[Federal Register Volume 63, Number 84 (Friday, May 1, 1998)]
[Rules and Regulations]
[Pages 24126-24129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11616]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[CC Docket No. 92-297; RM-7872; PP-22 et al.; FCC 98-71]


Dismissal of All Pending Pioneer's Preference Requests; Review of 
the Pioneer's Preference Rules

AGENCY: Federal Communications Commission.

ACTION: Final rule; denial of petition for reconsideration.

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SUMMARY: By this action, the Commission denies a petition for 
reconsideration filed by QUALCOMM Incorporated. QUALCOMM contends that 
the Commission is obligated to consider on its merits QUALCOMM's 
request for a pioneer's preference in the 2 GHz broadband Personal 
Communications Service (PCS). However, the Commission affirms that it 
no longer has the authority to award pioneer's preferences because the 
Balanced Budget Act of 1997 (Budget Act) terminated the pioneer's 
preference program. The intended effect of this action is to affirm the 
Commission's previous Order, which formally terminated the pioneer's 
preference program and dismissed all pending pioneer's preference 
requests.

EFFECTIVE DATE: May 1, 1998.

FOR FURTHER INFORMATION CONTACT: Rodney Small, Office of Engineering 
and Technology, (202) 418-2452; internet: [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Memorandum Opinion and Order (MO&O) adopted April 16, 1998, and 
released April 23, 1998. The full text of this Commission decision is 
available for inspection and copying during regular business hours in 
the FCC Reference Center (Room 239), 1919 M Street, NW., Washington, 
DC. The complete text of this decision also may be purchased from the 
Commission's duplication contractor, International

[[Page 24127]]

Transcription Service, Inc., (202) 857-3800, 2100 M Street, NW., Suite 
140, Washington, DC 20037.

