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File how2ftp (.txt & .wp) is in directory /pub/Bureaus/Miscellaneous/Public_Notices/ ***************************************************************** ******** $//MO&O, Applications for A and B Block Broadband PCS Licenses, FCC 96-140//$ $/ 1.115, Application for reveiw of action taken pursuant to delegated authority/$ FOR RECORD ONLY FCC 96-140 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Applications for A and B Block Broadband ) File Nos. 00001-CW-L-95 PCS Licenses ) through 00099-CW-L-95; ) Call Signs KNLF 204 ) through KNLF 302 MEMORANDUM OPINION AND ORDER Adopted: March 28, 1996 Released: April 1, 1996 By the Commission: I. INTRODUCTION 1. The Commission has before it an Application for Review filed on July 21, 1995 by the National Association of Black Owned Broadcasters, Percy E. Sutton, and the National Association for the Advancement of Colored People (collectively "Petitioners"), and an erratum filed by Petitioners on August 24, 1995, seeking review of an Order by the Chief, Wireless Telecommunications Bureau (the "Bureau") granting the applications filed by the auction winners of 99 broadband Personal Communications Services ("PCS") licenses for the A and B block frequencies. In a separate pleading, Petitioners seek review of a Bureau Order that declined to stay the licensing of the A and B block winners until the licensing of the ultimate winners of the C block auction. We address that by a separate order adopted today; in this Order, we deal exclusively with Petitioners' Application for Review of the A and B Block Order. II. BACKGROUND 2. On May 12, 1995, Petitioners filed a Petition to Deny the applications of the eighteen winning bidders in the A and B block auction. Petitioners alleged that the Commission violated Section 309(j) of the Communications Act, 47 U.S.C. 309(j), by failing to provide adequate opportunities for minorities to acquire PCS licenses in the A and B blocks. Petitioners further alleged that this failure to provide incentives has allowed a few dominant carriers to divide A and B block PCS licenses in an unlawful territorial allocation in violation of the antitrust laws. Petitioners contended that the distribution of licenses in the top markets indicated a pattern of collusion by these carriers to "dominate the wireless telephone industry, both PCS and cellular." 3. The Bureau dismised the Petition to Deny. First, the Bureau concluded that Petitioners had failed to demonstrate standing under Section 309(d)(1) of the Communications Act and applicable Commission precedent. Then, treating the petition as an informal objection, the Bureau further held that Petitioners had failed to show that a grant of the A and B block licenses would be inconsistent with the public interest. It rejected Petitioners' contention that the Commission had failed to comply with 47 U.S.C. 309(j) and deemed that contention "a belated attempt to revisit the Commission's auction rules for licensing of the A and B blocks." The Bureau also rejected Petitioners' argument that the major bidders colluded to allocate territory among themselves. III. CONTENTIONS OF THE PARTIES 4. Petitioners present the same contentions before the Commission that were previously rejected by the Bureau. They allege that the Commission has failed to comply with its statutory mandate to provide adequate opportunities for minorities to bid for PCS licenses. Petitioners also repeat their allegation that the Commission "appears to have allowed the dominant carriers to divide the PCS licenses in an unlawful territorial allocation." Petitioners further dispute the Bureau's conclusion that Petitioners' lacked standing to raise the issues presented in its Petition to Deny. 5. In opposition, Western PCS Corporation ("Western") alleges that Petitioners' Application for Review is procedurally defective because it does not specify the factors that warrant Commission review. Further, Wirelessco, L.P. and Phillieco, L.P. argue that Petitioners lacked standing. Several parties asserted that Petitioner's petition claimed no acts of misconduct by them and that the petition should, therefore, not affect their license grant. Pacific Telesis Mobile Services ("Pacific Telesis") accuses Petitioners of improperly seeking reconsideration of prior rulemaking proceedings. Pacific Telesis also argues that the Commission fully complied with its statutory mandate by providing for the rapid deployment of services without undue administrative delay. Finally, several parties contend that the Bureau properly rejected Petitioners' claims of collusion. IV. DISCUSSION 6. We agree with Western that Petitioners' Application for Review is procedurally defective and must be dismissed. Section 1.115(b)(2) of the Commission's rules, 47 C.F.R. 1.115(b)(2), requires Applications for Review to: specify with particularity, from among the following, the factors which warrant Commission consideration of the questions presented: (i) The action taken pursuant to delegated authority is in conflict with statute, regulation, case precedent, or established Commission policy. (ii) The action involves a question of law or policy which has not previously been resolved by the Commission. (iii) The action involves application of precedent or policy which should be overturned or revised. (iv) An erroneous finding as to an important or material question of fact. (v) Prejudicial procedural error. Petitioners' pleading is defective because it fails to "specify with particularity" any of the above subsections as grounds for granting its Application for Review. The Commission held in Chapman that a party that fails to identify one of the above factors in support of an application for review will have its application dismissed. Accordingly, we are dismissing Petitioners' Application for Review because it does not comply with 47 C.F.R.  1.115(b)(2). Although we are dismissing Petitioners' pleading, we briefly will address the issues raised therein. 7. The Bureau held that Petitioners lacked standing to challenge the A and B Block licensees on a blanket basis as it seeks to do here. We agree. To establish standing to file a petition to deny, the petitioners must allege sufficient facts to demonstrate that grant of the subject application would cause them to suffer a direct injury. The premise of Petitioners' standing argument is that the award of licenses to the A and B block applicants threatens their interests (or those of their members) as potential C block licensees as well as the interests of the public. We find, as did the Bureau, that these allegations are too contingent and speculative to support the required finding of a direct injury causally linked to the challenged action. First, there is no certainty that Petitioners or any of their members will in fact participate in the C block auction or that they will win licenses if they do. Both of these events must occur for any injury to even be possible. Second, we have previously held that the mere fact that a petitioner has applied to be a licensee in the same service does not confer standing. 