[Federal Register Volume 62, Number 48 (Wednesday, March 12, 1997)]
[Proposed Rules]
[Pages 11638-11643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6091]



  Federal Register / Vol. 62, No. 48 / Wednesday, March 12, 1997 / 
Proposed Rules  

[[Page 11638]]



FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 22 and 90

[WT Docket No. 96-18; PP Docket No. 93-253; FCC 97-59]


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

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this Further Notice of Proposed Rulemaking (FNPRM), in WT 
Docket No. 96-18 and PP Docket No. 93-253, the Commission seeks comment 
on coverage requirements for nationwide geographic area licenses, 
partitioning and disaggregation for geographic area paging licenses 
(including nationwide licenses), and the application procedure for the 
shared channels. The Commission seeks to eliminate or reduce paging 
license application fraud by providing applicants with information 
about the risks of telecommunications investment and the warning signs 
of possible investment fraud. The Commission's objective is to provide 
paging licensees the flexibility they need to tailor their service 
offerings to meet market demands and facilitate greater participation 
by small businesses.

DATES: Comments must be filed on or before April 17, 1997. Reply 
comments are to be filed on or before May 1, 1997.

ADDRESSES: Federal Communications Commission, 1919 M Street, NW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Mika Savir, Commercial Wireless 
Division, Wireless Telecommunications Bureau, at (202) 418-0620, or 
Frank Stilwell, Auctions Division, Wireless Telecommunications Bureau, 
at (202) 418-0660.

SUPPLEMENTARY INFORMATION: This Further Notice of Proposed Rulemaking 
in WT Docket No. 96-18 and PP Docket No. 93-253, adopted on February 
19, 1997 and released on February 24, 1997, is available for inspection 
and copying during normal business hours in the FCC Reference Center, 
Room 239, 1919 M Street, NW., Washington, DC 20554. The complete text 
may also be purchased from the Commission's copy contractor, 
International Transcription Service, Inc., 2100 M Street, NW., Suite 
140, Washington, DC 20037, (202) 857-3800.

Synopsis of the Further Notice of Proposed Rulemaking

I. Background

    1. In the Second Report and Order in WT Docket No. 96-18, the 
Commission adopted rules governing geographic area licensing for paging 
licenses and competitive bidding procedures for auctioning mutually 
exclusive applications for these licenses. Further comment is needed on 
several issues such as coverage requirements for nationwide geographic 
area licenses, partitioning and disaggregation for geographic area 
licenses, and possible modifications to the application procedure for 
shared channels.

II. Further Notice of Proposed Rulemaking

A. Nationwide Channels

    2. In the Second Report and Order in WT Docket No. 96-18, the 
Commission concluded that the three nationwide 931 MHz channels and 
twenty-three 929 MHz PCP nationwide channels will not be subject to 
competitive bidding. The Commission did not impose coverage 
requirements on the nationwide geographic area paging licenses. The 
Major Trading Area (MTA) and Economic Area (EA) geographic area 
licensees, which are not exempt from competitive bidding, are required 
to provide coverage to one-third of the geographic area population 
within three years of license grant, and to two-thirds of the 
geographic area population within five years of license grant. In the 
alternative, the MTA or EA licensee may provide substantial service to 
the geographic area within five years of license grant. In this Further 
Notice of Proposed Rulemaking (FNPRM), the Commission seeks comment on 
whether coverage requirements should be imposed on nationwide licenses, 
and the appropriate coverage area. The Commission seeks comment on 
whether the entire nationwide license, or just a portion of the 
license, should be auctioned if the nationwide licensee fails to meet 
the coverage requirements.

