[Federal Register Volume 59, Number 159 (Thursday, August 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20228]
[[Page Unknown]]
[Federal Register: August 18, 1994]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[GEN Docket No. 90-314; ET Docket No. 93-266; FCC 94-209]
New Personal Communications Services; Pioneer's Preference Review
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: By this Memorandum Opinion and Order on Remand (MO&O) the
Commission amends its rules regarding pioneer's preferences to provide
that any person receiving pioneer's preferences in proceedings where
tentative (but not final) decisions had been reached as of August 10,
1993, will be required to pay for their licenses. The amount of payment
shall be determined in each proceeding on a case-by-case basis.
EFFECTIVE DATE: September 19, 1994.
FOR FURTHER INFORMATION CONTACT:
Sally J. Novak, Common Carrier Bureau, (202) 418-1310 or David H.
Solomon, Office of General Counsel, (202) 418-1720.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Memorandum Opinion and Order on Remand, adopted and released August 9,
1994. The full text of the Commission decision is available to
inspection and copying during regular business hours in the FCC
Reference Center (Room 239), 1919 M Street NW, Washington, DC. The
complete text of this decision also may be purchased from the
Commission's duplication contractor, International Transcription
Service, Inc., 2100 M Street NW., Washington, DC 20037, (202) 857-3800.
Summary of Memorandum Opinion and Order on Remand
Introduction and summary
1. In this order, we amend our pioneer's preference rules to
require that recipients of pioneer's preferences in proceedings where
tentative decisions on preference requests had been made at the time
Congress enacted auction legislation must pay for their licenses. This
decision applies to three proceedings--2 GHz personal communications
services (Broadband PCS), local multipoint distribution service (LMDS)
and low earth orbital satellite services in the 1.6/2.4 GHz band (so-
called Big LEOs).\1\ Because we have reached a decision awarding final
preferences in only one of these proceedings--broadband PCS--that is
the only proceeding for which we will determine now the appropriate
amount of payment to be made. Broadband PCS pioneer's preference
winners will have a choice of paying either (i) ninety percent (90%) of
the winning bid for the 30 MHz license in the same market; or (ii)
ninety percent (90%) of the adjusted value of the license calculated
based upon the average per population price for the 30 MHz licenses in
the top 10 markets as established at auction.
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\1\While we name the three current recipients of broadband PCS
preferences for ease of reference, we emphasize that by doing so in
no way do we intend to indicate prejudgment of the petitions for
reconsideration of our broadband PCS pioneer's preference decision.
The payment rule we adopt here will apply to the three proceedings
in which a tentative (but not final) decision regarding preferences
had been made as of August 10, 1993 in the three proceedings.
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Background
2. The pioneer's preference rules provide a means by which an
applicant that demonstrates that it has developed a new communications
service or technology may obtain a license to provide the new service
or technology without being subject to mutually exclusive
applications.\2\ Under the pioneer's preference rules, an applicant may
be granted a preference for a license if it demonstrates that it has
developed the capabilities or possibilities of a new technology or
service, or has brought the technology or service to a more advanced or
effective state. The applicant for a preference must also demonstrate
that the new service or technology is technically feasible by
submitting either the results of an experiment or a technical showing.
The preference will be granted only if the final service rules adopted
by the Commission are a reasonable outgrowth of the applicant's
proposal and the new technology can be used to provide the service. An
applicant who meets these standards and is granted a pioneer's
preference is not subject to competing applications, and if otherwise
qualified will receive a license.
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\2\The pioneer's preference rules are codified at 47 CFR 1.402,
1.403, 5.207 (1993).
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3. In October 1992, the Commission tentatively granted pioneer's
preferences to American Personal Communications (APC) for its
development and demonstration of technologies that facilitate spectrum
sharing by PCS and microwave users at 2 GHz, to Cox Enterprises, Inc.
(Cox) for its development and demonstration of PCS/cable plant
interface technology and equipment that result in a spectrum-efficient
application of PCS services, and to Omnipoint Communications, Inc.
(Omnipoint) for its development of 2 GHz equipment that utilizes
advanced techniques that will facilitate the continued development and
implementation of PCS services and technologies.\3\ In December 1993,
the Commission granted final pioneer's preferences to APC, Cox, and
Omnipoint.\4\ The Commission determined that, if otherwise qualified,
APC would be licensed to use Channel Block A in the Major Trading Area
(MTA) that includes Washington, DC and Baltimore, Maryland (Washington-
Baltimore MTA); Cox would be licensed to use Channel Block A in the MTA
that includes San Diego, California (Los Angeles-San Diego MTA); and
Omnipoint would be licensed to use Channel Block A in the MTA that
includes northern New Jersey (New York MTA (including northern New
Jersey)). In granting these pioneer's preferences, the Commission
directed the licensing bureau to condition any 2 GHz PCS license
obtained through the pioneer's preference process upon the licensee's
building a system that substantially uses the design and technologies
upon which the preference award was based; and upon the licensee's
holding the license for a minimum of three years or until the
construction requirements applicable to the five-year build-out period
have been satisfied, whichever occurs first.\5\ In December 1992, the
Commission also awarded a tentative preference to Suite 12 Group in the
LMDS service.\6\ In August 1992, the Commission tentatively denied all
requests for preferences in the Big LEO service.\7\
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\3\Amendment of the Commission's Rules to Establish New Personal
Communications Services, GEN Docket No. 90-314, Tentative Decision
and Memorandum Opinion and Order, 7 FCC Rcd 7794, 7797-7804 (1992);
57 FR 57,458 (Dec. 4, 1992).
\4\Amendment of the Commission's Rules to Establish New Personal
Communications Services, GEN Docket No. 90-314, Third Report and
Order, 9 FCC Rcd 1337, paras. 10-36 (APC), paras. 37-50 (Cox); and
paras. 51-74 (Omnipoint) (1994): 59 FR 9,419 (Feb. 28, 1994)
(``Broadband Report and Order''), recon. pending; petitions for
review filed, Pacific Bell v. FCC, D.C. Circuit Nos. 94-1148 et al.,
remanded on the Commission's own motion, July 26, 1994.
\5\Id. at para. 9. This is consistent with the conditions that
the Commission directed the licensing bureau to place upon the
license granted to the narrowband PCS (900 Mhz) pioneer's preference
recipient. See Amendment of the Commission's Rules to Establish New
Narrowband Personal Communications Services, GEN Docket No. 90-314
and ET Docket No. 92-100, Memorandum Opinion and Order, 9 FCC Rcd
1309, 1316, paras. 47-48 (1994); 59 FR 32,830 (Jun. 24, 1994)
(Narrowband Reconsideration), recon. pending (unrelated to pioneer's
preference).
