**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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**FURTHER NOTICE OF PROPOSED RULEMAKING Adopted: May 31, 2000 Released:
June 7, 2000**

**Comments Due:** June 22, 2000

**Reply Comments Due:** June 30, 2000

**Final *Ex Parte* and Other Presentations Due:** July 12, 2000

By the Commission: Commissioner Powell concurring and issuing a
statement.

I. Introduction and Overview [2](#introduction-and-overview)

II\. Background [6](#background)

III\. Discussion [10](#discussion)

A. Reconfiguration of C Block Spectrum License Size
[10](#reconfiguration-of-c-block-spectrum-license-size)

B. Eliminate Eligibility Restrictions For Certain Licenses Under a
Tiered Approach
[13](#eliminate-eligibility-restrictions-for-certain-licenses-under-a-tiered-approach)

C. License Grouping for Bids [19](#license-grouping-for-bids)

D. Grandfather Exception [19](#grandfather-exception)

E. Bidding Credits [21](#bidding-credits)

F. Transfer Requirements [23](#transfer-requirements)

G. License Cap [24](#license-cap)

H. Spectrum Cap [25](#spectrum-cap)

IV\. Conclusion [26](#conclusion)

V. Procedural matters and ordering clauses
[27](#procedural-matters-and-ordering-clauses)

A. *Ex Parte* Rules -- Permit-But-Disclose Proceeding
[27](#ex-parte-rules-permit-but-disclose-proceeding)

B. Initial Regulatory Flexibility Analysis
[27](#initial-regulatory-flexibility-analysis)

C. Initial Paperwork Reduction Act Analysis
[27](#initial-paperwork-reduction-act-analysis)

D. Comment Dates [27](#comment-dates)

E. Further Information [28](#further-information)

F. Ordering Clauses [28](#ordering-clauses)

APPENDIX A -- Entrepreneur Eligibility Issues
[29](#appendix-a-entrepreneur-eligibility-issues)

APPENDIX B -- Spectrum Cap Issues [34](#appendix-b-spectrum-cap-issues)

APPENDIX C -- Initial Regulatory Flexibility Analysis
[36](#appendix-c-initial-regulatory-flexibility-analysis)

# Introduction and Overview

1.  On January 12, 2000, the Wireless Telecommunications Bureau
    ("Bureau") announced that a broadband Personal Communications
    Services ("PCS") C and F block auction -- Auction No. 35 -- would
    begin on July 26, 2000.[^1] Under the Commission's current rules,
    applicants for C and F block auctions must meet specified financial
    size requirements to qualify as "entrepreneurs" and to be eligible
    to compete in the auction.[^2] Following the announcement of Auction
    No. 35, the Commission received several formal requests to waive,
    modify, or eliminate various C and F block auction and service
    rules.[^3] These requests seek, among other things, modification of
    the C and F block eligibility requirements for the upcoming
    auction,[^4] reconfiguration of available 30 MHz C block
    licenses,[^5] and adoption of an alternative bidding plan.[^6]

2.  As justification for the proposed changes, the petitioners point to
    the relatively small percentage of C and F block licensees that have
    begun providing service in the years since the initial
    entrepreneurs' block auctions were held.[^7] They also note the
    increasing trend in the wireless marketplace toward nationwide
    service, their need for additional spectrum in order to ease
    spectrum capacity constraints, and their financial readiness to
    construct and operate C and F block systems should they win licenses
    in the upcoming auction.[^8] Numerous parties have filed opposing
    and supportive pleadings in response to these petitions.[^9]
    Opponents argue that businesses that qualify as "entrepreneurs"
    under our rules are more likely than larger companies to provide
    innovative and niche services and to serve rural areas; that the
    Commission's previous C and F block installment payment program was
    largely responsible for the dearth of build-out among C and F block
    licensees; and that changing the eligibility criteria at this
    juncture would be detrimental to the existing business plans of
    current C and F block "entrepreneur" licensees developed based upon
    these rules, and to the ability of small businesses to secure needed
    financing to provide valuable wireless services.[^10]

3.  Several parties have also asked that we consider whether we should
    revise, waive, or forbear from applying the Commercial Mobile Radio
    Service ("CMRS") spectrum cap for Auction 35.[^11] In support of
    these requests, the petitioners assert that the demand for CMRS
    services has significantly increased and created substantial
    spectrum constraints over the last few years. Further, petitioners
    contend that lifting the spectrum cap would better enable them to
    roll out Third Generation ("3G") and other advanced services, as
    well as otherwise help ensure the rapid and efficient development of
    the C and F block spectrum. Those opposing these requests claim that
    the current spectrum cap allows sufficient spectrum in local
    geographic markets to roll out 3G services in the foreseeable future
    and that petitioners failed to establish any basis for waiving the
    spectrum cap.

4.  Upon consideration of the petitions and responsive pleadings
    received to date, we have tentatively concluded that it is in the
    public interest to revise certain aspects of the C and F block
    rules. Accordingly, we seek comment in this *Further Notice of
    Proposed Rulemaking* ("*Further Notice*") on the following specific
    proposals to:

-   **[Reconfigure C Block Spectrum License Size]{.underline}**

We tentatively conclude that we will reconfigure each 30 MHz C block
license available in future broadband PCS auctions into three 10 MHz C
block licenses.

-   **[Apply a Tiered Approach to Basic Trading Areas
    (BTAs)]{.underline}**

We tentatively conclude that we will divide BTAs into two tiers
according to the population size of the BTA. Under this proposal, "Tier
1" would comprise BTAs at and above a 2.5 million population threshold;
and "Tier 2" would comprise BTAs below that population threshold.

-   **[Eliminate Eligibility Restrictions For Certain Licenses In
    Tiers]{.underline}**

We further propose to remove the auction eligibility restrictions for
certain of the newly reconfigured 10 MHz C block licenses, thereby
establishing "open" bidding for these licenses. We tentatively conclude
that we will allow "open" bidding (i.e., remove the eligibility
restrictions) for two of the three 10 MHz C Block licenses in Tier 1,
and one of the three 10 MHz C Block licenses in Tier 2. We also invite
comment on whether to allow "open" bidding for all three of the 10 MHz C
Block licenses in Tier 1, and two of the three 10 MHz C Block licenses
in Tier 2.

We tentatively conclude that we will allow "open" bidding for all
available 15 MHz C block licenses, which have previously been auctioned
but not sold.

We seek comment on whether to allow "open" bidding for all available F
block licenses. We also seek comment on whether, instead, to adopt a
tiered approach to eligibility for F block licenses or to retain
existing F block eligibility requirements.

-   **[Retain Our Current License Grouping for Bidding in the
    Auction]{.underline}**

We tentatively conclude that we will retain BTA service areas and a
license-by-license bidding design for Auction No. 35.

-   **[Clarify the Grandfather Exception]{.underline}**

We invite comment in this proceeding on a number of issues raised by
parties seeking reconsideration of the grandfather exception to the
eligibility rules, which is provided in Section 24.709(b)(9)(i). On the
issue of how the exception applies in a merger situation, we tentatively
conclude that when each of the merging entities is eligible for the
"grandfather" exception, the exception extends to the resulting entity,
but that when one (or more) of the merging entities is not eligible for
the "grandfather" exception, the exception does not extend to the
resulting entity.

-   **[Revise the Bidding Credits Available for Auction No.
    35]{.underline}**

We seek comment on whether to retain existing small and very small
business bidding credits (15 percent and 25 percent, respectively) for
licenses subject to "open" bidding or whether to increase them to 25
percent and 40 percent, respectively. We also seek comment on whether we
should change the bidding credits for licenses subject to "closed"
bidding, i.e., bidding where eligibility restrictions apply.

-   **[Alter the Transfer Requirements For Certain
    Licenses]{.underline}**

> *Licenses Won in "Open" Bidding*: We tentatively conclude that we will
> eliminate the Section 24.829 eligibility requirements for the
> assignment or transfer of control of C and F block licenses won in
> Auction No. 35 "open" bidding.
>
> *Licenses Won in "Closed" Bidding*: We seek comment on allowing a
> licensee to assign or transfer its license to any qualified entity,
> entrepreneur or not, upon the licensee's completion of its first
> construction benchmark, whether or not it takes the full five years
> allowed under our rules.
>
> *Licenses Held by Incumbent Licensees*: We seek comment on allowing an
> incumbent licensee to assign or transfer its license to any qualified
> entity, entrepreneur or not, upon the licensee's completion of its
> first construction benchmark, whether or not it takes the full five
> years allowed under our rules. We also seek comment on whether we
> should allow some flexibility for incumbent licensees to transfer
> certain licenses where the carrier can demonstrate "substantial
> service" throughout its system, rather than on a market-by-market
> basis.

-   **[Eliminate the License Cap]{.underline}**

> We tentatively conclude that we will eliminate the Section 24.710 cap
> on the number of C and F block licenses a single entity may win at
> auction.

-   **[Retain the Spectrum Cap]{.underline}**

We tentatively conclude that we will not eliminate or expand the current
spectrum cap in this proceeding.

# Background

5.  In the Omnibus Budget Reconciliation Act of 1993,[^12] Congress
    authorized the Commission to use systems of competitive bidding to
    award licenses for rights to use the radio spectrum. This
    authorization is codified as Section 309(j) of the Communications
    Act.[^13] Section 309(j)(3) directs the Commission to "seek to
    promote" a number of objectives, including:

-   the development and rapid deployment of new services for the benefit
    of the public, including those residing in rural areas;

```{=html}
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```
-   promoting economic opportunity and competition and ensuring that new
    and innovating technologies are readily accessible to the public by
    avoiding excessive concentration of licenses and by disseminating
    licenses among a wide variety of applicants, including small
    businesses, rural telephone companies, and businesses owned by
    members of minority groups and women, i.e., "designated entities;"

```{=html}
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```
-   recovery for the public of a portion of the value of the public
    spectrum resource made available for commercial use;[^14]

```{=html}
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```
-   avoidance of unjust enrichment through the methods employed to award
    uses of that resource; and

```{=html}
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```
-   efficient and intensive use of the electromagnetic spectrum.

6.  Section 309(j)(4) directs the Commission, in prescribing regulations
    to implement the objectives of Section 309(j)(3), to, *inter
    alia*, (1) establish performance requirements to ensure prompt
    delivery of service to rural areas and prevent warehousing of
    spectrum by licensees; (2) prescribe area designations and bandwidth
    assignments that promote an equitable geographic distribution of
    licenses and services, economic opportunity for a wide variety of
    applicants, including designated entities, and rapid deployment of
    services; and (3) ensure that designated entities are given the
    opportunity to participate in the provision of spectrum-based
    services, and, for such purposes, consider using bidding preferences
    and other procedures.[^15]

7.  The Commission outlined the original framework for C and F block
    auctions in the 1994 *Competitive Bidding Fifth Report and Order*,
    establishing the C and F blocks as "set-aside" blocks for
    "entrepreneurs" in which eligibility would be restricted to entities
    below a specified financial threshold.[^16] In doing so, the
    Commission noted the specific findings made by Congress, in the
    Small Business Credit and Business Opportunity Enhancement Act of
    1992, that "small business concerns, which represent higher degrees
    of risk in financial markets than do large businesses, are
    experiencing increased difficulties in obtaining credit."[^17] The
    Commission concluded that if it was to meet the Congressional goals
    of promoting economic opportunity and competition by dissemination
    of licenses among a wide variety of providers, it should take
    certain affirmative steps to mitigate these barriers to entry.[^18]
    The Commission also stated its intention to take steps to assure
    that designated entities that win licenses have the opportunity to
    become strong competitors in providing service.[^19] Thus, in
    attempting to address the imbalance between small businesses' and
    large businesses' relative abilities to access capital, the
    Commission established two set-aside blocks (the C and F blocks) in
    which large companies (those over the financial thresholds) would be
    prohibited from bidding or holding licenses for a period of
    time.[^20]

8.  The initial C block licenses were awarded through two auctions,
    Auction No. 5, which ended on May 6, 1996, and Auction No. 10, which
    concluded on July 16, 1996. Auction No. 11, the initial F block
    auction, ended on January 14, 1997, and also included D and E block
    licenses. Auction No. 22, which concluded on April 15, 1999, made
    available C and F block licenses that had been returned to, or
    reclaimed by, the Commission. Since the establishment of C and F
    block rules in 1994, no auctions, other than the C and F block
    auctions, have been conducted on a closed basis due to eligibility
    restrictions. Instead, in the 23 other auctions held by the
    Commission, we have typically provided opportunities for small
    businesses through bidding credits without a set-aside.

9.  Since adoption of the *Competitive Bidding Fifth Report and Order*,
    the rules for auctions of C and F block licenses have steadily
    evolved in response to legislative changes, judicial decisions, the
    needs of licensees striving to succeed in a rapidly developing
    wireless market, and the demand of the public for greater access to
    wireless services. Two-and-a-half years ago, in this docket, the
    Commission responded to requests from some C block auction winners
    to revise the auction rules and procedures for the C and F blocks.
    In the 1997 *C Block Second Report and Order*, [^21] as modified by
    the 1998 *C Block Reconsideration Order*,[^22] the Commission
    created a package of financial restructuring options to be offered
    to C block licensees experiencing financial difficulties in the wake
    of Auctions No. 5 and No. 10. The Commission also decided in the *C
    Block Second Report and Order*, as modified by the 1998 *C Block
    Fourth Report and Order*, to allow, for a period of two years from
    the beginning of the first post-restructuring C block auction
    (Auction No. 22), participation in bidding for C block licenses by
    entities that had participated in Auctions No. 5 and 10,[^23] even
    if such entities had since become too large to qualify as
    entrepreneurs under the Commission's rules.[^24]

10. Prior to the start of Auction No. 22, three C block licensees,
    NextWave Personal Communications, Inc. ("NextWave"),[^25] GWI PCS
    Inc. ("GWI"),[^26] and DCR PCS, Inc. ("DCR"),[^27] filed for
    bankruptcy protection. Other C block licensees defaulted on payments
    owed for their licenses. Bankruptcy filings and payment defaults by
    other C block licensees followed the auction; and, to date, a total
    of 232 C and F block licenses, covering a population ("pops") of
    approximately 191 million,[^28] have been involved in bankruptcy
    proceedings and/or defaulted on license payments. It appears that
    the vast majority of the defaulted licenses have never been placed
    into service.

11. As noted above, by Public Notice released January 12, 2000, the
    Bureau, pursuant to its delegated authority, announced that we would
    be holding a C and F block auction on July 26, 2000.[^29] The
    current inventory for this auction includes 93 30-MHz C block
    licenses, 21 15-MHz C block licenses and 40 10-MHz F block licenses
    for operation on frequencies for which previous licenses have
    automatically cancelled[^30] or have been returned to the
    Commission.[^31] The announcement of Auction No. 35 prompted
    petitions from SBC Communications Inc. ("SBC"), Nextel
    Communications, Inc. ("Nextel"), and other parties asking that we
    waive, modify, or eliminate our entrepreneur eligibility
    requirements for participation in the auction.[^32] In response to
    those filings, a number of parties also proposed that we make other
    modifications to our C and F block rules.[^33] Additionally, US WEST
    Wireless, LLC ("US West") and Sprint Spectrum L.P. dba Sprint PCS
    ("Sprint") filed a joint petition for reconsideration of our Order
    on Reconsideration of the Fourth Report and Order in WT Docket No.
    97-82 ("*C Block Fourth Report and Order Reconsideration*").[^34]
    The *C Block Fourth Report and Order Reconsideration* addressed
    certain of the rules governing auctions of C block licenses. Sprint
    and US West request that the Commission eliminate its eligibility
    restrictions for participation in the upcoming auction as well as
    modify other C block rules. In addition, Verizon Wireless
    ("Verizon") petitioned the Commission for clarification or
    reconsideration of our two-year C block auction eligibility
    "grandfather" rule, Section 24.709(b)(9)(i).[^35] The SBC, Nextel,
    and US West/Sprint petitions were placed on public notice, prompting
    more than 210 comments and other pleadings in response.[^36] A
    number of parties argue that all, or at least some portion, of the C
    and F block spectrum should be open to all participants in order to
    satisfy the Commission's obligations under 309(j)(4).[^37] Other
    parties oppose these arguments.[^38]

12. We have also received petitions from three parties that, under our
    proposed revisions to the C block rules, would become eligible to
    bid for licenses in the upcoming C and F block auction.[^39] These
    parties request that the Commission waive, or forbear from applying,
    the CMRS spectrum cap with regard to the spectrum available in
    Auction No. 35. We placed these petitions on public notice[^40] and
    received comments from 23 parties and reply comments from 14
    parties.[^41]

13. Based upon the extensive record before us, and our continuing
    obligation to weigh important spectrum policy management
    considerations in assessing the public interest, we have tentatively
    concluded that we will revise our rules for C and F block spectrum.
    We set forth our proposals and tentative conclusions concerning
    possible revisions in the rules in this *Further Notice.*

# Discussion

## Reconfiguration of C Block Spectrum License Size

14. **[Background]{.underline}.** In 1994, the Commission established a
    band plan for broadband PCS that provides for 30 MHz "C block"
    licenses and 10 MHz "F block" licenses.[^42] Each C and F block
    license covers a specific geographic service area known as a Basic
    Trading Area ("BTA").[^43] BTAs fall within still larger geographic
    service areas known as Major Trading Areas ("MTAs").[^44] As noted
    above, in the 1997 *C Block Second Report and Order*, as modified by
    the 1998 *C Block Reconsideration Order*, the Commission created a
    package of financial restructuring options designed to provide
    limited relief to C block licensees experiencing financial
    difficulties in the wake of Auction No. 5.[^45] Under one of the
    available options, licensees were allowed to disaggregate 15 MHz of
    each of their 30 MHz C block licenses in an MTA.[^46] In
    disaggregating a 30 MHz C block license, a licensee would retain a
    15 MHz C block license and would return the remaining 15 MHz of C
    block spectrum to the Commission for inclusion in the next C block
    auction, Auction No. 22.[^47] Because several of the available 15
    MHz C block licenses were not won in Auction No. 22, the license
    inventory for Auction No. 35 includes both 15 and 30 MHz C block
    licenses, as well as 10 MHz F block licenses.[^48]

15. A number of parties have suggested various proposals to alter the
    Commission's current band plan.[^49] Several parties, including US
    West, Sprint, Verizon, and AT&T propose that we subdivide each
    available 30 MHz C block license into three 10 MHz licenses, arguing
    that this change would provide greater flexibility to licensees and
    permit dissemination of licenses among a wider variety of
    competitors.[^50] Alternatively, Nextel requests that we subdivide
    each available 30 MHz C block license into a 20 MHz and a 10 MHz
    license, which it contends would allow bidders, whether new
    participants or existing licensees, to choose the spectrum block
    size that would best fit their needs.[^51] Bell Atlantic supports
    the Nextel proposal, provided that spectrum cap relief accompanies
    such a change.[^52] Other parties, like GTE and SBC, argue against
    subdividing the C block license spectrum size.[^53] A number of
    entrepreneurs also argue in favor of maintaining the status
    quo;[^54] however, many of these parties would support
    reconfiguration of the licenses as a second-best alternative,
    provided that such a change included a partial set-aside of C block
    spectrum for entrepreneurs.[^55]

16. **[Discussion]{.underline}.** We tentatively conclude that each 30
    MHz C block license available in Auction No. 35 should be
    reconfigured into three 10 MHz C block licenses, as requested by a
    number of the parties. We believe that by increasing the number of
    available licenses through this reconfiguration,[^56] taken together
    with our proposals to lift certain of our eligibility requirements,
    we will promote wider auction participation and license distribution
    in accordance with the goals of Section 309(j) of the Communications
    Act.[^57] Small bidders should find bidding for 10 MHz licenses more
    affordable, while large bidders should enjoy greater flexibility in
    tailoring their bidding to their business plans without running
    afoul of the spectrum cap. We further tentatively conclude that a 10
    MHz C block license is a viable minimum size for voice and some data
    services, including Internet access, and provides an appropriate
    building block for bidders that wish to acquire a larger amount of
    spectrum in particular markets.[^58] Accordingly, we propose to
    permit bidders to aggregate the 10 MHz C block licenses, subject
    only to the overall 45 MHz CMRS spectrum cap, and the relevant
    remaining eligibility restrictions for these licenses. We seek
    comment on this proposal and our tentative conclusions. We also seek
    comment on whether a different configuration, including adoption of
    blocks of 20 MHz where possible, would be more appropriate to
    provide meaningful opportunities for potential bidders, including
    new entrants into particular geographic markets.

17. Finally, with respect to aggregation of 10 MHz licenses, we note
    that the Bureau recently sought comment on procedures for
    implementing a combinatorial ("package") bidding design for the
    auction of licenses in the 700 MHz bands, which would facilitate
    aggregations of complementary licenses into larger blocks.[^59]
    While given the much larger number of licenses in this auction, true
    combinatorial bidding would be more complex and perhaps impractical
    to implement in the near term, we invite parties to suggest ways in
    which bidders could efficiently aggregate licenses in the auction
    process.

## Eliminate Eligibility Restrictions For Certain Licenses Under a Tiered Approach

18. **[Background]{.underline}.** Under the Commission's current rules,
    only qualified "entrepreneurs" are permitted to participate in
    auctions of C and F block licenses. To be considered an entrepreneur
    eligible for C and F block auction participation, an applicant
    (together with its affiliates and persons or entities that hold
    interests in the applicant and their affiliates) must have had gross
    revenues of less than \$125 million in each of the last two years
    and must have total assets of less than \$500 million.[^60]

19. We seek comment below on proposals to lift the entrepreneur
    eligibility restrictions for some, but not all, licenses available
    in Auction No. 35 and in future C and F block auctions. Our
    proposals take into account the contention of many entrepreneurs and
    their representatives that fairness requires the Commission to
    continue to maintain the present eligibility requirements.[^61]
    These parties contend that entrepreneurs developed business plans in
    the expectation that the C and F block licenses would remain set
    aside for them and that any auctions of reclaimed C and F block
    licenses would be subject to the same eligibility restrictions that
    applied in the original auctions of those licenses.[^62] These
    parties also argue that any lack of success among incumbent C and F
    block licensees can be attributed to bankruptcies, which were fueled
    by the now-suspended installment payment program.[^63] They point
    out that successful entrepreneurs have achieved substantial public
    interest benefits by providing types of services and service
    packages not offered by larger providers,[^64] and extending service
    to rural markets.[^65] These parties also argue that the
    continuation of the eligibility restrictions will better serve their
    ability to expand their service area as a competing carrier and to
    enter roaming relationships with other regional carriers.[^66]

20. Our proposals also take into account some of the arguments of
    several CMRS providers seeking to participate in the upcoming
    auction that currently do not qualify for entrepreneur eligibility.
    Such providers argue that opening up the entire auction to all
    bidders would be pro-competitive because it would allow them to
    acquire additional spectrum to meet capacity concerns, provide
    advanced services, and increase the size of their subscriber
    "footprints."[^67] They contend that they, unlike many
    entrepreneurs, possess the operational expertise and substantial
    resources necessary to construct and successfully operate PCS
    systems in already highly competitive markets. [^68] These
    commenters also point to evidence that suggests that the set-aside
    of C and F Block spectrum has not been successful in encouraging
    entrepreneurs to participate in the provision of spectrum-based
    services, particularly in large markets.[^69]

21. We note that, in apparent recognition of the Commission's obligation
    to balance a number of spectrum policy considerations, many parties
    have offered compromise suggestions as alternatives to the current C
    block rules should the Commission choose not to adopt their
    preferred approaches. Some commenters, including a number of
    entrepreneurs, have suggested compromise alternatives that would
    eliminate the set-aside (in whole or in part) for markets with
    populations in excess of certain specified amounts ranging from
    700,000 to five million. [^70] According to these commenters, such
    compromise alternatives to the current C block rules would provide
    larger carriers with greater financial resources with access to
    licenses for markets with larger populations, without foreclosing
    the opportunity for entrepreneurs to bid for those licenses. The
    suggested alternatives would also maintain the eligibility
    restrictions in markets where entrepreneurs might have a better
    chance of success.

22. Some commenters suggest compromises that would not use tiers, but
    would disaggregate the 30 MHz C block licenses into three 10 MHz
    blocks and would open up the bidding on one or two of the three 10
    MHz licenses in all markets. For example, Telecorp and Tritel would
    support open bidding on two 10 MHz licenses, provided that bidding
    credits for small businesses were increased for the open
    auctions.[^71] Similarly, US West and Sprint endorse setting aside
    one disaggregated 10 MHz license for entrepreneurs if the Commission
    does not adopt their preferred approach of open eligibility for all
    licenses.[^72] Leap offers an alternative that would combine the
    tiering and disaggregation approaches by suggesting that 20 MHz be
    open to all bidders in the largest markets (which it defines as over
    5 million pops) and 10 MHz be open to all bidders in the markets
    below that threshold.[^73] Burst and RTG each endorse reconfiguring
    the available 30 MHz C block licenses into 10 MHz and 20 MHz
    licenses and opening the bidding for the 10 MHz C block
    licenses.[^74]

23. While most of the commenters have focused on the Commission's
    treatment of the C block spectrum, as a general matter, current
    entrepreneurs argue in favor of keeping the 10 MHz F block licenses
    as restricted. On the other hand, companies currently ineligible to
    participate in Auction 35 argue in favor of open eligibility for
    those licenses. [^75]

24. **[Discussion]{.underline}**. As the expert agency charged with the
    management of the nation's radio spectrum, the Commission must
    continually evaluate the provision of service to the American
    public, weigh a variety of public interest considerations, and
    assess the changing needs of the industry. In doing so, we must
    always remain cognizant of our statutory obligations.[^76] These
    obligations often require that we balance a number of different, and
    at times competing, spectrum policy goals. In discharging these
    responsibilities, we seek to provide meaningful opportunities to
    small businesses, to speed the deployment and development of new
    services to the public, to encourage the efficient use of spectrum,
    and to recover for the public a portion of the value of spectrum.

25. When we adopted the original rules for C and F block spectrum in
    1994, PCS was in its infancy. Since 1994, circumstances in the
    industry have changed. In light of significant technology
    developments and increased demand for spectrum, it is appropriate
    for the Commission to consider reassessing the proper balance of its
    spectrum policies including whether its current C and F block rules
    continue to serve the public interest in all respects. In crafting
    rules for the upcoming auction, we recognize that we cannot overlook
    the difficulties that followed the original C block spectrum auction
    and our commitment, originally spelled out in the *Competitive
    Bidding Fifth Report and Order*, to promote opportunities for
    designated entities. As noted above, business failures and equity
    considerations compelled the Commission to allow the original C
    Block licensees to restructure their spectrum holdings and to
    provide for the grandfathering of certain entities for future C
    block auctions through March 23, 2001. We maintain our commitment to
    provide meaningful opportunities for entrepreneurs, including those
    that participated in our most recent auction of C block spectrum. We
    also recognize that some qualifying entrepreneurs have been
    successful innovators, providing service to rural markets and niche
    services in other markets. Our desire to promote the continued
    success of such entities, as they seek to fill in gaps in their
    service areas or otherwise strive to expand their service offerings,
    also factor into our decision regarding the extent to which we
    should revise our current rules.

26. Thus, although we have not, since the establishment of C and F block
    rules in 1994, conducted any auctions other than C and F block
    auctions and reauctions on a closed basis due to eligibility
    restrictions, we believe that entrepreneurs raise legitimate issues
    about preserving the eligibility restrictions on at least a portion
    of the spectrum that will be awarded in the upcoming auction.[^77]
    However, based on the demand for spectrum to satisfy congestion, new
    technology and competitive needs, we tentatively conclude that it
    would serve the public interest to make some additional spectrum
    available to all interested bidders.[^78] In balancing these
    factors, we believe parties on both sides of this debate have
    suggested a number of possible compromises that better advance the
    public interest than either maintaining the status quo or,
    conversely, eliminating the eligibility restrictions entirely. In
    particular, we think the parties suggesting tiering approaches have
    proposed creative solutions to balancing the competing interests by
    recognizing both that the need for additional unrestricted spectrum
    is greatest in the larger markets and that the track record for
    success for smaller entities is strongest in mid-sized and smaller
    markets.

27. With these factors in mind, we seek comment on the following
    proposals to lift the entrepreneur eligibility requirements for some
    of the licenses available in Auction No. 35 and future auctions.
    Consistent with several of the recommendations we have received,
    these proposals vary in the amount of spectrum that would remain
    set-aside according to the size of both the available licenses and
    the markets.

28. ***Available 30 MHz C block licenses:*** For markets with available
    30 MHz C block licenses, we seek comment on a proposal based on our
    tentative conclusion, discussed above, to reconfigure these licenses
    into three 10 MHz licenses. Our proposal is further based on
    dividing the available BTAs into two tiers: "Tier 1" would comprise
    BTAs with populations at or above a certain threshold, discussed
    below, and "Tier 2" would comprise BTAs below that population
    threshold. We tentatively conclude that we should allow "open"
    bidding (i.e. remove eligibility requirements) for two of the three
    10 MHz C block licenses in Tier 1, and one of the three 10 MHz C
    block licenses in Tier 2. We seek comment on this tentative
    conclusion.

29. We recognize that in balancing the interests served by preserving
    meaningful opportunities for designated entities and those served by
    opening up the spectrum to bidding by all entities, there may be
    other proposals we should consider. Thus, we also seek comment on
    whether we should allow "open" bidding for all three of the 10 MHz C
    block licenses in Tier 1, and two of the three 10 MHz C block
    licenses in Tier 2.

30. ***Tiers:*** We also seek comment on what population threshold we
    should use to divide the Tier 1 and Tier 2 BTAs. As discussed, the
    record provides some indication that designated entities have had
    greater success in markets with smaller populations, particularly
    below the top twenty markets. Markets with larger populations
    inevitably require more capital to build out and provide service.
    Moreover, as noted by commenters, there is evidence that spectrum is
    needed by incumbents to provide new generation wireless services and
    to alleviate congestion or by new entrants to fill out service
    footprints.[^79] Accordingly, we tentatively conclude that a
    population of 2.5 million or greater is the proper cut-off for Tier
    1 BTAs (the 17 largest markets); however, we also seek comment on
    establishing the threshold for Tier 1 at those BTAs with populations
    at or greater than either 2 million (the 23 largest markets) or 1.5
    million (the 32 largest markets). We recognize that other
    alternatives might also make sense. For example, we might also
    create a "Tier 3" for BTAs with populations below 700,000, the
    demarcation line that SBC recommends, establishing in this tier a
    larger set-aside for entrepreneurs. We also might instead decline to
    adopt a tiered approach at all, instead applying changes in
    eligibility restrictions to all BTAs, regardless of size. We seek
    comment on these alternatives, as well as on other possible tier
    divisions and other options for opening the bidding for some of the
    available C block licenses.[^80]

31. ***Available F block licenses:*** We seek comment on eliminating the
    eligibility requirements for all of the 10 MHz F block licenses
    available in Auction No. 35. We note that from a historical
    perspective, F block did not face the same types of problems and
    difficulties as C block.[^81] This difference is evidenced by the
    fact that the Commission did not see the need to allow F block
    licensees to restructure their spectrum holdings, nor did it provide
    for the grandfathering of eligibility for entrepreneur entities in
    future F block auctions. Thus, we have consistently treated the F
    block spectrum differently than C block in recognition of the fact
    that the history of these spectrum blocks evolved in divergent
    manners. Accordingly, we may not be faced with the same equity
    considerations in maintaining a set-aside of F block spectrum as we
    are for C block. Moreover, we note that in virtually all markets
    where there is an available F block license, there is a 30 MHz
    license held by a current C block entrepreneur.[^82] Thus, there is
    already significant set-aside spectrum in each of these markets.
    Further, despite the lack of historical controversy regarding the F
    block spectrum, build out of these licenses has not progressed as
    quickly as we may have anticipated, especially in larger markets.
    Allowing open eligibility for all 10 MHz F block licenses might lead
    to more expeditious provision of service to American consumers.
    Alternatively, we recognize that we could adopt a tiered approach
    similar to the proposals for C block licenses discussed above, or we
    could retain the existing F block eligibility requirements. We seek
    comment on these alternatives.

32. ***15 MHz C block licenses:*** Finally, we propose, and seek comment
    on, eliminating the eligibility requirements for all 15 MHz C block
    licenses that will be available in Auction No. 35 and in future C
    block auctions. As noted previously, all of the 15 MHz licenses
    available in Auction No. 35 were available in restricted Auction No.
    22, yet remained unsold. Accordingly, we believe that it is
    appropriate to make these licenses, located principally in rural
    markets, immediately available to any interested bidder.

33. ***Unsold C and F block licenses:*** We also seek comment on whether
    we should establish a rule that lifts eligibility restrictions on
    any C or F block licenses that remain unsold after Auction No. 35 or
    in other future auctions. Such licenses could then promptly be put
    up for auction under open bidding.

## License Grouping for Bids

34. **[Background]{.underline}.** In past C and F block auctions (as
    well as D and E block auctions), participants have bid separately
    for each license. Nextel proposes that all available 30 MHz licenses
    be reconfigured into 20 MHz and 10 MHz licenses and that the newly
    created 20 MHz C block licenses and the available 15 MHz C block
    licenses be offered together on a "bulk bid" (i.e., winner take all)
    basis in an expedited auction.[^83] Most commenters oppose Nextel's
    bulk bidding proposal, characterizing it as designed to benefit
    solely Nextel. Numerous smaller companies point out that the bulk
    bid auction would be out of the financial reach of
    entrepreneurs.[^84] Larger companies complain that spectrum cap
    limitations would prevent them from vying for the bulk bid
    package.[^85]

35. **[Discussion]{.underline}.** We tentatively conclude that we will
    take bids separately on each license in Auction No. 35 on a
    simultaneous multiple round basis as we have done in the past. We
    are persuaded by commenters that the massive scale of Nextel's bulk
    bid proposal (or something similar based upon a 10 MHz C block
    license configuration) would exclude all but a very few competitors.
    Small entities would be hard pressed to obtain the financing
    necessary to win and pay for the licenses and construct the systems
    included in the bulk bid proposal. Many other carriers would be
    constrained from participating by the CMRS spectrum cap. While we
    agree with Nextel that bidding for individual licenses will make it
    somewhat more challenging for it to win the very broad aggregation
    of licenses it seeks to acquire,[^86] we do not think this requires
    us to resort to its bulk bid proposal. Experience in our auctions to
    date demonstrates that significant aggregations of licenses through
    the auction process are feasible.[^87] For this reason, we believe
    that bidding for each license separately is unlikely to preclude
    carriers from aggregating licenses on a nationwide or regional
    basis, and at the same time provides carriers who have intense
    spectrum needs in a particular market the opportunity to compete for
    licenses as well.[^88]

## Grandfather Exception

36. **[Background]{.underline}:** In the *C Block Second Report and
    Order*, the Commission established in Section 24.709(b)(9)(i) a
    "grandfather" exception to the entrepreneur eligibility requirement
    for participation in C block auctions.[^89] Under that exception,
    all entities that had been eligible for and had participated in
    Auction No. 5 would be eligible to bid on C block licenses in
    Auction No. 22, regardless of their financial size at the time of
    the auction.[^90] We declined to apply the "grandfather" exception
    to bidding on F block licenses, based on our belief that F block
    licensees did not have the same need for financial relief.[^91] In
    the *C Block Fourth Report and Order*, we decided, in fairness to
    other future bidders, to limit the grandfather exception to a
    two-year period beginning on the start date of Auction No. 22, i.e.,
    through March 23, 2001.[^92] In the *C Block Fourth Report and Order
    Reconsideration*, we denied a petition by Omnipoint asking that we
    extend the grandfather exception indefinitely.[^93]

37. **[Discussion]{.underline}:** In a petition for reconsideration or
    clarification of the *C Block Fourth Report and Order
    Reconsideration*, Verizon asks us to reexamine the grandfather
    exception and limit resulting eligibility to those Auction No. 5 and
    10 participants that won licenses in the auctions and then returned
    spectrum pursuant to the Commission's C block restructuring
    options.[^94] Verizon explains that such entities are subject to
    Section 24.709(a)(3), which requires C and F block licensees to
    maintain their entrepreneur status for five years from the date of
    licensing, but does not count against their financial growth due to
    nonattributable equity investments, debt financing, revenue from
    operations or other investments, business development, or expanded
    service.[^95] According to Verizon, other grandfathered entities
    have no similar constraint on growth and, accordingly, may now be
    "very large."[^96] Verizon also proposes that the entity claiming
    the grandfather exception must be the same company -- substantially
    the same ownership and control -- that acquired the entrepreneur
    status.[^97] We seek comment on the issues raised in the Verizon
    petition and, more generally, on whether the grandfather exception
    should be revised or clarified in light of current
    circumstances.[^98]

38. We note that Nextel makes arguments similar to Verizon's in response
    to the US West/Sprint petition and also objects to the fact that the
    grandfather exception does not extend to Auction No. 11 and Auction
    No. 22 participants.[^99] Nextel suggests that the Commission limit
    the grandfather exception only to licensees from Auction No. 5 and
    not allow successor companies and merged entities to benefit from
    the exception, which it contends "would eviscerate the purpose of
    having any eligibility rules at all."[^100] We have received notice
    that currently "grandfathered" companies intend to combine with
    other carriers, some of which are also eligible for the grandfather
    exception. We believe that the eligibility of successor entities for
    participation in "closed" bidding is a subject that may also be ripe
    for clarification in our upcoming order. Accordingly, we seek
    comment on our tentative conclusion that upon the merger of two
    entities, each of which is eligible for the "grandfather" exception,
    the exception extends to the resulting entity, but that, upon the
    merger of two entities, only one of which is eligible for the
    "grandfather" exception, the exception does not extend to the
    resulting entity. We recognize that our tentative conclusion is
    based upon simplified examples, and we encourage comment on how to
    determine C and F block eligibility when faced with more complex
    transactions.

## Bidding Credits

39. Under current rules, a winning C or F block bidder that qualifies as
    a small business (i.e., a business that, together with its
    affiliates and persons or entities that hold interests in such
    entity and their affiliates, has had average annual gross revenues
    that are not more than \$40 million for the preceding three
    years)[^101] or a small business consortium[^102] may use a bidding
    credit of 15 percent.[^103] A winning bidder that qualifies as a
    very small business (i.e., a business that, together with its
    affiliates and persons or entities that hold interests in such
    entity and their affiliates, has had average annual gross revenues
    that are not more than \$15 million for the preceding three years)
    [^104] or a very small business consortium[^105] may use a bidding
    credit of 25 percent. [^106]

40. Since the Commission first established the entrepreneurs' block
    set-aside and C and F block bidding credits, its experience has
    demonstrated that bidding credits without a set-aside enable small
    businesses to compete effectively in open auctions, even auctions of
    broadband PCS licenses. For example, in Auction No. 11, where D and
    E block, as well as F block, broadband PCS licenses were available,
    small and very small businesses bid against larger applicants for D
    and E block licenses. Even though the D and E block licenses were
    not set aside for entrepreneurs, and installment financing was not
    available for those licenses, small and very small businesses --
    using bidding credits of 15 percent and 25 percent, respectively --
    were the high bidders for 141, or 14.3 percent, of the 986 D and E
    block licenses won in that auction. In the MDS auction -- using
    bidding credits of 15 percent -- 91 percent of the winning bidders
    were small businesses, winning 77 percent of the licenses. In the
    first LMDS auction -- using bidding credits of 25 percent, 35
    percent, and 45 percent -- 89 percent of the winning bidders were
    small businesses, winning 78 percent of the licenses, while in the
    second LMDS auction, 80 percent of the winning bidders were small
    businesses, winning 74 percent of the licenses.[^107] In the SMR 900
    MHz auction -- using bidding credits of 10 percent and 15 percent --
    75 percent of the winning bidders were small businesses, winning 26
    percent of the licenses. Finally, in the 39 GHz auction -- using
    bidding credits of 25 percent and 35 percent -- 39 percent of the
    winning bidders were small businesses.

41. **[Discussion]{.underline}.** A number of entrepreneurial firms have
    argued that if we open eligibility for some portion of the C block
    spectrum, we should increase the bidding credits applicable to those
    licenses.[^108] Otherwise, they argue, small businesses will not
    have a meaningful opportunity to compete in an open auction. We
    recognize that evidence in the record suggests that major,
    well-capitalized wireless companies have a significant interest in
    seeking to acquire this spectrum. We therefore seek comment on
    whether we should retain existing small and very small business
    bidding credits (15 percent and 25 percent, respectively) for
    licenses subject to "open" bidding or whether we should increase
    them to 25 percent and 40 percent, respectively.[^109]

42. We also seek comment on whether we should change the bidding credits
    for licenses subject to "closed" bidding, i.e., bidding where
    eligibility restrictions apply. For example, we could increase the
    bidding credits for these licenses, or we could keep them at their
    current level since the rationale for increasing the credits in open
    auctions -- to provide additional assistance for small companies
    bidding against major wireless providers -- does not apply to
    restricted auctions. Finally, we could eliminate bidding credits
    altogether on the ground that they are unnecessary and perhaps even
    counterproductive in ensuring opportunities for small business in
    the set-aside auctions. In this regard, we recognize that among
    those eligible to participate in the closed, entrepreneurs'
    auctions, some well capitalized new entities with small gross
    revenues qualify for bidding credits, while some older companies
    with small total assets and net revenues but high gross revenues do
    not. At least one commenter has questioned whether, in light of such
    results, offering bidding credits in a "closed" auction continues to
    make sense.[^110] We seek comment on these various proposals.

## Transfer Requirements

43. To ensure that C and F block licensees did not take advantage of the
    eligibility set-aside by immediately assigning or transferring
    control of their licenses to entities that do not meet the
    eligibility requirements, the Commission established a holding rule
    for these licenses as well as unjust enrichment provisions.[^111]
    Under the current holding rule, C and F block licensees may, for the
    first five years from the date of their initial license grant,
    assign or transfer control of their C and F block licenses only to
    entities that meet the eligibility requirements or to other C and F
    block licensees that obtained their licenses while meeting the
    requirements.[^112] The Commission set the current holding period at
    five years to guarantee that a C or F block licensee would hold and
    build out the license until the first construction benchmark,[^113]
    which currently occurs five years after the date of licensing.[^114]

44. **[Discussion]{.underline}.** We propose to modify our transfer
    requirements to correspond to our proposed changes in the
    eligibility requirements and to encourage rapid construction of C
    and F block systems. Specifically, we tentatively conclude that C
    and F block licenses won pursuant to open bidding at Auction No. 35,
    or any future open auction for such spectrum, would not be subject
    to a transfer holding rule. For licenses won in closed bidding in
    any C or F block auction, past or future, we seek comment on tying
    the holding period to completion of build-out requirements. Under
    this proposal, a licensee would be able to assign or transfer its
    license to any qualified entity, entrepreneur or not, upon the
    licensee's completion of its first construction benchmark, whether
    or not it takes the full five years allowed by our rules. In this
    way, we can continue to minimize the trafficking of C and F block
    licenses won pursuant to closed bidding, while enhancing the
    likelihood of early build-out. We seek comment on these proposals.

45. Additionally, we seek comment on whether to allow some further
    flexibility for incumbent licensees that may not have fully
    satisfied their construction requirements for all their licenses. We
    note that at least one carrier argues that it needs the flexibility
    to sell and exchange licenses in order to restructure its business
    plans.[^115] We wish to examine whether we should, under certain
    circumstances, evaluate a licensee's compliance with construction
    requirements on a system-wide basis. For example, we seek comment on
    whether we should allow a carrier to exchange and transfer licenses
    if the carrier can demonstrate "substantial service" throughout its
    system, rather than in that particular market. We also seek comment
    on any other modifications to our transfer restrictions that would
    provide incumbent licensees with the flexibility to restructure
    their business plans without decreasing their incentive to rapidly
    construct systems and place them into operation.

## License Cap

46. **[Background]{.underline}**. Section 24.710 of the Commission's
    rules prohibits an auction applicant from winning more than 98 C and
    F block licenses.[^116] The rule requires an applicant that is the
    high bidder for more than 98 C and F block licenses to withdraw its
    bids for a sufficient number of licenses to comply with the
    98-license limit. The limit applies only to licenses won at auction,
    not to the total number of licenses that may be obtained post
    auction.[^117] When established in 1994, the license cap was
    intended to facilitate a fair distribution of licenses within the
    two blocks by preventing an entity from winning more than
    approximately 10 percent of the then-total of 986 C and F block
    licenses.[^118] Exercise of the disaggregation option prior to
    Auction No. 22 created an additional 134 C block licenses, bringing
    the total number of C and F block licenses to 1,120.[^119] In
    creating the "pure amnesty" option -- pursuant to which C block
    licensees could return their spectrum to the Commission, relinquish
    the entire down payment for that spectrum, and remain fully eligible
    to reacquire the returned spectrum at auction or otherwise -- the
    Commission failed to address whether the returned spectrum would
    count against the licensees' 98-license limit. In response to a 1999
    request by Omnipoint for a limited waiver of Section 24.710 in
    connection with Auction No. 22, the Auctions and Industry Analysis
    Division ("Division") increased the license cap for all Auction No.
    22 bidders to 112 licenses, i.e., 10 percent of the new license
    total.[^120] The Division also clarified that C block licenses
    returned under the "pure amnesty" option would not count against the
    license cap.[^121] This waiver was requested and granted only for
    Auction No. 22.[^122]

47. **[Discussion]{.underline}.** We tentatively conclude that we will
    remove Section 24.710 from the Commission's rules. In 1994, when the
    rule was implemented, the Commission anticipated holding only one C
    block and one F block auction. To date, however, four C and F block
    auctions have been held, with the fifth, Auction No. 35, scheduled
    and one or more additional auctions anticipated. Many different
    entrepreneurs have won C and F block licenses at auction, and
    substantial diversity among C and F block licensees continues to
    exist. The Commission has achieved its initial objective of a fair
    distribution C and F block licenses. Moreover, our proposal to
    reconfigure available 30 MHz C block licenses, if implemented, would
    create an additional 186 C block licenses, while adoption of our
    proposal to eliminate the eligibility restrictions for many of the
    available C and F block licenses would significantly enhance the
    likelihood that these licenses would be won by a variety of
    entities. Accordingly, we seek comment on this tentative conclusion.

## Spectrum Cap 

48. **[Background]{.underline}.** The CMRS spectrum cap, set forth in
    Section 20.6 of the Commission's rules, limits the amount of
    cellular, broadband PCS, and digital Specialized Mobile Radio
    ("SMR") spectrum in which any entity may have an attributable
    interest in any geographic area.[^123] As discussed above, we
    received petitions from three parties that request that the
    Commission waive, or forbear from applying, the CMRS spectrum cap
    with regard to any spectrum awarded in the upcoming C and F blocks
    auction.

49. **[Discussion]{.underline}.** We tentatively conclude that we should
    not grant the petitions seeking waiver of, or forbearance from, the
    CMRS spectrum cap rules and, accordingly, we will apply the cap to
    licenses of PCS C and F block spectrum to be auctioned in Auction
    No. 35. In September 1999, after extensive analysis of spectrum
    allocation and competitive market conditions, we determined in our
    *Biennial CMRS Spectrum Cap Order* that the CMRS spectrum cap, with
    some modification, continued to be a necessary and efficient means
    to promote competition and protect the public interest.[^124]
    Specifically, we concluded that a cap on this spectrum serves the
    public interest by promoting competition, preventing excessive
    concentration of licenses, providing incentives for licensees to
    make more efficient use of their spectrum, encouraging innovation,
    and promoting dissemination of licenses to a wide variety of
    applicants.[^125] We also concluded that the "bright-line" test
    afforded by the CMRS spectrum cap rule efficiently promoted
    regulatory certainty and regulatory efficiency.[^126] For any
    carrier with a demonstrable need for additional spectrum in a
    particular geographic area, we established and clarified a process
    by which it could obtain a waiver of the spectrum cap rule.[^127]

50. On the basis of the petitions and the record filed in response, we
    propose not to revise the CMRS spectrum cap in light of the upcoming
    auction and our proposed rule changes described above. Since its
    inception in 1994, the cap on the 180 MHz of CMRS spectrum (*i.e.*,
    cellular A and B blocks, PCS A through F blocks, and digital SMR)
    has limited the amount of spectrum any carrier could aggregate from
    any part of the CMRS spectrum, including spectrum in the PCS C and F
    blocks, so as to ensure the many benefits of competition.[^128] The
    pleadings filed in connection with the upcoming auction contain no
    new material information regarding the costs and benefits of the
    spectrum cap and do not purport to make a waiver showing under the
    standard set forth in the *Biennial CMRS Spectrum Cap Order*. Our
    proposal to revise the rules pertaining to the PCS C and F block
    spectrum helps ease the impact of the cap in this auction, and
    thereby renders cap relief unnecessary.[^129] By proposing to divide
    the 30 MHz blocks of C block spectrum into 10 MHz blocks in the
    upcoming auction, we would better enable carriers to obtain
    additional spectrum without the need to exceed the CMRS spectrum
    cap. Carriers currently have accumulated spectrum up to the CMRS
    spectrum cap limits, either the general 45 MHz cap or the 55 MHz cap
    that applies to rural areas, in only a few locations. With regard to
    the C and F block spectrum to be auctioned, in every market almost
    all carriers could obtain additional spectrum in blocks of 10 MHz
    (or 15 MHz where applicable) and still comply with the spectrum cap
    without any need for disaggregation.[^130] As discussed above, for
    those carriers that require more than 45 MHz of spectrum in the near
    term, we have established a process for granting waiver of the
    spectrum cap. We stated that we would consider granting a waiver of
    the spectrum cap in a particular geographic area to the extent a
    carrier could credibly demonstrate that the spectrum cap was having
    a significantly adverse effect on its ability to provide 3G or other
    advanced services.[^131] We also note that our year 2000 biennial
    review[^132] of the spectrum cap rule commences later this year.
    This proceeding will provide us another opportunity to revisit, in a
    more comprehensive manner than the pleadings before us, issues
    pertaining to the CMRS spectrum cap and whether it should be
    retained, modified, or eliminated.[^133] We seek comment on our
    tentative conclusion to retain the CMRS spectrum cap on the PCS C
    and F block spectrum scheduled for auction.

# Conclusion

51. Based on the foregoing, we seek comment on overall changes to the C
    and F block rules that take into account our competing statutory
    objectives to manage spectrum in the public interest. We conclude
    that this Further Notice of Proposed Rulemaking will provide us with
    an opportunity to develop a record on the specific proposals to open
    eligibility for this spectrum and otherwise revise the C and F block
    rules for the benefit of consumers and the economy.

# Procedural matters and ordering clauses

## *Ex Parte* Rules -- Permit-But-Disclose Proceeding

52. This is a permit-but-disclose notice and comment rulemaking
    proceeding. *Ex parte* presentations are permitted, except during
    the Sunshine Agenda period, provided they are disclosed pursuant to
    the Commission's rules. *See generally* 47 C.F.R. §§ 1.1202, 1.1203,
    and 1.1206.

## Initial Regulatory Flexibility Analysis

53. As required by the Regulatory Flexibility Act ("RFA"), the
    Commission has prepared an Initial Regulatory Flexibility Analysis
    ("IRFA") of the possible impact on small entities of the proposals
    and tentative conclusions set forth in the *Further Notice of
    Proposed Rulemaking* ("*Notice*") in WT Docket No. 97-82. The IRFA
    is set forth as Appendix A. Written public comments are requested on
    the IRFA. Comments on the IRFA must have a separate and distinct
    heading designating them as responses to the IRFA and must be filed
    by the deadlines for comments on the *Notice*. In accordance with
    the RFA,[^134] the Commission will send a copy of this *Notice*,
    including this IRFA, to the Chief Counsel for Advocacy of the Small
    Business Administration.[^135]

## Initial Paperwork Reduction Act Analysis

54. This *Notice* contains neither a new nor a modified information
    collection.

## Comment Dates

55. Pursuant to Sections 1.415 and 1.419 of the Commission's rules,
    interested parties may file comments on or before **June 22, 2000**,
    and reply comments on or before **June 30, 2000**. 47 C.F.R.
    §§ 1.415, 1.419. Comments may be filed using the Commission's
    Electronic Comment Filing System ("ECFS") or by filing paper copies.
    *See* *Electronic Filing of Documents in Rulemaking Proceedings*, 63
    Fed. Reg. 24121 (1998).

56. Comments filed through ECFS may be sent as an electronic file via
    the Internet to <http://www.fcc.gov/e-file/ecfs.html>. Comments
    filed through the ECFS may be sent as an electronic file via the
    Internet to
    [http://www.fcc.gov/e‑file/ecfs.html](http://www.fcc.gov/e%1Efile/ecfs.html).
    Generally, only one copy of an electronic submission must be filed;
    however, if multiple docket or rulemaking numbers appear in the
    caption of this proceeding, commenters must transmit one electronic
    copy of the comments to each docket or rulemaking number referenced
    in the caption. When completing the transmittal screen, commenters
    should include their full name, Postal Service mailing address, and
    the applicable docket or rulemaking number. Parties may also submit
    an electronic comment by Internet e‑mail. To receive filing
    instructions for e‑mail comments, commenters should send an e‑mail
    to ecfs@fcc.gov, and should include the following words in the body
    of the message, \"get form \<your e‑mail address\>.\" A sample form
    and directions will be sent in reply.

57. Parties who choose to file by paper must file an original and four
    copies of each filing. If participants want each Commissioner to
    receive a personal copy of their comments, an original plus nine
    copies must be filed. If more than one docket or rulemaking number
    appears in the caption of this proceeding, commenters must submit
    two additional copies for each additional docket or rulemaking
    number. All filings must be sent to the Commission\'s Secretary,
    Magalie Roman Salas, Office of the Secretary, Federal Communications
    Commission, 445 12^th^ Street, S.W., Room TW‑A325, Washington,
    DC 20554. A courtesy copy should be delivered to Audrey Bashkin,
    Auctions and Industry Analysis Division, Wireless Telecommunications
    Bureau, Federal Communications Commission, 445 12^th^ Street, S.W.,
    Room 4A-664, Washington, DC 20554. Parties should reference WT
    Docket No. 97-82 in their comments. Pursuant to Section 1.1200(a) of
    the Commission's rules, presentations on issues in this proceeding
    will be prohibited after 7 p.m., **July 12, 2000**, until release of
    the Commission's order dealing with those issues. 47 C.F.R.
    §§ 1.1200(a) and 1.1202(a).

58. All relevant and timely comments will be considered by the
    Commission before final action is taken in this proceeding. Comments
    and reply comments will be available for public inspection during
    regular business hours in the FCC Reference Information Center of
    the Federal Communications Commission, 445 12^th^ Street, S.W.,
    Washington, DC 20554.

## Further Information

59. For further information concerning this *Notice*, contact Audrey
    Bashkin, Auctions and Industry Analysis Division, (202) 418-0660,
    Wireless Telecommunications Bureau, Federal Communications
    Commission, Washington, DC 20554.

## Ordering Clauses

60. Accordingly, IT IS ORDERED THAT, pursuant to Sections 4(i), 309(r),
    and 309(j) of the Communications Act of 1934, as amended, 47 U.S.C.
    Sections 154(i), 303(r), and 309(j), this *Further Notice of
    Proposed Rulemaking* is hereby ADOPTED.

61. IT IS FURTHER ORDERED that the Commission's Consumer Information
    Bureau, Reference Information Center, SHALL SEND a copy of this
    *Further Notice of Proposed Rulemaking*, including the Initial
    Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy
    of the Small Business Administration.

    FEDERAL COMMUNICATIONS COMMISSION

    Magalie Roman Salas

> Secretary

# APPENDIX A -- Entrepreneur Eligibility Issues {#appendix-a-entrepreneur-eligibility-issues .unnumbered}

**A-1. [Comments Filed in Response to Public Notice, DA 00-145, 00-191
and 00-271 (Petitions of SBC Communications, Inc. and Nextel
Communications, Inc.)]{.underline}**

Comments

+-----------------------------------------------------------------------+
| 1.  Alaska Digitel, LLC, Poplar PCS, LLC, and Eldorado                |
|     Communications, LLC ("Alaska Digitel")                            |
+-----------------------------------------------------------------------+
| 2.  Alpine PCS, Inc. ("Alpine")                                       |
+-----------------------------------------------------------------------+
| 3.  American Wireless, LLC ("American Wireless")                      |
+-----------------------------------------------------------------------+
| 4.  AT&T Wireless Services, Inc. ("AT&T")                             |
+-----------------------------------------------------------------------+
| 5.  Bell Atlantic Mobile, Inc. ("Bell Atlantic")                      |
+-----------------------------------------------------------------------+
| 6.  BellSouth Corporation ("BellSouth")                               |
+-----------------------------------------------------------------------+
| 7.  Burst Networks ("Burst")                                          |
+-----------------------------------------------------------------------+
| 8.  Carolina PCS I Limited Partnership ("Carolina")                   |
+-----------------------------------------------------------------------+
| 9.  Cellular Telecommunications Industry Association ("CTIA")         |
+-----------------------------------------------------------------------+
| 10. Cook Inlet Region, Inc. ("CIRI")                                  |
+-----------------------------------------------------------------------+
| 11. Council Tree Communications, LLC ("Council Tree")                 |
+-----------------------------------------------------------------------+
| 12. CT Communications, Inc. ("CT")                                    |
+-----------------------------------------------------------------------+
| 13. D&E Communications, Inc. ("D&E")                                  |
+-----------------------------------------------------------------------+
| 14. Devon Mobile Communications, L.P. ("Devon")                       |
+-----------------------------------------------------------------------+
| 15. Ericsson Inc. ("Ericsson")                                        |
+-----------------------------------------------------------------------+
| 16. Georgetown Partners, LLC ("Georgetown")                           |
+-----------------------------------------------------------------------+
| 17. GTE Service Corporation ("GTE")                                   |
+-----------------------------------------------------------------------+
| 18. Integrated Communications Group, Corp. ("ICG")                    |
+-----------------------------------------------------------------------+
| 19. Leap Wireless International, Inc. ("Leap")                        |
+-----------------------------------------------------------------------+
| 20. National Telephone Cooperative Association ("NTCA")               |
+-----------------------------------------------------------------------+
| 21. NextWave Personal Communications Inc. ("NextWave")                |
+-----------------------------------------------------------------------+
| 22. Northcoast Communications, LLC ("Northcoast")                     |
+-----------------------------------------------------------------------+
| 23. Office of Advocacy of the United States Small Business            |
|     Administration ("Advocacy")                                       |
+-----------------------------------------------------------------------+
| 24. Omnipoint Corporation ("Omnipoint")                               |
+-----------------------------------------------------------------------+
| 25. ONYX Telecommunications, LLC ("ONYX")                             |
+-----------------------------------------------------------------------+
| 26. OPM Auction Co. ("OPM")                                           |
+-----------------------------------------------------------------------+
| 27. Rural Cellular Association ("RCA")                                |
+-----------------------------------------------------------------------+
| 28. Rural Telecommunications Group and the Organization for the       |
|     Promotion and Advancement of Small Telephone Companies ("RTG")    |
+-----------------------------------------------------------------------+
| 29. SBC Communications Inc. ("SBC")                                   |
+-----------------------------------------------------------------------+
| 30. SMR Group, LLC ("SMR")                                            |
+-----------------------------------------------------------------------+
| 31. Sprint Spectrum L.P. d/b/a Sprint PCS ("Sprint")                  |
+-----------------------------------------------------------------------+
| 32. TeleCorp PCS, Inc. ("TeleCorp")                                   |
+-----------------------------------------------------------------------+
| 33. Telephone and Data Systems, Inc. ("TDS")                          |
+-----------------------------------------------------------------------+
| 34. Tritel Communications, Inc. ("Tritel")                            |
+-----------------------------------------------------------------------+
| 35. US West Wireless, LLC ("US West")                                 |
+-----------------------------------------------------------------------+
| 36. UTStarcom ("UTStarcom")                                           |
+-----------------------------------------------------------------------+
| 37. VoiceStream Wireless Corporation ("VoiceStream")                  |
+-----------------------------------------------------------------------+
| 38. Wireless Operating Company, Inc ("WOC")                           |
+-----------------------------------------------------------------------+

Reply Comments

+-----------------------------------------------------------------------+
| 1.  Alaska Digitel, LLC, Poplar PCS, LLC, and Eldorado                |
|     Communications, LLC ("Alaska Digitel")                            |
+-----------------------------------------------------------------------+
| 2.  Alpine PCS, Inc. ("Alpine")                                       |
+-----------------------------------------------------------------------+
| 3.  American Wireless, LLC ("American Wireless")                      |
+-----------------------------------------------------------------------+
| 4.  AT&T Wireless Services, Inc. ("AT&T")                             |
+-----------------------------------------------------------------------+
| 5.  C Block Coalition ("Coalition")                                   |
+-----------------------------------------------------------------------+
| 6.  Carolina PCS I Limited Partnership ("Carolina")                   |
+-----------------------------------------------------------------------+
| 7.  Chadmoore Wireless Group, Inc. ("Chadmoore")                      |
+-----------------------------------------------------------------------+
| 8.  CLEARTALK ("Cleartalk")                                           |
+-----------------------------------------------------------------------+
| 9.  CT Communications, Inc. ("CT")                                    |
+-----------------------------------------------------------------------+
| 10. Entertainment Unlimited, Inc. ("Entertainment Unlimited")         |
+-----------------------------------------------------------------------+
| 11. Georgetown Partners, LLC ("Georgetown")                           |
+-----------------------------------------------------------------------+
| 12. GTE Service Corporation ("GTE")                                   |
+-----------------------------------------------------------------------+
| 13. Nextel Communications, Inc. ("Nextel")                            |
+-----------------------------------------------------------------------+
| 14. Northcoast Communications, LLC ("Northcoast")                     |
+-----------------------------------------------------------------------+
| 15. Noverr Publishing Inc. ("NPI")                                    |
+-----------------------------------------------------------------------+
| 16. Office of Advocacy of the United States Small Business            |
|     Administration ("Advocacy")                                       |
+-----------------------------------------------------------------------+
| 17. Official Committee of Unsecured Creditors of NextWave Telecom     |
|     Inc. ("OCUC of NextWave")                                         |
+-----------------------------------------------------------------------+
| 18. OPM Auction Co. ("OPM")                                           |
+-----------------------------------------------------------------------+
| 19. Personal Communications Industry Association ("PCIA")             |
+-----------------------------------------------------------------------+
| 20. Polycell Communications, Inc. ("Polycell")                        |
+-----------------------------------------------------------------------+
| 21. SBC Communications Inc. ("SBC")                                   |
+-----------------------------------------------------------------------+
| 22. TeleCorp PCS, Inc. ("TeleCorp")                                   |
+-----------------------------------------------------------------------+
| 23. Tritel Communications, Inc. ("Tritel")                            |
+-----------------------------------------------------------------------+
| 24. US West Wireless, LLC ("US West")                                 |
+-----------------------------------------------------------------------+
| 25. VoiceStream Wireless Corporation ("VoiceStream")                  |
+-----------------------------------------------------------------------+

**A-2. [Oppositions and Other Pleadings Filed in Response to Public
Notice, DA 00-760 (US West/Sprint Spectrum Petition)]{.underline}**

Oppositions

+-----------------------------------------------------------------------+
| 1.  Alaska Digitel, LLC ("Alaska Digitel"), Poplar PCS, LLC           |
|     ("Poplar"), and Eldoro Communications, LLC ("Eldorado") (comment) |
+-----------------------------------------------------------------------+
| 2.  Alpine PCS, Inc. ("Alpine") (comment)                             |
+-----------------------------------------------------------------------+
| 3.  American Wireless Licensing Group, LLC ("American Wireless")      |
+-----------------------------------------------------------------------+
| 4.  AT&T Wireless Services, Inc. (" AT&T") (comment)                  |
+-----------------------------------------------------------------------+
| 5.  Burst Networks, Inc. ("Burst")                                    |
+-----------------------------------------------------------------------+
| 6.  Carolina PCS I Limited ("Carolina")                               |
+-----------------------------------------------------------------------+
| 7.  Cellular Telecommunications Industry Association ("CTIA")         |
|     (comment)                                                         |
+-----------------------------------------------------------------------+
| 8.  ComScape Telecommunications, Inc. ("ComScape")                    |
+-----------------------------------------------------------------------+
| 9.  Cook Inlet Region, Inc. ("CIRI")                                  |
+-----------------------------------------------------------------------+
| 10. GTE Service Corporation ("GTE")                                   |
+-----------------------------------------------------------------------+
| 11. Leap Wireless International, Inc. ("Leap")                        |
+-----------------------------------------------------------------------+
| 12. Nextel Communications, Inc. ("Nextel") (comment)                  |
+-----------------------------------------------------------------------+
| 13. NextWave Personal Communications, Inc. and NextWave Power         |
|     Partners, Inc. ("NextWave")                                       |
+-----------------------------------------------------------------------+
| 14. Northcoast Communications, LLC ("Northcoast")                     |
+-----------------------------------------------------------------------+
| 15. OPM Auction Co. ("OPM")                                           |
+-----------------------------------------------------------------------+
| 16. Personal Communications Industry Association ("PCIA")             |
+-----------------------------------------------------------------------+
| 17. TeleCorp PCS, Inc. ("TeleCorp") and Tritel Communications, Inc.   |
|     ("Tritel") (comment)                                              |
+-----------------------------------------------------------------------+
| 18. United States Small Business Administration Office of Advocacy    |
|     ("Advocacy") (comment)                                            |
+-----------------------------------------------------------------------+
| 19. Verizon Wireless ("Verizon") (comment)                            |
+-----------------------------------------------------------------------+
| 20. VoiceStream Wireless Corporation ("VoiceStream")                  |
+-----------------------------------------------------------------------+

**A-3. [Petitions Filed in Response to Public Notice, DA 00-145, 00-191
and 00-271 (SBC Communications, Inc. and Nextel Communications, Inc.
Petitions) and Public Notice, DA 00-760 (US West/Sprint Spectrum
Petition)]{.underline}**

**[Petitions Filed in Response to Public Notice, DA 00-145, 00-191 and
00-271]{.underline}**

+-----------------------------------------------------------------------+
| 1.  AT&T Wireless Services, Inc. ("AT&T") (Petition for Waiver and    |
|     Expedited Action)\*                                               |
+-----------------------------------------------------------------------+
| 2.  Bell Atlantic Mobile, Inc. ("Bell Atlantic") (Petition for        |
|     Limited Forbearance)\*                                            |
+-----------------------------------------------------------------------+
| 3.  BellSouth Corporation ("BellSouth") (Petition for Waiver and      |
|     Expedited Action)\*                                               |
+-----------------------------------------------------------------------+
| 4.  Cellular Telecommunications Industry Association ("CTIA")         |
|     (Petition for Rule Making)                                        |
+-----------------------------------------------------------------------+
| 5.  GTE Service Corporation ("GTE") (Petition for Waiver and          |
|     Declaratory Ruling)\*                                             |
+-----------------------------------------------------------------------+
| 6.  National Telephone Cooperative Association ("NTCA") (Expedited    |
|     Request for Extension of Deadline)                                |
+-----------------------------------------------------------------------+
| 7.  Office of Advocacy of the United States Small Business            |
|     Administration ("Advocacy") (Petition for Waiver)                 |
+-----------------------------------------------------------------------+
| 8.  Rural Cellular Association ("RCA") (Request for Extension of      |
|     Time)                                                             |
+-----------------------------------------------------------------------+
| 9.  Sprint Spectrum L.P. d/b/a Sprint PCS ("Sprint") (Petition for    |
|     Waiver)                                                           |
+-----------------------------------------------------------------------+
| 10. US West Wireless, LLC ("US West") (Petition for Waiver)           |
+-----------------------------------------------------------------------+

**[Petition Filed in Response to Public Notice, DA 00-760]{.underline}**

+-----------------------------------------------------------------------+
| 1.  Verizon Wireless ("Verizon") (Petition for Clarification or       |
|     Reconsideration)                                                  |
+-----------------------------------------------------------------------+

Petition primarily concerns spectrum cap issues.

**[A-4. *Ex Parte *]{.underline}**Communications and/or Late Filed
Comments in Response to Public Notice, DA 00-145, 00-191 and 00-271 (SBC
Communications, Inc. and Nextel Communications, Inc. Petitions) and
Public Notice, DA 00-760 (US West/Sprint Spectrum Petition)

+-----------------------------------------------------------------------+
| 1.  3G Network Holdings ("3G Network")                                |
+-----------------------------------------------------------------------+
| 2.  AirTouch Communications, Inc. ("AirTouch")                        |
+-----------------------------------------------------------------------+
| 3.  Alpine PCS, Inc. ("Alpine")                                       |
+-----------------------------------------------------------------------+
| 4.  American Wireless, LLC ("American Wireless")                      |
+-----------------------------------------------------------------------+
| 5.  AT&T Wireless Services, Inc. ("AT&T")                             |
+-----------------------------------------------------------------------+
| 6.  Bell Atlantic Mobile, Inc. ("Bell Atlantic")                      |
+-----------------------------------------------------------------------+
| 7.  BellSouth Cellular Corp. ("BellSouth")                            |
+-----------------------------------------------------------------------+
| 8.  Burst Networks, Inc. ("Burst")                                    |
+-----------------------------------------------------------------------+
| 9.  Carolina PCS I Limited Partnership ("Carolina")                   |
+-----------------------------------------------------------------------+
| 10. Cook Inlet, Inc. ("CIRI")                                         |
+-----------------------------------------------------------------------+
| 11. Dobson Communications Corporation ("DCC")                         |
+-----------------------------------------------------------------------+
| 12. GTE Wireless Inc. ("GTE")                                         |
+-----------------------------------------------------------------------+
| 13. Integrated Communications Group ("ITG")                           |
+-----------------------------------------------------------------------+
| 14. Leap Wireless International, Inc. ("Leap")                        |
+-----------------------------------------------------------------------+
| 15. Media Access Project ("MAP")                                      |
+-----------------------------------------------------------------------+
| 16. Michael Kurtis of Kurtis & Associates on Behalf of Edwards,       |
|     Helms, Hollings, and Thurmond                                     |
+-----------------------------------------------------------------------+
| 17. Nextel Communications, Inc. ("Nextel")                            |
+-----------------------------------------------------------------------+
| 18. NextWave Telecom, Inc. ("NextWave")                               |
+-----------------------------------------------------------------------+
| 19. Northcoast Communications, LLC ("Northcoast")                     |
+-----------------------------------------------------------------------+
| 20. Paula Ford of the Minority Staff of the Senate Commerce Committee |
|     ("Ford")                                                          |
+-----------------------------------------------------------------------+
| 21. Personal Communications Industry Association ("PCIA")             |
+-----------------------------------------------------------------------+
| 22. Representative Bennie G. Thompson                                 |
+-----------------------------------------------------------------------+
| 23. Representative Bob Clement                                        |
+-----------------------------------------------------------------------+
| 24. Representative Bob Riley                                          |
+-----------------------------------------------------------------------+
| 25. Representative Bobby L. Rush                                      |
+-----------------------------------------------------------------------+
| 26. Representative Brian Bilbray                                      |
+-----------------------------------------------------------------------+
| 27. Representative Charles Pickering                                  |
+-----------------------------------------------------------------------+
| 28. Representative Ciro D. Rodriguez                                  |
+-----------------------------------------------------------------------+
| 29. Representative Jay Dickey                                         |
+-----------------------------------------------------------------------+
| 30. Representative John J. Duncan                                     |
+-----------------------------------------------------------------------+
| 31. Representative John D. Dingell                                    |
+-----------------------------------------------------------------------+
| 32. Representative John R. Kasich                                     |
+-----------------------------------------------------------------------+
| 33. Representative Major R. Owens                                     |
+-----------------------------------------------------------------------+
| 34. Representative Ron Packard                                        |
+-----------------------------------------------------------------------+
| 35. Representative Ronnie Shows                                       |
+-----------------------------------------------------------------------+
| 36. Representative Tom Udall                                          |
+-----------------------------------------------------------------------+
| 37. Representative W.J. "Billy" Tauzin                                |
+-----------------------------------------------------------------------+
| 38. Representative William L. Clay                                    |
+-----------------------------------------------------------------------+
| 39. Representative Zach Wamp                                          |
+-----------------------------------------------------------------------+
| 40. Representatives, James E. Clyburn, William J. Jefferson,          |
|     Stephanie Tubbs Jones, Barbara Lee, Juanita Millender-McDonanld,  |
|     Bobby L. Rush, Edolphus Towns, and Albert Russell Wynn            |
+-----------------------------------------------------------------------+
| 41. Representatives Randy Cunningham & Duncan L. Hunter               |
+-----------------------------------------------------------------------+
| 42. Representatives Rick Boucher, Eliot L. Engel, Ralph M. Hall,      |
|     Steve Largent, Charles Pickering, Ronnie Shows, and Bennie G.     |
|     Thompson                                                          |
+-----------------------------------------------------------------------+
| 43. Roseville PCS, Inc. ("Roseville")                                 |
+-----------------------------------------------------------------------+
| 44. Rural Telecommunications Group ("RTG")                            |
+-----------------------------------------------------------------------+
| 45. Senator Barbara A. Mikulski and Paul S. Sarbanes                  |
+-----------------------------------------------------------------------+
| 46. Senator Barbara Boxer                                             |
+-----------------------------------------------------------------------+
| 47. Senator Carl Levin                                                |
+-----------------------------------------------------------------------+
| 48. Senator Charles S. Robb                                           |
+-----------------------------------------------------------------------+
| 49. Senator Christopher S. Bond                                       |
+-----------------------------------------------------------------------+
| 50. Senator Daniel K. Inouye                                          |
+-----------------------------------------------------------------------+
| 51. Senator Judd Gregg                                                |
+-----------------------------------------------------------------------+
| 52. SBC Communications, Inc. ("SBC")                                  |
+-----------------------------------------------------------------------+
| 53. Sprint Spectrum L.P. d/b/a Sprint PCS ("Sprint")                  |
+-----------------------------------------------------------------------+
| 54. TeleCorp PCS, Inc. ("TeleCorp")                                   |
+-----------------------------------------------------------------------+
| 55. Telepak, Inc. (Telepak")                                          |
+-----------------------------------------------------------------------+
| 56. Thomas Gutierrez of Lukas, Nace, Gutierrez & Sachs                |
+-----------------------------------------------------------------------+
| 57. TLA Spectrum, LLC ("TLA")                                         |
+-----------------------------------------------------------------------+
| 58. Tritel Communications, Inc. ("Tritel")                            |
+-----------------------------------------------------------------------+
| 59. US West Wireless, LLC ("US West")                                 |
+-----------------------------------------------------------------------+
| 60. Verizon Wireless ("Verizon")                                      |
+-----------------------------------------------------------------------+
| 61. VoiceStream Wireless Corporation ("VoiceStream")                  |
+-----------------------------------------------------------------------+

# APPENDIX B -- Spectrum Cap Issues {#appendix-b-spectrum-cap-issues .unnumbered}

**B-1. [Comments and Petitions Filed in Response to Public Notice, DA
00-318 (Petitions of AT&T Wireless Services, Inc., BellSouth
Corporation, and Bell Atlantic Mobile, Inc.)]{.underline}**

**[Comments]{.underline}**

+-----------------------------------------------------------------------+
| 1.  Alaska Digitel, LLC ("Alaska Digital")                            |
+-----------------------------------------------------------------------+
| 2.  American Wireless, LLC ("American Wireless")                      |
+-----------------------------------------------------------------------+
| 3.  Carolina PCS I Limited Partnership ("Carolina")                   |
+-----------------------------------------------------------------------+
| 4.  Cook Inlet Region, Inc. ("CIRI")                                  |
+-----------------------------------------------------------------------+
| 5.  CT Communications, Inc. ("CT")                                    |
+-----------------------------------------------------------------------+
| 6.  Cellular Telecommunications Industry Association ("CTIA")         |
+-----------------------------------------------------------------------+
| 7.  Eldorado Communications, LLC ("Eldorado")                         |
+-----------------------------------------------------------------------+
| 8.  Georgetown Partners, LLC ("Georgetown")                           |
+-----------------------------------------------------------------------+
| 9.  GTE Service Corporation ("GTE")                                   |
+-----------------------------------------------------------------------+
| 10. Leap Wireless International, Inc. ("Leap")                        |
+-----------------------------------------------------------------------+
| 11. National Telephone Cooperative Association ("NTCA")               |
+-----------------------------------------------------------------------+
| 12. Nextel Communications ("Nextel")                                  |
+-----------------------------------------------------------------------+
| 13. NextWave Personal Communications, Inc. ("NextWave Personal")and   |
|     NextWave Power Partners, Inc. ("NextWave Power")                  |
+-----------------------------------------------------------------------+
| 14. Personal Communications Industry Association ("PCIA")             |
+-----------------------------------------------------------------------+
| 15. Poplar PCS, LLC ("Poplar")                                        |
+-----------------------------------------------------------------------+
| 16. Rural Cellular Association ("RCA")                                |
+-----------------------------------------------------------------------+
| 17. Rural Telecommunications Group ("RTG")                            |
+-----------------------------------------------------------------------+
| 18. SBC Communications, Inc. ("SBC")                                  |
+-----------------------------------------------------------------------+
| 19. SMR Group, L.C. ("SMR")                                           |
+-----------------------------------------------------------------------+
| 20. Sprint Spectrum L.P. d/b/a Sprint PCS ("Sprint")                  |
+-----------------------------------------------------------------------+
| 21. TeleCorp PCS, Inc. ("TeleCorp")                                   |
+-----------------------------------------------------------------------+
| 22. Tritel Communications, Inc. ("Tritel")                            |
+-----------------------------------------------------------------------+
| 23. VoiceStream Wireless Corporation ("VoiceStream")                  |
+-----------------------------------------------------------------------+

**[Reply Comments]{.underline}**

+-----------------------------------------------------------------------+
| Alaska Digitel, LLC ("Alaska Digitel")                                |
+-----------------------------------------------------------------------+
| 1.  Alpine PCS, Inc. ("Alpine")                                       |
+-----------------------------------------------------------------------+
| 2.  American Wireless, LLC ("American Wireless")                      |
+-----------------------------------------------------------------------+
| 3.  AT&T Wireless Services, Inc. ("AT&T")                             |
+-----------------------------------------------------------------------+
| 4.  Bell Atlantic Mobile, Inc. ("Bell Atlantic")                      |
+-----------------------------------------------------------------------+
| 5.  BellSouth Corporation ("BellSouth")                               |
+-----------------------------------------------------------------------+
| 6.  CT Communications, Inc. ("CT")                                    |
+-----------------------------------------------------------------------+
| 7.  Eldorado Communications, LLC ("Eldorado")                         |
+-----------------------------------------------------------------------+
| 8.  GTE Service Corporation ("GTE")                                   |
+-----------------------------------------------------------------------+
| 9.  Leap Wireless International ("Leap")                              |
+-----------------------------------------------------------------------+
| 10. Northcoast Communications, LLP ("Northcoast")                     |
+-----------------------------------------------------------------------+
| 11. Poplar PCS, LLC ("Poplar")                                        |
+-----------------------------------------------------------------------+
| 12. TeleCorp PCS, Inc. ("TeleCorp")                                   |
+-----------------------------------------------------------------------+
| 13. Tritel Communications, Inc. ("Tritel")                            |
+-----------------------------------------------------------------------+

**[Petitions]{.underline}**

+-----------------------------------------------------------------------+
| 1.  AT&T Wireless Services, Inc. ("AT&T") (Petition for Waiver)       |
+-----------------------------------------------------------------------+
| 2.  Bell Atlantic Mobile, Inc. ("Bell Atlantic") (Petition for        |
|     Limited Forbearance)                                              |
+-----------------------------------------------------------------------+
| 3.  BellSouth Corporation ("BellSouth") (Petition for Waiver)         |
+-----------------------------------------------------------------------+
| 4.  GTE Service Corporation ("GTE") (Petition for Waiver and          |
|     Declaratory Ruling)                                               |
+-----------------------------------------------------------------------+

# APPENDIX C -- Initial Regulatory Flexibility Analysis {#appendix-c-initial-regulatory-flexibility-analysis .unnumbered}

As required by the Regulatory Flexibility Act ("RFA"),[^136] the
Commission has prepared an Initial Regulatory Flexibility Analysis
("IRFA") of the possible economic impact on small entities of the rules
proposed in the Further Notice of Proposed Rulemaking ("*Notice*") in WT
Docket No. 97-82. Written public comments are requested on the IRFA.
Comments on the IRFA must have a separate and distinct heading
designating them as responses to the IRFA and must be filed by the
deadlines for comments on the Notice. The Commission will send a copy of
the Notice, including this IRFA, to the Chief Counsel for Advocacy of
the Small Business Administration.[^137] In addition, the *Notice* and
IRFA (or summaries thereof) will be published in the Federal
Register.[^138]

**A. Need for, and Objectives, of the Proposed Rules:**

Section 309(j) of the Communications Act directs the Commission to
disseminate licenses among a wide variety of applicants, including small
businesses and other designated entities.[^139] Section 309(j) also
requires that the Commission ensure the development and rapid deployment
of new technologies, products, and services for the benefit of the
public, and recover for the public a portion of the value of the public
spectrum resource made available for commercial use.[^140] To date, the
Commission has received numerous requests to waive, modify, or eliminate
certain of the C and F block auction and service rules for C and F block
broadband Personal Communications Services ("PCS") licenses. As
discussed more fully in Section E of this IRFA, *infra*, these requests
seek, among other things, modification of the C and F block entrepreneur
eligibility requirements for the upcoming C and F block auction,
reconfiguration of available 30 MHz C block licenses, and adoption of an
alternative bidding plan. Upon consideration of these numerous requests,
the Commission has tentatively concluded that it is in the public
interest to revise certain aspects of the C and F block rules. This
*Notice* sets forth the Commission's proposals and tentative conclusions
concerning possible revisions to the rules governing the C and F block
spectrum. The Commission believes that this *Notice* will provide the
Commission with an opportunity to develop a record on the specific
proposals to open eligibility for this spectrum and otherwise revise the
C and F block rules for the benefit of consumers and the economy. In
addition, the Commission believes that the tentative conclusions and
proposals set forth in this *Notice* help meet the goals and objectives
of section 309(j), and promote competition while maintaining the fair
and efficient implementation of the auctions program. Accordingly, the
Commission seeks comment on all proposals, alternatives, tentative
conclusions, and other issues described in the *Notice*; and the impact
that such proposals, alternatives, tentative conclusions, and other
issues may have on small entities.

B.  **Legal Basis:**

> This action is authorized under Sections 4(i), 303(r), and 309(j) of
> the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i),
> 303(r), and 309(j).

**C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply:**

The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that will be
affected by the proposed rules, if adopted.[^141] Generally, the RFA
defines the term "small entity" as having the same meaning as the terms
"small business," "small organization," and "small governmental
jurisdiction."[^142] The term "small business" has the same meaning as
the term \"small business concern\" under the Small Business Act, unless
the Commission has developed one or more definitions that are
appropriate for its activities.[^143] Under the Small Business Act, a
"small business concern" is one which: (1) is independently owned and
operated; (2) is not dominant in its field of operation; and (3) meets
any additional criteria established by the Small Business Administration
("SBA").[^144]A small organization is generally "any not‑for‑profit
enterprise which is independently owned and operated and is not dominant
in its field."[^145]Nationwide, as of 1992, there were approximately
275,801 small organizations."[^146] "Small governmental jurisdiction"
generally means \"governments of cities, counties, towns, townships,
villages, school districts, or special districts, with a population of
less than 50,000.\"[^147] As of 1992, there were approximately 85,006
local governments in the United States.[^148] This number includes
38,978 counties, cities, and towns; of these, 37,566, or 96 percent,
have populations of fewer than 50,000.[^149] The Census Bureau estimates
that this ratio is approximately accurate for all governmental entities.
Thus, of the 85,006 governmental entities, we estimate that 81,600 (91
percent) are small entities.

The possible rule changes described in the *Notice* affect all small
entities that choose to participate in the upcoming auction of C and F
block spectrum and other future auctions of C and F block spectrum,
including small businesses currently holding C and F block licenses and
other small businesses that may acquire licenses through the auction.
The broadband PCS spectrum is divided into six frequency blocks
designated A through F, and the Commission has auctioned licenses in
each block. Frequency blocks C and F have been designated by the
Commission as "entrepreneurs' blocks," and participation in auctions of
C and F block licenses is limited to entities qualifying under the
Commission's rules as entrepreneurs. The Commission's rules define an
entrepreneur as an entity, together with its affiliates, having gross
revenues of less than \$125 million and total assets of less than \$500
million at the time the FCC Form 175 application is filed. For blocks C
and F, the Commission has defined "small business" as a firm, together
with its affiliates, that had average gross revenues of not more than
\$40 million in the three previous calendar years,[^150] and "very small
business" has been defined as an entity that, together with its
affiliates, has average gross revenues of not more than \$15 million for
the preceding three calendar years.[^151] These definitions have been
approved by the SBA.[^152]

On May 6, 1996, the Commission concluded the first broadband PCS C block
auction.[^153] On July 16, 1996, the second C block auction
closed.[^154] On January 14, 1997, the broadband PCS D, E, and F block
auction closed.[^155] Ninety bidders (prior to any defaults by winning
bidders) won 493 C block licenses and 88 bidders won 491 F block
licenses. Small businesses placing high bids in these C and F block
auctions were eligible for bidding credits and installment payment
plans. On April 15, 1999, Auction No. 22, which included 347 C and F
block licenses, closed.[^156] On January 12, 2000, the Wireless
Telecommunications Bureau announced the Commission's intention to
auction C and F block PCS licenses on July 26, 2000. The auction is
currently scheduled to include ninety-three 30 MHz C block licenses,
twenty-one 15 MHz C block licenses, and forty 10 MHz F block licenses.
For purposes of our evaluations and conclusions in this IRFA, we assume
that all of the original 90 C block broadband PCS licensees and 88 F
block broadband PCS licensees, a total of 178 licensees potentially
affected by this *Notice*, are small entities. In addition to the 178
original small business licensees that may participate in the auction of
the C block licenses, a number of additional small business entities may
seek to acquire licenses through auction; thus, these business entities
would be affected by these rules.

**D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements:**

At this time, the Commission does not anticipate the imposition of new
reporting, recordkeeping, or other compliance requirements as a result
of this Notice. We seek comment on this tentative conclusion. Auction
participants will need to follow the standard procedural rules used for
broadband PCS spectrum auctions, including application and payment
rules.[^157]

**E. Steps Taken to Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered:**

The RFA requires an agency to describe any significant alternatives that
it has considered in reaching its proposed approach, which may include
the following four alternatives (among others): (1) the establishment of
differing compliance or reporting requirements or timetables that take
into account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance or
reporting requirements under the rule for small entities; (3) the use of
performance, rather than design, standards; and (4) an exemption from
coverage of the rule, or any part thereof, for small entities. 5 U.S.C.
§ 603.

The Commission tentatively concludes that it is in the public interest
to revise certain aspects of the C and F block rules to encourage
participation by small businesses while at the same time helping to
ensure the best use of spectrum through the competitive bidding process.

[Reconfigure C Block Spectrum Size]{.underline}: The Commission
tentatively concludes it will reconfigure each 30 MHz C block license
available in future broadband PCS auctions into three 10 MHz C block
licenses. The Commission believes that by increasing the number of
available licenses through this reconfiguration, taken together with the
Commission's proposals to lift certain of our eligibility requirements,
the Commission will promote wider auction participation and license
distribution in accordance with the goals of Section 309(j) of the
Communications Act.[^158] Small bidders should find bidding for 10 MHz
licenses more affordable, while large bidders should enjoy greater
flexibility in tailoring their bidding to their business plans without
running afoul of the spectrum cap. The Commission also seeks comment on
whether a different configuration would be more appropriate to provide
meaningful opportunities for potential bidders, including new entrants
into particular markets.

[Eliminate Eligibility Restrictions for Certain Licenses in
Tiers]{.underline}: The Commission proposes to remove the entrepreneur
eligibility restrictions for some, but not all, licenses available in
Auction No. 35 and in future C and F block auctions. Based on the demand
for spectrum to satisfy congestion, new technology and competitive
needs, the Commission tentatively concludes that it would serve the
public interest to make some additional spectrum available to all
interested bidders. In light of the Commission's commitment to providing
meaningful opportunities for entrepreneurs, the Commission seeks comment
on proposals to lift the entrepreneur eligibility requirements for some
of the licenses available in Auction No. 35 and future auctions, which
vary in the amount of spectrum that would remain set-aside according to
the size of both the available licenses and the markets. The Commission
tentatively concludes that it will divide BTAs into two tiers according
to population size of the BTA. "Tier 1" would comprise BTAs at and above
a 2.5 million population threshold; "Tier 2" would comprise BTAs below
that population threshold. For available 30 MHz C block licenses, the
Commission tentatively concludes to allow "open" bidding for two of the
three 10 MHz C block licenses in Tier 1, and one of the three 10 MHz C
block licenses in Tier 2. The Commission also seeks comment on whether
there should be "open" bidding for all three of the 10 MHz licenses in
Tier 1, and two of the three in Tier 2. With respect to available F
block licenses, the Commission seeks comment on eliminating the
eligibility requirements, or, alternatively, applying a tiered approach
or retaining the existing eligibility rules. Finally, the Commission
also tentatively concludes it will allow "open" bidding for all
available 15 MHz C block licenses, which have previously been auctioned
but not sold. These alternatives would affect the configuration and
set-aside of spectrum. We seek comment on the impact of these
alternatives on small businesses.

[Retain Current License Grouping for Bidding in Auction]{.underline}:
The Commission tentatively concludes to take bids on each license
separately in Auction No. 35 on a simultaneous multiple round basis as
the Commission has previously done in the past. The Commission believes
that bidding for each license separately is unlikely to preclude
carriers from aggregating licenses on a nationwide or regional basis,
and at the same time will provide carriers that have intense spectrum
needs in a particular market the opportunity to compete for licenses as
well.

[Grandfather Exception]{.underline}: The Commission seeks comment on
whether the grandfather eligibility exception should be revised or
clarified. The Commission also tentatively concludes that upon the
merger of two entities, each of which is eligible for the "grandfather"
exception, the exception extends to the resulting entity; but that, upon
the merger of two entities, only one of which is eligible for the
"grandfather" exception, the exception does not extend to the resulting
entity.

[Revise the Bidding Credits Available for Auction No. 35]{.underline}:
For those licenses that are not subject to eligibility restrictions, the
Commission seeks comment on whether to increase bidding credits for
small and very small businesses, and consortia thereof, to 25 and 40
percent, respectively, or to retain existing bidding credit levels. We
expect that this departure from previous procedure will provide small
businesses with a meaningful opportunity to compete in an open auction.

[Alter the Transfer Requirements for Certain Licenses]{.underline}: The
Commission proposes to modify the Commission's transfer requirements to
correspond to the Commission's proposed changes in the eligibility
requirements, and to encourage rapid construction of C and F block
systems. Specifically, the Commission tentatively concludes that C and F
block licenses won pursuant to open bidding at Auction No. 35, or any
future open auction for such spectrum, would not be subject to a
transfer holding rule. For licenses won in closed bidding in any C or F
block auction, the Commission seeks comment on a proposal that will
allow a licensee to assign or transfer its license to any qualified
entity, entrepreneur or not, upon the licensee's completion of its first
construction benchmark, whether or not it takes the full five years
allowed by the rules. The Commission also seeks comment on whether it
should evaluate a licensee's compliance with construction requirements
on a system-wide basis.

[Eliminate the License Cap]{.underline}: The Commission proposes to
remove Section 24.710 from the Commission's rules which prohibits an
auction applicant from winning more than 98 C and F block licenses. When
this rule was established, the license cap was intended to facilitate a
fair distribution of licenses within the C and F blocks. The Commission
has achieved this objective; moreover, the Commission's proposal to
reconfigure the available 30 MHz C block licenses would create
additional C block licenses, while the Commission's proposal to
eliminate the eligibility restrictions would increase the chances of C
and F block licenses being won by a variety of entities.

[Retain the Spectrum Cap]{.underline}: The Commission tentatively
concludes that it should not grant the petitions seeking waiver of, or
forbearance from, the CMRS spectrum cap rules and, accordingly, it would
apply the spectrum cap to licenses of PCS C and F block spectrum to be
auctioned in Auction 35. The Commission's proposal to revise the rules
pertaining to the PCS C and F block spectrum helps ease the impact of
the cap in this auction, and thereby renders cap relief
unnecessary.[^159]

Section 309(j) of the Communications Act directs the Commission to
disseminate licenses among a wide variety of applicants, including small
businesses and other designated entities.[^160] Section 309(j) also
requires that the Commission ensure the development and rapid deployment
of new technologies, products, and services for the benefit of the
public, and recover for the public a portion of the value of the public
spectrum resource made available for commercial use.[^161] The
Commission believes that the proposals, alternatives, and tentative
conclusions described in this Notice promote these goals while
maintaining the fair and efficient execution of the auctions program.
The Commission, therefore, seeks comment on all issues, proposals,
tentative conclusions, and alternatives described in the Notice, and the
impact they may have on small entities.

**F. Federal Rules that May Duplicate, Overlap, or Conflict with the
Proposed Rules:**

None.

SEPARATE STATEMENT OF COMMISSIONER MICHAEL K. POWELL, CONCURRING

> In the Matter of Amendment of the Commission's Rules Regarding
> Installment Payment Financing for Personal Communications Services
> (PCS) Licensees, WT Docket No. 97-82, *Further Notice of Proposed
> Rulemaking*

I concur with the issuance of this *Further Notice* to explore changes
in the eligibility rules for the re-auction of this valuable and highly
sought-after PCS spectrum. I support the need to reexamine our
"entrepreneur's block" spectrum set-aside rules because, among other
reasons, there have been a lot of changes since we first embarked on
this auction experiment. However, I am open to all options and
considerations for the next auction of these licenses. I am not
particularly impressed by labels attached to the specific proposals
(i.e., those on which we "seek comment," "propose" or "tentatively
conclude") in this Further notice because I think all options are on the
table and I would not be predisposed to any particular outcome at this
time.

I am very dismayed that this *Further Notice* proposes to reject
out-of-hand any modification or elimination of the CMRS spectrum cap.
Even since we last addressed this issue, many changes in the marketplace
have occurred that require the immediate reexamination of this
artificial barrier (like the entrepreneur's block eligibility
restrictions) to the acquisition of spectrum. If we are not going to
adequately address it in this proceeding (despite the fact that parties
have asked us to), I strongly urge action on the reconsideration
petitions from the last review and the conclusion of the year 2000
biennial review before this re-auction takes place. In the meantime, or
if my plea to my colleagues goes unheeded, I would also encourage
spectrum-constrained licensees to make a compelling effort to justify
their need to exceed the cap or other reasons it should be waived.

[^1]: \"Auction of C and F Block Broadband PCS Licenses, Notice of
    Auction Scheduled for July 26, 2000,\" *Public Notice*, 15 FCC Rcd
    693 (2000).

[^2]: *See* 47 C.F.R. § 24.709; Implementation of Section 309(j) of the
    Communications Act -- Competitive Bidding, PP Docket 93-253, *Fifth
    Memorandum Opinion and Order*, 10 FCC Rcd 403 (1994) ("*Competitive
    Bidding Fifth Memorandum Opinion and Order*"), *Fifth Report and
    Order*, 9 FCC Rcd 5532 (1994) ("*Competitive Bidding Fifth Report
    and Order*").

[^3]: *See* Verizon Wireless, Petition for Clarification or
    Reconsideration (April 17, 2000) ("Verizon Petition"); "Wireless
    Telecommunications Bureau Sets Comment Schedule for Petitions for
    Reconsideration of the on Reconsideration of the Fourth Report and
    Order in WT Docket No. 97-82," *Public Notice*, DA 00-760 (released
    April 5, 2000); US WEST Wireless, LLC and Sprint Spectrum L.P. dba
    Sprint PCS, Petition for Reconsideration (Expedited Action
    Requested) (April 4, 2000) ("US West/Sprint Petition"); US WEST
    Wireless, LLC, Petition for Waiver (March 1, 2000) ("US West
    Petition"); Cellular Telecommunications Industry Association,
    Petition for Rule Making of the Cellular Telecommunications Industry
    Association (February 22, 2000) ("CTIA Petition"); Sprint Spectrum
    L.P. dba Sprint PCS, Sprint PCS Petition for Waiver (February 22,
    2000) ("Sprint Petition"); "Extension of Filing Deadline for
    comments to the Petitions Filed by SBC Communications Inc. and
    Nextel Communications, Inc. Regarding PCS C and F Block Rules,"
    *Public Notice*, 15 FCC Rcd 2814 (2000); Rural Cellular Association,
    Request for Extension of Time (February 9, 2000); Office of Advocacy
    of the United States Small Business Administration, Request for
    Additional Time to File Comments (February 7, 2000); National
    Telephone Cooperative Association, National Telephone Cooperative
    Association Expedited Request for Extension of Filing Deadline for
    Comments to SBC Communications Inc.'s and Nextel Communications,
    Inc.'s Request for Waiver of the Commission's Rules (February 4,
    2000); Wireless Telecommunications Bureau Seeks Comment on Nextel
    Communications, Inc.'s Petition Regarding PCS C and F Block
    Spectrum, Extension of Filing Deadline for Comments to SBC
    Communications Inc.'s Request for Waiver," *Public Notice*, 15 FCC
    Rcd 2104 (2000); Nextel Communications, Inc., Petition for Expedited
    Rulemaking or, in the Alternative, Waiver of the Commission's Rules
    (January 31, 2000) ("Nextel Petition"); "Wireless Telecommunications
    Bureau Seeks Comment on SBC Communications Inc.\'s Request for
    Waiver of the Eligibility Requirements for Participation in the
    Upcoming PCS C and F Block Auction,\" *Public Notice*, 15 FCC Rcd
    1953 (2000); SBC Communications Inc., Petition of SBC Communications
    Inc. for a Waiver of Section *24.709* and for Expedited Action,
    (January 21, 2000) ("SBC Petition"). The Commission also received
    petitions primarily concerning the Commercial Mobile Radio Service
    spectrum cap but also raising C and F block eligibility issues.
    *See* GTE Service Corporation, Petition for Declaratory Ruling
    and/or Waiver (March 8, 2000); Bell Atlantic Mobile, Inc., Petition
    for Limited Forbearance (February 17, 2000); BellSouth Corporation,
    Petition for Waiver and Expedited Action (February 17, 2000); AT&T
    Wireless Services, Inc., Petition for Waiver and Expedited Action
    (February 15, 2000).

[^4]: *See*, *e.g.*, SBC Petition, Nextel Petition.

[^5]: *See*, *e.g.*, US West/Sprint Petition at i, 4-7; Nextel Petition
    at 18-23.

[^6]: *See*, *e.g.*, Nextel Petition at 18-23.

[^7]: *See*, *e.g.*, SBC Petition at 6-10; Nextel Petition at 8-10.

[^8]: *See*, *e.g.*, SBC Petition at 11-12, 15-17; Nextel Petition at
    5-10, 12-16; *see also* Nextel Reply at 15-18, 21-27; Nextel
    Opposition at 4.

[^9]: *See* Appendix A. Appendix A-1 provides the full and abbreviated
    names of the parties filing comments or reply comments to the SBC
    and Nextel Petitions. Appendix A-2 provides the full and abbreviated
    names of the parties filing oppositions and other pleading in
    response to the US West/Sprint Petition.

[^10]: *See*, *e.g.*, Advocacy Comments at 2-4; 10-12; Advocacy Reply at
    1, 2-3; Alaska Digitel Comments at 5-6, 13-14; Alaska Digitel Reply
    at 4-5; American Wireless Comments at 13-14; AT&T Wireless Reply at
    3; Carolina Reply at ii, 7; Carolina PCS Comments at 10; Cleartalk
    Reply at 1; Council Tree Comments at 11-15; CT Reply at 5-6, 8-11;
    NTCA Comments at 4-6; Omnipoint Comments at ii, 2-5, 14-15; Onyx
    Comments at 8-9; OPM Auction Comments at 6; OPM Auction Reply at 9,
    12; PCIA Comments at 11-14, 20-21; RTG Comments at 8-10; SMR
    Advisory Comments at 10-11, 14-15; Telecorp Comments at 5-6, 13-14;
    Tritel Comments at 5-6, 13-14; Tritel Reply at 4-5. We note that
    several parties refer to the Commission's eligibility rules for
    "designated entities," rather than for "entrepreneurs." Because,
    under current rules, applicants that qualify as entrepreneurs are
    permitted to participate in C and F block auctions even if they are
    not designated entities (i.e., small businesses, business owned by
    members of minority groups and/or women, and rural telephone
    companies -- *see* 47 C.F.R. § 1.2110), we have interpreted these
    pleadings, where appropriate, as referring to entrepreneurs, rather
    than to designated entities.

[^11]: *See* App. B.

[^12]: Pub. L. No. 103-66, Title VI, § 6002(b), 107 Stat. 312 (1993).

[^13]: Section 309(j) of the Communications Act of 1934, as amended
    ("Communications Act"), 47 U.S.C. § 309(j).

[^14]: We note that Section 309(j)(7) of the Communications Act limits
    the Commission's consideration of auction revenues in making public
    interest determinations. 47 U.S.C. § 309(j)(7).

[^15]: 47 U.S.C. § 309(j)(4).

[^16]: The Commission required that in order to be eligible to bid, an
    applicant, including attributable investors and affiliates, must
    have gross revenues of less than \$125 million in each of the last
    two years and less than \$500 million in total assets. *See
    Competitive Bidding Fifth Report and Order*, 9 FCC Rcd at 5581-5582,
    ¶ 115. Originally, there was a personal net worth test, but this
    test was eliminated. *See* *Competitive Bidding Fifth Memorandum
    Opinion and Order*, 10 FCC Rcd at 420-21, ¶¶ 28-30.

[^17]: *Competitive Bidding Fifth Report and Order*, 9 FCC Rcd 5532,
    5537-38, ¶ 11 (1994), quoting Small Business Credit and Business
    Opportunity Enhancement Act of 1992, Pub. L. No. 102-366, 106 Stat.
    986, § 331(a)(3) (1992).

[^18]: *Id.* at 5575-76, ¶ 103.

[^19]: *Id.* at 5579, ¶ 111.

[^20]: *Id.* at 5580, ¶ 113.

[^21]: Amendment of the Commission\'s Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licenses, WT Docket No. 97-82, *Second Report and Order and Further
    Notice of Proposed Rule Making,* 12 FCC Rcd 16,436 (1997) (\"*C
    Block Second Report and Order*\").

[^22]: Amendment of the Commission\'s Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licenses, WT Docket No. 97-82, *Order on Reconsideration of the
    Second Report and Order*, 13 FCC Rcd 8345 (1998) (\"*C Block
    Reconsideration Order*\").

[^23]: Every participant in Auction No. 10 had participated in Auction
    No. 5.

[^24]: *See* Amendment of the Commission\'s Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licenses, WT Docket No. 97-82, *Fourth Report and Order*, 13 FCC Rcd
    15,743, 15,749, ¶ 10, 15,751, ¶ 13, 15,752, ¶ 15 (1998) (\"*C Block
    Fourth Report and Order*\"); *C Block Second Report and Order*, 12
    FCC Rcd 16,436, 16,448, ¶ 22; *see also* Amendment of the
    Commission\'s Rules Regarding Installment Payment Financing for
    Personal Communications Services (PCS) Licenses, WT Docket No.
    97-82, *Order on Reconsideration of the Fourth Report and Order*, 15
    FCC Rcd 4740, 4742-43, ¶¶ 6-8 (2000) ("*C Block Fourth Report and
    Order Reconsideration*").

[^25]: The proceedings of NextWave are jointly administered with those
    of NextWave Power Partners Inc., NextWave Partners Inc., NextWave
    Wireless Inc., and NextWave Telecom Inc.

[^26]: The proceedings of GWI are jointly administered with those of
    General Wireless, Inc.; GWI PCS California/Florida, Inc.; GWI PCS
    Georgia, Inc.; and GWI PCS Chico, Inc. (now known as Metro PCS,
    Inc.; Metro PCS Wireless, Inc.; Metro PCS California/Florida, Inc.;
    Metro PCS Georgia, Inc.; and Metro PCS Chico, Inc.).

[^27]: The DCR proceedings are jointly administered with those of DCR's
    parent company, Pocket Communications, Inc.

[^28]: This population figure is based upon the 1990 census.

[^29]: \"Auction of C and F Block Broadband PCS Licenses, Notice of
    Auction Scheduled for July 26, 2000,\" *Public Notice*, 15 FCC Rcd
    693 (2000).

[^30]: *See* 47 C.F.R. § 1.2110(f)(4)(iii)-(iv). *See also* NextWave
    Personal Communications, Inc. v. FCC, 200 F.3d 43 (2^nd^ Cir. 1999),
    *aff'd*, No. 99-5063 (2^nd^ Cir. May 25, 2000).

[^31]: *See* "C and F Block Broadband PCS Spectrum Auction Scheduled for
    July 26, 2000," *Public Notice*, 15 FCC Rcd 4702, 4713-15, Att. A
    (2000).

[^32]: CTIA Petition; Sprint Petition; "Extension of Filing Deadline for
    comments to the Petitions Filed by SBC Communications Inc. and
    Nextel Communications, Inc. Regarding PCS C and F Block Rules,"
    *Public Notice*, 15 FCC Rcd 2814 (2000); Rural Cellular Association,
    Request for Extension of Time (February 9, 2000); Office of Advocacy
    of the United States Small Business Administration, Request for
    Additional Time to File Comments (February 7, 2000); National
    Telephone Cooperative Association, National Telephone Cooperative
    Association Expedited Request for Extension of Filing Deadline for
    Comments to SBC Communications Inc.'s and Nextel Communications,
    Inc.'s Request for Waiver of the Commission's Rules (February 4,
    2000); Wireless Telecommunications Bureau Seeks Comment on Nextel
    Communications, Inc.'s Petition Regarding PCS C and F Block
    Spectrum, Extension of Filing Deadline for Comments to SBC
    Communications Inc.'s Request for Waiver," *Public Notice*, 15 FCC
    Rcd 2104 (2000); Nextel Petition; "Wireless Telecommunications
    Bureau Seeks Comment on SBC Communications Inc.\'s Request for
    Waiver of the Eligibility Requirements for Participation in the
    Upcoming PCS C and F Block Auction,\" *Public Notice*, 15 FCC Rcd
    1953 (2000); SBC Petition; *see also* the following petitions
    primarily concerning the Commercial Mobile Radio Service spectrum
    cap but also raising C and F block eligibility issues: GTE Service
    Corporation, Petition for Declaratory Ruling and/or Waiver (March 8,
    2000); Bell Atlantic Mobile, Inc., Petition for Limited Forbearance
    (February 17, 2000); BellSouth Corporation, Petition for Waiver and
    Expedited Action (February 17, 2000); AT&T Wireless Services, Inc.,
    Petition for Waiver and Expedited Action (February 15, 2000). GTE
    Service Corporation, Petition for Declaratory Ruling and/or Waiver
    (March 8, 2000); Bell Atlantic Mobile, Inc., Petition for Limited
    Forbearance (February 17, 2000); BellSouth Corporation, Petition for
    Waiver and Expedited Action (February 17, 2000); AT&T Wireless
    Services, Inc., Petition for Waiver and Expedited Action (February
    15, 2000).

[^33]: *See*, *e.g.*, Alpine PCS Reply at 3-4; Cleartalk Reply at 1,5;
    Coalition Reply at 3-5; RCA Comments at 11-17; US West Comments at
    i, 3, 6; UTStarcom Comments at 3.

[^34]: "Wireless Telecommunications Bureau Sets Comment Schedule for
    Petitions for Reconsideration of the on Reconsideration of the
    Fourth Report and Order in WT Docket No. 97-82," *Public Notice*, DA
    00-760 (released April 5, 2000); US West/Sprint Petition; *C Block
    Fourth Report and Order Reconsideration*, 15 FCC Rcd 4740 (2000).

[^35]: Verizon Petition.

[^36]: *See* Appendix A. Party abbreviations noted in Appendix A are
    used in the text and footnotes of this *Further Notice*.

[^37]: *See*, *e.g.*, AT&T Wireless Comments at 1-2, AT&T Wireless Reply
    at 1-2,4; D&E Communications Comments at 1-8; Ericsson Comments at
    2-3; GTE Comments at 9; GTE Reply at i; Nextel Opposition at 1,
    9-12; SBC Opposition at 2, 6; TDS Comments at 2; and Verizon
    Opposition at 2.

[^38]: *See*, *e.g.*, Advocacy Comments at 1-5; Advocacy Reply at 1-2;
    Advocacy Opposition at 1-5; Advocacy *Ex Parte* at 1-3; Alaska
    Digitel Comments at 1-2; Alaska Digitel Reply at 1-2; Alpine
    Comments at 2-3; Alpine Reply at 1; American Wireless Comments;
    American Wireless Reply; American Wireless Opposition at 2-3; Burst
    Comments at 10; Carolina Comments at 8; Carolina Opposition at 6-7;
    Chadmoore Reply at 2-3; Cleartalk Reply at 1; Coalition Reply at
    1-2; ComScape Opposition at 1; Council Tree Comments; CIRI Comments;
    CT Comments at 4-6; CT Reply at i-ii; Devon Comments at 1-2;
    Entertainment Unlimited Reply at 2; Georgetown Partners Comments at
    2, 5-9; Georgetown Partners Reply at 2-3; Leap Comments at 2; Leap
    Opposition at 15-16; Northcoast Comments at 2; Northcoast Reply at
    1; NPI Reply; NTCA Comments at 1; Omnipoint Comments at 2-4; Onyx
    Comments at 4-6; OPM Auction Comments at 2-3; OPM Auction Reply; OPM
    Auction Opposition at 4-5; PCIA Comments; PCIA Reply at 4; Polycell
    Reply at 1; RCA Comments at i; RTG/OPASTCO Comments at 10-13; SMR
    Comments; Telecorp Comments; Telecorp Reply at 2; Telecorp/Tritel
    Docketed Comments at 6-7; Tritel Comments at ii; Tritel Reply at 2,
    9; VoiceStream Comments at 4-9; WOC Comments at 1-2.

[^39]: Bell Atlantic Mobile, Inc., Petition for Limited Forbearance
    (February 17, 2000); BellSouth Corporation, Petition for Waiver and
    Expedited Action (February 17, 2000); AT&T Wireless Services, Inc.,
    Petition for Waiver and Expedited Action (February 15, 2000).

[^40]: *See* "Wireless Telecommunications Bureau Seeks Comment on AT&T
    Wireless Services, Inc., BellSouth Corporation and Bell Atlantic
    Mobile, Inc. Petitions Regarding CMRS Spectrum Cap Limits," *Public
    Notice*, DA 00-318 (released February 18, 2000). Subsequent to the
    issuance of the public notice, the Commission received an additional
    petition requesting that the Commission issue a declaratory ruling
    that the spectrum cap does not apply to the spectrum being auctioned
    in Auction No. 35 or, in the alternative, that the Commission waive
    the spectrum cap. *See* GTE Service Corporation, Petition for
    Declaratory Ruling and/or Waiver (March 8, 2000).

[^41]: Petitioners and commenting parties are listed in Appendix B*.*

[^42]: Amendment of the Commission's Rules to Establish New Personal
    Communications Services, GEN Docket No. 90-314, *Memorandum Opinion
    and Order*, 9 FCC Rcd 4957, 4975-4982, ¶¶ 41-62 (1994).

[^43]: *See* 47 C.F.R. § 24.202. The BTA service areas are based on the
    Rand McNally 1992 Commercial Atlas & Marketing Guide, 123^rd^
    Edition, at pp. 38-39.

[^44]: *See id*. The MTA service areas are based on the Rand McNally
    1992 Commercial Atlas & Marketing Guide, 123^rd^ Edition, at pp.
    38-39.

[^45]: *See* *C Block Reconsideration Order*, 13 FCC Rcd 8345; *C Block
    Second Report and Order*, 12 FCC Rcd 16,436.

[^46]: *See C Block Reconsideration Order*, 13 FCC Rcd at 8366-8371, ¶¶
    49-60; C *Block Second Report and Order*, 12 FCC Rcd at 16452-58, ¶¶
    32-45.

[^47]: *See C Block Reconsideration Order*, 13 FCC Rcd at 8367-8371, ¶¶
    51-60; C *Block Second Report and Order*, 12 FCC Rcd at 16455-58, ¶¶
    38-45.

[^48]: *See* "C and F Block Broadband PCS Spectrum Auction Scheduled for
    July 26, 2000," *Public Notice*, 15 FCC Rcd 4702, 4713-15, Att. A
    (2000).

[^49]: Some proposals for band plan modifications are contingent upon
    Commission implementation of commenters' proposed changes to
    eligibility and other C and F block rules.

[^50]: *See* AT&T Opposition at 2-5; Sprint Comments at 3-6; US West
    Comments at i, 3, 6; US West Reply at 5-8; US West/Sprint Petition
    at 4-5; Verizon Opposition at 2, 6-7.

[^51]: *See* Nextel Petition at 2-3, 16-23; Nextel Reply at ii-iv, 8-11,
    14, 15-21, Rosston Declaration; Nextel Opposition at i, 2, 6-7.

[^52]: *See* Bell Atlantic Comments at 5-6.

[^53]: *See* GTE Reply at 8-9; GTE Opposition at 3-6; SBC Comments at 2,
    6-7, 10-12; SBC Reply at 26; AT&T Comments at 8; Burst Comments at
    13; Carolina PCS Comments at 17; CIRI Comments at 6; Council Tree
    Comments at 18-20; CTIA Comments at 2-3; Devon Comments at 5, 7;
    Ericsson Comments at 2, n.2; NTCA Comments at 7; Omnipoint Comments
    at 19-20; RTG Comments at 13-14; VoiceStream Reply at 8-9; WOC
    Comments at 12; Advocacy *Ex Parte* at 1-2; Advocacy Opposition at
    1-2; OPM Opposition at 4; VoiceStream Opposition at 7-9; Carolina
    Opposition at 8-9; Leap Opposition at 4-5, 17-20; Telecorp/Tritel
    Opposition at 2, 6-7.

[^54]: *See* Carolina PCS Comments at 17; CIRI Comments at 6; CTIA
    Comments at 2-3; NTCA Comments at 7; Omnipoint Comments at 19-20;
    Advocacy Ex Parte at 1-2; OPM Auction Opposition at 4; VoiceStream
    Opposition at 7-9; Leap Opposition at 4-5, 17-20; Telecorp/Tritel
    Comments at 2, 6-7.

[^55]: *See* Alaska Opposition at 3-5; Burst Opposition at 9; Leap
    Opposition at 4-5, 17-20; Telecorp/Tritel Opposition at 2, 6-7.

[^56]: According to the most recent license inventory for Auction No.
    35, 93 30-MHz C block licenses are slated to be available. *See* "C
    and F Block Broadband PCS Spectrum Auction Scheduled for July 26,
    2000," *Public Notice*, 15 FCC Rcd 4702, 4713-15, Att. A (2000).
    Upon reconfiguration of these licenses as described in the
    accompanying text, our license inventory will increase by 186 C
    block licenses.

[^57]: *See* 47 U.S.C. § 309(j)(3)(B).

[^58]: *See* Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, *First Report and Order*, 15 FCC Rcd 476, 491, ¶ 36, 492, ¶
    38 (2000) ("*700 MHz Band Order*").

[^59]: *See* "Auction of Licenses in the 747-762 and 777-792 MHz Bands
    Scheduled for September 6, 2000, Comment Sought on Modifying the
    Simultaneous multiple Round Auction Design to Allow Combinatorial
    (Package) Bidding," *Public Notice*, DA 00-1075 (released May 18,
    2000).

[^60]: *See* 47 C.F.R. § 24.709. There are two control group equity
    exceptions to this rule, as well as exceptions for small business
    consortia and certain publicly traded corporations. *See* *id.* §
    24.709(b)(1)-(6).

[^61]: Advocacy states that a number of small operators, whose licenses
    are paid in full, have launched service and many more plan to begin
    service in the coming months. *See* Advocacy Opposition at 4. Based
    on a survey it conducted, PCIA asserts that there are numerous
    success stories among current C and F block licensees in moving
    forward to create new jobs, new digital networks, new service
    offerings, and new competitive mobile voice data alternatives in
    their market areas. For example, TeleCorp has successfully launched
    PCS service in 24 markets since February of 1999. Telecorp has a
    market capitalization of approximately \$4.3 billion. *See
    generally* PCIA Comments. Also, Leap purchased 36 licenses in the
    1999 C block reauctions and is purchasing additional licenses
    throughout the United States. Leap has introduced a new, local-only
    service that is rapidly adding customers. *See generally id.*
    Similarly, Alaska Digitel describes how three C and F block
    licensees are operating in at least 29 markets in the Southeast
    United States and will have expanded service to several additional
    markets by year's end. Alaska Digitel Comments at 4-5.

[^62]: *See*, *e.g.*, Burst Comments at 10; Cleartalk Reply at 1;
    Coalition Reply at 4; Council Tree Comments at 15-18; CT Reply at 5;
    Leap Comments at 20; Northcoast Comments at 2; Omnipoint Comments at
    7-8; OPM Auction Comments at 7-8; OPM Auction Reply at 11-12; PCIA
    comments at 14-16; PCIA Reply at 4-5; RCA Comments at 8, 10-11; and
    VoiceStream Reply at 3.

[^63]: *See*, *e.g.*, Advocacy Comments at 2, 8, 12; Advocacy Reply at
    2; Advocacy Opposition at 1-5; Alaska Digitel Comments at 5-6;
    Alpine Comments at 2; Alpine Reply at 2-4; American Wireless
    Comments at 5-6; Burst Comments at 7; Burst Opposition at 7-8;
    Carolina Reply at ii, 7; Coalition Reply at 3,5; Council Tree
    Comments at 11-15; CT Communications Comments at 7, 9-10; CT Mobile
    Comments at 3; Leap Comments at 6-9, 16-18; Leap Opposition at 2-3,
    6-11; Northcoast Reply at 3-4; NTCA Comments at 5-6; Omnipoint
    Comments at ii, 4-5; Onyx Comments at 9; OPM Auction Comments at 6;
    OPM Auction Reply at 9; PCIA Comments at 20-21; PCIA Reply at 4; SMR
    Advisory Comments at 10-11, 14; Telecorp Comments at 5-6; Tritel
    Comments at 5-6; WOC Comments at 5-6, 10.

[^64]: *See*, *e.g.*, Advocacy Comments at 10; Advocacy Reply at 1;
    Alaska Digitel comments at 4-5; Alaska Digitel Reply at 6-7; Alpine
    Reply at 1-2; American Wireless Comments at 4-5; Burst Comments at
    11-12; Carolina at 11; Carolina Reply at ii, 8; CIRI Comments at
    7-8; Chadmoore Reply at 2-3; CT Comments at 7; CT Reply at 2-5;
    Georgetown Partners Comments at 7; Northcoast Reply at 3-4; NPI
    Reply at 1-5; NTCA Comments at 5-6; Omnipoint Comments at 2-4; Onyx
    Comments at 9; OPM Auction Reply at 9-10; Polycell Reply at 1; PCIA
    Comments at ii, 11-14; PCIA Reply at 1-2; RCA Comments at 4-5; RTG
    Comments at 6-7; Telecorp Comments at 3-4; Telecorp Reply at 6-7;
    Tritel Comments at 3-5; Tritel Reply at 6-7; WOC Comments at 3.

[^65]: *See*, *e.g.*, Advocacy Comments at 3, 10; Alaska Digitel
    Comments at 13-14; Alaska Digitel Reply at 4-5; Alpine Reply at 2;
    American Wireless Comments at 13-14; American Wireless Reply at 4-5;
    Carolina PCS Comments at 10; Cleartalk Reply at 1; CT Reply at 9-10;
    NPI Reply at 4; NTCA Comments at 4-6; Omnipoint Comments at 2-3,
    13-15; Onyx Comments at 8; OPM Auction Reply at 12; PCIA Comments at
    11-14; RTG Comments at 8-10; SMR Advisory Comments at 15; Telecorp
    Comments at 13-14; Telecorp Reply at 4-5; Tritel Comments at 13-14;
    and Tritel Reply at 4-5.

