[Federal Register Volume 59, Number 99 (Tuesday, May 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12165]


[[Page Unknown]]

[Federal Register: May 24, 1994]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0 and 24

[PP Docket No. 93-253, FCC 94-98]

 

Competitive Bidding

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Commission has adopted rules establishing service-specific 
rules for competitive bidding on licenses to be awarded for Personal 
Communications Services in the 900 MHz band (``narrowband PCS''). This 
action is taken to implement section 309(j) of the Communications Act 
of 1934, as amended. The new rules will promote the development and 
rapid deployment of new technologies, products, and services for the 
benefit of the public, including those residing in rural areas. These 
rules also will promote economic opportunity for small businesses and 
businesses owned by women and/or minorities.

EFFECTIVE DATE: June 23, 1994.

FOR FURTHER INFORMATION CONTACT:
Toni Simmons, Federal Communications Commission, Office of Plans and 
Policy, Washington, DC 20554 (202) 418-2030).

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third 
Report and Order, PP Docket No. 93-253, adopted April 20, 1994, and 
released May 10, 1994. The full text of this Third Report and Order is 
available for inspection and copying during normal business hours in 
the FCC Dockets Branch, room 230, 1919 M Street, NW., suite 140, 
Washington, DC. The complete text may be purchased from the 
Commission's copy contractor, International Transcription Service, 
Inc., 2100 M Street, NW., suite 140, Washington, DC 20037, Telephone 
(202) 857-3800.

Paperwork Reduction Act

    The Federal Communications Commission has submitted the following 
information collection request to OMB for review and clearance under 
the Paperwork Reduction Act of 1980, 44 USC section 3507. Persons 
wishing to comment on this information collection should contact 
Timothy Fain, Office of Management and Budget, room 3225, New Executive 
Office Building, Washington, DC 20503, (202) 395-3561. For further 
information, contact Judy Boley, Federal Communications Commission, 
(202) 632-7513.
    Please Note: The Commission has requested emergency review of this 
collection by May 25, 1994, under the provisions of 5 CFR Sec. 1320.18.
    Title: Implementation of section 309(J) of the Communications Act-- 
Competitive Bidding, Third Report and Order, PP Docket No. 93-253.
    Action: New collections.
    Respondents: Individuals, state or local governments, non-profit 
organizations, business or other for-profit entities, including small 
businesses.
    Frequency of Response: On occasion.
    Estimate Annual Burden:

------------------------------------------------------------------------
                                       No. of     Estimated             
                                     sections/   average hrs   Estimated
                                       forms         per        annual  
                                    respondents   response      burden  
------------------------------------------------------------------------
Section 24.413(a)-(e).............       17,770         1.00      17,770
Section 24.415....................        3,554         1.00       3,554
Section 24.419....................           50        20.00        1000
Section 24.425....................           10         3.00          30
Section 24.406....................        5,000         2         10,000
Section 24.439....................          100          .50          50
Section 24.413(f).................        2,500         2.5        6,250
Section 24.430....................          100        20          2,000
                                   -------------------------------------
    Total Annual Burden...........  ...........  ...........      40,654
------------------------------------------------------------------------

    Needs and Uses: In the Third Report and Order in PP Docket No. 93-
253 the Commission amended 47 CFR part 24 to add a new subpart F and G. 
Subpart F contains the general rules and requirements governing the 
competitive bidding process for narrowband PCS initial licenses. 
Subpart G contains general rules and requirements for processing 
applications. Applicants are required to file certain information so 
that the Commission can determine whether the applicants are legally, 
technically and financially qualified to be licensed. Affected members 
of the public are any members of the public who wants to become a 
licensee. The foregoing estimates include the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collections of information. Send comments regarding these burden 
estimates or any other aspect of the collections of information 
including suggestions for reducing the burden to the Federal 
Communications Commission, Records Management Division, Paperwork 
Reduction Project, Washington, DC 20554 and to the Office of the 
Management and Budget Paperwork Reduction Project, Washington, DC 
20503.

Summary of the Third Report and Order

Introduction

    1. In this Third Report and Order, we adopt service-specific rules 
for competitive bidding on licenses to be awarded for Personal 
Communications Services in the 900 MHz band (``narrowband PCS''). We 
conclude that because of the significant interdependence among 
narrowband PCS licenses and the relatively high expected value of such 
licenses, most narrowband PCS licenses will be awarded through a 
sequence of simultaneous multiple round auctions. We will also adopt a 
system of preferences designed to enhance access to narrowband PCS 
spectrum and achieve the congressional directive that our competitive 
bidding rules ensure the opportunity of small businesses and businesses 
owned by women and minorities to participate in the auction process.
    2. Numerous comments and reply comments were filed by interested 
parties in response to the notice of proposed rule making (58 FR 53489 
(October 15, 1993)) in this docket. These comments address the many 
proposals made in the notice regarding, among other things, narrowband 
PCS licenses.

Auction Eligibility

    3. In the Second Report and Order (59 FR 22980 (May 4, 1994)), we 
concluded that narrowband PCS as a class of service was reasonably 
likely to satisfy the criteria of section 309(j) of the Communications 
Act. Also, the use of competitive bidding to award narrowband PCS 
licenses as compared to other licensing methods will speed the 
development and deployment of new services to the public and recover 
for the public a portion of the value of the spectrum.

Auction Design

    4. The spectrum allocation, service definition and technical rules 
for narrowband PCS were completed by the Commission in the Narrowband 
PCS Memorandum Opinion and Order (59 FR 14115 (March 25, 1994)). We 
anticipated that advanced paging and messaging services would be the 
predominant narrowband services provided. Three megahertz of spectrum 
were allocated to narrowband PCS in three one megahertz bands (901-902 
MHz, 930-931 MHz and 940-941 MHz). Two megahertz of this spectrum were 
divided into 50 kHz and 12.5 kHz channels and will be available for 
immediate licensing. The remaining one megahertz of narrowband PCS 
spectrum will be channelized and licensed in the future as this service 
develops.
    5. Simultaneous multiple round auction. In This Report and Order, 
we adopt simultaneous multiple round auctions as our primary auction 
methodology for narrowband PCS licenses. We expect the value of most 
narrowband PCS licenses to be sufficiently high to warrant the use of 
simultaneous auctions. This type of auction will be most likely to 
deploy rapidly new narrowband PCS technologies and services, promote 
the development of competition for the provision of those and other 
services, and thus foster economic growth. We recognize, however, that 
simultaneous multiple round bidding may involve a greater degree of 
complexity than other competitive bidding methods and that it may 
present greater operational difficulties for both the Commission and 
for bidders.
    6. Alternative auction designs. Because narrowband PCS licenses 
vary in terms of expected value and interdependence, we have determined 
that no single competitive bidding design will be optimal for all 
licenses. For this reason and because Congress directed us to test 
multiple alternative methodologies, we will adopt other auction designs 
as alternatives to our primary design. When we announce individual 
auctions to award specific groups of narrowband licenses, we will issue 
a public notice detailing the competitive bidding design and procedures 
to be used.
    7. Oral sequential and single round (sealed bid) auctions. If, as a 
result of our auction experience, we determine that the operational 
costs or complexities associated with simultaneous multiple round 
auctions outweigh their benefits, we may decide to employ either oral 
sequential auctions or single round sealed bid auctions. In an oral 
sequential auction, licenses are put up for bid one at a time, so that 
bidding ends on one item before it begins on the next item. Oral 
sequential auctions generate valuable information about earlier 
auctioned licenses, which can assist bidders in valuing later auctioned 
licenses. However, if license values are interdependent oral sequential 
auctions are less likely than simultaneous auctions to award 
interdependent licenses to the parties who value them the most and to 
aggregate licenses efficiently, because bidders for licenses that are 
auctioned early must bid with less information about the value of 
licenses to be auctioned later, and have less opportunity to pursue 
backup bidding strategies. Nonetheless, because oral sequential 
auctions are generally less complex, and costly both for the FCC and 
for potential bidders, they may be appropriate to use where the 
expected value of the narrowband PCS licenses to be auctioned is low 
relative to the costs of conducting a more complex auction or where 
interdependence is less significant.
    8. We may find, for some narrowband PCS licenses that even the 
lesser cost and complexity of oral sequential auctions are not 
justified by the revenues these licenses would be expected to generate. 
In such cases, we may choose to award licenses by single round sealed 
bidding where bids for all licenses are submitted simultaneously and 
the high bidder for each license is determined after a single round of 
bidding. Single round sealed bidding has the principal advantage of 
being relatively simple for bidders to understand and inexpensive for 
the FCC to administer and also can generally be completed fairly 
rapidly. However, because single round sealed bidding provides less 
information and flexibility to bidders than either simultaneous or 
sequential auctions, we will generally use this method only where there 
is less interdependence among individual licenses or groups of licenses 
and the expected value of the licenses to be auctioned is low relative 
to the cost of conducting a more complex auction. In addition, we may 
select this auction design where eligibility requirements limit 
participation to relatively few bidders.
    9. Combinatorial bidding. Although we recognize that there are 
significant benefits associated with combinatorial bidding, especially 
in terms of efficient aggregation of licenses, we conclude that 
simultaneous multiple round auctions offer many of these same 
advantages without the same degree of administrative and operational 
complexity and without biasing auction outcomes in favor of combination 
bids. Since simultaneous multiple round bidding is our preferred 
auction method for awarding narrowband PCS licenses, we think 
combinatorial bidding will be unnecessary in most narrowband PCS 
auctions. However, in circumstances where we do not use simultaneous 
multiple round bidding, we may permit combinatorial bidding.

