[Federal Register Volume 66, Number 29 (Monday, February 12, 2001)]
[Rules and Regulations]
[Pages 9773-9778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-3518]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 24

[WT Docket No. 97-82; FCC 01-17]


Installment Payment Financing for Personal Communications 
Services (PCS) Licensees

AGENCY: Federal Communications Commission.

ACTION: Final rule; denial.

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SUMMARY: This document denies five petitions for reconsideration 
(``Petitions'') of the Commission's Sixth Report and Order and Order on 
Reconsideration (``C/F Block Sixth Report and Order'') challenging a 
number of the modifications to the C and F block service and auction 
rules. The Commission declines to further revise its rules and affirms 
its modifications as adopted in the C/F Block Sixth Report and Order.

FOR FURTHER INFORMATION CONTACT: Regina Martin, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, at (202) 418-
0660.

SUPPLEMENTARY INFORMATION: This is a summary of an Order on 
Reconsideration (Order) in WT Docket No. 97-82, adopted on January 16, 
2001, and released on January 18, 2001. The complete text of the Order 
is available for inspection and copying during normal business hours in 
the FCC Reference Center (Room CY-A257), 445 12th Street, SW., 
Washington, DC. It may also be purchased from the Commission's copy 
contractor, International Transcription Services, Inc. (ITS, Inc.), 445 
12th Street, SW., Room CY-B400, Washington, DC 20554, (202) 314-3070. 
The Order is also available on the Internet at the Commission's web 
site: http://www.fec.gov/wtb/documents.html.

I. Introduction

    1. In the Order, we address the five petitions for reconsideration 
(``Petitions'') of the Commission's C/F Block Sixth Report and Order, 
65 FR 53624 (September 5, 2000). In that document we modified the 
auction and service rules for C and F block broadband Personal 
Communications Services (PCS) licenses. For the reasons set forth, we 
deny these Petitions and affirm our findings in the C/F Block Sixth 
Report and Order.

II. Background

    2. The Commission outlined the original framework for C and F block 
auctions in the 1994 Competitive Bidding Fifth Report and Order, 
establishing the C and F blocks as ``set-aside'' licenses for 
``entrepreneurs'' in which eligibility would be restricted to entities 
below a specified financial threshold. See 59 FR 37566 (July 22, 1994). 
These provisions were consistent with Congress' mandate to promote 
participation of small businesses, rural telephone companies, and 
businesses owned by members of minority groups and women (collectively 
``designated entities'') in the provision of spectrum-based services. 
In addition, the Commission adopted special provisions for the C and F 
blocks to assist designated entities.
    3. Section 309(j)(4) of the Communications Act directs the 
Commission, in prescribing regulations to implement the objectives of 
section 309(j)(3), to, inter alia: (i) Establish performance 
requirements to ensure prompt delivery of service to rural areas and 
prevent warehousing of spectrum by licensees; (ii) prescribe area 
designations and bandwidth assignments that promote an equitable 
geographic distribution of licenses and services, economic opportunity 
for a wide variety of applicants, including designated entities, and 
rapid deployment of services; and (iii) ensure

[[Page 9774]]

that designated entities are given the opportunity to participate in 
the provision of spectrum-based services, and, for such purposes, 
consider using bidding preferences and other procedures.
    4. The Commission has held four entrepreneurs' block broadband PCS 
auctions to date. The initial C block licenses were awarded through two 
auctions, Auction No. 5, which ended on May 6, 1996, and Auction No. 
10, which concluded on July 16, 1996. Auction No. 11, the initial F 
block auction, ended on January 14, 1997, and also included D and E 
block licenses. Auction No. 22, which concluded on April 15, 1999, made 
available C and F block licenses that had been returned to, or 
reclaimed by, the Commission. The inventory for Auction No. 35, which 
began on December 12, 2000, includes 422 licenses covering 195 various 
Basic Trading Areas (BTAs). The 422 licenses include 312 C block 10 MHz 
licenses, 43 C block 15 MHz licenses, and 67 F block 10 MHz licenses.
    5. On June 7, 2000, we released a Further Notice of Proposed 
Rulemaking (``Further NPRM''), 65 FR 37092 (June 13, 2000), which set 
forth tentative conclusions and proposals concerning the C and F block 
rules. On August 29, 2000, we released the C/F Block Sixth Report and 
Order, which resolved the issues raised in the Further NPRM and revised 
the service and auction rules for the auction of C and F block 
broadband PCS licenses in furtherance of the various goals of section 
309(j) of the Communications Act. The C/F Block Sixth Report and Order, 
among a number of other modifications to the Commission's rules, 
reconfigured the size of C block spectrum license size; removed the 
entrepreneur eligibility restrictions (permitted ``open'' bidding) for 
some, but not all, licenses available in Auction No. 35 and in future C 
and F block auctions; eliminated bidding credits in closed bidding; and 
modified the transfer restrictions for C and F block licenses. As 
addressed more fully, Petitioners challenge a number of the 
modifications to the C and F block service and auction rules adopted in 
the C/F Block Sixth Report and Order.

