IN THE MATTER OF AMENDMENT OF THE..., 7 FCC Rcd. 5676 (1992)
`
`7 FCC Rcd. 5676 (F.C.C.), 7 FCC Rcd. 5779, 73 Rad. Reg. 2d (P
`& F) 462, 7 F.C.C.R. 5676, 7 F.C.C.R. 5779, 1992 WL 691167
`
`NOTE: An Erratum is attached to the end of this document
`
`
`Federal Communications Commission (F.C.C.)
`FCC 92-333
`
`IN THE MATTER OF
`AMENDMENT OF THE COMMISSION'S RULES TO
`ESTABLISH NEW PERSONAL COMMUNICATIONS SERVICES
`
`GEN Docket No. 90-314
`ET Docket No. 92-100
`RM-7140, RM-7175, RM-7617, RM-7618, RM-7760, RM-7782, RM-7860, RM-7977, RM-7978, RM-7979, RM-7980
`PP-35 through PP-40, PP-79 through PP-85
`Adopted: July 16, 1992; Released: August 14, 1992
`
`NOTICE OF PROPOSED RULE MAKING AND TENTATIVE DECISION
`
`Comment Date: November 9, 1992
`Reply Comment Date: December 9, 1992
`
`**1 *5779 By the Commission: Commissioner Quello concurring and issuing a statement; Commissioners Marshall and
`Barrett issuing separate statements.
`
`
`RE: Amendment of the Commission's Rules to Establish New Personal Communication Services.
`
`Separate Statement of Commissioner James H. Quello
`
`Today's action is a significant step forward in the process of making personal communications services (PCS) availavle to the
`public. Although I support this action, there are some aspects of this Notice that need additional attention. I am asking that
`participants in this proceeding address the specific concerns listed below.
`
`The Commission recognizes that PCS is likely to be a family of services with a potential for a wide variety of applications.
`Without defining PSC more specifically than a family of services, the Commission is moving forward with specific proposals
`on PCS market size and eligibility. Such proposals, however, may have the unintended effect of limiting the full potential
`of PCS applications. Consequently the Commission may be moving to structure the PCS market prematurely. Nonetheless, I
`recognize the need to move forward, and I encourage participants not only to address the proposals in the Notice, but also to
`present alternative proposals on PCS market size and eligibility criteria.
`
`The Notice proposes four options for PCS service areas. One option not included in the Notice is the 734 cellular licensing
`areas. Cellular licensing areas were recently used in determining markets for the Interactive Video and Data Services. (See 7
`FCC Rcd 1360 (1992)) Since some PCS operators are likely to use microcellular technology, perhaps smaller service areas
`would be more appropriate. Furthermore, smaller services areas may facilitate delivery of PCS to rural areas in a timely manner.
`I encourage commenters to address the possible option of 734 PCS service areas.
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`1
`
`MTel., Exhibit 2003, Samsung v. MTel., Page 1, IPR2015-01726
`
`

`
`IN THE MATTER OF AMENDMENT OF THE..., 7 FCC Rcd. 5676 (1992)
`
`This Notice is significant not only for what is proposes for PCS, but also for what it proposed to do to the cellular industry. In my
`opinion, the proposals affecting the cellular industry have the potential to allow telephone companies with cellular subsidiaries
`to do anything they choose with their 25 MHz cellular allocation. If there is an interest or need to restructure the cellular industry,
`then perhaps the Commission should consider issuing a separate proceeding in this matter.
`
`Regarding licensing, the Notice proposes a 10 year license term for PCS. It appears that licensees' responsiblities depend on
`how licensees are selected. For example, if licensees are selected under a lottery scheme, construction requirements may be
`imposed. Under the auction proposal, PCS licensees would have no requirements other than protecting existing 1.8-2.2 GHz
`licensees from interference. Since license terms are for 10 years, a decade could pass before the Commission reclaims a license
`granted under the auction proposal due to failure to construct. This approach is taking the flexible use of spectrum concept to
`new levels that may not necessarily be in the public interest. I look forward to commenters' views on this issue.
