Implementation of Section 309(j) of the Communications Act Competitive Bidding

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 24

[PP Docket No. 93-253, FCC 94-198]

Implementation of Section 309(j) of the Communications Act--

Competitive Bidding

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rule making.

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SUMMARY: In this Further Notice of Proposed Rule Making, the Commission

seeks comment by September 12, 1994 on whether businesses owned by

minorities and/or women should be permitted to hold licenses in the

broadband personal communications services (``broadband PCS'') that are

geographically partitioned from established PCS service areas. A

similar plan, allowing geographic partitioning by rural telephone

companies, has been adopted to expedite the provision of broadband PCS

in rural area. The Commission seeks comment from interested parties on

the following issues: whether allowing businesses owned by minorities

and/or women to hold partitioned PCS licenses would serve the public

interest; if so, what parameters the Commission should provide for

these entities to obtain partitioned licenses (i.e., through what

mechanisms should partitioned licenses be granted and what, if any,

limitations should apply); and whether any such partitioning should be

prohibited for a period of time after initial PCS licensing, and if so,

for what period. Commenters should focus on the public interest impact

that allowing such partitioning would likely have. The Commission is

particularly interested in whether such partitioning could be expected

to give rise to benefits corresponding to those that are expected from

rural telephone company partitioning. The Commission also seeks comment

on whether the potential benefits that may be derived by partitioning

in this context outweigh any practical or administrative difficulties

that might arise, and whether more rapid and better service will be

provided to any areas as a result of the partitioning.

The Commission also seeks comment on whether it should restrict the

transfer or assignment of partitioned licenses (held by rural telephone

companies or by businesses owned by minorities and/or women) for some

period of time, and if so, for how long any such transfer restriction

period should last.

DATES: Comments are to be filed on or before September 12, 1994. Reply

comments are to be filed on or before September 27, 1994.

FOR FURTHER INFORMATION CONTACT:

Jonathan Cohen, Office of Plans and Policy, (202) 418-2030.

SUPPLEMENTARY INFORMATION: This Further Notice of Proposed Rule Making

is available for inspection and copying during normal business hours in

the FCC Dockets Branch, Room 230, 1919 M Street N.W., Washington, D.C.

The complete text may be purchased from the Commission's copy

contractor, International Transcription Service, Inc., 2100 M Street,

N.W., Suite 140, Washington, D.C. 20037, telephone (202) 857-3800.

I. Background

1. In the Memorandum Opinion and Order in GEN Docket No. 90-314, 59

FR 32830 (June 24, 1994), the Commission set forth rules for licensing

Personal Communications Services in the 2 GHz band (``broadband PCS''),

including specification of geographic service areas. We declined to

allow general partitioning of those service areas, stating that such

partitioning could be used to circumvent construction requirements, but

we also recognized that the public interest may favor a different

result ``for particular groups of service providers, such as rural

telephone companies, or to create PCS ownership opportunities for

companies owned by minorities or women.'' Memorandum Opinion and Order

at 83.

2. In the Fifth Report and Order in this proceeding, PP Docket No.

93-253, 59 FR 37566 (July 22, 1994) (``Fifth Report and Order''), the

Commission determined that, to expedite the provision of broadband PCS

in rural areas, which have historically suffered from delayed

introduction of new services and fewer choices in service providers,

rural telephone companies should be permitted to obtain PCS licenses by

partitioning certain geographic areas from the licensed PCS service

area (MTA or BTA). These companies will be permitted to acquire

partitioned broadband PCS licenses in either of two ways: (1) they may

form bidding consortia to participate in auctions, and then partition

the licenses won among themselves, or (2) they may acquire partitioned

broadband PCS licenses from other licensees through private

negotiation. We required that partitioned areas conform to established

geopolitical boundaries (such as county lines) and that each area

include that portion of the rural telephone company's wireline service

area that lies within the PCS license area. In addition, where a rural

telephone company acquires a partitioned license from another PCS

licensee, the partitioned area must be reasonably related to rural

telephone company's wireline service area. See Fifth Report and Order

at 148-153.

3. Our rationale in allowing partitioning for rural telephone

companies is that these companies are uniquely positioned to use their

existing infrastructure to provide broadband PCS in rural areas. Many

rural telephone companies argued that if they were required to bid on

entire Basic Trading Area or Major Trading Area licenses to obtain

licenses covering their wireline service areas, they would be

effectively barred from entering the broadband PCS industry. They

contend that under a partitioning plan, they would be able to serve

areas in which they already provide service, while the remainder of the

PCS service area could be served by other more efficient providers.

II. Discussion

4. We wish to consider whether a similar post-auction broadband PCS

partitioning plan should be adopted for the benefit of businesses owned

by minorities and/or women. We note that some parties commenting on

petitions for reconsideration that we received in GEN Docket No. 90-314

supported various forms of geographic partitioning.\1\ Others, however,

were opposed to partitioning.\2\ The record has not been sufficiently

developed on the issue of whether the public interest would be served

by permitting businesses owned by minorities and/or women to hold

partitioned licenses to enable the Commission to make a determination

on this issue. We therefore seek further comment from interested

parties.\3\ Commenters should address the following issues: (1) whether

allowing businesses owned by minorities and/or women to hold

partitioned PCS licenses would serve the public interest; (2) if so,

what parameters the Commission should provide for these entities to

obtain partitioned licenses (i.e., through what mechanisms should

partitioned licenses be granted and what, if any, limitations should

apply); and (3) whether any such partitioning should be prohibited for

a period of time after initial PCS licensing, and if so, for what

period.