Bidding Procedures

    10. Grouping of licenses. Whether we use our preferred approach of 
a sequence of simultaneous multiple round auctions or sequential 
individual auctions, the Commission must choose which licenses will be 
auctioned together. The importance of the choice of license grouping 
increases with the degree of interdependence among the individual 
licenses or groups of licenses to be auctioned. Accordingly, we will 
group narrowband PCS licenses into the various simultaneous auctions by 
aggregating together those licenses exhibiting the greatest degree of 
interdependence so that there will be limited interdependence across 
groups.
    11. Based on the foregoing, we will auction narrowband PCS licenses 
in the following license groupings. We will award all nationwide, 
regional and MTA (other than MTA response channels) licenses through a 
sequential series of simultaneous auctions. (However, as we gain 
experience we may determine that an alternative auction method or 
license grouping is more appropriate. Under these circumstances, as 
provided in the general procedural rules, we will announce before each 
auction the licenses to be auctioned and the type of competitive 
bidding method to be used, as well as the stopping rules and activity 
rules, if any, that will be used.) To maximize the information 
available to bidders and increase gradually the complexity of the 
narrowband PCS auctions as we gain more experience, we will begin by 
auctioning the ten nationwide narrowband licenses in one simultaneous 
multiple round auction. After the nationwide narrowband PCS auction is 
complete, we will auction the five regional blocks (30 licenses) 
together in one simultaneous multiple round auction. We subsequently 
will conduct another simultaneous multiple round auction for all of the 
50/50 kHz paired, 50/12.5 kHz paired and the 50 kHz unpaired MTA 
licenses (357 licenses). Simultaneous multiple round auctions are 
appropriate for each of these license groupings because of the 
relatively high value and significant interdependence of the licenses.
    12. After auctioning the MTA licenses, we will hold another 
simultaneous multiple round auction for the 50/12.5 kHz paired BTA 
licenses (984 licenses). Although most of the licenses are expected to 
have relatively low values, individually they are highly 
interdependent, and their aggregate value (compared to the cost of 
conducting a simultaneous auction) is sufficiently high to justify a 
simultaneous multiple round auction. Using this approach will also 
enable the Commission to gain valuable experience conducting 
simultaneous multiple round auctions involving large numbers of 
licenses.
    13. Finally, we will auction the 12.5 kHz unpaired MTA (204 
licenses) and the 12.5 kHz unpaired BTA response channel licenses 
(1,968 licenses) in a single round sealed bid auction because their 
values are low relative to the cost of conducting other more complex 
auctions. Under this auction method, however, bidders cannot be certain 
that they will be the high bidder on all of the licenses they seek to 
obtain because single round sealed bidding does not provides bidders 
with timely information about license values and bidders do not have 
the opportunity to increase their bid amounts during the course of the 
auction. Therefore, in this context we will allow bidders to bid on 
more licenses than they are eligible to be awarded under the existing 
aggregation limits, provided they specify in advance the order in which 
they wish to be awarded such licenses in the event that they are in 
high bidder on more licenses then they are permitted to hold. See 47 
CFR 24.130(a) (limiting paging licensees to a maximum of two response 
channel licenses within the same geographic area). Bidders, however, 
will only be permitted to bid on response channel licenses for which 
they are otherwise eligible (i.e., they must operate at least one base 
station in the service area of the response channel for which they are 
applying). The Commission will only designate a bidder the winning 
bidder on the maximum number of licenses the bidder is eligible to 
hold. Under these circumstances, a high bidder will not be subject to 
the bid withdrawal penalty for those additional licenses for which it 
is not designated the winning bidder.
    14. Bid increments. Where we use simultaneous multiple round 
auctions to award narrowband PCS licenses it is important to specify 
minimum bid increments. In these auctions, we may impose a minimum bid 
increment of 5 percent or $0.01 per pop per MHz, whichever is greater. 
This will provide flexibility for a wide range of different license 
values and will ensure timely closure of auctions, even where bidding 
begins at a very low dollar amount. The Commission retains the 
discretion in narrowband PCS auctions to set and, by announcement 
before or during the auction, vary the minimum bid increments for 
individual licenses or groups of licenses over the course of an 
auction. We will most likely reduce the minimum bid increment only in 
the later bidding rounds, as bidding begins to come to a close. In oral 
sequential auctions the auctioneer may within its sole discretion 
establish and vary the amount of the minimum bid increment in each 
round of bidding.
    15. Stopping rules for multiple round auctions. Where we use 
simultaneous multiple round bidding, we believe that a simultaneous 
stopping rule is preferable, especially for the nationwide, regional 
and MTA narrowband PCS licenses, which are expected to have relatively 
high values and are fewer in number. Because of the large number of BTA 
licenses and their relatively low expected value, we may use either a 
hybrid stopping rule or allow markets to close individually in auctions 
for these licenses.
    16. We will retain the discretion to declare at any point in a 
simultaneous multiple round auction that the auction will end after one 
additional round or some other specified number of additional rounds. 
We also reserve the discretion to vary the duration of bidding rounds 
or the interval at which bids are accepted in order to move the auction 
toward closure more quickly. We will announce by public notice, and may 
vary by announcement during an auction, the duration and intervals 
between bidding rounds.
    17. Activity rules. In order to ensure that simultaneous auctions 
with simultaneous stopping rules close within a reasonable period of 
time, it is necessary to impose an activity rule to prevent bidders 
from waiting until the end of the auction before participating. The 
rule proposed by Professors Paul Milgrom and Robert Wilson (``Milgrom-
Wilson rule'') will best achieve the Commission's goal of affording 
bidders flexibility to pursue back up strategies, while at the same 
time ensuring that simultaneous auctions are concluded within a 
reasonable period of time. Therefore, to award higher value narrowband 
PCS licenses, we plan to use the Milgrom-Wilson rule with a 
simultaneous stopping rule.
    18. Under the Milgrom-Wilson rule, the minimum activity level, 
measured as a fraction of the self declared maximum eligibility, would 
increase during the course of the auction. The auction would be divided 
into three stages. During the first stage of the auction, bidders would 
be required to be active on licenses encompassing at least one-third of 
the MHz-pops for which they are eligible. In the second stage, bidders 
would be required to be active on licenses encompassing at least two-
thirds of the MHz-pops for which they are eligible. In the third stage, 
bidders would be required to be active on licenses encompassing 100 
percent of the MHz-pops for which they are eligible. Under this rule, 
bidders would be required to meet these activity levels to retain their 
desired eligibility. A shortfall in activity would reduce eligibility 
levels accordingly. However, bidders will be permitted five automatic 
waivers from the activity rule during the course of an auction. We also 
retain the discretion to use less complex activity rules.

Procedural, Payment, and Penalty Matters

    19. Pre-auction procedures. We will follow the procedural, payment 
and penalty rules established in the Second Report and Order with 
certain minor modifications designed to address the characteristics of 
the narrowband PCS service. Before each scheduled narrowband PCS 
auction the Commission, or pursuant to delegated authority, a Bureau 
will release an initial Public Notice announcing the auction. This 
initial Public Notice will specify the license(s) to be auctioned and 
the time, place and method of competitive bidding to be used, including 
applicable bid procedures. The initial public notice will also specify 
the filing deadline for short-form applications.
    20. All bidders will be required to submit short-form applications 
on FCC Form 175 by the date specified in the public notice. If only one 
application is received, the Commission will by public notice cancel 
the auction for this license and establish a date for the filing of a 
long-form application, the acceptance of which will trigger the 
procedures permitting petitions to deny. The Commission will issue a 
second Public Notice listing all defective applications and applicants 
will be given a chance to cure and resubmit applications with minor 
defects.
    21. After reviewing the corrected applications, the Commission will 
release a third public notice announcing the names of all applicants 
whose applications have been accepted. These applicants will then be 
required to submit the full amount of their upfront payment to the 
Commission's lock-box bank by a date specified in the public notice. A 
fourth public notice announcing the names of all applicants that have 
been determined to be qualified to bid will then be issued. Each of 
these applicants will receive a bidder identification number and 
further instructions regarding auction procedures.
    22. Upfront payments. We will require all auction participants to 
tender in advance to the Commission an upfront payment as a condition 
of bidding. We believe that a standard upfront payment formula of $0.02 
per pop per MHz for the largest combination of MHz-pops a bidder 
anticipates bidding on in any single round of bidding is appropriate 
for narrowband PCS services. If licenses covering the nation are being 
auctioned simultaneously, a bidder will not be required to file an 
upfront payment representing national coverage unless it intends to bid 
on licenses covering the entire nation in any single bidding round. We 
will announce the upfront payment amount for each license in a public 
notice issued prior to the auction.
    23. We believe that the minimum upfront payment of $2,500 
established in the Second Report and Order may be too high for some 
narrowband licenses in sparsely populated areas, which may have values 
below this amount. Therefore, we will establish a lower minimum upfront 
payment of $1,000 for narrowband PCS applications. The specific 
procedures to be followed in the tendering and processing of upfront 
payments are set forth in Section 1.2106 of the Commission's rules.
    24. Down payment and full payment for licenses awarded by 
competitive bidding. Winning bidders will be required to supplement 
their upfront payments with a down payment sufficient to bring their 
total deposits up to 20 percent of their winning bid(s). The down 
payment must be submitted by cashier's check or wire transfer to our 
lock-box bank by a date specified, generally within five business days 
following the close of the bidding. All auction winners, with the 
exception of certain designated entities, will be required to make full 
payment of the balance of the winning bids within five business days 
following the award of the license. Small Businesses will be permitted 
to pay 10 percent of their down payment amount within five businesses 
days after bidding is closed and the remaining 10 percent within five 
days after grant of the license. As discussed below, small businesses 
will also be permitted to pay the balance of their winning bid amount 
for certain licenses in installments over the term of the license. 
License grants will be conditioned on full payment of the bid amount.
    25. Default and disqualification. Any bidder who withdraws a high 
bid during an auction before bidding closes, or defaults by failing to 
remit the required down payment within the prescribed time, will be 
required to reimburse the Commission in the amount of the difference 
between its high bid and the amount of the winning bid the next time 
the license is auctioned, if the subsequent winning bid is lower. After 
bidding closes, a defaulting or disqualified auction winner will be 
assessed an additional penalty of three percent of the subsequent 
winning bid or three percent of the amount of the defaulting bid, 
whichever is less. Deposits will be held by the FCC until full payment 
of the penalty. If default of disqualification involves such actions as 
gross misconduct, the Commission may declare the applicant ineligible 
to bid in future auctions and may take other actions including the 
revocation of Commission licenses.
    26. If the down payment is timely made, a long-form application 
filed on FCC form 401 (as modified) will be required to be filed by a 
specified date, generally within 10 business days after the close of 
the auction. Upon acceptance for filing of the long-form application, 
the FCC will release a public notice announcing this fact thus 
triggering the filing window for petitions to deny. If the petitions to 
deny are denied, and the FCC finds the applicant qualified, the license 
will be granted to the auction winner.
    27. As proposed, we adopt a modified version of the application 
requirements and processing rules in part 22 of the Commission's rules 
for narrowband PCS. These rules govern such matters as application 
filing and content requirements, waiver procedures, procedures for 
returning defective applications, and procedures regarding the 
modification of applications.
    28. With regard to petitions to deny, we adopt expedited procedures 
consistent with the provisions of section 309(i)(2) of the 
Communications Act for narrowband PCS applications. A hearing need not 
be conducted before denial of a petition to deny if the Commission 
determines that an applicant is not qualified and no substantial issue 
of fact exists concerning that determination. If the FCC identifies 
substantial and material issues of fact in need of resolution, section 
309(i)(2) of the Act permits in any hearing submission for all or part 
of the evidence in written form and allows employees other than 
administrative law judges to conduct hearings.
    29. As a general rule, when an auction winner defaults or is 
otherwise disqualified after having made the required down payment, the 
best course of action is to re-auction the license either to existing 
or new applicants. However, if the default occurs within five (5) 
businesses days after bidding has closed, the Commission retains the 
discretion to offer the license to the second highest bidder at its 
final bid level, or if that bidder declines the offer, to offer the 
license to other bidders (in descending order of their bid amounts) at 
their final bid levels.
    30. If a new auction becomes necessary because of default or 
disqualification more than five (5) business days after bidding has 
ended the Commission will afford new parties an opportunity to file 
applications because so much time is likely to have passed that 
different parties may be interested in bidding and existing applicants 
may have different valuations of the license.

