Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Proposed Rules 55375

List of Subjects in 40 CFR Part 52

Environmental protection, Air

pollution control, Hydrocarbons,

Reporting and recordkeeping, Nitrogen

Oxides, Ozone, Volatile organic

compounds.

Dated: September 19, 1997.

John P. DeVillars,

Regional Administrator, EPA Region I.

[FR Doc. 97–27856 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: Proposed rule.

SUMMARY: In this Further Notice of

Proposed Rule Making the Commission

proposes auction rules and procedures

for the reauction of licenses surrendered

to the Commission pursuant to the

Commission’s decision in the Second

Report and Order in Docket 97–82, FCC

97–342 (released October 16, 1997).

These proposed rules are necessary to

ensure that any licenses surrendered to

the Commission can be awarded to

parties who are capable of providing

service to the public as rapidly as

possible. The intended effect of this

action is to seek comment on proposed

rules and procedures for the reauction

of all surrendered C block licenses.

DATES: Comments are due on or before

November 13, 1997. Reply comments

are due on or before November 24, 1997.

ADDRESSES: Federal Communications

Commission, 1919 M Street, N.W.,

Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT:

Mark Bollinger, Auctions and Industry

Analysis Division, Wireless

Telecommunications Bureau, at (202)

418–0660.

SUPPLEMENTARY INFORMATION: This

Further Notice of Proposed Rule Making

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 Further Notice of

Proposed Rule Making also is available

on the Commission’s Internet home

page (http://www.fcc.gov).

SUMMARY OF ACTION:

I. Background

1. On September 25, 1997, the Federal

Communications Commission

(Commission) adopted a Further Notice

of Proposed Rule Making seeking

comment on proposed changes to its C

block rules to govern the reauction of

any licenses or spectrum surrendered

pursuant to the provisions adopted in

the Second Report and Order. See

Amendment of the Commission’s Rules

Regarding Installment Payment

Financing for Personal Communications

Services (PCS) Licensees, Second Report

and Order, WT Docket No. 97–82, FCC

97–342 (released October 16, 1997)

(‘‘Second Report and Order’’).

II. Further Notice of Proposed Rule

Making

2. In the Further Notice of Proposed

Rule Making, the Commission proposes

to reauction all licenses and spectrum

surrendered to the Commission under

the Second Report and Order. The

Commission believes that a reauction of

licenses surrendered to the Commission

will assure rapid provision of service to

the public. A reauction also will ensure

that these licenses are available to all

applicants in a rapid and fair fashion. A

simultaneous reauction of all the

licenses turned in to the Commission

will benefit all bidders because they

will be able to bid for a number of

licenses in a single reauction, instead of

a series of piecemeal auctions after

defaults and revocations, in which

opportunities for aggregation might be

less favorable.

A. Licenses to be Reauctioned

3. The Commission proposes that the

reauction include the following

licenses: (1) All licenses representing

the disaggregated spectrum surrendered

to the Commission under the

disaggregation option; (2) all licenses

surrendered to the Commission on or

before January 15, 1998, by incumbent

licensees who choose to take advantage

of the Commission’s prepayment or

amnesty options; and (3) all PCS C block

licenses currently held by the

Commission as a result of previous

defaults. By including all available

licenses in the reauction, the

Commission can efficiently and fairly

speed service to the public. In addition,

offering all available licenses will allow

for the most efficient aggregation of

licenses. The Commission seeks

comment on this proposal.

B. Eligibility for Participation

4. As the Commission stated in the

Second Report and Order, all

entrepreneurs, all entities that applied

for the original C block auction, and all

current C block licensees with

exceptions, are eligible to bid in the

reauction. The Commission seeks

comment on whether it should restrict

participation in the reauction to entities

that have not defaulted on any FCC

payments. See 47 U.S.C. 309(j)(5).

Should the Commission presume that

an entity’s prior default on payments for

an FCC license or authorization makes

that entity not financially or otherwise

fit to acquire a reauctioned C block

license? Alternatively, the Commission

could review financial qualifications

through several other means. For

instance, the Commission could allow

such entity to participate in an auction,

but if the applicant is a winning bidder,

set for expedited hearing the financial

qualifications of the bidder, and allow

the applicant to rebut a presumption

that it is not financially qualified. See

47 CFR 24.832(e), 1.2108(d)(3). Another

alternative would be to request that the

entity submit more detailed financial

information at the application stage, or

require that the entity submit a higher

upfront payment amount (e.g., a 50%

upfront payment requirement) to

participate in the reauction. With regard

to C block licensees who elect the

disaggregation, amnesty, or prepayment

options adopted in the Second Report

and Order, the Commission observes

that by making such election and related

payments they are not in default on

their C block licenses and, thus, would

not be restricted from participation in

the reauction (except as otherwise set

forth in the Second Report and Order).

C. Reauction Procedures

5. The Commission proposes below

auction design and application

procedures for the reauction of C block

licenses.

1. Competitive Bidding Design

6. The Commission proposes that all

licenses and spectrum surrendered be

awarded by means of a simultaneous

multiple-round electronic auction. The

Commission bases this proposal on its

desire to quickly auction available

licenses and thereby to promote the

most efficient assignment of the

spectrum. Consistent with the

Commission’s normal practice, the

specific procedural requirements of the

auction would be set out by public

notice prior to the auction. In general,
55376 Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Proposed Rules

the Commission has indicated that the

auction procedures chosen for each

service should be those that will best

promote the policy objectives identified

by Congress. The Commission further

concluded in 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’’) that in most cases the goals

set forth in Section 309(j) will be best

achieved by designing auctions that

award authorizations to the parties that

value them most highly. As the

Commission explained, such parties are

most likely to deploy new technologies

and services rapidly, and to promote the

development of competition for the

provision of those and other services.

7. Also, multiple-round bidding

during the auction will provide more

information to bidders about the value

of licenses than single round bidding.

With better information, bidders have

less incentive to shade their bids

downward in order to avoid the

‘‘winner’s curse,’’ that is, the tendency

for the winner to be the bidder who

most overestimates the value of the item

being auctioned. Finally, multipleround bidding is likely to be fairer than

single-round bidding. Every bidder has

the opportunity to win if it is willing to

pay the most for it. Thus, the

Commission tentatively concludes that

multiple-round bidding would be the

best method of auctioning all available

licenses and the Commission seeks

comment on this tentative conclusion.

8. The Commission also tentatively

concludes that all surrendered C block

licenses should be awarded in a single

simultaneous multiple-round auction. A

single simultaneous auction will

facilitate any aggregation strategies that

bidders may have, and it would provide

the most information to bidders about

license values at a time that they can

best put that information to use. The

Commission seeks comment on this

tentative conclusion.

9. Finally, if the Commission adopts

simultaneous multiple-round bidding as

its method of auctioning all available

licenses, the Commission tentatively

concludes that bidding should be

allowed only by electronic means,

rather than by telephone. Given the

Commission’s desire to conduct the

reauction quickly, as well as recent

improvements in the Commission’s

electronic bidding software, the

Commission tentatively concludes that

telephonic bidding should be permitted

only in exceptional circumstances, to be

determined by the Wireless

Telecommunications Bureau (‘‘Bureau’’)

in each instance.

