PUBLIC NOTICE 
FEDERAL COMMUNICATIONS COMMISSION 
1919 M STREET, N.W. 
WASHINGTON, D.C. 20554 
PR Docket No. 93-61 
GN Docket No. 96-228 
News Media Information: (202) 418-0500 
Fax-On-Demand: (202) 418-2830 
Internet: http://www.fee.gov 
ftp.fee.gov 
FCC 99-2 
Released: January 13, 1999 
COMMENT SOUGHT ON SMALL BUSINESS SIZE STANDARDS 
In accordance with a recent ruling by the Small Business Administration (SBA), the 
Commission is seeking further comment on small business size standards adopted for the 
auction of Location and Monitoring Service (LMS) and Wireless Communications Service 
(WCS) spectrum. This ruling is detailed in the attached letter from the Administrator of the 
Small Business Administration. We seek comment on these issues for purposes of obtaining 
SBA approval of the LMS and WCS size standards. This action will not affect the outcome 
of the WCS auction or the payment obligations of WCS licensees. 
The LMS auction is scheduled to begin on February 23, 1999.1 In our rules for that 
auction, we adopted small business size standards and associated bidding credits for LMS to 
remove entry barriers and ensure the participation of small businesses in the LMS auction and 
in the provision of service.2 We sought comment, in general, on small business size standards 
for LMS, and one party commented on this issue. This commenter, Comtrak, recommended 
that the Commission adopt two small business categories in the LMS auction: (1) a "small 
business" category, for businesses with average gross revenues not to exceed $10 million; and 
(2) a "very small business" category, for businesses with average gross revenues not to exceed 
$3 million. 3 Comtrak also recommended that the Commission rely solely on gross revenues, 
1 See Wireless Telecommunications Bureau Postpones December 15, 1998 Auction Date for 528 Multilateration 
Location and Monitoring Service Licenses, Public Notice, DA 98-2246 (November I 0, 1998). 
2 
·Amendment of the Commission's Rules to Adopt Regulations for Automatic Vehicle Monitoring Systems, 
Second Report and Order, FCC 98-157, ~ 20 (rel. July 14, 1998), 63 Fed. Reg. 40,659 (July 30, 1998) ("LMS 
Second Report and Order"). See also Amendment of Part 90 of the Commission's Rules to Adopt Regulations 
for Automatic Vehicle Monitoring Systems, Memorandum Opinion and Order and Further Notice of Proposed 
Rule.Making, PR Docket No. 93-61, 12 FCC Red 13942, ~ 75 (1997) ("LMS Further Notice"). 
3 Comtrak Comments at 4. 
1330 
and not the nwnber of employees, for the purpose of determining an entity's eligibility for 
small business incentives, as it has done in previous auctions. 4 None of the commenters 
addressed capital requirements supporting the suggested small business thresholds. 
The rules we adopted for LMS define a "small business" as an entity with average 
annual gross revenues for the preceding three years not to exceed $15 million. 5 They define a 
"very small business" as an entity with average annual gross revenues for the preceding three 
years not to exceed $3 million. 6 Thus, in accordance with the Part I rules concerning 
competitive bidding, small businesses will receive a 25 percent bidding credit and very small 
businesses will receive a 35 percent bidding credit.7 
The WCS auction closed on April 25, 1997.8 In the expedited rulemaking proceeding 
for this service, the Commission adopted tiered small business size standards and associated 
bidding credits. 9 The Commission took this action to ensure that small businesses have the 
opportunity to participate in the provision of spectrum-based services, as required by Section 
309(j) of the Communications Act. 10 The record in the WCS proceeding supported the · 
establishment of small business provisions. Several commenters urged the Commission to use 
tiered definitions, with levels similar to those employed for broadband PCS. 11 As was the 
case with LMS, none of the commenters discussed capital requirements supporting the 
suggested small business thresholds. 
