# December 26, 2002

# **DA 02-3604**

Michael K. Kurtis, Esq.

Jerome K. Blask, Esq.

Kurtis & Associates, P.C.

1000 Potomac Street, N.W., Suite 200

Washington, DC 20007

Dear Messrs. Kurtis and Blask:

This order dismisses the long-form applications filed by Mountain
Solutions Ltd., Inc. ("Mountain Solutions") for grant of the two
licenses for which Mountain Solutions was the high bidder in Auction No.
10.

**Background.** Mountain Solutions was the high bidder for two broadband
C block Personal Communications Services (PCS) licenses in Auction
No. 10, the second C block auction. Mountain Solutions' net high
bids[^1] for the two licenses were, respectively, \$17,169,777 for BTA
089 (Colorado Springs, CO) and \$6,450,001 for BTA 149 (Ft.
Collins-Loveland, CO). Mountain Solutions timely submitted a combined
down payment for the two licenses of \$672,989, which, together with
Mountain Solutions' prior upfront payment of \$508,000, totaled
\$1,180,989 or five percent of Mountain Solutions' combined net high
bids for the two licenses.[^2] The down payment leaves Mountain
Solutions with a remaining amount owed for the two licenses of
\$22,438,789.[^3] No further payment is due, however, until the
Commission has determined that it is ready to grant Mountain Solution's
long-form applications,[^4] which, to date, it has not done.

Mountain Solutions was also the high bidder for 10 C block licenses in
the first C block auction, Auction No. 5. After requesting, and being
denied, a waiver of the second down payment deadline for that auction,
Mountain Solutions defaulted on its second down payment. Under delegated
authority, we assessed Mountain Solutions' outstanding default payment
obligation as \$16,888,367.53.[^5] The denial of Mountain Solutions'
waiver request and subsequent objections by Mountain Solutions to making
the default payment have been the subject of both Commission and
judicial proceedings, which are, in part, ongoing.[^6] During these
proceedings, Mountain Solutions has informed the Commission that it
lacks the finances needed to pay for and build out broadband PCS
licenses. Specifically, in a January 2002 written response to a request
for information by the Commission's Office of General Counsel, Mountain
Solutions stated that it had "ceased business operations in August 1999"
and that it had "already liquidated in the sense that its revenue
generating assets \[had\] been assigned to an unrelated entity."[^7]

**Discussion.** Mountain Solutions' admission of insolvency in the
Auction No. 5 proceedings signifies that it lacks the financial
qualifications to become a Commission licensee.[^8] The Communications
Act of 1934, as amended, and the Commission's rules, prohibit our
granting a license won in competitive bidding unless we have determined,
*inter alia*, that the applicant is legally, technically, and
financially qualified to be a licensee and that the public interest,
convenience, and necessity would be served by such grant.[^9] To be
financially qualified, an applicant must, at a minimum, have the intent
and ready ability to pay for its licenses, build out its systems, and
provide service in accordance with Commission rules.[^10] Limiting the
award of licenses to applicants demonstrating such ability is
fundamental to achieving the statutory objective of promoting the rapid
deployment of new services for the benefit of the public.[^11] The
admissions by Mountain Solutions leave no question that Mountain
Solutions lacks the ability to pay for and build out its Auction No. 10
licenses.[^12] We, therefore, dismiss Mountain Solutions' long-form
applications as defective based upon a lack of financial
qualifications.[^13]

**Conclusion.** For the above reasons, Mountain Solutions' long-form
applications for grant of C block licenses for BTA 089, Colorado
Springs, CO, and BTA 149, Ft. Collins-Loveland, CO, are dismissed with
prejudice. This action is taken pursuant to authority delegated by
Section 0.331 of the Commission's rules, 47 C.F.R. § 0.331.

Sincerely,

Margaret W. Wiener, Chief

Auctions and Industry Analysis Division

Wireless Telecommunications Bureau

[^1]: The amount due from Mountain Solutions for each license was
    reduced 25 percent from the high bid by a small business bidding
    credit.

[^2]: *See* 47 C.F.R. § 24.711(a)(1) (1996).

[^3]: Mountain Solutions has an outstanding balance of \$16,337,825.75
    for the Colorado Springs license and \$6,100,963.25 for the Ft.
    Collins-Loveland license.

[^4]: *See* 47 C.F.R. § 24.711 (1996).

[^5]: Letter order from Margaret Wiener, Chief, Auctions and Industry
    Analysis Division, Wireless Telecommunications Bureau, Federal
    Communications Commission, to Michael K. Kurtis, Esq. and Jeanne W.
    Stockman, Esq., Kurtis & Associates, P.C., attorneys for Mountain
    Solutions, Ltd., Inc., 16 FCC Rcd 18,542 (2001) ("*October 17
    Order*").

[^6]: For a comprehensive account of these proceedings, *see* *October
    17 Order*, 16 FCC Rcd at 18,542-44. *See also* Letter order from
    Margaret Wiener, Chief, Auctions and Industry Analysis Division,
    Wireless Telecommunications Bureau, Federal Communications
    Commission, to Michael K. Kurtis, Esq. and Jerome K. Blask, Esq.,
    Kurtis & Associates, P.C., attorneys for Mountain Solutions, Ltd.,
    Inc., 17 FCC Rcd 4668 (2002).