III. Discussion

A. Reconfiguration of C Block Spectrum License Size

    6. Background. In the C/F Block Sixth Report and Order, we 
reconfigured each 30 MHz C block license available in Auction No. 35, 
or any subsequent auction, into three 10 MHz C block licenses.
    7. Discussion. All five of the Petitioners object to the 
Commission's decision to split the 30 MHz C block licenses into three 
10 MHz licenses. Petitioners argue that a 10 MHz license is 
insufficient to provide advanced mobile services. We considered and 
rejected similar arguments in the C/F Block Sixth Report and Order. As 
explained, we decline to further reconfigure the available C block 
licenses and we affirm our decision to provide for three 10 MHz C block 
licenses.
    8. As the petitioners have not provided any new rationale to 
justify deviating from our conclusion in the C/F Block Sixth Report and 
Order, we decline to reconsider our decision to divide each available 
30 MHz C block license into three 10 MHz licenses. Historically 10 MHz 
has been one of the principal license sizes used in broadband PCS. In 
the C/F Block Sixth Report and Order, we found that 10 MHz is a viable 
minimum license size. Moreover, we note that our rules permit 
aggregation, subject to the spectrum cap, and a 10 MHz license allows 
bidders to acquire additional spectrum in particular markets. Further, 
we believe dividing the spectrum into three 10 MHz C block licenses 
should promote a wider dissemination of licenses, provide bidders with 
more flexibility to adapt their bidding strategies to meet their 
business plans, and should make licenses more affordable, especially 
for entrepreneurs. As we noted in establishing both 20 MHz and 10 MHz 
licenses for wireless use in the 700 MHz service, 10 MHz wireless 
licenses ``should prove of interest to parties in the record who desire 
spectrum to deploy innovative wireless technologies, including high-
speed Internet access, that do not require as much spectrum.'' Thus, we 
continue to believe that this reconfiguration, along with the other 
rule modifications adopted in the C/F Block Sixth Report and Order, 
meets the diverse needs of both large and small carriers seeking to 
participate in the next C and F block auction. The reconfiguration 
ensures the most efficient use of spectrum through the competitive 
bidding process while at the same time promoting wider auction 
participation and license distribution in accordance with the goals of 
section 309(j) of the Communications Act. Lastly, as explained, we note 
that we have retained entrepreneur eligibility restrictions for some C 
block licenses to ensure that entrepreneurs are provided greater 
opportunities to acquire spectrum to fulfill their business needs.

