Washington, DC - The Federal Communications Commission (FCC) has tentatively
concluded it is in the public interest to modify certain aspects of its rules for the upcoming C and F
block auction:  to reconfigure the size of C block spectrum licenses;  to modify the
entrepreneur eligibility restrictions for certain licenses in both large and small markets;  and to
retain the spectrum cap. The FCC approved a "Further Notice of Proposed Rulemaking" to seek
public comment on these revisions.|
Under the FCC's current rules, in order to qualify as an "entrepreneur" and to participate in
a C or F Block auction, an applicant (together with its affiliates and persons or entities that hold
interests in the applicant and their affiliates) must have had gross revenues of less than $125 million
in each of the last two years and must have total assets of less than $500 million.
Following the January announcement of an upcoming broadband Personal Communications
Service (PCS) C and F Block auction (Auction 35), the FCC received several formal requests to
waive, modify, or eliminate the C and F block auction and service rules. These requests sought,
among other things, modification of the C and F block eligibility requirements for the upcoming
auction, reconfiguration of available 30 MHz C block licenses, and adoption of an alternative
bidding plan. Several parties also asked the FCC to consider whether it should revise, waive, or
forbear from applying the Commercial Mobile Radio Service ("CMRS") spectrum cap for Auction
35. Numerous parties filed opposing and supportive pleadings in response to these petitions and
asked the FCC to pursue a formal rulemaking to implement any changes.
Specifics of Today's Action:
Upon consideration of the petitions and responsive filings received to date, the FCC has
tentatively concluded that it is in the public interest to revise certain aspects of the C and F block
rules. Accordingly, the FCC seeks comment in a Further Notice of Proposed Rulemaking
(FNPRM) on the following specific proposals:
- Reconfigure C Block Spectrum License Size: The FCC tentatively concludes that each 30 MHz
C block license available in future broadband PCS auctions should be reconfigured into three 10
MHz C block licenses.
- Apply a Tiered Approach to Basic Trading Areas (BTAs): The FCC tentatively concludes to
divide BTAs into two tiers according to the population size. Under this proposal, "Tier 1"
would comprise BTAs at and above a 2.5 million population threshold; "Tier 2" would comprise
BTAs below that population threshold.
- Eliminate Eligibility Restrictions For Certain Licenses In Tiers: The FCC proposes to remove
the auction eligibility restrictions for certain of the newly reconfigured 10 MHz C block
licenses, thereby establishing "open" bidding for these licenses. The Commission tentatively
concludes to allow "open" bidding (i.e., remove the eligibility restrictions) for two of the three
10 MHz C Block licenses contained in Tier 1, and one of the three 10 MHz C Block licenses
contained in Tier 2. The FCC invites comment on whether to allow "open" bidding for all three
of the 10 MHz C Block licenses contained in Tier 1, and two of the three 10 MHz C Block
licenses contained in Tier 2. The Commission tentatively concludes that it will allow "open"
bidding for all available 15 MHz C block licenses, which have previously been auctioned but
not sold. The FCC seeks comment on whether to allow "open" bidding for all available F block
licenses. The FCC also seeks comment on whether, instead, to adopt a tiered approach to
eligibility for F block licenses or to retain existing F block eligibility requirements.
- Retain the Current License Grouping for Bidding in the Auction: The FCC tentatively concludes
to retain BTA service areas and a license-by-license simultaneous multiple-round bidding
design for Auction No. 35.
- Clarify the Grandfather Exception: The FCC invites comment in this proceeding on a number
of issues raised by parties seeking reconsideration of the grandfather exception to the eligibility
rules, contained in Section 24.709(b)(9)(i). On the issue of how the exception applies in a
merger situation, the FCC tentatively concludes that when each of the merging entities is
eligible for the "grandfather" exception, the exception extends to the resulting entity, but that
when one (or more) of the merging entities is not eligible for the "grandfather" exception, the
exception does not extend to the resulting entity.
- Revise the Bidding Credits Available for Auction No. 35: The FCC seeks comment on whether
to retain existing small and very small business bidding credits (15 percent and 25 percent,
respectively) for licenses subject to "open" bidding or whether to increase them to 25 percent
and 40 percent, respectively. The FCC also seeks comment on whether it should change the
bidding credits for licenses subject to "closed" bidding, i.e., bidding where eligibility
- Alter the Transfer Requirements For Certain Licenses
Licenses Won in "Open" Bidding: The FCC tentatively concludes it will eliminate the Section 24.829 eligibility requirements for the assignment or transfer of control of C and F block
licenses won in Auction No. 35 "open" bidding.
Licenses Won in "Closed" Bidding: The FCC seeks comment on allowing a licensee to assign
or transfer its license to any qualified entity, entrepreneur or not, upon the licensee's completion
of its first construction benchmark, whether or not it takes the full five years allowed under FCC
Licenses Held by Incumbent Licensees: The FCC seeks comment on allowing an incumbent
licensee to assign or transfer its license to any qualified entity, entrepreneur or not, upon the
licensee's completion of its first construction benchmark, whether or not it takes the full five
years allowed under our rules. The FCC also seeks comment on whether it should allow some
flexibility for incumbent licensees to transfer certain licenses where the carrier can demonstrate
"substantial service" throughout its system, rather than on a market-by-market basis.
- Eliminate the License Cap: The FCC tentatively concludes that it will eliminate the Section
24.710 cap on the number of C and F block licenses a single entity may win at auction.
- Retain the Spectrum Cap: The FCC tentatively concludes that it will retain the current spectrum
Action by the Commission on May 31, 2000 by Further Notice of Proposed Rulemaking
(FCC 00-197). Chairman Kennard, Commissioners Ness, Furchtgott-Roth and Tristani with
Commissioner Powell concurring and issuing a separate statement.
Wireless Bureau Contacts: (Auctions Division) Audrey Bashkin at (202) 418-0660, e-mail:
email@example.com; Paul Murray (Commercial Wireless Division) at (202) 418-0688,
e-mail:firstname.lastname@example.org; TTY at (202) 418-7233.
WT Docket No. 97-82