In the Matter of                                                                            )
                                                                                                    )
Mandatory Reimbursement Rules for                                            )                 Docket No. 001206341-0341-01
Frequency Band or Geographic Relocation of                               )
Federal Spectrum-Dependent Systems                                         )
 
 

Securicor Wireless Holdings, Inc. ("Securicor Wireless"), by its counsel, hereby submits its Comments on the Notice of Proposed Rulemaking ("NPRM") in the above-captioned proceeding. ¹

I. Introduction

Securicor Wireless is the largest service provider in the 220-222 MHz band ("220 MHz Service"). Through its two subsidiaries, Intek License Acquisition Corp. and Roamer One, Inc., it is by far the largest single license holder in the 220 MHz Service and, with its national footprint, it provides voice, dispatch, and data services to customers in markets throughout the United States. Securicor Wireless has recently filed comments in the proceeding initiated by the Federal Communications Commission ("FCC" or "Commission") on the reallocation of 27 MHz of spectrum from Government use to commercial use,² specifically regarding the reallocation of the neighboring 216-220 MHz band. In its comments, Securicor Wireless advocated that the 216-220 MHz band be reallocated primarily for commercial mobile operations and that Government entities operating in the band should be relocated at the option of the new commercial licensees. Securicor Wireless, therefore, submits these Comments on the mandatory reimbursement rules for relocation of Government operations proposed by the Department of Commerce’s National Telecommunications and Information Administration ("NTIA").

II. Discussion

A. Relocation Should Be Mandatory Upon the Option of the Auction Winner

In order for the spectrum that has been identified by Congress, NTIA, and the FCC to be reallocated from shared Government/non-Government use to exclusively non-Government use and auctioned for commercial service, it is critical that the new commercial spectrum holders (i.e., the "auction winners") have the right to relocate the Government facilities that are currently on the band ("incumbents"). Without this option, the overall commercial success of the reallocated spectrum may be threatened by problems of interference and non-contiguous spectrum.

In some circumstances, it is possible that relocation of the Government incumbents is unnecessary. Therefore, Securicor Wireless requests that NTIA clarify that it is the option of the auction winner to decide whether relocation of the incumbent Government facilities is appropriate. There may be situations where is more cost-effective to maintain and protect incumbent Government operations. Moreover, it is possible that relocation may not be necessary immediately after the auction winner acquires the license. Therefore, NTIA should clarify that relocation of incumbent Federal entities is a right, and not a requirement, of the auction winners.

B. Relocation Costs Must Be Specified Before Auction and Capped for Negotiation

It is critical to the business plans of those interested in providing service on the reallocated spectrum that the costs involved in relocating the incumbent operations be fully disclosed to potential bidders. The value of the spectrum is clearly tied to the level of incumbency and the costs associated in relocating those incumbents. Therefore, Securicor Wireless requests that as much information as possible regarding relocation costs be required prior to the auction of the spectrum.

Moreover, Securicor Wireless advocates that NTIA clarify that the total relocation cost provided by Federal entities to NTIA, the FCC, and potential bidders, be set as the ceiling in the post-auction negotiation and mediation period set forth in NTIA’s proposed reimbursement rules.³ Without this clarification, "new" costs could be introduced after the auction bidders have relied on the cost valuation in their bid calculation.

C. Relocation Costs Should Be Limited to Comparable Facilities

NTIA’s proposed rules state that the auction winners are required to reimburse the Federal entities for all costs incurred as a result of modification, retuning and/or relocation.⁴ NTIA further defines "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, and specifically include: (1) all engineering, equipment, software, site acquisition and construction costs; (2) any legitimate and prudent transaction expenses, including outside consultants; and (3) reasonable additional costs incurred by the Federal entity that are attributable to relocation, including increased recurring costs associated with the replacement facilities.⁵

Securicor Wireless believes that the totality of costs proposed by NTIA for reimbursement are, in general, consistent with the notion of comparable facilities, but does have concern that some of the costs enumerated in the NPRM may be interpreted to provide better facilities than those the incumbents currently use. Relocation should simply put the incumbent in a comparable place. The Federal entities should not have any increased value in their facilities due to the relocation process.

NTIA should also clarify that the reimbursement costs not only need to be reasonable, but also need to be supported and documented. Without clear documentation and support of the costs, it will be impossible to determine the accuracy of the relocation process.

