June 23, 1995



  FCC Seeks Comment on Changes to C Block Auction Rules for Broadband PCS
                      Auction Date Set For August 29

     In a Further Notice of Proposed Rule Making released today, the Commission
proposed measures to address legal uncertainties raised by the Supreme Court's recent
decision in Adarand Constructors, Inc. v. Pe¤a, 63 U.S.L.W. 4523 (U.S. June 12, 1995). 
The FCC stated that it was mindful of its obligation and commitment to ensure that
businesses owned by minorities and women, small businesses and rural telephone companies
are afforded opportunities to participate in the provision of spectrum-based services, and that
it remains committed to this goal.  Based on the unique circumstances of the auction for
licenses in the "C block" of Personal Communications Services in the 2 GHz band
("broadband PCS"), and the timing of the Supreme Court's decision in Adarand, the
Commission indicated its proposal to avoid further delay and legal uncertainty concerning the
C block auction is the best means of providing opportunities for businesses owned by
minorities and women, many of whom have made preparations to bid in the C block auction.


     The Commission made clear that its proposal is limited to the rules governing
eligibility to participate in the C block auction.  The Commission also emphasized that its
tentative conclusion to eliminate race- and gender-based measures does not indicate that the
agency has concluded that race- or gender-based measures are inappropriate for future
spectrum auctions.  Moreover, the Commission did not concede that the C block auction
rules themselves are unconstitutional in the wake of Adarand.  The Commission asked for
comment on the scope of a supplemental record to meet the standard of review required by
Adarand and the time required to develop such a record.

     The Commission stated that for purposes of the C block auction only, it proposes to
eliminate all race- and gender-based provisions contained in the competitive bidding rules
applicable to such licenses in order to avoid delay caused by legal challenges to the existing
rules that would likely result from the Supreme Court's ruling in Adarand.  According to the
Commission, such delay will significantly impede the C block auction and the expeditious
dissemination of broadband PCS licenses to entrepreneurs, including businesses owned by
minorities and women.  The Commission said it intended to make rule changes that are the
least disruptive to bidders who were in an advanced stage of planning to participate in the C
block auction at the time the Adarand decision was handed down.  The Commission also said
it intended to make such changes swiftly, in order to minimize the effect of the modified
rules on existing business relationships formed in anticipation of the C block auction.  In
order to facilitate swift action on the rule changes, comments are due July 7, 1995, and reply
comments are not requested.    

     Accordingly, the Commission tentatively concluded that the broadband PCS rules for
the C block should be modified as follows:

þ    Amend Section 24.709 of the Commission's Rules to make the 50.1/49.9 percent
     "control group" equity structure available to all entrepreneurs' block applicants, and
     not solely to businesses owned by women or minorities.  

þ    Amend Section 24.720 of the Commission's Rules to eliminate the exception to the
     affiliation rules that excludes the gross revenues and total assets of affiliates controlled
     by minority investors who are members of an applicant's control group.

þ    Amend Section 24.711 of the Commission's Rules to provide for three installment
     payment plans for entrepreneurs' block applicants that are based solely on financial
     size.  In particular, the small business installment payment plan would reflect the
     terms previously available to minority- or women-owned small businesses. 

þ    Amend Section 24.712 of the Commission's Rules to provide for a 25 percent bidding
     credit for small businesses only. 
     
þ    Amend Section 24.204 of the Commission's Rules to make the 40 percent cellular
     attribution threshold applicable only to ownership interests held by small businesses
     and rural telephone companies, or to ownership interests held by investors in
     broadband PCS applicants/licensees that are small businesses.

þ    Amend Section 20.6 of the Commission's Rules to make the 40 percent attribution
     threshold applicable only to ownership interests held by small businesses and rural
     telephone companies.

     The Commission also announced that the C block auction for broadband PCS licenses
will commence on Tuesday, August 29, 1995.  FCC Form 175 applications for that auction
must be received by 5:30 p.m. on Friday, July 28, 1995, and  upfront payments will be due
on Tuesday, August 15, 1995. 

     Action by the Commission, June 23, 1995, by Notice of Proposed Rulemaking 
(FCC 95-263).  Chairman Hundt, Commissioners  Quello, Barrett, Ness and Chong.
     Commissioner Barrett issued a separate statement.

                                   -FCC-

News Media Contact: Stacey Reuben Mesa at (202) 418-0654
Wireless Telecommunications Bureau Contact: Kathleen Ham at (202) 418-0620, Jackie
Chorney at (202) 418-0600
Office of the General Counsel Contact: Chris Wright at (202) 418-1700