Procedures in Other Auction Designs

    31. Single round bidding. Where we use sealed bidding, in addition 
to the information specified above, the initial public notice will 
specify the date on which sealed bids must be submitted. In single 
round sealed bid auctions, we will not require bidders to submit 
upfront payments because we believe that there is less risk of 
frivolous bidding when this auction design is used. We may, however, 
announce by public notice that bidders must tender the 20 percent down 
payment at the time they submit their buds in order to ensure payment 
of the penalty in case of bid withdrawal or default. In single round 
sealed bid auctions, we will require that bids be received on a date 
specified in the public notice and that bids clearly indicate the 
bidder's identification number and the auction and license to which the 
bid relates. Bidders submitting bids for more licenses than they are 
permitted to hold must also specify the order in which they wish to be 
awarded such licenses if they are the high bidder on more licenses then 
they are eligible to hold. After bids are submitted and evaluated, the 
Commission will issue a second public notice indicating all bidders who 
have made timely bid submissions. After release of the second public 
notice, the Commission will issue a third public notice announcing the 
high bidders on each license. (If a tie occurs, bidders will be 
afforded the opportunity to submit another bid and the highest bidder 
in this round will be designated the winning bidder.) If the 20 percent 
deposit has not already been submitted, then the high bidder will be 
required to submit the 20 percent down payment within five (5) business 
days after release of the public notice announcing the high bidders (if 
the 20 percent down payment has already been submitted, the Commission 
will simply deposit the high bidder's down payment).
    32. In the case of single round bidding, the withdrawal and default 
penalties must be modified to reflect the fact that bids cannot be 
withdrawn during the course of an auction because there is only a 
single round of bidding. In this context, if a bid is withdrawn before 
the Commission releases the public notice announcing the high bidders, 
no harm is likely to occur and no penalty will be assessed because the 
Commission can easily designate in the public notice that the party 
with the next highest bid is the winning bidder. If, however, a high 
bidder in a single round auction defaults after release of the public 
notice announcing the high bidders, the licensing process is likely to 
be delayed. Therefore, in order to encourage bidders in single round 
auctions to avoid default and the associated delays, we will impose a 
default penalty if a high bidder withdraws, defaults or is otherwise 
disqualified after release of the public notice announcing the winning 
bidders. This penalty will be equal to the difference between the high 
bid amount and the amount of the next highest valid bid. A bid will be 
considered valid for this purpose if the bidder has not already been 
designated the winning bidder on more licenses than it is permitted to 
be awarded.
    33. Bidders will be held to their bids on the maximum number of 
licenses they are permitted to hold. If there are multiple defaults 
each bidder will be responsible for the difference between its bid and 
the amount of the next highest valid bid. Holding each bidder in a 
single round auction responsible for the difference between its bid and 
the next highest valid bid will discourage cascading defaults, without 
penalizing bidders for bidding on more licenses than they are permitted 
to hold. Losing bidders, may decline a defaulted license without 
penalty if such default occurs more than 30 days after the Commission 
releases the initial public notice announcing the winning bidders. 
Where a bidder defaults or is disqualified more than 30 days after the 
release of the initial public notice announcing the winning bidders the 
Commission retains the discretion to either offer the license to the 
bidder with the next highest valid bid at its original bid price or re-
auction the license. If the Commission re-auctions the license, new 
applications will be accepted and the additional three percent penalty 
will apply.
    34. Oral sequential auctions. Where oral sequential bidding is 
employed, the general procedures described above will be followed with 
one exception. Qualified bidders will be required to bring a cashier's 
check for the full amount of their upfront payment to the auction site. 
Bidders will be required to display their upfront payment check as a 
condition of being issued a bidder identification number and admittance 
to the bidder section of the auction site. After bidding closes on a 
particular license, the high bidder will be asked to tender its upfront 
payment and sign a bid confirmation form. If the high bidder declines 
to tender the upfront payment and/or refuses to sign the bid 
confirmation form, no penalty will be assessed because the license 
would be immediately re-auctioned. The only damage from such withdrawal 
would be delay. And in an oral sequential auction such delay may be 
minimal. The standard default penalty and the additional three percent 
penalty will be assessed, however, if the bidder defaults on the 20 
percent down payment, fails to pay for the license or is disqualified 
after the close of an auction.

Regulatory Safeguards

    35. Unjust enrichment provisions. The transfer disclosure 
requirements in section 1.2111(a) of our rules, adopted in the Second 
Report and Order, will apply to all narrowband PCS licenses obtained 
through the competitive bidding process. Generally, applicants 
transferring their licenses within three years after the initial 
license grant will be required to file, together with their transfer 
application, the associated contracts for sale and all other documents 
disclosing the total consideration received in return for the transfer 
of its license.
    36. Performance requirements. The narrowband PCS service rules 
contain specific performance requirements, such as the requirement to 
construct within a specified period of time. Failure to satisfy these 
construction requirements will result in forfeiture of the license. 
Therefore, additional performance requirements are not necessary.
    37. Rules prohibiting collusion. The rules prohibiting collusion, 
adopted in the Second Report and Order, apply to all auctionable 
services including narrowband PCS. Bidders will generally be required 
to identify on their Form 175 applications all parties with whom they 
have arrangements or agreements which relate to the competitive bidding 
process. Bidders will also be required to provide certifications that 
they have entered into no other agreements. After the short-form 
application is filed, and prior to the down payment of a winning bid, 
bidders are prohibited from collaborating or discussing the substance 
of their bids or bidding strategies with bidders not members of a 
bidding consortium previously identified in the short-form application.
    38. Winning bidders are required to attach as an exhibit to the 
Form 401 application a detailed explanation of the terms, conditions 
and parties in any agreement relating to the competitive bidding 
process. All such arrangements must have been entered into prior to the 
filing of short-form applications. Specific instances of collusion in 
the competitive bidding process may result in investigation by the FCC 
or referral to the United States Department of Justice for 
investigation. Adjudicated violations of our rules or the anti-trust 
laws may result in forfeiture of payments, license revocations and 
prohibition from participation in future auctions.

Designated Entity Preferences

    39. Bidding credits. In this Report and Order, we adopt specific 
preferences for narrowband PCS designed to ensure that designated 
entities are given the opportunity to participate in the competitive 
bidding process and the provision of narrowband PCS services. We will 
make a 25 percent bidding credit available to businesses owned by women 
and minorities bidding on the following licenses: (1) The nationwide 
license on Channel 5, Channel 8 and Channel 11; (2) all regional 
licenses on Channel 13 and Channel 17; (3) all MTA licenses on Channel 
19, Channel 22, Channel 24; and (4) all BTA licenses on Channel 26.
    40. Given the history of under-representation of minorities and 
women in telecommunications and the inability of these groups to access 
financing, we find that the best way we can accomplish these statutory 
mandates is to provide bidding credits exclusively to minority and 
female-owned businesses, regardless of their status as small or large 
entities. We think that a 25 percent bidding credit is sufficient to 
ensure minority and female entry. It is not so substantial, however, as 
to foster participation by firms that are not otherwise financially 
capable of building-out a narrowband PCS network. We will also monitor 
carefully the effectiveness of the 25 percent bidding credit in the 
narrowband PCS auctions and continually assess whether it is achieving 
the goal of ensuring that minority and women-owned firms participate 
successfully in auctions for this service.
    41. To prevent unjust enrichment by women and minorities 
trafficking in licenses acquired through the use of bidding credits, we 
will impose a forfeiture requirement on transfers of such licenses to 
entities that are not owned by women or minorities. The penalty 
required will be reimbursement to the government for the amount of the 
bidding credit, plus interest, before transfer will be permitted. The 
amount of the penalty will be reduced over time. To ensure that only 
legitimate minority and women-owned firms are able to take advantage of 
bidding credits, strict eligibility criteria have been adopted (in the 
Second Report and Order). Also, to ensure that our rules are narrowly 
tailored while meeting the statutory goal of providing opportunities 
for women and minorities to participate in the telecommunications 
industry, publicly-traded companies are prohibited from taking 
advantage of bidding credits.
    42. Tax certificates. Tax certificates will be issued to initial 
investors in minority and female-owned enterprises upon divestiture of 
their interests, and to licensees who transfer their authorizations to 
minority and female-owned businesses. In implementing this program, we 
will borrow from our existing tax certificate program and grant tax 
certificates, upon request, that will enable the licensees and 
investors to defer the gain realized upon a sale either by: (1) 
Treating it as an involuntary conversion under 26 U.S.C. 1033, with the 
recognition of gain avoided by the acquisition of qualified replacement 
property; or (2) electing to reduce the basis of certain depreciable 
property, or both.
    43. Tax certificates will be available to initial investors who 
provide ``start-up'' financing and investors who purchase shares within 
the first year after license issuance. To be eligible for a tax 
certificate, such investor transactions must not reduce minority or 
female ownership or control in the entity below 50.1 percent. To 
prevent unjust enrichment, we will impose a one-year holding 
requirement on the transfer or assignment of narrowband PCS licenses 
obtained thorough the benefit of tax certificates.
    44. Installment payments. We adopt installment payments for small 
businesses--including small businesses owned by women and minorities 
and rural telephone companies that meet the small business definition--
bidding for any of the BTA, MTA or regional narrowband PCS licenses. 
These licenses are appropriately sized for development by bona fide 
small businesses. We estimate that the cost to build-out these licenses 
will be between $50,000 and $1.25 million.
    45. The installment payment option will enable all small businesses 
to pay the full amount of their winning bid in installments (less the 
upfront payment, which must be paid in full, and the down payment, half 
of which is due five days after the auction closes and the other half 
five days after the application is granted). Generally, interest 
charges will be fixed at the time of licensing at a rate equal to the 
rate for 10 year U.S. Treasury obligations. Payments of interest only 
will be due for the first two years. Principal and interest will be 
amortized over the remaining years of the license. Timely payment of 
all installments will be a condition of the license grant. If a small 
business making installment payments seeks to transfer a license to a 
non-small business entity during the term of the license, we will 
require payment of the remaining principal balance as a condition of 
the license transfer.

Final Regulatory Flexibility Analysis

Need for and Purpose of the Action

    46. This rulemaking proceeding was initiated to implement section 
309(j) of the Communications Act, as amended. The rules adopted herein 
will carry out Congress' intent to establish a system of competitive 
bidding for narrowband PCS licenses. The rules adopted herein also will 
carry out Congress' intent to ensure that small businesses, rural 
telephone companies, and businesses owned by women and minorities are 
afforded an opportunity to participate in the provision of spectrum-
based services.

Issues Raised in Response to the Initial Regulatory Flexibility 
Analysis

    47. The IRFA noted that the proposals under consideration in the 
NPRM included the possibility of new reporting and recordkeeping 
requirements for a number of small business entities. No commenters 
responded specifically to the issues raised in the IRFA. We have made 
some modifications to the proposed requirements as appropriate.

Significant Alternatives Considered and Rejected

    All significant alternatives have been addressed in the Second 
Report and Order.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

List of Subjects

47 CFR Part 0

    Organization and functions (Government agencies).

47 CFR Part 24

    Communications common carriers, Communications equipment, Radio, 
Reporting and recordkeeping requirements.

Amendatory Text

    Parts O and 24 of chapter I of title 47 of the Code of Federal 
Regulations are amended as follows:

PART O--COMMISSION ORGANIZATION

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

    Authority: Sec. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155.

    2. Section 0.91 is amended by adding a new paragraph (n) to read as 
follows:


Sec. 0.91  Functions of the Bureau.

* * * * *
    (n) Develops, in coordination with the Office of Plans and Policy, 
policies for the selection of licenses from mutually exclusive 
applicants in the Common Carrier Service subject to competitive 
bidding; issues Public Notices announcing auctions for Common Carrier 
Service Licenses; specifies the licenses to be auctioned; the deadlines 
for filing short-form applications, filing fees, and submission of 
upfront payments; the time and place of the auction; the method of 
competitive bidding to be used; competitive bidding procedures 
including, but not limited to, designated entity preferences, 
applicable bid submission procedures, upfront payment requirements, 
activity rules, stopping rules, and bid withdrawal procedures.

