Competitive Bidding

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0 and 24

[PP Docket No. 93-253, FCC 94-98]

Competitive Bidding

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission has adopted rules establishing service-specific

rules for competitive bidding on licenses to be awarded for Personal

Communications Services in the 900 MHz band (``narrowband PCS''). This

action is taken to implement section 309(j) of the Communications Act

of 1934, as amended. The new rules will promote the development and

rapid deployment of new technologies, products, and services for the

benefit of the public, including those residing in rural areas. These

rules also will promote economic opportunity for small businesses and

businesses owned by women and/or minorities.

EFFECTIVE DATE: June 23, 1994.

FOR FURTHER INFORMATION CONTACT:

Toni Simmons, Federal Communications Commission, Office of Plans and

Policy, Washington, DC 20554 (202) 418-2030).

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third

Report and Order, PP Docket No. 93-253, adopted April 20, 1994, and

released May 10, 1994. The full text of this Third Report and Order is

available for inspection and copying during normal business hours in

the FCC Dockets Branch, room 230, 1919 M Street, NW., suite 140,

Washington, DC. The complete text may be purchased from the

Commission's copy contractor, International Transcription Service,

Inc., 2100 M Street, NW., suite 140, Washington, DC 20037, Telephone

(202) 857-3800.

Paperwork Reduction Act

The Federal Communications Commission has submitted the following

information collection request to OMB for review and clearance under

the Paperwork Reduction Act of 1980, 44 USC section 3507. Persons

wishing to comment on this information collection should contact

Timothy Fain, Office of Management and Budget, room 3225, New Executive

Office Building, Washington, DC 20503, (202) 395-3561. For further

information, contact Judy Boley, Federal Communications Commission,

(202) 632-7513.

Please Note: The Commission has requested emergency review of this

collection by May 25, 1994, under the provisions of 5 CFR Sec. 1320.18.

Title: Implementation of section 309(J) of the Communications Act--

Competitive Bidding, Third Report and Order, PP Docket No. 93-253.

Action: New collections.

Respondents: Individuals, state or local governments, non-profit

organizations, business or other for-profit entities, including small

businesses.

Frequency of Response: On occasion.

Estimate Annual Burden:

------------------------------------------------------------------------

No. of Estimated

sections/ average hrs Estimated

forms per annual

respondents response burden

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Section 24.413(a)-(e)............. 17,770 1.00 17,770

Section 24.415.................... 3,554 1.00 3,554

Section 24.419.................... 50 20.00 1000

Section 24.425.................... 10 3.00 30

Section 24.406.................... 5,000 2 10,000

Section 24.439.................... 100 .50 50

Section 24.413(f)................. 2,500 2.5 6,250

Section 24.430.................... 100 20 2,000

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Total Annual Burden........... ........... ........... 40,654

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Needs and Uses: In the Third Report and Order in PP Docket No. 93-

253 the Commission amended 47 CFR part 24 to add a new subpart F and G.

Subpart F contains the general rules and requirements governing the

competitive bidding process for narrowband PCS initial licenses.

Subpart G contains general rules and requirements for processing

applications. Applicants are required to file certain information so

that the Commission can determine whether the applicants are legally,

technically and financially qualified to be licensed. Affected members

of the public are any members of the public who wants to become a

licensee. The foregoing estimates include the time for reviewing

instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collections of information. Send comments regarding these burden

estimates or any other aspect of the collections of information

including suggestions for reducing the burden to the Federal

Communications Commission, Records Management Division, Paperwork

Reduction Project, Washington, DC 20554 and to the Office of the

Management and Budget Paperwork Reduction Project, Washington, DC

20503.

Summary of the Third Report and Order

Introduction

1. In this Third Report and Order, we adopt service-specific rules

for competitive bidding on licenses to be awarded for Personal

Communications Services in the 900 MHz band (``narrowband PCS''). We

conclude that because of the significant interdependence among

narrowband PCS licenses and the relatively high expected value of such

licenses, most narrowband PCS licenses will be awarded through a

sequence of simultaneous multiple round auctions. We will also adopt a

system of preferences designed to enhance access to narrowband PCS

spectrum and achieve the congressional directive that our competitive

bidding rules ensure the opportunity of small businesses and businesses

owned by women and minorities to participate in the auction process.

2. Numerous comments and reply comments were filed by interested

parties in response to the notice of proposed rule making (58 FR 53489

(October 15, 1993)) in this docket. These comments address the many

proposals made in the notice regarding, among other things, narrowband

PCS licenses.

Auction Eligibility

3. In the Second Report and Order (59 FR 22980 (May 4, 1994)), we

concluded that narrowband PCS as a class of service was reasonably

likely to satisfy the criteria of section 309(j) of the Communications

Act. Also, the use of competitive bidding to award narrowband PCS

licenses as compared to other licensing methods will speed the

development and deployment of new services to the public and recover

for the public a portion of the value of the spectrum.

Auction Design

4. The spectrum allocation, service definition and technical rules

for narrowband PCS were completed by the Commission in the Narrowband

PCS Memorandum Opinion and Order (59 FR 14115 (March 25, 1994)). We

anticipated that advanced paging and messaging services would be the

predominant narrowband services provided. Three megahertz of spectrum

were allocated to narrowband PCS in three one megahertz bands (901-902

MHz, 930-931 MHz and 940-941 MHz). Two megahertz of this spectrum were

divided into 50 kHz and 12.5 kHz channels and will be available for

immediate licensing. The remaining one megahertz of narrowband PCS

spectrum will be channelized and licensed in the future as this service

develops.

5. Simultaneous multiple round auction. In This Report and Order,

we adopt simultaneous multiple round auctions as our primary auction

methodology for narrowband PCS licenses. We expect the value of most

narrowband PCS licenses to be sufficiently high to warrant the use of

simultaneous auctions. This type of auction will be most likely to

deploy rapidly new narrowband PCS technologies and services, promote

the development of competition for the provision of those and other

services, and thus foster economic growth. We recognize, however, that

simultaneous multiple round bidding may involve a greater degree of

complexity than other competitive bidding methods and that it may

present greater operational difficulties for both the Commission and

for bidders.

6. Alternative auction designs. Because narrowband PCS licenses

vary in terms of expected value and interdependence, we have determined

that no single competitive bidding design will be optimal for all

licenses. For this reason and because Congress directed us to test

multiple alternative methodologies, we will adopt other auction designs

as alternatives to our primary design. When we announce individual

auctions to award specific groups of narrowband licenses, we will issue

a public notice detailing the competitive bidding design and procedures

to be used.

7. Oral sequential and single round (sealed bid) auctions. If, as a

result of our auction experience, we determine that the operational

costs or complexities associated with simultaneous multiple round

auctions outweigh their benefits, we may decide to employ either oral

sequential auctions or single round sealed bid auctions. In an oral

sequential auction, licenses are put up for bid one at a time, so that

bidding ends on one item before it begins on the next item. Oral

sequential auctions generate valuable information about earlier

auctioned licenses, which can assist bidders in valuing later auctioned

licenses. However, if license values are interdependent oral sequential

auctions are less likely than simultaneous auctions to award

interdependent licenses to the parties who value them the most and to

aggregate licenses efficiently, because bidders for licenses that are

auctioned early must bid with less information about the value of

licenses to be auctioned later, and have less opportunity to pursue

backup bidding strategies. Nonetheless, because oral sequential

auctions are generally less complex, and costly both for the FCC and

for potential bidders, they may be appropriate to use where the

expected value of the narrowband PCS licenses to be auctioned is low

relative to the costs of conducting a more complex auction or where

interdependence is less significant.

8. We may find, for some narrowband PCS licenses that even the

lesser cost and complexity of oral sequential auctions are not

justified by the revenues these licenses would be expected to generate.

In such cases, we may choose to award licenses by single round sealed

bidding where bids for all licenses are submitted simultaneously and

the high bidder for each license is determined after a single round of

bidding. Single round sealed bidding has the principal advantage of

being relatively simple for bidders to understand and inexpensive for

the FCC to administer and also can generally be completed fairly

rapidly. However, because single round sealed bidding provides less

information and flexibility to bidders than either simultaneous or

sequential auctions, we will generally use this method only where there

is less interdependence among individual licenses or groups of licenses

and the expected value of the licenses to be auctioned is low relative

to the cost of conducting a more complex auction. In addition, we may

select this auction design where eligibility requirements limit

participation to relatively few bidders.

9. Combinatorial bidding. Although we recognize that there are

significant benefits associated with combinatorial bidding, especially

in terms of efficient aggregation of licenses, we conclude that

simultaneous multiple round auctions offer many of these same

advantages without the same degree of administrative and operational

complexity and without biasing auction outcomes in favor of combination

bids. Since simultaneous multiple round bidding is our preferred

auction method for awarding narrowband PCS licenses, we think

combinatorial bidding will be unnecessary in most narrowband PCS

auctions. However, in circumstances where we do not use simultaneous

multiple round bidding, we may permit combinatorial bidding.

Bidding Procedures

10. Grouping of licenses. Whether we use our preferred approach of

a sequence of simultaneous multiple round auctions or sequential

individual auctions, the Commission must choose which licenses will be

auctioned together. The importance of the choice of license grouping

increases with the degree of interdependence among the individual

licenses or groups of licenses to be auctioned. Accordingly, we will

group narrowband PCS licenses into the various simultaneous auctions by

aggregating together those licenses exhibiting the greatest degree of

interdependence so that there will be limited interdependence across

groups.

11. Based on the foregoing, we will auction narrowband PCS licenses

in the following license groupings. We will award all nationwide,

regional and MTA (other than MTA response channels) licenses through a

sequential series of simultaneous auctions. (However, as we gain

experience we may determine that an alternative auction method or

license grouping is more appropriate. Under these circumstances, as

provided in the general procedural rules, we will announce before each

auction the licenses to be auctioned and the type of competitive

bidding method to be used, as well as the stopping rules and activity

rules, if any, that will be used.) To maximize the information

available to bidders and increase gradually the complexity of the

narrowband PCS auctions as we gain more experience, we will begin by

auctioning the ten nationwide narrowband licenses in one simultaneous

multiple round auction. After the nationwide narrowband PCS auction is

complete, we will auction the five regional blocks (30 licenses)

together in one simultaneous multiple round auction. We subsequently

will conduct another simultaneous multiple round auction for all of the

50/50 kHz paired, 50/12.5 kHz paired and the 50 kHz unpaired MTA

licenses (357 licenses). Simultaneous multiple round auctions are

appropriate for each of these license groupings because of the

relatively high value and significant interdependence of the licenses.

12. After auctioning the MTA licenses, we will hold another

simultaneous multiple round auction for the 50/12.5 kHz paired BTA

licenses (984 licenses). Although most of the licenses are expected to

have relatively low values, individually they are highly

interdependent, and their aggregate value (compared to the cost of

conducting a simultaneous auction) is sufficiently high to justify a

simultaneous multiple round auction. Using this approach will also

enable the Commission to gain valuable experience conducting

simultaneous multiple round auctions involving large numbers of

licenses.

