AUTHORITY TO USE COMPETITIVE BIDDING.

SEC. 6002. AUTHORITY TO USE COMPETITIVE BIDDING. (a) Use of Competitive Bidding.— Section 309 of the Communications Act of 1934 (47 U.S.C. 309) is amended by adding at the end the following new subsection: 107 STAT. 388 “(j) Use of Competitive Bidding.— “(1) General authority.— If mutually exclusive applications are accepted for filing for any initial license or construction permit which will involve a use of the electromagnetic spectrum described in paragraph (2), then the Commission shall have the authority, subject to paragraph (10), to grant such license or permit to a qualified applicant through the use of a system of competitive bidding that meets the requirements of this subsection. “(2) Uses to which bidding may apply.— A use of the electromagnetic spectrum is described in this paragraph if the Commission determines that— “(A) the principal use of such spectrum will involve, or is reasonably likely to involve, the licensee receiving compensation from subscribers in return for which the licensee— “(i) enables those subscribers to receive communications signals that are transmitted utilizing frequencies on which the licensee is licensed to operate; or “(ii) enables those subscribers to transmit directly communications signals utilizing frequencies on which the licensee is licensed to operate; and “(B) a system of competitive bidding will promote the objectives described in paragraph (3). “(3) Design of systems of competitive bidding.— For each class of licenses or permits that the Commission grants through the use of a competitive bidding system, the Commission shall, by regulation, establish a competitive bidding methodology. The Commission shall seek to design and test multiple alternative methodologies under appropriate circumstances. In identifying classes of licenses and permits to be issued by competitive bidding, in specifying eligibility and other characteristics of such licenses and permits, and in designing the methodologies for use under this subsection, the Commission shall include safeguards to protect the public interest in the use of the spectrum and shall seek to promote the purposes specified in section 1 of this Act and the following objectives: “(A) the development and rapid deployment of new technologies, products, and services for the benefit of the public, including those residing in rural areas, without administrative or judicial delays; “(B) promoting economic opportunity and competition and ensuring that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women; “(C) recovery for the public of a portion of the value of the public spectrum resource made available for commercial use and avoidance of unjust enrichment through the methods employed to award uses of that resource; and “(D) efficient and intensive use of the electromagnetic spectrum. 107 STAT. 389 “(4) Contents of regulations.— In prescribing regulations pursuant to paragraph (3), the Commission shall— “(A) consider alternative payment schedules and methods of calculation, including lump sums or guaranteed installment payments, with or without royalty payments, or other schedules or methods that promote the objectives described in paragraph (3)(B), and combinations of such schedules and methods; “(B) include performance requirements, such as appropriate deadlines and penalties for performance failures, to ensure prompt delivery of service to rural areas, to prevent stockpiling or warehousing of spectrum by licensees or permittees, and to promote investment in and rapid deployment of new technologies and services; “(C) consistent with the public interest, convenience, and necessity, the purposes of this Act, and the characteristics of the proposed service, prescribe area designations and bandwidth assignments that promote (i) an equitable distribution of licenses and services among geographic areas, (ii) economic opportunity for a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women, and (iii) investment in and rapid deployment of new technologies and services; “(D) ensure that small businesses, rural telephone companies, and businesses owned by members of minority groups and women are given the opportunity to participate in the provision of spectrum-based services, and, for such purposes, consider the use of tax certificates, bidding preferences, and other procedures; and “(E) require such transfer disclosures and antitrafficking restrictions and payment schedules as may be necessary to prevent unjust enrichment as a result of the methods employed to issue licenses and permits. “(5) Bidder and licensee qualification.— No person shall be permitted to participate in a system of competitive bidding pursuant to this subsection unless such bidder submits such information and assurances as the Commission may require to demonstrate that such bidder’s application is acceptable for filing. No license shall be granted to an applicant selected pursuant to this subsection unless the Commission determines that the applicant is qualified pursuant to subsection (a) and sections 308(b) and 310. Consistent with the objectives described in paragraph (3), the Commission shall, by regulation, prescribe expedited procedures consistent with the procedures authorized by subsection (i)(2) for the resolution of any substantial and material issues of fact concerning qualifications. “(6) Rules of construction.