Summary of MO&O

    1. On October 20, 1997, QUALCOMM filed a petition for 
reconsideration of the Commission's Order, 62 FR 48951, September 18, 
1997, which dismissed all pending pioneer's preference requests, 
including QUALCOMM's 2 GHz broadband PCS request. For reasons that 
follow, we deny the petition for reconsideration.
    2. In 1994, we denied QUALCOMM's 2 GHz broadband PCS request. In 
January 1997, however, the United States Court of Appeals for the 
District of Columbia Circuit (Court) granted QUALCOMM's petition for 
review of our action, vacated our denial of QUALCOMM's pioneer's 
preference request, and remanded the proceeding to us for further 
consideration.
    3. On August 5, 1997, President Clinton signed into law the Budget 
Act. Among other things, the Budget Act revised the expiration date of 
the pioneer's preference program, as set forth in section 309(j)(13)(F) 
of the Communications Act of 1934, as amended. That section had been 
added in 1994 legislation domestically implementing the General 
Agreement on Tariffs and Trade (GATT), and read prior to enactment of 
the Budget Act: ``The authority of the Commission to provide 
preferential treatment in licensing procedures (by precluding the 
filing of mutually exclusive applications) to persons who make 
significant contributions to the development of a new service or to the 
development of new technologies that substantially enhance an existing 
service shall expire on September 30, 1998.'' The Budget Act advanced 
that date to ``the date of enactment of the Balanced Budget Act of 
1997.'' Thus, the pioneer's preference program expired on August 5, 
1997. In our Order, we formally terminated the pioneer's preference 
program and dismissed all pending pioneer's preference requests, 
including QUALCOMM's.
    4. On October 9, 1997, QUALCOMM filed with the Court a ``Motion to 
Enforce Mandate and Supporting Memorandum,'' contending that our Order 
misconstrued the Budget Act and requesting the Court to order us to 
consider QUALCOMM's pioneer's preference request on its merits. On 
October 16, 1997, counsel for the Commission filed an opposition to the 
motion, pointing out, inter alia, that QUALCOMM's motion was 
procedurally improper because QUALCOMM had not filed a petition for 
reconsideration of the Order affording us an opportunity to address its 
contentions. On October 20, 1997, while QUALCOMM's motion was still 
pending before the Court, QUALCOMM filed with the Commission a petition 
for reconsideration of the Order. On November 5, 1997, the Court 
dismissed the motion on the grounds that QUALCOMM had failed to exhaust 
its administrative remedies, stating that the ``appropriate procedure 
for QUALCOMM to seek relief is to petition to the Commission to 
reconsider its decision dismissing QUALCOMM's application.''
    5. In its petition for reconsideration, QUALCOMM argues that ``the 
FCC's application of the Budget Act violates the rule against 
retroactive application of the law,'' that ``the language of the Budget 
Act suggests that Congress intended to permit continuation of the 
[pioneer's preference] program, while placing restrictions on the 
Commission's authority to preclude the filing of mutually exclusive 
applications,'' and that ``QUALCOMM is entitled to a fair hearing on 
the merits of its pioneer's preference application.'' QUALCOMM also 
claims that, in terminating the pioneer's preference program and 
dismissing its request for a preference without providing for public 
notice and comment, our Order violated the requirements of the 
Administrative Procedure Act (APA). We reject each of these arguments.
    6. Retroactivity. We find QUALCOMM's characterization of our Order 
dismissing its pioneer's preference request as an improper 
``retroactive'' application of the Budget Act to be without merit. The 
Order appropriately gave prospective effect to this statute in 
concluding that as of the date of its enactment, August 5, 1997, we no 
longer had authority to grant pending requests for pioneer's 
preferences. Thus, contrary to QUALCOMM's claim, our action did not 
violate the traditional presumption against retroactivity that the 
Supreme Court reiterated in Landgraf v. USI Film Products, 511 U.S. 244 
(1994).
    7. Moreover, our application of the Budget Act in this case is 
consistent with the firmly-established principle that, ``when a law 
conferring jurisdiction is repealed without any reservation as to 
pending cases, all cases fall with the law.'' Bruner v. United States, 
343 U.S. 112, 116-117 (1952). The Supreme Court has explained that 
application of a new jurisdictional rule normally does not raise 
concerns about retroactivity ``because jurisdictional statutes speak to 
the power of the court rather than to the rights or obligations of the 
parties.'' Landgraf, 511 U.S. at 273. Similarly, application of the 
Budget Act in this case does not produce an impermissible retroactive 
effect because that statute addresses our authority to act, not the 
merits of QUALCOMM's pioneer's preference request.
    8. Accordingly, we find that we properly applied the time-honored 
tenet of statutory construction that, ``when a law conferring 
jurisdiction is repealed without any reservation as to pending cases, 
all cases fall with the law.'' Bruner, 343 U.S. at 116-17. Moreover, 
even if the Budget Act properly could be characterized as altering the 
substantive law applicable to pioneer's preferences, the statute's 
application in QUALCOMM's case does not raise the retroactivity 
concerns identified in Landgraf. As the Supreme Court explained, a new 
statute is considered retroactive only if ``it would impair rights a 
party possessed when he acted, increase a party's liability for past 
conduct, or impose new duties with respect to transactions already 
completed.'' Landgraf, 511 U.S. at 280. See also Saco River Cellular, 
Inc. v. FCC, No. 91-1248, slip op. at 9 (DC Cir. Jan. 16, 1998) (Saco 
River). The Budget Act has none of these effects. It neither increases 
QUALCOMM's liability for past conduct nor imposes new duties relating 
to completed transactions. Additionally, this new statute does not 
impair any right possessed by QUALCOMM ``because none vested on the 
filing of its [request].'' Chadmoore Communications, Inc. v. FCC, 113 
F.3d 235, 241 (DC Cir. 1997).
    9. Further, in its remand order, the Court in Freeman Engineering 
did not find that QUALCOMM had a vested right to a pioneer's 
preference; it simply required us to reevaluate whether QUALCOMM's 
request for a preference should be granted or denied. Thus, the effect 
of the remand was to return QUALCOMM's preference request to pending 
status before the Commission and afforded QUALCOMM no greater or lesser 
rights than those of any other party with a pending preference request. 
Clearly, Congress had the power to enact legislation that terminated 
our authority to grant pending requests for pioneer's preferences; and 
``the mere expectations of a license applicant cannot bar the 
legitimate exercise of such congressional power.'' Multi-State 
Communications, Inc. v. FCC, 728 F.2d 1519, 1526 n.12 (DC Cir.), cert. 
denied, 469 U.S. 1017 (1984). The mere fact that a statute is ``applied 
in a case arising from conduct antedating the statute's enactment or 
upsets expectations based in prior law'' does not render the statute

