94-511. Private Land Mobile Licenses; Reclassification  

  • [Federal Register Volume 59, Number 6 (Monday, January 10, 1994)]
    [Rules and Regulations]
    [Pages 1285-1288]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 94-511]
    
    
    [[Page Unknown]]
    
    [Federal Register: January 10, 1994]
    
    
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    FEDERAL COMMUNICATIONS COMMISSION
    
    47 CFR Parts 22, 25, 80, 87, 90, 95 and 99
    
    [GN Docket No. 93-252; FCC 94-2]
    
     
    
    Private Land Mobile Licenses; Reclassification
    
         In the matter of implementation of sections 3(n) and 332 of the 
    Communications Act; Regulatory Treatment of Mobile Services.
    
    AGENCY: Federal Communications Commission.
    
    ACTION: Procedures for waiver petitions.
    
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    SUMMARY: As a result of recent legislation, certain private land mobile 
    radio licensees will be reclassified as commercial mobile radio service 
    licensees and will be subject to foreign ownership restrictions within 
    the Communications Act of 1934, as amended. The Commission has now 
    established a procedure by which such licensees may file a waiver 
    petition with the Commission to request retention of existing foreign 
    ownership that would otherwise not be permitted. Such waiver petitions 
    must be received at the Commission by February 10, 1994.
    
    DATES: This document is effective January 10, 1994. Petitions for 
    waiver must be filed with the Commission by February 10, 1994.
    
    ADDRESS: Federal Communications Commission, 1919 M St. NW., Washington, 
    DC 20554.
    
    FOR FURTHER INFORMATION CONTACT:
    The Private Radio Bureau, Licensing Division, Consumer Assistance 
    Branch, (717) 337-1212 (for information regarding the filing of waiver 
    petitions). For information regarding this First Report and Order, 
    contact Carmen Cintron at (202) 632-6450 (Common Carrier Bureau, Mobile 
    Services Division) or Eric Malinen at (202) 632-6497 (Private Radio 
    Bureau, Land Mobile and Microwave Division).
    
    SUPPLEMENTARY INFORMATION:
    
    First Report and Order
    
        Adopted: January 4, 1994; Released: January 5, 1994.
    
        By the Commission:
    
    I. Introduction
    
        1. On September 23, 1993, we adopted a Notice of Proposed Rule 
    Making (Notice)\1\ in which we proposed, inter alia, to establish a 
    procedure by which private land mobile radio licensees that will be 
    reclassified as commercial mobile radio service (CMRS) providers 
    pursuant to this rule making proceeding could file a waiver petition to 
    retain existing foreign ownership. We now establish the filing 
    procedure for these waiver petitions and remind all potentially 
    affected licensees of the February 10, 1994, filing deadline. We also 
    emphasize that filing such a petition will not prejudice the licensee's 
    right at a later date to assert that it should not be classified as a 
    CMRS provider.
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        \1\GN Docket No. 93-252, 8 FCC Rcd 7988, 8002-03  76-78 
    (1993), 58 FR 53169 (October 14, 1993).
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    II. Background
    
        2. The Omnibus Budget Reconciliation Act of 1993 (Budget Act)\2\ 
    amended sections 3(n) and 332 of the Communications Act of 1934, as 
    amended, 47 U.S.C. 153(n), 332 (Communications Act), to create a 
    comprehensive regulatory framework for all mobile radio services. 
    ``[A]ny provider of a private land mobile service that will be treated 
    as a common carrier as a result of the enactment of the Omnibus Budget 
    Reconciliation Act of 1993'' is subject to the foreign ownership 
    restrictions imposed on common carriers by section 310(b) of the 
    Communications Act, 47 U.S.C. 310(b).\3\ Nevertheless, the statute 
    allows affected licensees to petition the Commission for waiver of the 
    application of section 310(b) to any foreign ownership that lawfully 
    existed as of May 24, 1993. The statute requires that these petitions 
    for waiver be filed with the Commission by February 10, 1994 (within 6 
    months of enactment of the Budget Act). The Commission may grant such 
    waivers to eligible petitioners only upon the following conditions:
    
        \2\Pub. L. No. 103-66, Title VI, Sec. 6002(b), 107 Stat. 312, 
    392, 395 (1993); see H.R. Conf. Rep. No. 213, 103d Cong., 1st Sess. 
    492, 494-95 (1993), reprinted in 1993 U.S. Code Cong. & Admin. News 
    1179, 1183-84.
        \3\See 47 U.S.C. 332(c)(6); see also Budget Act, Section 
    6002(c)(2)(B) (effective dates). For the text of Section 310(b), see 
    paragraph 3, infra.
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        (A) The extent of foreign ownership interest shall not be 
    increased above the extent which existed on May 24, 1993.
        (B) Such waiver shall not permit the subsequent transfer of 
    ownership to any other person in violation of section 310(b).
    
    47 U.S.C. 332(c)(6)(A), (B).\4\
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        \4\In regard to condition (B), the legislative history of the 
    amended statute states: ``In effect, this condition ``grandfathers'' 
    only the particular person who holds the foreign ownership on May 
    24, 1993; the ``grandfathering'' does not transfer to any future 
    foreign owners.'' H.R. Conf. Rep. No. 213, 103d Cong., 1st Sess. 495 
    (1993), reprinted in 1993 U.S. Code Cong. & Admin. News 1184.
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        3. Section 310(b) states in relevant part:
    
        No * * * common carrier * * * license shall be granted to or 
    held by--
        (1) any alien or the representative of any alien;
        (2) any corporation organized under the laws of any foreign 
    government;
        (3) any corporation of which any officer or director is an alien 
    or of which more than one-fifth of the capital stock is owned of 
    record or voted by aliens or their representatives or by a foreign 
    government or representative thereof or by any corporation organized 
    under the laws of a foreign country;
        (4) any corporation directly or indirectly controlled by any 
    other corporation of which any officer or more than one-fourth of 
    the directors are aliens, or of which more than one-fourth of the 
    capital stock is owned of record or voted by aliens, their 
    representatives, or by a foreign government or representative 
    thereof, or by any corporation organized under the laws of a foreign 
    country, if the Commission finds that the public interest will be 
    served by the refusal or revocation of such license.
    
        For the purposes of section 310(b), certain partnership interests, 
    as well as certain other interests held by non-corporate entities and 
    associations, may be considered ownership interests.\5\
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        \5\See e.g., Wilner & Scheiner, 103 FCC 2d 511 (1985), 
    reconsideration granted in part, 1 FCC Rcd 12 (1986); see also 
    Moving Phones Partnership, L.P. v. FCC, 998 F.2d 1051, 1055-57 (D.C. 
    Cir. 1993). Section 310(b) was amended in 1974 to eliminate the 
    restriction on alien ownership of private radio licensees. Pub. L. 
    93-505, 88 Stat 1576; H.R. Report No. 93-1423, 93rd Cong., 2d Sess., 
    reprinted in 1974 U.S. Code Cong. & Admin. News 6305, 6307. However, 
    the ban on licensing radio facilities to foreign governments or 
    representatives, established in section 310(a), still applies to all 
    licensees.
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        4. The Notice proposed to establish a petition procedure to allow 
    licensees to ``grandfather'' their foreign ownership. Under this 
    procedure, petitioners would be required to (1) identify all foreign 
    persons or entities holding an interest in the licensee and the 
    percentage of ownership interest for each; and (2) certify that the 
    identity and level of foreign ownership are unchanged since May 24, 
    1993, and that no change will occur in the future (other than 
    divestiture of a foreign ownership interest to a domestic person or 
    entity) without prior notice to the Commission.\6\
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        \6\Notice, 8 FCC Rcd at 8002-03 77.
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        5. The Notice indicated that we intend to place the burden on 
    licensees to file petitions, regardless of whether we have made a final 
    determination as to whether the licensee is subject to reclassification 
    as a CMRS provider. Furthermore, the Notice stated that while the 
    filing of a petition would not prejudice a licensee's future arguments 
    as to whether it should be reclassified, licensees who failed to file a 
    timely petition would be subject to immediate enforcement of our 
    foreign ownership restrictions.\7\
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        \7\Id. at 8003 78.
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    III. Comments
    
