[Federal Register Volume 62, Number 206 (Friday, October 24, 1997)]
[Proposed Rules]
[Pages 55375-55380]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28222]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1 and 24
[WT Docket No. 97-82; FCC 97-342]
Installment Payment Financing for Personal Communications
Services (PCS) Licensees
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this Further Notice of Proposed Rule Making the Commission
proposes auction rules and procedures for the reauction of licenses
surrendered to the Commission pursuant to the Commission's decision in
the Second Report and Order in Docket 97-82, FCC 97-342 (released
October 16, 1997). These proposed rules are necessary to ensure that
any licenses surrendered to the Commission can be awarded to parties
who are capable of providing service to the public as rapidly as
possible. The intended effect of this action is to seek comment on
proposed rules and procedures for the reauction of all surrendered C
block licenses.
DATES: Comments are due on or before November 13, 1997. Reply comments
are due on or before November 24, 1997.
ADDRESSES: Federal Communications Commission, 1919 M Street, N.W.,
Washington, D.C. 20554.
FOR FURTHER INFORMATION CONTACT: Mark Bollinger, Auctions and Industry
Analysis Division, Wireless Telecommunications Bureau, at (202) 418-
0660.
SUPPLEMENTARY INFORMATION: This Further Notice of Proposed Rule Making
in WT Docket No. 97-82, adopted on September 25, 1997, and released on
October 16, 1997, is available for inspection and copying during normal
business hours in the FCC Reference Center, Room 239, 1919 M Street,
N.W., Washington, D.C. 20554. The complete text may be purchased from
the Commission's copy contractor, International Transcription Service,
Inc., 1231 20th Street, N.W., Washington, D.C. 20036, (202) 857-3800.
The complete Further Notice of Proposed Rule Making also is available
on the Commission's Internet home page (http://www.fcc.gov).
SUMMARY OF ACTION:
I. Background
1. On September 25, 1997, the Federal Communications Commission
(Commission) adopted a Further Notice of Proposed Rule Making seeking
comment on proposed changes to its C block rules to govern the
reauction of any licenses or spectrum surrendered pursuant to the
provisions adopted in the Second Report and Order. See Amendment of the
Commission's Rules Regarding Installment Payment Financing for Personal
Communications Services (PCS) Licensees, Second Report and Order, WT
Docket No. 97-82, FCC 97-342 (released October 16, 1997) (``Second
Report and Order'').
II. Further Notice of Proposed Rule Making
2. In the Further Notice of Proposed Rule Making, the Commission
proposes to reauction all licenses and spectrum surrendered to the
Commission under the Second Report and Order. The Commission believes
that a reauction of licenses surrendered to the Commission will assure
rapid provision of service to the public. A reauction also will ensure
that these licenses are available to all applicants in a rapid and fair
fashion. A simultaneous reauction of all the licenses turned in to the
Commission will benefit all bidders because they will be able to bid
for a number of licenses in a single reauction, instead of a series of
piecemeal auctions after defaults and revocations, in which
opportunities for aggregation might be less favorable.
A. Licenses to be Reauctioned
3. The Commission proposes that the reauction include the following
licenses: (1) All licenses representing the disaggregated spectrum
surrendered to the Commission under the disaggregation option; (2) all
licenses surrendered to the Commission on or before January 15, 1998,
by incumbent licensees who choose to take advantage of the Commission's
prepayment or amnesty options; and (3) all PCS C block licenses
currently held by the Commission as a result of previous defaults. By
including all available licenses in the reauction, the Commission can
efficiently and fairly speed service to the public. In addition,
offering all available licenses will allow for the most efficient
aggregation of licenses. The Commission seeks comment on this proposal.
B. Eligibility for Participation
4. As the Commission stated in the Second Report and Order, all
entrepreneurs, all entities that applied for the original C block
auction, and all current C block licensees with exceptions, are
eligible to bid in the reauction. The Commission seeks comment on
whether it should restrict participation in the reauction to entities
that have not defaulted on any FCC payments. See 47 U.S.C. 309(j)(5).
Should the Commission presume that an entity's prior default on
payments for an FCC license or authorization makes that entity not
financially or otherwise fit to acquire a reauctioned C block license?
