WPCE 2BVTZ 3|g)?xxxX?Xx6X@DQX@HP LaserJet 5P/5MPstScriptm 5114HPLAS5P.WRSx  @,,,L$X@2@SP Z3|g Z-  #2PG;P#HP LaserJet 5P/5MPstScriptm 5114HPLAS5P.WRSx  @,,,L$X@Courier New (TT)Arial (TT)Times New Roman (TT)Times New Roman (Bold) (TT)Times New Roman (Italic) (TT)Times New Roman (Bold Italic) (TT)2@@@C @ "5@^AASМ,NN[ANAAAA휜Au©ܜAAAmNuA44u4‚NuAuuuuN=NANN'NN]`NЩuAAAAAAAAuuuuu]NNNAuu4`ܩN`uuNRA}NVUÂNN44NNNN4NNNtN捍:]@sCzsffzAASМ,NN[ANAAAA휜Au©ܜAAAmNuA44u4‚NuAuuuuN=N4N邂NN鯯44NNRNuNܯAN=NVN]NNN}ANNUÏ驜AAAAuAAAAu"5@^2CRdd$CCdq2C28dddddddddd88qqqYzoCNzoozzC8C^dCYdYdYCdd88d8ddddCN8ddddY`(`l2CC!CCPRCddYYYYYYzYzYzYzYC8C8C8C8ddddddddddYdddddoddYYYYYzYzYzYddddddPdCdCCCdNdz8zRdddCRoNoNNF2[dCYddddd7>d<d<CCYYdCCddCYCdYzzzzCCCCqodYYYYYYYYYYY8888dddddddnddddddd"5@^77Goo&BBNu7B77oooooooooo77uuuoˆz7dozz777^oBoodoo7oo,,d,ooooBd7oddddC4Cu7BB!BBPRBozoooooȲdoooo77777777ooooooooodoozodooooodddoooooooooPzBzBB7zddo,oRoooȽBRddNF7loBzoooooJIoBoB,,BBoBBoo,BBBtBnnnnuyy2Psu7coonCzshcnonvyXzXshn~|y77Goo&BBNu7B77oooooooooo77uuuoˆz7dozz777^oBoodoo7oo,,d,ooooBd7oddddC4Cu,oBooBȆBȖ,,BBFoBdB7Boooo4oBJouBoPnBBBsl7BBIozȑ7777uzoooooodoooo7777ooooooonzoooodo"5@^2Coddȧ8CCdr2C28ddddddddddCCrrrdzNdzoȐC8CtdCdoYoYCdo8Co8odooYNCodddYO,Oh2CC!CCPRCdodddddȐYYYYYN8N8N8N8oddddooooddoddddzodddYYYYYYddddooPoNoNCNodo8RoodȐYYoNoNNF2ldCddddddd<d<CCoodCCddCoCddzzzzzzzzzzCCCCozdddddddYYYYY8888dddddddndddddYd"5@^(1<XU4  pQX5PC2XQ XP*f9 xQXX W!0(XAh0\  P6QhPR&HHHXhH6X@DQh@l6RC2Xp XR9 xyQX"5@^2Nodd8CCdr2C28ddddddddddCCrrrdNdzzozzzC8CrdCddYdYCdo88d8odddNN8oYdYNF,Fr2CC!CCPRCdddddddYYYYYN8N8N8N8oddddoooozYddddzYdzddddYYYYYYddddooPdNdNCNdddz8zRoodNRoNoNNF2ddNdddddd5accrue in the disaggregation context, where the licensee continues to receive belowmarket interest rates and the government continues to administer installment debt.S But these funds do not belong to a licensee that cannot meet its commitments any more than do those paid for an option to buy land that has lapsed or a downpayment on a car that has been repossessed. Yet the majority allows"P 0*((|" these funds to be used to pay down principal on the licenses that are kept or, worse, to pay suspension interest.  X- Using deposits that would otherwise be forfeited to pay suspension interest essentially postpones the time when the licensee's financial ability to construct and operate a service is put to the test. It also is not fair to the licensees who met their obligations and who must raise the money to cover suspension interest payments.  XH-  Delays in Resumption of Payments and Reauction I am also troubled by yet another extensive delay before the date by which licensees will need to resume payments on their licenses. Until such payments are made, the market will not know which licensees are financially viable. The payments already have been suspended for one year. Now, additional time is needed for licensees to sort out their expanded options. At the same time, the grace period for delayed payments is being extended. So we prolong the time during which the licenses will be tied up, with no assurance that the licensees will ultimately be able to finance and construct their systems and provide service to the public. In addition, I am concerned by the further delay in the timing of the reauction of forfeited licenses. A reauction is needed to put licenses in the hands of those capable of putting them to productive use. It will also create longawaited opportunities for those designated entities that, in the prior auction, consciously and responsibly chose not to bid more than they could pay. And yet, in today's order, the majority indefinitely postpones the reauction. Last year, we said it would occur in the third quarter of 1998. Just two months ago, the new Commission committed to a date of September 29, 1998. Now, the reauction is deferred until further notice. Still more delay is inherent in the Commission's inaction on rules for the C block reauction. These rules were proposed in the same September order that here is under reconsideration and for which the comment period has ended. Yet even though decisions on some issues in that proceeding could affect the elections from among the newly expanded options, the majority has declined to settle those issues today.  X - Competing Objectives  X- The agency is caught between conflicting concerns. Everyone agrees, at least as a general principle, that it is vital to maintain the integrity of the auction process. Yet we naturally are drawn to help C block licensees who are facing hardship. Behind the corporate names printed on the licenses and the petitions for relief stand real people -- small business owners, entrepreneurs, individual investors, and others, many of them women and minorities -- facing real problems. I -- like my colleagues -- am drawn to help them. But it is impossible to fully reconcile a commitment to fair market-driven spectrum assignments with a willingness to change the rules of the game after it has been played. At"#'0*((%" some point, one objective must prevail over the other. In my judgment, where the objectives collide, the integrity of the process must control, and the desire to help individual players must yield. If we really believe in assigning spectrum by auctions as authorized by Congress in the Omnibus Budget Reconciliation Act of 1993, and the "procompetitive, deregulatory" paradigm of the Telecommunications Act of 1996, we must accept the reality that some licensees will fail in the marketplace, and that their conditional licenses will need to be canceled and reauctioned, as our rules envisioned. Such outcomes are painful, but necessary, if the marketplace is to work its magic. My disagreement with the majority concerns the lengths to which the Commission should go in trying to prevent such outcomes. Judges and legislators, lawyers and economists all speak to the need to promote and protect  X -competition, not competitors. In my opinion, today's decision crosses the line to favor specific competitors over others. I cannot support that result.  Xd-#Xj\  P6G;XP#Some parties have suggested that the Commission owes a duty to go to extra lengths because the C block licensees are all small business "designated entities." This argument misses the  X6-point that, with or without post hoc relief, the C block spectrum will remain exclusively for  X!-designated entities. What is at issue is a clash not between the interests of small entities and those of large conglomerates. Rather, the issue is whether the FCC should favor one group of  X<designated entities over another. I do not believe it should.#x6X@`7[X@#  X-#Xj\  P6G;XP# The Commission's Role The Commission's intervention in the postauction market is neither compelled nor excused by the ongoing financial obligation of the C block licensees to the U.S. Treasury. The Commission's fundamental role is that of a licensing agency, not that of a lender. Although the agency's C block rules enabled designated entities to purchase spectrum rights with installment payments, as Congress specifically contemplated (47 U.S.C. 309(j)(4)(A)), our responsibility after the auction was to issue licenses, which were expressly conditioned upon the licensees' fulfillment of their financial commitments. Those who say the Commission functioned as a banker are mistaken. We never performed the banker's role (which I know well) of reviewing the bidders' balance sheets, their business plans, the wisdom of their planned bids, and the quality of their management. We never assumed the responsibility of creating "commercially reasonable alternatives" for whatever difficulties the C block licenses encountered. To the contrary, we repeatedly declared our"d#0*((e"" commitment to the efficacy of the market mechanism, and our intention to enforce auction  X-rules.z ֽ Xb< ` ԍ#Xj\  P6G;XP#` ` I note that the Commission acted without hesitation when some successful C block  xbidders failed to make their down payments although they had made their deposits. The FCC  xLimmediately defaulted the bidders and assessed maximum forfeitures, applying all payments to  X- xthe forfeitures. See "18 Defaulted PCS licenses to be Reauctioned; Reauction to Begin July 3rd,"  X- x Public Notice, DA 96872 (rel. May 30, 1996); Mountain Solutions LTD, Inc., Order, 12 FCC  X- xzRcd 5904 (WTB 1997), application for review pending; BDPCS, Inc., Order, 12 FCC Rcd 6606  X- xM(WTB 1997), application for review pending; C.H. PCS Inc., Order, 11 FCC Rcd 22430 (WTB  x1996). These bidders, and those who dropped out in the course of the auction, had no reason to  xexpect that the Commission would subsequently change the rules of the game. It is of course  ximpossible to sort out how these bidders would have behaved differently if they could have  X| -foreseen the accommodations that would later be offered.#x6X@`7[X@#z  X- Conclusion Today's decision may enable the survival of some C block licensees who might have failed without government intervention. More likely is the prospect that the significantly sweetened selection of options will lead directly to more churn in business plans, more deviation from initial auction results, more confusion in the financial markets, and more delay in construction  X1-of facilities. A further cost is the longterm skepticism in the market that the Commission will revise its rules whenever the pressure is great enough. It is my view that these rule changes prolong uncertainty, and fail to treat all interested parties equitably. Accordingly, to the extent the majority goes beyond the terms of last September's order, I respectfully dissent.  ? <#x6X@`7[X@#