WPCJ 2BJZ Courier3|w ?x6X@`7X@HP LaserJet 4M (PCL)HPLA4MPC.PRSx  @\xX@2 6 F ZPv3|w HP LaserJet 4M (PCL)HPLA4MPC.PRSXw PE37\xXPa8DocumentgDocument Style StyleXX` `  ` 2=pRkk-a4DocumentgDocument Style Style . a6DocumentgDocument Style Style GX  a5DocumentgDocument Style Style }X(# a2DocumentgDocument Style Style<o   ?  A.  2votY a7DocumentgDocument Style StyleyXX` ` (#` BibliogrphyBibliography:X (# a1Right ParRight-Aligned Paragraph Numbers:`S@ I.  X(# a2Right ParRight-Aligned Paragraph Numbers C @` A. ` ` (#` 2  o  a3DocumentgDocument Style Style B b  ?  1.  a3Right ParRight-Aligned Paragraph Numbers L! ` ` @P 1. ` `  (# a4Right ParRight-Aligned Paragraph Numbers Uj` `  @ a. ` (# a5Right ParRight-Aligned Paragraph Numbers _o` `  @h(1)  hh#(#h 22   Y 2 a6Right ParRight-Aligned Paragraph Numbersh` `  hh#@$(a) hh#((# a7Right ParRight-Aligned Paragraph NumberspfJ` `  hh#(@*i) (h-(# a8Right ParRight-Aligned Paragraph NumbersyW"3!` `  hh#(-@p/a) -pp2(#p Tech InitInitialize Technical Style. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technical2d 4Ba1DocumentgDocument Style Style\s0  zN8F I. ׃  a5TechnicalTechnical Document Style)WD (1) . a6TechnicalTechnical Document Style)D (a) . a2TechnicalTechnical Document Style<6  ?  A.   2"o1a3TechnicalTechnical Document Style9Wg  2  1.   a4TechnicalTechnical Document Style8bv{ 2  a.   a1TechnicalTechnical Document StyleF!<  ?  I.   a7TechnicalTechnical Document Style(@D i) . 2 3oea8TechnicalTechnical Document Style(D a) . Doc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:CCwh,,,Cw,,,,CCCCCCCCCC,,w;w`T[cTO`c,4^Tyc`M`YHTc`~``V,,,CC,;C;C;,CC%%C%hCCCC14%CC`CC;;C;C#CCCCC,CCCCCCCCC%`;`;`;`;`;wY[;T;T;T;T;,%,%,%,%cC`C`C`C`CcCcCcCcC`C`;cC`C`C`CcCMC`;`C`;[;[;[C[CcPS;TCTCS;`C`C`C`C`CcCcC,%CCCC,CaJCC^CS%S0TCU(S%cCMcCcC`C`Cw`X0X0YCH3H3H3HCS0S%TCcCcCcCcCcCcC~``CU;U;U;cCTCcCHCTC`CP,CC,,,WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN```CCC,;66CCuCCCwwC/CCCCw/,,EECw##CCQQeCC`COooJJw,EC~/"``C`E``wwCww&wC,,`Qw``````````,C`CJCw`YC,C`;CM`hV``````````>``````oYQh`9O```````C```````;````;````````````````````````````````````````````,```,```,```,``````````````QTJQJY;T4V;cC`;,%^;YJyJc;YC`;`QMCQCCT;`;YQ`JhQQQ`Tc,C```Q;QQQQb,,CCCC`cCCC```Q,MC;,x=x]]xKP}}xxxxxxMk[[}}HHxpppXpuuXmcc`]kuxxx}}}{hccxxxx=cxMxxxHHxxxxxxxxxxxxxxxxxxxxxx+=+xxxxx=xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxkkxxxxxxxxhhhhxxuuuuxxmmmhhhh@3Uhxx2M?'+f +Z/79CG TimesCG Times BoldCG Times Italic",tB^ f ^;C]ddCCCdCCCCddddddddddCCdxN`xoCCCddCdoYoYFdo8Co8odooYNCodddYdddd4dddddCddddddddo8dddddYYYYYN8N8N8N8oddddooooddpddddxodddXXddXddXdddddooL8doddNorddo8PdN8ppoddXXdpLoNpLodPDdopoopodXYXodoodddCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCdUUddddddFddddFCCssd44ddzzddd~ooCsdF"dsd9dCCzCddoddCdYds`zUvdddCCCCzozoYNYYYN8YooYdYzzdzddYYzozzzNdzYzzzzCCdddddddzCzdYC\   pxtll\tll@\@\`L8wC;,=Xw PE37XP`%O,(,O PE37PD7zC;, bXz_ pi7XV"G($,hG PE37hP6uC;,^Xu&_ x7XX  "i~'K2^$(8<><q*"xxxxWWxxxWWkkxxx = Ye-ԍ Id. at para. 37. The 986 Basic Trading Area (BTA) licenses in Blocks C (30 MHz) and F (10 MHz) will be put up for bid in the second broadband PCS auction. The 986 10  Y7-MHz BTA licenses in Blocks D and E will be put up for bid in the last auction. Id.E We now have a clearer understanding of the interdependence of the broadband PCS MTA licenses and the significant impact that the free award of some of those licenses might have on the rationality and fairness of the auction process. In light of this interdependence, the degree to which a free license could result in uneconomic allocation of the spectrum is increased. Indeed, the entire bidding process might be distorted by awarding a pioneer's preference recipient a license without payment  Y -requirements.c3 = Y^-ԍ See discussion at para.  1615 , supra.c  Y -x19.19 In sum, based on our reevaluation of the record, and our own understanding of the relevant issues, we conclude that pioneer's preference recipients in proceedings where tentative decisions had been reached at the time of the auction statute's enactment should be  Yy-required to pay for their licenses.h4yt= Y"-ԍ The Commission has undertaken a negotiated rulemaking procedure in an attempt to adopt rules for Big LEOs that will avoid mutual exclusivity. Our decision regarding payment for any Big LEO preference awards would only be relevant if mutually exclusive applications can not be avoided and an auction becomes necessary.h The amount of payment will be determined in the"y 40*((;"  Y-context of each proceeding. We amend our pioneer's preference rules accordingly.