Subject: [NEXTEL-1] Cellular Service and Other Commercial Mobile Radio Services in the Gulf of Mexico

From: [email-masked]
Date: Fri, 27 Jun 2003 17:39:45 -0400

Before the
Federal Communications Commission
Washington, D.C.  20554

In the Matter of

Cellular Service and Other Commercial Mobile Radio Services in the Gulf of Mexico

Amendment of Part 22 of the Commission’s
Rules to Provide for Filing and Processing of
Applications for Unserved Areas in the Cellular
Service and to Modify Other Cellular Rules )

WT Docket No.  97-112

CC Docket 90-6

ORDER ON RECONSIDERATION

    Adopted:  June 10, 2003    Released: June 27, 2003

By the Commission:

I. INTRODUCTION

1. In this Order on Reconsideration, we resolve petitions for reconsideration
filed against the Report and Order in WT Docket No. 97-112 (Gulf Report and
Order), in which the Commission modified rules affecting cellular service in the
Gulf of Mexico.   In this item, we affirm the decision in the Gulf Report and
Order to use different formulas for predicting the propagation of cellular signals
over land and over water as the basis for determining the service area boundaries
(SABs) of land-based and water-based cell sites in the Gulf of Mexico area.  We
reinstate certain co-location applications that were inadvertently dismissed
pursuant to the Gulf Report and Order, and modify section 22.912 of the
Commission’s rules to clarify that land-based cellular carriers are precluded from
extending their SABs into any part of the Gulf of Mexico Exclusive Zone without
the applicable Gulf carrier’s consent.  We also affirm that the market boundaries
of Personal Communications Service (PCS) licensees adjacent to the Gulf of Mexico
are co-extensive with county boundaries.

II. BACKGROUND

2. The Commission first licensed two cellular carriers to serve the Gulf of Mexico
Service Area (GMSA) in 1985.   The two Gulf carriers were authorized to operate
throughout the GMSA, but were limited to using transmitter sites on offshore
platforms (predominately oil and gas drilling platforms).  In 1992, the Commission
established unserved area licensing rules for land-based cellular service, and
established a new method of calculating a carrier’s cellular geographic service
area (CGSA) as part of those new rules.   The rules provided that a carrier’s CGSA
would be coterminous with its area of actual service, and set out a mathematical
formula to be used by carriers to determine the service area boundary (SAB) of a
cell that would approximate actual coverage.   In effect, the rules created a
“use-or-lose” licensing regime: areas not within a carrier’s CGSA were classified
as unserved areas and subject to potential relicensing.  The Commission further
determined that the unserved area approach should be used to define the service
areas of the Gulf carriers as well as land-based carriers, but it used a different
formula to calculate the SABs of Gulf carrier cell sites because of the different
propagation characteristics of radio signals over water.   Thus, as in the case of
land-based carriers, the Gulf carriers’ service areas no longer encompassed their
entire original licensing area, but instead were limited to areas actually covered
by the carriers’ offshore platform-based transmitters.  Areas not served by the
offshore cell sites were considered “unserved” and subject to re-licensing.

3. In response, the Gulf carriers filed suit in the D.C. Circuit Court of Appeals
challenging the Commission’s decision to apply its unserved area rules to cellular
service in the Gulf.  The Gulf carriers contended that because their cell sites
were situated on movable offshore platforms, it was unreasonable to define their
rights to serve the Gulf based on a “use-or-lose” regime, which could potentially
allow land-based licensees to permanently extend their service areas into areas of
the Gulf where no offshore platform was currently located.  In the PetroCom
decision, the D.C. Circuit reversed and remanded this aspect of the Commission’s
decision.   The Court found that the Commission had failed to adequately consider
the distinctive nature of Gulf-based service, which relied on movable platforms
for placement of cell sites, in comparison to land-based service, which used
stationary sites.  The Court accordingly vacated the use-or-lose rule that defined
the Gulf carriers’ CGSAs based on their areas of actual service, and instructed
the Commission to re-evaluate the issue.   The effect of the remand was the
restoration of the original licensing areas of the Gulf carriers, regardless of
the location of their platform-based cell sites at any particular time.  However,
the remand did not vacate other aspects of the rule, such as the formula used by
the Gulf carriers to determine their service area boundaries.

4. In January 2002, the Commission released the Gulf Report and Order, which
responded to the PetroCom remand and resolved several other outstanding issues
relating to cellular service in the Gulf of Mexico.  In the Gulf Report and Order,
the Commission established a comprehensive regulatory scheme for the Gulf designed
to facilitate the provision of cellular service to unserved areas of the Gulf
region and resolve operational conflicts between Gulf and land carriers, while
minimizing the disturbance to existing operations and contractual relationships.
As part of this licensing scheme, the Commission adopted a bifurcated approach in
the Gulf that reflected the differences in deployment of cellular service in the
Eastern Gulf and the Western Gulf.   Due to the Gulf carriers’ extensive
deployment of offshore cellular service in the Western Gulf, the Commission
concluded that such service should continue to be governed by existing rules, with
minor modifications, to facilitate negotiated solutions to ongoing technical and
operational conflicts between Gulf-based and land-based carriers.   Therefore, the
Commission determined that the entirety of the Western Gulf would be included
within the “Gulf of Mexico Exclusive Zone” (GMEZ) in which the Gulf carriers would
not be subject to use-or-lose rules, but would have full flexibility to build,
relocate, modify and remove offshore facilities without any impact on their rights
to provide service to “unserved” areas.   In the Eastern Gulf, the lack of
offshore cellular deployment led the Commission to designate a Coastal Zone
extending from the shoreline seaward twelve nautical miles, in which unserved area
licensing rules would apply, while the remainder of the Eastern Gulf was included
in the GMEZ, giving Gulf carriers full flexibility to operate beyond the twelve
nautical mile limit.

