[Congressional Record Volume 140, Number 144 (Thursday, October 6, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 6, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                              RULE ON GATT

                                 ______


                            HON. JACK FIELDS

                                of texas

                    in the house of representatives

                       Wednesday, October 5, 1994

  Mr. FIELDS of Texas. Mr. Speaker, there has been a campaign of 
misinformation concerning one of the provisions in the GATT bill--title 
VIII--addressing the FCC's pioneer preference policy. Today, in 
response to a request by the Democratic and Republican leadership, the 
Subcommittees on Telecommunications and Finance and Oversight and 
Investigations held a hearing to clarify the confusion created by this 
campaign.
  The subcommittees took testimony from Government witnesses, one of 
the pioneer companies, and critics of the policy. I want to take this 
time to report on the facts with respect to this issue so that members 
can make an informed decision on the issue rather than react to 
misleading newspaper advertisements.
  We are all aware of the advertisement which ran in the Washington 
Post and the New York Times which charged that Congress was providing a 
loophole to give a billion dollar price break to certain companies for 
their licenses to provide PCS services. This advertisement is pure 
bunk.
  The facts are that Congress, in title VIII of the GATT legislation, 
intended to ensure that a give away of these licenses did not occur and 
that the pioneer licensee pay a significant portion of the market value 
of a PCS license--without which they would likely pay nothing.
  Let's review the history. The pioneer preference policy was 
established nearly 4 years ago by the FCC. This policy offers the 
guarantee of an FCC license to entrepreneurs who successfully developed 
important new communications services and technologies. This FCC policy 
is not unique to PCS services. For example, pioneer preferences have 
been awarded in other telecommunications cases such as to VITA, a 
nonprofit company offering low-earth-orbit satellite services; Suite 
12, a company offering wireless cable services; and M-TEL, a company 
offering narrowband personal communications services.
  Last December, the FCC awarded a pioneer preference to 3 PCS 
applicants--out of more than 100. In so doing, the FCC guaranteed these 
companies a license in 3 of the top 20 markets. The FCC awarded these 
preferences in recognition for their Unique contribution to the 
development of PCS technology. They only received one of the two 
licenses to be awarded in each market.

  American Personal Communications [APC] developed and demonstrated 
technologies which facilitated spectrum sharing by PCS and microwave at 
2 gigahertz resulting in a more efficient use of spectrum.
  Cox developed and demonstrated a PCS-cable interface technology and 
equipment which also improved spectrum efficiency for PCS.
  Finally, omnipoint developed 2 gigahertz hand-held equipment 
utilizing advanced techniques known as spread spectrum which 
facilitated broader range of PCS services.
  No one, not even their competitors who have taken out advertisements 
in the Post, denies the importance and benefit of these developments to 
the deployment of PCS services.
  In addition to guaranteeing the pioneers' a license in three markets, 
the FCC also decided that these applicants should be awarded these 
licenses at no cost.
  In response to concern that valuable spectrum was being given away, 
Chairman Dingell and Congressman Moorhead introduced a bill, H.R. 4700, 
which would require the pioneers to pay 90 percent of the value of the 
license in their market.
  The FCC then reversed their decision and required the three pioneer 
recipients to pay an amount comparable to that H.R. 4700. However, the 
committee was concerned that the FCC did not have the explicit legal 
authority under the Communications Act in which to require payment for 
a license that was given for free. If, as our legal experts advised us, 
the FCC's decision was overturned, the original FCC decision would 
remain and the pioneers would pay nothing for these valuable licenses.
  At that point, the administration, Senate, and House entered into 
negotiations to determine the appropriate fee which should be charged 
for these licenses. After lengthy negotiations, it was agreed that the 
pioneers should pay 85 percent of the per capita average of the top 20 
markets after adjusting for the anomolies created in the three award 
markets. The administration decided that the legislation should be 
placed in GATT in order to raise revenue.
  Without this legislation, the Government will most likely receive 
nothing for these licenses. That result would be a terrible deal for 
the taxpayers.

                          ____________________