B. Partitioning and Disaggregation

1. Partitioning
a. In General
    In the Second Report and Order, the Commission adopted geographic 
partitioning provisions for MTA and EA geographic area paging 
licensees. In this FNPRM, the Commission seeks comment on whether 
nationwide paging licensees should be permitted to partition their 
license area. Commenters should note that the three 931 MHz nationwide 
channels and twenty-three 929 MHz nationwide channels are not subject 
to competitive bidding, whereas the MTA and EA geographic area licenses 
are subject to competitive bidding.
    4. The Commission believes that partitioning can be an effective 
means of providing paging licensees with the flexibility they need to 
tailor their service offerings to meet market demands. Partitioning may 
be used to create smaller licenses and thus also facilitate greater 
participation by small businesses and rural telephone companies. The 
Commission did not, however, seek comment in the NPRM in WT Docket No. 
96-18 on the treatment of MTA and EA geographic area paging licensees 
that receive competitive bidding benefits, the license term of 
partitioned licenses, or build-out requirements. The Commission seeks 
comment on these issues with respect to geographic area paging 
licenses.
b. Licensees With Competitive Bidding Benefits
    5. Providing licensees with the flexibility to partition their 
geographic service areas will create smaller areas that can be licensed 
to small businesses, including those entities without the resources to 
participate successfully in spectrum auctions. The competitive bidding 
rules for paging include provisions for installment payments and 
bidding credits for small businesses. The Commission has also adopted 
rules to prevent unjust enrichment by small businesses seeking to 
transfer licenses obtained with installment payments or bidding 
credits. The Commission seeks comment on how to adjust installment 
payments owed by partitioning licensees. Parties are invited to comment 
on whether a small business partitioner should be required to repay, on 
an accelerated basis, a portion of the outstanding principal balance 
owed under an installment payment plan. The Commission seeks comment on 
how this payment should be calculated. The Commission seeks comment on 
whether the partitionee should be required to guarantee payment of a 
portion of the partitioner's obligation.
    6. The Commission tentatively concludes that partitionees that 
would qualify as small businesses should be permitted to pay their pro 
rata share of the remaining government obligation through installment 
payments. The Commission seeks comment on this tentative conclusion. 
Commenters should address the mechanisms for apportioning the remaining 
government obligation between the parties. The Commission proposes 
using population as the objective measure to calculate the

[[Page 11639]]