13. Finally, we will auction the 12.5 kHz unpaired MTA (204

licenses) and the 12.5 kHz unpaired BTA response channel licenses

(1,968 licenses) in a single round sealed bid auction because their

values are low relative to the cost of conducting other more complex

auctions. Under this auction method, however, bidders cannot be certain

that they will be the high bidder on all of the licenses they seek to

obtain because single round sealed bidding does not provides bidders

with timely information about license values and bidders do not have

the opportunity to increase their bid amounts during the course of the

auction. Therefore, in this context we will allow bidders to bid on

more licenses than they are eligible to be awarded under the existing

aggregation limits, provided they specify in advance the order in which

they wish to be awarded such licenses in the event that they are in

high bidder on more licenses then they are permitted to hold. See 47

CFR 24.130(a) (limiting paging licensees to a maximum of two response

channel licenses within the same geographic area). Bidders, however,

will only be permitted to bid on response channel licenses for which

they are otherwise eligible (i.e., they must operate at least one base

station in the service area of the response channel for which they are

applying). The Commission will only designate a bidder the winning

bidder on the maximum number of licenses the bidder is eligible to

hold. Under these circumstances, a high bidder will not be subject to

the bid withdrawal penalty for those additional licenses for which it

is not designated the winning bidder.

14. Bid increments. Where we use simultaneous multiple round

auctions to award narrowband PCS licenses it is important to specify

minimum bid increments. In these auctions, we may impose a minimum bid

increment of 5 percent or $0.01 per pop per MHz, whichever is greater.

This will provide flexibility for a wide range of different license

values and will ensure timely closure of auctions, even where bidding

begins at a very low dollar amount. The Commission retains the

discretion in narrowband PCS auctions to set and, by announcement

before or during the auction, vary the minimum bid increments for

individual licenses or groups of licenses over the course of an

auction. We will most likely reduce the minimum bid increment only in

the later bidding rounds, as bidding begins to come to a close. In oral

sequential auctions the auctioneer may within its sole discretion

establish and vary the amount of the minimum bid increment in each

round of bidding.

15. Stopping rules for multiple round auctions. Where we use

simultaneous multiple round bidding, we believe that a simultaneous

stopping rule is preferable, especially for the nationwide, regional

and MTA narrowband PCS licenses, which are expected to have relatively

high values and are fewer in number. Because of the large number of BTA

licenses and their relatively low expected value, we may use either a

hybrid stopping rule or allow markets to close individually in auctions

for these licenses.

16. We will retain the discretion to declare at any point in a

simultaneous multiple round auction that the auction will end after one

additional round or some other specified number of additional rounds.

We also reserve the discretion to vary the duration of bidding rounds

or the interval at which bids are accepted in order to move the auction

toward closure more quickly. We will announce by public notice, and may

vary by announcement during an auction, the duration and intervals

between bidding rounds.

17. Activity rules. In order to ensure that simultaneous auctions

with simultaneous stopping rules close within a reasonable period of

time, it is necessary to impose an activity rule to prevent bidders

from waiting until the end of the auction before participating. The

rule proposed by Professors Paul Milgrom and Robert Wilson (``Milgrom-

Wilson rule'') will best achieve the Commission's goal of affording

bidders flexibility to pursue back up strategies, while at the same

time ensuring that simultaneous auctions are concluded within a

reasonable period of time. Therefore, to award higher value narrowband

PCS licenses, we plan to use the Milgrom-Wilson rule with a

simultaneous stopping rule.

18. Under the Milgrom-Wilson rule, the minimum activity level,

measured as a fraction of the self declared maximum eligibility, would

increase during the course of the auction. The auction would be divided

into three stages. During the first stage of the auction, bidders would

be required to be active on licenses encompassing at least one-third of

the MHz-pops for which they are eligible. In the second stage, bidders

would be required to be active on licenses encompassing at least two-

thirds of the MHz-pops for which they are eligible. In the third stage,

bidders would be required to be active on licenses encompassing 100

percent of the MHz-pops for which they are eligible. Under this rule,

bidders would be required to meet these activity levels to retain their

desired eligibility. A shortfall in activity would reduce eligibility

levels accordingly. However, bidders will be permitted five automatic

waivers from the activity rule during the course of an auction. We also

retain the discretion to use less complex activity rules.

Procedural, Payment, and Penalty Matters

19. Pre-auction procedures. We will follow the procedural, payment

and penalty rules established in the Second Report and Order with

certain minor modifications designed to address the characteristics of

the narrowband PCS service. Before each scheduled narrowband PCS

auction the Commission, or pursuant to delegated authority, a Bureau

will release an initial Public Notice announcing the auction. This

initial Public Notice will specify the license(s) to be auctioned and

the time, place and method of competitive bidding to be used, including

applicable bid procedures. The initial public notice will also specify

the filing deadline for short-form applications.

20. All bidders will be required to submit short-form applications

on FCC Form 175 by the date specified in the public notice. If only one

application is received, the Commission will by public notice cancel

the auction for this license and establish a date for the filing of a

long-form application, the acceptance of which will trigger the

procedures permitting petitions to deny. The Commission will issue a

second Public Notice listing all defective applications and applicants

will be given a chance to cure and resubmit applications with minor

defects.

21. After reviewing the corrected applications, the Commission will

release a third public notice announcing the names of all applicants

whose applications have been accepted. These applicants will then be

required to submit the full amount of their upfront payment to the

Commission's lock-box bank by a date specified in the public notice. A

fourth public notice announcing the names of all applicants that have

been determined to be qualified to bid will then be issued. Each of

these applicants will receive a bidder identification number and

further instructions regarding auction procedures.

22. Upfront payments. We will require all auction participants to

tender in advance to the Commission an upfront payment as a condition

of bidding. We believe that a standard upfront payment formula of $0.02

per pop per MHz for the largest combination of MHz-pops a bidder

anticipates bidding on in any single round of bidding is appropriate

for narrowband PCS services. If licenses covering the nation are being

auctioned simultaneously, a bidder will not be required to file an

upfront payment representing national coverage unless it intends to bid

on licenses covering the entire nation in any single bidding round. We

will announce the upfront payment amount for each license in a public

notice issued prior to the auction.

23. We believe that the minimum upfront payment of $2,500

established in the Second Report and Order may be too high for some

narrowband licenses in sparsely populated areas, which may have values

below this amount. Therefore, we will establish a lower minimum upfront

payment of $1,000 for narrowband PCS applications. The specific

procedures to be followed in the tendering and processing of upfront

payments are set forth in Section 1.2106 of the Commission's rules.

24. Down payment and full payment for licenses awarded by

competitive bidding. Winning bidders will be required to supplement

their upfront payments with a down payment sufficient to bring their

total deposits up to 20 percent of their winning bid(s). The down

payment must be submitted by cashier's check or wire transfer to our

lock-box bank by a date specified, generally within five business days

following the close of the bidding. All auction winners, with the

exception of certain designated entities, will be required to make full

payment of the balance of the winning bids within five business days

following the award of the license. Small Businesses will be permitted

to pay 10 percent of their down payment amount within five businesses

days after bidding is closed and the remaining 10 percent within five

days after grant of the license. As discussed below, small businesses

will also be permitted to pay the balance of their winning bid amount

for certain licenses in installments over the term of the license.

License grants will be conditioned on full payment of the bid amount.

25. Default and disqualification. Any bidder who withdraws a high

bid during an auction before bidding closes, or defaults by failing to

remit the required down payment within the prescribed time, will be

required to reimburse the Commission in the amount of the difference

between its high bid and the amount of the winning bid the next time

the license is auctioned, if the subsequent winning bid is lower. After

bidding closes, a defaulting or disqualified auction winner will be

assessed an additional penalty of three percent of the subsequent

winning bid or three percent of the amount of the defaulting bid,

whichever is less. Deposits will be held by the FCC until full payment

of the penalty. If default of disqualification involves such actions as

gross misconduct, the Commission may declare the applicant ineligible

to bid in future auctions and may take other actions including the

revocation of Commission licenses.

26. If the down payment is timely made, a long-form application

filed on FCC form 401 (as modified) will be required to be filed by a

specified date, generally within 10 business days after the close of

the auction. Upon acceptance for filing of the long-form application,

the FCC will release a public notice announcing this fact thus

triggering the filing window for petitions to deny. If the petitions to

deny are denied, and the FCC finds the applicant qualified, the license

will be granted to the auction winner.

27. As proposed, we adopt a modified version of the application

requirements and processing rules in part 22 of the Commission's rules

for narrowband PCS. These rules govern such matters as application

filing and content requirements, waiver procedures, procedures for

returning defective applications, and procedures regarding the

modification of applications.

28. With regard to petitions to deny, we adopt expedited procedures

consistent with the provisions of section 309(i)(2) of the

Communications Act for narrowband PCS applications. A hearing need not

be conducted before denial of a petition to deny if the Commission

determines that an applicant is not qualified and no substantial issue

of fact exists concerning that determination. If the FCC identifies

substantial and material issues of fact in need of resolution, section

309(i)(2) of the Act permits in any hearing submission for all or part

of the evidence in written form and allows employees other than

administrative law judges to conduct hearings.

29. As a general rule, when an auction winner defaults or is

otherwise disqualified after having made the required down payment, the

best course of action is to re-auction the license either to existing

or new applicants. However, if the default occurs within five (5)

businesses days after bidding has closed, the Commission retains the

discretion to offer the license to the second highest bidder at its

final bid level, or if that bidder declines the offer, to offer the

license to other bidders (in descending order of their bid amounts) at

their final bid levels.

30. If a new auction becomes necessary because of default or

disqualification more than five (5) business days after bidding has

ended the Commission will afford new parties an opportunity to file

applications because so much time is likely to have passed that

different parties may be interested in bidding and existing applicants

may have different valuations of the license.

Procedures in Other Auction Designs

31. Single round bidding. Where we use sealed bidding, in addition

to the information specified above, the initial public notice will

specify the date on which sealed bids must be submitted. In single

round sealed bid auctions, we will not require bidders to submit

upfront payments because we believe that there is less risk of

frivolous bidding when this auction design is used. We may, however,

announce by public notice that bidders must tender the 20 percent down

payment at the time they submit their buds in order to ensure payment

of the penalty in case of bid withdrawal or default. In single round

sealed bid auctions, we will require that bids be received on a date

specified in the public notice and that bids clearly indicate the

bidder's identification number and the auction and license to which the

bid relates. Bidders submitting bids for more licenses than they are

permitted to hold must also specify the order in which they wish to be

awarded such licenses if they are the high bidder on more licenses then

they are eligible to hold. After bids are submitted and evaluated, the

Commission will issue a second public notice indicating all bidders who

have made timely bid submissions. After release of the second public

notice, the Commission will issue a third public notice announcing the

high bidders on each license. (If a tie occurs, bidders will be

afforded the opportunity to submit another bid and the highest bidder

in this round will be designated the winning bidder.) If the 20 percent

deposit has not already been submitted, then the high bidder will be

required to submit the 20 percent down payment within five (5) business

days after release of the public notice announcing the high bidders (if

the 20 percent down payment has already been submitted, the Commission

will simply deposit the high bidder's down payment).