Alternatively, the Commission could review financial qualifications
through several other means. For instance, the Commission could allow
such entity to participate in an auction, but if the applicant is a
winning bidder, set for expedited hearing the financial qualifications
of the bidder, and allow the applicant to rebut a presumption that it
is not financially qualified. See 47 CFR 24.832(e), 1.2108(d)(3).
Another alternative would be to request that the entity submit more
detailed financial information at the application stage, or require
that the entity submit a higher upfront payment amount (e.g., a 50%
upfront payment requirement) to participate in the reauction. With
regard to C block licensees who elect the disaggregation, amnesty, or
prepayment options adopted in the Second Report and Order, the
Commission observes that by making such election and related payments
they are not in default on their C block licenses and, thus, would not
be restricted from participation in the reauction (except as otherwise
set forth in the Second Report and Order).
C. Reauction Procedures
5. The Commission proposes below auction design and application
procedures for the reauction of C block licenses.
1. Competitive Bidding Design
6. The Commission proposes that all licenses and spectrum
surrendered be awarded by means of a simultaneous multiple-round
electronic auction. The Commission bases this proposal on its desire to
quickly auction available licenses and thereby to promote the most
efficient assignment of the spectrum. Consistent with the Commission's
normal practice, the specific procedural requirements of the auction
would be set out by public notice prior to the auction. In general,
[[Page 55376]]
the Commission has indicated that the auction procedures chosen for
each service should be those that will best promote the policy
objectives identified by Congress. The Commission further concluded in
Implementation of Section 309(j) of the Communications Act--Competitive
Bidding, Second Report and Order, 59 FR 22980 (May 4, 1994)
(``Competitive Bidding Second Report and Order'') that in most cases
the goals set forth in Section 309(j) will be best achieved by
designing auctions that award authorizations to the parties that value
them most highly. As the Commission explained, such parties are most
likely to deploy new technologies and services rapidly, and to promote
the development of competition for the provision of those and other
services.
7. Also, multiple-round bidding during the auction will provide
more information to bidders about the value of licenses than single
round bidding. With better information, bidders have less incentive to
shade their bids downward in order to avoid the ``winner's curse,''
that is, the tendency for the winner to be the bidder who most
overestimates the value of the item being auctioned. Finally, multiple-
round bidding is likely to be fairer than single-round bidding. Every
bidder has the opportunity to win if it is willing to pay the most for
it. Thus, the Commission tentatively concludes that multiple-round
bidding would be the best method of auctioning all available licenses
and the Commission seeks comment on this tentative conclusion.
8. The Commission also tentatively concludes that all surrendered C
block licenses should be awarded in a single simultaneous multiple-
round auction. A single simultaneous auction will facilitate any
aggregation strategies that bidders may have, and it would provide the
most information to bidders about license values at a time that they
can best put that information to use. The Commission seeks comment on
this tentative conclusion.
9. Finally, if the Commission adopts simultaneous multiple-round
bidding as its method of auctioning all available licenses, the
Commission tentatively concludes that bidding should be allowed only by
electronic means, rather than by telephone. Given the Commission's
desire to conduct the reauction quickly, as well as recent improvements
in the Commission's electronic bidding software, the Commission
tentatively concludes that telephonic bidding should be permitted only
in exceptional circumstances, to be determined by the Wireless
Telecommunications Bureau (``Bureau'') in each instance.
2. Bidding Procedures
10. Subject to the exceptions discussed below, which are designed
to speed the reauction process, the Commission tentatively concludes
that the reauction should be conducted in conformity with the general
competitive bidding rules set forth in part 1, subpart Q of the
Commission's rules, 47 CFR part 1, subpart Q, as revised (the
Commission initiated a proceeding last February to revise its part 1
rules; See Amendment of Part 1 of the Commission's Rules--Competitive
Bidding Proceeding, Order, Memorandum Opinion and Order and Notice of
Proposed Rule Making, WT Docket No. 97-82, 62 FR 13540 (March 21, 1997)
(``Part 1 Proceeding''), and substantially consistent with the auctions
that have been employed in other wireless services. The Commission also
proposes to use its part 24 rules, 47 CFR part 24, applicable to the C
block to the extent that such rules do not conflict with the
Commission's part 1 rules or rules specifically adopted in the Second
Report and Order for the reauction of C block licenses. Specifically,
except as set forth herein, the Commission proposes to apply the part 1
rules regarding competitive bidding mechanisms (47 CFR Sec. 1.2104);
bidding application and certification procedures and prohibition of
collusion (47 CFR Sec. 1.2105); submission of upfront payment, down
payment and filing of long-form applications (47 CFR Secs. 1.2106,
1.2107); procedures for filing long form applications (47 CFR
Sec. 1.2108); and procedures regarding license grant, denial and
default (47 CFR Sec. 1.2109). The Commission seeks comment on this
proposal.
