[Federal Register Volume 75, Number 247 (Monday, December 27, 2010)]
[Pages 81274-81276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32493]



 [GN Docket No. 10-244; DA 10-2259]

Media and Wireless Telecommunications Bureaus Seek Comment on 
Recommendation of the Advisory Committee on Diversity for 
Communications in the Digital Age

AGENCY: Federal Communications Commission.

ACTION: Notice.


SUMMARY: The Media and Wireless Telecommunications Bureaus of the 
Federal Communications Commission seek comment on a recommendation of 
the Advisory Committee on Diversity for Communications in the Digital 
Age that the Commission consider a new preference program in its 
competitive bidding process to provide bidding credits to individuals 
and entities who have overcome substantial disadvantage.

DATES: Comments are due on or before February 7, 2011; reply comments 
are due on or before February 25, 2011.

ADDRESSES: You may submit comments, identified by GN Docket No. 10-244, 
by any of the following methods:
     Federal Communications Commission's Web Site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. Filings can be sent by 
hand or messenger delivery, by commercial overnight courier, or by 
first-class or overnight U.S. Postal Service mail. All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St., SW., Room TW-A325, Washington, DC 20554. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street, SW., Washington, DC 20554.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: [email protected] or telephone: 202-
418-0530 or TTY: 202-418-0432.

FOR FURTHER INFORMATION CONTACT: Media Bureau, Industry Analysis 
Division: Amy Brett at (202) 418-2330, or Wireless Telecommunications 
Bureau, Auctions and Spectrum Access Division: Sayuri Rajapakse at 
(202) 418-0660.

SUPPLEMENTARY INFORMATION: This is a summary of the public notice, 
released December 2, 2010, in GN Docket No. 10-244, seeking comment on 
the Advisory Committee's Recommendation released on October 14, 2010. 
The Advisory Committee's Recommendation, which was released as an 
attachment to the public notice, is available at http://www.fcc.gov/DiversityFAC/meeting101410.html. The complete texts of the public 
notice and Recommendation are available for public inspection and 
copying from 8 a.m. to 4:30 p.m. ET Monday through Thursday or from 8 
a.m. to 11:30 a.m. ET on Fridays in the FCC Reference Information 
Center, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The 
public notice may be purchased from the Commission's duplicating 
contractor, Best Copy and Printing, Inc. (BCPI), 445 12th Street, SW., 
Room CY-B402, Washington, DC 20554, telephone 202-488-5300, fax 202-
488-5563, or you may contact BCPI at its Web site: http://www.BCPIWEB.com. When ordering documents from BCPI, please provide the 
appropriate FCC document number, for example, DA 10-2259. The public 
notice is also available on the Internet at the Commission's Web site 
or by using the search function for GN Docket No. 10-244 on the ECFS 
Web page at http://www.fcc.gov/cgb/ecfs/.
    On October 14, 2010, the Advisory Committee on Diversity for 
Communications in the Digital Age (``Advisory Committee'') formally 
recommended that the Federal Communications Commission (``Commission'') 
undertake a notice of proposed rulemaking to consider how the 
Commission could design, adopt, and implement an additional new 
preference program in its competitive bidding process. Under the 
proposed preference, persons or entities who have overcome substantial 
disadvantage would be eligible for a bidding credit. The Advisory 
Committee explains that the new preference ``would expand the pool of 
designated entities to include those qualified applicants who have 
overcome substantial disadvantage,'' noting that the proposed program 

[[Page 81275]]

analogous in some respects to programs used by educational institutions 
in their admissions processes.
    The Advisory Committee's Recommendation acknowledges that a number 
of issues concerning the design and implementation of its proposal 
would need to be refined and resolved by the Commission in a future 
rulemaking proceeding. The Media and Wireless Telecommunications 
Bureaus seek information that will assist the Commission in considering 
whether to launch a proceeding to further examine the components of the 
recommended preference. The Bureaus seek comment on the proposal and 
are especially interested in comments on the following questions. 
Interested parties need not address all the questions presented, but 
are encouraged to respond to those about which they have particular 
knowledge or information.

