**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of )

)

Metro-Trak, L.L.C. ) File No. 0000007442

)

Request for Extension of Final Payment )

Deadline for Multilateration Location and )

Monitoring Service Auction License - )

BEA 164C, Sacramento-Yolo, CA )

# ORDER

**Adopted: August 2, 2000 Released: August 3, 2000**

By the Chief, Commercial Wireless Division, Wireless Telecommunications
Bureau:

**I. Introduction**

1\. On June 30, 1999, Metro-Trak, L.L.C. (Metro-Trak) requested an
extension of time to make final payment on a license for which it was
the winning bidder in the multilateration Location and Monitoring
Service (LMS) auction, Auction No. 21.[^1] For the reasons set forth
herein, we deny Metro-Trak\'s request and find that Metro-Trak is in
default on its full payment obligations with respect to the LMS Block C
license in Basic Economic Area (BEA) 164, Sacramento-Yolo, CA.

**II. Background**

2\. On March 5, 1999, the Commission completed its auction of 528
multilateration LMS licenses.[^2] Metro-Trak was listed as the winning
bidder of Markets BEA 107C, Minneapolis‑St. Paul, MN‑WI‑IA, and BEA
164C, Sacramento-Yolo, CA.[^3] After a preliminary review of submitted
long-form applications, a number of applications, including
Metro-Trak\'s, were accepted for filing.[^4]

3\. On June 8, 1999, the Bureau announced that it was prepared to grant
the applications which had been accepted for filing upon the full and
timely payment of the remaining balance of each applicant\'s winning
bids.[^5] The Bureau stated that payment of remaining balances must be
received by June 22, 1999.[^6] The Bureau also stated that, any winning
bidder listed in the public notice who failed to pay its remaining
balance by June 22, 1999, would be allowed to make payment within ten
days after the payment deadline (*i.e.* July 6, 1999), provided that it
also pays a late fee equal to five percent of the amount due.[^7]
Moreover, the Bureau stated that, pursuant to section 1.2109(a), 47
C.F.R. § 1.2109(a), any winning bidder listed in the Public Notice who
failed to pay the balance of its winning bids by the late payment
deadline of July 6, 1999, would be considered in default on its licenses
and subject to the applicable default payments.[^8]

4\. The Bureau subsequently issued an *Erratum* on June 16, 1999, which
rescinded its decision to include Metro-Trak's application for Market
BEA 107C, Minneapolis-St. Paul, MN-WI as ready to grant.[^9] The Bureau
rescinded this decision because Hennepin County, Minnesota had filed a
request to obtain an LMS license for Market BEA 107C, pursuant to
section 337 of the Communications Act, as amended, and this request was
still pending.[^10] The Bureau stated that the Erratum applied only to
Market BEA 107C and did not modify the June 22, 1999 or the July 6, 1999
deadlines for any other market listed on public notice as ready for
grant.[^11] Metro-Trak failed to pay the remaining balance of its
winning bid for Market BEA 164C by the June 22, 1999 deadline. On June
30, 1999, Metro-Trak submitted its request for an extension of the June
22, 1999 and July 6, 1999 deadlines. Metro-Trak sought to extend its
payment deadline for BEA 164C until the Commission is prepared to grant
Metro-Trak's application for market BEA 107C.[^12] On November 18, 1999,
the Bureau denied Hennepin County's Petition, and dismissed its
associated application.[^13]

##  III. Discussion

5\. Metro-Trak effectively requests a waiver of section 1.2109(a) of the
Commission\'s rules. The Commission\'s rules provide that a waiver
request may be granted if: 1) the underlying purpose of the rule 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 2) in view of unique or unusual factual circumstances of
the instant case, application of the rules(s) would be inequitable,
unduly burdensome or contrary to the public interest, or the applicant
has no reasonable alternative.[^14]

6\. The Commission\'s rules provide that auction winners are required to
pay the balance of their winning bids within ten business days following
the release of a public notice establishing the payment deadline.[^15]
Section 1.2109(a) provides that, if a winning bidder fails to pay the
balance of its winning bids by the applicable deadline, it will be
allowed ten business days after the initial deadline to pay the
remaining balance, provided that it also pays a late fee equal to five
percent of the amount due. A winning bidder failing to pay in full by
the late payment deadline is considered in default and subject to the
applicable default payments.[^16]

7\. Metro-Trak states that it bid on Markets BEA 107C and BEA 164C as a
\"set.\" Metro-Trak explains that it was proposing to conduct certain
tests of its monitoring system and that its prospective clients were
interested in such tests only if both markets were involved.[^17]
Metro-Trak argues that given the uncertainty of the status of market BEA
107C, requiring Metro-Trak to submit the remaining balance on Market BEA
164C, would not be in the public interest.[^18] Metro-Trak also argues
that application of this requirement would be unfair to Metro-Trak in
this case because it would compromise its business plan.[^19]

8\. We have previously ruled that, if a waiver of the Commission\'s
competitive bidding rules is not limited to unique or unusual
circumstances, it would compromise the integrity of the licensing
process.[^20] In this case, Metro-Trak has not shown that the underlying
purpose of section 1.2109(a) would be frustrated by enforcing the final
payment deadline or that unique or unusual circumstances exist that
would justify granting Metro-Trak a waiver of the final payment
deadline. Nor does Metro-Trak persuade us that a waiver of the rule is
in the public interest.

9\. Although the Hennepin County Request was pending at the time
Metro-Trak's payment was due, this does not provide a basis for waiving
the Commission\'s competitive bidding rules. All potential bidders in
the LMS auction were provided with notice that Market BEA 107C was the
subject of a petition for waiver. On January 21, 1999, the Bureau issued
a public notice announcing that Hennepin County, Minnesota had filed for
an LMS license for Market BEA 164, pursuant to section 337 of the
Communications Act, as amended.[^21] The Bureau also released a public
notice requesting comment on Hennepin County\'s request on February 3,
1999.[^22] On February 11, 1999, the Bureau released a *Due Diligence
Public Notice* prior to the auction, which listed a number of pending
cases, that could have an impact on the LMS auction. The *Due Diligence
Public Notice* included the pending Hennepin Request.[^23] Accordingly,
Metro-Trak received notice prior to the LMS auction of the pending
Hennepin Request.

10\. Metro-Trak argues that failure by the Commission to extend the
final payment deadline for BEA 164C would not be in the public interest
because default would result in the delay or denial of the benefits of
its service to the public in Markets BEA 107C and Markets BEA 164C.[^24]
Metro-Trak has not, however, provided any evidence in this case that
waiver of section 1.2109(a) will prevent the delay of LMS to the public
in Market BEA 164C. It is contrary to the integrity and fairness of our
auction process to grant extensions of payment deadlines of certain
licenses dependent upon whether or not the winning bidder is also the
successful winning bidder of other specific markets. For these reasons,
we deny Metro-Trak's Request, and Metro-Trak is, therefore, in default
on its license for BEA 164C for failure to pay the balance of its
winning bid.

11\. Under the Commission\'s rules, a winning bidder that fails to
timely remit the required full payment is deemed to have defaulted on
its auction payment obligations.[^25] The purpose of the default payment
provisions,[^26] is to assure that the winning bidder is obligated to
pay the full amount of its winning bid (less any mitigation of damages
arising from a subsequent auction of the spectrum) even if the winning
bidder defaults or is determined to be disqualified and is never granted
a license. The winning bidder\'s contractual obligation to pay the
winning bid thus becomes fixed and established at the close of the
auction.[^27] A winning bidder that defaults on its full payment
obligation will, therefore, be required to make the Commission whole for
the amount of the winning bid, subject to any mitigation of damages
produced by the subsequent auction of the license (or licenses) for the
same spectrum.

12\. Accordingly, pursuant to sections 1.2104(g)(2) and 1.2106(c) the
Commission\'s rules, Metro-Trak is subject to default payment
obligations.[^28] Specifically, Metro-Trak is required to pay the
difference between the amount bid and the amount of the winning bid the
next time the license is offered by the Commission (so long as the
subsequent winning bid is less than the defaulted bid), plus an
additional payment equal to three percent of the defaulter\'s bid or the
subsequent winning bid, whichever is less.[^29] In the event that the
subsequent winning bid is greater than or equal to Metro-Trak's
defaulted bid, the total default payment is equal to three percent of
Metro-Trak's defaulted bid.[^30] Upfront and downpayment amounts on
deposit with the Commission are first applied to default payments before
being applied to payments owed on other licenses the bidder seeks to
acquire.[^31]

13\. Because the license for market BEA 164C will be included in a
future auction, we cannot at this time determine the full amount of the
default payment owed by Metro-Trak. The Commission has stated that in
such instances it will assess an initial default deposit of between
three (3) and twenty (20) percent of the defaulted bid price until the
full amount of the default payment can be determined.[^32] As the
Commission noted in a previous case, three percent is the minimum amount
that a defaulting winning bidder like Metro-Trak could owe even under
the most favorable circumstances.[^33]

14\. Therefore, pursuant to Commission practice, we will assess an
initial default payment of \$3,471.00,[^34] which is three percent of
Metro-Trak's net winning defaulted bid of \$115,700.00 for the LMS
license in BEA 107C. [^35] Metro-Trak's amount on deposit for upfront
and down payments will be applied to this initial default payment (BEA
164C). [^36] If additional payment is required after BEA 164C is
re-auctioned, a second order will be issued to assess the amount due.

