**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | WT Docket No. 97-82          |
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**SIXTH REPORT AND ORDER AND ORDER ON RECONSIDERATION**

**Adopted:** August 23, 2000 **Released:** August 29, 2000

By the Commission:

Table of Contents

Heading Paragraph \#

I. INTRODUCTION AND EXECUTIVE SUMMARY 1

II\. BACKGROUND 3

III\. DISCUSSION 11

A. Reconfiguration of C Block Spectrum License Size 11

B. Eligibility Restrictions Under a Tiered Approach 16

C. Determination of Entrepreneur Eligibility 30

D. License Grouping for Bids and Competitive Bidding Design 34

E. Grandfather Exception 38

F. Bidding Credits 43

G. Transfer Requirements 46

1\. Open bidding. 46

2\. Closed bidding. 48

3\. System-wide satisfaction of construction benchmark. 52

H. License Cap 54

I. Spectrum Cap 56

J. Late Filing 61

IV\. PROCEDURAL MATTERS AND ORDERING CLAUSES 63

A. Final Regulatory Flexibility Analysis 63

B. Paperwork Reduction Act Analysis 64

C. Ordering Clauses 65

V. APPENDIX A - COMMENTS AND PETITIONS IN RESPONSE TO THE *FURTHER
NOTICE*

VI\. APPENDIX B - Entrepreneur Eligibility Issues

VII\. APPENDIX C - Spectrum Cap Issues

VIII\. Appendix D - Revised Rules

IX\. Appendix E - Final Regulatory Flexibility Analysis

# INTRODUCTION AND EXECUTIVE SUMMARY

1.  In this *Sixth* *Report and Order and Order on Reconsideration*
    ("*C/F Block Sixth Report and Order*"), we address the tentative
    conclusions and proposals in our recent Further Notice of Proposed
    Rulemaking in this docket ("*Further Notice*").[^1] We also resolve
    the petitions that precipitated the *Further Notice*.[^2] The
    modifications to the Commission's rules that we adopt in this order
    will apply to Auction No. 35, a C and F block auction currently
    scheduled to begin on November 29, 2000. The modifications also will
    apply to any subsequent auctions of C or F block licenses, including
    any spectrum made available or reclaimed from bankruptcy proceedings
    in the future.

2.  We conclude that it is in the public interest to modify our auction
    and service rules for C and F block broadband Personal
    Communications Services (PCS) licenses to achieve the various goals
    of Section 309(j) of the Communications Act.[^3] Specifically, in
    this *C/F Block Sixth Report and Order* we retain, clarify, and
    revise our rules, as follows:

-   **Reconfiguration.** We will reconfigure each 30 MHz C block license
    available in Auction No. 35 and other future broadband PCS auctions
    into three 10 MHz C block licenses.

-   **Tiers.** We divide Basic Trading Areas (BTAs) into two tiers
    according to the population size of the BTA. "Tier 1" will comprise
    BTAs with populations equal to or greater than 2.5 million; "Tier 2"
    will comprise the remaining BTAs.

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-   **Eligibility restrictions.** We remove the entrepreneur auction
    eligibility restrictions -- thereby establishing "open" bidding --
    for the following licenses:

-   two of the three reconfigured 10 MHz C block licenses in Tier 1;

-   one of the three reconfigured 10 MHz C block licenses in Tier 2;

-   all 15 MHz C block licenses in Tier 1;

-   all F block licenses;

-   all C block licenses available but unsold in Auction No. 22.[^4]

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-   **License grouping.** We reject Nextel's proposal to license by bulk
    bidding.

-   **"Grandfather" exception.** We clarify an applicant's eligibility
    for the Section 24.709(b)(9)(i) C block "grandfather" exception
    after it has been involved in a merger, acquisition, or other
    business combination, as follows:

-   When each of the combining entities is individually eligible for the
    "grandfather" exception, the exception will extend to the resulting
    entity.

-   When one or more of the combining entities is not individually
    eligible for the grandfather exception, the resulting entity will be
    eligible for the exception only so long as an originally eligible
    entity retains *de facto* and *de jure* control of the resulting
    entity.

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-   **Bidding credits.**

-   [Licenses won in open bidding]{.underline}: We retain the existing
    bidding credits for small and very small businesses of 15 percent
    and 25 percent, respectively.

-   [Licenses won in closed bidding]{.underline}: We eliminate bidding
    credits.

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-   **Transfer requirements.**

-   [Licenses won in open bidding]{.underline}: We will not apply the
    entrepreneur eligibility restrictions to the assignment or transfer
    of control of C and F block licenses won in open bidding.

-   [Licenses won in closed bidding]{.underline}: Upon satisfaction of
    the first construction benchmark for a license won in closed
    bidding, the control group of any eligible entrepreneur may assign
    or transfer control of C block licenses to a non-entrepreneur. We
    will continue to evaluate satisfaction of construction requirements
    on a license-by-license, rather than on a system-wide, basis.

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-   [Unjust enrichment]{.underline}: A licensee that won a license in
    Auction No. 5 or 10 will not be subject to a bidding credit unjust
    enrichment payment upon assignment or transfer of the license,
    subject to the Commission's transfer requirements, to an entity not
    qualifying as a small business. Because all license winners in those
    auctions qualified for the available 25 percent bidding credit,
    there is no purpose in requiring the payment. Licenses won in other
    auctions using a bidding credit will be subject to a bidding credit
    unjust enrichment payment upon transfer or assignment in accordance
    with the Commission's transfer requirements.

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-   **License cap.** We eliminate the provision of our rules (Section
    24.710) that prohibits any applicant from winning more than 98 of
    the licenses available in the C and F blocks.

-   **Spectrum cap.** We will continue to apply the spectrum cap to C
    and F block licenses, including those won in Auction No. 35.

# Background

3.  In the Omnibus Budget Reconciliation Act of 1993,[^5] Congress
    authorized the Commission to employ systems of competitive bidding
    to award spectrum licenses. This authorization, as amended, is
    codified as Section 309(j) of the Communications Act.[^6] 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;

-   promoting economic opportunity and competition and ensuring that new
    and innovative 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;"

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-   recovery for the public of a portion of the value of the public
    spectrum resource made available for commercial use.[^7]

4.  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.[^8]

5.  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" licenses for
    "entrepreneurs" in which eligibility would be restricted to entities
    below a specified financial threshold.[^9] 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.[^10]

6.  Since adoption of the 1994 *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. For example, in the 1997 *C Block
    Second Report and Order*, [^11] as modified by the 1998 *C Block
    Reconsideration Order*,[^12] 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,[^13] even if such entities
    had since become too large to qualify as entrepreneurs under the
    Commission's rules.[^14]

7.  Prior to the start of Auction No. 22, three C block licensees,
    NextWave Personal Communications, Inc. ("NextWave"), GWI PCS Inc.
    ("GWI"), and DCR PCS, Inc. ("DCR"), filed for bankruptcy
    protection.[^15] Bankruptcy filings and payment defaults by C and F
    block licensees occurred, both before and after the auction; and, to
    date, a total of 232 C and F block licenses, covering a population
    ("pops") of approximately 191 million,[^16] have been involved in
    bankruptcy proceedings and/or license payment defaults.

8.  In January 2000, the Wireless Telecommunications Bureau ("Bureau"),
    pursuant to its delegated authority, announced the next C and F
    block auction, Auction No. 35.[^17] Auction No. 35 is slated to
    include both 30 MHz and 15 MHz C block licenses, as well as F block
    licenses (all 10 MHz each) for operation on frequencies for which
    previous licenses had automatically cancelled[^18] or had been
    returned to the Commission.[^19] 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.[^20] In response to
    those filings, several parties also proposed that we make other
    modifications to our C and F block rules.[^21] 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*").[^22]
    The *C Block Fourth Report and Order Reconsideration* addressed
    certain of the rules governing auctions of C block licenses. Sprint
    and US West requested 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).[^23] In response to
    these petitions, a number of parties argued 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);[^24] other parties opposed these arguments.[^25]

9.  We also received petitions from Bell Atlantic Mobile, Inc. ("Bell
    Atlantic"), BellSouth Corporation ("BellSouth"), AT&T Wireless
    Services, Inc. ("AT&T"), and GTE Service Corporation ("GTE")
    requesting that the Commission waive, forbear from applying, or
    declare inapplicable the Commercial Mobile Radio Services ("CMRS")
    spectrum cap with respect to the spectrum available in Auction No.
    35.[^26]

10. We addressed the issues raised and points made in the various
    petitions, comments, and other documents filed in this proceeding in
    a Further Notice of Proposed Rulemaking (the "*Further Notice*"),
    released on June 7, 2000, in which we set forth tentative
    conclusions and proposals concerning our C and F block rules. Also
    on June 7, 2000, the Bureau announced that Auction No. 35 would
    begin on November 29, 2000, in order to allow resolution of the
    issues in the *Further Notice* and implementation of any rule
    changes prior to the auction.[^27] In this *C/F Block Sixth Report
    and Order*, we resolve the issues raised in the *Further Notice* and
    in the petitions and other filings in this proceeding by retaining,
    clarifying, and modifying our rules governing C and F block auctions
    and licenses.

# DISCUSSION

## Reconfiguration of C Block Spectrum License Size

11. **[Background]{.underline}.** In the *Further Notice*, we
    tentatively concluded that each 30 MHz C block license available in
    Auction No. 35 should be reconfigured into three 10 MHz C block
    licenses.[^28] We asserted that the increased number of licenses
    available as a result of this reconfiguration, along with
    elimination of certain of the Commission's C and F block eligibility
    requirements, would promote wider auction participation and license
    distribution in accordance with the goals of Section 309(j) of the
    Communications Act. [^29] We tentatively concluded that a 10 MHz C
    block license is a viable minimum size for voice and some data
    services, including Internet access, and that it provides an
    appropriate building block for bidders that wish to acquire a larger
    amount of spectrum in particular markets.[^30] We sought comment on
    these tentative conclusions, as well as on whether a different
    configuration, such as creation of 20 MHz C block licenses where
    possible, would be more appropriate to provide meaningful
    opportunities for potential bidders, including new entrants into
    particular markets.[^31] Additionally, in the *Further Notice*, we
    proposed to permit bidders to aggregate the 10 MHz C block licenses,
    subject only to the CMRS spectrum cap and the relevant remaining
    eligibility restrictions for these licenses.[^32]

12. **[Discussion]{.underline}.** We adopt our tentative conclusions in
    the *Further Notice* to reconfigure each available 30 MHz C block
    license into three 10 MHz C block licenses and to permit bidders to
    aggregate the 10 MHz C block licenses, subject to the CMRS spectrum
    cap and the relevant remaining eligibility restrictions for these
    licenses. Each 30 MHz C block license that is available for
    inclusion in the Commission's license inventory for Auction No. 35
    or any subsequent auction, will be reconfigured into three 10 MHz C
    block licenses.[^33] Each of the newly reconfigured 10 MHz C block
    licenses will consist of two paired 5 MHz blocks: 1895 - 1900 MHz
    paired with 1975 - 1980 MHz; 1900 - 1905 MHz paired with 1980 - 1985
    MHz; and 1905 MHz - 1910 MHz paired with 1985 - 1990 MHz.
    Accordingly, we deny the Nextel Petition insofar as it requests a
    different reconfiguration of available 30 MHz C block licenses; and
    we grant the US West/Sprint Petition to the extent that it requests
    the reconfiguration we adopt today.[^34]

13. The majority of the commenters support our proposal to divide each
    available 30 MHz C block license into three 10 MHz C block
    licenses.[^35] They contend that dividing the spectrum into three 10
    MHz C block licenses will promote a wider dissemination of licenses;
    provide bidders with more flexibility to adapt their bidding
    strategies to meet their business plans; and make licenses more
    affordable, especially for entrepreneurs.[^36] Some parties offer
    contingent support for reconfiguring the 30 MHz C block licenses,
    e.g., provided that entrepreneur eligibility restrictions are
    maintained in their current form,[^37] are modified as proposed in
    the *Further Notice*,[^38] or are eliminated for at most only a
    single 10 MHz C block license in each market.[^39] Other parties
    oppose the Commission's proposal, arguing that such a proposal is
    contrary to statutory requirements, because it will reduce small
    business opportunity in the marketplace. [^40] Additionally, some
    parties contend that 10 MHz of C block spectrum is insufficient to
    provide a full range of third generation ("3G") services.[^41]

14. We believe that 10 MHz is a viable broadband PCS license size. Ten
    MHz has always been one of the principal license sizes used in
    broadband PCS. In fact, half of the original licenses representing
    one-fourth of the total broadband PCS spectrum were 10 MHz licenses.
    In Auction No. 11, we made available to bidders almost 1,500 D, E,
    and F block licenses, all of which were for 10 MHz of spectrum.
    Virtually all of those licenses were sold; and, with the exception
    of licenses won by entrepreneurs with substantial C block holdings,
    almost none of the them have been returned to, or reclaimed by, the
    Commission. Moreover, we believe that 10 MHz broadband PCS block
    licenses provide opportunities to applicants, such as smaller
    companies and new entrants, that might not be able to acquire 20 or
    30 MHz PCS licenses. In our recent *700 MHz* *First Report and
    Order*, where we established both 20 MHz and 10 MHz block licenses
    for wireless use, we noted that 10 MHz block wireless licenses
    "should prove of interest to parties in the record who desire
    spectrum to deploy innovative wireless technologies, including
    high-speed Internet access, that do not require as much
    spectrum."[^42] Those entities that want to obtain more than 10 MHz
    of C block spectrum where it is available in a BTA[^43] retain the
    option of bidding on, or otherwise acquiring, as many of the
    available C block licenses as they are eligible for[^44] and
    aggregating them, or aggregating one or more newly acquired licenses
    with existing licenses.

15. Accordingly, we conclude that, by dividing each available 30 MHz C
    block license into three 10 MHz licenses, we can best address the
    diverse needs of the potential participants in the next C and F
    block auction. Entrepreneurs that continue to favor smaller blocks
    will still be able to fulfill their business needs. Parties that
    desire more spectrum for services will be allowed to aggregate the
    10 MHz C block licenses, subject to the CMRS spectrum cap. As more
    fully discussed below, we will continue to provide set-asides for
    some C block licenses to ensure that entrepreneurs are provided
    opportunities to acquire spectrum for their needs. We believe that
    this reconfiguration, along with the other rule modifications we
    make today, will ensure the best use of spectrum through the
    competitive bidding process while at the same time promoting wider
    auction participation and license distribution in accordance with
    the goals of Section 309(j) of the Communications Act.[^45]

## Eligibility Restrictions Under a Tiered Approach

16. **[Background]{.underline}.** In the *Further Notice*, we proposed
    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.[^46] We tentatively concluded that we should 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. We also sought comment on other population thresholds and
    on establishing a third tier.[^47] We tentatively concluded that we
    would allow "open" bidding (i.e., bidding without eligibility
    restrictions) for two of the three newly reconfigured 10 MHz C block
    licenses in Tier 1 and one of the three newly reconfigured 10 MHz C
    block licenses in Tier 2.[^48] We also sought 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.[^49] With respect to
    available F block licenses, [^50] we sought comment on eliminating
    the eligibility requirements, or, alternatively, applying a tiered
    approach or retaining the existing eligibility rules.[^51] We
    tentatively concluded that we would allow "open" bidding for all
    available 15 MHz C block licenses, because they had not been sold in
    Auction No. 22.[^52] Finally, we sought comment on whether to
    establish a rule that lifts eligibility restrictions on any C or F
    block licenses that remain unsold after Auction No. 35 or after
    other future auctions.

17. **[Discussion]{.underline}**. As described below, we adopt our
    tentative conclusions and other proposals 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, utilizing
    the tiered approach outlined in the *Further Notice*. In the
    *Further Notice*, we discussed at some length the rationale behind
    those tentative conclusions and other proposals. We find in general
    that those reasons continue to apply and that they support the
    actions we take today. We elaborate further on our reasoning below
    in light of the record we received in response to the *Further
    Notice*.

18. ***Tiers.*** Consistent with our tentative conclusion, we will
    divide all BTAs into two categories, "Tier 1" BTAs and "Tier 2"
    BTAs. Tier 1 will comprise BTAs with populations that, according to
    the 1990 census, are equal to or greater than 2.5 million;[^53] and
    Tier 2 will comprise the remaining BTAs.[^54] Commenters that
    support or oppose a tiered approach *per se* do so in the context of
    removing entrepreneur eligibility restrictions, and we will address
    their views in the section immediately below. Certain commenters
    take issue with our tentative conclusion to demarcate the two tiers
    at a population of 2.5 million. For example, AT&T, while opposing
    the tiering concept as too restrictive for large companies, suggests
    that, if the concept is adopted, the upper tier should be enlarged
    to include BTAs with populations of one million or greater, i.e.,
    approximately the top ten percent of the BTAs in the United States.
    [^55] In contrast, Leap argues that we should constrict Tier 1 to
    include only BTAs with populations over five million.[^56]

19. We believe that our decision to establish two tiers with a 2.5
    million population demarcation represents the most reasonable
    balancing of the various competing public interest factors that bear
    on this issue. Both sides in this debate make credible arguments
    about their needs for additional spectrum. Because we have only a
    limited amount of spectrum to offer, we must respond with an
    approach to eligibility that necessarily will not fully satisfy all
    competing demands. Under these circumstances, we believe that the
    mid-course approach proposed in the *Further Notice*, which removes
    eligibility restrictions for some, but not all, of the available
    spectrum is the best course. The approach, in conjunction with the
    changes in entrepreneur eligibility restrictions described below,
    will make relatively more spectrum available for "open" bidding in
    the most populous markets where the demand for spectrum by existing
    CMRS carriers is the greatest and the prospects of a spectrum
    shortage for these carriers is the most acute. At the same time, the
    modifications we make today will keep most of this spectrum (i.e.,
    20 MHz) closed in all but the very largest markets, while also
    retaining restricted eligibility for some spectrum (i.e., 10 MHz)
    even in those latter cases. Thus, entrepreneurs will have an
    opportunity to acquire additional spectrum on a set-aside basis in
    all available C block markets. We note that the tiering approach
    will split the C block spectrum available in Auction No. 35 almost
    equally, when weighted by population, between open and closed
    licenses. For these reasons, implementing our tentative conclusion
    provides an effective method of accommodating the conflicting goals
    of entrepreneurs and non-entrepreneurs and satisfies our objectives
    under Section 309(j).

