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A. 1. a.(1)(a) i) a) 1. 1 1. 1.(1)(a) i) a)#Xj\  P6G;XP#ѐdddodYYYYYYdzYzYzYzYdddddddCdCdCCCdNCdz8zCzCzCz8dddddCCCoNoNoNoNzCzCzCdddddzYzYNF2[dCYddddd7>d<d<$YYdCCddooCYQDFootnote;Íčfootnote tex#<'p #FxX  Pg9CXP#header=Ax 4 <D  #FxX  Pg9CXP# reference>;#FxX  Pg9CXP#2J?~E@iFA^GBO[IitemizeX1?&V 8F ` hp xr#FxX  Pg9CXP#header2@I ` hp x`    #FxX  Pg9CXP# heading 3AF` hp x #FxX  Pg9CXP# footer!B!!#d\  PCP#2QLJL(MLtO"S^2CoddȧCCCdr2C28ddddddddddCCrrrdzNdzoȐC8CtdCdoYoYCdo8Co8odooYNCodddYO,OhC2CC!CCCCCCCCCCo8dddddȐYYYYYN8N8N8N8oddddooooddoddddzoddYYYYoYYYYdddddooNoNoNCNodCo8CCC8oooddȐYYYoNoNoNoNCCCooooȐdYYNF2ldCddddddd<d<+oodCCddddCo1  X-ԍ GTE Petition at 14. > GTE finds the rules regarding movement from one stage to the next, with the associated minimum required increase in activity levels, particularly troubling. Under these rules, GTE maintains, a bidder may be forced to submit a relatively high bid on properties with little standalone value at an early stage of the auction in order to ensure that the bidder can continue to participate in subsequent stages of the bidding with respect to all markets in which it is interested. GTE further notes that the present rules restrict a bidder's ability to alter bidding plans if information revealed during the latter stages of the auction causes the bidder to become interested in additional properties. Rather, GTE alleges that the  Xy-rule encourages artificial bidding activity that is inconsistent with the bidder's true intent.=y[  X-ԍ Id. at 1617.= GTE argues that instead bidders should only be required to be active on a single license in  XK-each round.3K  X !-ԍ Id.3 GTE maintains that this approach would afford maximum flexibility for  X4-qualified entities to adapt their bidding strategies to the activities of the other applicants.:4  X#-ԍ Id. at 18.:  X-x 10. Decision. The issues raised by GTE concerning the threestage activity rule, and the alternative activity rule proposed by GTE, were considered in the reconsideration of the"t0*(("  X-Second Report and Order.x  Xy-ԍ Second Memorandum Opinion and Order, FCC 94215 at  1417.x We concluded at that time that no changes in our existing procedures were needed. We see no reason to revise that conclusion.  X-x 11. As we discussed in the Second Memorandum Opinion and Order, we do not believe, despite GTE's assertion, that the threestage activity rule that we chose as our preferred activity rule will excessively restrict bidders' flexibility to bid for desired combinations of licenses, or cause licenses to be awarded to bidders who value them less than  Xc-other bidders.Ec{  X -ԍ Id. at  15.E The rules were expressly designed to counteract the incentive to delay serious bidding that may occur in simultaneous auctions, without unduly limiting bidders' flexibility  X5-to pursue backup strategies and to use new information.d5.  X-ԍ Second Report and Order, 9 FCC Rcd 2348 at  142.d The requirement in the first stage that bidders remain active on onethird of the MHzpops for which they wish to remain eligible constitutes only a minor restriction. By the time the auction enters stage III (if it ever does), bidding strategies should be welladvanced. In fact, we did not exercise our discretion to move the nationwide narrowband auction beyond stage I, so more restrictive rules were not invoked. Nevertheless, the Commission cannot expect all auctions to move as quickly as the nationwide narrowband auction, especially when there are more licenses with greater interdependencies among licenses. Thus, it would not be prudent for the Commission to preclude the use of stages II and III.  XO-x 12. We note that, in the Second Report and Order, we retained the flexibility to decide on an auctionbyauction basis, and to announce by Public Notice before each auction,  X#-whether to use an activity rule, and if so, what type of rule.@#  X-ԍ Id. at  133.@ We retained this flexibility for  X -broadband PCS in the Fifth Report and Order.d   XQ-ԍ Fifth Report and Order, FCC 94178 at  57.d Thus, if experience shows that the threestage rule we adopted is unduly difficult to administer or excessively restricts bidders' flexibility, we will have the option to shift to some other activity rule, including the one recommended by GTE requiring only that bidders be active on a single license in each round.  X- x 13. We wish to make some minor adjustments in the activity rules on our own motion. First, we conclude, after our experience in conducting the nationwide narrowband auction, that we may find it important to move the auctions from one stage to the next at a different pace than would occur under the current activity rule. Accordingly, we retain the discretion to determine and announce during the course of an auction when, and if, to move  X(-from one auction stage to the next, based on a variety of measures of bidder activity (e.g., the percentage of licenses on which there are new bids, the number of new bids, and the"G 0*((" percentage increase in revenue). Bidders will be notified of our intention to move to another stage at least one round prior to the commencement of the next stage of an auction.  X-x 14. We also stated in the Fifth Report and Order that in stage III, a bidder would  X-have to be active on 100 percent of the MHzpops for which it wishes to retain eligibility.K  X-ԍ Id. at  53.K In order to allow bidders greater flexibility, we think that it may be beneficial in auctions where we expect high bidding to reduce this figure slightly, but in no case below 95 percent. We will announce the required activity levels for stage III by Public Notice in advance of each auction.  X -x15. Finally, in the Fifth Report and Order we permitted bidders one waiver from the activity rule during each stage of an auction. A waiver will retain a bidder's eligibility from a previous round even though its bidding activity falls below the required level. We stated that if an activity rule waiver is entered in a round in which no other bidding activity occurs, the auction will remain open, but we stated that we might announce that submission of a  X -waiver would not keep an auction open under any circumstances.G {  X-ԍ Id. at  56, n.37. G  We also stated that a waiver may be submitted either in the round in which bidding falls below the level required to maintain current eligibility, or prior to submitting a bid in the next round. We now wish to clarify that the Commission retains the discretion to modify the method and timing of submitting waivers and to allow for two types of waivers "proactive" waivers and "automatic" waivers. Both types of waivers will retain a bidder's eligibility from the previous round even though its bidding activity in the current round falls below the required level. However, a proactive waiver invoked in a round in which there are no new valid bids will keep an auction open, while an automatic waiver submitted in a round in which no other bidding activity occurs will not keep an auction open. Proactive waivers must be requested by the bidder, but automatic waivers will be submitted automatically for a bidder whenever a bidder's eligibility would be reduced because of insufficient bidding activity and a waiver is available. Bidders will be afforded an opportunity to override the automatic waiver mechanism when they place a bid if they intentionally wish to reduce their bidding eligibility and do not want to use a waiver to retain their eligibility at its current level. We also wish to retain the discretion to change the number of waivers that will be permitted and the frequency with which they may be exercised by Public Notice prior to each auction. As Professor Milgrom, a leading game and auction theorist, notes, a change in the rule for moving from one stage to another may result in many more rounds being completed in one stage, and may  X-make a rule allowing one waiver per stage inappropriate.i .  X$-ԍ Affidavit of Paul R. Milgrom, September 8, 1994 at 9. Professor Milgrom is the Shirley and Leonard Ely, Jr. Professor of Humanities and Sciences and Professor of  X&-Economics of Stanford University and an architect of the activity rule adopted in our Fifth  X'-Report and Order. i Airtouch also recommends" 0*(("  X-allowing bidders more flexibility in choosing when to use waivers.!  Xy-ԍ Ex parte submission of Airtouch Communications, Inc. (Airtouch), Sept. 29, 1994.  X-x ` ` 3. Stopping Rule  X- x16. In the Fifth Report and Order, we adopted a simultaneous stopping rule for all licenses in an auction. We determined that this approach, which holds bidding open on all licenses until no new acceptable bid is offered on any license, would provide bidders full  Xa-flexibility to modify their bidding strategy as more information became available.e"a{  X -ԍ Fifth Report and Order, FCC 94178 at  4647.e We  XJ-further concluded that our activity rule (discussed supra) would help establish a reasonable  X5-pace and minimize the risk that bidders would hold back their bidding until the final rounds.3#5.  X-ԍ Id.3 Because of the large number of BTA licenses, however, we retained the discretion to use a hybrid stopping rule or to allow bidding to close individually for BTA licenses if we  X -determine our present rule is too complex.?$   X-ԍ Id. at  47.? In addition, we retained discretion to declare at any point after 40 rounds in a simultaneous multiple round auction that the auction will end  X -after some specified number ( probably three) of additional rounds.?%   X-ԍ Id. at  48.? We decided, however,  X -that if the Commission exercises this authority we would accept bids in the final round(s) only for licenses on which the highest bid had increased in at least one of the preceding three  X}-rounds.?