5. By using the existing rules as the basis for its decision in the Western Gulf,
the Commission reaffirmed the coastline as the legal demarcation line for the
Western Gulf separating the service areas of Gulf and land-based cellular
carriers.   The Gulf Report and Order continued to bar land-based carriers from
extending their SABs over any portion of the Western Gulf without the consent of
the relevant Gulf carrier, regardless of whether the Gulf carrier is serving that
portion of the Gulf from an offshore site.  Conversely, the Gulf carriers are
prohibited in the Western Gulf from extending contours over land that would
encroach on areas served by land-based carriers, absent consent.   The Commission
also determined that because of the different propagation characteristics of radio
signals transmitted over land and water, it would continue to use different
formulas to determine the SABs of land and water-based sites.   Accordingly, the
Commission retained the rule that determined the reliable service area of
Gulf-based sites using a 28 dBµV/m contour, while using a 32 dBµV/m contour to
determine the reliable service area of land-based sites.

6. Finally, the Gulf Report and Order addressed the issue of non-cellular services
in the Gulf.   The Commission declined to create a Gulf licensing area for
non-cellular services, noting the lack of support for this alternative in the
record.  However, the Commission clarified that in CMRS services that do not have
a separately licensed Gulf market, licensees serving areas adjacent to the Gulf of
Mexico were entitled to extend their coverage offshore.  Because most non-cellular
services use licensing areas based on county boundaries, which typically extend a
specified distance over water pursuant to state law, the Gulf Report and Order
clarified that such Commission licensing areas were co-extensive with county
boundaries.   The Gulf Report and Order also stated that licensees could extend
service further into the Gulf on a secondary basis, provided they did not cause
interference to others.

7. Petitions for Reconsideration.  Petroleum Communications, Inc. (PetroCom) and
VoiceStream Wireless Corp. (VoiceStream), filed petitions for reconsideration of
the Gulf Report and Order.   In its petition, PetroCom, one of the two cellular
licensees in the Gulf, argues that the Commission erred in adopting different
propagation formulas to calculate the SABs of land and water-based cell sites, and
contends that the Commission should have adopted a single formula applicable to
all sites.   PetroCom also argues that this aspect of the Commission’s decision is
inconsistent with the record and violates the Regulatory Flexibility Act.  In
addition, PetroCom seeks relief with respect to several other matters.
Specifically, PetroCom seeks: (1) reinstatement of certain co-location
applications that it filed pursuant to agreements with land carriers,  (2)
clarification that land carriers may not extend their coverage into any portion of
the Western Gulf without the applicable Gulf carrier’s consent; and (3)
grandfathering of the service area contours for all Gulf facilities that existed
as of April 16, 1997.
8. VoiceStream, a PCS carrier, seeks reconsideration or clarification of the
Commission’s decisions regarding PCS licensing in the Gulf.   VoiceStream argues
that the Gulf Report and Order erroneously reduced the rights of existing PCS
licensees along the Gulf coast to provide service extending out into the Gulf.
VoiceStream asserts that PCS licensees bordering the Gulf are entitled to serve
the entire Gulf area on a primary basis, and that the Commission should be
precluded from establishing a separate PCS licensing area for the Gulf.
Alternatively, VoiceStream advocates defining the market area boundaries of PCS
licensees extending into the Gulf based on federal rather than state law.

III. DISCUSSION

A. PetroCom Petition.
1. Two-Formula Approach.

9. Background.  For the most part, PetroCom does not challenge the Commission’s
disposition of issues concerning the Western Gulf in the Gulf Report and Order,
which substantially adopted the position advanced by the Gulf carriers that they
should not be subject to use-or-lose licensing rules.  PetroCom does seek
reconsideration, however, of the Commission’s decision to continue using different
formulas to determine the SABs of land and Gulf-based transmitters.  PetroCom
contends that this aspect of the Gulf Report and Order gives land-based carriers a
signal strength advantage over Gulf carriers, thereby enabling land-based carriers
to encroach into the Gulf and capture water-based cellular traffic.   PetroCom
maintains that either Gulf carriers should be entitled to use the 32 dBµV/m
land-based formula to determine their predicted signal strength at the coastal
boundary, or alternatively that the 28 dBµV/m water-based formula should be used
by land-based as well as Gulf carriers.   PetroCom also asserts that the
Commission’s adoption of the two-formula approach lacks adequate basis in the
record and is procedurally flawed.

10. Discussion.  We affirm our decision to use the two-formula approach in
calculating service area contours for land-based and Gulf carriers.  This approach
recognizes a basic fact of signal propagation: due to the absence of path
obstructions and typically quieter RF environment, a signal transmitted over water
is likely to be stronger than a signal transmitted over land at the equivalent
distance from the transmitter.  Therefore, it is important to use formulas that
take into account the different characteristics of land and water environments, as
we have done here.

