PUBLIC NOTICE Federal Communcations Commission 1919 M St., N.W. Washington, D.C. 20554 January 11, 1995 AUCTIONS DIVISION DENIES WAIVER REQUESTS SUBMITTED BY C BLOCK APPLICANTS The Auctions Division of the Wireless Telecommunications Bureau issued five letters denying waiver requests submitted by Broadband PCS C block auction applicants. The letters were mailed to the applicants or their representatives in December, 1995 and January, 1996. Attached herewith are copies of the five letters. Attachments: Five letters. December 20, 1995 David A LaFuria, Esq. Lukas, McGowan, Nace & Gutierrez 1111 19th Street, N.W. Suite 1200 Washington, D.C. 20036 Re: Meretel Communications, L.P.'s Petition for Waiver or in the alternative Request for Declaratory Ruling Dear Mr. LaFuria: This letter responds to the "Petition for Waiver or in the alternative Request for Declaratory Ruling" ("Petition") filed on behalf of Meretel Communications, L.P. ("Meretel") on December 1, 1995. Meretel requests a waiver of Section 1.2105(b) of the Commission s rules (47 C.F.R. 1.2105) to permit it to amend its short-form application (FCC Form 175) to participate in the Broadband PCS "C Block" Auction. Specifically, Meretel would like to add the following six additional markets to its application: BTA 238, BTA 009, BTA 290, BTA 449, BTA 175 and BTA 094. According to Meretel, Mercury Cellular Telephone Company ("Mercury"), owns a 24.33 percent interest in Meretel. Mercury, in turn, holds controlling interests in FCC cellular licenses in each of the BTAs that Meretel would like to add to its short-form application. Meretel states that it did not include these BTAs in its short-form application in order to comply with the Commission's PCS-cellular cross-ownership rule, Section 24.204. 47 C.F.R.  24.204. Meretel claims that it should now be allowed to bid conditionally on the six additional markets in light of the decision in Cincinnati Bell Telephone, et al. v. FCC, Nos. 94-3701/4113; 95-3023/3238/3315 (6th Cir., slip op., released November 9, 1995), in which the court remanded the PCS-cellular cross- ownership rule to the Commission to conduct further proceedings. Requests for waiver of rules pertaining to eligibility to participate in the broadband PCS C block auction must meet the requirements of Section 24.819 of the Commission's rules (47 C.F.R.  24.819). Under that rule, a waiver will not be granted unless an affirmative showing is made: (i) 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 (ii) That the unique facts and circumstances of a particular case render application of the rule inequitable, unduly burdensome or otherwise contrary to the public interest. Applicants must also show the lack of a reasonable alternative. 47 C.F.R.  24.819(a)(i) & (ii). Because Meretel's petition does not meet the criteria for granting a waiver, we are denying Meretel s petition. The Commission s Second Report and Order established the application procedures for the C block auction. See Second Report and Order in PP Docket No. 93-253, 9 FCC Rcd 2348 (released April 20, 1994) at  160-168. Under these procedures, potential applicants are required to submit a short-form application prior to an application deadline to reduce the administrative burdens on bidders and the FCC and minimize the potential for delay. Id., at  165. Thus, the underlying purpose of Section 1.2105 of the Commission s Rules was to ensure that serious, qualified bidders would participate in the auction and that the auction would proceed without unnecessary delay. In order to maximize participation in the auction, the Commission decided to allow applicants, whose short-form applications were substantially complete but contained minor errors or defects, an opportunity to cure. Applicants would not, however, be permitted to make any major modifications to their applications. Id., at  167. We consider changes in market selections to be major modifications (see Supplemental Bidder Package, p. 30 (rel. October 11, 1995) and discussion, infra.). To allow applicants such as Meretel to make major modifications to their applications after the filing deadline would frustrate the underlying purpose of Section 1.2105. That is, permitting applicants to make major modifications to their applications would in all likelihood increase the administrative burdens on bidders and the FCC and increase the potential for delay of the auction. Meretel has not otherwise