11. Activity Rules. The Commission tentatively concludes that, as
it has done in other simultaneous multiple-round auctions, it will
conduct the reauction in three stages. Three stages, with bidders
required to be more active in each stage, serves to provide bidders
with the flexibility to pursue backup strategies as the auction
progresses. However, because the Commission believes that efficiently
assigning these licenses for rapid service to the public and increased
competition in the CMRS marketplace requires a swift reauction of the
licenses, the Commission proposes to use high activity requirements in
the reauction. In recent auctions, for example, the Commission has
required bidders to be active on 80% of their eligible licenses in
Stage I, 90% in Stage II, and 98% in Stage III. The Commission proposes
to use similar activity levels in the C block reauction and, to further
expedite the auction, to require the Bureau to use its delegated
authority to aggressively schedule bidding rounds, quickly transition
into the next stage of the auction when bidding activity falls, and use
higher minimum bid increments for very active licenses. The Commission
seeks comment on these proposals and tentative conclusions.
12. Reserve Price, Minimum Opening Bid, and Minimum Bid Increments.
Section 1.2104 of the Commission's rules provides that the Commission
may establish reserve prices or suggested minimum opening bids. See 47
CFR Sec. 1.2104. The Balanced Budget Act of 1997, Public Law 105-33,
111 Stat. 251 (1997) (to be codified at 47 U.S.C. Sec. 309(j)(4)(F))
(``Balanced Budget Act'') directed the Commission to prescribe methods
by which a reasonable reserve price will be required or a minimum
opening bid will be established, unless the Commission determines that
a reserve price or a minimum opening bid is not in the public interest.
This legislative directive establishes a presumption in favor of
reserve prices or minimum opening bids in the reauction. A minimum
opening bid is the minimum bid price set at the beginning of the
auction below which no bids are accepted. Customarily, an auctioneer
has the discretion to lower a minimum opening bid in the course of the
auction. A minimum opening bid in the C block reauction, more than a
reserve price, will help make certain that the public is fairly
compensated for spectrum surrendered to the Commission, expedite the
auction and give the Commission the flexibility to make adjustments
based on the competitiveness of the auction. The Commission seeks
comment on this proposal. The Commission also seeks comment on the
methodology to be used to establish minimum opening bids and what
factors the Commission should consider in doing so. The Commission
proposes minimum opening bids for each market equal to 10% of the
corresponding high bid for the market in the original C block auction.
Such an approach will scale the minimum opening bids in a way that
reflects the relative value of the licenses. The Commission also asks
that commenters address whether the amount of the minimum opening bid
should be capped to ensure that bidding is not deterred on high
valuation markets, in particular. Finally, if commenters believe that a
minimum opening bid equal to 10% of the high bid in the original C
block auction will result in substantial unsold licenses, or is not a
[[Page 55377]]
reasonable amount, they should explain why this is so, and comment on
the desirability of a higher or lower minimum opening bid.
3. Procedural and Payment Issues
13. Pre-Auction Application Procedures. Auction applicants are
required to file a short-form application, FCC Form 175, prior to the
start of each auction. Although the Commission previously has allowed
both electronic and manual filing of such applications, the Commission
tentatively concludes that it should require electronic filing of all
short-form applications for the reauction. The Commission believes that
electronic filing of applications would serve the best interests of
auction participants as well as the members of the public monitoring
the reauction. The Commission also believes that an electronic filing
requirement will help ensure that the reauction will be completed
within the time frame contemplated by this Further Notice of Proposed
Rule Making. The Commission have developed user-friendly electronic
filing software and Internet World Wide Web forms to give applicants
the ability to easily and inexpensively file and review applications.