relative value of the partitioned area, and seeks comment on this 
proposal.
    7. The Commission proposes applying unjust enrichment rules to 
small businesses that partition to non-small businesses or to small 
businesses qualifying for a lower bidding credit. The Commission seeks 
comment on this proposal. These unjust enrichment provisions would 
include accelerated payment of bidding credits, unpaid principal, and 
accrued unpaid interest. The Commission seeks comment on how such 
unjust enrichment amounts should be calculated. Commenters should 
address how to calculate unjust enrichment amounts and how to enforce 
unjust enrichment payments. The Commission seeks comment on whether the 
price paid by the partitionee should be considered in determining the 
percentage of the outstanding principal balance to be repaid. 
Commenters should address whether the unjust enrichment payments should 
be calculated on a proportional basis, using population of the 
partitioned area as the objective measure.
    8. The Commission seeks comment on whether each party to a 
partitioning transfer should be required to guarantee all or a portion 
of the partitioner's original auctions-related obligation in the event 
of default or bankruptcy by any of the parties to the partitioning 
transfer. The Commission seeks comment on whether the partitioner (the 
original licensee) should continue to be responsible, with respect to 
the auctions-related obligation, for the entire initial geographic 
area.
c. Build-out requirements
    9. In the Second Report and Order, the Commission adopted coverage 
requirements for MTA and EA geographic area licensees. Specifically, 
each MTA or EA geographic area licensee must provide coverage to one-
third of the geographic area population within three years of the 
license grant, and to two-thirds of the geographic area population 
within five years of the license grant. In the alternative, the MTA or 
EA licensee may provide substantial service to the geographic area 
within five years of license grant. The Commission tentatively 
concludes that both the partitioner and the partitionee should be 
subject to coverage requirements that ensure that both portions of the 
license area will receive service. The Commission proposes that a 
partitionee will be obligated to satisfy the same build-out 
requirements as the original licensee within its partitioned area, 
regardless of when the license was acquired. A partitionee of an MTA or 
EA would provide coverage to one-third of the population in its 
partitioned area within three years of the license grant, and to two-
thirds of the population within its partitioned area within five years 
of the license grant. In the alternative, the partitionee may provide 
substantial service to the partitioned geographic area within five 
years of license grant. Parties are invited to comment on this 
proposal. Commenters should also address build-out requirements for 
partitioned nationwide licenses. Commenters are also invited to address 
what build-out requirements should apply where a licensee partitions a 
portion of its license area after the initial ten-year license term has 
expired.
d. License term
    10. A geographic area paging licensee is authorized to provide 
service for no more than ten years from the date of license grant. A 
licensee may submit an application to renew the license for an 
additional license term, and is afforded a renewal expectancy if it can 
demonstrate that it has provided substantial service during the past 
license term and has substantially complied with the applicable 
Commission rules, policies, and the Communications Act. Substantial 
service is service which is sound, favorable, and substantially above a 
mediocre level of service which might just minimally warrant renewal.
    11. The Commission proposes that a partitionee (including a 
nationwide license partitionee) be authorized to hold its license for 
the remainder of the partitioner's original ten-year term. The 
Commission tentatively concludes that this approach is reasonable 
because a partitioner-licensee should not be able to confer greater 
rights than it was awarded under the terms of its license grant. The 
Commission seeks comment on this tentative conclusion. The Commission 
also proposes that a partitionee be afforded the same renewal 
expectancy as a geographic area licensee. The Commission proposes to 
grant a partitionee a preference at a renewal proceeding if it can 
demonstrate that it has provided substantial service during its past 
license term and has substantially complied with the applicable 
Commission rules, policies, and the Communications Act. The Commission 
seeks comment on these proposals.
2. Disaggregation
a. In General
    12. In the NPRM, the Commission asked parties to comment on whether 
paging spectrum disaggregation should be allowed. The Commission did 
not receive sufficient comment on this issue to adopt disaggregation 
for paging services. The Commission seeks further comment on the 
feasibility of spectrum disaggregation for paging. Commenters should 
provide technical justifications and other relevant support in 
responding to this issue. Commenters should address whether minimum 
disaggregation standards are necessary for paging services. Commenters 
should also address whether nationwide licensees should be permitted to 
disaggregate spectrum.
b. Licensees With Competitive Bidding Benefits
    13. The Commission also seeks comment on what the respective 
obligations of the participants in a disaggregation transfer should be, 
and whether each party should be required to guarantee a proportionate 
amount of the disaggregator's original auctions-related obligation in 
the event of default or bankruptcy by any of the parties to the 
disaggregation transfer. The Commission seeks comment on whether the 
disaggregator (the original licensee) should have a continuing 
obligation with respect to the entire initial license. Alternatively, 
should the parties have available a choice of options, ranging from an 
accelerated payment based on purchase price to a guarantee for a larger 
payment by one party in the event another party defaults? Parties are 
invited to comment on whether the disaggregating parties should be able 
to determine which party has a continuing obligation with respect to 
the original license area.
    14. The Commission proposes to allow all small business licensees 
to disaggregate to similarly qualifying parties as well as parties not 
eligible for small business provisions. The Commission tentatively 
concludes that if a qualified small business licensee is permitted to 
disaggregate to a non-small business entity, the disaggregating 
licensee should be required to repay any benefits it received from the 
small business special provisions on a proportional basis. This would 
include accelerated payment of bidding credits, unpaid principal, and 
accrued unpaid interest. The Commission seeks comment on how such 
repayment amounts should be calculated. The Commission also seeks 
comment on whether we should consider the price paid by the 
disaggregatee in determining the percentage of the outstanding 
principal balance to be repaid.
    15. The Commission tentatively concludes that if a small business 
licensee is permitted to disaggregate to

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another qualified small business that would not qualify for the same 
level of bidding credit as the disaggregating licensee, the 
disaggregating licensee should be required to repay a portion of the 
benefit it received. The Commission seeks comment on how that amount 
should be calculated. Finally, the Commission seeks comment on what 
provisions, if any, should be adopted to address the situation of a 
small business licensee's disaggregation followed by default in payment 
of a winning bid at auction.
c. Build-Out Requirements
    16. The Commission requires each MTA or EA geographic area licensee 
to provide coverage to one-third of the geographic area population 
within three years of the license grant, and to two-thirds of the 
geographic area population within five years of the license grant. In 
the alternative, the MTA or EA licensee may provide substantial service 
to the geographic area within five years of license grant. The 
Commission proposes adopting a flexible approach for construction 
requirements on both the disaggregator and disaggregatee for their 
respective spectrum portions. The Commission proposes that either the 
disaggregator or the disaggregatee entering the geographic market 
should be obligated to provide coverage to one-third of the population 
within three years of the license grant, and to two-thirds of the 
population within five years of the license grant. In the alternative, 
either the disaggregator or the disaggregatee may provide substantial 
service to the geographic area within five years of license grant. The 
Commission seeks comment on this proposal. Commenters should also 
address the appropriate build-out requirements for the parties to 
disaggregation of nationwide paging licenses. The Commission proposes 
that if a licensee fails to meet the construction requirements, the 
license reverts back to the Commission. The Commission seeks comment on 
this proposal.
d. License Term
    17. The Commission proposes a similar license term for 
disaggregation as for partitioning, i.e., a disaggregatee would be 
authorized to hold its license for the remainder of the disaggregator's 
original ten-year license term. The Commission proposes that a 
disaggregatee would be afforded a renewal expectancy if it can 
demonstrate that it has provided substantial service during the past 
license term and has substantially complied with the applicable 
Commission rules, policies, and the Communications Act. The Commission 
seeks comment on these proposals, and on how to apply the renewal 
standard in cases where the disaggregatee has acquired the 
disaggregated license near the end of the license term.
3. Combination of Partitioning and Disaggregation
    18. The Commission tentatively concludes that combinations of 
partitioning and disaggregation should be permitted, subject to the 
rules proposed for each. The Commission seeks comment on this proposal. 
Commenters should address any conflicts in the partitioning and 
disaggregation rules and whether the Commission should implement the 
partitioning rules in such cases. Commenters should also address 
whether the Commission should allow the combination of partitioning and 
disaggregation for nationwide paging licenses.

C. Shared Channels

    19. The issue of paging license application fraud was initially 
raised in the comments filed by the Federal Trade Commission (FTC). 
According to the FTC, telecommunications investment frauds are of two 
basic types: (1) ``Application mills,'' where telemarketers sell 
application preparation services for wireless licenses for thousands of 
dollars to consumers, by claiming that telecommunications businesses 
will seek to lease or sell the licenses for many times the 
telemarketers' applications fees; and (2) ``build-out'' schemes, where 
telemarketers sell, again for thousands of dollars, interests in 
limited liability companies or partnerships that supposedly will 
acquire wireless licenses, build and operate telecommunications 
systems, and pay the consumers high dividends. The FTC argued that 
awarding licenses on a geographic basis through competitive bidding 
would likely reduce the incidence of ``application mills'' for paging 
licenses. The FTC explained that awarding licenses on an unlimited, 
shared basis is especially prone to abuse, because the constant 
availability of such licenses allows telemarketers to guarantee 
licenses to unsuspecting consumers. The transition of the exclusive 
paging channels to geographic area licensing might make the shared 
channels even more inviting to the fraudulent application mills. The 
Commission seeks comment on how to eliminate or reduce this problem.
    20. Specifically, the Commission seeks comment on how the current 
FCC Form 600 application could be revised to provide applicants with 
information regarding the risks of telecommunications investment and 
warning signs of possible investment fraud. In addition, the Commission 
seeks comment on whether application preparation services should be 
required to sign the FCC Form 600, and to certify that the applicant 
has received in writing pertinent information regarding the 
Commission's rules and the obligations of licensees. Commenters are 
also invited to address whether PCIA should be required to implement 
additional procedures in the coordination process to reduce fraudulent 
or speculative applications.

II. Conclusion

    21. The Commission believes that the proposals in the FNPRM will 
provide paging licensees the flexibility needed to tailor their service 
offerings to meet market demands, and facilitate greater participation 
by small businesses. Additionally, a revision to the application 
process for shared channels to provide applicants with information 
regarding the risks of telecommunications investment and the warning 
signs of possible investment fraud may reduce fraudulent or speculative 
applications.

III. Procedural Matters and Ordering Clauses

A. Regulatory Flexibility Act

Summary
    22. As required by section 603 of the Regulatory Flexibility Act, 5 
U.S.C. 603, the Commission has prepared an Initial Regulatory 
Flexibility Analysis (IRFA) of the expected impact on small entities of 
the policies and rules proposed in this FNPRM. Written public comments 
on the IRFA are requested.
Reason for Action
    23. This rulemaking proceeding in WT Docket No. 96-18 was initiated 
to secure comment on proposals for establishing a regulatory scheme for 
the common carrier paging (CCP) and private carrier paging (PCP) 
services which would promote efficient licensing and competition in the 
commercial mobile radio marketplace. The Commission seeks further 
comment on several issues: whether nationwide licenses should be 
subject to coverage requirements, how bidding credits and installment 
payments should be treated in cases where small businesses wish to 
partition their licenses, how build-out requirements and license term 
are affected in cases of geographic partitioning by paging market area

