PUBLIC NOTICE

FEDERAL COMMUNICATIONS COMMISSION
1919 M STREET, N.W.
WASHINGTON, D.C.  20554                         News Media Information: (202) 418-0500
                                  Fax-On-Demand: (202) 418-2830
                                   Internet: http://www.fcc.gov
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                                                     FCC 99-2  
                                     Released: January 13, 1999
PR Docket No. 93-61
GN Docket No. 96-228                      
        COMMENT SOUGHT ON SMALL BUSINESS SIZE STANDARDS
                                

     In accordance with a recent ruling by the Small Business Administration (SBA), the
Commission is seeking further comment on small business size standards adopted for the auction
of Location and Monitoring Service (LMS) and Wireless Communications Service (WCS)
spectrum.  This ruling is detailed in the attached letter from the Administrator of the Small
Business Administration.  We seek comment on these issues for purposes of obtaining SBA
approval of the LMS and WCS size standards.  This action will not affect the outcome of the
WCS auction or the payment obligations of WCS licensees.    

     The LMS auction is scheduled to begin on February 23, 1999.  In our rules for that
auction, we adopted small business size standards and associated bidding credits for LMS to
remove entry barriers and ensure the participation of small businesses in the LMS auction and in
the provision of service.  We sought comment, in general, on small business size standards for
LMS, and one party commented on this issue.  This commenter, Comtrak, recommended that the
Commission adopt two small business categories in the LMS auction: (1) a "small business"
category, for businesses with average gross revenues not to exceed $10 million; and (2) a "very
small business" category, for businesses with average gross revenues not to exceed $3 million. 
Comtrak also recommended that the Commission rely solely on gross revenues, and not the
number of employees, for the purpose of determining an entity's eligibility for small business
incentives, as it has done in previous auctions.  None of the commenters addressed capital
requirements supporting the suggested small business thresholds.   

     The rules we adopted for LMS define a "small business" as an entity with average annual
gross revenues for the preceding three years not to exceed $15 million.  They define a "very small
business" as an entity with average annual gross revenues for the preceding three years not to
exceed $3 million.  Thus, in accordance with the Part 1 rules concerning competitive bidding,
small businesses will receive a 25 percent bidding credit and very small businesses will receive a
35 percent bidding credit.  

     The WCS auction closed on April 25, 1997.  In the expedited rulemaking proceeding for
this service, the Commission adopted tiered small business size standards and associated bidding
credits.  The Commission took this action to ensure that small businesses have the opportunity to
participate in the provision of spectrum-based services, as required by Section 309(j) of the
Communications Act.  The record in the WCS proceeding supported the establishment of small
business provisions.  Several commenters urged the Commission to use tiered definitions, with
levels similar to those employed for broadband PCS.  As was the case with LMS, none of the
commenters discussed capital requirements supporting the suggested small business thresholds.  

     The Commission adopted the same small business definitions for WCS as it did for
broadband PCS.  Thus, it defined a "small business" as an entity with average annual gross
revenues for the preceding three years not to exceed $40 million.  The Commission defined a
"very small business" as an entity with average annual gross revenues for the preceding three
years not to exceed $15 million.  The Commission established bidding credits of 25 percent for
small businesses and 35 percent for very small businesses.

     The SBA recently informed the Commission that the SBA is unable to approve the LMS
and WCS definitions because the Commission did not seek comment on specific small business
proposals in the LMS Further Notice and the WCS Notice.  See Section 3(a)(2)(C) of the Small
Business Act.  Herein, we take this opportunity to solicit comments on the specific small business
size standards that we adopted for LMS and WCS.  Comments are due on or before January 20,
1999.  To file formally, parties must submit an original and four copies to the Office of the
Secretary, Federal Communications Commission, Federal Communications Commission, 445
Twelfth Street, S.W., TW-A325, Washington, D.C. 20554.  In addition, parties must submit one
copy to Amy Zoslov, Chief, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau, Federal Communications Commission, Room 5202, 2025 M Street
N.W., Washington, D.C. 20554.  Comments will be available for public inspection during regular
business hours in the Wireless Telecommunications Bureau Public Reference Room, Room 5608,
2025 M Street N.W., Washington, D.C. 20554.

     Action by the Commission on January 12, 1999.

     For further information concerning this proceeding, contact Ken Burnley or Arthur
Lechtman, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, at
(202) 418-0660.



                              - FCC -