WASHINGTON, DC -- The National Telecommunications and Information Administration (NTIA) today, in a letter to Federal Communications Commission (FCC) Chairman Reed Hundt, announced that it intends to relinquish the Federal Government's primary status on 125 channels inside the 220-222 MHz band. These channels are currently allocated equally to the Federal Government and to private users.

In the letter, NTIA Administrator Larry Irving suggested that relinquishing the Federal Government's primary status will increase the spectrum's auction value as it allows the private sector bidders to be the primary user.

NTIA also filed comments today recommending the FCC adopt a combinatorial approach to auction the 220-222 MHz band for commercial mobile services. This would allow bidding on a package of licenses. "We are recommending this approach as a part of our continued effort to improve the fairness and efficiency of spectrum licensing through auctions," said Irving, Assistant Secretary for Communications and Information and administrator of NTIA.

"We believe that the combinatorial approach would enable bidders to more accurately reflect their valuations on licenses, particularly those that could be used interdependently," said Irving. "The likely result would be more intense bidding competition, increased revenues for the U.S. Treasury, and in many cases, a more efficient assignment of licenses."

Before the PCS auction began, NTIA suggested that a combinatorial approach be used but it was not adopted. "Today's filing reinforces NTIA's long-held position that the combinatorial bidding approach is not only the best approach for the U.S. Treasury, but also for consumers and for the bidders," said Irving.

NTIA also recommends that if the FCC does not adopt combinatorial bidding, then it should reduce the participation requirements in the final stage of the auction to give bidders greater flexibility and better information for use in determining which licenses to pursue.

A staff study, Broadband PCS (MTA) Auction: An Empirical Examination, which accompanies the filing and is the basis for NTIA's recommended changes, evaluates the Commission's first auction for licenses to provide broadband Personal Communications Services (PCS). The Commission is currently conducting the second auction for smaller area licenses (i.e., Block C to provide broadband PCS). The study concludes that "the participation rules may have limited bidders' ability to switch their activity to larger markets in the final rounds and thus may have caused prices for small market licenses to be higher than those for larger markets."

NTIA made these recommendations in response to the FCC's Notice of Proposed Rulemaking on the matter of Implementation of Section 309 (j) of the Communications Act -- Competitive Bidding, 220-222 MHz, PP Docket No. 93-253.

The Commerce Department's National Telecommunications and Information Administration serves as the principal adviser to the President, Vice President and Secretary of Commerce on domestic and international communications and information issues and represents the Executive Branch before the Congress, other Federal agencies, foreign governments and international organizations. NTIA also manages Federal use of the radio frequency spectrum.

Copies of the filing are available via Internet at http://www.ntia.doc.gov or by calling NTIA's Office of Chief Counsel at 202-482-1816.