20. ***30 MHz and 15 MHz C block licenses.*** For markets with available
    30 MHz licenses, other than licenses that were available but unsold
    in Auction No. 22,[^57] we adopt our tentative conclusion and
    establish open bidding (i.e., bidding without entrepreneur
    eligibility restrictions) for two of the three newly reconfigured 10
    MHz C block licenses in Tier 1 and for one of the three newly
    reconfigured 10 MHz C block licenses in Tier 2. In Tier 1, the
    following two 10 MHz blocks will be open: 1900 - 1905 MHz paired
    with 1980 - 1985 MHz and 1905 MHz - 1910 MHz paired with 1985 - 1990
    MHz. In Tier 2, the following 10 MHz block will be open: 1905 MHz -
    1910 MHz paired with 1985 - 1990 MHz.[^58] For available 15 MHz C
    block licenses, other than for licenses that were available but
    unsold in Auction No. 22,[^59] we eliminate entrepreneur eligibility
    restrictions for licenses in Tier 1 but retain the restrictions for
    licenses in Tier 2.[^60]

21. A number of commenters oppose any relaxation of the Commission's
    entrepreneur eligibility restrictions.[^61] Some commenters argue
    that Section 309(j) compels the Commission to maintain the C and F
    block set-aside as is.[^62] On the other hand, SBC responds that
    nothing in Section 309(j) or its legislative history necessitates a
    C and F block set-aside for entrepreneurs.[^63] Some parties that
    favor elimination of entrepreneur eligibility requirements believe
    that our tentative conclusion is too limited. These parties, which
    include most of the major, national carriers, would prefer that we
    remove entrepreneur eligibility restrictions from more -- or all --
    of the available C and F block licenses.[^64] Other commenters ask
    that the reduction be smaller.[^65] CIRI, however, supports our
    tentative conclusion, provided that we also lift existing C and F
    block transfer restrictions.[^66]

22. Section 309(j)(3) directs the Commission to seek to promote a
    variety of sometimes competing objectives, including economic
    opportunity, competition, and the rapid deployment of new
    technologies and services by, *inter alia*, disseminating licenses
    among a wide variety of applicants, including small businesses.
    Section 309(j)(4) requires the Commission to ensure that small
    businesses and others "are given the opportunity to participate in
    the provision of spectrum based services" and directs the Commission
    to consider the use of mechanisms that will further that end. The
    statute accords the Commission wide latitude in determining how to
    achieve the stated objectives. For example, Section 309(j) does not
    mandate the use of set-asides, or any other particular method, to
    promote the participation of small businesses in spectrum auctions;
    and the Commission has conducted numerous auctions in recent years
    in which it has not provided an entrepreneurs' block set-aside.[^67]
    Similarly, Section 309(j)(3) does not require the Commission to
    promote the participation of small businesses in PCS auctions at the
    expense of other, potentially conflicting, objectives enumerated in
    the section, such as the promotion of competition and the rapid
    deployment of new technologies and services.[^68] Finally, Section
    309(j)(4)(D) does not require the Commission to ensure that licenses
    actually are granted to small businesses but, rather, requires only
    that these small businesses be given the *opportunity* to
    participate in the provision of spectrum-based services.[^69]

23. We believe that by implementing our tentative conclusion we give
    effect to, and reasonably balance, as many of the various and
    partially conflicting Section 309(j) objectives as possible. As
    discussed in the *Further Notice*,[^70] circumstances in the PCS
    industry have changed dramatically, and continue to change, since
    the implementation of our rules in 1994. The introduction of
    wireless Internet, advanced data, and 3G services, and global
    competition within these services, has created a shortage of
    suitable available spectrum.[^71] Many carriers claim that obtaining
    additional spectrum to provide such services or satisfy capacity
    needs is crucial to their business plans.[^72] In addition, these
    carriers state that they require additional spectrum to "fill out"
    regional or national service areas.[^73] Taking all of our statutory
    objectives into account, we believe that it is fair and appropriate
    to apportion the spectrum to accommodate these interests.
    Apportioning the 30 MHz C block licenses in the manner described
    will enable larger carriers to obtain additional spectrum, which, we
    find, will promote the further development of CMRS competition and
    innovation, especially in larger markets. At the same time,
    maintaining a significant set aside of C block spectrum for
    entrepreneurs will help smaller businesses in this band continue to
    achieve their business goals as well as providing meaningful
    opportunities for new entrepreneurial firms to enter the market.
    Entrepreneurs will retain exclusive eligibility to bid on 10 MHz of
    available C block spectrum in Tier 1 markets and on most of the
    first-time reauctioned C block spectrum in Tier 2 markets.
    Entrepreneurs also will be eligible to participate, along with
    non-entrepreneurs, in all open bidding.[^74]

24. ***F block licenses.*** We adopt open bidding -- bidding without
    entrepreneur eligibility restrictions -- for F block licenses
    available in Auction No. 35 and in all future auctions. No commenter
    advocates a middle ground for the F block, such as disaggregating
    the F block spectrum into smaller spectrum blocks or applying a tier
    structure to the F block and removing eligibility restrictions for
    some of the available licenses. Commenters argue, instead, either
    for maintaining the entrepreneur restrictions for all F block
    licenses or for lifting these restrictions entirely.[^75] Some
    parties that favor maintaining the set-aside contend that
    entrepreneurs have made business plans in reliance on their ability
    to vie for additional F block licenses in future closed
    auctions.[^76] Some argue that the Commission is constrained by
    Section 309(j) from eliminating the eligibility restrictions.[^77]
    Others point out that the Commission's proposals for modifying
    eligibility restrictions for C block licenses represent a
    substantial reduction in the set-aside and contend that the
    Commission should go no further.[^78] Finally, parties believe that,
    because the F block does not share the C block's history of
    financial difficulty, there is less, if any, justification for
    eliminating the F block set-aside.[^79]

25. Conversely, commenters supporting the lifting of F block
    entrepreneur eligibility restrictions argue that the lack of
    financial difficulties in the F block indicates no further need for
    continued protection in the form of a set-aside.[^80] Other
    commenters assert that eliminating the F block set-aside would
    further the goals of Section 309(j) by alleviating spectrum
    congestion, promoting new services, and advancing competition.[^81]
    VoiceStream maintains that opening F block bidding will expedite the
    build-out of F block markets, where progress has been slow.[^82] SBC
    argues that because a 30 MHz C block license is already held by an
    entrepreneur in most markets where a 10 MHz F block license is now
    available, there is no need to maintain the set-aside for F block
    spectrum in the name of preserving entrepreneurial opportunity in
    these markets.[^83]

26. We believe that it is in the public interest, and consistent with
    Section 309(j), to remove the set-aside for all available F block
    licenses. As we stated in the *Further Notice*, and as some
    commenters underscore, the F block has evolved in a fashion largely
    distinct from that of the C block.[^84] The two blocks have been
    subject to increasingly different regulatory requirements,
    reflecting in large part the different bidding and marketplace
    histories of the two blocks and the correspondingly different equity
    and reliance concerns applicable to bidders and licensees in each of
    the blocks.[^85] Accordingly, as we have recognized previously,
    there is no longer a rationale for attempting to treat the two
    blocks in an identical fashion.[^86] Moreover, the need for
    additional open spectrum that exists in the C block markets,
    discussed above, also applies in the F block markets; and allowing
    open eligibility for all available F block licenses might lead to
    more expeditious provision of service to consumers. Moreover, as
    discussed in the *Further Notice*, almost every market with an
    available F block license already has a significant 30 MHz C block
    entrepreneur presence.[^87] Thus, we can modify the F block
    eligibility rules while preserving the diversity of opportunity and
    service that are goals of Section 309(j).

27. ***Unsold set-aside licenses.*** For Auction No. 35, we eliminate
    entrepreneur eligibility requirements for all C block licenses that
    were available but not sold in Auction No. 22.[^88] For all auctions
    after Auction No. 35, we eliminate the entrepreneur eligibility
    requirements for *any* C or F block license that was available, but
    not sold, in Auction No. 22 or any subsequent auction. In the
    *Further Notice*, we proposed removing eligibility restrictions for
    available 15 MHz C block licenses, reasoning that they remained
    unsold after having been offered in closed bidding in Auction
    No. 22. We similarly proposed to remove eligibility restrictions on
    all C and F block licenses that are available, but not sold, in
    Auction No. 35 as well as on *all* broadband PCS licenses that
    remain unsold after having been available for closed bidding in any
    auction after Auction No. 35.

28. Burst disagrees with the proposal to lift eligibility requirements
    for 15 MHz licenses being offered for the second time.[^89] Nextel,
    however, supports our proposal for 15 MHz licenses, explaining that
    there is no reason to believe that these licenses, which were
    previously offered but not sold, will prove any more popular with
    entrepreneurs in yet another closed auction.[^90] Furthermore,
    Nextel urges us to extend our proposal logically to include all
    available 30 MHz C block licenses that were available but not sold
    in Auction No. 22.[^91] CIRI supports our proposal to lift
    eligibility restrictions for all C or F block licenses that are
    available, but not sold, in Auction No. 35 or that remain unsold
    after having been available for closed bidding in any future
    auction. As CIRI states in its comments, "if entrepreneurs have been
    unable or unwilling to provide service in particular areas, then
    eligibility restrictions should be lifted to allow the introduction
    of service by any provider."[^92] No commenter opposes adoption of
    this proposal.

29. The failure of certain 15 MHz C block licenses to sell in Auction
    No. 22 indicates that closed bidding for these licenses will not
    necessarily result in the acquisition and construction of these
    licenses and in service to the public. By lifting the eligibility
    restrictions for these unsold licenses now, we hope to prevent
    additional delays in their utilization. We find persuasive Nextel's
    argument that the same rationale that applies to 15 MHz C block
    licenses should apply to 30 MHz C block licenses, and we believe
    that the rationale is equally applicable to all C and F block
    licenses that have failed to sell in Auction No. 22 or any
    subsequent auction. We note that no commenter opposed Nextel's
    suggestion to extend our proposal. Accordingly, we will implement
    the rule change for all C or F block licenses that were available,
    but not sold, in Auction No. 22 or that remain unsold after having
    been available for closed bidding in Auction No. 35 or in any
    auction thereafter.[^93]

## Determination of Entrepreneur Eligibility

30. **[Background]{.underline}**. To qualify as an entrepreneur under
    current rules, a C or F block 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 at the short-form deadline.[^94]
    Total assets are generally determined by the applicant's most recent
    audited financial statements.[^95] As discussed below, the
    grandfather exception provides that, in addition to entities
    qualifying as entrepreneurs at the time of the short form filing
    deadline, any entity that was eligible for and participated in
    either of the first two C block auctions will be eligible to bid in
    any auction of C block spectrum that begins within two years of the
    March 23, 1999 start date of Auction No. 22.[^96] Each C or F block
    licensee, whether its license was acquired at auction or by transfer
    or assignment, must maintain its entrepreneur eligibility during the
    five-year holding period, which begins on the date of the initial
    license grant, except that a licensee's increased gross revenues or
    increased total assets due to nonattributable equity investments,
    debt financing, revenue from operations or other investments,
    business development, or expanded service will not be
    considered.[^97] With respect to applications for assignment or
    transfer of control of C or F block licenses during the five-year
    holding period, the proposed transferee or assignee must meet the
    entrepreneur eligibility criteria at the time the assignment or
    transfer application is filed or the proposed transferee or assignee
    must already hold other C or F block licenses and, at the time of
    receipt of such licenses, have met the entrepreneur eligibility
    criteria.[^98]

31. **[Discussion]{.underline}**. In its comments, Nextel asks that the
    Commission review its rules on reporting \"total assets\" for
    entrepreneur eligibility and require applicants to report total
    assets as of the short form filing deadline.[^99] Nextel asserts
    that Leap may try to qualify for Auction No. 35 based on the
    unavailability, at the short-form filing deadline, of Leap's audited
    financial statement for its fiscal year ending August 31,
    2000.[^100] In reply, Leap states that departing from a clear,
    bright-line test that uses credible audited numbers could facilitate
    manipulation of the eligibility calculations.[^101] Leap states that
    there is no need for it to "slip in" under the asset cap since the
    current rules allow it to remain eligible to participate in future C
    and F block auctions, even if its assets exceed \$500 million due to
    growth allowable under Section 24.709(a)(3).[^102] In short, Leap
    claims that the natural growth exception which allows C or F block
    licensees to retain their entrepreneur eligibility during the
    holding period establishes its eligibility for the upcoming C block
    auction, Auction No. 35.[^103]

32. Leap confuses the concept of maintaining entrepreneur eligibility
    for the purpose of meeting the five-year holding period[^104] with
    the concept of eligibility to participate as an entrepreneur in a C
    or F block auction.[^105] By allowing licensees to maintain their
    eligibility despite growth beyond the financial caps, the Commission
    intended to encourage entrepreneurs to grow and succeed during the
    five-year holding period. Contrary to Leap's assertions, although
    the Commission intended to ignore natural growth for purposes of
    entrepreneur eligibility during the five-year holding period, it did
    not intend to ignore such growth in determining eligibility to
    participate in future C and F block auctions. In other words, Leap,
    which is not eligible for the grandfather exception,[^106] would
    have us read the natural growth rule, that allows a licensee to
    maintain eligibility for the holding period despite growth beyond
    the financial caps, as an alternative grandfathering exception. If
    the Commission had intended the natural growth rule to be read as
    Leap contends, then the two-year grandfather exception for Auction
    No. 5 and 10 participants would have been more narrowly drafted.
    Instead, the Commission applied the grandfather exception to all
    entities that had qualified for, and participated in, the first two
    C block auctions.[^107]

33. Nextel's comments raise the issue of whether eligibility for C block
    auctions is determined by an applicant's most recently available
    audited financial statements, even if those statements are then a
    year or more out of date, or whether eligibility should be based on
    the relevant financial data as of the most recently completed
    calendar/fiscal year, even if audited financial statements for the
    most recent year are not available as of the short-form filing
    deadline.[^108] Under Section 24.720, an entrepreneurs' block
    applicant must evidence its gross revenues and total assets with its
    most recent audited financial statements, or, if the applicant does
    not otherwise use audited financial statements, a certification by
    the applicant's chief financial officer or its equivalent. We see no
    need to modify these rules. We note, however, that we expect an
    applicant to obtain financial statements within a reasonable period
    of time after the close of the applicable calendar or fiscal year
    and to base its claim to eligibility on those financial statements.
    If an applicant delays, or takes action that results in delay in,
    the generation and/or submission of current audited financial
    statements in order to capture entrepreneur eligibility to which the
    applicant would otherwise not be entitled, it will risk being
    declared ineligible for auction participation or license grant or
    jeopardize its continuing eligibility to hold its licenses.

## License Grouping for Bids and Competitive Bidding Design

34. **[Background]{.underline}.** In the *Further Notice*, we
    tentatively concluded that we would take bids separately on each
    license in Auction No. 35 on a simultaneous multiple round basis as
    we have done in the past.[^109] We agreed with commenters that
    Nextel's bulk bid proposal, under which the Commission would
    reconfigure the available 30 MHz C block licenses into separate 20
    MHz and 10 MHz licenses and offer the newly created 20 MHz C block
    licenses and the available 15 MHz C block licenses together on a
    "bulk bid"(i.e., winner-take-all) basis, would exclude all but a
    very few competitors.[^110] We stated that 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, while many other carriers would be constrained from
    participating by the CMRS spectrum cap.[^111] We noted that our past
    auctions demonstrate that significant aggregations of licenses
    through the auction process are feasible and that bidding for each
    license separately is unlikely to preclude carriers from aggregating
    licenses on a nationwide or regional basis.[^112]

35. At the same time, we explained that we were considering
    implementation of a combinatorial, or package, bidding design for
    the auction of licenses in the 700 MHz bands in order to facilitate
    aggregations of complementary licenses into larger blocks. We
    invited parties to suggest ways in which bidders could efficiently
    aggregate licenses in Auction No. 35;[^113] although, we noted that
    it might be impractical to implement a package bidding design for
    that auction.[^114]

36. **[Discussion]{.underline}.** We reject Nextel's bulk bid proposal.
    Instead, we leave to the Wireless Telecommunications Bureau
    ("Bureau"), under its existing delegated authority, the final
    selection of a competitive bidding design and methodology for
    Auction No. 35, including the decision whether or not to implement a
    combinatorial bidding design for the auction.[^115] There is no
    support in the record for the Nextel bulk bid proposal.[^116] We
    continue to be concerned that, as argued by the bulk bid opponents,
    Nextel's suggested approach would unduly favor Nextel to the
    possible exclusion of most other potential applicants.[^117]

37. Some of the parties that commented on ways to aggregate licenses in
    the auction process, argue against the use of package bidding for
    Auction No. 35, on the ground that such a design would be complex
    and impractical.[^118] Other commenters support implementation of
    package bidding as a way to enhance the ability of auction
    participants to acquire their targeted groups of licenses while
    reducing their exposure.[^119] In preparing for Auction No. 35, the
    Bureau, under its existing delegated authority and pursuant to
    public notice and comment, will determine the competitive bidding
    design most appropriate for the auction. [^120] Following the
    Bureau's determination of the auction design, we will, if necessary,
    revisit the need for any rule modifications.

## Grandfather Exception

38. **[Background]{.underline}**. In the *Further Notice*, the
    Commission tentatively concluded that upon the merger of two
    entities, the grandfather exception contained in Section
    24.709(b)(9)(i) should extend to the resulting entity when each of
    the two original entities is eligible for the exception, but not
    when only one of them is eligible for the exception.[^121] The
    Commission sought comment on how to determine C and F block
    eligibility when faced with more complex transactions.[^122] The
    Commission also sought comment on issues raised by Verizon in its
    petition for reconsideration or clarification of the *C Block Fourth
    Report and Order Reconsideration*.[^123] 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.[^124] Verizon also proposes that the
    entity claiming the grandfather exception must be the same company
    -- having substantially the same ownership and control -- as the one
    that acquired the entrepreneur status.[^125]

39. **[Discussion]{.underline}**. We clarify an applicant's eligibility
    for the grandfather exception after it has been involved in a
    merger, acquisition, or other business combination, as follows. When
    each of the combining entities is individually eligible for the
    "grandfather" exception, the exception will extend to the resulting
    entity. When one or more of the entities are not individually
    eligible for the grandfather exception, the resulting entity will be
    eligible for the exception only so long as an originally eligible
    entity retains *de facto* and *de jure* control of the resulting
    entity.

40. We deny the Verizon petition to the extent that it asks that the
    exception be available only to Auction No. 5 and 10 participants
    that won licenses in those auctions and then returned spectrum.
    Despite its narrowly worded caption,[^126] the rule codifying the
    grandfather exception is clear on its face. It applies not just to
    Auction No. 5 and 10 participants that returned spectrum to the
    Commission but also to participants in either of those auctions that
    either won no licenses or won licenses but did not disaggregate or
    return spectrum. We dismiss the remainder of the Verizon petition as
    moot in light of our clarification of the application of the
    grandfather exception to an auction applicant that has been involved
    in a business combination.

41. Alpine opposes the extension of the grandfather exception to merged
    entities, because merged entities have substantially different
    ownership than would the two entities if qualifying and bidding
    separately.[^127] Carolina and Dobson support the Commission's
    proposal;[^128] although, Dobson also urges the Commission to extend
    the grandfather exception not only to the merger of entities that
    are each eligible for the exception, but also to the merger of
    entities only one of which is eligible for the exception.[^129]
    Dobson asks the Commission to adopt a simple control analysis to
    extend the grandfather exception to a combination of entities only
    one of which is eligible for the exception if the transaction
    results in an entity over which the eligible entity retains
    control.[^130] Telecorp and Tritel jointly assert that the exception
    should apply to the combined entity, as long as control remains in
    the same hands.[^131] Several parties support maintaining the
    grandfather exception in its current state,[^132] while others urge
    the Commission to eliminate the exception altogether.[^133]

42. We do not believe that, when entities eligible for the grandfather
    exception combine, the resulting entity should be penalized.
    Accordingly, we clarify that, under such circumstances, the
    grandfather exception will extend to the resulting entity. For
    situations where at least one of the entities is not individually
    eligible for the grandfather exception, we find persuasive Dobson's
    suggestion that we adopt a simple control analysis to determine
    whether an entity is "substantially the same" as the prior auction
    participant in Auction No. 5 or 10.[^134] Pursuant to this
    reasoning, the grandfather exception should be available to the
    resulting entity, so long as at least one entity that was originally
    eligible for the grandfather exception retains *de facto* and *de
    jure* control over the resulting entity. Other than to make these
    clarifications, we see no need to modify the grandfather exception,
    which will apply to auctions of C block licenses that begin on or
    before March 23, 2001.

