FCC: Facilitate Future Development of Paging Systems and Implementation of Section 309(j) of the Communications Act, and Competitive Bidding

Published by the Government Accountability Office on 1997-03-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Office of the General Counsel


      March 21, 1997

      The Honorable John McCain
      The Honorable Ernest F. Hollings
      Ranking Minority Member
      Committee on Commerce, Science, and Transportation
      United States Senate

      The Honorable Thomas J. Bliley, Jr.
      The Honorable John D. Dingell
      Ranking Minority Member
      Committee on Commerce
      House of Representatives

      Subject:   Federal Communications Commission: Facilitate Future Development
                 of Paging Systems and Implementation of Section 309(j) of the
                 Communications Act; Competitive Bidding

      Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report
      on a major rule promulgated by the Federal Communications Commission
      (Commission), entitled "Facilitate Future Development of Paging Systems and
      Implementation of Section 309(j) of the Communications Act; Competitive Bidding"
      (WT Docket No. 96-18; PP Docket No. 93-253; FCC 97-59). We received the rule on
      March 6, 1997. It was published in the Federal Register as a final rule on March 12,
      1997. 62 Fed. Reg. 11616.

      The final rule governs the geographic area licensing of Common Carrier Paging and
      exclusive 929 MHz Private Carrier Paging and the competitive bidding procedures
      for auctioning mutually exclusive applications for these licenses. The Commission
      states that the rule is necessary to promote competition and efficient licensing in
      paging services.

      Enclosed is our assessment of the Commission's compliance with the procedural
      steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the

rule. Our review indicates that the Commission complied with the applicable

If you have any questions about this report, please contact James Vickers, Assistant
General Counsel, at (202) 512-8210. The official responsible for GAO evaluation
work relating to the Federal Communications Commission is John Anderson,
Director of Transportation Issues. Mr. Anderson can be reached at (202) 512-2834.

Robert P. Murphy
General Counsel


cc: Mr. Andrew S. Fishel
    Managing Director
    Federal Communications Commission

Page 2                                                             GAO/OGC-97-31

      ANALYSIS UNDER 5 U.S.C. § 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE
                                 ISSUED BY
                         COMPETITIVE BIDDING"
            (WT Docket No. 96-18; PP Docket No. 93-253; FCC 97-59)

(i) Cost-benefit analysis

The Commission, in its report to our Office, states that it was not required to
prepare and did not prepare a cost-benefit analysis of the final rule.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. §§ 603-605,
607 and 609

The Commission prepared an Initial Regulatory Flexibility Analysis in connection
with the proposed rule. The analysis was available in the Commission's docket for
review by the public and the submission of comments.

The preamble to the final rule contains the complete Final Regulatory Flexibility
Analysis, which describes the reason for the final rule and the legal basis for it. The
analysis also includes descriptions and estimates of the number of small entities
affected by the rule; a discussion of the recordkeeping, reporting, and other
compliance requirements; and the steps taken to minimize the burdens on small
entities. The analysis discusses the comments received in response to the Initial
Regulatory Flexibility Analysis.

The Commission adopted a two-tiered definition of small business which allows
greater flexibility for qualifying small businesses through varying bidding credits. In
addition, a small business may pay its winning bid in quarterly installments over the
term of the license with qualified licensees being permitted to make interest-only
payments for the first 2 years.

However, the Commission concluded that it would not permit small businesses to
make a lower down payment than the 20 percent of the winning bid required of all
bidders because it is necessary to ensure the financial capability of the bidder and
provide stronger assurances against default.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform
Act of 1995, 2 U.S.C. §§ 1532-1535

As an independent regulatory agency, the Commission is not subject to title II of the
Unfunded Mandates Reform Act of 1995.

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.

The final rule was promulgated using the notice and comment procedures of
5 U.S.C. § 553. On February 16, 1996, the Commission published in the Federal
Register a Notice of Proposed Rulemaking and requested comments on the
proposed rule. 61 Fed. Reg. 6199.

The preamble to the final rule discusses the changes the Commission made to the
proposed rule as a result of the comments, including not adopting the formulas
proposed regarding co-channel interference protection but using the fixed distances
already in existing criteria. In addition, the Commission explains why it did not
choose to change the proposed rule in response to certain comments.

Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520

The final rule contains information collections which are subject to review by the
Office of Management and Budget (OMB) under the Paperwork Reduction Act. In
the preamble to the proposed rule, 61 Fed. Reg. 6209, the Commission explained the
need for the information and the burden estimate related to the collections. The
Commission estimated that the collections from 750 existing licensees and 525
auction winners would entail a one-time hourly burden of 4,099 hours at a cost of
$1,008,036. Also, the Commission had invited comments on the information
collection, including its necessity and the accuracy of the burden estimate, be sent
to the Commission and OMB.

In the preamble to the final rule, the Commission notes that the collections were
approved by OMB and OMB issued control number 3060-0697. For FCC Forms 175
and 600, control numbers 3060-0600 and 3060-0623, respectively, have been issued.

Statutory authorization for the rule

The final rule was issued under authority of sections 4(i), 303(r), 309(c), 309(j), and
332 of the Communications Act. (47 U.S.C. §§ 154(i), 303(r), 309(c), 309(j), and 332)

Page 2                                                              GAO/OGC-97-31
Executive Order No. 12866

The rule, promulgated by an independent regulatory agency, is not subject to the
review requirements of Executive Order No. 12866.

The Commission did not identify any other statutes or executive orders imposing
requirements on the rulemaking.

Page 3                                                            GAO/OGC-97-31