PART 24--PERSONAL COMMUNICATIONS SERVICES

    3. The authority citation for part 24 is revised to read as 
follows:

    Authority: 47 U.S.C. 154, 301, 302, 303, 309 and 332, unless 
otherwise noted.

    4. Section 24.10 is revised to read as follows:


Sec. 24.10  Scope.

    This subpart contains some of the procedures and requirements for 
filing applications for licenses in the personal communications 
services. You should also consult subparts F and G of this part. Other 
Commission rule parts of importance that may be referred to with 
respect to licensing and operation of radio services governed under 
this part include 47 CFR parts 0, 1, 2, 5, 15, 17 and 20.

    5. Section 24.129 is revised to read as follows:


Sec. 24.129  Frequencies.

    The following frequencies are available for narrowband PCS. All 
licenses on channels indicated with an (**) will be eligible for 
bidding credits as set forth in section 24.309(b) of this part if 
competitive bidding is used to award such licenses.
    (a) Eleven frequencies are available for assignment on a nationwide 
basis as follows:
    (1) Five 50 kHz channels paired with 50 kHz channels:

Channel 1: 940.00-940.05 and 901.00-901.05 MHz;
Channel 2: 940.05-940.10 and 901.05-901.10 MHz;
Channel 3: 940.10-940.15 and 901.10-901.15 MHz;
Channel 4: 940.15-940.20 and 901.15-901.20 MHz; and,
Channel 5: 940.20-940.25 and 901.20-901.25 MHz.**

    (2) Three 50 kHz channels paired with 12.5 kHz channels:

Channel 6: 930.40-930.45 and 901.7500-901.7625 MHz;
Channel 7: 930.45-930.50 and 901.7625-901.7750 MHz; and,
Channel 8: 930.50-930.55 and 901.7750-901.7875 MHz.**

    (3) Three 50 kHz unpaired channels:

Channel 9: 940.75-940.80 MHz;
Channel 10: 940.80-940.85 MHz; and,
Channel 11: 940.85-940.90 MHz.**

    (b) Six frequencies are available for assignment on a regional 
basis as follows:
    (1) Two 50 kHz channels paired with 50 kHz channels:

Channel 12: 940.25-940.30 and 901.25-901.30 MHz; and,
Channel 13: 940.30-940.35 and 901.30-901.35 MHz.**

    (2) Four 50 kHz channels paired with 12.5 kHz channels:

Channel 14: 930.55-930.60 and 901.7875-901.8000 MHz;
Channel 15: 930.60-930.65 and 901.8000-901,8125 MHz;
Channel 16: 930.65-930.70 and 901.8125-901.8250 MHz; and,
Channel 17: 930.70-930.75 and 901.8250-901.8375 MHz.**

    (c) Seven frequencies are available for assignment on a MTA basis 
as follows:
    (1) Two 50 kHz channels paired with 50 kHz channels:

Channel 18: 940.35-940.40 and 901.35-901.40 MHz; and,
Channel 19: 940.40-940.45 and 901.40-901.45 MHz.**

    (2) Three 50 kHz channels paired with 12.5 kHz channels:

Channel 20: 930.75-930.80 and 901.8375-901.8500 MHz;
Channel 21: 930.80-930.85 and 901.8500-901.8625 MHz; and,
Channel 22: 930.85-930.90 and 901.8625-901.8750 MHz.**

    (3) Two 50 kHz unpaired channels:

Channel 23: 940.90-940.95 MHz; and,
Channel 24: 940.95-941.00 MHz.**

    (d) Two 50 kHz channels paired with 12.5 kHz channels are available 
for assignment on a BTA basis:

Channel 25: 930.90-930.95 and 901.8750-901.8875 MHz; and,
Channel 26: 930.95-931.00 and 901.8875-901.9000 MHz.**

    Note 1: Operations in markets or portions of markets which 
border other countries, such as Canada and Mexico, will be subject 
to on-going coordination arrangements with neighboring countries.

    6. Sections 24.130 (b) and (c) are revised to read as follows


Sec. 24.130  Paging response channels.

 * * * * *
    (b) The following four 12.5 kHz unpaired channels are available for 
assignment on a MTA basis:

Channel A: 901.9000-901.9125 MHz;
Channel B: 901.9125-901.9250 MHz;
Channel C: 901.9250-901.9375 MHz; and,
Channel D: 901.9375-901.9500 MHz.

    (c) The following four 12.5 kHz unpaired channels are available for 
assignment on a BTA basis.

Channel E: 901.9500-901.9625 MHz;
Channel F: 901.9625-901.9750 MHz;
Channel G: 901.9750-901.9875 MHz; and,
Channel H: 901.9875-902.0000 MHz.

    7. Part 24 is amended by adding a new subpart F consisting of 
Secs. 23.301 through 24.309 to read as follows:

Subpart F--Competitive Bidding Procedures for Narrowband PCS

Sec.
24.301  Narrowband PCS subject to competitive bidding.
24.302  Competitive bidding design for narrowband PCS licensing.
24.303  Competitive bidding mechanisms.
24.304  Withdrawal, default and disqualification penalties.
24.305  Bidding applications (FCC Form 175 and 175-S Short-Form).
24.306  Submission of upfront payments and downpayments.
24.307  Long-Form applications.
24.308  License grant, denial, default, and disqualification.
24.309  Designated entities.

Subpart F--Competitive Bidding Procedures for Narrowband PCS


Sec. 24.301  Narrowband PCS subject to competitive bidding.

    Mutually exclusive initial applications to provide narrowband PCS 
service are subject to competitive bidding procedures. The general 
competitive bidding procedures found in 47 CFR part 1, subpart Q, will 
apply unless otherwise provided in this part.


Sec. 24.302  Competitive bidding design for narrowband PSC licensing.

    (a) The Commission will employ the following competitive bidding 
designs when choosing from among mutually exclusive initial 
applications to provide narrowband PCS service:
    (1) Single round sealed bid auctions (either sequential or 
simultaneous);
    (2) Sequential oral auctions;
    (3) Simultaneous multiple round auctions.
    (b) The Commission may design and test alternative procedures. The 
Commission will announce by Public Notice before each auction the 
competitive bidding design to be employed in a particular auction.
    (c) The Commission may use combinatorial bidding, which would allow 
bidders to submit all or nothing bids on combinations of licenses, in 
addition to bids on individual licenses. The Commission may require 
that to be declared the high bid, a combinatorial bid must exceed the 
sum of the individual bids by a specified amount. Combinatorial bidding 
may be used with any type of auction design.
    (d) The Commission may use single combined auctions, which combine 
bidding for two or more substitutable licenses and award licenses to 
the highest bidders until the available licenses are exhausted. This 
technique may be used in conjunction with any type of auction.


Sec. 24.303  Competitive bidding mechanisms.

    (a) Sequencing. The Commission will establish and may vary the 
sequence in which narrowband PCS licenses will be auctioned.
    (b) Grouping. In the event the Commission uses either a 
simultaneous multiple round competitive bidding design or combinatorial 
bidding, the Commission will determine which licenses will be auctioned 
simultaneously or in combination.
    (c) Reservation Price. The Commission may establish a reservation 
price, either disclosed or undisclosed, below which a license subject 
to auction will not be awarded.
    (d) Minimum Bid Increments. The Commission may, by announcement 
before or during an auction, require minimum bid increments in dollar 
or percentage terms.
    (e) Stopping Rules. The Commission may establish stopping rules 
before or during multiple round auctions in order to terminate an 
auction within a reasonable time.
    (f) Activity Rules. The Commission may establish activity rules 
which require a minimum amount of bidding activity. In the event that 
the Commission establishes an activity rule in connection with a 
simultaneous multiple round auction, each bidder will be entitled to 
request and will be automatically granted five (5) waivers of such rule 
during the course of a single auction.


Sec. 24.304  Withdrawal, default and disqualification penalties.

    (a) When the Commission conducts a simultaneous multiple round 
auction pursuant to Sec. 24.302(a)(3), the Commission will impose 
penalties on bidders who withdraw high bids during the course of an 
auction, or who default on payments due after an auction closes or who 
are disqualified.
    (1) Bid withdrawal prior to close of auction. A bidder who 
withdraws a high bid during the course of an auction will be subject to 
a penalty equal to the difference between the amount bid and the amount 
of the winning bid the next time the license is offered by the 
Commission. No withdrawal penalty would be assessed if the subsequent 
winning bid exceeds the withdrawn bid. This penalty amount will be 
deducted from any upfront payments or down payments that the 
withdrawing bidder has deposited with the Commission.
    (2) Default or disqualification after close of auction. If a high 
bidder defaults or is disqualified after the close of such an auction, 
the defaulting bidder will be subject to the penalty in paragraph 
(a)(1) of this section plus an additional penalty equal to three (3) 
percent of the subsequent winning bid. If the subsequent winning bid 
exceeds the defaulting bidder's bid amount, the 3 percent penalty will 
be calculated based on the defaulting bidder's bid amount. These 
amounts will be deducted from any upfront payments or down payments 
that the defaulting or disqualified bidder has deposited with the 
Commission.
    (b) When the Commission conducts single round sealed bid auctions 
or sequential oral auctions, the Commission may modify the penalties to 
be paid in the event of bid withdrawal, default or disqualification; 
provided, however, that such penalties shall not exceed the penalties 
specified above.
    (c) In the case of single round bidding for narrowband PCS 
licenses:
    (1) If a bid is withdrawn before the Commission releases the 
initial public notice announcing the winning bidder(s), no bid 
withdrawal penalty will be assessed.
    (2) If a bid is withdrawn after the Commission releases the initial 
public notice announcing the winning bidder(s), the bid withdrawal 
penalty will be equal to the difference between the high bid amount and 
the amount of the next highest valid bid. A bid will be considered 
valid for this purpose if the bidder has not already been designated 
the winning bidder on more licenses than it is permitted to be awarded. 
Losing bidders will only be subject to this bid withdrawal penalty for 
a period of 30 days after the Commission releases the initial public 
notice announcing the winning bidders.
    (d) In the case of oral sequential bidding for narrowband PCS 
licenses:
    (1) If a bid is withdrawn before the Commission has declared the 
bidding to be closed for the license bid on, no bid withdrawal penalty 
will be assessed.
    (2) If a bid is withdrawn after the Commission has declared the 
bidding to be closed for the license bid on, the bid withdrawal penalty 
of Sec. 1.2104(g) and paragraphs (a) (1) and (2) of this section will 
apply.


Sec. 24.305  Bidding application (FCC Form 175 and 175-S Short-Form).

    All applicants for initial provision of narrowband PCS service must 
submit applications on FCC Forms 175 and 175-S pursuant to the 
procedures set forth in Sec. 1.2105 of part 1 of this chapter. The 
Commission will issue a public notice announcing the date of a 
narrowband PCS auction, the licenses which are to be auctioned, and the 
date on or before which applicants intending to participate in an 
upcoming narrowband PCS auction must file their applications in order 
to be eligible for that auction. The public notice will also contain 
information necessary for completion of the application as well as 
other important information such as the materials which must accompany 
the Forms, any filing fee that must accompany the application or any 
upfront payment that will need to be submitted, and the location where 
the application must be filed.


Sec. 24.306  Submission of upfront payments and down payments.

    (a) Where the Commission uses simultaneous multiple round auctions 
or oral sequential auctions bidders will be required to submit an 
upfront payment pursuant to the procedures set forth in Sec. 1.2106 of 
this chapter.
    (b) Winning bidders in an auction must submit a down payment to the 
Commission in accordance with the procedures set forth in Sec. 1.2107 
(a) and (b) of this chapter.


