Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of	)

)

Small Business in Telecommunications	)

)

Application for Review of	)

Public Notice DA 97-1933	)

)

Application for Review of	)

Public Notice DA 97-1934	)

)

800 MHz Specialized Mobile Radio Auction	)

Upper 200 Channels	)

ORDER

Adopted: October 21, 1999	Released: October 22, 1999

By the Commission:

The Commission has before it two Applications for Review (Applications), filed by Small Business in Telecommunications (SBT) on September 12, 1997. SBT seeks review of a public notice, in which the Wireless Telecommunications Bureau (Bureau) announced changes to auction procedures for the 800 MHz Specialized Mobile Radio (SMR) auction (Auction No. 16), which was scheduled to start on October 28, 1997, and a second public notice, in which the Bureau requested comment on the use of minimum opening bids and reserve prices. For the reasons set forth below, we deny SBT's Applications.

SBT first claims that, by these two public notices, the Bureau made substantive changes to the Commission's rules in violation of the Commission's rules regarding delegation of authority and the Administrative Procedure Act (APA), and therefore committed prejudicial procedural error. Specifically, SBT argues that the Bureau's actions in, first, implementing "click box" bidding and exponential smoothing in addition to setting upfront payment amounts and, second, requesting comment on the use of minimum opening bids or reserve prices for the 800 MHz SMR auction fall outside the parameters of its delegated authority. We disagree. Section 0.131 of the Commission's rules explicitly states that the Bureau has delegated authority to develop, recommend and administer policies, programs and rules concerning auctions of spectrum for wireless telecommunications. In our Part 1 rulemaking, we clarified that pursuant to 0.131 of our rules, the Chief of the Wireless Telecommunications Bureau has delegated authority to implement all of the Commission's rules pertaining to auctions procedures. This includes the authority to choose competitive bidding designs and methodologies, such as simultaneous multiple round auctions or oral outcry auctions and remote electronic bidding or on-site bidding; conduct auctions; administer application, payment, license grant and denial procedures; and determine upfront and down payment amounts as well as minimum opening bids. These actions do not fall under the prohibited activities, set forth in Section 0.331 of the Commission's rules, which include acting upon complaints, petitions, requests, applications for review and notices of proposed rulemaking. Accordingly, the modifications that SBT complains of were within the Bureau's delegated authority. Furthermore, the Bureau's actions were in compliance with the APA. Pursuant to 5 U.S.C. Section 553(b), an agency may modify procedural rules without notice and comment. Because the rule modifications were procedural in nature and did not affect the substantive rights of interested parties, then the Bureau's actions fall within that exception.

Moreover, we do not agree with SBT's contention that the Bureau's actions violate Section 309(j)(3)(E) of the Communications Act of 1934, as amended, which requires that the Commission "ensure that, in the scheduling of any competitive bidding, an adequate period is allowed after issuance of bidding rules, to ensure that interested parties have sufficient time to develop business plans, assess market conditions, and evaluate the ability of equipment for the relevant services." SBT argues that the proximity of the Bureau's modification of auctions procedures to the October 28, 1997, auction date rendered it impossible for prospective participants to develop business plans and assess market conditions. We have found no evidence that these two modifications had a significant effect on the parties' business plans so as to warrant delay of the auction start date. We believe that prospective participants in the 800 MHz SMR auction had ample time to develop auction strategies and assess market conditions prior to the start of the auction.

Finally, we disagree with SBT's claim that reserve prices or minimum opening bids are not in the public interest because they impede the dissemination of licenses to designated entities. The Bureau addressed this issue at length in an order ("Order"), released on October 6, 1997, and found, to the contrary, that minimum opening bids are in the public interest in this auction. We agree with the Bureau's reasoning in the Order and, therefore, reject SBT's claim.

ACCORDINGLY, IT IS ORDERED pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C. § 154(i), and Section 1.115 of the Commission's rules, 47 C.F.R. § 1.115, that SBT's Applications ARE DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary