December 20, 1995 David A LaFuria, Esq. Lukas, McGowan, Nace & Gutierrez 1111 19th Street, N.W. Suite 1200 Washington, D.C. 20036 Re: Meretel Communications, L.P.'s Petition for Waiver or in the alternative Request for Declaratory Ruling Dear Mr. LaFuria: This letter responds to the "Petition for Waiver or in the alternative Request for Declaratory Ruling" ("Petition") filed on behalf of Meretel Communications, L.P. ("Meretel") on December 1, 1995. Meretel requests a waiver of Section 1.2105(b) of the Commission's rules (47 C.F.R. 1.2105) to permit it to amend its short-form application (FCC Form 175) to participate in the Broadband PCS "C Block" Auction. Specifically, Meretel would like to add the following six additional markets to its application: BTA 238, BTA 009, BTA 290, BTA 449, BTA 175 and BTA 094. According to Meretel, Mercury Cellular Telephone Company ("Mercury"), owns a 24.33 percent interest in Meretel. Mercury, in turn, holds controlling interests in FCC cellular licenses in each of the BTAs that Meretel would like to add to its short-form application. Meretel states that it did not include these BTAs in its short-form application in order to comply with the Commission's PCS-cellular cross-ownership rule, Section 24.204. 47 C.F.R.  24.204. Meretel claims that it should now be allowed to bid conditionally on the six additional markets in light of the decision in Cincinnati Bell Telephone, et al. v. FCC, Nos. 94-3701/4113; 95-3023/3238/3315 (6th Cir., slip op., released November 9, 1995), in which the court remanded the PCS-cellular cross-ownership rule to the Commission to conduct further proceedings. Requests for waiver of rules pertaining to eligibility to participate in the broadband PCS C block auction must meet the requirements of Section 24.819 of the Commission's rules (47 C.F.R.  24.819). Under that rule, a waiver will not be granted unless an affirmative showing is made: (i) that the underlying purpose of the rule will not be served, or would be frustrated, by its application in a particular case, and that grant of the waiver is otherwise in the public interest; or (ii) That the unique facts and circumstances of a particular case render application of the rule inequitable, unduly burdensome or otherwise contrary to the public interest. Applicants must also show the lack of a reasonable alternative. 47 C.F.R.  24.819(a)(i) & (ii). Because Meretel's petition does not meet the criteria for granting a waiver, we are denying Meretel's petition. The Commission's Second Report and Order established the application procedures for the C block auction. See Second Report and Order in PP Docket No. 93-253, 9 FCC Rcd 2348 (released April 20, 1994) at  160-168. Under these procedures, potential applicants are required to submit a short-form application prior to an application deadline "to reduce the administrative burdens on bidders and the FCC and minimize the potential for delay." Id., at  165. Thus, the underlying purpose of Section 1.2105 of the Commission's Rules was to ensure that serious, qualified bidders would participate in the auction and that the auction would proceed without unnecessary delay. In order to maximize participation in the auction, the Commission decided to allow applicants, whose short-form applications were substantially complete but contained minor errors or defects, an opportunity to cure. Applicants would not, however, be permitted to make any major modifications to their applications. Id., at  167. We consider changes in market selections to be major modifications (see Supplemental Bidder Package, p. 30 (rel. October 11, 1995) and discussion, infra.). To allow applicants such as Meretel to make major modifications to their applications after the filing deadline would frustrate the underlying purpose of Section 1.2105. That is, permitting applicants to make major modifications to their applications would in all likelihood increase the administrative burdens on bidders and the FCC and increase the potential for delay of the auction. Meretel has not otherwise shown how the underlying purpose of Section 1.2105 would not be served, or would be frustrated, by its application in this case. Moreover, Meretel has not shown that the grant of a waiver is otherwise in the public interest. The Supplemental Bidder Package gave notice to all potential applicants of Radiofone's challenge to our PCS-cellular cross-ownership rule. Supplemental Bidder Package, p. 23. On November 13, 1995, the Wireless Telecommunications Bureau released a Public Notice in response to the decision by the Sixth Circuit in Cincinnati Bell. "FCC Will Proceed with C Block Auction on Schedule", Public Notice (released November 13, 1995). This Public Notice announced that "applicants (such as Radiofone, Inc.) that filed timely applications and requests seeking a waiver of the PCS-cellular cross-ownership rule and the 45 MHz limit will be allowed to participate in the C block auction on a continual basis." Meretel neither applied for the markets where Mercury is a cellular operator nor did it seek a timely waiver of the PCS-cellular cross-ownership