11. The 32 dBµV/m land-based formula incorporates factors that typically affect
propagation of signals over land, such as rolling terrain.  The land formula also
assumes a noisier environment and that the subscriber will be using a mobile
handset near ground level. On the other hand, assumptions factored into the 28
dBµV/m water formula are quite different.  The water formula assumes that a signal
in the Gulf will not have the same path obstructions encountered by radio signals
over land.  The water formula does not factor in rolling terrain, presumes a
quieter noise environment, and also takes into account the different
characteristics of water-borne cellular receivers, which are typically
mast-mounted and therefore able to receive a signal at a greater distance from the
transmitter.  Thus, the water formula assumes that the typical Gulf subscriber
operating on a boat or drilling platform will have a receive unit with a
mast-mounted antenna at a height of approximately 30 feet.

12. Indeed, using 28 dBµV/m as the basis for defining reliable service over water
was originally proposed by PetroCom itself, which contended that it more
accurately approximated actual coverage in the Gulf.  In the Unserved Area
proceeding, the Commission initially proposed a water formula based on the 32
dBµV/m median field strength contour.   However, PetroCom argued that 28 dBµV/m
more accurately predicted reliable service in the Gulf due to the stronger
propagation characteristics of over-water transmissions.   In support of this
argument, PetroCom submitted actual received power measurements from Gulf
facilities to what it characterized as a typical mobile unit for a Gulf
subscriber.  The Commission concluded that PetroCom’s technical exhibit provided a
convincing demonstration of the service range of typical cellular facilities found
in the Gulf, and therefore established the formula based on the data submitted by
PetroCom.

13. PetroCom now argues that the measurement data it submitted, and that the
Commission used as a basis for the water formula, is now “stale.”   Accordingly,
it argues that we should not use the water formula.  PetroCom does not, however,
provide support for its assertion that the technical data supporting the water
formula is no longer valid.  We do not agree that propagation measurements become
“stale” with the passage of time.  We note that the land formula is based on
measured data from the Carey Report which was issued in 1964.   Accordingly, we
continue to consider the water formula a fair approximation of reliable service in
the Gulf.

14.  We also reject PetroCom’s argument that a single formula will “equalize” the
signal strengths of land-based and Gulf carriers at the shoreline.  If we were to
apply the land-based formula to establish the SABs of both land-based and Gulf
carriers, as PetroCom proposes, the actual signal strength of the Gulf carrier’s
signal at the shoreline would very likely be higher than 32 dBµV/m.  Because the
land formula assumes rolling terrain that is not encountered over water, it will
tend to underestimate the actual strength of a signal transmitted over water at
the SAB radial distance.  Thus, while the land formula will indicate that the Gulf
carrier’s SAB does not encroach on land, the Gulf carrier’s actual 32 dB?V/m
contour is likely to extend inland.  Accordingly, use of the land formula over
water could result in the Gulf carrier having an actual signal strength at the
boundary that is greater than that of the adjacent land carrier, thereby leading
to potential capture of the land carrier’s customers.

15. Alternatively, if we were to apply the water formula to both land-based and
Gulf carriers, the result would likely be dead spots and undesired carrier capture
along the coastline.  The water formula does not take into account variations in
terrain that are present in over-land transmissions; accordingly, although use of
the formula may make it appear that the land carrier has an adequate signal at the
shoreline, in fact the signal may well be substantially weaker.   In contrast, the
Gulf carrier would be operating at a signal strength sufficient to provide
reliable service.  The use of the water formula by all parties would therefore
likely lead to capture of land traffic by the Gulf carrier because of the stronger
Gulf signal.

16. PetroCom argues that using different formulas for land-based and Gulf carriers
gives a signal strength advantage to land carriers  and thereby will cause
subscriber capture problems for Gulf carriers.  We agree that the two-formula
approach will not prevent subscriber capture in all situations, and that capture
of Gulf traffic by land carriers may occur on occasion.  The Commission has always
acknowledged that these formulas are theoretical models that approximate but do
not precisely predict the extent of actual coverage provided by carriers beyond
their respective sides of the coastline.   However, in situations where the
majority of the signal path is over a single medium -- land or water -- the
two-formula approach provides the most reasonable estimate of a given station’s
service area.  We conclude that the PetroCom’s proposal does not provide a better
solution to subscriber capture than the two-formula approach, and that it is more
likely to exacerbate capture problems in comparison to the two-formula approach.

17. PetroCom further argues that the two-formula approach does not preserve the
status quo, but actually gives land-based carriers a bargaining advantage in
negotiating agreements with Gulf carriers.   We reject this view.  Because the
Gulf Report and Order prohibits land carriers from extending their SAB contours
anywhere into the Western Gulf, a land carrier seeking to place a site close to
the boundary has no choice but to negotiate with the applicable Gulf carrier,
regardless of whether the Gulf carrier has a facility in the area.  As noted in
the Gulf Report and Order, we realize that in areas where Gulf carriers and land
carriers operate in close proximity to one another, the Commission’s technical
rules will not resolve all conflicts.  Accordingly, only cooperation between
land-based and Gulf carriers can resolve these conflicts, and we conclude that the
existing rules present the most viable means to bring about such resolution.