This software helps applicants ensure the accuracy of their
applications as they are filling them out, and assists them in avoiding
errors and omissions. In addition, by shortening the time required for
the Commission to process applications before the auction, electronic
filing will increase the lead time available to applicants to pursue
business plans and arrange necessary financing before the short-form
deadline. The Commission's experiences from recent auctions show that
bidders are confident that the electronic filing system is reliable.
For example, in the broadband PCS D, E, and F block auction, 94% of the
qualified bidders filed their short-form applications electronically.
In the recently completed Wireless Communications Services (``WCS'')
auction, all winning bidders filed their long-form applications
electronically. In addition, the Commission notes that in the Part 1
Proceeding, the Commission tentatively concluded that Secs. 1.2105(a)
and 1.2107(c) of its rules should be amended to require electronic
filing of all short-form and long-form applications. See 47 CFR
Secs. 1.2105(a) and 1.2107(c). The Commission seeks comment on this
tentative conclusion.
14. Upfront Payment. The Commission's part 1 rules, 47 CFR Part 1,
require the submission of an upfront payment as a prerequisite to
participation in spectrum auctions. The Commission proposes to set the
amount of the upfront payment for the reauction at $.06 per MHz per
pop. The Commission adopted the same upfront payment amount for its
most recent broadband PCS auction, the D, E, and F block auction, in
which all applicants for all blocks made a $.06 per MHz per pop upfront
payment. In the Competitive Bidding Second Report and Order, the
Commission indicated that the upfront payment should be set using a
formula based upon the amount of spectrum and population (or ``pops'')
covered by the license or licenses for which parties intend to bid. The
Commission reasoned that this method of determining the required
upfront payment would enable prospective bidders to tailor their
upfront payment to their bidding strategies. At the same time, however,
the Commission noted that determining an appropriate upfront payment
involved balancing the goal of encouraging bidders to submit serious,
qualified bids with the desire to simplify the bidding process and
minimize implementation costs imposed on bidders. The Commission
concluded that the best approach would be to maintain the flexibility
to determine the amount of the upfront payment on an auction-by-auction
basis because this balancing may yield different results depending upon
the particular licenses being auctioned. In light of the its desire
that only serious, qualified applicants participate in the reauction,
the Commission's proposal of a $.06 per MHz per pop is appropriate. The
Commission seeks comment on this proposal. The Commission also seeks
comment on alternative methods of establishing an upfront payment, and
in particular, on how the Commission may estimate the present market
value of the spectrum to be auctioned.
15. Down Payment and Full Payment. Consistent with the procedures
used in prior auctions, the Commission tentatively concludes that every
winning bidder in an auction should be required to tender a down
payment sufficient to bring its total amount on deposit with the
Commission up to 20% of its winning bid within 10 business days after
the issuance of a public notice announcing the winning bidder for the
license. See 47 CFR Sec. 1.2107(b). The Commission seeks comment on
this tentative conclusion.
16. If a winning bidder makes its down payment in a timely manner,
the Commission proposes that it file an FCC Form 600 long-form
application and follow the long-form application procedures in
Sec. 1.2107 of the Commission's rules. See 47 CFR Sec. 1.2107. See
also, 47 CFR Sec. 24.707. After reviewing the winning bidder's long-
form application, and after verifying receipt of the winning bidder's
20% down payment, the Commission would announce the application's
acceptance for filing, thus triggering the filing window for petitions
to deny. The Commission notes that the Balanced Budget Act of 1997
authorizes the Commission to establish a shortened period for the
filing of petitions to deny. In light of this authority, as well as the
Commission's desire to conclude the reauction process as quickly as
possible, the Commission proposes that parties then have 15 days
following public notice that an application was accepted for filing to
file a petition to deny. If, pursuant to Section 309(d) of the
Communications Act, as amended, 47 U.S.C. Sec. 309(j), the Commission
dismisses or denies any and all petitions to deny, the Commission would
announce by public notice that it is prepared to award the license, and
the winning bidder would then have 10 business days to submit the
balance of its winning bid. If the bidder does so, the license would be
granted. If the bidder fails to submit the required down payment or the
balance of the winning bid or the license is otherwise denied, the
Commission would assess a default payment as discussed below. The
Commission seeks comment on these proposals.