## Bidding Credits 

43. **[Background]{.underline}**. In the *Further Notice*, we sought
    comment on whether we should make adjustments to the current C and F
    block bidding credits for future auctions based on whether such
    auctions are open to all bidders or subject to eligibility
    restrictions. More specifically, we sought 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 increase them to 25 percent and 40 percent,
    respectively.[^135] For licenses subject to closed bidding, we
    sought comment on whether we should increase the bidding credits,
    retain them at the current level, or eliminate them entirely.[^136]

44. **[Discussion]{.underline}**. For licenses subject to open bidding,
    we will maintain the current level of bidding credits for small and
    very small businesses, and consortia thereof, of 15 percent and 25
    percent, respectively. For licenses subject to closed bidding, we
    will eliminate all bidding credits. While a number of commenters,
    primarily small and very small businesses, support an increase in
    bidding credits for licenses won in open bidding,[^137] other
    parties contend that the existing bidding credits would enable small
    and very small businesses to compete successfully in open
    auctions.[^138] We agree with the latter contingent that bidding
    credits of 15 and 25 percent will allow effective competition by
    small businesses in open C and F block bidding. We note that in our
    Specialized Mobile Radio (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.
    Moreover, in Auction No. 11, the auction of D, E, and F block
    licenses, small and very small business were the high bidders for
    141 of the 986 D and E block licenses won in that auction, even
    though bidding credits are not available for D and E block
    licenses.[^139]

45. With respect to closed bidding, we believe that the continued use of
    bidding credits in restricted auctions would not necessarily serve
    its intended purpose. As we explained in the *Further Notice*, among
    those eligible to participate in entrepreneurs' block 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. According to
    Dobson, bidding credits in set-aside auctions "simply skew these
    auctions in favor of well-capitalized applicants that are carefully
    structured to shield deep-pocketed investors from
    attribution."[^140] For this reason, Dobson urges us to eliminate
    the use of bidding credits altogether in restricted auctions. We
    agree with Dobson and other commenters that support Dobson's
    position.[^141] Furthermore, the results of Auction No. 11 suggest
    that if small and very small businesses can compete effectively in
    open bidding without bidding credits, they can certainly compete
    effectively in closed bidding without bidding credits.

## Transfer Requirements

### Open bidding.

46. **[Background.]{.underline}** In the *Further Notice*, we proposed
    to modify the transfer restrictions for C and F block licenses to
    correspond to our proposed changes in entrepreneur eligibility
    requirements and to encourage rapid construction of C and F block
    systems.[^142] We tentatively concluded that C and F block licenses
    won pursuant to open bidding at Auction No. 35, or in any future
    open auction for such spectrum, would not be subject to the
    restrictions against transfers to non-entrepreneurs.[^143]

47. **[Discussion]{.underline}.** Pursuant to our tentative conclusion,
    we will not subject C and F block spectrum licenses won pursuant to
    open bidding at Auction No. 35, or any future open auction for such
    spectrum, to a five-year holding and limited transfer rule. Thus,
    such licenses may be transferred or assigned at any time after grant
    to any qualified entity, entrepreneur or not. Several commenters
    support removing the transfer restrictions for C and F block
    licenses won pursuant to open bidding at Auction No. 35, or any
    future open auction for such spectrum.[^144] OPM supports
    eliminating transfer restrictions on the basis that there is little
    justification for restricting the transfer of licenses to
    entrepreneurs when non-entrepreneurs are eligible to bid on the
    spectrum at auction.[^145] BellSouth asserts that there is no need
    for a limitation on transfer or assignment for licenses won in an
    open auction because there is no unjust enrichment associated with
    such a license.[^146] None of the commenters urge maintaining
    transfer restrictions on licenses won in open bidding. The only
    purpose for restricting the transfer of C and F block licenses to
    non-entrepreneurs is to ensure the integrity of the set-aside
    auction process. Because these licenses will now be subject to
    competitive bidding in open auctions, there is no longer a need to
    restrict their transfer and assignment solely to entrepreneurs.

### Closed bidding. 

48. **[Background]{.underline}**. With respect to licenses won in closed
    bidding in any C or F block auction, past or future, we sought
    comment on tying the holding period to completion of build-out
    requirements.[^147] Under our 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.[^148] In this way, we sought to minimize the trafficking
    of C and F block licenses won pursuant to closed bidding, while
    enhancing the likelihood of early build-out.[^149]

49. **[Discussion]{.underline}.** We will allow a licensee to assign or
    transfer a license won in closed bidding to any qualified entity,
    entrepreneur or not, as soon as the licensee has satisfied its first
    construction benchmark. The decision to transfer a restricted
    license to a non-entrepreneur before the end of the five-year
    holding period in this manner must be made affirmatively by those in
    control of the entrepreneur.[^150] As discussed below, even under
    our modified rule, an early transfer or assignment may be subject to
    unjust enrichment payment requirements.

50. Most commenters that addressed this issue support the elimination of
    transfer restrictions upon completion of the first construction
    benchmark for licenses won in closed bidding in any C or F block
    auction, past or future.[^151] VoiceStream supports eliminating
    transfer restrictions on C and F block licenses, but disagrees with
    the Commission's proposal that the elimination of transfer
    restrictions on licenses won in closed bidding should be tied to
    completion of build-out requirements.[^152] Other commenters
    advocate retention of the transfer restrictions in "closed"
    auctions.[^153] In our estimation, permitting such assignments and
    transfers will encourage rapid build-out and service to the public,
    two objectives of Section 309(j), while at the same time providing C
    and F block licensees with the ability to access capital. The result
    should be increased competition and more efficient spectrum
    use.[^154]

51. Normally, if a C or F block licensee that used a bidding credit
    assigns or transfers its license within the first five years after
    the initial license grant date to an entity not qualifying for a
    bidding credit, or as favorable a bidding credit, the licensee is
    subject to an unjust enrichment payment requirement.[^155] In the
    case of early transfers or assignments of C block licenses won in
    Auctions No. 5 and 10, where virtually all bidders, and all license
    winners, qualified for a single 25 percent bidding credit, we see no
    purpose in requiring the payment. When all bidders are given the
    same bidding credit, the competitive effect is the same as if no
    bidder has a credit. Thus, bidding credits likely did not affect the
    outcome of those auctions in terms of who won or how much money was
    paid to the government. Accordingly, allowing the early sale of a C
    block license by an Auction No. 5 or 10 licensee would not
    constitute unjust enrichment.[^156] When there is an early transfer
    or assignment of a license won in Auctions No. 11 or 22, or of any
    other license won in closed bidding, we will continue to require any
    applicable unjust enrichment payment. In Auctions No. 11 and 22,
    where two levels of bidding credits were used and a significant
    number of bidders and winners did not receive a bidding credit, the
    use of such credit by some bidders may well have influenced the
    results of the auction.

### System-wide satisfaction of construction benchmark. 

52. **[Background.]{.underline}** In the *Further Notice*, we sought
    comment on whether we should, under certain circumstances, evaluate
    an incumbent licensee's compliance with construction requirements on
    a system-wide basis.[^157] Noting that at least one carrier had
    argued that it needs the flexibility to sell and exchange licenses
    in order to restructure its business plans, we sought 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 a particular market.[^158] We also sought
    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.[^159]

53. **[Discussion]{.underline}.** Although several commenters urge us to
    do so,[^160] we do not believe that we should allow a carrier to
    exchange and transfer licenses where the carrier can demonstrate
    "substantial service" throughout its system, but not in the
    particular market that would be affected by the transfer. Although
    permitting such transfers might provide incumbent licensees with the
    flexibility to restructure their business plans, we believe that it
    would also remove an important incentive for carriers to construct
    systems rapidly and place them into operation in all markets where
    they are licensed. If we adopt a system-wide "substantial service"
    standard, carriers may choose to build out selectively in more
    populous markets at the expense of less populated areas in
    anticipation of transferring or exchanging licenses. Also, an
    entrepreneur could acquire a license in a closed auction and
    immediately sell the newly acquired -- and wholly unconstructed --
    license on the open market so long as the entrepreneur satisfied the
    system-wide standard, even with the newly acquired license included
    in its "system." We do not think that such a result is consistent
    with making licenses available for closed bidding by entrepreneurs.

## License Cap

54. **[Background]{.underline}**. In the *Further Notice*, we
    tentatively concluded that we would remove from the Commission's
    rules Section 24.710, which prohibits an auction applicant from
    winning (but not from acquiring in the secondary market)[^161] more
    than 98 C and F block licenses.[^162]

55. **[Discussion]{.underline}.** We adopt our proposal to remove
    Section 24.710 from the Commission's rules. When established in
    1994, this license cap was intended to facilitate a fair
    distribution of licenses within the C and F blocks by preventing an
    entity from winning more than approximately 10 percent of the
    then-total of 986 D and F block licenses.[^163] In the *Further
    Notice*, we explained that the Commission has already achieved its
    objective of disseminating the C and F block licenses among a
    variety of entrepreneurs. While most commenters agree that the
    license cap has outlived its purpose,[^164] a few believe that the
    cap is still necessary to prevent big applicants from acquiring
    large numbers of licenses.[^165] We believe that the license cap is
    no longer necessary. Not only is there already substantial diversity
    among C and F block licensees, but our decision today to reconfigure
    each available 30 MHz C block license into three 10 MHz licenses --
    tripling the number of available C block licenses -- and to
    eliminate the eligibility restrictions for many of the available C
    block licenses, and all of the available F block licenses, should
    enhance that diversity.

## Spectrum Cap

56. **[Background]{.underline}.** In the *Further Notice*, we
    tentatively concluded that we would continue to apply the CMRS
    spectrum cap, as set forth in Section 20.6 of the Commission's
    rules,[^166] to the spectrum awarded in the upcoming C and F block
    auction. Almost a year ago, we determined in our *Biennial CMRS
    Spectrum Cap Order* that the CMRS spectrum cap, with some
    modification, continued to be an efficient means to promote
    competition and protect the public interest.[^167] In addition, we
    established and clarified a process by which any carrier with a
    demonstrable need for additional spectrum to provide 3G or other
    advanced services in a particular geographic area could seek a
    waiver of the spectrum cap rule.[^168] Finally, we stated that we
    would be reexamining whether to retain, modify, or eliminate the
    CMRS spectrum cap as part of our year 2000 biennial review.[^169]

57. **[Discussion]{.underline}.** We conclude that we will continue to
    apply the CMRS spectrum cap to the C and F block licenses to be
    auctioned. Those parties requesting that the cap be eliminated with
    respect to this spectrum have not provided sufficient bases in the
    record to revise a rule or eliminate the cap in the context of this
    particular auction of initial licenses.

58. In the comments on this *Further Notice*, almost all of the
    commenters supported our tentative conclusion not to eliminate the
    CMRS spectrum cap with respect to these C and F block licenses. They
    agreed with our general conclusion that the parties requesting
    elimination of the cap have not provided the Commission sufficient
    bases for revising the CMRS spectrum cap.[^170] Only four
    commenters, including three of the parties that petitioned the
    Commission earlier this year (discussed below), opposed our
    tentative conclusion; they did not, however, supply any additional
    substantive arguments[^171] to those raised in the petitions filed
    earlier this year.

59. As we indicated in the *Further Notice*, we did not find that those
    petitions requesting waiver, or limited forbearance from
    application, of the CMRS spectrum cap were persuasive.[^172] In
    requesting waiver or forbearance, AT&T, Bell Atlantic, BellSouth,
    and GTE only supplied very general assertions that, absent lifting
    of the cap, they would face considerable difficulty rolling out 3G
    and other advanced broadband services.[^173] We agree with most of
    the commenters to the petitions[^174] that the petitioners failed to
    satisfy the waiver standard set forth either in the *Biennial CMRS
    Spectrum Cap Order* or in Section 1.3 of the Commission's
    rules.[^175] We also agree that Bell Atlantic failed to establish
    the basis for reversing our determination that the spectrum cap
    promoted the public interest, as would be necessary for granting a
    forbearance request.[^176] Finally, we find unpersuasive GTE's
    argument that the CMRS spectrum cap does not apply to the C and F
    block spectrum in the upcoming auction, and therefore deny its
    request for a declaratory ruling.[^177]

60. As a practical matter, we believe that our decision to reconfigure
    the 30 MHz blocks of C block spectrum into 10 MHz blocks will better
    enable all carriers to obtain additional spectrum in the vast
    majority of markets without the need to exceed the CMRS spectrum
    cap. In only a few locations have carriers 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. More particularly, in
    the upcoming C and F block auction, almost all carriers in every
    market 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.[^178] Finally, as we noted above, we
    will shortly issue a Notice of Proposed Rulemaking as part of our
    year 2000 biennial review of the spectrum cap rule.[^179] That
    proceeding will provide the Commission a better opportunity to
    revisit, in a more comprehensive manner than in this context, issues
    pertaining to the CMRS spectrum cap, taking into consideration
    existing competitive conditions and technological developments that
    could affect the continued need for the cap.

## Late Filing

61. **[Background]{.underline}.** The *Further Notice* established 7
    p.m., July 12, 2000, as the time and date after which *ex parte* and
    other presentations regarding the *Further Notice* would be
    prohibited.[^180] On July 7, 2000, we extended this deadline until 7
    p.m., July 17, 2000.[^181]

62. **[Discussion]{.underline}.** The Personal Communications Industry
    Association ("PCIA") requests that we accept its supplemental
    comments filed on July 21, 2000, arguing that the relevant
    information did not become public until publication of a July 19,
    2000 newspaper article.[^182] Nextel opposes the PCIA request,
    pointing to the July 17, 2000 deadline. While the Commission does
    not often establish an *ex parte* presentation cut-off deadline, we
    did so in this proceeding in order to ensure sufficient time to
    consider the voluminous record.[^183] Upon review of PCIA's July 21,
    2000 request, and in light of our deadline, we are not persuaded
    that consideration of PCIA's late-filed supplemental comments is
    warranted. Accordingly, we deny PCIA's request.

# PROCEDURAL matters and ordering clauses

## Final Regulatory Flexibility Analysis

63. Pursuant to the Regulatory Flexibility Act, the Final Regulatory
    Flexibility Analysis is attached as Appendix C. *See* 5 U.S.C. §
    604.

## Paperwork Reduction Act Analysis

64. This Order contains neither a new nor a modified information
    collection.

## Ordering Clauses

65. Accordingly, IT IS ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Petition for a Waiver of Section 24.709 and for
    Expedited Action filed by SBC Communications Inc. on January 21,
    2000 IS DISMISSED in part as moot and DENIED in all other respects.

66. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Petition for Expedited Rulemaking or, in the
    Alternative, Waiver of the Commission's Rules by Nextel
    Communications, Inc. on January 31, 2000 IS DISMISSED in part as
    moot and DENIED in all other respects.

67. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Petition for Waiver and Expedited Action filed by AT&T
    Wireless Services, Inc. on February 15, 2000 IS DISMISSED in part as
    moot and DENIED in all other respects.

68. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Petition for Waiver and Expedited Action filed by
    BellSouth Corporation on February 17, 2000 IS DISMISSED in part as
    moot and DENIED in all other respects.

69. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Petition for Limited Forbearance filed by Bell Atlantic
    Mobile, Inc. on February 17, 2000, IS DENIED.

70. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Petition for Waiver by Sprint Spectrum L.P. dba Sprint
    PCS on February 22, 2000, IS DISMISSED as moot.

71. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Petition for Rulemaking by the Cellular
    Telecommunications Industry Association on February 22, 2000, IS
    GRANTED in part and DENIED in all other respects.

72. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Petition for Waiver by US WEST Wireless, LLC on March 1,
    2000, IS DISMISSED as moot.

73. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Petition for Declaratory Ruling and/or Waiver filed by
    GTE Service Corporation on March 8, 2000, IS DISMISSED in part as
    moot and DENIED in all other respects.

74. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Petition for Reconsideration (Expedited Action
    Requested) by US WEST Wireless, LLC and Sprint Spectrum L.P. dba
    Sprint PCS on April 4, 2000, IS DISMISSED in part as moot and DENIED
    in all other respects.

75. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Petition for Clarification or Reconsideration by Verizon
    Wireless on April 17, 2000, IS DENIED in part and DISMISSED as moot
    in all other respects.

76. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Motion for Extension of Time by the Personal
    Communications Industry Association on June 19, 2000, IS DISMISSED
    as moot.

77. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), the Motion to Accept Late-Filed Supplemental Comments by the
    Personal Communications Industry Association on July 21, IS DENIED.

78. IT IS FURTHER ORDERED that, pursuant to Sections 4(i), 5(b),
    5(c)(1), 309(r), and 309(j) of the Communications Act of 1934, as
    amended, 47 U.S.C. Sections 154(i), 155(b), 156(c)(1), 303(r), and
    309(j), this *Sixth Report and Order and Order on Reconsideration*
    is hereby ADOPTED, and Sections 24.202, 24.203, 24.229, 24.709,
    24.710, 24.712, 24.714, 24.717, 24.720, and 24.839 of the
    Commission's rules, 47 C.F.R. Sections 24.202, 24.203, 24.229,
    24.709, 24.710, 24.712, 24.714, 24.717, 24.720, and 24.839, are
    amended as set forth in Appendix E, effective 60 days after
    publication in the Federal Register.

79. IT IS FURTHER ORDERED that the Commission's Consumer Information
    Bureau, Reference Information Center, SHALL SEND a copy of this
    *Sixth Report and Order*, including the Final Regulatory Flexibility
    Analysis, to the Chief Counsel for Advocacy of the Small Business
    Administration.

80. IT IS FURTHER ORDERED that, pursuant to 47 U.S.C. § 155(c) and 47
    C.F.R. § 0.331, the Chief of the Wireless Telecommunications Bureau
    IS GRANTED DELEGATED AUTHORITY to prescribe and set forth procedures
    for the implementation of the provisions adopted herein.

