IN THE MATTER OF AMENDMENT OF THE..., 8 FCC Rcd. 7162 (1993)
`
`KeyCite Yellow Flag - Negative Treatment
`Corrected by
`In the Matter of Amendment of the Commission's Rules to Establish New Personal Communications Services,
`
`
`
` F.C.C., October 31, 1994
`
`8 FCC Rcd. 7162 (F.C.C.), 9 FCC Rcd. 6388, 73 Rad. Reg. 2d (P
`& F) 435, 8 F.C.C.R. 7162, 9 F.C.C.R. 6388, 1993 WL 757328
`FCC 93-329
`
`FEDERAL COMMUNICATIONS COMMISSION (F.C.C.)
`
`IN THE MATTER OF
`AMENDMENT OF THE COMMISSION'S RULES TO ESTABLISH
`NEW NARROWBAND PERSONAL COMMUNICATIONS SERVICES
`
`GEN Docket No. 90-314
`ET Docket No. 92-100
`RM-7617
`RM-7760
`RM-7782
`RM-7860
`RM-7977
`RM-7978
`RM-7979
`RM-7980
`PP-4
`PP-5
`PP-11
`PP-14
`PP-35 through PP-40
`PP-53
`PP-69
`PP-79 through PP-85
`Adopted: June 24, 1993; Released: July 23, 1993
`
`*7162 First Report and Order
`
`**1 By the Commission: Commissioner Barrett issuing a statement.
`
`
`INTRODUCTION
`
`1. By this action, the Commission provides for operation of new, narrowband personal communications services (PCS) on
`spectrum in the 900 MHz band. 1 Such new services are expected to include advanced voice paging, two-way acknowledgement
`paging, data messaging, and both one-way and two-way messaging and facsimile. The regulatory plan we are adopting for
`narrowband PCS includes an allocation of spectrum, a flexible regulatory structure, and technical and operational rules. Issues
`regarding licensee selection procedures and the regulatory status of the service are the subject of legislation actively being
`considered by the Congress and will be addressed by the Commission in a further action. The narrowband PCS services
`authorized under these rules are expected to increase the productivity of businesses, result in significant opportunities for small
`business participation, make available to the public new services to enhance their communications, and assist American industry
`to maintain its leadership position in the global telecommunications marketplace.
`
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`IN THE MATTER OF AMENDMENT OF THE..., 8 FCC Rcd. 7162 (1993)
`
`BACKGROUND
`
`2. The Commission initiated the PCS proceeding with a Notice of Inquiry in 1990. 2 The Commission subsequently issued a
`Policy Statement on PCS and has held an en banc hearing to address the issues raised in this proceeding. 3
`
`3. On July 16, 1992, the Commission adopted a Notice of Proposed Rule Making and Tentative Decision (Notice) in which
`it addressed both narrowband PCS services at 900 MHz and PCS at 2 GHz. 4 In the Notice, the Commission enumerated the
`following four goals: 1) universality of *7163 service availability; 2) speed of deployment; 3) diversity of services; and 4)
`competitive delivery. It stated that these four goals should be optimized and balanced in providing spectrum and a regulatory
`structure for PCS. 5 The Commission noted that the 900 MHz proposals include a variety of narrowband PCS services such
`as advanced paging, messaging, and advanced cordless telephones. These services include one-way systems with relatively
`low power transmissions from a subscriber to a base station, one-way systems with relatively high power transmissions from
`a base station to a subscriber, and one-way services that include facsimile, graphics and other imaging services. Also proposed
`are two-way services that would provide subscribers with more diverse messaging than is currently available, including for
`example, tracking and acknowledgement. In addition, two-way advanced cordless telephone services were proposed.
`
`**2 4. In view of the wide diversity of proposed services, the Commission proposed to define PCS broadly. Specifically, the
`Commission proposed to define PCS as a family of mobile or portable radio services which could provide services to individuals
`and business, and be integrated with a variety of competing networks. An allocation of spectrum for narrowband PCS was
`proposed at 901-902, 930-931 and 940-941 MHz. Comment also was requested on various combinations of four licensed service
`area options: 1) 487 Basic Trading Areas (BTAs); 2) 47 Major Trading Areas (MTAs); 3) 194 Local Access and Transport
`Areas (LATAs); and, 4) nationwide.
`
`5. The Notice included proposals for technical requirements, such as emission limits and frequency stability. The item proposed
`to pair blocks of spectrum from the 901-902 and 940-941 MHz bands and to provide for unpaired use in the 930-931 MHz band.
`Comment was sought on three alternative channeling plans providing both paired and unpaired channels and on the amount of
`spectrum that should be provided for each configuration.
`
`6. In the tentative decision portion of the Notice, the Commission proposed to award a pioneer's preference to Mtel for
`development of innovative new technology that will increase spectrum efficiency. 6 This tentative decision was based on
`Mtel's having developed and tested “Multi-Carrier Modulation” technology that is capable of transmitting a 24 kbps nationwide
`simulcast signal in a single 50 kHz channel and designing a complete advanced messaging system based upon this efficient
`technology.
`
`
`
`Service Definition and Spectrum Matters
`
`DISCUSSION
`
`7. Narrowband PCS Demand. In the Notice, the Commission recognized the increasing demand for PCS services, including
`those narrowband PCS services that can be reasonably and efficiently provided using spectrum available at 900 MHz. In
`response to the Notice, the commenting parties confirm this demand for narrowband PCS. Several commenters also submitted
`a number of market projections indicating substantial demand for narrowband PCS services. Specifically, Arthur D. Little,
`Inc. (Arthur D. Little) estimates future demand for enhanced paging/messaging services would be 15 million units in 1995,
`17.5 million units in 1998, and 21.3 million units in 2002. 7 Telocator states that the 1991 market for paging services is 11.2
`million subscribers (4.5% penetration of total market) and forecasts that the market for paging and advanced paging services
`
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`IN THE MATTER OF AMENDMENT OF THE..., 8 FCC Rcd. 7162 (1993)
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`will grow to 16.7 million subscribers in 1997 (6.3% penetration) and 22.99 million subscribers (8.13% penetration) in 2002,
`if licensing is complete in 1994. Similarly, PageNet states that advanced voice paging, its proposed narrowband PCS service,
`has an immediate consumer demand of at least 18 million people nationwide. Another paging concern, Dial Page states that
`four million current paging users and an additional four million new paging users would subscribe to a type of narrowband
`PCS it refers to as Acknowledgement Paging (AP). Mtel submits another Arthur D. Little study concluding that demand for
`its nationwide wireless network (NWN) approaches one million subscribers that would increase to nearly ten million after ten
`years of service, assuming service in 300 markets. 8
`
`**3 8. Based on the record in this proceeding, we continue to believe that there is a significant and growing demand for
`narrowband PCS services. We find that the establishment of narrowband PCS is warranted and that the public interest would
`be served through the provision of new and innovative narrowband PCS services to meet consumers' demands and needs for
`mobile and portable communications services.
`
`9. Narrowband PCS Service Definition. In the Notice, we proposed to define PCS broadly as a family of mobile and portable
`radio communications services which could provide services to individuals and business, and be integrated with a variety of
`competing networks. We proposed that broadcasting 9 be excluded from PCS spectrum and that fixed services generally be
`permitted only if reasonably ancillary to mobile PCS services.
`
`10. Commenting parties interested in providing services in the 900 MHz range provided a number of examples of services that
`fit within this definition. The most commonly *7164 cited services are advanced paging and messaging services. Both of these
`services go beyond simply alerting the subscriber that a call or message is waiting, and allow the subscriber to respond and
`interact with the page or message. Motorola Inc. (Motorola) states that advanced messaging services are a major subgroup of
`narrowband services and will permit the provision of services such as electronic mail (E-mail) and the transmission of voice
`messages and graphic images. 10 PacTel states that full two-way services (such as two-way data) and limited two-way data
`(such as acknowledgement paging) should be provided for within the narrowband PCS concept and that a variety of advanced
`messaging services can be offered in 25 kHz channels. American Paging, Inc. (American Paging) discusses one and two-way
`messaging communications to deliver enhanced character sets, high/low resolution graphics, video, E-mail, facsimile, digitized
`voice, and a range of data products. 11 PageNet agrees that narrowband PCS should be defined as mobile or portable paging
`services including, but not limited to, data, advanced paging and messaging services.
`
`11. Many parties argue that narrowband PCS should be restricted to some type of advanced paging or messaging, or that some
`type of limitation of use be imposed. A number of parties argue that due to the limited amount of spectrum available, narrowband
`900 MHz PCS services should be more limited than broadly-defined PCS at higher frequencies. American Paging proposes
`that two-way voice communications such as advanced cordless telephone operations be prohibited. Motorola proposes that
`the entire allocation be dedicated exclusively for new advanced messaging and data services. Utilities Telecommunications
`Council (UTC) requests that some 900 MHz spectrum be allocated exclusively for non-commercial, internal use by traditional
`private radio eligibles. Grand Broadcasting Corporation (Grand Broadcasting) proposes that one megahertz be allocated solely
`for a mobile interactive broadcast radio service (IBRS). In-Flight Phone Corporation (In-Flight) requests that at least one
`nationwide 500 kHz block be allocated solely for audio broadcast retransmissions to airline passengers. Corporate Technology
`Partners (CTP) requests that 100 kHz control channels be allocated in the 930-931 and 940-941 MHz bands so that its Personal
`Communications Interface (PCI) can share frequencies between 930-960 MHz on a secondary basis, which would allow PCI/
`CT2 Plus roaming between the United States and Canada. Finally, American Petroleum Institute (API) proposes that 375 kHz
`industrial/land transportation eligibles.
`
`**4 12. In reply comments, Motorola opposes the limitations proposed by CTP, In-Flight, and API. Motorola argues that the
`spectrum requirements of CTP's CT-2 services are significantly greater than other narrowband services and, consequently, that
`those services would be more appropriate in higher bands; that In-Flight's service is more similar to broadcast than personal
`messaging and would consume too much spectrum for each provider; and that API's proposal constitutes a conventional land
`
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`IN THE MATTER OF AMENDMENT OF THE..., 8 FCC Rcd. 7162 (1993)
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`mobile radio service already authorized in other spectrum. PageNet also opposes CTP, In-Flight and API's proposals, arguing
`that the allocation should be limited to advanced paging. Telocator agrees, stating that the spectrum should be used only for
`advanced messaging type services, and not for the uses suggested by API, CTP, and In-Flight. Telocator also opposes UTC's
`proposal to reserve a third of the allocation for non-commercial internal use by traditional private radio eligibles.
`
`13. We continue to believe that a broad definition of PCS is warranted. We find that our concept of PCS as family of services
`is appropriate and will permit PCS to encompass a wide array of mobile, portable and ancillary communication services to
`individuals and businesses, and be integrated with a variety of competing networks. We find that narrowband PCS is an
`important first member of the PCS service family, and are adopting the rules proposed in the Notice for the definition of PCS
`and for permissible communications with minor editorial changes. We decline to adopt the suggestions of some commenters
`to limit narrowband PCS to advanced paging and messaging services. While we anticipate, given the stated interest in such
`services, that advanced messaging and paging services will be one of the predominant narrowband PCS services to be provided,
`at the same time, we do not wish to foreclose other potential narrowband services.
`
`14. Further, we decline to allocate spectrum specifically for an advanced cordless telephone service, inasmuch as already we
`have permitted cordless telephones to operate in a number of frequency bands, including 902-928 MHz, 12 and have under
`consideration a petition for additional frequencies in a different band. 13 Additionally, no set-aside for non-commercial use by
`traditional private radio eligibles, as proposed by UTC, will be made because we are not convinced that spectrum currently
`allocated for such private land mobile services is inadequate and because, in general, the services suggested by UTC appear
`to be within the definition of narrowband PCS and permissible in this spectrum. As there is no petition for rule making before
`us requesting that spectrum sharing in the 930-960 MHz band be permitted, we will not reserve spectrum for control channels
`in the narrowband PCS spectrum. Finally, we are adopting the restriction that the spectrum allocated for narrowband PCS not
`be used for broadcasting.
`
`15. Spectrum Allocation/Channelization Plan. In the Notice we proposed to allocate 3 megahertz of spectrum at 901-902,
`930-931, and 940-941 MHz to narrowband PCS. Specifically, we proposed to pair blocks of spectrum from the 901-902 and
`940-941 MHz bands, and to provide for unpaired use in the 930-931 MHz band. Three alternative channelization plans were
`presented: twenty 50 kHz symmetrically paired blocks and twenty 50 kHz unpaired blocks; four 250 kHz symmetrically paired
`blocks and four 250 kHz unpaired blocks; and two 500 kHz symmetrically *7165 paired blocks and a 1 MHz unpaired block.
`Comment was requested on our proposals to provide both paired and unpaired spectrum and on the amount of spectrum that
`should be provided for each configuration.
`
`**5 16. There was no clear consensus on channelization. Although most commenters believe that the majority of channels
`should have bandwidths of 50 kHz or less, a number of commenters suggest that the channeling plan for narrowband PCS
`should accommodate both paired and unpaired operation and a number of varying channel bandwidths. There was general
`agreement among the commenters, however, that the 901-902 MHz band should be used for low power “talk-in” (mobile-to-
`base) operations. 14 Motorola, for example, states that commenters have recognized the potential engineering and cost benefits
`of reserving the 901-902 MHz band exclusively for low power talk-in channels. Additionally, many of the parties support
`providing for some asymmetrically paired blocks (a mobile-to-base block of smaller bandwidth than the base-to-mobile block).
`These parties state that asymmetrical channeling is spectrally efficient since the response requirement uses less bandwidth than
`that needed for the message being communicated.
`
`17. American Paging, Arch Communications Group, Inc. (Arch), The Ericsson Corporation (Ericsson), and Mtel support
`channel bandwidths of 50 kHz or less. Mtel states that no proven efficiencies would result from specifying blocks larger than
`50 kHz, and that creating larger channel blocks would restrict entry opportunities and limit competition and diversity. PacTel
`states that large channel blocks such as 200 kHz are unnecessary and would result in “warehousing” of spectrum by applicants
`that can provide their service with less.
`
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`IN THE MATTER OF AMENDMENT OF THE..., 8 FCC Rcd. 7162 (1993)
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`18. PageMart, PacTel, and Motorola each propose alternate channeling plans. Each of these plans would limit the 901-902
`MHz band to low power transmissions and would provide for both symmetrical and asymmetrical channel pairings. All of
`the proposed channeling plans include some unpaired channels in 901-902 MHz to provide low-power response capability for
`existing paging licensees. In particular, PageMart proposes: five 200 kHz blocks, each associated with two 25 kHz blocks; five
`25 kHz symmetrically paired blocks; ten 25 kHz blocks paired with 12.5 kHz blocks; ten 50 kHz unpaired blocks; and fifty
`12.5 kHz unpaired blocks. PacTel proposes five 100 kHz symmetrically paired blocks; twenty-two 20 kHz blocks paired with
`ten 100 kHz blocks, eight 50 kHz blocks, and four 25 kHz blocks; and three 20 kHz unpaired blocks. Motorola proposes three
`150 kHz symmetrically paired blocks; thirty-one 50 kHz blocks paired with 12.5 kHz blocks; and thirteen 12.5 kHz unpaired
`blocks for use by existing paging providers. Additionally, Motorola suggests that we allow licensees the flexibility to combine
`or split channels as long as they stay within their authorized spectrum.
`
`19. We believe that the channelization plan for narrowband PCS should provide a flexible framework that will foster our goals
`of universality, speed of deployment, diversity of services and competitive delivery. Potential PCS providers propose a diverse
`range of services with varying channel bandwidth requirements. We find that a mix of paired, unpaired and varying bandwidths
`will provide the most flexible solution for meeting the stated needs of narrowband PCS providers. At the same time, we have
`reconsidered our original proposal to channelize and license the entire 3 MHz of available 900 MHz spectrum at this time. We
`now believe that less spectrum is sufficient to support the narrowband PCS proposals before us. Further, given the diversity in
`channel bandwidths and other operational considerations associated with these proposals, this approach will allow us to respond
`to growth and development of specific narrowband PCS services as well as potential new future services. In view of the above
`considerations, we are allocating the 901-902, 930-931 and 940-941 MHz bands to narrowband PCS. However, at this time we
`will only channelize and license two of the three megahertz of spectrum we are making available for 900 MHz PCS use. We
`believe this will provide an adequate amount of spectrum for the initiation of narrowband PCS and allow us flexibility in the
`future to channelize and license the remaining one megahertz of spectrum as this service develops.
`
`**6 20. Based on the record, it appears that most proposed narrowband services can be accommodated within a 50 kHz
`channelization plan. It also appears that the vast majority of narrowband PCS services propose low-power return path response
`capability. In this regard, we agree with the commenting parties that the 901-902 MHz band is particularly suited to use for
`low-power operations and that asymmetrical channel bandwidth pairings should be used to promote spectrum efficiency. As
`noted by Motorola and others, the communications requirements of response operations are substantially less than those of
`base-to-mobile operations. Therefore, our channelization plan will provide twelve 50 kHz channels in the 930-931 MHz band
`asymmetrically paired with twelve 12.5 kHz channels in the 901-902 MHz band. We also concur with those commenters that
`suggest that some response channels be provided for use by existing licensees. This will permit existing paging operations to be
`upgraded and provide some acknowledgement and messaging capability. We will therefore provide eight 12.5 kHz channels for
`use by existing common carrier and private paging licensees. To accommodate unpaired 50 kHz operations, we are providing
`five unpaired channels. To accommodate uses that require symmetrical pairings, we are providing nine 50 kHz channel pairs
`(i.e., 50 kHz paired with 50 kHz).
`
`21. Finally, we will permit the aggregation of channels in any of the paired or unpaired channel groups (e.g., up to 150 kHz
`paired with 150 kHz) to accommodate the wider bandwidth services. We believe that such an aggregation approach will permit
`the wider bandwidth proposals suggested by PacTel and Motorola, yet ensure that the spectrum resource is used in an efficient
`manner. 15 Further, *7166 our technical rules will permit sufficient flexibility for licensees to use different modulations and
`other technical characteristics as suggested by Motorola.
`
`22. Licensed Service Areas. In the Notice, the Commission stated that large regional or nationwide licensed service areas would
`provide for flexibility in the design and implementation of 900 MHz narrowband PCS systems. 16 The Commission also noted
`that 900 MHz petitioners generally proposed either regional or nationwide services. The Commission tentatively concluded that
`PCS licensed service areas should be larger than those initially licensed in cellular; and requested comment on four options: 1)
`487 BTAs plus Puerto Rico; 17 2) 47 MTAs with Alaska separated from the Seattle MTA, plus Puerto Rico; 18 3) 194 LATAs;
`and 4) nationwide.
`
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`IN THE MATTER OF AMENDMENT OF THE..., 8 FCC Rcd. 7162 (1993)
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`23. Most of the commenting parties support a combination of nationwide and regional licensed service areas for narrowband
`900 MHz PCS services. For example, Arch and Motorola argue that some spectrum should be allocated to nationwide service.
`Echo states that the economies of scale available to nationwide licensees would translate into better and lower cost service to
`subscribers. PageNet states that at least some, if not all, licenses should be granted on a nationwide basis since it is doubtful
`that smaller carriers would be able to satisfy demand for service quickly and efficiently because of the difficulties inherent
`in aggregation. Mtel suggests allocating three nationwide spectrum blocks. Telocator also supports both nationwide and large
`regional licensed service areas, and states that there is a clear consensus that exclusively local licenses are not needed for
`narrowband PCS. American Paging proposes that 25% of the spectrum be licensed on a nationwide basis. Ericsson proposes
`that channels be allocated on a 40% regional and 60% nationwide basis.
`
`**7 24. A number of commenters support establishment of large regions for narrowband PCS. Telocator, with support from
`Dial Page and others, suggests that we establish five large regions for narrowband 900 MHz PCS service. 19 Telocator argues
`that the traditional paging market is increasingly regional, national and even international in service coverage and that economic
`efficiencies in wireless messaging dictate nationwide and regional licensed service areas. It also states that larger licensed service
`areas are needed in order to achieve economies of scale necessary for development of low cost personal receivers. Telocator
`further submits that many paging providers have concluded that the economic viability of narrowband services in smaller
`licensed service areas is doubtful. Southwestern Bell Corporation suggests that there be nine to ten regions for narrowband
`PCS. The Small Business Administration proposes that the 47 MTAs be used as the basis for defining narrowband PCS licensed
`service areas. UTC suggests that we use either the 47 MTAs or the 194 LATAs.
`
`25. Other parties support the provision of smaller licensing areas for narrowband PCS. Celpage, Inc. (Celpage) states that paging
`is essentially a local service and that there is no justifiable basis for designating only region-wide or nationwide service. Celpage
`and others, such as Freeman Engineering Associates, Inc. (Freeman), favor using the cellular metropolitan statistical area and
`rural service area (MSA/RSA) model for narrowband PCS licensed service areas. NYNEX Corporation also requests that we
`reconsider using cellular licensed service areas because MSAs/RSAs would allow the prospective PCS market to develop in a
`recognized cellular licensed service area and thus induce inter-service competition as well as intra-service competition, would
`help ensure more widespread deployment of PCS in both metropolitan and rural licensed service areas, and would be far easier
`to consolidate than to sell off portions of a larger licensed service area. CTP supports license areas that are based on the 194
`telephone LATAs because it considers PCS as in part a wireless local loop service and feels that the strongest PCS network
`approach should match the local telephone system, which is on LATA basis.
`
`26. While there appears to be interest in providing narrowband PCS services across a wide range of local, regional and national
`licensed service area sizes, the majority of the parties commenting on this issue favor large regional or nationwide licensed
`service areas. We concur with the commenting parties that large regional and nationwide licensed service areas would provide
`economies of scale, and should alleviate some of the problems licensees have experienced when they tried to aggregate smaller
`licensed service areas. As we noted above and in our original Notice, large regional and nationwide licensed service areas would
`provide for flexibility in the design and implementation of narrowband PCS services. We also recognize that large regional and
`nationwide licensed service areas will further our goal of fostering the swift implementation and deployment of narrowband PCS
`services and systems. Accordingly, we are setting aside the majority of spectrum and channels for nationwide and large regional
`licensed service area use. For the regional licensed service area, we regard the 47 MTAs as a good compromise between the
`*7167 three to five large licensed service areas suggested by PacTel and Telocator, and the smaller areas suggested by other
`commenters for narrowband PCS. We find that the 47 MTAs would provide for more reasonable and homogeneous markets
`for the provision of PCS services. If larger licensed service areas are required for certain narrowband PCS services, nationwide
`PCS channels are available. In addition, aggregation of MTA licensed service areas will be permitted.
`
`**8 27. While the majority of the channels will be designated for nationwide and MTA use, we recognize that there are a variety
`of narrowband PCS services that could be offered at the local level. We believe that by providing channels at the local level, 20
`we will foster broader participation in narrowband PCS, allow entry by smaller firms and businesses, increase competition and
`
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`IN THE MATTER OF AMENDMENT OF THE..., 8 FCC Rcd. 7162 (1993)
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`promote diversity in the provision of narrowband PCS services. Therefore, we will designate some channels for narrowband
`PCS use for the 487 BTAs. In addition, we are using BTAs for the licensed service area for the unpaired acknowledgement
`channels being provided for use by existing licensees. We conclude that this approach is appropriate given the limited number
`of channels and the fact that most existing paging is now licensed on a local basis.
`
`28. As indicated above, the licensed service area and channeling plan we are establishing will accommodate operation of
`competitive PCS services at the nationwide, regional and local levels. The plan we are adopting is as follows:
`
`Licensed Service Area
`
`Nationwide
`
`
`Regional (47 MTAs, plus Alaska separate from the Seattle
`MTA; Puerto Rico and U.S. Virgin Islands; Guam and
`Northern Marianas; and American Samoa.)
`
`
`Local (487 BTAs, plus America Samoa, Guam, Northern
`Marianas, Puerto Rico, and U.S. Virgin Islands)
`
`
`**9 Licensing Issues
`
`Channels Available
`
`3-50 kHz paired with 12.5 kHz
`
`3-50 kHz paired with 50 kHz
`
`3-50 kHz unpaired
`
`7-50 kHz paired with 12.5 kHz
`
`
`4-50 kHz paired with 50 kHz
`
`2-50 kHz unpaired
`
`2-50 kHz paired with 12.5 kHz
`
`
`8-12.5 kHz unpaired for use by existing paging licensees
`
`
`29. Eligibility. In the Notice we sought comment on whether there should be any eligibility restrictions for cellular and local
`exchange carriers (LECs) with regard to the provision of narrowband 900 MHz PCS services. We noted that unlike proposed
`PCS at 2 GHz, narrowband PCS is not likely to provide a competitive alternative to the existing wireline and cellular networks.
`
`30. Most parties addressing this issue support allowing cellular entities and LECs to participate in the provision of narrowband
`PCS. Some parties do, however, suggest that certain restrictions be applied to participation by cellular carriers and LECs. Arch
`and Metrocall of Delaware, Inc. (Metrocall) suggest that cellular providers be allowed to participate in narrowband PCS, but
`only outside their existing licensed service areas. Similarly, Freeman and Metrocall support LEC participation, but only outside
`their landline service areas. Florida Cellular RSA Limited Partnership (Florida Cellular) proposes that LEC participation be
`allowed only through a separate subsidiary. UTC also suggests that some form of safeguards be imposed on LEC participation.
`
`31. We conclude that it is appropriate to allow cellular entities and LECs to participate in the provision of narrowband PCS
`without restriction. The channeling and licensed service area plans we are adopting will ensure that there will be substantial
`competition among providers of narrowband PCS services. In addition, we believe that the nature of narrowband PCS is
`sufficiently different from that of the services provided by cellular systems and LECs that any ability they might have to exert
`undue market power or restrain trade will be negligible.
`
`32. Limits on Holding Multiple Licenses. In the Notice, we requested comment on whether to permit licensees that may need
`more spectrum than is provided with a single license to acquire more than one license in the same market. Additionally, we
`
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`presented alternative options that would place limits on holding multiple licenses: 1) limit *7168 operators to one license per
`market; 2) cap the total spectrum a licensee could acquire or use; or 3) decide license merger questions on a case-by-case basis.
`
`33. Parties expressed general support for allowing individual parties to hold multiple licenses in the same market. American
`Paging proposes that a licensee be permitted to aggregate as many as five 50 kHz channels in each licensed service area. Celpage
`states that there should be no limit on licenses held per market because this would have anti-competitive implications and the
`marketplace and the financial wherewithal of the carriers will dictate how many carriers can compete effectively.
`
`34. We conclude that some limits on the holding of multiple licenses are appropriate to ensure that narrowband PCS is offered
`on a competitive basis. At this time, as indicated above, we also want to provide opportunities for licensees to aggregate or
`combine channels to provide multiple offerings or wider bandwidth services. Therefore, we will permit a single licensee to
`hold licenses for up to three 50 kHz channels, paired or unpaired (i.e., no more than 150 kHz paired with 150 kHz). 21 This
`plan will allow PCS providers considerable flexibility to combine channels to accommodate specific service needs while also
`ensuring competition in the provision of services.
`
`**10 35. License Term. In the Notice, we proposed a ten-year license term for narrowband PCS with a renewal expectancy
`similar to that of cellular telephone service. We noted that without a relatively long license term and a high renewal expectancy,
`entrepreneurs might be reluctant to make investments in PCS. The commenting parties addressing this issue, which include
`Metrocall, Mtel and UTC, generally support our proposal for a ten-year license term. We continue