4 Comtrak Comments at 5. 
5 LMS Second Report and Order at 1120. 
6 Id. 
7 Id See also 41 C.F.R. 1.2I IO(e). 
8 WCS Auction Closes; Winning Bidders in the Auction of I28 Wireless Communications Services Licenses, 
Public Notice, DA 97-886 (April 28, 1997). 
9 Amendment of the Commission's Rules to Establish Part 27, the Wireless Communications Service, Report 
and Order, I2 FCC Red 10785 (1997) at 111 I93, 194 ("WCS Report and Order"). See also Amendment of the 
Commission's Rules to Establish Part 27, the Wireless Communications Service, Notice of Proposed Rulemaking 
I I FCC Red 21713 (1996) at 1[iJ 62, 63 ("WCS Notice"). 
10 47 U.S.C. § 3090)(4)(0). See also 41 U.S.C. §§ 309G)(3)(B) and G)(4XA). 
11 See Comments filed by Rural Telecommunications Group and Cook Inlet Region, Inc., and Reply Comments 
filed by Total Telecommunications Services, Inc. For broadband PCS, a "small business" is defmed as an entity 
with average annual gross revenues of not more than $40 million for the preceding three ~ars; a "very small 
business" is defined as an entity with average anriual gross revenues of not more than $15 million for the 
preceding three years. See 47 C.F.R. § 24.720. 
1331 
The Commission adopted the same small business definitions for WCS as it did for 
broadband PCS. 12 Thus, it defined a "small business" as an entity with average annual gross 
revenues for the preceding three years not to exceed $40 million. 13 The Commission defined 
a "very small business" as an entity with average annual gross revenues for the preceding 
three years not to exceed $15 million. 14 The Commission established bidding credits of 25 
percent for small businesses and 35 percent for very small businesses. 15 
The SBA recently informed the Commission that the SBA is unable to approve the 
. LMS and WCS definitions because the Commission did not seek comment on specific small 
business proposals in the LMS Further Notice and the WCS Notice. 16 See Section 3(a)(2)(C) 
of the Small Business Act. Herein, we take this opportunity to solicit comments on the 
specific small business size standards that we adopted for LMS and WCS. Comments are due 
on or before January 20, 1999. To file formally, parties must submit an original .and four 
copies to the Office of the Secretary, Federal Communications Commission, Federal 
Communications Commission, 445 Twelfth Street, S.W., TW-A325, Washington, D.C. 20554. 
In addition, parties must submit one copy to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal Communications 
Commission, Room 5202, 2025 M Street N.W., Washington, D.C. 20554. Comments will be 
available for public inspection during regular business hours in the Wireless 
Telecommunications Bureau Public Reference Room, Room 5608, 2025 M Street N.W., 
Washington, D.C. 20554. 
Action by the Commission on January 12, 1999. 
For further information concerning this proceeding, contact Ken Burnley or Arthur 
Lechtman, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, at 
(202) 418-0660. 
- FCC -
12 WCS Report and Order at ~ 194. 
13 47 C.F.R. § 27.210(b). 
14 Id. 
" 47 C.F.R. § 27.209. 
"' See Letters to Amy J. Zoslov, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications 
Bureau, from Aida Alvarez, Administrator, Small Business Administration (December 2, 1998), at Attachments 
A and B. 
1332 
December 2, 1998 
AmvZosJov 
Attachnent A 
U.S. SMAL.L. BUSINESS ACMINISTAATION 
WA5111NGTON, c.c. 204115 
OUef (Acting), Wireless Telecommunications Bureau 
Federal Communicatinm Commission 
202S M Street. NW. s* Ploor 
Washington., DC 20554 
Re: Request for Approval of Small Business Size Standard - Competitive Biddina Rules for VHP 
Public Com Service and Location Monitorina Service 
Dear Ms Zoslov: 
This is in respame to your letter of July 31, 1998, requestina Small Business Administration 
(SBA) approval of small business siZe standards 1br use in 1he auction oflicemes £or the two captionld 
services. The Federal Communication Commission (the Commission) adopted the following size 
standards fur both servi~: 
• "Small Business'' - one wi1h average annual poss revenues that do not exceed 
SI 5 million fir the Precedina 3 years. 
• "Very Small Business" - one wi1h averqe annual aross revmucs 1hat do DDt 
exceed $3 million mr the p~ 3 years. 
• "Small Business Consonium" - a conglomerate orpnization formed as a joint 
venture between or amcna mutually-independent business firms, each of wbidi 
individually satisfies the dc&itiOll of a small business 
SRA's decisions: 
The SBA hereby approvu the size standards fbr use in the Marldme Comm11dicatiom: 
Public Coast VHF Stadom (VPC) auetion. Alena with yoiJr letter you provided copies of the 'IJrUd 
Report and Order aNl M111110randum Opinion and Onar togelber wi1h the relevant colll!!lmU 
rect".ived on your proposal to adopt a Sl S million size standard for small business and a $3 million size 
standard for very small bumess. Your staff also provided supplemm1Bl infi.mmtion on this seivice to 
the Office of Size Standards at a meecina on October 11, 1998. when 1bey explained your basis for 
selectin& these size standards. Accordina to your stlft VPC is a very small spec1n1m and 1he mdustzy 
consists primarily of very small businesses. Commauen supPorted lows standards. 1houah not thae 
specifically. and one supported tiered size standards. similar 10 these used in other auctiam. To be 
consistent with the size standards established for other services usociamd widi 
""-,_ . ..,...., .... -.. ,-... ....,_,_ 
133"3 
Amy I. Zoslov Page2 
small spectrumS (e.g., 800MHz Specialized Mobile Radio (SMR) Services and Interactive Video and 
Data Services), you selected the lowest size standards established. by the Commission for any service. 
We agree that the low~ size standard established by the Commission are appropriate for VPC. 
The SBA doa not approve 1he size standards fOr use in the Locadoa Monitorin& Servica 
lLMS) auction. Sectioo 3(a)(2XC) of the Small Business Act requires that .. Unless specifically 
authorized by statute, no Federal depar1ment or agency may prescribe a size standard for cateaoriz:ing a 
business concern a.s a small bu.!inea cone.em, unl.ss such proposed siz.e standard- (i) is proposed 
after an oppom.anity for public notice and comment;" Neiihet 1he Federal Register notice or the 
rvf emorandum Opinion and Ord~r and Ful'ther Notice of hopo1td Ruls Malting (adopted 
August 28. 1997 and released September 16. 1997). for the lMS auction. proposed any specific size 
st3ndards; rather, they merely contained a general descnption of the subjem and issues involved. A 
general description does not satisfy the requirements of the Small Business Act for a "prop05ed si;e 
standard" offered for public comment 
Your letter explained why the Commissioo adopted these size standards. With the letter ~ 
copies of the Seccnd Report and Ord4r to&ether with the relevant commm1S received to your proposal 
to establish biddina credits for small business. To supplement this infonmtion and to f\Jrther suppoz> 
adopting these standards. members of your staff met wi1h die OtBce of Size Standards on 
October 1. 1998. They explained that you had compared 1he size standards established for other 
license areas. particulacly 1be 800 llriliz and 900 MHz SMR Services and for Broadband Personal 
Corrununications Services (PCS). Accordlna to your sta£t: 1he technolOi)' for LMS Im some 
similarities w1th the 800 MHz and 900 MHz SMR Servi~ and the site and equipment costs for these 
three services are about the same. They a1&o stated that Broadband PCS. whh a higher size standard. 
has capital costs that are substantially higher than for LMS. 
Although public commems supported me establishment of tiered size standards for small 
business and very small business, we lack authority to approve 1he LMS special size stmu:iatm. 
We are pleased to usist you in this process, and are happy to work widl you and the 
Commission 10 assist small businesses. Ifyo'l hav. any questions an 1his matter or need additioaal . 
mfurmation concerning size Stlndarck, pleue contact Guy Iackscn. A.uistant Administrator for Size 
Standards, at (202) 20S~l8. 
Sincerely, 
~ 
Aida Alvarez 
Admini!U'ISDC 
cc: Dr. Richard L Hayes 
1334 
Attaclment B 
U.S. SMAt.L 8USIN&:SS ACMINISTRATION 
WAIHINQTON, o.c. 2041& 
Uecember 2. 1998 
Amy I. Z.O.lov 
Chief (Ac:tina). ·w-ueleu TelecommunicatiClllS Burau 
Federal CommwU.catiam Commission 
2025 M Street, N.W. 
Wuhingaxi. DC 20554 
Re: The FCC'1 Request for Approval of Small Business Sa Standardl - Competitive Biddin, 
Rules for the followina auctiom: 
Btoldband Personal Communicadoos Services (C, D, E and F Blocb) 
Wini• Communications Service.t 
Nmawb111d PCS -Phut m 
Pllina Sll'Yice1 
Dear Ms. Zoslov: 
This letter respcnds, ill ,,an; to your requem of'May I, 1997. md of Auaust 21, 1998, that the 
U.S. Small Business Admimstratian (SBA) approvt (1) 10 small businea size standarda propo1ed by 
the Federal Communicaiiam Commi1aian \ml Commiuian'1 and (2) & very 1mall blllineu cateamy 
tO the scheduled re-auction of Broadband C Block. This letter speciftcally addreu• the small busineal 
size standards the Commission adopted for Broadband Personal Communicatiam (PCS) Seme11 (C. 
D, E and F Blocks). Wireless Communications Strvicel mcl Pqina Services, and proposed fbr 
Narrowband PCS - Pbue m Wiih thia letter, thereCore, SBA bu prcM.decl 1he Commission with a 
decision on its requested lize ltlndlrdl for all spectruma addreued in your May a. 1997, letmr. 
A. Qroadbaud Penaaal Commwdeadou Semas (C, D, E and r Blockl) 
Wireleu Commlllllcadonl Service1 · 
Namnrbud PCS -Pbue m 
R•quat-4 Siu~: 
For Broad.bind PCS and W'treleu Commuaicatiam Services the Commiuian adopted and tor 
Narrowband PCS - Pbue m it proposed a two-tiered deftnition of 11Slmll bUlines1," u tollows: 
• a small busineu ii Ill entity tlm. toaecher wid1 itl •Mliates and perscm or entities 1hat 
hold interest in such entity and their 1 ffl1iam, bu averaae annual srou revenues chat 
ace not more than S40 million for 1he precedina l years . 
....... ....,... ,,... .... flt,._"'_,..,.,._ 133~ 
Amy J. Zoslov Pap2 
• a very small business is an entity 1i11t toaether with its afllliates and persons or enti1ies 
that hold interests in such entities and their aBJliatts, hu averap annual gros1 reven\191 
that are not more than SI! million for th8 precediq 3 yem. 
In addition, the Commission's size standardl tor the 3 181"Jicea include a consortium of small 
bu.11inesses and very small busineues u an eligible small buaineu. The Commilsion defined a 
consortium as a cooalomerate orpniution formed u a joint venture between or among mutually· 
independent business &ml, each of whic:b individually aatiaiea the deftnitim of a small business or 
very small busineu. 
~PCS<:; D, E llllll F Block: 
The $40 milllcn small busineu me mndard b Broadband PCS D, E and F Block i1 th• uma 
standard the Commissica adopted fi>r the Broadbmd PCS C Block auction, and wbidt the SBA 
approved on November 4, 1994. The Commilsim adapted the same size standard because they haw 
similar capital costs. Moreover, ad.optina the same size standard avoids disruptions to the buaineu 
plans of potential bidders, particuJatly plrticip11111 in the BrOldband PCS C Block auction. Molt of the 
commenters on the propo1ed rul•1bat addrased the sWi ltlndards allo supported the cauinued un of 
the C Block size stlndard fbr the Broadband PCS D, E and F Black auction. 'l'be Commiuiml added 
the ••very small business" campy 10 mcourap ewn smaller business• to participate in 1his aucdon 
than in 1he C Block auction. Por the ume reuaa, 1he Commiuian m Auauat 27, 1998, requened 
approval to add a vmy amall bU1ineu catelQIY to the 1cheduled nHUCtian ot C Block 
Wlnlo~ Co~ SM'tlllJa: 
For the Wireleu Communications Servicea auction, the Cammiaion adapted the same size 
standards as for th• Broadband PCS avcticms. The Commissicn 1tata 1hat it is mostly largo firms 1bat 
operate nationally in 1hi1 spectrum that will realize scale ef!ciencies. Establilhiq biddiq creditl tbr 
smaller firms, however, will help them compete in reaional markets, particularly those smaller service 
area. of a size to make it euy for mnall and very small businesu1 to acquire licenses. All but one ot 
the panies commemina on iht Q>mmissic:m's proposed rule also qreed with 1he use of'1he PCS size 
standarda. 
NarowlHuul PCS-Phu III: 
In the Narrowband Pbum I and 11 auc:tiam, the Commillian used a sinafe $40 million small 
business size standard that SBA approwd oa April 20, 1994. For 1he upcomina Narrowband license 
auction, the Commislian propoHI cwo tien at small businelw. While S40 million definel a "small 
business, .. the Commission rec:oanizes the need to provide increued beneftm tD bidders 1iazU!cantly 
under $40 million. TM Commission propo1es, therefore, 10 define a "Vflt'f small businosa" with a 
S 1 ~ million standard. Narrowband capital requirem111ta are similar to thou for the Broadband P Block 
and the Broadband C Block, and these two-tiered size standards are consistent with those SBA ii 
approvin& for those aw:tionl. The Commilliaa 10ught cammmtl speci!cally an 1he 
1336 
Amy 1. 7..oslov Pqo3 
necessity and appropriateness of these ltllldards, and wlw iyptS of compani• may ben.tftt While 
some ccmmenten •uuest other benefi11 for small busineu bidden, thl)' all support adoptina the size 
standards. 
SBA approwa tha $40 million "small buainea" and SI 5 millian "very small 'bulinul" 
dafmitions f'or use in the Broadband PCS C. D, I. ud r Block and 1hl Narrowband PCS-
Phue Ill auctians. W• natl that fot 1hes1 sltYicll the Commiulan '1 rulm on afftlfation are tho same 
aa those SBA approved fm previous auctiom. Thi only 1ubmmial dift'areace botween these afftliatim 
rules and the SBA'• ii die additim al a sp.W gmsary fbr a small bu1m .. consortium. 
SBA recently liberalized m U!li&tion rui.. to proyide areater opportunity filt small busineaet 
to joint venture on larp Govemment proc:urtmmtl. We support the Commiuion'1 eftbrt to similarly 
broaden the opporrunities for small businesses to obtain licenst1 fbr tMle services. However, we 
reconunend that in the tbturt the Commislian consider d~ itl afftliatim rula. Under the 
existing language, members of a joint wnturt 1rt afBllltld, 11 are 1hole who are 111 identity of 
inierest, common manaaement, common ficiliiiel and cantrldUl1 relaiioaahipt. Thi• liftH.Uon rule 
does not indicate that 1mall buaine1..t 1hat A>rm a consortium. when lppfOWd far biddiq at auctiom, .. 
are not considered aflUiated wi1h an1 another, md we beliew 1hl Commillion should modi4' its 
affiliation Nie 10 explicitly Stat9 an excepdcn &om its afftliaticn provilicm tar canslomerate 
organizariam. 
SBA doet aot approve the $40 millian "lllllD bUlinla" and SU milUm "'vtf'/ ama1l 
business" deflnitiC!ftl tbr Ult in die WI ....... Cammmdcadam Sen1ce1 auctiaa. Sec:tian 3(a)(2)(C) 
of the Small Busin1111 Am requirtl dm .. unl .. apeciBcally awhcrized by atatute. no Fedml 
department or aaency may pracribe a aize ltlDdard fbr cateaorizina a business c:cncem u a small 
business concem, unl111 such proposed size ltlndml- (i) ii propoMd der Ill opportunity b public 
notice and comment;,. The Notice of'Propolld llulemakJna b the W'nl• Communicatialll 
Services, published in 1he F.araJ bf11•, on Nowmber 20, 1996, did not, ho'tWVlf, propo11 any 
specific size standardl; rather, it contained a pneral description olthe mbjectl and i111111 inwlwd. A 
general description doel not sadaiY the requiremal of tlw Smlll Busineu Act tor a ~roposod me 
standard'• offer~ fot public comment 'Iherelore, we lade authority to approve 1he Wireleu •Ptd*l 
siz.e standards. 
B. Papas Senias 
• "Small Buainet1" - m entity with mnp IJ'OU 1'1Ytftull 1hat do not exceed 
1337 
Amy J. Zoslov . 
Approwil: 
• $15 million for 1he pnctdina 3 yan. 
• $3 million fbr the Prec.dina 3 yun. 
• ••Smlll Bu1in•s Ccmortium" -a~ orpnizatian .fbrmld u ajofnt 
vemure beew.en or amona mu1Ullly-independmt busin•• fhma, each of which 
individually 1ad1fte1 die deSnitiaft of. ima1I businea. 
SBA approws the ma ltlndardl reqUllt9d fbr ute in thit IUdfon. the lize 1tlndardl 1tlected 
by the Commiuiaa rm an ccnsidirltionl reprdiq IPeGtnms chlncteristlct md 1b.e capital 
requiremems for Pllinl·S.-vtces. 'Iha Comi!Uaica souatlt ~the Cl[)ital requirements ot 
m1 paainl service in compariloa to ocher wlreleu HrVicel mdwbetbat small bulinenet &ce bairim 
. to entry into pagina MrYice bued ca lack of acctll 10 capital. Comments Ylritd from ibaH adwc:atma 
no credits to those advocaUna hlaher mdim. The Commillim canduded that there 11'1 pouibly 
siinificant capital eo1m. and 1blt 1ueh barrien do exist. The Coa:nmiuicm therefore adapted 1b.e 
proposed size standards and credi~. 1bat are the 11m1 u SBA IPPrcmd for UH in the 900 MHz • 
Specialized Mobile Radio (SMll) Jervicel auctim. We c:mclude ftoom this infarmation 1hat b 1bil 
auction these small buainel1 deftni1iam are aceepcable. Punber, 1hele size RIDdards are CODliltmt 
"irith 1hose we haYI alrtedy ippraved for other 11rvic:a, such u 1be 800 MHz SMI. and Phlle U 
220MHz. .. 
W1 are pleued fD Ulilt you in thi1 procm, Ind n hlPP)' to work whh you llld 1M 
Commiuion to ISliat mnlll bulinel1a. If you have Ill'/ qUeltianl en ti1 IDlttlr' or need addltimal 
information concemina size ltlndlrda. pltue contlCt Oary M. Jacbon. Alliltam AdminiatratGr fcJ 
Siz.e Standards, at (202) 205-6618. 
cc: Ms. Cllherine 1. Smdov&I 
Honorable I-. W. GloY8r 
Dr. 1W:hatd L Hayti 
Sincerely, 
1338