[Federal Register Volume 65, Number 136 (Friday, July 14, 2000)]
[Rules and Regulations]
[Pages 43716-43717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17848]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 90

[PR Docket No. 93-144, GN Docket No. 93-252, PP Docket No. 93-253; FCC 
99-368]


Rules To Facilitate Future Development of SMR Systems in the 800 
MHz Frequency Band

AGENCY: Federal Communications Commission.

ACTION: Final rule; petition for reconsideration.

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SUMMARY: In this document, the Commission addresses petitions for 
reconsideration of the 800 MHz Specialized Mobile Radio (SMR) 
proceeding in which the Commission reconsidered the rules governing the 
upper 200 channels of the SMR.

DATES: Effective July 14, 2000.

FOR FURTHER INFORMATION CONTACT: Alice Elder, Wireless 
Telecommunications Bureau, Industry Analysis Division (202) 418-0660.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Memorandum Opinion and Order on Reconsideration (Second MO&O) in PR 
Docket No. 93-144, adopted November 23, 1999 and released December 2, 
1999. The complete text of this Second MO&O is available for inspection 
and copying during normal business hours in the Commission's Reference 
Center, room CY-A257, 445 12th Street SW, Washington, DC. This Second 
MO&O is also available through the Internet at http://www.fcc.gov/Bureaus/Wireless/Orders/1999/. The complete text may be purchased from 
the Commission's duplicating contractor, International Transcription 
Service, Inc. (ITS, Inc.) at 1231 20th Street NW, Washington, DC 10036, 
(202) 857-3800.
    1. Two petitions for reconsideration (``Petitions''), were filed 
with the Commission seeking reconsideration of the Amendment of Part 1 
of the Commission's Rules to Facilitate Future Development of SMR 
Systems in the 800 MHz Frequency Band, Memorandum Opinion and Order on 
Reconsideration (First MO&O), 62 FR 41225 (July 31, 1997). In that 
document the Commission reconsidered the rules governing the upper 200 
channels of the 800 MHz Specialized Mobile Radio (SMR). No pleadings 
were filed in response to these petitions.
    2. First, petitioners request reconsideration of the Commission's 
decision to modify its competitive bidding rules to eliminate 
installment payments and adopt larger bidding credits for entities 
qualifying as small businesses for the auction of the upper 200 
channels of the 800 MHz SMR service. Second, one petitioner claims that 
the Commission acted in violation of its rules regarding delegation of 
authority and the Administrative Procedure Act (APA), by delegating the 
authority to set the level of upfront payments to the Wireless 
Telecommunications Bureau (``Bureau''). Third, one petitioner requests 
review of the Commission's decisions to license the upper 200 channels 
of the 800 MHz SMR spectrum in contiguous blocks, eliminate the 
finder's preference program, and use competitive bidding to license the 
upper 200 channels in the 800 MHz spectrum band. Finally, one 
petitioner requests clarification of the Commission's decision to 
require incumbents seeking geographic licenses to show that their 
external site facilities are constructed and operational.
    3. On reconsideration, the Commission affirms its decision to 
eliminate installment payments. At the outset, the Commission notes 
that Congress did not require the use of installment payments in all 
auctions, but rather recognized them as one means of promoting the 
objectives of section 309(j)(3) of the Communications Act. However, 
Congress has not dictated that installment payments are the only tool 
in assisting small business. The Commission's experience with the 
installment payment program has led it to conclude that installment 
payments may not always serve the public interest. As noted in the 
First MO&O, the Commission has found that obligating licensees to pay 
for their licenses as a condition of receipt requires greater financial 
accountability from applicants. The Commission determined in its 
Amendment of Part 1 of the Commission's Rules to Facilitate Future 
Development of SMR Systems in the 800 MHz Frequency Band, Third Report 
and Order and Second Further Notice of Proposed Rule Making (Third 
R&O), 63 FR 2315 (January 15, 1998), that installment payments should 
not be used in the immediate future as a means of financing small 
business participation in our auction program. Moreover, in recent 
legislation, Congress dictated that certain future auctions effectively 
be conducted without installment payments. The Balanced Budget Act of 
1997 requires the Commission to conduct the competitive bidding 
required by that act in a manner that ensures that the proceeds of such 
bidding are deposited in the U.S. Treasury by September 30, 2002. After 
careful consideration, the Commission concludes that it has met its 
statutory obligations without offering installment payment plans for 
800 MHz SMR licensees. The Commission notes further that in place of 
installment payments, it established larger bidding credits for the 800 
MHz SMR auction to provide for qualifying small businesses.
    4. The Commission disagrees with petitioner's contentions that 
installment payments are necessary to ensure a meaningful opportunity 
for small businesses to participate in the 800 MHz SMR auction. The 
rules were changed more than ten weeks before the filing deadline, 
providing an adequate opportunity for the parties to alter their 
business plans, if necessary. The Commission also notes that the 
elimination of installment payments

