Before the
                FEDERAL COMMUNICATIONS COMMISSION
                     Washington, D.C.  20554

In the Matter of

Amendment of the Commission's Rules
Regarding  the 37.0-38.6 GHz and
38.6-40.0 GHz Bands

DA 99-2624
ET Docket No. 95-183
     Comments of the Office of Advocacy, U.S. Small Business
                         Administration

     The Office of Advocacy of the United States Small Business

Administration ("Advocacy") (1)respectfully submits these

Comments to the Public Notice issued November 23, 1999, in the

above-captioned proceeding, regarding procedural issues related

to the upcoming spectrum auction for the 39 GHz band, scheduled

to begin April 11, 2000.

     Advocacy is troubled by the Federal Communications

Commission's ("Commission") apparent decision to auction this

service according to Economic Areas ("EAs"), rather than Basic

Trading Areas ("BTAs"), as the Commission originally proposed.(2)

Advocacy notes that the sole stated reason for this decision

relates to complications arising from Rand McNally's copyright

interest in BTAs, which might delay the 39 GHz spectrum auction.

While Advocacy understands the Commission's interest in assigning

this spectrum without unnecessary delay,

Advocacy believes that this is an inadequate rationale for

adopting a much larger geographic licensing area.  There are

approximately 175 EAs and EA-like areas in the country, in

contrast to the 493 BTAs or BTA-like areas.  EAs contain rural,

urban, and suburban areas, while BTAs, being smaller, are more

targeted to rural or urban areas, and may be better suited for

small business needs.  If the Commission finds that using BTAs

will unacceptably delay the spectrum auction, Advocacy would urge

the Commission to explore other geographic areas, such as

Metropolitan Statistical Areas ("MSAs") and Rural Service Areas

("RSAs") that more closely approach the size of BTAs.  Making a

jump from BTAs to the larger EAs risks limiting small business's

ability to compete with large business in the spectrum auction.

To make this jump for simply procedural reasons, that may not

justify the negative impact on small business, is irresponsible.

     MSAs and RSAs would more closely approximate BTAs and would

permit small businesses to compete for precisely the type of area

that they wish to serve.  While EAs could later be partitioned,

and rural areas could be transferred to small businesses that

wish to serve them, small businesses may be forced to pay

considerably more for these areas than they would have if the

rural areas were auctioned discreetly, and not part of an EA

containing more valuable urban areas.  And from a cost standpoint

it may not be possible for small businesses to compete for whole

EAs, particularly if their business plans only include a portion

of the EA.  Small businesses may be forced, from a practical

point of view, to wait until the spectrum has been auctioned and

try to pick off rural areas from EAs.  Small businesses will have

a greater opportunity to obtain licenses for the areas they wish

to serve if they can compete for these licenses at the auction

stage.  Small businesses may well find it economically preclusive

to attempt to compete at auction, with presumably higher dollar

amounts, for EAs that they are not prepared to serve.

     Advocacy urges the Commission to choose smaller geographic

areas than EAs by which to auction spectrum at 39 GHz.


Respectfully submitted,



Jere W. Glover
Chief Counsel for Advocacy



R. Bradley Koerner
Assistant Chief Counsel for Telecommunications

December 8, 1999

ENDNOTES

1.  Congress established Advocacy in 1976 by Pub. L. No. 94-305
to represent the views and interests of small business within the
Federal government.  (Codified as amended at 15 U.S.C.  634 a-
g, 637.)  Advocacy serves as a focal point for concerns regarding
the government's policies as they affect small business, develops
proposals for changes in Federal agencies' policies, and
communicates these proposals to the agencies.  (See 15 U.S.C.
634c(1)-(4).)  Advocacy also monitors agency compliance with the
RFA and reports this to Congress.
2.   "[W]e determined that BTAs were the most appropriate
geographic areas for the types of services envisioned for the 39
GHz band."  Amendment of the Commission's Rules Regarding the
37.0-38.6 GHz and 38.6-40.0 GHz Bands, Memorandum Opinion and
Order, ET Docket No. 95-183, FCC 99-179, rel. July 29, 1999,
para.46.