`
`**2 While on the subject of licensing, I encourage commenters to submit proposals designed to strenghen the lottery process.
`Construction requirements, financial showings and antitrafficking provisions are just a few examples of how the lottery process
`can be improved. I believe sound lottery criteria will stem the tide of speculative applicants and the application mills.
`
`Finally, regarding auctions or competitive bidding, I am not convinced that those with the deepest pockets always have the
`most innovative ideas, especially when it comes to technology. What effect do auctions have on those who create new spectrum
`efficient technologies, but are unable to afford to compete for spectrum? What will auctions argue that the dollar value of
`spectrum will flow directly to the national treasury. There is some truth in that statement. In the American economy, however,
`it is more likely that profits derived from private transactions would be reinvested in the private market, creating employment
`opportunities, thereby sustaining American industry. This economic scenario has the potential of serving broad segments of
`the public. Alternatively, the possibility of auction coupled with the proposal for national licenses (as proposed in the Notice)
`suggests that winners will be interested in serving only the most lucrative markets. Is this trickle-down spectrum management?
`What happens to mid-sized on rural markets? Again, I am concerned about the ability of small businesses to compete for
`spectrum under an auction proposal. I am interested in commenters' views on the merits of auctions as well as the specific
`questions contained on how auctions should be structured, if Congress grants the Commission authority to test the auction
`concept.
`
`
`*5678 I. INTRODUCTION
`
`1. Today the Commission takes a significant step towards making personal communications services (PCS) a reality. This Notice
`seeks comprehensive comment on how we should structure the regulatory treatment of PCS, including a variety of possible
`spectrum allocation and licensing schemes, so as to bring that family of services known as PCS to the public expeditiously and
`with the least amount of regulatory delay.
`
`2. The increasing availability of mobile communications over the past decade is freeing business and residential consumers from
`the physical constraints of a wholly wired telecommunications network. Cellular, together with paging and other complementary
`services, brought mobility to the Nation's telecommunications services for the first time. In licensing mobile services, the
`Commission has squarely placed its faith in competitive markets and service flexibility as the best path to provide greater choice
`and low prices for consumers—a faith which has been amply justified by the nationwide availability of cellular service; the
`competition among cellular providers for customers; the diverse array of service and equipment options; and the aggressive
`behavior of cellular providers in implementing new technologies such as digital transmission and providing a variety of new
`services using the cellular spectrum.
`
`**3 3. The revolution in mobile and portable technologies has continued unabated in the decade since cellular
`first was authorized. Significant technological advances have expanded substantially the number and types of wireless
`telecommunications services that can be made available to the American people. These services include advanced forms of
`cellular telephone service, in addition to advanced digital cordless telephone service, portable facsimile services, wireless
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`2
`
`MTel., Exhibit 2003, Samsung v. MTel., Page 2, IPR2015-01726
`
`

`
`IN THE MATTER OF AMENDMENT OF THE..., 7 FCC Rcd. 5676 (1992)
`
`private branch exchange (PBX) services, and wireless local area network (LAN) services, among others. These services are
`potentially revolutionary; depending on their application, they can be used through the existing public switched network or
`through alternative local networks such as cable television systems. PCS can even exist independently of local wired networks,
`filling gaps in existing communications and creating new markets.
`
`4. The advent of PCS will have a great impact on the future development and configuration of all telecommunications networks
`by improving significantly their flexibility and functionality. Many PCS applications should create new markets and in others
`provide competition for the first time. PCS also could provide a greater overall level of competition in many already competitive
`segments of the telecommunications industry. The many applications of PCS also could increase productivity and efficiency
`across a broad array of industries and have a positive *5679 impact on the international competitiveness of the Nation's
`economy.
`
`5. The Commission has devoted significant effort and resources in gathering information on PCS and educating itself on
`this communications development. Following the submission of comments in the Notice of Inquiry in this proceeding, the
`Commission issued a policy statement on PCS, held an en banc hearing on PCS, and opened a proceeding designed to make
`available spectrum in the 2 GHz band for a variety of emerging technologies including PCS.
`
`6. It is essential that our decisions on PCS spectrum and regulatory structure furnish PCS providers the ability to reach and serve
`existing and new markets in an economic and responsive manner. We intend to ensure that all mobile services are provided
`with the highest quality at low-cost, reasonable rates to the greatest number of consumers, consistent with the goals of the
`Communications Act. Our experiences with mobile communications, as well as our information about the developing PCS
`services, lead us to conclude that we should attempt to optimize and balance four values in providing spectrum and a regulatory
`structure for PCS:
`
`—universality;
`
`—speed of deployment;
`
`—diversity of services; and
`
`—competitive delivery.
`
`7. Fulfillment of the goals listed above also should ensure that PCS deployment and delivery does not become bogged down
`in a regulatory morass that may delay the delivery, or even threaten the existence, of PCS. The years-long process culminating
`in cellular's birth is one of the prime examples of how the Commission's regulatory processes can be manipulated to delay the
`initiation of a new service. We are determined to avoid that result in this proceeding. We will resolve the many issues and
`proposals presented here in a thorough and reasoned manner, but one that also allows PCS to be brought to the public with
`the least possible regulatory delay.
`
`II. BACKGROUND
`
`**4 8. The Commission initiated this proceeding in 1989 after receiving several petitions for rule making. The Commission
`has since issued a Notice of Inquiry and a Policy Statement, held an en banc hearing that addressed PCS, and proposed
`allocating spectrum for emerging technologies, including PCS. The Commission also made recommendations and participated
`in negotiating *5680 international allocations that recognize and permit use of this spectrum for PCS. 1 Various
`telecommunications companies also have been active in participating in our PCS proceedings, and over 100 companies are
`conducting more than 150 experiments pursuant to experimental licenses to develop and test PCS services and technologies.
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`3
`
`MTel., Exhibit 2003, Samsung v. MTel., Page 3, IPR2015-01726
`
`

`
`IN THE MATTER OF AMENDMENT OF THE..., 7 FCC Rcd. 5676 (1992)
`
`Commission Actions
`
`Petitions and Notice of Inquiry
`
`9. This proceeding was initiated after the Commission received petitions for rule making from Cellular 21, Inc. (Cellular 21) and
`PCN America, Inc. (PCN America) 2 requesting that the Commission allocate spectrum for the implementation of new personal
`communication services. 3 On June 14, 1990, the Commission adopted a Notice of Inquiry (Notice) soliciting comment on a
`broad array of issues that address making PCS available to the American public. 4 Most commenters to the Notice support the
`Commission's decision to initiate a rulemaking on PCS and predict great demand for PCS services or devices such as CT-2,
`PCNs, wireless PBXs, wireless data transfer and advanced paging. 5 However, incumbent users of the 2 GHz spectrum express
`concern that the introduction of PCS would have an adverse effect on their current operations.
`
`*5681 10. Subsequent to the Notice, the Commission received a number of related petitions that proposed new PCS services or
`technologies. On February 13, 1991, Apple Computer, Inc. proposed that 40 MHz from the 1850-1990 MHz band be allocated
`for high-speed local-area data communications services connecting personal computers (Data-PCS). 6 Because the petition
`proposed a service significantly different than that addressed in the Notice, we accepted this petition and received separate
`comment on it. With the record before us, it appeared that the services proposed by Apple came within the PCS family of services
`defined in our Policy Statement, infra, and accordingly we incorporated the petition into this Docket when we adopted the
`Policy Statement. 7 More recently, on March 26, 1992, Broadband Communications Corporation filed a petition for rulemaking
`proposing use of 2 GHz spectrum for competitive-access wireless local loops. We would classify wireless local loop service as a
`type of PCS, and because Broadband proposes use of the same spectrum being considered herein, the substance of Broadband's
`proposal is incorporated in this proceeding.