B. Eligibility Restrictions Under a Tiered Approach

    9. Background. In the C/F Block Sixth Report and Order, we divided 
the BTAs into two categories, ``Tier 1'' BTAs and ``Tier 2'' BTAs. Tier 
1 comprises BTAs with populations that, according to the 1990 census, 
are equal to or greater than 2.5 million; and Tier 2 comprises the 
remaining BTAs. We decided to establish open bidding (bidding without 
entrepreneur eligibility restrictions) for two of the three newly 
reconfigured 10 MHz C block licenses in Tier 1 and for one of the three 
newly reconfigured 10 MHz C block licenses in Tier 2. We also adopted 
open bidding for all F block licenses available in Auction No. 35 and 
in all future auctions.
    10. Discussion. Tiers. Northcoast urges the Commission to 
reconsider and simplify its tiering and eligibility restrictions by 
eliminating all tiering and by allowing open bidding only for a single 
10 MHz C block license in all markets. Northcoast asserts that, under 
the new tiering rule, it will be unable to meet its business plans 
because it will not be able to competitively bid for available C block 
spectrum in markets with a population above 2.5 million. We considered 
and rejected similar arguments in the C/F Block Sixth Report and Order. 
We continue to believe that this approach is, in conjunction with the 
other modifications to the entrepreneur eligibility restrictions, the 
most effective method of accommodating the various business plans of 
both small and larger carriers and is fully consistent with the 
statutory goals for competitive bidding. This approach, in conjunction 
with the changes in entrepreneur eligibility restrictions, makes more 
spectrum available for ``open'' bidding in the most populous markets 
where the demand for spectrum by existing CMRS carriers is the greatest 
and the prospects of a spectrum shortage for these carriers is the most 
acute. At the same time, this approach keeps most of the C block 
spectrum (i.e. 20 MHz) closed in all but the very largest markets, 
while also retaining restricted eligibility for some spectrum (i.e. 10 
MHz) even in those latter cases. Thus, under our new rules, 
entrepreneurs will have an opportunity to acquire additional spectrum 
on a set-aside basis in all available C block markets, which should 
assist them in achieving their business goals and objectives. At the 
same time, our new rules also take into account the need of many large 
carriers to acquire additional spectrum. In adopting this approach, we 
have also taken into account section 309(j)(3) of the Communications 
Act

[[Page 9775]]

which requires us to promote a variety of objectives, including but not 
limited to, the promotion of economic opportunity and competition, and 
the dissemination of licenses among a wide variety of applicants, in 
order to serve the needs of the public. We continue to believe that 
``our decision to establish two tiers with 2.5 million population 
demarcation represents the most reasonable balancing of the various 
competing public interest factors that bear on this issue.'' For the 
foregoing reasons, we affirm our decision in the C/F Block Sixth Report 
and Order to utilize a tiered approach, limiting non-entrepreneurs 
participation to certain markets.
    11. 30 MHz and 15 MHz C block licenses. Alpine maintains that the 
Commission, in eliminating some of the entrepreneur eligibility 
restrictions, failed to consider the 309(j)(3) statutory objectives, 
particularly the objective to avoid the excessive concentration of 
licenses. Additionally, several petitioners state that the record does 
not support the Commission's decision to eliminate some of the 
entrepreneur eligibility restrictions. These petitioners assert that 
the majority of the commenters favored maintaining the entrepreneur 
eligibility restrictions. As discussed, by eliminating some, but not 
all, of the C block entrepreneur eligibility restrictions, we give 
effect to, and reasonably balance, as many of the section 309(j) 
objectives as possible.
    12. Section 309(j)(3) directs the Commission to seek to promote a 
variety of objectives, including economic opportunity, competition, and 
the rapid deployment of new technologies and services by, inter alia, 
disseminating licenses among a wide variety of applicants. In certain 
instances, these objectives conflict, thus requiring the Commission to 
balance the competing objectives. Section 309(j) does not require the 
Commission to seek to promote the participation of small businesses in 
PCS auctions at the expense of other enumerated 309(j)(3) objectives 
nor does it give one objective greater weight than another objective. 
In balancing the 309(j)(3) objectives, including the avoidance of the 
excessive concentration of licenses, we reviewed the record before us 
and have taken into account the needs of both large and small carriers 
to acquire additional spectrum to provide services and/or to satisfy 
their business plans. In the C/F Block Sixth Report and Order, we 
concluded that it was fair and appropriate to apportion the spectrum to 
accommodate the interests of large carriers to obtain additional 
spectrum to ``fill out'' regional or national service areas. At the 
same time, we decided to maintain a significant set-aside of C block 
spectrum for entrepreneurs. As previously explained, section 309(j) 
does not mandate the use of set-asides or any other method to promote 
the participation of small businesses in spectrum auctions, 
particularly in light of changed circumstances.
    13. Three petitioners argue that the record provides no 
justification for providing large carriers with additional spectrum. 
Specifically, they point to recent general statements in news articles 
where two large carriers asserted that they have a sufficient amount of 
spectrum. Therefore, petitioners argue that the record provides no 
justification for providing them with an opportunity to acquire 
additional spectrum. As we previously discussed, circumstances in the 
industry have changed dramatically, and continue to change, since the 
implementation of our rules in 1994. The introduction of wireless 
Internet, advanced data, and 3G services, as well as global competition 
within these services, has created a shortage of suitable available 
spectrum. The statement of two large carriers, as reported in two 
recent news articles, does not undermine the record as a whole, 
particularly where other large carriers claim that they need additional 
spectrum to provide advanced services or to fulfill their business 
plans. We believe that apportioning the spectrum as described promotes 
the further development of CMRS competition and innovation, especially 
in large markets. For these reasons, we affirm our position in the C/F 
Block Sixth Report and Order to remove the eligibility restrictions for 
some, but not all, of the available C block spectrum.
    14. F block licenses. Four petitioners requested that the 
Commission retain entrepreneur eligibility requirements for F block 
licenses. These petitioners argue that the Commission failed to provide 
support for eliminating the F block set-aside, particularly in light of 
the success of F block licensees. For instance, Northcoast argues that 
since entrepreneurs are in the process of building out their systems 
and service has not been delayed to the public, the entrepreneur 
eligibility requirement should be maintained. These petitioners have 
not provided any new rationale to justify the preservation of the F 
block set-aside. We considered arguments such as Northcoast's when we 
reached our decision in the C/F Block Sixth Report and Order. As we 
stated there, the need for additional open spectrum that exists in the 
C block markets also extends to the F block markets. Additionally, open 
bidding for F block licenses may lead to more expeditious provision of 
wireless services to the public. The C and F blocks have been subject 
to different regulatory requirements, reflecting the different bidding 
and marketplace histories of the two blocks as well as the 
corresponding different equity and reliance concerns applicable to 
bidders and licensees in each of the blocks. Taking into account the 
divergent history of F block, we decided to remove the entrepreneur 
eligibility restrictions and to allow open bidding for all available F 
block licenses in Auction No. 35 and in future auctions. This 
determination was informed by the fact that almost every market with an 
available F block license already has a significant 30 MHz C block 
entrepreneur presence. Thus, we found that we could modify the F block 
eligibility rules while preserving the diversity of opportunity and 
service that are goals of section 309(j). For these reasons, we affirm 
our position in the C/F Block Sixth Report and Order to allow open 
bidding and eliminate the F block entrepreneur eligibility 
restrictions.
    15. Unsold set-aside licenses. For Auction No. 35, in the C/F Block 
Sixth Report and Order, we eliminated entrepreneur eligibility 
requirements for all C block licenses that were available but not sold 
in Auction No. 22. We also decided to eliminate the set-aside for any C 
and F block license that was available, but not sold, in any subsequent 
auction. RTG and OPASTCO urge the Commission not to eliminate 
entrepreneur eligibility requirements for licenses unsold in Auction 
No. 22, but rather provide entrepreneurs with one more opportunity to 
bid on such licenses on a closed basis as well as on future unsold 
licenses under a set-aside approach. We previously considered RTG and 
OPASTCO's position and determined that closed bidding for this spectrum 
will not result in the acquisition and construction of these licenses. 
The failure of certain 15 MHz C block licenses to sell in Auction No. 
22 indicates that closed bidding for these licenses will not 
expeditiously result in the acquisition and construction of these 
licenses and in service to the public. By lifting the eligibility 
restrictions for these unsold licenses, we seek to prevent additional 
delays in their utilization. For these reasons, we affirm our decision 
in the C/F Block Sixth Report and Order and will provide all bidders 
with an opportunity to acquire previously unsold set-aside licenses.