17. Amendments and Modifications of Applications. To encourage
maximum bidder participation, the Commission proposes to allow
applicants to amend or modify their short-form applications as provided
in Sec. 1.2105. See 47 CFR Sec. 1.2105. In the broadband PCS context,
the Commission modified its rules to permit ownership changes that
result when consortium investors drop out of bidding consortia, even if
control of the consortium changes due to this restructuring. See
Implementation of Section 309(j) of the Communications Act--Competitive
Bidding, PP Docket No. 93-253, Fourth Memorandum Opinion and Order, 59
FR 24947 (October 24, 1994). The Commission proposes to adopt the same
exception to our rule prohibiting major amendments in the reauction.
The Commission seeks comment on these proposals.
18. Bid Withdrawal, Default and Disqualification. The Commission
tentatively concludes that the withdrawal, default, and
disqualification rules for the reauction should be based upon the
procedures established in the Commission's general competitive bidding
rules. With regard to bids that are submitted in error, the Commission
proposes to apply the guidelines that the Commission has fashioned to
provide for relief from the
[[Page 55378]]
bid withdrawal payment requirements under certain circumstances. The
Commission seeks comment on this approach.
4. Anti-Collusion Rules
19. In the Competitive Bidding Second Report and Order, the
Commission adopted rules to prevent collusion in connection with
competitive bidding, explaining that these rules, which are codified at
47 CFR Sec. 1.2105, would enhance the competitiveness of both the
auction process and the post-auction market structure. The Commission
proposes to apply these same rules to the reauction of licenses
surrendered to the Commission. The Commission seeks comment on this
proposal.
5. Designated Entity Provisions
20. The Commission proposes to provide small business bidders in
the C block reauction with a two tiered bidding credit, which will
provide a greater discount to very small businesses. In the C block
auction, a winning bidder that qualified as a small business or a
consortium of small businesses was able to use a bidding credit equal
to 25% of its winning bid. For the reauction, however, the Commission
tentatively concludes that it should offer tiered bidding credits, as
the Commission did for F block and, more recently, Local Multipoint
Distribution Service (LMDS) small business bidders. The Commission
proposes to define a second tier of small business, which the
Commission will refer to as ``very small businesses,'' as entities
that, together with their affiliates and persons or entities that hold
interest in such entities and their affiliates, have average gross
revenues of not more that $15 million for the preceding three years.
Creation of this subcategory of small business enables the Commission
to tailor a bidding credit to meet the needs of entities that may be
interested in bidding on spectrum surrendered by C block licensees.
Thus, the Commission proposes a 35% bidding credit for very small
businesses and a 25% bidding credit for small businesses. The
Commission seeks comment on these proposals and tentative conclusions.
21. The Commission also tentatively conclude that an installment
payment program will not be offered in the reauction. The Commission
has conducted several auctions without installment payments. The
Commission must balance competing objectives in 47 U.S.C. Sec. 309(j)
that require, inter alia, that it promote the development and rapid
deployment of new spectrum-based services and ensure that designated
entities are given the opportunity to participate in the provision of
such services. In assessing the public interest, the Commission must
try to ensure that all the objectives of Section 309(j) are considered.
The Commission has found, for example, that obligating licensees to pay
for their licenses as a condition of receipt ensures greater financial
accountability from applicants. Thus, the Commission tentatively
concludes that it should not extend installment payments to winners in
the reauction, given the incentives to entrepreneurs established
through the various proposals discussed above. The Commission seeks
comment on these tentative conclusions.
III. Procedural Matters
A. Regulatory Flexibility Analysis
22. As required by the Regulatory Flexibility Act (RFA), 5 U.S.C.
Sec. 603, the Commission has prepared an Initial Regulatory Flexibility
Analysis (IRFA) of the expected impact on small entities of the rules
proposed in the Further Notice of Proposed Rule Making. Written public
comments are requested on the IRFA. Comments on the IRFA must have a
separate and distinct heading designating them as responses to the IRFA
and must be filed by the deadlines for comments on the Further Notice
of Proposed Rule Making. The Commission will send a copy of the Further
Notice of Proposed Rule Making, including this IRFA, to the Chief
Counsel for Advocacy of the Small Business Administration. In addition,
the Further Notice of Proposed Rule Making and IRFA (or summaries
thereof) will be published in the Federal Register.
1. Need for, and Objectives of, the Proposed Rules
23. This Further Notice of Proposed Rule Making is being initiated
to secure comment on proposed changes to auction rules to govern the
reauction of returned broadband PCS spectrum in the C block. Among
other goals, Section 309(j) of the Communications Act of 1934, as
amended, directs the Commission to disseminate licenses among a wide
variety of applicants, including small businesses and other designated
entities. 47 U.S.C. Sec. 309(j)(3)(B). Section 309(j) also requires
that the Commission ensure the development and rapid deployment of new
technologies, products, and services for the benefit of the public, and
recover for the public a portion of the value of the public spectrum
resource made available for commercial use. 47 U.S.C.
Secs. 309(j)(3)(A), (C). The Commission is seeking comment on proposed
changes to auction rules to govern the reauction of returned broadband
PCS spectrum in the C block.
2. Legal Basis
24. This action is taken pursuant to Sections 4(i), 5(b), 5(c)(1),
303(r), and 309 (j) of the Communications Act of 1934, as amended, 47
U.S.C. Sections 154(i), 155(b), 155(c)(1), 303(r), and 309(j).
3. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
25. The Commission is required to provide a description of and,
where feasible, an estimate of the number of small entities that will
be affected by its rules. See 5 U.S.C. Secs. 603(b)(3), 604(a)(3). The
RFA directs agencies to provide a description of and, where feasible,
an estimate of the number of small entities that will be affected by
the Commission's rules. 5 U.S.C. Secs. 603(b)(3), 604(a)(3). The RFA
generally defines the term ``small entity'' as having the same meaning
as the terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' 5 U.S.C. Sec. 601(6). In addition, the
term ``small business'' has the same meaning as the term ``small
business concern'' under Section 3 of the Small Business Act. See 5
U.S.C. Sec. 601(3) (incorporating by reference the definition of
``small business concern'' in 15 U.S.C. Sec. 632). Under the Small
Business Act, a ``small business concern'' is one which: (1) is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) meets any additional criteria established by the
Small Business Administration (SBA). 15 U.S.C. Sec. 632.
26. The rule changes proposed in the Further Notice of Proposed
Rule Making will affect all small businesses which avail themselves of
these rule changes, including small businesses currently holding C
block and F block broadband PCS licenses who choose to participate and
other small businesses who may acquire licenses through reauction. The
Commission, with respect to broadband PCS, defines small entities to
mean those having gross revenues of not more than $40 million in each
of the preceding three calendar years. See 47 CFR Sec. 24.720(b)(1).
This definition has been approved by the SBA. On May 6, 1996, the
Commission concluded the broadband PCS C block auction. The broadband
PCS D, E, and F block auction closed on January 14, 1997. Ninety
bidders (including the C block reauction winners, prior to any defaults
by winning bidders) won 493 C block
[[Page 55379]]
licenses and 88 bidders won 491 F block licenses. Small businesses
placing high bids in the C and F block auctions were eligible for
bidding credits and installment payment plans. For purposes of our
evaluations and conclusion in this IRFA, the Commission assumes that
all of the 90 C block broadband PCS licensees and 88 F block broadband
PCS licensees, a total of 178 licensees potentially affected by this
order, are small entities. In addition to the 178 current small
business licensees who may participate at the reauction of C block
licenses, a number of additional small business entities may seek to
acquire licenses through reauction, and thus be affected by these
rules.
27. In addition, the Commission proposes to provide small business
bidders in the C block reauction with bidding credits, and to that end
proposes a two tiered bidding credit which will provide a greater
discount to ``very small businesses.'' In the C block auction, a
winning bidder that qualified as a small business or a consortium of
small businesses was able to use a bidding credit equal to 25 percent
of its winning bid. For the reauction, the Commission proposes tiered
bidding credits, as were offered for F block and, more recently, Local
Multipoint Distribution Service (LMDS) small business bidders. The
Commission proposes to define the second tier of very small business as
entities that, together with their affiliates and persons or entities
that hold interest in such entities and their affiliates, have average
gross revenues of not more that $15 million for the preceding three
years. Creation of this subcategory of small business will enable the
Commission to tailor a bidding credit to meet the needs of entities
that may be interested in bidding on spectrum returned by C block
licensees. Thus, the Commission proposes a 35 percent bidding credit
for very small businesses and a 25 percent bidding credit for small
businesses.
