Facilitate Future Development of Paging Systems and Implementation of Section 309(j) of the Communications ActCompetitive Bidding

SUMMARY: In this Further Notice of Proposed Rulemaking (FNPRM), in WT

Docket No. 96-18 and PP Docket No. 93-253, the Commission seeks comment

on coverage requirements for nationwide geographic area licenses,

partitioning and disaggregation for geographic area paging licenses

(including nationwide licenses), and the application procedure for the

shared channels. The Commission seeks to eliminate or reduce paging

license application fraud by providing applicants with information

about the risks of telecommunications investment and the warning signs

of possible investment fraud. The Commission's objective is to provide

paging licensees the flexibility they need to tailor their service

offerings to meet market demands and facilitate greater participation

by small businesses.

DATES: Comments must be filed on or before April 17, 1997. Reply

comments are to be filed on or before May 1, 1997.

ADDRESSES: Federal Communications Commission, 1919 M Street, NW.,

Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Mika Savir, Commercial Wireless

Division, Wireless Telecommunications Bureau, at (202) 418-0620, or

Frank Stilwell, Auctions Division, Wireless Telecommunications Bureau,

at (202) 418-0660.

SUPPLEMENTARY INFORMATION: This Further Notice of Proposed Rulemaking

in WT Docket No. 96-18 and PP Docket No. 93-253, adopted on February

19, 1997 and released on February 24, 1997, is available for inspection

and copying during normal business hours in the FCC Reference Center,

Room 239, 1919 M Street, NW., Washington, DC 20554. The complete text

may also be purchased from the Commission's copy contractor,

International Transcription Service, Inc., 2100 M Street, NW., Suite

140, Washington, DC 20037, (202) 857-3800.

Synopsis of the Further Notice of Proposed Rulemaking

I. Background

1. In the Second Report and Order in WT Docket No. 96-18, the

Commission adopted rules governing geographic area licensing for paging

licenses and competitive bidding procedures for auctioning mutually

exclusive applications for these licenses. Further comment is needed on

several issues such as coverage requirements for nationwide geographic

area licenses, partitioning and disaggregation for geographic area

licenses, and possible modifications to the application procedure for

shared channels.

II. Further Notice of Proposed Rulemaking

A. Nationwide Channels

2. In the Second Report and Order in WT Docket No. 96-18, the

Commission concluded that the three nationwide 931 MHz channels and

twenty-three 929 MHz PCP nationwide channels will not be subject to

competitive bidding. The Commission did not impose coverage

requirements on the nationwide geographic area paging licenses. The

Major Trading Area (MTA) and Economic Area (EA) geographic area

licensees, which are not exempt from competitive bidding, are required

to provide coverage to one-third of the geographic area population

within three years of license grant, and to two-thirds of the

geographic area population within five years of license grant. In the

alternative, the MTA or EA licensee may provide substantial service to

the geographic area within five years of license grant. In this Further

Notice of Proposed Rulemaking (FNPRM), the Commission seeks comment on

whether coverage requirements should be imposed on nationwide licenses,

and the appropriate coverage area. The Commission seeks comment on

whether the entire nationwide license, or just a portion of the

license, should be auctioned if the nationwide licensee fails to meet

the coverage requirements.

B. Partitioning and Disaggregation

1. Partitioning

a. In General

In the Second Report and Order, the Commission adopted geographic

partitioning provisions for MTA and EA geographic area paging

licensees. In this FNPRM, the Commission seeks comment on whether

nationwide paging licensees should be permitted to partition their

license area. Commenters should note that the three 931 MHz nationwide

channels and twenty-three 929 MHz nationwide channels are not subject

to competitive bidding, whereas the MTA and EA geographic area licenses

are subject to competitive bidding.

4. The Commission believes that partitioning can be an effective

means of providing paging licensees with the flexibility they need to

tailor their service offerings to meet market demands. Partitioning may

be used to create smaller licenses and thus also facilitate greater

participation by small businesses and rural telephone companies. The

Commission did not, however, seek comment in the NPRM in WT Docket No.

