[Congressional Record Volume 140, Number 86 (Thursday, June 30, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 30, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                 PIONEER PREFERENCE REFORM ACT OF 1994

                                 ______


                         HON. EDWARD J. MARKEY

                            of massachusetts

                    in the house of representatives

                        Thursday, June 30, 1994

  Mr. MARKEY. Mr. Speaker, today, Chairman Dingell and I and others 
introduced the Pioneer Preference Reform Act of 1994. This bill seeks 
to address a problem which has come to our attention recently 
concerning the Federal Communications Commission's implementation of 
personal communications services [PCS] and a system of competitive 
bidding to award licenses, both of which were mandated by the Omnibus 
Budget Reconciliation Act of 1993.
  The pioneer preference program was developed by the Commission in the 
late 1980's as a means to reward those who invest in technology but who 
might lose out in the casino-style lottery system which then determined 
how licenses were awarded. The lottery system made no distinction 
between the serious technology applicant and the person off the street 
who plunked money down to pay the copying fee for an application. The 
problem which the pioneer preference program sought to remedy was that 
a person could invest millions in developing new technology only to see 
someone pay $75 to a lottery mill and win the license. Thus, the 
pioneer program was designed to reward those who invest in technology.
  However, the FCC licensing process changed dramatically in 1993 when 
Chairman Dingell and I and others pushed through the Licensing Reform 
Act of 1993, which largely abolished lotteries and instead put in place 
a system of competitive bidding. The Commission is now implementing the 
competitive bidding process, and in that context it appears that the 
Commission lacks authority to impose a reasonable fee on those who 
obtain their license under the pioneer preference program.
  Though I have generally supported the concept of the pioneer 
preference program, since I think it served as an important 
counterbalance to the ``roll-the-dice, anyone-can-win'' lottery system, 
I agree that this matter needs to be revisited since the Commission may 
not have full authority to collect a fair amount from these pioneers. 
The legislation introduced today would accomplish that goal in two 
ways.
  First, it gives the Commission authority to require a pioneer 
preference winner to pay a sum equal to not less than 90 percent of the 
highest bid for a license that is most reasonably comparable in terms 
of bandwidth, area designation, usage restrictions, and other 
characteristics. Thus, the Commission will look to reasonably 
comparable license bids, taking into account a variety of complex 
factors to help identify what would be a fair reference point, and 
apply 90 percent to that figure to determine how much the pioneer 
preference winners should pay. In establishing a payment system, the 
Commission could require payment using schedules and methods outlined 
in section 309(j)(4)(A) as a means of collecting revenues for the 
Treasury.
  Second, the legislation requires the FCC to establish a formal 
process for considering future applications. Correspondence between the 
chairman of the Oversight Committee and the Commission shows that a 
more rigorous process needs to be in place as we move forward with this 
program. An FCC rulemaking would meet that need.