&}G  Xu-ԍ Id. at  49.?  XO-x17. Petitions. Metrex Communications Group (Metrex) and GTE both comment on the Commission's stopping rules. Metrex encourages the Commission to adopt an individual stopping rule for all BTA licenses. Specifically, Metrex requests that the Commission employ a marketbymarket stopping rule pursuant to which bidding would close on each BTA if no  X-acceptable bids are received after five rounds of bidding.{'  X!-ԍ Metrex Petition for Reconsideration (Metrex Petition), filed Aug. 22, 1994, at 3.{ A marketbymarket stopping rule, Metrex argues, would provide entrepreneurs' block bidders the necessary certainty to develop  X-and implement regional licensing strategies.;(  X!%-ԍ Id. at 34.; GTE requests that the Commission decline to exercise its discretion to announce, after forty rounds, that the auction will close after an" ^(0*(("  X-additional three rounds.=)  Xy-ԍ GTE Petition at 18.= GTE maintains that such action would effectively reduce the  X-auction to the equivalent of a first price sealed bid auction.:*y  X-ԍ Id. at 19.: Instead, GTE supports the Commission's determination that the auction should terminate for all markets once a single  X-round passes in which no acceptable bids are submitted for any license.3+,  X-ԍ Id.3  X-x18. Decision.  We reaffirm that, as we stated in the Fifth Report and Order, we will  Xx-in most cases use a simultaneous stopping rule for simultaneous auctions.d,x  X -ԍ Fifth Report and Order, FCC 94178 at  47.d We continue to believe that a simultaneous stopping rule has important efficiency advantages in allowing bidders to pursue backup strategies and to take advantage of new information from earlier bids. Further, we do not believe that a simultaneous stopping rule will prevent the implementation of regional strategies. We believe bidding activity in early rounds will provide significant information about the value of licenses to competing bidders. If bidding takes unexpected turns, it is precisely the fact that bidding on all licenses remains open to the end that will give bidders the flexibility to adopt a new strategy if an original one proves less desirable than anticipated. Moreover, bidders have the option of withdrawing high bids during an auction, subject to the applicable penalties, if they find they have bid too high on one license in the expectation of getting a complementary license at a low price.  Xd-x19. Our experience in the nationwide narrowband auctions bears out this conclusion. Individual licenses often had no new bids for several rounds, followed by active bidding and  X6-steep increases in bids.e-6  Xy-ԍ See Affidavit of Paul R. Milgrom, Sept. 8, 1994 at 2.e Allowing bidding to close on licenses individually, while bidding remains active on others, creates a risk of closing on some licenses before the final value has been reached, decreasing the likelihood that the license will be awarded to the bidder that values it most and reducing the revenues generated. In addition, as Professor Milgrom points out, individual closing might encourage strategic bidding that would reduce the efficiency of  X-the auction.3.E  X!-ԍ Id.3 Hence, we decline to adopt Metrex's recommendation that the Commission adopt and immediately announce an individual stopping rule. We note, however, that in the  X-Fifth Report and Order we retained the discretion to use a hybrid or individual stopping rule for BTA licenses if a simultaneous stopping rule proved too complex to administer for large  Xi-numbers of licenses.e/i  X'-ԍ Fifth Report and Order, FCC 94178 at  47. e We will announce the specific stopping rule to be used for BTA"i /0*((1" licenses by Public Notice prior to each auction.  X- x20. As for the option of declaring that the auction will end after some specified number of additional rounds, we agree with GTE that this procedure would likely result in less efficient allocation of licenses, and lower revenues, than allowing the auction to remain  X-open as long as new bids are received.@0  X-ԍ GTE Petition at 1819.@ We note that we have other methods to hasten the end of an auction, including shortening the bidding rounds, raising the minimum bid increments, and proceeding to a later auction stage. We wish to retain the option of declaring the imminent end of the auction, however, as a fallback in case of extremely dilatory bidding. We note that the procedure is only a permitted option, and we do not expect to use it except in the unlikely case that other methods fail to bring about the close of an excessively long  X -auction.15 y  X--ԍ Fifth Report and Order, FCC 94178 at  48. We stated that if we used this closing procedure we would accept bids in the final round(s) only for licenses on which the highest bid increased in at least one of the preceding three rounds. Thus, the procedure would incorporate a form of individual closing. It would encourage active bidding on all desired licenses in the later stages of an auction to prevent losing licenses through unexpected closings, and would ensure high bidders that they would not lose a license without having an  X-opportunity to make a counteroffer. Id. at  49. This procedure would impose the certainty Metrex seeks for the final bids of an auction, but would not allow the development of extended regional bidding strategies because it would occur only at the end of the auction.   X -XxX` ` 4.X Duration of Bidding Rounds (#  X -x21. In the Fifth Report and Order, the Commission decided that bidders would be provided a single business day to submit bids and that one round of bidding would be  X{-conducted each business day.?2{v  X-ԍ Id. at  50.? However, we retained discretion to vary, by Public Notice or announcement, the duration of bidding rounds or the interval at which bids are accepted, in  XM-order to move the auction toward closure more quickly.33M)  X' -ԍ Id.3  X-x22. Petition. McCaw requests that the Commission lengthen its bidding rounds to  X-ensure that bidders have sufficient time to submit wellinformed bids.4  X$-ԍ McCaw Petition for Reconsideration (McCaw Petition), filed Aug. 22, 1994, at 3; Reply of McCaw Cellular Communications, Inc. (McCaw Reply), filed Sept. 19, 1994, at 67. Noting that bidding decisions are likely to require frequent consultation with lenders, corporate board members, technical staff and any joint venture partners, McCaw alleges that one business day per round" v40*(("  X-is likely to be too short to afford fullyinformed bidding.@5  Xy-ԍ McCaw Petition at 34.@ Additionally, McCaw maintains that it will take considerable time for bidders to input auction data, analyze it, and formulate  X-their next bid, unless the Commission electronically makes bidding information available.96y  X-ԍ Id. at 4.9  X-x23. Decision. In the Fifth Report and Order, we discussed our discretion to vary the duration of bidding rounds or the interval at which bids are accepted as a tool for moving  Xx-auctions toward closure more quickly.Z7x,  XU -ԍ Fifth Report and Order, 94178 at  50.Z We anticipated that holding one round of bidding per day might allow bidders more time than necessary to formulate their bids and might result in excessively long auctions. We still believe that our planned oneday bidding rounds are more likely to be too long than too short. We find it likely that McCaw overestimates the time required between rounds to formulate bids, particularly since much of the work of estimating the values of licenses, developing business plans, and arranging financing can be done in advance of the auction. Further, as Professor Milgrom points out, under McCaw's proposal  X -the broadband auction might last as much as two years.[8   Xg-ԍ Affidavit of Paul R. Milgrom, Sept. 8, 1994 at 5.[  X -x24. We wish to clarify that we retain the discretion to lengthen as well as shorten the duration of bidding rounds or the interval at which bids are accepted, and will lengthen the time allowed for bidding if we see evidence during the auctions that bidders are prevented by the bidding schedule from developing rational, wellinformed bids. Nevertheless, it is more likely that we will shorten bidding rounds than that we will lengthen them because we believe that doing so will expedite provision of PCS service to the public without reducing the efficiency of the auction. We believe it is extremely unlikely that we will hold more than two rounds per day, though we may start with one round per day and move to two rounds per day after the first week if it appears that this schedule will allow bidders enough time to formulate their bids.  X-x25. We agree with Pacific Bell that prospective bidders may find it important to know the time parameters of bidding rounds as early as possible. We do not believe we have enough information at present to set an appropriate minimum duration for bidding rounds. We will continue to consider this issue as the broadband PCS auctions approach in light of the experience we gain in the regional narrowband auctions.  X"-x` ` 5. Timing for Auctioning Specific Spectrum Blocks (#  X-x26. In the Fifth Report and Order, the Commission decided to auction the broadband PCS spectrum at three separate auctions. The 99 available PCS licenses in MTA blocks A" 80*((;" and B will be auctioned first, followed by the 986 PCS licenses in BTA blocks C and F (the entrepreneurs' blocks). In the last auction, the remaining 986 licenses in BTA blocks D and  X-E will be put up for bid.^9  XK-ԍ Fifth Report and Order, FCC 94178 at  37.