[Federal Register Volume 60, Number 97 (Friday, May 19, 1995)]
[Proposed Rules]
[Pages 26860-26861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12462]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[WT Docket No. 95-69, FCC 95-202]
Auctionable Services
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Notice of Proposed Rulemaking contains proposed rules
pertaining to fees for certain services and products provided to
specific persons and entities participating in future Federal
Communications Commission auctions. In particular, the proposal
establishes fees for Commission proprietary remote software packages,
on-line communications service charges, and bidder's information
packages in connection with auctionable services. The Commission, in
establishing the proposed fees, implements the Independent Offices
Appropriations Act. The Commission's proposal would receiver the
Federal Government's cost from any bidders utilizing Commission-
provided services.
DATES: Written comments must be submitted by May 31, 1995, and written
reply comments must be submitted by June 6, 1995.
ADDRESSES: Send comments and reply comments to Office of the Secretary,
Federal Communications Commission, Washington, D.C. 20554. Interested
parties who do not wish to participate formally in this proceeding may
file informal comments at the same address.
FOR FURTHER INFORMATION CONTACT:
Bert Weintraub, Wireless Telecommunications Bureau, (202) 418-1316.
SUPPLEMENTARY INFORMATION: In previous Federal Communications
Commission (hereafter, ``Commission'' or ``FCC'') auctions, bidders
have paid auction contractors of the Commission fees consisting of the
contractors' costs and a reasonable profit for remote bidding software
and an on-line access charge. The Independent Offices Appropriations
Act (``IOAA''), codified at 31 U.S.C. Sec. 9701, permit fees and
charges for Government services and things of value and authorizes
agencies to prescribe regulations establishing charges for products and
services provided by the agency. The Office of Management and Budget
(``OMB'') has issued policy guidance on fees via Circular A-25 for
agencies to recover expenses. The OMB published a revised revision of
the Circular in the Federal Register, 58 FR 38142 (July 15, 1993),
which provided updated policy guidance on user fees. Pursuant to this
revision, the imposition of fees for Government-provided products and
services conferring benefits on identifiable recipients over and above
those benefits received by the general public are encouraged. Under the
OMB Circular, agencies, in establishing fees, are to select between
``full cost'' or ``market price.''
On August 10, 1993, the Omnibus Budget Reconciliation Act of 1993,
Pub. L. No. 103-66, 107 Stat. 312, added a new section 309(j) to the
Communications Act of 1934, 47 U.S.C. Sec. 309(j). This amendment to
the Communications Act authorized the Commission to use competitive
bidding [[Page 26861]] procedures to choose from among two or more
mutually exclusive applications for initial licenses for use of the
radio spectrum. Pursuant to this authority, the Commission has
conducted three simultaneous multiple round auctions for Personal
Communications Service (``PCS'') licenses (i.e., the Nationwide
Narrowband PCS auction, held from July 25 through July 29, 1994; the
Regional Narrowband PCS auction, held October 26, through November 8,
1994; and the Broadband A and B block PCS auction, held December 5,
1994, through March 13, 1995). In each PCS auction, bids were placed
electronically using a computer bidding system designed and developed
by the FCC in conjunction with its auction contractors.
The Commission and its auction contractors incurred significant
costs in developing the on-site electronic bidding systems used in the
PCS auctions and the remote electronic bidding system used in two of
the PCS auctions. The Commission recovered its developments costs for
the electronic bidding system for the first three auctions from the
proceeds of those actions. Additionally, the FCC's auction contractor
was allowed to charge bidders electing to use on-line remote bidding
system a $200.00 fee for the proprietary remote bidding software
package and an on-line access charge. The FCC has determined, based on
its auction experience, that remote electronic bidding provides bidders
with an important and valuable service as it enables them to place and
withdraw bids, access auction round results and other FCC announcements
during the auction from their offices using their personal computer.