96-18 on the treatment of MTA and EA geographic area paging licensees

that receive competitive bidding benefits, the license term of

partitioned licenses, or build-out requirements. The Commission seeks

comment on these issues with respect to geographic area paging

licenses.

b. Licensees With Competitive Bidding Benefits

5. Providing licensees with the flexibility to partition their

geographic service areas will create smaller areas that can be licensed

to small businesses, including those entities without the resources to

participate successfully in spectrum auctions. The competitive bidding

rules for paging include provisions for installment payments and

bidding credits for small businesses. The Commission has also adopted

rules to prevent unjust enrichment by small businesses seeking to

transfer licenses obtained with installment payments or bidding

credits. The Commission seeks comment on how to adjust installment

payments owed by partitioning licensees. Parties are invited to comment

on whether a small business partitioner should be required to repay, on

an accelerated basis, a portion of the outstanding principal balance

owed under an installment payment plan. The Commission seeks comment on

how this payment should be calculated. The Commission seeks comment on

whether the partitionee should be required to guarantee payment of a

portion of the partitioner's obligation.

6. The Commission tentatively concludes that partitionees that

would qualify as small businesses should be permitted to pay their pro

rata share of the remaining government obligation through installment

payments. The Commission seeks comment on this tentative conclusion.

Commenters should address the mechanisms for apportioning the remaining

government obligation between the parties. The Commission proposes

using population as the objective measure to calculate the

[[Page 11639]]

relative value of the partitioned area, and seeks comment on this

proposal.

7. The Commission proposes applying unjust enrichment rules to

small businesses that partition to non-small businesses or to small

businesses qualifying for a lower bidding credit. The Commission seeks

comment on this proposal. These unjust enrichment provisions would

include accelerated payment of bidding credits, unpaid principal, and

accrued unpaid interest. The Commission seeks comment on how such

unjust enrichment amounts should be calculated. Commenters should

address how to calculate unjust enrichment amounts and how to enforce

unjust enrichment payments. The Commission seeks comment on whether the

price paid by the partitionee should be considered in determining the

percentage of the outstanding principal balance to be repaid.

Commenters should address whether the unjust enrichment payments should

be calculated on a proportional basis, using population of the

partitioned area as the objective measure.

8. The Commission seeks comment on whether each party to a

partitioning transfer should be required to guarantee all or a portion

of the partitioner's original auctions-related obligation in the event

of default or bankruptcy by any of the parties to the partitioning

transfer. The Commission seeks comment on whether the partitioner (the

original licensee) should continue to be responsible, with respect to

the auctions-related obligation, for the entire initial geographic

area.

c. Build-out requirements

9. In the Second Report and Order, the Commission adopted coverage

requirements for MTA and EA geographic area licensees. Specifically,

each MTA or EA geographic area licensee must provide coverage to one-

third of the geographic area population within three years of the

license grant, and to two-thirds of the geographic area population

within five years of the license grant. In the alternative, the MTA or

EA licensee may provide substantial service to the geographic area

within five years of license grant. The Commission tentatively

concludes that both the partitioner and the partitionee should be

subject to coverage requirements that ensure that both portions of the

license area will receive service. The Commission proposes that a

partitionee will be obligated to satisfy the same build-out

requirements as the original licensee within its partitioned area,

regardless of when the license was acquired. A partitionee of an MTA or

EA would provide coverage to one-third of the population in its

partitioned area within three years of the license grant, and to two-

thirds of the population within its partitioned area within five years

of the license grant. In the alternative, the partitionee may provide

substantial service to the partitioned geographic area within five

years of license grant. Parties are invited to comment on this

proposal. Commenters should also address build-out requirements for

partitioned nationwide licenses. Commenters are also invited to address

what build-out requirements should apply where a licensee partitions a

portion of its license area after the initial ten-year license term has

expired.

d. License term

10. A geographic area paging licensee is authorized to provide

service for no more than ten years from the date of license grant. A

licensee may submit an application to renew the license for an

additional license term, and is afforded a renewal expectancy if it can

demonstrate that it has provided substantial service during the past

license term and has substantially complied with the applicable

Commission rules, policies, and the Communications Act. Substantial

service is service which is sound, favorable, and substantially above a

mediocre level of service which might just minimally warrant renewal.

11. The Commission proposes that a partitionee (including a

nationwide license partitionee) be authorized to hold its license for

the remainder of the partitioner's original ten-year term. The

Commission tentatively concludes that this approach is reasonable

because a partitioner-licensee should not be able to confer greater

rights than it was awarded under the terms of its license grant. The

Commission seeks comment on this tentative conclusion. The Commission

also proposes that a partitionee be afforded the same renewal

expectancy as a geographic area licensee. The Commission proposes to

grant a partitionee a preference at a renewal proceeding if it can

demonstrate that it has provided substantial service during its past

license term and has substantially complied with the applicable

Commission rules, policies, and the Communications Act. The Commission

seeks comment on these proposals.

2. Disaggregation

a. In General

12. In the NPRM, the Commission asked parties to comment on whether

paging spectrum disaggregation should be allowed. The Commission did

not receive sufficient comment on this issue to adopt disaggregation

for paging services. The Commission seeks further comment on the

feasibility of spectrum disaggregation for paging. Commenters should

provide technical justifications and other relevant support in

responding to this issue. Commenters should address whether minimum

disaggregation standards are necessary for paging services. Commenters

should also address whether nationwide licensees should be permitted to

disaggregate spectrum.

b. Licensees With Competitive Bidding Benefits

13. The Commission also seeks comment on what the respective

obligations of the participants in a disaggregation transfer should be,

and whether each party should be required to guarantee a proportionate

amount of the disaggregator's original auctions-related obligation in

the event of default or bankruptcy by any of the parties to the

disaggregation transfer. The Commission seeks comment on whether the

disaggregator (the original licensee) should have a continuing

obligation with respect to the entire initial license. Alternatively,

should the parties have available a choice of options, ranging from an

accelerated payment based on purchase price to a guarantee for a larger

payment by one party in the event another party defaults? Parties are

invited to comment on whether the disaggregating parties should be able

to determine which party has a continuing obligation with respect to

the original license area.

14. The Commission proposes to allow all small business licensees

to disaggregate to similarly qualifying parties as well as parties not

eligible for small business provisions. The Commission tentatively

concludes that if a qualified small business licensee is permitted to

disaggregate to a non-small business entity, the disaggregating

licensee should be required to repay any benefits it received from the

small business special provisions on a proportional basis. This would

include accelerated payment of bidding credits, unpaid principal, and

accrued unpaid interest. The Commission seeks comment on how such

repayment amounts should be calculated. The Commission also seeks

comment on whether we should consider the price paid by the

disaggregatee in determining the percentage of the outstanding

principal balance to be repaid.

15. The Commission tentatively concludes that if a small business

licensee is permitted to disaggregate to

[[Page 11640]]

another qualified small business that would not qualify for the same

level of bidding credit as the disaggregating licensee, the

disaggregating licensee should be required to repay a portion of the

benefit it received. The Commission seeks comment on how that amount

should be calculated. Finally, the Commission seeks comment on what

provisions, if any, should be adopted to address the situation of a

small business licensee's disaggregation followed by default in payment

of a winning bid at auction.

c. Build-Out Requirements

16. The Commission requires each MTA or EA geographic area licensee

to provide coverage to one-third of the geographic area population

within three years of the license grant, and to two-thirds of the

geographic area population within five years of the license grant. In

the alternative, the MTA or EA licensee may provide substantial service

to the geographic area within five years of license grant. The

Commission proposes adopting a flexible approach for construction

requirements on both the disaggregator and disaggregatee for their

respective spectrum portions. The Commission proposes that either the

disaggregator or the disaggregatee entering the geographic market

should be obligated to provide coverage to one-third of the population

within three years of the license grant, and to two-thirds of the

population within five years of the license grant. In the alternative,

either the disaggregator or the disaggregatee may provide substantial

service to the geographic area within five years of license grant. The

Commission seeks comment on this proposal. Commenters should also

address the appropriate build-out requirements for the parties to

disaggregation of nationwide paging licenses. The Commission proposes

that if a licensee fails to meet the construction requirements, the

license reverts back to the Commission. The Commission seeks comment on

this proposal.