^ The Commission reasoned that this grouping strikes a proper balance among the competing concerns of awarding licenses to the parties who value them most highly, keeping the auction process simple and manageable, minimizing administrative  X-delay, and fostering designated entity participation.F:{  X-ԍ Id. at  3740.F  X_-x27. Petitions. Columbia PCS, Inc. (Columbia), National Paging and Personal Communications Association (NPPCA), Pacific Bell Mobile Services (Pacific Bell), Small  X1-Business PCS Association (SBPCS), and USIMTA petitioned on this issue.\;_1.  X-ԍ Columbia Petition for Reconsideration (Columbia Petition), filed Aug. 22, 1994, at 89; NPPCA Petition for Reconsideration (NPPCA Petition), filed Aug. 22, 1994, at 8; Pacific Bell Petition for Reconsideration and Clarification (Pacific Bell Petition), filed Aug. 22, 1994, at 13; SBPCS Petition for Reconsideration (SBPCS Petition), filed Aug. 22, 1994, at 4; USIMTA Petition for Reconsideration (USIMTA Petition), filed Aug. 22, 1994, at 4; NPPCA Reply and Comments to Oppositions to Petitions for Reconsideration (NPPCA Reply), filed Sept. 19, 1994, at 45.\ Several parties advocate that the entrepreneurs' block licenses (on blocks C and F) be auctioned before, or at  X -approximately the same time as, the MTA block licenses.m< U  X -ԍ NPPCA Petition at 8; SBPCS Petition at 4; Columbia Petition at 89.m These petitioners allege that this approach is needed to ensure that the block A and B licensees do not gain a competitive advantage through a head start to the market. NPPCA also argues that BTA licenses in the entrepreneurs' blocks should be auctioned first, to encourage large, nondesignated entities to invest in, or partner with, designated entities earlier in the process. NPPCA further argues that the large companies that could help to finance designated entities are holding back until the A and B block auctions occur. USIMTA requests that BTAs be licensed before the MTAs, noting that the Commission's present scheme underestimates the advantage that large companies will have in bidding for nonreserved BTAs after the MTAs. USIMTA argues that auctioning the BTA licenses first will give designated entities a realistic opportunity to acquire  X-licenses before their value is artificially increased by the demand of MTA licenses.?=  X!-ԍ USIMTA Petition at 4.? In addition, Pacific Bell requests that the Commission auction the BTA licenses that correspond to the territory for which pioneer preferences were awarded simultaneously with the remaining" =0*(("  X-MTA licenses in those areas.>  Xy-ԍ Pacific Bell Petition at 1; Reply of Pacific Bell Mobile Services to Comments/Oppositions to Petitions for Reconsideration of the Fifth Report and Order (Pacific Bell Reply), filed Sept. 22, 1994, at 78. BET Holdings, Inc. (BET) in its comments requests that the Commission affirm the sequence of the PCS auctions, arguing that any market advantage afforded successful A and B block bidders from entering the market before the designated entities will be more than offset by the availability of price information and the accessibility  X-of capital made available to designated entities by frustrated early bidders.?K  X -ԍ BET Comments on Petitions for Reconsideration and Clarification (BET Comments), filed Sept. 9, 1994, at 1819.  Xv-x28. Decision. In the Fifth Report and Order, we decided not to auction all broadband PCS licenses at the same time because of the cost and complexity of auctioning a very large  XJ-number of interdependent licenses simultaneously.d@J  X-ԍ Fifth Report and Order, FCC 94178 at  36.d We attempted to divide the licenses into three groups by combining those licenses that are most closely related to minimize  X -interdependence across groups.3A   Xe-ԍ Id.3 We stated that auctioning licenses in the entrepreneurs' blocks after those in the 30 MHz unrestricted blocks would assist designated entities in attracting partners among unsuccessful bidders for the 30 MHz unrestricted licenses, and that the auction of the large unrestricted blocks would produce price information that would be  X -valuable to designated entities in their business planning.?B K  X-ԍ Id. at  39.?  X-x29. We continue to believe that the sequence of auctions of broadband licenses  X{-specified in the Fifth Report and Order will be efficient and will be most beneficial to designated entities, and consequently we decline to make changes in that sequence. We do not believe the alternative sequences proposed by commenters would improve the efficiency or fairness of the auction market.  X -x30. With respect to arguments that we should auction BTA licenses (or at least entrepreneurs' block licenses) before MTA licenses to prevent large firms from getting a head start over designated entities, we believe that such a strategy would be less advantageous to designated entities than the current auction sequence and might reduce the efficiency of the auctions. Because the large firms that are potential partners for designated entities probably would prefer to own outright any licenses they might obtain in an auction, we think it less likely, rather than more likely, that these large firms would form partnership agreements with designated entities if auctions in the restricted blocks were held before the MTA auctions. In addition, we believe that the information about license values conveyed in the MTA auctions"R B0*((" will reduce the risk of BTA financing and partnering and so will be valuable to bidders in the entrepreneurs' block auctions. In addition, it appears to us that a rational strategy for bidders in many cases might be to bid on the largest licenses first and only after the outcome of those auctions is known to attempt to acquire smaller, complementary licenses or, if unsuccessful in the auction for larger licenses, to attempt to aggregate smaller licenses as a backup strategy. In addition, if winners of MTA licenses were willing to bid more than other applicants for complementary BTA licenses, that willingness, we believe, would almost certainly represent true efficiencies of joint operation and ought to be allowed to affect the assignment of licenses.  X -x31. As for auctioning MTA and BTA licenses together in markets with Pioneer's  X -Preference licenses, we continue to believe, as we stated in the Fifth Report and Order, that substituting two 10 MHz BTA licenses for a 30 MHz MTA license is not likely to be a widely used strategy, so that little loss of efficiency would result from auctioning MTA and  X -BTA licenses separately.PC  X9-ԍ See id. at  40. P Further, we believe that bidders will have enough information to make informed bids in all MTA markets. We see no reason to believe that auctioning MTA and BTA licenses separately would have a greater effect on efficiency in markets where Pioneer's Preference licenses have been removed from the auction than in other markets, since the same total amount of spectrum is available for PCS in all markets. Commenters apparently have no objection to the plan to separate MTA and BTA auctions in other markets. In addition, auctioning MTA and BTA licenses together in Pioneer's Preference markets would remove those BTAs from the BTA auctions and thus may impede efficient geographic aggregation of licenses. As Omnipoint points out, the plan would also make it more difficult for entrepreneurs' block winners in those markets to aggregate their licenses with other BTA  X-licenses.ED{  X-ԍ Omnipoint Opposition at 14.E The auctions might also become unnecessarily administratively complex and confusing to bidders if BTAs were auctioned with MTAs in a few but not all markets. Further, changing the grouping of licenses at this stage in the planning process might cause  X-the first auctions to be delayed.E,  Xr-ԍ The petitioner does not advocate changing to the proposed grouping if doing so would delay the auction. Pacific Bell Petition at 3. Consequently we are not convinced that any efficiency advantages would accrue from this strategy, and we will continue to auction MTAs separately  Xg-from BTAs in all markets.Fg  X"-ԍ Pacific Bell suggests as an alternative that the Commission combine all BTA licenses  X#-in a single auction. Id. Leaving aside the increased size of the resulting auction and the complexities of auctioning restricted and unrestricted blocks together, we fail to see how this proposal addresses the issue of lack of substitutes for the Block B MTA licenses in Pioneer's Preference markets.   XP- x"P F0*(("Ԍ X-x32. We agree with commenters, however, that auctioning the MTA blocks far ahead of other blocks would give a head start to the winners in the MTA blocks that would likely afford them some competitive advantage over winners in later auctions. Consequently, we intend to hold the three broadband auctions as close together in time as possible given our administrative resources. We decline to delay finalizing the award of A and B block licenses, however, because of the overriding public interest in rapid introduction of service to the public.  XH- xB.` ` Application, Payment and Penalty Procedures (#`  X -x` ` 1. Authority to Adopt Filing and Processing Rules (#  X -x 33. In the Notice of Proposed Rule Making (Notice) in this proceeding, the Commission stated: XxIn order to avoid needless duplication, we propose that the following general filing and processing rules apply to all PCS: Sections 22.322.45, 22.917(f), and 22.91822.945. For those PCS applicants who file on Form 574, we believe that Sections 90.11390.159 of our rules, 47 C.F.R.  90.11390.159,  XM-could be used to process those applications with appropriate modifications.GM  X-ԍ Notice of Proposed Rule Making in PP Docket No. 93253, 8 FCC Rcd 7635 (1993) at  X- 128 (Notice).   