shown how the underlying purpose of Section 1.2105 would not be served, or would be frustrated, by its application in this case. Moreover, Meretel has not shown that the grant of a waiver is otherwise in the public interest. The Supplemental Bidder Package gave notice to all potential applicants of Radiofone's challenge to our PCS-cellular cross-ownership rule. Supplemental Bidder Package, p. 23. On November 13, 1995, the Wireless Telecommunications Bureau released a Public Notice in response to the decision by the Sixth Circuit in Cincinnati Bell. FCC Will Proceed with C Block Auction on Schedule , Public Notice (released November 13, 1995). This Public Notice announced that "applicants (such as Radiofone, Inc.) that filed timely applications and requests seeking a waiver of the PCS-cellular cross-ownership rule and the 45 MHz limit will be allowed to participate in the C block auction on a continual basis." Meretel neither applied for the markets where Mercury is a cellular operator nor did it seek a timely waiver of the PCS- cellular cross-ownership rule. Meretel asserts that our decision to allow only those who filed appropriate waiver requests prior to the Sixth Circuit's decision is "tantamount to creating a separate class of applicant without prior notice." We disagree. The November 13 Public Notice merely announced the status and conditional treatment of pending applications and waivers. Such action was taken out of fairness to those parties that had filed applications and contingent waivers to preserve their rights in the event that the Sixth Circuit s decision affected the rules. As noted above, all potential bidders were given notice of Radiofone's challenge to the PCS-cellular cross-ownership rule in the Supplemental Bidder Package. It appears that Meretel either ignored the notice of the implications of the Radiofone litigation, or was not interested in bidding on the markets overlapping its cellular interests at the time it filed its FCC Form 175. In either case, because Meretel did not initially seek a waiver of the PCS-cellular cross-ownership and spectrum cap rules, we will not allow Meretel to add new markets to its application. Meretel had the same opportunity to preserve its rights in the event that the Sixth Circuit s ruling would affect the Commission s rules. In any event, the effect of the ruling has not been determined. As the court stated, "while attempting to buttress the Cellular eligibility restrictions, the FCC may simply find more support for its conclusions [or] [p]erhaps the FCC's reexamination of the Cellular eligibility rules will result in a modification of those rules." Slip op. at 12 (emphasis added, citations omitted). Accordingly, Meretel s situation presents no unique facts or circumstances justifying the grant of a waiver. Moreover, Meretel has not shown the lack of a reasonable alternative. Meretel objects to the statement in the Supplemental Bidder Package that indicates that we will consider a change in market designation as a "major amendment," and therefore prohibited under the Commission s rules. Specifically, Meretel asserts that this statement, which was not challenged by Meretel (until now) or any other party, amounts to "retroactive rulemaking." The Commission s rules make clear that applicants may only make minor amendments to their applications after the initial filing deadline. Specifically, Section 24.822 allows applicants "to amend their Form 175 applications to make minor amendments to correct minor errors or defects such as typographical errors." 47 C.F.R. 24.822(b). In addition, Section 1.2105 states that "Form 175 may be amended or modified to make minor changes or correct minor errors in the application (such as typographical errors)" and specifies limited circumstances in which applicants may modify their short-form applications to reflect formation of consortia or changes in ownership. We continue to interpret these rules to prohibit applicants from adding markets to their short- form applications, unless a waiver of the rules is warranted under Section 24.819(a). While certain amendments are expressly deemed minor and are allowed by the rules, they do not specify the type of amendment sought by Meretel as either minor or major. We believe, however, that the Commission intended to treat such amendments as major. Further guidance on what types of amendments are to be deemed major can be found in Section 24.823, which addresses applications other than FCC Form 175 (such as FCC Form 600, the long-form applications required of winning bidders). That rule classifies an amendment as not being major if it "does not create new or increased frequency conflicts." 