting provider could file a complaint
or petition for declaratory ruling regarding the commercial
reasonableness of the agreed terms and conditions to the extent such
claims are based on new information that the requesting provider
reasonably did not know prior to signing the agreement. Because the
standard of commercial reasonableness is one that we expect to
accommodate a variety of terms and conditions in data roaming, and to
discourage frivolous claims regarding the reasonableness of the terms
and conditions in a signed agreement, the Commission will presume in
such cases that the terms of a signed agreement meet the reasonableness
standard and will require a party challenging the reasonableness of any
term in the agreement to rebut that presumption.
62. The Commission further clarifies that the Enforcement Bureau
has delegated authority to resolve complaints arising out of the data
roaming rule. The Commission notes that the Wireless Telecommunications
Bureau has delegated authority to resolve other disputes with respect
to the data roaming rule adopted herein. The Commission also notes that
whether or not the appropriate procedural vehicle is a complaint under
Section 20.12(e) or a petition for declaratory ruling under Section 1.2
may vary depending on the circumstances of each case. If a dispute
arises regarding data roaming, parties are encouraged to contact
Commission staff for procedural guidance and for negotiations using the
Commission's informal dispute resolution processes.
63. Some commenters propose other measures for resolving data
roaming disputes or roaming disputes in general, such as mandatory
mediation or arbitration. Although the Commission is not adopting any
such mandatory processes, the Commission notes that providers are free
to negotiate and mutually agree to other processes, such as third party
mediation or arbitration, as a means to resolve the roaming dispute.
64. A few commenters propose that the Commission adopts a time
limit for roaming negotiations to limit the opportunity for host
carriers to delay in negotiating roaming agreements. The Commission
declines to adopt a specific time limit because some data roaming
negotiations may be more complex or fact-intensive than others and are
likely to require more time. A single time limit for all negotiations
would not be appropriate in such cases. As part of the requirement to
offer a data roaming arrangement, the Commission expects parties to
proceed with such negotiations in a timely manner and to avoid
stonewalling behavior or undue delays. If a provider involved in a data
roaming negotiation believes that another provider is delaying the
negotiation unduly, it may ask the Commission to set a time limit for
that particular negotiation. The Commission will consider such requests
on a case-by-case basis.
65. Determination of Commercial Reasonableness. The Commission will
assess whether a particular data roaming offering includes commercially
reasonable terms and conditions or whether a provider's conduct during
negotiations, including its refusal to offer data roaming, is
commercially reasonable, on a case-by-case basis, taking into
consideration the totality of the circumstances. As discussed above,
providers can negotiate different terms and conditions, including
prices, with different parties, where differences in terms and
conditions reasonably reflect actual differences in particular cases.
Further, providers of commercial mobile data services can negotiate
commercially reasonable measures to safeguard quality of service
against network congestion that may result from data roaming traffic or
to prevent harm to their networks. Conduct that unreasonably restrains
trade, however, is not commercially reasonable.
66. In the interconnected services context, the Commission listed
factors it will take into account in resolving roaming disputes that
are brought before it. Some parties have asked the Commission to use
these factors, or others, in resolving disputes that arise with respect
to data roaming. These factors relate to public interest benefits and
costs of a data roaming arrangement offered in a particular case,
including the impact on investment, competition, and consumer welfare
and whether a particular data roaming offering is commercially
reasonable. The Commission finds it is therefore appropriate to take
them into account, as listed below, and to the extent relevant in the
data roaming context. The Commission emphasizes that each case will be
decided based on the totality of the circumstances. With that in mind,
the Commission clarifies that, to guide it in determining the
reasonableness of the negotiations, providers' conduct, and the terms
and conditions of the proffered data roaming arrangements, including
the prices, the Commission may consider the following factors, as well
as others:
Whether the host provider has responded to the request for
negotiation, whether it has engaged in a persistent pattern of
stonewalling behavior, and the length of time since the initial
request;
Whether the terms and conditions offered by the host
provider are so unreasonable as to be tantamount to a refusal to offer
a data roaming arrangement;
Whether the parties have any roaming arrangements with
each other, including roaming for interconnected services such as
voice, and the terms of such arrangements;
Whether the providers involved have had previous data
roaming arrangements with similar terms;

[[Page 26210]]

The level of competitive harm in a given market and the
benefits to consumers;
The extent and nature of providers' build-out;
Significant economic factors, such as whether building
another network in the geographic area may be economically infeasible
or unrealistic, and the impact of any ``head-start'' advantages;
Whether the requesting provider is seeking data roaming
for an area where it is already providing facilities-based service;
The impact of the terms and conditions on the incentives
for either provider to invest in facilities and coverage, services, and
service quality;
Whether there are other options for securing a data
roaming arrangement in the areas subject to negotiations and whether
alternative data roaming partners are available;
Events or circumstances beyond either provider's control
that impact either the provision of data roaming or the need for data
roaming in the proposed area(s) of coverage;
The propagation characteristics of the spectrum licensed
to the providers;
Whether a host provider's decision not to offer a data
roaming arrangement is reasonably based on the fact that the providers
are not technologically compatible;
Whether a host provider's decision not to enter into a
roaming arrangement is reasonably based on the fact that roaming is not
technically feasible for the service for which it is requested;
Whether a host provider's decision not to enter into a
roaming arrangement is reasonably based on the fact that changes to the
host network necessary to accommodate the request are not economically
reasonable;
Whether a host provider's decision not to make a roaming
arrangement effective was reasonably based on the fact that the
requesting provider's provision of mobile data service to its own
subscribers has not been done with a generation of wireless technology
comparable to the technology on which the requesting provider seeks to
roam;
Other special or extenuating circumstances.
67. The Commission emphasizes that these factors are not exclusive
or exhaustive and that providers may argue that the Commission should
consider other relevant factors in determining the commercial
reasonableness of the negotiations, providers' conduct, and the terms
and conditions of the proffered data roaming arrangements, including
the prices. In addition, in making this determination the Commission
also will consider all relevant precedents and decisions by the
Commission.

E. Other Issues

68. Advertising. In the Second Further Notice, the Commission
sought comment on whether it should ``clarify that a carrier that
obtains automatic roaming from another carrier does not have a right to
advertise that it offers its subscribers roaming on a particular host
carrier's network absent a voluntary agreement of the host carrier''
and whether such measure would help to ``prevent free riding on the
value of the host carrier's brand name recognition and service quality
reputation.'' The Commission now clarifies that it does not intend the
rule it adopts today to be construed as permitting a provider that
obtains roaming from another provider to use the trade name of a host
provider when it advertises extended coverage due to roaming, unless
the parties to the roaming agreement agree otherwise. Although Cellular
South argues any such restrictions are not necessary or appropriate,
the Commission agrees with AT&T that providers can make significant
capital and marketing investments with respect to differentiating the
quality and brand image of their networks from competitors. Also, the
Commission is concerned that construing the rule the Commission adopts
as allowing a roaming provider to engage in unauthorized use of a
competitor's brand name recognition and/or service quality reputation
as a means of differentiating the roaming provider's own service may
indeed encourage the use of roaming as de facto resale. The Commission
has previously stated with regard to automatic roaming for voice and
data services for CMRS providers that ``automatic roaming obligations
can not be used as a backdoor way to create de facto mandatory resale
obligations or virtual reseller networks.'' As requested, the
Commission also further clarifies that the Commission does not intend
the data roaming rule it establishes in this order to disturb any
provider's existing right, under applicable law, to advertise the
geographic reach of their services, as extended by roaming agreements,
and to use data roaming to expand their advertised service area, where
under applicable law there is no unauthorized use of a competitor's
brand name and/or image associated with such advertising.
69. Spectrum Sharing. In the Second Further Notice, the Commission
sought comment on what other actions might be appropriate to address
spectrum capacity needs that may arise out of data roaming or to help
ensure that spectrum is utilized to the fullest extent possible,
including, for example, whether facilitating spectrum sharing
arrangements between a host provider and a requesting provider would be
helpful or appropriate. After review of the record, the Commission
finds there is an insufficient basis to make a determination on
spectrum sharing in the context of data roaming services at this time.
The one comment addressing the issue does so briefly in a footnote and
provides no detail on how such a requirement would be implemented.
Given the very limited record on this option, the Commission finds that
requiring spectrum sharing arrangements as a condition for commercial
mobile data services roaming arrangements is not warranted at this
time.

III. Procedural Matters

A. Final Regulatory Flexibility Analysis

1. As required by the Regulatory Flexibility Act of 1980, as
amended (the ``RFA''),\1\ an Initial Regulatory Flexibility Analysis
(IRFA) was incorporated in the Order on Reconsideration and Second
Further Notice of Proposed Rulemaking in WT Docket No. 05-265.\2\ The
Commission sought written public comment on the proposals in the Second
Further Notice, including comment on the IRFA. The comments received
are discussed below. This present Final Regulatory Flexibility Analysis
(FRFA) conforms to the RFA.\3\
---------------------------------------------------------------------------

\1\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been
amended by the Small Business Regulatory Enforcement Fairness Act of
1996 (SBREFA), Public Law 104-121, Title II, 110 Stat. 857 (1996).
\2\ Reexamination of Roaming Obligations of Commercial Mobile
Radio Service Providers and Other Providers of Mobile Data Services,
WT Docket No. 05-265, Order on Reconsideration and Second Further
Notice of Proposed Rulemaking, 25 FCC Rcd 4181 (2010).
\3\ See 5 U.S.C. 604.
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1. Need for, and Objectives of, the Proposed Rules
2. In the Second Further Notice that the Commission adopted in
conjunction with the Order on Reconsideration in 2010, the Commission
sought to refresh and further develop the record by requesting
additional comment on whether to extend roaming obligations to mobile
data services, including mobile broadband Internet access, that are
provided without interconnection to the public switched telephone
network.\4\ The objective of the rule