— Nothing in this subsection, or in the use of competitive bidding, shall— “(A) alter spectrum allocation criteria and procedures established by the other provisions of this Act; “(B) limit or otherwise affect the requirements of subsection (h) of this section, section 301, 304, 307, 310, or 706, or any other provision of this Act (other than subsections (d)(2) and (e) of this section); 107 STAT. 390 “(C) diminish the authority of the Commission under the other provisions of this Act to regulate or reclaim spectrum licenses; “(D) be construed to convey any rights, including any expectation of renewal of a license, that differ from the rights that apply to other licenses within the same service that were not issued pursuant to this subsection; “(E) be construed to relieve the Commission of the obligation in the public interest to continue to use engineering solutions, negotiation, threshold Qualifications, service regulations, and other means in order to avoid mutual exclusivity in application and licensing proceedings; “(F) be construed to prohibit the Commission from issuing nationwide, regional, or local licenses or permits; “(G) be construed to prevent the Commission from awarding licenses to those persons who make significant contributions to the development of a new telecommunications service or technology; or “(H) be construed to relieve any applicant for a license or permit of the obligation to pay charges imposed pursuant to section 8 of this Act. “(7) Consideration of revenues in public interest determinations.— “(A) Consideration prohibited.— In making a decision pursuant to section 303(c) to assign a band of frequencies to a use for which licenses or permits will be issued pursuant to this subsection, and in prescribing regulations pursuant to paragraph (4)(C) of this subsection, the Commission may not base a finding of public interest, convenience, and necessity on the expectation of Federal revenues from the use of a system of competitive bidding under this subsection. “(B) Consideration limited.— In prescribing regulations pursuant to paragraph (4)(A) of this subsection, the Commission may not base a finding of public interest, convenience, and necessity solely or predominantly on the expectation of Federal revenues from the use of a system of competitive bidding under this subsection. “(C) Consideration of demand for spectrum not affected.— Nothing in this paragraph shall be construed to prevent the Commission from continuing to consider consumer demand for spectrum-based services. “(8) Treatment of revenues.— “(A) General rule.— Except as provided in subparagraph (B), all proceeds from the use of a competitive bidding system under this subsection shall be deposited in the Treasury in accordance with chapter 33 of title 31, United States Code. “(B) Retention of revenues.— Notwithstanding subparagraph (A), the salaries and expenses account of the Commission shall retain as an offsetting collection such sums as may be necessary from such proceeds for the costs of developing and implementing the program required by this subsection. Such offsetting collections shall be available for obligation subject to the terms and conditions of the receiving appropriations account, and shall be deposited in such accounts on a quarterly basis. Any funds 107 STAT. 391appropriated to the Commission for fiscal years 1994 through 1998 for the purpose of assigning licenses using random selection under subsection (i) shall be used by the Commission to implement this subsection. “(9) Use of former government spectrum.— The Commission shall, not later than 5 years after the date of enactment of this subsection, issue licenses and permits pursuant to this subsection for the use of bands of frequencies that— “(A) in the aggregate span not less than 10 megahertz; and “(B) have been reassigned from Government use pursuant to part B of the National Telecommunications and Information Administration Organization Act. “(10) Authority contingent on availability of additional spectrum.— “(A) Initial conditions.— The Commission’s authority to issue licenses or permits under this subsection shall not take effect unless— “(i) the Secretary of Commerce has submitted to the Commission the report required by section 113(d)(1) of the National Telecommunications and Information Administration Organization Act; “(ii) such report recommends for immediate reallocation bands of frequencies that, in the aggregate, span not less than 50 megahertz; “(iii) such bands of frequencies meet the criteria required by section 113(a) of such Act; and “(iv) the Commission has completed the rule-making required by section 332(c)(1)(D) of this Act. “(B) Subsequent conditions.— The Commission’s authority to issue licenses or permits under this subsection on and after 2 years after the date of the enactment of this subsection shall cease to be effective if— “(i) the Secretary of Commerce has failed to submit the report required by section 113(a) of the National Telecommunications and Information Administration Organization Act; “(ii) the President has failed to withdraw and limit assignments of frequencies as required by paragraphs (1) and (2) of section 114(a) of such Act; “(iii) the Commission has failed to issue the regulations required by section 115(a) of such Act; “(iv) the Commission has failed to complete and submit to Congress, not later than 18 months after the date of enactment of this subsection, a study of current and future spectrum needs of State and local government public safety agencies through the year 2010, and a specific plan to ensure that adequate frequencies are made available to public safety licensees; or “(v) the Commission has failed under section 332(c)(3) to grant or deny within the time required by such section any petition that a State has filed within 90 days after the date of enactment of this subsection; until such failure has been corrected. 107 STAT. 392 “(11) Termination.— The authority of the Commission to grant a license or permit under this subsection shall expire September 30, 1998. “(12) Evaluation.— Not later than September 30, 1997, the Commission shall conduct a public inquiry and submit to the Congress a report— “(A) containing a statement of the revenues obtained, and a projection of the future revenues, from the use of competitive bidding systems under this subsection; “(B) describing the methodologies established by the Commission pursuant to paragraphs (3) and (4); “(C) comparing the relative advantages and disadvantages of such methodologies in terms of attaining the objectives described in such paragraphs; “(D) evaluating whether and to what extent— “(i) competitive bidding significantly improved the efficiency and effectiveness of the process for granting radio spectrum licenses; “(ii) competitive bidding facilitated the introduction of new spectrum-based technologies and the entry of new companies into the telecommunications market; “(iii) competitive bidding methodologies have secured prompt delivery of service to rural areas and have adequately addressed the needs of rural spectrum users; and “(iv) small businesses, rural telephone companies, and businesses owned by members of minority groups and women were able to participate successfully in the competitive bidding process; and “(E) recommending any statutory changes that are needed to improve the competitive bidding process.”. (b) Conforming Amendments.— (1) Limitations on lotteries.— Section 309 of the Communications Act of 1934 (47 U.S.C. 309) is further amended— (A) by striking subsection (i)(1) and inserting the following: “(i) Random Selection.— “(1) General authority.— If— “(A) there is more than one application for any initial license or construction permit which will involve a use of the electromagnetic spectrum; and “(B) the Commission has determined that the use is not described in subsection (j)(2)(A); then the Commission shall have the authority to grant such license or permit to a qualified applicant through the use of a system of random selection.”; and (B) in paragraph (4), by adding at the end the following new subparagraph: “(C) Not later than 180 days after the date of enactment of this subparagraph, the Commission shall prescribe such transfer disclosures and antitrafficking restrictions and payment schedules as are necessary to prevent the unjust enrichment of recipients of licenses or permits as a result of the methods employed to issue licenses under this subsection.”. (2) Regulatory treatment to enhance auction value of spectrum licenses.— 107 STAT. 393 (A) Amendment.— Section 332 of the Communications Act of 1934 (47 U.S.C. 332) is amended— (i) by striking “private land” from the heading of the section; (ii) by striking “land” each place it appears in subsections (a) and (b); and (iii) by striking subsection (c) and inserting the following: “(c) Regulatory Treatment of Mobile Services.— “(1) Common carrier treatment of commercial mobile services.— (A) A person engaged in the provision of a service that is a commercial mobile service shall, insofar as such person is so engaged, be treated as a common carrier for purposes of this Act, except for such provisions of title II as the Commission may specify by regulation as inapplicable to that service or person. In prescribing or amending any such regulation, the Commission may not specify any provision of section 201, 202, or 208, and may specify any other provision only if the Commission determines that— “(i) enforcement of such provision is not necessary in order to ensure that the charges, practices, classifications, or regulations for or in connection with that service are just and reasonable and are not unjustly or unreasonably discriminatory; “(ii) enforcement of such provision is not necessary for the protection of consumers; and “(iii) specifying such provision is consistent with the public interest. “(B) Upon reasonable request of any person providing commercial mobile service, the Commission shall order a common carrier to establish physical connections with such service pursuant to the provisions of section 201 of this Act. Except to the extent that the Commission is required to respond to such a request, this subparagraph shall not be construed as a limitation or expansion of the Commission’s authority to order interconnection pursuant to this Act. “(C) The Commission shall review competitive market conditions with respect to commercial mobile services and shall include in its annual report an analysis of those conditions. Such analysis shall include an identification of the number of competitors in various commercial mobile services, an analysis of whether or not there is effective competition, an analysis of whether any of such competitors have a dominant share of the market for such services, and a statement of whether additional providers or classes of providers in those services would be likely to enhance competition. As a part of making a determination with respect to the public interest under subparagraph (A)(iii), the Commission shall consider whether the proposed regulation (or amendment thereof) will promote competitive market conditions, including the extent to which such regulation (or amendment) will enhance competition among providers of commercial mobile services. If the Commission determines that such regulation (or amendment) will promote competition among providers of commercial mobile services, such determination may be the basis for a Commission finding that such regulation (or amendment) is in the public interest. 