32. In the case of single round bidding, the withdrawal and default

penalties must be modified to reflect the fact that bids cannot be

withdrawn during the course of an auction because there is only a

single round of bidding. In this context, if a bid is withdrawn before

the Commission releases the public notice announcing the high bidders,

no harm is likely to occur and no penalty will be assessed because the

Commission can easily designate in the public notice that the party

with the next highest bid is the winning bidder. If, however, a high

bidder in a single round auction defaults after release of the public

notice announcing the high bidders, the licensing process is likely to

be delayed. Therefore, in order to encourage bidders in single round

auctions to avoid default and the associated delays, we will impose a

default penalty if a high bidder withdraws, defaults or is otherwise

disqualified after release of the public notice announcing the winning

bidders. This penalty will be equal to the difference between the high

bid amount and the amount of the next highest valid bid. A bid will be

considered valid for this purpose if the bidder has not already been

designated the winning bidder on more licenses than it is permitted to

be awarded.

33. Bidders will be held to their bids on the maximum number of

licenses they are permitted to hold. If there are multiple defaults

each bidder will be responsible for the difference between its bid and

the amount of the next highest valid bid. Holding each bidder in a

single round auction responsible for the difference between its bid and

the next highest valid bid will discourage cascading defaults, without

penalizing bidders for bidding on more licenses than they are permitted

to hold. Losing bidders, may decline a defaulted license without

penalty if such default occurs more than 30 days after the Commission

releases the initial public notice announcing the winning bidders.

Where a bidder defaults or is disqualified more than 30 days after the

release of the initial public notice announcing the winning bidders the

Commission retains the discretion to either offer the license to the

bidder with the next highest valid bid at its original bid price or re-

auction the license. If the Commission re-auctions the license, new

applications will be accepted and the additional three percent penalty

will apply.

34. Oral sequential auctions. Where oral sequential bidding is

employed, the general procedures described above will be followed with

one exception. Qualified bidders will be required to bring a cashier's

check for the full amount of their upfront payment to the auction site.

Bidders will be required to display their upfront payment check as a

condition of being issued a bidder identification number and admittance

to the bidder section of the auction site. After bidding closes on a

particular license, the high bidder will be asked to tender its upfront

payment and sign a bid confirmation form. If the high bidder declines

to tender the upfront payment and/or refuses to sign the bid

confirmation form, no penalty will be assessed because the license

would be immediately re-auctioned. The only damage from such withdrawal

would be delay. And in an oral sequential auction such delay may be

minimal. The standard default penalty and the additional three percent

penalty will be assessed, however, if the bidder defaults on the 20

percent down payment, fails to pay for the license or is disqualified

after the close of an auction.

Regulatory Safeguards

35. Unjust enrichment provisions. The transfer disclosure

requirements in section 1.2111(a) of our rules, adopted in the Second

Report and Order, will apply to all narrowband PCS licenses obtained

through the competitive bidding process. Generally, applicants

transferring their licenses within three years after the initial

license grant will be required to file, together with their transfer

application, the associated contracts for sale and all other documents

disclosing the total consideration received in return for the transfer

of its license.

36. Performance requirements. The narrowband PCS service rules

contain specific performance requirements, such as the requirement to

construct within a specified period of time. Failure to satisfy these

construction requirements will result in forfeiture of the license.

Therefore, additional performance requirements are not necessary.

37. Rules prohibiting collusion. The rules prohibiting collusion,

adopted in the Second Report and Order, apply to all auctionable

services including narrowband PCS. Bidders will generally be required

to identify on their Form 175 applications all parties with whom they

have arrangements or agreements which relate to the competitive bidding

process. Bidders will also be required to provide certifications that

they have entered into no other agreements. After the short-form

application is filed, and prior to the down payment of a winning bid,

bidders are prohibited from collaborating or discussing the substance

of their bids or bidding strategies with bidders not members of a

bidding consortium previously identified in the short-form application.

38. Winning bidders are required to attach as an exhibit to the

Form 401 application a detailed explanation of the terms, conditions

and parties in any agreement relating to the competitive bidding

process. All such arrangements must have been entered into prior to the

filing of short-form applications. Specific instances of collusion in

the competitive bidding process may result in investigation by the FCC

or referral to the United States Department of Justice for

investigation. Adjudicated violations of our rules or the anti-trust

laws may result in forfeiture of payments, license revocations and

prohibition from participation in future auctions.

Designated Entity Preferences

39. Bidding credits. In this Report and Order, we adopt specific

preferences for narrowband PCS designed to ensure that designated

entities are given the opportunity to participate in the competitive

bidding process and the provision of narrowband PCS services. We will

make a 25 percent bidding credit available to businesses owned by women

and minorities bidding on the following licenses: (1) The nationwide

license on Channel 5, Channel 8 and Channel 11; (2) all regional

licenses on Channel 13 and Channel 17; (3) all MTA licenses on Channel

19, Channel 22, Channel 24; and (4) all BTA licenses on Channel 26.

40. Given the history of under-representation of minorities and

women in telecommunications and the inability of these groups to access

financing, we find that the best way we can accomplish these statutory

mandates is to provide bidding credits exclusively to minority and

female-owned businesses, regardless of their status as small or large

entities. We think that a 25 percent bidding credit is sufficient to

ensure minority and female entry. It is not so substantial, however, as

to foster participation by firms that are not otherwise financially

capable of building-out a narrowband PCS network. We will also monitor

carefully the effectiveness of the 25 percent bidding credit in the

narrowband PCS auctions and continually assess whether it is achieving

the goal of ensuring that minority and women-owned firms participate

successfully in auctions for this service.

41. To prevent unjust enrichment by women and minorities

trafficking in licenses acquired through the use of bidding credits, we

will impose a forfeiture requirement on transfers of such licenses to

entities that are not owned by women or minorities. The penalty

required will be reimbursement to the government for the amount of the

bidding credit, plus interest, before transfer will be permitted. The

amount of the penalty will be reduced over time. To ensure that only

legitimate minority and women-owned firms are able to take advantage of

bidding credits, strict eligibility criteria have been adopted (in the

Second Report and Order). Also, to ensure that our rules are narrowly

tailored while meeting the statutory goal of providing opportunities

for women and minorities to participate in the telecommunications

industry, publicly-traded companies are prohibited from taking

advantage of bidding credits.

42. Tax certificates. Tax certificates will be issued to initial

investors in minority and female-owned enterprises upon divestiture of

their interests, and to licensees who transfer their authorizations to

minority and female-owned businesses. In implementing this program, we

will borrow from our existing tax certificate program and grant tax

certificates, upon request, that will enable the licensees and

investors to defer the gain realized upon a sale either by: (1)

Treating it as an involuntary conversion under 26 U.S.C. 1033, with the

recognition of gain avoided by the acquisition of qualified replacement

property; or (2) electing to reduce the basis of certain depreciable

property, or both.

43. Tax certificates will be available to initial investors who

provide ``start-up'' financing and investors who purchase shares within

the first year after license issuance. To be eligible for a tax

certificate, such investor transactions must not reduce minority or

female ownership or control in the entity below 50.1 percent. To

prevent unjust enrichment, we will impose a one-year holding

requirement on the transfer or assignment of narrowband PCS licenses

obtained thorough the benefit of tax certificates.

44. Installment payments. We adopt installment payments for small

businesses--including small businesses owned by women and minorities

and rural telephone companies that meet the small business definition--

bidding for any of the BTA, MTA or regional narrowband PCS licenses.

These licenses are appropriately sized for development by bona fide

small businesses. We estimate that the cost to build-out these licenses

will be between $50,000 and $1.25 million.

45. The installment payment option will enable all small businesses

to pay the full amount of their winning bid in installments (less the

upfront payment, which must be paid in full, and the down payment, half

of which is due five days after the auction closes and the other half

five days after the application is granted). Generally, interest

charges will be fixed at the time of licensing at a rate equal to the

rate for 10 year U.S. Treasury obligations. Payments of interest only

will be due for the first two years. Principal and interest will be

amortized over the remaining years of the license. Timely payment of

all installments will be a condition of the license grant. If a small

business making installment payments seeks to transfer a license to a

non-small business entity during the term of the license, we will

require payment of the remaining principal balance as a condition of

the license transfer.

Final Regulatory Flexibility Analysis

Need for and Purpose of the Action

46. This rulemaking proceeding was initiated to implement section

309(j) of the Communications Act, as amended. The rules adopted herein

will carry out Congress' intent to establish a system of competitive

bidding for narrowband PCS licenses. The rules adopted herein also will

carry out Congress' intent to ensure that small businesses, rural

telephone companies, and businesses owned by women and minorities are

afforded an opportunity to participate in the provision of spectrum-

based services.

Issues Raised in Response to the Initial Regulatory Flexibility

Analysis

47. The IRFA noted that the proposals under consideration in the

NPRM included the possibility of new reporting and recordkeeping

requirements for a number of small business entities. No commenters

responded specifically to the issues raised in the IRFA. We have made

some modifications to the proposed requirements as appropriate.

Significant Alternatives Considered and Rejected

All significant alternatives have been addressed in the Second

Report and Order.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

List of Subjects

47 CFR Part 0

Organization and functions (Government agencies).

47 CFR Part 24

Communications common carriers, Communications equipment, Radio,

Reporting and recordkeeping requirements.

Amendatory Text

Parts O and 24 of chapter I of title 47 of the Code of Federal

Regulations are amended as follows:

PART O--COMMISSION ORGANIZATION

1. The authority citation for part O continues to read as follows:

Authority: Sec. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155.

2. Section 0.91 is amended by adding a new paragraph (n) to read as

follows:

Sec. 0.91 Functions of the Bureau.

* * * * *

(n) Develops, in coordination with the Office of Plans and Policy,

policies for the selection of licenses from mutually exclusive

applicants in the Common Carrier Service subject to competitive

bidding; issues Public Notices announcing auctions for Common Carrier

Service Licenses; specifies the licenses to be auctioned; the deadlines

for filing short-form applications, filing fees, and submission of

upfront payments; the time and place of the auction; the method of

competitive bidding to be used; competitive bidding procedures

including, but not limited to, designated entity preferences,

applicable bid submission procedures, upfront payment requirements,

activity rules, stopping rules, and bid withdrawal procedures.

PART 24--PERSONAL COMMUNICATIONS SERVICES

3. The authority citation for part 24 is revised to read as

follows:

Authority: 47 U.S.C. 154, 301, 302, 303, 309 and 332, unless

otherwise noted.