28. To assist the Commission analyzing the total number of affected
small entities, commenters are requested to provide information
regarding how many total broadband PCS small business entities would be
affected by the rules proposed in this Further Notice of Proposed Rule
Making. In particular, the Commission seeks estimates of how many
broadband PCS entities, existing and potential, will be considered
small businesses or very small businesses.
4. Description of Reporting, Recordkeeping, and Other Compliance
Requirements
29. There are no additional reporting, recordkeeping, or other
compliance requirements as a result of the Further Notice of Proposed
Rule Making.
5. Steps Taken to Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
30. The Commission proposes to apply the same rules that were used
in the C block auction to the reauction of C block licenses, with some
modifications designed to encourage participation by small businesses
while at the same time helping to ensure the best use of the spectrum
through the competitive bidding process. The Commission proposes to
conduct the C block reauction in three stages. Having three stages,
with bidders required to be more active in each stage, serves to
provide bidders with the flexibility to pursue backup strategies as the
auction progresses. The Commission proposes to use high activity
requirements in the reauction. In addition, the Commission proposes to
use similar activity levels in the C block reauction and, to further
expedite the auction, require the Wireless Telecommunications Bureau to
use its delegated authority to aggressively schedule bidding rounds,
quickly transition into the next stage of the auction when bidding
activity falls, and use higher minimum bid increments for very active
licenses.
31. The Commission proposes to establish a minimum opening bid for
the reauction. A minimum opening bid is the minimum bid price set at
the beginning of the auction below which no bids are accepted. A
minimum opening bid in the C block reauction will help ensure that the
public is fairly compensated for licenses returned to the Commission,
expedite the auction and give the Commission the flexibility to make
adjustments based on the competitiveness of the auction. The Commission
proposes minimum opening bids for each market equal to ten percent of
the corresponding high bid for the market in the original C block
auction. Such an approach will scale the minimum opening bids in a way
that reflects the relative value of the licenses.
32. The Commission proposes to require electronic filing of all
short-form applications for the reauction. Electronic filing of
applications would serve the best interests of auction participants as
well as the members of the public monitoring the reauction. The
Commission believes that an electronic filing requirement will help
ensure that the reauction will be completed within the time frame
contemplated by this Further Notice of Proposed Rule Making.
33. The Commission proposes to set the amount of the upfront
payment for the reauction at $.06 per megahertz per population (``MHz
per pop'').
34. The Commission proposes that parties have fifteen (15) days to
file a petition to deny following public notice that an application was
accepted for filing. If, pursuant to Section 309(d) of the
Communications Act, the petitions to deny are dismissed or denied, the
Commission would announce by public notice that it is prepared to award
the license, and the winning bidder would then have ten (10) business
days to submit the balance of its winning bid. If the bidder does so,
the license would be granted. If the bidder fails to submit the
required down payment or the balance of the winning bid or the license
is otherwise denied, a default payment would be assessed.
35. Section 309(j) of the Communications Act of 1934, as amended,
directs the Commission to disseminate licenses among a wide variety of
applicants, including small businesses and other designated entities.
See 47 U.S.C. Sec. 309(j)(3)(B). Section 309(j) also requires that the
Commission ensure the development and rapid deployment of new
technologies, products, and services for the benefit of the public, and
recover for the public a portion of the value of the public spectrum
resource made available for commercial use. 47 U.S.C.
Secs. 309(j)(3)(A), (C). The Commission believes these provisions in
the Further Notice of Proposed Rule Making help meet those goals and
promote efficient competition while maintaining fairness and
efficiencies of process in the Commission's rules.
6. Federal Rules Which Overlap, Duplicate, or Conflict With These Rules
None.
