55348 Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Rules and Regulations

TABLE 1.—WASTES EXCLUDED FROM NON-SPECIFIC SOURCES—Continued

Facility Address Waste description

1. Verification Testing: GM must implement an annual testing

program to demonstrate, based on the analysis of a minimum

of four representative samples, that the constituent concentrations measured in the TCLP (or OWEP, where appropriate)

extract of the waste are within specific levels. The constituent

concentrations must not exceed the following levels (mg/l)

which are back-calculated from the delisting health-based levels and a DAF of 90: Arsenic—4.5; Cobalt—189; Copper—

126; Nickel—63; Vanadium—18; Zinc—900; 1,2-

Dichloroethane—0.45; Ethylbenzene—63; 4-Methylphenol—

16.2; Naphthalene—90; Phenol—1800; and Xylene—900. The

constituent concentrations must also be less than the following

levels (mg/l) which are the toxicity characteristic levels: Barium—100.0; and Chromium (total)—5.0.

2. Changes in Operating Conditions: If GM significantly changes

the manufacturing or treatment process or the chemicals used

in the manufacturing or treatment process, GM may handle

the WWTP filter press sludge generated from the new process

under this exclusion after the facility has demonstrated that the

waste meets the levels set forth in paragraph 1 and that no

new hazardous constituents listed in Appendix VIII of Part 261

have been introduced.

3. Data Submittals: The data obtained through annual verification

testing or paragraph 2 must be submitted to U.S. EPA Region

5, 77 W. Jackson Blvd., Chicago, IL 60604–3590, within 60

days of sampling. Records of operating conditions and analytical data must be compiled, summarized, and maintained on

site for a minimum of five years and must be made available

for inspection. All data must be accompanied by a signed copy

of the certification statement in 260.22(I)(12).

* * * * * * *

[FR Doc. 97–28274 Filed 10–23–97; 8:45 am]

BILLING CODE 6560–50–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Parts 1 and 24

[WT Docket No. 97–82; FCC 97–342]

Installment Payment Financing for

Personal Communications Services

(PCS) Licensees

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: In this Second Report and

Order the Commission orders

resumption of installment payments for

the broadband Personal

Communications Services (PCS) C and F

blocks, with the payment deadline

reinstated as of March 31, 1998. The

Commission adopts disaggregation,

amnesty, and prepayment options

designed to assist C block licensees

experiencing financial difficulties.

These options will allow C block

licensees to build systems or surrender

spectrum to the Commission for

reauction. The Commission’s objectives

in this proceeding are to ensure that the

C block licensees have opportunities to

provide service to the public while

maintaining the fairness and integrity of

the Commission’s auctions program.

EFFECTIVE DATE: The effective date of the

rule changes herein is December 23,

1997. The information collection

contained in these rules becomes

effective on OMB approval but no

sooner than December 23, 1997. The

Commission will publish a document

on a later date announcing the effective

date of the information collection.

FOR FURTHER INFORMATION CONTACT:

Jerome Fowlkes or Sandra Danner,

Auctions and Industry Analysis

Division, Wireless Telecommunications

Bureau, at (202) 418–0660.

SUPPLEMENTARY INFORMATION: This

Second Report and Order in WT Docket

No. 97–82, adopted on September 25,

1997 and released on October 16, 1997,

is available for inspection and copying

during normal business hours in the

FCC Reference Center, Room 239, 1919

M Street, N.W., Washington, D.C. 20554.

The complete text may be purchased

from the Commission’s copy contractor,

International Transcription Service,

Inc., 1231 20th Street, N.W.,

Washington, D.C. 20036 (202) 857–3800.

The complete Second Report and Order

also is available on the Commission’s

Internet home page (http://

www.fcc.gov).

Summary of Action

I. Background

1. In the Competitive Bidding Fifth

Report and Order, the Commission

established a variety of incentives to

encourage small businesses to

participate in the auction of C block 30

MHz and F block 10 MHz broadband

PCS licenses. See Implementation of

Section 309(j) of the Communications

Act—Competitive Bidding, Fifth Report

and Order, 59 FR 37566 (July 22, 1994)

(Competitive Bidding Fifth Report and

Order). Provisions to promote

participation by small businesses in

broadband PCS included limiting

eligibility in the initial C and F block

auctions to entrepreneurs and small

businesses, offering varying bidding

credits, and offering installment

payment plans. The installment

payment plan for C block permitted

licensees that qualified as small

businesses to pay 90% of the bid price

over a period of ten years, with interest

only paid for the first six years and

interest and principal for the remaining

four. See 47 CFR § 24.711(b)(3). In

addition, there were other installment

payment options available for bidders
Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Rules and Regulations 55349

qualifying as entrepreneurs. See 47 CFR

§§ 24.711(b)(1)–(3). All bidders in the C

block auction, however, qualified as

small businesses. Installment payments

for small business F block licensees

were limited to 80% of the bid price

over ten years, and payments consist of

interest only for the first two years, then

interest and principal for the remaining

eight years. See 47 CFR § 24.716(b)(3).

Entrepreneurs were also eligible for less

favorable installment payment terms.

See 47 CFR §§ 24.711(b)(1)–(2).

2. On May 6, 1996 and July 16, 1996,

the Commission concluded its

broadband PCS C block auctions. Ninety

bidders (including the C block reauction

winners) won 493 C block licenses. The

broadband PCS D, E, and F block

auction concluded on January 14, 1997,

and 88 bidders won 491 F block

licenses. Net high bids received for C

block 30 MHz licenses, including C

block reauction bids, totalled

approximately $10.2 billion; net high

bids received for F block 10 MHz

licenses totalled $642.3 million.

3. While many C block licenses were

purchased for prices below or

comparable to those for the A or B

blocks, a handful of large bidders bid

extremely high prices per pop for major

markets, even adjusted for the value of

the government financing we provide.

The aggregate results of the C block

auction, when measured in average

price per pop paid, are markedly higher

than the other PCS bands, even after

adjusting for financing, and even though

many individual small licensees bid

prices comparable to those paid for the

A and B block PCS licenses.

4. When formulating its original

auction rules in 1994, the Commission

considered the possibility of debt

restructuring and observed that it would

follow current procedures under the

existing debt collection rules and

procedures. See Implementation of

Section 309(j) of the Communications

Act—Competitive Bidding, Second

Report and Order, 59 FR 22980 (May 4,

1994) (Competitive Bidding Second

Report and Order).

5. The Notice of Proposed Rulemaking

to revise the part 1 auction rules sought

comment on several topics related to

auction installment debt. See

Amendment of Part 1 of the

Commission’s Rules—Competitive

Bidding Proceeding, Order,

Memorandum Opinion and Order, and

Notice of Proposed Rule Making, 62 FR

13540 (March 21, 1997) (Part 1

Proceeding). The Commission sought

comment on imposing late payment fees

on installment payments; the default

provisions of § 1.2104(g) in the event of

installment payment defaults; and

revised procedures for granting grace

period requests.

6. On March 31, 1997, in response to

a joint request from several C block

licensees seeking to modify their

installment payment obligations, and

because of other debt collection issues,

the Wireless Telecommunications

Bureau (Bureau) suspended the

deadline for payment of installment

payments for all C block licensees. On

April 28, 1997, the Bureau extended the

suspension to F block licensees.

