Pioneer's Preference Rules

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 5

[ET Docket No. 93-266; FCC 95-80]

Pioneer's Preference Rules

agency: Federal Communications Commission.

action: Final rule.

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summary: By this Second Report and Order, the Commission modifies

certain rules regarding its pioneer's preference program. This action

is intended to increase the efficiency of the program by making it

better comport with competitive bidding authority and the Commission's

experience administering it.

effective date: April 13, 1995.

for further information contact: Rodney Small, Office of Engineering

and Technology, (202) 776-1622.

supplementary information: This is a summary of the Commission's Second

Report and Order, adopted February 28, 1995, and released March 1,

1995. The full text of this Commission decision is available for

inspection and copying during regular business hours in the FCC

Reference Center (Room 239), 1919 M Street, NW., Washington, DC. The

complete text of this decision also may be purchased from the

Commission's duplication contractor, International Transcription

Service, Inc., (202) 857-3800, 2100 M Street, NW., Suite 140,

Washington, DC 20037.

Summary of Second Report and Order

1. In the Notice of Proposed Rule Making (Notice) in this

proceeding, 58 FR 57578 (October 26, 1993), the Commission sought

comment on whether and how the pioneer's preference rules could be

amended to take into account competitive bidding and its experience

administering them, or whether these rules should be repealed. In the

Notice, the Commission proposed to eliminate the current policies of

issuing public notices specifying pioneer's preference filing

deadlines, considering raw experimental license material that relates

to preference requests, and making initial determinations on preference

requests. The Commission also proposed to limit acceptance of

preference requests to services that use new technologies and proposed

that preference requests be filed prior to a notice of inquiry (NOI) in

a proceeding that addresses a new service or technology, if such a

document is issued in advance of a notice of proposed rulemaking

(NPRM), rather than the current policy of allowing requests to be filed

after an NOI but prior to an NPRM. In the First Report and Order, 59 FR

8413 (February 22, 1994), the Commission determined that it would not

apply amendments to its rules to three proceedings in which tentative

pioneer's preference decisions had been issued.

2. In the Second Report and Order, the Commission determined that

the pioneer's preference program should be retained, but it decided to

eliminate its current policies of issuing public notices specifying

filing deadlines, considering raw experimental license material that

relates to preference requests, and making initial determinations on

preference requests. These requirements were originally imposed to

ensure a complete record in all pioneer's preference proceedings, but

the Commission said that eliminating them would result in a more

efficient process with no detriment to the public. The Commission also

adopted its proposal to require that preference requests be filed prior

to an NOI, if such a document is issued in advance of an NPRM. The

Commission stated that deferring the filing deadline to the NPRM stage

in cases in which an NOI has been issued may encourage speculative

preference requests. Finally, in response to comments to the Notice,

the Commission required that any preference grant be conditioned on use

of the technology and system for which the preference was awarded.

3. The Commission did not adopt its proposal to limit acceptance of

pioneer's preference requests to services that use new technologies. It

said that while a pioneer's preference should not be awarded simply for

transferring technologies from existing services in one band to similar

services in another band, a significant enhancement of an existing

service, under some circumstances, could be achieved by combining

existing technologies in new and innovative ways. The Commission also

noted that the recently-enacted General Agreement on Tariffs and Trade

(GATT) legislation provides that preferences be awarded for significant

contributions to the development of a new service or to the development

of new technologies that substantially enhance an existing service.

4. Additionally, the Commission decided that in services in which

licenses are assigned by competitive bidding, any parties receiving

pioneer's preferences will be required to pay for their licenses in

accord with the payment formula specified in the GATT legislation. The

GATT legislation mandates that recipients of preferences in service in

which licenses are awarded by competitive bidding and whose requests

were accepted for filing after September 1, 1994, pay in a lump sum or

in installment payments over a period of not more than five years 85

percent of the average price paid for comparable licenses. The

Commission said that it will also use this formula for any future

grants of pioneer's preference requests accepted for filing on or

before September 1, 1994 and--in accord with the GATT legislation--will

determine comparable licenses on a case-by-case basis.

5. Accordingly, it is ordered That Parts 1 and 5 of the

Commission's Rules are amended as specified below, effective 30 days

after publication in the Federal Register. This action is taken

pursuant to Sections 4(i), 7(a), 303(c), 303(f), 303(g), 303(r), and

309(j) of the Communications Act of 1934, as amended, 47 U.S.C.

Sections 154(i), 157(a), 303(c), 303(f), 303(g), 303(r), and 309(j).

List of Subjects

47 CFR Part 1

Administrative practice and procedure.

47 CFR Part 5

Radio.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Amendatory Text

Parts 1 and 5 of chapter I of title 47 of the Code of Federal

Regulations are amended as follows:

PART 1--PRACTICE AND PROCEDURE

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

Authority: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47

U.S.C. 154, 303. Implement 5 U.S.C. 552 and 21 U.S.C. 853a, unless

otherwise noted.

