[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4682 Introduced in House (IH)]
103d CONGRESS
2d Session
H. R. 4682
To guarantee the participation of small businesses, rural telephone
companies, and businesses owned by members of minority groups and women
in spectrum auctions.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 29, 1994
Mr. Richardson (for himself, Mrs. Collins of Illinois, and Mrs.
Schroeder) introduced the following bill; which was referred to the
Committee on Energy and Commerce
_______________________________________________________________________
A BILL
To guarantee the participation of small businesses, rural telephone
companies, and businesses owned by members of minority groups and women
in spectrum auctions.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Communications Opportunity Act of
1994''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) Section 309(j)(3) of the Communications Act of 1934
requires the Federal Communications Commission to disseminate
licenses among a wide variety of applicants, including small
businesses, rural telephone companies, and businesses owned by
members of minority groups and women (hereinafter in this Act
referred to as ``designated entities'').
(2) Section 309(j)(4) of such Act requires the Commission
to ensure that small businesses, rural telephone companies, and
businesses owned by minority groups and women are given the
opportunity to participate in the provision of spectrum-based
services, and, for such purposes, requires the Commission to
consider the use of tax certificates, bidding preferences, and
other procedures.
(3) License set-asides and installment payments are
additional policy tools available to the Commission for
ensuring that licenses are disseminated to designated entities.
(4) Designated entities are greatly underrepresented in all
of the telecommunications industries. In particular, businesses
owned by members of minority groups and women suffer numerous
barriers to participating in the provision of
telecommunications services. Market entry is greatly
complicated by historically low participation and by a lack of
access to capital markets for businesses owned by members of
minority groups and women.
(5) Because the electromagnetic spectrum is a public
resource and because minorities and women face discrimination
and other barriers to entering the telecommunication market,
there is a compelling public interest to promote diversity in
the participation in the telecommunications industries in order
to promote the goals of competitive prices for services,
service innovation, full employment, and diversity of opinions
and viewpoints in public discourse.
(6) Because of the extremely capital intensive nature of
developing and deploying systems in new telecommunications
industries, and the ability of large corporations to amass
financial resources swiftly and efficiently, allocation of the
electromagnetic spectrum under a purely competitive approach
will greatly hinder access to licenses by designated entities,
especially business owned by members of minority groups and
women, wanting to provide telecommunications services. Without
the use of certain bidding preferences, in particular set-
asides, business owned by members of minority groups and women
will not make significant progress in participating in the
telecommunications industries.
SEC. 3. PARTICIPATION BY DESIGNATED ENTITIES.
(a) General Requirement.--The Commission shall ensure the
participation of small businesses, rural telephone companies, and
businesses owned by members of minority groups and women in the
provision of spectrum-based services, particularly through licenses
controlled by them.
(b) Licensing Plan.--
(1) Requirements applicable to competitive bidding.--If the
Commission decides to use competitive bidding to grant 3 or
more licenses which serve a market, the Commission shall
reserve at least one license, of up to 30 megahertz, for
bidding by designated entities only. If more than 6 licenses
serving a market are to be conferred through competitive
bidding, the Commission shall reserve at least 2 licenses, one
of which is at least 30 megahertz, for bidding by designated
entities only. In addition, the Commission shall provide
bidding preferences to designated entities which choose to bid
on other licenses, but may not substitute such preferences for
the license reservation required in this paragraph, or provide
such reservations to entities which are not designated
entities.
(2) Additional requirements.--To the maximum extent
feasible, the Commission shall equalize licenses to be bid on
initially by size and area, and shall not discriminate between
designated entity licenses and other licenses.
(3) Access to capital.--In developing rules regarding other
licenses and licensees for the same service, the Commission
shall take into account the impact of those rules on the
competitiveness and access to financing of designated entities.
To the extent possible the Commission should provide incentives
for nondesignated entities to invest as minority equity holders
in designated entity concerns. To the extent possible, the
Commission shall ensure that its preferences are not abused.
(4) Simple procedures required.--Particularly for rural
areas, the Commission shall provide a simple regulatory
approval process to allow and encourage voluntary partitioning
of licenses between overall license holders and rural telephone
companies and others which wish to serve smaller portions of
the license area.
(c) Competitive Bidding and Bid Financing.--
(1) Considerations required.--The Commission shall
carefully consider the practical effect of its auction and
related requirements on designated entities, and shall seek
wherever possible to remove or lessen regulatory and business
barriers to successful participation by designated entities,
and to provide flexibility to designated entities. This
consideration shall include--
(A) lower application fees;
(B) the initial payment or downpayment shall be no
more than 10 percent of a winning bid for successful
designated entity bidders; and
(C) installment payments of the balance due over
the term of the license.
(2) Flexibility.--The Commission shall extend similar
flexibility to requirements of financial capability for
designated entities which have won licenses. Good faith efforts
to pursue financing and construction shall meet the
requirements of title II and regulations enacted pursuant
thereto.
(3) Additional methods.--The Commission shall consider
additional methods to maximize effective participation of
designated entities in auctions and the resulting marketplace.
These methods may include devices such as tax certificates.
(d) Rules Applying to Designated Entities With Licenses.--
(1) Waivers.--In general, designated entities should be
subject to the same rules as all other parties. The Commission
shall institute a waiver process whereby a designated entity
licensee can demonstrate why the public interest will be served
by granting flexibility to such an entity.
(2) Transfers.--Designated entity licensees may freely
transfer a license to a third party, which qualifies as a
designated entity, without additional financial penalties or
obligations. A designated entity may transfer its license to a
nondesignated entity if the parties comply with the
requirements of paragraph (3).
(3) Payments by transferees.--Any party which is not a
designated entity but which buys a controlling interest in a
license from a designated entity must pay the government the
balance due of the spectrum bid immediately. Until 3 years
after award, a nondesignated entity must pay, in addition, the
difference, if any, between the amount initially bid by the
designated entity and the market price for such licenses, based
on the average of nondesignated entity bids for similar
licenses in that market. The Commission shall establish a
formula for calculating this difference taking into
consideration any bidding credits.
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