[Federal Register Volume 66, Number 12 (Thursday, January 18, 2001)]
[Proposed Rules]
[Pages 4771-4782]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-1306]
[[Page 4771]]
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DEPARTMENT OF COMMERCE
National Telecommunications and Information Administration
47 CFR Part 301
[Docket No. 001206341-0341-01]
RIN 0660-AA14
Mandatory Reimbursement Rules for Frequency Band or Geographic
Relocation of Federal Spectrum-Dependent Systems
AGENCY: National Telecommunications and Information Administration,
Commerce.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The National Telecommunications and Information Administration
(NTIA) proposes to amend its regulations to set forth the rules
governing reimbursement to Federal entities by the private sector as a
result of reallocation of frequency spectrum. This action is necessary
to provide spectrum for future commercial wireless communications
service and to compensate the Federal Government for the costs incurred
in making that spectrum available.
DATES: Submit comments on or before March 19, 2001. Reply comments are
due April 18, 2001.
ADDRESSES: The public is invited to submit written comments in paper or
electronic form. Comments may be mailed to Milton Brown, Office of the
Chief Counsel, National Telecommunications and Information
Administration (NTIA), Room 4713, U.S. Department of Commerce, 1401
Constitution Avenue, N.W., Washington, DC 20230. Paper submissions
should include a version on diskette in ASCII, Word Perfect (please
specify version), or Microsoft Word (please specify version) format.
Comments may be viewed on NTIA's website at http://www.ntia.doc.gov.
Comments submitted in electronic form may be sent to
[email protected]. Electronic comments should be submitted in
the formats specified above.
FOR FURTHER INFORMATION CONTACT: Milton Brown, NTIA, (202) 482-1816.
SUPPLEMENTARY INFORMATION:
Authority: 47 U.S.C. 921, et seq. (Supp. V. 1993); Strom
Thurmond National Defense Authorization Act for FY 1999, Pub. L. No.
105-261, 112 Stat. 1920 (1998); 47 U.S.C. 923(g).
I. Introduction
1. NTIA is the executive branch agency principally responsible for
developing and articulating domestic and international
telecommunications policy. NTIA acts as the principal advisor to the
President on telecommunications policies pertaining to the Nation's
economic and technological advancement and to the regulation of the
telecommunications industry. NTIA is also responsible for managing the
Federal Government's use of the radio spectrum. The Federal
Communications Commission (FCC), an independent agency of the Federal
Government, manages electromagnetic spectrum used by the private
sector, including state and local governments. With the proliferation
of radio-based technologies, management and use of the radio spectrum
has become increasingly complex. Federal agencies are extremely
dependent on spectrum access to provide a wide variety of critical
services to the American people. Congress has found that
telecommunications and information are vital to the public welfare,
national security, and competitiveness of the United States, and that
technological advances in the telecommunications and information fields
make it imperative that the United States maintain effective national
and international policies and programs capable of taking advantage of
these continued advancements.\1\
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\1\ See National Telecommunications and Information
Administration Organization Act, 47 U.S.C. 901 (b)(1)-(2).
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II. Background
2. On August 10, 1993, Title VI of the Omnibus Budget
Reconciliation Act of 1993 (OBRA 93) was signed into law.\2\ OBRA 93
authorized the FCC to use competitive bidding (auctions) for the
reassignment and licensing of spectrum frequencies for certain
commercial services. OBRA 93 also directed the Secretary of Commerce to
transfer at least 200 megahertz (MHz) of spectrum below 5 gigahertz
(GHz) from Federal agencies to the FCC for licensing to the private
sector. Pursuant to OBRA 93, NTIA identified Federal bands for
reallocation totaling 235 MHz from the Federal Government to non-
Government use in its February 1995 Spectrum Reallocation Final
Report.\3\
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\2\ Pub. L. 103-66, 107 Stat. 31 (1993).
\3\ See National Telecommunications and Information
Administration, U.S. Department of Commerce, NTIA Special
Publication 94-27, Spectrum Reallocation Final Report (Feb. 1995).
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3. Title III of the Balanced Budget Act of 1997 (BBA 97) required
the Secretary of Commerce to identify an additional 20 MHz below 3 GHz
for reallocation to non-Federal users.\4\ In response to this
directive, NTIA issued a Spectrum Reallocation Report in February 1998
which identified the additional bands for reallocation.\5\ BBA 97
directed the FCC to auction the 20 MHz by 2002 and the 1710-1755 band
identified in the 1995 Spectrum Reallocation Final Report after January
1, 2001.\6\
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\4\ Pub. L. 105-33, 111 Stat. 251 (1997).
\5\ See National Telecommunications and Information
Administration, U.S. Department of Commerce, NTIA Special
Publication 98-36, Spectrum Reallocation Report (Feb. 1998).
\6\ See note 4 supra at section 3002(b). Of the 20 MHz of
spectrum, eight (8) MHz (i.e., 139-140.5 MHz, 141.5-143 MHz and
1385-1390 MHz bands) were subsequently reclaimed by the Federal
Government in accordance with the National Defense Authorization Act
for Fiscal Year 2000, See Pub. L. 106-65, 113 Stat. 512 (1999).
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4. In 1998, Congress passed the Strom Thurmond National Defense
Authorization Act for Fiscal Year 1999 (the Act).\7\ This legislation
sought to encourage the transfer of electromagnetic spectrum from
Federal government to private use by authorizing Federal entities to
accept compensation payments when they relocate or modify their
frequency use to accommodate non-Federal users of the spectrum.\8\
Indeed the Act requires ``any person on whose behalf a Federal entity
incurs costs'' pursuant to frequency spectrum relocation or
modification ``to compensate the Federal entity in advance'' for the
entity's modification or relocation expenses.\9\ The Act also
references various expenses associated with frequency relocation or
modification that qualify for reimbursement including ``the costs of
any modification, replacement, or re-issuance of equipment, facilities,
operating manuals, or regulations incurred by that entity.'' \10\
Moreover, the Act requires the Federal entity to notify NTIA of the
``marginal costs anticipated to be associated with such relocation or
with the modifications necessary to accommodate prospective
licensees.'' \11\
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\7\ Pub. L. 105-261, 112 Stat. 1920 (1998) (amending section
113(g) of the NTIA Organization Act (codified at 47 U.S.C. 923(g)).
\8\ See 47 U.S.C. 923(g)(1)(A). ``Federal entity'' is defined as
``any department, agency, or other instrumentality of the Federal
Government that utilizes a Government station license obtained under
section 305 of the 1934 Act (47 U.S.C. 305).'' 47 U.S.C. 923(i).
\9\ See 47 U.S.C. 923(g)(1)(B).
\10\ See 47 U.S.C. 923(g)(1)(A).
\11\ Id.
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5. The Act directs NTIA and the FCC to ``develop procedures for the
implementation of [relocation] which * * * shall include a process for
resolving any differences that arise between the Federal Government and
commercial licensees regarding
[[Page 4772]]
estimates of relocation or modification costs.'' \12\
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\12\ See 47 U.S.C. 923(g)(1)(E).
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6. These proposed rules provide a procedure for Federal entities to
receive reimbursement for the relocation or modification expenses that
they incur as a result of the reallocation of radio spectrum mandated
by OBRA 93, BBA 97, and future reallocations. As such, these proposed
rules address reimbursement issues associated with the relocation or
modification of frequency spectrum that have been reallocated. The
proposed rules do not apply to issues involving the reallocation of
frequency spectrum. These proposed rules provide a mechanism for the
Federal entities to submit estimates of the costs to relocate. The
proposed rules direct NTIA to solicit estimates of the costs of
relocation from the affected Federal entities, and provide that
information to the FCC at least 180 days prior to an auction.\13\
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\13\ We note that the FCC will notify potential bidders prior to
the auction of the estimated relocation costs submitted by the
Federal entities for the affected bands.
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7. The proposed rules also provide procedures for the successful
bidder to make payment to the Federal entity after an auction. Pursuant
to direction from Congress, the proposed rules also include a process
for resolving differences that arise between the Federal Government and
the successful bidder regarding estimates of relocation or modification
of costs. To the extent that a successful bidder disagrees with a
Federal entity's estimated relocation costs, the proposed rules provide
for a mandatory negotiation and/or third-party mediation period. If the
parties do not agree to relocation costs within the mandatory
negotiation period, the parties must enter into a non-binding
arbitration program.