>5x= Yy-ԍ We note that Congressman Dingell recently introduced legislation that would amend Section 309(j)(6)(G) of the Communications Act, 47 U.S.C.  309(j)(6)(G), to require that the Commission charge a pioneer's preference recipient 90% of the highest bid for a  Y4-comparable license. See H.R. 4700, 103d Cong., 2d Sess. (1994) ("Pioneer Preference Reform Act of 1994"). We recognize that this pending bill is not law and emphasize that our judgment on these issues is based on our own analysis and experience.>  X-x B. Amount of Payment in Broadband PCS  Y-x20.20 In our recent narrowband PCS decision awarding a license to a pioneer, we required the recipient, Mtel, to pay either ninety percent (90%) of the lowest winning bid for a comparable license or $3 million less than the lowest winning bid, whichever is less. We decided not to require Mtel to pay the full value of the license, as determined at the auction, because we had imposed more stringent buildout requirements on Mtel than on other narrowband PCS licensees and because we had disrupted Mtel's business plans by deciding to charge for the license after earlier deciding that Mtel would not have to pay. The first of those circumstances is not applicable here because we have imposed no additional buildout requirement on pioneers receiving broadband PCS licenses. On the other hand, we did conclude previously that APC, Cox, and Omnipoint would receive their licenses without charge. And we have decided to condition the broadband PCS grants on the licensees holding their licenses for a minimum of three years or until the fiveyear construction requirements have been satisfied.  Yb-x21.21 In spite of the differences, we have decided to adhere to a similar formula in this case that we applied to Mtel, which also involved a party that had been tentatively awarded pioneer's preference before we were granted authority to auction licenses. We believe the formula set forth below should adequately compensate APC, Cox, and Omnipoint for any transaction costs incurred in reliance on our prior determination that they would receive their licenses for free, particularly since that determination remained subject to challenge in court. At the same time, we are not concerned that a discount of that amount will provide these pioneers with an excessive financial advantage over their competitors, since the discount will amount to a small fraction of the cost of the license, which in turn is only one part of the cost of building a system. Nor do we believe that this discount will affect the auction  Y|-process adversely.6|= Y5"-ԍ We note that the narrowband PCS auctions, which took place after we decided to require Mtel to pay a discounted amount for its license, produced total winning bids of  Y$-$617,006,674. See Announcing the High Bidders in the Auction of Ten Nationwide Narrowband PCS Licenses, Public Notice, Mimeo No. 44177 (Aug. 2, 1993). This amount was significantly more than expected by some observers of the licensing process. "e_ 60*((N"Ԍ Y-x22. The Joint Response argues that the Commission can choose one of two ways to implement the payment requirement: (i) require the pioneer's preference recipients to participate in the auction, but give them a discount; or (ii) withhold the licenses from the auction but condition their award on payment of a sum discounted from auction prices as was  Y-done with Mtel.H7= Y-ԍ Joint Response at 1516.H The parties filing the Joint Response favor the former method. For this transition period, we will withhold the licenses from the auction, but require a discounted payment. This result is closer to the original intent of the pioneer's preference programs's guarantee of a license. A bidding credit, in contrast, would put the pioneer at risk that it might not receive a license. We reserve the right, for pioneer's preference awards made entirely in the postauction environment, to revisit this issue in the ongoing Pioneer's Preference Review proceeding.  Y -x23. We note that a variety of mechanisms for determining the pioneer's payment have been proposed to the Commission. APC argues that, if there is to be a payment, a 25% discount below the national average price of licenses for broadband PCS MTA licenses is appropriate because the auction price of the second license in the pioneer's MTA is likely  Y-to be higher in a market where it is the only 30 MHz license available.z8{= Y-ԍ See APC Emergency Request at 1112, APC Further Comments at 3.z Basing payment on a "national average" would result in significantly undervaluing the licenses at issue here. As  Yf-the Joint Response points out, the three broadband PCS licenses involved here are all for major markets. We note that the preference holders in broadband PCS would receive licenses for three of the most populous MTAs. The New York MTA is ranked No. 1; the Los AngelesSan Diego MTA is ranked No. 2; and the WashingtonBaltimore MTA is  Y -ranked No. 10 in the Rand McNally 1992 Commercial Atlas & Marketing Guide. The auction prices paid for licenses in much smaller markets should not be averaged in with the prices paid in those large markets to determine what the pioneers should pay. At the same  Y-time, we recognize that using the other comparable MTA licenses (i.e., the other 30 MHz license in each region) in the market may not be the most appropriate measure. Unlike the situation with narrowband PCS, where several other comparable licenses in the nationwide market existed as a basis for calculating the payment amount for the preference winner, the use of what is now only one other comparable license in the market might lead to a somewhat distorted result. To address this problem, broadband PCS pioneer's preference winners will have a choice of payment methods. They may pay either ninety percent (90%) of the winning bid for the other 30 MHz license in the MTA or ninety percent (90%) of the adjusted value of the license which is calculated based on the average per population price  Y-for the 30 MHz licenses in the top 10 MTAs as established at the auction.9.= Y$-ԍ Should the spectrum or market size of the pioneer's preference recipients' tentative awards be changed due to the pending reconsideration of these awards, the payment would be based on the then comparable license. This latter amount would be calculated by adding together the winning bids for the other 30 MHz MTA"90*(( "  Y-licenses for the top 10 markets offered at auction:= Yy-ԍ A total of twenty 30 MHz MTA licenses in the top 10 markets are available in Blocks  Yb-A and B for broadband PCS two per each market. See 47 C.F.R.  24.202 (Service Areas) and 47 C.F.R.  24.229 (Frequencies).  and dividing by the total population  Y-covered by those licenses.;M= Y-ԍ Population should be calculated based on the 1990 U.S. census figures as published in  Y-the Rand McNally 1992 Commercial Atlas & Marketing Guide. Total population means the  Y-population covered by each of the other MTA licenses, e.g., the population of the Chicago MTA (Market No. 3) would be included twice because two licenses for that MTA will be auctioned. This would establish an average per population (per pop) price for the top 10 MTAs. The preference recipient would then multiply the average per pop price by the population of its MTA to establish the prediscount value of its license. The preference recipient would be required to pay ninety percent (90%) of that amount. Taking into account all of the top 10 markets in the latter payment method will help avoid any such distortion without the problem of including substantially smaller markets which would itself distort the result. We will not include the $3 million dollar option that we had in the narrowband context. We believe that the options here will cover the costs discussed in para.  Y1- 2121 , supra.  Y -x24. One party has proposed, as an option to a price based on auction results, that pioneers pay a royalty of 3%5% on gross revenues over 10 years as the appropriate  Y -payment mechanism.< = Y,-ԍ See Ex Parte Letter from Douglas G. Smith, President, Omnipoint Corporation to William F. Caton, Acting Secretary, FCC (July 5, 1994). First, we find that this payment method is too speculative because the amount of the payment can not be determined until years after the fact. Second, this method may result in a payment amount that is not commensurate with the present market value of the license itself because it is based on a different measure. It also fundamentally departs from the auction concept because it is based upon afterthefact results rather than forecasts of revenues which other potential licensees must develop and rely on in determining the amount they are willing to bid for their license. We conclude that the payment options imposed here strike the correct balance between the avoidance of unjust enrichment on the part of some broadband PCS licensees and the transition to auctions to award broadband PCS licenses.  Y-x25. Any broadband PCS licenses awarded to pioneer's preference recipients will be conditioned upon their making the required payments. Their payments must be received no later than thirty (30) days after the orders granting their licenses and their pioneer's preferences have become final, as well as the decision here to require payment, that is, 30 days after the orders are no longer subject to administrative reconsideration or judicial review. "P@ <0*((M"Ԍ X-x C. Authority to Require Payment  Y-x26. Our decision requires us to determine whether we have authority to amend our pioneer's preference rules to require pioneer's preference recipients to pay for their licenses. The question of our authority to require payment from pioneers was raised in the rulemaking  Y-notice that began our Review of Pioneer's Preference Rules;q== Y-ԍ Pioneer's Preference Review NPRM, 8 FCC Rcd 7692, 7693, para. 10.q but we did not resolve the question in that proceeding because we decided at that time not to require payment by  Y_-narrowband or broadband PCS preference recipients.6>_{= Y -ԍ Id. at 76945, para. 18. Pioneer's Preference Review Report and Order, 9 FCC Rcd at 610, para. 9. We did, however, conclude that any such rule change would not constitute  Y_ -retroactive rulemaking. Id., 9 FCC Rcd at 61011, n.24.6 Now that we have decided to require payment by the preference winners in these proceeding, we must consider our authority to do so. Our analysis in this case is similar to that in our order granting Mtel's narrowband PCS  Y -license subject to a payment condition.a? = Y-ԍ See Mtel Order, supra, note  1427 .a x  Y -x27. Section 309(j) of the Communications Act,@@ = YP-ԍ 47 U.S.C.  309(j).@ the source of our authority to select licensees by auction, applies only when the Commission has accepted "mutually exclusive applications" for licenses or construction permits. APC, Cox, and Omnipoint, by operation of our pioneer's preference rules, are the only entities eligible to apply for the licenses at  Y-issue, and there can be no mutually exclusive applications for those licenses.Ad = Y-ԍ We reiterate that while we name the three current recipients of broadband PCS preferences for ease of reference, we emphasize that by doing so we do not prejudge the petitions for reconsideration of our broadband PCS pioneer's preference decision. The payment rule we adopt here will apply to all proceedings in which we made a tentative (but not final) decision regarding preferences as of August 10, 1993 in the three proceedings. Thus, we could not require APC, Cox, and Omnipoint to bid in an auction under Section 309(j) unless we amended our pioneer's preference rules to change the nature of the pioneer's preference  YK-award,[BK= Y!-ԍ See Pioneer's Preference Review NPRM.[ which we do not do here.  Y-x28. Some parties at various stages of these proceedings have contended that Section 309(j) is the only source of authority for the Commission to assess a charge (other than a generally applicable fee) for a license, and that we have no choice but to grant APC, Cox,"lB0*(("  Y-and Omnipoint's licenses without requiring payment.sC= Yy-ԍ See, e.g., Narrowband Reconsideration, 9 FCC Rcd 131516, para. 44.s We disagree, and for the reasons that  Y-follow, we find such authority under Section 4(i),@D{= Y-ԍ 47 U.S.C.  154(i).@ in conjunction with Sections 1, 303(r),  Y-307, 309, and 214,[E,= Y-ԍ 47 U.S.C.  151, 303(r), 307, 309, 214(c).[ of the Communications Act.  Y-x29. Section 4(i), which has been called the "necessary and proper clause" of the  Y-Communications Act,<Fx= Y -ԍ See New England Telephone & Telegraph Co. v. FCC, 826 F.2d 1101, 1108 (D.C.  