Commission Modifies "C Block" Auction Rules for Broadband PCS

The Federal Communications Commission (FCC) announced on July 18, 1995 that it is modifying the rules applicable to the C block broadband Personal Communications Services (PCS) auction provision from its C block auction rules in order to reduce legal uncertainties and prevent further delay of the auction as a result of the Supreme Court's decision in Adarand Constructors, In. v. Pena. In Adarand the Supreme Court held that all federal programs which make distinctions based on race must serve a compelling government interests and must be narrowly tailored to serve that interest.

The Commission said that the rule changes were necessary to ensure the auction commences quickly while preserving, to the extent possible, business relationships that had been formed under the prior rules. The FCC emphasized that the rule changes will only affect the August 29 auction and that rules for future actions are still being examined.

Under the new rules, businesses averaging $40 million or less in grow revenues in the past three years are eligible for the 25 percent bidding credit and installment payment terms previously available only to minority or women-owned small businesses. Another rule available to minority or women-owned businesses. In addition, another rule change provides that small business applicants may exclude the gross revenues and total assets of any affiliate that would qualify as an entrepreneur as long as the aggregate of all affiliates of the applicant does not exceed the financial threshold for participation in the C block auction.

This rule change does not reflect a change of philosophy for the agency. "The FCC is committed to ensuring that the communications revolution is inclusive, not exclusive," said FCC Chairman Reed Hundt. "This means that our licensing of spectrum should not only include big established companies, but also small businesses, including those owned by minorities and women. By encouraging such participation, all U.S. citizens will benefit from the imagination, completion, and spirit that these new entrepreneurs will benefit from the imagination, competition, and spirit that these new entrepreneurs will bring this industry and to the country."