        6. A single commenter responded to this issue. Roamer One, Inc., 
    argues that the Notice misread the Budget Act's amendment to the 
    Communications Act to the extent that it imposes ``immediate'' foreign 
    ownership restrictions on all private radio licensees.\8\ It maintains 
    that while the Notice refers to private land mobile service providers 
    that ``may'' be treated as common carriers, the statute refers to 
    existing private land mobile service providers that ``will'' be treated 
    as common carriers as a result of the enactment of the Budget Act.\9\ 
    It contends that, prior to the completion of this rule making 
    proceeding, the Commission may not impose alien ownership restrictions 
    on private radio licensees who are unlikely to be classified as CMRS 
    providers.\10\
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        \8\Comments of Roamer One, Inc., at 15-16 (Nov. 8, 1993); see 
    also id. at iii-iv.
        \9\Id. at 15.
        \10\Id.
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    IV. Discussion
    
    A. Who Should File a Waiver Petition
        7. Initially, we agree with Roamer One that Section 332(c)(6) does 
    not impose foreign ownership restrictions on all private radio 
    licensees. As noted above, the foreign ownership restrictions apply 
    only to those current private land mobile service providers that ``will 
    be'' classified as CMRS providers ``as a result of enactment of the 
    [Budget Act].'' As we discussed in the Notice, a private land mobile 
    radio licensee could potentially be reclassified as a CMRS licensee if 
    it meets two criteria: Its service: (1) Is ``provided for profit,'' and 
    (2) makes ``interconnected service'' available ``to the public'' or 
    ``to such classes of eligible users as to be effectively available to a 
    substantial portion of the public.'' In addition, it is possible that a 
    service might not fully satisfy the two criteria, but nonetheless be 
    classified as CMRS if the Commission were to find that the service is 
    the ``functional equivalent'' of CMRS.\11\ If a licensee determines 
    that there is a possibility that it will be reclassified as a CMRS 
    provider, it must also determine whether its foreign ownership as of 
    May 24, 1993, would be prohibited under section 310(b).\12\
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        \11\See Notice, 8 FCC Rcd at 7990-96 10-40.
        \12\See paragraph 3, supra.
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        8. Final rules governing regulatory classification of mobile 
    services may not be available on or before the February 10, 1994, 
    filing deadline. We recognize that this presents private land mobile 
    licensees with the potentially difficult decision of whether they 
    should file petitions for waiver. Therefore, in instances where there 
    is any chance at all that the licensee might later be classified as a 
    CMRS provider, we strongly encourage the licensee to err on the side of 
    filing and thereby preserve all of its rights under the new statutory 
    provisions. Similarly, if a licensee is uncertain of whether it would 
    be affected by section 310(b) restrictions absent a waiver, we strongly 
    recommend that the licensee file a petition.
    B. Contents of Waiver Petition
        9. As noted above, section 332(c)(6) permits the Commission to 
    grant waiver petitions only where two conditions are met. First, the 
    waiver can only cover ``the [licensee's] extent of foreign ownership 
    interest [that has] not * * * increased above the extent which existed 
    on May 24, 1993.'' Consistent with the legislative history quoted 
    previously (see note 4, supra), we interpret this language to refer to 
    the precise identities of persons or entities and not merely to 
    preexisting levels of foreign ownership interests. Petitioners must 
    therefore identify in their petitions all foreign interests in the 
    licensee as of May 24, 1993, that would, absent a waiver, be subject to 
    the section 310(b) restrictions and for which a waiver is sought. For 
    instance, except as noted below, petitioners should specifically 
    identify all foreign persons or entities holding an ownership interest 
    in the licensee and the percentage of ownership interest of each and 
    identify all foreign partners,\13\ officers, and directors, regardless 
    of whether they have any ownership interest. While we will not require 
    publicly traded corporations\14\ to identify each foreign stockholder 
    in instances where this requirement would be especially onerous,\15\ we 
    note that it is the responsibility of all petitioners to ensure that 