18. PetroCom also notes that it has negotiated agreements with land-based carriers
in which both parties agreed to use of the land formula.   This is not an argument
for adopting the land formula as an across-the-board rule. The Commission found
that land and Gulf carriers had been using the existing formulas and had been
successful in reaching negotiated agreements under the existing framework.  The
Commission consequently found that changing the SAB definitions could lead to one
side or the other unilaterally increasing their transmitter power under the
revised definitions, which could upset existing agreements and create new
conflicts.   Parties remain free to negotiate alternative arrangements.
PetroCom’s current extension and co-location agreements with land carriers (where
PetroCom has filed applications showing a 32 dBµV/m contour) were the end result
of negotiations, rather than the starting points.

19. PetroCom further argues that as part of the D.C. Circuit’s PetroCom remand
decision, the court vacated the water formula established in the Unserved Area
Third Report and Order and reinstated the original cellular rule that defined
reliable service, which was based on a 39 dB?V/m contour.  Accordingly, PetroCom
argues, it is entitled under the “status quo” to a signal strength of 39 dB?V/m at
the coastline, a significantly stronger signal than either 28 or 32 dB?V/m.   We
disagree with PetroCom’s characterization of the effect of the remand on this
issue.  The issue that the Gulf carriers raised and which the D.C. Circuit Court
remanded was whether the Gulf carriers should be limited to areas of actual
service in light of their dependence on itinerant offshore platforms as sites for
their transmitters.  The Court held that the Commission had not addressed why it
was treating land and Gulf carriers in the same manner (i.e., limiting both land
and Gulf carriers to areas of actual service) even though the Gulf carriers are
dependent on oil and gas rigs as transmitter sites.

20. Accordingly, the Court remanded "this issue to the Commission with
instructions to vacate section 22.903(a)  insofar as it applies to GMSA licensees
pending reconsideration."   Pending resolution of the remand, the Commission
adopted a note to paragraph (a) of the rule, in which it identified the status
quo:  "[U]ntil further notice, the authorized CGSAs of the cellular systems
licensed to serve the GMSA are those which were authorized prior to January 11,
1993."   The Commission believed then, and continues to believe now that the
Court's intent was to direct the Commission to vacate only that portion of former
section 22.903(a) that limited Gulf licensees' CGSAs to their existing areas of
actual service -- the only issue as to which the Court was remanding  -- and not
to compel the Commission to also vacate the formula it had adopted for determining
reliable service in the Gulf, as to which no objection had been made and which
played no role in defining the previous CGSA which was reinstated during the
interim as a result of the Court's decision.

21. Following the PetroCom remand, the Commission has applied the 28 dBµV/m water
formula as the applicable standard for Gulf carriers.   This is consistent with
our policy that, to the extent that Gulf carriers are allowed to serve up to the
boundary of the GMSA, i.e., the shoreline, they are permitted to operate at a
height and power sufficient to provide reliable service at the shoreline.  The use
of the 39 dBµV/m field strength by Gulf carriers is inappropriate because it is
clearly counter to data submitted to the Commission regarding the field strength
necessary for reliable service by either land or water carriers.  Indeed, carriers
other than PetroCom have understood that the Gulf carriers were subject to the
water formula.  For example, Bachow/Coastel, the B-Block Gulf carrier, engineered
its systems using the water formula as the applicable standard, and entered into
agreements based on that formula.

 2. “Hybrid” Formula Proposal.
22. Background.  In the Second Further Notice, the Commission proposed to create a
Coastal Zone that would encompass coastal waters in both the Eastern and Western
Gulf, and proposed to develop a “hybrid” propagation formula that would be used by
both land-based and Gulf carriers to measure service area contours within the
Coastal Zone.   In the Gulf Report and Order, the Commission declined to adopt the
Coastal Zone proposal or a hybrid propagation formula, but instead, as noted
above, concluded that the existing rules should be retained in the Gulf of Mexico
Exclusive Zone.  With respect to the hybrid formula proposal, the Commission noted
that the record reflected little support for such a formula, and found that it
would be difficult to establish a single formula that would accurately account for
the variations in signal propagation over both land and water.

23. In its reconsideration petition, PetroCom argues that the Commission’s
tentative conclusion in favor of developing a hybrid formula constituted an
“acknowledgment” that a two-formula approach was inappropriate.   PetroCom also
maintains that there was record support for a hybrid formula.  Accordingly,
PetroCom argues that Commission erred in rejecting the hybrid formula and adopting
the two-formula approach.

24. Discussion.  We find no merit in PetroCom’s contention that the Commission
erred in rejecting a hybrid approach in favor of retaining the two-formula
approach.  First, as noted above, the proposal in the Notice to create a hybrid
formula was linked to the proposal to establish a Coastal Zone that could be
served by both land and Gulf carriers, which the Commission ultimately did not
adopt.  Once the Commission decided to retain existing rules rather than establish
a Coastal Zone in both the Eastern and Western Gulf, there was no longer a need to
pursue development of a hybrid signal propagation formula as previously proposed.
Second, we reject PetroCom’s contention that there was a sufficient record to
justify, much less compel, adoption of a hybrid formula.  Although there were
indeed some commenters who supported use of a hybrid formula, others did not.
Moreover, few commenters actually proposed specific technical criteria for the
development of such a formula, and the Commission found that those who did failed
to provide the type of detailed technical analysis or supporting data (such as
measurements) necessary to support their proposals.  Given these and other
factors, we continue to believe that a hybrid formula would be very difficult to
develop, and that the benefits of such a formula do not outweigh the costs and
complications involved in establishing and employing one.