4. Section 24.10 is revised to read as follows:

Sec. 24.10 Scope.

This subpart contains some of the procedures and requirements for

filing applications for licenses in the personal communications

services. You should also consult subparts F and G of this part. Other

Commission rule parts of importance that may be referred to with

respect to licensing and operation of radio services governed under

this part include 47 CFR parts 0, 1, 2, 5, 15, 17 and 20.

5. Section 24.129 is revised to read as follows:

Sec. 24.129 Frequencies.

The following frequencies are available for narrowband PCS. All

licenses on channels indicated with an (**) will be eligible for

bidding credits as set forth in section 24.309(b) of this part if

competitive bidding is used to award such licenses.

(a) Eleven frequencies are available for assignment on a nationwide

basis as follows:

(1) Five 50 kHz channels paired with 50 kHz channels:

Channel 1: 940.00-940.05 and 901.00-901.05 MHz;

Channel 2: 940.05-940.10 and 901.05-901.10 MHz;

Channel 3: 940.10-940.15 and 901.10-901.15 MHz;

Channel 4: 940.15-940.20 and 901.15-901.20 MHz; and,

Channel 5: 940.20-940.25 and 901.20-901.25 MHz.**

(2) Three 50 kHz channels paired with 12.5 kHz channels:

Channel 6: 930.40-930.45 and 901.7500-901.7625 MHz;

Channel 7: 930.45-930.50 and 901.7625-901.7750 MHz; and,

Channel 8: 930.50-930.55 and 901.7750-901.7875 MHz.**

(3) Three 50 kHz unpaired channels:

Channel 9: 940.75-940.80 MHz;

Channel 10: 940.80-940.85 MHz; and,

Channel 11: 940.85-940.90 MHz.**

(b) Six frequencies are available for assignment on a regional

basis as follows:

(1) Two 50 kHz channels paired with 50 kHz channels:

Channel 12: 940.25-940.30 and 901.25-901.30 MHz; and,

Channel 13: 940.30-940.35 and 901.30-901.35 MHz.**

(2) Four 50 kHz channels paired with 12.5 kHz channels:

Channel 14: 930.55-930.60 and 901.7875-901.8000 MHz;

Channel 15: 930.60-930.65 and 901.8000-901,8125 MHz;

Channel 16: 930.65-930.70 and 901.8125-901.8250 MHz; and,

Channel 17: 930.70-930.75 and 901.8250-901.8375 MHz.**

(c) Seven frequencies are available for assignment on a MTA basis

as follows:

(1) Two 50 kHz channels paired with 50 kHz channels:

Channel 18: 940.35-940.40 and 901.35-901.40 MHz; and,

Channel 19: 940.40-940.45 and 901.40-901.45 MHz.**

(2) Three 50 kHz channels paired with 12.5 kHz channels:

Channel 20: 930.75-930.80 and 901.8375-901.8500 MHz;

Channel 21: 930.80-930.85 and 901.8500-901.8625 MHz; and,

Channel 22: 930.85-930.90 and 901.8625-901.8750 MHz.**

(3) Two 50 kHz unpaired channels:

Channel 23: 940.90-940.95 MHz; and,

Channel 24: 940.95-941.00 MHz.**

(d) Two 50 kHz channels paired with 12.5 kHz channels are available

for assignment on a BTA basis:

Channel 25: 930.90-930.95 and 901.8750-901.8875 MHz; and,

Channel 26: 930.95-931.00 and 901.8875-901.9000 MHz.**

Note 1: Operations in markets or portions of markets which

border other countries, such as Canada and Mexico, will be subject

to on-going coordination arrangements with neighboring countries.

6. Sections 24.130 (b) and (c) are revised to read as follows

Sec. 24.130 Paging response channels.

* * * * *

(b) The following four 12.5 kHz unpaired channels are available for

assignment on a MTA basis:

Channel A: 901.9000-901.9125 MHz;

Channel B: 901.9125-901.9250 MHz;

Channel C: 901.9250-901.9375 MHz; and,

Channel D: 901.9375-901.9500 MHz.

(c) The following four 12.5 kHz unpaired channels are available for

assignment on a BTA basis.

Channel E: 901.9500-901.9625 MHz;

Channel F: 901.9625-901.9750 MHz;

Channel G: 901.9750-901.9875 MHz; and,

Channel H: 901.9875-902.0000 MHz.

7. Part 24 is amended by adding a new subpart F consisting of

Secs. 23.301 through 24.309 to read as follows:

Subpart F--Competitive Bidding Procedures for Narrowband PCS

Sec.

24.301 Narrowband PCS subject to competitive bidding.

24.302 Competitive bidding design for narrowband PCS licensing.

24.303 Competitive bidding mechanisms.

24.304 Withdrawal, default and disqualification penalties.

24.305 Bidding applications (FCC Form 175 and 175-S Short-Form).

24.306 Submission of upfront payments and downpayments.

24.307 Long-Form applications.

24.308 License grant, denial, default, and disqualification.

24.309 Designated entities.

Subpart F--Competitive Bidding Procedures for Narrowband PCS

Sec. 24.301 Narrowband PCS subject to competitive bidding.

Mutually exclusive initial applications to provide narrowband PCS

service are subject to competitive bidding procedures. The general

competitive bidding procedures found in 47 CFR part 1, subpart Q, will

apply unless otherwise provided in this part.

Sec. 24.302 Competitive bidding design for narrowband PSC licensing.

(a) The Commission will employ the following competitive bidding

designs when choosing from among mutually exclusive initial

applications to provide narrowband PCS service:

(1) Single round sealed bid auctions (either sequential or

simultaneous);

(2) Sequential oral auctions;

(3) Simultaneous multiple round auctions.

(b) The Commission may design and test alternative procedures. The

Commission will announce by Public Notice before each auction the

competitive bidding design to be employed in a particular auction.

(c) The Commission may use combinatorial bidding, which would allow

bidders to submit all or nothing bids on combinations of licenses, in

addition to bids on individual licenses. The Commission may require

that to be declared the high bid, a combinatorial bid must exceed the

sum of the individual bids by a specified amount. Combinatorial bidding

may be used with any type of auction design.

(d) The Commission may use single combined auctions, which combine

bidding for two or more substitutable licenses and award licenses to

the highest bidders until the available licenses are exhausted. This

technique may be used in conjunction with any type of auction.

Sec. 24.303 Competitive bidding mechanisms.

(a) Sequencing. The Commission will establish and may vary the

sequence in which narrowband PCS licenses will be auctioned.

(b) Grouping. In the event the Commission uses either a

simultaneous multiple round competitive bidding design or combinatorial

bidding, the Commission will determine which licenses will be auctioned

simultaneously or in combination.

(c) Reservation Price. The Commission may establish a reservation

price, either disclosed or undisclosed, below which a license subject

to auction will not be awarded.

(d) Minimum Bid Increments. The Commission may, by announcement

before or during an auction, require minimum bid increments in dollar

or percentage terms.

(e) Stopping Rules. The Commission may establish stopping rules

before or during multiple round auctions in order to terminate an

auction within a reasonable time.

(f) Activity Rules. The Commission may establish activity rules

which require a minimum amount of bidding activity. In the event that

the Commission establishes an activity rule in connection with a

simultaneous multiple round auction, each bidder will be entitled to

request and will be automatically granted five (5) waivers of such rule

during the course of a single auction.

Sec. 24.304 Withdrawal, default and disqualification penalties.

(a) When the Commission conducts a simultaneous multiple round

auction pursuant to Sec. 24.302(a)(3), the Commission will impose

penalties on bidders who withdraw high bids during the course of an

auction, or who default on payments due after an auction closes or who

are disqualified.

(1) Bid withdrawal prior to close of auction. A bidder who

withdraws a high bid during the course of an auction will be subject to

a penalty equal to the difference between the amount bid and the amount

of the winning bid the next time the license is offered by the

Commission. No withdrawal penalty would be assessed if the subsequent

winning bid exceeds the withdrawn bid. This penalty amount will be

deducted from any upfront payments or down payments that the

withdrawing bidder has deposited with the Commission.

(2) Default or disqualification after close of auction. If a high

bidder defaults or is disqualified after the close of such an auction,

the defaulting bidder will be subject to the penalty in paragraph

(a)(1) of this section plus an additional penalty equal to three (3)

percent of the subsequent winning bid. If the subsequent winning bid

exceeds the defaulting bidder's bid amount, the 3 percent penalty will

be calculated based on the defaulting bidder's bid amount. These

amounts will be deducted from any upfront payments or down payments

that the defaulting or disqualified bidder has deposited with the

Commission.

(b) When the Commission conducts single round sealed bid auctions

or sequential oral auctions, the Commission may modify the penalties to

be paid in the event of bid withdrawal, default or disqualification;

provided, however, that such penalties shall not exceed the penalties

specified above.

(c) In the case of single round bidding for narrowband PCS

licenses:

(1) If a bid is withdrawn before the Commission releases the

initial public notice announcing the winning bidder(s), no bid

withdrawal penalty will be assessed.

(2) If a bid is withdrawn after the Commission releases the initial

public notice announcing the winning bidder(s), the bid withdrawal

penalty will be equal to the difference between the high bid amount and

the amount of the next highest valid bid. A bid will be considered

valid for this purpose if the bidder has not already been designated

the winning bidder on more licenses than it is permitted to be awarded.

Losing bidders will only be subject to this bid withdrawal penalty for

a period of 30 days after the Commission releases the initial public

notice announcing the winning bidders.

(d) In the case of oral sequential bidding for narrowband PCS

licenses:

(1) If a bid is withdrawn before the Commission has declared the

bidding to be closed for the license bid on, no bid withdrawal penalty

will be assessed.

(2) If a bid is withdrawn after the Commission has declared the

bidding to be closed for the license bid on, the bid withdrawal penalty

of Sec. 1.2104(g) and paragraphs (a) (1) and (2) of this section will

apply.

Sec. 24.305 Bidding application (FCC Form 175 and 175-S Short-Form).

All applicants for initial provision of narrowband PCS service must

submit applications on FCC Forms 175 and 175-S pursuant to the

procedures set forth in Sec. 1.2105 of part 1 of this chapter. The

Commission will issue a public notice announcing the date of a

narrowband PCS auction, the licenses which are to be auctioned, and the

date on or before which applicants intending to participate in an

upcoming narrowband PCS auction must file their applications in order

to be eligible for that auction. The public notice will also contain

information necessary for completion of the application as well as

other important information such as the materials which must accompany

the Forms, any filing fee that must accompany the application or any

upfront payment that will need to be submitted, and the location where

the application must be filed.

Sec. 24.306 Submission of upfront payments and down payments.

(a) Where the Commission uses simultaneous multiple round auctions

or oral sequential auctions bidders will be required to submit an

upfront payment pursuant to the procedures set forth in Sec. 1.2106 of

this chapter.