`
`11. We also have received ten separate petitions for rulemaking that request using the 930-931 MHz advanced paging reserve
`for a variety of new applications, principally advanced paging and messaging services. These petitions have been or are being
`accepted, consolidated within ET Docket No. 92-100, and considered in this Notice of Proposed Rule Making. 8 However,
`if *5682 it appears that ET Docket No. 92-100 will be delayed by this action, we will consider separating ET Docket No.
`92-100 from this combined proceeding.
`
`**5 Policy Statement
`
`12. On October 24, 1991, the Commission adopted a Policy Statement and Order to provide preliminary guidance for the
`development of PCS in the United States and to serve as a basis for an en banc hearing on PCS. 9 In the Policy Statement and
`Order, the Commission recognized that the concept of PCS has grown in scope and complexity since the initial PCS petitions
`were filed with the Commission. Therefore, the Commission stated that it intends to broadly define PCS to encompass a family
`of services that would include services other than voice, such as data, imaging, and other new services. The Commission
`also stated that it would adopt regulations that promote the rapid development of PCS, encourage significant flexibility in the
`development of technologies and services, and promote competition in PCS and in telecommunications in general.
`
`13. The Commission further set the framework for PCS by concluding that an adequate amount of spectrum should be made
`available for PCS to foster the development of innovative and competitive markets. It stated that the allocation should facilitate
`local, regional, national and international uses and that the spectrum should be allocated in phases to prevent early developments
`precluding later ones. Finally, it stated that important equipment, cost, and international considerations suggest that a portion
`of the spectrum to be allocated for PCS should come from the 1.8 to 2.2 GHz band.
`
`En Banc Hearing
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`4
`
`MTel., Exhibit 2003, Samsung v. MTel., Page 4, IPR2015-01726
`
`

`
`IN THE MATTER OF AMENDMENT OF THE..., 7 FCC Rcd. 5676 (1992)
`
`14. In the Policy Statement and Order the Commission recognized that the record in this proceeding did not provide sufficient
`information on the many difficult regulatory issues for the Commission to propose tentative regulations. Therefore, on December
`5, 1991, the Commission held an en banc hearing to *5683 further develop the record. Testimony was solicited on the following
`topics: definition of service, including the types of service anticipated and the potential demand for each service type; spectrum
`requirements, including the amount of spectrum required, where it should be located in the spectrum, and the ability to share
`with incumbents; technologies, including the degree of technical flexibility that should be granted PCS licensees, the role of
`unlicensed devices, and the need for mandated standards; and regulatory issues, including the method of assigning licenses, the
`size and location of service areas, and the advantages and disadvantages of common versus private carriage for PCS.
`
`15. In addition to the testimony of the panelists, the Commission received 134 comments that addressed the issues raised
`at the hearing. The presentations and comments confirm that there is significant interest in PCS and strong support for a
`substantial spectrum allocation for PCS. Commenters argue that such an allocation is required to provide the many developing
`services that American consumers are demanding and to allow American manufacturers to develop equipment that could be
`marketed throughout the world. Commenters also argue that an allocation is required to provide competition to existing cellular
`services. Some commenters raise concerns that an allocation in the 2 GHz fixed microwave bands would result in interference
`to incumbent users and require them to replace these communications links, but other commenters argue that the 2 GHz fixed
`microwave bands could be shared.
`
`**6 Emerging Technologies Spectrum
`
`16. On January 16, 1992, the Commission adopted a Notice of Proposed Rule Making in ET Docket No. 92-9, proposing
`to allocate 220 megahertz of spectrum between 1850 and 2200 MHz to meet the spectrum requirements of innovative new
`services, such as PCS, made feasible by emerging technologies. 10 The Commission found that allocating spectrum for emerging
`technologies would further its Congressional mandate to encourage the provision of new technologies and services to the
`public, 11 encourage the larger and more effective use of radio in the public interest, 12 and complement our recently adopted
`Pioneer's Preference rules 13 *5684 intended to foster the development of new technologies and services.