[^7]: Response of Mountain Solutions Ltd., Inc. to FCC Letter Dated
    December 6, 2001 (filed Jan. 28, 2002) ("January 2002 Response").

[^8]: Mountain Solutions' inability to meet its financial obligations
    with regard to Auction No. 5 and its admission of insolvency in the
    January 2002 Response have not been the only indicia of Mountain
    Solutions' lack of financial qualification. For example, two years
    prior to providing the January 2002 Response, Mountain Solutions
    acknowledged in a letter to then Chairman William E. Kennard that it
    was wholly without resources. Letter from D. Lynn Langford,
    President, Mountain Solutions, to Federal Communications Commission,
    Chairman William E. Kennard (dated Jan. 10, 2000).

[^9]: 47 U.S.C. §§ 308(b), 309(a), (j)(5); 47 C.F.R. § 1.2105(a)(2)(v).
    *See also id.* § 1.2105(a)(2)(vii).

[^10]: *See*, *e.g.*, BDPCS, Inc., *Memorandum Opinion and Order*, 15
    FCC Rcd 17,590, 17,598-601 ¶¶ 14-18 (2000) (explaining that "the
    default payment provisions are critical for maintaining the
    integrity of the auction process by discouraging insincere bidding
    and ensuring that licenses end up in the hands of those parties that
    value them the most and have the financial qualifications necessary
    to construct operational systems and provide service."); Amendment
    of Part 1 of the Commission's Rules -- Competitive Bidding
    Procedures, WT Docket No. 97-82, *Third Report and Order and Second
    further Notice of Proposed Rule Making*, 13 FCC Rcd 374, 433-34 ¶
    101 (1998); Implementation of Section 309(j) of the Communications
    Act -- Competitive Bidding, PP Docket No. 93-253, *Second Report and
    Order*, 9 FCC Rcd 2348, 2381, 2382-83 ¶¶ 190, 197-98 (1994)
    (discussing the value of down payments and default payments in
    ensuring that all licensees have the financial capability to rapidly
    deploy their systems and operate them in an efficient manner).

[^11]: *See* 47 U.S.C. § 309(j)(3)(A); *supra* note 10. Ensuring that
    broadband PCS licenses are granted only to those with the resources
    necessary to speedily provide service to the public is particularly
    important now that the introduction of wireless Internet, advanced
    data, and 3G services, and global competition within these services,
    have created a shortage of suitable available spectrum. *See*
    Amendment of the Commission's Rules Regarding Installment Payment
    Financing for Personal Communications Services (PCS) Licensees, WT
    Docket No. 97-82, *Sixth Report and Order and Order on
    Reconsideration*, 15 FCC Rcd 16,266, 16,278-79 ¶ 23 (2000).

[^12]: Under section 1.17 of the Commission's rules, applicants are
    prohibited from making misrepresentations or willful material
    omissions in any application, pleading, report, or other written
    statement submitted to the Commission. 47 C.F.R. § 1.17. Thus, we
    take notice of these admissions in evaluating Mountain Solutions'
    long-form applications. However, we also note that Mountain
    Solutions failed to notify us directly of its changed financial
    circumstances, as it was required to do by Commission rules. 47
    C.F.R. § 1.65 ("Whenever there has been a substantial change as to
    any . . . matter which may be of decisional significance in a
    Commission proceeding involving the pending applications, the
    applicant shall as promptly as possible and in any event within 30
    days, unless good cause is shown, submit a statement furnishing such
    additional or corrected information as may be appropriate. . . .").

[^13]: 47 C.F.R. §§ 1.934(c), 1.945, 2.108. We note that, where, as
    here, there is no substantial issue of fact as to an applicant's
    lack of qualifications, we need not hold an evidentiary hearing
    prior to making our determination. Implementation of Section 309(j)
    of the Communications Act -- Competitive Bidding, PP Docket No.
    93-253, *Second Report and Order*, 9 FCC Rcd 2348, 2383 ¶ 202 (1994)
    ("We affirm our tentative conclusion that the Commission need not
    conduct a hearing before denial \[of a long-form application\] if it
    determines that an applicant is not qualified and no substantial
    issue of fact exists concerning that determination."); *see* 47
    U.S.C. § 309(e); *U.S. v. Storer Broadcasting Co.*, 76 S. Ct. 763,
    770-72 (1956) ("We do not think Congress intended the Commission to
    waste time on applications that do not state a valid basis for a
    hearing."); *see also* 47 C.F.R. § 1.2108(d)(2). We note further
    that Mountain Solutions recently filed a petition for
    reconsideration of a Commission order in a separate proceeding,
    seeking, in part, relief for its Auction No. 10 license obligations.
    Petition for Reconsideration of Order and Order on Reconsideration,
    filed by Mountain Solutions Ltd., Inc. (Dec. 16, 2002) (seeking
    reconsideration of Disposition of Down Payment and Pending
    Applications By Certain Winning Bidders in Auction No. 35, WT Docket
    No. 02-276, *Order and Order on Reconsideration*, FCC 02-311 (rel.
    Nov. 14, 2002)). We, of course, leave formal resolution of that
    petition to the Commission.