Y -Cir. 1987), cert. denied, 490 U.S. 1039 (1989) (quoting North American Telecomm. Ass'n  Y -v. FCC, 772 F.2d 1282, 1292 (7th Cir. 1985)). The reference is to Article I, Section 8, Clause 18 of the Constitution, which authorizes Congress to make all laws that shall be "necessary and proper" for carrying out the enumerated powers "and all other powers" vested in the federal government. < authorizes the Commission to Xxperform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this Act, as may be necessary in the execution of  Y1-its functions.   We could not rely upon Section 4(i) to contravene an express prohibition or requirement of the Act, as the language of Section 4(i) itself makes clear. Thus, if any provision of the Act prohibited the Commission from imposing a charge on a pioneer's preference recipient, Section 4(i) would not be an independent basis for such authority. But no provision of the Act addresses this issue, either expressly or implicitly. Therefore, requiring preference  Y-recipients to pay for their licenses is "not inconsistent with the Act."G 3 = Y^-ԍ See North American Telecomm. Ass'n v. FCC, 772 F.2d at 129293. xAssessing an auctionbased charge is not contrary to the Supreme Court's decision in  Y-National Cable Television Ass'n v. FCC, 415 U.S. 336 (1974) (NCTA). In that case, as subsequently described, the Supreme Court struck down Commission fees that the Court perceived as an effort "to recover from regulated parties costs for benefits inuring to the  Y!-public generally." Skinner v. MidAmerican Pipeline Co., 490 U.S. 212, 22324 (1989)  Y"-(Skinner). The Court in NCTA said that the only proper measure of the fee was "value to the recipient." 415 U.S. at 34243, 344. In this instance, we do not seek to recover from APC, Cox, and Omnipoint (and, by extension, from other licensees who pay auctionbased  Yz%-charges) "costs for benefits inuring to the public generally." Skinner, 490 U.S. at 224. Indeed, the "measure" of the charge for APC, Cox, and Omnipoint is precisely the one  YL'-identified in NCTA as the only proper measure the value of the license to the recipient. "L'F0*(('" That value is determined by the auction price the value that bidders are willing to pay  Yy-discounted for APC, Cox, and Omnipoint's special circumstances. See para.  2020 , supra. This assessment thus does not raise concerns that the Commission may have used an incorrect standard in setting the charge. 415 U.S. at 343. Moreover, because the action the Commission takes here does not put it "in search of revenue in the manner of an  Y-Appropriation Committee of the House," NCTA, 415 U.S. at 341, no issue of impermissible  Y-delegation of taxing authority arises. Id. The charge here is determined directly by the auction process, and not by any concern for raising revenues "to recover administrative costs  Y-not inuring directly to the benefit of the parties...." Skinner, 490 U.S. at 224. " G0*((<"Ԍ Y-ԙx30. The remaining inquiry under Section 4(i) is whether the action the Commission proposes to take "may be necessary in the execution of its functions." In application, Section 4(i) has been held to justify FCC orders that were not within explicit grants of authority, where the orders reasonably could be found to be "necessary and proper" for the execution  Y-of the agency's enumerated powers. In Nader v. FCC,HH = Y-ԍ 520 F.2d 182 (D.C. Cir. 1975).H for example, the court held that an FCC order prescribing a rate of return for AT&T "was in the public interest, necessary for the Commission to carry out its functions in an expeditious manner, and within its section  Y_-4(i) authority.";I_t = Y-ԍ Id. at 204.; This was so even though the Communications Act gave the Commission  YH-express authority, in Section 205(a),=JH% = Y-ԍ 47 U.S.C.  205.= to prescribe "any charge, classification, regulation, or practice of any carrier...," but did not mention any authority to prescribe a rate of return.  Y -Similarly, in Lincoln Telephone & Telegraph Co. v. FCC,cK = Y-ԍ 659 F.2d 1092 (D.C. Cir. 1981) (Lincoln Telephone).c the court affirmed an order of the Commission requiring the telephone company, which was a "connecting carrier" within the meaning of the Act, to file tariffs with the FCC offering certain services. The order was upheld even though the only provision in the Act requiring carriers to file tariffs, Section  Y -203(a),@L = Y-ԍ 47 U.S.C.  203(a).