\6\Establishment of Local Multipoint Distribution Service, CC
Docket No. 92-297, Notice of Proposed Rulemaking, Order, Tentative
Decision and Order on Reconsideration, 8 FCC Rcd 557 (1993); 58 FR
6,400 (Jan. 28, 1993).
\7\Amendment of Sec. 2.106 of the Commission's rules to Allocate
the 1610-1626.5 MHz and 2483.5-2500 MHz Bands for Use by the Mobile-
Satellite Service, Including Non-Geostationary Satellites, ET Docket
No. 92-28, Notice of Proposed Rule Making and Tentative Decision, 7
FCC Rcd 6414 (1992); 57 FR (Sep. 21, 1992).
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4. After these tentative decisions, Congress gave the Commission
authority to award licenses by auction.\8\ The Commission then issued a
Notice of Proposed Rule Making in ET Docket No. 93-266 to evaluate
whether it should change the pioneer's preference rules in light of
this landmark change in its statutory authority. The Commission was
concerned that the competitive bidding authority may have undermined
the basis for the pioneer's preference rules:
\8\See Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-
66, Title IV, section 6002, 107 Stat. 387 (enacted Aug. 10, 1993).
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Establishment of competitive bidding authority creates a new
dynamic for the assignment of licenses. Specifically, a bidder, who
may also happen to be an innovator, through its bidding efforts
would primarily control whether it obtains the desired license. It
may obtain the license directly by outbidding other mutually
exclusive applicants, whether by using its own financial resources
or by soliciting the aid of financial institutions and venture
capitalists. One may conclude, therefore, that under this new scheme
the value of innovation may be considered in the marketplace and
measured by the ability to raise the funds necessary to obtain the
desired license(s). Thus, we are concerned that competitive bidding
authority may have undermined the basis for our pioneer's preference
rules.\9\
\9\Review of the Pioneer's Preference Rules, ET Docket No. 93-
266, Notice of Proposed Rulemaking, 8 FCC Rcd 7692, 7693, para. 7
(1993); 58 FR 57,578 (Oct. 26, 1993) (``Pioneer's Preference Review
NPRM'').
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The Commission asked for comment on how any changes in the
pioneer's preference rules as a result of auction authority should
apply to the three proceedings in which tentative preference decisions
had been issued.
5. Several commenters argued that, at the very least, preference
recipients in these proceedings should be required to pay for their
licenses. Specifically, for example, Pacific Bell and Nevada Bell
argued that an ``outright grant of a license would confer a significant
cost advantage in a highly competitive market over firms which will be
required to expend financial resources to successfully bid in auctions
to acquire spectrum.'' Nextel argued that, to prevent anticompetitive
inequities in the cost of obtaining Commission licenses, the preference
winners should have to pay for their licenses. PageMart, Inc. argued
that the pioneer's preferences were designed to provide ``regulatory
certainty for an innovator; they were not intended to result in a
financial windfall.'' PageMart further argued that non-pioneer
licensees would be handicapped (without any public benefit) if they had
to take on a substantial financial burden that was not imposed on
preference grantees. Southwestern Bell argued that ``allowing the
pioneers to be licensed without making a similar investment [as those
who bid] not only would subvert the intentions of Congress in setting
up the auction process, it would also grossly distort the competitive
dynamics of the new market the Commission is creating.'' NYNEX argued
that requiring all licenses (including pioneer's licenses) to be
competitively awarded would promote economic efficiency by allowing the
competitive market to determine the value of the pioneer's innovation.
Other commenters including APC, Cox, and Omnipoint argued that any such
charge would be inequitable. In the Pioneer's Preference Review Report
and Order, while not reaching the overall question of what changes, if
any, should be made in its preference rules, the Commission decided
that it would be ``inequitable'' to apply any such rule changes to the
three proceedings at issue here.\10\ Its explanation, in full, for this
decision was as follows:
\10\Review of the Pioneer's Preference Rules, ET Docket No. 93-
266, First Report and Order, 9 FCC Rcd 605, 610-11 (1994); 59 FR
8,413 (Feb. 22, 1994) (``Pioneer's Preference Review Report and
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Order'').
We conclude that it would be inequitable to apply any changes in
our rules to pending proceedings in which Tentative Decisions have
been issued. Notwithstanding that other licensees in the three
proceedings at issue may have to pay for their licenses, preference
applicants in these proceedings have submitted their requests and
publicly disclosed substantial detail of their system designs in
reliance on the continued applicability of the pioneer's preference
rules. We have evaluated their requests based on existing rules and
issued Tentative Decisions, and parties have expended not
inconsiderable resources to further argue the merits or demerits of
the requests and our tentative conclusions addressing the requests.
Had the rules been different, these applicants might have structured
their requests differently; or conducted research, development, and
experimentation differently; or elected not to disclose detailed
information about their systems. We conclude that notwithstanding
our legal authority to treat 2 GHz broadband PCS pending applicants
differently than the 900 MHz narrowband PCS pioneer (Mtel) and also
to apply changed rules prospectively to pending applicants in the 28
GHz LMDS and 1.6/2.4 GHz MSS proceedings, to do so would be
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inequitable in these three proceedings.\11\
\11\Pioneer's Preference Review Report and Order, 9 FCC Rcd 605,
610-11 at para. 9 (footnotes omitted).
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As a result of that decision, APC, Cox, and Omnipoint (as well as
any preference winners in the LMDS and Big LEOs/MSS proceedings) would
not be required to pay for their licenses.
6. Subsequent to the decisions awarding final pioneer's preferences
to APC, Cox, and Omnipoint and requiring no payment for the pioneer's
licenses, a number of applicants whose broadband PCS pioneer's
preference requests had been denied petitioned for judicial review
raising a number of challenges to the awards. A primary argument of the
petitioners to the court was that the Commission had not adequately
explained its decision to retain the pioneer's preference program and
to award the broadband PCS preference licenses for free. The
petitioners asked the court to vacate the Broadband Report and Order
and the Pioneer's Preference Review Report and Order. On July 8, 1994,
the Commission's General Counsel, on instruction by the Commission,
filed a motion in the District of Columbia Circuit asking the court to
remand the broadband PCS cases to the Commission for further
consideration.\12\ The Commission stated that it intended ``to
reconsider the substance of the decision not to charge these pioneer's
preference winners for licenses in circumstances where other licensees
in the same service would pay substantial amounts in order to prevail
in competitive bidding procedures,'' and that it would issue a decision
within two weeks of any remand.\13\
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\12\Commission Instructs General Counsel to Seek Remand of
Broadband Personal Communications Service Pioneer's Preference
Cases, FCC 94-182, Public Notice (released Jul. 8, 1994) (``July 8
Public Notice'').