107 STAT. 394 “(D) The Commission shall, not later than 180 days after the date of enactment of this subparagraph, complete a rule-making required to implement this paragraph with respect to the licensing of personal communications services, including making any determinations required by subparagraph (C). “(2) Non-common carrier treatment of private mobile services.— A person engaged in the provision of a service that is a private mobile service shall not, insofar as such person is so engaged, be treated as a common carrier for any purpose under this Act. A common carrier (other than a person that was treated as a provider of a private land mobile service prior to the enactment of the Omnibus Budget Reconciliation Act of 1993) shall not provide any dispatch service on any frequency allocated for common carrier service, except to the extent such dispatch service is provided on stations licensed in the domestic public land mobile radio service before January 1, 1982. The Commission may by regulation terminate, in whole or in part, the prohibition contained in the preceding sentence if the Commission determines that such termination will serve the public interest. “(3) State preemption.— (A) Notwithstanding sections 2(b) and 221(b), no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services. Nothing in this subparagraph shall exempt providers of commercial mobile services (where such services are a substitute for land line telephone exchange service for a substantial portion of the communications within such State) from requirements imposed by a State commission on all providers of telecommunications services necessary to ensure the universal availability of telecommunications service at affordable rates. Notwithstanding the first sentence of this subparagraph, a State may petition the Commission for authority to regulate the rates for any commercial mobile service and the Commission shall grant such petition if such State demonstrates that— “(i) market conditions with respect to such services fail to protect subscribers adequately from unjust and unreasonable rates or rates that are unjustly or unreasonably discriminatory; or “(ii) such market conditions exist and such service is a replacement for land line telephone exchange service for a substantial portion of the telephone land line exchange service within such State. The Commission shall provide reasonable opportunity for public comment in response to such petition, and shall, within 9 months after the date of its submission, grant or deny such petition. If the Commission grants such petition, the Commission shall authorize the State to exercise under State law such authority over rates, for such periods of time, as the Commission deems necessary to ensure that such rates are just and reasonable and not unjustly or unreasonably discriminatory. “(B) If a State has in effect on June 1, 1993, any regulation concerning the rates for any commercial mobile service offered in such State on such date, such State may, no later than 107 STAT. 3951 year after the date of enactment of the Omnibus Budget Reconciliation Act of 1993, petition the Commission requesting that the State be authorized to continue exercising authority over such rates. If a State files such a petition, the State’s existing regulation shall, notwithstanding subparagraph (A), remain in effect until the Commission completes all action (including any reconsideration) on such petition. The Commission shall review such petition in accordance with the procedures established in such subparagraph, shall complete all action (including any reconsideration) within 12 months after such petition is filed, and shall grant such petition if the State satisfies the showing required under subparagraph (A)(i) or (A)(ii). If the Commission grants such petition, the Commission shall authorize the State to exercise under State law such authority over rates, for such period of time, as the Commission deems necessary to ensure that such rates are just and reasonable and not unjustly or unreasonably discriminatory. After a reasonable period of time, as determined by the Commission, has elapsed from the issuance of an order under subparagraph (A) or this subparagraph, any interested party may petition the Commission tor an order that the exercise of authority by a State pursuant to such subparagraph is no longer necessary to ensure that the rates for commercial mobile services are just and reasonable and not unjustly or unreasonably discriminatory. The Commission shall provide reasonable opportunity for public comment in response to such petition, and shall, within 9 months after the date of its submission, grant or deny such petition in whole or in part. “(4) Regulatory treatment of communications satellite corporation.— Nothing in this subsection shall be construed to alter or affect the regulatory treatment required by title IV of the Communications Satellite Act of 1962 of the corporation authorized by title III of such Act. “(5) Space segment capacity.— Nothing in this section shall prohibit the Commission from continuing to determine whether the provision of space segment capacity by satellite systems to providers of commercial mobile services shall be treated as common carriage. “(6) Foreign ownership.