47 C.F.R.  24.823(g)(5). While these rules are silent on market designation changes in particular, a newly designated market in a short-form application is tantamount to creating a new frequency conflict and should be deemed major in both long-form and short-form applications. Accordingly, we believe it is reasonable to interpret these rules to classify a change in market designation as a "major amendment." Because Meretel does not allege that it failed to include the six additional markets due to "typographical errors" or "similar clerical errors," we deny Meretel's request. Finally, we note that the Commission s anti-collusion rules (47 C.F.R.  1.2105(c)) also bars Meretel from adding additional markets to its application. The anti-collusion rules require an applicant to identify on its short-form application all parties with whom it has entered into a bidding consortium or other joint bidding arrangement as of the short-form filing deadline. After the short-form filing deadline, applicants may not discuss the substance of their bids or their bidding strategies with other applicants (other than those identified on the short-form application) that are bidding in the same geographical license areas. 47 C.F.R.  1.2105(c)(1); Fourth Memorandum Opinion and Order in PP Docket No. 93-253, 9 FCC Rcd 6858, 6868 (1994). For the reasons stated above, Meretel's request IS HEREBY DENIED. Sincerely, Kathleen O'Brien Ham Chief, Auctions Division Wireless Telecommunications Bureau January 2, 1995 Jack E. Robinson Chief Executive Officer National Telecom PCS, Inc. Clearwater House 2187 Atlantic Street Stamford, CT 06902 Dear Mr. Robinson: National Telecom PCS, Inc., ("NatTel") filed a petition for waiver of the Commission's rules, dated December 9, 1995, seeking permission to amend its short-form application to participate in the Broadband PCS "C block" auction. Specifically, NatTel would like to reduce the markets it is eligible to bid on from "all" to two just markets, BTA 491 and BTA 388. NatTel filed a petition for waiver dated December 4, 1995, seeking to increase the size of its upfront payment after the upfront payment deadline had expired. NatTel's earlier waiver request was denied by the Auctions Division of the Wireless Telecommunications Bureau on December 8, 1995. As a result of that action, NatTel states that it is now eligible to bid on only a fraction of the markets for which it originally applied. Consequently, NatTel would like to amend its application to reflect its current eligibility. NatTel's request is denied. Changes in market designations after the short-form filing deadline has expired are considered "major" amendments. As such, they are prohibited under the Commission's rules. See, 47 C.F.R.  1.2105 and 24.822. NatTel claims that because the Commission allowed three applicants to make changes to their market designations after the short-form filing deadline (see, "Qualified Bidders and Bidding Instructions for December 18, 1995 Broadband PCS C Block Auction", fn. 1, Public Notice (rel. December 8, 1995)), NatTel should be given the same opportunity to amend. However, NatTel's situation is in no way similar to that of the three applicants who were granted waivers. Two of the applicants, Antigone Communications Limited and Magnacom Wireless, L.L.C., were permitted to delete markets from their short-form applications because the markets at issue were originally listed due to typographical errors. Their requests were therefore considered to be minor amendments. See, Letter to Gene DeJordy, Esq., December 8, 1995; Letter to David J. Kaufman, Esq., December 8, 1995. The third applicant, SJI, Inc., was permitted to add a market as a result of the Sixth Circuit's decision in Cincinnati Bell Tel. Co. v. FCC, No. 94-3701 (6th Cir. Nov 9, 1995) and the Commission's action in its November 13, 1995 Public Notice ("FCC will Proceed with C Block Auction on Schedule", Public Notice ). See, Letter to Sara F. Seidman, Esq., December 11, 1995. Because changes to market designations are generally considered major amendments and therefore prohibited under the Commission's rules, and because NatTel's request does not conform to Commission