 3. Regulatory Flexibility Act requirements.

25. Background.  PetroCom argues that the Commission violated the Regulatory
Flexibility Act (RFA) because its Initial Regulatory Flexibility Analysis (IRFA)
did not describe the potential impact on Gulf carriers of retaining the
two-formula approach.  PetroCom further argues that the Final Regulatory
Flexibility Analysis (FRFA) in the Gulf Report and Order was flawed because it did
not contain a description of the steps the Commission has taken to minimize the
significant economic impact on the Gulf carriers of continuing to allow land
carriers to utilize the land formula.  PetroCom also contends that the Commission
was required to include a statement in the FRFA why proposals for the use of “an
equal strength rule” were rejected as alternatives.

26. Discussion. The Regulatory Flexibility Act requires that agencies evaluate the
effect that new regulations will have on small business entities.   When proposing
a new rule, agencies must perform an IRFA discussing the proposed new rule’s
impact on small entities.   Further, when adopting a final rule, the agency must
also perform a FRFA.  The Commission complied with these requirements.  However,
PetroCom incorrectly asserts that as part of the RFA process, the Commission was
required to analyze the effects that retaining existing rules would have on small
entities.  The Commission’s decision to continue applying existing rules was not a
new undertaking that falls under the provisions of the RFA.   Instead, after
reviewing alternatives, the Commission determined that, in light of the
difficulties of adopting a single formula that would apply in all cases, the
existing regulatory environment should be retained because of the flexibility
provided by the Commission’s rules for parties to enter into agreements that would
allow carriers to choose for themselves which operating parameters to apply.  This
decision did not require additional discussion in the FRFA.

  4. Other Issues.

 a. PetroCom Co-location Applications.
27. Background.  In December 1992, following the adoption of Gulf-specific
cellular unserved area licensing rules in the Unserved Area Third Report and
Order, the Commission began accepting Phase II applications for unserved area
licenses in the GMSA.  However, following the PetroCom remand, the Commission
suspended processing of these applications pending reconsideration of the
Commission’s policies in the Gulf region.  Similarly, the Commission ceased
processing de minimis extension requests along the Gulf coast due to uncertainty
regarding the rules for the GMSA.  In the Gulf Report and Order, the Commission
dismissed all pending Phase II applications and extension requests (as well as
associated petitions to deny).  The Commission reasoned that in light of length of
time since the applications had been filed, the fairest and most efficient
resolution was to dismiss all pending applications and allow the carriers to
reapply.

28. On reconsideration, PetroCom argues that, in dismissing all pending Phase II
and de minimis extension applications, the Commission erroneously dismissed a
number of PetroCom’s applications that were filed pursuant to agreements to
co-license sites on land in markets adjacent to the Gulf of Mexico.  PetroCom
argues that the dismissal of these applications conflicts with the Commission’s
stated intent in the Gulf Report and Order to encourage agreements between Gulf
and land-based carriers.
29. Discussion.  We agree that PetroCom’s referenced applications should not have
been included among the Phase II and de minimis applications that were dismissed.
As noted, a major goal of the Gulf Report and Order was to encourage parties to
reach negotiated solutions to issues such as coverage, capture, and roaming
rates.  The policies set out in the Gulf Report and Order were also aimed at
ensuring that existing contractual relationships are not disturbed.  The dismissal
of PetroCom’s applications based on negotiated co-location agreements runs counter
to that goal.  Accordingly, we reinstate the applications cited in PetroCom’s
petition to pending status.

 b. Clarification regarding extensions into the GMEZ.

30. Background.  In the Gulf Report and Order, the Commission gave the Gulf
carriers full flexibility to build, relocate, modify, and remove offshore
facilities throughout the GMEZ without seeking prior Commission approval or facing
competing applications.  Further, the Commission chose not to allow land carriers
to make de minimis extensions into unserved areas of the GMEZ.   In light of these
decisions, PetroCom seeks clarification of the relationship between rule section
22.950, which provides that the Gulf carriers are exclusively licensed to operate
facilities in the GMEZ, and section 22.911, which details the Commission’s rules
regarding the calculation of carriers’ CGSAs and SABs.  PetroCom expresses concern
that these rules could be misconstrued as meaning that a land carrier may extend
service into the Gulf so long as it does not encroach upon a Gulf carrier’s SAB
contours.   PetroCom suggests that the CGSA definition of section 22.911(a)(2) be
modified to clarify that a land carrier may not extend into any part of the GMEZ,
served or unserved, without the Gulf carrier’s consent.   Alternatively, PetroCom
proposes that the Gulf carriers’ CGSAs be defined as coterminous with the GMEZ.
PetroCom argues that failure to make these changes will undermine its co-location
agreements if land carriers believe the rules permit non-consensual extensions
into unserved portions of the GMEZ.

31. Discussion.  We agree with PetroCom that our rules as currently worded may
cause some confusion.  Accordingly, we clarify that land-based carriers are
precluded from extending their SABs into any part of the GMEZ, whether served by
the applicable Gulf carrier or not, without the Gulf carrier’s consent.  We amend
rule section 22.912 to reflect this fact.
32. We also take this opportunity to clarify, on our own motion, the wording of
another rule section to remove confusion.  In the Gulf Report and Order, the
Commission amended section 22.911(a)(2) in order to reflect that areas of the Gulf
of Mexico Coastal Zone would be subject to Phase II licensing and open to all
carriers.   However, section 22.911(a)(2) in its current form may be misread as
applying only to the two original Gulf (GMEZ) carriers.  We therefore clarify that
the rule applies to all cell sites actually located in the GMSA (whether in the
GMEZ or GMCZ), and not just to GMEZ carriers.
  c. Grandfathering of existing Gulf carrier operating parameters.

33. Background.  PetroCom argues that it was material error for the Commission not
to address an ex parte request made by PetroCom in October 2001, proposing that
the Commission adopt a grandfathering rule that preserves the current operating
parameters of all facilities that existed as of the release date of the Second
Further Notice.   PetroCom argues that “current operating parameters” means the
use of 32 dB?V/m contours as calculated using the land formula at the coastline.
According to this proposal, all operating parameters, including contour extensions
that cross the coastline boundary, would be grandfathered using the land formula.
PetroCom’s proposal would allow a carrier to modify or construct a new site as
long as any new cross-boundary extensions (also calculated using the land formula)
remain within the extension of the originally grandfathered contour.

34. Discussion.  We decline to reconsider the grandfathering of existing cellular
facilities as proposed by PetroCom.  The Gulf Report and Order sought to maintain
existing operational facilities to encourage carriers to maintain any agreements
they entered into that resolved operational conflicts along the coastline
boundary.  Accordingly, the Gulf Report and Order did not affect any existing
operating parameters, including the use of the land formula by Gulf carriers or
cross-boundary contours, that might have resulted from such agreements.  However,
while the Commission grandfathered such existing operations, it did not grant
carriers, either land carrier or Gulf carrier, a permanent right to encroach
across the coastline boundary or the right to Gulf carriers to calculate contours
using the land formula in the absence of agreements permitting them to do so.  As
previously discussed, the use of the land formula by Gulf carriers has never been
the status quo for the Gulf carriers.  Instead, the Gulf carriers are required to
operate using the water formula, absent an agreement with the applicable land
carrier.  Given that the Commission has previously concluded that the use of the
land formula by Gulf carriers is not appropriate, we must also decline to adopt
PetroCom’s proposal to “grandfather” facilities using the land formula that are
not subject to agreements.

 B. VoiceStream Petition.

35. Background.  In the Second Further Notice, the Commission requested comment on
whether the Commission should adopt licensing and service rules for non-cellular
CMRS in the Gulf.   In the Gulf Report and Order, the Commission observed that
although Gulf licensing areas have been established in several services, there was
little support in the record for creating a Gulf licensing area for all
non-cellular CMRS services.  Instead, the Commission stated that it would take up
the issue of establishing Gulf licensing areas on a service-by-service basis.

36. In response to the Second Further Notice, however, many land-based carriers in
services that lacked a Gulf licensing area sought clarification regarding their
ability to extend their coverage offshore.  Addressing this issue, the Commission
found in the Gulf Report and Order that it was in the public interest to allow
land-based CMRS carriers to extend their coverage offshore, both to increase
coverage and service quality for land-based customers along the coastline and to
offer service to coastal boating traffic.   The Commission further noted that the
geographic service area definitions used for most non-cellular CMRS services --
including those for PCS -- are based on county boundaries, which typically extend
over water pursuant to state law.   Accordingly, the Gulf Report and Order
clarified that such Commission licensing areas are co-extensive with the county
boundaries on which they are based.   The Commission also stated that licensees
could provide service extending beyond county boundaries and into the Gulf on a
secondary basis so long as they comply with the technical limitations applicable
to the radio service and do not cause co-channel or adjacent channel interference
to others.

37. In its petition for reconsideration, VoiceStream argues that the Gulf Report
and Order erroneously reduced the rights of existing PCS licensees along the Gulf
coast to provide service extending out into the Gulf.   Prior to the Gulf Report
and Order, VoiceStream contends, land-based PCS licensees assumed they had the
right to provide service throughout the entire Gulf of Mexico on a primary basis,
not just in those portions of the Gulf within state-defined county boundaries.
VoiceStream argues that this assumption was reasonable because the Commission did
not establish a Gulf licensing area for PCS as it had in cellular, and did not
identify any limits on the ability of land-based PCS carriers to extend service
into the Gulf.   VoiceStream and other PCS licensee commenters also argue that
they presumed that they could serve the entire Gulf of Mexico based on the PCS
rules regarding signal strength, propagational characteristics of signals over
water, and the absence of any PCS Gulf licensee that they would be required to
protect from interference.   Commenters argue that PCS auction bidders relied on
these factors in setting their bids for land-based licenses along the Gulf coast,
and that it was reasonable for such bidders to assume that no separate PCS license
would ever be created in the Gulf.

38. VoiceStream and other commenters assert that by defining PCS licensing areas
as co-extensive with county boundaries, allowing carriers to provide service in
the Gulf beyond county boundaries only on a secondary basis, and leaving open the
possibility of licensing separate PCS markets in the Gulf at a later date, the
Gulf Report and Order has arbitrarily reduced the rights of existing PCS
licensees.   VoiceStream contends that PCS licensees bordering the Gulf should be
expressly authorized to serve the entire Gulf area on a primary basis, and that
the Commission should be precluded from establishing a separate PCS licensing area
for the Gulf.  Alternatively, VoiceStream requests that if we conclude that PCS
licensing areas along the Gulf coast are limited to county boundaries, we should
redefine the market area boundaries of PCS licensees extending into the Gulf based
on the federally-defined Exclusive Economic Zone (EEZ) which extends 200 nautical
miles into the Gulf of Mexico.
39. Discussion.  We affirm the conclusion in the Gulf Report and Order that the
licensing areas of PCS licensees along the Gulf coast are co-extensive with county
boundaries.  The Commission has clearly stated in its rules and proceedings that
PCS is licensed using Major Trading Areas (MTAs) and Basic Trading Areas (BTAs),
as defined in the Rand McNally Commercial Atlas and Marketing Guide.   The
boundaries of MTAs and BTAs are expressly based on county boundaries.   Thus, we
find that county boundaries define the licensing area borders for PCS licensees,
both on land and in the Gulf.

40. Similarly, the PCS technical rules regarding field strength limits at
licensing area borders do not entitle licensees to extend service on a primary
basis beyond the licensing areas specified on their authorizations. Nothing in the
Commission’s rules indicates that carriers may serve areas outside of their
markets on a primary basis simply because there is no adjacent licensee.  To the
contrary, our rules state that the “holding of an authorization does not create
any rights beyond the terms, conditions and period specified in the
authorization.”   We reject the argument that our conclusions here represent a
“reduction” in the rights of PCS licensees, because primary rights to serve the
Gulf beyond county boundaries were never granted as part of those licenses.

41. We also reject the argument that the Commission should grant land-based PCS
licensees primary rights to serve the Gulf because PCS bidders allegedly relied on
the lack of a separate PCS Gulf licensee in setting their bids.   In our
proceeding on MDS/ITFS service in the Gulf, we rejected a similar argument that
bidders for BTA-based MDS licenses along the Gulf coast could reasonably assume
that there was no prospect of future licensing of the service in the Gulf:
It would [not] have been reasonable for applicants [ ] to have based their bidding
strategy upon the assumption that, in the future, the Commission would not
designate a Gulf service area or auction authorizations for such a service area.
As a general matter, in circumstances such as this, we expect all applicants when
developing their bidding strategies to take into consideration potential
allocation or auction determinations that would result in additional auctions in
the service.
In the case of PCS, nothing in the bidder information packages for the various PCS
auctions, including maps that set out MTA and BTA boundaries, indicated that the
Commission had foreclosed the possibility of creating a PCS licensing area in the
Gulf at some time in the future.

42. Finally, we see no basis to adopt VoiceStream’s request that we change the MTA
and BTA definitions in PCS to extend existing Gulf coast markets 200 nautical
miles into the Gulf based on the federally-defined Exclusive Economic Zone.  The
Commission adopted the MTA and BTA market areas for PCS in 1993 after much debate
over which type of service area is the most appropriate,  and has repeatedly
affirmed its decision to use MTA and BTA market areas on reconsideration.
VoiceStream provides no compelling reason why we should revisit our MTA and BTA
market definitions ten years after the PCS rules were adopted.

43. While we affirm that the licensing areas of land-based PCS licensees are
co-extensive with county boundaries, we reiterate that this does not prevent such
licensees from building facilities or extending their coverage further into the
Gulf on a secondary basis so long as such coverage does not cause interference to
other operations.  Moreover, we clarify that our use of the term “secondary” in
this context does not imply the existence of a “primary” Gulf spectrum user with
superior rights, nor does it imply that PCS licensees should expect that a primary
carrier will be licensed.  The term “secondary” signifies that PCS licensees who
choose to build facilities or extend coverage into the Gulf beyond county
boundaries do not have exclusive operating rights in such areas, and must accept
interference as well as avoiding interference to others.  As a practical matter,
this enables land-based PCS to extend their coverage into the Gulf so long as they
coordinate with one another, because there is no primary PCS licensee in the Gulf.

44. We also reiterate that we find no basis in the record to create a separate PCS
Gulf licensee with primary rights in this proceeding.  The Gulf Report and Order
sought only to provide flexibility in cases where carriers in a particular service
seek to establish a separate Gulf market.   In those cases, we would commence a
proceeding to determine whether, based on a service’s specific rules, a new Gulf
market should be established.  In the Gulf Report and Order, however, we did not
find that a new PCS market should be created.  To the contrary, we stated that the
lack of support in the record suggests that there is limited interest among PCS
carriers in serving offshore facilities in the Gulf.   We see no reason to revisit
this issue.  While we do not rule out the possibility that circumstances could
change at some time in the future, we emphasize that we would only consider
creation of a PCS Gulf licensing area based on a clear record demonstrating that
such a step is in the public interest, and that the interests of land-based PCS
licensees along the Gulf coast have been fully taken into account.