\13\Id.
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7. By order dated July 26, 1994, the court granted the Commission's
motion and remanded the cases for further consideration. Due to our
commitment to the court to act expeditiously on such further
consideration, we are not addressing here petitions for reconsideration
of the Broadband Report and Order or the Pioneer's Preference Review
Report and Order.\14\
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\14\We deny the Emergency Request for Oral Argument filed by
APC. We note that oral argument would not be useful in this instance
since the parties have had ample opportunity to brief the issues
considered here, and APC itself filed supplemental comments on
remand after filing its emergency request. We would not be able to
schedule or and hold oral argument in any event within the deadline
for action specified in our request for remand.
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Discussion
Payment Requirement
8. Arguments that APC, Cox, and Omnipoint (as well as any
preference recipients in LMDS and Big LEOs) should pay for their
licenses were considered in the Pioneer's Preference Review Report and
Order.\15\ In that order we decided, as a matter of equity, not to
charge APC, Cox, and Omnipoint for the licenses that they may receive
pursuant to their pioneer's preference awards. The Commission noted
that APC, Cox, and Omnipoint had publicly disclosed substantial details
of their system designs in reliance on the continued applicability of
the rules and had expended resources to argue the ``merits or demerits
of the requests and our tentative conclusions addressing the
requests.''\16\ In this order, we revisit the question of payment for
the licenses.
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\15\While our discussion here focuses on broadband PCS because
that is the proceeding on which the parties focused and the only one
of the three at issue that has progressed to final award of
pioneer's preferences, our discussion applies to the LMDS and Big
LEO proceedings as well, unless otherwise indicated.
\16\Pioneer's Preference Review Report and Order, 9 FCC Rcd at
610, para. 9.
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9. At the outset, we note that, since the adoption of the Pioneer's
Preference Review Report and Order and the Broadband Report and Order
in December 1993, we have adopted four reports and orders in the
Competitive Bidding proceeding setting forth general auction rules and
specific auction rules for narrowband PCS, interactive video and data
services (IVDS), and broadband PCS. This has led to a greater
understanding on our part of how the competitive bidding process will
work in the context of the award of spectrum for various services and,
in particular, broadband PCS. It has also resulted in concern over the
award of free licenses to some parties when other licensees competing
in the same markets must bid and pay substantial amounts of money for
their licenses. In particular, we are concerned that the award of free
licenses to APC, Cox, and Omnipoint would result in unjust enrichment
of the parties and give them a financial advantage over licensees who
may pay significant sums for their licenses. We also are concerned
about the effect that granting free licenses to these applicants might
have on the auction process.
10. In adopting the pioneer's preference procedures, the Commission
sought to foster the development of new services and to improve
existing services by reducing the delays and risks for innovators
associated with the Commission's allocation and licensing processes as
they existed then. In particular, the Commission was concerned that an
innovator facing a lottery had no assurance of receiving a license and
therefore no confidence in its ability to obtain a license as a reward
for its efforts. We decided to offer a significant reward to encourage
innovators to present proposals for new technologies and services to
the Commission in a timely manner. In crafting this ``reward,'' our
intention was to assure innovators that they would be able to obtain
licenses so as to implement their innovations. We did not contemplate
rewarding an innovator by giving it a license for free while its
competitors had to pay, because at that time no one paid for initial
licenses. Rather, we decided to permit an otherwise qualified pioneer's
preference recipient to apply for a license without facing competing
applications:
Our objective in establishing a pioneer's preference is to
reduce the risk and uncertainty innovating parties face in our
existing rule making and licensing procedures, and therefore to
encourage the development of new services and new technologies. The
essence of this risk and uncertainty is that they may not be awarded
a license and, therefore, may not be able to take their
developmental work into full business operation. The most workable
action we can take to reduce this risk is effectively to guarantee
an otherwise qualified innovating party that it will be able to
operate in the new service by precluding competing applications.\17\
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\17\6 FCC Rcd at 3492, para. 32 (emphasis supplied).
11. The Commission concluded that it has the authority to grant a
dispositive preference as a reward for innovation.\18\ The text of the
Commission's decisions make clear that the overriding objective of the
pioneer's preference rules was to ensure the award of a license to an
otherwise-qualified pioneer's preference recipient. Nowhere did the
Commission suggest that it wished to give the preference recipient a
financial or competitive advantage over other licensees. Indeed, in
rejecting proposals to give preference recipients a formal headstart
over other licensees, the Commission explicitly rejected that goal.\19\
We have recognized from the outset that pioneer's preference recipients
may receive a de facto headstart because of the nature of our licensing
process, but we specifically declined to provide a headstart beyond any
such de facto headstart. In light of this background, the arguments of
the petitioners to the court, and our further understanding of the
auction process, we now conclude that our pioneer's preference rules
should be amended to require preference recipients in those proceedings
where tentative decision had been reached at the time of the auction
statute's enactment to pay for licenses.
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\18\6 FCC Rcd at 3492, para. 33; 56 FR 24,011 (May 28, 1991).
Upon reconsideration, the Commission affirmed that the preference
will be dispositive. 7 FCC Rcd 1808, 1809 at para. 8; 57 FR 7,897
(Mar. 5, 1992). On further reconsideration, the Commission discussed
at length its legal authority to award a dispositive preference. See
8 FCC Rcd 1659 (1993); 58 FR 14,328 (Mar. 5, 1992).
\19\Pioneer's Preference Report and Order, 6 FCC Rcd at 3492,
para. 34:
We further have decided not to provide a headstart for the
pioneering entity beyond the de facto headstart that may occur due
to the time it may take other entities to apply for and receive a
license. The commenting parties have convinced us that no additional
headstart is necessary. As Southwestern Bell points out, the main
effect of a headstart would be to give the pioneer a temporary
service monopoly. As Southwestern Bell, Geller and Lampert, and
others note, the key public interest benefit of a preference is the
assurance to the pioneering entity that, if otherwise qualified, it
will receive a license. For the Commission to go beyond this and
guarantee the pioneer a temporary service monopoly would not appear
to be justified at this time.
[footnote omitted.]
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12. We do not decide in this order whether the pioneer's preference
policy remains useful, and choose not to do so in this order, which
involves pioneer's preference awards in proceedings where tentative
decisions were made prior to the legislation granting authority to
conduct auctions. We do reconsider how the pioneer's preference policy
should be implemented in the auction environment with respect to
proceedings where tentative preference decisions were made before
section 309(j) was enacted. This decision thus addresses only the
transitional question of appropriate changes in our pioneer's
preference rules for those three proceedings where tentative decisions
already had been adopted when auctions were authorized.
13. At the time the pioneer's preference rules were adopted, all
licenses were awarded at the same price--for free. We see no sound
public interest reason to award some licenses for free when other
licensees who will compete in the same markets will have to pay for
them. Pioneers were never promised a free license, or even a discount
or a bonus, but instead were assured that they would be able to obtain
a license if they developed valuable technological innovations.
Moreover, we fail to advance Congress's objective, set out in section
309(j)(3)(C) of the Act, of ``avoidance of unjust enrichment'' if we
award pioneer's preference licenses to these applicants for free.\20\
We recognize that Congress has instructed us not to seek to maximize
auction revenues at the cost of other important objectives.
Nonetheless, we do not interpret that admonition to require us to award
pioneer's preference licenses for free if that would serve no valid
public interest purpose and in fact would disserve other important
objectives. Accordingly, we conclude that the proper application of the
pioneer's preference policy in the auction environment where tentative
decisions were made prior to the auction statute is to guarantee that
the pioneers receive licenses, but on roughly the same terms as other
licensees. That is no less than the pioneers were promised when the
pioneer's preference policy was adopted.
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\20\See Joint Response at 12-15. We recognize this purpose
relates specifically only to auction winners. Nevertheless, given
the close relationship of our decision here to the auction process,
we believe it is appropriate to take this purpose into account here.
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14. Our decision here is buttressed by our concerns about
introducing financial inequalities into the broadband PCS market. We
recognize, as APC's economic experts argue, that profit-maximizing
firms in a competitive market will not base their pricing and output
decisions on ``sunk costs,'' but on marginal or incremental costs. We
nevertheless believe it self-evident that awarding licensees for free
to some parties while requiring others to pay substantial sums is
likely to provide the pioneers with a financial advantage over their
competitors. We do not seek to equalize the financial status of
competitors or to handicap those that obtain advantages by virtue of
their other activities or holdings. Here we see no legitimate basis for
creating financial advantages for some parties over their competitors.
We would not charge pioneer's preference winners for their licenses
simply to enhance the government's revenues or to ensure that pioneer's
preference recipients do not have lower debt payments than their
competitors, if there were a good public interest reason to award
licenses to pioneers without requiring payment. But based on the record
here, and in light of our experience with auctions, we conclude that
our public interest mandate requires that pioneers not obtain licenses
for free of charge while their competitors must purchase licenses at
auction. Providing licenses to preference winners for free would give a
financial advantage to some competitors with no public interest
benefit. We believe such action would disserve important public policy
objectives.
15. As the Joint Response points out, moreover, the auction process
itself was designed in large part to promote competition by assigning
spectrum to users that are most likely to offer new, better, and lower
cost services. Congress enacted our statutory auction authority in
large measure based upon the theory that awarding licenses to those who
value them most will encourage growth and competition in the
development of new services. Granting some licenses free necessarily
would undermine this purpose to the extent that the recipients of free
licenses might not have valued them as much as the other bidders. Our
decision to require a payment tied to the actual auction results
permits the competitive bidding process to identify--as it was intended
to do--those applicants who value the licenses most and thus can be
expected to compete vigorously in the development of new services. If
the pioneers are unwilling to pay even the discounted charges we order,
the licenses will be awarded to those who value them most highly.
16. On further reflection, we are convinced that the equities,
considered more broadly, favor a policy requiring payment. In making
equitable determinations, we must balance the interests of all affected
parties and of the public.\21\ The public would not be favored by free
grants, which might frustrate, at least in part, the Commission's
efforts to recover for the public a part of the value of the spectrum
the pioneers will use.\22\ Our decision here avoids the ``unjust
enrichment'' that free licenses would provide in the new auction
environment that did not exist when these parties applied for
preferences.\23\ Charging them for their licenses thus is ``equitable''
to the pioneers as well. We conclude on further review of this issue
that requiring payment is an equitable decision as well as a sound
legal and policy decision.
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\21\E.g., McElroy Elec. Corp. v. FCC, 990 F.2d 1351, 1365 (D.C.
Cir. 1993) (Commission must balance ``all relevant interests'').
\22\See 47 U.S.C. 309(j)(3)(C).
\23\Id.
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17. We recognize that preference recipients have argued that the
public interest would be served by granting them free licenses as a
reward for investments and disclosure of information they have made in
reliance on their expectation of a preference. There is, however, no
evidence in the record to suggest that such investment and information
disclosure would not have been made if the preference recipients had
known they would have to pay for a guaranteed license. We believe it is
reasonable to conclude that, to the extent this investment and
disclosure related to Commission rules at all, it related to the
expectation of a guaranteed license, not a guaranteed license without
payment where other competitors must pay for their licenses.
18. Our decision to require payment also is driven by concern for a
rational and fair auction process. The Commission has issued a number
of orders relating to auctions since we decided initially that the
pioneers in these three proceedings would not have to pay for their
licenses, and our understanding of the auction process has grown as we
have resolved various issues relating to the auctions. For example, in
the Competitive Bidding Second Report and Order, we concluded that,
where the licenses to be auctioned are interdependent and their value
is expected to be high, simultaneous multiple round auctions would best
achieve our goals for competitive bidding and would award
interdependent licenses to the bidders who value them the most. In
addition, we concluded that highly interdependent licenses should be
grouped together and put up for bid at the same time in multiple round
auctions. We later expressed our belief that the values of most
broadband PCS licenses will be significantly interdependent. In
addition, while we believe that all broadband PCS licenses are
interdependent, we decided not to auction them all simultaneously due
to the cost and complexity of auctioning a very large number of
interdependent licenses simultaneously. Instead, we decided to ``divide
the licenses into three groups by combining those licenses that are
most closely related so that there will be limited interdependence
across groups.'' We determined to auction the 99 available 30 MHz MTA
licenses in Blocks A and B in the first auction. We now have a clearer
understanding of the interdependence of the broadband PCS MTA licenses
and the significant impact that the free award of some of those
licenses might have on the rationality and fairness of the auction
process. In light of this interdependence, the degree to which a free
license could result in uneconomic allocation of the spectrum is
increased. Indeed, the entire bidding process might be distorted by
awarding a pioneer's preference recipient a license without payment
requirements.