7. On June 30, 1997, the Bureau

conducted a public forum in

Washington, D.C. (‘‘FCC Public Forum’’)

to discuss broadband PCS C and F block

installment payment issues, including

the alternative financing arrangements

proposed in connection with the Public

Notices issued on June 2, 1997. An FCC

Task Force also was established which

included representatives from the

Bureau, the Office of Plans and Policy,

the Office of General Counsel, and the

Office of Communications Business

Opportunities. This Task Force was

charged with evaluating proposals for

alternative financing arrangements

submitted by PCS C and F block

licensees and recommending to the

Commission how to respond to those

proposals. Both before and after the FCC

Public Forum, numerous comments,

reply comments, and ex parte letters

and presentations were submitted to the

Commission as part of this proceeding.

The Commission thus has before it a

wide range of proposals from

entrepreneur block licensees, financial

institutions and investors, equipment

vendors, and other interested parties.

II. Second Report and Order

8. The Commission requires C and F

block licensees to resume their Note

payments on March 31, 1998. They will

also be required to pay on that date oneeighth of the Suspension Interest, and

thereafter, pay one-eighth of the

Suspension Interest with each regular

installment payment made until the

Suspension Interest is paid in full.

‘‘Suspension Interest’’ is the entire

amount of the unpaid simple interest

that was accrued at the rate set forth in

each licensee’s Note(s) during the

period beginning with the date on

which each license was conditionally

granted through and including March

31, 1998 (‘‘Suspension Period’’). After

March 31, 1998, payment due dates will

conform to those indicated in the Notes

executed by the licensees. C block

licensees will be entitled to elect to

continue making payments under their

original C block Notes. In addition, the

Commission adopts three options

relating to the rules governing

installment payments for the C block.

These are designed to help to resolve

the financing issues facing C block

licensees and restore certainty to the

marketplace, while at the same time

helping the Commission meet its

statutorily mandated public interest

considerations set forth under Section

309(j) of the Communications Act.

9. These goals will also be furthered

by generally applying the same rules

regarding eligibility that were used in

the C block auction to the reauction of

C block licenses. See 47 CFR § 24.709.

All applicants for the reauction meeting

the current definition of ‘‘entrepreneur’’

will be eligible to bid in the reauction.

The Commission will also allow all

entities that were eligible for and

participated in the original C block

auction to bid in the reauction. Further,

with the exception of incumbent

licensees who choose to disaggregate

portions of spectrum they currently

hold, and those licensees who surrender

licenses under the prepayment option,

all C block licensees who return licenses

to the Commission will be eligible to bid

on all markets in the reauction.

A. Resumption of Payments

10. Effective March 31, 1998, the

Commission rescinds the Order and

Public Notice suspending payments for

the C and F block licenses and reinstates

the installment payment plans for all C

and F block licensees. The Commission

directs that all payments due and owing

on and after March 31, 1998 be made in

accordance with the terms of each

licensee’s Note, associated Security

Agreement, and the Commission Orders

and regulations. All Suspension Interest

will become due and payable over a

two-year period and all Commission

rules regarding installment payments

and defaults for the broadband PCS C

and F blocks will remain in effect. Any

C or F block licensee that fails to remit

the payment due on March 31, 1998,

and remains delinquent for more than

60 days (i.e., fails to make the March 31,

1998, payment on or before May 30,

1998), will be in default on its license.

See 47 CFR § 1.2110(e)(4)(i). The 60-day

period is an exception to the existing

rules that provide for an automatic 90-

day non-default period. Given the one

year suspension, the Commission

believes that providing a shorter

automatic grace period is justified.

11. Any licensee that continues under

its original Note(s), will be required to

pay on March 31, 1998, one-eighth of

the Suspension Interest; thereafter,

regular payments will become due and

payable in accordance with the

provisions of the licensee’s original

Note. The Commission concludes that it
55350 Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Rules and Regulations

could place a significant burden on

licensees to require payment of the

entire amount of the Suspension Interest

on March 31, 1998. Therefore, the

Commission requires that broadband

PCS C and F block licensees submit oneeighth of the Suspension Interest on

March 31, 1998, and one-eighth of the

Suspension Interest with each regular

installment payment made thereafter

until the Suspension Interest is paid in

full. After March 31, 1998, payment due

dates will conform to those indicated in

the Note(s) executed by the licensees.

While the first regular installment

payment next made after March 31,

1998, will be pro-rated to account for

the resumption of payments on March

31, 1998, all regular installment

payments thereafter will be in the

amounts shown on the amortization

schedule attached to and made a part of

each Note, as amended, plus the

applicable payments of Suspension

Interest. For example, for those

licensees granted in September, 1996

whose regular installments occur on

March 31, June 30, September 30, and

December 31 of each year, the next

regular payment due after March 31,

1998, will be due on June 30, 1998, and

will include the amount of interest

accrued from April 1, 1998, through and

including June 30, 1998, plus one-eighth

of the Suspension Interest. The next

regular payment will be due on

September 30, 1998, and will be due in

the amount shown on the amortization

schedule attached to the Note (i.e.,

interest from July 1, 1998, through and

including September 30, 1998), plus

one-eighth of the Suspension Interest.

Regular payments will continue on each

and every December 31, March 31, June

30, and September 30 thereafter until

the Note is paid in full. For these

licensees, the payment due on

December 31, 1999, will be the last

payment due that includes any

amortized Suspension Interest. All

payments after that date will continue

in accordance with the terms of the

amortization schedule attached to the

Note executed by the licensee. All

installment payments previously made

by licensees who elect one of the three

options will be applied in accordance

with the provisions set forth under the

discussion of each option below.

12. The Commission delegates to the

Bureau authority to set forth all

procedures for implementing the

resumption of payments.

13. Broadband PCS C block licensees

choosing to surrender their licenses

pursuant to the amnesty option

described below and those surrendering

licenses that are not prepaid pursuant to

the prepayment option described below

will be required to return to the

Commission each original Note and

Security Agreement for cancellation by

the Commission. The Commission will

not entertain any requests for an

extension of the March 31, 1998

deadline beyond the automatic 60-day

non-default period discussed above. The

licensees have already been afforded a

significant period to licensees during

which payments were not required.

Therefore, the Commission intends to

deny any requests for a grace period

beyond the automatic 60-day nondefault period adopted herein,

including any requests made pursuant

to § 1.2110 of the Commission’s rules.

See 47 CFR § 1.2110(e)(4)(ii).

14. C block licensees may resume

payments under their current Note or

elect one of the three options described

below.

B. Disaggregation of Spectrum for

Reauction

15. Under the disaggregation option

adopted today by the Commission, any

C block licensee may disaggregate a

portion of its spectrum from each of its

licenses and surrender it to the

Commission for reauction. The licensee

must disaggregate 15 MHz of spectrum

it holds across all Basic Trading Areas

(BTAs) in an Major Trading Area

(MTA). These provisions prevent

licensees from selectively surrendering

spectrum for which they may believe

they paid too much, or otherwise

discarding spectrum in markets that

may be more difficult to serve

(commonly referred to as ‘‘cherrypicking’’ of licenses or spectrum). The

Commission limits the ability of

licensees to selectively disaggregate

spectrum within an MTA also to

facilitate attempts by new bidders to

aggregate spectrum and initiate service.

Because the Commission is allowing

disaggregation on an MTA-by-MTA

basis, special exemptions for built-out

systems, such as the one adopted under

the amnesty option discussed below, are

unnecessary. In cases where a licensee

has built-out a BTA, it can choose either

to retain all 30 MHz in each of the BTAs

it has licenses for in an MTA, or it can

operate its built-out system with 15

MHz. The Commission believes that this

flexibility mitigates the need for a buildout exception for this option.

16. Licensees electing this option will

be required to return half of their

spectrum at 1895–1902.5 MHz paired

with 1975–1982.5 MHz, which is

spectrum contiguous to the PCS F block.

The surrender of spectrum adjacent to

the F block will provide sufficient

contiguous spectrum for both the

incumbent and new licensees to offer

competitive PCS services.

17. Under the disaggregation option,

the Commission will reduce the amount

of the debt owed by an amount equal to

the pro rata portion of the spectrum

returned to the Commission, i.e., by

50%, subject to coordination with the

Department of Justice pursuant to

applicable federal claims collection

standards. The Commission will retain

the pro rata portion of the down

payments applicable to the spectrum.

The following illustrates how this

proposal would operate in practice:

Company X holds a 30 MHz license in a

BTA market; paid the Commission $100,000

in its down payment; and owes the

Commission $900,000 on a net bid of

$1,000,000. Company X could disaggregate

15 MHz and surrender it to the Commission

for reauction, and the Commission would

retain $50,000 of the down payment. In

return, the Commission would reduce the

licensee’s obligation to the government to

$450,000.

The face amount of the licensee’s

Note will be adjusted to reflect the new

principal, and the Note will then be

amortized from the original date of

execution to calculate the payments at

the new face amount of the Note. All

installment payments made as of March

31, 1997 (including any payments due

prior to and on March 31, 1997) will be

applied to reduce the amount of the

Suspension Interest calculated on the

new principal balance to be made in

eight equal payments beginning March

31, 1998.

18. Where applicable, the existing

disaggregation rules will govern this

option. See 47 CFR § 24.714. However,

the broadband disaggregation rules were

not designed for the surrender of

spectrum to the Commission. Thus,

existing rule provisions on designated

entity transfer restrictions, unjust

enrichment, installment payments,

abbreviated license terms and

construction requirements, restrictions

on the amount of spectrum that can be

disaggregated, and similar rules will not

apply to disaggregation to the

Commission authorized by this option.

In order to take advantage of the

disaggregation option, licensees will be

required to make an election consistent

with the procedures specified in this

Second Report and Order.

19. In order to avoid unjust

enrichment, licensees (defined as

qualifying members of the licensee’s

control group, and their affiliates) will

be prohibited from bidding in the

subsequent reauction for spectrum the

incumbent licensee has disaggregated.

However, they will be permitted to

acquire spectrum for any BTA for which
Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Rules and Regulations 55351

the incumbent licensee has not

disaggregated spectrum. The

Commission does not believe that it

would be fair for these entities to benefit

from a reauction after taking advantage

of the disaggregation option. To ensure

further against unjust enrichment, these

entities will also be barred from

reacquiring the spectrum they have

surrendered to the Commission through

a secondary market transaction for a

period of two years from the start of a

reauction.

20. The Commission believes that the

disaggregation option set forth above is

consistent with the goals in this

proceeding and serves the public

interest. First, this option preserves the

credibility and integrity of the

Commission’s rules. The relief provided

is another means of making more

efficient use of the spectrum. It does not

provide a windfall or unfair advantage

to the C block licensees availing

themselves of the disaggregation option.

The disaggregating licensee continues to

pay for spectrum at its net high bid

price, and the Commission receives full

payment for the spectrum retained by

the licensee. In addition, the

Commission will retain 50% of the

down payment consistent with the

amount of spectrum being surrendered

to the Commission. Moreover,

disaggregation with a pro rata

adjustment in debt is consistent with

the Commission’s rules with regard to

private party disaggregation.

21. Second, the disaggregation option

is fair and equitable to all interested

parties. Losing bidders and other

eligible parties will have an opportunity

to bid on the disaggregated spectrum in

the reauction. Also, by limiting

disaggregation of spectrum to 15 MHz

blocks on a BTA within an MTA basis,

the Commission increases the likelihood

that the licenses available for reauction

will be in quantities and geographic

clusters that are commercially viable. In

addition, by providing this limited

opportunity to ‘‘pick and choose’’ which

licenses to disaggregate, and not

requiring the surrender of all 30 MHz of

the spectrum it holds in an MTA, this

option is fair to those who have builtout some of their markets. This option

does not materially alter the competitive

landscape for commercial mobile radio

services. Given the current state of the

market and the Commission’s existing

rules, it is reasonable to expect that

some C block spectrum will be

transferred to competitors through

reauction or private sale. The

Commission’s action here facilitate this

process, by reducing the amount of

spectrum that would otherwise be

marketed in a piecemeal fashion.

Moreover, as noted above, other parties

will have an opportunity to bid on this

spectrum in the reauction and, because

of the spectrum’s proximity to the F

block, the spectrum may be particularly

attractive to prospective licensees.

22. Third, the disaggregation option is

consistent with the Section 309(j)

obligation for the Commission to

promote opportunities for designated

entities, including small businesses.

This option should assist current C

block licensees in moving forward with

the deployment of their service

offerings. Disaggregation will also

provide opportunities for other small

businesses to enter the PCS market in

the future. Finally, by requiring C block

licensees to disaggregate the 15 MHz of

spectrum adjacent to the F block, the

Commission provides opportunities for

existing F block licensees to aggregate

spectrum in a manner that could benefit

their planned or prospective service

offerings.

C. Surrender Licenses for Reauction

(Amnesty)

23. The Commission concludes that it

serves the public interest to adopt an

amnesty option that permits any C block

licensee to surrender all of its licenses

in exchange for relief from its

outstanding debt and waive any

applicable default payments, subject to

coordination with the Department of

Justice pursuant to applicable federal

claims collections standards. The

Commission adopts the amnesty option

for purposes of speeding use of the C

block spectrum to provide services to

the American public. The surrender of

licenses under this option will provide

qualified parties with an opportunity to

obtain C block licenses at the market

value of the licenses prevailing at the

time of the reauction. The amnesty

option adopted today is equitable to all

parties because, while amnesty relieves

a licensee from further debt obligations

and any applicable default payments, a

coordinated surrender of licenses

facilitates expeditious reauctioning of

the spectrum and will provide new

market opportunities for all eligible

entities. In addition, rapid reauction of

those licenses surrendered will also

comply with the Congressional directive

that we promote competition and

participation in the telecommunications

industry by small businesses.

24. A C block licensee must make the

amnesty election in accordance with the

procedures set forth below in this

Second Report and Order. The

Commission will reauction those

licenses surrendered on an expedited

basis under the reauction rules

discussed in the Further Notice of

Proposed Rulemaking adopted with this

Second Report and Order. Licensees

electing the amnesty option will be

eligible to bid for any and all licenses

at the reauction.

25. Licensees electing the amnesty

option will not have their down

payment returned. This will discourage

speculation and ensure that all bidders,

new entrants as well as existing

licensees, participate in the reauction

without undue advantage. Retention of

the down payments—10% of the bid

price for most licensees—is consistent

with the Commission’s previous

decisions and actions affecting C block

bidders. The Commission has retained

any payments made by those C block

bidders who have failed to make their

first or second down payments. In

forgiving the outstanding debt the

Commission affords significant relief to

the licensees by allowing them to avoid

anticipated defaults. In addition, these

licensees will not be deemed in default

or delinquent in meeting government

debt obligations. Nor will they be

subject to any applicable default

payments or in violation of any

Commission rules or license conditions.