(b) Winning bidders in an auction must submit a down payment to the

Commission in accordance with the procedures set forth in Sec. 1.2107

(a) and (b) of this chapter.

Sec. 24.307 Long-Form applications.

Winning bidders will be required to submit long form applications

on FCC Form 401, as modified, within ten (10) business days after being

notified that they are the winning bidder. Applications on FCC Form 401

shall be submitted pursuant to the procedures set forth in subpart G of

this part and Sec. 1.2107 (c) and (d) of this chapter and any

associated public notices. Only auction winners will be eligible to

file applications on FCC Form 401 for initial narrowband PCS licenses

in the event of mutual exclusivity between applicants filing Form 175.

Winning bidders need not complete Schedule B to Form 401.

Sec. 24.308 License grant, denial, default, and disqualification.

(a) Winning Bidders are required to pay the balance of their

winning bid in a lump sum payment within five (5) business days

following the award of the license. Grant of the license will be

conditioned upon full and timely payment of the winning bid amount.

(b) A bidder who withdraws its bid, defaults on a payment or is

disqualified will be subject to the penalties specified in Sec. 1.2109

of this chapter.

Sec. 24.309 Designated entities.

Designated entities entitled to preferences in the narrowband PCS

service are small businesses and businesses owned by members of

minority groups and/or women as defined in Sec. 1.2110(b) of this

chapter.

(a) Installment payments. Small businesses, including small

businesses owned by women and/or minorities, will be eligible to pay

the full amount of their winning bid on any regional, MTA or BTA

license in installments over the term of the license pursuant to the

terms set forth in Sec. 1.2110(d) of this chapter.

(b) Bidding credits. Businesses owned by women and/or minorities,

including small businesses owned by women and/or minorities will be

eligible for a twenty-five percent (25) bidding credit when bidding on

the following licenses:

(1) The nationwide licenses on Channel 5, Channel 8 and Channel 11;

(2) All regional licenses on Channel 13 and Channel 17;

(3) All MTA licenses on Channel 19, Channel 22, Channel 24; and

(4) All BTA licenses on Channel 26. See 47 CFR 24.129.

The bidding credit will reduce by 25 percent the bid price that

businesses owned by women and/or minorities will be required to pay to

obtain a license. The licenses that will be eligible for bidding

credits are indicated by an (**) in Sec. 24.129.

(c) Tax certificates. Any initial investor in a business owned by

minorities and/or women and who provides ``start-up'' financing, which

allows such business to acquire a narrowband PCS license(s), and any

investor who purchases an ownership interest in a narrowband PCS

licensee owned by minorities and/or women within the first year after

license issuance, which allows for the stabilization of the entity's

capital base, may, upon the sale of such investment or interest,

request from the Commission a tax certificate, so long as such investor

transaction does not reduce minority or female ownership or control in

the entity below 50.1 percent. Any narrowband PCS licensee who assigns

or transfers control of its license to a business owned by minorities

and/or women may request that the Commission issue it a tax

certificate.

(d) Unjust enrichment. Designated entities using installment

payments, bidding credits or tax certificates to obtain a narrowband

PCS license will be subject to the following unjust enrichment

provisions:

(1) If a small business paying for a narrowband PCS license in

installment payments seeks to transfer a license to a non-small

business entity during the term of the license, the remaining principal

balance must be repaid as a condition of the license transfer.

(2) Female and minority-owned businesses seeking to transfer a

license to an entity that is not owned by women or minorities will be

required to reimburse the government for the amount of the bidding

credit, plus interest at the rate imposed for installment financing at

the time the license was awarded, before transfer will be permitted.

The amount of this penalty will be reduced over time as follows: a

transfer in the first two years of the license term will result in a

forfeiture of 100 percent of the value of the bidding credit; in year

three of the licenses term the penalty will be 75 percent; in year four

the penalty will be 50 percent and in year five the penalty will be 25

percent, after which there will be no penalty.

(3) Any business owned by minorities and or women that obtains a

narrowband PCS license through the benefit of tax certificates shall

not assign or transfer control of its license within one year of its

license grant date. If the assignee or transferee is a business owned

by minorities and or women, this paragraph shall not apply; Provided,

however, that the assignee or transferee shall not assign or transfer

control of the license within one year of the grant date of the

assignment or transfer.

8. Part 24 is amended by adding a new subpart G consisting of

Secs. 24.403 through 24.444 to read as follows:

Subpart G--Interim Application, Licensing and Processing Rules for

Narrowband PCS

Sec.

24.403 Authorization required.

24.404 Eligibility.

24.405 Formal and informal applications.

24.406 Filing of Narrowband PCS applications, fees, and numbers of

copies.

24.407-24.408 [Reserved]

24.409 Standard Application forms and permissive changes or minor

modifications for the narrowband Personal Communications Service.

24.411 Miscellaneous forms.

24.412 [Reserved]

24.413 General application requirements.

24.414 [Reserved]

24.415 Technical content of applications; maintenance of list of

station locations.

24.416 Station Antenna Structures.

24.417-24.418 [Reserved]

24.419 Waiver of rules.

24.420 Defective applications.

24.421 Inconsistent or conflicting applications.

24.422 Amendment of application for Narrowband Personal

Communications Service filed on FCC Form 175.

24.423 Amendment of applications for Narrowband Personal

Communications Service (other than applications filed on FCC Form

175). This section applies to all applications for Narrowband

Personal Communications Service other than applications filed on FCC

Form 175.

24.424 [Reserved]

24.425 Application for temporary authorizations.

24.426 Receipt of application; applications in the narrowband

Personal Communications Services filed on FCC Form 175 and other

applications in the narrowband PCS Service.

24.427 Public notice period.

24.428 Dismissal and return of applications.

24.429 Ownership changes and agreements to amend to dismiss

applications or pleadings.

24.430 Opposition to applications.

24.431 Mutually exclusive applications.

24.432 Consideration of applications.

24.433-24.438 [Reserved]

24.439 Transfer of control or assignment of station authorization.

24.440-24.442 [Reserved]

24.443 Extension of time to complete construction.

24.444 Termination of authorization.

SUBPART G--INTERIM APPLICATION, LICENSING AND PROCESSING RULES FOR

NARROWBAND PCS

Sec. 24.403 Authorization required.

No person shall use or operate any device for the transmission of

energy or communications by radio in the services authorized by this

part except as provided in this part.

Sec. 24.404 Eligibility.

(a) General. Authorizations will be granted upon proper application

if:

(1) The applicant is qualified under the applicable laws and the

regulations, policies and decisions issued under the laws, including

Sec. 24.101 and 24.12;

(2) There are frequencies available to provide satisfactory

service; and

(3) The public interest, convenience or necessity would be served

by a grant.

(b) Alien ownership.

A narrowband PCS authorization to provide Commercial Mobile Radio

Service may not be granted to or held by:

(1) Any alien or the representative of any alien.

(2) Any corporation organized under the laws of any foreign

government.

(3) Any corporation of which any officer or director is an alien or

of which more than one-fifth of the capital stock is owned of record or

voted by aliens or their representatives or by a foreign government or

representative thereof or any corporation organized under the laws of a

foreign country.

(4) Any corporation directly or indirectly controlled by any other

corporation of which any officer or more than one-fourth of the

directors are aliens, or of which more than one-fourth of the capital

stock is owned of record or voted by aliens, their representatives, or

by a foreign government or representative thereof, or by any

corporation organized under the laws of a foreign country, if the

Commission finds that the public interest will be served by the refusal

or revocation of such license. A Narrowband PCS authorization to

provide Private Mobile Radio Service may not be granted to or held by a

foreign government or a representative thereof.

Sec. 24.405 Formal and informal applications.

(1) Except for an authorization under any of the conditions stated

in section 308(a) of the Communications Act of 1934 (47 U.S.C. 308(a)),

the Commission may grant only upon written application received by it,

the following authorization: Station licenses; modifications of

licenses; renewals of licenses; transfers and assignments of station

licenses, or any right thereunder.

(b) Except as may be otherwise permitted by this part, a separate

written application shall be filed for each instrument of authorization

requested. Applications may be:

(1) ``Formal applications'' where the Commission has prescribed in

this Part a standard form; or

(2) ``Informal applications'' (normally in letter form) where the

Commission has not prescribed a standard form.

(c) An informal application will be accepted for filing only if:

(1) A standard form is not prescribed or clearly applicable to the

authorization requested;

(2) It is a document submitted, in duplicate, with a caption which

indicates clearly the nature of the request, radio service involved,

location of the station, and the application file number (if known);

and

(3) It contains all the technical details and informational

showings required by the rules and states clearly and completely the

facts involved and authorization desired.

Sec. 24.406 Filing of Narrowband PCS applications, fees, and numbers

of copies.

(a) As prescribed by Secs. 24.305, 24.307, and 24.409 of this part,

standard formal application forms applicable to the narrowband PCS may

be obtained from either:

(1) Federal Communications Commission, Washington, DC 20554; or

(2) By calling the Commission's Forms Distribution Center, (202)

632-3676.

(b) Applications for the initial provision of narrowband PCS

service must be filed on FCC Form 175 in accordance with the rules in

Sec. 24.305 and 47 CFR part 1, subpart Q. In the event of mutual

exclusivity between applicants filing FCC Form 175, only auction

winners will be eligible to file subsequent long form applications on

FCC Form 401 for initial narrowband PCS licenses. Mutually exclusive

applications filed on Form 175 are subject to competitive bidding under

those rules. Narrowband PCS applicants filing Form 401 need not

complete Schedule B.

(c) All applications for Narrowband PCS radio station

authorizations (other than applications for initial provision of

narrowband PCS service filed on FCC Form 175) shall be submitted for

filing to: Federal Communications Commission, Washington, DC 20554,

Attention: Narrowband PCS Processing Section. Applications requiring

fees as set forth at part 1, subpart G of this chapter must be filed in

accordance with Sec. 0.401(b).

(d) All correspondence or amendments concerning a submitted

application shall clearly identify the name of the applicant, applicant

identification number or Commission file number (if known) or station

call sign of the application involved, and may be sent directly to the

Common Carrier Bureau, Narrowband PCS Processing Station.

(e) Except as otherwise specified, all applications, amendments,

correspondence, pleadings and forms (including FCC Form 175) shall be

submitted on one original paper copy and with three microfiche copies,

including exhibits and attachments thereto, and shall be signed as

prescribed by Sec. 1.743. Filings of five pages or less are exempt from

the requirement to submit on microfiche, as well as emergency filings

like letters requesting special temporary authority. Those filing any

amendments, correspondence, pleadings, and forms must simultaneously

submit the original hard copy which must be stamped ``original''. In

addition to the original hard copy, those filing pleadings, including

pleadings under 47 CFR 1.2108 shall also submit 2 paper copies as

provided in 47 CFR 1.51.