precedent, NatTel's request must be denied. Finally, we note that the Commission's anti-collusion rules (47 C.F.R.  1.2105(c)) also acts as a bar to NatTel's request to delete markets from its short-form application. The anti-collusion rules require an applicant to identify on its short-form application all parties with whom it has entered into a bidding consortium or other joint bidding arrangement as of the short-form filing deadline. After the deadline, applicants may not discuss the substance of their bids or bidding strategies with other applicants (other than those identified on the short-form application) that are bidding in the same geographical license areas. 47 C.F.R.  1.2105(c)(1); Fourth Memorandum Opinion and Order in PP Docket No. 93-253, 9 FCC Rcd 6858, 6868 (1994). Because NatTel listed that it wished to be eligible to bid on "all" licenses in the C block auction, it is prohibited from discussing the substance of its bids or bidding strategies with all other applicants except those that it may have identified on its short-form application. For the reasons stated above, NatTel's request IS HEREBY DENIED. Sincerely, Kathleen O'Brien Ham Chief, Auctions Division Wireless Telecommunications Bureau January 2, 1996 Mr. Richard L. Vega, Sr. RLV-PCS Partnership 235 Hunt Club Blvd. Longwood, FL 32779 Dear Mr. Vega: In your letter dated December 12, 1995, you requested a waiver of the Commission's rules to permit RLV-PCS Partnership ("RLV-PCS") to amend its short-form application to participate in the Broadband PCS C block auction. Specifically, RLV-PCS wishes to add market B439 to its application. You state that RLV-PCS omitted this market inadvertently when it filed its original application electronically. You further state that this omission went unnoticed when RLV-PCS resubmitted its application. You claim that the addition of market B439 to the short-form application would be a minor amendment. RLV-PCS's request is denied. The Supplemental Bidder Package indicates that a change in market designation will be considered a "major amendment," and therefore prohibited under the Commission's rules. Supplemental Bidder Package, p. 30 (rel. October 11, 1995). The rules make clear that applicants may make only minor amendments to their applications after the filing deadline. Specifically, Section 24.822 allows applicants "to amend their Form 175 applications to make minor amendments to correct minor errors or defects such as typographical errors." 47 C.F.R.  24.822(b). In addition, Section 1.2105 states that "Form 175 may be amended or modified to make minor changes or correct minor errors in the application (such as typographical errors)" and specifies limited circumstances in which applicants may modify their short-form applications to reflect formation of consortia or changes in ownership. 47 C.F.R.  1.2105. Because RLV-PCS's petition does not demonstrate that the failure to include B439 in its original application was due to "typographical errors" or similar clerical errors, we deny RLV-PCS's request. Finally, we note that the Commission's anti-collusion rules (47 C.F.R.  1.2105(c)) also bars RLV- PCS from adding an additional market to its application. The anti-collusion rules require an applicant to identify on its short-form application all parties with whom it has entered into a bidding consortium or other joint bidding arrangement as of the short-form filing deadline. After the short-form filing deadline, applicants may not discuss the substance of their bids or their bidding strategies with other applicants (other than those identified on the short-form application) that are bidding in the same geographical license areas. 47 C.F.R.  1.2105(c)(1); Fourth Memorandum Opinion and Order in PP Docket No. 93-253, 9 FCC Rcd 6858, 6868 (1994). For the reasons stated above, RLV-PCS's request IS HEREBY DENIED. Sincerely, Kathleen O'Brien Ham Chief, Auctions Division Wireless Telecommunications Bureau Eliot J. Greenwald, Esq. Fisher Wayland Cooper Leader & Zaragoza L.L.P 2001 Pennsylvania Ave., N.W. Suite 400 Washington, DC 20006 January 11, 1996 Re: New Wave LLC Request for Conditional Authorization and Request for Waiver of Sections 1.2105, 24.822, 20.6 and 24.204 of the Commission's Rules Dear Mr. Greenwald: This letter responds to your filing dated December 19, 1995 on behalf of New Wave LLC ("New Wave"). New Wave requests a waiver of the Commission's rules (47 