26. Subject to one exception

identified below, licensees choosing to

take advantage of the amnesty option

will be required to surrender all of their

licenses to the Commission. The

requirement that all licenses be

surrendered precludes licensees from

‘‘cherry picking.’’ The simultaneous

multiple-round auction design enables

bidders to place bids on many licenses

at once and to aggregate desired licenses

in a manner that facilitates workable

business plans. If licensees could

‘‘cherry pick’’ which licenses to

surrender, the interdependency of the

licenses would be harmed. Licenses

surrendered pursuant to such a ‘‘cherry

picking’’ scheme might lack the

potential for beneficial aggregation

within MTAs, and therefore would

likely be less valuable to potential

bidders and impair business plans of

new investors.

27. As an exception to the all-ornothing requirement, licensees that have

met or exceeded the five year build-out

requirements by September 25, 1997,

the date of adoption of this Second

Report and Order, will not be required

to surrender licenses for built-out

markets. In addition, these licensees

will be permitted to retain those BTA

licenses in which such build-out has

occurred. However, licensees availing

themselves of this exception may not

pick and choose BTAs within an MTA

but will be required, instead, to keep all

of the other BTAs in the MTA in which

the build-out requirement has been met
55352 Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Rules and Regulations

and to pay for those licenses under the

terms of their Notes. The build-out

exception facilitates the achievement of

the statutory goal set forth in Section

309(j) that it encourages the rapid

provision of service to the public, and

responds to the needs of licensees that

have already commenced operations or

have otherwise invested significantly in

certain of their C block licenses. The

Commission has an interest in

minimizing the competitive impact of

the changes that it makes to the auction

rules, consistent with its broader policy

objectives. The exception adopted today

is one method by which the

Commission can ensure that the menu

of options available to the C block is fair

to those licensees that have rapidly

built-out their markets and initiated

provision of competitive service.

28. Some licensees made their

installment payments (i.e., installments

due on that date, and amounts due on

December 31, 1996, but not paid until

March 31, 1997, based on the automatic

90-day non-default rule) after the

suspension. In addition, prior to the

suspension of payments, many C block

licensees made their regularly

scheduled installment payments. Due to

the actions taken in this Second Report

and Order, it would be unjust and

inequitable for C block licensees to be

treated differently merely because some

C block licensees made prior payments

while others did not. Consequently, the

Wireless Telecommunications Bureau is

directed to refund any installment

payments made (whether due on or

before March 31, 1997) on any license

that is surrendered pursuant to this

Second Report and Order. In addition,

the Commission will forgive payment of

any due, but unpaid, installment

payments for any surrendered license.

For licensees exercising the build-out

exception and retaining certain licenses,

all previously made installment

payments will be applied first to reduce

the Suspension Interest applicable to

those licenses, and any amounts

remaining will be refunded.

D. Prepayment

29. Under the prepayment option the

Commission adopts, any C block

licensee may prepay selective licenses

subject to the restrictions described in

this Second Report and Order. All

licenses that are not prepaid in

accordance with this option must be

surrendered to the Commission in

exchange for a forgiveness of the

corresponding debt and any penalties. A

licensee selecting this option may apply

70% of the total of all down payments

it made on the licenses that it elects to

surrender to the Commission

(‘‘Available Down Payments’’), to a

prepayment of the Notes for as many of

its licenses it wishes to keep. For

example, if a licensee held two licenses

with net high bids of $100 and $200,

then the total down payments would

equal $30 ($10 + $20). If the licensee

elected to keep the $200 license, the

licensee would have $7 ($10 x 70

percent) of its down payment from the

$100 license to apply towards the

prepayment of the $200 license’s Note.

If, on the other hand, the licensee

elected to prepay the $100 license, then

the licensee would have $14 ($20 x 70

percent) of its down payment from the

$200 license to apply towards the

prepayment of the $100 license’s Note.

The remaining down payments not

applied to prepayment will be retained

by the Commission.

30. Additionally, an incumbent may

use any ‘‘new money’’ to prepay as

many of its own licenses as it desires.

Any installment payments previously

made by the licensee for all its licenses

will be added to the Available Down

Payments to increase the funds available

to prepay its Notes. Interest accrued

from the date of the conditional license

grant through the Election Date will be

forgiven. For purposes of this option,

the down payment associated with

licenses that are transferred as of the

Election Date to subsidiaries or affiliates

will be considered transferred with the

licenses and the corresponding debt. For

example, if ABC Company paid

$100,000 each for two licenses and

submitted $10,000 in down payments

for each license, the total down

payments submitted by ABC Company

would be $20,000. However, if ABC had

subsequently transferred one of its

licenses to XYZ Company, a whollyowned subsidiary, ABC Company

would not have any additional money

available to purchase its license, and

XYZ Company would not have any

additional money available to purchase

its license. This option, however, is not

intended to prohibit additional license

transfers consistent with existing

Commission rules.

31. The Commission believes that this

prepayment option fairly balances

competing interests, while maintaining

the fairness and integrity of our rules

and auctions. The Commission notes

that 30% of the down payments is equal

to 3% of the net high bids and is

consistent with the approach adopted

previously for down payments. Under

the Commission’s existing rules, an

applicant is subject to a 3% payment if

it fails to make the required down

payment. See 47 CFR §§ 1.2104(g)(2),

24.704(a)(2). The Commission believes

it to be most fair to apply this provision

to those licensees who seek the relief

provided by this option. If licensees

were able to use all of their down

payment, they would recoup in full

what they paid, and there would be no

deterrent effect against bidding

excessively in the auction or otherwise

gaming the process. Thus, in the next

auction to which default payments

apply, these rules could be ignored with

impunity. Such a result would severely

harm the Commission’s market-based

auction program. It would make it

impossible to impose the charges

already imposed in past cases, including

in C block cases. Further, permitting C

block licensees access to the down

payments they previously made for

licenses they no longer wish to retain is

a substantial benefit and fair to these

licensees. To allow them to use 100% of

those funds would be unfair to other C

block licensees who choose to continue

to pay under their existing obligations,

and to bidders who were unsuccessful

in the auction.

32. The Commission declines to

discount the Notes. The Commission

believes it is fair to other bidders and to

the credibility and integrity of the rules

for the prepayment to be in the amount

of the outstanding debt for the net high

bid. In other words, licensees should

pay what they bid. To offer deep

discounts off the amount of the debt is

outside normal commercial practices

and otherwise appears to be a ‘‘bail-out’’

of C block licensees who have

encountered financial difficulties long

after the auction was completed and the

financial commitments were made. Debt

paid off in advance of the maturity date

allows the debtor to reap the benefit of

not incurring additional interest due on

the principal amount owed. To discount

the amount of the principal would

unfairly permit a windfall to the

licensee electing this option. The

Commission is cognizant of the

financial difficulties for some C block

licensees, but is also mindful of a duty

to the other C block licensees who are

successfully meeting their obligations

and continuing build-out efforts for

wireless services. Therefore, the

Commission believes that it strikes the

proper balance by allowing a licensee

the benefit of prepaying its debt

obligations, thereby reducing the

amount of interest that would be

payable over the full term of the Note,

while avoiding fundamental changes to

our rules that unfairly harm other

licensees who followed the rules and

who continue to meet their payment

obligations.

