**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | *  | File No. 0000721683          |
|                                  | *) |                              |
| Winstar LMDS, LLC (Chapter 7     | ** |                              |
| Debtor) Request for Waiver of    |    |                              |
| 1.2111(d) and 101.1107(e) of the | *  |                              |
| Commission's Rules Regarding     | *) |                              |
| Unjust Enrichment Payment for    | ** |                              |
| Fifteen LMDS Licenses Purchased  |    |                              |
| in Auction No. 17                | *  |                              |
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| Application for Assignment of    | ** |                              |
| Licenses and Authorizations from |    |                              |
| Winstar LMDS, LLC (Chapter 7     | *  |                              |
| Debtor) to Winstar Spectrum, LLC | *) |                              |
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+----------------------------------+----+------------------------------+

**ORDER**

**Adopted: April 17, 2002 Released: April 17, 2002**

By the Deputy Chief, Auctions and Industry Analysis Division:

# Introduction

1.  In this Order, we resolve Winstar LMDS, LLC (Chapter 7 Debtor)'s
    ("Winstar LMDS") request for waiver[^1] of the unjust enrichment
    provisions in sections 1.2111(d) and 101.1107(e) of the Commission's
    rules[^2] with respect to a pending application to assign fifteen
    LMDS licenses to a non-designated entity.[^3] For the reasons
    discussed below, we deny Winstar LMDS' Waiver Request.

# Background

2.  On March 25, 1998, the Commission concluded an auction of 986 Local
    Multipoint Distribution Service ("LMDS") licenses ("Auction No.
    17").[^4] Winstar LMDS, LLC a subsidiary of Winstar Communications,
    Inc. ("Winstar Communications"), qualified as an entrepreneur in
    Auction No. 17 and utilized a twenty-five percent bidding
    credit.[^5] Winstar LMDS, LLC was the successful high bidder on
    fifteen LMDS licenses. [^6] Winstar LMDS, LLC's total net bid was
    approximately 43 million dollars for the fifteen LMDS licenses.[^7]

3.  In April 2001, Winstar Communications and its domestic subsidiaries,
    Winstar Wireless Fiber Corp., WWI License Holding, Inc., and Winstar
    LMDS, LLC filed for bankruptcy under Chapter 11 of the U.S.
    Bankruptcy Code.[^8] In June 2001, the Commission approved the *pro
    forma* transfer of Winstar Communications' subsidiaries' licenses to
    the debtors-in-possession.[^9] On December 18, 2001, IDT
    corporation, through its subsidiary, IDT Winstar Acquisition, Inc.
    (which subsequently changed its name to Winstar Holdings, LLC
    ("Winstar Holdings")), submitted an offer ("Asset Purchase
    Agreement") to the Bankruptcy Court to acquire, for 38 million
    dollars plus other consideration in the form of IDT Winstar
    Acquisition, Inc.'s common stock,[^10] the core domestic
    telecommunications assets of Winstar Communications, and to manage
    its network, subject to regulatory approvals.[^11] The next day, the
    Bankruptcy Court approved the Asset Purchase Agreement and other
    related agreements, including a Management Agreement, between
    Winstar Communications, its subsidiaries, and Winstar Holdings,
    subject to Commission approval of the assignment applications.[^12]
    Subsequently, in January 2002, the Bankruptcy Court approved the
    conversion of Winstar Communications' and its domestic subsidiaries'
    cases to a Chapter 7 bankruptcy proceeding.[^13]

4.  Prior to finalizing the Asset Purchase Agreement, Winstar Spectrum,
    LLC ("Winstar Spectrum"), a subsidiary of Winstar Holdings, was
    formed to take assignment of the licenses held by Winstar
    Communications' subsidiaries.[^14] Subsequently, on January 10,
    2002, Winstar Communications' subsidiaries filed applications with
    the Commission to assign over 1,768 licenses to Winstar
    Spectrum.[^15] The 1,768 licenses listed in the assignment
    applications include: (1) 615 site based Common Carrier
    Point-to-Point Microwave licenses; (2) 931 39 GHz Economic Area
    licenses; (3) 205 39 GHz Rectangular Service Area Common Carrier
    licenses; (4) 16 LMDS licenses;[^16] and (5) 1 Digital Electronic
    Message Service license.[^17] Winstar LMDS filed the request for
    waiver of the Commission's unjust enrichment payment provisions with
    respect to the fifteen auctioned LMDS licenses as an attachment to
    the assignment application.[^18] In the Waiver Request, Winstar LMDS
    acknowledges that Winstar Spectrum, the proposed assignee, is not
    eligible to receive bidding credits.[^19]