C. Competitive Bidding Design

    16. Background. In the C/F Block Sixth Report and Order, we 
rejected

[[Page 9776]]

Nextel Communications, Inc.'s (``Nextel'') bulk bid proposal. We 
concluded that Nextel's proposal would exclude all but a very few 
competitors. We also left to the Bureau, under its existing delegated 
authority, the final selection of a competitive bidding design and 
methodology for Auction No. 35, including the decision whether to 
implement a combinatorial (package) bidding design for the auction. On 
September 6, 2000, the Bureau released the Comment Public Notice, 65 FR 
55243 (September 13, 2000), which invited public comment on its auction 
procedures for the C and F block auction, including the proposal to 
adopt a simultaneous multiple round bidding methodology. On October 5, 
2000, the Bureau released the Procedures Public Notice, 65 FR 75702 
(December 4, 2000), in which, inter alia, it determined to utilize a 
simultaneous multiple round bidding design for Auction No. 35. 
Subsequently, on November 6, 2000, Nextel filed a petition seeking to 
change the Auction No. 35 design to allow package bidding. The Bureau 
denied Nextel's Petition.
    17. Discussion. As an alternative to the Commission reserving at 
least 20 MHz of spectrum for entrepreneurs, RTG and OPASTCO have 
requested that the Commission provide entities with a means of 
combinatorial bidding on the disaggregated licenses. We reject this 
alternative because, as the Bureau previously explained in response to 
Nextel's request for combinatorial bidding, the public interest would 
not be served by implementing package bidding for Auction No. 35. 
Implementation of a package bidding design would have necessitated a 
notice and comment period due to the unique auction and service rules 
applicable to Auction No. 35. The public had ample opportunity to 
request an alternative bidding design prior to the start of Auction No. 
35. First, we sought comment, in the Further NPRM, on possible ways for 
bidders to efficiently aggregate licenses in Auction No. 35. The Bureau 
also invited public comment on its proposal to adopt simultaneous 
multiple round bidding. No party filed comments contesting this bidding 
methodology. In denying Nextel's Petition, the Bureau found that 
establishing combinatorial bidding, after the short-form application 
filing deadline, would impose delay on auction participants that would 
not be in the public interest.
    18. Moreover, the Commission has not yet conducted an auction 
utilizing combinatorial bidding due to the complexity of implementing 
such a bidding design. Although the Bureau has adopted package bidding 
procedures for the auction of the 747-762 and 777-792 MHz bands 
(Auction No. 31), the package bidding procedures established for 
Auction No. 31 were not designed with Auction No. 35 in mind. 
Accordingly, absent significant modification, such a design would have 
been complex and impractical to implement for Auction No. 35, 
particularly in light of the large number of licenses involved. 
Further, applicants prepared business plans based on the Bureau's 
bidding methodology announced in the Procedures Public Notice. As 
noted, parties that need additional spectrum have the ability to 
aggregate licenses, subject to the CMRS spectrum cap. For these 
reasons, we affirm that the final selection of a bidding design is 
within the Bureau's delegated authority and we will not disturb the 
Bureau's final selection of a simultaneous multiple round bidding 
design for Auction No. 35.