2. Bidding Procedures

10. Subject to the exceptions

discussed below, which are designed to

speed the reauction process, the

Commission tentatively concludes that

the reauction should be conducted in

conformity with the general competitive

bidding rules set forth in part 1, subpart

Q of the Commission’s rules, 47 CFR

part 1, subpart Q, as revised (the

Commission initiated a proceeding last

February to revise its part 1 rules; See

Amendment of Part 1 of the

Commission’s Rules—Competitive

Bidding Proceeding, Order,

Memorandum Opinion and Order and

Notice of Proposed Rule Making, WT

Docket No. 97–82, 62 FR 13540 (March

21, 1997) (‘‘Part 1 Proceeding’’), and

substantially consistent with the

auctions that have been employed in

other wireless services. The

Commission also proposes to use its

part 24 rules, 47 CFR part 24, applicable

to the C block to the extent that such

rules do not conflict with the

Commission’s part 1 rules or rules

specifically adopted in the Second

Report and Order for the reauction of C

block licenses. Specifically, except as

set forth herein, the Commission

proposes to apply the part 1 rules

regarding competitive bidding

mechanisms (47 CFR § 1.2104); bidding

application and certification procedures

and prohibition of collusion (47 CFR

§ 1.2105); submission of upfront

payment, down payment and filing of

long-form applications (47 CFR

§§ 1.2106, 1.2107); procedures for filing

long form applications (47 CFR

§ 1.2108); and procedures regarding

license grant, denial and default (47

CFR § 1.2109). The Commission seeks

comment on this proposal.

11. Activity Rules. The Commission

tentatively concludes that, as it has

done in other simultaneous multipleround auctions, it will conduct the

reauction in three stages. Three stages,

with bidders required to be more active

in each stage, serves to provide bidders

with the flexibility to pursue backup

strategies as the auction progresses.

However, because the Commission

believes that efficiently assigning these

licenses for rapid service to the public

and increased competition in the CMRS

marketplace requires a swift reauction

of the licenses, the Commission

proposes to use high activity

requirements in the reauction. In recent

auctions, for example, the Commission

has required bidders to be active on

80% of their eligible licenses in Stage I,

90% in Stage II, and 98% in Stage III.

The Commission proposes to use similar

activity levels in the C block reauction

and, to further expedite the auction, to

require the Bureau to use its delegated

authority to aggressively schedule

bidding rounds, quickly transition into

the next stage of the auction when

bidding activity falls, and use higher

minimum bid increments for very active

licenses. The Commission seeks

comment on these proposals and

tentative conclusions.

12. Reserve Price, Minimum Opening

Bid, and Minimum Bid Increments.

Section 1.2104 of the Commission’s

rules provides that the Commission may

establish reserve prices or suggested

minimum opening bids. See 47 CFR

§ 1.2104. The Balanced Budget Act of

1997, Public Law 105–33, 111 Stat. 251

(1997) (to be codified at 47 U.S.C.

§ 309(j)(4)(F)) (‘‘Balanced Budget Act’’)

directed the Commission to prescribe

methods by which a reasonable reserve

price will be required or a minimum

opening bid will be established, unless

the Commission determines that a

reserve price or a minimum opening bid

is not in the public interest. This

legislative directive establishes a

presumption in favor of reserve prices

or minimum opening bids in the

reauction. A minimum opening bid is

the minimum bid price set at the

beginning of the auction below which

no bids are accepted. Customarily, an

auctioneer has the discretion to lower a

minimum opening bid in the course of

the auction. A minimum opening bid in

the C block reauction, more than a

reserve price, will help make certain

that the public is fairly compensated for

spectrum surrendered to the

Commission, expedite the auction and

give the Commission the flexibility to

make adjustments based on the

competitiveness of the auction. The

Commission seeks comment on this

proposal. The Commission also seeks

comment on the methodology to be used

to establish minimum opening bids and

what factors the Commission should

consider in doing so. The Commission

proposes minimum opening bids for

each market equal to 10% of the

corresponding high bid for the market in

the original C block auction. Such an

approach will scale the minimum

opening bids in a way that reflects the

relative value of the licenses. The

Commission also asks that commenters

address whether the amount of the

minimum opening bid should be

capped to ensure that bidding is not

deterred on high valuation markets, in

particular. Finally, if commenters

believe that a minimum opening bid

equal to 10% of the high bid in the

original C block auction will result in

substantial unsold licenses, or is not a
Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Proposed Rules 55377

reasonable amount, they should explain

why this is so, and comment on the

desirability of a higher or lower

minimum opening bid.

3. Procedural and Payment Issues

13. Pre-Auction Application

Procedures. Auction applicants are

required to file a short-form application,

FCC Form 175, prior to the start of each

auction. Although the Commission

previously has allowed both electronic

and manual filing of such applications,

the Commission tentatively concludes

that it should require electronic filing of

all short-form applications for the

reauction. The Commission believes

that electronic filing of applications

would serve the best interests of auction

participants as well as the members of

the public monitoring the reauction.

The Commission also believes that an

electronic filing requirement will help

ensure that the reauction will be

completed within the time frame

contemplated by this Further Notice of

Proposed Rule Making. The Commission

have developed user-friendly electronic

filing software and Internet World Wide

Web forms to give applicants the ability

to easily and inexpensively file and

review applications. This software helps

applicants ensure the accuracy of their

applications as they are filling them out,

and assists them in avoiding errors and

omissions. In addition, by shortening

the time required for the Commission to

process applications before the auction,

electronic filing will increase the lead

time available to applicants to pursue

business plans and arrange necessary

financing before the short-form

deadline. The Commission’s

experiences from recent auctions show

that bidders are confident that the

electronic filing system is reliable. For

example, in the broadband PCS D, E,

and F block auction, 94% of the

qualified bidders filed their short-form

applications electronically. In the

recently completed Wireless

Communications Services (‘‘WCS’’)

auction, all winning bidders filed their

long-form applications electronically. In

addition, the Commission notes that in

the Part 1 Proceeding, the Commission

tentatively concluded that §§ 1.2105(a)

and 1.2107(c) of its rules should be

amended to require electronic filing of

all short-form and long-form

applications. See 47 CFR §§ 1.2105(a)

and 1.2107(c). The Commission seeks

comment on this tentative conclusion.

14. Upfront Payment. The

Commission’s part 1 rules, 47 CFR Part

1, require the submission of an upfront

payment as a prerequisite to

participation in spectrum auctions. The

Commission proposes to set the amount

of the upfront payment for the reauction

at $.06 per MHz per pop. The

Commission adopted the same upfront

payment amount for its most recent

broadband PCS auction, the D, E, and F

block auction, in which all applicants

for all blocks made a $.06 per MHz per

pop upfront payment. In the

Competitive Bidding Second Report and

Order, the Commission indicated that

the upfront payment should be set using

a formula based upon the amount of

spectrum and population (or ‘‘pops’’)

covered by the license or licenses for

which parties intend to bid. The

Commission reasoned that this method

of determining the required upfront

payment would enable prospective

bidders to tailor their upfront payment

to their bidding strategies. At the same

time, however, the Commission noted

that determining an appropriate upfront

payment involved balancing the goal of

encouraging bidders to submit serious,

qualified bids with the desire to

simplify the bidding process and

minimize implementation costs

imposed on bidders. The Commission

concluded that the best approach would

be to maintain the flexibility to

determine the amount of the upfront

payment on an auction-by-auction basis

because this balancing may yield

different results depending upon the

particular licenses being auctioned. In

light of the its desire that only serious,

qualified applicants participate in the

reauction, the Commission’s proposal of

a $.06 per MHz per pop is appropriate.

The Commission seeks comment on this

proposal. The Commission also seeks

comment on alternative methods of

establishing an upfront payment, and in

particular, on how the Commission may

estimate the present market value of the

spectrum to be auctioned.

15. Down Payment and Full Payment.

Consistent with the procedures used in

prior auctions, the Commission

tentatively concludes that every

winning bidder in an auction should be

required to tender a down payment

sufficient to bring its total amount on

deposit with the Commission up to 20%

of its winning bid within 10 business

days after the issuance of a public notice

announcing the winning bidder for the

license. See 47 CFR § 1.2107(b). The

Commission seeks comment on this

tentative conclusion.

16. If a winning bidder makes its

down payment in a timely manner, the

Commission proposes that it file an FCC

Form 600 long-form application and

follow the long-form application

procedures in § 1.2107 of the

Commission’s rules. See 47 CFR

§ 1.2107. See also, 47 CFR § 24.707.

After reviewing the winning bidder’s

long-form application, and after

verifying receipt of the winning bidder’s

20% down payment, the Commission

would announce the application’s

acceptance for filing, thus triggering the

filing window for petitions to deny. The

Commission notes that the Balanced

Budget Act of 1997 authorizes the

Commission to establish a shortened

period for the filing of petitions to deny.