[^66]: *See*, *e.g.*, Alaska Digitel Comments at 4-5; Alaska Digitel
    Reply at 5; American Wireless Comments at 4-5; American Wireless
    Reply at 5; Carolina PCS Comments at ii, 9, 15-16; Carolina PCS
    Reply at ii; Chadmoore Reply at 1-3; CT Comments at 11; CT Reply at
    8-11; Devon Comments at 4-5; Leap Comments at 13-14; NTCA Comments
    at 6; Omnipoint Comments at 16-18; PCIA Reply at 5; Telecorp
    Comments at 4-5; WOC Comments at 9.

[^67]: *See*, *e.g.*, AT&T Comments at 1-2; AT&T Reply at 1-2, 4; Bell
    Atlantic Comments at 9-10; D&E Communications Comments at 1-8;
    Ericsson Comments at 2-3; GTE Comments at 9; GTE Reply i; Nextel
    Reply at ii, 2-9, 15; US West Comments at 9-10; US West Reply at 1,
    3-5. "Footprint" is an industry term of art referring to the total
    geographic area in which a wireless provider can offer services.

[^68]: *See* Nextel Petition at 15-16; SBC Petition at 12-13; *see
    generally* AT&T Comments; US West/Sprint Petition.

[^69]: For example, Nextel notes that at least eight C and F block
    licensees holding more than 190 licenses have declared bankruptcy
    and that only a few of the nearly 1,000 C and F block licenses have
    been constructed and are in commercial operation. *See* Nextel
    Petition at i, 8-9. Similarly, SBC explains that the top three
    winning bidders from Auction No. 5 have declared bankruptcy and that
    the fourth has defaulted on its payments. SBC also explains that, in
    nine of the top ten markets by population, C block licenses were won
    by parties that later declared bankruptcy and that only one of 20
    licenses in the top ten markets was operational at the beginning of
    2000. *See* SBC Petition at i, 7-9.

[^70]: *See* SBC *Ex Parte* (March 21, 2000) (the Commission should
    waive the entrepreneur eligibility requirements for all BTAs with a
    population of 700,000 or more and retain the requirements for the
    remaining markets); Leap Opposition at 4-5, 17-20 (five million);
    American Wireless Opposition at 4-5 (two million); Carolina PCS
    Opposition at 10 (two million); AT&T Opposition at 5-7
    (approximately one million).

[^71]: TeleCorp/Tritel Opposition at 5-7.

[^72]: US West/Sprint Petition at 5 n.10.

[^73]: *See* Leap Opposition at 4-5, 17-20.

[^74]: *See* Burst Opposition at 9-11; RTG *Ex Parte* (April 17, 2000).

[^75]: Roseville explains that while it will be eligible to bid on C
    block spectrum in Auction No. 35 by virtue of the grandfather
    exception, it will not be eligible to bid on F block spectrum absent
    a change in Commission rules. Accordingly, Roseville suggests that
    the Commission raise the financial cap for eligibility, expand the
    grandfather exception, or remove the F block eligibility restriction
    entirely. *See* Roseville *Ex Parte* (May 25, 2000).

[^76]: *See* 47 U.S.C. §§ 301, 302, 308, and 309(j).

[^77]: We also note that we have conducted four auctions of C and F
    block licenses and have consistently applied the set-aside approach
    in each of these auctions.

[^78]: A number of entrepreneurial companies including Telecorp, Tritel,
    Burst, and RTG, suggest this type of approach. *See*, *supra*,
    paragraph 22.

[^79]: *See* AT&T Opposition at 2-5; Nextel Reply at 15-18, 21-27;
    Nextel Opposition at i, 2, 6-7; SBC Comments at 10-12; SBC Reply at
    26; SBC Opposition at 2, 6-7; US West Comments at i, 3, 6; US West
    Reply at 5-8; US West/Sprint Petition at 4-5; Verizon Opposition at
    2-5.

[^80]: In the absence better official data, we will rely on 1990 census
    data for population numbers.

[^81]: For example, F block licensees did not face the same
    circumstances or have the same financial difficulties as some of the
    original C block licensees. *See* *C Block Reconsideration Order*,
    13 FCC Rcd at 8377-78, ¶¶ 75-76; C *Block Second Report and Order*,
    12 FCC Rcd at 16,446, ¶ 20.

[^82]: *See* the license inventory for Auction No. 35. *See* "C and F
    Block Broadband PCS Spectrum Auction Scheduled for July 26, 2000,"
    *Public Notice*, 15 FCC Rcd 4702, 4713-15, Att. A (2000). In three
    of the markets listed in the inventory -- Longview, WA; Portland,
    OR; and Salisbury, MD -- both an F block license and a 30 MHz C
    block license are available.

[^83]: *See* Nextel Petition at 18-23.

[^84]: *See*, *e.g.*, Alaska Digitel Comments at 14-15; Alaska Digitel
    Reply at 9-10; American Wireless Comments at 14-15; Carolina
    Comments at iii; Carolina Reply at ii, 13-14; CTIA Comments at 1-3;
    Northcoast Reply at 1-2; Omnipoint Comments at 18-21; OPM Auction
    Comments at 4; OPM Auction Reply at 2, 14-15; PCIA Comments at
    27-30; TDS Comments at 3-6; WOC Comments at 11-12.

[^85]: *See*, *e.g.*, GTE Comments at 14; GTE Reply at 11; GTE
    Opposition at 7-8; Sprint Comments at 6; US West Comments at ii, 2,
    6; VoiceStream Comments at 3, 11.

[^86]: *See* Nextel Reply at 15-18 and at Rosston Declaration, 11,
    14-19; Nextel Opposition at 5-8, 11-17.

[^87]: Winning bidders in our A and B block and DEF block auctions,
    Auctions No. 4 and 11, were successful in aggregating licenses. We
    have proposed, *supra*, to permit licensees to aggregate newly
    created 10 MHz C block licenses within BTAs.

[^88]: *See*, *supra*, paragraph 17, on combinatorial bidding and the
    aggregation of licenses in the auction process.

[^89]: *C Block Second Report and Order*, 12 FCC Rcd at 16,448, ¶ 22.

[^90]: *Id.*

[^91]: *See*, *e.g.*, *See* *C Block Reconsideration Order*, 13 FCC Rcd
    at 8377-78, ¶¶ 74-76; C *Block Second Report and Order*, 12 FCC Rcd
    at 16,446, ¶ 20.

[^92]: *C Block Fourth Report and Order*, 13 FCC Rcd at 15,752, ¶ 15. In
    the *C Block Order on Reconsideration*, we modified
    § 24.709(b)(9)(i) to extend the "grandfather" exception to
    participants in Auction No. 10, as well as those in the "original" C
    block auction, Auction No. 5. 63 Fed. Reg. 17,111, 17,122 (April 8,
    1998). *See also C Block Fourth Report and Order Reconsideration*,
    15 FCC Rcd at 4742, ¶ 6.

[^93]: *C Block Fourth Report and Order Reconsideration*, 15 FCC Rcd at
    4742-43, ¶¶ 7-8.

[^94]: Verizon Petition at 9-10.

[^95]: *Id.* at 7.

[^96]: *Id.* at 6.

[^97]: *Id.* at 10.

[^98]: We will address the issues raised in the Verizon Petition in the
    order we adopt in this docket.

[^99]: Nextel Opposition at ii, 9-15.

[^100]: *Id.* at 13-15.

[^101]: *See* 47 C.F.R. § 24.720(b)(1), (3).

[^102]: *See id.* § 24.720(b)(1), (3), (4).

[^103]: *See id.* §§ 24.712(a); 24.717(a); 1.2110(e)(2)(iii).

[^104]: *See id.* § 24.720(b)(2), (5).

[^105]: *See id.* § 24.720(b)(2), (3), (5).

[^106]: *See id.* §§ 24.712(b); 24.717(b); 1.2110(e)(2)(ii).

[^107]: We note that for these LMDS auctions, pursuant to Section
    101.1003 of the Commission's rules, an incumbent local exchange
    carrier or incumbent cable operator was prohibited from owning an
    attributable interest in an LMDS A block license if there was a
    significant overlap between the LMDS license's geographic service
    area and the incumbent's authorized or franchised service area. 47
    C.F.R. § 101.1003.

[^108]: *See*, *e.g.*, Alaska Opposition at 5 (increase to 40% for small
    businesses and 50% for very small businesses); PCIA Opposition at
    4-5 (increase to at least 50%); TeleCorp/Tritel Opposition at 5
    (increase to 35% and 45%, respectively); *see also* Leap Opposition
    at 3-5 (citing a spectrum allocation proposal under which small and
    very small business bidding credits would increase for all licenses
    to 35% and 45%, respectively).

[^109]: Numerous commenters are in favor of continuing to provide small
    and very small businesses with bidding credits for all C and F block
    licenses. *See*, *e.g.*, US West/Sprint Petition at i, 4; Cleartalk
    Reply at 5; US West Reply at 2-3, Nextel Opposition at 2; OPM
    Auction Opposition at 3; SBC Opposition at 2; and Verizon Opposition
    at 2,6. *But see* Roseville *Ex Parte* at 5 (May 25, 2000) (if the F
    block is opened up for all bidder, bidding credits should not be
    made available to any bidders).

[^110]: *See* Dobson *Ex Parte* at 3-4 (May 31, 2000); Dobson *Ex Parte*
    at 2 (April 20, 2000).

[^111]: *See* *Competitive Bidding Fifth Memorandum Opinion and Order*,
    10 FCC Rcd at 465-469, ¶¶ 117-127; *Competitive Bidding Fifth Report
    and Order*, 9 FCC Rcd at 5588-89, ¶¶ 128-29.

[^112]: 47 C.F.R. § 24.839

[^113]: *See* Amendment of Parts 20 and 24 of the Commission's Rules --
    Broadband PCS Competitive Bidding and the Commercial Mobile Radio
    Service Spectrum Cap, WT Docket No. 96-59, Amendment of the
    Commission's Cellular/PCS Cross-Ownership Rule, GN docket No.
    90-314, *Report and Order*, 11 FCC Rcd 7824, 7863, ¶ 84 (1996).

[^114]: 47 C.F.R. § 24.203; *see also* *id.* §§ 1.2111.

[^115]: *See* CIRI Opposition at 2-6.

[^116]: 47 C.F.R. § 24.710.

[^117]: *Competitive Bidding Fifth Report and Order*, 9 FCC Rcd at 5606,
    ¶ 171.

[^118]: *Id.* at 5606 ¶ 170.

[^119]: *See C Bock Second Report and Order*, 12 FCC Rcd at 16,455-56,
    ¶¶ 38-39; *C Block Reconsideration Order*, 13 FCC Rcd at 8366-67, ¶
    49; "Wireless Telecommunications Bureau Announces Broadband Personal
    Communications Services (PCS) C Block Unconditional Elections,"
    *Public Notice*, 13 FCC Rcd 17,434 (1998); "Wireless
    Telecommunications Bureau Announces Broadband Personal
    Communications Services C Block Elections," *Public Notice*, 13 FCC
    Rcd 16,705 (1998), *erratum* (released June 18, 1998).

[^120]: Letter from Amy J. Zoslov, Chief, Auctions and Industry Analysis
    Division, Wireless Telecommunications Bureau, to Mark J. O'Connor,
    Esq., Counsel for Omnipoint Corporation, 14 FCC Rcd 6240 (1999).

[^121]: *Id.*

[^122]: *See id.* at 6242.

[^123]: *See* 47 C.F.R. § 20.6.

[^124]: *See* 1998 Biennial Regulatory Review -- Spectrum Aggregation
    Limits for Wireless Telecommunications Carriers, WT Docket No.
    98-205, *Report and Order*, FCC 99-244, at ¶¶ 1-2, 5-6, 20-65, 77-85
    (released September 22, 1999) ("*Biennial CMRS Spectrum Cap
    Order*"). Specifically, we determined that the 45 MHz spectrum cap
    should remain in place except in rural areas, defined as rural
    service areas (RSAs), where we raised the cap to 55 MHz. *Id.* at ¶¶
    77-85. The Commission first instituted a CMRS spectrum cap in 1994,
    and reaffirmed the spectrum cap in 1996. *See id.* at ¶¶ 9, 11-13.

    Two parties have filed petitions for reconsideration of the
    *Biennial CMRS Spectrum Cap Order*, while a third has filed a
    petition for clarification. We will address these petitions in a
    separate order in the near future.

[^125]: *See generally id.* at ¶¶ 20-65, 77-85.

[^126]: *Id.* at ¶¶ 49-58.

[^127]: *Id.* at ¶ 82.

[^128]: *Id.* at ¶¶ 78-83.

[^129]: In our recent *700 MHz Band Order*, issued in January 2000, we
    determined not to apply a spectrum cap to the 700 MHz band spectrum
    in large measure because we determined that the CMRS spectrum cap
    helped ensure that a competitive structure in the CMRS marketplace
    was being maintained. *See* *700 MHz Band Order*, 15 FCC Rcd at 498,
    ¶ 53.

[^130]: For instance, in those markets where the C block would be
    divided into 10 MHz blocks of spectrum, our analysis indicates that
    relatively few carriers currently have more than 35 MHz of spectrum
    in markets in which the 45 MHz cap applies.

[^131]: *Biennial CMRS Spectrum Cap Order* at ¶ 82. Specifically, we
    requested that petitioners clearly identify what additional services
    they would provide if the waiver were granted and why such services
    could not be provided without exceeding the cap. In evaluating such
    a waiver request, we plan to weigh both the potential benefits that
    would be provided by the advanced services and the potential adverse
    impact of granting the waiver, such as diminution of competition.
    *Id.*

[^132]: The Commission reviews the CMRS spectrum cap biennially,
    pursuant to Section 11 of the Communications Act, as amended. *See*
    47 U.S.C. § 161.

[^133]: *See Biennial CMRS Spectrum Cap Order* at ¶ 26.

[^134]: *See* 5 U.S.C. § 603. The RFA has been amended by the Contract
    With America Advancement Act of 1996, Pub. L. No. 104-21, 110 Stat.
    847 (1996) (CWAAA). Title II of the CWAAA is the Small Business
    Regulatory Enforcement Fairness Act of 1996 (SBREFA).

[^135]: *See* 5 U.S.C. § 603(a).

[^136]: 5 U.S.C. § 603. The RFA has been amended by the Contract With
    America Advancement Act of 1996, Pub. L. No. 104-121, 110 Stat. 847
    (1996) (CWAAA). Title II of the CWAAA is the Small Business
    Regulatory Enforcement Fairness Act of 1996.

[^137]: *See* 5 U.S.C. § 603(a).

[^138]: *See id.*

[^139]: 47 U.S.C. § 309(j)(3)(B).

[^140]: *Id.* §§ 309(j)(3)(A),(C)

[^141]: 5 U.S.C. § 603(b)(3).

[^142]: *Id.* § 601(6).

[^143]: *Id.* § 601(3) (incorporating by reference the definition of
    "small business concern" in 15 U.S.C. § 632). Pursuant to 5 U.S.C. §
    601(3), the statutory definition of a small business applies "unless
    an agency after consultation with the Office of Advocacy of the
    Small Business Administration and after opportunity for public
    comment, establishes one or more definitions of such term which are
    appropriate to the activities of the agency and publishes such
    definition(s) in the Federal Register.

[^144]: 15 U.S.C. § 632.

[^145]: 5 U.S.C. § 601(4).

[^146]: 1992 Economic Census, U.S. Bureau of the Census, Table 6
    (special tabulation data under contract to the Office of Advocacy of
    the U.S. Small Business Administration).

[^147]: 5 U.S.C. § 601(5).

[^148]: U.S. Dept. of Commerce, Bureau of the Census, "1992 Census of
    Governments."

[^149]: *Id*.

[^150]: *See* 47 C.F.R. § 24.720(b)(1).

[^151]: *See id.* § 24.720(b)(2).

[^152]: *See* Letter to Amy J. Zoslov, Chief, Auctions & Industry
    Analysis Division, Wireless Telecommunications Bureau, from Aida
    Alvarez, Administrator, U.S. Small Business Administration, dated
    December 2, 1998. *See also* *Competitive Bidding Fifth Report and
    Order*, 9 FCC Rcd at 5581-5584; 47 C.F.R. § 24.720(b).

[^153]: "Entrepreneurs' C Block Auction Closes," *Public Notice*, DA
    96-716 (released May 8, 1996).

[^154]: "Entrepreneurs' C Block Reauction Closes," *Public Notice,* DA
    96-1153 (released July 17, 1996).

[^155]: FCC News, Broadband PCS, D, E, and F Block Auction Closes, No.
    71744 (released Jan. 14, 1997).

[^156]: "C, D, E, and F Block Broadband PCS License Auction Closes,"
    *Public Notice*, DA 99-757 (released April 20, 1999).

[^157]: *See generally* 47 C.F.R. Part 1, Subpart Q; Part 24.

[^158]: *See* 47 U.S.C. § 309(j)(3)(B).

[^159]: In the Commission's recent *700 MHz Band Order*, issued in
    January 2000, the Commission determined not to apply a spectrum cap
    to the 700 MHz band spectrum in large measure because the Commission
    determined that the CMRS spectrum cap helped ensure that a
    competitive structure in the CMRS marketplace was being maintained.
    *See* Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, *First Report and Order*, 15 FCC Rcd 476, 498, ¶ 53 (2000)
    ("*700 MHz Band Order*").

[^160]: 47 U.S.C. § 309(j)(3)(B).

[^161]: *Id.* §§ 309(j)(3)(A), (C).