8. In their Application for Review, Petitioners rely on the holding in United Church of Christ v. FCC for the proposition that they have standing as representatives of the public interest. As Pacific Telesis points out, in UCC there were specific allegations by the party filing the petition to deny that the broadcast station in question was ignoring the needs of a major segment of the listening audience. In this case, Petitioners make no allegations and no party has submitted any evidence that the A and B block licensees will fail to provide adequate service to any segment of the population. Petitioners' major complaint appears to be that they would have preferred entities other than the successful bidders to have received the A and B block licenses. This is not sufficient to support a petition to deny. Petitioners fail to demonstrate how they will be harmed, either as consumers or potential bidders, by the granting of licenses to the A and B block winners. Accordingly, we conclude, as did the Bureau, that Petitioners have not alleged sufficient facts in this case to demonstrate that it has standing to challenge the A and B block licenses. 9. Petitioners repeat the argument previously made to the Bureau that the Commission failed to adopt specific provisions in the A and B block auction, which Petitioners contend is a violation of Section 309(j) of the Act. Pacific Telesis points out in opposition that Petitioners fail to address the Bureau's holding that this argument constitutes an untimely petition for reconsideration of the Commission's broadband PCS auction rules rather than a valid basis for a petition to deny. We agree. The Bureau properly concluded that the purpose of the petition to deny process is to assess challenges to applicants' qualifications to be Commission licensees. Petitioners' statutory argument does not address licensee qualifications, however, but challenges the structure of the A and B block auction itself. We agree with the Bureau that Petitioners' argument was not a valid petition to deny, but was instead a belated attempt to revisit the Commission's auction rules for licensing of the A and B blocks. In the Fifth Report and Order in Docket No. 93-253, the Commission decided against making special provisions for designated entities on the A and B blocks. We determined that this approach fully complied with Section 309(j) and affirmed this conclusion on reconsideration more than ten months before Petitioners filed their petition. Petitioners' attempt to challenge the rules again through the petition to deny process is therefore untimely and procedurally improper. 10. Petitioners also reiterate their allegation that the dominant carriers have divided the PCS licenses in an unlawful territorial allocation. We agree with the Bureau that Petitioners have failed to provide evidence supporting this allegation or otherwise to demonstrate that a grant of the A and B block applications would be inconsistent with the public interest. Under Section 309(d)(1) of the Communications Act, 47 U.S.C.  309 (d)(1), parties filing a petition to deny must make specific allegations of fact sufficient to show that a grant of the application would be prima facie inconsistent with the public interest, convenience, and necessity. Except where official notice may be taken, such allegations must be supported by affidavits of persons with personal knowledge of the facts alleged. Section 309(d)(2) states that if the pleadings and affidavits fail to raise substantial and material questions of fact and the Commission concludes that grant of the application would be in the public interest, the Commission shall deny the petition. 11. In support of their claim of territorial allocation both before the Bureau and now before the Commission, Petitioners allege only that three companies -- AT&T Wireless PCS, PCS Primeco, and WirelessCo -- won 61% of the A and B block licenses. Petitioners suggest that this constitutes "circumstantial evidence" that is not only enough to support a petition to deny, but "a jury verdict finding a conspiracy which violates antitrust laws." A petition to deny must "contain specific allegations of fact sufficient to show . . . that a grant of the application would be prima facie inconsistent with [the public interest]." Where the Commission finds that such a showing has not been made, it may refuse the petition to deny on the basis of "a concise statement of the reasons for denying the petition, which statement shall dispose of all substantial issues raised by the petition." In this instance, we find that petitioners' allegation of territorial allocation does not constitute a showing that the grant to the A and B block winners was prima facie inconsistent with the public interest. We agree with the Bureau that Petitioners have failed to raise a substantial or material question of fact based on these allegations. First, Petitioners offer no grounds for denying the applications of the fifteen auction winners other than AT&T, PCS Primeco, and WirelessCo. Second, with respect to these latter three applicants, Petitioners fail to provide any factual evidence of collusion. Contrary to Petitioners' contention that the Bureau improperly required a "smoking gun," we agree with the Bureau's conclusion that Petitioners must provide a modicum of a factual showing that collusion occurred -- particularly in an auction that lasted over three months and resulted in aggregate winning bids of nearly $8 billion by 18 different parties. Petitioners introduce no evidence showing that AT&T, PCS Primeco, WirelessCo, or any other A or B block winner has violated any of the Commission's rules, including the collusion rules or the rules regarding aggregation of PCS spectrum. We also agree with Western that the bidding patterns were determined to a large degree by the desire of individual applicants to acquire national wireless footprints and/or to acquire markets complementing their existing telecommunications holdings. We therefore find Petitioners' allegation of collusion to be without merit. V. CONCLUSION 12. For the reasons discussed above, we are dismissing Petitioners' Application for Review for failure to comply with Section 1.115(b)(2) of our rules. Although our action renders further discussion unnecessary, we agree with the Bureau's disposition of the issues Petitioners raised in their original Petition to Deny. V. ORDERING CLAUSE 13. ACCORDINGLY, IT IS ORDERED pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), and Section 1.115(b)(2) of the Commission's Rules, 47 C.F.R.  1.115(b)(2), that the Application for Review filed by Petitioners on July 21, 1995, IS DENIED FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary