[FOR RECORD ONLY] $// PN, Emergency Motion For Remand of Broadband PCS //$ $/ 300.309(j) Competitive Bidding /$ July 8, 1994 FCC 94-182 COMMISSION INSTRUCTS GENERAL COUNSEL TO SEEK REMAND OF BROADBAND PERSONAL COMMUNICATIONS SERVICE PIONEER'S PREFERENCE CASES The Federal Communications Commission has instructed its General Counsel to file a motion for remand of pending cases in the District of Columbia Circuit seeking judicial review of the Commission's decision to grant broadband personal communications service (PCS) licenses free of charge to three pioneer's preference applicants. Pacific Bell v.FCC, D.C. Circuit No. 94- 1148 (and consolidated cases). A copy of the Commission's motion for remand is attached to this notice. In instructing the General Counsel to seek remand of the cases, the three Commissioners participating in this matter stated that they intended to reconsider the substance of the decision not to charge these pioneer's preference winners for licenses in circumstances where other licensees in the same service would have to pay substantial amounts in order to prevail in competitive bidding procedures. The Commission decisions on review in these cases are the First Report and Order in ET Docket No. 93-266, 9 FCC Rcd 605 (1994), and the Third Report and Order in General Docket No. 90-314, 9 FCC Rcd 1137 (1994). Action by the Commission July 8, 1994, Commissioners Quello, Barrett and Ness voting; Chairman Hundt and Commissioner Chong not participating. IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT PACIFIC BELL, et al., ) Petitioner, ) ) v. ) No. 94-1148 (and ) consolidated cases) FEDERAL COMMUNICATIONS COMMISSION ) and UNITED STATES OF AMERICA, ) Respondents. ) EMERGENCY MOTION FOR REMAND The Federal Communications Commission respectfully moves for a remand of the above captioned case so that it can give further consideration to certain aspects of the orders challenged by the petitioners. The Commission asks the Court to treat this motion as an emergency motion in light of the concerns that prompted the Court to order an expedited briefing schedule. In the pages that follow, the Commission describes the background of the case, explains its reasons for requesting a remand, and proposes a procedural schedule that will enable the Commission to reconsider issues on remand without impeding the Court's expeditious review of the Commission's orders. This case presents a challenge to the three "pioneer's preferences" awarded by the Federal Communications Commission to applicants for licenses to provide broadband personal communications service ("broadband PCS"). Under the Commission orders that are at issue, three innovators in the field of wireless communications were awarded preferences that entitle them to obtain licenses, at no cost, to provide broadband PCS, provided that they satisfy technical and financial qualifications and that the grant of their applications is determined to be in the public interest. A number of disappointed applicants for pioneer's preferences petitioned for review by this Court, raising a number of challenges to the awards. Their primary argument is that the Commission "failed to explain adequately its decision to retain the pioneer's preference program -- and to award preference recipients licenses for free -- despite congressional authorization to sell licenses at auction and congressional direction to prevent unjust enrichment." Br. for Pacific Bell et al. 1. The petitioners ask this Court to vacate the Commission's orders. Id. at 51. The petitioners asked this Court to expedite consideration of their challenges, because the Commission intends to start auctioning the remaining broadband PCS licenses at the end of the year. Over the Commission's opposition, the Court expedited the case; the petitioners filed their brief on June 17 and the Commission's brief currently is due on July 15, although the Commission has sought an extension to July 19. No date has been set for oral argument. The Commission has issued a number of orders relating to the broadband PCS auctions since the orders at issue were released, and the Commission's understanding of the PCS marketplace and the auction process has developed as it has resolved various issues relating to the auctions. Specifically, for example, the Commission now has a fuller understanding of the competitive implications of one licensee receiving its license without payment while its competitors, under an auction process, must pay significant amounts for their licenses. In light of our current understanding of these issues, we agree that the Commission's stated rationale is no longer adequate to support its decision to award licenses to preference recipients for free. As the petitioners state, the Commission's rationale for awarding licenses for free is set forth in a single paragraph that fails to take account of all the relevant circumstances as we now understand them. More specifically, the Commission failed to address the fact that the pioneer's preference program was initiated in an era when licenses were awarded through lotteries and comparative hearings, and all licenses were awarded free of charge, whereas the Commission now has authority to auction licenses, and licensees are expected to pay a substantial amount of money for the licenses. Accordingly, we believe that, following oral argument, this Court would ultimately vacate the Commission's orders and remand for further proceedings. We therefore ask this Court to remand the cases to the Commission now. This request is not made for purposes of delay. We are not requesting remand just to have the opportunity to better explain the Commission's prior decisions. To the contrary, holding the broadband PCS auction as soon as possible is of vital importance to the Commission, and the Commission intends to take every step possible to adhere to its schedule for initiating broadband auctions at the end of 1994. Indeed, ensuring that the auction can be held on schedule is one of our primary motives for seeking a voluntary remand. That is, as matters stand, sometime this Fall, this Court would vacate the Commission's orders that are at issue and remand the case to the Commission for further consideration, which might set back the auction date. For those reasons, as well as some reasons identified by the petitioners in their brief, the Commission intends to reconsider both the rationale and the substance of the decisions at issue. In particular, the Commission has authorized litigation counsel to advise the Court that it will give serious consideration to the proposal that recipients of pioneer's preferences for broadband PCS licenses be required to pay some amount for the licenses, taking account of all the relevant circumstances and the competing equities. We realize that this Court expedited consideration of this case over our opposition. At the time that we opposed expedition, however, we were not able to advise the Court that the Commission recognized that its prior explanation for its decision was deficient. Nor were we able to advise the Court that the Commission intends to reconsider the substance of its decisions. In light of the Commission's current position, it does not make sense for this Court to review orders that the Commission acknowledges are inadequate and intends to change. Like the petitioners, we favor expedition in order to ensure that the case can be resolved before the auction begins by the end of the year. Moreover, we recognize that any order on remand that the Commission issues in this proceeding is likely to be challenged in this Court, and that the petitioners will argue that the auction should not take place until their challenges are resolved. Accordingly, the Commission is prepared to issue a revised order within two weeks after the Court remands the case to the Commission. We would propose that the Court order any party that wants to challenge the order on remand to file a brief three weeks after the Commission releases it, and then allow the Commission three weeks to file a brief responding to any arguments in the briefs already on file that are unaffected by the Commission's revised order and to the arguments in the additional briefs that will be filed. We would then ask the Court to hold oral argument and issue a decision as soon as its schedule permits. The Court should remand the case to the Commission. Respectfully submitted, William E. Kennard General Counsel Christopher J. Wright Deputy General Counsel John E. Ingle Deputy Associate General Counsel James M. Carr Counsel Federal Communications Commission Washington, D.C. 20554 July 8, 1994