    all foreign ownership listed in the petition, including that held by 
    individual stockholders, did exist as of May 24, 1993, and to retain 
    documentation substantiating that ownership.
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        \13\Petitioners must list all foreign partners regardless of 
    whether they are general or limited partners, except that 
    petitioners need not list a limited partner (1) whose level of 
    ownership interest in the licensee does not exceed the level allowed 
    by section 310(b), and (2) who is ``insulated'' from the management 
    and control of the partnership. See, e.g., Wilner and Scheiner, 
    supra, 103 FCC 2d at 517 n. 31, 520 n. 43; Attribution of Ownership 
    Interests, Memorandum Opinion and Order in MM Docket No. 83-46, 58 
    RR 2d 604, 619-20 48-50 (1985).
        \14\For a definition of such corporations, see First Report and 
    Order and Memorandum Opinion and Order on Reconsideration in CC 
    Docket Nos. 90-6, 85-388, 6 FCC Rcd 6185, 6213 63 (1991).
        \15\See, e.g., Advanced Mobile Phone Inc., 54 RR 2d 354, 362 29 
    (Com. Car. Bur. 1983) (applicant demonstrated sufficient compliance 
    with the requirements of FCC Form 401 by indicating the percentage 
    of its common stock held or voted by aliens, and by listing the 
    identities of its ten largest stockholders and stating that none of 
    them was an alien, and would not be required to circulate a 
    questionnaire to all of its stockholders). The burden will be on any 
    entity claiming such an onerous burden to explain why identifying 
    individual shareholders would be extraordinarily burdensome.
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        10. The second condition is that the waiver cannot permit any 
    ``subsequent transfer of ownership to any other person in violation of 
    section 310(b).'' We interpret ``subsequent'' here to mean subsequent 
    to May 24, 1993. Petitioners must therefore certify in their petitions 
    that the identity and percentages of each listed component of foreign 
    ownership are unchanged since May 24, 1993, and that each listed 
    foreign officer, director or partner continues to hold the same 
    position. The waiver can recognize only the particular person or entity 
    that held the ownership interest on May 24, 1993; it cannot recognize 
    any subsequent transfers to other foreign owners or foreign officers or 
    directors.\16\ If, following the grant of a waiver in light of the 
    above condition, a licensee wishes to transfer ``grandfathered'' 
    foreign ownership interests, the waiver will remain valid (for the 
    remaining ``grandfathered'' interests) only if the transfer is made to 
    a domestic person or entity.\17\ The same is true for ``grandfathered'' 
    partners, officers, and directors.
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        \16\See note 4, supra. Thus, transfers to aliens that occurred 
    after May 24 are not covered by the grandfathering provisions of the 
    Budget Act even if they occurred before the Budget Act was enacted 
    on August 10, 1993. Where such a transfer is found to create an 
    ownership interest in violation of section 310(b), the licensee will 
    be required to comply with section 310(b) with respect to that 
    interest, regardless of whether alien ownership in the licensee that 
    existed prior to May 24 is grandfathered.
        \17\Licensees seeking to transfer their ownership or control 
    would also be required to comply with section 310(d) of the 
    Communications Act, 47 U.S.C. 310(d), and with applicable Commission 
    rules.
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    C. Effective Date of Section 310(b) Restrictions
        11. Roamer One appears to object to our statement in the Notice 
    that ``all reclassifiable private licensees are immediately subject to 
    the foreign ownership restrictions on common carriers by section 
    310(b).''\18\ As noted above, Roamer One contends that, prior to the 
    completion of this rule making proceeding, the Commission should not 
    impose alien ownership restrictions on private radio licensees who are 
    unlikely to be classified as CMRS providers. We agree that the 
    restrictions in section 310(b) would only apply to licensees that are 
    actually reclassified pursuant to the statute and its implementation in 
    this rule making. Section 310(b) does not and will not apply to private 
    land mobile radio licensees who will not be reclassified as CMRS 
    providers. On the other hand, the statute does require immediate 
    enforcement of section 310(b) for private land mobile providers that 
    are reclassified as CMRS. Section 6002(c)(2)(B) of the Budget Act 
    states:
    