[[Page 26211]]

adopted is to require providers of commercial mobile data services to
offer data roaming arrangements on commercially reasonable terms and
conditions, pursuant to the Commission's authority under the
Communications Act. In addition, the Commission also clarifies that
providers of commercial mobile data roaming services are permitted to
negotiate commercially reasonable measures to safeguard quality of
service against network congestion that may result from roaming traffic
or to prevent harm to their networks.
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\4\ The Commission had received several proposals concerning
data roaming in response to the Further Notice, including a request
by SpectrumCo that the Commission reconsider its decision to limit
the automatic roaming obligation only to services that use the
public switched network. See Second Further Notice, 25 FCC Rcd at
4212-13 ] 63. The Commission noted that issues in SpectrumCo's
petition for reconsideration were being addressed in the Second
Further Notice. Id. at 4185 ] 9.
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3. This rule will apply to all facilities-based providers of
commercial mobile data services regardless of whether these entities
are also providers of commercial mobile radio service (CMRS).\5\ For
purposes of data roaming, the Commission defines a ``commercial mobile
data service'' as any mobile data service that is not interconnected
with the public switched network but is (1) provided for profit; and
(2) available to the public or to such classes of eligible users as to
be effectively available to the public.
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\5\ For purposes of this proceeding, ``commercial mobile data
service'' is defined as any mobile data service that is not
interconnected with the public switched network but is (1) provided
for profit; and (2) available to the public or to such classes of
eligible users as to be effectively available to the public. 47 CFR
20.12. The current roaming obligation in Section 20.12 applies to
CMRS carriers' provision of mobile voice and data services that are
interconnected with the public switched network, as well as their
provision of text messaging and push-to-talk services. The data
roaming rule adopted herein will cover mobile services that fall
outside the scope of the current automatic roaming obligation if
provided for profit; and available to the public or to such classes
of eligible users as to be effectively available to the public.
---------------------------------------------------------------------------

4. Below, the Commission describes the duty of providers of
commercial mobile data services to offer data roaming arrangements on
commercially reasonable terms and conditions subject to certain
limitations. When a request for data roaming negotiations is made, as a
part of the duty of providers to offer data roaming arrangements on
commercially reasonable terms and conditions, a would-be host provider
has a duty to respond promptly to the request and avoid actions that
unduly delay or stonewall the course of negotiations regarding that
request. The Commission will determine whether the terms and conditions
of a proffered data roaming arrangement are commercially reasonable on
a case-by-case basis, taking into consideration the totality of the
circumstances. The duty to offer data roaming arrangements on
commercially reasonable terms and conditions is subject to certain
limitations. In particular: (1) Providers may negotiate the terms of
their roaming arrangements on an individualized basis; (2) it is
reasonable for a provider not to offer a data roaming arrangement to a
requesting provider that is not technologically compatible; (3) it is
reasonable for a provider not to offer a data roaming arrangement where
it is not technically feasible to provide roaming for the particular
data service for which roaming is requested and any changes to the host
provider's network necessary to accommodate roaming for such data
service are not economically reasonable; and (4) it is reasonable for a
provider to condition the effectiveness of a data roaming arrangement
on the requesting provider's provision of mobile data service to its
own subscribers using a generation of wireless technology comparable to
the technology on which the requesting provider seeks to roam.\6\
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\6\ In other words, a provider offering service only through,
for example, a 1xRTT or GPRS/EDGE network, would not be able to rely
on the data roaming obligation for this service to obtain roaming on
a later generation EV-DO or UMTS/HSPA network until it starts
offering the later generation service.
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2. Legal Basis
5. The authority for the actions taken in this Second Report and
Order is contained in Sections 1, 4(i), 4(j), 301, 303, 304, 309, 316,
and 332 of the Communications Act of 1934, as amended, and Section 706
of the Telecommunications Act of 1996, as amended, 47 U.S.C. 151,
154(i), 154(j), 301, 303, 304, 309, 316, 332, and 1302.
3. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
6. The RFA directs agencies to provide a description of, and, where
feasible, an estimate of, the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' \7\ In addition, the term ``small business'' has the
same meaning as the term ``small business concern'' under the Small
Business Act.\8\ A ``small business concern'' is one which: (1) Is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the
Small Business Administration (SBA).\9\
---------------------------------------------------------------------------

\7\ 5 U.S.C. 601(6).
\8\ 5 U.S.C. 601(3) (incorporating by reference the definition
of ``small-business concern'' in the Small Business Act, 15 U.S.C.
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a
small business applies ``unless an agency, after consultation with
the Office of Advocacy of the Small Business Administration and
after opportunity for public comment, establishes one or more
definitions of such term which are appropriate to the activities of
the agency and publishes such definition(s) in the Federal
Register.''
\9\ 15 U.S.C. 632.
---------------------------------------------------------------------------

7. In the following paragraphs, the Commission further describes
and estimates the number of small entity licensees that may be affected
by the rules the Commission proposes in this Second Report and Order.
This rule will apply to all facilities-based providers of commercial
mobile data services regardless of whether these entities are also
providers of commercial mobile radio service (CMRS).
8. This FRFA analyzes the number of small entities affected on a
service-by-service basis. When identifying small entities that could be
affected by the Commission's new rules, this FRFA provides information
that describes auction results, including the number of small entities
that were winning bidders. However, the number of winning bidders that
qualify as small businesses at the close of an auction does not
necessarily reflect the total number of small entities currently in a
particular service. The Commission does not generally require that
licensees later provide business size information, except in the
context of an assignment or a transfer of control application that
involves unjust enrichment issues.
9. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category.\10\ Prior to that time, such firms
were within the now-superseded categories of ``Paging'' and ``Cellular
and Other Wireless Telecommunications.'' \11\ Under the present and
prior categories, the SBA has deemed a wireless business to be small if
it has 1,500 or fewer employees.\12\ For the category of

[[Page 26212]]

Wireless Telecommunications, Carriers (except Satellite), Census data
for 2007, which supersede data contained in the 2002 Census, show that
there were 1,383 firms that operated that year.\13\ Of those 1,383,
1,368 had fewer than 100 employees, and 15 firms had more than 100
employees. Thus under this category and the associated small business
size standard, the majority of firms can be considered small.
Similarly, according to Commission data, 413 carriers reported that
they were engaged in the provision of wireless telephony, including
cellular service, Personal Communications Service (PCS), and
Specialized Mobile Radio (SMR) Telephony services.\14\ Of these, an
estimated 261 have 1,500 or fewer employees and 152 have more than
1,500 employees.\15\ Consequently, the Commission estimates that
approximately half or more of these firms can be considered small.
Thus, using available data, we estimate that the majority of wireless
firms can be considered small.
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\10\ U.S. Census Bureau, 2007 NAICS Definitions, ``Wireless
Communications Carriers (Except Satellite), NAICS code 517210'';
http://www.census.gov/naics/2007/def/ND517210.HTM#N517210.
\11\ U.S. Census Bureau, 2002 NAICS Definitions, ``517211
Paging''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.; U.S.
Census Bureau, 2002 NAICS Definitions, ``517212 Cellular and Other
Wireless Telecommunications''; http://www.census.gov/epcd/naics02/def/NDEF517.HTM.
\12\ 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes
517211 and 517212 (referring to the 2002 NAICS).
\13\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
\14\ See Trends in Telephone Service at Table 5.3.
\15\ See id.
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10. Broadband Personal Communications Service. The broadband
personal communications services (PCS) spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission initially defined a ``small
business'' for C- and F-Block licenses as an entity that has average
gross revenues of $40 million or less in the three previous calendar
years.\16\ For F-Block licenses, an additional small business size
standard for ``very small business'' was added and is defined as an
entity that, together with its affiliates, has average gross revenues
of not more than $15 million for the preceding three calendar
years.\17\ These small business size standards, in the context of
broadband PCS auctions, have been approved by the SBA.\18\ No small
businesses within the SBA-approved small business size standards bid
successfully for licenses in Blocks A and B. There were 90 winning
bidders that claimed small business status in the first two C-Block
auctions. A total of 93 bidders that claimed small business status won
approximately 40 percent of the 1,479 licenses in the first auction for
the D, E, and F Blocks.\19\ On April 15, 1999, the Commission completed
the re-auction of 347 C-, D-, E-, and F-Block licenses in Auction No.
22.\20\ Of the 57 winning bidders in that auction, 48 claimed small
business status and won 277 licenses.
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\16\ See Amendment of Parts 20 and 24 of the Commission's
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile
Radio Service Spectrum Cap; Amendment of the Commission's Cellular/
PCS Cross-Ownership Rule; WT Docket No. 96-59, GN Docket No. 90-314,
Report and Order, 11 FCC Rcd 7824, 7850-52, paras. 57-60 (1996)
(``PCS Report and Order''); see also 47 CFR 24.720(b).
\17\ See PCS Report and Order, 11 FCC Rcd at 7852, para. 60.
\18\ See Alvarez Letter 1998.
\19\ See Broadband PCS, D, E and F Block Auction Closes, Public
Notice, Doc. No. 89838 (rel. Jan. 14, 1997).
\20\ See C, D, E, and F Block Broadband PCS Auction Closes,
Public Notice, 14 FCC Rcd 6688 (WTB 1999). Before Auction No. 22,
the Commission established a very small standard for the C Block to
match the standard used for F Block. Amendment of the Commission's
Rules Regarding Installment Payment Financing for Personal
Communications Services (PCS) Licensees, WT Docket No. 97-82, Fourth
Report and Order, 13 FCC Rcd 15743, 15768, para. 46 (1998).
---------------------------------------------------------------------------

11. On January 26, 2001, the Commission completed the auction of
422 C and F Block Broadband PCS licenses in Auction No. 35. Of the 35
winning bidders in that auction, 29 claimed small business status.\21\
Subsequent events concerning Auction 35, including judicial and agency
determinations, resulted in a total of 163 C and F Block licenses being
available for grant. On February 15, 2005, the Commission completed an
auction of 242 C-, D-, E-, and F-Block licenses in Auction No. 58. Of
the 24 winning bidders in that auction, 16 claimed small business
status and won 156 licenses.\22\ On May 21, 2007, the Commission
completed an auction of 33 licenses in the A, C, and F Blocks in
Auction No. 71.\23\ Of the 12 winning bidders in that auction, five
claimed small business status and won 18 licenses.\24\ On August 20,
2008, the Commission completed the auction of 20 C-, D-, E-, and F-
Block Broadband PCS licenses in Auction No. 78.\25\ Of the eight
winning bidders for Broadband PCS licenses in that auction, six claimed
small business status and won 14 licenses.\26\
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\21\ See C and F Block Broadband PCS Auction Closes; Winning
Bidders Announced, Public Notice, 16 FCC Rcd 2339 (2001).
\22\ See Broadband PCS Spectrum Auction Closes; Winning Bidders
Announced for Auction No. 58, Public Notice, 20 FCC Rcd 3703 (2005).
\23\ See Auction of Broadband PCS Spectrum Licenses Closes;
Winning Bidders Announced for Auction No. 71, Public Notice, 22 FCC
Rcd 9247 (2007).
\24\ Id.
\25\ See Auction of AWS-1 and Broadband PCS Licenses Closes;
Winning Bidders Announced for Auction 78, Public Notice, 23 FCC Rcd
12749 (WTB 2008).
\26\ Id.
---------------------------------------------------------------------------

12. Narrowband Personal Communications Service. In 1994, the
Commission conducted an auction for Narrowband PCS licenses. A second
auction was also conducted later in 1994. For purposes of the first two
Narrowband PCS auctions, ``small businesses'' were entities with
average gross revenues for the prior three calendar years of $40
million or less.\27\ Through these auctions, the Commission awarded a
total of 41 licenses, 11 of which were obtained by four small
businesses.\28\ To ensure meaningful participation by small business
entities in future auctions, the Commission adopted a two-tiered small
business size standard in the Narrowband PCS Second Report and
Order.\29\ A ``small business'' is an entity that, together with
affiliates and controlling interests, has average gross revenues for
the three preceding years of not more than $40 million.\30\ A ``very
small business'' is an entity that, together with affiliates and
controlling interests, has average gross revenues for the three
preceding years of not more than $15 million.\31\ The SBA has approved
these small business size standards.\32\ A third auction was conducted
in 2001. Here, five bidders won 317 (Metropolitan Trading Areas and
nationwide) licenses.\33\ Three of these claimed status as a small or
very small entity and won 311 licenses.
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\27\ Implementation of Section 309(j) of the Communications
Act--Competitive Bidding Narrowband PCS, Third Memorandum Opinion
and Order and Further Notice of Proposed Rulemaking, 10 FCC Rcd 175,
196 ] 46 (1994).
\28\ See ``Announcing the High Bidders in the Auction of ten
Nationwide Narrowband PCS Licenses, Winning Bids Total
$617,006,674,'' Public Notice, PNWL 94-004 (rel. Aug. 2, 1994);
``Announcing the High Bidders in the Auction of 30 Regional
Narrowband PCS Licenses; Winning Bids Total $490,901,787,'' Public
Notice, PNWL 94-27 (rel. Nov. 9, 1994).
\29\ Amendment of the Commission's Rules to Establish New
Personal Communications Services, Narrowband PCS, Second Report and
Order and Second Further Notice of Proposed Rule Making, 15 FCC Rcd
10456, 10476 ] 40 (2000).
\30\ Id.
\31\ Id.
\32\ See Letter to Amy Zoslov, Chief, Auctions and Industry
Analysis Division, Wireless Telecommunications Bureau, Federal
Communications Commission, from Aida Alvarez, Administrator, Small
Business Administration, dated December 2, 1998.
\33\ See ``Narrowband PCS Auction Closes,'' Public Notice, 16
FCC Rcd 18663 (WTB 2001).
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13. Specialized Mobile Radio. The Commission awards ``small
entity'' bidding credits in auctions for Specialized Mobile Radio (SMR)
geographic area licenses in the 800 MHz and 900 MHz bands to firms that
had revenues of no more than $15 million in each of the three previous
calendar

[[Page 26213]]

years.\34\ The Commission awards ``very small entity'' bidding credits
to firms that had revenues of no more than $3 million in each of the
three previous calendar years.\35\ The SBA has approved these small
business size standards for the 900 MHz Service.\36\ The Commission has
held auctions for geographic area licenses in the 800 MHz and 900 MHz
bands. The 900 MHz SMR was completed in 1996. Sixty bidders claiming
that they qualified as small businesses under the $15 million size
standard won 263 geographic area licenses in the 900 MHz SMR band. The
800 MHz SMR auction for the upper 200 channels was conducted in 1997.
Ten bidders claiming that they qualified as small businesses under the
$15 million size standard won 38 geographic area licenses for the upper
200 channels in the 800 MHz SMR band.\37\ A second auction for the 800
MHz band was conducted in 2002 and included 23 BEA licenses. One bidder
claiming small business status won five licenses.\38\
---------------------------------------------------------------------------

\34\ 47 CFR 90.814(b)(1).
\35\ Id.
\36\ See Letter to Thomas Sugrue, Chief, Wireless
Telecommunications Bureau, Federal Communications Commission, from
Aida Alvarez, Administrator, Small Business Administration, dated
August 10, 1999.
\37\ See ``Correction to Public Notice DA 96-586 `FCC Announces
Winning Bidders in the Auction of 1020 Licenses to Provide 900 MHz
SMR in Major Trading Areas,' '' Public Notice, 18 FCC Rcd 18367 (WTB
1996).
\38\ See ``Multi-Radio Service Auction Closes,'' Public Notice,
17 FCC Rcd 1446 (WTB 2002).
---------------------------------------------------------------------------

14. The auction of the 1,050 800 MHz SMR geographic area licenses
for the General Category channels was conducted in 2000. Eleven bidders
won 108 geographic area licenses for the General Category channels in
the 800 MHz SMR band qualified as small businesses under the $15
million size standard.\39\ In an auction completed in 2000, a total of
2,800 Economic Area licenses in the lower 80 channels of the 800 MHz
SMR service were awarded.\40\ Of the 22 winning bidders, 19 claimed
``small business'' status and won 129 licenses. Thus, combining all
three auctions, 40 winning bidders for geographic licenses in the 800
MHz SMR band claimed status as small business.
---------------------------------------------------------------------------

\39\ See ``800 MHz Specialized Mobile Radio (SMR) Service
General Category (851-854 MHz) and Upper Band (861-865 MHz) Auction
Closes; Winning Bidders Announced,'' Public Notice, 15 FCC Rcd 17162
(2000).
\40\ See, ``800 MHz SMR Service Lower 80 Channels Auction
Closes; Winning Bidders Announced,'' Public Notice, 16 FCC Rcd 1736
(2000).
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15. In addition, there are numerous incumbent site-by-site SMR
licensees and licensees with extended implementation authorizations in
the 800 and 900 MHz bands. The Commission does not know how many firms
provide 800 MHz or 900 MHz geographic area SMR pursuant to extended
implementation authorizations, nor how many of these providers have
annual revenues of no more than $15 million. One firm has over $15
million in revenues. In addition, the Commission does not know how many
of these firms have 1500 or fewer employees.\41\ The Commission
assumes, for purposes of this analysis, that all of the remaining
existing extended implementation authorizations are held by small
entities, as that small business size standard is approved by the SBA.
---------------------------------------------------------------------------

\41\ See generally 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------

16. AWS Services (1710-1755 MHz and 2110-2155 MHz bands (AWS-1);
1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz bands
(AWS-2); 2155-2175 MHz band (AWS-3)). For the AWS-1 bands, the
Commission has defined a ``small business'' as an entity with average
annual gross revenues for the preceding three years not exceeding $40
million, and a ``very small business'' as an entity with average annual
gross revenues for the preceding three years not exceeding $15
million.\42\ In 2006, the Commission conducted its first auction of
AWS-1 licenses.\43\ In that initial AWS-1 auction, 31 winning bidders
identified themselves as very small businesses.\44\ Twenty-six of the
winning bidders identified themselves as small businesses.\45\ In a
subsequent 2008 auction, the Commission offered 35 AWS-1 licenses.\46\
Four winning bidders identified themselves as very small businesses,
and three of the winning bidders identified themselves as a small
business.\47\ For AWS-2 and AWS-3, although the Commission does not
know for certain which entities are likely to apply for these
frequencies, the Commission notes that the AWS-1 bands are comparable
to those used for cellular service and personal communications service.
The Commission has not yet adopted size standards for the AWS-2 or AWS-
3 bands but has proposed to treat both AWS-2 and AWS-3 similarly to
broadband PCS service and AWS-1 service due to the comparable capital
requirements and other factors, such as issues involved in relocating
incumbents and developing markets, technologies, and services.\48\
---------------------------------------------------------------------------

\42\ See Service Rules for Advanced Wireless Services in the 1.7
GHz and 2.1 GHz Bands, Report and Order, 18 FCC Rcd 25,162, App. B
(2003), modified by Service Rules for Advanced Wireless Services In
the 1.7 GHz and 2.1 GHz Bands, Order on Reconsideration, 20 FCC Rcd
14,058, App. C (2005).
\43\ See ``Auction of Advanced Wireless Services Licenses
Scheduled for June 29, 2006; Notice and Filing Requirements, Minimum
Opening Bids, Upfront Payments and Other Procedures for Auction No.
66,'' AU Docket No. 06-30, Public Notice, 21 FCC Rcd 4562 (2006)
(``Auction 66 Procedures Public Notice'').
\44\ See ``Auction of Advanced Wireless Services Licenses
Closes; Winning Bidders Announced for Auction No. 66,'' Public
Notice, 21 FCC Rcd 10,521 (2006) (``Auction 66 Closing Public
Notice'').
\45\ See id.
\46\ See AWS-1 and Broadband PCS Procedures Public Notice, 23
FCC Rcd at 7499. Auction 78 also included an auction of broadband
PCS licenses.
\47\ See ``Auction of AWS-1 and Broadband PCS Licenses Closes,
Winning Bidders Announced for Auction 78, Down Payments Due
September 9, 2008, FCC Forms 601 and 602 Due September 9, 2008,
Final Payments Due September 23, 2008, Ten-Day Petition to Deny
Period,'' Public Notice, 23 FCC Rcd 12,749 (2008).
\48\ Service Rules for Advanced Wireless Services in the 1915-
1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz Bands et
al., Notice of Proposed Rulemaking, 19 FCC Rcd 19,263, App. B
(2005); Service Rules for Advanced Wireless Services in the 2155-
2175 MHz Band, Notice of Proposed Rulemaking, 22 FCC Rcd 17,035,
App. (2007); Service Rules for Advanced Wireless Services in the
2155-2175 MHz Band, Further Notice of Proposed Rulemaking, 23 FCC
Rcd 9859, App. B (2008).
---------------------------------------------------------------------------

17. Rural Radiotelephone Service. The Commission has not adopted a
size standard for small businesses specific to the Rural Radiotelephone
Service.\49\ A significant subset of the Rural Radiotelephone Service
is the Basic Exchange Telephone Radio System (``BETRS'').\50\ In the
present context, the Commission will use the SBA's small business size
standard applicable to Wireless Telecommunications Carriers (except
Satellite), i.e., an entity employing no more than 1,500 persons.\51\
There are approximately 1,000 licensees in the Rural Radiotelephone
Service, and the Commission estimates that there are 1,000 or fewer
small entity licensees in the Rural Radiotelephone Service that may be
affected by the rules and policies adopted herein.
---------------------------------------------------------------------------

\49\ The service is defined in Sec. 22.99 of the Commission's
Rules, 47 CFR 22.99.
\50\ BETRS is defined in Sec. Sec. 22.757 and 22.759 of the
Commission's Rules, 47 CFR 22.757 and 22.759.
\51\ 13 CFR 121.201, NAICS code 517210.
---------------------------------------------------------------------------

18. Wireless Communications Services. This service can be used for
fixed, mobile, radiolocation, and digital audio broadcasting satellite
uses in the 2305-2320 MHz and 2345-2360 MHz bands. The Commission
defined ``small business'' for the wireless communications services
(WCS) auction as an entity with average gross revenues of $40 million
for each of the three preceding years, and a ``very small business'' as
an entity with average gross revenues of $15 million for each of the

[[Page 26214]]

three preceding years.\52\ The SBA has approved these definitions.\53\
The Commission auctioned geographic area licenses in the WCS service.
In the auction, which commenced on April 15, 1997 and closed on April
25, 1997, there were seven bidders that won 31 licenses that qualified
as very small business entities, and one bidder that won one license
that qualified as a small business entity.
---------------------------------------------------------------------------

\52\ Amendment of the Commission's Rules to Establish Part 27,
the Wireless Communications Service (WCS), Report and Order, 12 FCC
Rcd 10785, 10879 ] 194 (1997).
\53\ See Letter to Amy Zoslov, Chief, Auctions and Industry
Analysis Division, Wireless Telecommunications Bureau, Federal
Communications Commission, from Aida Alvarez, Administrator, Small
Business Administration, dated December 2, 1998.
---------------------------------------------------------------------------

19. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service
has both Phase I and Phase II licenses. Phase I licensing was conducted
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized
to operate in the 220 MHz band. The Commission has not developed a
small business size standard for small entities specifically applicable
to such incumbent 220 MHz Phase I licensees. To estimate the number of
such licensees that are small businesses, the Commission applies the
small business size standard under the SBA rules applicable. The SBA
has deemed a wireless business to be small if it has 1,500 or fewer
employees.\54\ For this service, the SBA uses the category of Wireless
Telecommunications Carriers (except Satellite). Census data for 2007,
which supersede data contained in the 2002 Census, show that there were
1,383 firms that operated that year.\55\ Of those 1,383, 1,368 had
fewer than 100 employees, and 15 firms had more than 100 employees.
Thus under this category and the associated small business size
standard, the majority of firms can be considered small.
---------------------------------------------------------------------------

\54\ 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes
517211 and 517212 (referring to the 2002 NAICS).
\55\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
---------------------------------------------------------------------------

20. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service
has both Phase I and Phase II licenses. The Phase II 220 MHz service is
a new service, and is subject to spectrum auctions. In the 220 MHz
Third Report and Order, the Commission adopted a small business size
standard for defining ``small'' and ``very small'' businesses for
purposes of determining their eligibility for special provisions such
as bidding credits and installment payments.\56\ This small business
standard indicates that a ``small business'' is an entity that,
together with its affiliates and controlling principals, has average
gross revenues not exceeding $15 million for the preceding three
years.\57\ A ``very small business'' is defined as an entity that,
together with its affiliates and controlling principals, has average
gross revenues that do not exceed $3 million for the preceding three
years.\58\ The SBA has approved these small size standards.\59\
Auctions of Phase II licenses commenced on and closed in 1998.\60\ In
the first auction, 908 licenses were auctioned in three different-sized
geographic areas: Three nationwide licenses, 30 Regional Economic Area
Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908
licenses auctioned, 693 were sold.\61\ Thirty-nine small businesses won
373 licenses in the first 220 MHz auction. A second auction included
225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies
claiming small business status won 158 licenses.\62\ A third auction
included four licenses: 2 BEA licenses and 2 EAG licenses in the 220
MHz Service. No small or very small business won any of these
licenses.\63\ In 2007, the Commission conducted a fourth auction of the
220 MHz licenses.\64\ Bidding credits were offered to small businesses.
A bidder with attributed average annual gross revenues that exceeded $3
million and did not exceed $15 million for the preceding three years
(``small business'') received a 25 percent discount on its winning bid.
A bidder with attributed average annual gross revenues that did not
exceed $3 million for the preceding three years received a 35 percent
discount on its winning bid (``very small business''). Auction 72,
which offered 94 Phase II 220 MHz Service licenses, concluded in
2007.\65\ In this auction, five winning bidders won a total of 76
licenses. Two winning bidders identified themselves as very small
businesses won 56 of the 76 licenses. One of the winning bidders that
identified themselves as a small business won 5 of the 76 licenses won.
---------------------------------------------------------------------------

\56\ Amendment of Part 90 of the Commission's Rules to Provide
For the Use of the 220-222 MHz Band by the Private Land Mobile Radio
Service, Third Report and Order, 12 FCC Rcd 10943, 11068-70 ]] 291-
295 (1997).
\57\ Id. at 11068 ] 291.
\58\ Id.
\59\ See Letter to Daniel Phythyon, Chief, Wireless
Telecommunications Bureau, Federal Communications Commission, from
Aida Alvarez, Administrator, Small Business Administration, dated
January 6, 1998 (Alvarez to Phythyon Letter 1998).
\60\ See generally ``220 MHz Service Auction Closes,'' Public
Notice, 14 FCC Rcd 605 (WTB 1998).
\61\ See ``FCC Announces It is Prepared to Grant 654 Phase II
220 MHz Licenses After Final Payment is Made,'' Public Notice, 14
FCC Rcd 1085 (WTB 1999).
\62\ See ``Phase II 220 MHz Service Spectrum Auction Closes,''
Public Notice, 14 FCC Rcd 11218 (WTB 1999).
\63\ See ``Multi-Radio Service Auction Closes,'' Public Notice,
17 FCC Rcd 1446 (WTB 2002).
\64\ See ``Auction of Phase II 220 MHz Service Spectrum
Scheduled for June 20, 2007, Notice and Filing Requirements, Minimum
Opening Bids, Upfront Payments and Other Procedures for Auction 72,
Public Notice, 22 FCC Rcd 3404 (2007).
\65\ See ``Auction of Phase II 220 MHz Service Spectrum Licenses
Closes, Winning Bidders Announced for Auction 72, Down Payments due
July 18, 2007, FCC Forms 601 and 602 due July 18, 2007, Final
Payments due August 1, 2007, Ten-Day Petition to Deny Period, Public
Notice, 22 FCC Rcd 11573 (2007).
---------------------------------------------------------------------------

21. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order,
the Commission adopted size standards for ``small businesses'' and
``very small businesses'' for purposes of determining their eligibility
for special provisions such as bidding credits and installment
payments.\66\ A small business in this service is an entity that,
together with its affiliates and controlling principals, has average
gross revenues not exceeding $40 million for the preceding three
years.\67\ Additionally, a ``very small business'' is an entity that,
together with its affiliates and controlling principals, has average
gross revenues that are not more than $15 million for the preceding
three years.\68\ SBA approval of these definitions is not required.\69\
In 2000, the Commission

[[Page 26215]]

conducted an auction of 52 Major Economic Area (``MEA'') licenses.\70\
Of the 104 licenses auctioned, 96 licenses were sold to nine bidders.
Five of these bidders were small businesses that won a total of 26
licenses. A second auction of 700 MHz Guard Band licenses commenced and
closed in 2001. All eight of the licenses auctioned were sold to three
bidders. One of these bidders was a small business that won a total of
two licenses.\71\
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\66\ Service Rules for the 746-764 MHz Bands, and Revisions to
Part 27 of the Commission's Rules, Second Report and Order, 15 FCC
Rcd 5299 (2000). Service rules were amended in 2007, but no changes
were made to small business size categories. See Service Rules for
the 698-746, 747-762 and 777-792 MHz Bands, WT Docket No. 06-150,
Revision of the Commission's Rules to Ensure Compatibility with
Enhanced 911 Emergency Calling Systems, CC Docket No. 94-102,
Section 68.4(a) of the Commission's Rules Governing Hearing Aid-
Compatible Telephones, WT Docket No. 01-309, Biennial Regulatory
Review--Amendment of Parts 1, 22, 24, 27, and 90 to Streamline and
Harmonize Various Rules Affecting Wireless Radio Services, WT Docket
03-264, Former Nextel Communications, Inc. Upper 700 MHz Guard Band
Licenses and Revisions to Part 27 of the Commission's Rules, WT
Docket No. 06-169, Implementing a Nationwide, Broadband,
Interoperable Public Safety Network in the 700 MHz Band, PS Docket
No. 06-229, Development of Operational, Technical and Spectrum
Requirements for Meeting Federal, State and Local Public Safety
Communications Requirements Through the Year 2010, WT Docket No. 96-
86, Report and Order and Further Notice of Proposed Rulemaking, 22
FCC Rcd 8064 (2007).
\67\ Id. at 5343 ] 108.
\68\ Id.
\69\ Id. at 5343 ] 108 n.246 (for the 746-764 MHz and 776-704
MHz bands, the Commission is exempt from 15 U.S.C. 632, which
requires Federal agencies to obtain Small Business Administration
approval before adopting small business size standards).
\70\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders
Announced,'' Public Notice, 15 FCC Rcd 18026 (2000).
\71\ See ``700 MHz Guard Bands Auction Closes: Winning Bidders
Announced,'' Public Notice, 16 FCC Rcd 4590 (WTB 2001).
---------------------------------------------------------------------------

22. Upper 700 MHz Band Licenses. In the 700 MHz Second Report and
Order, the Commission revised its rules regarding Upper 700 MHz
licenses.\72\ On January 24, 2008, the Commission commenced Auction 73
in which several licenses in the Upper 700 MHz band were available for
licensing: 12 Regional Economic Area Grouping licenses in the C Block,
and one nationwide license in the D Block.\73\ The auction concluded on
March 18, 2008, with 3 winning bidders claiming very small business
status (those with attributable average annual gross revenues that do
not exceed $15 million for the preceding three years) and winning five
licenses.
---------------------------------------------------------------------------

\72\ 700 MHz Second Report and Order, 22 FCC Rcd 15289.
\73\ See Auction of 700 MHz Band Licenses Closes, Public Notice,
23 FCC Rcd 4572 (WTB 2008).
---------------------------------------------------------------------------

23. Lower 700 MHz Band Licenses. The Commission previously adopted
criteria for defining three groups of small businesses for purposes of
determining their eligibility for special provisions such as bidding
credits.\74\ The Commission defined a ``small business'' as an entity
that, together with its affiliates and controlling principals, has
average gross revenues not exceeding $40 million for the preceding
three years.\75\ A ``very small business'' is defined as an entity
that, together with its affiliates and controlling principals, has
average gross revenues that are not more than $15 million for the
preceding three years.\76\ Additionally, the lower 700 MHz Service had
a third category of small business status for Metropolitan/Rural
Service Area (MSA/RSA) licenses--``entrepreneur''--which is defined as
an entity that, together with its affiliates and controlling
principals, has average gross revenues that are not more than $3
million for the preceding three years.\77\ The SBA approved these small
size standards.\78\ An auction of 740 licenses (one license in each of
the 734 MSAs/RSAs and one license in each of the six Economic Area
Groupings (EAGs)) was conducted in 2002. Of the 740 licenses available
for auction, 484 licenses were won by 102 winning bidders. Seventy-two
of the winning bidders claimed small business, very small business or
entrepreneur status and won licenses.\79\ A second auction commenced on
May 28, 2003, closed on June 13, 2003, and included 256 licenses.\80\
Seventeen winning bidders claimed small or very small business status,
and nine winning bidders claimed entrepreneur status.\81\ In 2005, the
Commission completed an auction of 5 licenses in the Lower 700 MHz
band. All three winning bidders claimed small business status.
---------------------------------------------------------------------------

\74\ See Reallocation and Service Rules for the 698-746 MHz
Spectrum Band (Television Channels 52-59), Report and Order, 17 FCC
Rcd 1022 (2002) (``Channels 52-59 Report and Order'').
\75\ See id., 17 FCC Rcd at 1087-88 ] 172.
\76\ See id.
\77\ See id., 17 FCC Rcd at 1088 ] 173.
\78\ See Alvarez Letter 1998.
\79\ See Lower 700 MHz Band Auction Closes, Public Notice, 17
FCC Rcd 17,272 (2002).
\80\ See Lower 700 MHz Band Auction Closes, Public Notice, 18
FCC Rcd 11,873 (2003).
\81\ See id.
---------------------------------------------------------------------------

24. In 2007, the Commission reexamined its rules governing the 700
MHz band in the 700 MHz Second Report and Order.\82\ An auction of A, B
and E block 700 MHz licenses was held in 2008.\83\ Twenty winning
bidders claimed small business status (those with attributable average
annual gross revenues that exceed $15 million and do not exceed $40
million for the preceding three years). Thirty three winning bidders
claimed very small business status (those with attributable average
annual gross revenues that do not exceed $15 million for the preceding
three years).
---------------------------------------------------------------------------

\82\ 700 MHz Second Report and Order, Second Report and Order,
22 FCC Rcd 15,289, 15,359 n.434 (2007).
\83\ See Auction of 700 MHz Band Licenses Closes, Public Notice,
23 FCC Rcd 4572 (2008).
---------------------------------------------------------------------------

25. Wireless Telephony. Wireless telephony includes cellular,
personal communications services, and specialized mobile radio
telephony carriers. As noted, the SBA has developed a small business
size standard for Wireless Telecommunications Carriers (except
Satellite).\84\ Under the SBA small business size standard, a business
is small if it has 1,500 or fewer employees.\85\ According to Trends in
Telephone Service data, 413 carriers reported that they were engaged in
wireless telephony.\86\ Of these, an estimated 261 have 1,500 or fewer
employees and 152 have more than 1,500 employees.\87\ Therefore, more
than half of these entities can be considered small.
---------------------------------------------------------------------------

\84\ 13 CFR 121.201, NAICS code 517210.
\85\ Id.
\86\ Trends in Telephone Service, tbl. 5.3.
\87\ Id.
---------------------------------------------------------------------------

26. Air-Ground Radiotelephone Service. The Commission has
previously used the SBA's small business definition applicable to
Wireless Telecommunications Carriers (except Satellite), i.e., an
entity employing no more than 1,500 persons.\88\ There are
approximately 100 licensees in the Air-Ground Radiotelephone Service,
and under that definition, the Commission estimates that almost all of
them qualify as small entities under the SBA definition. For purposes
of assigning Air-Ground Radiotelephone Service licenses through
competitive bidding, the Commission has defined ``small business'' as
an entity that, together with controlling interests and affiliates, has
average annual gross revenues for the preceding three years not
exceeding $40 million.\89\ A ``very small business'' is defined as an
entity that, together with controlling interests and affiliates, has
average annual gross revenues for the preceding three years not
exceeding $15 million.\90\ These definitions were approved by the
SBA.\91\ In 2006, the Commission completed an auction of nationwide
commercial Air-Ground Radiotelephone Service licenses in the 800 MHz
band (Auction 65). Later in 2006, the auction closed with two winning
bidders winning two Air-Ground Radiotelephone Services licenses.
Neither of the winning bidders claimed small business status.
---------------------------------------------------------------------------

\88\ 13 CFR 121.201, NAICS codes 517210.
\89\ Amendment of Part 22 of the Commission's Rules to Benefit
the Consumers of Air-Ground Telecommunications Services, Biennial
Regulatory Review--Amendment of Parts 1, 22, and 90 of the
Commission's Rules, Amendment of Parts 1 and 22 of the Commission's
Rules to Adopt Competitive Bidding Rules for Commercial and General
Aviation Air-Ground Radiotelephone Service, WT Docket Nos. 03-103,
05-42, Order on Reconsideration and Report and Order, 20 FCC Rcd
19663, 19677-83 ]] 28-42 (2005).
\90\ Id.
\91\ See Letter from Hector V. Barreto, Administrator, SBA, to
Gary D. Michaels, Deputy Chief, Auctions and Spectrum Access
Division, Wireless Telecommunications Bureau, FCC (filed Sept. 19,
2005).
---------------------------------------------------------------------------

27. Aviation and Marine Radio Services. Small businesses in the
aviation and marine radio services use a very high frequency (VHF)
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator
transmitter. The Commission has not developed a small business size

[[Page 26216]]

standard specifically applicable to these small businesses. For
purposes of this analysis, the Commission uses the SBA small business
size standard for the category Wireless Telecommunications Carriers
(except satellite),'' which is 1,500 or fewer employees.\92\ Census
data for 2007, which supersede data contained in the 2002 Census, show
that there were 1,383 firms that operated that year.\93\ Of those
1,383, 1,368 had fewer than 100 employees, and 15 firms had more than
100 employees. Thus under this category and the associated small
business size standard, the majority of firms can be considered small.
Additionally, the Commission notes that most applicants for
recreational licenses in this category of wireless service are
individuals. Approximately 581,000 ship station licensees and 131,000
aircraft station licensees operate domestically and are not subject to
the radio carriage requirements of any statute or treaty. For purposes
of our evaluations in this analysis, the Commission estimates that
there are up to approximately 712,000 licensees that are small
businesses (or individuals) under the SBA standard. In addition,
between December 3, 1998 and December 14, 1998, the Commission held an
auction of 42 VHF Public Coast licenses in the 157.1875-157.4500 MHz
(ship transmit) and 161.775-162.0125 MHz (coast transmit) bands. For
purposes of the auction, the Commission defined a ``small'' business as
an entity that, together with controlling interests and affiliates, has
average gross revenues for the preceding three years not to exceed $15
million dollars. In addition, a ``very small'' business is one that,
together with controlling interests and affiliates, has average gross
revenues for the preceding three years not to exceed $3 million
dollars.\94\ There are approximately 10,672 licensees in the Marine
Coast Service, and the Commission estimates that almost all of them
qualify as ``small'' businesses under the above special small business
size standards
---------------------------------------------------------------------------

\92\ 13 CFR 121.201, NAICS code 517210.
\93\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
\94\ Amendment of the Commission's Rules Concerning Maritime
Communications, PR Docket No. 92-257, Third Report and Order and
Memorandum Opinion and Order, 13 FCC Rcd 19853 (1998).
---------------------------------------------------------------------------

28. Fixed Microwave Services. Microwave services include common
carrier,\95\ private-operational fixed,\96\ and broadcast auxiliary
radio services.\97\ They also include the Local Multipoint Distribution
Service (LMDS),\98\ the Digital Electronic Message Service (DEMS),\99\
and the 24 GHz Service,\100\ where licensees can choose between common
carrier and non-common carrier status.\101\ The Commission has not yet
defined a small business with respect to microwave services. For
purposes of the IRFA, the Commission will use the SBA's definition
applicable to Wireless Telecommunications Carriers (except satellite)--
i.e., an entity with no more than 1,500 persons is considered
small.\102\ For the category of Wireless Telecommunications Carriers
(except Satellite), Census data for 2007, which supersede data
contained in the 2002 Census, show that there were 1,383 firms that
operated that year.\103\ Of those 1,383, 1,368 had fewer than 100
employees, and 15 firms had more than 100 employees. Thus under this
category and the associated small business size standard, the majority
of firms can be considered small. The Commission notes that the number
of firms does not necessarily track the number of licensees. The
Commission estimates that virtually all of the Fixed Microwave
licensees (excluding broadcast auxiliary licensees) would qualify as
small entities under the SBA definition.
---------------------------------------------------------------------------

\95\ See 47 CFR Part 101, Subparts C and I.
\96\ See 47 CFR Part 101, Subparts C and H.
\97\ Auxiliary Microwave Service is governed by Part 74 of Title
47 of the Commission's Rules. See 47 CFR Part 74. Available to
licensees of broadcast stations and to broadcast and cable network
entities, broadcast auxiliary microwave stations are used for
relaying broadcast television signals from the studio to the
transmitter, or between two points such as a main studio and an
auxiliary studio. The service also includes mobile TV pickups, which
relay signals from a remote location back to the studio.
\98\ See 47 CFR Part 101, Subpart L.
\99\ See 47 CFR Part 101, Subpart G.
\100\ See id.
\101\ See 47 CFR 101.533, 101.1017.
\102\ 13 CFR 121.201, NAICS code 517210.
\103\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
---------------------------------------------------------------------------

29. Local Multipoint Distribution Service. Local Multipoint
Distribution Service (LMDS) is a fixed broadband point-to-multipoint
microwave service that provides for two-way video
telecommunications.\104\ In the 1998 and 1999 LMDS auctions,\105\ the
Commission defined a small business as an entity that has annual
average gross revenues of less than $40 million in the previous three
calendar years.\106\ Moreover, the Commission added an additional
classification for a ``very small business,'' which was defined as an
entity that had annual average gross revenues of less than $15 million
in the previous three calendar years.\107\ These definitions of ``small
business'' and ``very small business'' in the context of the LMDS
auctions have been approved by the SBA.\108\ In the first LMDS auction,
104 bidders won 864 licenses. Of the 104 auction winners, 93 claimed
status as small or very small businesses. In the LMDS re-auction, 40
bidders won 161 licenses. Based on this information, the Commission
believes that the number of small LMDS licenses will include the 93
winning bidders in the first auction and the 40 winning bidders in the
re-auction, for a total of 133 small entity LMDS providers as defined
by the SBA and the Commission's auction rules.
---------------------------------------------------------------------------

\104\ See Local Multipoint Distribution Service, Second Report
and Order, 12 FCC Rcd 12545 (1997).
\105\ The Commission has held two LMDS auctions: Auction 17 and
Auction 23. Auction No. 17, the first LMDS auction, began on
February 18, 1998, and closed on March 25, 1998. (104 bidders won
864 licenses.) Auction No. 23, the LMDS re-auction, began on April
27, 1999, and closed on May 12, 1999. (40 bidders won 161 licenses.)
\106\ See LMDS Order, 12 FCC Rcd at 12545.
\107\ Id.
\108\ See Letter to Daniel Phythyon, Chief, Wireless
Telecommunications Bureau (FCC) from A. Alvarez, Administrator, SBA
(January 6, 1998).
---------------------------------------------------------------------------

30. Offshore Radiotelephone Service. This service operates on
several UHF television broadcast channels that are not used for
television broadcasting in the coastal areas of states bordering the
Gulf of Mexico.\109\ There are presently approximately 55 licensees in
this service. The Commission is unable to estimate at this time the
number of licensees that would qualify as small under the SBA's small
business size standard for the category of Wireless Telecommunications
Carriers (except Satellite). Under that standard \110\ a business is
small if it has 1,500 or fewer employees.\111\ Census data for 2007,
which supersede data contained in the 2002 Census, show that there were
1,383 firms that operated that year.\112\ Of those 1,383, 1,368 had
fewer than 100 employees, and 15 firms had more than 100 employees.
Thus under this category and the associated small business size
standard, the majority of firms can be considered small.
---------------------------------------------------------------------------

\109\ This service is governed by Subpart I of Part 22 of the
Commission's Rules. See 47 CFR 22.1001-22.1037.
\110\ 13 CFR 121.201, NAICS code 517210.
\111\ Id.
\112\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
---------------------------------------------------------------------------

31. 39 GHz Service. The Commission created a special small business
size

[[Page 26217]]

standard for 39 GHz licenses--an entity that has average gross revenues
of $40 million or less in the three previous calendar years.\113\ An
additional size standard for ``very small business'' is: an entity
that, together with affiliates, has average gross revenues of not more
than $15 million for the preceding three calendar years.\114\ The SBA
has approved these small business size standards.\115\ The auction of
the 2,173 39 GHz licenses began and closed in 2000. The 18 bidders who
claimed small business status won 849 licenses.
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\113\ See Amendment of the Commission's Rules Regarding the
37.0-38.6 GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-183, Report
and Order, 63 FR 6079 (Feb. 6, 1998).
\114\ Id.
\115\ See Letter to Kathleen O'Brien Ham, Chief, Auctions and
Industry Analysis Division, Wireless Telecommunications Bureau, FCC,
from Aida Alvarez, Administrator, SBA (Feb. 4, 1998).
---------------------------------------------------------------------------

32. 218-219 MHz Service. The first auction of 218-219 MHz spectrum
resulted in 170 entities winning licenses for 594 Metropolitan
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by
entities qualifying as a small business. For that auction, the small
business size standard was an entity that, together with its
affiliates, has no more than a $6 million net worth and, after federal
income taxes (excluding any carry over losses), has no more than $2
million in annual profits each year for the previous two years.\116\ In
the 218-219 MHz Report and Order and Memorandum Opinion and Order, the
Commission established a small business size standard for a ``small
business'' as an entity that, together with its affiliates and persons
or entities that hold interests in such an entity and their affiliates,
has average annual gross revenues not to exceed $15 million for the
preceding three years.\117\ A ``very small business'' is defined as an
entity that, together with its affiliates and persons or entities that
hold interests in such an entity and its affiliates, has average annual
gross revenues not to exceed $3 million for the preceding three
years.\118\ The SBA has approved of these definitions.\119\ These size
standards will be used in future auctions of 218-219 MHz spectrum.
---------------------------------------------------------------------------

\116\ Implementation of Section 309(j) of the Communications
Act--Competitive Bidding, PP Docket No. 93-253, Fourth Report and
Order, 9 FCC Rcd 2330 (1994).
\117\ Amendment of Part 95 of the Commission's Rules to Provide
Regulatory Flexibility in the 218-219 MHz Service, WT Docket No. 98-
169, Report and Order and Memorandum Opinion and Order, 15 FCC Rcd
1497 (1999).
\118\ Id.
\119\ See Alvarez to Phythyon Letter 1998.
---------------------------------------------------------------------------

33. Incumbent 24 GHz Licensees. This analysis may affect incumbent
licensees who were relocated to the 24 GHz band from the 18 GHz band,
and applicants who wish to provide services in the 24 GHz band. For
this service, the Commission uses the SBA small business size standard
for the category ``Wireless Telecommunications Carriers (except
satellite),'' which is 1,500 or fewer employees.\120\ To gauge small
business prevalence for these cable services we must, however, use the
most current census data. Census data for 2007, which supersede data
contained in the 2002 Census, show that there were 1,383 firms that
operated that year.\121\ Of those 1,383, 1,368 had fewer than 100
employees, and 15 firms had more than 100 employees. Thus under this
category and the associated small business size standard, the majority
of firms can be considered small. The Commission notes that the Census'
use of the classifications ``firms'' does not track the number of
``licenses''. The Commission believes that there are only two licensees
in the 24 GHz band that were relocated from the 18 GHz band, Teligent
\122\ and TRW, Inc. It is the Commission's understanding that Teligent
and its related companies have less than 1,500 employees, though this
may change in the future. TRW is not a small entity. Thus, only one
incumbent licensee in the 24 GHz band is a small business entity.
---------------------------------------------------------------------------

\120\ 13 CFR 121.201, NAICS code 517210.
\121\ U.S. Census Bureau, 2007 Economic Census, Sector 51, 2007
NAICS code 517210 (rel. Oct. 20, 2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en.
\122\ Teligent acquired the DEMS licenses of FirstMark, the only
licensee other than TRW in the 24 GHz band whose license has been
modified to require relocation to the 24 GHz band.
---------------------------------------------------------------------------

34. Future 24 GHz Licensees. With respect to new applicants in the
24 GHz band, the small business size standard for ``small business'' is
an entity that, together with controlling interests and affiliates, has
average annual gross revenues for the three preceding years not in
excess of $15 million.\123\ ``Very small business'' in the 24 GHz band
is an entity that, together with controlling interests and affiliates,
has average gross revenues not exceeding $3 million for the preceding
three years.\124\ The SBA has approved these small business size
standards.\125\ These size standards will apply to the future auction,
if held.
---------------------------------------------------------------------------

\123\ Amendments to Parts 1, 2, 87 and 101 of the Commission's
Rules to License Fixed Services at 24 GHz, WT Docket No. 99-327,
Report and Order, 15 FCC Rcd 16934, 16967 at para. 77 (2000); see
also 47 CFR 101.538(a)(2).
\124\ Amendments to Parts 1, 2, 87 and 101 of the Commission's
Rules to License Fixed Services at 24 GHz, WT Docket No. 99-327,
Report and Order, 15 FCC Rcd 16934, 16967 at para. 77 (2000); see
also 47 CFR 101.538(a)(1).
\125\ See Letter to Margaret W. Wiener, Deputy Chief, Auctions
and Industry Analysis Division, Wireless Telecommunications Bureau,
FCC, from Gary M. Jackson, Assistant Administrator, SBA (July 28,
2000).
---------------------------------------------------------------------------

35. 1670-1675 MHz Services. This service can be used for fixed and
mobile uses, except aeronautical mobile.\126\ An auction for one
license in the 1670-1675 MHz band was conducted in 2003. The winning
bidder was not a small entity.
---------------------------------------------------------------------------

\126\ 47 CFR 2.106; see generally 47 CFR 27.1-.70.
---------------------------------------------------------------------------

36. 3650-3700 MHz Band. In March 2005, the Commission released a
Report and Order and Memorandum Opinion and Order that provides for
nationwide, non-exclusive licensing of terrestrial operations,
utilizing contention-based technologies, in the 3650 MHz band (i.e.,
3650-3700 MHz).\127\ As of April 2010, more than 1270 licenses have
been granted and more than 7433 sites have been registered. The
Commission has not developed a definition of small entities applicable
to 3650-3700 MHz band nationwide, non-exclusive licensees. However, the
Commission estimates that the majority of these licensees are Internet
Access Service Providers (ISPs) and that most of those licensees are
small businesses.
---------------------------------------------------------------------------

\127\ The service is defined in section 90.1301 et seq. of the
Commission's Rules, 47 CFR 90.1301 et seq.
---------------------------------------------------------------------------

37. Internet Service Providers. The 2007 Economic Census places
these firms, whose services might include voice over Internet protocol
(VoIP), in either of two categories, depending on whether the service
is provided over the provider's own telecommunications facilities
(e.g., cable and DSL ISPs), or over client-supplied telecommunications
connections (e.g., dial-up ISPs). The former are within the category of
Wired Telecommunications Carriers,\128\ which has an SBA small business
size standard of 1,500 or fewer employees.\129\ These are also labeled
``broadband.'' The latter are within the category of All Other
Telecommunications,\130\ which has a size standard of annual receipts
of $25 million or less.\131\ These are labeled non-broadband.
---------------------------------------------------------------------------

\128\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers''; http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\129\ 13 CFR 121.201, NAICS code 517110.
\130\ U.S. Census Bureau, 2007 NAICS Definitions, ``517919 All
Other Telecommunications''; http://www.census.gov/naics/2007/def/ND517919.HTM#N517919.
\131\ 13 CFR 121.201, NAICS code 517919 (updated for inflation
in 2008).
---------------------------------------------------------------------------

38. The most current Economic Census data for all such firms are
2007 data, which are detailed specifically for

[[Page 26218]]

ISPs within the categories above. For the first category, the data show
that 396 firms operated for the entire year, of which 159 had nine or
fewer employees.\132\ For the second category, the data show that 1,682
firms operated for the entire year.\133\ Of those, 1,675 had annual
receipts below $25 million per year, and an additional two had receipts
of between $25 million and $49,999,999. Consequently, the Commission
estimates that the majority of ISP firms are small entities.
---------------------------------------------------------------------------

\132\ U.S. Census Bureau, 2007 Economic Census, Subject Series:
Information, ``Establishment and Firm Size,'' NAICS code 5171103
(released Nov. 19, 2010) (employment size). The data show only two
categories within the whole: the categories for 1-4 employees and
for 5-9 employees.
\133\ U.S. Census Bureau, 2007 Economic Census, Subject Series:
Information, ``Establishment and Firm Size,'' NAICS code 5179191
(released Nov. 19, 2010) (receipts size).
---------------------------------------------------------------------------

39. Satellite Telecommunications Providers. Two economic census
categories address the satellite industry. The first category has a
small business size standard of $15 million or less in average annual
receipts, under SBA rules.\134\ The second has a size standard of $25
million or less in annual receipts.\135\
---------------------------------------------------------------------------

\134\ 13 CFR 121.201, NAICS code 517410.
\135\ 13 CFR 121.201, NAICS code 517919.
---------------------------------------------------------------------------

40. The category of Satellite Telecommunications ``comprises
establishments primarily engaged in providing telecommunications
services to other establishments in the telecommunications and
broadcasting industries by forwarding and receiving communications
signals via a system of satellites or reselling satellite
telecommunications.'' \136\ Census Bureau data for 2007 show that 512
Satellite Telecommunications firms that operated for that entire
year.\137\ Of this total, 464 firms had annual receipts of under $10
million, and 18 firms had receipts of $10 million to $24,999,999.\138\
Consequently, the Commission estimates that the majority of Satellite
Telecommunications firms are small entities that might be affected by
its action.
---------------------------------------------------------------------------

\136\ U.S. Census Bureau, 2007 NAICS Definitions, ``517410
Satellite Telecommunications.''
\137\ See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-_skip=900&-ds_name=EC0751SSSZ4&-_lang=en.
\138\ http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-_skip=900&-ds_name=EC0751SSSZ4&-_lang=en.
---------------------------------------------------------------------------

41. The second category, i.e. ``All Other Telecommunications''
comprises ``establishments primarily engaged in providing specialized
telecommunications services, such as satellite tracking, communications
telemetry, and radar station operation. This industry also includes
establishments primarily engaged in providing satellite terminal
stations and associated facilities connected with one or more
terrestrial systems and capable of transmitting telecommunications to,
and receiving telecommunications from, satellite systems.
Establishments providing Internet services or voice over Internet
protocol (VoIP) services via client-supplied telecommunications
connections are also included in this industry.'' \139\ For this
category, Census Bureau data for 2007 show that there were a total of
2,383 firms that operated for the entire year.\140\ Of this total,
2,347 firms had annual receipts of under $25 million and 12 firms had
annual receipts of $25 million to $49,999,999.\141\ Consequently, the
Commission estimates that the majority of All Other Telecommunications
firms are small entities that might be affected by its action.
---------------------------------------------------------------------------

\139\ http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=517919&search=2007%20NAICS%20Search.
\140\ U.S. Cens http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-_skip=900&-ds_name=EC0751SSSZ4&-_lang=en.
\141\ http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-_skip=900&-ds_name=EC0751SSSZ4&-_lang=en.
---------------------------------------------------------------------------

42. Part 15 Device Manufacturers. The Commission has not developed
a definition of small applicable to unlicensed communications devices
manufacturers. Therefore the Commission will utilize the SBA definition
applicable to Radio and Television Broadcasting and Wireless
Communications Equipment Manufacturing. The Census Bureau defines this
category as follows: This industry comprises establishments primarily
engaged in manufacturing radio and television broadcast and wireless
equipment. Examples of products made by these establishments are:
transmitting and receiving antennas, cable television equipment, GPS
equipment, pagers, cellular phones, mobile communications equipment,
and radio and television studio and broadcasting equipment.'' \142\ The
SBA has developed a small business size standard for Radio and
Television Broadcasting and Wireless Communications Equipment
Manufacturing, which is all firms having 750 or fewer employees.\143\
The U.S. Census data for 2007 indicate that in that year there were 939
active establishments, of which 912 had less than 500 hundred employees
and of which 27 had 500 employees or more.\144\ Accordingly, the
Commission concludes that the majority of businesses in this category
were small.
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\142\ http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=334220&search=2007%20NAICS%20Search.
\143\ NAICS Code 334220, 13 CFR 121.201(Effective August 8, 2008
to November 4, 2011).
\144\ http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=EC0731SG3&-ib_type=NAICS2007&-NAICS2007=334220.
---------------------------------------------------------------------------

43. Telephone Apparatus Manufacturing. This industry comprises
establishments primarily engaged in manufacturing wire telephone and
data communications equipment. These products may be standalone or
board-level components of a larger system. Examples of products made by
these establishments are central office switching equipment, cordless
telephones (except cellular), PBX equipment, telephones, telephone
answering machines, LAN modems, multi-user modems, and other data
communications equipment, such as bridges, routers, and gateways.\145\
The SBA has developed a small business size standard for Telephone
Apparatus Manufacturing, which is all such firms having fewer than
1,000 employees.\146\ U.S. Census data for 2007 indicate that there
were 398 establishments that were operational during that year. Of that
398, 393 had less than 100 employees and 5 had 1,000 employees or
more.\147\ Accordingly, the Commission concludes that the majority of
businesses in this category were small.
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\145\ http://www.census.gov/cgi-bin/sssd/naics/naicsrch.
\146\ NAICS CODE 334210, 13 CFR 121.201(Effective August 8, 2008
to November 4, 2011).
\147\ http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=EC0731SG3&-ib_type=NAICS2007&-NAICS2007=334210.
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44. Other Communications Equipment Manufacturing. This industry
comprises establishments primarily engaged in manufacturing
communications equipment (except telephone apparatus, and radio and
television broadcast, and wireless communications equipment).\148\ The
SBA has developed a small business size standard for Other
Communications Equipment Manufacturing, which is all such firms having
fewer than 750 employees.\149\ U.S. Census data for 2007 indicate that
there were 452 establishments that were operational in this category of
manufacturing during that year. Of that 452, 452 had fewer than 1,000
employees. None had more than 100 employees.\150\ Accordingly, the