d. License Term

17. The Commission proposes a similar license term for

disaggregation as for partitioning, i.e., a disaggregatee would be

authorized to hold its license for the remainder of the disaggregator's

original ten-year license term. The Commission proposes that a

disaggregatee would be afforded a renewal expectancy if it can

demonstrate that it has provided substantial service during the past

license term and has substantially complied with the applicable

Commission rules, policies, and the Communications Act. The Commission

seeks comment on these proposals, and on how to apply the renewal

standard in cases where the disaggregatee has acquired the

disaggregated license near the end of the license term.

3. Combination of Partitioning and Disaggregation

18. The Commission tentatively concludes that combinations of

partitioning and disaggregation should be permitted, subject to the

rules proposed for each. The Commission seeks comment on this proposal.

Commenters should address any conflicts in the partitioning and

disaggregation rules and whether the Commission should implement the

partitioning rules in such cases. Commenters should also address

whether the Commission should allow the combination of partitioning and

disaggregation for nationwide paging licenses.

C. Shared Channels

19. The issue of paging license application fraud was initially

raised in the comments filed by the Federal Trade Commission (FTC).

According to the FTC, telecommunications investment frauds are of two

basic types: (1) ``Application mills,'' where telemarketers sell

application preparation services for wireless licenses for thousands of

dollars to consumers, by claiming that telecommunications businesses

will seek to lease or sell the licenses for many times the

telemarketers' applications fees; and (2) ``build-out'' schemes, where

telemarketers sell, again for thousands of dollars, interests in

limited liability companies or partnerships that supposedly will

acquire wireless licenses, build and operate telecommunications

systems, and pay the consumers high dividends. The FTC argued that

awarding licenses on a geographic basis through competitive bidding

would likely reduce the incidence of ``application mills'' for paging

licenses. The FTC explained that awarding licenses on an unlimited,

shared basis is especially prone to abuse, because the constant

availability of such licenses allows telemarketers to guarantee

licenses to unsuspecting consumers. The transition of the exclusive

paging channels to geographic area licensing might make the shared

channels even more inviting to the fraudulent application mills. The

Commission seeks comment on how to eliminate or reduce this problem.

20. Specifically, the Commission seeks comment on how the current

FCC Form 600 application could be revised to provide applicants with

information regarding the risks of telecommunications investment and

warning signs of possible investment fraud. In addition, the Commission

seeks comment on whether application preparation services should be

required to sign the FCC Form 600, and to certify that the applicant

has received in writing pertinent information regarding the

Commission's rules and the obligations of licensees. Commenters are

also invited to address whether PCIA should be required to implement

additional procedures in the coordination process to reduce fraudulent

or speculative applications.

II. Conclusion

21. The Commission believes that the proposals in the FNPRM will

provide paging licensees the flexibility needed to tailor their service

offerings to meet market demands, and facilitate greater participation

by small businesses. Additionally, a revision to the application

process for shared channels to provide applicants with information

regarding the risks of telecommunications investment and the warning

signs of possible investment fraud may reduce fraudulent or speculative

applications.

III. Procedural Matters and Ordering Clauses

A. Regulatory Flexibility Act

Summary

22. As required by section 603 of the Regulatory Flexibility Act, 5

U.S.C. 603, the Commission has prepared an Initial Regulatory

Flexibility Analysis (IRFA) of the expected impact on small entities of

the policies and rules proposed in this FNPRM. Written public comments

on the IRFA are requested.

Reason for Action

23. This rulemaking proceeding in WT Docket No. 96-18 was initiated

to secure comment on proposals for establishing a regulatory scheme for

the common carrier paging (CCP) and private carrier paging (PCP)

services which would promote efficient licensing and competition in the

commercial mobile radio marketplace. The Commission seeks further

comment on several issues: whether nationwide licenses should be

subject to coverage requirements, how bidding credits and installment

payments should be treated in cases where small businesses wish to

partition their licenses, how build-out requirements and license term

are affected in cases of geographic partitioning by paging market area

[[Page 11641]]

licensees, whether spectrum disaggregation is feasible for paging

licensees, and revisions to the current FCC Form 600 and the

application procedures for licenses on the shared channels to reduce

paging application fraud.

Objectives

24. The Second Report and Order grants 26 nationwide geographic

area licenses to nationwide paging licensees, but does not impose any

additional coverage beyond what the nationwide licensees have already

achieved. In the FNPRM, the Commission seeks comment on whether

coverage requirements are appropriate.

25. In the Second Report and Order the Commission allows all

licensees, including small business licensees, to partition at any time

to another eligible entity. In the FNPRM the Commission proposes that

unjust enrichment provisions should apply when a small business

licensee has benefitted from the small business provisions in the

auction rules and then partitions a portion of the license area to

another entity that would not qualify for such benefits, or would

qualify for a lower bidding credit. Without the unjust enrichment

provisions on such transactions, a small business could benefit from

special bidding provisions and then become unjustly enriched by

immediately partitioning a portion of the license area to parties that

do not qualify for such benefits. The objective of this proposal is to

prevent unjust enrichment.

26. In the FNPRM the Commission seeks comment on build-out

requirements and license term for partitioned geographic area licenses

(including nationwide licenses). The Commission also seeks comment on

whether nationwide licensees should be permitted to partition their

license area, build-out requirements for partitioned nationwide

licenses, and the license term of partitioned nationwide licenses.

27. In the FNPRM the Commission seeks comment on whether spectrum

disaggregation would be feasible for paging, and how much spectrum a

paging licensee should be permitted to disaggregate. The Commission

seeks comment on build-out requirements and license term for

disaggregated geographic area licenses. If spectrum disaggregation is

feasible in paging it may facilitate the efficient use of spectrum,

increase competition, and expedite service to the public.

28. The Commission also seeks comment on paging application fraud,

an issue raised by the Federal Trade Commission. Specifically, the

Commission seeks comment on whether the current FCC Form 600 should be

revised to warn paging applicants of the risk of application fraud, and

whether application preparation services should be required to certify

that the applicant has received information regarding the Commission's

rules and the obligations of licensees. Additionally, commenters are

invited to address whether the frequency coordinator should implement

additional procedures to reduce fraudulent or speculative paging

applications. The objective of these proposals is to inform consumers

of the rules and the prevalence of paging application fraud and thus

reduce fraud and speculation.

Legal Basis

29. The proposed action is authorized under sections 4(i), 257,

303(r), and 309(j) of the Communications Act of 1934, as amended, 47

U.S.C. 154(i), 257, 303(r), and 309(j).

Reporting, Recordkeeping, and Other Compliance Requirements

30. Nationwide Channels. The proposals in the FNPRM include the

possibility of imposing reporting and recordkeeping requirements for

the nationwide geographic area licensees to establish compliance with

the coverage requirements, if coverage requirements are adopted.

31. Geographic Partitioning and Spectrum Disaggregation. The

proposals in the FNPRM include the possibility of imposing reporting

and recordkeeping requirements for small businesses seeking licenses

through the proposed partitioning and disaggregation rules. The

information requirements would be used to determine if the licensee is

a qualifying entity to obtain a partitioned license or disaggregated

spectrum. This information will be a one-time filing by any applicant

requesting such a license. The information will be submitted on the FCC

Forms 490 (or 430 and/or 600 filed as one package under cover of the

Form 490) which are currently in use and have already received OMB

clearance. The Commission estimates that the average burden on the

applicant is three hours for the information necessary to complete

these forms. The Commission estimates that 75 percent of the

respondents (which may include small businesses) will contract out the

burden of responding. The Commission estimates that it will take

approximately 30 minutes to coordinate information with those

contractors. The remaining 25 percent of respondents (which may include

small businesses) are estimated to employ in-house staff to provide the

information. Applicants (including small businesses) filing the package

under cover of FCC Form 490 electronically will incur a $2.30 per

minute on-line charge. On-line time would amount to no more than 30

minutes. The Commission estimates that 75 percent of the applicants may

file electronically. The Commission estimates that applicants

contracting out the information would use an attorney or engineer

(average of $200 per hour) to prepare the information.