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licensees, whether spectrum disaggregation is feasible for paging 
licensees, and revisions to the current FCC Form 600 and the 
application procedures for licenses on the shared channels to reduce 
paging application fraud.
Objectives
    24. The Second Report and Order grants 26 nationwide geographic 
area licenses to nationwide paging licensees, but does not impose any 
additional coverage beyond what the nationwide licensees have already 
achieved. In the FNPRM, the Commission seeks comment on whether 
coverage requirements are appropriate.
    25. In the Second Report and Order the Commission allows all 
licensees, including small business licensees, to partition at any time 
to another eligible entity. In the FNPRM the Commission proposes that 
unjust enrichment provisions should apply when a small business 
licensee has benefitted from the small business provisions in the 
auction rules and then partitions a portion of the license area to 
another entity that would not qualify for such benefits, or would 
qualify for a lower bidding credit. Without the unjust enrichment 
provisions on such transactions, a small business could benefit from 
special bidding provisions and then become unjustly enriched by 
immediately partitioning a portion of the license area to parties that 
do not qualify for such benefits. The objective of this proposal is to 
prevent unjust enrichment.
    26. In the FNPRM the Commission seeks comment on build-out 
requirements and license term for partitioned geographic area licenses 
(including nationwide licenses). The Commission also seeks comment on 
whether nationwide licensees should be permitted to partition their 
license area, build-out requirements for partitioned nationwide 
licenses, and the license term of partitioned nationwide licenses.
    27. In the FNPRM the Commission seeks comment on whether spectrum 
disaggregation would be feasible for paging, and how much spectrum a 
paging licensee should be permitted to disaggregate. The Commission 
seeks comment on build-out requirements and license term for 
disaggregated geographic area licenses. If spectrum disaggregation is 
feasible in paging it may facilitate the efficient use of spectrum, 
increase competition, and expedite service to the public.
    28. The Commission also seeks comment on paging application fraud, 
an issue raised by the Federal Trade Commission. Specifically, the 
Commission seeks comment on whether the current FCC Form 600 should be 
revised to warn paging applicants of the risk of application fraud, and 
whether application preparation services should be required to certify 
that the applicant has received information regarding the Commission's 
rules and the obligations of licensees. Additionally, commenters are 
invited to address whether the frequency coordinator should implement 
additional procedures to reduce fraudulent or speculative paging 
applications. The objective of these proposals is to inform consumers 
of the rules and the prevalence of paging application fraud and thus 
reduce fraud and speculation.
Legal Basis
    29. The proposed action is authorized under sections 4(i), 257, 
303(r), and 309(j) of the Communications Act of 1934, as amended, 47 
U.S.C. 154(i), 257, 303(r), and 309(j).
Reporting, Recordkeeping, and Other Compliance Requirements
    30. Nationwide Channels. The proposals in the FNPRM include the 
possibility of imposing reporting and recordkeeping requirements for 
the nationwide geographic area licensees to establish compliance with 
the coverage requirements, if coverage requirements are adopted.
    31. Geographic Partitioning and Spectrum Disaggregation. The 
proposals in the FNPRM include the possibility of imposing reporting 
and recordkeeping requirements for small businesses seeking licenses 
through the proposed partitioning and disaggregation rules. The 
information requirements would be used to determine if the licensee is 
a qualifying entity to obtain a partitioned license or disaggregated 
spectrum. This information will be a one-time filing by any applicant 
requesting such a license. The information will be submitted on the FCC 
Forms 490 (or 430 and/or 600 filed as one package under cover of the 
Form 490) which are currently in use and have already received OMB 
clearance. The Commission estimates that the average burden on the 
applicant is three hours for the information necessary to complete 
these forms. The Commission estimates that 75 percent of the 
respondents (which may include small businesses) will contract out the 
burden of responding. The Commission estimates that it will take 
approximately 30 minutes to coordinate information with those 
contractors. The remaining 25 percent of respondents (which may include 
small businesses) are estimated to employ in-house staff to provide the 
information. Applicants (including small businesses) filing the package 
under cover of FCC Form 490 electronically will incur a $2.30 per 
minute on-line charge. On-line time would amount to no more than 30 
minutes. The Commission estimates that 75 percent of the applicants may 
file electronically. The Commission estimates that applicants 
contracting out the information would use an attorney or engineer 
(average of $200 per hour) to prepare the information.
    32. It is also possible that small business partitioners and 
disaggregators will be required to repay, on an accelerated basis, a 
portion of the outstanding principal balance owed under an installment 
payment plan. If unjust enrichment rules are applied to small 
businesses that partition or disaggregate to non-small businesses, or 
to small businesses qualifying for a lower bidding credit, small 
businesses may be required to reimburse the United States government 
for all or a portion of the special competitive bidding benefits they 
have received. This could include accelerated payment of bidding 
credits, unpaid principal, and accrued unpaid interest. It is also 
possible that each party to a partitioning or disaggregation transfer 
could be required to guarantee all or a portion of the partitioner's or 
disaggregator's original auctions-related obligation in the event of 
default or bankruptcy by any of the parties.
    33. Shared Channels. The proposals in the FNPRM do not include the 
possibility of imposing reporting and recordkeeping requirements for 
small businesses seeking licenses for shared channels. The FNPRM seeks 
comment on whether the current FCC Form 600 application should be 
revised to warn applicants of the risk of application fraud; whether 
application preparation services should be required to certify that the 
applicant has received information regarding the Commission's rules; 
and whether the frequency coordinator should be required to implement 
additional procedures in the coordination process to reduce the 
likelihood of fraudulent applications. These proposals would, if 
implemented, furnish additional information to applicants. None of 
these proposals would impose reporting or recordkeeping requirements on 
small businesses.
Federal Rules Which Overlap, Duplicate or Conflict With These Rules
    34. None.
Description and Number of Small Entities Involved
    35. Nationwide Channels. The rule changes discussed in the FNPRM 
with