**IV. Ordering Clauses**

15\. Accordingly, IT IS ORDERED that, pursuant to sections 0.331 and
1.925(b)(3) of the Commission's rules, 47 C.F.R. §§ 0.331, 1.925(b)(3),
Metro-Trak L.L.C.'s Letter, dated June 30, 1999, requesting a waiver of
Section 1.2109(a) of the Commission's rules, 47 C.F.R. § 1.2109(a), IS
DENIED.

16\. IT IS FURTHER ORDERED that, pursuant to sections 0.331 and
1.2104(g) of the Commission's rules, 47 C.F.R. §§ 0.331, 1.2104(g),
Metro-Trak L.L.C. is assessed an initial default payment in the amount
of \$3,471.00.

17\. IT IS FURTHER ORDERED that, pursuant to section 0.331 of the
Commission's Rules, 47 C.F.R. § 0.331, Metro-Trak, L.L.C.'s amount on
deposit, totaling \$89,100.00, will be applied to cover the default
payment of \$3,471.00.

18\. IT IS FURTHER ORDERED that, pursuant to sections 0.331, 24.704 and
1.2104(g), 47 C.F.R. §§ 0.331, 24.704, 1.2104(g), Metro-Trak, L.L.C.
will be subject to the balance of the payment after the market for BEA
164 is auctioned and the full default payment is determined.

19\. IT IS FURTHER ORDERED that, pursuant to sections 0.331 and
1.2104(g), 47 C.F.R. §§ 0.331, 1.2104(g), the application of Metro-Trak,
L.L.C. IS DISMISSED.

FEDERAL COMMUNICATIONS COMMISSION

William W. Kunze, Chief

Commercial Wireless Division

Wireless Telecommunications Bureau

## APPENDIX A:

## 

## DEFAULT CALCULATIONS ATTACHMENT

**Metro-Trak, LLC, Auction No. 21:**

**Market BEA [164]{.underline} , Channel Block [C]{.underline},**

##### \*\*\*Initial Default Deposit

Net Winning Bid \$ 115,700.00

(times 3% default payment)

(Initial Default Penalty) \$ 3,471.00

[^1]: *See* Letter to Paul D\'Ari, Wireless Telecommunications Bureau
    from Davis R. Schwartz, Metro-Trak, L.L.C., dated June 30, 1999
    (Metro-Trak Letter Request).

[^2]: *See* Location and Monitoring Service Auction Closes: Winning
    Bidders in the Auction of 528 Multilateration Licenses in the
    Location and Monitoring Service, *Public Notice*, 14 FCC Rcd. 3754
    (WTB: 1999) (*March 8, 1999 Public Notice*).

[^3]: *Id.* at Attachment A.

[^4]: *See* Location and Monitoring Service Applications Accepted for
    Filing, *Public Notice*, 14 FCC Rcd. 7813 (WTB: 1999).

[^5]: *See* Wireless Telecommunications Bureau Announces It Is Prepared
    To Grant Location and Monitoring Service Licenses After Final
    Payment Is Made, *Public Notice*, 14 FCC Rcd. 9166 (WTB: 1999).

[^6]: *Id*.

[^7]: *Id*.

[^8]: *Id*.

[^9]: Erratum to Location and Monitoring Service Public Notice Released
    June 8, 1999, *Public Notice*, 14 FCC Rcd. 9657(WTB: 1999).

[^10]: *See* Hennepin County Application for Location and Monitoring
    Service License and Waiver under Section 337 of the Communications
    Act, *Public Notice*, 14 FCC Rcd. 2058 (WTB: 1999).

[^11]: *Id*.

[^12]: *See* Metro-Trak Letter Request, *supra*, n.1.

[^13]: *See* In re Application of Hennepin County, *Order*, 14 FCC Rcd.
    19418 (WTB: 1999).

[^14]: 47 C.F.R. § 1.925(b)(3)(i)-(ii).

[^15]: ^?^ 47 C.F.R. §§ 1.2109(a), 90.1015(a).

[^16]: *Id.*

[^17]: *See* Metro-Trak Letter Request, *supra*, n.1.

[^18]: *Id*.