32. It is also possible that small business partitioners and

disaggregators will be required to repay, on an accelerated basis, a

portion of the outstanding principal balance owed under an installment

payment plan. If unjust enrichment rules are applied to small

businesses that partition or disaggregate to non-small businesses, or

to small businesses qualifying for a lower bidding credit, small

businesses may be required to reimburse the United States government

for all or a portion of the special competitive bidding benefits they

have received. This could include accelerated payment of bidding

credits, unpaid principal, and accrued unpaid interest. It is also

possible that each party to a partitioning or disaggregation transfer

could be required to guarantee all or a portion of the partitioner's or

disaggregator's original auctions-related obligation in the event of

default or bankruptcy by any of the parties.

33. Shared Channels. The proposals in the FNPRM do not include the

possibility of imposing reporting and recordkeeping requirements for

small businesses seeking licenses for shared channels. The FNPRM seeks

comment on whether the current FCC Form 600 application should be

revised to warn applicants of the risk of application fraud; whether

application preparation services should be required to certify that the

applicant has received information regarding the Commission's rules;

and whether the frequency coordinator should be required to implement

additional procedures in the coordination process to reduce the

likelihood of fraudulent applications. These proposals would, if

implemented, furnish additional information to applicants. None of

these proposals would impose reporting or recordkeeping requirements on

small businesses.

Federal Rules Which Overlap, Duplicate or Conflict With These Rules

34. None.

Description and Number of Small Entities Involved

35. Nationwide Channels. The rule changes discussed in the FNPRM

with

[[Page 11642]]

respect to implementing coverage requirements for the 26 nationwide

licenses will probably not directly affect small businesses because

nationwide licensees are probably not small businesses. However, if all

26 nationwide licenses are held by small businesses, the rule change

would not affect more than 26 small businesses.

36. Geographic Partitioning and Spectrum Disaggregation. The

partitioning and disaggregation rule changes proposed in this

proceeding will affect all small businesses which avail themselves of

these rule changes, including small businesses currently holding paging

licenses who choose to partition and/or disaggregate and small

businesses who may acquire licenses through partitioning and/or

disaggregation.

37. The Commission is required to estimate in its Final Regulatory

Flexibility Analysis the number of small entities to which a rule will

apply, provide a description of such entities, and assess the impact of

the rule on such entities. To assist the Commission in this analysis,

commenters are requested to provide information regarding how many

total entities, existing and potential, would be affected by the

proposed rules in the FNPRM. In particular, the Commission seeks

estimates of how many such entities, existing and potential, will be

considered small businesses. The Small Business Administration (SBA)

has not developed a definition of small business specifically

applicable to paging. The closest applicable definition under the SBA

rules is radiotelephone (wireless) companies. According to the SBA's

definition, a small business radiotelephone company is one employing

fewer than 1,500 persons. The Commission seeks comment on whether this

definition is appropriate for paging licensees in this context.

Additionally, the Commission requests each commenter to identify

whether it is a small business under this definition. If a commenter is

a subsidiary of another entity, this information should be provided for

both the subsidiary and the parent corporation or entity.

38. The Commission estimates that up to approximately 50,000

licensees or potential licensees could take the opportunity to

partition and/or disaggregate a license or obtain a license through

partitioning and/or disaggregation. This number is based on the total

geographic area licenses to be awarded (approximately 16,600) and an

estimate that each license will probably not be partitioned and/or

disaggregated to more than three parties. Given the fact that nearly

all radiotelephone companies have fewer than 1,000 employees, and that

no reliable estimate of the number of future paging licensees can be

made, the Commission assumes for purposes of this IRFA that all of the

licenses will be awarded to small businesses. It is possible that a

significant number of the up to approximately 50,000 licensees or

potential licensees who could take the opportunity to partition and/or

disaggregate a license or who could obtain a license through

partitioning and/or disaggregation will be small businesses.