8. As required by section 603 of the Regulatory Flexibility Act, 5
U.S.C. 603, NTIA has prepared an Initial Regulatory Flexibility
Analysis (IRFA) of the expected impact on small entities of the
proposals suggested in this document. The IRFA is set forth in the
Regulatory Flexibility Analysis section of these proposed rules.
Written public comments are requested on the IRFA. These comments must
be filed in accordance with the same filing deadlines as comments filed
in this Notice of Proposed Rulemaking (NPRM), but they must have a
separate and distinct heading designating them as responses to the
IRFA. NTIA shall send a copy of this NPRM, including the IRFA, to the
Chief Counsel for Advocacy of the Small Business Administration in
accordance with section 603(a) of the Regulatory Flexibility Act, 5
U.S.C. 603(a).
III. Discussion
9. These proposed rules have been developed to ensure that the
Federal Government is fully reimbursed for the expenses it incurs in
retuning, modifying or relocating a system as a result of reallocation.
To the extent that there are other ways to accomplish this goal, NTIA
will entertain comments from interested parties.
Affected Bands
10. Pursuant to OBRA 93, NTIA identified 235 MHz of Federal
Government spectrum for transfer to the private sector.\14\ Similarly,
NTIA identified another 20 MHz of spectrum for reallocation to the
private sector as mandated by the BBA 97.\15\ The table below shows the
specific frequency bands reallocated from Federal Government use to the
private sector as a result of the legislation and Federal Government
action.
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\14\ See note 3, supra. The Federal Government, however, later
reclaimed fifty (50) MHz of this spectrum (i.e., 4635-4685 MHz) and
substituted 4940-4990 MHz in its place. See 47 U.S.C. 924(b), 926;
see also Letter from Larry Irving, Assistant Secretary for
Communications and Information, U.S. Department of Commerce, to
William E. Kennard, Chairman, Federal Communications Commission
(March 30, 1999) (notifying FCC of reclamation and substitutiuon of
spectrum).
\15\ See note 5, supra.
Reallocated Frequency Bands From the Federal Government to the Private Sector
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Bandwidth
Freq. band (MHz) Legislation (MHz) Schedule
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1390-1400......................... OBRA-93 10 January 1999
1427-1432......................... OBRA-93 5 January 1999
1670-1675......................... OBRA-93 5 January 1999
1710-1755......................... OBRA-93 45 January 2004 \16\
2300-2310......................... OBRA-93 10 August 1995
2390-2400......................... OBRA-93 10 February 1995
2400-2402......................... OBRA-93 2 August 1995
2402-2417......................... OBRA-93 15 February 1995
2417-2450......................... OBRA-93 33 August 1995
3650-3700......................... OBRA-93 50 January 1999
4940-4990......................... OBRA-93 \17\ 50 January 1997
216-220........................... BBA-97 4 January 2002
1432-1435......................... BBA-97 3 January 1999
2385-2390......................... BBA-97 5 January 2005
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11. On October 17, 1998, the President signed into law the Strom
Thurmond National Defense Authorization Act for Fiscal Year 1999, which
among other things, amended the NTIA Organization Act to require
private sector entities to reimburse Federal users for relocations due
to reallocation of spectrum assignments.\18\ The Act also sets forth
which spectrum would be the subject of the mandatory reimbursement
rules: the 1710-1755 MHz band from the first reallocation report, the
20 MHz identified in the second reallocation report, and any future
reallocations.\19\ The affected frequency bands that currently qualify
for reimbursement under the proposed rule include the following:
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\16\ The NTIA Spectrum Reallocation Final Report provided for
early reallocation band (i.e., 1999) for the top 25 major cities in
the United States with the private sector reimbursing the Federal
users. Subsequently, Title III of BBA 97 (entitled ``Communications
and Spectrum Allocation Provisions'') provides for the reallocation
of this band for competitive bidding commencing after January 1,
2001.
\17\ See note 14, supra.
\18\ See note 7, supra.
\19\ See note 6, supra.
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[[Page 4773]]
Bands That Qualify for Reimbursement
216-220 MHz
1432-1435 MHz
1710-1755 MHz
2385-2390 MHz
12. We seek comment on the affected bands identified above. Future
bands that qualify for reimbursement will be identified via a public
notice and request for comment.
Mandatory Relocation
13. DOBRA 93 and BBA 97 require NTIA to identify spectrum for
reallocation to exclusive non-Government uses. Moreover, Section 3002
of BBA 97 amended the NTIA Organization Act to add a subsection to
encourage Federal entities to relocate Government stations from the
bands identified in any reallocation report through means of these
reimbursement requirements or any other provision of law to ``maximize[
] the spectrum available for non-Federal use.'' \20\ Nevertheless, in
some cases, it may be technically possible for incumbent Federal
entities to continue to share the reallocated spectrum with the new
commercial licensees. We seek comment on whether these Federal entities
should be required to relocate in those cases where sharing is
technically possible. If not, we seek comment on the conditions whereby
such Federal entities should be permitted to remain in the band and who
would pay for any system modification that would enhance spectrum
sharing. For example, because the spectrum will be reallocated to
exclusive non-Government uses as required by DOBRA 93 or BBA 97, should
such a Federal entity be permitted to remain in the band only on a non-
interference basis after the appropriate regulatory approvals have been
obtained?
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\20\ See 47 U.S.C. 923(h).
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14. We also solicit comment on whether a Federal entity should be
entitled to reimbursement of relocation costs if it relocates to a
landline communications system or commercial radio services.\21\ We
note that such an option may provide the most spectrum efficient and
cost-effective alternative to a government-exclusive radio frequency
system consistent with policy directive set forth in the NTIA
Organization Act. For example, section 104 of the NTIA Organization Act
provides that the Secretary of Commerce, in assigning frequencies for
mobile radio services and other radio services ``shall promote
efficient and cost-effective use of the spectrum to the maximum extent
feasible.'' 47 U.S.C. 903(d)(1). Moreover, the NTIA Organization Act
provides that any Federal Government station identified for
reallocation shall ``to the maximum extent practicable * * * relocate
its spectrum use to other frequencies that are reserved for Federal use
or to consolidate its spectrum use with other Federal Government
stations in a manner that maximizes the spectrum available for non-
Federal use.'' Id. at section 923(h). There may also be other
circumstances where no other frequency is available and a landline or
other commercial service is a viable alternative available to the
Federal entity that is required to relocate.
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\21\ We note, however, that the statute provides reimbursement
to Federal entities that relocate to ``another frequency or
frequencies.'' 47 U.S.C. 923(g).
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Availability of a Comparable Facility
15. The proposed rules do not require a Federal entity to relocate
until a comparable facility is available to it for a reasonable time to
make adjustments, determine compatibility, and ensure a seamless
transition from an existing facility or frequency band(s) to the new or
modified facility or frequency band(s). NTIA defines the term
``comparable facility'' to mean that the replacement facility restores
the operational capabilities of the original facility to an equal or
superior level. For example, in the 1710-1755 MHz band, the vast
majority of Non-DoD Federal Government facilities are fixed point-to-
point microwave networks, and may be replaced by fixed microwave
facilities in other bands. On the other hand, DoD operates a number of
systems, including highly mobile, non-communications systems. These
military systems must operate within the limits of established
doctrine.
16. NTIA will consider four basic factors to determine
comparability of replacement communications facility, although there
may be other factors to consider. These four basic factors are
communications throughput, system reliability, operating costs, and
operational capability. A replacement facility will be considered
comparable if the new system's operational capability, communications
throughput and reliability are equal to or greater than that of the
system being replaced, taking into account the operating costs.
17. Communications throughput, for the purposes of this proceeding,
means the amount of information transferred within the system for a
given amount of time. For digital systems, communications throughput is
measured in bits per second (bps), for analog systems the
communications throughput is measured by the number of voice, video or
data channels.
18. System reliability means the percentage of time information is
accurately transferred within a system. The reliability of a system is
a function of equipment failures (e.g., transmitters, feed lines,
antennas, receivers and battery back-up power) and the availability of
the frequency channel given the propagation characteristics (e.g.,
frequency, terrain, atmospheric condition, and noise) and equipment
sensitivity. System reliability also includes the ability of a radio-
communications station to perform a required function under stated
conditions for a stated period of time. System reliability may involve
three distinct concepts: Attaining a specified level of performance;
the probability of achieving that level; and maintaining that level for
a specified time. For digital systems this would be measured by the
percent of time the bit error rate (BER) exceeds a desired value, and
for analog transmissions this would be measured by the percentage of
time that the receiver carrier-to-noise ratio exceeds the receiver
threshold. It should be noted for many DoD systems, performance is
defined by sophisticated system specifications as related to specific
mission requirements. In measuring/assessing DoD systems, these
specific system specifications must be used.