`
`Related Matters
`
`WARC-92
`
`17. A worldwide allocation for PCS was discussed at the International Telecommunication Union (ITU) World Administrative
`Radio Conference in Torremolinos, Spain. At the conference it was decided to maintain the primary fixed and mobile allocations
`at 2 GHz in Region 2, 14 add additional mobile-satellite service (MSS) allocations in the 1930-2010 and 2120-2200 MHz bands,
`and add a footnote stating that future public land mobile telecommunications systems (FPLMTS), which are similar in concept
`to PCS, are expected to use the 1885-2025 MHz and 2110-2200 MHz bands on a worldwide basis. 15
`
`PCS Experiments
`
`18. The Commission has authorized over 150 PCS experimental licenses in the past three years. These experiments are
`developing and testing equipment in several different frequency bands. A number of the experiments also are authorized to
`perform market studies on a variety of technologies and service concepts. The services or devices being tested include CT-2,
`CT-2 Plus, *5685 CT-3, PCN, Wireless PBX, and Wireless Local Loop. 16
`
`19. The modulation schemes and access technologies being tested include frequency division multiple access (FDMA) 17 ,
`time division multiple access (TDMA) 18 , and narrowband and broadband spread spectrum technologies with associated code
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`5
`
`MTel., Exhibit 2003, Samsung v. MTel., Page 5, IPR2015-01726
`
`

`
`IN THE MATTER OF AMENDMENT OF THE..., 7 FCC Rcd. 5676 (1992)
`
`division multiple access (CDMA) 19 technology. The majority of experiments propose to operate in the 800/900 MHz and 2
`GHz bands, although AT & T is conducting experiments in the 6 GHz band and cable companies in the 12 GHz band. Additional
`experiments are being conducted by cellular operators in the cellular bands. At 2 GHz, the emphasis has been on propagation
`analysis and examination of spectrum sharing feasibility between PCS and fixed microwave users.
`
`*5686 20. The stage of testing and progress of individual experiments varies greatly. Many licensees are in the early planning
`stage of their experiments. Other licensees are conducting propagation tests to determine coverage areas, developing computer
`models to determine geographic areas where sharing and coordination with existing microwave operations will be required, and
`performing market studies to determine consumer demands for PCS-type services. Most experiments that are actively testing
`equipment are doing so in the 800/900 MHz bands, due to the availability of British CT-2 equipment. Narrowband systems,
`particularly for advanced messaging services (advanced paging), also are being tested in the 900 MHz range.
`
`**7 21. Most experiments in the 2 GHz band are focusing on the development of propagation data. PCN America and APC
`are actively testing prototype 2 GHz equipment. PCN America is testing a broadband spread spectrum system in an effort to
`demonstrate that PCS can coexist with microwave users. This system would overlay the microwave frequencies and make use
`of notch filters, automatic power control and cell engineering to minimize interference. APC is pursuing a narrowband approach
`with its Frequency Agile Sharing Technology (FAST). The FAST system would use spectrum not used by existing microwave
`operations to avoid interference with the microwave operations.
`
`Cellular and SMR Experience
`
`22. The Commission's reallocation in the 1970's of a large amount of spectrum from UHF-TV broadcasting and the federal
`government in the 800/900 MHz region provided opportunities for the development of new technologies. 20 This spectrum has
`been used primarily for new land mobile technologies, including common carrier cellular radio and private trunked operations
`such as specialized mobile radio (SMR) service. The cellular and trunked technologies pioneered by American companies not
`only have met domestic telecommunication requirements, but also have been exported and implemented abroad. As a result,
`U.S. domestic telecommunications products lead the world in meeting public demand and in using innovative technology.
