DA 02-2077

Dr. Jo Anne Y. McFarland

President

Central Wyoming College

2660 Peck Avenue

Riverton, WY 82501

Mr. Peter W. Morrill

General Manager

State Board of Education, State of Idaho

1455 North Orchard

Boise, ID 83706

> Re: **Central Wyoming College and State Board of Education, State of
> Idaho -- FCC Form 175 Applications to Participate in Auction No. 44**

Dear Dr. McFarland and Mr. Morrill:

This letter responds to the Central Wyoming College's ("Central
Wyoming") and the State Board of Education, State of Idaho's ("State
Board") requests that their short-form applications to participate in
the Lower 700 MHz band auction ("Auction No. 44") be accepted and
processed outside of the Commission's competitive bidding process. This
letter also responds to Central Wyoming and the State Board's Joint
Emergency Motion for Partial Stay of Auction No. 44.[^1] In claiming
that they are exempt from the requirement to participate in Auction No.
44 to obtain the licenses they selected on their short-form applications
(FCC Form 175), Central Wyoming and the State Board assert that they are
not required to submit upfront payments or make any other payments in
connection with the competitive bidding process.[^2] In addition,
Central Wyoming and the State Board seek a waiver of the requirement to
submit certain financial information to establish their eligibility for
bidding credits.[^3] For the reasons explained below, we dismiss Central
Wyoming's and the State Board's requests as moot.

**I. [Background]{.underline}**

Central Wyoming and the State Board filed timely short-form applications
to participate in Auction No. 44.[^4] In their Applications, Central
Wyoming and the State Board state that they are noncommercial
educational ("NCE") entities and intend to use the Lower 700 MHz
(698-746 MHz) band spectrum to provide new digital noncommercial
educational television broadcast service.[^5] Further, they claim that,
pursuant to Section 309(j)(2)(C) of the Communications Act of 1934, as
amended (the "Act"),[^6] they are exempt from any requirement to
participate in the competitive bidding process that the Commission will
use to assign new licenses for the Lower 700 MHz band.[^7] In support of
their assertions that they are not required to bid at auction for the
Lower 700 MHz band licenses they seek, and their request for waiver of
the requirement to provide financial information demonstrating their
eligibility for bidding credits, Central Wyoming and the State Board
cite *National Public Radio v*. *FCC*.[^8]

Instead of submitting an upfront payment by the May 30, 2002, deadline,
Central Wyoming and the State Board each submitted a "Position Statement
Regarding Upfront Payments," in which they further argue that their
status as NCEs under Section 309(j)(2)(C) of the Act requires that we
accept their applications and process them outside of the competitive
bidding process. [^9] Because Central Wyoming and the State Board did
not submit upfront payments, which determine an applicant's eligibility
to bid in an auction, these applicants could not become "qualified
bidders" in Auction No. 44.[^10] Accordingly, in a public notice
released on June 7, 2002, Central Wyoming and the State Board were
listed as unqualified to participate in Auction No. 44.[^11]

On June 12, 2002, Central Wyoming and the State Board filed with the
Commission a Joint Emergency Motion for Partial Stay of Auction No. 44
with respect to the Lower 700 MHz licenses listed on their short-form
applications.[^12] At the time that they made their joint filing,
Auction No. 44 was scheduled to commence on June 19, 2002.[^13] The NCEs
stated that that they would file with the United States Court of Appeals
for the District of Columbia Circuit a motion for judicial stay of
Auction No. 44 if the Commission did not act on the stay request by noon
on June 14, 2002.[^14]

On June 14, 2002, the Commission released a Memorandum Opinion and Order
addressing issues that had been raised in petitions for reconsideration
of the *Lower 700 MHz Report and Order*.[^15] After rejecting an
argument that public safety eligibles are permitted to apply for
licenses in the Lower 700 MHz band without participating in an auction,
pursuant to the "public safety radio services" exemption of Section
309(j)(2)(A) of the Communications Act,[^16] the Commission decided on
its own motion that NCEs are not eligible to apply for initial licenses
for new services in the Lower 700 MHz band.[^17] The Commission
determined that prohibiting NCEs from applying for licenses in this
flexible-use band "will eliminate uncertainties about the outcome of the
competitive bidding process and promote our goals of assigning these
licenses expeditiously and promoting the intensive and efficient use of
this spectrum."[^18]

Because the Commission did not act on their requests by noon on June 14,
2002, Central Wyoming and State Board filed a joint emergency motion for
partial stay of the auction and joint petition for writ of mandamus with
the D.C. Circuit seeking to compel the Commission to address the issues
raised in their Applications.[^19] On June 18, 2002, the court of
appeals denied the joint emergency motion for stay, finding that the
petitioners had not demonstrated the requisite irreparable injury to
warrant a stay.[^20]