Sec. 24.307  Long-Form applications.

    Winning bidders will be required to submit long form applications 
on FCC Form 401, as modified, within ten (10) business days after being 
notified that they are the winning bidder. Applications on FCC Form 401 
shall be submitted pursuant to the procedures set forth in subpart G of 
this part and Sec. 1.2107 (c) and (d) of this chapter and any 
associated public notices. Only auction winners will be eligible to 
file applications on FCC Form 401 for initial narrowband PCS licenses 
in the event of mutual exclusivity between applicants filing Form 175. 
Winning bidders need not complete Schedule B to Form 401.


Sec. 24.308  License grant, denial, default, and disqualification.

    (a) Winning Bidders are required to pay the balance of their 
winning bid in a lump sum payment within five (5) business days 
following the award of the license. Grant of the license will be 
conditioned upon full and timely payment of the winning bid amount.
    (b) A bidder who withdraws its bid, defaults on a payment or is 
disqualified will be subject to the penalties specified in Sec. 1.2109 
of this chapter.


Sec. 24.309  Designated entities.

    Designated entities entitled to preferences in the narrowband PCS 
service are small businesses and businesses owned by members of 
minority groups and/or women as defined in Sec. 1.2110(b) of this 
chapter.
    (a) Installment payments. Small businesses, including small 
businesses owned by women and/or minorities, will be eligible to pay 
the full amount of their winning bid on any regional, MTA or BTA 
license in installments over the term of the license pursuant to the 
terms set forth in Sec. 1.2110(d) of this chapter.
    (b) Bidding credits. Businesses owned by women and/or minorities, 
including small businesses owned by women and/or minorities will be 
eligible for a twenty-five percent (25) bidding credit when bidding on 
the following licenses:
    (1) The nationwide licenses on Channel 5, Channel 8 and Channel 11;
    (2) All regional licenses on Channel 13 and Channel 17;
    (3) All MTA licenses on Channel 19, Channel 22, Channel 24; and
    (4) All BTA licenses on Channel 26. See 47 CFR 24.129.
The bidding credit will reduce by 25 percent the bid price that 
businesses owned by women and/or minorities will be required to pay to 
obtain a license. The licenses that will be eligible for bidding 
credits are indicated by an (**) in Sec. 24.129.
    (c) Tax certificates. Any initial investor in a business owned by 
minorities and/or women and who provides ``start-up'' financing, which 
allows such business to acquire a narrowband PCS license(s), and any 
investor who purchases an ownership interest in a narrowband PCS 
licensee owned by minorities and/or women within the first year after 
license issuance, which allows for the stabilization of the entity's 
capital base, may, upon the sale of such investment or interest, 
request from the Commission a tax certificate, so long as such investor 
transaction does not reduce minority or female ownership or control in 
the entity below 50.1 percent. Any narrowband PCS licensee who assigns 
or transfers control of its license to a business owned by minorities 
and/or women may request that the Commission issue it a tax 
certificate.
    (d) Unjust enrichment. Designated entities using installment 
payments, bidding credits or tax certificates to obtain a narrowband 
PCS license will be subject to the following unjust enrichment 
provisions:
    (1) If a small business paying for a narrowband PCS license in 
installment payments seeks to transfer a license to a non-small 
business entity during the term of the license, the remaining principal 
balance must be repaid as a condition of the license transfer.
    (2) Female and minority-owned businesses seeking to transfer a 
license to an entity that is not owned by women or minorities will be 
required to reimburse the government for the amount of the bidding 
credit, plus interest at the rate imposed for installment financing at 
the time the license was awarded, before transfer will be permitted. 
The amount of this penalty will be reduced over time as follows: a 
transfer in the first two years of the license term will result in a 
forfeiture of 100 percent of the value of the bidding credit; in year 
three of the licenses term the penalty will be 75 percent; in year four 
the penalty will be 50 percent and in year five the penalty will be 25 
percent, after which there will be no penalty.
    (3) Any business owned by minorities and or women that obtains a 
narrowband PCS license through the benefit of tax certificates shall 
not assign or transfer control of its license within one year of its 
license grant date. If the assignee or transferee is a business owned 
by minorities and or women, this paragraph shall not apply; Provided, 
however, that the assignee or transferee shall not assign or transfer 
control of the license within one year of the grant date of the 
assignment or transfer.
    8. Part 24 is amended by adding a new subpart G consisting of 
Secs. 24.403 through 24.444 to read as follows:

Subpart G--Interim Application, Licensing and Processing Rules for 
Narrowband PCS

Sec.
24.403  Authorization required.
24.404  Eligibility.
24.405  Formal and informal applications.
24.406  Filing of Narrowband PCS applications, fees, and numbers of 
copies.
24.407-24.408  [Reserved]
24.409  Standard Application forms and permissive changes or minor 
modifications for the narrowband Personal Communications Service.
24.411  Miscellaneous forms.
24.412  [Reserved]
24.413  General application requirements.
24.414  [Reserved]
24.415  Technical content of applications; maintenance of list of 
station locations.
24.416  Station Antenna Structures.
24.417-24.418  [Reserved]
24.419  Waiver of rules.
24.420  Defective applications.
24.421  Inconsistent or conflicting applications.
24.422  Amendment of application for Narrowband Personal 
Communications Service filed on FCC Form 175.
24.423  Amendment of applications for Narrowband Personal 
Communications Service (other than applications filed on FCC Form 
175). This section applies to all applications for Narrowband 
Personal Communications Service other than applications filed on FCC 
Form 175.
24.424  [Reserved]
24.425  Application for temporary authorizations.
24.426  Receipt of application; applications in the narrowband 
Personal Communications Services filed on FCC Form 175 and other 
applications in the narrowband PCS Service.
24.427  Public notice period.
24.428  Dismissal and return of applications.
24.429  Ownership changes and agreements to amend to dismiss 
applications or pleadings.
24.430  Opposition to applications.
24.431  Mutually exclusive applications.
24.432  Consideration of applications.
24.433-24.438  [Reserved]
24.439  Transfer of control or assignment of station authorization.
24.440-24.442  [Reserved]
24.443  Extension of time to complete construction.
24.444  Termination of authorization.

SUBPART G--INTERIM APPLICATION, LICENSING AND PROCESSING RULES FOR 
NARROWBAND PCS


Sec. 24.403  Authorization required.

    No person shall use or operate any device for the transmission of 
energy or communications by radio in the services authorized by this 
part except as provided in this part.


Sec. 24.404  Eligibility.

    (a) General. Authorizations will be granted upon proper application 
if:
    (1) The applicant is qualified under the applicable laws and the 
regulations, policies and decisions issued under the laws, including 
Sec. 24.101 and 24.12;
    (2) There are frequencies available to provide satisfactory 
service; and
    (3) The public interest, convenience or necessity would be served 
by a grant.
    (b) Alien ownership.
A narrowband PCS authorization to provide Commercial Mobile Radio 
Service may not be granted to or held by:
    (1) Any alien or the representative of any alien.
    (2) Any corporation organized under the laws of any foreign 
government.
    (3) Any corporation of which any officer or director is an alien or 
of which more than one-fifth of the capital stock is owned of record or 
voted by aliens or their representatives or by a foreign government or 
representative thereof or any corporation organized under the laws of a 
foreign country.
    (4) Any corporation directly or indirectly controlled by any other 
corporation of which any officer or more than one-fourth of the 
directors are aliens, or of which more than one-fourth of the capital 
stock is owned of record or voted by aliens, their representatives, or 
by a foreign government or representative thereof, or by any 
corporation organized under the laws of a foreign country, if the 
Commission finds that the public interest will be served by the refusal 
or revocation of such license. A Narrowband PCS authorization to 
provide Private Mobile Radio Service may not be granted to or held by a 
foreign government or a representative thereof.


Sec. 24.405  Formal and informal applications.

    (1) Except for an authorization under any of the conditions stated 
in section 308(a) of the Communications Act of 1934 (47 U.S.C. 308(a)), 
the Commission may grant only upon written application received by it, 
the following authorization: Station licenses; modifications of 
licenses; renewals of licenses; transfers and assignments of station 
licenses, or any right thereunder.
    (b) Except as may be otherwise permitted by this part, a separate 
written application shall be filed for each instrument of authorization 
requested. Applications may be:
    (1) ``Formal applications'' where the Commission has prescribed in 
this Part a standard form; or
    (2) ``Informal applications'' (normally in letter form) where the 
Commission has not prescribed a standard form.
    (c) An informal application will be accepted for filing only if:
    (1) A standard form is not prescribed or clearly applicable to the 
authorization requested;
    (2) It is a document submitted, in duplicate, with a caption which 
indicates clearly the nature of the request, radio service involved, 
location of the station, and the application file number (if known); 
and
    (3) It contains all the technical details and informational 
showings required by the rules and states clearly and completely the 
facts involved and authorization desired.


Sec. 24.406  Filing of Narrowband PCS applications, fees, and numbers 
of copies.

    (a) As prescribed by Secs. 24.305, 24.307, and 24.409 of this part, 
standard formal application forms applicable to the narrowband PCS may 
be obtained from either:
    (1) Federal Communications Commission, Washington, DC 20554; or
    (2) By calling the Commission's Forms Distribution Center, (202) 
632-3676.
    (b) Applications for the initial provision of narrowband PCS 
service must be filed on FCC Form 175 in accordance with the rules in 
Sec. 24.305 and 47 CFR part 1, subpart Q. In the event of mutual 
exclusivity between applicants filing FCC Form 175, only auction 
winners will be eligible to file subsequent long form applications on 
FCC Form 401 for initial narrowband PCS licenses. Mutually exclusive 
applications filed on Form 175 are subject to competitive bidding under 
those rules. Narrowband PCS applicants filing Form 401 need not 
complete Schedule B.
    (c) All applications for Narrowband PCS radio station 
authorizations (other than applications for initial provision of 
narrowband PCS service filed on FCC Form 175) shall be submitted for 
filing to: Federal Communications Commission, Washington, DC 20554, 
Attention: Narrowband PCS Processing Section. Applications requiring 
fees as set forth at part 1, subpart G of this chapter must be filed in 
accordance with Sec. 0.401(b).
    (d) All correspondence or amendments concerning a submitted 
application shall clearly identify the name of the applicant, applicant 
identification number or Commission file number (if known) or station 
call sign of the application involved, and may be sent directly to the 
Common Carrier Bureau, Narrowband PCS Processing Station.
    (e) Except as otherwise specified, all applications, amendments, 
correspondence, pleadings and forms (including FCC Form 175) shall be 
submitted on one original paper copy and with three microfiche copies, 
including exhibits and attachments thereto, and shall be signed as 
prescribed by Sec. 1.743. Filings of five pages or less are exempt from 
the requirement to submit on microfiche, as well as emergency filings 
like letters requesting special temporary authority. Those filing any 
amendments, correspondence, pleadings, and forms must simultaneously 
submit the original hard copy which must be stamped ``original''. In 
addition to the original hard copy, those filing pleadings, including 
pleadings under 47 CFR 1.2108 shall also submit 2 paper copies as 
provided in 47 CFR 1.51.
    (1) Microfiche copies. Each microfiche copy must be a copy of the 
signed original. Each microfiche copy shall be a 148 mm  x  105 mm 
negative (clear transparent characters appearing on an opaque 
background) at 24X to 27X reduction for microfiche or microfiche 
jackets. One of the microfiche sets must be a silver halide camera 
master or a copy made on silver halide film such as Kodak Direct 
Duplicatory Film. The microfiche must be placed in paper microfiche 
envelopes and submitted in a B6 (125 mm  x  176 mm) or 5  x  7.5 inch 
envelope. All applicants must leave Row ``A'' (the first row for page 
images) of the first fiche blank for in-house identification purposes.
    (2) All applications and all amendments must have the following 
information printed on the mailing envelope, the microfiche envelope, 
and on the title area at the top of the microfiche:
    (i) The name of the applicant;
    (ii) The type of application (e.g., nationwide, regional, MTA, BTA, 
response channel);
    (iii) The month and year of the document;
    (iv) Name of the document;
    (v) File number, applicant identification number, and call sign, if 
assigned; and
    (vi) The identification number and date of the Public Notice 
announcing the auction in response to which the application was filed 
(if applicable).
    Each microfiche copy of pleadings shall include:
    (A) The month and year of the document;
    (B) Name of the document;
    (C) Name of the filing party;
    (D) File number, applicant identification number, and call sign, if 
assigned;
    (E) The identification number and date of the Public Notice 
announcing the auction in response to which the application was filed 
(if applicable). Abbreviations may be used if they are easily 
understood.