(1) Microfiche copies. Each microfiche copy must be a copy of the

signed original. Each microfiche copy shall be a 148 mm x 105 mm

negative (clear transparent characters appearing on an opaque

background) at 24X to 27X reduction for microfiche or microfiche

jackets. One of the microfiche sets must be a silver halide camera

master or a copy made on silver halide film such as Kodak Direct

Duplicatory Film. The microfiche must be placed in paper microfiche

envelopes and submitted in a B6 (125 mm x 176 mm) or 5 x 7.5 inch

envelope. All applicants must leave Row ``A'' (the first row for page

images) of the first fiche blank for in-house identification purposes.

(2) All applications and all amendments must have the following

information printed on the mailing envelope, the microfiche envelope,

and on the title area at the top of the microfiche:

(i) The name of the applicant;

(ii) The type of application (e.g., nationwide, regional, MTA, BTA,

response channel);

(iii) The month and year of the document;

(iv) Name of the document;

(v) File number, applicant identification number, and call sign, if

assigned; and

(vi) The identification number and date of the Public Notice

announcing the auction in response to which the application was filed

(if applicable).

Each microfiche copy of pleadings shall include:

(A) The month and year of the document;

(B) Name of the document;

(C) Name of the filing party;

(D) File number, applicant identification number, and call sign, if

assigned;

(E) The identification number and date of the Public Notice

announcing the auction in response to which the application was filed

(if applicable). Abbreviations may be used if they are easily

understood.

Secs. 24.407-24.408 [Reserved].

Sec. 24.409 Standard application forms and permissive changes or minor

modifications for the narrowband Personal Communications Service.

(a) Applications for the initial provision of narrowband PCS

service must be filed on FCC Forms 175 and 175-S.

(b) Subsequent application by auction winners or non-mutually

exclusive applicants for narrowband PCS radio station(s) under part 24.

FCC Form 401 (``Application for New or Modified Common Carrier Radio

Station Under part 22'') shall be submitted by each auction winner for

each narrowband PCS license applied for on FCC Form 175. In the event

that mutual exclusivity does not exist between applicants filing FCC

Form 175, the Commission will so inform the applicant and the applicant

will also file FCC Form 401. Blanket licenses are granted for each

market frequency block. Applications for individual sites are not

needed and will not be accepted. See Sec. 24.11. Narrowband PCS

applicants filing Form 401 need not complete Schedule B.

(c) Extensions of time and reinstatement. When a licensee cannot

complete construction in accordance with the provisions of Sec. 24.103,

a timely application for extension of time (FCC Form 489) must be

filed.

(d) License for mobile subscriber station--These stations are

considered to be associated with and covered by the authorization

issued to the carrier serving the land mobile station. No additional

authorization is required.

Sec. 24.410 [Reserved].

Sec. 24.411 Miscellaneous forms.

(a) Licensee qualifications. FCC Form 430 (``Common Carrier and

Satellite Radio Licensee Qualifications Report'') shall be filed by

Narrowband Personal Communications Service licensees only as required

by Form 490 (Application for Assignment or Transfer of Control Under

part 22).

(b) Renewal of station license. Except for renewal of special

temporary authorizations, FCC Form 405 (``Application for Renewal of

Station License'') must be filed in duplicate by the licensee between

thirty (30) and sixty (60) days prior to the expiration date of the

license sought to be renewed.

Sec. 24.412 [Reserved].

Sec. 24.413 General application requirements.

(a) Each application (including applications filed on Forms 175 and

401) for a radio station authorization or for consent to assignment or

transfer of control in the narrowband PCS shall disclose fully the real

party or parties in interest and must include the following

information:

(1) A list of its subsidiaries, if any. Subsidiary means any

business five per cent or more whose stock, warrants, options or debt

securities are owned by the applicant or an officer, director,

stockholder or key management personnel of the applicant. This list

must include a description of each subsidiary's principal business and

a description of each subsidiary's relationship to the applicant.

(2) A list of its affiliates, if any. Affiliates means any business

which holds a five per cent or more interest in the applicant, or any

business in which a five per cent or more interest is held by another

company which holds a five per cent interest in the applicant (e.g.

Company A owns 5% of Company B and 5% of Company C; Companies B and C

are affiliates).

(3) A list of the names, addresses, citizenship and principal

business of any person holding five per cent or more of each class of

stock, warrants, options or debt securities together with the amount

and percentage held, and the name, address, citizenship and principal

place of business of any person on whose account, if other than the

holder, such interest is held. If any of these persons are related by

blood or marriage, include such relationship in the statement.

(4) In the case of partnerships, the name and address of each

partner, each partner's citizenship and the share or interest

participation in the partnership. This information must be provided for

all partners, regardless of their respective ownership interests in the

partnership. A signed and dated copy of the partnership agreement must

be included in the application. This information must be included in

Exhibit V of the application.

(b) Each application for a radio station authorization in the

narrowband PCS must:

(1) Submit the information required by the Commission's rules,

requests, and application forms;

(2) Be maintained by the applicant substantially accurate and

complete in all significant respects in accordance with the provisions

of Sec. 1.65 of this chapter; and

(3) Show compliance with and make all special showings that may be

applicable.

(c) Where documents, exhibits, or other lengthy showings already on

file with the Commission contain information which is required by an

application form, the application may specifically refer to such

information, if:

(1) The information previously filed is over one A4 (21 cm x 29.7

cm) or 8.5 x 11 inch (21.6 cm x 27.9 cm) page in length, and all

information referenced therein is current and accurate in all

significant respects under Sec. 1.65 of this chapter; and

(2) The reference states specifically where the previously filed

information can actually be found, including mention of:

(i) the station call sign or application file number whenever the

reference is to station files or previously filed applications;

(ii) The title of the proceeding, the docket number, and any legal

citations, whenever the reference is to a docketed proceeding. However,

questions on an application form which call for specific technical

data, or which can be answered by a ``yes'' or ``no'' or other short

answer shall be answered as appropriate and shall not be cross-

referenced to a previous filing.

(d) In addition to the general application requirements of subpart

F and Secs. 1.2105, 24.413 and 24.415 of this part, applicants shall

submit any additional documents, exhibits, or signed written statements

of fact:

(1) As may be required by these rules; and

(2) As the Commission, at any time after the filing of an

application and during the term of any authorization, may require from

any applicant, permittee, or licensee to enable it to determine whether

a radio authorization should be granted, denied, or revoked.

(e) Except when the Commission has declared explicitly to the

contrary, an informational requirement does not in itself imply the

processing treatment of decisional weight to be accorded the response.

(f) All applicants (except applicants filing FCC Form 175) are

required to indicate at the time their application is filed whether or

not a Commission grant of the application may have a significant

environmental impact as defined by 47 CFR 1.1307. If answered

affirmatively, the requisite environmental assessment as prescribed in

Sec. 1.1311 of this chapter must be filed with the application and

Commission environmental review must be completed prior to

construction. See Sec. 1.1312 of this chapter. All narrowband PCS

licensees are subject to a continuing obligation to determine whether

subsequent construction may have a significant environmental impact

prior to undertaking such construction and to otherwise comply with

Secs. 1.1301 through 1.1319 of this chapter. See 47 CFR 1.1312.

Sec. 24.414 [Reserved].

Sec. 24.415 Technical content of applications; maintenance of list of

station locations.

(a) All applications required by this part shall contain all

technical information required by the application forms or associated

public notice(s). Applications other than initial applications for a

narrowband PCS license must also comply with all technical requirements

of the rules governing the narrowband PCS (see subparts C and D as

appropriate). The following paragraphs describe a number of general

technical requirements.

(b) Each application (except applications for initial licenses

filed on Form 175) for a radio station authorization for narrowband PCS

must comply with the provisions of Secs. 24.129 through 24.135.

(c)--(i) [Reserved]

(i) The location of the transmitting antenna shall be considered to

be the station location. Narrowband PCS licensees must maintain a

current list of all station locations, which must describe the

transmitting antenna site by its geographical coordinates and also by

conventional reference to street number, landmark, or the equivalent.

All such coordinates shall be specified in terms of degrees, minutes,

and seconds to the nearest second of latitude and longitude.

Sec. 24.416 Station antenna structures.

(a) Unless the narrowband PCS licensee has received prior approval

from the FCC, no antenna structure, including radiating elements,

tower, supports and all appurtenances, may be higher than 61 m (200

feet) above ground level at its site.

(b) Unless the narrowband PCS licensee has received prior approval

from the FCC, no antenna structure at an airport or heliport that is

available for public use and is listed in the Airport Directory of the

current Airman's Information Manual or in either the Alaska or Pacific

Airman's Guide and Chart Supplement; or at an airport or heliport under

construction that is the subject of a notice or proposal on file with

the FAA, and except for military airports, it is clearly indicated that

the airport will be available for public use; or at an airport or

heliport that is operated by the armed forces of the United States; or

a place near any of these airports or heliports, may be higher than:

(1) 1 m above the airport elevation for each 100 m from the airport

runway longer than 1 km within 6.1 km of the antenna structure.

(2) 2 m above the airport elevation for each 100 m from the nearest

runway shorter than 1 km within 3.1 km of the antenna structure.

(3) 4 m above the airport elevation for each 100 m from the nearest

landing pad within 1.5 km of the antenna structure.

(c) A narrowband PCS station antenna structure no higher than 6.1 m

(10 feet) above ground level at its site or no higher than 6.1 m above

any natural object or existing manmade structure, other than an antenna

structure, is exempt from the requirements of paragraphs (a) and (b) of

this section.

(d) Further details as to whether an aeronautical study and/or

obstruction marking and lighting may be required, and specifications

for obstruction marking and lighting are contained in part 17 of the

FCC Rules, Construction, Marking and Lighting of Antenna Structures. To

request approval to place an antenna structure higher than the limits

specified in paragraphs (a), (b), and (c) of this section, the licensee

must notify the Federal Aviation Administration (FAA) on FAA Form 7460-

1 and the FCC on FCC Form 854.

Secs. 24.417-24.418 [Reserved]

Sec. 24.419 Waiver of rules.

(a) Request for waivers. (1) Waivers of these rules may be granted

upon application or by the Commission on its own motion. Requests for

waivers shall contain a statement of reasons sufficient to justify a

waiver. Waivers will not be granted except upon an affirmative showing:

(i) That the underlying purpose of the rule will not be served, or

would be frustrated, by the application in a particular case, and that

grant of the waiver is otherwise in the public interest; or

(ii) That the unique facts and circumstances of a particular case

render application of the rule inequitable, unduly burdensome or

otherwise contrary to the public interest. Applicants must also show

the lack of a reasonable alternative.

(2) If the information necessary to support a waiver request is

already on file, the applicant may cross-reference to the specific

filing where it may be found.

(b) Denial of waiver, alternate showing required. If a waiver is

not granted, the application will be dismissed as defective unless the

applicant has also provided an alternative proposal which complies with

the Commission's rules (including any required showings).

Sec. 24.420 Defective applications.