C.F.R.  1.2105 and 24.822) to amend its short-form application to participate in the Broadband PCS C block auction by adding market B395. New Wave also requests a waiver of the PCS-cellular cross-ownership and spectrum cap rules (47 C.F.R.  20.6 and 24.204) so that it may be eligible to bid on this market and become the licensee should it be the high bidder at the close of the auction. You state that New Wave did not include this market on its short-form application in order to comply with the Commission's PCS-cellular cross-ownership and spectrum cap rules. One of New Wave's attributable investors owns a 90 percent ownership interest in a cellular licensee whose service area significantly overlaps market B395. New Wave claims that it should now be allowed to bid conditionally on this market in light of the decision in Cincinnati Bell Telephone Co. et al. v. FCC, Nos. 94-3701/4113; 95-3023/3238/3315 (6th Cir., slip op., released November 9, 1995), in which the court remanded the PCS-cellular cross-ownership rule to the Commission to conduct further proceedings. Requests for waiver of rules pertaining to eligibility to participate in the broadband PCS C block auction must meet the requirements of Section 24.819 of the Commission's rules (47 C.F.R.  24.819). Under that rule, a waiver will not be granted unless an affirmative showing is made: (i) 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 (ii) That the unique facts and circumstances of a particular case render application of the rule inequitable, unduly burdensome or otherwise contrary to the public interest. Applicants must also show the lack of a reasonable alternative. 47 C.F.R.  24.819(a)(i) & (ii). Because New Wave's filing does not meet the criteria for granting a waiver, we are denying New Wave's requests. The Commission s Second Report and Order established the application procedures for the C block auction. See Second Report and Order in PP Docket No. 93-253, 9 FCC Rcd 2348 (released April 20, 1994) at  160-168. Under these procedures, potential applicants are required to submit a short-form application prior to an application deadline to reduce the administrative burdens on bidders and the FCC and minimize the potential for delay. Id., at  165. Thus, the underlying purpose of Section 1.2105 of the Commission s Rules was to ensure that serious, qualified bidders would participate in the auction and that the auction would proceed without unnecessary delay. In order to maximize participation in the auction, the Commission decided to allow applicants, whose short-form applications were substantially complete but contained minor errors or defects, an opportunity to cure. Applicants would not, however, be permitted to make any major modifications to their applications. Id., at  167. We consider changes in market selections to be major modifications (see Supplemental Bidder Package, p. 30 (rel. October 11, 1995)). To allow applicants such as New Wave to make major modifications to their applications after the filing deadline would frustrate the underlying purpose of Section 1.2105. That is, permitting applicants to make major modifications to their applications would in all likelihood increase the administrative burdens on bidders and the FCC and increase the potential for delay of the auction. New Wave has not otherwise shown how the underlying purpose of Section 1.2105 would not be served, or would be frustrated, by its application in this case. Moreover, New Wave has not shown that the grant of a waiver is otherwise in the public interest. The Supplemental Bidder Package gave notice to all potential applicants of Radiofone's challenge to our PCS-cellular cross-ownership rule. Supplemental Bidder Package, p. 23. On November 13, 1995, the Wireless Telecommunications Bureau released a Public Notice in response to the decision by the Sixth Circuit in Cincinnati Bell. FCC Will Proceed with C Block Auction on Schedule , Public Notice (released November 13, 1995). This Public Notice announced that "applicants (such as Radiofone, Inc.) that filed timely applications and requests seeking a waiver of the PCS-cellular cross-ownership rule and the 45 MHz limit will be allowed to participate in the C block auction on a continual basis." New Wave neither applied for the markets where one of its principals is a cellular operator nor did it seek a timely waiver of the PCS-cellular cross-ownership rule. Because New Wave