19. Operating costs are the costs to operate and maintain the
Federal entity's replacement system. New licensees would compensate
federal entities for any increased recurring costs associated with the
replacement facilities (e.g., additional rental payments and increased
utility fees) for five years after relocation.
20. Operational capability is the measure of a system's ability to
perform its validated functions within doctrinal requirements,
including service, joint service, and allied interoperability
requirements with related systems.
21. These four factors, however, may not be appropriate measures
for all Federal Government stations required to relocate. For example,
to measure comparability for radar systems it may be more accurate to
compare the minimum required radar target cross section able to be
detected at a given range with a specified probability of false alarm
under mission-required conditions. Other measures of radar system
comparability may include target resolution and the ability to meet
performance specifications under adverse conditions such as weather and
hostile jamming. Radar and other spectrum-dependent systems may require
access to specific frequency bands to perform their missions in an
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optimal manner. For example, long range surveillance functions
relatively free of weather effects are optimized at low frequencies and
weapon control at higher frequencies. The use of higher frequencies,
however, may limit the useful range of some spectrum-dependent systems,
such as radar or data links. Such limitations could affect mission
performance.
22. NTIA seeks comments on this proposed definition and whether the
factors described above are sufficient to determine comparability of
facilities. If not, NTIA seeks comment on what other factors should be
considered, and whether such factors should be tailored to specific
Federal Government systems to be relocated.
Frequency Assignments Eligible for Reimbursement
23. The proposed rules outline the conditions, limitations and
eligibility requirements for reimbursement of the costs associated with
relocation as a result of reallocation.
24. Equipment/system modification: Sometimes radiocommunication
systems in certain bands can be modified to tune outside of the
reallocated band to the upper or lower portion of the incumbent band.
Re-tuning is oftentimes less expensive to implement, assuming there is
no congestion in the upper portion of the band as a result of the
migration and assuming the transmitter-receiver frequency separation
can be met. Re-tuning could save an agency a considerable amount of
money because it does not require additional towers or stations, new
feed lines or associated equipment. Thus, to the extent that a Federal
entity that is required to relocate is able to modify its equipment,
with the result that the retuned equipment provides operational
capabilities comparable with its original system, NTIA proposes to
limit reimbursement to the costs associated with re-tuning. We note,
however, that modification/retuning may not be possible when taking
into consideration the factor of ``operational comparability'' as noted
above. We seek comment on this proposed limitation.
25. Old Assignments versus new assignments: NTIA identified the
Federal bands for reallocation from the Federal Government to non-
Government use in the February 1995 Spectrum Reallocation Final Report,
as well as the February 1998 Spectrum Reallocation Report. On October
17, 1998, the President subsequently signed into law the National
Defense Authorization Act for Fiscal Year 1999 that requires the
private sector to reimburse Federal entities for the cost of relocation
or modification of systems as a result of reallocation. Thus, for
purposes of these proposed rules, we propose to characterize an old
assignment to a Federal entity as one that was authorized before
October 17, 1998, and a new assignment as one that was authorized after
October 17, 1998. With respect to reimbursement under these rules, we
propose that only old assignments within the affected bands (i.e., 216-
220 MHz, 143-1435 MHz, 1710-1755 MHz, 2385-2390 MHz) would be entitled
to reimbursement. NTIA believes that the costs associated with any new
assignment requested by Federal entities after the respective dates of
reallocation reports in the affected bands should be borne by that
Federal entity rather than a new commercial licensee to prevent unjust
enrichment. We seek comment on this limitation.
26. Exempted Federal power agencies: Assignments made to Federal
power agencies (FPAs) are statutorily exempt from the requirements to
relocate under the reallocation reports.\22\ Thus, the 1995 Spectrum
Reallocation Final Report provides a list of frequency assignments in
the 1710-1755 MHz band that support the FPAs and that are not required
to relocate.\23\ NTIA believes, however, that Section 923(g)(1)(A) of
Title 47 of the U.S. Code can be read to permit an FPA to accept
reimbursement for relocations undertaken on a voluntary basis. We seek
comment on whether an FPA that wishes to relocate from a band of
spectrum identified for reallocation can accept voluntary reimbursement
from a commercial licensee. If so, should the parties be subject to
these proposed rules or be left exclusively to voluntary negotiations?
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\22\ See 47 U.S.C. Sec. 923(c)(4)(C). The term Federal power
agency refers to the Tennessee Valley Authority, the Bonneville
Power Administration, the Western Area Power Administration, the
Southwestern Power Administration, the Southeastern Power
Administration, and the Alaska Power Administration.
\23\ See Spectrum Reallocation Final Report, NTIA Special
Publication 95-32, Appendix E, Tables 1and 2.
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27. Other government stations: Under the 1995 Spectrum Reallocation
Final Report and the 1998 Spectrum Reallocation Report, NTIA also
exempted other Federal Government assignments from the requirement to
relocate from the bands identified for reallocation either indefinitely
or for a longer terms of years.\24\ We seek comment on whether these
Federal entities can accept reimbursement for voluntarily relocating
these stations to a commercial licensee, and if so, whether such
negotiations should be subject to these proposed rules.
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\24\ See id. at Appendix E (Exempted Safety-of-Life Fixed
Microwave Stations in the 1710-1755 MHz band); see also 1998
Spectrum Reallocation Report at 3-18 (Table 3-2), 3-38 (Table 3-4),
3-48 (Table 3-6), 4-1 (Table 4-1) (setting forth the sites exempt
from relocation or with special relocation dates in the 216-220 MHz,
1432-1435 MHz, and 2385-2390 MHz bands).
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28. Experimental Stations: In general, the proposed rules do not
permit reimbursement for relocated frequency assignments for
experimental stations or experimental testing stations. An
``experimental station'' means a station utilizing radio waves in
experiments with a view to the development of science or technique. An
``experimental testing station'' is used for the evaluation or testing
of electronics, equipment or systems, including site selection and
transmission path surveys. These stations are oftentimes temporary use
stations and are operated on a non-interference basis. NTIA believes
that most experimental stations not be entitled to reimbursement under
the statute. Reimbursement, however, would still be required for
frequency assignments to experimental stations for systems that are in
the developmental stage that have been certified for spectrum support
by NTIA for Stage 3 developmental testing.\25\ Because systems at the
Stage 3 are certified for testing of proposed operational hardware and
potential equipment configurations, we believe that these systems are
entitled to reimbursement. We seek comment on our treatment of
experimental stations in the proposed rules.
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\25\ NTIA Manual of Regulations and Procedures for Federal Radio
Frequency Management, Section 10.3.1 (September 1995). Stage 3
certification is required for testing proposed operational hardware
and potential equipment configurations.
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Cost Sharing
29. NTIA proposes to adopt a cost-sharing plan where the potential
requirement to reimburse a Federal entity for relocation costs could
disproportionately fall upon one potential bidder or licensee or a
small number of potential bidders or licensees. For example, there may
be multiple bidders in a geographic area for small bandwidth that may
result in division of a Federal entity's bandwidth. There is no
mechanism in place to compensate the Federal entity for that portion of
the spectrum that is not licensed or acquired by any particular auction
winner. In these circumstances, one auction winner could be made to pay
for the entire spectrum allocation held by the Federal entity, despite
the
[[Page 4775]]
fact that only a portion of the bandwidth is needed. On the other hand,
auction bidders that need only a portion of the bandwidth may perceive
the cost of relocating a Federal entity too expensive in the absence of
a cost-sharing plan, and thus may forgo providing a particular service
to a geographic area.\26\ To ensure that no private entity bears the
full cost burden of relocating a government entity and to ensure that a
geographic area is not denied service because the costs of
reimbursement are disproportionate, we seek comment on whether a cost
sharing plan, among auction winners, should be implemented. We also
seek comment on what measures might reasonably be implemented to assure
that the federal entity is guaranteed full payment from multiple
licensees. We also seek comment on whether a band manager or some other
entity that licensees may establish would be appropriate to serve as a
clearinghouse to administer the cost-sharing plan. Although we
contemplate developing a cost-sharing plan and criteria for identifying
a clearinghouse for each auction, NTIA proposes to determine on a case-
by-case basis whether a cost-sharing plan is needed for each auction.
We seek comment on whether this case-by-case approach is appropriate.