**II. [Discussion]{.underline}**

The applicants' claim that they are exempt from competitive bidding
procedures, pursuant to Sections 309(j)(2)(C) and 397(6) of Act, was
rendered moot by the Commission's decision in its *Lower 700 MHz
Reconsideration Order* that NCEs are not eligible to apply for initial
licenses in this spectrum band. Because Central Wyoming and the State
Board, as NCEs, are not eligible to apply for initial licenses in the
Lower 700 MHz band, the Commission need not consider whether the Section
309(j)(2)(C) auction exemption would apply to their Applications.[^21]
For the same reason, we dismiss the motion for stay, which was filed to
defer the auction pending the Commission\'s action on the matters
rendered moot by the Lower 700 MHz Reconsideration Order. We note that
the D.C. Circuit denied the applicants\' motion for stay on the merits.
[^22]

**III. [Conclusion]{.underline}**

For the reasons stated above, the requests filed by Central Wyoming
College and the State Board of Education, State of Idaho to have their
applications processed outside of the Commission's competitive bidding
process and for waiver of the payment and disclosure requirements in
connection with Auction No. 44 are dismissed as moot. Central Wyoming
and the State Board's related Joint Emergency Motion for Partial Stay is
also dismissed as moot.

This action is taken pursuant to Sections 4(i), 4(j), 303(r), and 309(j)
of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i),
154(j), 303(r), and 309(j), under authority delegated pursuant to
Section 0.331 of the Commission's rules.

Margaret W. Wiener

Chief, Auctions and Industry Analysis Division

Wireless Telecommunications Bureau

cc: Anne G. Crump, Esq.

[^1]: Joint Emergency Motion for Partial Stay of Central Wyoming College
    and the State Board of Education, State of Idaho (filed June 14,
    2002).

[^2]: *See, e.g.,* 47 C.F.R. §§ 1.2104(g) (withdrawal, default, and
    disqualification payments), 1.2106 (requirement to submit upfront
    payments); 1.2107 (requirement of high bidders to submit
    downpayments).

[^3]: *See* 47 C.F.R. § 1.2110(b) (requirement of applicants to disclose
    gross revenues). Central Wyoming and the State Board's waiver
    requests are premised on a notion that, in seeking to obtain
    licenses included in the Auction No. 44 inventory without making any
    payments, they are essentially seeking a 100 percent bidding credit.
    Central Wyoming College, FCC Form 175 Application to Participate in
    Auction No. 44 (filed May 8, 2002); State Board of Education, State
    of Idaho, FCC Form 175 Application to Participate in Auction No. 44
    (filed May 8, 2002) (collectively, the "Applications"). For the
    reasons set forth below, we need not address Central Wyoming's and
    the State Board's assertions that their requests are tantamount to a
    request for a 100 percent bidding credit.

[^4]: ^?^ *See* Applications.

[^5]: *See id.*, Further Bidding Credit Explanation/Auction Exemption,
    Exhibit C, at 1 (filed May 30, 2002).

[^6]: 47 U.S.C. § 309(j)(2) (C) states that the FCC's competitive
    bidding authority "shall not apply to licenses or construction
    permits issued by the Commission" for "stations described in section
    397(6)." 47 U.S.C. § 397(6) defines a "noncommercial educational
    broadcast station" to mean "a television or radio broadcast station
    which (A) under the rules and regulations of the Commission in
    effect on the effective date of this paragraph, is eligible to be
    licensed by the Commission as a noncommercial educational radio or
    television broadcast station and which is owned and operated by a
    public agency or nonprofit private foundation, corporation, or
    association; or (B) is owned and operated by a municipality and
    which transmits only noncommercial programs for educational
    purposes."

[^7]: *See* Applications, Bidding Credit Explanation/Auction Exemption,
    Exhibit C (as amended May 30, 2002); Position Statement Regarding
    Upfront Payments, Exhibit F (as amended May 30, 2002). Although each
    of the Applications indicates that the applicant claims eligibility
    as an "entrepreneur" under Section 27.702 of the Commission's rules,
    47 C.F.R. § 27.702(a)(1), and the associated 35 percent bidding
    credit, the applicants contend that they did so only because those
    choices were the highest available credit allowed on the form. *See
    id.*, Exhibits C and G.

[^8]: *See* *id.*, Bidding Credit Explanation/Auction Exemption, Exhibit
    C, at 2; Position Statement Regarding Upfront Payments, Exhibit F,
    at 5-6 (citing *National Public Radio v. FCC*, 254 F.3d 226 (D.C.
    Cir. 2001) (holding that Section 309(j)(2)(C) exempts NCEs from
    participating in auctions for broadcasting spectrum, whether or not
    the spectrum has been reserved for educational use)).

[^9]: *Id.*, Position Statement Regarding Upfront Payments, at 6 (filed
    May 30, 2002).