    FEDERAL COMMUNICATIONS COMMISSION

    Magalie Roman Salas

    Secretary

# APPENDIX A - COMMENTS AND PETITIONS IN RESPONSE TO THE *FURTHER NOTICE*

Comments

+-----------------------------------------------------------------------+
| 1.  Advanced Telecommunications Technology Inc. ("Advanced")          |
+-----------------------------------------------------------------------+
| 2.  AirGate Wireless ("AirGate")                                      |
+-----------------------------------------------------------------------+
| 3.  Alaska DigiTel, LLC ("Alaska"), Poplar PCS, LLC ("Poplar"), and   |
|     Eldorado Communications, LLC ("Eldorado")                         |
+-----------------------------------------------------------------------+
| 4.  Alpine PCS, Inc. ("Alpine")                                       |
+-----------------------------------------------------------------------+
| 5.  America Connect, Inc. ("America Connect")                         |
+-----------------------------------------------------------------------+
| 6.  Association of Communications Enterprises ("ASCENT")              |
+-----------------------------------------------------------------------+
| 7.  AT&T Wireless Services, Inc. ("AT&T")                             |
+-----------------------------------------------------------------------+
| 8.  BellSouth Corporation ("BellSouth")                               |
+-----------------------------------------------------------------------+
| 9.  Burst Wireless, Inc. ("Burst")                                    |
+-----------------------------------------------------------------------+
| 10. Carolina PCS I Limited Partnership ("Carolina")                   |
+-----------------------------------------------------------------------+
| 11. The Cellular Telecommunications Industry Association ("CTIA")     |
+-----------------------------------------------------------------------+
| 12. Choice Wireless, LC ("Choice")                                    |
+-----------------------------------------------------------------------+
| 13. ComScape Telecommunications ("ComScape")                          |
+-----------------------------------------------------------------------+
| 14. Cook Inlet Region, Inc. ("CIRI")                                  |
+-----------------------------------------------------------------------+
| 15. Dobson Communications Corporation ("Dobson")                      |
+-----------------------------------------------------------------------+
| 16. Leap Wireless International, Inc. ("Leap")                        |
+-----------------------------------------------------------------------+
| 17. Vincent McBride ("McBride")                                       |
+-----------------------------------------------------------------------+
| 18. National Telephone Cooperative Association ("NTCA")               |
+-----------------------------------------------------------------------+
| 19. Nextel Communications, Inc. ("Nextel")                            |
+-----------------------------------------------------------------------+
| 20. NextWave Personal Communications, Inc. and NextWave Power         |
+-----------------------------------------------------------------------+
| > Partners Inc. (collectively "NextWave")                             |
+-----------------------------------------------------------------------+
| 21. Northcoast Communications, LLC ("Northcoast")                     |
+-----------------------------------------------------------------------+
| 22. OPM Auction Co. ("OPM")                                           |
+-----------------------------------------------------------------------+
| 23. Personal Communications Industry Association ("PCIA")             |
+-----------------------------------------------------------------------+
| 24. Polycell Communications, Inc. ("Polycell")                        |
+-----------------------------------------------------------------------+
| 25. Powertel Inc. ("Powertel")                                        |
+-----------------------------------------------------------------------+
| 26. Rahda Krushn Communications ("RK Communications")                 |
+-----------------------------------------------------------------------+
| 27. Roseville, PCS ("RPCS")                                           |
+-----------------------------------------------------------------------+
| 28. Rural Cellular Association ("RCA")                                |
+-----------------------------------------------------------------------+
| 29. Rural Telecommunications Group ("RTG") and Organization for the   |
|     Promotion and Advancement of Small Telecommunications Companies   |
|     ("OPASTCO")                                                       |
+-----------------------------------------------------------------------+
| 30. SBC Communications, Inc. ("SBC")                                  |
+-----------------------------------------------------------------------+
| 31. STPCS Joint Venture, LLC ("STPCS")                                |
+-----------------------------------------------------------------------+
| 32. TeleCorp PCS, Inc and Tritel Communications, Inc. (collectively   |
|     "Telecorp and Tritel")                                            |
+-----------------------------------------------------------------------+
| 33. Twenty First Wireless, Inc. ("Twenty First Wireless")             |
+-----------------------------------------------------------------------+
| 34. U.S. AirWaves, Inc. ("U.S. AirWaves")                             |
+-----------------------------------------------------------------------+
| 35. U.S. Small Business Administration, Office of Advocacy            |
|     ("Advocacy")                                                      |
+-----------------------------------------------------------------------+
| 36. US West Wireless, LLC ("US West")                                 |
+-----------------------------------------------------------------------+
| 37. Verizon Wireless ("Verizon")                                      |
+-----------------------------------------------------------------------+
| 38. VoiceStream Wireless ("VoiceStream")                              |
+-----------------------------------------------------------------------+

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

+-----------------------------------------------------------------------+
| 1.  AirGate Wireless ("AirGate")                                      |
+-----------------------------------------------------------------------+
| 2.  ALLTEL Corporation ("ALLTEL")                                     |
+-----------------------------------------------------------------------+
| 3.  Alpine PCS, Inc. ("Alpine")                                       |
+-----------------------------------------------------------------------+
| 4.  AT&T Wireless Services, Inc. ("AT&T")                             |
+-----------------------------------------------------------------------+
| 5.  BellSouth Corporation ("BellSouth")                               |
+-----------------------------------------------------------------------+
| 6.  Burst Wireless, Inc. ("Burst")                                    |
+-----------------------------------------------------------------------+
| 7.  Carolina PCS I Limited Partnership ("Carolina")                   |
+-----------------------------------------------------------------------+
| 8.  Cook Inlet Region, Inc. ("CIRI")                                  |
+-----------------------------------------------------------------------+
| 9.  Dobson Communications Corporation ("Dobson")                      |
+-----------------------------------------------------------------------+
| 10. Leap Wireless International, Inc. ("Leap")                        |
+-----------------------------------------------------------------------+
| 11. Nextel Communications, Inc. ("Nextel")                            |
+-----------------------------------------------------------------------+
| 12. Northcoast Communications, LLC ("Northcoast")                     |
+-----------------------------------------------------------------------+
| 13. North Coast Mobile Communications, Inc. ("North Coast")           |
+-----------------------------------------------------------------------+
| 14. OPM Auction Co. ("OPM")                                           |
+-----------------------------------------------------------------------+
| 15. Personal Communications Industry Association ("PCIA"), Polycell   |
|     Communications, Inc. ("Polycell") and CFW Communications ("CFW")  |
+-----------------------------------------------------------------------+
| 16. Rainbow/Push Coalition ("Rainbow/Push")                           |
+-----------------------------------------------------------------------+
| 17. Roseville PCS, Inc. ("RPCS")                                      |
+-----------------------------------------------------------------------+
| 18. Rural Cellular Association ("RCA")                                |
+-----------------------------------------------------------------------+
| 19. SBC Communications Inc. ("SBC")                                   |
+-----------------------------------------------------------------------+
| 20. Southern LINC ("Southern")                                        |
+-----------------------------------------------------------------------+
| 21. Sprint PCS ("Sprint")                                             |
+-----------------------------------------------------------------------+
| 22. STPCS Joint Venture, LLC ("STPCS")                                |
+-----------------------------------------------------------------------+
| 23. TeleCorp PCS, Inc. and Tritel Communications, Inc. ("Telecorp and |
|     Tritel")                                                          |
+-----------------------------------------------------------------------+
| 24. Twenty First Wireless, Inc. ("Twenty First Wireless")             |
+-----------------------------------------------------------------------+
| 25. U.S. AirWaves ("U.S. AirWaves")                                   |
+-----------------------------------------------------------------------+
| 26. US West Wireless, LLC ("US West")                                 |
+-----------------------------------------------------------------------+
| 27. VoiceStream Wireless Corporation ("VoiceStream")                  |
+-----------------------------------------------------------------------+

***[Ex Partes]{.underline}***

+-----------------------------------------------------------------------+
| 1.  ALLTEL Communications, Inc. ("ALLTEL")                            |
+-----------------------------------------------------------------------+
| 2.  Alpine PCS, Inc. ("Alpine")                                       |
+-----------------------------------------------------------------------+
| 3.  AT&T Wireless Services, Inc. ("AT&T")                             |
+-----------------------------------------------------------------------+
| 4.  Bell Atlantic Mobile ("Bell Atlantic")                            |
+-----------------------------------------------------------------------+
| 5.  BellSouth Cellular Corporation ("BellSouth")                      |
+-----------------------------------------------------------------------+
| 6.  Burst Wireless, Inc. ("Burst")                                    |
+-----------------------------------------------------------------------+
| 7.  Conestoga Wireless Company ("Conestoga")                          |
+-----------------------------------------------------------------------+
| 8.  Dobson Communications Corporation ("Dobson")                      |
+-----------------------------------------------------------------------+
| 9.  National Congress of American Indians ("NCAI")                    |
+-----------------------------------------------------------------------+
| 10. Nextel Communications, Inc. ("Nextel")                            |
+-----------------------------------------------------------------------+
| 11. Northcoast Communications ("Northcoast")                          |
+-----------------------------------------------------------------------+
| 12. Personal Communications Industry Association ("PCIA")             |
+-----------------------------------------------------------------------+
| 13. Polycell Communications, Inc. ("Polycell")                        |
+-----------------------------------------------------------------------+
| 14. Qwest Wireless ("Qwest"), Sprint PCS ("Sprint"), and ALLTEL       |
|     Corporation ("ALLTEL")                                            |
+-----------------------------------------------------------------------+
| 15. Representative Eliot L. Engel and Charles V. Pickering            |
+-----------------------------------------------------------------------+
| 16. Representative John Linder                                        |
+-----------------------------------------------------------------------+
| 17. Representative Johnny Isakson                                     |
+-----------------------------------------------------------------------+
| 18. Rural Telecommunications Group ("RTG")                            |
+-----------------------------------------------------------------------+
| 19. SBC Telecommunications ("SBC")                                    |
+-----------------------------------------------------------------------+
| 20. Senator Christopher S. Bond                                       |
+-----------------------------------------------------------------------+
| 21. Senator Thad Cochran                                              |
+-----------------------------------------------------------------------+
| 22. STPCS Joint Venture, LLC ("STPCS")                                |
+-----------------------------------------------------------------------+
| 23. TeleCorp PCS, Inc, and Tritel Communications, Inc. ("Telecorp and |
|     Tritel")                                                          |
+-----------------------------------------------------------------------+
| 24. Twenty First Wireless, Inc. ("Twenty First Wireless")             |
+-----------------------------------------------------------------------+
| 25. U.S. AirWaves ("U.S. AirWaves")                                   |
+-----------------------------------------------------------------------+
| 26. UTStarcom ("UTStarcom")                                           |
+-----------------------------------------------------------------------+
| 27. Verizon Wireless ("Verizon")                                      |
+-----------------------------------------------------------------------+
| 28. VoiceStream Wireless Corporation ("VoiceStream")                  |
+-----------------------------------------------------------------------+

[Petitions]{.underline}

+-----------------------------------------------------------------------+
| 1.  Personal Communications Industry Association ("PCIA") (Motion to  |
|     Accept Late-Filed Supplemental Comments) (filed July 21,          |
|     2000---late-filed)                                                |
+-----------------------------------------------------------------------+
| 2.  Personal Communications Industry Association ("PCIA") (Motion for |
|     Extension of Time) (filed June 19, 2000)                          |
+-----------------------------------------------------------------------+

**[Opposition to Petitions]{.underline}**

1.  Nextel Communications, Inc. ("Nextel") (filed July 31, 2000)
    (opposing PCIA Motion to Accept Late-Filed Supplemental Comments)

# APPENDIX B - Entrepreneur Eligibility Issues

B-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]{.underline}

+-----------------------------------------------------------------------+
| 1.  Alaska Digitel, LLC (Alaska"), Poplar PCS, LLC ("Poplar"), and    |
|     Eldorado Communications, LLC ("Eldorado")                         |
+-----------------------------------------------------------------------+
| 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 Cellular Corporation ("BellSouth")                      |
+-----------------------------------------------------------------------+
| 7.  Burst Networks, Inc. ("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]{.underline}**

+-----------------------------------------------------------------------+
| 1.  Alaska Digitel, LLC ("Alaska"), Poplar PCS, LLC ("Poplar"), and   |
|     Eldorado Communications, LLC ("Eldorado")                         |
+-----------------------------------------------------------------------+
| 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")                  |
+-----------------------------------------------------------------------+

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

**[Oppositions]{.underline}**

+-----------------------------------------------------------------------+
| 1.  Alaska Digitel, LLC ("Alaska"), Poplar PCS, LLC ("Poplar"), and   |
|     Eldorodo 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 Partnership ("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")                  |
+-----------------------------------------------------------------------+

**B-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") (Request for Additional Time to File  |
|     Comments)                                                         |
+-----------------------------------------------------------------------+
| 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 primarily concerns spectrum cap issues.

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

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

**B-4. [*Ex Parte* 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)]{.underline}**

+-----------------------------------------------------------------------+
| 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 ("DOBSON")                      |
+-----------------------------------------------------------------------+
| 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 Bart Stupak                                        |
+-----------------------------------------------------------------------+
| 23. Representative Bennie G. Thompson                                 |
+-----------------------------------------------------------------------+
| 24. Representative Bob Clement                                        |
+-----------------------------------------------------------------------+
| 25. Representative Bob Riley                                          |
+-----------------------------------------------------------------------+
| 26. Representative Bobby L. Rush                                      |
+-----------------------------------------------------------------------+
| 27. Representative Brian Bilbray                                      |
+-----------------------------------------------------------------------+
| 28. Representative Charles Pickering                                  |
+-----------------------------------------------------------------------+
| 29. Representative Ciro D. Rodriguez                                  |
+-----------------------------------------------------------------------+
| 30. Representative Diane DeGette                                      |
+-----------------------------------------------------------------------+
| 31. Representative Jay Dickey                                         |
+-----------------------------------------------------------------------+
| 32. Representative John J. Duncan                                     |
+-----------------------------------------------------------------------+
| 33. Representative John D. Dingell                                    |
+-----------------------------------------------------------------------+
| 34. Representative John R. Kasich                                     |
+-----------------------------------------------------------------------+
| 35. Representative Major R. Owens                                     |
+-----------------------------------------------------------------------+
| 36. Representative Ron Packard                                        |
+-----------------------------------------------------------------------+
| 37. Representative Ronnie Shows                                       |
+-----------------------------------------------------------------------+
| 38. Representative Tammy Baldwin                                      |
+-----------------------------------------------------------------------+
| 39. Representative Tom Udall                                          |
+-----------------------------------------------------------------------+
| 40. Representative W.J. "Billy" Tauzin                                |
+-----------------------------------------------------------------------+
| 41. Representative William L. Clay                                    |
+-----------------------------------------------------------------------+
| 42. Representative Zach Wamp                                          |
+-----------------------------------------------------------------------+
| 43. Representatives, James E. Clyburn, William J. Jefferson,          |
|     Stephanie Tubbs Jones, Barbara Lee, Juanita Millender-McDonanld,  |
|     Bobby L. Rush, Edolphus Towns, and Albert Russell Wynn            |
+-----------------------------------------------------------------------+
| 44. Representatives Randy Cunningham & Duncan L. Hunter               |
+-----------------------------------------------------------------------+
| 45. Representatives Rick Boucher, Eliot L. Engel, Ralph M. Hall,      |
|     Steve Largent, Charles Pickering, Ronnie Shows, and Bennie G.     |
|     Thompson                                                          |
+-----------------------------------------------------------------------+
| 46. Roseville PCS, Inc. ("Roseville")                                 |
+-----------------------------------------------------------------------+
| 47. Rural Telecommunications Group ("RTG")                            |
+-----------------------------------------------------------------------+
| 48. Senator Barbara A. Mikulski and Paul S. Sarbanes                  |
+-----------------------------------------------------------------------+
| 49. Senator Barbara Boxer                                             |
+-----------------------------------------------------------------------+
| 50. Senator Carl Levin                                                |
+-----------------------------------------------------------------------+
| 51. Senator Charles S. Robb                                           |
+-----------------------------------------------------------------------+
| 52. Senator Christopher S. Bond                                       |
+-----------------------------------------------------------------------+
| 53. Senator Daniel K. Inouye                                          |
+-----------------------------------------------------------------------+
| 54. Senator Judd Gregg                                                |
+-----------------------------------------------------------------------+
| 55. Senator Trent Lott                                                |
+-----------------------------------------------------------------------+
| 56. SBC Communications, Inc. ("SBC")                                  |
+-----------------------------------------------------------------------+
| 57. Sprint Spectrum L.P. d/b/a Sprint PCS ("Sprint")                  |
+-----------------------------------------------------------------------+
| 58. TeleCorp PCS, Inc. ("TeleCorp")                                   |
+-----------------------------------------------------------------------+
| 59. Telepak, Inc. (Telepak")                                          |
+-----------------------------------------------------------------------+
| 60. Thomas Gutierrez of Lukas, Nace, Gutierrez & Sachs                |
+-----------------------------------------------------------------------+
| 61. TLA Spectrum, LLC ("TLA")                                         |
+-----------------------------------------------------------------------+
| 62. Tritel Communications, Inc. ("Tritel")                            |
+-----------------------------------------------------------------------+
| 63. US West Wireless, LLC ("US West")                                 |
+-----------------------------------------------------------------------+
| 64. Verizon Wireless ("Verizon")                                      |
+-----------------------------------------------------------------------+
| 65. VoiceStream Wireless Corporation ("VoiceStream")                  |
+-----------------------------------------------------------------------+

# APPENDIX C - Spectrum Cap Issues

[Comments and Petitions Filed in Response to Public Notice, DA
00-318]{.underline}

[(Petitions of AT&T Wireless Services, Inc., BellSouth Corporation, and
Bell Atlantic Mobile, Inc.)]{.underline}

[Comments]{.underline}

+-----------------------------------------------------------------------+
| 1.  Alaska Digitel, LLC ("Alaska")                                    |
+-----------------------------------------------------------------------+
| 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") 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}**

+-----------------------------------------------------------------------+
| 1.  Alaska Digitel, LLC ("Alaska")                                    |
|                                                                       |
| 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.  CT Communications, Inc. ("CT")                                    |
+-----------------------------------------------------------------------+
| 8.  Eldorado Communications, LLC ("Eldorado")                         |
+-----------------------------------------------------------------------+
| 9.  GTE Service Corporation ("GTE")                                   |
+-----------------------------------------------------------------------+
| 10. Leap Wireless International ("Leap")                              |
+-----------------------------------------------------------------------+
| 11. Northcoast Communications, LLP ("Northcoast")                     |
+-----------------------------------------------------------------------+
| 12. Poplar PCS, LLC ("Poplar")                                        |
+-----------------------------------------------------------------------+
| 13. TeleCorp PCS, Inc. ("TeleCorp")                                   |
+-----------------------------------------------------------------------+
| 14. 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)                          |
+-----------------------------------------------------------------------+

##  {#section .unnumbered}

# Appendix D - Revised Rules

**PART 24 - PERSONAL COMMUNICATIONS SERVICES**

1\. The authority citation for part 24 continues to read as follows:

**Authority:** 47 U.S.C. 154, 301, 302, 303, 309 and 332.

2.  Amend § 24.202 by revising the introductory text to read as follows:

[§ 24.202 Service areas]{.underline}.

Broadband PCS service areas are Major Trading Areas (MTAs) and Basic
Trading Areas (BTAs) as defined in this section. MTAs and BTAs are based
on the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd
Edition, at pages 38‑39 (\"BTA/MTA Map\"). Rand McNally organizes the 50
states and the District of Columbia into 47 MTAs and 487 BTAs. The
BTA/MTA Map is available for public inspection at the Office of
Engineering and Technology\'s Technical Information Center, 445 12^th^
Street, SW, Washington, DC 20554.

\* \* \* \* \*

3.  Amend § 24.203 by revising paragraph (b) to read as follows:

[§ 24.203 Construction requirements]{.underline}.

\* \* \* \* \*

\(b\) Licensees of 10 MHz blocks, including 10 MHz C block licenses
reconfigured pursuant to Amendment of the Commission's Rules Regarding
Installment Payment Financing for Personal Communications Services (PCS)
Licensees, WT Docket No. 97-82, [Sixth Report and Order]{.underline},
FCC 00---313, and 15 MHz blocks resulting from the disaggregation option
as provided in the Commission\'s Rules Regarding Installment payment
Financing for Personal Communications Services (PCS) Licensees, Second
Report and Order and Further Notice of Proposed Rule Making, WT Docket
97-82, 12 FCC Rcd 16,436 (1997), as modified by Order on Reconsideration
of the Second Report and Order, WT Docket 97-82, 13 FCC Rcd 8345 (1998),
must serve with a signal level sufficient to provide adequate service to
at least one-quarter of the population in their licensed area within
five years of being licensed, or make a showing of substantial service
in their licensed area within five years of being licensed. Population
is defined as the 1990 population census. Licensees may elect to use the
2000 population census to determine the five-year construction
requirement. Failure by any licensee to meet these requirements will
result in forfeiture of the license and the licensee will be ineligible
to regain it.

\* \* \* \* \*

4.  Amend § 24.229 by revising paragraph (b) to read as follows:

[§ 24.229 Frequencies]{.underline}.

\* \* \* \* \*

\(b\) The following frequency blocks are available for assignment on a
BTA basis:

Block C: 1895-1910 MHz paired with 1975-1990 MHz;

Pursuant to Amendment of the Commission's Rules Regarding Installment
Payment Financing for Personal Communications Services (PCS) Licensees,
WT Docket No. 97-82, [Sixth Report and Order]{.underline}, FCC 00---313,
all 30 MHz Block C licenses available for auction in Auction No. 35 or
any subsequent auction will be reconfigured into three 10 MHz C block
licenses as follows:

1895‑1900 MHz paired with 1975‑1980 MHz,

1900-1905 MHz paired with 1980-1985 MHz,

1905-1910 MHz paired with 1985-1990 MHz;

Block D: 1865-1870 MHz paired with 1945-1950 MHz;

Block E: 1885-1890 MHz paired with 1965-1970 MHz;

Block F: 1890-1895 MHz paired with 1970-1975 MHz;

5.  Amend § 24.709 by revising paragraphs (a), (a)(1), (a)(3),
    (b)(9)(i), redesignating paragraph (b)(9)(ii) as paragraph
    (b)(9)(iv), adding new paragraphs (b)(9)(ii), (b)(9)(iii), revising
    paragraph (d)(1), redesignating paragraph (e) as paragraph (g), and
    adding new paragraphs (e) and (f) to read as follows:

[§ 24.709 Eligibility for licenses for frequency Blocks C and
F]{.underline}.

\(a\) General Rule for licenses offered for closed bidding.

\(1\) No application is acceptable for filing and no license shall be
granted to a winning bidder in closed bidding for frequency block C or
frequency block F, unless the applicant, together with its affiliates
and persons or entities that hold interests in the applicant and their
affiliates, have had gross revenues of less than \$125 million in each
of the last two years and total assets of less than \$500 million at the
time the applicant\'s short-form application (Form 175) is filed.

\* \* \* \* \*

\(3\) Any licensee awarded a license won in closed bidding pursuant to
the eligibility requirements of this section (or pursuant to §
24.839(a)(2)) shall maintain its eligibility until at least five years
from the date of initial license grant, except that a licensee\'s (or
other attributable entity\'s) increased gross revenues or increased
total assets due to nonattributable equity investments (i.e., from
sources whose gross revenues and total assets are not considered under
paragraph (b) of this section), debt financing, revenue from operations
or other investments, business development, or expanded service shall
not be considered.

\(b\) \* \* \*

\(9\) \* \* \*

\(i\) In addition to entities qualifying for closed bidding under
paragraph (a)(1) of this section, any entity that was eligible for and
participated in the auction for frequency block C, which began on
December 18, 1995, or the reauction for frequency block C, which began
on July 3, 1996, will be eligible to bid for C block licenses offered in
closed bidding in any reauction of frequency block C spectrum that
begins within two years of March 23, 1999.

\(ii\) In cases of merger, acquisition, or other business combination of
entities, where each of the entities is eligible to bid for C block
licenses offered in closed bidding in any reauction of C block spectrum
on the basis of the eligibility exception set forth in paragraph
(b)(9)(i) of this section, the resulting entity will also be eligible
for the exception specified in paragraph (b)(9)(i).

\(iii\) In cases of merger, acquisition, or other business combination
of entities, where one or more of the entities are ineligible for the
exception set forth in paragraph (b)(9)(i) of this section, the
resulting entity will not be eligible pursuant to paragraph (b)(9)(i)
unless an eligible entity possesses [de jure]{.underline} and [de
facto]{.underline} control over the resulting entity.

\* \* \* \* \*

\(d\) \* \* \*

\(1\) Applicants and licensees claiming eligibility for closed bidding
under this section or for other provisions under §§ 24.711 through
24.720 shall be subject to audits by the Commission, using in‑ house and
contract resources. Selection for audit may be random, on information,
or on the basis of other factors.

\* \* \* \* \*

\(e\) Tiers.

\(1\) For purposes of determining spectrum to which the eligibility
requirements of this section are applicable, the BTA service areas (see
§ 24.202(b)) are divided into two tiers according to their population as
follows:

Tier 1: BTA service areas with population equal to or greater than 2.5
million;

Tier 2: BTA service areas with population less than 2.5 million.

\(2\) For Auction No. 35, the population of individual BTA service areas
will be based on the 1990 census. For auctions beginning after the start
of Auction No. 35, the population of individual BTA service areas will
be based on the most recent available decennial census.

(f) Application of eligibility requirements.

```{=html}
<!-- -->
```
(1) The following categories of licenses will be subject to closed
    bidding pursuant to the eligibility requirements of this section in
    auctions that begin after the effective date of this paragraph.

For Tier 1 BTAs, one of the 10 MHz C block licenses (1895 -- 1900 MHz
paired with 1975 -- 1980 MHz);

For Tier 2 BTAs, two of the 10 MHz C block licenses (1895 -- 1900 MHz
paired with 1975 -- 1980 MHz; 1900 -- 1905 MHz paired with 1980-1985
MHz) and all 15 MHz C block licenses.

\(2\) Notwithstanding the provisions of paragraph (f)(1) of this
section, any C block license for operation on spectrum that has been
offered, but not won by a bidder, in closed bidding in any auction
beginning on or after March 23, 1999, will not be subject in a
subsequent auction to closed bidding pursuant to the eligibility
requirements of this section.

\* \* \* \* \*

**[§ 24.710 \[Removed and Reserved\]]{.underline}**

6.  Remove and reserve § 24.710.

7.  Revise § 24.712 to read as follows:

**[§ 24.712 Bidding credits for licenses for frequency Block
C]{.underline}.**

\(a\) Except with respect to licenses won in closed bidding in auctions
that begin after March 23, 1999, a winning bidder that qualifies as a
small business or a consortium of small businesses as defined in
§ 24.720(b)(1) or § 24.720(b)(4) may use a bidding credit of fifteen
percent, as specified in § 1.2110(e)(2)(iii) of this chapter, to lower
the cost of its winning bid.

\(b\) Except with respect to licenses won in closed bidding in auctions
that begin after March 23, 1999, a winning bidder that qualifies as a
very small business or a consortium of very small businesses as defined
in § 24.720(b)(2) or § 24.720(b)(5) may use a bidding credit of
twenty-five percent as specified in § 1.2110(e)(2)(ii) of this chapter,
to lower the cost of its winning bid.

\(c\) Unjust enrichment. See § 1.2111 of this chapter. The unjust
enrichment provisions of § 1.2111(d) and (e)(2) shall not apply with
respect to licenses acquired in either the auction for frequency block C
that began on December 18, 1995, or the reauction of block C spectrum
that began on July 3, 1996.

8.  Amend § 24.714 by revising paragraphs (a)(2) and (a)(3) to read as
    follows:

**[§ 24.714 Partitioned licenses and disaggregated
spectrum]{.underline}.**

\(a\) \* \* \*

\(2\) Broadband PCS licensees in spectrum blocks A, B, D, and E and
broadband PCS C and F block licenses not subject to the eligibility
requirements of § 24.709 may apply to partition their licensed
geographic service area or disaggregate their licensed spectrum at any
time following the grant of their licenses.

\(3\) Broadband PCS licensees that acquired C or F block licenses in
closed bidding subject to the eligibility requirements of § 24.709 may
partition their licensed geographic service area or disaggregate their
licensed spectrum at any time to an entity that meets the eligibility
criteria set forth in § 24.709 at the time the request for partial
assignment of license is filed or to an entity that holds license(s) for
frequency blocks C and F that met the eligibility criteria set forth in
§ 24.709 at the time of receipt of such license(s). Partial assignment
applications seeking partitioning or disaggregation of broadband PCS
licenses in spectrum blocks C and F must include an attachment
demonstrating compliance with this section.

\* \* \* \* \*

9.  Amend § 24.717 by revising paragraphs (a) and (b) to read as
    follows:

**[§ 24.717 Bidding credits for licenses for frequency Block
F]{.underline}**.

\(a\) Except with respect to licenses won in closed bidding in auctions
that begin after March 23, 1999, a winning bidder that qualifies as a
small business or a consortium of small businesses as defined in
§ 24.720(b)(1) or § 24.720(b)(4) may use a bidding credit of fifteen
percent, as specified in § 1.2110(e)(2)(iii) of this chapter, to lower
the cost of its winning bid.

\(b\) Except with respect to licenses won in closed bidding in auctions
that begin after March 23, 1999, a winning bidder that qualifies as a
very small business or a consortium of very small businesses as defined
in § 24.720(b)(2) or § 24.720(b)(5) may use a bidding credit of
twenty-five percent as specified in § 1.2110(e)(2)(ii) of this chapter,
to lower the cost of its winning bid.

\* \* \* \* \*

10. Amend § 24.720 by revising paragraph (i) to read as follows.

[§ 24.720 Definitions]{.underline}.

\* \* \* \* \*

\(i\) [Members of Minority Groups]{.underline}. Members of minority
groups include individuals of African American, Hispanic-surnamed,
American Eskimo, Aleut, American Indian, and Asian American extraction.

\* \* \* \* \*

11. Amend § 24.839 by revising paragraphs (a) introductory text, (a)(2),
    (a)(3) and (a)(5) and by adding paragraph (a)(6) to read as follows:

[§ 24.839 Transfer of control or assignment of license]{.underline}.

\(a\) Restrictions on Assignments and Transfers of Licenses for
Frequency Blocks C and F won in closed bidding. No assignment or
transfer of control of a license for frequency Block C or frequency
Block F won in closed bidding pursuant to the eligibility requirements
of § 24.709 will be granted unless:

\* \* \* \* \*

\(2\) The proposed assignee or transferee meets the eligibility criteria
set forth in § 24.709 of this part at the time the application for
assignment or transfer of control is filed, or the proposed assignee or
transferee holds other license(s) for frequency blocks C and F and, at
the time of receipt of such license(s), met the eligibility criteria set
forth in § 24.709 of this part; or

\(3\) The application is for partial assignment of a partitioned service
area to a rural telephone company pursuant to § 24.714 of this part and
the proposed assignee meets the eligibility criteria set forth in §
24.709 of this part; or

\* \* \* \* \*

\(5\) The assignment or transfer of control is pro forma; or

\(6\) The application for assignment or transfer of control is filed on
or after the date the licensee has notified the Commission pursuant to §
24.203(c) that its five-year construction requirement has been
satisfied.

\* \* \* \* \*

# Appendix E - Final Regulatory Flexibility Analysis 

As required by the Regulatory Flexibility Act ("RFA"),[^184] an Initial
Regulatory Flexibility Analysis ("IRFA") was incorporated into the
*Further Notice of Proposed Rule Making* in WT Docket 97-82 ("*Further
Notice*").[^185] The Commission sought written public comment on the
tentative conclusions, proposals, and alternatives in the *Further
Notice*, including comment on the IRFA. This Final Regulatory
Flexibility Analysis ("FRFA") conforms to the RFA.[^186]

## A. Need for, and objectives of, the *C/F Block Sixth Report and Order* in WT Docket No. 97-82: {#a.-need-for-and-objectives-of-the-cf-block-sixth-report-and-order-in-wt-docket-no.-97-82 .unnumbered}

This *Sixth* *Report and Order and Order on Reconsideration* ("*C/F
Block Sixth Report and Order*") addresses the tentative conclusions and
proposals in our recent *Further Notice* and also resolves the petitions
that precipitated the *Further Notice*.[^187] The modifications to the
Commission's rules that we adopt in this order will apply to Auction No.
35, a C and F block auction currently scheduled to begin on November 29,
2000. The modifications will also apply to any subsequent auctions of C
or F block licenses, including any spectrum made available or reclaimed
from bankruptcy proceedings in the future.

We conclude that it is in the public interest to modify our auction and
service rules for C and F block broadband Personal Communications
Services ("PCS") licenses to achieve the various goals of Section 309(j)
of the Communications Act. In reaching this conclusion, we recognize
that many carriers, including small and very small businesses, need
additional spectrum to "fill out" their service areas or to satisfy
capacity needs. Although our modifications to the rules include the
elimination of entrepreneur eligibility requirements (allowing open
bidding) for some C and F block licenses, our revised rules provide
entrepreneurs with a significant set-aside of C block spectrum (for
closed bidding) in order to assist them in achieving their business
goals. Section 309(j) does not mandate the use of set-asides to promote
the participation of small businesses in spectrum auctions. In fact, we
note that there have been numerous auctions in recent years in which we
have not included an entrepreneurs' block set-aside. By maintaining a
significant set aside for entrepreneurs, small and very small businesses
will be given the opportunity to participate in the provision of
spectrum-based services. Additionally, in open auctions, small and very
small businesses will continue to be provided with bidding credits in
order to ensure meaningful participation. This *C/F Block Sixth Report
and Order* reflects the Commission's continuing commitment to
encouraging participation by small businesses while at the same time
helping to ensure the best use of spectrum through the competitive
bidding process.

**B. Summary of significant issues raised by public comments in response
to the IRFA:**

There were no comments filed directly in response to the IRFA. However,
a number of parties did submit general comments on the Commission's
tentative conclusions and proposals set forth in the *Further Notice*.
The significant issues raised by small and very small businesses
primarily concerned the removal of the entrepreneur eligibility
restrictions for some licenses available in future C and F block
auctions and the use of bidding credits. For example, some commenters
opposed the Commission's proposal to reconfigure the available 30 MHz C
block license into three 10 MHz C block licenses, arguing that such a
proposal is contrary to statutory requirements, because it will reduce
small business opportunity in the marketplace.[^188] Many of the
commenters that opposed the reconfiguration, contended that 10 MHz of C
block spectrum is insufficient to provide a full range of third
generation ("3G") services.[^189] In addition, a number of commenters
opposed any relaxation of the Commission's entrepreneur eligibility
restrictions.[^190] Some commenters argued that Section 309(j) compels
the Commission to maintain the C and F block set-aside as is.[^191] In
addition, small and very small businesses supported an increase in
bidding credits in open bidding.[^192]

On the other hand, a number of larger entities, including most of the
major national carriers, favored the elimination of eligibility
restrictions from more, or all, of the available C and F block
licenses.[^193] Many carriers claimed that obtaining additional spectrum
to provide advanced telecommunications services and global competition
within these services, or to satisfy capacity needs, was crucial to
their business plans.[^194] In addition, these carriers stated that they
require additional spectrum to complete regional or national service
areas.[^195] As required by the RFA, and in light of the numerous
comments received, the Commission considered the economic impact on
small businesses of the rules adopted herein.[^196] *See* section E,
*infra*.

**C. Description and estimate of the number of small entities to which
the rules 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.[^197] Generally, the RFA
defines the term "small entity" as having the same meaning as the terms
"small business," "small organization," and "small governmental
jurisdiction."[^198] 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.[^199] 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").[^200]A small organization is generally "any not‑for‑profit
enterprise which is independently owned and operated and is not dominant
in its field."[^201] Nationwide, as of 1992, there were approximately
275,801 small organizations."[^202] " 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.\"[^203] As of 1992, there were approximately 85,006
local governments in the United States.[^204] This number includes
38,978 counties, cities, and towns; of these, 37,566, or 96 percent,
have populations of fewer than 50,000.[^205] 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. According to SBA reporting data, there were
4.44 million small business firms nationwide in 1992.[^206]

The rule changes effected by this *C/F Block Sixth Report and Order*
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 participate in,
and/or 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 were originally designated by the Commission as "entrepreneurs'
blocks," and participation in past auctions of C and F block licenses
was 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 and persons or entities that hold
interests in the applicant and their affiliates) that had gross revenues
of less than \$125 million in each of the last two years and total
assets of less than \$500 million at the time the FCC Form 175
application was 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,[^207] 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.[^208] These definitions have been approved by the
SBA.[^209]

On May 6, 1996, the Commission concluded the first broadband PCS C block
auction.[^210] On July 16, 1996, the second C block auction
closed.[^211] On January 14, 1997, the broadband PCS D, E, and F block
auction closed.[^212] Ninety (90) 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.[^213]

On January 12, 2000, the Wireless Telecommunications Bureau ("Bureau")
announced an auction of broadband PCS C and F block licenses scheduled
for July 26, 2000 (Auction No. 35). At that time, under the Commission's
eligibility rules, in order to participate in an entrepreneur auction, a
C or F block 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.
Following the announcement of Auction No. 35, the Commission received
several formal requests to waive, modify, or eliminate the C and F block
auction and service rules in order to allow companies other than
entrepreneurs to participate in the upcoming PCS auction.[^214] The
Commission addressed the issues raised in the various petitions,
comments, and other documents filed in this proceeding in a Further
Notice of Proposed Rulemaking ("*Further Notice*"), released on June 7,
2000, in which we set forth tentative conclusions and proposals to
retain, clarify, and modify our rules related to the C and F block
auctions and service. In addition, on June 7, 2000, the Bureau announced
that Auction No. 35 would begin on November 29, 2000, in order to allow
resolution of the issues in the *Further Notice* and implementation of
any rule changes prior to the auction. [^215] In this *C/F Block Sixth
Report and Order*, we resolve the issues raised in the *Further Notice*
and in the petitions and other filings in this proceeding by retaining,
clarifying, and modifying our rules governing C and F block auctions and
licenses.

Auction No. 35 is slated to include C block licenses as well as F block
licenses for operation on frequencies for which previous licenses had
automatically cancelled or had been returned to the Commission. 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 *C/F Block Sixth Report and Order* 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 reporting, recordkeeping, and other compliance
requirements:**

This *C/F Block Sixth Report and Order* does not impose new reporting,
recordkeeping, or other compliance requirements upon auction
participants. As customary, auction participants will need to follow the
standard procedural rules used for broadband PCS spectrum auctions,
including application and payment rules.[^216]

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 concludes that it is in the public interest to modify our
auction and service rules for C and F block broadband Personal
Communications Services (PCS) licenses to achieve the various goals of
Section 309(j) of the Communications Act.[^217] Specifically, in this
*C/F Block Sixth Report and Order* we retain, clarify, and revise our
rules, as follows:

[Reconfiguration of C Block License Size]{.underline}: The Commission
will reconfigure each 30 MHz C block license available in future
broadband PCS auctions into three 10 MHz C block licenses. By increasing
the number of available licenses through this reconfiguration, rather
than retaining the larger spectrum blocks (with fewer licenses), taken
together with lifting certain of our eligibility requirements, providing
set-asides, and providing small and very small business bidding credits
to small entities for licenses offered in open bidding, the Commission
will promote wider auction participation and license distribution in
accordance with the goals of Section 309(j) of the Communications
Act.[^218] Under this alternative, small bidders be able to fulfill
their business needs, while large bidders should enjoy greater
flexibility in tailoring their bidding to their business plans without
running afoul of the spectrum cap.

[Utilization of a Tiered Approach]{.underline}: The Commission will
remove the entrepreneur eligibility restrictions for some, but not all,
licenses available in future C and F block auctions. Based on the demand
for spectrum to satisfy congestion, new technology and competitive
needs, the Commission has considered the alternatives and determined
that it would serve the public interest to make some additional spectrum
available to all interested bidders, not just entrepreneurs. The
Commission will divide Basic Trading Areas ("BTAs")[^219] 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. The Commission believes that by
dividing BTAs into two tiers, according to population, the Commission
has greater flexibility to eliminate the entrepreneur eligibility
restrictions in some of the largest markets while retaining the
restrictions in many mid-sized and smaller markets, where smaller
entities have proven more successful.

[Eligibility Restrictions Under a Tiered Approach]{.underline}: For
markets with available 30 MHz licenses, other than licenses that were
available but unsold in Auction No. 22, the Commission will allow open
bidding for two of the three newly reconfigured 10 MHz C block licenses
in Tier 1 and for one of the three newly reconfigured 10 MHz C block
licenses in Tier 2. Specifically, in Tier 1, the Commission will allow
open bidding for two 10 MHz blocks, 1900 - 1905 MHz paired with 1980 -
1985 MHz and 1905 MHz - 1910 MHz paired with 1985 - 1990 MHz. In Tier 2,
the Commission will allow open bidding for one 10 MHz block, 1905 MHz -
1910 MHz paired with 1985 - 1990 MHz. The Commission believes this
approach will split the C block spectrum available in Auction No. 35
almost equally, when weighted by population, between open and closed
licenses. Moreover, in light of the alternatives, this approach, in
conjunction with the other revisions to the entrepreneur eligibility
restrictions, will make relatively more spectrum available for open
bidding in the most populous markets where the demand for spectrum by
the large Commercial Mobile Radio Service ("CMRS") carriers is the
greatest and the prospects of a spectrum shortage for these carriers is
the most acute. For available 15 MHz C block licenses, other than
licenses that were available but unsold in Auction No. 22, the
Commission will eliminate entrepreneur eligibility restrictions in Tier
1 but retain the restrictions in Tier 2. The Commission believes that in
this way we give effect to as many of the Section 309(j) objectives as
possible. Balancing all of our statutory objectives and considering
alternative possibilities, we believe that it is fair and appropriate to
apportion the spectrum to accommodate the interests of many carriers
that need additional spectrum to "fill out" their service areas or to
satisfy capacity needs. Apportioning the 30 MHz C block licenses in the
manner described will enable larger carriers to obtain spectrum crucial
to their business plans. At the same time, maintaining a significant set
aside of C block spectrum for entrepreneurs will help smaller businesses
in this band continue to achieve their business goals as well as
providing meaningful opportunities for new entrepreneurial firms to
enter the market.

In addition, the Commission will allow open bidding for all F block
licenses available in Auction No. 35 and in all future auctions. The
Commission believes that it is in the public interest and consistent
with Section 309(j), to remove the set-aside for all available F block
licenses. The F block has evolved in a fashion largely distinct from
that of the C block; thus, the two blocks have been subject to
increasingly different regulatory requirements, reflecting the separate
equity and reliance concerns applicable to each of the blocks.
Therefore, there is no longer a rationale for attempting to treat the
two blocks in an identical or a substantially similar fashion.

Lastly, the Commission will establish open bidding for all broadband PCS
C and F block licenses available but unsold in Auction No. 35 or in any
other future auction and for all C block licenses, 15 MHz or 30 MHz
(reconfigured into 10 MHz), that were available but not sold in Auction
No. 22. Bidding to date has failed to result in construction of these
licenses and service to the public. By lifting the eligibility
restrictions for these unsold licenses now, the Commission hopes to
prevent additional delays in their utilization.

[Entrepreneur Eligibility]{.underline}: The Commission will not apply
the natural growth exception, which allows C and F block licensees to
retain their entrepreneur eligibility during the five-year holding
period, to determinations of entrepreneur eligibility for Auction No.
35. Although the Commission intended to ignore natural growth for
purposes of entrepreneur eligibility during the five-year holding
period, it did not intend to ignore such growth in determining
eligibility to participate in future C and F block auctions. In
addition, the Commission does not see a need to modify Section 24.720
which states that an entrepreneurs' block applicant must substantiate
its gross revenues and total assets with its most recent audited
financial statements, or, if the applicant does not otherwise use
audited financial statements, a certification by the applicant's chief
financial officer or its equivalent. However, the Commission expects
applicants to obtain audited financial statements within a reasonable
period of time after the close of the applicable calendar or fiscal year
and to base its claim to eligibility on those financial statements.

[License Grouping for Bids and Competitive Design]{.underline}: The
Commission will not license by bulk bidding. As stated in the *Further
Notice*, the Commission is concerned that small entities may be hard
pressed to obtain the financing necessary to win and pay for licenses
and construct systems included in the bulk bid proposal, while many
other carriers may be constrained from participating by the CMRS
spectrum cap.[^220] Some of the parties that commented on ways to
aggregate licenses in the auction process, argued against the use of
package bidding for Auction No. 35, on the ground that such a design
would be complex and impractical.[^221] Other commenters support
implementation of package bidding as a way to enhance the ability of
auction participants to acquire their targeted groups of licenses while
reducing their exposure.[^222] The Bureau has discretion, under its
existing delegated authority and pursuant to public notice and comment,
to determine the competitive bidding design most appropriate for the
auction.

["Grandfather" Exception]{.underline}: The Commission will not eliminate
the "grandfather" exception contained in Section 24.709(b)(9)(i).
Instead, the Commission will clarify an applicant's eligibility for the
"grandfather" exception after it has been involved in a merger,
acquisition, or other business combination, as follows. When each of the
merging entities is individually eligible for the "grandfather"
exception, the exception will extend to the resulting entity. When one
or more of the entities is not individually eligible for the
"grandfather" exception, the resulting entity will be eligible for the
exception only so long as an originally eligible entity retains *de
facto* and *de jure* control of the resulting entity. The Commission
does not believe that, when entities eligible for the "grandfather"
exception combine, the resulting entity should be penalized. This
revision to the Commission's rules will provide spectrum opportunities
for entrepreneurs while at the same time maintaining a fair
implementation of the auctions program.

[Bidding Credits]{.underline}: The Commission will maintain the current
level of bidding credits for small and very small businesses, and
consortia thereof, of 15 percent and 25 percent, respectively, for
licenses subject to "open" biding. After considering the alternatives,
the Commission believes that bidding credits of 15 and 25 percent will
allow effective competition by small businesses in open C and F block
bidding. In our Specialized Mobile Radio (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. Moreover, in Auction No. 11, the auction of D, E, and F block
licenses, small and very small business were the high bidders for 141 of
the 986 D and E block licenses won in that auction, even though bidding
credits are not available for D and E block licenses. The current level
of bidding credits for broadband PCS C and F blocks seems to allow
significant participation of small and very small entities; therefore,
we do not see a need to increase the current level of bidding credits.

For licenses subject to "closed" bidding, the Commission will eliminate
all bidding credits. After considering the alternatives, the Commission
believes that the continued use of bidding credits in restricted
auctions would not necessarily serve its intended purpose. As explained
in the *Further Notice*, 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.[^223] Eliminating bidding credits in a closed auction will remove
this anomaly while at the same time continuing to provide small and very
small businesses with a meaningful opportunity to compete in Auction No.
35.

[Transfer Requirements for Certain Licenses]{.underline}: The Commission
will modify its transfer requirements to correspond to the Commission's
changes in the eligibility requirements, and to encourage rapid
construction of C and F block systems. Specifically, C and F block
licenses won pursuant to "open" bidding at Auction No. 35, or any future
open auction for such spectrum, will not be subject to a holding rule.
For C and F block licenses won pursuant to "closed" bidding, the
Commission will permit a licensee to assign or transfer its licenses 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. This will encourage rapid
build-out and service to the public while at the same time providing C
and F block licensees with the ability to access capital; thus,
resulting in a more efficient use of spectrum. The Commission will
continue to evaluate satisfaction of construction requirements on a
license-by-license, rather than on a system-wide, basis.

Additionally, a licensee that won a license in Auction No. 5 or 10 will
not be subject to a bidding credit unjust enrichment payment upon
transfer and assignment of the license to an entity not qualifying as a
small business, subject to the Commission's transfer requirements.
Because all license winners in those auctions qualified for the
available 25 percent bidding credit, there is no purpose in requiring
the payment. However, licenses won in other auctions using a bidding
credit will be subject to a bidding credit unjust enrichment payment
upon transfer or assignment in accordance with the Commission's transfer
requirements.

[License Cap]{.underline}: The Commission will remove Section 24.710,
which prohibits an auction applicant from winning more than 98 C and F
block licenses, from the Commission's rules. 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 reconfiguration of the available
30 MHz C block licenses will create additional C block licenses, while
the elimination of the eligibility restrictions will increase the
chances of C and F block licenses being won by a variety of entities.

[Spectrum Cap]{.underline}: The Commission will continue to apply the
CMRS spectrum cap to PCS C and F block licenses to be auctioned. In
September 1999, the Commission decided that the spectrum cap, with some
modification, continued to promote competition, efficient spectrum use,
innovation, and a wide dissemination of licenses. The Commission
believes that implementation of the C and F block auction and service
rule changes will ease the impact of the spectrum cap for Auction No.
35, making the alternative of spectrum cap relief unnecessary with
respect to licenses in this auction. [^224] Moreover, the Commission
will soon begin its year 2000 biennial review of the spectrum cap rules,
providing another opportunity for a comprehensive review of related
issues.

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.[^225] Section 309(j) also
requires that the Commission ensures 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.[^226] The
Commission believes that these revisions to the C and F block auction
and service rules as set forth in the *C/F Block Sixth Report and Order*
promote these goals while maintaining the fair and efficient execution
of the auctions program.

**[Report to Congress]{.underline}**: The Commission will send a copy of
the *C/F Block Sixth Report and Order*, including this FRFA, in report
to be sent to Congress pursuant to the SBREFA, *see* 5 U.S.C.
§ 801(a)(1)(A). In addition, the Commission will send a copy of the *C/F
Block Sixth Report and Order*, including the FRFA, to the Chief Counsel
for Advocacy of the Small Business Administration. A copy of the *C/F
Block Sixth Report and Order* and FRFA (or summaries thereof) will also
be published in the Federal Register. *See* 5 U.S.C. § 604(b).

[^1]: *See* 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*, 15 FCC Rcd 9773 (2000) ("*Further Notice**"***). The
    Commission received 38 comments, 27 reply comments, 28 *ex partes*,
    and one motion in response to the *Further Notice*. Appendices A-C
    contain a list of full and abbreviated names of commenting parties.

[^2]: *See* *Further Notice*, 15 FCC Rcd at 9774-76, ¶¶ 1, 3.

[^3]: Section 309(j) of the Communications Act of 1934, as amended
    ("Communications Act"), 47 U.S.C. § 309(j).

[^4]: In addition, for auctions subsequent to Auction No. 35, we remove
    the entrepreneur eligibility restrictions for all C and F block
    licenses available but unsold in Auction No. 35 or in any future
    auction. *See infra* ¶¶ 29-31.

[^5]: Pub. L. No. 103-66, Title VI, § 6002(b), 107 Stat. 312 (1993)
    (Omnibus Budget Reconciliation Act of 1993 ("OBRA-1993")).

[^6]: Section 309(j) of the Communications Act of 1934, as amended
    ("Communications Act"), 47 U.S.C. § 309(j). The Balanced Budget Act
    of 1997 revised the auction authority granted in OBRA-1993.

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

[^8]: 47 U.S.C. § 309(j)(4).

[^9]: The Commission required that in order to be eligible to bid, an
    applicant, including attributable investors and affiliates, must
    have had gross revenues of less than \$125 million in each of the
    last two years and must have less than \$500 million in total
    assets. *See* Implementation of Section 309(j) of the Communications
    Act -- Competitive Bidding, PP Docket 93-253, *Fifth Report and
    Order*, 9 FCC Rcd 5532, 5581-82, ¶ 115 (1994) ("*Competitive Bidding
    Fifth Report and Order*"). Originally, there was a personal net
    worth test, but this test was eliminated. *See* Implementation of
    Section 309(j) of the Communications Act -- Competitive Bidding, PP
    Docket 93-253, *Fifth Memorandum Opinion and Order*, 10 FCC Rcd 403,
    420-21 ¶¶ 28-30 (1994) ("*Competitive Bidding Fifth Memorandum
    Opinion and Order*").

[^10]: E block licenses were also included in Auction No. 22.

[^11]: 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*\").

[^12]: 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*\").

[^13]: Every participant in Auction No. 10 had participated in Auction
    No. 5.

[^14]: *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*").

[^15]: The proceedings of NextWave are jointly administered with those
    of NextWave Power Partners Inc., NextWave Partners Inc., NextWave
    Wireless Inc., and NextWave Telecom Inc. 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.). The DCR proceedings are jointly administered with
    those of DCR's parent company, Pocket Communications, Inc.

[^16]: This population figure is based upon the 1990 census.

[^17]: \"Auction of C and F Block Broadband PCS Licenses, Notice of
    Auction Scheduled for July 26, 2000,\" *Public Notice*, 15 FCC Rcd
    693 (2000).

[^18]: *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).

[^19]: *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).

[^20]: *See Further Notice*, 15 FCC Rcd at 9781 n.32.

[^21]: *See id.*, 15 FCC Rcd at 9781 n.33.

[^22]: *See id.*, 15 FCC Rcd at 9781 n.34. In the public notice
    announcing the filing of the US West/Sprint Petition as part of WT
    Docket No. 97-82, we stated that we were incorporating into WT
    Docket No. 97-82 the comments and other documents filed in response
    to the Nextel Petition and the SBC Petition regarding C and F block
    rules. "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*, 15
    FCC Rcd 6079, 6080 (2000). We clarify that we also incorporate into
    the docket the Nextel Petition, the SBC Petition, and similar
    petitions that prompted the comments and other responsive filings.

[^23]: Verizon Petition.

[^24]: *See Further Notice*, 15 FCC Rcd at 9782 n.37.

[^25]: *See Further Notice*, 15 FCC Rcd at 9782 n.38.

[^26]: *See* AT&T Wireless Services, Inc., Petition for Waiver and
    Expedited Action (February 15, 2000) ("AT&T Waiver Petition");
    BellSouth Corporation, Petition for Waiver and Expedited Action
    (February 17, 2000) ("BellSouth Waiver Petition"); Bell Atlantic
    Mobile, Inc., Petition for Limited Forbearance (February 17, 2000)
    ("Bell Atlantic Forbearance Petition"); and, GTE Service
    Corporation, Petition for Declaratory Ruling and/or Waiver (March 8,
    2000) ("GTE Declaratory Ruling Petition"). *See also Further
    Notice*, 15 FCC Rcd at 9782 nn.39-40.

[^27]: "Auction of Licenses for C and F Block Broadband PCS Spectrum
    Postponed Until November 29, 2000," *Public Notice*, 15 FCC Rcd 9771
    (2000).

[^28]: *See Further Notice*, 15 FCC Rcd at 9784, ¶ 16.

[^29]: *See* 47 U.S.C. § 309(j)(3)(B); *Further Notice*, 15 FCC Rcd at
    9784, ¶ 16.

[^30]: *See Further Notice*, 15 FCC Rcd at 9784, ¶ 16.

[^31]: *Id.*

[^32]: *See id*. The CMRS spectrum cap is set forth at 47 C.F.R. § 20.6.
    The rule provides that for broadband PCS, cellular, or Specialized
    Mobile Radio services, a licensee is not permitted to hold more than
    45 MHz of spectrum in a given market, except in rural areas where
    the cap is set at 55 MHz.

[^33]: We will not reconfigure available 15 MHz C block licenses.

[^34]: *See Further Notice*, 15 FCC Rcd at 9783-84, ¶ 15.

[^35]: *See* Advanced Comments at 4-5 (supports only if entrepreneur
    eligibility restrictions are maintained for all C and F block
    licenses); AirGate Comments at i, 1-2, 4 (supports provided that the
    Commission's entrepreneur eligibility proposals in the *Further
    Notice* are adopted); AirGate Reply at 1; ALLTEL Reply at 1-2;
    America Connect Comments at 3; AT&T Comments at 1, 10; AT&T Reply at
    2-3; BellSouth Comments at ii, 2, 5; BellSouth Reply at 3; CTIA
    Comments at 2-3; CIRI Comments at 7-8; RK Communications Comments at
    1-2; Sprint Reply at 4-6; US West Comments at 3-4; US West Reply at
    1, 4; Verizon Comments at 4-5; VoiceStream Comments at 3-4;
    VoiceStream Reply at 2. *See also* Northcoast Comments at 4-5
    (prefers no reconfiguration; however, the proposed reconfiguration
    is acceptable provided that 20 MHz remains set aside in each
    market).

[^36]: *See, e.g.,* ALLTEL Reply at 1-2; America Connect Comments at 3;
    AT&T Comments at 3-4; AT&T Reply at 2-4; BellSouth Comments at 2;
    BellSouth Reply at 3; CTIA Comments at 2-3: CIRI Comments at 7-8; RK
    Communications Comments at 2; Sprint Reply at 4; US West Comments at
    3; Verizon Comments at 5; VoiceStream Comments at 4; VoiceStream
    Reply at 2.

[^37]: *See* Advanced Comments at 4-5.

[^38]: *See* AirGate Comments at i, 1-2, 4; AirGate Reply at 1.

[^39]: *See* Northcoast Comments at 4-5.

[^40]: *See* Alpine Comments at ii-iii, 1-15, 18; Alpine Reply at 1, 6;
    Leap Comments at 14-16, NTCA Comments at 2-3; OPM Comments at i,
    2,6-9; OPM Reply at i, 6-10, Declaration; PCIA Comments at 17-20;
    PCIA Reply at 2-3, 9-14; Powertel Comments at 7; Rainbow/Push Reply
    at 7-9; Twenty First Wireless Comments at 11; Twenty First Wireless
    Reply at 1-3, 5; U.S. AirWaves Comments at 5-6; Advocacy Comments at
    5-6; NORTH COAST Reply at i, 3-4.

[^41]: *See*, *e.g.*, Alpine Comments at ii-iii, 1-15; Alpine Reply at
    1-2, 5-7.

[^42]: *See* Service Rules for 746-764 MHz 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, 478, ¶ 3 (2000)
    ("*700 MHz* *First Report and Order*"). In our view, the advantages
    of reconfiguring 30 MHz C block licenses into three 10 MHz licenses
    outweigh the "exposure risk" that so concerns Nextel. *See* Nextel
    Reply at 15-16.

[^43]: *See* 47 C.F.R. § 24.202.

[^44]: As explained *infra*, entities that qualify as entrepreneurs
    under the Commission's rules will be eligible to bid on all three 10
    MHz C block licenses in each market; other entities will be eligible
    to bid on either one or two of such licenses depending on the
    population size of the market.

[^45]: *See* 47 U.S.C. § 309(j)(3)(B).

[^46]: *See Further Notice*, 15 FCC Rcd at 9789, ¶ 27.

[^47]: We stated that, in the absence of better data, we would rely on
    the 1990 census data for population numbers.

[^48]: *See Further Notice*, 15 FCC Rcd at 9789, ¶ 29.

[^49]: *Id.*

[^50]: All F block licenses are 10 MHz licenses.

[^51]: *See Further Notice*, 15 FCC Rcd at 9790, ¶ 31.

[^52]: *See id.* at 9790, ¶ 32.

[^53]: Tier 1 BTAs comprise approximately five percent of all BTAs.

[^54]: For auctions after Auction No. 35, we will base population
    figures on the most recent available decennial census.

[^55]: *See* AT&T Comments at 7-8; AT&T Reply at 4-5; Nextel Comments at
    ii, 12-13, 24; Nextel Reply at 6; SBC Comments at i, 2, 8; SBC Reply
    at 4-5; US West Comments at 4-5; US West Reply at 2, 4; VoiceStream
    Comments at 4-5; VoiceStream Reply at 3-4.

[^56]: Leap Comments at 4, 15-16; Leap Reply at 7-8.

[^57]: As we explain *infra*, for 30 MHz C block licenses that were
    available but unsold in Auction No. 22, we will remove all
    entrepreneur eligibility restrictions for each of the three 10 MHz C
    block licenses.

[^58]: In each case, the closed band or bands will be adjacent to the F
    block spectrum. Because the bands will be contiguous, entrepreneurs
    that wish to aggregate newly acquired closed 10 MHz C block licenses
    with F block licenses may enjoy reduced base station facilities
    costs and simplified maintenance requirements.

[^59]: As we explain *infra*, we will remove all entrepreneur
    eligibility restrictions for 15 MHz C block licenses that were
    available but unsold in Auction No. 22.

[^60]: As a practical matter, all of the 15 MHz licenses that we expect
    to be available in Auction No. 35, that were not available but
    unsold in Auction No. 22, are in Tier 2 and therefore would be
    subject to closed bidding restricted to entrepreneurs.

[^61]: *See, e.g.,* Advanced Comments at 1-2; Advocacy Comments at 15
    n.15; OPM Comments at i, 2, 4-6, 8, 16; RK Communications Comments
    at 2; Telecorp and Tritel Comments at 3, 5; US West Comments at 4;
    US West Reply at 2,4; RCA Comments at 8-9, 11-14; RCA Reply at 1-3,
    7; Twenty First Wireless Reply at 5. *See also* Advocacy Comments at
    1-5, 8; Alaska/Poplar/Eldorado Comments at 2; Alpine Comments at ii,
    4-15; Choice Comments at 1; Leap Comments at 1; NTCA Comments at 3;
    PCIA Comments at i, 4-5, 11-17; Polycell Comments at 1, 2-4;
    RTG/OPASTCO Comments at 5-6; Telecorp and Tritel Comments at 3, 5.
    *See generally* U.S. AirWaves Comments at 4-5.

[^62]: *See*, *e.g.*, OPM Comments at 4 ("Removing DE eligibility
    restrictions would diminish meaningful participation of small
    businesses in the auction process. . . \[I\]n light of the language
    of Section 309(j)(4) and its legislative history, OPM disagrees with
    the notion that meaningful participation of small businesses is a
    matter the Commission is free to purposely diminish without
    violating both the Act and the policy it is intended to implement.
    \[citation omitted\]"; Advanced at 2; AirGate Comments at 2-3;
    Alpine Comments at iii, 2, 15; Northcoast at 8; NTCA at 2; PCIA
    Comments at i, 1-5; RCA Comments at 1-2 (cover letter); RCA Comments
    at 7-10; and RTG/OPASTCO Comments at 1-2, 3-4.

[^63]: *See* SBC Reply at 2-4.

[^64]: *See*, *e.g.*, AT&T Comments at 1-2, 6-8, 10; BellSouth Comments
    at ii, 1, 9-10, 15; BellSouth Reply at 1,3; SBC Comments at i, 2-3,
    10-11; SBC Reply at 4-6; US West Comments at 4-5; US West Reply at
    1-4; Verizon Comments at 5-9; VoiceStream Comments at 5; VoiceStream
    Reply at 1-2, 8.

[^65]: *See*, *e.g.*, Advocacy Comments at 5; ASCENT Comments at 4, 7.

[^66]: *See* CIRI Comments at 7-9; CIRI Reply at 2-3. *See also* *infra*
    Part III.H. (transfer requirements).

[^67]: In auctions of licenses in most other services, the Commission
    has used bidding credits, rather than a set-aside, to encourage
    auction participation by small businesses. To date, in open
    Commission auctions with small business bidding credits, a total of
    79 percent of all winning bidders have been small businesses using a
    bidding credit. *See* *infra* Part III.G. (bidding credits).

[^68]: *Melcher v. FCC*, 134 F.3d 1143, 1154 (D.C. Cir. 1998), *citing
    Mobile Tel, Inc. v. FCC*, 107 F.3d 888, 895 (D.C. Cir. 1997); *see*
    *Fresno Mobile Radio*, 165 F.3d 965, 971 (D.C. Cir. 1999).

[^69]: *Melcher v. FCC*, 134 F.3d 1143, 1154-55 (D.C. Cir. 1998).

[^70]: *Further Notice*, 15 FCC Rcd at 9788, ¶ 25.

[^71]: *See* Jill Carroll and Leslie Cauley, *Demand for Airwaves May
    Create Shortage*, *The Wall Street Journal*, Aug. 2, 2000, at A2
    (The explosion in wireless communications and the emergence of 3G
    technology have resulted in a shortage of spectrum to satisfy the
    huge demand.); Susan Schmidt and Peter S. Goodman, *Spectrum Up for
    Grabs*, *The Washington Post*, July 11, 2000, at E1 ("\[T\]he
    21^st^-century battle over the spectrum is a scramble for a highly
    valuable resource in increasingly short supply."); Implementation of
    Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993;
    Annual Report and Analysis of Competitive Market Conditions With
    Respect to Commercial Mobile Services, *Fifth Report*, FCC-00289, at
    Part II.A.1.h (rel. August 18, 2000).

[^72]: *See*, *e.g.*, SBC Petition at 3, 11, 15; Nextel Petition at 5-8;
    *see also*, *e.g.*, the following comments and reply comments to the
    SBC and Nextel Petitions: AT&T Comments at 2-4; Bell Atlantic
    Comments at 9-10; GTE at 11-13 (re spectrum cap); Nextel Reply at
    21-22; SBC Comments at 12-13.

[^73]: *See id.*

[^74]: We emphasize that entrepreneurs will remain eligible to bid for
    open as well as closed C and F block licenses. We note, moreover,
    that in Auction No. 11, where D and E block, as well as F block,
    broadband PCS licenses were available, small and very small
    businesses successfully 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 neither bidding credits nor installment
    financing was available for these licenses, small and very small
    businesses were the high bidders for more than 14 percent of the D
    and E block licenses won in that auction. We note also that, in the
    *Further Notice*, we failed to take into account the fact that no
    bidding credits were available for D and E block licenses in Auction
    No. 11 or any other auction. *See Further Notice*, 15 FCC Rcd
    9793-94, ¶ 40.

[^75]: *See*, *e.g.*, AirGate Comments at i, 1-2, 6-7; AirGate Reply at
    4-6; Alaska/Poplar/Eldorado Comments at 3-4; ASCENT Comments at 2-9;
    Burst Comments at 3-5; Burst Reply at 4; Carolina Comments at 4;
    Carolina Reply at 4-5; Leap Comments at i, 4-5, 17-19; Leap Reply at
    10; NTCA Comments at 6-7; Northcoast Comments at 5-9; Northcoast
    Reply at 9; PCIA at 20-21; RK Communications Comments at 2; Advocacy
    Comments at 7-8; ALLTEL Reply at 2; OPM Reply at 3-5; Telecorp and
    Tritel Reply at 3-10. *But see*, *e.g.*, Nextel Comments at i, iii,
    14-17, 24; Nextel Reply at 6; RPCS Comments at 6-7; RPCS Reply at
    2-4; US West Comments at 4-5; Verizon Comments at 14-15; VoiceStream
    Comments at 5; VoiceStream Reply at 1-2, 8. *See also* BellSouth
    Reply at 1-5; CIRI Reply at 2; SBC Reply at 7-8.

[^76]: *See*, *e.g.*, Alaska/Poplar/Eldorado Comments at 2,3-4; Burst
    Comments at 3-5; Burst Reply at 4. *See also* Northcoast Comments at
    7-9; Northcoast Reply at 2-5, 9.

[^77]: As discussed above in paragraphs 23-25, we are not compelled to
    retain set-aside spectrum to fulfill the objectives of Section
    309(j).

[^78]: *See*, *e.g.*, Leap Comments at 4-13, 17-18; Leap Reply at 10.

[^79]: *See*, *e.g.*, Advocacy Comments at 7-8; AirGate Comments at 6-7;
    AirGate Reply at 4-6.

[^80]: *See* Nextel Comments at 14-16, 24; Nextel Reply at 6. BellSouth
    explains that it is a fallacy to believe that Section 309(j)
    requires the entrepreneur eligibility restrictions. *See* BellSouth
    Reply at 3-5.

[^81]: *See* RPCS Comments at 6-8; RPCS Reply at 1-7; US West Comments
    at 4-5.

[^82]: *See* VoiceStream Comments at 5; VoiceStream Reply at 1-2.

[^83]: *See* SBC Reply at 8.

[^84]: *See Further Notice*, 15 FCC Rcd at 9785-86, ¶ 19, 9788, ¶ 25,
    9790, ¶ 31.

[^85]: *See* *id.* As discussed in the *Further Notice*, there has been
    a lack of historical controversy regarding F block licenses. *Id.*
    Moreover, we note that, except for licenses won by licensees with
    substantial C block holdings, very few F block licenses have been
    reclaimed by the Commission as a result of default or bankruptcy.

[^86]: *See* *id.* at 9790, ¶ 31 and n. 81.

[^87]: *See* *id.* at 9790, ¶ 31.

[^88]: These licenses will include both 15 MHz C block licenses and 10
    MHz C block licenses that have been reconfigured from the 30 MHz C
    block licenses that were available but not sold in Auction No. 22.

[^89]: *See* Burst Comments at 5; Burst Reply at 4-5. *See also*
    Northcoast Reply at 2-5, 9.

[^90]: *See* Nextel Comments at 6-7; Nextel Reply at 6. *See also*
    Carolina Reply at 5; CIRI Reply at 2; US West Comments at 4-5;
    Verizon Comments at 5-9.

[^91]: *See* Nextel Comments at 16 (citations omitted).

[^92]: *See* CIRI Comments at 8. *See also* AirGate Comments at 7;
    Nextel Comments at i-ii, 5-11, 14-17, 24; SBC Comments at 10-11.

[^93]: We note that some 15 MHz C block licenses that were not available
    in Auction No. 22 may be included in our auction inventory for
    Auction No. 35. For Auction No. 35, bidding for such licenses in
    Tier 1 will be open; and bidding for such licenses in Tier 2 will be
    closed. *See supra* ¶ 22.

[^94]: 47 C.F.R. § 24.709(a)(1).

[^95]: *Id.* § 24.720(g).

[^96]: *Id.* § 24.709(b)(9)(i).

[^97]: *See* C*ompetitive Bidding Fifth Report and Order*, 9 FCC Rcd
    5532, 5605, ¶ 167; *Competitive Bidding Fifth Memorandum Opinion and
    Order*, 10 FCC Rcd 403, 419-20, ¶ 27 (the Commission has a strong
    interest in seeing entrepreneurs grow and succeed in the PCS
    marketplace and will under certain circumstances allow licensees to
    retain their eligibility during the holding period, even if the
    company has grown beyond the size limitations for the entrepreneur's
    block (i.e., "natural growth")).

[^98]: 47 C.F.R. § 24.839(a)(2).

[^99]: *See* Nextel Comments at iii, 20-23; Nextel Reply at 8.

[^100]: *Id.*

[^101]: *See* Leap Reply at 13.

[^102]: *See id .*at 14.

[^103]: In doing so, Leap also states that the assignment and transfer
    rule, set forth in Section 24.839, and the *Competitive Bidding
    Fifth Memorandum Opinion and Order* support its interpretation of
    the rules. *See* *id.*, *citing* *Competitive Bidding Fifth
    Memorandum Opinion and Order*, 10 FCC Rcd at 419-20, ¶ 27.

[^104]: *See* 47 C.F.R. § 24.709(a)(3).

[^105]: Under the current rules, a C or F block 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 at the short-form deadline*. See*
    47 C.F.R. § 24.709(a)(3). Total assets are generally determined by
    the applicant's most recent audited financial statements. *See* 47
    C.F.R. § 24.720(g).

[^106]: Leap was not a participant in either Auction No. 5 or Auction
    No. 10 and therefore is not eligible for the grandfather exception.
    The grandfather exception, set forth in Section 24.709(b)(9)(i),
    provides that, in addition to entities qualifying as entrepreneurs
    at the time of the short form deadline, any entity that was eligible
    for and participated in either of the first two C block auctions
    (Auction No. 5 and Auction No. 10) will be eligible to bid in any
    auction of C block spectrum that begins within two years of the
    start date of Auction No. 22 (March 23, 1999). *See* 47 C.F.R. §
    24.709(b)(9)(i). *See* *also* In re Applications of AirGate
    Wireless, L.L.C., Assignor, and Cricket Holdings, Inc., Assignee and
    Application of Leap Wireless International, Inc., For Authorization
    to Construct and Operate 36 Broadband PCS C Block Licenses,
    *Memorandum Opinion and Order*, 14 FCC Rcd 11,827 (CWD, 1999)
    ("*Leap Order*"), *aff'd*, FCC 00-269 (rel. July 27, 2000). In the
    *Leap Order*, the Commercial Wireless Division, after exhaustive
    evaluation of Leap's DE qualifications, found Leap to be qualified
    to hold the four F block (via assignment) and 36 C block licenses
    (won in Auction No. 22).

[^107]: *See* 47 C.F.R. § 24.709(b)(9)(i).

[^108]: *See* Nextel Comments at 20-23; Leap Reply at 12-14.

[^109]: *See Further Notice*, 15 FCC Rcd at 9791, ¶ 35.

[^110]: *See* Nextel Petition at 18-23.

[^111]: *See Further Notice* at 15 FCC Rcd at 9791, ¶35.

[^112]: *Id.*

[^113]: *See id.* at 9785, ¶ 17.

[^114]: *See id.*

[^115]: *See* Amendment of Part 1 of the Commission's Rules --
    Competitive Bidding Proceeding, WT Docket No. 97-82, *Order,
    Memorandum Opinion and Order and Notice of Proposed Rule Making*, 12
    FCC Rcd 5686, 5697-98, ¶16 (1997).

[^116]: The comments submitted on this issue were opposed to Nextel's
    proposal. *See* Carolina Comments at 4; CTIA Comments at 3; RCA
    Comments at 9-10; US AirWaves Comments at 9; US AirWaves Reply
    Comments at 9; US West Comments at 6; US West Reply at 4; OPM
    Comments at i, 2, 9-10, 16; RK Communications Comments at 2.

[^117]: We note that in establishing procedures for the Commission's
    upcoming auction of licenses in the 700 MHz bands, the first auction
    for which the Bureau established procedures to use a combinatorial
    or package bidding design, the Bureau declined to offer a limited
    number of packages designed by the Commission and instead allowed
    bidders to create their own grouping of licenses on which to make
    all-or-nothing bids. *See* "Auction of Licenses in the 747-762 and
    777-792 MHz Bands Scheduled for September 6, 2000, Procedures
    Implementing Package Bidding for Auction No. 31," *Public Notice*,
    DA 00-1486 (rel. July 3, 2000) at 4-5.

[^118]: *See* AT&T Comments at 4; SBC Comments at 10 n.13; VoiceStream
    Reply at 2-3.

[^119]: *See* Nextel Comments at 17 n.31; PCIA Comments at 19; OPM Reply
    at 10-11.

[^120]: For a general discussion of the benefits of and difficulties
    with package bidding, *see* "Auction of Licenses in the 747-767 and
    777-792 MHz Bands Scheduled for September 6, 2000, Procedures
    Implementing Package Bidding for Auction No. 31," *Public Notice*,
    DA 00-1486 (rel. July 3, 2000).

[^121]: *See Further Notice*, 15 FCC Rcd at 9792-93, ¶ 38; 47 C.F.R. §
    24.709(b)(9)(i).

[^122]: *See Further Notice*, 15 FCC Rcd at 9792-93, ¶ 38.

[^123]: Verizon Petition at 9-10.

[^124]: *Id.*.

[^125]: *Id.* at 10.

[^126]: The caption to the grandfather exception, 47 C.F.R. §
    24.709(b)(9)(i), reads, "Special rule for licensees disaggregating
    or returning certain spectrum in frequency block C."

[^127]: *See* Alpine Comments at 15-16. *See also* Nextel Comments at
    iii, 18-20 (a once-qualified "entrepreneur" should not be
    grandfathered if it has undergone ownership changes of more than 20%
    since its original license was issued).

[^128]: *See* Carolina Comments at 5; Carolina PCS Reply at 7-8; Dobson
    Comments at 11-12.

[^129]: *See* Dobson Comments at 12.

[^130]: *See* *id.*

[^131]: *See* Telecorp and Tritel Comments at 12.

[^132]: *See* CTIA Comments at 3-4; RK Communications Comments at 2.

[^133]: *See* BellSouth Comments at ii, 10-11 (the grandfather exception
    should be eliminated in an open auction); Nextel Comments at iv, 4,
    20; Nextel Reply at 6-7; Twenty First Wireless Comments at 11-12;
    Twenty First Wireless Reply at 5-6; Verizon Comments at 15-16 (the
    Commission should repeal the grandfather exception or, at a minimum,
    clarify the rule because entities that participated for the first C
    block auction, but did not win licenses, are eligible for the
    exception even though they have grown beyond the eligibility
    criteria); ALLTEL Reply at 3.

[^134]: *See* Dobson Comments at 12. *See also* Telecorp and Tritel
    Comments at 2-3, 11-12; PCIA Reply at 3 n.3

[^135]: See *Further Notice*, 15 FCC Rcd at 9794, ¶ 41.

[^136]: *See* *id.* at 9794, ¶ 42.

[^137]: These commenters favor an increase in the bidding credits to 25
    percent and 40 percent, respectively, for small and very small
    businesses. *See* AirGate Comments at i, 2, 7; ASCENT Comments at 4;
    Advanced Comments at 5; AT&T Comments at 7; Burst Comments at 5, 10;
    OPM Comments at 2, 5, 11-12, 16; Carolina Comments at 5-6 and
    Carolina Reply at 5-7; McBride Comments at 2; Telecorp and Tritel
    Comments at 15-16; Telecorp and Tritel Reply at 20-21;
    Alaska/Poplar/Eldorado Comments at 2, 6. *See also* Powertel
    Comments at 6; RK Communications at 3; OPM Reply at 11-12 (support
    an increase in bidding credits but do not suggest an amount). *See
    generally* Northcoast Comments at 10 (an increase in bidding credits
    should never be used as a substitute for eligibility restrictions in
    the context of a C and F block reauction); PCIA Comments at 1-3 (the
    availability of bidding credits in the absence of an entrepreneurs'
    block would have no measurable effect on entrepreneur
    participation); RTG/OPASTCO Comments at 6 (an increase in bidding
    credits will not make a difference when a small company is bidding
    against a large carrier). Other commenters support an increase of
    bidding credits of more than 25 percent and 40 percent,
    respectively, for small and very small businesses in "open" bidding.
    *See* Leap Comments at 4, 19; U.S. AirWaves Comments at 6-7 and U.S.
    AirWaves Reply at 7-8.