[[Page 24128]]

retroactive.'' Saco River, slip op. at 9, quoting Landgraf, 511 U.S. at 
269.
    10. Scope of Sunset Provision in Budget Act. QUALCOMM asserts that 
the Budget Act does not bar us from awarding pioneer's preferences, but 
only limits our power to provide preferential treatment to pioneers by 
precluding the filing of mutually exclusive applications. We disagree. 
Our preference program rewarded innovators by enabling them to obtain 
licenses without having to face competing (i.e., mutually exclusive) 
applications. We are not at liberty to grant some other sort of 
preference to communications pioneers. Section 309(j)(13)(A) of the 
Communications Act provides that we ``shall not award licenses'' by 
giving preferential treatment to innovators ``except in accordance with 
the requirements'' of section 309(j)(13). 47 U.S.C. 309(j)(13)(A). 
Following its amendment by the Budget Act, section 309(j)(13) contains 
no provision authorizing us to give preferences to innovators in the 
licensing process. Further, while sections 7(a) and 303(g) give us the 
authority to award pioneer's preferences in the absence of an explicit 
statute to the contrary, section 309(j)(13)(F) is just such a statute.
    11. QUALCOMM contends, however, that Congress did not intend for 
the Budget Act's immediate termination of the pioneer's preference 
program to affect its pending preference request because the House 
Report on the 1994 GATT Legislation stated that Congress did not intend 
to ``affect the rights of persons who have been denied a pioneer's 
preference.'' Petition for Reconsideration at 6 (quoting Report to 
accompany H.R. 5110, 103 Cong. 2d. House Rept. 103-826 (House Report)). 
We are not persuaded by QUALCOMM's argument. The quoted statement from 
the House Report does not address the sunset provision set forth in 
section 309(j)(13)(F) of the Communications Act. Instead, the statement 
in question clarified that a different provision of the Act, section 
309(j)(13)(E), which precluded further administrative and judicial 
review of certain grants of pioneer's preference requests, was not 
intended to ``affect the rights of persons who have been denied a 
pioneer's preference.'' House Report at 8 (emphasis added). That is, 
Congress intended simply to make clear in 1994 that parties like 
QUALCOMM could appeal the denial of a pioneer's preference request 
despite the no review provision.
    12. Right to a Hearing. QUALCOMM argues that the Order violated its 
right to due process by denying its ``right to a fair hearing [that 
had] vested long before Congress changed the law relating to pioneer's 
preferences on a going forward basis.'' We disagree. QUALCOMM does not 
have a constitutional ``right to a fair hearing'' unless that hearing 
concerns constitutionally protected liberty or property interests: 
``The requirements of procedural due process apply only to the 
deprivation of interests encompassed by the [Constitution's] protection 
of liberty and property.'' Board of Regents v. Roth, 408 U.S. 564, 569 
(1972). Although QUALCOMM claims a property interest in a fair hearing, 
any hearing that it would receive at this point would not implicate any 
property interest because we no longer have authority to grant 
QUALCOMM's preference request. As the U.S. Court of Appeals for the 
District of Columbia Circuit recently reaffirmed, ``[t]he filing of an 
application creates no vested right to a hearing; if the substantive 
standards change so that the applicant is no longer qualified, the 
application may be dismissed.'' Chadmoore, 113 F.3d at 241 (quoting 
Hispanic Information & Telecommunications Network v. FCC, 865 F.2d 
1289, 1294-95 (DC Cir. 1989)); see also Melcher v. FCC, 134 F.3d 1143, 
1164-65 (DC Cir. 1998).
    13. While QUALCOMM contends that it has a vested right in a 
pioneer's preference, neither we nor the court has ever found that 
QUALCOMM was entitled to a preference under our rules. Further, 
QUALCOMM has no right to a hearing that cannot yield the benefits it 
seeks. A hearing is a means to an end, and the end that QUALCOMM 
seeks--grant of a pioneer's preference--is no longer available. A 
hearing thus would be futile. Accordingly, our decision to dismiss 
QUALCOMM's preference application ``simply respects the statutorily-
fixed deadline'' for exercising our authority to award pioneer's 
preferences: ``[I]n thus following the legislature's direction, the 
[Commission] contravened no due process right to fundamentally fair 
procedures.'' Spannaus v. FCC, 990 F.2d 643, 645 (DC Cir. 1993).
    14. APA Notice and Comment Requirements. QUALCOMM argues that 
``[t]he APA requires that the Commission allow an opportunity for 
notice and comment before promulgating rules other than those `of 
agency organization, or practice.' '' The APA also, however, permits us 
to proceed without notice and comment procedures when good cause exists 
for finding such procedures are ``impracticable, unnecessary, or 
contrary to the public interest.'' 5 U.S.C. 553(b)(B). Similarly, 
publication or service of a rule change at least 30 days before its 
effective date is not required when good cause is found. 5 U.S.C. 
553(d)(3). Such is the situation before us. The unambiguous language of 
the Budget Act terminating our authority to grant pioneer's preferences 
effective upon enactment of the Act made it unnecessary for us to 
follow public notice and comment procedures or to provide for at least 
30 days advance publication in order to amend our rules to terminate 
the pioneer's preference program and to dismiss pending pioneer's 
preference requests.
    15. Other Matters. In comments filed November 6, 1997, QUALCOMM 
argues that the Order interpreted the sunset provision of section 
309(j)(13)(F) in a manner inconsistent with past Commission precedent 
but failed to explain the reasons for this departure from precedent. 
Specifically, QUALCOMM claims that in the Second Report and Order and 
Further Notice of Proposed Rule Making (Second R&O) in the Pioneer's 
Preference Review Proceeding, 60 FR 13396, March 13, 1995, we 
interpreted section 303(j)(13)(F) as applying only to pioneer's 
preference requests filed after September 1, 1994, but in our Order we 
applied that provision to pioneer's preference requests, such as 
QUALCOMM's, which were filed before that date. Because the Order relied 
on the sunset provision as the basis for dismissing QUALCOMM's request, 
QUALCOMM asserts that it was denied administrative due process because 
the Commission changed its interpretation of the sunset provision 
without explanation.
    16. As an initial matter, we agree with observations made by 
PrimeCo Personal Communications, L.P. and Sprint PCS, in their 
opposition to the petition, that QUALCOMM's comments constitute a late-
filed supplement to its petition for reconsideration. Accordingly, 
pursuant to section 1.429 of the Commission's rules, we are dismissing 
those comments. Nonetheless, we note sua sponte that the ``unexplained 
departure from precedent'' argument advanced in QUALCOMM's comments is 
without merit. In the Second R&O, in rejecting comments suggesting that 
we immediately repeal the pioneer's preference program, we explained 
that, for preference requests filed after September 1, 1994, section 
309(j)(13)(F) directed us to continue this program until September 30, 
1998, and that for preference requests filed on or before September 1, 
1994, we did not find any valid reason for terminating the program 
earlier. No commenter in that