IV. PROCEDURAL MATTERS.

 A. Supplemental Regulatory Flexibility Act Certification.

45. The Regulatory Flexibility Act of 1980, as amended (RFA)  requires that a
regulatory flexibility analysis be prepared for rulemaking proceedings, unless the
agency certifies that "the rule will not have a significant economic impact on a
substantial number of small entities."   The RFA generally defines "small entity"
as having the same meaning as the terms "small business," "small organization,"
and "small governmental jurisdiction."   In addition, the term "small business"
has the same meaning as the term "small business concern" under the Small Business
Act.   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.  As required
by the RFA, a Final Regulatory Flexibility Analysis was incorporated in the Gulf
Report and Order.  This Supplemental Final Regulatory Flexibility Analysis is
limited to matters raised on reconsideration.
46. In this order, we affirm the decision in the Gulf Report and Order to use
different formulas for predicting the propagation of cellular signals over land
and over water as the basis for determining the service area boundaries (SABs) of
land-based and water-based cell sites in the Gulf of Mexico area.  We also affirm
that the market boundaries of PCS licensees adjacent to the Gulf of Mexico are
co-extensive with county boundaries.  We also amend rule section 22.912 to codify
the Commission’s decision in the Gulf Report and Order  that a land carrier may
not extend its SABs into any part of the GMEZ, served or unserved, without the
Gulf carrier’s consent.  Further, we clarify language in section 22.911(a)(2) to
more accurately reflect a rule change made in the Gulf Report and Order.

47. Because this decision affects only the small number of carriers providing
cellular service along the coastline adjacent to the Gulf of Mexico, we conclude
that this action will not affect a substantial number of small businesses.
Further, the Order on Reconsideration affirms or codifies decisions previously
made in the Gulf Report and Order.  Accordingly, we certify that this decision
will not have a significant economic impact on a substantial number of small
entities. The Commission will send a copy of the Order on Reconsideration
including a copy of this certification, in a report to Congress pursuant to the
Congressional Review Act of 1996.   In addition, the Order on Reconsideration and
this certification will be sent to the Chief Counsel for Advocacy of the Small
Business Administration, and will be published in the Federal Register.

 B. Paperwork Reduction Act Analysis.

48. This Order on Reconsideration has been analyzed with respect to the Paperwork
Reduction Act of 1995, Pub. L. 104-13, and found to impose no new or modified
reporting and recordkeeping requirements or burdens on the public.

V. ORDERING CLAUSES.

49. Accordingly, IT IS ORDERED that, pursuant to sections 1, 4(i), 4(j), and 405
of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i), 154(j),
and 405, and section 1.429 of the Commission's rules, 47 C.F.R. § 1.429, that the
April 3, 2002 Petition for Partial Reconsideration filed by Petroleum
Communications, Inc., IS DENIED IN PART AND GRANTED IN PART, as described herein.

50. IT IS FURTHER ORDERED that the February 22, 2002 Petition for Reconsideration
filed by Petroleum Communications, Inc., IS GRANTED, and that File Nos.
02590-CL-97, 02593-CL-97, 02594-CL-97, 02595-CL-97, 02596-CL-97, 02600-CL-P2-97,
and 02407-CL-P2-97 are reinstated and placed in pending status.

51. IT IS FURTHER ORDERED that the Petition for Reconsideration filed by
VoiceStream Wireless Corporation IS DENIED.

         FEDERAL COMMUNICATIONS COMMISSION

         Marlene H. Dortch
        Secretary

  APPENDIX A
RULES
1. Section 22.911 is amended by revising paragraph (a)(2) to read as follows:

§ 22.911 Cellular geographic service area.

* * * * *

(a) * * *

(2) The distance from a cell transmitting antenna located in the Gulf of Mexico
Service Area (GMSA) to its SAB along each cardinal radial is calculated as
follows:

d  =  6.895  ×  h0.30  ×  p0.15

where:
d is the radial distance in kilometers
h is the radial antenna HAAT in meters
p is the radial ERP in Watts

* * * * *

2. Section 22.912 is amended by revising paragraphs (a) and (b) as follows:

§ 22.912 Service area boundary extensions.

* * * * *

(a) De minimis extensions.  Except as otherwise provided in paragraphs (b) and
(d), SABs may be extended into adjacent cellular markets if such extensions are de
minimis, are demonstrably unavoidable for technical reasons of sound engineering
design, and do not extend into the CGSA of any other licensee’s cellular system on
the same channel block, any part of the Gulf of Mexico Exclusive Zone (GMEZ), or
into any adjacent cellular market on a channel block for which the five year
build-out period has expired.

(b) Contract extensions.  Except as otherwise provided in paragraph (d), cellular
system licensees may enter into contracts to allow SAB extensions as follows:

(1) The licensee of any cellular system may, at any time, enter into a contract
with an applicant for, or licensee of, a cellular system on the same channel block
in an adjacent cellular market, to allow one or more SAB extensions into its CGSA
only (not into unserved area).

(2) The licensee of the first authorized cellular system on each channel block in
the Gulf of Mexico Service Area (GMSA) may enter into a contract with an applicant
for, or licensee of, a cellular system on the same channel block in an adjacent
cellular market or in the Gulf of Mexico Coastal Zone (GMCZ), to allow one or more
SAB extensions into the Gulf of Mexico Exclusive Zone.

(3) The licensee of the first authorized cellular system on each channel block in
each cellular market may enter into a contract with an applicant for or licensee
of a cellular system on the same channel block in an adjacent cellular market, to
allow one or more SAB extensions into its CGSA and/or unserved area in its
cellular market, during its five year build-out period.

* * * * *

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