`Further, because of the opportunities created by this allocation, American companies enjoy a position of global leadership in
`radio technology that has resulted in strengthening our competitiveness in international markets, particularly with regard to
`trunked and cellular radio *5687 systems. Rapid development and delivery of PCS technology to the marketplace will help
`enable the United States to maintain its position as a global telecommunications leader.
`
`23. Based on our experience in issuing cellular licenses, we hope to avoid some causes of delay in the PCS licensing and
`regulatory process. For example, as discussed infra, the comparative hearings held to award early cellular licenses proved to be
`unacceptably complex, costly, and slow. Once cellular lottery procedures were implemented, licenses were issued more rapidly
`and the cellular industry grew at an unprecedented rate, with service currently available in every market in the country with
`some 9,000,000 subscribers.
`
`24. Further, in GEN Docket 87-390, the Commission found it in the public interest to modify the cellular regulatory structure to
`facilitate the implementation of a new generation of cellular technology. 21 The Commission recognized that the initial detailed
`technical and compatibility standards governing the cellular service provided for a rapid and highly successful development
`of the service but subsequently impeded both development of new services and accommodation of the large number of
`additional subscribers anticipated in the future. The rules adopted in that proceeding allowed cellular providers flexibility in the
`introduction of advanced digital technologies and auxiliary common carrier services such as wireless PBXs. Our experience
`suggests that we should adopt a PCS regulatory structure that allows similar flexibility in implementing new services and
`technologies. In sum, we are proposing policies for PCS licensing that respond to the needs of the marketplace.
`
`III. DISCUSSION
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`6
`
`MTel., Exhibit 2003, Samsung v. MTel., Page 6, IPR2015-01726
`
`

`
`IN THE MATTER OF AMENDMENT OF THE..., 7 FCC Rcd. 5676 (1992)
`
`**8 Need for PCS
`
`25. Personal communications requirements in the United States are rapidly changing as our society becomes more mobile and the
`demand for instantaneous communications increases. There is steadily increasing consumer and business interest in new mobile
`services and technologies for numerous, sometimes incompatible, applications. These include wireless PBXs; smaller, lighter,
`portable cellular phones; portable fax machines; multi-channel cordless telephones; and services that facilitate contacting an
`individual instead of a particular station. Current radio equipment and services (cordless telephones, radio paging, and cellular
`radio) cannot fully meet the demands for these new services. Cordless telephones are used in and around the home or *5688
`office, operate on only a few channels that are congested, and are limited in use to the immediate vicinity of their base stations.
`Radio paging services are only one-way and generally require another communications link. While cellular and specialized
`mobile radio services will be able to provide some of the new communications requirements within their currently allocated
`spectrum, they cannot meet the full range of demand for PCS within a competitive framework.
`
`26. The establishment of PCS also is warranted as a way of introducing additional competition to current mobile radio services.
`Taking into account the wide range of proposed service functionally and cost, several consumer studies project that there could
`be over 60 million PCS users in the U.S. within ten years. 22 Parties have suggested that such services may provide competition
`to existing cellular, paging and private radio services and result in lowering the cost of these services. PCS also could augment
`emergency communications when disasters, such as earthquakes or tornadoes, render the public switched telephone network
`inoperable.
`
`27. In addition to domestic use, consumer requirements for PCS increasingly are international. Some highly mobile consumers
`of PCS can be expected to want their PCS handsets to be portable internationally and for the scope of service to be global. The
`international communications community appears to be moving toward establishing PCS operations in the 1800 to 2200 MHz
`band. To allow PCS providers to meet the consumer's expectation of worldwide service availability, the public interest would
`be served best by a U.S. allocation for PCS in or near this portion of the spectrum. Finally, establishing services in the same
`spectrum as other countries would facilitate the export of American products and services and decrease the price of equipment
`due to economies of scale. This would allow American manufacturers to maintain their lead in developing innovative mobile
`radio-based communications equipment and services. A domestic allocation that differed from the allocation in the rest of the
`world could retard domestic development and implementation by forcing manufacturers to develop incompatible equipment
`for smaller markets.