        \18\Notice, 8 FCC Rcd at 8002  76 (emphasis added).
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        [A]ny private land mobile service provided by any person before 
    [the Budget Act's] date of enactment, and any paging service 
    utilizing frequencies allocated as of January 1, 1993, for private 
    land mobile services, shall, except for purposes of section 
    332(c)(6) of [the Communications Act], be treated as a private 
    mobile service until 3 years after such date of enactment.
    
    Budget Act, section 6002(c)(2)(B) (emphasis added). Although other 
    common carrier regulation may not apply to some licensees for 3 years, 
    unless a licensee timely files and is granted a waiver pursuant to 
    section 332(c)(6), section 310(b) will apply immediately upon the 
    effective date of our rules reclassifying the licensee's service as 
    CMRS. Accordingly, as stated above, licensees that may be reclassified 
    should file a timely waiver request to grandfather any foreign 
    ownership or other interest that existed as of May 24, 1993, and that 
    might be affected by the application of section 310(b).
    
    V. Petitioning Procedure
    
        12. In light of the above, we adopt the following petitioning 
    procedure. First, petitions should be in an informal, letter format, 
    and must contain the caption ``COMMERCIAL MOBILE RADIO SERVICE FOREIGN 
    OWNERSHIP WAIVER PETITION.'' Petitions must clearly specify the 
    licensee's name, radio service, call sign(s), station address(es) or 
    geographical location(s), and contact person with telephone number. 
    Petitions must specifically request a waiver of section 310(b), 
    identify the particular subsection(s) of section 310(b) for which the 
    waiver is requested, and state that the waiver is sought under section 
    332(c)(6). The original copy of the waiver petition must be signed by 
    the licensee,\19\ and this signature will be taken to certify that all 
    statements made in the petition are true, complete, correct, and made 
    in good faith.
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        \19\See Section 1.913 of the Commission's Rules, 47 CFR 1.913.
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        13. In addition, as proposed in the Notice, petitions must:
        (1) identify by name,\20\ as of May 24, 1993, all foreign 
    persons or other entities holding ownership interests in the 
    licensee, directly or indirectly, that would, absent a waiver, not 
    be permitted to hold such interests under section 310(b), and for 
    which a waiver is sought; likewise, petitions must identify 
    similarly situated foreign partners, officers, or directors of the 
    licensee, regardless of whether they have any ownership interest in 
    the licensee;
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        \20\As noted previously, publicly traded corporations are not 
    required to identify all individual stockholders when to do so would 
    constitute an especially onerous burden. See notes 14-15, supra, and 
    accompanying text.
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        (2) as applicable, as of May 24, 1993, identify the following 
    for each person or other entity (including officers, directors and 
    partners) identified in (1) above: residence, citizenship, office or 
    directorship held, number of shares or nature of partnership 
    interests, number of votes, and percentage of votes; also, if the 
    entity is other than an individual, petitions must also identify the 
    name, address, and citizenship of the natural person authorized to 
    vote the stock; and
        (3) Answer the following:
        (a) Have the ownership and other interests listed pursuant to 
    (1) and (2) above remained the same since May 24, 1993?
        (b) Have the officers, directors or partners continued to retain 
    their positions since May 24, 1993?
        If the answer to (a) or (b) is ``No,'' please explain.
    