(a) Unless the Commission shall otherwise permit, an application

will be unacceptable for filing and will be returned to the applicant

with a brief statement as to the omissions or discrepancies if:

(1) The application is defective with respect to completeness of

answers to questions, informational showings, execution, or other

matters of a formal character; or

(2) The application does not comply with the Commission's rules,

regulations, specific requirements for additional information or other

requirements. See also 47 CFR 1.2105.

(b) Some examples of common deficiencies which result in defective

applications under paragraph (a) of this section are:

(1) The application is not filled out completely and signed;

(2)-(4) [Reserved]

(5) The application (other than an application filed on FCC Form

175) does not include an environmental assessment as required for an

action that may have a significant impact upon the environment, as

defined in Sec. 1.1307 of this chapter.

(6) [Reserved]

(7) The application is filed prior to the Public Notice issued

under Sec. 24.305 announcing the application filing date for the

relevant auction or after the cutoff date prescribed in that public

notice;

(c) [Reserved]

(d) If an applicant is requested by the Commission to file any

documents or any supplementary or explanatory information not

specifically required in the prescribed application form, a failure to

comply with such request within a specified time period will be deemed

to render the application defective and will subject it to dismissal.

Sec. 24.421 Inconsistent or conflicting applications.

While an application is pending and undecided, no subsequent

inconsistent or conflicting application may be filed by the same

applicant, his successor or assignee, or on behalf or for the benefit

of the same applicant, his successor or assignee.

Sec. 24.422 Amendment of application for Narrowband Personal

Communications Service filed on FCC Form 175.

(a) The Commission will provide bidders a limited opportunity to

cure defects in FCC Form 175 specified herein except for failure to

sign the application and to make certifications, defects which may not

be cured. See also 47 CFR 1.2105.

(b) In the Narrowband PCS, the only amendments to FCC Form 175

which will be permitted are minor amendments to correct minor errors or

defects such as typographical errors. All other amendments to FCC Form

175, such as ownership changes or changes in the identification of

parties to bidding consortia, will be considered to be major

amendments. An FCC Form 175 which is amended by a major amendment will

be considered to be newly filed and cannot be resubmitted after

applicable filing deadlines. See also Sec. 1.2105.

Sec. 24.423 Amendment of applications for Narrowband Personal

Communications Service (other than applications filed on FCC Form 175).

This section applies to all applications for Narrowband Personal

Communications Service other than applications filed on FCC Form 175.

(a) Amendments as of right. A pending application may be amended as

a matter of right if the application has not been designated for

hearing.

(1) Amendments shall comply with Sec. 24.429, as applicable; and

(2) Amendments which resolve interference conflicts or amendments

under Sec. 24.429 may be filed at any time.

(b) The Commission or the presiding officer may grant requests to

amend an application designated for hearing only if a written petition

demonstrating good cause is submitted and properly served upon the

parties of record.

(c) Major amendments, minor amendments. The Commission will

classify all amendments as minor except in the cases listed below. An

amendment shall be deemed to be a major amendment subject to

Sec. 24.427 under any of the following circumstances:

(1) Change in technical proposal. If the amendment results in a

substantial change in the engineering proposal such as (but not

necessarily limited to) a change in, or an addition of, a radio

frequency; or

(2) Amendment to proposed service area. If the amendment extends

the reliable service area of the proposed facilities outside its MTA,

BTA, or other applicable market area as defined in Sec. 24.102; or

(3) A substantial change in ownership or control.

(d) If a petition to deny (or other formal objection) has been

filed, any amendment, requests for waiver, (or other written

communications) shall be served on the petitioner, unless waiver of

this requirement is granted pursuant to paragraph (e) of this section.

See also 47 CFR 1.2108.

(e) The Commission may waive the service requirements of paragraph

(d) of this section and prescribe such alternative procedures as may be

appropriate under the circumstances to protect petitioners' interests

and to avoid undue delay in a proceeding, if an applicant submits a

request for waiver which demonstrates that the service requirement is

unreasonably burdensome.

(f) Any amendment to an application shall be signed and shall be

submitted in the same manner, and with the same number of copies, as

was the original application. Amendments may be made in letter form if

they comply in all other respects with the requirements of this

chapter.

(g) An application will be considered to be a newly filed

application if it is amended by a major amendment (as defined in this

section), except in the following circumstances:

(1)-(2) [Reserved]

(3) The amendment reflects only a change in ownership or control

found by the Commission to be in the public interest;

(4) [Reserved]

(5) The amendment corrects typographical transcription, or similar

clerical errors which are clearly demonstrated to be mistakes by

reference to other parts of the application, and whose discovery does

not create new or increased frequency conflicts;

(6) The amendment does not create new or increased frequency

conflicts, and is demonstrably necessitated by events which the

applicant could not have reasonably foreseen at the time of filing,

such as, for example:

(i) The loss of a transmitter or receiver site by condemnation,

natural causes, or loss of lease or option; or

(ii) Obstruction of a proposed transmission path caused by the

erection of a new building or other structure.

Sec. 24.424 [Reserved].

Sec. 24.425 Application for temporary authorizations.

(a) In circumstances requiring immediate or temporary use of

facilities, request may be made for special temporary authority to

install and/or operate new or modified equipment. Any such request may

be submitted as an informal application in the manner set forth in

Sec. 24.5 and must contain full particulars as to the proposed

operation including all facts sufficient to justify the temporary

authority sought and the public interest therein. No such request will

be considered unless the request is received by the Commission at least

10 days prior to the date of proposed construction or operation or,

where an extension is sought, expiration date of the existing temporary

authorization. A request received within less than 10 days may be

accepted upon due showing of sufficient reasons for the delay in

submitting such request.

(b) Special temporary authorizations may be granted without regard

to the 30-day public notice requirements of Sec. 24.27(b) when:

(1) The authorization is for a period not to exceed 30 days and no

application for regular application is contemplated to be filed;

(2) The authorization is for a period not to exceed 60 days pending

the filing of an application for such regular operation;

(3) The authorization is to permit interim operation to facilitate

completion of authorized construction or to provide substantially the

same service as previously authorized; or

(4) The authorization is made upon a finding that there are

extraordinary circumstances requiring operation in the public interest

and that delay in the institution of such service would seriously

prejudice the public interest.

(c) Temporary authorizations of operation not to exceed 180 days

may be granted under the standards of section 309(f) of the

Communications Act where extraordinary circumstances so require.

Extensions of the temporary authorization for a period of 180 days each

may also be granted, but the renewal applicant bears a heavy burden to

show that extraordinary circumstances warrant such an extension.

(d) In cases of emergency found by the Commission, involving danger

to life or property or due to damage of equipment, or during a national

emergency proclaimed by the President or declared by the Congress or

during the continuance of any war in which the United States is engaged

and when such action is necessary for the national defense or safety or

otherwise in furtherance of the war effort, or in cases of emergency

where the Commission finds that it would not be feasible to secure

renewal applications from existing licensees or otherwise to follow

normal licensing procedure, the Commission will grant radio station

authorizations and station licenses, or modifications or renewals

thereof, during the emergency found by the Commission or during the

continuance of any such national emergency or war, as special temporary

licenses, only for the period of emergency or war requiring such

action, without the filing of formal applications.

Sec. 24.426 Receipt of application; applications in the narrowband

Personal Communications Services filed on FCC Form 175 and other

applications in the narrowband PCS Service.

(a) All applications for the initial provision of narrowband PCS

service must be submitted on FCC Forms 175 and 175-S. Mutually

exclusive initial applications in the narrowband Personal

Communications Services are subject to competitive bidding. FCC Form

401 (``Application for New or Modified Common Carrier Radio Station

Under Part 22'') must be submitted by each winning bidder for each

narrowband PCS license applied for on FCC Form 175. In the event that

mutual exclusivity does not exist between applicants filing FCC Form

175, the applicant will also file FCC Form 401. The aforementioned

Forms 175, 175-S, and 401 are subject to the provisions of 47 CFR part

1, subpart Q (``Competitive Bidding Proceedings'') and subpart F of

this part. Blanket licenses are granted for each market frequency

block. Applications for individual sites are not needed and will not be

accepted. See Sec. 24.11.

(b) Applications received for filing are given a file number. The

assignment of a file number to an application is merely for

administrative convenience and does not indicate the acceptance of the

application for filing and processing. Such assignment of a file number

will not preclude the subsequent return or dismissal of the application

if it is found to be not in accordance with the Commission's rules.

(c) Acceptance of an application for filing merely means that it

has been the subject of a preliminary review as to completeness. Such

acceptance will not preclude the subsequent return or dismissal of the

application if it is found to be defective or not in accordance with

the Commission's rules. (See Sec. 24.413 for additional information

concerning filing of applications.)

Sec. 24.427 Public notice period.

(a) At regular intervals, the Commission will issue a public notice

listing:

(1) The acceptance for filing of all applications and major

amendments thereto;

(2) Significant Commission actions concerning applications listed

as acceptable for filing;

(3) Information which the Commission in its discretion believes of

public significance. Such notices are solely for the purpose of

informing the public and do not create any rights in an applicant or

any other person;

(4) Special environmental considerations as required by part 1 of

this chapter.

(b)(1) The Commission will not grant any application until

expiration of a period of thirty (30) days following the issuance date

of a public notice listing the application, or any major amendments

thereto, as acceptable for filing. Provided, that the Commission will

not grant an application filed on Form 401 filed either by a winning

bidder or by an applicant whose Form 175 application is not mutually

exclusive with other applicants, until the expiration of a period of

forty (40) days following the issuance of a public notice listing the

application, or any major amendments thereto, as acceptable for filing.

See also 47 CFR 1.2108.

(c) As an exception to paragraphs (a)(1), (a)(2) and (b) of this

section, the public notice provisions are not applicable to

applications:

(1) For authorization of a minor technical change in the facilities

of an authorized station where such a change would not be classified as

a major amendment (as defined by Sec. 24.423) were such a change to be

submitted as an amendment to a pending application;

(2) For issuance of a license subsequent to a radio station

authorization or, pending application for a grant of such license, any

special or temporary authorization to permit interim operation to

facilitate completion of authorized construction or to provide

substantially the same service as would be authorized by such license;

(3) For extension of time to complete construction of authorized

facilities, see Sec. 24.103;

(4) For temporary authorization pursuant to Sec. 24.425(b);

(5) [Reserved]

(6) For an authorization under any of the proviso clauses of

section 308(a) of the Communications Act of 1934 (47 U.S.C. 308(a));

(7) For consent to an involuntary assignment or transfer of control

of a radio authorization; or

(8) For consent to a voluntary assignment or transfer of control of

a radio authorization, where the assignment or transfer does not

involve a substantial change in ownership or control.

Sec. 24.428 Dismissal and return of applications.