X-x!34. Petition. The Association of Independent Designated Entities (AIDE) alleges that the Commission acted improperly in adopting substantive PCS applicationprocessing rules because, it argues, such rules are outside the scope of this proceeding, which is limited to implementation of the competitive bidding requirements of  309(j) of the Communications  X-Act.{Hf  X-ԍ AIDE Petition for Reconsideration (AIDE Petition), filed Aug. 22, 1994, at 1924.{ AIDE argues that the Commission's proposal is legally insufficient to constitute a valid notice of the proposed rules, and that some of the rules cited have no immediate applicability  X-to PCS service.=I  X]-ԍ Id. at 1920.= AIDE concludes that the Commission must initiate a supplemental Notice of  X-Proposed Rule Making in order to adopt any substantive applicationprocessing rules for  Xk-PCS.:Jk  X"-ԍ Id. at 22.:  X=-x"35. Decision. We disagree with AIDE and will not issue a supplemental Notice as it  X&-requests. Indeed, we have addressed AIDE's argument previously in the Fifth Report and"&}J0*(("  X-Order.^K  Xy-ԍ Fifth Report and Order, FCC 94178 at  82.^ AIDE also raised a similar notice argument concerning the adoption of PCS  X-processing rules on reconsideration of our Second Report and Order on auctions.L{  X-ԍ See Second Memorandum Opinion and Order, FCC 94215 at  5860. Our  X-response, once again, is that our Notice sought comment on specific rule sections contained in Parts 22 and 90 of our Rules, and asked commenters to indicate what modifications should be  X-made to those rules to adapt them for PCS services.SM.  X -ԍ Notice, 8 FCC Rcd 7635 at  128.S In addition, the Notice specifically requested comment on the general procedural, processing and petitiontodeny procedures that  X~-should be used for auctionable services.HN~  X -ԍ Id. at  95114. H The Notice's proposal to adopt processing rules based on Parts 22 and 90 of the Commission's Rules, with any appropriate modifications for PCS services, clearly indicated to commenters the terms of the proposed rules, as is required  X;-by the Administrative Procedures Act and the Commission's Rules (see 5 U.S.C.  553 and 47 C.F.R.  1.413(c)). Thus, we believe our original description of the proposed rule was sufficiently specific to alert interested parties to the substance of our proposal and to provide an adequate opportunity for comment on those proposals. Several commenters did, in fact,  X -address the proposed application and processing rules set forth in our Notice, a further  X -indication that sufficient notice was provided.O   X-ԍ See Arch Communications Group, Inc. Comments, filed Nov. 10, 1993, at 89, 1819 (application requirements, petitions to deny); AT&T Comments, filed Nov. 10, 1993, at 2935, 38, 4042 (application standard, petitions to deny); Cellular Telecommunications Industry Association Comments, filed Nov. 10, 1993, at 45, 2529 (application requirements, petitions to deny); Comcast Corp. Comments, filed Nov. 10, 1993, at 16 (application requirements); Cox Enterprises, Inc. Comments, filed Nov. 10, 1993, at 68 (application requirements and standard); Liberty Cellular, Inc. Comments, filed Nov. 10, 1993, at 57 (applications requirements, amendment of applications); Pacific Bell Comments, filed Nov. 10, 1993, at 2128 (application standard and requirements, amendment of applications, petitions to deny); Rural Cellular Association Comments, filed Nov. 10, 1993, at 23, 2021 (application requirements and standards). AIDE itself commented on several aspects of the application  X -and processing rules proposed in the Notice. AIDE Comments, filed Nov. 10, 1993, at 1013 (application requirements). We also believe that these issues were within the scope of this proceeding because as a means of assigning licenses, the competitive bidding process is integrally related to rules and procedures for processing of license applications.  Xr-x#36. The broadband PCS rules established in the Fifth Report and Order, and modified here today, adopt several of the procedures set forth in Parts 22 and 90 of the Commission's  XF-Rules and discussed in the Notice. Our minor modifications to the proposed rules were needed to reflect specific concerns related to auctioning broadband PCS licenses, and address"15O0*(( " comments raised by the public. The adopted rules are a logical outgrowth of the rules  X-proposed in the Notice, applied in the context of the use of competitive bidding to assign broadband PCS licenses. Rules adopted as a logical outgrowth comply with all  X-Administrative Procedure Act requirements.P  X6-ԍ Public Service Commission of the District of Columbia v. FCC, 906 F.2d 713, 717  X!-(D.C. Cir. 1990); Small Refiner Lead PhaseDown Task Force v. EPA, 705 F.2d 506, 547 (D.C. Cir. 1983). An agency must be free to adopt a final rule not described exactly in the  X-Notice, where the difference involved is "sufficiently minor," otherwise, agencies could not  X-change a rule in response to valid comments without beginning the rulemaking anew. See  X -National Cable Television Assoc., Inc. v. FCC, 747 F.2d 1503, 1507 (D.C. Cir. 1984).  X- XxX` ` 2.X Disclosure of Bidding Information (#  Xa-x$37. In the Second Memorandum Opinion and Order in this proceeding, the Commission announced that it would generally release the identities of bidders before each  X5-auction.kQ5  X-ԍ Second Memorandum Opinion and Order, FCC 94215 at  42.k The Commission concluded that disclosure was appropriate because of the advantages of providing more information to bidders and the difficulties involved in ensuring  X -that bidder identities remain confidential.9R   X{-ԍ Id.9 The Commission reserved the option, however, to  X -withhold bidder identities on an auctionbyauction basis.3S v  X-ԍ Id.3 Bidders will be informed by Public Notice prior to each auction whether the identities of bidders will be made public in that auction.  X-x%38. Petitions. GTE Service Corporation (GTE) requests clarification that the  X}-Commission will apply the general bidder disclosure policy adopted in the Second  Xh-Memorandum Opinion and Order to the broadband PCS auctions.=Th)  XB-ԍ GTE Petition at 12.= GTE alleges that bidder  XS-disclosure is needed to help bidders formulate successful bidding strategies.3US  X -ԍ Id.3 GTE further argues that bidder disclosure would maximize information flow and efficient bidding without  X%-sacrificing consumer safeguards.=V%  Xc$-ԍ Id. at 1213.=  X-x&39. Decision. As noted in the Commission's Public Notice announcing the first broadband PCS auction, Report No. AUC9404 (released Sept. 19, 1994), we have decided to"@V0*(("  X-apply the bidder disclosure policy adopted in the Second Memorandum Opinion and Order to  X-the first broadband PCS auction. As we indicated in the Second Memorandum Opinion and  X-Order, we will generally identify bidders before each auction.kW  XO-ԍ Second Memorandum Opinion and Order, FCC 94215 at  42.k We reserve the authority, however, to conceal bidder identities if further experience demonstrates it is desirable to do so. Consequently, we reserve the option of withholding bidder identities on an auctionbyauction basis. Therefore, for each broadband auction, we will decide whether to identify qualified auction participants and will announce our decision in a Public Notice released before each auction.  X7-XxX` ` 3.X Short and Long Form Applications (#  X -x'40. The Commission adopted a twopart application procedure in the Fifth Report and  X -Order consisting of short and longform application obligations.^X {  X -ԍ Fifth Report and Order, FCC 94178 at  60.^ The Commission will initiate the application process by Public Notice, announcing when we will accept shortform  X -applications to participate in an auction for specific broadband PCS licenses.FY .  X-ԍ Id. at  61. F The notice, in part, will specify the licenses that will be available, identify the time and place of an auction in the event that mutually exclusive applications are filed, and announce a deadline by which  X-shortform applications must be filed.3Z  X-ԍ Id.3 After an auction, winning bidders will be required to file a longform application. The longform applications must be submitted by a date specified by Public Notice, generally within ten business days after the close of bidding. Upon acceptance for filing of the longform application, the Commission will issue a Public  X'-Notice, which will open the filing window for petitions to deny.?['  Xl-ԍ Id. at  81.?  X-x(41. Petitions. Pacific Bell Mobile Services (Pacific Bell) requests clarification that the Commission will establish shortform filing deadlines prior to each separate auction,  X-instead of a single submission date for all three auctions.G\G  X!-ԍ Pacific Bell Petition at 45.G Pacific Bell maintains that this clarification is needed to provide flexibility in formulating backup strategies. Pacific Bell also requests that the Commission issue separate Public Notices announcing the submission of  X-longform applications after each auction.9]  X/&-ԍ Id. at 8.9 Pacific Bell alleges that separate notices would facilitate the expeditious deployment of PCS services."o ]0*((O"Ԍ X-ԙx)42. Decision. As demonstrated by our September 19, 1994 Public Notice announcing the first broadband PCS auction, we plan to announce the deadlines for submitting shortform and longform applications separately for each broadband PCS auction. We intend to establish a separate submission date for each auction, as Pacific Bell requests. Indeed, we have been conducting the process in this manner for narrowband PCS. Thus, we plan to specify by Public Notice prior to each broadband auction the filing date for shortform applications and the accepted applications for each auction. Similarly, we plan to specify by Public Notice after each auction is conducted the longform filing dates and accepted long form applications. Our experience with the nationwide narrowband PCS auctions to date shows that these procedures work well to facilitate efficient operation of the competitive bidding process. We do reserve the right, however, to alter these procedures if we find there is a need to do so in the future.  X -Xx` ` 4. Upfront Payments (# x  X -x*43. In establishing its auction methodology for PCS, the Commission set forth several provisions to ensure that winning bidders will have the resources needed to obtain their licenses and construct their systems and to discourage insincere bidding. For example, shortform applicants must certify that they are financially qualified pursuant to Section 308(b) of the Communications Act, and must disclose certain information concerning the real party or  X4-parties in interest (e.g., major stockholders, partners, joint ventures).^4  X-ԍ Second Report and Order, 9 FCC Rcd 2348 at  166; Fifth Report and Order, FCC 94178 at  62. Additionally, the Commission requires accepted shortform applicants to make a substantial upfront payment,  X-and has established significant bid withdrawal and default penalties._d  X-ԍ Fifth Report and Order, FCC 94178 at  6571, 7577. Specifically, we require an upfront payment of $0.02 per pop per MHz for the largest combination of MHzpops a bidder anticipates bidding on in any single round of bidding. Payments must be made to the Commission's lockbox bank by a date certain, which we will announce in a Public Notice and which generally will be no later than 14 days before the scheduled auction.  X-x+44. Petitions. Roland A. Hernandez (Hernandez) and GTE petition on the issue of upfront payments. Specifically, Hernandez requests that the Commission require bidders to demonstrate their ability to pay the entire down payment and meet the terms of an installment  X-payment plan when the shortform application is filed.`  X#-ԍ Hernandez Petition for Reconsideration (Hernandez Petition), filed Aug. 22, 1994, at 5. Hernandez maintains that this modification is needed to keep nonlegitimate bidders from corrupting the bidding process. Hernandez further notes that, to the extent insincere bidders artificially distort the bidding and force out legitimate bidders, the Commission's policy of promoting designated entity"Pl `0*(("  X-ownership is compromised.3a  Xy-ԍ Id.3 In addition, GTE requests that multimarket bidders be  X-permitted to make use of an interestbearing evergreen deposit account for upfront payments.b{  X-ԍ GTE Petition at iii. We note, however, that GTE did not raise this argument in the body of its Petition. GTE maintains that the present rules unnecessarily restrict the flexibility of multimarket bidders to participate in different bidding rounds, and may discourage full and active  X-participation by some interested parties.3c  Xj -ԍ Id.3  Xv-x,45. Decision. With respect to the concerns raised by Hernandez, we believe that the  X_-existing requirements for broadband PCS auction applicants provide an adequate measure of a party's ability to pay. As indicated above, shortform applicants must make a substantial upfront payment and subject themselves to significant bid withdrawal and default penalties in order to participate in the auctions. One of the principal purposes of these requirements is to ensure that only serious and financially qualified bidders participate in the auction. Thus far, our experience with the narrowband PCS nationwide license auction suggests that our requirements are sufficiently stringent to ensure that auction participants have the financial  X -resources to purchase the spectrum for which they intend to bid.dx   X7-ԍ We note, for example, that none of the narrowband auction winners have defaulted on their payment obligations. Hernandez contends that the recent IVDS auction defaults suggest that stricter financial scrutiny is needed for broadband PCS. In this regard, we observe that the financial requirements for both narrowband and broadband PCS are already more stringent  X-than those required for IVDS auction participants. Compare Section 98.16 (c)(3) with Section 24.706.  We will address Hernandez's concern about the ability of designated entities to make their installment payments in our separate reconsideration order on designated entity issues. x  Xb-x-46. Concerning GTE's request, we have considered the issue of paying auction  XK-applicants interest on their upfront payments before in the Second Memorandum Opinion and  X6-Order on auctions. We reject such a proposal for now because of the administrative difficulties that are posed by the need to track and transfer applicant funds, and because we lack the legal authority to engage in such financial activity. We have sought legislative authority in the 1994 House and Senate FCC authorization bills to establish interestbearing  X-accounts so that auction applicants may accrue interest on upfront payments.e  X$-ԍ See H.R. 4522, 103d Cong. 2d Sess., 140 Cong. Rec. H4164 (May 26, 1994); and S. 2336, 103d Cong., 2d Sess., 140 Cong. Rec. S10142 (July 29, 1994). If such authority is granted we may choose to pay interest. "e0*((p"Ԍ X-Xx ` ` 5. Collusion and Settlement Restrictions(#  X-  X-x.47. In the Fifth Report and Order, the Commission prohibited bidders from discussing the substance of their bids or bidding strategies with other bidders, unless such bidders are members of a bidding consortium or other joint bidding arrangement identified on the bidder's  X-shortform application.^f  X-ԍ Fifth Report and Order, FCC 94178 at  91.^ The Commission further required bidders to identify on their Form 175 applications all parties with whom they have entered into any consortium arrangements,  Xa-joint ventures, partnerships or other agreements relating to the competitive bidding process.3ga{  X -ԍ Id.3 We also determined that auction applicants would not be permitted to make any ownership changes or changes in the identification of parties to bidding consortia once a shortform  X -application is filed.?h .  X-ԍ Id. at  63.? We recently modified these rules on reconsideration of our general  X -competitive bidding rules to permit bidders who have not applied for any of the same licenses  X -to enter into bidding agreements during the course of an auction.ki   X-ԍ Second Memorandum Opinion and Order, FCC 94215 at  51.k We also decided to allow applicants to amend their Form 175 applications to make ownership changes after the filing deadline has passed, provided such changes do not result in a change of control of the  X -applicant.?j   X-ԍ Id. at  52.?  X{-x/48. Petitions. McCaw Cellular Communications, Inc. (McCaw) and AIDE request changes to our collusion and settlement restrictions. In particular, McCaw requests that the Commission relax its anticollusion rule to permit bidders to form, during the course of an auction, consortia with other bidders that have dropped out of bidding for a particular license  X-or group of licenses.?kG  X-ԍ McCaw Petition at 10.? McCaw maintains that this revision would help ensure that bidders have greater flexibility to increase their competitiveness in the auction by combining their resources. McCaw further notes that its proposed modification would promote the participation of designated entities, small companies and other entities with limited access to  X-capital.=l  Xl#-ԍ Id. at 1011.=  X-x049. In its petition, AIDE observes that both the Communications Act and the Commission have a wellestablished policy favoring full settlements of mutually exclusive applications, and alleges that the Commission erred in adopting rules which prohibit post"g l0*((O"ԫ X-filing settlements.@m  Xy-ԍ AIDE Petition at 513.@ AIDE maintains that the Commission's prohibition is inconsistent with Sections 309(j)(6)(A) and (E) of the Communications Act, which indicate that settlements are  X-in the public interest.hn y  X-ԍ Id. at 11. Section 309(j)(6) provides: x(6) Rules of Construction Nothing in this subsection [309(j)], or in the use of competitive bidding, shall Xx(A) Alter spectrum allocation criteria and procedures established by the other provisions of this Act;(# x` `  hh*** Xx(E) Be construed to relieve the Commission of the obligation in the public interest to continue to use ... negotiation ... and other means in order to avoid mutual exclusivity in application and licensing proceedings.(#h AIDE further notes that the Commission never explained the  X-regulatory or statutory purposes which its settlement prohibition was intended to satisfy.Do/  X-ԍ AIDE Petition at 11.D Finally, AIDE states that the prohibition against settlements represents poor public policy, because potential licensees would be arbitrarily precluded from structuring business  Xv-arrangements between themselves once the prebid documents had been filed.:pv  X-ԍ Id. at 13.:  XH-x150. Decision. We decline to liberalize our collusion and settlement restrictions for broadband PCS in the manner requested by either McCaw or AIDE. We continue to believe that a prohibition against agreements and alliances concerning bidding between applicants bidding for the same licenses is a prudent deterrent to collusion that should have only a  X -minimal and temporary effect on bidders' flexibility. As we stated in the Second Report and  X -Order, our rules prohibiting collusion serve the objectives of the Budget Act by preventing applicants, especially the largest companies, from entering into agreements to use bidding  X -strategies that divide the market to the disadvantage of other bidders.rq   X -ԍ Second Report and Order, 9 FCC Rcd 2348 at  221224.r Also, we want to avoid the problem of entities filing applications solely for the purpose of demanding payment from other bidders in exchange for settlement or withdrawal. Overall, we believe that auctions are likely to result in more efficient assignments than settlements because they reduce the transaction cost of putting a license in the hands of the applicant that values it most highly.  X -x251. With regard to McCaw's proposal, the fact that one bidder has withdrawn its" Fq0*((" application before entering into a consortium with another bidder does not reduce the importance of our collusion rules, even if we forbid bidders to communicate with other bidders competing for the same license until after a formal withdrawal has taken place. We are concerned that if we permitted such consortium arrangements to occur, particularly in an environment where bidder identities are known, undue pressure might be brought to bear on smaller bidders to withdraw in exchange for teaming up with other larger bidders, or sham applications might be filed to demand payment from other applicants. In general, we are concerned that McCaw's proposal would create incentives for parties to collude and behave in an anticompetitive manner. While we recognize that allowing consortia to occur could  X1-enable many smaller applicants to pool their resources to win licenses, we believe the risks of allowing such arrangements between applicants for the same license (even when one applicant has withdrawn) outweigh the benefits at this time.  X -x352. We also reject AIDE's contention that the Commission lacks the authority under the Communications Act to preclude settlements between mutually exclusive applicants for  X -auctionable licenses.@r  X -ԍ AIDE Petition at 910.@ While the Commission has an established policy of favoring settlements in some contexts, it is entirely within our authority to restrict or prohibit  Xy-settlements if we find such agreements would not be in the public interest.syy  X-ԍ In the broadcast context, for example, while we have allowed settlements between applicants for construction permits, such agreements have been significantly restricted in  Xu-recent years. See Report and Order in MM Docket No. 90263, 6 FCC Rcd 85 (1990), recon.   X`-Memorandum Opinion and Order, 6 FCC Rcd 2901 (1991) (limiting settlements between mutually exclusive applicants for broadcast construction permits). At this time, we find that postfiling settlements between applicants for the same license in the broadband PCS competitive bidding process would not serve the public interest for reasons stated above. We believe that nothing in the language or legislative history of Section 309(j) contradicts this view. Consequently, we are amending our rules to eliminate Section 24.829(b), which (as AIDE suggested in its petition) is inconsistent with our collusion rules contained in Section 1.2105 of the Rules. x  X-x453. In order to provide bidders sufficient time and greater flexibility to attract capital, however, we make several modifications to our collusion rules and policies adopted in the  X-Fifth Report and Order and in our reconsideration of the generic auction rules. First, we recognize that an entity may hold noncontrolling ownership interests in two or more bidders, and that those bidders may aggregate more PCS spectrum cumulatively than a single entity is entitled to hold. In such cases, we will permit divestiture of noncontrolling interests to bring the entities into compliance with the PCS spectrum aggregation limits provided such  X"-divestiture is completed within 90 days of grant of the license.t"  X&-ԍ We adopted a similar provision in our reconsideration of the narrowband auction  X'-rules. Third Memorandum Opinion and Order, FCC 94219 at  29. Such postauction""n t0*((\" divestiture will enable investors to finance more than one bidder without risking default penalties if both bidders, for example, win licenses which in combination exceed our aggregation limits.  X-x554. Procedurally, if entities with a common noncontrolling ownership interest aggregate more PCS spectrum among them than a single entity is entitled to hold, we will require that the longform applications for broadband PCS licensing be accompanied by a signed statement from the applicant that sufficient properties will be divested within 90 days of the license grant to bring the broadband PCS licenses held within the permitted aggregation limits. If the applicant is otherwise qualified, the applications will be granted subject to a condition that the licensee come into compliance with the PCS spectrum aggregation limits within 90 days of grant. Within 90 days of license grant, the licensee must certify to the Commission that the applicant and all parties to the application have come into compliance with our PCS spectrum aggregation limits. If the PCS licensee fails to submit this certification within 90 days, we will invoke the condition on all broadband PCS licenses won by the applicant in the auction, cancelling them immediately and imposing the default penalty. In addition, we may investigate whether the certifications on divestiture are evidence of misrepresentations that call into question the party's qualification to hold any PCS licenses. If a buyer has not been secured in the required period of time, the PCS licensee may divest the prohibited interest to an interim independent trustee, as long as the applicant has no interest in or control of the trustee. The trustee may dispose of the interest as it sees fit. In no event, however, may the trustee retain the property for longer than six months.  X- x  X-x655. Also, as indicated supra, our auction collusion rules have been revised to permit bidders who have not filed Form 175 applications for any of the same licenses to engage in discussions and enter into bidding consortia or joint bidding arrangements during the course of  X-an auction.u  X%-ԍ See Second Memorandum Opinion and Order, FCC 94215 at  51; see also Section 1.2105 (c)(3). We stated in our Third Memorandum Opinion and Order on narrowband PCS auctions that where bidders have not applied for any of the same licenses there is little risk of  X-anticompetitive conduct with respect to a single license.jvd  X-ԍ Third Memorandum Opinion and Order, FCC 94219 at  31.j We reach the same conclusion with respect to broadband PCS. The relaxed collusion rules, which we will apply in the broadband PCS context, will permit bidders to have greater flexibility to compete in the auction by combining their resources, provided that no change of control of any applicant takes place. We wish to clarify that we intended these provisions to apply to applicants that  X -have not applied for licenses in any of the same geographic license areas, i.e., the same MTAs  X-for A and B block licenses or the same BTAs for other broadband PCS licenses.,w  X%-ԍ If, for instance, one applicant has applied for licenses on block A in MTAs 1, 2, and 3, and another applicant has applied for licenses on block B in MTAs 3, 4, and 5, these applicants may not hold discussions or form consortia or joint bidding arrangements., "w0*(("Ԍ X-ԙx756. As noted above, we also modified our generic auction rules to permit applicants to amend their FCC Form 175 applications to reflect ownership changes that do not result in a  X-change in control of the applicant.kx  XK-ԍ Second Memorandum Opinion and Order, FCC 94215 at  52.k We now modify Section 24.822 (b) to clarify the applicability of this provision to broadband PCS. Such changes shall not be regarded as major amendments to an application, provided they do not result in a transfer of control of the applicant. Amendments to FCC Form 175 must be filed with the Commission within two business days of any such change. Our experience in the nationwide narrowband PCS auction demonstrated that it is necessary to allow applicants to amend their FCC Form 175 applications to make ownership changes after the filing deadline has passed, provided such changes do not result in a change of control or discussions that violate our anticollusion rules. Permitting such amendments will provide bidders with flexibility to seek additional capital after applications have been filed, while ensuring that the real party in interest does not  X -change. Again, we clarify that this change applies only to applicants that have not applied for  X -licenses in any of the same geographic license areas.y {  X-ԍ Of course, formation of consortia, bidding agreements, and new ownership arrangements remains subject to Commission review under the public interest standard, and we would expect that entities entering into such arrangements would comply with all relevant  X-Commission policies and all other applicable laws, e.g., the antitrust laws.   X -x857. We will also permit ownership changes in which consortium investors drop out of  X-bidding consortia, even if control of the consortium changes as a result.sz  X*-ԍ See ex parte submission of Comcast Corporation, Oct. 7, 1994.s We do not wish to restrict some members of consortia from continuing to bid even though other members of the consortia wish to drop out of the bidding. We emphasize that members that are removed from a consortium may not subsequently bid individually or become involved with another bidder in bidding on any license for which the consortium had applied. Bidders must submit a revised Form 175 to reflect the change in ownership.  X-x958. We also wish to clarify an aspect of our rules dealing with the information that applicants must provide to the Commission with their Form 175 and Form 401 applications. Section 24.813(a)(1) of the Commission's Rules, 47 C.F.R. 24.813(a)(1), states among other things that applicants must provide "a list of any business five percent or more of whose stock, warrants, options or debt securities are owned by the applicant or an officer, director,  X|-stockholder or key management personnel of the applicant." (Emphasis added.) Read literally, this provision would require applicants to ascertain the holdings in other concerns of every one of their stockholders, regardless of how small that stockholder's stake in the applicant may be. This was not our intent, and we take this opportunity to amend this rule to clarify  X"-that only holdings in other concerns that are held by attributable shareholders in the applicant""z0*((z"  X-need be disclosed.{  Xy-ԍ By "attributable" shareholder we mean a shareholder that holds an interest of 5 percent or more in a bidder or that holds an attributable interest in a bidder through the operation of the multiplier.  X-x:59. Finally, we note that in the Second Memorandum Opinion and Order, we clarified the applicability of the collusion rules to cases where an applicant has a common ownership  X-interest with another applicant.E|K  X -ԍ Id. at  53.E We stated that, unless the second applicant is expressly identified as an entity with whom the first applicant has an agreement concerning bidding, we will prohibit these parties from communicating concerning their bidding strategies. As we  Xa-stated in the Second Memorandum Opinion and Order, this prohibition will hold even if the other bidder is identified on the applicant's shortform application as having a common  X5-ownership interest with the applicant.}5  X-ԍ Of course, applicants will also be subject to existing antitrust laws. For example, we would expect that this would prohibit discussions with respect to bid prices between any  X-applicants who have applied for licenses in the same geographic market.  See United States v.  X-Champion Int'l Corp., 557 F.2d 1270 (9th Cir.), 434 U.S. 938 (1977); c.f., e.g., United States  X-v. Addyston Pipe & Steel Co., 85 F. 271, 293 (6th Cir. 1898), modified and aff'd 175 U.S. 211 (1899). In addition, agreements between two or more actual or potential competitors to  X`-submit collusive, noncompetitive or rigged bids are per se violations of Section One of the  XK-Sherman Antitrust Act, 15 U.S.C.  1 et seq. See, e.g., United States v. MMR Corporation  X6-(LA), 907 F.2d 489 (5th Cir. 1990); United States v. W.F. Brinkley & Sons Construction Co.,  X!-783 F.2d 1157 (4th Cir. 1986); United States v. Finis P. Renest, Inc., 509 F.2d 1256 (7th Cir.  X -1975), cert. denied, 423 U.S. 874. Similarly, agreements between actual or potential competitors to divide or allocate territories horizontally in order to minimize competition are  X-per se violations of the Sherman Act (United States v. Topco, 405 U.S. 596 (1972); Affiliated  X-Capital Corporation v. City of Houston, 700 F. 2d 226, 236), and such agreements are anticompetitive regardless of whether the parties split a market in which they both do business  X-or whether they merely reserve one market for one and another for the other. See Palmer v.  X-BRG of Georgia, Inc., 498 U.S. 46, 49 (1990).  Communication among bidders concerning matters unrelated to the license auctions, however, will be permitted.  X -x;60. Accordingly, we are retaining the collusion rules in the broadband PCS context  X -with the modifications set forth above.h~ W  X#-ԍ See Second Report and Order, 9 FCC Rcd 2348 at  225.h We believe that these modifications will ensure that the bidding process is competitive and will encourage formation of a competitive postauction market structure,  X}-x` ` xD.` ` Miscellaneous(#` "} ~0*((i"Ԍ X-ԙXxX` ` 1. X Antenna Height Restrictions (#  X-x<61. The Commission established antenna height restrictions in the Fifth Report and  X-Order which provide, in part, that no antenna structure, including radiating elements, tower, supports and all appurtenances, may be higher than 61 meters above ground level unless prior  X-Commission approval is obtained.  X -ԍ Fifth Report and Order, FCC 94178 at Appendix B (Section 24.816). Section 24.816 also contains restrictions on height and use of antennas around airports.  Xc-x=62. Petition. American Personal Communications (APC) requests that the antenna height restrictions be rescinded because they were adopted without comment in a proceeding intended to adopt PCS auction and application processing rules, not substantive technical  X -ones.u d  X3-ԍ APC Petition for Reconsideration (APC Petition), filed Aug. 22, 1994, at 4.u Noting that the Commission has already established antenna safety and interference provisions, APC also maintains that the rule is unnecessary. APC further argues that the rule would impose a regulatory burden on PCS providers that is not imposed on either cellular or enhanced specialized mobile radio (ESMR) providers, a result that is incompatible with the  X -Commission's efforts to achieve regulatory parity.4   X-ԍ Id. 4 Finally, APC maintains that the implementation and enforcement of this rule would consume significant industry and staff  X-resources without gaining any appreciable benefit.3  X -ԍ Id.3  Xf-x>63. Decision. In light of APC's petition, we believe that issues relating to antenna height are best resolved in another proceeding, to afford a greater opportunity for industry comment. Our primary concern when we adopted this rule section was to promote the safe location and identification of PCS antennas, particularly in areas around airports. There may be less administratively burdensome methods, however, of obtaining the same result. Moreover, Section 24.816, may be duplicative since Part 17 of our rules already provides for  X-similar antenna height and use safeguards.9{  X -ԍ 47 CFR Part 17.9 We therefore rescind the antenna height  X-restrictions adopted in the Fifth Report and Order, but will examine the issue in a future proceeding on revisions to Part 24 of our rules. The substantive merits of APC's petition, as well as the arguments set forth in oppositions filed by PCIA and DCR Communications, Inc.,  X-will be considered at that time.k,  X_%-ԍ PCIA Opposition at 13; DCR Communications, Inc. Opposition at 8.k  XT- XxX` ` 2.X Restrictions on Cellular Participation (# "T 0*(("Ԍ X-ԙx?64. In the Fifth Report and Order, we reserved specific spectrum blocks in broadband PCS for bidding exclusively by entities that, together with their affiliates and certain investors, have gross revenues of less than $125 million in each of the last two years and total assets of  X-less than $500 million._  X6-ԍ Fifth Report and Order, FCC 94178 at  121._ We determined that designation of these "entrepreneurs' blocks" was needed to ensure that small entities have a meaningful opportunity to participate in the  X-acquisition and provision of broadband PCS services.3{  X-ԍ Id.3  Xa-x@65. Petition. GTE alleges that our entrepreneurs' block plan, which is intended to ensure that designated entities have opportunities to acquire licenses and provide PCS service,  X3-restricts the ability of cellular carriers to participate in the provision of PCS.<3.  X-ԍ GTE Petition at 2.< Specifically, GTE argues that many cellular operators can now only bid on a maximum of 20 MHz instead of 30 MHz of spectrum, which will impair their ability to compete with other PCS operators. Accordingly, GTE requests that we eliminate several cellular restrictions adopted in our  X -broadband PCS service rules proceeding.   Xg-ԍ Id. at 68. See Second Report and Order in GN Docket No. 90314, 8 FCC Rcd 7700 (1993) at  97111. First, GTE encourages the Commission to eliminate the cellularPCS crossownership restrictions to permit cellular carriers to obtain 30  X -MHz of spectrum in any MTA in the country.< {  X-ԍ GTE Petition at 6.< Next, GTE requests we modify our  X-geographic overlap standard for purposes of determining cellular eligibility.;,  Xo-ԍ Id. at 67.; Specifically, GTE requests we adopt an "effective pops" test that it has previously advocated in the PCS proceedings. Finally, GTE requests that we permit cellular carriers to acquire up to 30 MHz of spectrum, so long as they divest the appropriate cellular properties within 90 days of the  X6-PCS license grant.;6  X-ԍ Id. at 78.;  X-xA66. Discussion. We reject GTE's proposal to eliminate certain cellular restrictions, as its request is outside the scope of this proceeding. Rather, those restrictions were appropriately addressed in our broadband PCS service rules proceeding, GN Docket No. 90 X-314.+  X&-ԍ Second Report and Order in GN Docket No. 90314, 8 FCC Rcd 7700 (1993) at   X&-97111, recon. Memorandum Opinion and Order, FCC 94144 (Rel. June 13, 1994) at  98"&0*(('"ԫ146.+ As Pacific Bell points out in its Opposition, the Commission considered arguments"y0*((" identical or similar to the ones raised by GTE in that proceeding and concluded that our restrictions strike an appropriate balance between fostering broad participation in PCS and  X-ensuring that cellular operators do not exert undue market power.y  X-ԍ Pacific Bell Opposition at 1011. See also Second Report and Order, 8 FCC Rcd 7700 at  108. Accordingly, we will retain our present restrictions on cellular participation in the provision of PCS. We will address the merits of GTE's claim that they will be unfairly disadvantaged by the creation of  X-entrepreneurs' blocks in our reconsideration order on designated entity concerns.  XS -ԍ #X\  P6G;H;P# #Xj\  P6G;XP#See also Omnipoint Opposition at 1112.  X_- IV.XxPROCEDURAL MATTERS (#  XH-  X1-Xx A.X` ` Final Regulatory Flexibility Analysis (#`  X -xB67. Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C.  604, the  X -Commission's final analysis for the Memorandum Opinion and Order is as follows:  X -xC68. Need for, and Purpose of, this Action. As a result of new statutory authority, the Commission may utilize competitive bidding mechanisms in the granting of certain initial  X-licenses. The Commission published an Initial Regulatory Flexibility Analysis, see generally  X}-5 U.S.C.  603, within the Notice of Proposed Rule Making in this proceeding and published  Xh-Final Regulatory Flexibility Analyses within the Second Report and Order (at  299302)  XS-and the Fifth Report and Order (at  219222). As noted in these previous final analyses, this proceeding will establish a system of competitive bidding for choosing among certain applications for initial licenses, and will carry out statutory mandates that certain designated entities, including small entities, be afforded an opportunity to participate in the competitive bidding process and in the provision of spectrumbased services.  X-xD69. Summary of the Issues Raised by the Public Comments. No commenters  X-responded specifically to the issues raised by the Fifth Report and Order. We have made some modifications to the proposed requirements as appropriate.  Xq-xE70. Significant Alternatives Considered and Rejected. All significant alternatives have  XZ-been addressed in the Fifth Report and Order and in this Memorandum Opinion and Order.  X.-Xx B.X` ` Ordering Clauses (#`  X-xF71. Accordingly, IT IS ORDERED that the petitions for reconsideration ARE GRANTED to the extent described above, DEFERRED with respect to entrepreneurs block"0*((" issues and DENIED in all other respects.  X-xG72. IT IS FURTHER ORDERED that Part 24 of the Commission's Rules IS AMENDED as set forth in Appendix B.  X-xH73. IT IS FURTHER ORDERED that the rule amendments made herein WILL BECOME EFFECTIVE immediately upon publication in the Federal Register. This action is taken pursuant to Sections 4(i), 303(r) and 309(j) of the Communications Act of 1934, as  XH-amended, 47 U.S.C.  154(i), 303(r) and 309(j).aH  X -ԍ Pursuant to 5 U.S.C.  553(d)(3), we conclude that "good cause" exists to have the rule changes take effect immediately because a delay would not provide applicants with sufficient time to finalize their bidding strategies and business plans for the upcoming broadband PCS auctions. Immediate implementation of the rule changes set forth herein also provides applicants with the required certainty to proceed with their bidding and business strategies, alleviating concerns that lastminute modifications to our Rules would impede the  X7-success of their auction plan. See 5 U.S.C.  553(d)(1). x` `  FEDERAL COMMUNICATIONS COMMISSION x` `  William F. Caton  Xy-x` `  Acting Secretaryh"y0*(("  X-0 Appendix A ă  X-List of Parties who Filed Petitions for Reconsideration in PP Docket 93253  Xv-American Personal Communications (APC)  X_-Association of Independent Designated Entities (AIDE)  XH-BET Holdings, Inc. (BET) Cellular Telecommunications Industry Association (CTIA) Century Telephone Enterprises, Inc. (Century) Citizens Utilities Company (Citizens) Columbia PCS, Inc. (Columbia PCS) Cook Inlet Region, Inc. (Cook Inlet) EATELCORP, Inc. (EATEL) GTE Service Corporation (GTE) Hernandez, Roland A. (Hernandez) Hicks and Ragland Engineering Company, Inc. (Hicks and Ragland) Karl Brothers, Inc. (Karl Brothers) Lehman Brothers (Lehman) MasTec, Inc. (MasTec) McCaw Cellular Communications, Inc. (McCaw) Metrex Communications Group, Inc. (Metrex) Minnesota Equal Access Network Services, Inc. and xSouth Dakota Network, Inc. (Joint) (MEANS/SDN)  X-National Association of Black Owned Broadcasters, Inc. (NABOB)  X-National Paging and Personal Communications Association (NPPCA)  X-Omnipoint Communications, Inc. (Omnipoint)  X|-Pacific Bell Mobile Services (Pacific Bell)  Xe-Pacific Telecom Cellular, Inc. (PTC)  XN-Small Business PCS Association (SBPCS)  X7-Telephone Electronics Corporation (TEC) United States Interactive & Microwave Television Association (USIMTA)  X-Oppositions filed in Response to Petitions for Reconsideration Association of Independent Designated Entities (AIDE) American Personal Communications (APC) BET Holdings, Inc. (BET) Columbia PCS, Inc. (Columbia) Cook Inlet Region, Inc. (Cook) DCR Communications, Inc. (DCR) Encompass, Inc. (Encompass) Mankato Citizens Telephone Co. (Mankato)"#' 0*((%"ԌMasTec (MasTec) McCaw Cellular Communications, Inc. (McCaw) Minnesota Equal Access Network Services, Inc. and South Dakota Network, Inc. Omnipoint Communications, Inc. (Omnipoint) Pacific Bell Mobile Services (PacBell) Personal Communications Industry Association (PCIA) Telephone and Data Systems, Inc. (TDS) United States Telephone Association (USTA) Vanguard Cellular Systems, Inc. (Vanguard)  X -Replies filed in Response to Petitions for Reconsideration BET Holdings, Inc. (BET) City of Dallas (Dallas) GO Communications Corporation (GO Comm.) (formerly Columbia PCS, Inc.) (Columbia PCS) McCaw Cellular Communications, Inc. (McCaw) Minnesota Equal Access Equal Access Network Services, Inc. xand South Dakota Network, Inc. (Minnesota) National Paging & Personal Communications Association (NPPCA) Omnipoint Communications (Omnipoint) Small Business Administration (SBA)"!0*((u"  X-0 Appendix B ă /Rule Changes Part 24 of Chapter I of Title 47 of the Code of Federal Regulations is amended as follows:  Xv-xI1. The authority citation for Part 24 continues to read as follows: AUTHORITY: 47 U.S.C.  154, 301, 302, 303, 309, and 332, unless otherwise noted.  X -xI2. Section 24.703 is amended by revising paragraph (f) and adding paragraph (h) to read as follows:  X -  24.703 Competitive bidding mechanisms. * * * * *  Xy-(f) Activity Rules. The Commission will establish activity rules which require a minimum amount of bidding activity. In the event that the Commission establishes an activity rule in connection with a simultaneous multiple round auction, bidders will be entitled to request and be granted waivers of such rule. The Commission will specify the number of waivers permitted in an auction, the frequency with which they may be exercised, and the method of operation of waivers by Public Notice prior to each auction. * * * * *  X-(h) Bidder Identification During Auctions. The Commission may choose, on an auctionbyauction basis, to release the identity of the bidders associated with bidder identification numbers. The Commission will announce by Public Notice before each auction whether bidder identities will be revealed. x3. Section 24.813(a)(1) is amended to read as follows:  X -  24.813 General application requirements. (a) * * * x(1) A list of any business five percent or more of whose stock, warrants, options or debt securities are owned by the applicant or an officer, director, attributable stockholder or key management personnel of the applicant. This list must include a description of each such business's principal business and a description of each such business's relationship to the applicant. * * * * * x4. Section 24.816 is removed and reserved."#'"0*((%"Ԍx5. Section 24.822(b) is revised to read as follows:  X-  24.822 Amendment of application to participate in auction for licenses in the  X-broadband Personal Communications Services filed on FCC Form 175. * * * * * (b) In broadband PCS, applicants will be permitted to amend their Form 175 applications to make minor amendments to correct minor errors or defects such as typographical errors. Applicants will also be permitted to amend FCC Form 175 to make changes to the information required by  24.813(a) (such as ownership changes or changes in the identification of parties to bidding consortia), provided such changes do not result in a change in control of the applicant and do not involve another applicant (or parties in interest to an applicant) who has applied for licenses in any of the same geographic license areas as the applicant. Amendments which change control of the applicant will be considered major amendments. An FCC Form 175 which is amended by a major amendment will be  X-considered to be newly filed and cannot be resubmitted after applicable filing deadlines. See  Xy-also Section 1.2105 of this Chapter. x6. Section 24.829 is amended by removing paragraph (b) and redesignating paragraph (c) as paragraph (b).  X- x7. Section 24.833 is added to read as follows:  X-  24.833 Postauction divestitures.  X- Any parties sharing a common noncontrolling ownership interest who aggregate more  X-PCS spectrum among them than a single entity is entitled to hold (See  20.6(e), 24.710, 24.204, 24.229(c)) will be permitted to divest sufficient properties within 90 days of the license grant to come into compliance with the spectrum aggregation limits as follows: (a) The broadband PCS applicant shall submit a signed statement with its longform application stating that sufficient properties will be divested within 90 days of the license grant. If the licensee is otherwise qualified, the Commission will grant the applications subject to a condition that the licensee come into compliance with the PCS spectrum aggregation limits within 90 days of grant. (b) Within 90 days of license grant, the licensee must certify that the applicant and all parties to the application have come into compliance with the PCS spectrum aggregation limits. If the licensee fails to submit the certification within 90 days, the Commission will immediately cancel all broadband PCS licenses won by the applicant, impose the default penalty and, based on the facts presented, take any other action it may deem appropriate. Divestiture may be to an interim trustee if a buyer has not been secured in the required time frame, as long as the applicant has no interest in or control of the trustee, and the trustee may dispose of the"#'#0*((%" property as it sees fit. In no event may the trustee retain the property for longer than six months from grant of license.