[^138]: *See* BellSouth Comments at ii, 11-12; VoiceStream Comments at
    12; CTIA Comments at 4. *See generally* Nextel Comments at 14;
    Dobson Comments at 16. Three other parties offer alternative
    proposals. *See* Burst Comments at 5-7, 10; Carolina Reply at 5-7;
    Twenty First Wireless Comments at 12.

[^139]: *See supra* note 78.

[^140]: *See* Dobson Comments at 13-16; Dobson Reply at 5-6.

[^141]: *See* AirGate Comments at i, 2; CIRI Comments at 9-10; CIRI
    Reply at 5; America Connect Comments at 4-5; Telecorp and Tritel
    Reply at 21.

[^142]: *See Further Notice*, 15 FCC Rcd at 9795, ¶ 44.

[^143]: *Id.*

[^144]: *See* BellSouth Comments at 13; CIRI Comments at 2-4, 8-9; OPM
    Comments at 13,16; SBC Comments at i, 2-3, 11; SBC Reply at 8-9;
    VoiceStream Comments at 6-7; VoiceStream Reply at 1, 5.

[^145]: *See* OPM Comments at 13.

[^146]: *See* BellSouth Comments at 13.

[^147]: *See Further Notice*, 15 FCC Rcd at 9795, ¶ 44.

[^148]: *Id. See also* 47 C.F.R. § 24.203.

[^149]: *See Further Notice*, 15 FCC Rcd at 9795, ¶ 44.

[^150]: *See* *Competitive Bidding Fifth Memorandum Opinion and Order*,
    10 FCC Rcd at 454-56, ¶¶ 93-96 ("\[A\]greements between
    \[entrepreneurs\] and strategic investors that involve terms (such
    as management contracts combined with rights of first refusal,
    loans, puts, etc.) that cumulatively are designed financially to
    force the \[entrepreneur\] into a sale (or major refinancing) will
    constitute a transfer of control under our rules."). *See also Leap
    Order*, 14 FCC Rcd at 11,836, ¶ 20, *aff'd*, FCC 00-269 (rel. July
    27, 2000).

[^151]: *See* AT&T Comments at 2, 9-10; Advanced Comments at 5; AirGate
    Comments at i, 2, 9; ALLTELL Reply at 3; BellSouth Comments at ii,
    12-13; Carolina Reply at 8-9; OPM Comments at 13, 16; SBC Comments
    at i, 2-3. *See also* CIRI Comments at 6 (eliminate transfer
    restrictions on incumbent licensees but impose a one-year holding
    period for licenses won in "closed" auctions to ensure that
    qualified entrepreneurs are acquiring licenses for their own
    participation ); STPCS Comments at 1, STPCS Reply at 1 (permit
    transfers to non-designated entities before the first construction
    benchmark, provided the licensee has already met the benchmark or
    can show "substantial service' throughout its system); Twenty First
    Comments at 9-10 (there should be no restrictions on very small
    Native American entrepreneurs); Telecorp and Tritel Reply at 22-23
    (Telecorp and Tritel does not oppose lifting transfer restrictions
    but believes that any modification to existing transfer limitations
    must lie solely with the qualified entity component of the
    entrepreneurial licensee).

[^152]: *See* VoiceStream Comments at 6; VoiceStream Reply at 5-6.

[^153]: *See* Alaska/Poplar/Digital Comments at 4; Alpine Comments at
    16-17 (allowing entrepreneurs to sell to large carriers upon
    construction will undermine the establishment of stable,
    entrepreneur-based competition); Leap Comments at 20 (current
    transfer restrictions should be maintained because maintaining a
    restricted aftermarket in entrepreneur's block spectrum remains an
    important tool to ensure that entrepreneurs are able to acquire
    additional spectrum and to prevent large carriers from warehousing
    spectrum); RK Communications Comments at 3-4 (strongly opposes
    proposed changes to C and F block transfer restrictions).

[^154]: We note, moreover, that we are nearing the end of the five-year
    holding period for C block licenses won in Auction No. 5 and 10.

[^155]: *See* 47 C.F.R. § 1.2111(d).

[^156]: Accordingly, we will not require a bidding credit unjust
    enrichment payment upon the transfer to an entrepreneur that is not
    a small business of a license won in Auction No. 5 or 10 within the
    first five years after the date of the initial license grant, even
    if the transferor or assignor has not yet satisfied its initial
    construction benchmark requirement. We are *not*, however,
    eliminating other unjust enrichment payment requirements for
    licenses won in Auction No. 5 and 10. *See id.* § 1.2111.

[^157]: *See Further Notice*, 15 FCC Rcd at 9795, ¶ 45.

[^158]: *Id*.

[^159]: *Id*.

[^160]: *See* AirGate Comments at 9 (recommends elimination of the
    transfer requirements upon completion of first construction
    benchmark on a system wide basis rather than a market-by-market
    basis); Carolina Comments at 8; Carolina Reply at 8-9; CIRI Comments
    at 4-5 (if the Commission requires any build-out before permitting
    license transfers, the only reasonable method for evaluating
    build-out is on a system-wide basis); CIRI Reply at 4-5; STPCS
    Comments at 4; STPCS Reply at 1 (urges the Commission to permit
    transfer and assignment of C and F block licenses to
    non-entrepreneurs prior to expiration of the first construction
    benchmark period, provided the licensee has already met the
    benchmark or can demonstrate "substantial service" throughout its
    system.); VoiceStream Comments at 11-12 (the Commission should allow
    an incumbent C or F block licensee that has not met the build-out
    benchmarks to assign or transfer licenses to any entity upon a
    showing of "substantial service" to 25 percent or more of the
    combined population in its system, rather than on a market-specific
    basis).

[^161]: Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding, PP Docket No. 93-253, *Fifth Report and Order*,
    9 FCC Rcd 5532, 5606, ¶ 171 (1994) ("*Competitive Bidding Fifth
    Report and Order*").

[^162]: *See Further Notice*, 15 FCC Rcd at 9796-97, ¶ 47; *see* 47
    C.F.R. § 24.710.

[^163]: *Competitive Bidding Fifth Report and Order*, 9 FCC Rcd at 5606,
    ¶ 170.

[^164]: S*ee* AirGate Comments at i, 2, 9; BellSouth Comments at 13-14;
    Burst Comments at 8-9; Carolina Comments at 9; CTIA Comments at 5;
    CIRI Comments at 9; VoiceStream Comments at 12-13.

[^165]: S*ee* Alpine Comments at 17; OPM Comments at i, 3,14-15; RK
    Communications Comments at 4.

[^166]: *See* 47 C.F.R. § 20.6.

[^167]: *See* 1998 Biennial Regulatory Review -- Spectrum Aggregation
    Limits for Wireless Telecommunications Carriers, WT Docket No.
    98-205, *Report and Order*, 15 FCC Rcd 9219, 9221-22, ¶¶ 1-2,
    9222-23, ¶¶ 5-6, 9229-49, ¶¶ 20-65, 9253-57, ¶¶ 77-85 (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 9253-57, ¶¶ 77-85. The Commission first
    instituted a CMRS spectrum cap in 1994, and reaffirmed the spectrum
    cap in 1996. *See id.* at 9224-25, ¶ 9, 9226-27, ¶¶ 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.

[^168]: *Id.* at 9255-56, ¶ 82.

[^169]: *Id.* at 9232, ¶ 26.

[^170]: *See* Advanced Comments at 6; AirGate Comments at 9-10; Alpine
    Comments at 17; ASCENT Comments at 3-4; Carolina Comments at 9;
    Burst Comments at 7-8; Burst Reply at 5; Leap Comments at 8-9,
    20-21; Northcoast Comments; OPM Comments at 15; OPM Reply at ii;
    VoiceStream Comments at 13; VoiceStream Reply at 7-8; US West
    Comments at 6-7; US West Reply at 2, 4; U.S. AirWaves Comments at
    9-10, U.S. AirWaves Reply at 8-9; U.S. AirWaves *Ex Parte* Comments
    at 1; RK Communications Comments at 4; Powertel Comments at 3-4, 7;
    PCIA, Polycell, and CFW Reply at 14; Southern Reply at 1-8;
    Conestoga *Ex Parte* Comments at 3.

[^171]: *See* AT&T Comments at 4-6; AT&T Reply at 1-2; BellSouth
    Comments at 14-15; Verizon Comments at 4, 20-24; CTIA Comments at
    5-6.

[^172]: *See Further Notice*, 15 FCC Rcd at 9797-98, ¶¶ 49-50.

[^173]: *See* AT&T Waiver Petition at 2-6; AT&T Reply at 3; Bell
    Atlantic Forbearance Petition at 8-13; BellSouth Waiver Petition at
    2-5; GTE Declaratory Ruling Petition at 5-7; GTE Reply at 12.

[^174]: Three of these petitions were placed on public notice. *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 (rel. February 18, 2000). Petitioners and commenters are
    listed in Appendix C. Twenty-three of the twenty-five commenters to
    this public notice opposed petitioners' requests. *See generally*
    Alaska Digitel, Poplar, and Eldorado Comments; Alaska, Poplar, and
    Eldorado Reply; American Wireless Comments; American Wireless Reply;
    Carolina Comments; CIRI Comments; CT Comments; CT Reply; Georgetown
    Comments; Leap Comments; Leap Reply; NTCA Comments; Nextel Comments;
    NextWave and NextWave Power Comments; PCIA Comments; RCA Comments;
    RTG Comments; SBC Comments; SMR Comments; Sprint Comments; TeleCorp
    Comments; TeleCorp Reply; Tritel Comments; Tritel Reply; VoiceStream
    Comments; Alpine Reply; Northcoast Reply. Only CTIA and GTE
    supported the petitions. *See generally* CTIA Comments; GTE
    Comments; GTE Reply.

[^175]: 47 C.F.R. § 1.3.

[^176]: Under Section 10 of the Communications Act, the Commission can
    forbear from applying a regulation only if it determines, among
    other things, that forbearance is "consistent with the public
    interest." 47 U.S.C. § 160.

[^177]: *See* GTE Declaratory Ruling Petition at 2, 7-8. Since first
    instituting the CMRS spectrum cap in 1994, the cap has been applied
    to the entire 180 MHz of broadband CMRS spectrum, including the 40
    MHz of C and F block spectrum. *See* Implementation of Sections 3(n)
    and 332 of the Communications Act, Regulatory Treatment Of Mobile
    Services, GN Docket No. 93-252, *Third Report and Order*, 9 FCC Rcd.
    7988, 8109-10, ¶¶ 263-64 (1994); *see also Biennial CMRS Spectrum
    Cap Order*, 15 FCC Rcd at 9254-56, ¶¶ 78-83.

[^178]: For instance, in those markets in which the C block will 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.

[^179]: The Commission reviews the CMRS spectrum cap biennially,
    pursuant to Section 11 of the Communications Act, as amended. 47
    U.S.C. § 161.

[^180]: *Further Notice*, 15 FCC Rcd at 9773, 9800, ¶ 57. *See* 47
    C.F.R. §§ 1.1200(a) and 1.1202(a).

[^181]: "Deadline for Final *Ex Parte* and Other Presentations
    Responding to Issues Raised in Further Notice of Proposed Rulemaking
    in WT Docket No. 97-82 Extended to July 17, 2000," *Public Notice*,
    DA 00-1531, (rel. July 7, 2000).

[^182]: PCIA Petition (July 21, 2000).

[^183]: Since the filing of the SBC and Nextel Petitions, we have
    received approximately 300 filings in this proceeding. *See* *infra*
    Appendices A-C (in some cases, multiple *ex parte* presentations
    filed by the same party are represented in an appendix by a single
    entry).

[^184]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et seq*.,
    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 ("SBREFA").

[^185]: *See* 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*, 15 FCC Rcd 9773, 9808-14 (rel. June 7, 2000) ("*Further
    Notice**"***).

[^186]: *See* 5 U.S.C. § 604.

[^187]: *See* *Further Notice*, 15 FCC Rcd at 9774-76, ¶¶ 1, 3.

[^188]: *See* Alpine Comments at ii-iii, 1-15, 18; Alpine Reply at 1, 6;
    Leap Comments at 14-16, NTCA Comments at 2-3; OPM Comments at i,
    2,6-9; OPM Reply at i, 6-10, Declaration; PCIA Comments at 17-20;
    PCIA Reply at 2-3, 9-14; Powertel Comments at 7; Rainbow/Push Reply
    at 7-9; Twenty First Wireless Comments at 11; Twenty First Wireless
    Reply at 1-3, 5; U.S. AirWaves Comments at 5-6; Advocacy Comments at
    5-6; North Coast Reply at i, 3-4.

[^189]: *See*, *e.g.*, Alpine Comments at ii-iii, 1-15; Alpine Reply at
    1-2, 5-7.

[^190]: *See, e.g.,* Advanced Comments at 1-2; Advocacy Comments at 15
    n.15; OPM Comments at i, 2, 4-6, 8, 16; RK Communications Comments
    at 2; Telecorp and Tritel Comments at 3, 5; US West Comments at 4;
    US West Reply at 2,4; RCA Comments at 8-9, 11-14; RCA Reply at 1-3,
    7; Twenty First Wireless Reply at 5. *See also* Advocacy Comments at
    1-5, 8; Alaska/Poplar/Eldorado Comments at 2; Alpine Comments at ii,
    4-15; Choice Comments at 1; Leap Comments at 1; NTCA Comments at 3;
    PCIA Comments at i, 4-5, 11-17; Polycell Comments at 1, 2-4;
    RTG/OPASTCO Comments at 5-6; Telecorp and Tritel Comments at 3, 5.
    *See generally* U.S. AirWaves Comments at 4-5.

[^191]: *See*, *e.g.*, OPM Comments at 4 ("Removing DE eligibility
    restrictions would diminish meaningful participation of small
    businesses in the auction process. . . \[I\]n light of the language
    of Section 309(j)(4) and its legislative history, OPM disagrees with
    the notion that meaningful participation of small businesses is a
    matter the Commission is free to purposely diminish without
    violating both the Act and the policy it is intended to implement.
    \[citation omitted\]"; Advanced at 2; AirGate Comments at 2-3;
    Alpine Comments at iii, 2, 15; Northcoast at 8; NTCA at 2; PCIA
    Comments at i, 1-5; RCA Comments at 1-2 (cover letter); RCA Comments
    at 7-10; and RTG/OPASTCO Comments at 1-2, 3-4.

[^192]: These commenters favor an increase in the bidding credits to 25
    percent and 40 percent, respectively, for small and very small
    businesses. *See* AirGate Comments at i, 2, 7; ASCENT Comments at 4;
    Advanced Comments at 5; AT&T Comments at 7; Burst Comments at 5, 10;
    OPM Comments at 2, 5, 11-12, 16; Carolina Comments at 5-6 and
    Carolina at 5-7; McBride Comments at 2; Telecorp and Tritel Comments
    at 15-16; Telecorp and Tritel Reply at 20-21; Alaska/Poplar/Eldorado
    Comments at 2, 6. *See also* Powertel Comments at 6; RK
    Communications at 3; OPM Reply at 11-12 (support an increase in
    bidding credits but do not suggest an amount). *See generally*
    Northcoast Comments at 10 (an increase in bidding credits should
    never be used as a substitute for eligibility restrictions in the
    context of a C and F block reauction); PCIA Comments at 1-3 (the
    availability of bidding credits in the absence of an entrepreneurs'
    block would have no measurable effect on entrepreneur
    participation); RTG/OPASTCO Comments at 6 (an increase in bidding
    credits will not make a difference when a small company is bidding
    against a large carrier). Other commenters support an increase of
    bidding credits of more than 25 percent and 40 percent,
    respectively, for small and very small businesses in "open" bidding.
    *See* Leap Comments at 4, 19; U.S. AirWaves Comments at 6-7 and U.S.
    AirWaves Reply at 7-8.

[^193]: *See*, *e.g.*, AT&T Comments at 1-2, 6-8, 10; BellSouth Comments
    at ii, 1, 9-10, 15; BellSouth Reply at 1,3; SBC Comments at i, 2-3,
    10-11; SBC Reply at 4-6; US West Comments at 4-5; US West Reply at
    1-4; Verizon Comments at 5-9; VoiceStream Comments at 5; VoiceStream
    Reply at 1-2, 8.

[^194]: *See*, *e.g.*, the following comments and reply comments to the
    SBC and Nextel Petitions: AT&T Comments at 2-4; Bell Atlantic
    Comments at 9-10; GTE at 11-13 (re spectrum cap); Nextel Reply at
    21-22; SBC Comments at 12-13.

[^195]: *See id*.

[^196]: *See* 5 U.S.C. §§ 601-612.

[^197]: *Id.*

[^198]: *Id.* § 601(6).

[^199]: *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.

[^200]: *Id.* § 632.

[^201]: *Id.* § 601(4).

[^202]: 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).

[^203]: 5 U.S.C. § 601(5).

[^204]: U.S. Dept. of Commerce, Bureau of the Census, "1992 Census of
    Governments."

[^205]: *Id.*

[^206]: *See supra* note 16.

[^207]: *See* 47 C.F.R. § 24.720(b)(1).

[^208]: *See id.* § 24.720(b)(2).

[^209]: *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).

[^210]: "Entrepreneurs' C Block Auction Closes," *Public Notice*, DA
    96-716 (rel. May 8, 1996).

[^211]: "Entrepreneurs' C Block Reauction Closes," *Public Notice,* DA
    96-1153 (rel. July 17, 1996).

[^212]: FCC News, Broadband PCS, D, E, and F Block Auction Closes, No.
    71744 (rel. Jan. 14, 1997).

[^213]: "C, D, E, and F Block Broadband PCS License Auction Closes,"
    *Public Notice*, DA 99-757 (rel. April 20, 1999).

[^214]: *See Further Notice*, 15 FCC Rcd at 9781 n.32.

[^215]: "Auction of Licenses for C and F Block Broadband PCS Spectrum
    Postponed Until November 29, 2000," *Public Notice*, DA 00-1246
    (rel. June 7, 2000).

[^216]: *See generally* 47 C.F.R. Part 1, Subpart Q; Part 24.

[^217]: Section 309(j) of the Communications Act of 1934, as amended
    ("Communications Act"), 47 U.S.C. § 309(j).

[^218]: *See* 47 U.S.C. § 309(j)(3)(B).

[^219]: *See* *id.* § 24.202.

[^220]: *See Further Notice*, 15 FCC Rcd at 9791, ¶ 35.

[^221]: *See* AT&T Comments at 4; SBC Comments at 10 n.13, VoiceStream
    Reply at 2-3.

[^222]: *See* Nextel Comments at 17 n.31; PCIA Comments at 19; OPM Reply
    at 10-11.

[^223]: *See Further Notice*, 15 FCC Rcd at 9795, ¶ 45.

[^224]: 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).

[^225]: 47 U.S.C. § 309(j)(3)(B).

[^226]: *Id.* §§ 309(j)(3)(A), (C).