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\26\ There also may be circumstances where the national nature
of federal systems is such that the requirement to reimburse a
federal entity for relocation costs may disproportionately fall on a
small number of successful bidders. Thus, a particular licensee's
geographic area may cover a critical element of a much larger
national system, such as a system where a small number of satellite
uplink transmitter terminals, each located at a specific site,
communicates to many satellites. In other situations, there are
highly mobile systems (e.g., airborne telemetry or data link
systems) that are not related to any specific geographic area.
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30. If the proposed cost-sharing plan is adopted, NTIA proposes and
seeks comment on whether it should be administered by an industry-
supported organization or the government. NTIA does not propose at this
time to designate any particular organization as the representative of
the industry that will benefit from the auction of government spectrum,
nor does NTIA propose any particular form that such an organization
might take. NTIA seeks comment on the criteria it should use in
designating a clearinghouse, and on whether it should be an existing
organization or a new entity created for this purpose. NTIA also seeks
comment on how the clearinghouse would be funded. If a clearinghouse is
established receipts from expenses already incurred would be submitted
to the clearinghouse for accounting purposes. We propose to sunset the
cost-sharing plan to five years after any auction of a government
spectrum subject to reimbursement rules. We believe that it is
important to set a date certain on which any clearinghouse will be
dissolved, and adopt a cost-sharing plan with the fewest possible
variables so that it will be easy to administer.
31. We also seek comment on how a negotiation framework can best be
established so as to minimize the personnel and other budgetary costs
to the Government. For example, should NTIA establish a negotiation
framework that will permit relocation of each Government system on a
system-wide basis? Under such a framework, a Federal agency could
request that all auction winners with frequency assignments that
require that the agency relocate its system, participate in a single
negotiation process so that a system-wide relocation solution can be
achieved. Each Federal entity would provide a single point of contact
for such consolidated negotiations. NTIA believes that such a
negotiation mechanism could benefit both affected agencies and the
private sector by streamlining administrative processes and reducing
negotiating costs for both parties.
Sunset of Reimbursement Rights
32. The Defense Authorization Act of 1999 mandated reimbursement to
Federal agencies and did not limit the time period for reimbursement.
Thus, these proposed rules do not provide a sunset provision with
respect to the reimbursement rights of Federal entities. We seek
comments on our proposal not to include a sunset provision in these
rules. Specifically, we seek comment on whether the statute precludes a
sunset date.
Costs to Relocate
33. The proposed rules identify the marginal relocation and
modification costs that are reimbursable. NTIA proposes to define
``marginal costs'' as the costs that will be incurred by a Federal
entity to achieve comparable capability of systems relocated to a new
frequency assignment or band or otherwise modified. Specifically,
marginal costs would include all engineering, equipment, software, site
acquisition and construction costs, as well as any legitimate and
prudent transaction expenses, including outside consultants, and
reasonable additional costs incurred by the Federal entity that are
attributable to relocation, including increased recurring costs
associated with the replacement facilities. Marginal costs would
include costs related to the need to achieve comparable capability when
replacing, modifying or reissuing equipment in order to relocate when
the systems that must be procured or developed have increased
functionality due to technological growth, but would not include costs
related to optional increased functionality that is independent of the
need to achieve comparable capability. To the extent that a Federal
entity needs to accelerate the introduction of systems and equipment to
allow for relocation earlier than the Federal entity had planned,
replacement costs of the accelerated systems and equipment shall be
included in marginal costs. Marginal costs would also include the costs
of any modification or replacement of equipment, software, facilities,
operating manuals, training costs, or regulations that are attributable
to relocation. Marginal costs would not include costs related to
routine upgrades and operating costs and lifecycle replacements that
would have occurred prior to the date of the required relocation. The
costs identified as reimbursable in these proposed rules conform to
those identified by Congress in 47 U.S.C. Sec. 923(g)(1)(A) and 923
(g)(2)(A). We seek comment on this definition of marginal costs.
34. Consistent with the statute, the proposed rules would require
reimbursement payments to be made in advance of relocation. The
proposed rules would also require the successful bidder to guarantee to
pay all marginal costs as a precondition of NTIA's withdrawal of the
relevant Federal license. The proposed rules also would permit payments
to be made in cash or in kind, as agreed to by the affected Federal
entity. The proposed rules further require that cash payments be made
in the account of the Federal entity in the Treasury of the United
States, or in a separate account as authorized by law.
Notification of Marginal Costs
35. Under 47 U.S.C. 923(g)(1)(A), NTIA must provide information to
the FCC so that the FCC can advise potential bidders of the marginal
costs of relocation or modification. This statute also requires Federal
entities that propose to relocate to notify NTIA of the marginal costs
anticipated to be associated with such relocation or with modifications
necessary to accommodate a prospective licensee. NTIA's proposed rules
thus require Federal entities that propose to relocate, modify or
retune systems to provide such marginal cost information to NTIA at
least 240 days prior to an FCC
[[Page 4776]]
auction.\27 \ In turn, NTIA intends to provide this information to the
FCC at least 180 days prior to such auction so that the FCC will have a
sufficient amount of time to notify potential bidders.\28\
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\27\ The marginal costs submitted on behalf of the Federal
agencies as part of the notification process may be subject to
review and approval by the Office of Management and Budget (OMB).
OMB's review would assure the accuracy of the costs. See also
Section 1064(d) of the Strom Thurmond National Defense Authorization
Act for Fiscal Year 1999, Pub. L. No. 105-261, 112 Stat. 1920
(1998).
\28\ For example, we anticipate that the first FCC auction for
spectrum frequency subject to these rules will occur in December
2001. In that case, NTIA would provide cost information to the FCC
no later than June 1, 2001. Therefore, the Federal entities would
have to provide estimated cost information to NTIA by April 1, 2001.
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Negotiation and Mediation
36. Under the proposed rules, within 30 days after the license is
granted, the auction winner would be required to contact the Federal
entity that is required to relocate. Under the proposed rules, receipt
of the notification by the Federal entity would trigger a 135-day
negotiation and/or third-party mediation period between the Federal
entity and the auction winner. During the mandatory negotiation period,
parties are encouraged to resolve any differences with respect to
relocation or modification costs or any other related issues. If, at
the end of the 135-day period, the parties have not reached an
agreement with respect to relocation, under the proposed rules, the
parties may agree, by mutual consent, to extend the mandatory
negotiation period. We believe that this mandatory negotiation period
affords the parties an opportunity to freely, and without constraints,
negotiate the terms relative to relocation. To the extent that the 135-
day period is insufficient, we believe that the extension of time
provision gives the party additional time that may be necessary to come
to an agreement. This provision would also allow the parties to take
advantage of a neutral third party to help facilitate the negotiation
process without rendering a decision. We solicit comments on the
proposed rule to require mandatory party-to-party negotiations and/or
third-party mediation.
37. Under the proposed rules, the parties would be required to
negotiate relocation or modification costs in good faith during the
mandatory negotiation period. Good faith requires each party to provide
information to the other that is reasonably necessary to facilitate the
relocation process. Good faith means that (1) neither party may refuse
to negotiate; and (2) each party must behave in a manner necessary to
facilitate negotiation in a timely manner. We seek comments on these
good faith obligations.
Non-Binding Arbitration
38. If the parties have not reached agreement and do not agree to
extend the negotiation/mediation period, or if a previously extended
negotiation/mediation period expires, the proposed rules would require
the parties to enter into non-binding arbitration. The parties would
have to agree on the arbitrator, and to prevent bias, the arbitrator
would not be the same person as the mediator if mediation has been used
by the parties and failed. Each party would pay its own costs for
arbitration and share equally the cost of the arbitrator. The
arbitrator's non-binding decision may be requested by NTIA as part of
the record in a petition for relocation, as described below. The
recommended decision may be a factor, among others, in NTIA's
determination on a petition for relocation. We seek comments on the
proposed requirement that parties enter into non-binding arbitration.
We also seek comments on any alternative proposal for the resolution of
disputes between the parties.
Petition for Relocation
39. Under 47 U.S.C. 923(g)(2), an auction winner seeking to
relocate a Federal Government station must submit a petition for
relocation to NTIA. Under the proposed rules, NTIA requires that a copy
of the petition also be simultaneously provided to the FCC.\29\
Moreover, under the proposed rule, NTIA's determination on the petition
would be set forth in writing within six months after the petition has
been filed and be provided to the auction winner and the Federal
entity. The statute requires NTIA to limit or terminate the Federal
entity's license within six months after receiving the petition if the
following requirements are met:
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\29\ We note that the statute permits the Federal entity to
reclaim its facilities if it demonstrates to the FCC that the new
facilities are not comparable. See 47 U.S.C. 923(g)(3). Rules
regarding the Federal entity's right to reclaim will be promulgated
by the FCC. See also Reallocation of the 216-220 MHz, 1390-1395 MHz,
1427-1429 MHz, 1429-1432 MHz, 1432-1435 MHz, 1670-1675 MHz, and
2385-2390 MHz Government Transfer Bands, ET Docket No. 00-221,
Notice of Proposed Rule Making, FCC 00-395, at para. 64 (November
20, 2000).