33. Under this prepayment option, an

incumbent must prepay all of the BTA

licenses in a particular MTA and cannot
Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Rules and Regulations 55353

arbitrarily select individual BTA

licenses in a given MTA to prepay while

surrendering other licenses in that

MTA, with one exception. The

Commission concludes that while a

licensee must prepay the debt on all of

the BTAs for which it holds licenses in

an MTA, a licensee may not have

sufficient funds available to it to prepay

all of its Notes for the BTA licenses in

a given MTA. Therefore, any licensee

that has enough funds on hand to

prepay one or more BTAs within an

MTA, but not enough for the entire

MTA, must prepay all of those BTAs

within that MTA that it can afford. The

Commission concludes that a

requirement that all licenses in a given

MTA be prepaid precludes licensees

from ‘‘cherry picking.’’ The

simultaneous multiple-round auction

design discussed in the Further Notice

of Proposed Rulemaking enables bidders

to place bids on many licenses at once.

If licensees were permitted to ‘‘cherry

pick’’ which licenses in an MTA to

prepay and which to surrender under

this option, the interdependency of the

licenses would be threatened. Licenses

surrendered pursuant to such a ‘‘cherry

picking’’ scheme would lack the

potential for aggregation, and

consequently would hold much less

value to other bidders in the subsequent

reauction.

34. The Commission declines to

provide an exception for markets in

which the five-year build-out

requirement has been met as provided

under the amnesty option. Under the

prepayment option, licensees have the

flexibility to select which markets they

will retain subject to the restrictions in

this Second Report and Order. For this

reason, licensees have the option of

selecting and prepaying for licenses

where they have invested capital to

meet the build-out requirements and not

prepaying in an MTA where they have

not. The Commission believes that this

flexibility, compared to the all or

nothing approach of simple amnesty,

mitigates the need for this exception.

35. Finally, for a period of two years

from the start date of the reauction,

licensees (defined as qualifying

members of the licensee’s control group,

and their affiliates) will be prohibited

from reacquiring the licenses

surrendered pursuant to this option

either through a reauction or any other

secondary market transaction. The

Commission does not believe that it

would be fair to other licensees and

bidders for these licensees to benefit

from a reauction of those licenses after

taking advantage of this option.

Furthermore, the Commission does not

believe that this option should provide

opportunities for licensees to

‘‘selectively’’ reduce their license

obligations by surrendering a license in

hopes of re-obtaining it in a reauction at

a lower price.

E. Election Procedures

36. The Commission concludes that a

licensee electing to continue under its

existing installment payment plan or

electing one of the options set forth in

this Second Report and Order, must file

a written notice of such election with

the Wireless Telecommunications

Bureau on or before the Election Date

(‘‘Election Notice’’). The ‘‘Election Date’’

is January 15, 1998. The Election Notice

must be filed on or before January 15,

1998 with the Office of the Secretary,

Federal Communications Commission,

Washington, D.C. 20554 (attn: Wireless

Telecommunications Bureau, Auctions

and Industry Analysis Division—

Election Notice). The Wireless

Telecommunications Bureau will

provide more information concerning

filing procedures in a subsequent public

notice.

37. The Commission requires that

those licensees electing (i) to continue

making payments under their original C

block Notes, (ii) the disaggregation

option, or (iii) the amnesty option who

elect to take advantage of the build-out

exception and retain certain of their

licenses make the appropriate payment

by March 31, 1998 (or by the end of the

60-day grace period allowed), and

execute any necessary financing

documents pursuant to appropriate

requirements and time frames

established by the Bureau in order to

continue to be eligible under the option

chosen.

38. Continuation Under Existing

Note(s). Any licensee that wishes to

continue making installment payments

in accordance with the terms of its

original C block Note, must elect to do

so by submitting the Election Notice of

such election.

39. Disaggregation. For licensees

electing the disaggregation option, the

Election Notice must include (i) a list of

all licenses being disaggregated, (ii) the

original of all licenses being

disaggregated, and (iii) all originals of

the Notes and Security Agreements for

those licenses being disaggregated for

cancellation by the Commission. Upon

acceptance of the Election Notice, the

disaggregated spectrum will be deemed

returned to the Commission.

40. Amnesty. For licensees electing

the amnesty option, the Election Notice

must include (i) a list of all licenses

being surrendered, (ii) if applicable, a

statement indicating that it intends to

avail itself of the build-out exception

together with a list of those BTA

licenses it intends to retain and

pertinent information concerning buildout pursuant to the Commission’s rules,

(iii) the original of all licenses being

surrendered, and (iv) all originals of the

Notes and Security Agreements for

those licenses being surrendered for

cancellation by the Commission. Those

licensees electing to proceed under the

build-out exception will be required to

adhere to the specific obligations set

forth in their Notes and Security

Agreements, as modified for those

licenses not being surrendered to the

Commission.

41. Prepayment. For licensees electing

the prepayment option, the Election

Notice must include (i) a list of all

licenses being prepaid, (ii) a payment in

the amount of any additional ‘‘new

money’’ a licensee desires to apply to

the prepayment of its licenses, (iii) the

original of all licenses not being prepaid

in accordance with this option, and (iv)

all originals of the Notes and Security

Agreements for those licenses not being

prepaid for cancellation by the

Commission. Notes which are prepaid

will be marked ‘‘Paid-In-Full’’ and

returned to the licensee.

42. The Commission further

concludes that any C block licensee that

(i) fails to elect one of the options set

forth in this Second Report and Order

on or before the Election Date, or (ii)

fails to elect on or before the Election

Date to continue making payments

under its original C block Note(s), or (iii)

fails to fully and timely execute and

deliver to the Commission (or its agent)

any required financing documents

within the period of time specified by

the Bureau, will not be afforded the

opportunity granted to licensees who do

make a timely election to repay the

Suspension Interest over a period of

eight equal payments. In such event, the

licensee will be required, on or before

March 31, 1998, to make all payments

that would have been due under its

Note(s) but for the effect of the

Suspension Order. For example, a

licensee whose regular installment due

date was March 31, 1997, who did not

make payment on that date because of

the Suspension Order, will owe on

March 31, 1998, all payments that were

due and payable earlier, but unpaid due

to the Suspension Order, in addition to

the regularly scheduled March 31, 1998,

payment.

F. Cross Defaults

43. The Commission will not pursue

cross default remedies against C block

licensees who default on installment

payments with regard to other licenses

in the C or F blocks. For example, if a
55354 Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Rules and Regulations

licensee defaults on a C block license

and that licensee holds other C block

licenses on which it is making its

payments, the Commission will not

declare it to be in default on its debt

associated with the other C block

licenses. Similarly, if a licensee defaults

on a C block license, and also holds F

block licenses on which it is making its

payments, the Commission will not

declare it to be in default on its F block

debt.

44. This decision is warranted in light

of the efforts to provide current C block

licensees who are experiencing

financing difficulties with options for

meeting their financial obligations to the

Commission. This decision does not

affect the Commission’s policy with

regard to defaults on first or second

down payments. The Commission

emphasizes that this decision only

addresses the context of a licensee’s

default on an installment payment for a

C block license upon other licenses held

by that licensee in the C or F blocks.

The Commission defers to completion of

the Part 1 Rulemaking a decision on

whether to amend more

comprehensively the policy of cross

defaults. The Commission also

emphasizes that existing installment

payment default rules and license

conditions will continue to apply for

those particular licenses in default after

March 31, 1998. Accordingly, upon

default, a license will automatically

cancel and the Commission will initiate

debt collection procedures against the

licensee and accountable affiliates. See

47 CFR § 1.2110(e)(4)(iii).

III. Conclusion

45. In this Second Report and Order

the Commission orders resumption of

installment payments for the broadband

PCS C and F blocks, with the payment

deadline reinstated as of March 31,

1998. The Commission also adopt

options designed to assist C block

licensees that are experiencing financial

difficulties to build systems that will

promote competition, or to surrender

spectrum to the Commission for

reauction. These options include

disaggregation, amnesty, and

prepayment. These provisions will

create opportunities for C block

licensees to provide service to the

public while maintaining the fairness

and integrity of our auctions program.

