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Pioneer's Preference Program

The FCC's pioneer's preference program was established in 1991 to provide a means of extending preferential treatment in the FCC's licensing processes to parties that demonstrated their responsibility for developing new spectrum-using communications services and technologies. The program was eliminated in 1997 following enactment of Congressional legislation terminating the FCC's authority to continue this program. In the approximately six years of the program's existence, about 140 parties applied for pioneer's preferences in various services, and five applications for preferences were granted. Additionally, one party successfully appealed the dismissal of its pioneer's preference application.

Under the pioneer's preference rules, a necessary condition for the grant of a preference was that the applicant demonstrate that it had developed the capabilities or possibilities of a new service or technology, or had brought the service or technology to a more advanced or effective state. The applicant must also have demonstrated that the new service or technology was technically feasible by submitting either experimental results or a technical showing. Finally, a preference was granted only if the service rules adopted were a reasonable outgrowth of the applicant's proposal and lent themselves to a grant. A preference grant provided that the recipient's application for a construction permit or license was not subject to mutually exclusive applications.

In 1993, pioneer's preferences were granted to Volunteers in Technical Assistance in the non- voice, non-geostationary mobile satellite service below 1 GHz; to Mobile Telecommunication Technologies Corporation in the 900 MHz narrowband personal communications service (PCS); and to American Personal Communications, Cox Enterprises, Inc., and Omnipoint Communications, Inc. in the 2 GHz broadband PCS service.

In 1995, the FCC modified the pioneer's preference rules in response to directives contained in the legislation implementing domestically the General Agreement on Tariffs and Trade (GATT), as well as on its own motion. In response to the GATT legislation, the FCC required in services in which licenses are awarded by competitive bidding that pioneers pay in a lump sum or in installment payments over a period of not more than five years 85 percent of the average price paid for comparable licenses. Also, in such services where pioneer's preference requests were accepted for filing after September 1, 1994, the FCC required that to qualify for a pioneer's preference, an applicant -- in addition to meeting other requirements -- demonstrate that the FCC's public rulemaking process inhibited it from capturing the economic rewards of its innovation unless it was granted a pioneer's preference license. Additionally, the FCC provided an opportunity for review and verification of pioneer's preference requests accepted for filing after September 1, 1994 by experts who were not FCC employees.

On its own motion, the FCC streamlined the pioneer's preference rules by eliminating public notices specifying filing deadlines for pioneer's preference requests and tentative decisions on such requests. Rather, the FCC decided that a preference request would not be accepted after initiation of a proceeding pertinent to the request, and that a request complying with this filing deadline and that was otherwise acceptable would be listed without evaluation in a notice of proposed rule making in the proceeding. The FCC also required a preference applicant to incorporate only relevant experimental material into its request, rather than submitting its entire experimental file. Additionally, the FCC limited preference grants to services that required a new spectrum allocation, and required a preference grantee to construct within a reasonable time a communications system that substantially used the design and technologies upon which its grant was based.

Finally, pursuant to the GATT legislation, the FCC stated that the pioneer's preference program would terminate on September 30, 1998. However, on August 5, 1997, President Clinton signed into law the Balanced Budget Act of 1997. The Budget Act amended the Communications Act to terminate the authority of the FCC to provide preferential treatment in its licensing procedures for pioneers as of the date of enactment of the Budget Act. Thus, as of August 5, 1997, the FCC's authority to grant any applicant a pioneer's preference expired. Subsequently, in September 1997, the FCC released an Order terminating its pioneer's preference program and dismissing all 13 pioneer's preference requests that remained pending before it. QUALCOMM Incorporated -- one of the companies whose preference request (for a 2 GHz broadband PCS license) was dismissed -- filed a petition for reconsideration of this Order, but the FCC denied QUALCOMM's petition. However, QUALCOMM appealed this denial, and in July 1999 the U.S. Court of Appeals for the District of Columbia Circuit granted QUALCOMM's appeal and ordered the FCC to grant QUALCOMM a pioneer's preference license.

The pioneer's preference regulations were codified at 47 C.F.R. §§ 0.241, 1.402, and 5.207 (1996). See Establishment of Procedures to Provide a Preference, GEN Docket No. 90-217, Report and Order, 6 FCC Rcd 3488 (1991), recon. granted in part, Memorandum Opinion and Order, 7 FCC Rcd 1808 (1992), further recon. denied, Memorandum Opinion and Order, 8 FCC Rcd 1659 (1993). In October 1993, the Commission initiated a review of the pioneer's preference rules; see ET Docket No. 93-266, Notice of Proposed Rule Making, 8 FCC Rcd 7692 (1993); First Report and Order, 9 FCC Rcd 605 (1994), recon. denied, Memorandum Opinion and Order, 9 FCC Rcd 6837 (1994); Second Report and Order and Further Notice of Proposed Rule Making, 10 FCC Rcd 4523 (1995), recon. denied, Memorandum Opinion and Order, 11 FCC Rcd 2468 (1996); Third Report and Order, 10 FCC Rcd 13183 (1995), recon. granted, Memorandum Opinion and Order, 11 FCC 2468 (1996); Order, 12 FCC 14006 (1997), recon. denied, Memorandum Opinion and Order, 13 FCC 11485 (1998), appeal granted, QUALCOMM Incorporated v. FCC, D.C. Cir. No. 98-1246 (order issued July 23, 1999). See also ET Docket No. 93-266 and GEN Docket No. 90-314 (broadband PCS), Memorandum Opinion and Order on Remand, 9 FCC Rcd 4055 (1994).

Commission documents in this docket can be obtained from Pioneer's Preference Program Docket Tracking.

For further information on the pioneer's preference program,
please contact Rodney Small.

Last Updated/Reviewed on: Thursday, January 13, 2000 

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