[Federal Register Volume 60, Number 97 (Friday, May 19, 1995)]
[Proposed Rules]
[Pages 26860-26861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12462]



=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[WT Docket No. 95-69, FCC 95-202]


Auctionable Services

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Notice of Proposed Rulemaking contains proposed rules 
pertaining to fees for certain services and products provided to 
specific persons and entities participating in future Federal 
Communications Commission auctions. In particular, the proposal 
establishes fees for Commission proprietary remote software packages, 
on-line communications service charges, and bidder's information 
packages in connection with auctionable services. The Commission, in 
establishing the proposed fees, implements the Independent Offices 
Appropriations Act. The Commission's proposal would receiver the 
Federal Government's cost from any bidders utilizing Commission-
provided services.

DATES: Written comments must be submitted by May 31, 1995, and written 
reply comments must be submitted by June 6, 1995.

ADDRESSES: Send comments and reply comments to Office of the Secretary, 
Federal Communications Commission, Washington, D.C. 20554. Interested 
parties who do not wish to participate formally in this proceeding may 
file informal comments at the same address.

FOR FURTHER INFORMATION CONTACT:
Bert Weintraub, Wireless Telecommunications Bureau, (202) 418-1316.

SUPPLEMENTARY INFORMATION: In previous Federal Communications 
Commission (hereafter, ``Commission'' or ``FCC'') auctions, bidders 
have paid auction contractors of the Commission fees consisting of the 
contractors' costs and a reasonable profit for remote bidding software 
and an on-line access charge. The Independent Offices Appropriations 
Act (``IOAA''), codified at 31 U.S.C. Sec. 9701, permit fees and 
charges for Government services and things of value and authorizes 
agencies to prescribe regulations establishing charges for products and 
services provided by the agency. The Office of Management and Budget 
(``OMB'') has issued policy guidance on fees via Circular A-25 for 
agencies to recover expenses. The OMB published a revised revision of 
the Circular in the Federal Register, 58 FR 38142 (July 15, 1993), 
which provided updated policy guidance on user fees. Pursuant to this 
revision, the imposition of fees for Government-provided products and 
services conferring benefits on identifiable recipients over and above 
those benefits received by the general public are encouraged. Under the 
OMB Circular, agencies, in establishing fees, are to select between 
``full cost'' or ``market price.''
    On August 10, 1993, the Omnibus Budget Reconciliation Act of 1993, 
Pub. L. No. 103-66, 107 Stat. 312, added a new section 309(j) to the 
Communications Act of 1934, 47 U.S.C. Sec. 309(j). This amendment to 
the Communications Act authorized the Commission to use competitive 
bidding [[Page 26861]] procedures to choose from among two or more 
mutually exclusive applications for initial licenses for use of the 
radio spectrum. Pursuant to this authority, the Commission has 
conducted three simultaneous multiple round auctions for Personal 
Communications Service (``PCS'') licenses (i.e., the Nationwide 
Narrowband PCS auction, held from July 25 through July 29, 1994; the 
Regional Narrowband PCS auction, held October 26, through November 8, 
1994; and the Broadband A and B block PCS auction, held December 5, 
1994, through March 13, 1995). In each PCS auction, bids were placed 
electronically using a computer bidding system designed and developed 
by the FCC in conjunction with its auction contractors.
    The Commission and its auction contractors incurred significant 
costs in developing the on-site electronic bidding systems used in the 
PCS auctions and the remote electronic bidding system used in two of 
the PCS auctions. The Commission recovered its developments costs for 
the electronic bidding system for the first three auctions from the 
proceeds of those actions. Additionally, the FCC's auction contractor 
was allowed to charge bidders electing to use on-line remote bidding 
system a $200.00 fee for the proprietary remote bidding software 
package and an on-line access charge. The FCC has determined, based on 
its auction experience, that remote electronic bidding provides bidders 
with an important and valuable service as it enables them to place and 
withdraw bids, access auction round results and other FCC announcements 
during the auction from their offices using their personal computer. 
Thus, bidders are not required to be physically present at the auction 
site for the duration of the auction. Because the Commission will 
provide these services directly to bidders, the Commission proposes to 
recover the Federal Government's costs by charging bidders a fee for 