D. Extend Period to Notify Federal Entity of Intent to Relocate

NTIA proposes that an auction winner would be required to notify Federal entities within 30 days after its license is granted whether it wishes to relocate those Government facilities.⁶ Securicor Wireless believes that the 30-day period is an insufficient amount of time for an auction winner to fully appreciate whether it should relocate the incumbent operations. While Securicor Wireless recognizes that grant of a license does not occur immediately following an auction, the grant of a license to a winning bidder is not guaranteed, given the Commission’s review of eligibility and qualifications following an auction and the right of interested parties to file petitions to deny. Therefore, Securicor Wireless proposes that NTIA extend the time in which an auction winner needs to notify the Federal entity of its intent to relocate the incumbent operations. Specifically, Securicor Wireless advocates a period of one year following the grant of licenses to notify the Federal entities of their intent to relocate their facilities. The one-year period is consistent with other wireless relocations,⁷ and would provide auction winners with sufficient amount of time to determine whether it is in their interest to relocate the incumbents.

E. Pre-Auction Notification Should Include More Information Than Proposed Rules

In addition to the information set forth in the NPRM, Federal entities should inform NTIA (and thus the FCC and potential auction bidders) whether the incumbent facilities can be relocated on a single, local or regional basis, or whether an entire system must be relocated. For example, if a Government facility is a nationwide system that cannot be broken apart, then such information must be made clear to the potential auction bidders.

Securicor Wireless also advocates that the Federal entities provide specific information about the age (i.e., stage in lifecycle) and state of their current facilities. Such information should, in turn, be factored in to the computation of reimbursable costs, so that auction winners are given some consideration if the costs of replacement would have occurred anyway. For example, equipment with 20-year lifecycle in Year 18 should not be given the same value as equipment in Year 2.

F. Payment in Advance for Recurring Costs Should be Done on Net Present Value

As set forth in the proposed rules, auction winners are to reimburse relocated incumbents for operational costs, including any increased recurring costs associated with the replacement facilities for five years after relocation.⁸ Moreover, pursuant to statute, the proposed rules indicate that reimbursement payments shall be made in advance of relocation.⁹ Payment of increased recurring costs in advance may inadvertently provide a greater benefit to the incumbents because of the time of value of money. Securicor Wireless proposes, therefore, that payment for recurring costs in advance be done on a net present value basis. Securicor Wireless believes that such a calculation is easy to administer and would be equitable for both of the auction winners and the relocated incumbents.

G. Cost-Sharing Plan Should be Administered by Industry-Supported Organization

Securicor Wireless supports NTIA’s proposal to adopt a cost-sharing plan so that the costs associated with relocating an incumbent would not fall disproportionately on one potential bidder or licensee or a small number of potential bidders or licensees.10 Securicor Wireless believes that such cost-sharing plan would best be administered by an industry-supported organization. For example, in the relocation of incumbent microwave operations in the 2 GHz band for new licensees in the FCC’s broadband Personal Communications Services ("PCS") auction, the relocation process was administrated by the Personal Communications Industry Association ("PCIA"). Securicor Wireless believes that the 2 GHz microwave/PCS relocation process as administrated by PCIA was effective and efficient and could serve as a model for relocation of Government operations.

III. Conclusion

For the reasons set forth herein, Securicor Wireless advocates adoption of the mandatory reimbursement rules proposed by NTIA with the modifications suggested in these Comments.

                                                                                                    __________________________________

Dated: March 19, 2001

2       See 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, Federal Communications Commission ET Docket No. 00-221, Notice of Proposed Rulemaking, 15 FCC Rcd. 22657 (2000).

3     See NPRM at  36-37.

4    See proposed 40 C.F.R. § 301.100.

5     See proposed 40 C.F.R. § 301.110(a).

6     See NPRM at  36.  See also proposed 40 C.F.R. § 301.120(a).

7    In the context of relocation of incumbent operations in the 800 MHz SMR context, the auction winners were given 90 days following a public notice announcing the start of the voluntary negotiation period (i.e., from December 4, 1998 to March 4, 1999), to inform the incumbents of their intent to relocate.  Because most of the 800 MHz SMR auction licenses were granted in March 1998, the auction winners were basically given one year following grant of their licenses to notify the incumbents on their intent to relocate.

8      See proposed 40 C.F.R. § 301.20(o).

9      See proposed 40 C.F.R. § 301.100(b).

10    See NPRM at  29-31.