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(A) the person seeking relocation of the Federal Government station
has guaranteed to pay all relocation or modification costs incurred by
the Federal entity, including all engineering, equipment, site
acquisition and construction, and regulatory fee costs;
(B) all activities necessary for implementing the relocation or
modification have been completed, including construction of replacement
facilities (if necessary and appropriate) and identifying and obtaining
new frequencies for use by the relocated Federal Government station;
(C) any necessary replacement facilities, equipment modifications,
or other changes have been implemented and tested to ensure that the
Federal Government station is able to accomplish its purposes; and
(D) NTIA has determined that the proposed use of the spectrum
frequency band to which the Federal entity will relocate is consistent
with:
(i) Obligations undertaken by the United States in international
agreements and United States national security and public safety
interests; and
(ii) The technical characteristics of the band and other uses of
the band.
If NTIA does not act within 6 months after the Petition for
Relocation is filed, the Petition is deemed denied. NTIA's
determination, or failure to act on a Petition within 6 months, would
be final and conclusive upon the parties.
40. The proposed rules would permit an auction winner to file a
petition for relocation anytime after an agreement has been reached on
marginal costs. The proposed rules also permit an auction winner to
file a petition for relocation if the parties fail to reach agreement
and non-binding arbitration has occurred. In that case, the auction
winner may file a petition for relocation with NTIA after a decision
has been rendered by the arbitrator. Any recommended decision by the
arbitrator may be requested by NTIA as part of the record in a petition
for relocation determination. The recommended decision may be a factor,
among others, in the NTIA determination on the petition for relocation.
In making its determination, NTIA will consult with the affected
Federal entity and, as appropriate, may also consult with the Office of
Management and Budget and other executive branch agencies. We seek
comment on these proposed rules as they relate to the Petition for
Relocation.
41. In certain circumstances, it may be beneficial for the Federal
entity to seek voluntary withdrawal of an assignment after the parties
reach an agreement through negotiation, mediation, or non-binding
arbitration. NTIA anticipates the vast majority of relocations to occur
under agreements reached between the parties, thus permitting voluntary
withdrawals of assignments would greatly streamline the administrative
process of making the spectrum available to auction winners. NTIA
[[Page 4777]]
seeks comment on permitting such voluntary requests for assignment
withdrawal as an alternative to the petition for relocation in cases in
which the parties have reached agreement.
Unclassified, Classified and Sensitive Assignments
42. Unclassified government facilities. With respect to
unclassified government facilities, we propose to provide the following
information to the FCC prior to an auction of the affected bands:
(1) List of Government facilities.
(2) Government agency operating each facility.
(3) Location of each facility.
(4) General type of operation and equipment (e.g., fixed microwave,
tactical mobile radio, etc.).
(5) Whether the facility can be retuned, modified, or must be
relocated.
(6) Estimated marginal cost of retuning, modification, or
relocation.
(7) Whether the facility overlaps to one or more license areas or
spectrum blocks.
(8) Total estimated costs of relocation for all assignments.
43. Classified government facilities. These proposed rules would
permit reimbursement to the Federal entity, even if an assignment is
classified. As defined in the proposed rule and consistent with
Executive Order 12958,\30\ a ``classified assignment'' would be a
frequency assignment and information related to a frequency assignment
that has been determined pursuant to Executive Order 12958 or any
predecessor order to require protection against unauthorized disclosure
and that is marked as ``confidential,'' ``secret,'' or ``top secret''
to indicate its classified status when in documentary form. As directed
by Executive Order 12958, Executive Order 12968 \31\ and related
national security regulations, classified assignment can only be made
available to individuals with the appropriate clearances and with a
``need to know'' (need for access) in order to perform or assist in
performing a lawful and authorized government function.
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\30\ Exec. Order No. 12958, 3 CFR 333 (1995).
\31\ Exec. Order No. 12968, 3 C.F.R. 391 (1995).
---------------------------------------------------------------------------
44. Prior to an auction, Federal entities will provide a single,
consolidated and unclassified figure to NTIA for the cost of
relocating, retuning, or modifying all such classified systems. NTIA
will provide this information to the FCC which in turn will provide the
figure to bidders with the following conditions: To the extent it is
consistent with national security considerations, the figure may be
broken down by license service area and spectrum block to give those
bidding on a geographic basis the best indication possible of the cost
they may have to pay to relocate, retune or modify the systems at
issue. Following the auction, the winner may apply for a facility
clearance pursuant to the National Industrial Security Program
Operating Manual and related individual security clearances. If those
clearances and accesses are granted, classified information may be made
available with regard to certain Government systems in accordance with
the terms and conditions prescribed in the clearances and accesses
provided, and subject to the overall rules and authorities found in
Executive Order 12958, Executive Order 12968, and related federal laws,
rules and regulations.
45. Sensitive assignments. As defined in the proposed rule, a
``sensitive assignment'' would be a frequency assignment and
information related to a frequency assignment (e.g. operations or
technical parameters) that are not releasable to the public under the
Freedom of Information Act or relevant laws or regulations.\32\ Prior
to an auction, Federal entities will provide a single, consolidated and
unclassified figure to NTIA for the cost of relocating, retuning, or
modifying all such sensitive systems. NTIA will provide this
information to the FCC which in turn will provide the figure to bidders
with the following conditions: To the extent it is consistent with the
sensitive nature of the assignment, the figure may be broken down by
license service area and spectrum block to give those bidding on a
geographic basis the best indication possible of the cost they may have
to pay to relocate, retune or modify the systems at issue. Following
the auction, we propose that the government agency release the
sensitive information to the winning licensee pursuant to a non-
disclosure agreement.
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\32\ Many of these assignments involve federal public safety and
law enforcement activities.
---------------------------------------------------------------------------
46. We seek comment on our proposed treatment of these assignments.
Other Information
Executive Order 12866
47. This proposed rule has been determined to be significant under
section 3(f) of Executive Order 12866.
Executive Order 13312
48. This rule does not contain policies with Federalism
implications sufficient to warrant preparation of a Federalism
assessment under Executive Order 12612.
Regulatory Flexibility Act
49. As required by the Regulatory Flexibility Act (RFA) \33\ NTIA
has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the
possible impact that this proposed rule, if adopted, would have on
small entities. Written public comments are requested on the IRFA.
Comment must be identified as responses to the IRFA and must be filed
by the deadlines for comments on the NPRM.
---------------------------------------------------------------------------
\33\ See 5 U.S.C. 603.
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Initial Regulatory Flexibility Analysis
50. As required by the Regulatory Flexibility Act (RFA), NTIA has
prepared this present Initial Regulatory Flexibility Analysis (IRFA) of
the possible significant economic impact on small entities by the
policies and rules proposed in this NPRM. Written public comments are
requested on this IRFA. Comments must be identified as responses to the
IRFA and must be filed by the deadlines for comments on this NPRM.
A. Need for, and Objectives of, the Proposed Rules
51. The Strom Thurmond National Defense Authorization Act for
Fiscal Year 1999 authorized Federal entities to accept compensation
payments when they relocate or modify their frequency use to
accommodate non-Federal users of the spectrum.\34\ In essence, the Act
requires the private sector to reimburse Federal entities for the costs
that are incurred as a result of the reallocation of radio spectrum
mandated by Title VI of the Omnibus Budget Reconciliation Act of 1993
(OBRA 93),\35\ the Balanced Budget Act of 1997 (BBA 97) and future
reallocations. The Act also directs NTIA and the Federal Communications
Commission (FCC) to ``develop procedures for the implementation of
[relocation] which * * * shall include a process for resolving any
differences that arise between the Federal Government and commercial
licensees regarding estimates of relocation and modification costs.''
\36\
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\34\ 47 U.S.C. 923(g)(1).
\35\ Pub. L. 103-66, 107 Stat. 31 (1993).
\36\ See 47 U.S.C. 923(g)(1)(E).
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52. This initial regulatory flexibility analysis provides, to the
extent possible, relevant information regarding reimbursement such as
the Federal frequency assignments for reallocation and the estimated
relocation costs that will ultimately be borne by the private sector.