Secs. 24.407-24.408  [Reserved].


Sec. 24.409  Standard application forms and permissive changes or minor 
modifications for the narrowband Personal Communications Service.

    (a) Applications for the initial provision of narrowband PCS 
service must be filed on FCC Forms 175 and 175-S.
    (b) Subsequent application by auction winners or non-mutually 
exclusive applicants for narrowband PCS radio station(s) under part 24. 
FCC Form 401 (``Application for New or Modified Common Carrier Radio 
Station Under part 22'') shall be submitted by each auction winner for 
each narrowband PCS license applied for on FCC Form 175. In the event 
that mutual exclusivity does not exist between applicants filing FCC 
Form 175, the Commission will so inform the applicant and the applicant 
will also file FCC Form 401. Blanket licenses are granted for each 
market frequency block. Applications for individual sites are not 
needed and will not be accepted. See Sec. 24.11. Narrowband PCS 
applicants filing Form 401 need not complete Schedule B.
    (c) Extensions of time and reinstatement. When a licensee cannot 
complete construction in accordance with the provisions of Sec. 24.103, 
a timely application for extension of time (FCC Form 489) must be 
filed.
    (d) License for mobile subscriber station--These stations are 
considered to be associated with and covered by the authorization 
issued to the carrier serving the land mobile station. No additional 
authorization is required.


Sec. 24.410  [Reserved].


Sec. 24.411  Miscellaneous forms.

    (a) Licensee qualifications. FCC Form 430 (``Common Carrier and 
Satellite Radio Licensee Qualifications Report'') shall be filed by 
Narrowband Personal Communications Service licensees only as required 
by Form 490 (Application for Assignment or Transfer of Control Under 
part 22).
    (b) Renewal of station license. Except for renewal of special 
temporary authorizations, FCC Form 405 (``Application for Renewal of 
Station License'') must be filed in duplicate by the licensee between 
thirty (30) and sixty (60) days prior to the expiration date of the 
license sought to be renewed.


Sec. 24.412  [Reserved].


Sec. 24.413  General application requirements.

    (a) Each application (including applications filed on Forms 175 and 
401) for a radio station authorization or for consent to assignment or 
transfer of control in the narrowband PCS shall disclose fully the real 
party or parties in interest and must include the following 
information:
    (1) A list of its subsidiaries, if any. Subsidiary means any 
business five per cent or more whose stock, warrants, options or debt 
securities are owned by the applicant or an officer, director, 
stockholder or key management personnel of the applicant. This list 
must include a description of each subsidiary's principal business and 
a description of each subsidiary's relationship to the applicant.
    (2) A list of its affiliates, if any. Affiliates means any business 
which holds a five per cent or more interest in the applicant, or any 
business in which a five per cent or more interest is held by another 
company which holds a five per cent interest in the applicant (e.g. 
Company A owns 5% of Company B and 5% of Company C; Companies B and C 
are affiliates).
    (3) A list of the names, addresses, citizenship and principal 
business of any person holding five per cent or more of each class of 
stock, warrants, options or debt securities together with the amount 
and percentage held, and the name, address, citizenship and principal 
place of business of any person on whose account, if other than the 
holder, such interest is held. If any of these persons are related by 
blood or marriage, include such relationship in the statement.
    (4) In the case of partnerships, the name and address of each 
partner, each partner's citizenship and the share or interest 
participation in the partnership. This information must be provided for 
all partners, regardless of their respective ownership interests in the 
partnership. A signed and dated copy of the partnership agreement must 
be included in the application. This information must be included in 
Exhibit V of the application.
    (b) Each application for a radio station authorization in the 
narrowband PCS must:
    (1) Submit the information required by the Commission's rules, 
requests, and application forms;
    (2) Be maintained by the applicant substantially accurate and 
complete in all significant respects in accordance with the provisions 
of Sec. 1.65 of this chapter; and
    (3) Show compliance with and make all special showings that may be 
applicable.
    (c) Where documents, exhibits, or other lengthy showings already on 
file with the Commission contain information which is required by an 
application form, the application may specifically refer to such 
information, if:
    (1) The information previously filed is over one A4 (21 cm x 29.7 
cm) or 8.5 x 11 inch (21.6 cm x 27.9 cm) page in length, and all 
information referenced therein is current and accurate in all 
significant respects under Sec. 1.65 of this chapter; and
    (2) The reference states specifically where the previously filed 
information can actually be found, including mention of:
    (i) the station call sign or application file number whenever the 
reference is to station files or previously filed applications;
    (ii) The title of the proceeding, the docket number, and any legal 
citations, whenever the reference is to a docketed proceeding. However, 
questions on an application form which call for specific technical 
data, or which can be answered by a ``yes'' or ``no'' or other short 
answer shall be answered as appropriate and shall not be cross-
referenced to a previous filing.
    (d) In addition to the general application requirements of subpart 
F and Secs. 1.2105, 24.413 and 24.415 of this part, applicants shall 
submit any additional documents, exhibits, or signed written statements 
of fact:
    (1) As may be required by these rules; and
    (2) As the Commission, at any time after the filing of an 
application and during the term of any authorization, may require from 
any applicant, permittee, or licensee to enable it to determine whether 
a radio authorization should be granted, denied, or revoked.
    (e) Except when the Commission has declared explicitly to the 
contrary, an informational requirement does not in itself imply the 
processing treatment of decisional weight to be accorded the response.
    (f) All applicants (except applicants filing FCC Form 175) are 
required to indicate at the time their application is filed whether or 
not a Commission grant of the application may have a significant 
environmental impact as defined by 47 CFR 1.1307. If answered 
affirmatively, the requisite environmental assessment as prescribed in 
Sec. 1.1311 of this chapter must be filed with the application and 
Commission environmental review must be completed prior to 
construction. See Sec. 1.1312 of this chapter. All narrowband PCS 
licensees are subject to a continuing obligation to determine whether 
subsequent construction may have a significant environmental impact 
prior to undertaking such construction and to otherwise comply with 
Secs. 1.1301 through 1.1319 of this chapter. See 47 CFR 1.1312.


Sec. 24.414  [Reserved].


Sec. 24.415  Technical content of applications; maintenance of list of 
station locations.

    (a) All applications required by this part shall contain all 
technical information required by the application forms or associated 
public notice(s). Applications other than initial applications for a 
narrowband PCS license must also comply with all technical requirements 
of the rules governing the narrowband PCS (see subparts C and D as 
appropriate). The following paragraphs describe a number of general 
technical requirements.
    (b) Each application (except applications for initial licenses 
filed on Form 175) for a radio station authorization for narrowband PCS 
must comply with the provisions of Secs. 24.129 through 24.135.
    (c)--(i) [Reserved]
    (i) The location of the transmitting antenna shall be considered to 
be the station location. Narrowband PCS licensees must maintain a 
current list of all station locations, which must describe the 
transmitting antenna site by its geographical coordinates and also by 
conventional reference to street number, landmark, or the equivalent. 
All such coordinates shall be specified in terms of degrees, minutes, 
and seconds to the nearest second of latitude and longitude.


Sec. 24.416  Station antenna structures.

    (a) Unless the narrowband PCS licensee has received prior approval 
from the FCC, no antenna structure, including radiating elements, 
tower, supports and all appurtenances, may be higher than 61 m (200 
feet) above ground level at its site.
    (b) Unless the narrowband PCS licensee has received prior approval 
from the FCC, no antenna structure at an airport or heliport that is 
available for public use and is listed in the Airport Directory of the 
current Airman's Information Manual or in either the Alaska or Pacific 
Airman's Guide and Chart Supplement; or at an airport or heliport under 
construction that is the subject of a notice or proposal on file with 
the FAA, and except for military airports, it is clearly indicated that 
the airport will be available for public use; or at an airport or 
heliport that is operated by the armed forces of the United States; or 
a place near any of these airports or heliports, may be higher than:
    (1) 1 m above the airport elevation for each 100 m from the airport 
runway longer than 1 km within 6.1 km of the antenna structure.
    (2) 2 m above the airport elevation for each 100 m from the nearest 
runway shorter than 1 km within 3.1 km of the antenna structure.
    (3) 4 m above the airport elevation for each 100 m from the nearest 
landing pad within 1.5 km of the antenna structure.
    (c) A narrowband PCS station antenna structure no higher than 6.1 m 
(10 feet) above ground level at its site or no higher than 6.1 m above 
any natural object or existing manmade structure, other than an antenna 
structure, is exempt from the requirements of paragraphs (a) and (b) of 
this section.
    (d) Further details as to whether an aeronautical study and/or 
obstruction marking and lighting may be required, and specifications 
for obstruction marking and lighting are contained in part 17 of the 
FCC Rules, Construction, Marking and Lighting of Antenna Structures. To 
request approval to place an antenna structure higher than the limits 
specified in paragraphs (a), (b), and (c) of this section, the licensee 
must notify the Federal Aviation Administration (FAA) on FAA Form 7460-
1 and the FCC on FCC Form 854.


Secs. 24.417-24.418  [Reserved]


Sec. 24.419  Waiver of rules.

    (a) Request for waivers. (1) Waivers of these rules may be granted 
upon application or by the Commission on its own motion. Requests for 
waivers shall contain a statement of reasons sufficient to justify a 
waiver. Waivers will not be granted except upon an affirmative showing:
    (i) That the underlying purpose of the rule will not be served, or 
would be frustrated, by the application in a particular case, and that 
grant of the waiver is otherwise in the public interest; or
    (ii) That the unique facts and circumstances of a particular case 
render application of the rule inequitable, unduly burdensome or 
otherwise contrary to the public interest. Applicants must also show 
the lack of a reasonable alternative.
    (2) If the information necessary to support a waiver request is 
already on file, the applicant may cross-reference to the specific 
filing where it may be found.
    (b) Denial of waiver, alternate showing required. If a waiver is 
not granted, the application will be dismissed as defective unless the 
applicant has also provided an alternative proposal which complies with 
the Commission's rules (including any required showings).


Sec. 24.420  Defective applications.