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respect to implementing coverage requirements for the 26 nationwide 
licenses will probably not directly affect small businesses because 
nationwide licensees are probably not small businesses. However, if all 
26 nationwide licenses are held by small businesses, the rule change 
would not affect more than 26 small businesses.
    36. Geographic Partitioning and Spectrum Disaggregation. The 
partitioning and disaggregation rule changes proposed in this 
proceeding will affect all small businesses which avail themselves of 
these rule changes, including small businesses currently holding paging 
licenses who choose to partition and/or disaggregate and small 
businesses who may acquire licenses through partitioning and/or 
disaggregation.
    37. The Commission is required to estimate in its Final Regulatory 
Flexibility Analysis the number of small entities to which a rule will 
apply, provide a description of such entities, and assess the impact of 
the rule on such entities. To assist the Commission in this analysis, 
commenters are requested to provide information regarding how many 
total entities, existing and potential, would be affected by the 
proposed rules in the FNPRM. In particular, the Commission seeks 
estimates of how many such entities, existing and potential, will be 
considered small businesses. The Small Business Administration (SBA) 
has not developed a definition of small business specifically 
applicable to paging. The closest applicable definition under the SBA 
rules is radiotelephone (wireless) companies. According to the SBA's 
definition, a small business radiotelephone company is one employing 
fewer than 1,500 persons. The Commission seeks comment on whether this 
definition is appropriate for paging licensees in this context. 
Additionally, the Commission requests each commenter to identify 
whether it is a small business under this definition. If a commenter is 
a subsidiary of another entity, this information should be provided for 
both the subsidiary and the parent corporation or entity.
    38. The Commission estimates that up to approximately 50,000 
licensees or potential licensees could take the opportunity to 
partition and/or disaggregate a license or obtain a license through 
partitioning and/or disaggregation. This number is based on the total 
geographic area licenses to be awarded (approximately 16,600) and an 
estimate that each license will probably not be partitioned and/or 
disaggregated to more than three parties. Given the fact that nearly 
all radiotelephone companies have fewer than 1,000 employees, and that 
no reliable estimate of the number of future paging licensees can be 
made, the Commission assumes for purposes of this IRFA that all of the 
licenses will be awarded to small businesses. It is possible that a 
significant number of the up to approximately 50,000 licensees or 
potential licensees who could take the opportunity to partition and/or 
disaggregate a license or who could obtain a license through 
partitioning and/or disaggregation will be small businesses.
    39. Shared Channels. The rule changes proposed in the FNPRM with 
respect to warning prospective applicants about paging application 
fraud would probably not have an impact on any small business or other 
entity applying for a paging license on a shared channel. The proposed 
changes to the paging license application are intended to warn 
consumers about the prevalence of application fraud.
Significant Alternatives Minimizing the Impact on Small Entities 
Consistent With the Stated Objectives
    40. The Commission seeks comment on whether coverage requirements 
should be imposed for the nationwide geographic area licensees. Any 
significant alternatives presented in the comments will be considered. 
Coverage requirements for the nationwide geographic area licensees, if 
adopted, would probably not affect small businesses.
    41. With respect to partitioning, the Commission seeks comment on 
whether nationwide licensees should be permitted to partition their 
license area, build-out requirements for partitioned nationwide 
licenses, and license term of partitioned nationwide licenses. For MTA 
and EA geographic area licenses, the Commission proposes that unjust 
enrichment provisions should apply when a licensee has benefitted from 
the small business provisions in the auction rules and partitions a 
portion of the geographic license area to another entity that would not 
qualify for such benefits. The alternative to applying the unjust 
enrichment provisions would be to allow an entity who had benefitted 
from the special bidding provisions for small businesses to become 
unjustly enriched by partitioning a portion of their license area to 
parties that do not qualify for such benefits. The Commission also 
seeks comment on build-out requirements and license term for 
partitioned MTA and EA geographic area licenses.
    42. The Commission seeks comment on whether spectrum disaggregation 
would be feasible for paging, and how much spectrum a paging licensee 
should be permitted to disaggregate. The Commission seeks comment on 
build-out requirements and license term for disaggregated geographic 
area licenses. If spectrum disaggregation is feasible in paging it may 
facilitate the efficient use of spectrum, increase competition, and 
expedite service to the public.
    43. The Commission also seeks comment on an issue raised by the 
Federal Trade Commission in comments regarding paging application 
fraud. Specifically, the Commission seeks comment on whether the 
current FCC Form 600 should be revised to warn applicants of the risk 
of application fraud, and whether application preparation services 
should be required to certify that the applicant has received 
information regarding the Commission's rules and the obligations of 
licensees. Commenters are invited to address whether the frequency 
coordinator should implement additional procedures to reduce fraudulent 
or speculative paging applications. The alternative to revising the 
application and/or the coordination process could permit application 
mill fraud which may affect many unwitting consumers.
    44. The FNPRM solicits comment on a variety of alternatives 
discussed herein. Any significant alternatives presented in the 
comments will be considered.

B. Paperwork Reduction Act

    45. This FNPRM contains either a proposed or modified information 
collection. As part of its continuing effort to reduce paperwork 
burdens, the Commission invites the general public and the Office of 
Management and Budget (OMB) to take this opportunity to comment on the 
information collections contained in this FNPRM as required by the 
Paperwork Reduction Act of 1995, Pub. L. 104-13. Public and agency 
comments are due at the same time as other comments on this FNPRM; OMB 
notification of action is due May 12, 1997. Comments should address (a) 
whether the proposed collection of information is necessary for the 
proper performance of the functions of the Commission, including 
whether the information shall have practical utility; (b) the accuracy 
of the Commission's burden estimates; (c) ways to enhance the quality, 
utility, and clarity of the information collected; and (d) ways to 
minimize the burden of the collection of information on the 
respondents, including the use of automated collection techniques or 
other forms of information technology.
    46. Dates: Written comments by the public on the proposed 
information

[[Page 11643]]

collections are due April 11, 1997. Written comments must be submitted 
by the Office of Management and Budget (OMB) on the proposed 
information collections on or before May 12, 1997.
    47. Addresses: In addition to filing comments with the Secretary, a 
copy of any comments on the information collections contained herein 
should be submitted to Dorothy Conway, Federal Communications 
Commission, Room 234, 1919 M Street, NW., Washington, DC 20554, or via 
the Internet to [email protected], and to Timothy Fain, OMB Desk Officer, 
10236 NEOB, 725-17th Street, NW., Washington, DC 20503 or via the 
Internet to [email protected].
    48. Further Information: For additional information concerning the 
information collections contained in this NPRM contact Dorothy Conway 
at (202) 418-0217, or via the Internet at [email protected].
    49. Supplementary Information: 
    Title: Revision of part 22 and part 90 of the Commission's rules to 
Facilitate Future Development of Paging Systems and Implementation of 
section 309(j) of the Communications Act--Competitive Bidding
    Type of Review: New Collection.
    Respondents:
    Number of Respondents: We estimate that approximately 50,000 
licensees or potential licensees could take the opportunity to 
partition or disaggregate a license or obtain a license through 
partitioning or disaggregation.
    Estimated Time Per Response: The average burden on the applicant is 
3 hours for the information necessary to complete FCC Forms 490 or 430 
and 600 filed under cover of the FCC Form 490. We estimate that 75 
percent of the respondents will contract out the burden of responding. 
We estimate that it will take approximately 30 minutes to coordinate 
information with those contractors. The remaining 25 percent of 
respondents are estimated to employ in-house staff to provide the 
information.