[^19]: *Id*.

[^20]: *See* In re Rush Network Corp., *Order*, 13 FCC Rcd. 22866 (WTB:
    1998).

[^21]: *See* Hennepin County Application for Location and Monitoring
    Service License and Waiver under Section 337 of the Communications
    Act, *Public Notice*, 14 FCC Rcd. 985 (WTB: 1999).

[^22]: *See* Wireless Telecommunications Bureau Seeks Comment On Request
    For Waiver by Hennepin County, Minnesota To Obtain A Location and
    Monitoring Service License Outside The Competitive Bidding Process,
    *Public Notice*, 14 FCC Rcd. 2058 (WTB: 1999).

[^23]: *See* Auction of 528 Multilateration Location and Monitoring
    Service Licenses: Report No. AUC-21-H (Auction No. 21), *Public
    Notice*, 14 FCC Rcd. 2735 (WTB: 1999) (*Due Diligence Public
    Notice*).

[^24]: *See* Metro-Trak Letter Request, *supra*, n.1.

[^25]: 47 C.F.R. § 1.2109(c); s*ee also* National Telecom PCS, Inc.,
    *Memorandum Opinion and Order*, 12 FCC Rcd. 10163, 10171-72 (¶
    15)(1997); 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, 434 (¶ 107 )(1997).

[^26]: *See* In the Matter of Request for Waiver of Section 1.2104(g) of
    the Commission's Rules Filed by Grand Connectivity L.L.C., *Order,*
    14 FCC Rcd. 13943, 13945 (¶ 5) (WTB: 1999)(G*rand Connectivity
    Order*).

[^27]: *See* Amendment of the Commission\'s Rules Regarding Installment
    Payment Financing For Personal Communications (PCS) Licensees,
    Amendment of Part 1 of the Commission\'s Rules \-- Competitive
    Bidding Procedures, WT Docket No. 97-82, *Second Order on
    Reconsideration of the Second Report and Order*, 14 FCC Rcd. 6571,
    6581, n.66 (¶ 17)(1999).

[^28]: 47 C.F.R. §§ 1.2104(g)(2), 1.2106(e) and 1.2109(c).

[^29]: 47 C.F.R. § 1.2104(g)(1).

[^30]: 47 C.F.R. § 1.2104(g)(2).

[^31]: 47 C.F.R § 1.2106(e). *See* \"Wireless Telecommunications Bureau
    Will Strictly Enforce Default Payment Rules; Bureau to Re-Auction
    Licenses Quickly,\" *Public Notice*, 11 FCC Rcd. 10853 (WTB: 1996).

[^32]: *See* Grand Connectivity, *Order,* 14 FCC Rcd. at 13946 (¶ 6).

[^33]: *See* In the Matter of Mountain Solutions Ltd., Inc., Emergency
    Petition for Waiver of Section 24.711(a)(2) of the Commission's
    Rules Regarding Various BTA Markets in the Broadband Personal
    Communications Services (PCS) C Block Auction, *Memorandum Opinion
    and Order*, 13 FCC Rcd. 21983, 21997 (¶ 25)(1998).

[^34]: *See* Appendix A, *infra*, for calculation on remaining deposit.

[^35]: *Id*.; *see also* In the Matter of C.H. PCS, Inc., *Order*, 14
    FCC Rcd. 4131, 4133 (¶ 4)(WTB: 1999).

[^36]: We are simultaneously releasing a default payment order against
    Metro-Trak for failure to make its final payment on LMS Market
    BEA107C, Minneapolis-St. Paul, MN-WI-IA in the amount of \$
    9,926.00. *See* In the Matter of Metro-Trak, LLC, for
    Multilateration Location and Monitoring Service Auction License -
    BEA 107C, Minneapolis-St. Paul, MN-WI-IA, *Order*, DA 00-1715
    (WTB/CWD: rel. Aug. 3, 2000). Metro-Trak has \$89,100.00 on deposit
    with the Commission. This consists of Metro-Trak's upfront and down
    payments for LMS Markets BEA 164C, Sacramento-Yolo, CA and Market
    BEA 107C, Minneapolis-St. Paul, MN-WI-IA. Therefore, we subtract the
    3% default payment amount of \$3,471.00, for Market BEA 164C,
    Minneapolis-St. Paul, MN-WI-IA from the \$89,100.00 on deposit. In
    the above referenced default payment order, we are subtracting the
    3% payment, in the amount of \$9,926.00, for Market BEA 107C,
    Minneapolis-St. Paul, MN-WI-I from the \$89,100 on deposit.