Subject: [NEXTEL-1] FCC Proposes Additional Spectrum for Unlicensed Use

From: [email-masked]
Date: Fri, 16 May 2003 02:16:45 -0400

FCC News
May 15th, 2003

FCC ADOPTS SPECTRUM LEASING RULES  AND STREAMLINED PROCESSING  FOR LICENSE TRANSFER AND 
ASSIGNMENT APPLICATIONS, AND  PROPOSES FURTHER STEPS TO INCREASE ACCESS TO SPECTRUM
THROUGH SECONDARY MARKETS

Washington, DC

The Federal Communications Commission today adopted a Report and Order and a Further
Notice of Proposed Rulemaking that (1) authorizes spectrum leasing in a broad array of
wireless radio services, (2) adopts streamlined processing for certain categories of
license transfer and assignment applications, and (3) seeks comment on additional steps to
improve the functioning of secondary markets.  The Commission noted that demand for
spectrum has increased dramatically as a result of explosive growth in wireless
communications technologies and user demand for wireless services.  The steps taken in
today's order will allow and encourage licensees to freely lease their unused or unneeded
spectrum capacity, which will increase the amount of spectrum available to prospective
users and new wireless technologies.  Similarly, the steps taken to streamline the license
assignment and transfer process will also enhance access to spectrum by a variety of
entities.

The spectrum leasing policies adopted in the Report and Order are a landmark step in the
Commission's evolution toward greater reliance on the marketplace to expand the scope of
available wireless services and devices.  These policies will lead to more efficient and
dynamic use of the important spectrum resource to the ultimate benefit of consumers
throughout the country.  Facilitating the development of these secondary markets enhances
and complements several of the Commission's major policy initiatives and public interest
objectives, including efforts to encourage the development of broadband services for all
Americans, promote increased facilities-based competition among service providers, enhance
economic opportunities and access for the provision of communications services by small
businesses, and enable development of additional and innovative services in rural areas. 
Today's order also implements key recommendations of the Spectrum Policy Task Force, which
advocated the development of secondary markets mechanisms, including spectrum leasing, in
its report.  

Summary of Report and Order.

In the Report and Order, the Commission authorizes most wireless radio licensees with
"exclusive" rights to their assigned spectrum to enter into spectrum leasing
arrangements.  These policies and rules affect both mobile and fixed services, including
Cellular, Personal Communications Services (PCS), Specialized Mobile Radio (SMR), Local
Multipoint Distribution Service (LMDS), fixed microwave, 24 GHz, and 39 GHz, among others.

Updated de facto control standard for spectrum leases: The Report and Order adopts an
updated standard for defining transfers of de facto control under Section 310(d) of the
Communications Act.  The Report and Order replaces the facilities-based standard set forth
in the 1963 Intermountain Microwave decision because the Commission determined that, as
applied to spectrum leasing, the Intermountain Microwave standard was not required by the
statute, imposes unnecessary barriers to efficient and effective access to spectrum
resources, and has become increasingly out of step with the flexible, market-based
spectrum policies that Congress and the Commission have developed in recent years.  Under
the refined de facto standard adopted today, licensees may lease spectrum usage rights to
spectrum lessees, without the need for prior Commission approval, so long as the licensee
continues to exercise effective working control over the use of the spectrum it leases.
  
General spectrum leasing policies:  Under the leasing rules adopted in the Report and
Order, licensees in the covered services may lease some or all of their spectrum-usage
rights to third parties, for any amount of spectrum and in any geographic area encompassed
by the license, and for any period of time within the term of the license.   
  
Alternative spectrum leasing mechanisms:  The Report and Order creates two different
mechanisms for spectrum leasing depending on the scope of the rights and responsibilities
to be assumed by the lessee.  

-- The first leasing option - "spectrum manager" leasing - enables parties to enter into
spectrum leasing arrangements without obtaining prior Commission approval so long as the
licensee retains both de jure control (i.e., legal control) of the license and de facto
control (i.e., working control) over the leased spectrum pursuant to the updated de facto
control standard for leasing.  

-- The second option - de facto transfer leasing - permits parties to enter into long-term
or short-term leasing arrangements whereby the licensee retains de jure control of the
license while de facto control is transferred to the lessee for the term of the lease.  De
facto transfer leases under this option will require prior Commission approval under a
streamlined approval process.  Under the de facto transfer leasing option, the Report and
Order establishes different rules and procedures for long-term and short-term leases
("short-term" leases are defined as leases of 360 days or less in duration).  

Features of the "spectrum manager" leasing option  -

-- The licensee must file a notification at least 21 days in advance of operation and
provide certain relevant information with regard to each lease.
 
-- All technical and operational rules applicable to the licensee are applicable to the
spectrum lessee.  
  
-- Lessees will be required to meet foreign ownership criteria and the Commission's
character qualifications. 