did not initially seek a waiver of the PCS-cellular cross-ownership and spectrum cap rules, we will not allow New Wave to add a new market to its application. New Wave had the same opportunity to preserve its rights in the event that the Sixth Circuit s ruling would affect the Commission s rules. In any event, the effect of the ruling has not been determined. As the court stated, "while attempting to buttress the Cellular eligibility restrictions, the FCC may simply find more support for its conclusions [or] [p]erhaps the FCC's reexamination of the Cellular eligibility rules will result in a modification of those rules." Slip op. at 12 (emphasis added, citations omitted). Accordingly, New Wave's situation presents no unique facts or circumstances justifying the grant of a waiver. Moreover, New Wave has not shown the lack of a reasonable alternative. Finally, we note that the Commission s anti-collusion rules (47 C.F.R.  1.2105(c)) also bar New Wave from adding an additional market to its application. The anti-collusion rules require an applicant to identify on its short-form application all parties with whom it has entered into a bidding consortium or other joint bidding arrangement as of the short-form filing deadline. After the short-form filing deadline, applicants may not discuss the substance of their bids or their bidding strategies with other applicants (other than those identified on the short-form application) that are bidding in the same geographical license areas. 47 C.F.R.  1.2105(c)(1); Fourth Memorandum Opinion and Order in PP Docket No. 93-253, 9 FCC Rcd 6858, 6868 (1994). For the reasons stated above, New Wave's request IS HEREBY DENIED. Sincerely, Kathleen O'Brien Ham Chief, Auctions Division Wireless Telecommunications Bureau January 2, 1996 Thomas Gutierrez, Esq. Lukas, McGowan, Nace & Gutierrez 1111 19th St., N.W. Suite 1200 Washington, DC 20036 Re: New England PCS, L.P. Request for Waiver Dear Mr. Gutierrez: In a filing dated December 12, 1995, you requested on behalf of your client, New England PCS, L.P. ("New England") a waiver of the Commission's PCS-cellular cross-ownership and spectrum cap rules (47 C.F.R.  20. 6 and 24.204). You state that New England requested to be eligible to bid on all markets in in its short-form application to participate in the Broadband PCS C block auction. You further state that after New England filed its short-form application, it discovered that it may have attributable cellular interests in the following five markets: BTA 99, BTA 126, BTA 227, BTA 249 and BTA 384. Consequently, New England requests that it be permitted to bid conditionally on these five markets "in the event that waivers are granted to other applicants who made request [sic] after November 13, 1995." New England also requests confirmation that it will be permitted to bid on all markets other than those in which it may have attributable cellular interests, or alternatively, it requests permission to delete the five markets from its short-form application. New England's waiver request is denied. All potential bidders were given notice of Radiofone's challenge to the PCS-cellular cross-ownership rule in the Supplemental Bidder Package. Supplemental Bidder Package, p. 23. On November 13, 1995, the Wireless Telecommunications Bureau released a Public Notice in response to the Sixth Circuit's decision in Cincinnati Bell Tel. Co. et al. v. FCC, Docket Nos. 94-3701/4113; 95-3023/3238/3315 (slip. op. rel. November 9, 1995). "FCC will proceed with C Block Auction on schedule," Public Notice. This Public Notice announced that "applicants (such as Radiofone, Inc.) that filed timely applications and requests seeking a waiver of the PCS-cellular cross- ownership rule and the 45 MHz limit will be allowed to participate in the C block auction on a conditional basis." Because New England did not seek a waiver of the Commission's PCS-cellular cross-ownership and spectrum cap rules prior to the short-form filing deadline, it is not allowed to bid conditionally on those markets in which it has attributable cellular interests. See, Letter to David A. LaFuria, Esq., December 20, 1995. New England may, however, continue to bid on markets in which it is otherwise eligible under the Commission's rules. For the reasons stated above, New England's request for waiver is HEREBY DENIED. Sincerely, Kathleen O'Brien Ham Chief, Auctions Division Wireless Telecommunications Bureau