39. Shared Channels. The rule changes proposed in the FNPRM with

respect to warning prospective applicants about paging application

fraud would probably not have an impact on any small business or other

entity applying for a paging license on a shared channel. The proposed

changes to the paging license application are intended to warn

consumers about the prevalence of application fraud.

Significant Alternatives Minimizing the Impact on Small Entities

Consistent With the Stated Objectives

40. The Commission seeks comment on whether coverage requirements

should be imposed for the nationwide geographic area licensees. Any

significant alternatives presented in the comments will be considered.

Coverage requirements for the nationwide geographic area licensees, if

adopted, would probably not affect small businesses.

41. With respect to partitioning, the Commission seeks comment on

whether nationwide licensees should be permitted to partition their

license area, build-out requirements for partitioned nationwide

licenses, and license term of partitioned nationwide licenses. For MTA

and EA geographic area licenses, the Commission proposes that unjust

enrichment provisions should apply when a licensee has benefitted from

the small business provisions in the auction rules and partitions a

portion of the geographic license area to another entity that would not

qualify for such benefits. The alternative to applying the unjust

enrichment provisions would be to allow an entity who had benefitted

from the special bidding provisions for small businesses to become

unjustly enriched by partitioning a portion of their license area to

parties that do not qualify for such benefits. The Commission also

seeks comment on build-out requirements and license term for

partitioned MTA and EA geographic area licenses.

42. The Commission seeks comment on whether spectrum disaggregation

would be feasible for paging, and how much spectrum a paging licensee

should be permitted to disaggregate. The Commission seeks comment on

build-out requirements and license term for disaggregated geographic

area licenses. If spectrum disaggregation is feasible in paging it may

facilitate the efficient use of spectrum, increase competition, and

expedite service to the public.

43. The Commission also seeks comment on an issue raised by the

Federal Trade Commission in comments regarding paging application

fraud. Specifically, the Commission seeks comment on whether the

current FCC Form 600 should be revised to warn applicants of the risk

of application fraud, and whether application preparation services

should be required to certify that the applicant has received

information regarding the Commission's rules and the obligations of

licensees. Commenters are invited to address whether the frequency

coordinator should implement additional procedures to reduce fraudulent

or speculative paging applications. The alternative to revising the

application and/or the coordination process could permit application

mill fraud which may affect many unwitting consumers.

44. The FNPRM solicits comment on a variety of alternatives

discussed herein. Any significant alternatives presented in the

comments will be considered.

B. Paperwork Reduction Act

45. This FNPRM contains either a proposed or modified information

collection. As part of its continuing effort to reduce paperwork

burdens, the Commission invites the general public and the Office of

Management and Budget (OMB) to take this opportunity to comment on the

information collections contained in this FNPRM as required by the

Paperwork Reduction Act of 1995, Pub. L. 104-13. Public and agency

comments are due at the same time as other comments on this FNPRM; OMB

notification of action is due May 12, 1997. Comments should address (a)

whether the proposed collection of information is necessary for the

proper performance of the functions of the Commission, including

whether the information shall have practical utility; (b) the accuracy

of the Commission's burden estimates; (c) ways to enhance the quality,

utility, and clarity of the information collected; and (d) ways to

minimize the burden of the collection of information on the

respondents, including the use of automated collection techniques or

other forms of information technology.

46. Dates: Written comments by the public on the proposed

information

[[Page 11643]]

collections are due April 11, 1997. Written comments must be submitted

by the Office of Management and Budget (OMB) on the proposed

information collections on or before May 12, 1997.

47. Addresses: In addition to filing comments with the Secretary, a

copy of any comments on the information collections contained herein

should be submitted to Dorothy Conway, Federal Communications

Commission, Room 234, 1919 M Street, NW., Washington, DC 20554, or via

the Internet to [email protected], and to Timothy Fain, OMB Desk Officer,

10236 NEOB, 725-17th Street, NW., Washington, DC 20503 or via the

Internet to [email protected].

48. Further Information: For additional information concerning the

information collections contained in this NPRM contact Dorothy Conway

at (202) 418-0217, or via the Internet at [email protected].