19. In sum, based on our re-evaluation of the record, and our own
understanding of the relevant issues, we conclude that pioneer's
preference recipients in proceedings where tentative decisions had been
reached at the time of the auction statute's enactment should be
required to pay for their licenses.\24\ The amount of payment will be
determined in the context of each proceeding. We amend our pioneer's
preference rules accordingly.
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\24\The Commission has undertaken a negotiated rulemaking
procedure in an attempt to adopt rules for Big LEOs that will avoid
mutual exclusivity. Our decision regarding payment for any Big LEO
preference awards would only be relevant if mutually exclusive
applications can not be avoided and an auction becomes necessary.
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Amount of Payment in Broadband PCS
20. In our recent narrowband PCS decision awarding a license to a
pioneer, we required the recipient, Mtel, to pay either ninety percent
(90%) of the lowest winning bid for a comparable license or $3 million
less than the lowest winning bid, whichever is less. We decided not to
require Mtel to pay the full value of the license, as determined at the
auction, because we had imposed more stringent build-out requirements
on Mtel than on other narrowband PCS licensees and because we had
disrupted Mtel's business plans by deciding to charge for the license
after earlier deciding that Mtel would not have to pay. The first of
those circumstances is not applicable here because we have imposed no
additional build-out requirement on pioneers receiving broadband PCS
licenses. On the other hand, we did conclude previously that APC, Cox,
and Omnipoint would receive their licenses without charge. And we have
decided to condition the broadband PCS grants on the licensees holding
their licenses for a minimum of three years or until the five-year
construction requirements have been satisfied.
21. In spite of the differences, we have decided to adhere to a
similar formula in this case that we applied to Mtel, which also
involved a party that had been tentatively awarded pioneer's preference
before we were granted authority to auction licenses. We believe the
formula set forth below should adequately compensate APC, Cox, and
Omnipoint for any transaction costs incurred in reliance on our prior
determination that they would receive their licenses for free,
particularly since that determination remained subject to challenge in
court. At the same time, we are not concerned that a discount of that
amount will provide these pioneers with an excessive financial
advantage over their competitors, since the discount will amount to a
small fraction of the cost of the license, which in turn is only one
part of the cost of building a system. Nor do we believe that this
discount will affect the auction process adversely.
22. The Joint Response argues that the Commission can choose one of
two ways to implement the payment requirement: (i) Require the
pioneer's preference recipients to participate in the auction, but give
them a discount; or (ii) withhold the licenses from the auction but
condition their award on payment of a sum discounted from auction
prices as was done with Mtel. The parties filing the Joint Response
favor the former method. For this transition period, we will withhold
the licenses from the auction, but require a discounted payment. This
result is closer to the original intent of the pioneer's preference
programs' guarantee of a license. A bidding credit, in contrast, would
put the pioneer at risk that it might not receive a license. We reserve
the right, for pioneer's awards made entirely in the post-auction
environment, to revisit this issue in the ongoing Pioneer's Preference
Review proceeding.
23. We note that a variety of mechanisms for determining the
pioneer's payment have been proposed to the Commission. APC argues
that, if there is to be a payment, a 25 percent discount below the
national average price of licenses for broadband PCS MTA licenses is
appropriate because the auction price of the second license in the
pioneer's MTA is likely to be higher in a market where it is the only
30 MHz license available. Basing payment on a ``national average''
would result in significantly undervaluing the licenses at issue here.
As the Joint Response points out, the three broadband PCS licenses
involved here are all for major markets. We note that the preference
holders in broadband PCS would receive licenses for three of the most
populous MTAs. The New York MTA is ranked No. 1; the Los Angeles-San
Diego MTA is ranked No. 2; and the Washington-Baltimore MTA is ranked
No. 10 in the Rand McNally 1992 Commercial Atlas & Marketing Guide. The
auction prices paid for licenses in much smaller markets should not be
averaged in with the prices paid in those large markets to determine
what the pioneers should pay. At the same time, we recognize that using
the other comparable MTA licenses (i.e., the other 30 MHz license in
each region) in the market may not be the most appropriate measure.
Unlike the situation with narrowband PCS, where several other
comparable licenses in the nationwide market existed as a basis for
calculating the payment amount for the preference winner, the use of
what is now only one other comparable license in the market might lead
to a somewhat distorted result. To address this problem, broadband PCS
pioneer's preference winners will have a choice of payment methods.
They may pay either ninety percent (90%) of the winning bid for the
other 30 MHz license in the MTA or ninety percent (90%) of the adjusted
value of the license which is calculated based on the average per
population price for the 30 MHz licenses in the top 10 MTAs as
established at the auction.\25\ This latter amount would be calculated
by adding together the winning bids for the other 30 MHz MTA licenses
for the top 10 markets offered at auction\26\ and dividing by the total
population covered by those licenses.\27\ This would establish an
average per population (per pop) price for the top 10 MTAs. The
preference recipient would then multiply the average per pop price by
the population of its MTA to establish the pre-discount value of its
license. The preference recipient would be required to pay ninety
percent (90%) of that amount. Taking into account all of the top 10
markets in the latter payment method will help avoid any such
distortion without the problem of including substantially smaller
markets which would itself distort the result. We will not include the
$3 million dollar option that we had in the narrowband context. We
believe that the options here will cover the costs discussed in para.
21, supra.
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\25\Should the spectrum or market size of the pioneer's
preference recipients' tentative awards be changed due to the
pending reconsideration of these awards, the payment would be based
on the then comparable license.
\26\A total of twenty 30 Mhz MTA licenses in the top 10 markets
are available in Blocks A and B for broadband PCS--two per each
market. See 47 CFR 24.202 (Service Areas) and 47 CFR 24.229
(Frequencies).
\27\Population should be calculated based on the 1990 U.S.
census figures as published in the Rand McNally 1992 Commercial
Atlas & Marketing Guide. Total population means the population
covered by each of the other MTA licenses, e.g., the population of
the Chicago MTA (Market No. 3) would be included twice because two
licenses for that MTA will be auctioned.
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24. One party has proposed, as an option to a price based on
auction results, that pioneers pay a royalty of 3%-5% on gross revenues
over 10 years as the appropriate payment mechanism. First, we find that
this payment method is too speculative because the amount of the
payment can not be determined until years after the fact. Second, this
method may result in a payment amount that is not commensurate with the
present market value of the license itself because it is based on a
different measure. It also fundamentally departs from the auction
concept because it is based upon after-the-fact results rather than
forecasts of revenues which other potential licensees must develop and
rely on in determining the amount they are willing to bid for their
license. We conclude that the payment options imposed here strike the
correct balance between the avoidance of unjust enrichment on the part
of some broadband PCS licensees and the transition to auctions to award
broadband PCS licenses.
25. Any broadband PCS licenses awarded to pioneer's preference
recipients will be conditioned upon their making the required payments.
Their payments must be received no later than thirty (30) days after
the orders granting their licenses and their pioneer's preferences have
become final, as well as the decision here to require payment, that is,
30 days after the orders are no longer subject to administrative
reconsideration or judicial review.
Authority To Require Payment
26. Our decision requires us to determine whether we have authority
to amend our pioneer's preference rules to require pioneer's preference
recipients to pay for their licenses. The question of our authority to
require payment from pioneers was raised in the rulemaking notice that
began our Review of Pioneer's Preference Rules;\28\ but we did not
resolve the question in that proceeding because we decided at that time
not to require payment by narrowband or broadband PCS preference
recipients.\29\ Now that we have decided to require payment by the
preference winners in these proceedings, we must consider our authority
to do so. Our analysis in this case is similar to that in our order
granting Mtel's narrowband PCS license subject to a payment
condition.\30\
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\28\Pioneer's Preference Review NPRM, 8 FCC Rcd 7692, 7693,
para. 10.
\29\Id. at 7694-5, para. 18. Pioneer's Preference Review Report
and Order, 9 FCC Rcd at 610, para. 9. We did, however, conclude that
any such rule change would not constitute retroactive rulemaking.
Id., 9 FCC Rcd at 610-11, n.24.
\30\See Mtel Order, supra, note?.
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27. Section 309(j) of the Communications Act,\31\ the source of our
authority to select licensees by auction, applies only when the
Commission has accepted ``mutually exclusive applications'' for
licenses or construction permits. APC, Cox, and Omnipoint, by operation
of our pioneer's preference rules, are the only entities eligible to
apply for the licenses at issue, and there can be no mutually exclusive
applications for those licenses.\32\ Thus, we could not require APC,
Cox, and Omnipoint to bid in an auction under section 309(j) unless we
amended our pioneer's preference rules to change the nature of the
pioneer's preference award,\33\ which we do not do here.
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\31\47 U.S.C. 309(j).
\32\We reiterate that while we name the three current recipients
of broadband PCS preferences for ease of reference, we emphasize
that by doing so we do not prejudge the petitions for
reconsideration of our broadband PCS pioneer's preference decision.
The payment rule we adopt here will apply to all proceedings in
which we made a tentative (but not final) decision regarding
preferences as of August 10, 1993 in the three proceedings.
\33\See Pioneer's Preference Review NPRM.
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28. Some parties at various stages of these proceedings have
contended that section 309(j) is the only source of authority for the
Commission to assess a charge (other than a generally applicable fee)
for a license, and that we have no choice but to grant APC, Cox, and
Omnipoint's licenses without requiring payment.\34\ We disagree, and
for the reasons that follow, we find such authority under section
4(i),\35\ in conjunction with sections 1, 303(r), 307, 309, and
214,\36\ of the Communications Act.
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\34\See, e.g., Narrowband Reconsideration, 9 FCC Rcd 1315-16,
para. 44.
\35\47 U.S.C. 154(i).
\36\47 U.S.C. 151, 303(r), 307, 309, 214(c).
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29. Section 4(i), which has been called the ``necessary and proper
clause'' of the Communications Act,\37\ authorizes the Commission to
\37\See New England Telephone & Telegraph Co. v. FCC, 826 F.2d
1101, 1108 (D.C. Cir. 1987), cert. denied, 490 U.S. 1039 (1989)
(quoting North American Telecomm. Ass'n v. FCC, 772 F.2d 1282, 1292
(7th Cir. 1985)). The reference is to Article I, Section 8, Clause
18 of the Constitution, which authorizes Congress to make all laws
that shall be ``necessary and proper'' for carrying out the
enumerated powers ``and all other powers'' vested in the federal
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government.
perform any and all acts, make such rules and regulations, and issue
such orders, not inconsistent with this Act, as may be necessary in
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the execution of its functions.
We could not rely upon section 4(i) to contravene an express
prohibition or requirement of the Act, as the language of section 4(i)
itself makes clear. Thus, if any provision of the Act prohibited the
Commission from imposing a charge on a pioneer's preference recipient,
section 4(i) would not be an independent basis for such authority. But
no provision of the Act addresses this issue, either expressly or
implicitly. Therefore, requiring preference recipients to pay for their
licenses is ``not inconsistent with the Act.''\38\
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\38\See North American Telecomm. Ass'n v. FCC, 772 F.2d at 1292-
93.
Assessing an auction-based charge is not contrary to the Supreme
Court's decision in National Cable Television Ass'n v. FCC, 415 U.S.
336 (1974) (NCTA). In that case, as subsequently described, the
Supreme Court struck down Commission fees that the Court perceived
as an effort ``to recover from regulated parties costs for benefits
inuring to the public generally.'' Skinner v. Mid-American Pipeline
Co., 490 U.S. 212, 223-24 (1989) (Skinner). The Court in NCTA said
that the only proper measure of the fee was ``value to the
recipient.'' 415 U.S. at 342-43, 344. In this instance, we do not
seek to recover from APC, Cox, and Omnipoint (and, by extension,
from other licensees who pay auction-based charges) ``costs for
benefits inuring to the public generally.'' Skinner, 490 U.S. at
224. Indeed, the ``measure'' of the charge for APC, Cox, and
Omnipoint is precisely the one identified in NCTA as the only proper
measure--the value of the license to the recipient. That value is
determined by the auction price--the value that bidders are willing
to pay--discounted for APC, Cox, and Omnipoint's special
circumstances. See para. 20, supra. This assessment thus does not
raise concerns that the Commission may have used an incorrect
standard in setting the charge. 415 U.S. at 343. Moreover, because
the action the Commission takes here does not put it ``in search of
revenue in the manner of an Appropriation Committee of the House,''
NCTA, 415 U.S. at 341, no issue of impermissible delegation of
taxing authority arises. Id. The charge here is determined directly
by the auction process, and not by any concern for raising revenues
``to recover administrative costs not insuring directly to the
benefit of the parties * * *.'' Skinner, 490 U.S. at 224.