    (a) Unless the Commission shall otherwise permit, an application 
will be unacceptable for filing and will be returned to the applicant 
with a brief statement as to the omissions or discrepancies if:
    (1) The application is defective with respect to completeness of 
answers to questions, informational showings, execution, or other 
matters of a formal character; or
    (2) The application does not comply with the Commission's rules, 
regulations, specific requirements for additional information or other 
requirements. See also 47 CFR 1.2105.
    (b) Some examples of common deficiencies which result in defective 
applications under paragraph (a) of this section are:
    (1) The application is not filled out completely and signed;
    (2)-(4) [Reserved]
    (5) The application (other than an application filed on FCC Form 
175) does not include an environmental assessment as required for an 
action that may have a significant impact upon the environment, as 
defined in Sec. 1.1307 of this chapter.
    (6) [Reserved]
    (7) The application is filed prior to the Public Notice issued 
under Sec. 24.305 announcing the application filing date for the 
relevant auction or after the cutoff date prescribed in that public 
notice;
    (c) [Reserved]
    (d) If an applicant is requested by the Commission to file any 
documents or any supplementary or explanatory information not 
specifically required in the prescribed application form, a failure to 
comply with such request within a specified time period will be deemed 
to render the application defective and will subject it to dismissal.


Sec. 24.421  Inconsistent or conflicting applications.

    While an application is pending and undecided, no subsequent 
inconsistent or conflicting application may be filed by the same 
applicant, his successor or assignee, or on behalf or for the benefit 
of the same applicant, his successor or assignee.


Sec. 24.422  Amendment of application for Narrowband Personal 
Communications Service filed on FCC Form 175.

    (a) The Commission will provide bidders a limited opportunity to 
cure defects in FCC Form 175 specified herein except for failure to 
sign the application and to make certifications, defects which may not 
be cured. See also 47 CFR 1.2105.
    (b) In the Narrowband PCS, the only amendments to FCC Form 175 
which will be permitted are minor amendments to correct minor errors or 
defects such as typographical errors. All other amendments to FCC Form 
175, such as ownership changes or changes in the identification of 
parties to bidding consortia, will be considered to be major 
amendments. An FCC Form 175 which is amended by a major amendment will 
be considered to be newly filed and cannot be resubmitted after 
applicable filing deadlines. See also Sec. 1.2105.


Sec. 24.423  Amendment of applications for Narrowband Personal 
Communications Service (other than applications filed on FCC Form 175).

    This section applies to all applications for Narrowband Personal 
Communications Service other than applications filed on FCC Form 175.
    (a) Amendments as of right. A pending application may be amended as 
a matter of right if the application has not been designated for 
hearing.
    (1) Amendments shall comply with Sec. 24.429, as applicable; and
    (2) Amendments which resolve interference conflicts or amendments 
under Sec. 24.429 may be filed at any time.
    (b) The Commission or the presiding officer may grant requests to 
amend an application designated for hearing only if a written petition 
demonstrating good cause is submitted and properly served upon the 
parties of record.
    (c) Major amendments, minor amendments. The Commission will 
classify all amendments as minor except in the cases listed below. An 
amendment shall be deemed to be a major amendment subject to 
Sec. 24.427 under any of the following circumstances:
    (1) Change in technical proposal. If the amendment results in a 
substantial change in the engineering proposal such as (but not 
necessarily limited to) a change in, or an addition of, a radio 
frequency; or
    (2) Amendment to proposed service area. If the amendment extends 
the reliable service area of the proposed facilities outside its MTA, 
BTA, or other applicable market area as defined in Sec. 24.102; or
    (3) A substantial change in ownership or control.
    (d) If a petition to deny (or other formal objection) has been 
filed, any amendment, requests for waiver, (or other written 
communications) shall be served on the petitioner, unless waiver of 
this requirement is granted pursuant to paragraph (e) of this section. 
See also 47 CFR 1.2108.
    (e) The Commission may waive the service requirements of paragraph 
(d) of this section and prescribe such alternative procedures as may be 
appropriate under the circumstances to protect petitioners' interests 
and to avoid undue delay in a proceeding, if an applicant submits a 
request for waiver which demonstrates that the service requirement is 
unreasonably burdensome.
    (f) Any amendment to an application shall be signed and shall be 
submitted in the same manner, and with the same number of copies, as 
was the original application. Amendments may be made in letter form if 
they comply in all other respects with the requirements of this 
chapter.
    (g) An application will be considered to be a newly filed 
application if it is amended by a major amendment (as defined in this 
section), except in the following circumstances:
    (1)-(2) [Reserved]
    (3) The amendment reflects only a change in ownership or control 
found by the Commission to be in the public interest;
    (4) [Reserved]
    (5) The amendment corrects typographical transcription, or similar 
clerical errors which are clearly demonstrated to be mistakes by 
reference to other parts of the application, and whose discovery does 
not create new or increased frequency conflicts;
    (6) The amendment does not create new or increased frequency 
conflicts, and is demonstrably necessitated by events which the 
applicant could not have reasonably foreseen at the time of filing, 
such as, for example:
    (i) The loss of a transmitter or receiver site by condemnation, 
natural causes, or loss of lease or option; or
    (ii) Obstruction of a proposed transmission path caused by the 
erection of a new building or other structure.


Sec. 24.424  [Reserved].


Sec. 24.425  Application for temporary authorizations.

    (a) In circumstances requiring immediate or temporary use of 
facilities, request may be made for special temporary authority to 
install and/or operate new or modified equipment. Any such request may 
be submitted as an informal application in the manner set forth in 
Sec. 24.5 and must contain full particulars as to the proposed 
operation including all facts sufficient to justify the temporary 
authority sought and the public interest therein. No such request will 
be considered unless the request is received by the Commission at least 
10 days prior to the date of proposed construction or operation or, 
where an extension is sought, expiration date of the existing temporary 
authorization. A request received within less than 10 days may be 
accepted upon due showing of sufficient reasons for the delay in 
submitting such request.
    (b) Special temporary authorizations may be granted without regard 
to the 30-day public notice requirements of Sec. 24.27(b) when:
    (1) The authorization is for a period not to exceed 30 days and no 
application for regular application is contemplated to be filed;
    (2) The authorization is for a period not to exceed 60 days pending 
the filing of an application for such regular operation;
    (3) The authorization is to permit interim operation to facilitate 
completion of authorized construction or to provide substantially the 
same service as previously authorized; or
    (4) The authorization is made upon a finding that there are 
extraordinary circumstances requiring operation in the public interest 
and that delay in the institution of such service would seriously 
prejudice the public interest.
    (c) Temporary authorizations of operation not to exceed 180 days 
may be granted under the standards of section 309(f) of the 
Communications Act where extraordinary circumstances so require. 
Extensions of the temporary authorization for a period of 180 days each 
may also be granted, but the renewal applicant bears a heavy burden to 
show that extraordinary circumstances warrant such an extension.
    (d) In cases of emergency found by the Commission, involving danger 
to life or property or due to damage of equipment, or during a national 
emergency proclaimed by the President or declared by the Congress or 
during the continuance of any war in which the United States is engaged 
and when such action is necessary for the national defense or safety or 
otherwise in furtherance of the war effort, or in cases of emergency 
where the Commission finds that it would not be feasible to secure 
renewal applications from existing licensees or otherwise to follow 
normal licensing procedure, the Commission will grant radio station 
authorizations and station licenses, or modifications or renewals 
thereof, during the emergency found by the Commission or during the 
continuance of any such national emergency or war, as special temporary 
licenses, only for the period of emergency or war requiring such 
action, without the filing of formal applications.


Sec. 24.426  Receipt of application; applications in the narrowband 
Personal Communications Services filed on FCC Form 175 and other 
applications in the narrowband PCS Service.

    (a) All applications for the initial provision of narrowband PCS 
service must be submitted on FCC Forms 175 and 175-S. Mutually 
exclusive initial applications in the narrowband Personal 
Communications Services are subject to competitive bidding. FCC Form 
401 (``Application for New or Modified Common Carrier Radio Station 
Under Part 22'') must be submitted by each winning bidder for each 
narrowband PCS license applied for on FCC Form 175. In the event that 
mutual exclusivity does not exist between applicants filing FCC Form 
175, the applicant will also file FCC Form 401. The aforementioned 
Forms 175, 175-S, and 401 are subject to the provisions of 47 CFR part 
1, subpart Q (``Competitive Bidding Proceedings'') and subpart F of 
this part. Blanket licenses are granted for each market frequency 
block. Applications for individual sites are not needed and will not be 
accepted. See Sec. 24.11.
    (b) Applications received for filing are given a file number. The 
assignment of a file number to an application is merely for 
administrative convenience and does not indicate the acceptance of the 
application for filing and processing. Such assignment of a file number 
will not preclude the subsequent return or dismissal of the application 
if it is found to be not in accordance with the Commission's rules.
    (c) Acceptance of an application for filing merely means that it 
has been the subject of a preliminary review as to completeness. Such 
acceptance will not preclude the subsequent return or dismissal of the 
application if it is found to be defective or not in accordance with 
the Commission's rules. (See Sec. 24.413 for additional information 
concerning filing of applications.)


Sec. 24.427  Public notice period.

    (a) At regular intervals, the Commission will issue a public notice 
listing:
    (1) The acceptance for filing of all applications and major 
amendments thereto;
    (2) Significant Commission actions concerning applications listed 
as acceptable for filing;
    (3) Information which the Commission in its discretion believes of 
public significance. Such notices are solely for the purpose of 
informing the public and do not create any rights in an applicant or 
any other person;
    (4) Special environmental considerations as required by part 1 of 
this chapter.
    (b)(1) The Commission will not grant any application until 
expiration of a period of thirty (30) days following the issuance date 
of a public notice listing the application, or any major amendments 
thereto, as acceptable for filing. Provided, that the Commission will 
not grant an application filed on Form 401 filed either by a winning 
bidder or by an applicant whose Form 175 application is not mutually 
exclusive with other applicants, until the expiration of a period of 
forty (40) days following the issuance of a public notice listing the 
application, or any major amendments thereto, as acceptable for filing. 
See also 47 CFR 1.2108.
    (c) As an exception to paragraphs (a)(1), (a)(2) and (b) of this 
section, the public notice provisions are not applicable to 
applications:
    (1) For authorization of a minor technical change in the facilities 
of an authorized station where such a change would not be classified as 
a major amendment (as defined by Sec. 24.423) were such a change to be 
submitted as an amendment to a pending application;
    (2) For issuance of a license subsequent to a radio station 
authorization or, pending application for a grant of such license, any 
special or temporary authorization to permit interim operation to 
facilitate completion of authorized construction or to provide 
substantially the same service as would be authorized by such license;
    (3) For extension of time to complete construction of authorized 
facilities, see Sec. 24.103;
    (4) For temporary authorization pursuant to Sec. 24.425(b);
    (5) [Reserved]
    (6) For an authorization under any of the proviso clauses of 
section 308(a) of the Communications Act of 1934 (47 U.S.C. 308(a));
    (7) For consent to an involuntary assignment or transfer of control 
of a radio authorization; or
    (8) For consent to a voluntary assignment or transfer of control of 
a radio authorization, where the assignment or transfer does not 
involve a substantial change in ownership or control.


Sec. 24.428  Dismissal and return of applications.