49. Supplementary Information:

Title: Revision of part 22 and part 90 of the Commission's rules to

Facilitate Future Development of Paging Systems and Implementation of

section 309(j) of the Communications Act--Competitive Bidding

Type of Review: New Collection.

Respondents:

Number of Respondents: We estimate that approximately 50,000

licensees or potential licensees could take the opportunity to

partition or disaggregate a license or obtain a license through

partitioning or disaggregation.

Estimated Time Per Response: The average burden on the applicant is

3 hours for the information necessary to complete FCC Forms 490 or 430

and 600 filed under cover of the FCC Form 490. We estimate that 75

percent of the respondents will contract out the burden of responding.

We estimate that it will take approximately 30 minutes to coordinate

information with those contractors. The remaining 25 percent of

respondents are estimated to employ in-house staff to provide the

information.

37,500 applicants (contracting out) x .5 hour = 18,750 hours

12,500 applicants (in-house) x 3 hours = 37,500 hours

Total burden = 18,750 + 37,500 = 56,250 hours.

Estimated Cost to the Respondent: Total capital and start-up costs:

Applicants wishing to file the package under cover of the FCC Form 490

electronically will incur a $2.30 per minute on-line charge. On-line

time would amount to no more than 30 minutes. Seventy-five percent of

applicants are expected to file electronically.

37,500 applications x $2.30 x 30 = $2,587,500

All other respondents are expected to file manually and would incur

the following costs:

12,500 applications x $1.15 = $14,375

Total capital and start-up costs = $2,587,500 + $14,375 = $2,601,875.

We assume that the respondents contracting out the information

would use an attorney or engineer (average $200 per hour) to prepare

the information.

37,500 applications x $200 per hour x 3 hours = $22,500,000

Total respondent costs: $2,601,875 + $22,500,000 = $25,101,875

Cost to the Federal Government: The government review time per

response for this submission is estimated at 15 minutes per response

with review being done by personnel at the GS-6 level.

50,000 applications x $3.39 = $169,500

C. Ex Parte Presentations--Non-Restricted Proceeding

50. This is a non-restricted notice and comment rulemaking

proceeding. Ex parte presentations are permitted, except during the

Sunshine Agenda period, provided that they are disclosed as provided in

the Commission's rules. See generally 47 CFR 1.1202, 1.1203, 1.1206(a).

D. Comment Period

51. Pursuant to applicable procedures set forth in Secs. 1.415 and

1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested

parties may file comments on or before April 17, 1997. Reply comments

are to be filed on or before May 1, 1997. 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

and nine copies. Comments and reply comments should be sent to Office

of the Secretary, Federal Communications Commission, 1919 M Street,

NW., Room 222, Washington, DC 20554. Parties should also submit two

copies of comments and reply comments to Bobby Brown, Commercial

Wireless Division, Wireless Telecommunications Bureau, 2025 M Street,

NW., Room 7130, Washington, DC 20554. Parties should also file one copy

of any documents filed in this docket with the Commission's copy

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

NW., Suite 140, Washington, DC 20037. Comments and reply comments will

be available for public inspection during regular business hours in the

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

20554.

E. Authority

52. Authority for issuance of this Further Notice of Proposed

Rulemaking is contained in sections 4(i), 257, 303(r), and 303(j) of

the Communications Act of 1934, as amended, 47 U.S.C. Sec. 154(i), 257,

303(r), and 303(j).

F. Ordering Clauses

53. Accordingly, it is ordered that, pursuant to the authority of

sections 4(i), 257, 303(r), and 303(j) of the Communications Act of

1934, as amended, 47 U.S.C. Sec. 154(i), 257, 303(r), and 303(j), a

Further Notice of Proposed Rulemaking is hereby adopted.

54. It is further ordered that comments in WT Docket No. 96-18 will

be due April 17, 1997 and reply comments will be due May 1, 1997.

List of Subjects

47 CFR Part 22

Communications common carriers, Reporting and recordkeeping

requirements.

47 CFR Part 90

Common carriers, Reporting and recordkeeping requirements.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 97-6091 Filed 3-11-97; 8:45 am]

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