D. Bidding Credits

    19. Background. In the C/F Block Sixth Report and Order, we decided 
to maintain existing small and very small business bidding credits (15 
percent and 25 percent, respectively) for licenses won in open bidding 
and to eliminate bidding credits for licenses won in closed bidding. 
With respect to open bidding, we concluded that bidding credits of 15 
and 25 percent will allow effective competition by small businesses. 
With respect to closed bidding, we concluded that the continued use of 
bidding credits in restricted auctions would not serve its intended 
purpose.
    20. Discussion. Open Bidding. We received petitions from 
Northcoast, RTG and OPASTCO requesting an increase in bidding credits 
in open auctions. Northcoast argues that retaining the existing levels 
of bidding credits (15 and 25 percent) in open bidding will not permit 
effective competition by small businesses. Similarly, RTG and OPASTCO 
argue that the Commission should increase bidding credits in open 
auctions to ensure that entrepreneurs have an opportunity to 
participate. We considered and rejected these arguments in the C/F 
Block Sixth Report and Order. We noted that in our Specialized Mobile 
Radio (SMR) 900 MHz auction--using bidding credits of 10 percent and 15 
percent--75 percent of the winning bidders were small businesses, 
winning 26 percent of the licenses. Moreover, in Auction No. 11, the 
auction of D, E, and F block licenses, small and very small business 
were the high bidders for 141 of the 986 D and E block licenses won in 
that auction, even though bidding credits were not available for D and 
E block licenses. Thus, small businesses have proven to be competitive 
in auctions even where we have provided for lower bidding credits than 
what we have adopted for Auction No. 35. Northcoast, RTG and OPASTCO 
have not provided any new rationale to justify increasing the level of 
bidding credits for licenses subject to open bidding. Therefore, for 
open licenses, we will maintain the current level of bidding credits 
for small and very small businesses.
    21. Closed Bidding. With respect to closed bidding, four 
petitioners object to the Commission's decision to eliminate bidding 
credits in closed auctions. These petitioners argue that by eliminating 
the bidding credits in closed auctions, the Commission has violated the 
congressional mandate pursuant to section 309(j) to provide small and 
very small businesses with a meaningful opportunity to compete in 
spectrum auctions. Specifically, Northcoast, NTCA, and RTG and OPASTCO 
are concerned that, without bidding credits, small and very small 
businesses will be unable to compete against ``grandfathered'' entities 
that are generating millions of dollars in gross revenues.
    22. We considered and rejected this argument in the C/F Block Sixth 
Report and Order. We noted that two groups are included among those 
entities eligible to participate in the entrepreneurs' block auctions. 
One group consists of well-capitalized new entities with small gross 
revenues. Another group consists of older companies with small total 
assets and net revenues, but high gross revenues. As we explained, this 
situation creates an anomaly because the first group, the well-
capitalized new entities, may qualify for bidding credits, while the 
second group, the older companies, may not qualify for bidding credits. 
If we were to retain bidding credits in closed bidding, it may skew 
these auctions in favor of well-capitalized new entities that are 
uniquely structured to protect large investors from attribution. 
Moreover, although there may be a number of ``grandfathered'' entities 
participating in Auction No. 35, we have found that small and very 
small businesses have been previously successful in open auctions 
without bidding credits. As we are not persuaded that small and very 
small businesses will be unable to effectively compete against 
``grandfathered'' entities, and as we do not want to undermine the 
``grandfather'' exception, we reject petitioners' request to provide 
bidding credits in closed auctions. We

[[Page 9777]]

continue to believe that small and very small businesses will have a 
meaningful opportunity to compete in Auction No. 35 and in future 
spectrum auctions. For this reason, we affirm our decision in the C/F 
Block Sixth Report and Order to eliminate bidding credits in closed 
auctions.

E. Transfer Requirements

    23. Background. In the C/F Block Sixth Report and Order, we 
modified the transfer restrictions for C and F block licenses. 
Specifically, we concluded that C and F block spectrum licenses won 
pursuant to open bidding would not be subject to a five-year holding 
and limited transfer rule. With respect to closed bidding, we concluded 
that a licensee would be allowed to assign or transfer a license to a 
non-entrepreneur as soon as the licensee completed its first 
construction benchmark. Additionally, we eliminated unjust enrichment 
payments for licenses won in Auction No. 5 and Auction No. 10, but 
retained unjust enrichment payments for licenses that were acquired in 
Auction No. 11 and Auction No. 22. Despite requests from commenters, we 
decided not to allow a carrier to exchange or transfer restricted C or 
F block licenses during the holding period where the carrier could 
demonstrate ``substantial service'' throughout its system, but not in 
the particular market that would be affected by the transfer.
    24. Discussion. On August 9, 2000, fourteen days before adoption of 
the C/F Block Sixth Report and Order, Congress adopted legislation that 
grants qualifying Alaska Native regional corporations relief from the 
entrepreneur transfer restrictions and unjust enrichment payment 
requirements. To qualify, the corporation (or an affiliate thereof) 
must be organized pursuant to the Alaska Native Claims Settlement Act, 
hold a PCS license as of the date of the enactment of the legislation, 
and either have paid for the license in full or have complied with the 
payment schedules for the license. Cook Inlet Region, Inc. (``CIRI'') 
is an Alaska Native regional corporation and meets the requirements of 
the statute. Thus, this legislation allows CIRI to transfer or assign a 
license to a non-entrepreneur without paying any unjust enrichment 
penalties. Alpine requests that the Commission, in light of this 
legislation, revise its transfer rules so as to apply the same relief 
afforded CIRI in a uniform manner to all entrepreneurs. Alpine argues 
that if relief from the unjust enrichment penalty requirements is not 
applied to all entrepreneurs, then this will result in discriminatory 
application of the Commission's rule. In the alternative, Alpine asks 
the Commission to amend its rules to exclude CIRI from Auction No. 35 
if all entrepreneurs cannot be afforded the same relief. CIRI and 
VoiceStream Wireless Corporation (``VoiceStream'') both oppose Alpine's 
request to exclude CIRI from Auction No. 35. Although CIRI and 
VoiceStream do not oppose the elimination of all transfer restrictions 
for entrepreneurs, both parties object to Alpine's attempt to utilize a 
rulemaking proceeding to decide CIRI's eligibility to participate in 
Auction No. 35. Verizon opposes Alpine's request to remove all transfer 
restrictions on licenses won in closed bidding. Verizon states that, 
absent the Commission's transfer restrictions, entrepreneurs could 
purchase licenses and immediately sell the licenses to non-
entrepreneurs.
    25. As stated, we have made several modifications to the C and F 
block transfer restrictions. In modifying the transfer restrictions, we 
have attempted to level the playing field for entrepreneurs with 
respect to other licensees, making it easier for entrepreneurs to 
restructure their spectrum holdings, provide additional access to 
capital, and to increase effective competition by entrepreneurs. The 
relief accorded CIRI under the statute was specifically authorized by 
Congress and narrowly tailored. The legislation, therefore, does not 
change the Commission's application of its transfer requirements to all 
other entrepreneurs. As a matter of legislative initiative, Congress 
determined to exempt companies like CIRI from the economic consequences 
of the application of the unjust enrichment provisions. Congress could 
have provided the same relief to all applicants, but instead Congress 
chose to narrowly tailor the specific relief. Notably, Congress left 
intact the statutory directive of section 309(j)(4)(E), which requires 
the Commission to ``require such transfer disclosures and 
antitrafficking restrictions and payment schedules as may be necessary 
to prevent unjust enrichment as a result of the methods employed to 
issue licenses and permits.'' Therefore, Congress' determination to 
create an exemption that applies to CIRI does not show legislative 
intent to exempt all applicants from the antitrafficking and unjust 
enrichment provisions. Nor does Congress' action negate the statutory 
purpose served by the transfer restrictions. Providing all applicants 
with the specific relief provided to CIRI would circumvent the 
underlying purpose of retaining a set-aside in that entrepreneurs could 
acquire a license in a closed auction and immediately sell the newly 
acquired license on the open market at windfall prices without paying 
any penalties. We think that such a result is neither consistent with 
making licenses available for closed bidding by entrepreneurs, in 
furtherance of section 309(j)(4)(D) (requiring the Commission to ensure 
that small businesses, inter alia, are given the opportunity to 
participate in the provision of spectrum-based services, and, for such 
purposes, consider the use of bidding preferences and other procedures) 
nor, as indicated, with the directives of section 309(j)(4)(E) 
(requiring various measures to prevent unjust enrichment).
    26. Moreover, the legislation that provides CIRI with this relief 
does not at the same time, in and of itself, render CIRI ineligible for 
entrepreneur status in Auction No. 35, or in any future auction. CIRI's 
eligibility to participate in Auction No. 35 as an entrepreneur is 
dependent on CIRI satisfying our entrepreneur eligibility restrictions. 
The instant rulemaking proceeding is not the proper forum to challenge 
congressional legislation or to determine CIRI's entrepreneur status 
for Auction No. 35. After the Commission by public notice announces 
that long-form applications have been accepted for filing, Alpine and/
or any other applicant, if they choose to do so, will have an 
opportunity to challenge CIRI's entrepreneurial status by way of a 
petition to deny filed with the Commission. For these reasons, we will 
not further revise its transfer rules or amend its rules to exclude 
CIRI from Auction No. 35.

IV. Ordering Clause

    27. Accordingly, it is ordered, 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), the Petitions filed by Alpine PCS, Inc, National Telephone 
Cooperative Association, Northcoast Communications, LLC, Office of 
Advocacy of the United States Small Business Administration, and The 
Rural Telecommunications Group and the Organization for the Promotion 
and Advancement of Small Telecommunications Companies filed in response 
to the C/F Block Sixth Report and Order are denied.

List of Subjects in 47 CFR Part 24

    Personal communications services.


[[Page 9778]]


Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 01-3518 Filed 2-9-01; 8:45 am]
BILLING CODE 6712-01-P