[[Page 24129]]

proceeding had raised, and we did not discuss, whether we had the 
authority to continue the pioneer's preference program beyond the date 
specified in section 309(j)(13)(F) for preference requests filed on or 
before September 1, 1994. It is clear, however, that we retained no 
such authority. The GATT legislation required the termination of the 
entire pioneer's preference program by a date certain, September 30, 
1998. That we retained the discretion to terminate the program with 
respect to earlier-filed preference requests (but chose not to exercise 
that discretion) does not imply that we had discretion to continue the 
program in any respect beyond the date set forth in the legislation. 
Our actions in the Order dismissing QUALCOMM's preference request and 
terminating the pioneer's preference program as of the date set forth 
in section 309(j)(13)(F) as amended by the Budget Act, August 5, 1997, 
are thus fully consistent with our actions in the Second R&O.
    17. Finally, we note that in comments filed November 12, 1997, 
Global Broadcasting Company, Inc. requests that we ``consider on the 
merits'' the pioneer's preference request filed by Web SportsNet, Inc. 
and Gregory D. Deieso but also dismissed in our Order. We are 
dismissing these comments as an improperly late-filed petition for 
reconsideration of our action dismissing the preference request, but 
also note that we have no authority to grant the relief requested.

Ordering Clauses

    18. Accordingly, it is ordered that the petition for 
reconsideration filed on October 20, 1997 by QUALCOMM Incorporated is 
denied. This action is taken pursuant to sections 4(i) and 303(r) of 
the Communications Act of 1934, as amended, 47 U.S.C. 154(i) and 
303(r).
    19. It is further ordered that the comments filed on November 6, 
1997 by QUALCOMM Incorporated and on November 12, 1997 by Global 
Broadcasting Company, Inc. are dismissed. This action is taken pursuant 
to section 1.429(d) of the Commission's rules.

List of Subjects in 47 CFR Part 1

    Administrative practice and procedure.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-11616 Filed 4-30-98; 8:45 am]
BILLING CODE 6712-01-P