B. Paperwork Reduction Act Analysis
36. This Further Notice of Proposed Rule Making contains either a
proposed or modified information collection. As part of its continuing
effort to reduce paperwork burdens, the Commission invites the general
public and the Office of Management and Budget (``OMB'') to take this
opportunity to comment on the information collections contained in this
Further Notice of Proposed Rule Making, as required by the Paperwork
Reduction Act of 1995, Public Law No. 104-13. Public and agency
comments are due at the same time as other
[[Page 55380]]
comments on this Further Notice of Proposed Rule Making; OMB comments
are due 60 days from date of publication of this Further Notice of
Proposed Rule Making in the Federal Register. Comments should address:
(a) Whether the proposed collection of information is necessary for the
proper performance of the functions of the Commission, including
whether the information shall have practical utility; (b) the accuracy
of the Commission's burden estimates; (c) ways to enhance the quality,
utility, and clarity of the information collected; and (d) ways to
minimize the burden of the collection of information on the
respondents, including the use of automated collection techniques or
other forms of information technology.
Dates
Written comments by the public on the proposed or modified
information collections in this Further Notice of Proposed Rule Making
are due on or before December 1, 1997. Written comments must be
submitted by OMB on the modified information collections on or before
December 1, 1997.
Address
In addition to filing comments with the Secretary, a copy of any
comments on the information collections contained herein should be
submitted to Judy Boley, Federal Communications Commission, Room 234,
1919 M Street, N.W., Washington, DC 20554, or via the Internet to
jboley@fcc.gov and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725--
17th Street, N.W., Washington, DC 20503 or via the Internet to
fain__t@al.eop.gov.
Further Information
For additional information concerning the information collections
contained in this Further Notice of Proposed Rule Making contact Judy
Boley, Federal Communications Commission, Room 234, 1919 M Street,
N.W., Washington, DC 20554, or via the Internet to jboley@fcc.gov.
Supplementary Information
Title: Amendment of the Commission's Rules Regarding Installment
Payment Financing for Personal Communications Services (PCS) Licensees.
Type of Review: Proposed or Modified Collection.
Respondents: The Commission estimates that no more than 255
respondents (i.e., previous C block bidders) will participate in this
information collection. The Commission estimates that this information
collection, that eligibility is based on previous participation in a C
block auction and the bidder identification number from the previous
auction, will take 0.5 hours to complete. In addition, the Commission
proposes that C block reauction applicants submit more detailed
financial information, if necessary. The Commission estimates that this
information collection will take 1.0 hours to complete. The Commission
estimates that the total burden will be 1.5 hours per respondent or
377.5 total hours.
Estimate of total cost burden to respondents: The Commission
estimates that there will be no additional cost burden to respondents.
The cost to the Federal Government is estimated to be:
GS 7 Legal Instrument Examiners at $14.06 per hour to review the
documentation for approximately 0.5 hours per submission, times 255
submissions = $1,581.75
GS 12 Attorneys to review the financial documentation at $24.95 per
hour, for approximately 2.0 hours per submission, times 255 submissions
= $11,227.50
Total = $12,809.25
C. Ex Parte Presentations
The Further Notice of Proposed Rule Making is a permit but disclose
notice and comment rule making proceeding. Ex parte presentations are
permitted, provided they are disclosed as provided in Commission rules.
See generally 47 CFR Secs. 1.1202, 1.1203, and 1.1206(a).
D. Comments
38. Pursuant to applicable procedures set forth in Secs. 1.415 and
1.419 of the Commission's rules, interested parties may file comments
on or before November 13, 1997, and reply comments on or before
November 24, 1997. In addition, a courtesy copy should be delivered to
Mark Bollinger, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau, Federal Communications Commission, 2025 M
Street, Room 5202, Washington, DC 20554. All relevant and timely
comments will be considered by the Commission before final action is
taken in this proceeding. To file formally in this proceeding,
participants must file an original and five copies of all comments,
reply comments, and supporting comments. If participants want each
Commissioner to receive a personal copy of their comments, an original
plus ten copies must be filed. Comments and reply comments should be
sent to Office of the Secretary, Federal Communications Commission,
Washington, DC 20554. Comments and reply comments will be available for
public inspection during regular business hours in the FCC Reference
Center (Room 239) of the Federal Communications Commission, 1919 M
Street, N.W., Washington, DC 20554.
List of Subjects
47 CFR Part 1
Communications common carriers, Reporting and recordkeeping
requirements.
47 CFR Part 24
Communications common carriers, Reporting and recordkeeping
requirements.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-28222 Filed 10-23-97; 8:45 am]
BILLING CODE 6712-01-P