Thus, bidders are not required to be physically present at the auction
site for the duration of the auction. Because the Commission will
provide these services directly to bidders, the Commission proposes to
recover the Federal Government's costs by charging bidders a fee for
the remote electronic bidding software and an on-line access charge via
a 900 telephone service (``900 service''). Bidders will continue to
have the option of placing their bids telephonically from remote
locations via an 800 telephone service at no charge. Round results
information is also available to remote access bidders over the
Internet and the Commission's Bulletin Board at no charge.
The significant costs and expenses incurred by the Federal
Government in developing the remote electronic auction system have
included infrastructure design and implementation, software
development, software testing, and administrative and personnel costs
associated with this process. The Commission has developed its own
remote on-line bidding system to be offered as a convenience to bidders
in future auctions, enabling bidders to participate in auctions from
their offices using their personal computers, submit and review
applications, and access auction round results information from remote
locations using a 900 service. The Notice of Proposed Rulemaking
(``NPRM'') proposes to recover the costs to the Government by charging
bidders who elect to bid electronically from remote locations a fee for
the remote bidding software and for remote access to the bidding system
via the 900 service. The Commission's remote electronic bidding system
will enable bidders to participate in Commission auctions, review
applications, and access auction round results information from remote
locations using a Wide Area Network to connect with the bidding system
via a 900 telephone service. The proposed rule would recover future
costs from bidders who directly benefit from the services and products
offered by the Commission in conjunction with holding the auctions.
Imposing such fees on bidders who actually use the remote electronic
bidding system is the fairest and most equitable manner for the
Government to recover its costs in developing, maintaining, enhancing,
and upgrading the remote bidding system.
In proposing the fees, the Commission has followed OMB guidance and
relevant court cases in calculating the costs of the 900 service,
remote access bidding software, and bidder's information packages,
utilizing ``market price'' instead of ``full cost'' because it is
simpler, more practical, more efficient, and more readily
ascertainable. As a result, based upon market surveys for 900 service,
remote access bidding software, and bidder's information packages, the
NPRM proposes the following fees: $4.00 per minute for 900 service;
$200.00 per package for remote bidding software, one free bidder's
information package and $16.00 for each additional bidder's information
package requested by that same person or entity.
The proposed fee of $4.00 per minute for 900 service is based on
the FCC's survey of the charges for similar on-line services. The
services surveyed were mainly on-line reference and research services
operating in the open market with sufficient competition to establish a
market-based price. FCC sampling revealed that prices currently range
from $4.05 per minute to $4.42 per minute (plus monthly account
maintenance fees). Even though the average price for this type of
services $4.23 per minute, $4.00 per minute is proposed. The proposed
$200.00 fee for the remote access bidding software packages was based
upon the open market prices for similar software packages. FCC research
indicated that the most comparable software package currently available
is $200.00 per package and offered by only one supplier. Due to highly
specialized nature of the remote access software, the Commission could
not identify other comparable software packages for which it could
obtain additional market price information. The proposed $16.00 fee for
each additional bidder's information package was developed by comparing
the average cost of producing bidder's information packages in the open
market amount commercial printing firms. The previous prices ranged
from $13.50 to $18.50 (both figures include postage), and $16.00 is the
average of this range. Payment procedures to collect the fees are
proposed as follows: the fee for the 900 service will appear as a
charge on the user's monthly telephone bill; the fees for the software
packages and bidder's information packages will be collected by the
Commission's auction contractor. Funds received from the sale of
auction materials, software, or services, pursuant to the IOAA, must go
directly to the U.S. Treasury.
This action is taken pursuant to Sections 4(i), 7(a), 302, 303(c),
303(f), 303(g), and 303(r) of the Communications Act of 1934, as
amended, 47 U.S.C. Sections 154(i), 157(a), 302, 303(c), 303(f),
303(g), and 303(r).
List of Subjects in 47 CFR Part 1
Administrative practice and procedure.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 95-12462 Filed 5-18-95; 8:45 am]
BILLING CODE 6712-01-M
