NOTICE ************************************************************************* NOTICE ************************************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file pnmc5021. File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ************************************************************************* DA 96-1402 August 19, 1996 Sara F. Seidman, Esquire Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. 701 Pennsylvania Avenue, N.W. Suite 900 Washington, DC 20005 RE: SJI, Inc. Petition for Waiver in Auction No. 11 Adopted August 19, 1996 Released August 20, 1996 Dear Ms. Seidman: This letter responds to the July 29, 1996 request of SJI, Inc. ("SJI") for waiver of the Commission's Rules to allow it to qualify to bid as a small business in the broadband PCS F block auction. Specifically, SJI requests that the Commission allow it to use the years 1991- 1993, instead of 1993-1995, to calculate its gross revenues under Section 24.720 of the Commission's Rules, or that the Commission re-institute an abolished exception to the affiliation rule, formerly contained in Section 24.720(l)(11)(ii), for singular application to SJI. For the reasons stated below, we deny SJI's request. Section 24.720(b)(1) defines a small business, for purposes of the F block, as "an entity that, together with its affiliates and persons or entities that hold interest in such entity and their affiliates, has average annual gross revenues that are not more than $40 million for the preceding three years." Section 24.720(b)(3) requires that gross revenues, for purposes of 24.720(b)(1), shall be considered on a cumulative basis and aggregated. Section 24.720(l) sets forth the Commission's definition of "affiliate" for purposes of the F block. Section 24.720(l)(11)(ii) was applicable on its express terms solely to the C block, and was not made applicable to the F block. When operative, Section 24.720(l)(11)(ii) excluded from affiliation, for purposes of the definition of small business, any would-be affiliate that itself met the entrepreneurs' block caps, provided the gross revenues and total assets of all such affiliates of the small business, when aggregated, did not exceed those caps. A request for waiver of a rule for broadband PCS must include a showing either "that the underlying purpose of the rule will not be served, or would be frustrated, by its application in a particular case, and that grant of the waiver is otherwise in the public interest;" or "that unique facts and circumstances of a particular case render application of the rule inequitable, unduly burdensome or otherwise contrary to the public interest." 47 C.F.R.  24.819(a)(i) and (ii). SJI asserts that its averaged gross revenues for the years 1991-1993 were approximately $39.2 million, slightly below the $40 million small business ceiling. Exhibits C and D of SJI's short-form application for participation in the D, E and F block auction (FCC Form 175) indicate, however, that SJI's gross revenues have since grown substantially, resulting in a three-year average for 1993-1995 of approximately $54.5 million. SJI requests waiver of the rules calling for measurement of gross revenue by average of the three most recent years, based on three arguments: (1) that SJI "reasonably believed" that the average of the years 1991-1993 would be considered in determining its eligibility for small business treatment in the F block auction; (2) that SJI "reasonably believed" that exceptions to the affiliation rules applied to the C block auction would also extend to the F block auction; and (3) that the timing of the Commission's decision to change the eligibility requirements "unfairly harms" SJI's efforts to obtain PCS licenses. SJI does not explain how the underlying purpose of the Commission's Rules defining small businesses would not be served or would be frustrated by their application in this case. Further, SJI fails to allege unique facts that would render application of the rules in its case to be inequitable, unduly burdensome, or otherwise contrary to the public interest. SJI basically argues reliance on two factors: (1) that it believed that the same years that were considered for applicants claiming small business status in the C block would apply to the F block; and (2) that the same affiliation rule exceptions provided to C block bidders would apply in the F block. In summary, SJI contends that it is harmed by the timing of the Commission's rule changes. Reliance alone, however, is not grounds for a waiver. The Commission has the discretion to change its view of what is in the public interest, either with or without a change in circumstances, as long as the Commission supplies a reasonable analysis indicating that the prior policies and standards are being deliberately changed and not casually ignored. Greater Boston Television v. FCC, 444 F.2d 841 (D.C. Cir. 1970). In any event, the Commission invited applicants that participated in the C block auction and relied on the affiliation exception then contained in Section 24.720(l)(11)(ii) to submit requests that the Commission waive it rules to allow them to participate in the F block auction. Amendment of Parts 20 and 24 of the Commission's Rules -- Broadband PCS Competitive Bidding and the Commercial Mobile Radio Service Spectrum Cap, WT Docket 96-59, FCC 96-278, Report and Order (rel. June 24, 1996), at  36. We note that here SJI can still participate as an entrepreneur in the F block auction, and as such, is eligible for an installment payment plan in accordance with its size. For the reasons stated above, SJI's request IS HEREBY DENIED. This action is taken under delegated authority pursuant to Section 0.331 of the Commission's Rules. Sincerely, Kathleen O'Brien Ham Chief, Auctions Division Wireless Telecommunications Bureau