July 1994 NARROWBAND PCS FACT SHEET What is Narrowband PCS? The FCC has defined the new personal communications service (PCS) broadly as a family of mobile or portable radio services which can be used to provide service to individuals and businesses, and may be integrated with a variety of competing networks. The FCC cannot tell you what to use this spectrum for but it anticipates that these licenses will be used to provide such new services as advanced voice paging, two way acknowledgment paging, and data services. These licenses may not be used to provide traditional broadcasting services or fixed services unless such services are reasonably ancillary to mobile services. Potential of PCS These new services can increase business productivity and enhance communications. They could do this, for example, by alerting subscribers that a message or page is waiting and by allowing those subscribers to respond and interact by transmitting voice, data and graphic images. Availability of PCS On July 25th the FCC will begin the auction of the ten available nationwide licenses for narrowband PCS in the 900 MHz band. In future auctions, the FCC will accept bids for the regional, Major Trading Area (MTA), and Basic Trading Area (BTA) narrowband PCS licenses. Licensing area and frequency of nationwide PCS The narrowband PCS nationwide licenses cover all fifty states, the District of Columbia, American Samoa, Guam, the Northern Marianas Islands, Puerto Rico, and the United States Virgin Islands. They are divided into 50 kHz paired and unpaired channel categories. There are five 50/50 kHz paired licenses, three 50/12.5 kHz paired licenses and two 50 kHz unpaired licenses available. You will be permitted to aggregate or combine up to three of these kHz licenses in any geographic area in order to -2- provide multiple service offerings or wider bandwidth services. There are also 12.5 kHz BTA response channels available to existing paging licenses. If you are interested in bidding for PCS You should familiarize yourself with the Commission's decisions and rules regarding the narrowband PCS service before the auction. These decisions contain detailed descriptions of the service, the spectrum allocations, service rules, technical and construction requirements that will apply to these licenses. You should try to attend an informational seminar held by the FCC on the auction procedures to be used for narrowband PCS which will take place in July. How do I participate in the PCS auction? In order to participate in the auction, you must file a short form application on FCC Form 175. Bidder information packages are available from Tradewinds International, Inc. at (202) 637-FCC1. How do I get information I need to bid? The market number and frequency blocks for each license can be found in the bidder information packages which are available by contacting the FCC's auction contractor, Tradewinds International, Inc. at (202) 637-FCC1(3221) or request by fax, 637-FCC2(3222). How do I apply for a license? You should list the market number and frequency for each narrowband PCS license individually on Form 175. If you are applying for more than five licenses, in addition to FCC Form 175, you should use FCC Form 175S to list the additional licenses you want to apply for. You must fill out all information required on the short form application. For example, the Form 175 requires you to create a 10 digit FCC Account Number that we will use to identify and track your application. In creating this number you must use a taxpayer ID number if you have one, or you can use your 10 digit area code and telephone number, if you don't have a taxpayer I.D. number. You should use this FCC account number whenever you submit additional information regarding your application, including when you submit your upfront payment. -3- How do I find out the status of my short form application after I filed? For information on auctions in general, call the FCC's auctions contractor, Tradewinds International Inc. at (202) 637- FCC1. Designated entities: On your Form 175 application you can indicate whether you will be seeking the preferences available to businesses owned by women and minorities and to small businesses. Businesses that are at least 50.1 percent owned and controlled by women or minorities will be eligible for a 25 percent bidding credit (i.e., a 25 percent discount on the amount bid) when bidding on three of the nationwide narrowband PCS licenses, one of the regional licenses and 153 of the MTA licenses. In addition, tax certificates will be available to initial investors in minority and female-owned firms upon sale of their interests, and to licensees who transfer their authorizations to minority and women-owned businesses. Tax certificates enable the investors or licensees to avoid recognition of any gain upon sale of their interests. Finally, small businesses (or those with a net worth not in excess of $6 million and net income not in excess of $2 million) will be permitted to pay their winning bids for any of the BTA, MTA or regional narrowband licenses in installments. Can I send someone to bid for me? You are required to identify all parties who you want to be authorized to represent you at the auction on your short form application. These parties will be admitted to the auction with you. However, only one bidder identification card, which authorizes the holder to place a bid at the auction, will be issued to each applicant. A bidder may not bid on behalf of more than one bidder for the same license. How much do I need to submit to participate? In addition to filing your short form application, you must submit an upfront payment set by the FCC and announced in advance of the auction for every license you want to bid on in any single round of bidding. If you are the high bidder on a particular license but decline to accept that license you will be subject to a bid withdrawal penalty on those licenses. -4- When do I pay? Your upfront payment must be received by the Commission's lockbox bank prior to the auctions. The upfront payments of losing bidders will be refunded as soon as possible after the auction closes, generally within two weeks after the auction and by wire transfer. Procedures may vary, however, by class of narrowband PCS license. How will I know if I can bid? The Commission will issue a Public Notice after short form applications are filed indicating all applicants who have filed incomplete or defective applications. This notice will also specify the deadline for filing corrected applications. Applicants who have made minor errors will be offered an opportunity to resubmit corrected applications. However, applicants who fail to sign their applications will not be allowed to resubmit their application and will be barred from participating in the auction. After the deadline for filing corrected applications has passed, the FCC will issue further Public Notices listing all applicants who are eligible to participate in the auction. How will I know if I won? Finally, after the auction has closed and the winning bidders have been identified and submitted their 20% down payment and long form application on FCC Form 401, the Commission will issue another Public Notice identifying the winning bidder for each license. After winning a PCS narrowband license... For licensing and regulatory purposes the FCC has established a presumption that all PCS spectrum will be designated for commercial mobile radio service (CMRS) offerings. If you win a license and plan to use any portion of the PCS spectrum to offer private mobile radio services you may overcome this presumption by making a showing, including a certification, that you intend to offer PCS service on a private basis. This certification should be attached as an exhibit to your long form application (FCC Form 401), which must be filed with the FCC no later than 10 days after the close of the auction. This certification must include a description of the proposed service sufficient to demonstrate that it does not fall within the CMRS classification because it will not be available to the public or because it will not be interconnected to a public switched network. -5- Responsibility of PCS licensee: If you are a winning bidder in the auction, and the FCC finds that you are qualified to become a licensee, you will be granted a license for a 10 year term. During the license term you will be required to satisfy certain construction requirements established by the Commission. If you fail to satisfy the build-out required your license will be cancelled. -FCC-