-- The licensee must maintain an oversight role to ensure lessee compliance with the
Communications Act and applicable Commission rules, and is responsible to the Commission
for such compliance.  

-- The licensee is ultimately responsible to the Commission for all spectrum-related
applications and notifications.     

-- In enforcing spectrum-related rules, the Commission will look primarily to the licensee
on compliance issues, but lessees are potentially accountable as well.  

-- Lessees are primarily responsible for compliance with non-spectrum-related requirements
relating directly to their provision of whichever service they pursue (e.g., Title II
requirements in the case of lessees providing common carriage). 
 
-- Following notification of the lease, the Commission retains the right to investigate
and nullify a leasing arrangement to the extent it raises significant public interest
concerns.  

Features of long-term de facto transfer leasing -

-- Prior FCC approval of the lease is required, but achieved through streamlined
procedures. 

-- Lease applications are placed promptly on public notice, and approved within 21 days of
the public notice unless "offlined" for more detailed review.

-- All service rules and policies applicable to licensee, including all eligibility rules,
are applicable to lessee.  

-- Spectrum lessees are directly and primarily responsible for ensuring compliance with
all applicable Commission policies and rules, and for submitting filings relating to
leased spectrum.

-- For enforcement purposes, the Commission will look primarily to the spectrum lessee for
compliance, and lessees will be subject to enforcement action as appropriate.  

-- Licensees' responsibility for lessee compliance is limited to instances of actual or
constructive knowledge of the lessee's failure to comply or violation of the terms of the
lease. 

Features of short-term (360 days or less) de facto transfer leasing -

-- Prior FCC approval is required, but short-term lease applications are subject to
expedited approval (10 days) under the Commission's Special Temporary Authority (STA)
procedures. 

-- The respective rights and responsibilities of licensees and lessees generally are the
same as under the long-term option (e.g., lessees exercise de facto control and are
primarily responsible for compliance).

-- All technical and operational rules apply to short-term spectrum lessees.  However,
given short-term nature of these arrangements, some rules applicable to the licensee -
including certain use restrictions, designated entity/entrepreneur policies, and policies
related to spectrum aggregation - will not be applied to the lessee.

Streamlined processing for transfer of control and assignment of license applications: The
Report and Order applies the Commission's forbearance authority under Section 10 of the
Act to extend the streamlined processing rules adopted for long-term de facto transfer
leasing to applications for assignment and transfer of control of telecommunications
carrier licenses.  Under this plan, such applications will be placed promptly on public
notice once complete, and will be acted on within 21 days of that public notice date
unless the application is "offlined" for more detailed review.  Such streamlined
processing will become effective upon completion of an implementation period during which
the Commission will refine its databases and forms to facilitate such streamlined
treatment.  

Summary of Further Notice of Proposed Rulemaking.  The Further Notice undertakes an
expansive examination of critical issues affecting the Commission's long-term vision for
enhancing opportunities for spectrum access, efficiency, and innovation.  It also
considers options for expanding upon the steps taken in the Report and Order.
 
Specifically, the Further Notice seeks comment on the following issues:

-- What additional steps the Commission should take to ensure that licensees with
available spectrum and parties in need of access to spectrum have the necessary
information to engage in secondary market transactions; what type of spectrum information
interested parties may need; the potential for "market-maker" intermediaries to develop;
and the nature of the Commission's role in regulating such intermediaries or otherwise
facilitating access to spectrum information.

-- What secondary market mechanisms are necessary to facilitate access to spectrum by new
technologies; whether there will be need for a clearinghouse mechanism to provide
real-time spectrum access information for "opportunistic" devices; and what the
Commission's role should be in the establishment or regulation of such a clearinghouse.

The Further Notice also considers a number of potential actions to supplement and expand
on actions taken in the Report and Order, including:

-- Forbearing from requiring prior Commission approval for certain categories of spectrum
leases that involve a de facto transfer of control to the lessee.

-- Forbearing from requiring prior Commission approval of certain categories of transfers
of control and assignments of licenses that do not raise public interest issues requiring
prior Commission review.

-- Extending spectrum leasing policies and procedures to services not within the scope of
the Report and Order.

-- Implementing the new de facto control standard established by the Report and Order in
other regulatory contexts that require a determination of de facto control.  

-- Assessing the impact of the secondary markets policies on the Commission's designated
entity rules.

Action by the Commission, May 15, 2003, by Report and Order and Further Notice of Proposed
Rulemaking (FCC 03-113).  Chairman Powell, Commissioners Abernathy, Martin and Adelstein,
with Commissioner Copps dissenting.  Chairman Powell and Commissioner Martin issue joint
statement, separate statements issued by Commissioner Abernathy, Adelstein, and dissenting
statement issued by Commissioner Copps.

FCC Contact:  Paul Murray at (202) 418-7240; TTY at (202) 418-7233; e-mail:
[email-masked].

WT Docket No. 00-230

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-234562A1.doc

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