the remote electronic bidding software and an on-line access charge via 
a 900 telephone service (``900 service''). Bidders will continue to 
have the option of placing their bids telephonically from remote 
locations via an 800 telephone service at no charge. Round results 
information is also available to remote access bidders over the 
Internet and the Commission's Bulletin Board at no charge.
    The significant costs and expenses incurred by the Federal 
Government in developing the remote electronic auction system have 
included infrastructure design and implementation, software 
development, software testing, and administrative and personnel costs 
associated with this process. The Commission has developed its own 
remote on-line bidding system to be offered as a convenience to bidders 
in future auctions, enabling bidders to participate in auctions from 
their offices using their personal computers, submit and review 
applications, and access auction round results information from remote 
locations using a 900 service. The Notice of Proposed Rulemaking 
(``NPRM'') proposes to recover the costs to the Government by charging 
bidders who elect to bid electronically from remote locations a fee for 
the remote bidding software and for remote access to the bidding system 
via the 900 service. The Commission's remote electronic bidding system 
will enable bidders to participate in Commission auctions, review 
applications, and access auction round results information from remote 
locations using a Wide Area Network to connect with the bidding system 
via a 900 telephone service. The proposed rule would recover future 
costs from bidders who directly benefit from the services and products 
offered by the Commission in conjunction with holding the auctions. 
Imposing such fees on bidders who actually use the remote electronic 
bidding system is the fairest and most equitable manner for the 
Government to recover its costs in developing, maintaining, enhancing, 
and upgrading the remote bidding system.
    In proposing the fees, the Commission has followed OMB guidance and 
relevant court cases in calculating the costs of the 900 service, 
remote access bidding software, and bidder's information packages, 
utilizing ``market price'' instead of ``full cost'' because it is 
simpler, more practical, more efficient, and more readily 
ascertainable. As a result, based upon market surveys for 900 service, 
remote access bidding software, and bidder's information packages, the 
NPRM proposes the following fees: $4.00 per minute for 900 service; 
$200.00 per package for remote bidding software, one free bidder's 
information package and $16.00 for each additional bidder's information 
package requested by that same person or entity.
    The proposed fee of $4.00 per minute for 900 service is based on 
the FCC's survey of the charges for similar on-line services. The 
services surveyed were mainly on-line reference and research services 
operating in the open market with sufficient competition to establish a 
market-based price. FCC sampling revealed that prices currently range 
from $4.05 per minute to $4.42 per minute (plus monthly account 
maintenance fees). Even though the average price for this type of 
services $4.23 per minute, $4.00 per minute is proposed. The proposed 
$200.00 fee for the remote access bidding software packages was based 
upon the open market prices for similar software packages. FCC research 
indicated that the most comparable software package currently available 
is $200.00 per package and offered by only one supplier. Due to highly 
specialized nature of the remote access software, the Commission could 
not identify other comparable software packages for which it could 
obtain additional market price information. The proposed $16.00 fee for 
each additional bidder's information package was developed by comparing 
the average cost of producing bidder's information packages in the open 
market amount commercial printing firms. The previous prices ranged 
from $13.50 to $18.50 (both figures include postage), and $16.00 is the 
average of this range. Payment procedures to collect the fees are 
proposed as follows: the fee for the 900 service will appear as a 
charge on the user's monthly telephone bill; the fees for the software 
packages and bidder's information packages will be collected by the 
Commission's auction contractor. Funds received from the sale of 
auction materials, software, or services, pursuant to the IOAA, must go 
directly to the U.S. Treasury.
    This action is taken pursuant to Sections 4(i), 7(a), 302, 303(c), 
303(f), 303(g), and 303(r) of the Communications Act of 1934, as 
amended, 47 U.S.C. Sections 154(i), 157(a), 302, 303(c), 303(f), 
303(g), and 303(r).

List of Subjects in 47 CFR Part 1

    Administrative practice and procedure.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 95-12462 Filed 5-18-95; 8:45 am]
BILLING CODE 6712-01-M