@ specifically exempted connecting carriers from that requirement. The court held: XxSection 203(a)'s terms do not ... in any way suggest that the section provides the exclusive authority under which the Commission can require a tariff to be filed. Thus, while Section 203(a) did not grant the Commission the requisite  YK-authority for its action, Section 154(i) did.WMK8= Y4%-ԍ Lincoln Telephone, 659 F.2d at 110809.W  "4M0*(("Ԍ Y-x31. In North American Telecomm. Ass'n v. FCC,_N= Yy-ԍ 772 F.2d 1282 (7th Cir. 1985) (North American)._ the Seventh Circuit affirmed an order requiring the Bell holding companies to file capitalization plans for subsidiary companies organized to sell telephone equipment, even though the Act conferred no authority on the FCC over holding companies and the legislative history of the Act suggested that  Y-Congress had considered granting such authority but ultimately had denied it.AOy= Y-ԍ Id. at 129192. A The court held that the Commission's authority to require the capitalization plans arose under "a  Yv-separate grant of power" Section 4(i).=Pv*= YQ -ԍ Id. at 1292. = The only real question, the court said, was Xxwhether the Commission could reasonably conclude that requiring the regional [holding] companies to submit plans of capitalization ... was necessary and proper to the effectuation of [the Commission's order requiring the separation  Y -of equipment sales from the companies' telephone operations].Q = Y-ԍ Id. at 1293. It is noteworthy that the order requiring structural separation of equipment sales from telephone operations is itself an action not expressly authorized by the Act. Structural separations requirements have been affirmed as proper exercises of the  YJ-Commission's "ancillary jurisdiction." See Computer and Communications Industry Ass'n v.  Y5-FCC, 693 F.2d 198, 211 (D.C. Cir. 1982), cert. denied, 461 U.S. 938 (1983).  The court answered that question in the affirmative in holding that Section 4(i) authorized this action.  Y-x32. In New England Telephone & Telegraph Co. v. FCC,\R2 = Ys-ԍ 826 F.2d 1101 (D.C. Cir 1987) (New England).\ the D.C. Circuit affirmed the Commission's order requiring AT&T (along with its former operating companies) to refund rates it had collected in excess of its authorized rate of return, rejecting the telephone companies' argument that the Commission's only statutory authority to require  Y4-refunds, under Section 204(a)(1),CS4 = Y -ԍ 47 U.S.C.  204(a)(1).C did not apply to their situation. Agreeing with the  Y-telephone companies that Section 204 "does not apply to the circumstances of this case,"NT= Yb#-ԍ New England, 826 F.2d at 1107.N the court held that the Commission had "properly exercised its authority under section 4(i) to  Y-remedy the violation" of its rate of return order.<UE= Y&-ԍ Id. at 1109.< The court found that the Commission's"U0*((" choice of the refund remedy, "[i]n a strictly technical sense," was "absolutely necessary" to  Y-the effectuation of its rate of return prescription.?V= Yb-ԍ Id. at 110708.? But it made clear that the Commission was not required to show that it had selected "the only conceivable remedy in order to invoke  Y-its 4(i) powers."<Wy= Y-ԍ Id. at 1108.< It was enough that the action chosen by the agency "was appropriate and  Y-reasonable."3X*= Y -ԍ Id.3  Yv-x 33. The rule that emerges from the cases described above is that Section 4(i),  Y_-although "not infinitely elastic,"QY_= Y -ԍ North American, 772 F.2d at 1292.Q is a "wide ranging source of authority."NZ_= Y-ԍ New England, 826 F.2d at 1109.N XxSection 4(i) empowers the Commission to deal with the unforeseen even if that means straying a little way beyond the apparent boundaries of the Act to the extent necessary to regulate effectively those matters already within the  Y -boundaries.`[ = = Y-ԍ North American, 772 F.2d at 1292. See also U.S. v. Southwestern Cable Co., 392  Y-U.S. 157, 181 (1968); Rural Telephone Coalition v. FCC, 838 F.2d 1307, 1315 (D.C. Cir.  Y-1988); FTC Communications, Inc. v. FCC, 750 F.2d 226, 232 (2d Cir. 1984).