As stated above Congress directed NTIA and the FCC to develop
procedures for the implementation of the reimbursement process.
Pursuant to
[[Page 4778]]
this direction from Congress, NTIA prepared this NPRM. NTIA is not able
to determine the type of entities that will be potential bidders for
the particular spectrum frequencies at issue here, thus NTIA is unable
to fully describe the effect that the proposed rules will have on small
entities. However, significant economic impacts are unlikely because it
is expected that bidders in an auction for the eligible spectrum,
including small entities, will factor in the estimated relocation costs
and adjust their bids accordingly.
B. Federal Frequency Assignments Subject to Reallocation
53. On August 10, 1993 OBRA 93 was signed into law. OBRA 93
authorized the FCC to use competitive bidding (auctions) for the
reassignment and licensing of spectrum frequencies for certain
commercial services. OBRA 93 also directed the Secretary of Commerce to
transfer at least 200 megahertz (MHz) of spectrum below 5 gigahertz
(GHz) from Federal agencies to the FCC for licensing to the private
sector. Pursuant to OBRA 93, NTIA identified Federal bands for
reallocation totaling 235 MHz from the Federal Government to non-
Government use in its February 1995 Spectrum Reallocation Final
Report.\37\ Subsequently, BBA-97 required the Secretary of Commerce to
identify an additional 20 MHz below 3 Ghz for reallocation to non-
Federal users.\38\ In response to this directive, NTIA issued a
Spectrum Reallocation Report in February 1998 which identified the
additional bands for reallocation.\39\ The specific frequency bands
that currently qualify for reimbursement pursuant to the proposed rules
are: 216-220 MHz; 1432-1435 MHz; 1710-1755 MHz; and 2385-2390 MHz.
---------------------------------------------------------------------------
\37\ See National Telecommunications and Information
Administration, U.S. Department of Commerce, NTIA Special
Publication 94-27, Spectrum Reallocation Final Report (Feb. 1995).
\38\ Pub. L. 105-33, 111 Stat. 251 (1997).
\39\ Of the 20 MHz of spectrum, eight (8) MHz were subsequently
reclaimed by the Federal Government in accordance with the National
Defense Authorization Act for Fiscal Year 2000. See Pub. L. 106-65,
113 Stat. 512 (1999).
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C. Estimated Relocation Costs
54. At this point, NTIA does not have the final estimated costs of
relocation for all of the bands identified in the NPRM. In fact, the
NPRM proposes dates for the Federal entities to provide that
information to NTIA. The final spectrum reallocation reports prepared
by NTIA in response to OBRA 93 and BBA 97 identified estimates of
implementation costs to Federal agencies of approximately $1.5 billion
based on data provided by major Federal agencies. Subsequent
modifications to these estimates have been made based on a report to
Congress from the Department of Defense (DoD), and changes to the
reallocation plan as directed by the National Defense Authorization Act
for FY 2000. Taking these factors into account, the current
reimbursable long-term cost estimates to the Federal agencies of
implementing the spectrum reallocations under OBRA 93 and BBA 97 is
between $460-$810 million.
Although NTIA identifies spectrum to reallocate from the Federal
government to the private sector, NTIA does not determine how the
spectrum will be used by the private sector. The Federal Communications
Commission, through its regulations identifies options for making use
of bands transferred from Government to non-Government use pursuant to
OBRA 93 and BBA 97. In fact, the FCC recently issued an NPRM on the
allocation of 27 megahertz of spectrum from the 216-220 MHz, 1390-135
MHz, 1427-1429 MHz, 1429-1432 MHz, 1432-1435 MHz, 1670-1675 MHz, and
2385-2390 MHz bands.\40\ In that NPRM, the FCC proposes general Fixed
Service and Mobile Service allocation for these bands, and solicits
comments on other possible allocations and potential service rules for
the services to which the bands may be allocated. The FCC also solicits
comments on its Initial Regulatory Flexibility Analysis of the NPRM
which describes the number of small entities to which its proposed
rules would apply.
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\40\ Reallocation of the 216-220 MHz, 1390-1395 MHz, 1427-1429
MHz, 1429-1432 MHz, 1432-1435 MHz, 1670-1675 MHz, and 2385-2390 MHz
Government Transfer Bands, ET Docket No. 00-221, Notice of Proposed
Rule Making, FCC 00-395, at para. 64 (November 20, 2000).
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In accordance with 5 U.S.C. 603, the following information is
provided to conduct the necessary initial regulatory flexibility
analysis:
D. Legal Basis
55. The objective of the proposed rule is to establish procedures
to compensate the Federal Government for expenses it incurs in
relocating to a new frequency as a result of a reallocation of
spectrum. Congress determined that the Federal Government should be
reimbursed by commercial licensees that are awarded spectrum previously
held by the Federal Government. The legal basis for the proposed rule
is the Defense Authorization Act for Fiscal Year 1999 which directs
NTIA and the FCC to develop procedures to implement reimbursement,
including a process for resolving differences that arise between the
parties regarding estimates of relocation or modification costs.
E. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
56. It is difficult, if not impossible, to estimate the number of
small entities, if any, to which the proposed rule would apply. The
rule applies to winners of a competitive bidding (auction) that the FCC
will hold at an undetermined date after January 2001. There is no way
to predict, at this point in time, the type of entities that will be
potential bidders for the spectrum that the FCC makes available. In
fact, entities that are not even in existence at this time may be
participating in a future auction for the particular spectrum frequency
at issue. The FCC may impose eligibility requirements, however the
auctions are usually open to any type of entity. Any estimate of the
number of small entities to which this proposed rule will apply should
be made after the FCC makes a determination of the type of service that
the FCC allocates for these bands of spectrum. The proposed rules,
however, require the FCC to provide the estimated cost of reimbursement
to potential bidders. Thus, to the extent that a small entity is a
potential bidder, it will be able to calculate its costs to bid on the
particular spectrum frequency, taking into account the estimated cost
to reimburse the Federal Government. As stated above the estimated
costs of relocation at this time is between $460-$810 million. Because
these costs are only estimates and bids may be adjusted to reflect
these costs, it is difficult at this time to determine the impact that
these costs will have on small entities. We solicit public comment on
this IRFA as to the impact that the proposed rule will have on small
entities as well as any alternative ways to alleviate such an impact.
F. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
57. The proposed rules do not impose reporting, record keeping or
other compliance requirements on the private sector, small entities or
otherwise.
G. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
58. It does not appear that any other Federal rule duplicates,
overlaps or conflicts with the proposed rule. The proposed rules are
focused on reimbursement to Federal entities for relocation costs from
specific spectrum frequencies. No other Federal rule requires the
private sector to reimburse
[[Page 4779]]
Federal entities for relocation costs of the specific radio spectrum
frequencies identified in the proposed rules. The FCC, however, will
promulgate service rules regarding these spectrum frequencies, however,
we do not anticipate that the FCC's rules will duplicate, overlap or
conflict with this proposed rule.
H. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
59. As stated above, the applicable statute requires NTIA to
develop rules to implement the reimbursement process.\41\ The NPRM,
proposes and solicits comment on a number of alternatives which would
minimize economic impact on small entities. For example, the proposed
rules solicit comments on whether a Federal entity could retune or
modify its equipment outside of the reallocated band to the upper or
lower portion of the incumbent band. Re-tuning is usually less
expensive to implement and can save an agency a considerable amount of
money thus lessening the reimbursement obligation of the private
sector. Another alternative in the proposed rule which could minimize
the economic impact on small entities is the proposal to permit Federal
entities to relocate to a landline communications system or a
commercial radio service. Such an option may be a cost-effective
alternative to the Federal entity relocating to another frequency.
Again, this alternative may reduce reimbursement expenses that would be
borne by the private sector and, perhaps, small entities. To the extent
that there are other ways to accomplish the stated objectives of
Congress, the proposed rule states that ``[t]hese proposed rules have
been developed to ensure that the Federal Government is fully
reimbursed for the expenses it incurs in retuning, modifying or
relocating a system as a result of reallocation. To the extent that
there are other ways to accomplish this goal, NTIA will entertain
comments from interested parties. Comments received addressing
alternatives to the proposed rules will be discussed in a more thorough
analysis in the Final Rule.
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\41\ See 47 U.S.C. 923(g)(1)(E).
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List of Subjects in 40 CFR Part 301
Administrative practice and procedure, Classified information,
Communications, Communications equipment, Government procurement,
Government property, Radio, Satellites, Telecommunications, Telephone.