5.  The Commission's unjust enrichment rules provide that a licensee
    that utilizes a bidding credit, and during the initial license term,
    seeks to assign or transfer a license to an entity that is
    ineligible to receive a bidding credit, must reimburse the Federal
    Government for the amount of the bidding credit plus interest from
    the date of license grant.[^20] However, the amount of unjust
    enrichment will be reduced over time based on the year the
    assignment or transfer occurs during the license term.[^21]

6.  Winstar LMDS seeks a waiver of the Commission's unjust enrichment
    rules so it can assign fifteen LMDS licenses, which it obtained
    using small business bidding credits, to Winstar Spectrum without
    making the unjust enrichment payment.[^22] In support of its request
    for waiver of the unjust enrichment payment, Winstar LMDS states
    that it is currently in bankruptcy and will not profit from the
    assignment of the LMDS licenses nor does it have any remaining funds
    to make the required unjust enrichment payment.[^23] Additionally,
    Winstar LMDS argues that waiving the unjust enrichment payment will
    permit Winstar Spectrum to fully devote current funds to the
    operation and maintenance of the Winstar LMDS network, to build a
    nationwide network, and to compete against local exchange
    carriers.[^24] Specifically, Winstar LMDS received a twenty-five
    percent bidding credit for each LMDS license, totaling approximately
    14 million dollars for the fifteen LMDS licenses.[^25] Because
    Winstar LMDS seeks to assign the LMDS licenses during year four of
    the license term for each license, under the Commission's rules, the
    unjust enrichment payment would be calculated by reducing the total
    value of the bidding credits by fifty percent.[^26] Therefore,
    absent a waiver, under the Commission's rules, approval of Winstar
    LMDS' assignment application would be conditioned on the payment of
    approximately 7 million dollars in unjust enrichment plus 1.5
    million dollars in interest.[^27]

# Discussion

7.  As we explain below, Winstar LMDS does not offer any persuasive
    arguments to waive the unjust enrichment rules in this instance.
    Winstar LMDS has failed to establish that it should be permitted to
    retain the financial benefit granted, *i.e*. the bidding credit,
    where it has not retained the LMDS licenses for the minimum
    five-year holding period. Accordingly, the waiver request is denied.

8.  In order to obtain the requested waiver, Winstar LMDS must show that
    either (i) the underlying purpose of the unjust enrichment rules
    would not be served or would be frustrated by application to the
    instant case, and that a grant of the requested waiver would be in
    the public interest; or (ii) in view of the unique or unusual
    factual circumstances of the instant case, application of the rules
    would be inequitable, unduly burdensome or contrary to the public
    interest, or the applicant has no reasonable alternative.[^28]
    Winstar LMDS, like others before it, has not presented any
    persuasive arguments to justify a waiver of the Commission's unjust
    enrichment rules.[^29]

9.  The underlying purposes of the Commission's unjust enrichment rules
    stem from our congressional mandate in Section 309(j) of the
    Communications Act of 1934, as amended.[^30] Congress included the
    concept of unjust enrichment in two subsections in Section 309(j) of
    the Communications Act.[^31] As one of the objectives of the
    Communications Act, Congress instructed the Commission to avoid
    unjust enrichment through the methods it employed to award use of
    the spectrum.[^32] Congress also specifically directed that, in
    prescribing regulations pursuant to Section 309(j) of the
    Communications Act, the Commission shall "require such transfer
    disclosures and antitrafficking restrictions and payment schedules
    as may be necessary to prevent unjust enrichment as a result of the
    methods employed to issue licenses."[^33] Pursuant to this mandate,
    when the Commission adopted small business bidding preferences to
    facilitate the participation of designated entities[^34] in
    auctions, the Commission also adopted unjust enrichment
    provisions.[^35] The purpose of such provisions is "to prevent
    designated entities from profiting by the rapid sale of licenses
    acquired through the benefit of preference policies."[^36]
    Accordingly, the unjust enrichment rule requires designated
    entities, during the first five years of the initial license term,
    seeking approval of a transfer of control or assignment of a license
    to a non-designated entity or an entity that qualifies for a
    different level of bidding credit, to reimburse the government for
    the amount of the bidding credit or for the difference between the
    bidding credit obtained by the seller and the bidding credit for
    which the buyer would qualify, plus interest.[^37]