2. Section 1.402 of this chapter is amended by revising paragraphs

(c), (d), (e), and (g), redesignating paragraph (f) as new paragraph

(h), and adding new paragraph (f) to read as follows:

Sec. 1.402 Pioneer's preference.

* * * * *

(c) Pioneer's preference requests relating to a specific new

spectrum-based service or technology will not be

[[Page 13637]] accepted after the Commission's Sunshine Notice is

issued announcing initiation, by either a notice of inquiry or notice

of proposed rule making that will be considered by the Commission at a

public meeting, of a proceeding pertaining to that service or

technology. Alternatively, if the Commission initiates a new proceeding

pertaining to a specific new spectrum-based service or technology by

notation, pioneer's preference requests will not be accepted after such

notice is submitted to the Commission for vote.

(d) Pioneer's preference requests complying with the requirements

and procedures in paragraphs (a) through (c) of this section will be

accepted for filing and listed by file number in a notice of proposed

rule making addressing the new service or technology proposed in the

request, if such a notice of proposed rule making is adopted. A final

determination on a request for pioneer's preference and its scope will

normally be made in a report and order adopting new rules for the

service or technology proposed in the request, if such rules are

adopted. If awarded, the pioneer's preference will provide that the

preference applicant's application for a construction permit or license

will not be subject to mutually exclusive applications. If granted, the

construction permit or license will be subject to the conditions in

paragraphs (f) and (g) of this section.

(e) Any interested person may file a statement in support of or in

opposition to a request for pioneer's preference listed in a notice of

proposed rule making, and a reply to such statements, subject to filing

deadlines that shall be published in the notice of proposed rule

making. Statements on the merits of pioneer's preference requests must

be filed separate from, and not part of, any comments on the rules

proposed in the notice of proposed rule making. Statements on pioneer's

preference requests will not be accepted prior to issuance of the

notice of proposed rule making.

(f) As a condition of its license grant, a pioneer's preference

grantee will be required to construct a system that substantially uses

the design and technologies upon which its pioneer's preference award

is based within a reasonable time, as determined by the Commission,

after receiving its license. Failure to comply with this provision will

result in revocation of the pioneer grantee's license, and transfer of

the license will be prohibited until this requirement is met.

(g) In services in which licenses are assigned by competitive

bidding, any parties receiving pioneer's preferences will be required

to pay for their licenses in accord with the payment formula specified

in the General Agreement on Tariffs and Trade legislation, Public Law

103-465. This formula requires that pioneers pay in a lump sum or in

installment payments over a period of not more than five years 85

percent of the average price paid for comparable licenses. Comparable

licenses will be determined by the Commission on a case-by-case basis.

* * * * *

3. Section 1.403 is revised to read as follows:

Sec. 1.403 Notice and availability.

All petitions for rule making (other than petitions to amend the

FM, Television, and Air-Ground Tables of Assignments) meeting the

requirements of Sec. 1.401 will be given a file number and, promptly

thereafter, a ``Public Notice'' will be issued (by means of a

Commission release entitled ``Petitions for Rule Making Filed'') as to

the petition, file number, nature of the proposal, and date of filing.

Petitions for rule making are available at the Commission's Dockets

Reference Center (1919 M Street NW., Room 239, Washington, DC).

PART 5--EXPERIMENTAL RADIO SERVICES (OTHER THAN BROADCAST)

1. The authority citation for part 5 continues to read as follows:

Authority: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47

U.S.C. 154, 303. Interpret or apply sec. 301, 48 Stat. 1081, as

amended; 47 U.S.C. 301.

2. Section 5.207 is revised to read as follows:

Sec. 5.207 Experiments performed in conjunction with pioneer's

preference applications.

An applicant for a pioneer's preference pursuant to Sec. 1.402 of

this chapter may file an experimental license application for a limited

geographical area, generally including no more than one Metropolitan

Statistical Area. In order to be eligible for a preference at the time

of a report and order in a proceeding addressing a new service or

technology, the experimental applicant must demonstrate the technical

feasibility of its proposal by summarizing its experimental results in

its preference application, unless it instead submits an acceptable

showing of technical feasibility. If a pioneer's preference applicant

wishes the Commission to consider in conjunction with the application

experimental material filed subsequent to the application, the

applicant must summarize this material and submit the summary to the

Commission prior to the Sunshine Notice announcing that a report and

order pertaining to the new service or technology will be considered by

the Commission at a public meeting, or--if a report and order is

considered by notation--prior to submission of the report and order to

the Commission for vote. All experimental material must be summarized

and its relevance to the pioneer's preference application explained in

order for it to be considered by the Commission.

[FR Doc. 95-6081 Filed 3-13-95; 8:45 am]

BILLING CODE 6712-01-M