[[Page 26219]]

Commission concludes that all of the businesses in this category were
small.
---------------------------------------------------------------------------

\148\ http://www.census.gov/naics/2007/def/ND334290.HTM.
\149\ NAICS CODE 334290, 13 CFR 121.201(Effective August 8, 2008
to November 4, 2011).
\150\ http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=EC0731SG3&-ib_type=NAICS2007&-NAICS2007=334290.
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4. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
45. The compliance requirement is that facilities-based providers
of commercial mobile data services are required to offer data roaming
arrangements to other such providers on commercially reasonable terms
and conditions.
5. Steps Taken To Minimize Significant Economic Impact on Small
Entities and Significant Alternatives Considered
46. The RFA requires an agency to describe any significant
alternatives that it has considered in developing its approach, which
may include the following four alternatives (among others): (1) The
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities.\151\
---------------------------------------------------------------------------

\151\ See 5 U.S.C. 603(c).
---------------------------------------------------------------------------

47. The adoption of a data roaming rule will benefit small
providers in many ways. The record in this proceeding shows that, among
other things, many small providers have had difficulty negotiating data
roaming agreements with nationwide providers on commercially reasonable
terms. The data roaming rule will benefit small providers by helping
them to maintain their ability to compete with the major national
providers, and ensuring that consumers of such small providers have
access to data services when they travel outside of their provider's
network coverage. Additionally, the data roaming will help to encourage
investment by ensuring that small providers wanting to invest in their
networks or expand their coverage into new areas can offer subscribers
a competitive level of coverage during the early period of investment
and buildout.
48. With respect to data roaming disputes, the Commission
establishes a complaint process similar to the complaint process
available under the current roaming obligations for interconnected
voice and data services. Under the dispute resolution procedures
established, providers, including small providers, may file a complaint
or file a petition for declaratory ruling to resolve any disputes
arising out of the data roaming rule adopted. Additionally, although
all data roaming complaints will not automatically be placed on the
Accelerated Docket, an affected small provider can seek consideration
of its complaint under the Commission's Accelerated Docket rules and
procedures where appropriate. Furthermore, during ongoing negotiations
for data roaming, parties (including small providers) can seek
Commission dispute resolution for claims such as, for example, those
regarding the commercial reasonableness of the negotiations, providers'
conduct, and the terms and conditions of the proffered data roaming
arrangement. With respect to claims regarding the commercial
reasonableness of the proffered terms and conditions, including prices,
the Commission staff may, in resolving such claims, require both
parties to provide to the Commission their best and final offers (final
offers). This dispute resolution mechanism offers small providers an
avenue to have disputes resolved in the event the parties are not able
to agree on terms.
49. In light of the benefits described above that small providers
will likely receive as a result of the adoption of the data roaming
rule, and the extensive and uniform record support from small providers
for a data roaming rule consistent with the Commission's approach, the
Commission does not address any significant alternatives considered in
developing that approach.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
50. None.

B. Final Paperwork Reduction Act Analysis

70. This document contains modified information collection
requirements subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. It will be submitted to the Office of Management and
Budget (OMB) for review under Section 3507(d) of the PRA. OMB, the
general public, and other Federal agencies are invited to comment on
the modified information collection requirements contained in this
proceeding. In addition, pursuant to the Small Business Paperwork
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the
Commission seeks specific comment on how the Commission might ``further
reduce the information collection burden for small business concerns
with fewer than 25 employees.''
71. In this present document, the Commission has assessed the
effects of using the procedural complaint processes established in the
Commission's Part 1, Subpart E rules, including applicable filing and
discovery procedures, to govern the process for data roaming
complaints, and find that this will ensure that voice and data roaming
complaints are resolved under a consistent Commission process, which
will reduce the regulatory burden of understanding and using these
processes, and will allow a party to bring a single proceeding to
address a roaming dispute that involves both voice and data services.
This will, in turn, be more efficient for providers and result in
faster resolution of such disputes.

C. Congressional Review Act

72. The Commission will send a copy of this Second Report and Order
to Congress and the Government Accountability Office, pursuant to the
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

D. Accessible Formats

73. To request materials in accessible formats for people with
disabilities (Braille, large print, electronic files, audio format),
send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental
Affairs Bureau at 202-418-0530 (voice) or 202-418-0432 (TTY).

IV. Ordering Clauses

74. Accordingly, it is ordered, pursuant to the authority contained
in Sections 1, 4(i), 4(j), 301, 303, 304, 309, 316, and 332 of the
Communications Act of 1934, as amended, and Section 706 of the
Telecommunications Act of 1996, as amended, 47 U.S.C. 151, 154(i),
154(j), 301, 303, 304, 309, 316, 332, and 1302, that this second report
and order in WT Docket No. 05-265 is hereby adopted.
75. It is further ordered that Parts 0 and 20 of the Commission's
rules, 47 CFR Parts 0 and 20, are Amended as set forth in Appendix A,
and such rule amendments shall be effective 30 days after the date of
publication of the text thereof in the Federal Register, except for
Sec. 20.12(e)(2), which contains an information collection that is
subject to OMB approval.
76. It is further ordered that Sec. 20.12(e)(2) and the
information collection contained in this Second Report and Order will
become effective following approval by the Office of Management and
Budget. The Commission will publish a document at

[[Page 26220]]

a later date establishing the effective date.
77. It is further ordered that, pursuant to Section 5(c) of the
Communications Act of 1934, as amended, 47 U.S.C. 155(c), the
Enforcement Bureau and the Wireless Telecommunications Bureau are
granted delegated authority to resolve any disputes arising out of the
data roaming rule, as set forth in this second report and order and the
rules in Appendix A.
78. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this second report and order, including the Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
79. It is further ordered that the Commission shall send a copy of
this second report and order in a report to be sent to Congress and the
Government Accountability Office pursuant to the Congressional Review
Act, see 5 U.S.C. 801(a)(1)(A).

List of Subjects

47 CFR Part 0

Organization and functions (Government agencies).

47 CFR Part 20

Communications common carriers.

Federal Communications Commission.
Bulah P. Wheeler,
Deputy Manager.

For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR parts 0 and 20 as follows:

PART 0--COMMISSION ORGANIZATION

0
1. The authority citation for part 0 continues to read as follows:

Authority: Secs. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155.

0
2. Amend Sec. 0.111 by revising paragraph (a)(11) introductory text
(note remains unchanged) to read as follows:

Sec. 0.111 Functions of Bureau.

(a) * * *
(11) Resolves other complaints against Title III licensees and
permittees, including complaints under Sec. 20.12(e) of this chapter.
* * * * *

PART 20--COMMERCIAL MOBILE SERVICES

0
3. The authority citation for part 20 is revised to read as follows:

Authority: 47 U.S.C. 154, 160, 201, 251-254, 301, 303, 316, and
332 unless otherwise noted. Section 20.12 is also issued under 47
U.S.C. 1302.

0
4. Revise the heading to part 20 to read as set forth above.

0
5. Amend Sec. 20.3 by adding the definition ``commercial mobile data
service'' in alphabetical order to read as follows:

Sec. 20.3 Definitions.

* * * * *
Commercial mobile data service. (1) Any mobile data service that is
not interconnected with the public switched network and is:
(i) Provided for profit; and
(ii) Available to the public or to such classes of eligible users
as to be effectively available to the public.
(2) Commercial mobile data service includes services provided by
Mobile Satellite Services and Ancillary Terrestrial Component providers
to the extent the services provided meet this definition.
* * * * *

0
6. Amend Sec. 20.12 by adding paragraphs (a)(3) and (e) to read as
follows:

Sec. 20.12 Resale and roaming.

(a) * * *
(3) Scope of Offering Roaming Arrangements for Commercial Mobile
Data Services. Paragraph (e) of this section is applicable to all
facilities-based providers of commercial mobile data services.
* * * * *
(e) Offering Roaming Arrangements for Commercial Mobile Data
Services. (1) A facilities-based provider of commercial mobile data
services is required to offer roaming arrangements to other such
providers on commercially reasonable terms and conditions, subject to
the following limitations:
(i) Providers may negotiate the terms of their roaming arrangements
on an individualized basis;
(ii) It is reasonable for a provider not to offer a data roaming
arrangement to a requesting provider that is not technologically
compatible;
(iii) It is reasonable for a provider not to offer a data roaming
arrangement where it is not technically feasible to provide roaming for
the particular data service for which roaming is requested and any
changes to the host provider's network necessary to accommodate roaming
for such data service are not economically reasonable;
(iv) It is reasonable for a provider to condition the effectiveness
of a roaming arrangement on the requesting provider's provision of
mobile data service to its own subscribers using a generation of
wireless technology comparable to the technology on which the
requesting provider seeks to roam.
(2) A party alleging a violation of this section may file a formal
or informal complaint pursuant to the procedures in Sec. Sec. 1.716
through 1.718, 1.720, 1.721, and 1.723 through 1.735 of this chapter,
which sections are incorporated herein. For purposes of Sec. 20.12(e),
references to a ``carrier'' or ``common carrier'' in the formal and
informal complaint procedures incorporated herein will mean a provider
of commercial mobile data services. The Commission will resolve such
disputes on a case-by-case basis, taking into consideration the
totality of the circumstances presented in each case. The remedy of
damages shall not be available in connection with any complaint
alleging a violation of this section. Whether the appropriate
procedural vehicle for a dispute is a complaint under this paragraph or
a petition for declaratory ruling under Sec. 1.2 of this chapter may
vary depending on the circumstances of each case.

[FR Doc. 2011-10223 Filed 5-5-11; 8:45 am]
BILLING CODE 6712-01-P