10. Winstar LMDS argues that the underlying purpose of the regulations
    would not be served by requiring an unjust enrichment payment in
    this instance.[^38] Winstar LMDS states that it will not profit from
    the assignment of the LMDS licenses, because any proceeds from the
    assignment of the licenses will be given to Winstar LMDS' creditors
    in the bankruptcy proceeding.[^39] Further, Winstar LMDS contends
    that if it could retain the proceeds from the assignment of the LMDS
    licenses, it still would not make a "profit," as the term is
    commonly used, because it would sell at a loss.[^40] Finally,
    Winstar LMDS asserts that waiving the unjust enrichment payment will
    serve the public interest because it will allow Winstar Spectrum to
    fully devote current funds to build a nationwide network and compete
    against local exchange carriers.[^41]

11. Winstar LMDS' arguments lack merit. Winstar LMDS has not outlined a
    situation where adherence to the Commission's rules would undermine
    their underlying purpose or where deviating from the rules would be
    in the public interest. As noted above, Congress has specifically
    directed the Commission to take measures to prevent unjust
    enrichment as a result of the methods employed to issue
    licenses.[^42] Pursuant to this statutory obligation, the
    Commission's unjust enrichment rules provide that where a designated
    entity seeks to assign or transfer a license during the first five
    years of the initial license term, approval of the assignment or
    transfer application will be conditioned upon full repayment of the
    bidding credit. Thus, through this mechanism, the Commission
    prevents unjust enrichment.[^43]

12. In calculating an unjust enrichment payment, the Commission does not
    take into consideration the amount of profit or loss a licensee
    incurs when selling its assets. Rather, the Commission looks towards
    the benefit initially received by the licensee at the time the
    spectrum was auctioned. As we observed in the *D&E Communications*
    case, the Commission has stated that the purposes of these rules are
    "\[t\]o ensure that bidding credits benefit the parties to whom they
    are directed" and "to help promote the long-term holding of licenses
    by those parties receiving bidding credits."[^44] The approach
    adopted by the Commission reflects the determination that the
    licensee should not retain the financial benefit of the bidding
    credit if the license is not going to remain in the hands of an
    entity eligible for that credit for at least five years. Moreover,
    to look at each transaction using a profit/loss analysis, as Winstar
    LMDS' request suggests, would inject lengthy delays into the process
    governing assignment and transfer of licenses. Furthermore, to
    substitute subjective business judgments regarding issues of profit
    or loss as the measure to determine unjust enrichment is to replace
    the objective standards established by the Commission in accordance
    with the Communications Act. The Commission cannot administer its
    programs, and in particular the designated entity program, in such a
    way.

13. Winstar LMDS, at the time of Auction No. 17, received a fixed
    benefit, *i.e.,* bidding credit, from the Government for fifteen
    LMDS licenses. If the unjust enrichment payment is waived, Winstar
    LMDS will receive the benefit of the bidding credit despite its
    failure to either hold on to the license for the required holding
    period or ensure that the LMDS licenses are sold to a designated
    entity. Such a situation undermines the purpose of the unjust
    enrichment rules envisioned by the Commission.[^45] In this
    instance, a denial of Winstar LMDS' request does not prohibit the
    transfer of the LMDS licenses to Winstar Spectrum or any other
    entity. Rather, denial ensures that "bidding credits benefit the
    parties to whom they are directed."[^46] We also reject, as contrary
    to the underlying purpose of the Commission's bidding credit rules,
    Winstar LMDS' argument that it would be appropriate to grant the
    waiver request because grant would allow Winstar Spectrum to fully
    devote current funds to its other business initiatives.[^47]

