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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.
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
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AGENCY: Federal Communications
Commission.
ACTION: Final rule.
SUMMARY: In this document, the Federal
Communications Commission (FCC)
adopts a rule that requires facilitiesbased 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
§ 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
[email protected]. For
additional information concerning the
Paperwork Reduction Act information
collection requirements contained in
this document, send an e-mail to
[email protected] or contact Judith B.
Herman at 202–418–0214 or via the
Internet at [email protected].
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 [email protected]. Copies of
the public notice also may be obtained
via the Commission’s Electronic
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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 facilitiesbased 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
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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
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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.
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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
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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
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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
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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 proinvestment 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
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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
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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
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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.
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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
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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 underinvest 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
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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 facilitiesbased 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
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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
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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 wideranging 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
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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.
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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.
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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
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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.
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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
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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
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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
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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 nondiscriminatory 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
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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
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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
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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
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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
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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 precomplaint 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
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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
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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
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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 caseby-case basis.
65. Determination of Commercial
Reasonableness. The Commission will
assess whether a particular data roaming
offering includes commercially
reasonable terms and conditions or
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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;
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• 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
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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
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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. 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
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.
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
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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.
3. This rule will apply to all facilitiesbased 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.
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,
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.
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.
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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
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
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.
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
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26211
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. 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-byservice 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 nowsuperseded 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
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.
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).
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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.
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
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.
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.
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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 reauction 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.
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
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).
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.
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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.
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
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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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
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.
15. In addition, there are numerous
incumbent site-by-site SMR licensees
and licensees with extended
implementation authorizations in the
34 47
CFR 90.814(b)(1).
35 Id.
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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).
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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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.
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
41 See generally 13 CFR 121.201, NAICS code
517210.
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,
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26213
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
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.
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
2008, FCC Forms 601 and 602 Due September 9,
2008, Final Payments Due September 23, 2008, TenDay 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).
49 The service is defined in § 22.99 of the
Commission’s Rules, 47 CFR 22.99.
50 BETRS is defined in §§ 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.
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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.
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.
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’’
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.
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.
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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
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).
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Fmt 4700
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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.
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
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).
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
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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
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.
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
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).
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).
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.
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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.
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).
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
77 See
id., 17 FCC Rcd at 1088 ¶ 173.
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.
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).
84 13 CFR 121.201, NAICS code 517210.
85 Id.
78 See
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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.
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 AirGround 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 AirGround Radiotelephone Services
licenses. Neither of the winning bidders
claimed small business status.
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
86 Trends
in Telephone Service, tbl. 5.3.
87 Id.
88 13
CFR 121.201, NAICS codes 517210.
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).
89 Amendment
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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
28. Fixed Microwave Services.
Microwave services include common
carrier,95 private-operational fixed,96
92 13
CFR 121.201, NAICS code 517210.
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).
95 See 47 CFR Part 101, Subparts C and I.
96 See 47 CFR Part 101, Subparts C and H.
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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.
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
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.
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,
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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 reauction, for a total of 133 small entity
LMDS providers as defined by the SBA
and the Commission’s auction rules.
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.
31. 39 GHz Service. The Commission
created a special small business size
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).
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.
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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.
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.
33. Incumbent 24 GHz Licensees. This
analysis may affect incumbent licensees
who were relocated to the 24 GHz band
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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).
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.
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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.
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
120 13
CFR 121.201, NAICS code 517210.
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.
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).
121 U.S.
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standards.125 These size standards will
apply to the future auction, if held.
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.
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.
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.
38. The most current Economic
Census data for all such firms are 2007
data, which are detailed specifically for
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).
126 47 CFR 2.106; see generally 47 CFR 27.1–.70.
127 The service is defined in section 90.1301 et
seq. of the Commission’s Rules, 47 CFR 90.1301 et
seq.
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).
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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.
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
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.
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
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).
134 13 CFR 121.201, NAICS code 517410.
135 13 CFR 121.201, NAICS code 517919.
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.
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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.
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
139 http://www.census.gov/cgi-bin/sssd/naics/
naicsrch?code=517919&search=2007%20
NAICS%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.
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).
PO 00000
Frm 00042
Fmt 4700
Sfmt 4700
more.144 Accordingly, the Commission
concludes that the majority of
businesses in this category were small.
43. Telephone Apparatus
Manufacturing. This industry comprises
establishments primarily engaged in
manufacturing wire telephone and data
communications equipment. These
products may be standalone or boardlevel 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.
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
144 http://factfinder.census.gov/servlet/
IBQTable?_bm=y&-ds_name=EC0731SG3&ib_type=NAICS2007&-NAICS2007=334220.
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.
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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Commission concludes that all of the
businesses in this category were small.
jlentini on DSKJ8SOYB1PROD with RULES
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
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
151 See
5 U.S.C. 603(c).
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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.’’
PO 00000
Frm 00043
Fmt 4700
Sfmt 4700
26219
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
[email protected] 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 § 20.12(e)(2), which contains an
information collection that is subject to
OMB approval.
76. It is further ordered that
§ 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
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Federal Register / Vol. 76, No. 88 / Friday, May 6, 2011 / Rules and Regulations
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).
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
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.
2. Amend § 0.111 by revising
paragraph (a)(11) introductory text (note
remains unchanged) to read as follows:
■
jlentini on DSKJ8SOYB1PROD with RULES
Functions of Bureau.
(a) * * *
(11) Resolves other complaints against
Title III licensees and permittees,
including complaints under § 20.12(e) of
this chapter.
*
*
*
*
*
PART 20—COMMERCIAL MOBILE
SERVICES
3. The authority citation for part 20 is
revised to read as follows:
■
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16:12 May 05, 2011
Jkt 223001
4. Revise the heading to part 20 to
read as set forth above.
■ 5. Amend § 20.3 by adding the
definition ‘‘commercial mobile data
service’’ in alphabetical order to read as
follows:
■
§ 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.
*
*
*
*
*
■ 6. Amend § 20.12 by adding
paragraphs (a)(3) and (e) to read as
follows:
§ 20.12
47 CFR Part 20
Communications common carriers.
§ 0.111
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.
[FR Doc. 2011–10223 Filed 5–5–11; 8:45 am]
BILLING CODE 6712–01–P
Resale and roaming.
(a) * * *
(3) Scope of Offering Roaming
Arrangements for Commercial Mobile
Data Services. Paragraph (e) of this
section is applicable to all facilitiesbased 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
PO 00000
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
§§ 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 § 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
§ 1.2 of this chapter may vary depending
on the circumstances of each case.
Frm 00044
Fmt 4700
Sfmt 4700
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Part 19
[FAC 2005–50; FAR Case 2011–004; Docket
2011–0004; Sequence 1]
RIN 9000–AL88
Federal Acquisition Regulation;
Socioeconomic Program Parity
AGENCY: Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Correcting amendment.
SUMMARY: This document contains a
correction to the interim rule which
published in the Federal Register of
Wednesday, March 16, 2011 (76 FR
14568). The regulations implement
section 1347 of the ‘‘Small Business Jobs
Act of 2010.’’
DATES: Effective on May 6, 2011.
FOR FURTHER INFORMATION CONTACT: Mr.
Karlos Morgan, Procurement Analyst, at
(202) 501–2364. Please cite FAC 2005–
50; FAR Case 2011–004.
E:\FR\FM\06MYR1.SGM
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| File Type | application/pdf |
| File Title | Document |
| Subject | Extracted Pages |
| Author | U.S. Government Printing Office |
| File Modified | 2011-07-15 |
| File Created | 2011-07-15 |