******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Certain Cellular ) Fee Nos. 9179072 et al. Rural Service Area Applications ) ORDER Adopted: April 2, 1999 Released: April 2, 1999 By the Deputy Chief, Wireless Telecommunications Bureau: I. INTRODUCTION 1. By this Order, we dismiss all pending Cellular Radiotelephone applications in the six Rural Service Areas (RSAs) in which no initial cellular license has been awarded. As discussed in greater detail below, these applications were filed in anticipation of the Commission's awarding licenses for these markets by lottery. However, as a result of the Balanced Budget Act of 1997, the Commission no longer has authority to use lotteries to select among competing mutually exclusive applicants for initial licenses or construction permits. Therefore, we conclude that the applications should be dismissed without prejudice. II. BACKGROUND 2. The Commission has been awarding cellular licenses since 1982. Although we awarded the first thirty Metropolitan Statistical Area (MSA ) licenses through comparative hearings, we adopted rules in 1984 to award the remaining cellular MSA and RSA licenses by lottery. By 1991, the Commission had conducted lotteries for every MSA and RSA, and licenses were awarded to the lottery winners in most instances. In some markets, however, the initial lottery winner was disqualified from receiving the license because of a successful petition to deny or other Commission action, and the initial license was not awarded. Our cellular lottery rules in effect at the time provided that if the application of the tentative selectee was denied, a second lottery would be held among the remaining applicants. Although second lotteries were held in some cellular markets pursuant to these rules, there are six RSA markets in which no second lottery occurred and no initial license has been awarded. As a result, the applications of the unsuccessful lottery applicants in these six RSAs remain pending. III. DISCUSSION 3. In the Omnibus Budget Reconciliation Act of 1993 (1993 Budget Act), Congress authorized the Commission to resolve pending mutually exclusive applications by auction, and generally directed it to do so. Section 6002(e) of the 1993 Budget Act provided that: "the Federal Communications Commission shall not issue any license or permit [by lottery] after the date of this Act unless . . . one or more applications for such licenses were accepted by the Commission before July 26, 1993." This provision required the Commission to use auctions for applications filed after July 26, 1993, but left to the Commission's discretion whether to use auctions or lotteries for applications filed before that time. 4. In the Balanced Budget Act of 1997 (1997 Budget Act), Congress expressly repealed Section 6002(e) of the 1993 Budget Act. In addition, the 1997 Budget Act terminated the Commission's authority to award licenses by lottery, except for licenses for non-commercial educational and public broadcast stations. Section 3002(a) of the 1997 Balanced Budget Act states that, with limited exceptions not applicable to this proceeding, "the Commission shall not issue any licenses or permit using a system of random selection under this subsection after July 1, 1997." Additionally, Section 309(j) of the 1997 Balanced Budget Act expanded the Commission's authority -- and statutory mandate -- to use competitive bidding to select licenses from among mutually exclusive applications for any initial license. Thus, the 1997 Budget Act requires the Commission to award outstanding RSA licenses by competitive bidding. 5. Because the Commission is without authority to process the pending mutually exclusive RSA applications pursuant to the rules and requirements under which they were filed, namely, random selection procedures, we conclude that the applications must be dismissed. Further, because we conclude that this result is unambiguously compelled by statute, this decision may be made pursuant to delegated authority with no further notice or comment. These applicants will have the opportunity to refile cellular applications for these RSA markets upon adoption of new licensing rules that are fully compliant with the 1997 Balanced Budget Act. Thus, we believe that the public interest would be best served by not subjecting these applicants to any further delay in the final disposition of their applications, particularly when Congress has acted on the broader issue of the Commission's use of lotteries. 6. Finally, we note that in certain circumstances, applicants can apply to the FCC Office of the Managing Director for the refund of filing fees. We conclude, however, that these RSA applicants do not qualify for refunds of their filing fees. Not only were their applications accepted for filing under our lottery rules, but the applicants actually participated in the initial lotteries for their respective markets, giving them a full opportunity to be selected. Having received this opportunity, applicants who were unsuccessful in the initial lottery are not entitled to a refund based on the happenstance that the initial winner was disqualified and no second lottery was conducted. IV. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED that, as of the adopted date of this Order, pursuant to Section 309(i)(5) of the Communications Act of 1934, 47 U.S.C. Section 309(i)(5), as amended by the Balanced Budget Act of 1997, Pub. L. No. 105-33, 111 Stat. 251 (1997), all pending cellular RSA applications filed under Part 22 of the Commission's Rules as set out in the attachment of this Order ARE DISMISSED without prejudice. 8. IT IS FURTHER ORDERED that no new applications for the cellular RSA markets will be accepted for filing until the Commission or the Wireless Telecommunications Bureau, acting under delegated authority, announces new filing procedures. 9. This action is taken under delegated authority pursuant to Section 0.131 and 0.331 of the Commission's Rules, 47 C.F.R. Sections 0.131, 0.331 FEDERAL COMMUNICATIONS COMMISSION Gerald P. Vaughan Deputy Chief, Wireless Telecommunications Bureau The attachment will not be published in the FCC Record. However, it may be viewed at the Commission's web site at www.fcc.gov/Bureaus/Wireless/Orders/1999.