(a) Except as provided under Sec. 24.429, any application may be

dismissed without prejudice as a matter of right if the applicant

requests its dismissal prior to designation for hearing or, in the case

of applications filed on Forms 175 and 175-S, prior to auction. An

applicant's request for the return of his application after it has been

accepted for filing will be considered to be a request for dismissal

without prejudice. Applicants requesting dismissal of their

applications are also subject to 47 CFR 1.2104. Requests for dismissal

shall comply with the provisions of Sec. 24.429 as appropriate.

(b) A request to dismiss an application without prejudice will be

considered after designation for hearing only if:

(1) A written petition is submitted to the Commission and is

properly served upon all parties of record, and

(2) The petition complies with the provisions of Sec. 24.429

(whenever applicable) and demonstrates good cause.

(c) The Commission will dismiss an application for failure to

prosecute or for failure to respond substantially within a specified

time period to official correspondence or requests for additional

information. Dismissal shall be without prejudice if made prior to

designation for hearing or prior to auction, but dismissal may be made

with prejudice for unsatisfactory compliance with Sec. 24.429 or after

designation for hearing or after the applicant is notified that it is

the winning bidder under the auction process.

Sec. 24.429 Ownership changes and agreements to amend or to dismiss

applications or pleadings.

(a) Applicability. Subject to the provisions of 47 CFR 1.2105

(Bidding Application and Certification Procedures; Prohibition of

Collusion), this section applies to applicants and all other parties

interested in pending applications who wish to resolve contested

matters among themselves with a formal or an informal agreement or

understanding. This section applies only when the agreement or

understanding will result in:

(1) A major change in the ownership of an applicant to which

Secs. 24.423 and 24.423(g) apply or which would cause the applicant to

lose its status as a designated entity under Sec. 24.309, or

(2) The individual or mutual withdrawal, amendment or dismissal of

any pending application, amendment, petitioner or other pleading.

(b) Policy. Parties to contested proceedings are encouraged to

settle their disputes among themselves. Parties which, under a

settlement agreement, apply to the Commission for ownership changes or

for the amendment or dismissal of either pleadings or applications,

shall at the time of filing notify the Commission that such filing is

the result of an agreement or understanding.

(c) If the amendment would, if granted, cause the applicant to lose

its status as a designated entity under Sec. 24.309, the applicant must

comply with the obligations imposed by Sec. 24.309 (Designated

Entities) and Sec. 1.2111 (Assignment of transfer of control; unjust

enrichment) before the amendment will be granted.

(d) The provisions of 47 CFR 22.927 will apply in the event of the

individual or mutual withdrawal, amendment or dismissal of any pending

application, amendment, petitioner or other pleading.

Sec. 24.430 Opposition to applications.

(a) Petitions to deny (including petitions for other forms of

relief) and responsive pleadings for Commission consideration must

comply with Section 1.2108 and must:

(1) Identify the application or applications (including applicant's

name, station location, Commission file numbers and radio service

involved) with which it is concerned;

(2) Be filed in accordance with the pleading limitations, filing

periods, and other applicable provisions of 47 CFR 1.41 through 1.52

except where otherwise provided in 47 CFR 1.2108;

(3) Contain specific allegations of fact which, except for facts of

which official notice may be taken, shall be supported by affidavit of

a person or persons with personal knowledge thereof, and which shall be

sufficient to demonstrate that the petitioner (or respondent) is a

party in interest and that a grant of, or other Commission action

regarding, the application would be prima facie inconsistent with the

public interest;

(4) Be filed within thirty (30) days after the date of public

notice announcing the acceptance for filing of any such application or

major amendment thereto (unless the Commission otherwise extends the

filing deadline); and

(5) Contain a certificate of service showing that it has been

mailed to the applicant no later than the date of filing thereof with

the Commission.

(b) A petition to deny a major amendment to a previously filed

application may only raise matters directly related to the amendment

which could not have been raised in connection with the underlying,

previously filed application. This does not apply to petitioners who

gain standing because of the major amendment.

Sec. 24.431 Mutually exclusive applications.

(a) The Commission will consider applications to be mutually

exclusive if their conflicts are such that the grant of one application

would effectively preclude by reason of harmful electrical

interference, or other practical reason, the grant of one or more of

the other applications. The Commission will presume ``harmful

electrical interference'' to mean interference which would result in a

material impairment to service rendered to the public despite full

cooperation in good faith by all applicants or parties to achieve

reasonable technical adjustments which would avoid electrical conflict.

(b) Mutually exclusive applications filed on Form 175 for the

initial provision of narrowband PCS service are subject to competitive

bidding in accordance with the procedures in subpart F of this part and

in 47 CFR part 1, subpart Q.

(c) An application will be entitled to comparative consideration

with one or more conflicting applications only if the Commission

determines that such comparative consideration will serve the public

interest.

Sec. 24.432 Consideration of applications.

(a) Applications for an instrument of authorization will be granted

if, upon examination of the application and upon consideration of such

other matters as it may officially notice, the Commission finds that

the grant will serve the public interest, convenience, and necessity.

See also Sec. 1.2108.

(b) The grant shall be without a formal hearing if, upon

consideration of the application, any pleadings or objections filed, or

other matters which may be officially noticed, the Commission finds

that:

(1) The application is acceptable for filing, and is in accordance

with the Commission's rules, regulations, and other requirements;

(2) The application is not subject to a post-auction hearing or to

comparative consideration pursuant to Sec. 24.431 with another

application(s);

(3) A grant of the application would not cause harmful electrical

interference to an authorized station;

(4) There are no substantial and material questions of fact

presented; and

(5) The applicant is qualified under current FCC regulations and

policies.

(c) If the Commission should grant without a formal hearing an

application for an instrument of authorization which is subject to a

petition to deny filed in accordance with Sec. 24.430, the Commission

will deny the petition by the issuance of a Memorandum Opinion and

Order which will concisely report the reasons for the denial and

dispose of all substantial issues raised by the petition.

(d) Whenever the Commission, without a formal hearing, grants any

application in part, or subject to any terms or conditions other than

those normally applied to applications of the same type, it shall

inform the applicant of the reasons therefor, and the grant shall be

considered final unless the Commission should revise its action (either

by granting the application as originally requested, or by designating

the application for a formal evidentiary hearing) in response to a

petition for reconsideration which:

(1) Is filed by the applicant within thirty (30) days from the date

of the letter or order giving the reasons for the partial or

conditioned grant;

(2) Rejects the grant as made and explains the reasons why the

application should be granted as originally requested; and,

(3) Returns the instrument of authorization.

(e) The Commission will designate an application for a formal

hearing, specifying with particularity the matters and things in issue,

if, upon consideration of the application, any pleadings or objections

filed, or other matters which may be officially noticed, the Commission

determines that:

(1) A substantial and material question of fact is presented (see

also Sec. 1.2108);

(2) The Commission is unable for any reason to make the findings

specified in paragraph (a) of this section and the application is

acceptable for filing, complete, and in accordance with the

Commission's rules, regulations, and other requirements; or

(3) The application is entitled to comparative consideration (under

Sec. 24.431) with another application (or applications).

(f) The Commission may grant, deny or take other action with

respect to an application designated for a formal hearing pursuant to

paragraph (e) of this section or part 1 of this chapter.

(g) [Reserved]

(h) Reconsideration or review of any final action taken by the

Commission will be in accordance with Subpart A of part 1 of this

chapter.

Sec. 24.433-24.438 [Reserved].

Sec. 24.439 Transfer of control or assignment of station

authorization.

(a) Approval required. Authorizations shall be transferred or

assigned to another party, voluntarily (for example, by contract) or

involuntarily (for example, by death, bankruptcy, or legal disability),

directly or indirectly or by transfer of control of any corporation

holding such authorization, only upon application and approval by the

Commission. A transfer of control or assignment of station

authorization in the narrowband Personal Communications Service is also

subject to Sec. 24.309 (Designated Entities) and Sec. 1.2111

(Assignment or transfer of control: unjust enrichment).

(1) A change from less than 50% ownership to 50% or more ownership

shall always be considered a transfer of control.

(2) In other situations a controlling interest shall be determined

on a case-by-case basis considering the distribution of ownership, and

the relationships of the owners, including family relationships.

(b) Form required--(1) Assignment.

(i) FCC Form 490 shall be filed to assign a license or permit.

(ii) In the case of involuntary assignment, FCC Form 490 shall be

filed within 30 days of the event causing the assignment.

(2) Transfer of control. (i) FCC Form 490 shall be submitted in

order to transfer control of a corporation holding a license or permit.

(ii) In the case of involuntary transfer of control, FCC Form 490

shall be filed within 30 days of the event causing the transfer.

(3) Form 430. Whenever an application must be filed under paragraph

(a) (1) or (2) of this section, the assignee or transferee shall file

FCC Form 430 (``Common Carrier Radio License Qualification Report'')

unless an accurate report is on file with the Commission.

(4) Notification of completion. The Commission shall be notified by

letter of the date of completion of the assignment or transfer of

control.

(5) If the transfer of control of a license is approved, the new

licensee is held to the original build-out requirement of Sec. 24.103.

(c) In acting upon applications for transfer of control or

assignment, the Commission will not consider whether the public

interest, convenience, and necessity might be served by the transfer or

assignment of the authorization to a person other than the proposed

transferee or assignee.

(d) [Reserved]

Sec. 24.440-24.442 [Reserved].

Sec. 24.443 Extension of time to complete construction.

(a) If construction is not completed within the time period set

forth in Sec. 24.103, the authorization will automatically expire.

Before the period for construction expires an application for an

extension of time to complete construction (FCC Form 489) may be filed.

See paragraph (b) of this section. Within 30 days after the

authorization expires an application for reinstatement may be filed on

FCC Form 489.

(b) An application for extension of time to complete construction

may be made on FCC Form 489. Extension of time requests must be filed

prior to the expiration of the construction period. Extensions will be

granted only if the licensee shows that the failure to complete

construction is due to causes beyond his control. An application for

modification of an authorization (under construction) does not extend

the initial construction period. If additional time to construct is

required, an FCC Form 489 must be submitted.

Sec. 24.444 Termination of authorization.

(a) (1) All authorizations shall terminate on the date specified on

the authorization or on the date specified by these rules, unless a

timely application for renewal has been filed.

(2) If no application for renewal has been made before the

authorization's expiration date, a late application for renewal will

only be considered if it is filed within 30 days of the expiration date

and shows that the failure to file a timely application was due to

causes beyond the applicant's control. During this 30 day period

reinstatement applications must be filed on FCC Form 489. Service to

subscribers need not be suspended while a late filed renewal

application is pending, but such service shall be without prejudice to

Commission action on the renewal application and any related sanctions.

See also Sec. 24.16 (Criteria for Comparative Renewal Proceedings).

(b) Special Temporary Authority. A special temporary authorization

shall automatically terminate upon failure to comply with the

conditions in the authorization.

[FR Doc. 94-12165 Filed 5-23-94; 8:45 am]

BILLING CODE 6712-01-M