Subject: [NEXTEL-1] Request of Southern Communications Services, Inc. and the United Telecom Council for Postponement of Auction No. 55 (900Mhz)

From: [email-masked]
Date: Tue, 16 Dec 2003 18:22:44 -0500

Good Read Shows The FCC Mindset........
------------------------------------------------
Before the
Federal Communications Commission
Washington, D.C. 20554

In the Matter of

Request of Southern Communications Services, Inc. and the United Telecom Council
for Postponement of Auction No. 55 )
ORDER

   Adopted:  December 12, 2003 Released:  December 12, 2003

By the Chief, Auctions and Spectrum Access Division, Wireless Telecommunications
Bureau:

I. INTRODUCTION

1.   We have before us a request jointly filed by Southern Communications
Service, Inc. and the United Telecom Council (“Petitioners”) for postponement of
Auction No. 55,  the auction of Specialized Mobile Radio (“SMR”) Service
licenses in the 896-901 MHz and 935-940 MHz bands scheduled to commence on
February 11, 2004.   The Petitioners request a postponement of Auction No. 55
until after Commission resolution of the pending 800 MHz Public Safety
proceeding.   For the reasons set forth below, we deny the Petitioners’ request.

II. BACKGROUND

2.  On September 17, 2003, the Wireless Telecommunications Bureau (“Bureau”),
acting under delegated authority, released a Public Notice announcing the
scheduling of Auction No. 55 and seeking comment on a variety of procedures for
Auction No. 55.   The Bureau issued the Auction No. 55 Comment Public Notice
pursuant to delegated statutory authority over the timing of auctions.
Consistent with our statutory obligation to ensure that potential bidders have
adequate time before the auction to familiarize themselves with the specific
rules and procedures that will govern the auction, on October 17, 2003, the
Bureau released a public notice announcing the procedures and minimum opening
bids for Auction No. 55.   On November 14, 2002, Petitioners filed their joint
request for the postponement of Auction No. 55 pending resolution of the 800 MHz
Public Safety proceeding.

III. DISCUSSION

3. Petitioners contend that Section 309(j)(3)(E)(ii) of the Communications Act
requires that we postpone Auction No. 55 until after resolution of the 800 MHz
Public Safety proceeding.   Petitioners also assert that such a postponement of
Auction No. 55 would be consistent with previous instances in which the
Commission has exercised its discretion to postpone auctions.   Finally,
Petitioners maintain that postponement of Auction No. 55 would be in the public
interest.
4. Petitioners argue that uncertainty surrounding the 800 MHz Public Safety
proceeding makes it difficult for prospective bidders in Auction No. 55 to
develop business plans, formulate bidding strategies or assess the viability of
the 900 MHz spectrum for their operations.   Therefore, Petitioners argue, the
Commission must postpone the auction in order to comply with Section
309(j)(3)(E)(ii).   We disagree.  Section 309(j)(3)(E)(ii) provides, in
pertinent part, that after the issuance of bidding rules the Commission shall
“ensure that interested parties have a sufficient time to develop business
plans, assess market conditions, and evaluate the availability of equipment for
the relevant services.”   We do not believe that the statutory requirement to
provide prospective bidders with time to develop a business plan and evaluate
the availability of equipment requires the Commission to postpone an auction
until every external factor that might influence a bidder’s business plan is
resolved with absolute certainty.  We also note that, while Section 309(j)(3)(E)
directs the Commission to provide interested parties adequate time to prepare
prior to an auction, the statute also requires that the Commission promote
several other objectives in exercising its competitive bidding authority,
including the rapid deployment of new technologies and services to the public,
promotion of economic opportunity and competition, recovery for the public of a
portion of the value of the spectrum, and efficient and intensive use of the
spectrum.   In balancing these objectives, we determine that the public interest
would be served by proceeding with the auction as scheduled.
A. Prior Auction Scheduling Decisions

5. In support of their request to postpone Auction No. 55, Petitioners cite
several instances in which the Commission has postponed other auctions.
Petitioners’ reliance on these previous postponements is misplaced.  In specific
instances, the Commission has postponed auctions because of one or more
unresolved issues directly relating to the licenses or spectrum to be
auctioned.   However, the Commission has not postponed an auction because of
applicant concerns stemming entirely from unresolved issues in a rulemaking that
does not directly relate to the licenses being auctioned.

6. Petitioners err in claiming that the Commission has postponed auctions if
pending rulemakings or auctions involving other bands could possibly impact
decisions concerning the spectrum available in the auction.   Contrary to
Petitioners’ assertions, the Upper 700 MHz band auction (Auction No. 31) was not
postponed for the purpose of delaying that auction until the close of the
broadband PCS C and F block auction.   The paramount reasons for the
postponement of Auction No. 31 from September 6, 2000 until March 6, 2001, were
to allow bidders sufficient time to develop business plans and assess market
conditions in light of both the existence of incumbent UHF television operations
using the spectrum that was to be assigned in that auction and to prepare for
combinatorial bidding, a new approach to bidding that was to be implemented for
the first time.   The Commission also sought to provide prospective bidders with
an opportunity to plan for and negotiate voluntary band clearing agreements with
incumbent broadcasters in the band.   After explaining its primary reasons for
the postponement, the Commission merely noted that “another factor” favoring
postponement was the view expressed by some commenters that they could better
assess their 700 MHz spectrum needs if Auction No. 31 followed the broadband PCS
C and F block auction.

7.  Moreover, Petitioners erroneously assert that the Commission further delayed
the Upper 700 MHz auction because pending rulemaking proceedings concerning the
implementation of Advanced Wireless Services (“AWS”) in other bands could
influence the behavior of prospective bidders in Auction No. 31.   Although some
commenters suggested that the Commission should not auction the 700 MHz band
until after the AWS proceeding is concluded,  the Bureau did not endorse this
view in its decision.   Of four previous auction postponements cited by the
Petitioners,  in only one of those instances, Auction No. 21, did the Commission
postpone the auction for the express purpose of providing potential bidders an
additional opportunity to evaluate the spectrum to be licensed.   In that case,
the circumstances that led to the postponement were distinguishable from the
circumstances presented in Auction No. 55.  In Auction No. 21, prospective
bidders on licenses in the Location and Monitoring Service sought additional
time to consider information on federal government primary users occupying the
same band.   The information on federal usage of the spectrum to be auctioned
had not been released by the National Telecommunications and Information
Administration (“NTIA”), and the postponement gave bidders an opportunity to
consider the deployment and technical information that NTIA was compiling at the
time the auction had been initially scheduled.   In contrast, Petitioners here
seek to delay an auction of spectrum in one band while they wait to see if any
decision the Commission might make regarding spectrum in a different band would
indirectly affect licensees in the first band.  If we were to accept
Petitioners’ general arguments for postponing Auction No. 55 until the
elimination of any alleged “uncertainties,” subsequent spectrum auctions would
be at risk of substantial postponement while the Commission resolves the myriad
issues that parties raise in various proceedings in attempts to circumvent
auctions for their individual purposes.

8.  The additional auction postponements Petitioners cite as examples also do
not support their position.   The Commission postponed the LMDS auction (Auction
No. 17) to enable applicants to take advantage of a specific World Trade
Organization agreement to pursue additional sources of capital to finance their
bids.   The Commission postponed Auction No. 37 because the non-reserved FM band
allotments included in the auction would be directly affected by the
Commission’s proceeding to address a federal court of appeals decision
pertaining to noncommercial educational applicants for such channels.   Finally,
the Commission postponed Auction No. 19 because of a demonstrated absence of
demand for licenses in the 4660-4685 MHz band.   None of these postponements
provides support for a postponement of the 900 MHz SMR auction.  The reasons for
postponement in those instances are distinguishable from the reasons Petitioners
present.  Petitioners have provided as reasons nothing more than speculation
about the possible indirect impact that decisions regarding the 800 MHz band may
have on a limited portion of the 900 MHz band.  Moreover, we strongly disagree
with Petitioners’ premise that the comments received from prospective bidders
regarding the minimum opening bids and auction procedures serve as a measure of
interest in the spectrum to be auctioned.  We reject Petitioners’ speculation
that the reason for a prospective bidder’s absence of comment is disinterest in
the auction rather than its agreement with the procedures proposed.
B. Petitioners’ Concerns Regarding Outcome of 800 MHz Public Safety Proceeding

9. We find no merit in Petitioners’ arguments based on conjecture and
speculation about potential outcomes of the 800 MHz Public Safety proceeding.
Petitioners contend it is difficult for prospective bidders to develop business
plans or formulate bidding strategies for Auction No. 55 because they believe
that certain proposals advanced by parties to that proceeding could have impacts
on the 900 MHz band.   Petitioners claim that the band might become either
non-commercial in nature or might take on a more commercial character, if the
Commission chooses to adopt certain alternative proposals that have been
advanced in the 800 MHz Public Safety proceeding, and that any such changes
could impact the interference environment for new 900 MHz SMR licensees.
Petitioners also state that they “cannot ascertain” the kinds of equipment that
will be available to auction winners because certain outcomes concerning 800 MHz
band interference issues could affect the availability of equipment for
commercial operations in the 900 MHz band by changing manufacturers’ incentives
to develop and produce new equipment.   Any of these developments, Petitioners
argue, could alter the demand for the 900 MHz band spectrum, and how prospective
bidders value it.

10. First, we disagree with Petitioners’ assertion that Nextel’s proposal, if
adopted, would effectively reallocate the band for non-commercial use.   Even
were the Consensus Parties proposal adopted and some incumbent 800 MHz licensees
relocated to the 900 MHz band, we do not believe that this possibility is
sufficient reason to delay the scheduled auction.  Moreover, the Consensus
Parties' proposal is not dependent on the availability of the 900 MHz SMR
licenses that are included in the Auction No. 55 inventory.  Second, we are not
persuaded that the prospect of more intensive use of the 900 MHz band is a sound
basis for postponing Auction No. 55.  Although it is possible that more
intensive use of the spectrum might generate greater interference, such an
outcome is not certain and could occur independently of any decision the
Commission might make with respect to the 800 MHz band.  If Petitioners are
concerned that incumbent licensees in the 900 MHz band might make more intensive
use of the band and create additional interference, they may factor their
opinions into their business plans and bidding strategies.  Third, we decline to
postpone Auction No. 55 based on Petitioners’ speculation that bidders might not
be able to ascertain the full range of equipment that will be available for 900
MHz operations.  Even if Nextel were to vacate the 900 MHz band, a result that
is far from certain, we have no evidence that equipment manufacturers are likely
to stop producing equipment for use by the remaining licensees operating in the
band.  Moreover, even absent Nextel’s relocation proposal, bidders have no
guarantee that any number of other events may or may not occur that would affect
the type of equipment that manufacturers will market.  We believe the
“uncertainties” Petitioners allege are not unlike those many bidders face before
participating in a spectrum auction.  Like other bidders, Petitioners may factor
their concerns into their bids and bidding strategies.

11. We also reject Petitioners’ suggestion that we should postpone Auction No.
55 because of the possibility that Nextel’s 900 MHz SMR licenses could be
cancelled pursuant to applicable construction requirements, based on the
circumstances under which Nextel was granted an extension of those
requirements.   Petitioners argue that cancellation of Nextel’s licenses would
increase the number of licenses available for auction, and accordingly increase
participation in the auction.   We find Petitioners’ reasoning to be highly
speculative.  Notwithstanding views expressed by a small number of commenters,
Nextel’s compliance with its construction deadlines is not at issue in the 800
MHz Public Safety proceeding.  Nor is it currently the subject of any other
pending proceeding.  Therefore, we will not consider the possibility of adding
to our auction inventory as a reason to postpone Auction No. 55.
C. Public Interest Objectives

12. Finally, we do not agree with Petitioners’ contention that a postponement of
Auction No. 55 would serve the public interest.  Petitioners argue that a
postponement would be in the public interest because an auction of the 900 MHz
SMR licenses as scheduled, prior to resolution of the 800 MHz Public Safety
proceeding, (1) would decrease the Commission’s flexibility in resolving issues
addressed in the 800 MHz Public Safety proceeding;  (2) would not ensure that
the spectrum would be won by the parties that value it most highly;  and (3)
would reduce participation in the auction and thus reduce the amount of revenue
the Commission receives for the spectrum.   We reject these arguments for the
reasons stated above, and disagree with the Petitioners’ assertion that holding
Auction No. 55 as scheduled would be an obstacle to resolution of the issues in
the 800 MHz band.  For the same reasons, we reject Petitioners’ claim that under
its current schedule, participation in Auction No. 55 will be limited and that
parties that win the licenses will not value them most highly.  Further, we find
that grant of Petitioners’ request to postpone Auction No. 55 would not serve
the public interest, because doing so would defeat the underlying policy
objectives set forth in Section 309(j)(3).   As discussed above, Petitioners’
insubstantial arguments on the merits do not warrant the extraordinary relief
they seek.

IV.       CONCLUSION

13. Accordingly, IT IS ORDERED pursuant to sections 1, 4(i), 4(j), and 303(r) of
the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i), 154(j),
303(r), 309(j)(3) and the
 authority delegated pursuant to section 0.331 of the Commission's rules, as
amended, 47 C.F.R. §§ 0.131(c), 0.331, that the Request for Postponement of
Auction No. 55 filed jointly by Southern Communications Service, Inc. and the
United Telecom Council on November 14, 2003, IS DENIED.

      FEDERAL COMMUNICATIONS COMMISSION

      Margaret W. Wiener
      Chief, Auctions and Spectrum Access Division
     Wireless Telecommunications Bureau

Yahoo! Groups Links

To visit your group on the web, go to:
 http://groups.yahoo.com/group/NEXTEL-1/

To unsubscribe from this group, send an email to:
 [email-masked]

Your use of Yahoo! Groups is subject to:
 http://docs.yahoo.com/info/terms/

---

From: [email-masked]
Date: Tue, 16 Dec 2003 18:30:16 -0500

Durning the Old 900 MHz auction there were too many bogus bidders bidding for
themselves and their clients. Let us see if these players reappear.

 

Yahoo! Groups Links