OFFICE OF GENERAL COUNSEL
MEMORANDUM
TO:
FROM:
SUBJECT:
Chief, PIRS
Associate General Counsel, Litigation Division
Telephone Electronics Corporation v. FCC & USA, No.
95-1015. Filing of a new Petition for Review filed
in the United States Court of Appeals for the
District of Columbia Circuit
DATE: January 24, 1995
Docket No(s).pp~.
File No (s) .
OOCKET FILE COpy ORIGINAL
This is to advise you that on January 6. 1995, Telephone ,
Electronics Corporation, filed a Section 402(a) Petition for
Review in the United States Court of Appeals for the District of
columbia Circuit of the FCC decision: In the Matter of
Implementation of Section 309(;) of the Communications Act
Competitive Bidding (Fifth MO&O) , FCC 94-178, released November
23, 1994.
Challenge the denial of adopted rules governing eligibility to
bid in the auction for licenses in the entrepreneurs' blocks for
the provision of broadband personal communications services.
Due to a change in the Communications Act, it will not be
necessary to notify the parties of this filing.
The Court has docketed this case as No. 95-1015 aqd the attorney
assigned to handle the litigation of this case is James M. Carr.
Daniel M. Armstrong
cc: General Counsel
Office of Public Affairs
Shepard's Citations
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THE UNITED STATES OF AMERICA,
TELEPHONE ELECTRONICS
CORPORATION,
FEDERAL COIOlU1fICATIONS
COMMISSION,
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FILED JAN 06 1995
RON GARVll'4
CLERK
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CASE NO.
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PETITION FOR REVIEW
Telephone Electronics Corporation ("TEC") pursuant to 47
U.S.C. § 402(a), 28 U.S.C. §§ 2342 and 2344, and Rule 15(a) of the
Federal Rules of Appellate Procedure, petitions this Court for
review of two Orders issued by the Federal Communications
Commission ("FCC") in a proceedinq entitled In the Matter of
Iaple.entation of Section 309 (j) of the COUlunicatiQDs Act
Competitive Bidding, PP Docket No. 93-253. The first Order is the
Fifth Report and Order, 9 FCC Red 5532 (1994). A summary of the
FCC's Fifth RePOrt and Order was published in the Federal Reqister
on JUly 22, 1994 at 59 Fed. Req. 37,566. The second Order is the
Fifth MemorandUM Opinion and Order, FCC 94-285 (released November
23, 1994). A summary of this second Order was published in the
Federal Reqister on December 7, 1994 at 59 Fed. Req. 63,210. A
copy of each Order is attached to this Petition.
In the Fifth Maoranciull Qginion and Order, the FCC denied
TEC's petition for reconsideration of the Fifth Report and Order
which adopted rules governing eligibility to bid in the auction for
licenses in the entrepreneurs' blocks for the provision of
broadband personal c01lDllunications services ("PCS"). The rifth
Memorandum Opinion and Order also denied TEC's request for
reconsideration of the -FCC's affiliation rules, its partitioning
requirements, and its rules qoverning eligibility to receive
bidding credits and to pay for winning bids in installments.
Relief from the FCC's Fifth RePOrt and Order and Fifth
.emorandUll. Opinion and Order is sought on the grounds that they are
unlawful, arbitrary and capricious, not supported by substantiat
evidence, and otherwise not in accordance with law. The FCC acted
arbitrarily and capriciously in applying its affiliation rules to
small, rural telephone companies in spite of the fact that
corporate and regulatory barriers prevent cross-pooling with their
affiliates. National As.'n. of Regulatory Util.Cgmm'rs. v. FCC,
737 F.2d 1095, 1128 (D.C. Cir. 1984), cert. denied, 469 U.S. 1227,
105 S. ct. 1224 (1985).
The FCC's auction rules, which prohibit TEC's small, rural
telephone coapanie. from bidding directly on licen.e. during the
entrepreneurs' block auctions, are also contrary to Section 309(j)
of the Co.-unication. Act, 47 U.S.C. § 309(j), which mandates that
the FCC "en.ure that small businesses, rural telephone capanies,
and businesses owned by members of minority groups and women are
given the opportunity to participate in the provision of spectrum-
2
based services." (£aphasis added.) Excludinq TEC's rural
telephone companies from the auction also iqnores the Conqressional
mandate set forth in the section of the statute entitled "Desiqn of
Systems of Competitive Biddinq" which directs the FCC to
"disseminat[e] licenses" to rural telephone companies.
The FCC acted arbitrarily and capriciously, abused its
discretion, and acted contrary to section 309(j) of the
Communications Act by disqualifyinq several small, rural telephone
companies from the preferences available to other small businesses
and imposinq a partitioninq system that severely restricts where
small, rural telephone companies can provide broadband PCS ?
..
Furthermore, the FCC's choice of qross revenue criteria rather than
net worth criteria as the basis for its eliqibility rules is
irrational as only net worth identifies the amount of funds that an
entity actually has available to be used for biddinq in an auction.
TEC is a privately-owned, small entrepreneurial company with
its operations centered in rural areas. Its core business consists
of six, small rural telephone companies. The FCC's Fifth Report
and Order and Fifth Keaorandua Opinion and Order prohibit these
small, rural telephone companies from biddinq directly on licenses
durinq the entrepreneurs' blocks auction, a result contrary to
section 309(j) of the Co..unications Act.
TEC requests that this Court hold unlawful, vacate, enjoin and
set aside both the Fifth Report and Order and the Fifth Kaaorandum
Opinion and Order, and that the Court qrant such other and further
relief as may be proper and just under the circumstances.
3
Venue is proper under 28 U.S.C. § 2343.
Respectfully submitted,
TELEPHONE ELECTRONICS
CORPORATION
U. Troup
Bar No.
Roger P. Furey
(D.C. Bar No. 375600)
ARTER , HADDEN
1801 K Street, N.W., suite 400K
Washington, D.C. 20006
(202) 775-7100
Its Attorneys
Dated: January 6, 1995
4
CERTIFICATE OF SERVICE
I hereby certify that on January 6, 1995, copies of the
foregoing Petition for Review were served by express mail upon:
Janet Reno
Attorney General
United States Department of Justice
lOth and Pennsylvania Avenue, N.W.
Washington, D.C. 20530
William E. Kennard
General Counsel
Federal co..unications Commission
1919 M street, N.W., Rm. 614
Washington, D.C. 20554
CERTIFICATE OF SERVICE
I hereby certify that on January 6, 1995, copies of the
foregoing Petition for Review were served by express mail upon:
Janet Reno
Attorney General
united states Department of Justice
loth and Constitution Avenue, N.W.
Room 4400
Washington, D.C. 20530
William E. Kennard
General Counsel
Federal Co..unications Commission
1919 M street, N.W., Rm. 614
Washington, D.C. 20554