IV. Procedural Matters and Ordering

Clauses

A. Regulatory Flexibility Analysis

46. As required by the Regulatory

Flexibility Act (RFA), 5 U.S.C. § 604, an

Initial Regulatory Flexibility Analysis

(IRFA) was incorporated in Amendment

of Part 1 of the Commission’s Rules—

Competitive Bidding Proceeding, Order,

Memorandum Opinion and Order, and

Notice of Proposed Rule Making, 62 FR

13540 (March 21, 1997) (Part 1

Proceeding) in WT Docket No. 97–82.

The Commission sought written public

comment on the proposals in the Part 1

Proceeding, including comment on the

IRFA. This Final Regulatory Flexibility

Analysis (FRFA) conforms to the IRFA.

Need for, and Objectives of, this Action

47. This Second Report and Order is

designed to assist C block broadband

personal communications services (PCS)

licensees to meet their financial

obligations to the Commission while at

the same time helping the Commission

meet its goals of ensuring the rapid

provision of PCS service to the public.

Summary of Significant Issues Raised by

Public Comments in Response to the

Initial Regulatory Flexibility Analysis

(IRFA)

48. There were no comments filed in

response to the IRFA; however, in this

proceeding we have considered the

economic impact on small businesses of

the rules adopted herein.

Description and Estimate of the Number

of Small Entities to Which Rules Will

Apply

49. 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

our rules. See 5 U.S.C. §§ 603(b)(3),

604(a)(3). The RFA generally defines the

term ‘‘small entity’’ as having the same

meaning as the terms ‘‘small business,’’

‘‘small organization,’’ and ‘‘small

governmental jurisdiction.’’ See 5 U.S.C.

§ 601(6). In addition, the term ‘‘small

business’’ has the same meaning as the

term ‘‘small business concern’’ under

Section 3 of the Small Business Act. See

5 U.S.C. § 601(3). 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). See 15 U.S.C.

§ 632.

50. This Second Report and Order

applies to broadband PCS C and F block

licensees. The Commission, with

respect to broadband PCS, defines small

entities to mean those having gross

revenues of not more than $40 million

in each of the preceding three calendar

years. See 47 CFR § 24.720(b)(1). This

definition has been approved by the

SBA. On May 6, 1996, the Commission

concluded the broadband PCS C block

auction. The broadband PCS D, E, and

F block auction closed on Jan. 14, 1997.

Ninety bidders (including the C block

reauction winners, 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 the C and F block auctions were

eligible for bidding credits and

installment payment plans. For

purposes of our evaluations and

conclusion in this FRFA, we assume

that all of the 90 C block broadband PCS

licensees and 88 F block broadband PCS

licensees, a total of 178 licensees

potentially affected by this order, are

small entities.

Description of the Projected Reporting,

Recordkeeping, and other Compliance

Requirements

51. A licensee electing one of the

options set forth in the Order must file

a written notice of such election (the

‘‘Election Notice’’) with the Wireless

Telecommunications Bureau, Auctions

and Industry Analysis Division no later

than the Election Date. The ‘‘Election

Date’’ is January 15, 1998. Those

licensees electing either (1) to continue

making payments under their original C

block Notes; (2) the disaggregation

option; or (3) the amnesty option but

elect to take advantage of the build-out

exception and retain certain of their

licenses, will be required to execute and

submit a modification of their Notes,

Security Agreements, Uniform

Commercial Code (‘‘UCC’’) Financing

Statements and any other related

documents securing their Notes within

the time frame established by the

Bureau.

52. Continuation under Existing

Note(s). Any licensee that wishes to

continue making installment payments

in accordance with the terms of its

original C block Note, must elect to do

so by submitting the Election Notice.

53. Disaggregation. For licensees

electing the disaggregation option, the

Election Notice must include the

following: (1) A list of all licenses being

disaggregated; (2) the original of all

licenses being disaggregated; and (3) all

originals of the Notes and Security

Agreements for those licenses being

disaggregated for cancellation by the

Commission.

54. Amnesty. For licensees electing

the amnesty option, the Election Notice

must include the following: (1) A list of

all licenses being surrendered; (2) if

applicable, a statement indicating that

the licensee intends to avail itself of the

build-out exception together with a list

of those BTA licenses it intends to

retain and pertinent information
Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Rules and Regulations 55355

concerning build-out; (3) the original of

all licenses being surrendered; and (4)

originals of the Notes and Security

Agreements for those licenses being

surrendered for cancellation by the

Commission.

55. Prepayment. For licensees electing

the prepayment option, the Election

Notice must include the following: (1) A

list of all licenses being prepaid; (2) a

payment in the amount of any

additional ‘‘new money’’ as a licensee

desires to apply to the prepayment of its

licenses; (3) the original of all licenses

not being prepaid in accordance with

this option; and (4) all originals of the

Notes and Security Agreements for

those licenses not being prepaid for

cancellation by the Commission.

Steps Taken to Minimize Significant

Economic Impact on Small Entities, and

Significant Alternatives Considered

56. The Commission believes that it is

in the public interest to adopt these

provisions to facilitate use of C block

licenses without further regulatory or

marketplace delay. The menu approach

adopted in this Second Report and

Order is intended to provide options to

facilitate the rapid introduction of

service to the public, while recognizing

that ultimately the decisions concerning

competition and services appropriately

are marketplace decisions and should

not be determined by government

intervention. This decision is intended

to be fair to current C block licensees

(including small entities), to bidders

who were not successful in their

attempts to obtain licenses in this

spectrum, and to the public desiring

new and innovative competitive

services. These options minimize the

potential significant economic impact

on small entities because they meet the

unique circumstances facing the C block

licensees and permit these small entities

to choose one of three alternative

solutions to reduce their debt to the

Commission. All of the entities affected

by this Second Report and Order are

small entities, and the intent of this

Second Report and Order is to alleviate,

to some extent, the financial difficulties

faced by these small entities. These

options are relatively straightforward,

achieve a degree of fairness to all

parties, including losing bidders in the

C block auction, continue to promote

competition and participation by

smaller businesses in providing

broadband PCS service, and avoid

solutions that merely prolong

uncertainty.

57. The Commission received

numerous comments and ex parte

comments that addressed these issues at

great length. The majority of

commenters favor some type of relief,

including debt restructuring, spectrum

disaggregation, or a penalty-free license

surrender (i.e., amnesty) followed by a

reauction. Other commenters express

disapproval of any relief, and urge the

Commission to strictly enforce its rules.

The Commission believes that there may

be a need for some measure of relief for

these small entities in addition to the

suspension of payments previously

granted. The Commission believes that

the options adopted in this Second

Report and Order are relatively

straightforward and achieve a degree of

fairness to all parties, including small

entities. Finally, the Commission rejects

any proposal of a deferral of payments

on the grounds that such proposal

would be unfair to unsuccessful bidders

who may have withdrawn from the C

block when prices became too high.