14. Nor are we persuaded that the purported benefit to Winstar LMDS'
    creditors in the bankruptcy is a sufficient public interest basis to
    grant a waiver here.[^48] The Commission's rules regarding unjust
    enrichment were known to the parties at the time of the transaction,
    and there was no precedent for the parties to assume that a waiver
    would be forthcoming. Likewise, the creditors of Winstar LMDS knew
    or should have known that the LMDS licenses held by Winstar LMDS
    were acquired using bidding credits and that assignment of the
    licenses before five years could result in recovery of an unjust
    enrichment payment. Accordingly, we assume that Winstar Spectrum and
    Winstar LMDS took into account the potential unjust enrichment
    recovery in reaching the value of the assets paid to the estate. A
    waiver of the unjust enrichment rules could result in a double
    recovery to the estate and creditors - - Winstar LMDS and its
    creditors obtained the benefit of the bidding credit while Winstar
    LMDS held the licenses, and will receive the benefits of the
    assignment of the licenses to Winstar Spectrum upon the consummation
    of the transaction, which presumably took into account the
    possibility that a waiver would not be granted.[^49] In these
    circumstances, we do not believe that the unjust enrichment rules
    should be compromised. As noted above, the waiver denial will not
    impede the transaction with Winstar Spectrum, which will bring value
    to the estate. In view of the explicit Congressional mandate in the
    Communications Act regarding the imposition of unjust enrichment
    payments, we conclude that the parties have not shown that the
    public interest, including consideration of the general policies of
    the Bankruptcy Code, will be served by granting the requested
    waiver.

15. We also find to be unpersuasive Winstar LMDS' argument that the
    application of the rules in this instance is unduly burdensome. In
    the *Part 1 Order*, the Commission considered and rejected the
    position advocated by Winstar LMDS in this instance, that a
    licensee's financial inability to make an unjust enrichment payment
    makes the application of the rules unduly burdensome.[^50] The
    Commission stated that "in most situations of financial distress,
    licenses can be transferred as a "going concern" subject, of course,
    to the rights of the Commission to the payments of obligations
    created under the Commission's rules (including unjust enrichment
    payments), the license conditions, the promissory note, and the
    security agreement."[^51] Following this precedent, we denied a
    request to waive the unjust enrichment provisions for an entity that
    had, at the time of an application for transfer of a license,
    outgrown the bidding credit eligibility it held at the time of
    Auction No. 5.[^52] In denying the request, we noted that the
    Commission previously indicated in the *Part 1 Order* that even when
    the financial distress of a licensee is so severe that the
    Commission chooses to allow a designated entity to transfer a
    license to a non-designated entity, the Commission will require
    payment of unjust enrichment.[^53] In sum, the applicable precedent
    makes it clear that financial distress is not a basis upon which to
    grant a waiver of the unjust enrichment rules and does not present
    unique or unusual circumstances sufficient to justify a waiver of
    the bidding credit unjust enrichment rules.

# ORDERING CLAUSE

16. Accordingly, IT IS ORDERED that, pursuant to 4(i), 4(j), 303(r), and
    309(j) of the Communications Act of 1934, as amended, 47 U.S.C. §§
    154(i), 154(j), 303(r), and 309(j), and Section 0.331 of the
    Commission's rules, Winstar LMDS' request for waiver of sections
    1.2111(d) and 101.1107(e) of the Commission's rules IS DENIED.

    Federal Communications Commission

    Kelly Quinn Deputy Division Chief Auctions and Industry Analysis
    Division

[^1]: Request for Waiver of the Unjust Enrichment Payment; Federal
    Communications Commission Rule Sections 1.2111(d) and 101.1107(e),
    filed by Christine Shubert, on behalf of Winstar LMDS, LLC
    (debtor-in-possession), on January 10, 2002. As discussed herein,
    Winstar LMDS' (debtor-in-possession) assignment application, File
    No. 0000721683, was subsequently amended to reflect the assignor as
    Winstar LMDS, LLC (Chapter 7 Debtor). Application of Winstar LMDS,
    LLC (debtor-in-possession) to Winstar LMDS, LLC (Chapter 7 Debtor),
    File No. 0000760178 (Feb. 5, 2002) (collectively referred to herein
    as Winstar LMDS "Waiver Request").

[^2]: 47 C.F.R. §§ 1.2111(d), 101.1107(e).

[^3]: Waiver Request at 1. This Order does not address the merits of
    Winstar LMDS' assignment application, File No. 0000721683 or the
    additional waiver requests attached to the other assignment
    applications, File Nos. 0000723317 (Winstar Wireless Fiber Corp.)
    and 0000721675 (WWI License Holding, Inc.).

[^4]: "LMDS Auction Closes; Winning Bidders in the Auction of 986 Local
    Multipoint Distributions Service (LMDS) Licenses," *Public Notice*,
    13 FCC Rcd 18217 (1998) ("*Auction No. 17* *Closing PN*").

[^5]: 47 C.F.R. § 101.1107(c).

[^6]: *Auction No. 17* *Closing PN*, Attachment A. The fifteen markets
    included: (1) B079 (B) (Chico-Oroville, CA); (2) B136 (B)
    (Fairbanks, AK); (3) B157 (A) (Fresno, CA); (4) B174 (A) (Point,
    NC); (5) B208 (B) (Ithaca, NY); (6) B221 (B) (Juneau-Ketchikan, AK);
    (7) B303 (A) (Modesto, CA); (8) B320 (A) (New Orleans, LA); (9) B324
    (A) (News-Hampton, VA); (10) B336 (A) (Orlando, FL); (11) B365 (A)
    (Provo-Orem, UT); (12) B389 (B) (Sacramento, CA); (13) B399 (A)
    (Salt Lake City-Ogden, UT); (14) B404 (A) (CA); and (15) B492 (B)
    (American Samoa). These licenses are respectively designated as FCC
    Call Signs WPOH628, WPOH635, WPOH626, WPOH629, WPOH623, WPOH636,
    WPOH627, WPOH631, WPOH632, WPOH630, WPOH634, WPOH625, WPOH633,
    WPOH624, and WPOH637.

[^7]: *Auction No. 17* *Closing PN*, 13 FCC Rcd 18217; Waiver Request at
    7.

[^8]: *In re Winstar Communications, Inc.*, Case No. 01-1430 (Bankr. D.
    Del.) (Apr. 18, 2001).

[^9]: These *pro forma* transfer applications are designated as File
    Nos. 0000463080 (Winstar Wireless Fiber Corp.), 0000463106 (WWI
    License Holding, Inc.), 0000463132 (Winstar LMDS, LLC), and
    0000463234 (Winstar Puerto Rico, Inc.).

[^10]: In the alternative, the Asset Purchase Agreement provides that
    IDT Winstar Acquisition, Inc. could acquire Winstar Communications
    for approximately 30 million dollars and IDT Corporation's Class B
    common stock having a value equal to 12.5 million dollars plus other
    consideration in the form of IDT Winstar Acquisition, Inc.'s common
    stock. Application of Winstar LMDS, LLC, File No. 0000721683,
    Exhibit A at 11, Section 3.1.

[^11]: Waiver Request at 3. The Asset Purchase Agreement does not
    indicate what amount of the purchase price is associated with the 15
    LMDS licenses from the value of the other licenses and assets. *Id*.

[^12]: *Id*.

[^13]: *In re Winstar Communications, Inc.,* Case No. 01-1430 (Bankr. D.
    Del.) (Jan. 24, 2002). The approvals converting Winstar
    Communications' and its domestic subsidiaries' cases from a Chapter
    11 bankruptcy proceeding to a Chapter 7 bankruptcy proceeding are
    designated as File Nos. 0000760127 (WWI License Holding, Inc.),
    0000760178 (Winstar LMDS, LLC), and 0000760156 (Winstar Wireless
    Fiber Corp.). Specifically, Winstar LMDS' (debtor-in-possession)
    assignment application, File No. 0000721683, was amended to reflect
    the assignor as Winstar LMDS, LLC (Chapter 7 Debtor). Application of
    Winstar LMDS, LLC (debtor-in-possession) to Winstar LMDS, LLC
    (Chapter 7 Debtor), File No. 0000760178 (Feb. 5, 2002). This Order
    does not address the status of these licenses.

[^14]: Waiver Request at 4, fn. 8.

[^15]: *Id*. at 4. These assignment applications are designated as File
    Nos. 0000721683 (Winstar LMDS, LLC), 0000723317 (Winstar Wireless
    Fiber Corp.), and 0000721675 (WWI License Holding, Inc.).

[^16]: This includes the fifteen LMDS licenses that were purchased in
    Auction No. 17 and one non-auctioned LMDS license.

[^17]: Application of Winstar LMDS, LLC (debtor-in-possession), File No.
    0000721683, Attachment 2 at 1, fn. 2 (Jan. 10, 2002).