    (a) Except as provided under Sec. 24.429, any application may be 
dismissed without prejudice as a matter of right if the applicant 
requests its dismissal prior to designation for hearing or, in the case 
of applications filed on Forms 175 and 175-S, prior to auction. An 
applicant's request for the return of his application after it has been 
accepted for filing will be considered to be a request for dismissal 
without prejudice. Applicants requesting dismissal of their 
applications are also subject to 47 CFR 1.2104. Requests for dismissal 
shall comply with the provisions of Sec. 24.429 as appropriate.
    (b) A request to dismiss an application without prejudice will be 
considered after designation for hearing only if:
    (1) A written petition is submitted to the Commission and is 
properly served upon all parties of record, and
    (2) The petition complies with the provisions of Sec. 24.429 
(whenever applicable) and demonstrates good cause.
    (c) The Commission will dismiss an application for failure to 
prosecute or for failure to respond substantially within a specified 
time period to official correspondence or requests for additional 
information. Dismissal shall be without prejudice if made prior to 
designation for hearing or prior to auction, but dismissal may be made 
with prejudice for unsatisfactory compliance with Sec. 24.429 or after 
designation for hearing or after the applicant is notified that it is 
the winning bidder under the auction process.


Sec. 24.429  Ownership changes and agreements to amend or to dismiss 
applications or pleadings.

    (a) Applicability. Subject to the provisions of 47 CFR 1.2105 
(Bidding Application and Certification Procedures; Prohibition of 
Collusion), this section applies to applicants and all other parties 
interested in pending applications who wish to resolve contested 
matters among themselves with a formal or an informal agreement or 
understanding. This section applies only when the agreement or 
understanding will result in:
    (1) A major change in the ownership of an applicant to which 
Secs. 24.423 and 24.423(g) apply or which would cause the applicant to 
lose its status as a designated entity under Sec. 24.309, or
    (2) The individual or mutual withdrawal, amendment or dismissal of 
any pending application, amendment, petitioner or other pleading.
    (b) Policy. Parties to contested proceedings are encouraged to 
settle their disputes among themselves. Parties which, under a 
settlement agreement, apply to the Commission for ownership changes or 
for the amendment or dismissal of either pleadings or applications, 
shall at the time of filing notify the Commission that such filing is 
the result of an agreement or understanding.
    (c) If the amendment would, if granted, cause the applicant to lose 
its status as a designated entity under Sec. 24.309, the applicant must 
comply with the obligations imposed by Sec. 24.309 (Designated 
Entities) and Sec. 1.2111 (Assignment of transfer of control; unjust 
enrichment) before the amendment will be granted.
    (d) The provisions of 47 CFR 22.927 will apply in the event of the 
individual or mutual withdrawal, amendment or dismissal of any pending 
application, amendment, petitioner or other pleading.


Sec. 24.430  Opposition to applications.

    (a) Petitions to deny (including petitions for other forms of 
relief) and responsive pleadings for Commission consideration must 
comply with Section 1.2108 and must:
    (1) Identify the application or applications (including applicant's 
name, station location, Commission file numbers and radio service 
involved) with which it is concerned;
    (2) Be filed in accordance with the pleading limitations, filing 
periods, and other applicable provisions of 47 CFR 1.41 through 1.52 
except where otherwise provided in 47 CFR 1.2108;
    (3) Contain specific allegations of fact which, except for facts of 
which official notice may be taken, shall be supported by affidavit of 
a person or persons with personal knowledge thereof, and which shall be 
sufficient to demonstrate that the petitioner (or respondent) is a 
party in interest and that a grant of, or other Commission action 
regarding, the application would be prima facie inconsistent with the 
public interest;
    (4) Be filed within thirty (30) days after the date of public 
notice announcing the acceptance for filing of any such application or 
major amendment thereto (unless the Commission otherwise extends the 
filing deadline); and
    (5) Contain a certificate of service showing that it has been 
mailed to the applicant no later than the date of filing thereof with 
the Commission.
    (b) A petition to deny a major amendment to a previously filed 
application may only raise matters directly related to the amendment 
which could not have been raised in connection with the underlying, 
previously filed application. This does not apply to petitioners who 
gain standing because of the major amendment.


Sec. 24.431  Mutually exclusive applications.

    (a) The Commission will consider applications to be mutually 
exclusive if their conflicts are such that the grant of one application 
would effectively preclude by reason of harmful electrical 
interference, or other practical reason, the grant of one or more of 
the other applications. The Commission will presume ``harmful 
electrical interference'' to mean interference which would result in a 
material impairment to service rendered to the public despite full 
cooperation in good faith by all applicants or parties to achieve 
reasonable technical adjustments which would avoid electrical conflict.
    (b) Mutually exclusive applications filed on Form 175 for the 
initial provision of narrowband PCS service are subject to competitive 
bidding in accordance with the procedures in subpart F of this part and 
in 47 CFR part 1, subpart Q.
    (c) An application will be entitled to comparative consideration 
with one or more conflicting applications only if the Commission 
determines that such comparative consideration will serve the public 
interest.


Sec. 24.432  Consideration of applications.

    (a) Applications for an instrument of authorization will be granted 
if, upon examination of the application and upon consideration of such 
other matters as it may officially notice, the Commission finds that 
the grant will serve the public interest, convenience, and necessity. 
See also Sec. 1.2108.
    (b) The grant shall be without a formal hearing if, upon 
consideration of the application, any pleadings or objections filed, or 
other matters which may be officially noticed, the Commission finds 
that:
    (1) The application is acceptable for filing, and is in accordance 
with the Commission's rules, regulations, and other requirements;
    (2) The application is not subject to a post-auction hearing or to 
comparative consideration pursuant to Sec. 24.431 with another 
application(s);
    (3) A grant of the application would not cause harmful electrical 
interference to an authorized station;
    (4) There are no substantial and material questions of fact 
presented; and
    (5) The applicant is qualified under current FCC regulations and 
policies.
    (c) If the Commission should grant without a formal hearing an 
application for an instrument of authorization which is subject to a 
petition to deny filed in accordance with Sec. 24.430, the Commission 
will deny the petition by the issuance of a Memorandum Opinion and 
Order which will concisely report the reasons for the denial and 
dispose of all substantial issues raised by the petition.
    (d) Whenever the Commission, without a formal hearing, grants any 
application in part, or subject to any terms or conditions other than 
those normally applied to applications of the same type, it shall 
inform the applicant of the reasons therefor, and the grant shall be 
considered final unless the Commission should revise its action (either 
by granting the application as originally requested, or by designating 
the application for a formal evidentiary hearing) in response to a 
petition for reconsideration which:
    (1) Is filed by the applicant within thirty (30) days from the date 
of the letter or order giving the reasons for the partial or 
conditioned grant;
    (2) Rejects the grant as made and explains the reasons why the 
application should be granted as originally requested; and,
    (3) Returns the instrument of authorization.
    (e) The Commission will designate an application for a formal 
hearing, specifying with particularity the matters and things in issue, 
if, upon consideration of the application, any pleadings or objections 
filed, or other matters which may be officially noticed, the Commission 
determines that:
    (1) A substantial and material question of fact is presented (see 
also Sec. 1.2108);
    (2) The Commission is unable for any reason to make the findings 
specified in paragraph (a) of this section and the application is 
acceptable for filing, complete, and in accordance with the 
Commission's rules, regulations, and other requirements; or
    (3) The application is entitled to comparative consideration (under 
Sec. 24.431) with another application (or applications).
    (f) The Commission may grant, deny or take other action with 
respect to an application designated for a formal hearing pursuant to 
paragraph (e) of this section or part 1 of this chapter.
    (g) [Reserved]
    (h) Reconsideration or review of any final action taken by the 
Commission will be in accordance with Subpart A of part 1 of this 
chapter.


Sec. 24.433-24.438  [Reserved].


Sec. 24.439  Transfer of control or assignment of station 
authorization.

    (a) Approval required. Authorizations shall be transferred or 
assigned to another party, voluntarily (for example, by contract) or 
involuntarily (for example, by death, bankruptcy, or legal disability), 
directly or indirectly or by transfer of control of any corporation 
holding such authorization, only upon application and approval by the 
Commission. A transfer of control or assignment of station 
authorization in the narrowband Personal Communications Service is also 
subject to Sec. 24.309 (Designated Entities) and Sec. 1.2111 
(Assignment or transfer of control: unjust enrichment).
    (1) A change from less than 50% ownership to 50% or more ownership 
shall always be considered a transfer of control.
    (2) In other situations a controlling interest shall be determined 
on a case-by-case basis considering the distribution of ownership, and 
the relationships of the owners, including family relationships.
    (b) Form required--(1) Assignment.
    (i) FCC Form 490 shall be filed to assign a license or permit.
    (ii) In the case of involuntary assignment, FCC Form 490 shall be 
filed within 30 days of the event causing the assignment.
    (2) Transfer of control. (i) FCC Form 490 shall be submitted in 
order to transfer control of a corporation holding a license or permit.
    (ii) In the case of involuntary transfer of control, FCC Form 490 
shall be filed within 30 days of the event causing the transfer.
    (3) Form 430. Whenever an application must be filed under paragraph 
(a) (1) or (2) of this section, the assignee or transferee shall file 
FCC Form 430 (``Common Carrier Radio License Qualification Report'') 
unless an accurate report is on file with the Commission.
    (4) Notification of completion. The Commission shall be notified by 
letter of the date of completion of the assignment or transfer of 
control.
    (5) If the transfer of control of a license is approved, the new 
licensee is held to the original build-out requirement of Sec. 24.103.
    (c) In acting upon applications for transfer of control or 
assignment, the Commission will not consider whether the public 
interest, convenience, and necessity might be served by the transfer or 
assignment of the authorization to a person other than the proposed 
transferee or assignee.
    (d) [Reserved]


Sec. 24.440-24.442  [Reserved].


Sec. 24.443  Extension of time to complete construction.

    (a) If construction is not completed within the time period set 
forth in Sec. 24.103, the authorization will automatically expire. 
Before the period for construction expires an application for an 
extension of time to complete construction (FCC Form 489) may be filed. 
See paragraph (b) of this section. Within 30 days after the 
authorization expires an application for reinstatement may be filed on 
FCC Form 489.
    (b) An application for extension of time to complete construction 
may be made on FCC Form 489. Extension of time requests must be filed 
prior to the expiration of the construction period. Extensions will be 
granted only if the licensee shows that the failure to complete 
construction is due to causes beyond his control. An application for 
modification of an authorization (under construction) does not extend 
the initial construction period. If additional time to construct is 
required, an FCC Form 489 must be submitted.


Sec. 24.444  Termination of authorization.

    (a) (1) All authorizations shall terminate on the date specified on 
the authorization or on the date specified by these rules, unless a 
timely application for renewal has been filed.
    (2) If no application for renewal has been made before the 
authorization's expiration date, a late application for renewal will 
only be considered if it is filed within 30 days of the expiration date 
and shows that the failure to file a timely application was due to 
causes beyond the applicant's control. During this 30 day period 
reinstatement applications must be filed on FCC Form 489. Service to 
subscribers need not be suspended while a late filed renewal 
application is pending, but such service shall be without prejudice to 
Commission action on the renewal application and any related sanctions. 
See also Sec. 24.16 (Criteria for Comparative Renewal Proceedings).
    (b) Special Temporary Authority. A special temporary authorization 
shall automatically terminate upon failure to comply with the 
conditions in the authorization.

[FR Doc. 94-12165 Filed 5-23-94; 8:45 am]
BILLING CODE 6712-01-M