`
`**9 28. Accordingly, for both domestic and international considerations, we propose the establishment of a new PCS service.
`We believe that the establishment of PCS is warranted and will provide a family of new and innovative services to meet
`consumers' demands and needs for mobile and portable communication services. It is our goal to allocate sufficient spectrum
`and establish rules to allow the widest possible range of such services.
`
`*5689 Service Definition
`
`29. PCS concepts expressed in the comments submitted in this proceeding, the experimental applications and reports, and the
`requests for pioneer's preferences encompass a wide range of capabilities and technologies. Proposed new services range from
`wireless replacements for ordinary residential and office telephones to communication devices capable of sending and receiving
`voice and data to and from virtually anywhere. Therefore, we propose that personal communications services be defined as a
`family of mobile or portable radio communications services which could provide services to individuals and business, and be
`integrated with a variety of competing networks.
`
`30. We propose that spectrum allocated for PCS not be used for broadcasting service 23 and that fixed services generally be
`allowed only as ancillary to the mobile PCS services. There is only a limited amount of spectrum for these new PCS services,
`and fixed service uses generally can be accommodated by other means or in other frequency bands. Therefore, the primary
`focus of PCS will be to meet communications requirements of people on the move.
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`7
`
`MTel., Exhibit 2003, Samsung v. MTel., Page 7, IPR2015-01726
`
`

`
`IN THE MATTER OF AMENDMENT OF THE..., 7 FCC Rcd. 5676 (1992)
`
`Spectrum Allocations
`
`31. Allocation decisions are among the most difficult that the Commission must make because virtually all of the usable
`spectrum already is allocated to specific services, and most of it has been assigned to specific licensees. Therefore, to provide
`for new services, the Commission must identify spectrum that can be shared between a new service and an existing service, or
`that can be reallocated to a new service and the incumbent licensees relocated.
`
`32. The Commission began the process of identifying spectrum for PCS in its Policy Statement, supra. In ET Docket No. 92-9,
`the Commission proposes that 220 MHz of spectrum in the 1850-1990, 2110-2150, and 2160-2200 MHz bands be allocated
`for emerging technologies. 24 Consistent with that proceeding, and conditioned upon its outcome, we propose that 110 MHz
`of this 2 GHz spectrum be allocated for PCS services. We also propose that 3 MHz of 900 MHz spectrum be allocated for
`narrowband PCS operations, as discussed below.
`
`*5690 2 GHz Allocation
`
`33. Licensed PCS Services. Proponents of PCS estimate that several hundred megahertz of spectrum will be required to
`support all of the services envisioned. 25 They state that a substantial allocation of spectrum is required to provide the greatest
`opportunity for PCS services to develop and to provide for competition among PCS service providers. Several commenters
`argue that the allocation should be sufficient to provide for competition among licensed PCS providers. However, others argue
`that the number of licensed providers should be limited due in part to the cost of developing a PCS infrastructure. 26 A number
`of commenters state that PCS services at 2 GHz will compete with existing cellular radio service and, therefore, suggest that PCS
`licensees be provided at least a comparable amount of spectrum. Most parties favoring PCS argue that a large initial allocation
`would increase the opportunity for economies of scale and integration, further enhancing the prospect that PCS entrants will
`be competitive with established carriers.
`
`**10 34. Number of Providers. It is our goal to provide an allocation that allows for the provision of the widest range of PCS
`services at the lowest cost to consumers. The most desirable allocation to accomplish this goal would be one large enough to
`accommodate all entities interested in providing PCS services. Such an allocation would allow market forces to determine the
`optimum number of service providers. In view of the limited spectrum available for all emerging technologies, however, we
`necessarily must limit the size of any PCS allocation; this in turn will limit the number of potential PCS providers. Nevertheless,
`we tentatively conclude that an allocation that provides sufficient spectrum to support at a minimum three service providers
`per market will be necessary to ensure a wide and rich range of PCS services that meet consumer needs at reasonable pric