[^18]: *Id*. at Attachment 4.

[^19]: Waiver Request at 2, fn. 5.

[^20]: 47 C.F.R. §§ 1.2111(d)(1), 101.1109(e)(1).

[^21]: 47 C.F. R. §§ 1.2111(d)(2), 101.1109(e)(2).

[^22]: Waiver Request at 10.

[^23]: *Id*. at 4-5.

[^24]: *Id*. at 8.

[^25]: The bidding credit is calculated as twenty-five percent of the
    winning bid on each LMDS license. 47 C.F.R. § 101.1107(c). The
    winning bids for the fifteen LMDS licenses totaled approximately 57
    million dollars. *Auction No. 17* *Closing PN* , 13 FCC Rcd 18217,
    Attachment A.

[^26]: 47 C.F.R. §§ 1.2111(d)(2)(C), 101.1107(e)(2)(iii).

[^27]: 47 C.F.R. §§ 1.2111(d)(1), 101.1109(e)(1). The interest was
    calculated from the date of license grant, August 10, 1998, to April
    17, 2002. Any unjust enrichment payments are assessed in the
    Commission's action on the underlying assignment applications. *See*
    Wireless Telecommunications Bureau Conditions Grant of Assignments
    of Licenses from Subsidiaries of Winstar Communications, Chapter VII
    Debtors, to Winstar Spectrum, LLC, a Subsidiary of IDT Corporation,
    *Public Notice*, DA 02-895 (rel. April 17, 2002).

[^28]: 47 C.F.R. § 1.925.

[^29]: *See* Amendment of the Commission's Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licenses, *Memorandum Opinion and Order*, 14 FCC Rcd 20453 (1999)
    ("*Omnipoint Order*") (upholding a Division order denying
    Omnipoint's petition for waiver of the Commission's size-based
    bidding credit eligibility rule for C block licenses, the Commission
    noted that it had previously determined that the unjust enrichment
    provisions would apply to secondary market transactions as described
    by Omnipoint); *D&E Order*, 15 FCC Rcd 61 (holding that an assignee
    lacked standing to request waiver of the unjust enrichment rules,
    and that, in any event, the fact that the assignee had been eligible
    for bidding credit at time of original auction did not warrant
    waiver of these rules, given fact that assignee had since outgrown
    the bidding credit eligibility); Applications of TeleCorp PCS, Inc.,
    Tritel, Inc., and Indus, Inc. and TeleCorp Holding Corp. II. L.L.C.,
    TeleCorp PCS, L.L.C., et. al, *Memorandum Opinion and Order*, 16 FCC
    Rcd 3716 (2000) (WTB) ("*TeleCorp and Tritel Order*") (denying
    waiver of the unjust enrichment rules and holding that for purposes
    of determining bidding credit eligibility the Commission evaluates
    an entity's status at the time an assignment or transfer application
    is filed and does not look to prior eligibility determinations).

[^30]: 47 U.S.C. § 309(j)(3)(C),(4)(E).

[^31]: 47 U.S.C. § 309(j)(3)(C),(4)(E).

[^32]: 47 U.S.C. § 309(j)(3)(C) (". . . \[the Commission\] shall seek to
    promote . . . the following objectives: . . . recovery for the
    public of a portion of the value of the public spectrum resource
    made available for commercial use and avoidance of unjust enrichment
    through the methods employed to award uses of that resource . . .").

[^33]: 47 U.S.C. § 309(j)(4)(E).

[^34]: The Commission's rules define designated entities as "small
    businesses, businesses owned by women or members of minority groups,
    and rural telephone companies." 47 C.F.R. § 1.2110(a); *see* 47
    U.S.C. §§ 309(j)(4)(C)-(D). However, the term is generally used in a
    more limited context to refer to those entities, which satisfy
    certain size standards and thereby qualify for certain benefits.

[^35]: 47 C.F.R. §§ 1.2111(d), 101.1107(e).

[^36]: Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding, *Second Report and Order*, 9 FCC Rcd 2348,
    2394, ¶ 258 (1994) ("*Competitive Bidding Second Report and
    Order*").

[^37]: 47 C.F.R. § 1.2111; *Competitive Bidding Second Report and
    Order*, 9 FCC Rcd at 2395, ¶ 264.

[^38]: Waiver Request at 5.

[^39]: *Id*. at 6-7.