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\1\See e.g., comments of GTE Service Corp., Association of

Independent Designated Entities, McCaw Cellular Communications, Inc.

on Petitions for Reconsideration in GEN Docket No. 90-314.

\2\See e.g., comments of MCI Telecommunications Corporation and

comments of Nextel Communications, Inc. in GEN Docket No. 90-314.

\3\Comments submitted on this issue in GEN Docket No. 90-314

will also be considered in this proceeding.

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Commenters should focus on the public interest impact that allowing

such partitioning would likely have. We are particularly interested in

hearing from interested parties whether such partitioning could be

expected to give rise to benefits corresponding to those we expect to

derive from rural telephone company partitioning. We also seek comment

on whether the potential benefits that may be derived by partitioning

in this context outweigh any practical or administrative difficulties

that might arise, and whether more rapid and better service will be

provided to any areas as a result of the partitioning.

5. We also wish to explore whether the Commission should restrict

the transfer or assignment of partitioned licenses (held by rural

telephone companies or by businesses owned by minorities and/or women)

for some period of time. We therefore seek comment on this issue, and

ask commenters to address how long any such transfer restriction period

should last.

III. Procedural Matters

6. Initial Regulatory Flexibility Analysis. As required by Section

603 of the Regulatory Flexibility Act, the Commission has prepared an

Initial Regulatory Flexibility Analysis (IFRA) of the expected impact

on small entities of the proposals contained in this Further Notice of

Proposed Rule Making (FNPRM). We request written public comment on the

IRFA, which follows. These comments must be filed in accordance with

the same filing deadlines as comments on the rest of the Notice, but

they must have a separate and distinct heading designating them as

responses to the Initial Regulatory Flexibility Analysis. The Secretary

shall send a copy of this Notice of Proposed Rule Making, including the

Initial Regulatory Flexibility Analysis, to the Chief Counsel for

Advocacy of the Small Business Administration in accordance with

paragraph 603(a) of the Regulatory Flexibility Act. Pub. L. No. 96-354,

94 Stat. 1164, 5 U.S.C. Sec. 601 et seq. (1981).

7. Reason for Action: This FNPRM is issued to obtain comment

regarding the certain aspects of the implementation of Section 309(j)

of the Communications Act, as amended by the Omnibus Budget

Reconciliation Act of 1993 (Budget Act).

8. Objectives: The Commission seeks to implement changes to the

Communications Act that, inter alia, provide the Commission with the

authority to award licenses to use the electromagnetic spectrum through

competitive bidding.

9. Legal Basis: The FNPRM is authorized under the Omnibus Budget

Reconciliation Act of 1993, Pub. L. No. 103-66, Title VI, Section 6002,

and Sections 4(i), 303(r), and 309(j) of the Communications Act of

1934, as amended, 47 U.S.C Secs. 154(i), 303(r), and 309(j).

10. Reporting, Recordkeeping and Other Compliance Requirements: The

proposals under consideration in this FNPRM include the possibility of

new reporting and recordkeeping requirements for a number of small

business entities.

11. Federal Rules Which Overlap, Duplicate or Conflict With These

Rules: None.

12. Description, Potential Impact, and Number of Small Entities

Involved: The rule changes proposed in this FNPRM could affect small

businesses if they apply for or are granted licenses in the Personal

Communications Services in the 2 GHz band (broadband PCS). The FNPRM

proposes that certain entities be permitted to obtain broadband PCS

licenses for geographic areas that are partitioned from other broadband

PCS licenses. After evaluating the comments in response to this FNPRM,

the Commission will further examine the impact of any rule changes on

small entities and set forth our findings in the Final Regulatory

Flexibility Analysis.

13. Any Significant Alternatives Minimizing the Impact on Small

Entities Consistent with the Stated Objectives: None.

14. Other Procedural Matters. This is a non-restricted notice and

comment rule making proceeding. Ex parte presentations are permitted,

except during the Sunshine Agenda period, provided they are disclosed

as provided in Commission rules. See generally 47 CFR Secs. 1.1202,

1.1203, and 1.1206(a).

15. Pursuant to applicable procedures set forth in Sections 1.415

and 1.419 of the Commission's Rules, 47 CFR Secs. 1.415 and 1.419,

interested parties may file comments on or before September 12, 1994,

and reply comments on or before September 27, 1994. To file formally in

this proceeding, you must file an original and four copies of all

comments, reply comments, and supporting comments. If you want each

Commissioner to receive a personal copy of your comments, you must file

an original plus nine copies. You should send comments and reply

comments to Office of the Secretary, Federal Communications Commission,

Washington, DC 20554. Comments and reply comments will be available for

public inspection during regular business hours in the Reference Center

of the Federal Communications Commission, Room 239, 1919 M Street, NW.,

Washington, DC 20554. The complete text of the Notice may be purchased

from the Commission's copy contractor, International Transcription

Service, 1919 M Street, Room 236, Washington, DC 20554, telephone (202)

857-3800.

16. Issuance of this Notice of Proposed Rule Making is authorized

under the Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-

66, Title VI, Section 6002, and Sections 4(i), 303(r), and 309(j) of

the Communications Act of 1934, as amended, 47 U.S.C. Secs. 154(i),

303(r), and 309(j).

17. For further information concerning this proceeding, contact

Toni Simmons, Office of Plans and Policy, (202) 418-2030.

List of Subjects in 47 CFR Part 24

Personal Communications Services, Radio.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 94-19714 Filed 8-11-94; 8:45 am]

BILLING CODE 6712-01-M