[^10]: *See* 47 C.F.R. § 1.2106(c) ("If the applicant does not submit at
    least the minimum upfront payment, it will be ineligible to bid, its
    application will be dismissed and any upfront payment it has made
    will be returned."); *see also* "Auction of Licenses in the 698-736
    MHz Band Scheduled For June 19, 2002; Notice and Filing
    Requirements, Minimum Opening Bids, Upfront Payments and Other
    Auction Procedures," *Public Notice,* DA 02-563, at 23 (rel. March
    20, 2002) ("In order to be able to bid in the auction, applicants
    must submit an upfront payment accompanied by an FCC Remittance
    Advice Form (FCC Form 159)."). The Commission has long recognized
    that the upfront payment requirement is necessary to provide
    "assurance that each bidder is a bona fide applicant and that each
    bid is sincere." Implementation of Section 309(j) of the
    Communications Act - Competitive Bidding, PP Docket No. 93-253*,
    Second Report and Order*, 9 FCC Rcd. 2378 ¶ 175 (1994). This
    requirement is also integral to the auction process because the
    amount of a bidder's upfront payment determines that bidder's
    maximum eligibility to bid on licenses during an auction.

[^11]: "Auction of Licenses for 698-746 MHz Band," *Public Notice*, DA
    02-1346, Attachment C (rel. June 7, 2002) ("*Auction No. 44
    Qualified Bidders Public Notice*"). That public notice also states
    that the licenses selected by Central Wyoming and the State Board on
    their short form applications are subject to resolution of the
    issues discussed herein. *Id.* at n. 2.

[^12]: *See* Joint Emergency Motion for Partial Stay.

[^13]: *See Auction No. 44 Qualified Bidders Public Notice*, at 1.
    Subsequently, on June 19, 2002, the President signed into law
    legislation that directed the Commission to delay indefinitely the
    auction of initial licenses in Blocks A, B and E of the Lower 700
    MHz band (and licenses in the Upper 700 MHz band), and to conduct an
    auction of initial licenses in Blocks C and D of the Lower 700 MHz
    band before September 19, 2002. *See* Auction Reform Act of 2002,
    Pub. L. No. 107-195, 116 Stat. 715 (2002). Pursuant to this
    legislation, the auction of Block C and D initial licenses is
    scheduled to commence on August 27, 2002. *Id.*; *see also* "Auction
    44 Revised Schedule, License Inventory, and Procedures," *Public
    Notice* DA 02-1491 (rel. June 26, 2002).

[^14]: *See* Joint Emergency Motion for Partial Stay, at 4.

[^15]: *See* Reallocation and Service Rules for the 698-746 MHz Spectrum
    Band (Television Channels 52-59), *Report and Order*, 17 FCC Rcd
    1022 (2002).

[^16]: 47 U.S.C. § 309(j)(2)(A) provides that the Commission's
    competitive bidding authority does not apply to licenses or
    construction permits issued by the Commission "for public safety
    radio services."

[^17]: *See* Reallocation and Service Rules for the 698-746 MHz Spectrum
    Band (Television Channels 52-59), *Memorandum Opinion and Order*,
    FCC 02-185, at ¶¶ 35-38 (rel. June 14, 2002).

[^18]: *Id.* at ¶ 39. In arriving at this decision, the Commission did
    not reach the issue of whether the Section 309(j)(2)(C) exemption
    would apply to mutually exclusive license applications for new
    services in the Lower 700 MHz band if NCES were eligible to apply
    for such licenses. *See id.* at n.102.

[^19]: *See* Joint Emergency Motion for Partial Stay and Joint Petition
    For Writ Of Mandamus, In re: Central Wyoming College and State Board
    of Education, State of Idaho, No. 02-1191 (D.C. Cir., filed June 14,
    2002).

[^20]: *See* In re: Central Wyoming College and State Board of
    Education, State of Idaho, No. 02-1191 (D.C. Cir.), Order, filed
    June 18, 2002 (per curiam). On July 18, 2002, the Commission opposed
    the joint petition for writ of mandamus, requesting that the court
    dismiss the petition as moot. *See* Opposition to Joint Petition for
    Writ of Mandamus, No. 02-1191 (D.C. Cir. filed July 18, 2002).
    Subsequently, on July 24, 2002, Central Wyoming and the State Board
    notified the court that they do not oppose dismissal of the
    petition. *See* Comments, No. 02-1191 (D.C. Cir. filed July 24,
    2002).

[^21]: *See* Comments, No. 02-1191 (D.C. Cir. filed July 24, 2002).

[^22]: *See* In re: Central Wyoming College and State Board of
    Education, State of Idaho, No. 02-1191 (D.C. Cir.), Order, filed
    June 18, 2002 (per curiam) (citing *Washington Metropolitan Area
    Transit Commission v. Holiday Tours, Inc.*, 559 F.2d 841, 843 (D.C.
    Cir. 1977)).