I. Authority and Objectives

    Sections 309(j)(3)(B) and (4)(D) of the Communications Act of 1934, 
as amended, direct the Commission respectively to seek to disseminate 
licenses among ``a wide variety of applicants, including small 
businesses, rural telephone companies, and businesses owned by members 
of minority groups and women'' and to ``ensure that small businesses, 
rural telephone companies, and businesses owned by members of minority 
groups and women are given the opportunity to participate in the 
provision of spectrum-based services.'' The Commission has established 
a program to promote the involvement of statutorily-identified 
designated entities in the provision of spectrum-based services. 
Designated entities are defined in 47 CFR 1.2110(a) as small 
businesses, businesses owned by members of minority groups and/or 
women, and rural telephone companies. The Commission's primary method 
of promoting the participation of designated entities in competitive 
bidding for wireless services has been to award bidding credits 
(percentage discounts on winning bid amounts) to small business 
applicants. In the context of broadcast services, the Commission 
adopted a tiered new entrant bidding credit to promote the objectives 
of section 309(j) and further its long-standing commitment to the 
diversification of broadcast facility ownership. That bidding credit 
may be awarded to broadcast auction applicants having no, or very few, 
other media interests. The Advisory Committee's Recommendation would 
establish an additional preference for persons or entities that have 
overcome substantial disadvantage.
    1. Would the proposed preference comply with the Communications Act 
and other relevant statutes? Does section 309(j)(4)(D) authorize the 
Commission to establish the proposed preference for individuals who 
have overcome substantial disadvantage? If not, are there other 
statutory provisions that afford sufficient authorization? Would the 
Commission need additional legal authority to implement this new 
    2. The Commission has previously found that rural telephone 
companies and minority- and women-owned businesses that qualify as 
small businesses are able to take advantage of the provisions we have 
adopted for small businesses. Similarly, in the broadcast context, the 
Commission established its new entrant bidding credit, having found 
that a preference for new entrants would be the most appropriate way to 
implement the statutory provisions regarding opportunities for small, 
minority- and women-owned businesses based on then-available 
information on opportunities for designated entities to participate in 
the provision of broadcast services. The Bureaus seek information to 
assess how individuals who have overcome substantial disadvantage have 
fared under the Commission's existing auction process and the 
designated entity benefits. Have persons who have overcome substantial 
disadvantages had difficulty in obtaining licenses under the existing 
process and designated entity programs? Do data exist that would 
demonstrate that individuals who have overcome substantial disadvantage 
are underrepresented in the Commission's auctions process? Is there 
evidence that persons who have overcome substantial disadvantage are 
more likely than others to utilize Commission licenses in the public 
interest, or do so to a greater extent? If no such data exist, what 
information could be developed to assess the need for the proposed 
bidding preference?
    3. In establishing the existing small business bidding credit 
program, the Commission found that the preferences would allow 
designated entities to overcome barriers that have impeded these 
groups' participation in the telecommunications arena, including 
barriers related to access to capital. The Advisory Committee's 
Recommendation notes that the proposed preference would provide fair 
opportunity to those who have overcome substantial disadvantage and 
that it would result in the introduction of new entrants having diverse 
viewpoints. How would this proposed preference provide additional 
opportunities to individuals and entities that differ from those 
available under our current bidding credit programs?
    4. The Advisory Committee's Recommendation observes that the 
proposed overcoming disadvantage preference would be subject to a 
``rational basis'' constitutional standard and that any Commission 
rulemaking ``must support the conclusion that the overcoming 
disadvantage preference program will serve the public interest and is a 
rational way to further'' the program's public interest objectives. 
What public or governmental interests would be served by establishing 
such a bidding preference? Commenters are specifically invited to 
provide information on what interests would be served under this 
program that are not being addressed with the Commission's existing 
bidding credit programs.
    5. Are there additional constitutional issues raised by the 
Advisory Committee's Recommendation that the Commission should 
consider? If so, what are they? How might they be mitigated or 

II. Eligibility for Preference

    6. The Advisory Committee's Recommendation supplies a non-
exhaustive list of disadvantages that may have had a substantial 
negative impact on an individual's ``entry into or advancement in the 
professional world or other comparable context'' that might justify the 
award of a preference, such as physical disabilities or psychological 
disorders that have rendered professional or business advancement 
substantially more difficult. Are there other categories of 
disadvantages that should qualify an individual for preferences beyond 
those listed in the Recommendation? Should any of the proposed 
disadvantages not be included? Should any of the disadvantages take 
precedence over others? Should there be a point system to weigh the 
relative merit of different disadvantages? Should the Commission 
develop and publish an exclusive list of qualifying disadvantages, or 
should determinations about whether a substantial disadvantage is 
qualifying be made on a case-by-case basis?
    7. The Advisory Committee's Recommendation suggests that any 
disadvantage must be ``substantial'' in order to qualify an applicant 
for a preference. By what means should the Commission assess and/or 
quantify what experience would demonstrate ``substantial'' 
    8. What degree of success in overcoming a substantial disadvantage 
would an applicant have to demonstrate in order to evidence its 
eligibility for such a preference? How should

[[Page 81276]]

applicants be required to document their successes in ``substantially'' 
or at least ``partially'' overcoming disadvantages? Should any 
successes documented be limited to the applicant's professional 
achievements, or should success in other contexts be considered by the 
    9. At what level of success, if any, should an applicant who has 
overcome substantial disadvantages become ineligible for the preference 
(e.g., by what measure of wealth or access to capital)? Should the 
Commission adopt different levels of preference based on a measure of 
wealth or access to capital? What criteria should be used to disqualify 
the applicant from eligibility for a bidding credit? If the Commission 
adopts an additional preference such as that recommended by the 
Advisory Committee, how should the Commission implement the statutory 
requirement to avoid unjust enrichment in the context of its bidding 
preference program?

III. Administration

    10. The Advisory Committee's Recommendation notes that any 
determination of an individual's or entity's eligibility for an 
overcoming disadvantage preference would require an examination of all 
relevant evidence and would be based on an individualized evaluation. 
The individualized reviews that would occur under the proposed program 
are subjective in a manner that distinguishes them from existing 
designated entity programs, which are based on objective criteria such 
as financial data. By what means could applicants demonstrate that they 
qualify for the preference? For example, should a narrative explanation 
suffice? If not, what information or documentation would be necessary 
to substantiate a claim? Should an applicant be permitted to certify 
its eligibility for this preference under penalty of perjury in its 
short-form application when it seeks to participate in an auction, 
similar to the way in which applicants may certify eligibility for new 
entrant and small business bidding credits? If so, what guidance can 
the Commission provide to potential applicants so that they can make a 
good faith certification of eligibility? The Recommendation suggests 
that an overcoming disadvantage preference might be applied differently 
for different services (e.g., a preference might apply only for more 
valuable licenses in a broadcast auction). Would the Commission have to 
tailor the preference for specific services in a rulemaking, similar to 
its existing practice of establishing the small business definitions on 
a service-by-service basis? The Advisory Committee recognized the 
importance of reducing subjectivity and achieving consistency among 
individualized determinations. What standards could the Commission 
implement to achieve those goals?
    11. The Advisory Committee's Recommendation suggests that a 
determination as to whether applicants have overcome disadvantages 
could be made within the existing short-form auction application review 
process. What would be the administrative burden for the Commission to 
conduct individualized review for such a preference within the 
relatively short time frames allotted under the existing auctions 
short-form application process? If the Commission were to allocate 
additional time in the pre-auction process for such reviews, would the 
possible burdens on auction applicants be outweighed by the public 
interest benefits of the proposed preference?
    12. As an alternative, the Recommendation suggests that applicants 
could pre-qualify for preferences and thus avoid subsequent petitions 
to deny their licenses targeted at their qualification for the 
preference. Are there Administrative Procedure Act or other concerns 
for not allowing parties to file petitions challenging a proposed 
qualification? Is there a reason to treat this qualification 
differently than other qualifications that are subject to the petition 
to deny process? Does this raise issues with regard to the requirements 
of the Communications Act? If an applicant is found to be qualified 
prior to an auction but experiences a change of status during bidding, 
or after submitting a winning bid, should the individual remain 
eligible for the preference? Should a pre-qualification review strictly 
be limited to the overcoming of substantial disadvantage, or should it 
be a broader review of an applicant's license qualifications, provided 
that the pre-auction process is extended?
    13. The Advisory Committee's Recommendation suggests three options 
for the management of qualification review: (1) Establishing a 
``special cadre'' of Commission officials to evaluate applicant 
qualifications; (2) designing a modified Administrative Law Judge 
procedure for this purpose; (3) assigning the function to the 
Commission's Bureau responsible for oversight of the service in 
question. What are the relative advantages and disadvantages of each 
option? What aspects of the current process for review of auction 
applicant eligibility suggest that these additional options are 
necessary for the proposed preference program?
    14. The Advisory Committee's Recommendation asks whether a 
corporation should be able to receive the proposed preference based on 
the qualifications of its principal. What role should the principal 
play in a corporation or other business entity to confer eligibility 
for the preference on the entity? For instance, should the principal be 
required to have majority equity ownership and a management role?
    This matter shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules 47 CFR 
1.1200, 1.1206. Persons making oral ex parte presentations are reminded 
that memoranda summarizing the presentations must contain summaries of 
the substance of the presentations and not merely a listing of the 
subjects discussed. More than a one- or two-sentence description of the 
views and arguments presented generally is required. See 47 CFR 
1.1206(b). Other rules pertaining to oral and written ex parte 
presentations in permit-but-disclose proceedings are set forth in 47 
CFR 1.1206(b).

Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB, Federal 
Communications Commission.
[FR Doc. 2010-32493 Filed 12-23-10; 8:45 am]