[^40]: *Id*.

[^41]: *Id*. at 8. Winstar LMDS also requests, at a minimum, that the
    Commission waive its unjust enrichment payment for 6 LMDS licenses
    (designated as FCC Call Signs WPOH626, WPOH627, WPOH629, WPOH630,
    WPOH631 and WPOH637) since all bidders on these 6 LMDS licenses used
    a twenty-five percent bidding credit. *Id*. at 7, fn. 17. Thus,
    Winstar LMDS argues that the use of bidding credits does not affect
    the outcome of these 6 LMDS licenses. *Id*. We disagree. Unlike
    licensees that participated in C block Auction Nos. 5 and 10, where
    virtually *all* bidders in these auctions (not just on particular
    licenses) and license winners qualified for a single twenty-five
    percent bidding credit, Auction No. 17 included many other bidders
    and license winners not eligible for bidding credits. *See*
    Amendment of the Commission's Rules Regarding Installment Payment
    Financing for Personal Communications Services (PCS) Licenses,
    *Sixth Report and Order and Order on Reconsideration*, 15 FCC Rcd
    16266, 16290-91, ¶ 51 (2000) ("*C Block Sixth Report and Order*").
    Thus, the rationale articulated in the *C Block Sixth Report and
    Order* is not applicable in the instant matter.

[^42]: 47 U.S.C. § 309(j)(4)(E).

[^43]: 47 C.F.R. § 1.2111(d)(1). Section 1.2111(d)(1) states that "\[a\]
    licensee that utilizes a bidding credit, and that during the initial
    term seeks to assign or transfer control of a license to an entity
    that does not meet the eligibility criteria . . . will be required
    to reimburse the Government for the amount of the bidding credit,
    plus interest . . . as a *condition* of Commission approval of the
    assignment or transfer." (emphasis added); *see* Amendment of Part 1
    of the Commission's Rules -- Competitive Bidding Procedures*, Order
    on Reconsideration of the Third Report and Order, Fifth Report and
    Order, and Fourth Further Notice of Proposed Rule Making*, 15 FCC
    Rcd 15293, 15314, ¶ 37 (2000) ("*Part 1 Fifth Report and Order*");
    *see also* *D&E Order*, 15 FCC Rcd 61.

[^44]: *D&E Order*, 15 FCC Rcd at 65 (quoting Implementation of Section
    309(j) of the Communications Act -- Competitive Bidding, *Fifth
    Report and Order*, 9 FCC Rcd 5532, 5539, ¶ 15 (1994) ("*Competitive
    Bidding Fifth Report and Order*")).

[^45]: *See Competitive Bidding Second Report and Order*, 9 FCC Rcd at
    2394, ¶ 258.

[^46]: *Competitive Bidding Fifth Report and Order*, 9 FCC Rcd at 5591,
    ¶ 134.

[^47]: *Id*.

[^48]: *See LaRose v. FCC*, 494 F.2d 1145 (D.C. Cir. 1974).

[^49]: Similarly, Winstar Spectrum has not shown, beyond its *ipse
    dixit*, that retaining the bidding credit will actually increase its
    ability to compete in the relevant markets.

[^50]: Amendment of Part 1 of the Commission's Rules -- Competitive
    Bidding Procedures, *Order, Memorandum Opinion and Order and Notice
    of Proposed Rulemaking*, 12 FCC Rcd 5686, 5695-96, ¶ 13 (1997)
    ("*Part 1 Order*"); *D&E Order*, 15 FCC Rcd 61 (1999) (A&IAD).

[^51]: *Id*. at 5696, ¶ 13.

[^52]: *D&E Order*, 15 FCC Rcd 61 (1999) (A&IAD). We note that in this
    case, the entity requesting the waiver was the parent of one of the
    constituent parties of the buyer (not the licensee-seller). We not
    only denied the entity's waiver request on the ground stated above
    (*i.e.*, that the entity did not, at the time of the proposed
    transfer, qualify as eligible for bidding credits), but also because
    the entity lacked standing (since repayment of the bidding credit is
    an obligation of the licensee/assignor).

[^53]: *Id*. at 68, ¶ 15; (citing *Part 1 Order*, 12 FCC Rcd at 5695-96,
    ¶ 13); *see also TeleCorp and Tritel Order*, 16 FCC Rcd 3716.