Proposed Rules
Accordingly, NTIA amends 47 CFR chapter III by adding part 301 to
read as follows:
PART 301---MANDATORY REIMBURSEMENT FOR FREQUENCY BAND OR GEOGRAPHIC
RELOCATION OF SPECTRUM-DEPENDENT SYSTEMS
Subpart A--General Information
Sec.
301.1 Purpose.
301.10 Applicability.
301.20 Definitions.
Subpart B--Procedure for Reimbursement for Relocations and Dispute
Resolution.
301.100 Costs to relocate.
301.110 Notification of marginal costs.
301.120 Negotiations and mediation.
301.130 Nonbinding arbitration.
301.140 Petition for relocation.
301.150 Request for withdrawal.
Authority: 47 U.S.C. 921 et seq.; Pub. L. 105-261, 112 Stat.
1920.
Subpart A--General Information
Sec. 301.1 Purpose.
Pursuant to Public Law 105-261 (112 Stat. 1920), private sector
entities are required to reimburse Federal users for relocation of
Federal Government stations from one or more frequencies due to
reallocation. Reimbursement costs are in addition to any costs paid by
the successful bidder for the frequency spectrum at the FCC auction.
301.10 Applicability.
(a) Affected bands.
(1) These provisions apply to the following bands of frequencies
located below 3 gigahertz:
(i) 216 to 220 MHz
(ii) 1432 to 1435 MHz
(iii) 1710 to 1755 MHz
(iv) 2385 to 2390 MHz
(2) NTIA may periodically identify additional bands that are
subject to this part in a notice published in the Federal Register.
(b) Availability of comparable facility. The Federal entity will
not relocate until a comparable facility, or modification to an
existing facility, is available for enough time to determine
comparability, make adjustments, and ensure a seamless handoff. The
factors to be considered in determining comparability are
communications throughput, system reliability, operating costs, and
operational capability as defined in this part.
(c) Frequency Assignments Eligible for Reimbursement.
(1) Equipment modification/retuning. To the extent that a Federal
entity that is required to relocate is able to modify/re-tune its
equipment with the result that the modified equipment provides
operational capabilities comparable with the original system,
reimbursement will be limited to the marginal costs associated with
modification/retuning.
(2) Old assignments/new assignments. Old assignments are those that
were authorized prior to October 17, 1998 (i.e., 216-220 MHz, 143-1435
MHz, 1710-1755 MHz, 2385-2390 MHz). New assignments are those
assignments in the affected bands that were authorized after October
17, 1998. New assignments in the affected bands are not eligible for
reimbursement under these rules.
(3) Exempted Federal power agencies. Frequency assignments in the
1710--1755 MHz band that support the Federal power agencies that are
exempt from reallocation requirements are not entitled to reimbursement
under these rules.
(4) Experimental stations. Frequency assignments for experimental
stations or experimental testing stations are not entitled to
reimbursement under this part. Reimbursement shall apply to
experimental stations that have been certified for spectrum support by
NTIA for stage 3 developmental tests under section 10.3.1. of the NTIA
Manual of Federal Regulations and Procedures for Federal Radio
Frequency Management. This manual is available on NTIA's website at
http://www.ntia.doc.gov/osmhome/redbook/redbook.html. The manual is
also available from the U.S. Government Printing Office (S/N: 903-008-
0025-3).
(5) Certain other government stations. Other exempted stations
identified under the 1995 Spectrum Reallocation Final Report and the
1998 Spectrum Reallocation Report are not entitled to reimbursement
under these rules. These reports are available at http://www.ntia.doc.gov.
(d) Sunset of reimbursement rights. There is no sunset of
reimbursement rights for affected agencies.
Sec. 301.20 Definitions.
As used in this part:
(a) The term allocation means an entry in the national table of
frequency allocations (47 CFR 2.105) of a given frequency band for the
purpose of its use by one or more radiocommunication services, or the
radio astronomy service under specified conditions.
(b) The term assignment means authorization given for a radio
station to use a radio frequency or radio frequency channel under
specified conditions.
(c) The term auction means the competitive bidding process that
Congress authorized the Federal
[[Page 4780]]
Communication Commission to use in title VI of the Omnibus Budget
Reconciliation Act of 1993 and the Balanced Budget Act of 1997 for the
reassignment and licensing of spectrum identified in Sec. 301.10(a) of
this subpart for certain commercial radio-based services.
(d) The term classified assignment means a frequency assignment and
information related to a frequency assignment that has been determined
pursuant to Executive Order 12958 or any predecessor order to require
protection against unauthorized disclosure and that is marked as
``confidential,'' ``secret,'' or ``top secret'' to indicate its
classified status when in documentary form.
(e) The term Commission or FCC means the Federal Communications
Commission.
(f) The term communications throughput means the amount of
information transferred within the system for a given amount of time.
For digital systems, the communications throughput is measured in bits
per second (bps) and for analog systems the communications throughput
is measured by the number of voice, video or data channels.
(g) The term comparable facility means that the replacement
facility restores the operational capabilities of the original facility
to an equal or superior level taking into account at least four
factors: communications throughput, system reliability, operating
costs, and operational capability.
(h) The term experimental station means a station utilizing radio
waves in experiments with a view to the development of science or
technique.
(i) The term experimental testing station refers to an experimental
station used for the evaluating or testing of electronics equipment or
systems, including site selection and transmission path surveys, which
have been developed for operational use.
(j) The term Federal entity means any department, agency or other
instrumentality of the Federal Government that utilizes a Government
station license obtained under section 305 of the Communications Act of
1934 (47 U.S.C. 305).
(k) The term in-kind means the value of non-cash contributions
provided by non-Federal private parties. In-kind contributions may be
in the form of real property, equipment, supplies and other expendable
property, and the value of goods and services directly benefitting and
specifically identifiable to the project or program.
(l) The term marginal costs means the costs that will be incurred
by a Federal entity to achieve comparable capability of systems
relocated to a new frequency assignment or band or otherwise modified.
(m) The term mediation means a flexible and voluntary dispute
resolution procedure in which a specially trained mediator facilitates
negotiations to reach a mutually agreeable resolution. The mediator may
not dictate a settlement. The mediation process involves one or more
sessions in which counsel, parties and the mediator participates, and
may continue over the period of time specified in this part. The
mediator can help the parties improve communication, clarify interests,
and probe the strengths and weaknesses of positions. The mediator can
also identify areas of agreement and help generate options that lead to
a settlement.
(n) The term NTIA means the National Telecommunications and
Information Administration.
(o) The term operational costs means the cost to operate and
maintain the federal entity's replacement facility. New licensees would
compensate federal entities for any increased recurring costs
associated with the replacement facilities for five years after
relocation. Such costs shall include, but not be limited to additional
rental payments and increased utility fees.
(p) The term operational capability means the measure of a system's
ability to perform its validated functions within doctrinal
requirements, including service, joint service, and allied
interoperability requirements with related systems.
(q) The term relocation refers to the process of moving a system
that is displaced as a result of reallocation.
(r) The term sensitive assignments refer those assignments whose
operations or technical parameters are not releasable to the public
under the Freedom of Information Act.
(s) The term system reliability means the percentage of time
information is accurately transmitted within a system. The reliability
of a system is a function of equipment failures (e.g., transmitters,
feed lines, antennas, receivers and battery back-up power), the
availability of the frequency channel given the propagation
characteristics (e.g., frequency, terrain, atmospheric condition and
noise), and equipment sensitivity. System reliability also includes the
ability of a radio-communications station to perform a required
function under stated conditions for a stated period of time. System
reliability may involve three concepts: attaining a specified level of
performance; the probability of achieving that level; and maintaining
that level for a specified time. For digital systems, system
reliability shall be measured by the percentage of time the bit error
rate (BER) exceeds a desired value, and for analog transmissions, this
would be measured by the percentage of time that the received carrier-
to-noise ratio exceeds the receiver threshold.
Subpart B--Procedure for Reimbursement for Relocations and Dispute
Resolution
Sec. 301.100 Costs to relocate.
(a) Relocation costs. The auction winner is required to reimburse
the Federal entity for all costs incurred as a result of modification,
retuning and/or relocation.
(b) Method of reimbursement. Reimbursement payments shall be made
in advance of relocation and may be in cash or in kind as agreed to by
the affected Federal entity. Any such payment in cash shall be
deposited in the account of such Federal entity in the Treasury of the
United States or in a separate account as authorized by law. If actual
costs are less than the payments made, the Federal entity shall refund
the difference.
Sec. 301.110 Notification of marginal costs.
(a) NTIA shall provide the Federal entity's estimated marginal cost
information to the FCC at least 180 days before to an auction. Marginal
costs are the costs that will be incurred by a Federal entity to
achieve comparable capability of systems relocated to a new frequency
assignment or band or otherwise modified. Specifically, marginal costs
would include all engineering, equipment, software, site acquisition
and construction costs, as well as any legitimate and prudent
transaction expenses, including outside consultants, and reasonable
additional costs incurred by the Federal entity that are attributable
to relocation, including increased recurring costs associated with the
replacement facilities. Marginal costs would include costs related to
the need to achieve comparable capability when replacing, modifying or
reissuing equipment in order to relocate when the systems that must be
procured or developed have increased functionality due to technological
growth, but would not include costs related to optional increased
functionality that is independent of the need to achieve comparable
capability. To the extent that a Federal entity needs to accelerate the
introduction of systems and equipment to allow for relocation earlier
than the Federal entity had planned, replacement costs of the
accelerated systems and equipment shall be included in marginal costs.
Marginal
[[Page 4781]]
costs would also include the costs of any modification or replacement
of equipment, software, facilities, operating manuals, training costs,
or regulations that are attributable to relocation. Marginal costs
would not include costs related to routine upgrades and operating costs
and lifecycle replacements that would have occurred prior to the date
of the required relocation. Any Federal entity that proposes to
relocate shall notify NTIA at least 240 days before the auction of the
marginal costs anticipated to be associated with relocation or with
modifications necessary to accommodate prospective licensees. The
information provided to NTIA must also include the name and telephone
number of a person within the Federal entity that can be contacted by
the auction winner.
(b) Unclassified assignments. NTIA will provide the following
information to the FCC prior to the auction with repect to unclassified
government facilities:
(1) List of Government facilities.
(2) Government agency operating each facility.
(3) Location of each facility.
(4) General type of operation and equipment.
(5) Whether the facility can be retuned, modified, or must be
relocated.
(6) Estimated marginal cost of retuning, modification, or
relocation.
(7) Whether the facility overlaps to one or more license areas or
spectrum blocks.
(8) Total estimated costs of relocation for all assignments.
(c) Classified assignments. Prior to an auction, Federal entities
will provide a single, consolidated and unclassified figure to NTIA for
the cost of relocating, retuning, or modifying all such classified
systems. NTIA will provide this information to the FCC which in turn
will provide the figure to bidders with the following conditions: To
the extent it is consistent with national security considerations, the
figure may be broken down by license service area and spectrum block to
give those bidding on a geographic basis the best indication possible
of the cost they may have to pay to relocate, retune or modify the
systems at issue. Following the auction, the winner may apply for a
facility clearance pursuant to the National Industrial Security Program
Operating Manual and related individual security clearances. The manual
is available throught the Defense Security Service at http://www.dss.mil/isec/nistom.htm or the Government Printing Office (ISBN 0-
16-045560-X). If those clearances and accesses are granted, classified
information may be made available with regard to certain Government
systems in accordance with the terms and conditions prescribed in the
clearances and accesses provided, and subject to the overall rules and
authorities found in Executive Order 12958, Executive Order 12968, and
related Federal laws, rules, and regulations.
(d) Sensitive assignments. Prior to an auction, Federal entities
will provide a single, consolidated, and unclassified figure to NTIA
for the cost of relocating, retuning, or modifying all such sensitive
systems. NTIA will provide this information to the FCC which in turn
will provide the figure to bidders with the following conditions: To
the extent it is consistent with the sensitive nature of the
assignment, the figure may be broken down by license service area and
spectrum block to give those bidding on a geographic basis the best
indication possible of the cost they may have to pay to relocate,
retune, or modify the systems at issue. Following the auction, the
government agency shall release the sensitive information to the
winning licensee pursuant to a non-disclosure agreement.
Sec. 301.120 Negotiations and mediation.
(a) Within 30 days after the license is granted, the auction winner
is required to contact the Federal entity that occupies the band that
the FCC has awarded to the auction winner. Receipt of this notification
by the Federal entity triggers the 135-day period for negotiation or
mediation between the Federal entity and the auction winner. During
this period, parties are encouraged to resolve any differences with
respect to relocation or modification costs or any other related
issues, either through party-to-party negotiations and/or a third party
mediator. If, at the end of the 135-day period, the parties have not
reached an agreement with respect to relocation, the parties may agree
to extend the negotiation period.
(b) Good faith obligation. The parties are required to negotiate in
good faith. Good faith means that:
(1) Neither party may refuse to negotiate; and
(2) Each party must behave in a manner necessary to facilitate the
relocation process in a timely manner. Classified or sensitive
information will be treated in accordance with Sec. 301.110 of this
subpart.
Sec. 301.130 Nonbinding arbitration.
If the parties have not reached agreement to extend the
negotiation/mediation period, or if a previously extended negotiation/
mediation period expires, the parties shall enter into nonbinding
arbitration. The parties shall agree on an arbitrator, and the
arbitrator may not be the same person as the mediator if mediation has
been used by the parties and failed. The parties may design such rules
for arbitration as deemed appropriate. The arbitrator's nonbinding
decision may be requested by NTIA as part of the record in its
determination on a petition for relocation under Sec. 301.140. The
decision may be a factor, among other things, in the NTIA determination
on a petition for relocation.
301.140 Petition for relocation.
(a) In general. An auction winner seeking to relocate a Federal
Government station must submit a petition for relocation to NTIA. A
copy of the petition must also be simultaneously provided to the FCC.
NTIA's determination shall be set forth in writing within 6 months
after the petition for relocation has been filed, and be provided to
the auction winner and the Federal entity. NTIA shall limit or
terminate the Federal entity's operating license within 6 months after
receiving the petition if the following requirements are met:
(1) The person seeking relocation of the Federal Government station
has guaranteed to pay all modification and relocation costs incurred by
the Federal entity, including all engineering, equipment, site
acquisition and construction, and regulatory fees;
(2) All activities necessary for implementing the relocation or
modification have been completed, including construction of replacement
facilities (if necessary and appropriate) and identifying and obtaining
new frequencies for use by the relocated Federal Government station
(where such station is not relocating to spectrum reserved exclusively
for Federal use);
(3) Any necessary replacement facilities, equipment modifications,
or other changes have been implemented and tested to ensure that the
Federal Government station is able to accomplish its purposes; and
(4)(i)NTIA has determined that the proposed use of the spectrum
frequency band to which the Federal entity will relocate its operations
is
(A) Consistent with obligations undertaken by the United States in
international agreements and with United States national security and
public safety interests; and
(B) Suitable for the technical characteristics of the band and
consistent with other uses of the band.
[[Page 4782]]
(ii) In exercising its authority, NTIA shall consult with the
Secretary of Defense, the Secretary of State, or other appropriate
officers of the Federal Government
(5) If these requirements are not met, NTIA shall notify the
petitioner that the request is declined and why.
(6) If NTIA does not issue a determination under this section
within 6 months of the filing of a petition for relocation, the
petition for relocation is deemed to be denied.
(7) In making its determination under this section, NTIA shall
consult with the affected Federal entity and, as appropriate, the
Office of Management and Budget and other executive branch agencies.
(b) Petition after agreement between the parties. The auction
winner may file a petition for relocation pursuant to Sec. 301.140 of
this subpart at anytime after the parties have reached agreement on
relocation in negotiations or mediation as provided in Sec. 301.120 of
this subpart and submit the agreement as evidence of having met the
requirements of the petition for relocation.
(c) Petition after failure to reach an agreement. If the parties
fail to reach an agreement as provided in Sec. 301.120 and non-binding
arbitration has occurred pursuant to Sec. 301.130, the auction winner
may file a petition for relocation with NTIA after a decision has been
rendered by the arbitrator. Any recommended decision by the arbitrator
may be requested by NTIA as part of the record in a petition for
relocation under Sec. 301.140. The recommended decision may be a
factor, among others, in the NTIA determination on the petition for
relocation.
Sec. 301.150 Request for withdrawal.
If the parties reach an agreement in negotiations or mediation or
agree with the decision of the arbitrator, the Federal entity may seek
voluntary withdrawal of the assignments that are the subject of the
relocation.
Dated: January 11, 2001.
Gregory L. Rohde,
Assistant Secretary for Communications and Information.
[FR Doc. 01-1306 Filed 1-17-01; 8:45 am]
BILLING CODE 3510-60-P