58. Among other goals, Section 309(j)

directs the Commission to disseminate

licenses among a wide variety of

applicants, including small businesses

and other designated entities. See 47

U.S.C. § 309(j)(3)(B). At the same time,

Section 309(j) requires that the

Commission ensure the development

and rapid deployment of new

technologies, products and services for

the benefit of the public, and recover for

the public a portion of the value of the

public spectrum resource made

available for commercial use. See 47

U.S.C. §§ 309(j)(3)(A), (C). In assessing

the public interest, the Commission

must try to ensure that all the objectives

of Section 309(j) are considered. The

Commission believes that those goals

are best met by promoting efficient

competition while maintaining fairness

and efficiencies of process in the

Commission’s rules.

Report to Congress

59. The Commission shall send a copy

of the Second Report and Order,

including the Final Regulatory

Flexibility Analysis, in a report to

Congress pursuant to the Small Business

Regulatory Enforcement Fairness Act of

1996. See 5 U.S.C. § 801(a)(1)(A). A

copy of the Second Report and Order

and this Final Regulatory Flexibility

Analysis will also be sent to the Chief

Counsel for Advocacy of the Small

Business Administration.

B. Paperwork Reduction Act

60. This Second Report and Order

contains a modified information

collection. The Commission, as part of

its continuing effort to reduce

paperwork burdens, invites the general

public and the Office of Management

and Budget (OMB) to take this

opportunity to comment on the

information collections contained in

this Second Report and Order, as

required by the Paperwork Reduction

Act of 1995, Public Law 104–13. Public

and agency comments are due December

1, 1997. OMB comments are due

December 1, 1997. Comments should

address: (a) whether the proposed

collection of information is necessary

for the proper performance of the

functions of the Commission, including

whether the information shall have

practical utility; (b) the accuracy of the

Commission’s burden estimates; (c)

ways to enhance the quality, utility, and

clarity of the information collected; and

(d) ways to minimize the burden of the

collection of information on the

respondents, including the use of

automated collection techniques or

other forms of information technology.

Dates: Written comments by the

public on the modified information

collections in this Second Report and

Order are due on or before December 1,

1997. Written comments must be

submitted by OMB on the modified

information collections on or before

December 1, 1997.

Address: In addition to filing

comments with the Secretary, a copy of

any comments on the information

collections contained herein should be

submitted to Judy Boley, Federal

Communications Commission, Room

234, 1919 M Street, N.W., Washington,

DC 20554, or via the Internet to

jboley@fcc.gov and to Timothy Fain,

OMB Desk Officer, 10236 NEOB, 725—

17th Street, N.W., Washington, DC

20503 or via the Internet to

fainlt@al.eop.gov.

Further Information: For additional

information concerning the information

collections contained in this Second

Report and Order contact Judy Boley,

Federal Communications Commission,

Room 234, 1919 M Street, N.W.,

Washington, DC 20554, or via the

Internet to jboley@fcc.gov.

Supplementary Information

Title: Amendment of the

Commission’s Rules Regarding

Installment Payment Financing for

Personal Communications Services

(PCS) Licensees

Type of Review: New Collection.

Respondents

Number of Respondents: The

Commission estimates that up to 90

respondents will take the opportunity to

elect one of the options in the Second

Report and Order.

Estimated Time Per Response: The

Commission estimates the total burden

under the disaggregation and amnesty

options would be 4.0 hours per
55356 Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Rules and Regulations

respondent, a total hour burden of 360

hours, which is the highest estimate and

assumes that all 90 potential

respondents elect either the

disaggregation or amnesty options. The

Commission believes that the actual

total hour burden will be less than 360

hours. The Commission is of the

opinion that the respondents will

prepare the submission with in-house

staff, such as in-house counsel or the

equivalent, in lieu of outside

contractors. At the equivalent of the GS

15 hourly rate, $41.24, the total burden

would be $41.24 times 360 hours =

$14,846.40.

Estimate of total cost burden to

respondents: The Commission estimates

that there will be no additional cost

burden to respondents.

Cost to the Federal Government

GS 7 Legal Instrument Examiners at

$14.06 per hour to review the

documentation for approximately 0.5

hours per submission, times 90

submissions = $632.70

GS 7 Clerical at $14.06 per hour to

process refunds for approximately 1.0

hour per submission, times 90

submissions = $1,265.40

GS 12 Engineers to review the

documentation at $24.95 per hour, for

approximately 0.5 hours per

submission, times 90 submissions =

$1,122.75

GS 12 Engineers to review technical

analysis at $24.95 per hour, for

approximately 0.5 hours per

submission, times 90 submissions =

$1,122.75

GS 12 Attorneys to review the financial

documentation at $24.95 per hour, for

approximately 2.0 hours per

submission, times 90 submissions =

$4,491.00

GS 15 Financial Analysts or

Accountants to review the

documentation, accounting analysis,

and revised payment schedules and to

oversee the repayment process at

$41.24 per hour, for approximately

2.0 hours per submission, times 90

submissions = $7,423.20

Total = $16,057.80.

C. Authority

61. The above action is authorized

under the Communications Act of 1934,

§§ 4(i), 5(b), 5(c)(1), 303(r), and 309(j) as

amended.

D. Ordering Clauses

62. Accordingly, it is ordered that,

pursuant to Sections 4(i), 5(b), 5(c)(1),

303(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

Second Report and Order is hereby

adopted, and §§ 1.2110 and 24.709 of

the Commission’s rules are amended as

set forth below, effective December 23,

1997. The information collection

contained in these rules becomes

effective on OMB approval but no

sooner than December 23, 1997. The

Commission will publish a document

on a later date announcing the effective

date of the information collection.

63. It is further ordered that the

Wireless Telecommunications Bureau’s

Suspension Order dated March 31,

1997, suspending the installment

payment obligations for Personal

Communications Services (PCS) C block

licensees, and the subsequent Public

Notice dated April 28, 1997, suspending

those obligations for PCS F block

licensees are rescinded, effective March

31, 1998, and installment payments for

C and F block PCS licensees are

reinstated as of that date.

64. It is further ordered that on or

before January 15, 1998, the Election

Date, all C block broadband PCS

licensees must elect either (1) to

continue making payments under their

original C block Notes, or (2) one of the

options set forth in Section IV of this

Second Report and Order. The Election

Notice must be filed on or before

January 15, 1998 with the Office of the

Secretary, Federal Communications

Commission, Washington, D.C. 20554

(attn: Wireless Telecommunications

Bureau, Auctions and Industry Analysis

Division—Election Notice).

65. It is further ordered that the

Secretary shall send a copy of this

Second Report and Order, including the

Final Regulatory Flexibility Analysis, to

the Chief Counsel for Advocacy of the

Small Business Administration, in

accordance with Section 605(b) of the

Regulatory Flexibility Act, 5 U.S.C.

§§ 601 et seq.

66. It is further ordered that, pursuant

to 47 U.S.C. § 155(c) and 47 CFR § 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.

List of Subjects

47 CFR Part 1

Communications common carriers,

Reporting and recordkeeping

requirements.

47 CFR Part 24

Communications common carriers,

Reporting and recordkeeping

requirements.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rule Changes

Parts 1 and 24 of Chapter I of title 47

of the Code of Federal Regulations are

amended as follows:

PART 1—PRACTICE AND

PROCEDURE

1. The authority citation for Part 24

continues to read as follows:

Authority: Secs. 4, 301, 302, 303, 309 and

332, 48 Stat. 1066, 1082, as amended; 47

U.S.C. §§ 154, 301, 302, 303, 309 and 332,

unless otherwise noted.

2. Section 1.2110 is amended by

revising paragraph (e)(4)(i) to read as

follows.

§ 1.2110 Designated entities.

* * * * *

(e) * * *

(4) * * *

(i) If an eligible entity making

installment payments is more than

ninety (90) days delinquent in any

payment, it shall be in default, except

that broadband PCS frequency block C

licensees making the March 31, 1998,

interest payment pursuant to their

elections under the Amendment of the

Commission’s Rules Regarding

Installment Payment Financing for

Personal Communications Services

Licensees, Second Report and Order,

WT Docket No. 97–82 (released October

16, 1997), shall be in default if they are

more than sixty (60) days delinquent on

such payment. (The Second Report and

Order is available in the FCC Reference

Center, Room 239, 1919 M Street, NW.,

Washington, DC 20554.)

* * * * *

PART 24—PERSONAL

COMMUNICATIONS SERVICES

3. The authority citation for Part 24

continues to read as follows:

Authority: Secs. 4, 301, 302, 303, 309 and

332, 48 Stat. 1066, 1082, as amended; 47

U.S.C. §§ 154, 301, 302, 303, 309 and 332,

unless otherwise noted.

4. Section 24.709 is amended by

adding paragraph (b)(9) to read as

follows.

§ 24.709 Eligibility for licenses for

frequency Blocks C and F.

* * * * *

(b) * * *

(9) Special rule for licensees

disaggregating or returning certain

spectrum in frequency block C.

(i) In addition to entities qualifying

under this section, any entity that was
Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Rules and Regulations 55357

eligible for and participated in the first

auction for frequency block C, which

began on December 18, 1995, will be

eligible to bid in a reauction of licenses

for frequency block C conducted after

March 31, 1998.

(ii) The following restrictions will

apply for any reauction of frequency

block C licenses conducted after March

31, 1998:

(A) Applicants that elected to

disaggregate 15 MHz of spectrum from

any or all of their frequency block C

licenses, as provided in subsection

IV.B., Amendment of the Commission’s

Rules Regarding Installment Payment

Financing for Personal Communications

Services Licensees, Second Report and

Order, WT Docket No. 97–82 (released

October 16, 1997), will not be eligible to

apply for such disaggregated licenses

until 2 years from the start of the

reauction of those licenses. The Second

Report and Order is available in the FCC

Reference Center, Room 239, 1919 M

Street, NW., Washington, DC 20554.

(B) Applicants that surrendered any of

their frequency block C licenses as

provided in subsection IV.D. (the

‘‘prepayment option’’) Amendment of

the Commission’s Rules Regarding

Installment Payment Financing for

Personal Communications Services

Licensees, Second Report and Order,

WT Docket No. 97–82 (released October

16, 1997), will not be eligible to apply

for the licenses that they surrendered to

the Commission until 2 years from the

start of the reauction of those licenses.

(C) For purposes of this paragraph,

applicant shall mean the applicant and

its affiliates and any present or former

qualifying member of a control group

and their affiliates.

* * * * *

[FR Doc. 97–28221 Filed 10–23–97; 8:45 am]

BILLING CODE 6712–01–P

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 1

[OST Docket No. 1; Amdt. 1–291]

RIN 9000–AA02

Organization and Delegation of Powers

and Duties; Secretarial Succession

AGENCY: Office of the Secretary, DOT.

ACTION: Final rule.

SUMMARY: The purpose of this

amendment is to alter the order of

Secretarial succession for the

Department to reflect that the Federal

Aviation Administrator now serves a

statutory term of office.

DATES: The effective date of this

amendment is October 24, 1997.

FOR FURTHER INFORMATION CONTACT:

David K. Tochen, Office of the General

Counsel, Department of Transportation,

Washington, DC (202) 366–4710.

SUPPLEMENTARY INFORMATION: In 49 CFR

1.26, the order of succession to act as

Secretary of Transportation is set forth:

The Deputy Secretary, General Counsel,

Assistant Secretary for Transportation

Policy, Assistant Secretary for Aviation

and International Affairs, Assistant

Secretary for Governmental Affairs,

Assistant Secretary for Budget and

Programs, Associate Deputy Secretary,

Saint Lawrence Seaway Development

Corporation Administrator, and

Assistant Secretary for Administration,

in that order. The Saint Lawrence

Seaway Development Corporation

Administrator is included in the order

of succession because that official has a

statutory term of office, and therefore is

more likely to be in office during a

Presidential transition, when someone

of that rank must act as Secretary. With

the recent appointment of the first

Federal Aviation Administrator to serve

a statutory term of office (five years—see

49 USC 106(b), as amended by the

Federal Aviation Administration

Authorization Act of 1994, Public Law

103–305, Section 201, August 23, 1994),

that official is also more likely to be in

office during a Presidential transition,

and is being substituted for the Saint

Lawrence Seaway Development

Corporation Administrator. This

amendment reflects this change in the

order of Secretarial Succession.

Since this amendment relates to

Departmental management, procedures,

and practice, notice and comment on it

are unnecessary under 5 USC

553(b)(3)(A), and it may be made

effective in less than 30 days after

publication in the Federal Register

under 5 USC 553(d)(2) as a change in

internal policy.

List of Subjects in 49 CFR Part 1

Authority delegations (Government

agencies), Organization and functions

(Government agencies).

In consideration of the foregoing, Part

1 of Title 49, Code of Federal

Regulations, is amended as follows:

PART 1—[AMENDED]

1. The authority citation continues to

read as follows:

Authority: 49 USC 322; Public Law 101–

522, 28 USC 2672, 31 USC 3711 (a)(2).

2. In § 1.26, paragraph (a) introductory

text is republished and paragraph (a)(8)

is revised to read as follows:

§ 1.26 Secretarial succession.

(a) The following officials, in the

order indicated, shall act as Secretary of

Transportation, in case of the absence or

disability of the Secretary, until the

absence or disability ceases, or, in case

of a vacancy, until a successor is

appointed:

* * * * *

(8) Federal Aviation Administrator.

* * * * *

Issued in Washington, DC, on October 15,

1997.

Rodney E. Slater,

Secretary of Transportation.

[FR Doc. 97–27960 Filed 10–23–97; 8:45 am]

BILLING CODE 4910–62–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

50 CFR Part 630

[Docket No. 970710171–7240–02; I.D.

041097A]

RIN 0648–AJ63

Atlantic Swordfish Fishery; Annual

Quotas

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Final rule.

SUMMARY: NMFS issues this final rule to

amend the regulations governing the

Atlantic swordfish fishery to: establish

the U.S. swordfish quota for the North

Atlantic Ocean at 2,464 metric tons (mt)

dressed weight (dw) for 1997, at 2,398.6

mt dw for 1998, and at 2,333.2 mt dw

for 1999, with one half of each year’s

longline/harpoon subquota allocated to

each of two semiannual fishing seasons

(June 1 through November 30 and

December 1 through May 31); define the

South Atlantic swordfish stock and set

a 188 mt dw quota for that stock for

1997, with one-half allocated to each of

the two semiannual fishing seasons; and

implement the same management

measures for the South Atlantic

swordfish stock as are currently in place

for the North Atlantic stock.

DATES: All provisions of this final rule

are effective October 21, 1997, except

for the amendments to §§ 630.4(a),

630.7(c), (bb) and (cc), and 630.23(a)

and (b) and the revision to § 630.21

which are effective November 20, 1997.

ADDRESSES: Copies of the Final

Environmental Assessment/Regulatory

Impact Review (EA/RIR) supporting this