        14. Petitioners must also certify that, in the case of an 
    individual petitioner, he or she is not subject to a denial of federal 
    benefits, that includes FCC benefits, pursuant to section 5301 of the 
    Anti-Drug Abuse Act of 1988, 21 U.S.C. section 862, or, in the case of 
    a non-individual petitioner, (e.g., corporation, partnership, or other 
    unincorporated association), no party to the application is subject to 
    a denial of federal benefits, that includes FCC benefits, pursuant to 
    that section. For the definition of a ``party'' for these purposes, see 
    47 CFR 1.2002(b).
        15. The Commission has no authority to extend the Congressionally 
    mandated deadline date, so it is imperative that waiver petitions be 
    filed on time. To be timely received, petitions must, by February 10, 
    1994, be either (1) hand-delivered to the offices of the FCC in 
    Gettysburg, Pennsylvania, at the address below, or (2) received through 
    the U.S. Mail or other mail delivery service at the address below.
    
    Federal Communications Commission, Attn: CMRS Foreign Ownership Waiver 
    Petition, 1270 Fairfield Road, Gettysburg, Pennsylvania 17325--7245.
    
        Licensees should file one original and two copies. These petitions 
    do not require a filing fee.
    
    VI. Final Regulatory Flexibility Analysis
    
        16. Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C. 
    604, the Commission's final analysis is as follows:
    A. Need for, and Purpose of, This Action
        As a result of recent legislation, certain private land mobile 
    radio licensees will be reclassified as commercial mobile radio service 
    licensees and will be subject to foreign ownership restrictions within 
    the Communications Act of 1934, as amended. This present First Report 
    and Order describes the procedure by which such licensees may file a 
    waiver petition with the Commission to request retention of existing 
    foreign ownership that would otherwise not be permitted.
    B. Summary of the Issues Raised by the Public Comments in Response to 
    the Initial Regulatory Flexibility Analysis
        In regard to the foreign ownership issue addressed by this First 
    Report and Order, no comments were submitted in response to our Initial 
    Regulatory Flexibility Analysis.
    C. Significant Alternatives Considered
        No significant alternatives were considered.
    
    VII. Ordering Clauses
    
        17. Accordingly, It is Ordered That, pursuant to the authority of 
    sections 4(i), 303(r), and 332(c)(6) of the Communications Act of 1934, 
    as amended, 47 U.S.C. 154(i), 303(r), and 332(c)(6), this First Report 
    and Order is adopted, effective upon publication in the Federal 
    Register.\21\
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        \21\In light of the statutory deadline for filing petitions, we 
    find that there is good cause to make this action effective 
    immediately upon publication in the Federal Register.
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        18. For further information on filing a waiver petition, contact 
    the Private Radio Bureau, Licensing Division, Consumer Assistance 
    Branch, (717) 337-1212. For further information regarding this First 
    Report and Order, contact Carmen Cintron at (202) 632-6450 (Common 
    Carrier Bureau, Mobile Services Division) or Eric Malinen at (202) 632-
    6497 (Private Radio Bureau, Land Mobile and Microwave Division).
    
    Federal Communications Commission.
    William F. Caton,
    Acting Secretary.
    [FR Doc. 94-511 Filed 1-7-94; 8:45 am]
    BILLING CODE 6712-01-M
    
    
    

Document Information

Effective Date:
1/10/1994
Published:
01/10/1994
Department:
Federal Communications Commission
Entry Type:
Rule
Action:
Procedures for waiver petitions.
Document Number:
94-511
Dates:
This document is effective January 10, 1994. Petitions for waiver must be filed with the Commission by February 10, 1994.
Pages:
1285-1288 (4 pages)
Docket Numbers:
Federal Register: January 10, 1994, GN Docket No. 93-252, FCC 94-2
CFR: (7)
47 CFR 22
47 CFR 25
47 CFR 80
47 CFR 87
47 CFR 90
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