— The Commission, upon a petition for waiver filed within 6 months after the date of enactment of the Omnibus Budget Reconciliation Act of 1993, may waive the application of section 310(b) to any foreign ownership that lawfully existed before May 24, 1993, of any provider of a private land mobile service that will be treated as a common carrier as a result of the enactment of the Omnibus Budget Reconciliation Act of 1993, but only upon the following conditions: “(A) The extent of foreign ownership interest shall not be increased above the extent which existed on May 24, 1993. “(B) Such waiver shall not permit the subsequent transfer of ownership to any other person in violation of section 310(b). “(d) Definitions.— For purposes of this section— “(1) the term ‘commercial mobile service’ means any mobile service (as defined in section 3(n)) that is provided for profit and makes interconnected service available (A) to the public 107 STAT. 396or (B) to such classes of eligible users as to be effectively available to a substantial portion of the public, as specified by regulation by the Commission; “(2) the term ‘interconnected service’ means service that is interconnected with the public switched network (as such terms are defined by regulation by the Commission) or service for which a request for interconnection is pending pursuant to subsection (c)(1)(B); and “(3) the term ‘private mobile service’ means any mobile service (as defined in section 3(n)) that is not a commercial mobile service or the functional equivalent of a commercial mobile service, as specified by regulation by the Commission.”. (B) Additional conforming amendments.— (i) Section 2(b) of the Communications Act of 1934 (47 U.S.C. 152(b)) is amended by inserting “and section 332,” after “inclusive,”. (ii) Section 3 of the Communications Act of 1934 (47 U.S.C. 153) is amended— (I) in subsection (n) by inserting “(1)” after “and includes”, and by inserting before the period at the end the following: “, (2) a mobile service which provides a regularly interacting group of base, mobile, portable, and associated control and relay stations (whether licensed on an individual, cooperative, or multiple basis) for private one-way or two-way land mobile radio communications by eligible users over designated areas of operation, and (3) any service for which a license is required in a personal communications service established pursuant to the proceeding entitled ‘Amendment to the Commission’s Rules to Establish New Personal Communications Services’ (GEN Docket No. 90–314; ET Docket No. 92–100), or any successor proceeding”; and (II) by striking subsection (gg). (c) Effective Dates.— (1) In general.— Except as provided in paragraph (2), the amendments made by this section are effective on the date of enactment of this Act. (2) Effective dates of mobile service amendments.— The amendments made by subsection (b)(2) shall be effective on the date of enactment of this Act, except that— (A) section 332(c)(3)(A) of the Communications Act of 1934, as amended by such subsection, shall take effect 1 year after such date of enactment; and (B) any private land mobile service provided by any person before such date of enactment, and any paging service utilizing frequencies allocated as of January 1, 1993, for private land mobile services, shall, except for purposes of section 332(c)(6) of such Act, be treated as a private mobile service until 3 years after such date of enactment. (d) Deadlines for Commission Action.— (1) General rulemaking.— The Federal Communications Commission shall prescribe regulations to implement section 309(j) of the Communications Act of 1934 (as added by this section) within 210 days after the date of enactment of this Act. (2) PCS orders and licensing.— The Commission shall— 107 STAT. 397 (A) within 180 days after such date of enactment, issue a final report and order (i) in the matter entitled “Redevelopment of Spectrum to Encourage Innovation in the Use of New Telecommunications Technologies” (ET Docket No. 92–9); and (ii) in the matter entitled “Amendment of the Commission’s Rules to Establish New Personal Communications Services” (GEN Docket No. 90–314; ET Docket No. 92–100); and (B) within 270 days after such date of enactment, commence issuing licenses and permits in the personal communications service. (3) Transitional rulemaking for mobile service providers.— Within 1 year after the date of enactment of this Act, the Federal Communications Commission— (A) shall issue such modifications or terminations of the regulations applicable (before the date of enactment of this Act) to private land mobile services as are necessary to implement the amendments made by subsection (b)(2); (B) in the regulations that will, after such date of enactment, apply to a service that was a private land mobile service and that becomes a commercial mobile service (as a consequence of such amendments), shall make such other modifications or terminations as may be necessary and practical to assure that licensees in such service are subjected to technical requirements that are comparable to the technical requirements that apply to licensees that are providers of substantially similar common carrier services; (C) shall issue such other regulations as are necessary to implement the amendments made by subsection (b)(2); and (D) shall include, in such regulations, modifications, and terminations, such provisions as are necessary to provide for an orderly transition. (e) Special Rule.— The Federal Communications Commission shall not issue any license or permit pursuant to section 309(i) of the Communications Act of 1934 (47 U.S.C. 309(i)) after the date of enactment of this Act unless— (1) the Commission has made the determination required by paragraph (1)(B) of such section (as added by this section); or (2) one or more applications for such license were accepted for filing by the Commission before July 26, 1993.