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Federal Communications Commission
1919 - M Street, N.W.
Washington, D.C. 20554
News media information 202 / 418-0500
Fax-On-Demand 202 / 418-2830
Internet: http://www.fcc.gov

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).


(WT DOCKET 97-82, ET Docket 94-32)

Today the Commission adopted comprehensive and streamlined rules for all auctionable services, replacing rules adopted in 1994 which require the Commission to adopt separate rules for each auction. The Commission also sought further comment on the use of installment payments and other financial incentives for small businesses, women, minorities, and rural telephone companies.

The changes in the rules, based on the experience the Commission has gained in running 15 auctions over the past four years, will ensure uniform auction procedures for all future participants and will greatly simplify and streamline the auction process. The Third Report and Order, which will apply to all future auctions, with limited exceptions, addresses certain designated entity provisions, auction application procedures, payment procedures, auction design, and other issues.

For designated entities, the Commission adopts uniform affiliation rules and ownership disclosure rules in the Third Report and Order and asks in the Further Notice whether it should adopt uniform size attribution rules for small businesses. The new rules also suspend the use of installment payments for the 800 MHz Lower 80 and General Category channels services, as well as for other services to be auctioned in the immediate future, but do not govern installment payment obligations from previous auctions. The Commission also noted its intent to suspend installment payments for the paging and 220 MHz services.

To offset these changes, the Commission voted to provide for higher bidding credits (15, 25, and 35 percent, based on the size of the business) to encourage and facilitate the participation of small businesses in future auctions. Furthermore, in the Further Notice, the Commission asked for comment both on how to offer an effective installment payment program and on how to encourage participation of small businesses, women, minorities, and rural telephone companies in future auctions by other means.

The rules also provide for several efficient and uniform application procedures, including a requirement that applications be filed electronically by January 1, 1999. The item also modifies certain payment rules to provide for extensions of time with associated late fees, to conform the Commission's payment rules to those of private lenders.

With respect to auction design, the Third Report and Order makes a variety of rule changes. For example, as a result of the Balanced Budget Act of 1997, the item provides that the Bureau will specify a minimum opening bid or reserve price for each auction, and provides for additional time prior to the start of future auctions for potential bidders to develop business plans, assess market conditions, and evaluate the availability of equipment. The new rules also provide for the use of "real time" bidding in simultaneous multiple round auctions to keep them moving rapidly.

In addition, the Order clarifies certain aspects of the Commission's anti-collusion rule in an effort to continue to ensure the competitiveness of the Commission's auction process and the post-auction market structure. The item also adopts pre-grant construction rules for all auction winners, regardless of whether petitions to deny have been filed against them, in order to further expedite the initiation of service to the public.

The Second Further Notice of Proposed Rulemaking, in addition to seeking comment on the possible future use of installment payments, other means to foster participation by small businesses, women, minorities, and rural telephone companies in future auctions, and the adoption of uniform attribution rules, also proposes to use the Part 1 Rules adopted in this proceeding for the General Wireless Communications Services auction, which has an August 8, 1998, statutory licensing deadline.

Action by the Commission December 18, 1997, by Third Report and Order and Second Further Notice of Proposed Rulemaking (FCC 97-413). Chairman Kennard, Commissioners Ness, Furchtgott-Roth, Powell and Tristani, with Commissioner Furchtgott-Roth issuing a separate statement.


News Media contacts:
Elizabeth Lyle at (202) 418-0654 and Rosemary Kimball at (202) 418-0500.
Wireless Telecommunications Bureau contact: Josh Roland and Ken Burnley at (202) 418-0660.