In light of this authority, as well as the

Commission’s desire to conclude the

reauction process as quickly as possible,

the Commission proposes that parties

then have 15 days following public

notice that an application was accepted

for filing to file a petition to deny. If,

pursuant to Section 309(d) of the

Communications Act, as amended, 47

U.S.C. § 309(j), the Commission

dismisses or denies any and all petitions

to deny, the Commission would

announce by public notice that it is

prepared to award the license, and the

winning bidder would then have 10

business days to submit the balance of

its winning bid. If the bidder does so,

the license would be granted. If the

bidder fails to submit the required down

payment or the balance of the winning

bid or the license is otherwise denied,

the Commission would assess a default

payment as discussed below. The

Commission seeks comment on these

proposals.

17. Amendments and Modifications of

Applications. To encourage maximum

bidder participation, the Commission

proposes to allow applicants to amend

or modify their short-form applications

as provided in § 1.2105. See 47 CFR

§ 1.2105. In the broadband PCS context,

the Commission modified its rules to

permit ownership changes that result

when consortium investors drop out of

bidding consortia, even if control of the

consortium changes due to this

restructuring. See Implementation of

Section 309(j) of the Communications

Act—Competitive Bidding, PP Docket

No. 93–253, Fourth Memorandum

Opinion and Order, 59 FR 24947

(October 24, 1994). The Commission

proposes to adopt the same exception to

our rule prohibiting major amendments

in the reauction. The Commission seeks

comment on these proposals.

18. Bid Withdrawal, Default and

Disqualification. The Commission

tentatively concludes that the

withdrawal, default, and

disqualification rules for the reauction

should be based upon the procedures

established in the Commission’s general

competitive bidding rules. With regard

to bids that are submitted in error, the

Commission proposes to apply the

guidelines that the Commission has

fashioned to provide for relief from the
55378 Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Proposed Rules

bid withdrawal payment requirements

under certain circumstances. The

Commission seeks comment on this

approach.

4. Anti-Collusion Rules

19. In the Competitive Bidding

Second Report and Order, the

Commission adopted rules to prevent

collusion in connection with

competitive bidding, explaining that

these rules, which are codified at 47

CFR § 1.2105, would enhance the

competitiveness of both the auction

process and the post-auction market

structure. The Commission proposes to

apply these same rules to the reauction

of licenses surrendered to the

Commission. The Commission seeks

comment on this proposal.

5. Designated Entity Provisions

20. The Commission proposes to

provide small business bidders in the C

block reauction with a two tiered

bidding credit, which will provide a

greater discount to very small

businesses. In the C block auction, a

winning bidder that qualified as a small

business or a consortium of small

businesses was able to use a bidding

credit equal to 25% of its winning bid.

For the reauction, however, the

Commission tentatively concludes that

it should offer tiered bidding credits, as

the Commission did for F block and,

more recently, Local Multipoint

Distribution Service (LMDS) small

business bidders. The Commission

proposes to define a second tier of small

business, which the Commission will

refer to as ‘‘very small businesses,’’ as

entities that, together with their

affiliates and persons or entities that

hold interest in such entities and their

affiliates, have average gross revenues of

not more that $15 million for the

preceding three years. Creation of this

subcategory of small business enables

the Commission to tailor a bidding

credit to meet the needs of entities that

may be interested in bidding on

spectrum surrendered by C block

licensees. Thus, the Commission

proposes a 35% bidding credit for very

small businesses and a 25% bidding

credit for small businesses. The

Commission seeks comment on these

proposals and tentative conclusions. 21. The Commission also tentatively

conclude that an installment payment

program will not be offered in the

reauction. The Commission has

conducted several auctions without

installment payments. The Commission

must balance competing objectives in 47

U.S.C. § 309(j) that require, inter alia,

that it promote the development and

rapid deployment of new spectrumbased services and ensure that

designated entities are given the

opportunity to participate in the

provision of such services. In assessing

the public interest, the Commission

must try to ensure that all the objectives

of Section 309(j) are considered. The

Commission has found, for example,

that obligating licensees to pay for their

licenses as a condition of receipt

ensures greater financial accountability

from applicants. Thus, the Commission

tentatively concludes that it should not

extend installment payments to winners

in the reauction, given the incentives to

entrepreneurs established through the

various proposals discussed above. The

Commission seeks comment on these

tentative conclusions.

III. Procedural Matters

A. Regulatory Flexibility Analysis

22. As required by the Regulatory

Flexibility Act (RFA), 5 U.S.C. § 603, the

Commission has prepared an Initial

Regulatory Flexibility Analysis (IRFA)

of the expected impact on small entities

of the rules proposed in the Further

Notice of Proposed Rule Making.

Written public comments are requested

on the IRFA. Comments on the IRFA

must have a separate and distinct

heading designating them as responses

to the IRFA and must be filed by the

deadlines for comments on the Further

Notice of Proposed Rule Making. The

Commission will send a copy of the

Further Notice of Proposed Rule

Making, including this IRFA, to the

Chief Counsel for Advocacy of the Small

Business Administration. In addition,

the Further Notice of Proposed Rule

Making and IRFA (or summaries

thereof) will be published in the Federal

Register.

1. Need for, and Objectives of, the

Proposed Rules

23. This Further Notice of Proposed

Rule Making is being initiated to secure

comment on proposed changes to

auction rules to govern the reauction of

returned broadband PCS spectrum in

the C block. Among other goals, Section

309(j) of the Communications Act of

1934, as amended, directs the

Commission to disseminate licenses

among a wide variety of applicants,

including small businesses and other

designated entities. 47 U.S.C.

§ 309(j)(3)(B). Section 309(j) also

requires that the Commission ensure the

development and rapid deployment of

new technologies, products, and

services for the benefit of the public,

and recover for the public a portion of

the value of the public spectrum

resource made available for commercial

use. 47 U.S.C. §§ 309(j)(3)(A), (C). The

Commission is seeking comment on

proposed changes to auction rules to

govern the reauction of returned

broadband PCS spectrum in the C block.

2. Legal Basis

24. This action is taken 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), 155(c)(1), 303(r), and

309(j).

3. Description and Estimate of the

Number of Small Entities to Which the

Proposed Rules Will Apply

25. The Commission is required to

provide a description of and, where

feasible, an estimate of the number of

small entities that will be affected by its

rules. See 5 U.S.C. §§ 603(b)(3),

604(a)(3). 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

Commission’s rules. 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.’’ 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) (incorporating by reference the

definition of ‘‘small business concern’’

in 15 U.S.C. § 632). 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). 15 U.S.C. § 632.

26. The rule changes proposed in the

Further Notice of Proposed Rule Making

will affect all small businesses which

avail themselves of these rule changes,

including small businesses currently

holding C block and F block broadband

PCS licenses who choose to participate

and other small businesses who may

acquire licenses through reauction. 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 January 14, 1997.

Ninety bidders (including the C block

reauction winners, prior to any defaults

by winning bidders) won 493 C block
Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Proposed Rules 55379

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 IRFA, the

Commission assumes 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. In addition

to the 178 current small business

licensees who may participate at the

reauction of C block licenses, a number

of additional small business entities

may seek to acquire licenses through

reauction, and thus be affected by these

rules.

27. In addition, the Commission

proposes to provide small business

bidders in the C block reauction with

bidding credits, and to that end

proposes a two tiered bidding credit

which will provide a greater discount to

‘‘very small businesses.’’ In the C block

auction, a winning bidder that qualified

as a small business or a consortium of

small businesses was able to use a

bidding credit equal to 25 percent of its

winning bid. For the reauction, the

Commission proposes tiered bidding

credits, as were offered for F block and,

more recently, Local Multipoint

Distribution Service (LMDS) small

business bidders. The Commission

proposes to define the second tier of

very small business as entities that,

together with their affiliates and persons

or entities that hold interest in such

entities and their affiliates, have average

gross revenues of not more that $15

million for the preceding three years.

Creation of this subcategory of small

business will enable the Commission to

tailor a bidding credit to meet the needs

of entities that may be interested in

bidding on spectrum returned by C

block licensees. Thus, the Commission

proposes a 35 percent bidding credit for

very small businesses and a 25 percent

bidding credit for small businesses.

28. To assist the Commission

analyzing the total number of affected

small entities, commenters are

requested to provide information

regarding how many total broadband

PCS small business entities would be

affected by the rules proposed in this

Further Notice of Proposed Rule

Making. In particular, the Commission

seeks estimates of how many broadband

PCS entities, existing and potential, will

be considered small businesses or very

small businesses.

4. Description of Reporting,

Recordkeeping, and Other Compliance

Requirements

29. There are no additional reporting,

recordkeeping, or other compliance

requirements as a result of the Further

Notice of Proposed Rule Making.

5. Steps Taken to Minimize Significant

Economic Impact on Small Entities, and

Significant Alternatives Considered

30. The Commission proposes to

apply the same rules that were used in

the C block auction to the reauction of

C block licenses, with some

modifications designed to encourage

participation by small businesses while

at the same time helping to ensure the

best use of the spectrum through the

competitive bidding process. The

Commission proposes to conduct the C

block reauction in three stages. Having

three stages, with bidders required to be

more active in each stage, serves to

provide bidders with the flexibility to

pursue backup strategies as the auction

progresses. The Commission proposes to

use high activity requirements in the

reauction. In addition, the Commission

proposes to use similar activity levels in

the C block reauction and, to further

expedite the auction, require the

Wireless Telecommunications Bureau to

use its delegated authority to

aggressively schedule bidding rounds,

quickly transition into the next stage of

the auction when bidding activity falls,

and use higher minimum bid

increments for very active licenses.

31. The Commission proposes to

establish a minimum opening bid for

the reauction. A minimum opening bid

is the minimum bid price set at the

beginning of the auction below which

no bids are accepted. A minimum

opening bid in the C block reauction

will help ensure that the public is fairly

compensated for licenses returned to the

Commission, expedite the auction and

give the Commission the flexibility to

make adjustments based on the

competitiveness of the auction. The

Commission proposes minimum

opening bids for each market equal to

ten percent of the corresponding high

bid for the market in the original C

block auction. Such an approach will

scale the minimum opening bids in a

way that reflects the relative value of the

licenses.

32. The Commission proposes to

require electronic filing of all short-form

applications for the reauction.

Electronic filing of applications would

serve the best interests of auction

participants as well as the members of

the public monitoring the reauction.

The Commission believes that an

electronic filing requirement will help

ensure that the reauction will be

completed within the time frame

contemplated by this Further Notice of

Proposed Rule Making.

33. The Commission proposes to set

the amount of the upfront payment for

the reauction at $.06 per megahertz per

population (‘‘MHz per pop’’).

34. The Commission proposes that

parties have fifteen (15) days to file a

petition to deny following public notice

that an application was accepted for

filing. If, pursuant to Section 309(d) of

the Communications Act, the petitions

to deny are dismissed or denied, the

Commission would announce by public

notice that it is prepared to award the

license, and the winning bidder would

then have ten (10) business days to

submit the balance of its winning bid.

If the bidder does so, the license would

be granted. If the bidder fails to submit

the required down payment or the

balance of the winning bid or the

license is otherwise denied, a default

payment would be assessed.

35. Section 309(j) of the

Communications Act of 1934, as

amended, 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).

Section 309(j) also requires that the

Commission ensure the development

and rapid deployment of new

technologies, products, and services for

the benefit of the public, and recover for

the public a portion of the value of the

public spectrum resource made

available for commercial use. 47 U.S.C.

§§ 309(j)(3)(A), (C). The Commission

believes these provisions in the Further

Notice of Proposed Rule Making help

meet those goals and promote efficient

competition while maintaining fairness

and efficiencies of process in the

Commission’s rules.

6. Federal Rules Which Overlap,

Duplicate, or Conflict With These Rules

None.

B. Paperwork Reduction Act Analysis

36. This Further Notice of Proposed

Rule Making contains either a proposed

or modified information collection. As

part of its continuing effort to reduce

paperwork burdens, the Commission

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 Further Notice of Proposed Rule

Making, as required by the Paperwork

Reduction Act of 1995, Public Law No.