37,500 applicants (contracting out)  x  .5 hour = 18,750 hours
12,500 applicants (in-house)  x  3 hours = 37,500 hours
Total burden = 18,750 + 37,500 = 56,250 hours.

    Estimated Cost to the Respondent: Total capital and start-up costs: 
Applicants wishing to file the package under cover of the FCC Form 490 
electronically will incur a $2.30 per minute on-line charge. On-line 
time would amount to no more than 30 minutes. Seventy-five percent of 
applicants are expected to file electronically.

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

    All other respondents are expected to file manually and would incur 
the following costs:

12,500 applications  x  $1.15 = $14,375
Total capital and start-up costs = $2,587,500 + $14,375 = $2,601,875.

    We assume that the respondents contracting out the information 
would use an attorney or engineer (average $200 per hour) to prepare 
the information.

37,500 applications  x  $200 per hour  x  3 hours = $22,500,000
Total respondent costs: $2,601,875 + $22,500,000 = $25,101,875

    Cost to the Federal Government: The government review time per 
response for this submission is estimated at 15 minutes per response 
with review being done by personnel at the GS-6 level.

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

C. Ex Parte Presentations--Non-Restricted Proceeding

    50. This is a non-restricted notice and comment rulemaking 
proceeding. Ex parte presentations are permitted, except during the 
Sunshine Agenda period, provided that they are disclosed as provided in 
the Commission's rules. See generally 47 CFR 1.1202, 1.1203, 1.1206(a).

D. Comment Period

    51. Pursuant to applicable procedures set forth in Secs. 1.415 and 
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested 
parties may file comments on or before April 17, 1997. Reply comments 
are to be filed on or before May 1, 1997. To file formally in this 
proceeding, you must file an original and four copies of all comments, 
reply comments, and supporting comments. If you want each Commissioner 
to receive a personal copy of your comments, you must file an original 
and nine copies. Comments and reply comments should be sent to Office 
of the Secretary, Federal Communications Commission, 1919 M Street, 
NW., Room 222, Washington, DC 20554. Parties should also submit two 
copies of comments and reply comments to Bobby Brown, Commercial 
Wireless Division, Wireless Telecommunications Bureau, 2025 M Street, 
NW., Room 7130, Washington, DC 20554. Parties should also file one copy 
of any documents filed in this docket with the Commission's copy 
contractor, International Transcription Services, Inc., 2100 M Street, 
NW., Suite 140, Washington, DC 20037. Comments and reply comments will 
be available for public inspection during regular business hours in the 
FCC Reference Center, Room 239, 1919 M Street, NW., Washington, DC 
20554.

E. Authority

    52. Authority for issuance of this Further Notice of Proposed 
Rulemaking is contained in sections 4(i), 257, 303(r), and 303(j) of 
the Communications Act of 1934, as amended, 47 U.S.C. Sec. 154(i), 257, 
303(r), and 303(j).

F. Ordering Clauses

    53. Accordingly, it is ordered that, pursuant to the authority of 
sections 4(i), 257, 303(r), and 303(j) of the Communications Act of 
1934, as amended, 47 U.S.C. Sec. 154(i), 257, 303(r), and 303(j), a 
Further Notice of Proposed Rulemaking is hereby adopted.
    54. It is further ordered that comments in WT Docket No. 96-18 will 
be due April 17, 1997 and reply comments will be due May 1, 1997.

List of Subjects

47 CFR Part 22

    Communications common carriers, Reporting and recordkeeping 
requirements.

47 CFR Part 90

    Common carriers, Reporting and recordkeeping requirements.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-6091 Filed 3-11-97; 8:45 am]
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