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30. The remaining inquiry under section 4(i) is whether the action
the Commission proposes to take ``may be necessary in the execution of
its functions.'' In application, section 4(i) has been held to justify
FCC orders that were not within explicit grants of authority, where the
orders reasonably could be found to be ``necessary and proper'' for the
execution of the agency's enumerated powers. In Nader v. FCC,\39\ for
example, the court held that an FCC order prescribing a rate of return
for AT&T ``was in the public interest, necessary for the Commission to
carry out its functions in an expeditious manner, and within its
section 4(i) authority.''\40\ This was so even though the
Communications Act gave the Commission express authority, in section
205(a),\41\ to prescribe ``any charge, classification, regulation, or
practice of any carrier * * *,'' but did not mention any authority to
prescribe a rate of return.
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\39\520 F.2d 182 D.C. Cir. 1975).
\40\Id. at 204.
\41\47 U.S.C. 205.
---------------------------------------------------------------------------
Similarly, in Lincoln Telephone & Telegraph Co. v. FCC,\42\ the
court affirmed an order of the Commission requiring the telephone
company, which was a ``connecting carrier'' within the meaning of the
Act, to file tariffs with the FCC offering certain services. The order
was upheld even though the only provision in the Act requiring carriers
to file tariffs, section 203(a),\43\ specifically exempted connecting
carriers from that requirement. The court held:
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\42\659 F.2d 1092 (D.C. Cir. 1981) (Lincoln Telephone).
\43\47 U.S.C. 203(a).
Section 203(a)'s terms do not * * * in any way suggest that the
section provides the exclusive authority under which the Commission
can require a tariff to be filed. Thus, while section 203(a) did not
grant the Commission the requisite authority for its action, section
154(i) did.\44\
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\44\Lincoln Telephone, 659 F.2d at 1108-09.
31. In North American Telecomm. Ass'n v. FCC,\45\ the Seventh
Circuit affirmed an order requiring the Bell holding companies to file
capitalization plans for subsidiary companies organized to sell
telephone equipment, even though the Act conferred no authority on the
FCC over holding companies and the legislative history of the Act
suggested that Congress had considered granting such authority but
ultimately had denied it.\46\ The court held that the Commission's
authority to require the capitalization plans arose under ``a separate
grant of power''--section 4(i).\47\ The only real question, the court
said, was
---------------------------------------------------------------------------
\45\772 F.2d 1282 (7th Cir. 1985) (North American).
\46\Id. at 1291-92.
\47\Id. at 1292.
whether the Commission could reasonably conclude that requiring
the regional (holding) companies to submit plans of capitalization
* * * was necessary and proper to the effectuation of (the
Commission's order requiring the separation of equipment sales from
the companies' telephone operations).\48\
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\48\Id. at 1293. It is noteworthy that the order requiring
structural separation of equipment sales from telephone operations
is itself an action not expressly authorized by the Act. Structural
separations requirements have been affirmed as proper exercises of
the Commission's ``ancillary jurisdiction.'' See Computer and
Communications Industry Ass'n v. FCC, 693 F.2d 198, 211 (D.C. Cir.
1982), cert. denied, 461 U.S. 938 (1983).
The court answered that question in the affirmative in holding that
section 4(i) authorized this action
32. In New England Telephone & Telegraph Co. v. FCC,\49\ the D.C.
Circuit affirmed the Commission's order requiring AT&T (along with its
former operating companies) to refund rates it had collected in excess
of its authorized rate of return, rejecting the telephone companies'
argument that the Commission's only statutory authority to require
refunds, under section 204(a)(1),\50\ did not apply to their situation.
Agreeing with the telephone companies that section 204 ``does not apply
to the circumstances of this case.''\51\ the court held that the
Commission had ``properly exercised its authority under section 4(i) to
remedy the violation'' of its rate of return order.\52\ The court found
that the Commission's choice of the refund remedy, ``(i)n a strictly
technical sense,'' was ``absolutely necessary'' to the effectuation of
its rate of return prescription.\53\ But it made clear that the
Commission was not required to show that it had selected ``the only
conceivable remedy in order to invoke its 4(i) powers.''\54\ It was
enough that the action chosen by the agency ``was appropriate and
reasonable.''\55\
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\49\826 F.2d 1101 (D.C. Cir. 1978) (New England).
\50\47 U.S.C. 204(a)(1).
\51\New England, 826 F.2d at 1107.
\52\Id. at 1109.
\53\Id. at 1107-08.
\54\Id. at 1108.
\55\Id.
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33. The rule that emerges from the cases described above is that
section 4(i), although ``not infinitely elastic,''\56\ is a ``wide
ranging source of authority.''\57\
---------------------------------------------------------------------------
\56\North American, 772 F.2d at 1292.
\57\New England, 826 F.2d at 1109.
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Section 4(i) empowers the Commission to deal with the
unforeseen--even if that means straying a little way beyond the
apparent boundaries of the Act--to the extent necessary to regulate
effectively those matters already within the boundaries.\58\
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\58\North American, 772 F.2d at 1292. See also U.S. v.
Southwestern Cable Co., 392 U.S. 157, 181 (1968); Rural Telephone
Coalition v. FCC, 838 F.2d 1307, 1315 (D.C. Cir. 1988); FTC
Communications, Inc. v. FCC, 750 F.2d 226, 232 (2d Cir. 1984).
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If an action taken by the agency does not contravene another
provision of the Act, it may be justified under section 4(i) if the
Commission ``could reasonably conclude that (the action) was necessary
and proper to the effectuation'' of its functions.\59\
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\59\North American, 772 F.2d at 1293.
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34. Applying this rule here, we find authority under section 4(i)
to amend our pioneer's preference rules to condition any licenses
granted to APC, Cox, and Omnipoint, on the basis of their pioneer's
preferences, on the payment of an appropriate charge. First, requiring
payment by APC, Cox, and Omnipoint is ``necessary'' if we are properly
to carry out our public interest mandate in licensing broadband PCS
providers.\60\ An important aspect of the public interest is promoting
competition to the extent feasible and taking appropriate regulatory
steps to ensure that the competition is fair.\61\ Our development of
PCS and of the pioneer's preference policies appropriately has
emphasized competition at ever step. Granting APC, Cox, and Omnipoint a
license free of charge, we have found in this order, would likely give
APC, Cox, and Omnipoint a financial advantage over other licensees
competing in the same markets, who would have to pay auction prices--a
result that would not serve the public interest.
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\60\See 47 U.S.C. 307(a), 309(a), 214 (a) and (c). See also 47
U.S.C. 151.