104–13. Public and agency comments

are due at the same time as other
55380 Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Proposed Rules

comments on this Further Notice of

Proposed Rule Making; OMB comments

are due 60 days from date of publication

of this Further Notice of Proposed Rule

Making in the Federal Register.

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 proposed or modified information

collections in this Further Notice of

Proposed Rule Making 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 Further Notice of Proposed Rule

Making 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: Proposed or Modified

Collection.

Respondents: The Commission

estimates that no more than 255

respondents (i.e., previous C block

bidders) will participate in this

information collection. The Commission

estimates that this information

collection, that eligibility is based on

previous participation in a C block

auction and the bidder identification

number from the previous auction, will

take 0.5 hours to complete. In addition,

the Commission proposes that C block

reauction applicants submit more

detailed financial information, if

necessary. The Commission estimates

that this information collection will take

1.0 hours to complete. The Commission

estimates that the total burden will be

1.5 hours per respondent or 377.5 total

hours.

Estimate of total cost burden to

respondents: The Commission estimates

that there will be no additional cost

burden to respondents.

The cost to the Federal Government is

estimated to be:

GS 7 Legal Instrument Examiners at

$14.06 per hour to review the

documentation for approximately 0.5

hours per submission, times 255

submissions = $1,581.75

GS 12 Attorneys to review the financial

documentation at $24.95 per hour, for

approximately 2.0 hours per

submission, times 255 submissions =

$11,227.50

Total = $12,809.25

C. Ex Parte Presentations

The Further Notice of Proposed Rule

Making is a permit but disclose notice

and comment rule making proceeding.

Ex parte presentations are permitted,

provided they are disclosed as provided

in Commission rules. See generally 47

CFR §§ 1.1202, 1.1203, and 1.1206(a).

D. Comments

38. Pursuant to applicable procedures

set forth in §§ 1.415 and 1.419 of the

Commission’s rules, interested parties

may file comments on or before

November 13, 1997, and reply

comments on or before November 24,

1997. In addition, a courtesy copy

should be delivered to Mark Bollinger,

Auctions and Industry Analysis

Division, Wireless Telecommunications

Bureau, Federal Communications

Commission, 2025 M Street, Room 5202,

Washington, DC 20554. All relevant and

timely comments will be considered by

the Commission before final action is

taken in this proceeding. To file

formally in this proceeding, participants

must file an original and five copies of

all comments, reply comments, and

supporting comments. If participants

want each Commissioner to receive a

personal copy of their comments, an

original plus ten copies must be filed.

Comments and reply comments should

be sent to Office of the Secretary,

Federal Communications Commission,

Washington, DC 20554. Comments and

reply comments will be available for

public inspection during regular

business hours in the FCC Reference

Center (Room 239) of the Federal

Communications Commission, 1919 M

Street, N.W., Washington, DC 20554.

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.

[FR Doc. 97–28222 Filed 10–23–97; 8:45 am]

BILLING CODE 6712–01–P

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 10

[Docket No. OST–96–1472; Notice 97–10]

RIN 2105–AC60

Privacy Act; Implementation

AGENCY: Office of the Secretary, DOT.

ACTION: Notice of proposed rulemaking.

SUMMARY: DOT proposes to amend its

rules implementing the Privacy Act of

1974 to exempt from certain provisions

of the Act the Coast Guard’s Vessel

Information System. Public comment is

invited.

DATES: Comments are due November 24,

1997.

ADDRESSES: Comments should be

addressed to Documentary Services

Division, Attention: Docket Section,

Room PL401, Docket OST–96–1472,

Department of Transportation, C–55,

Washington, DC 20590. Any person

wishing acknowledgment that his/her

comments have been received should

include a self-addressed stamped

postcard. Comments received will be

available for public inspection and

copying in the Documentary Services

Division, Room PL401, Department of

Transportation Building, 400 Seventh

Street, SW, Washington, DC, from 9 AM

to 5 PM ET Monday through Friday

except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Robert I. Ross, Office of the General

Counsel, C–10, Department of

Transportation, Washington, DC 20590,

telephone (202) 366–9156, FAX (202)

366–9170.