rule. Meretel asserts that our decision to allow only those who filed appropriate waiver requests prior to the Sixth Circuit's decision is "tantamount to creating a separate class of applicant without prior notice." We disagree. The November 13 Public Notice merely announced the status and conditional treatment of pending applications and waivers. Such action was taken out of fairness to those parties that had filed applications and contingent waivers to preserve their rights in the event that the Sixth Circuit's decision affected the rules. As noted above, all potential bidders were given notice of Radiofone's challenge to the PCS-cellular cross-ownership rule in the Supplemental Bidder Package. It appears that Meretel either ignored the notice of the implications of the Radiofone litigation, or was not interested in bidding on the markets overlapping its cellular interests at the time it filed its FCC Form 175. In either case, because Meretel did not initially seek a waiver of the PCS-cellular cross-ownership and spectrum cap rules, we will not allow Meretel to add new markets to its application. Meretel had the same opportunity to preserve its rights in the event that the Sixth Circuit's ruling would affect the Commission's rules. In any event, the effect of the ruling has not been determined. As the court stated, "while attempting to buttress the Cellular eligibility restrictions, the FCC may simply find more support for its conclusions [or] [p]erhaps the FCC's reexamination of the Cellular eligibility rules will result in a modification of those rules." Slip op. at 12 (emphasis added, citations omitted). Accordingly, Meretel's situation presents no unique facts or circumstances justifying the grant of a waiver. Moreover, Meretel has not shown the lack of a reasonable alternative. Meretel objects to the statement in the Supplemental Bidder Package that indicates that we will consider a change in market designation as a "major amendment," and therefore prohibited under the Commission's rules. Specifically, Meretel asserts that this statement, which was not challenged by Meretel (until now) or any other party, amounts to "retroactive rulemaking." The Commission's rules make clear that applicants may only make minor amendments to their applications after the initial filing deadline. Specifically, Section 24.822 allows applicants "to amend their Form 175 applications to make minor amendments to correct minor errors or defects such as typographical errors." 47 C.F.R. 24.822(b). In addition, Section 1.2105 states that "Form 175 may be amended or modified to make minor changes or correct minor errors in the application (such as typographical errors)" and specifies limited circumstances in which applicants may modify their short-form applications to reflect formation of consortia or changes in ownership. We continue to interpret these rules to prohibit applicants from adding markets to their short-form applications, unless a waiver of the rules is warranted under Section 24.819(a). While certain amendments are expressly deemed "minor" and are allowed by the rules, they do not specify the type of amendment sought by Meretel as either minor or major. We believe, however, that the Commission intended to treat such amendments as major. Further guidance on what types of amendments are to be deemed "major" can be found in Section 24.823, which addresses applications other than FCC Form 175 (such as FCC Form 600, the long-form applications required of winning bidders). That rule classifies an amendment as not being major if it "does not create new or increased frequency conflicts." 47 C.F.R.  24.823(g)(5). While these rules are silent on market designation changes in particular, a newly designated market in a short-form application is tantamount to creating a new frequency conflict and should be deemed major in both long-form and short-form applications. Accordingly, we believe it is reasonable to interpret these rules to classify a change in market designation as a "major amendment." Because Meretel does not allege that it failed to include the six additional markets due to "typographical errors" or "similar clerical errors," we deny Meretel's request. Finally, we note that the Commission's anti-collusion rules (47 C.F.R.  1.2105(c)) also bars Meretel from adding additional markets to its application. The anti-collusion rules require an applicant to identify on its short-form application all parties with whom it has entered into a bidding consortium or other joint bidding arrangement as of the short-form filing deadline. After the short-form filing deadline, applicants may not discuss the substance of their bids or their bidding strategies with other applicants (other than those identified on the short-form application) that are bidding in the same geographical license areas. 47 C.F.R.  1.2105(c)(1); Fourth Memorandum Opinion and Order in PP Docket No. 93-253, 9 FCC Rcd 6858, 6868 (1994). For the reasons stated above, Meretel's request IS HEREBY DENIED. Sincerely, Kathleen O'Brien Ham Chief, Auctions Division Wireless Telecommunications Bureau