`  If an action taken by the agency does not contravene another provision of the Act, it may be justified under Section 4(i) if the Commission "could reasonably conclude that [the action]  Y-was necessary and proper to the effectuation" of its functions.Q\ = Y-ԍ North American, 772 F.2d at 1293.Q  Yb-x!34. Applying this rule here, we find authority under Section 4(i) to amend our pioneer's preference rules to condition any licenses granted to APC, Cox, and Omnipoint, on the basis of their pioneer's preferences, on the payment of an appropriate charge. First, requiring payment by APC, Cox, and Omnipoint is "necessary" if we are properly to carry  Y-out our public interest mandate in licensing broadband PCS providers.]s= Y*$-ԍ See 47 U.S.C.  307(a), 309(a), 214(a) and (c). See also 47 U.S.C.  151. An important aspect of the public interest is promoting competition to the extent feasible and taking appropriate"&]0*(("  Y-regulatory steps to ensure that the competition is fair.^= Yy-ԍ See National Ass'n of Regulatory Until. Comm'rs v. FCC, 525 F.2d 630, 636 and n.  Yd-25 (D.C. Cir), cert. denied, 425 U.S. 992 (1976). See also McLean Trucking Co. v. U.S., 321 U.S. 67, 8688 (1944). Our development of PCS and of the pioneer's preference policies appropriately has emphasized competition at every step. Granting APC, Cox, and Omnipoint a license free of charge, we have found in this order, would likely give APC, Cox, and Omnipoint a financial advantage over other licensees competing in the same markets, who would have to pay auction prices a result that would not serve the public interest.  Y_-x"35. Second, requiring payment by APC, Cox, and Omnipoint is "necessary and proper" in the execution of our function under Section 309(j) to implement a rational, fair system of competitive bidding. We have found elsewhere that the values of broadband PCS licenses will be significantly interdependent. The prices a bidder might be willing to pay or even the willingness to bid at all might be affected in various ways by the fact that some of the licenses are available free to applicants who will be competing with the auction winners. Awards to APC, Cox, and Omnipoint free of charge thus might distort significantly the auction of other broadband PCS licenses and, thereby, defeat or at least undermine some or all of the purposes of having the auction. In this regard, we note that the auction statute itself does not limit our authority to require pioneer's preference recipients to  Yy-pay for their licenses; it is neutral on this point._yM= Yw-ԍ See 47 U.S.C.  309(j)(6)(b); H.R. Rep. No. 111, 103d Cong., 1st Sess. 257 (1993). And third, as noted above, requiring payment will serve Section 309(j)'s purpose of avoiding unjust enrichment.  Y4-x#36. We recognize that our decision here is a reversal of the course we took initially with respect to payments made by the broadband PCS pioneers. In this regard, it is similar to our recent decision to require payment by Mtel for its narrowband PCS license after first deciding not to require payment. We asked the court for a remand of the pioneer's preference review order and the broadband PCS pioneer's preference order to give further  Y-consideration to this important issue.`= Yr-ԍ The question of payment was still technically before the Commission as a result of a  Y[-timely filed petition for reconsideration of the Pioneer's Preference Review Report and  YF -Order. 47 U.S.C.  405. See WratherAlvarez Broadcasting v. FCC, 248 F.2d 646 (D.C. Cir. 1957) (where petition for agency reconsideration is filed, agency has jurisdiction even though other parties have sought judicial review). We believe that this change is well supported by the record and best serves the public interest. When we first considered the payment question these pioneers had only their tentative preferences and, even now, their preferences are the subject of petitions for reconsideration and petitions for review. Thus, not only do we believe that our change of course is legal and best serves the public interest, we also believe it does not undermine any legitimate reliance interests of APC, Cox, and Omnipoint. x"7Y `0*((="Ԍ X-x D. Ex Parte Rules  Y-x$37. We note that in their briefs to the court, petitioners and amicus curi% raised  Y-allegations of violations of the Commission's ex parte rules. These issues were addressed in  Y-a letter by the Managing Director;ua= Y-ԍ Letter from Andrew S. Fishel to Michael K. Kellogg, Esquire (May 27, 1994).u and our General Counsel reviewed the contacts in depth  Y-in preparing a response to a congressional inquiry.pby= Y-ԍ Letter from William E. Kennard to Hon. John D. Dingell (June 3, 1994).p We have thus had an opportunity to consider, with substantial staff analysis, the allegations. While the matter has not been  Y_-formally brought to the Commission, e.g., through an application for review of the Managing Director's letter, we take this opportunity to affirm the Managing Director's letter.  Y - IV. ORDERING CLAUSES ă  Y -x%38. Accordingly, IT IS ORDERED, pursuant to Sections 1, 4(i), 303(r), 307, 309, and 214 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 303(r), 307, 309, and 214, that Section 1.402 of the Commission's rules, 47 C.F.R.  1.402, IS AMENDED as set forth in Appendix A to be effective thirty (30) days after publication in the Federal Register.  Yc-x&39. Accordingly, IT IS FURTHER ORDERED that the relevant licensing bureau shall impose the following additional condition on any licenses received by pioneer's preference recipients for broadband PCS (GEN Docket No. 90314) based upon their pioneer's preference awards:  X-XxX` ` Each licensee shall pay to the United States Treasury an amount equal to either ninety percent (90%) of the winning bid for the 30 MHz broadband MTA license in the same market or ninety percent (90%) of the adjusted value of the license calculated based on the average per population price for the 30 MHz licenses in the top 10 MTAs as established at auction, thirty (30) days after an order granting any such license based upon a pioneer's preference, the order granting the preferences, and this order become final orders, that is, thirty (30) days after the order is no longer subject to administrative reconsideration or judicial review, appeal, or  X-stay. x`  Y -x'40. IT IS FURTHER ORDERED that the Emergency Request for Oral Argument filed by American Personal Communications on July 21, 1994 IS DENIED. ""*b0*((#"Ԍx` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhWilliam F. Caton x` `  hhActing Secretary"b0*(("  Y-& APPENDIX A ă Part 1 of Chapter 1 of Title 47 of the Code of Federal Regulations is amended as follows: 1. The authority citation for Part 1 continues to read as follows: xAuthority: Sections 4, 303, 48 Stat. 1066, 1082, as amended; 47 U.S.C. 154, 303. 2. Section 1.402 is amended by adding new subsection (g) to read as follows: XxX` ` (g) Any person receiving pioneer's preferences in proceedings where tentative (but not final) decisions had been reached as of August 10, 1993, will be required to pay for their licenses. The amount of payment shall be determined in each proceeding on a casebycase basis.x` "b0*(("  Y-' APPENDIX B ă  I. 1. 1. a.(1)(a) i) a)( I. 1. 1. a.(1)(a) i) a)  X- Final Regulatory Flexibility Statement   Y-x1. Pursuant to the Regulatory Flexibility Act of 1980, an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rule Making in ET Docket No. 93266. Written comments with a separate and distinct heading designating them as a response to the IRFA were requested. The Commission's final analysis is as follows:  Y2-x2. Need for and purpose of this action. This proceeding was initiated to obtain comment regarding possible modifications to, or repeal of, the pioneer's preference rules. The rule adopted here will serve the public interest by modifying the pioneer's preference rules in light of the statutory authority to assign licenses by competitive bidding.  Y -x3. Issues Raised in Response to the IRFA. The IRFA noted that the proposed changes could affect small businesses if they have pioneer's requests pending, it they contemplate filing pioneer's preference requests, or if they intend to file applications for services in which others might receive a pioneer's preference. No commenters responded specifically to the issues raised in IRFA. We note that, with regard to PCS, small businesses receive certain competitive bidding preferences as set forth in the Third Report and Order, 9 FCC Rcd 2941 (1994) and the Fifth Report and Order, FCC 94178 (released Jul. 15, 1994) in PP Docket No. 93253.  Y-x4. Significant alternatives considered. All significant alternatives have been addressed in the Memorandum Opinion and Order on Remand.