\61\See National Ass'n of Regulatory Util. Comm'rs v. FCC, 525
F.2d 630, 636 and n. 25 (D.C. Cir.), cert denied, 425 U.S. 992
(1976). See also McLean Trucking Co. v. U.S. ., 321 U.S. 67, 86-88
(1944).
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35. Second, requiring payment by APC, Cox, and Omnipoint is
``necessary and proper'' in the execution of our function under section
309(j) to implement a rational, fair system of competitive bidding. We
have found elsewhere that the values of broadband PCS licenses will be
significantly interdependent. The prices a bidder might be willing to
pay--or even the willingness to bid at all--might be affected in
various ways by the fact that some of the licenses are available free
to applicants who will be competing with the auction winners. Awards to
APC, Cox, and Omnipoint free of charge thus might distort significantly
the auction of other broadband PCS licenses and, thereby, defeat or at
least undermine some or all of the purposes of having the auction. In
this regard, we note that the auction statute itself does not limit our
authority to require pioneer's preference recipients to pay for their
licenses; it is neutral on this point.\62\ And third, as noted above,
requiring payment will serve section 309(j)'s purpose of avoiding
unjust enrichment.
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\62\See 47 U.S.C. 309(j)(6)(b); H.R. Rep. No. 111, 103d Cong.,
1st Sess. 257 (1993).
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36. We recognize that our decision here is a reversal of the course
we took initially with respect to payments made by the broadband PCS
pioneers. In this regard, it is similar to our recent decision to
require payment by Mtel for its narrowband PCS license after first
deciding not to require payment. We asked the court for a remand of the
pioneer's preference review order and the broadband PCS pioneer's
preference order to give further consideration to this important
issue.\63\ We believe that this change is well supported by the record
and best serves the public interest. When we first considered the
payment question these pioneers had only their tentative preferences
and, even now, their preferences are the subject of petitions for
reconsideration and petitions for review. Thus, not only do we believe
that our change of course is legal and best serves the public interest,
we also believe it does not undermine any legitimate reliance interests
of APC, Cox, and Omnipoint.
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\63\The question of payment was still technically before the
Commission as a result of a timely filed petition for
reconsideration of the Pioneer's Preference Review Report and Order.
47 U.S.C. 405. See Wrather-Alvarez Broadcasting v. FCC, 248 F.2d 646
(D.C. Cir. 1957) (where petition for agency reconsideration if
filed, agency has jurisdiction even though other parties have sought
judicial review).
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Ex Parte Rules
37. We note that in their briefs to the court, petitioners and
amicus curiae raised allegations of violations of the Commission's ex
parte rules. These issues were addressed in a letter by the Managing
Director;\64\ and our General Counsel reviewed the contacts in depth in
preparing a response to a congressional inquiry.\65\ We have thus had
an opportunity to consider, with substantial staff analysis, the
allegations. While the matter has not been formally brought to the
Commission, e.g., through an application for review of the Managing
Director's letter, we take this opportunity to affirm the Managing
Director's letter.
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\64\Letter from Andrew S. Fishel to Michael K. Kellogg, Esquire
(May 27, 1994).
\65\Letter from William E. Kennard to Hon. John D. Dingell (June
3, 1994).
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Final Regulatory Flexibility Statement
38. Pursuant to the Regulatory Flexibility Act of 1980, an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice
of Proposed Rule Making in ET Docket No. 93-266. Written comments with
a separate and distinct heading designating them as a response to the
IRFA were requested. The Commission's final analysis is as follows:
A. Need for and purpose of this action. This proceeding was
initiated to obtain comment regarding possible modifications to, or
repeal of, the pioneer's preference rules. The rule adopted here will
serve the public interest by modifying the pioneer's preference rules
in light of the statutory authority to assign licenses by competitive
bidding.
B. Issues raised in response to the IRFA. The IRFA noted that the
proposed changes could affect small businesses if they have pioneer's
requests pending, if they contemplate filing pioneer's preference
requests, or if they intend to file applications for services in which
others might receive a pioneer's preference. No commenters responded
specifically to the issues raised in IRFA. We note that, with regard to
PCS, small businesses receive certain competitive bidding preferences
as set forth in the Third Report and Order, 9 FCC Rcd 2941 (1994) and
the Fifth Report and Order, FCC 94-178 (released Jul. 15, 1994) in PP
Docket No. 93-253.
C. Significant alternatives considered. All significant
alternatives have been addressed in the Memorandum Opinion and Order on
Remand.
Ordering Clauses
39. Accordingly, it is ordered, pursuant to sections 1, 4(i),
303(r), 307, 309, and 214 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i), 303(r), 307, 309, and 214, that
Sec. 1.402 of the Commission's rules, 47 CFR 1.402, is amended as set
forth below to be effective thirty (30) days after publication in the
Federal Register.
40. Accordingly, it is further ordered that the relevant licensing
bureau shall impose the following additional condition on any licenses
received by pioneer's preference recipients for broadband PCS (GEN
Docket No. 90-314) based upon their pioneer's preference awards:
Each licensee shall pay to the United States Treasury an amount
equal to either ninety percent (90%) of the winning bid for the 30
MHz broadband MTA license in the same market or ninety percent (90%)
of the adjusted value of the license calculated based on the average
per population price for the 30 MHz licenses in the top 10 MTAs as
established at auction, thirty (30) days after an order granting any
such license based upon a pioneer's preference, the order granting
the preferences, and this order become final orders, that is, thirty
(30) days after the order is no longer subject to administrative
reconsideration or judicial review, appeal, or stay.
41. It is further ordered that the Emergency Request for Oral
Argument filed by American Personal Communications on July 21, 1994 is
denied.
List of Subjects in 47 CFR Part 1
Administrative practice and procedure, Reporting and recordkeeping
requirements, Telecommunications.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Final Rule
Part 1 of chapter 1 of title 47 of the Code of Federal Regulations
is amended as follows:
PART 1--PRACTICE AND PROCEDURE
1. The authority citation for part 1 continues to read as follows:
Authority: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47
U.S.C. 154, 303.
2. Section 1.402 is amended by adding new paragraph (g) to read as
follows:
Sec. 1.402 Pioneer's preference.
* * * * *
(g) Any person receiving pioneer's preferences in proceedings where
tentative (but not final) decisions had been reached as of August 10,
1993, will be required to pay for their licenses. The amount of payment
shall be determined in each proceeding on a case-by-case basis.
[FR Doc. 94-20228 Filed 8-17-94; 8:45 am]
BILLING CODE 6712-01-M