[[Page 43717]]

and the timing of that auction did not prevent the participation of 
small businesses in the 800 MHz SMR auction, in which 52 of the 62 
qualified bidders were eligible for small or very small business 
credits.
    5. Second, the Commission rejects the claim that the Bureau's 
authority to set the level of upfront payments constitutes an illegal 
delegation of authority. Section 0.131 of the Commission's rules 
explicitly states that the Bureau has delegated authority to develop, 
recommend and administer policies, programs and rules concerning 
auctions of spectrum for wireless telecommunications. In the Amendment 
of Part 1 of the Commission's Rules to Facilitate Future Development of 
SMR Systems in the 800 MHz Frequency Band, Order and Memorandum Opinion 
& Order (Part 1 Order), 62 FR 13540 (March 21, 1997), rulemaking, the 
Commission clarified that pursuant to Sec. 0.131 of its rules, the 
Chief of the Wireless Telecommunications Bureau has delegated authority 
to implement all of the Commission's rules pertaining to auctions 
procedures. This includes the authority to choose competitive bidding 
designs and methodologies; conduct auctions; administer application, 
payment, licenses grant and denial procedures; and determine upfront 
and down payment amounts as well as minimum opening bids. These actions 
do not fall under the prohibited activities set forth in Sec. 0.331 of 
the Commission's rules, which include acting upon complaints, 
petitions, requests, applications for review and notices of proposed 
rulemaking. The Commission concludes that the Bureau's actions are 
valid, as they affect procedural rather than substantive issues, and 
are, therefore, in compliance with our rules. Furthermore, the Bureau's 
actions were in compliance with the APA. Pursuant to 5 U.S.C. 553(b), 
an agency may modify procedural rules without notice and comment. 
Because the rule modifications were procedural in nature and did not 
affect the substantive rights of interested parties, the Bureau's 
actions fall within that exception.
    6. Third, the Commission dismisses as repetitions the request that 
it reconsider its decisions to allocate licenses in the upper 200 
channels of the 800 MHz SMR spectrum in contiguous blocks, eliminate 
the finder's preference program, and use competitive bidding as the 
licensing mechanism for the upper 200 channels in the 800 MHz band. The 
Commission disagrees with petitioner's contention that these decisions 
were unsupported by evidence and therefore, arbitrary and capricious. 
These conclusions were set forth first in the Amendment of Part 1 of 
the Commission's Rules to Facilitate Future Development of SMR Systems 
in the 800 MHz Frequency Band, First Report and Order, Eighth Report 
and Order and Second Further Notice of Proposed Rulemaking (First R&O), 
61 FR 6212 (February 16, 1996), and reaffirmed in the First MO&O. In 
each case, the Commission set forth reasoned explanations for its 
decision. It is not in the public interest to revisit these issues.
    7. Finally, the Commission finds it unnecessary to address the 
request for clarification of the Commission's decision to require 
incumbents seeking geographic licenses to show that their facilities 
are constructed and operational. In the First R&O, the Commission 
stated that such licensees are required to make a one-time filing of 
specific information for each of their external base station sites to 
assist the staff in updating the Commission database after the close of 
the auction for the upper 200 channels of the 800 MHz SMR spectrum. 
Under that decision, the Commission also requires evidence that such 
facilities are constructed and placed in operation and that, by 
operation of its rules, no other licensees would be able to use these 
channels within a geographic area.
    8. It is ordered that the Petitions are denied.

List of Subjects in 47 CFR Part 90

    Radio.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 00-17848 Filed 7-13-00; 8:45 am]
BILLING CODE 6712-01-P