**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | File No. 840247              |
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| BERNARD PASQUET                  | ) |                              |
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| Request for Rule Waiver for      | * |                              |
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| 218-219 MHz Service License      | * |                              |
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| in Tallahassee, Florida (MSA     | ) |                              |
| #168A)                           | * |                              |
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**ORDER**

**Adopted: January 21, 2000 Released: January 25, 2000**

By the Chief, Public Safety and Private Wireless Division, Wireless
Telecommunications Bureau:

**I. INTRODUCTION**

1\. On December 31, 1996, Bernard Pasquet (Pasquet) requested a waiver
of Section 1.2109(c) of the Commission\'s Rules regarding a 218-219 MHz
Service license in Tallahassee, Florida, for which he was the high
bidder.[^1] For the reasons that follow, we deny Pasquet\'s waiver
request.

**II. BACKGROUND**

2\. In the *Competitive Bidding Second Report and Order*, the Commission
determined that 218-219 MHz Service[^2] licenses should be awarded
through competitive bidding.[^3] On July 28 and 29, 1994, Pasquet
participated in the auctions for 218-219 MHz Service licenses.[^4]
Pasquet was the highest bidder on the license for MSA #168A.[^5] Because
Pasquet qualified as a small business, he was eligible to pay for the
license through an installment payment plan.[^6] The Commission\'s Rules
required winning bidders to bring their total deposits with the
Commission to twenty percent of their winning bid by making two down
payments of ten percent each.[^7] The initial down payment was required
within five business days after the release of a public notice
announcing the winning bidders.[^8] This public notice was released on
August 2, 1994.[^9] Pasquet submitted his initial down payment in a
timely manner. The final down payment was required within five business
days of the grant of the application.[^10] Pasquet\'s application was
granted on February 28, 1995.[^11] Thus, Pasquet\'s final down payment
was due on March 7, 1995.[^12] On March 9, 1995, Pasquet filed a request
to extend the deadline date for paying the final down payment.[^13] On
April 28, 1995, the Wireless Telecommunications Bureau (Bureau) denied
the request.[^14] Due to his failure to submit the requisite final down
payment, Pasquet was in default as of March 8, 1995, and his license
automatically cancelled as of that date.[^15]

3.  The Bureau's former Private Wireless Division notified Pasquet that
    the license was canceled and would be auctioned because he was in
    default.[^16] Subsequently, on December 31, 1996, Pasquet submitted
    a request for a waiver of Section 1.2109(c) of the Commission\'s
    Rules, which provides the Commission with authority to offer a
    license for auction when the winning bidder defaults.[^17] Pasquet
    argued that grant of this waiver request is in the public interest
    because it would allow the Commission to avoid the time and expense
    associated with auctioning the license.[^18] He also argued that
    grant of this waiver request in combination with a proposed
    agreement to transfer the license to Wincom Corp. (Wincom) would
    serve the Commission\'s goal of rapid development and provision of
    viable 218-219 MHz Service to the public.[^19]

4\. On September 7, 1999, the Commission adopted three payment
restructuring options for those 218-219 MHz Service licensees who were
current on their installment payments (*i.e.* less than ninety days
delinquent) as of March 16, 1998; or had properly filed grace period
requests under the former installment payment rules.[^20] The three
options are: (a) reamortization of principal and interest installment
payments over a ten-year period with subsequent resumption of
payments;[^21] (b) amnesty, wherein eligible licensees surrender any
licenses they choose to the Commission for subsequent auction and, in
return, have all the outstanding debt on those licenses forgiven,
subject to Department of Justice approval and pursuant to applicable
federal claims collections standards;[^22] or (c) prepayment, whereby
licensees may prepay the outstanding principal of any license it wishes
to retain with cash and prepayment credits generated from down payments
on spectrum returned to the Commission and any installment payments
previously made.[^23] Eligible licensees must elect one of the three
restructuring options by filing a written notice with the Bureau.[^24]
As a result of the adoption of the payment restructuring options, the
Commission dismissed all of the pending grace period requests.[^25] For
persons, such as Pasquet, who failed to make second down payments, the
Commission did not allow them the opportunity to avail themselves of the
options provided under the restructuring plan. The Commission noted that
their licenses canceled automatically.[^26]

**III. DISCUSSION**

5\. The Commission may exercise its discretion to waive a rule where the
\"unique or unusual factual circumstances\" of the instant case would
make application of the rule \"contrary to the public interest.\"[^27]
In this case, Pasquet\'s unique or unusual factual circumstance is an
unfavorable income to debt ratio that forced him to file for personal
bankruptcy.[^28] Pasquet, therefore, seeks to negate the cancellation
and proposed auction of his license with a waiver of Section 1.2109(c)
of the Commission\'s Rules and afterwards, to finalize a license
transfer agreement with Wincom, whereby Wincom will assume all debt and
penalties owed on the license.[^29] He argues that this scenario, if
successful, will serve the public interest because it will speed the
development and availability of viable 218-219 MHz Service under this
particular license.[^30] He further argues that such result will avoid
the costs of auctioning the license.[^31] We note that Section 1.2109(c)
of the Commission's Rules applies to winning bidders who default
\"*after* having made the required down payment.\"[^32] On the other
hand, Section 1.2109(b) of the Commission's Rules applies to winning
bidders, such as Pasquet, who fail \"to remit the required down payment
within five (5) business days\" after the auction has closed.[^33] We,
therefore, will treat Pasquet's request as a request for waiver of
Section 1.2109(b) of the Commission's Rules.

6\. We note, first and foremost, that an unanticipated lack of financing
is not a unique or unusual factual circumstance.[^34] We find that
bidders assume the risk that unexpectedly poor financial circumstances,
which could even lead to bankruptcy, might occur at a later date.[^35]
If we treat a bidder\'s unfavorable income to debt ratio as a unique or
unusual factual circumstance that justifies a waiver of Section
1.2109(b) of the Commission\'s Rules and then allow the bidder to
\"shop\" the license later in an effort to obtain financing, \"we will
further encourage such undesirable conduct and lessen the likelihood
that in the future only serious, qualified bidders will participate in
Commission-sponsored auctions.\"[^36] Therefore, we believe that grant
of this requested waiver under the circumstances presented is not in the
public interest because it would undermine the integrity of the auction
process itself.[^37] We find that there is no firm evidence to support
Pasquet\'s argument that granting the waiver request and allowing the
license transfer to Wincom will speed the development and availability
of viable 218-219 MHz Service. We do not believe that a petitioner\'s
speculative predictions constitutes a sufficient basis for granting a
waiver request.[^38] Moreover, even if petitioner's plan did result in
the expeditious use of spectrum covered by his cancelled license, the
precedent of granting such a waiver would, over the long run, create an
overall delay of service to the public by encouraging the type of
inefficient licensee behavior that has given rise to Pasquet's request.
Finally, we are not persuaded by Pasquet\'s argument that granting the
requested waiver will help the Commission avoid auction costs, because
it ignores the fact that the rule which is the subject of the waiver
request, Section 1.2109(b) of the Commission\'s Rules, provides the
Commission with the means to recover such costs.[^39] In light of the
Commission\'s refusal to grant relief to entities such as Pasquet in the
*218-219 MHz Flex Order* and Pasquet\'s failure to satisfy the waiver
standard, we deny Pasquet\'s request for a waiver.

**IV. ORDERING CLAUSES**

7\. ACCORDINGLY, IT IS ORDERED pursuant to Sections 4(i) and 303(r) of
the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 303(r),
and Section 1.925(b)(3)(ii) of the Commission\'s Rules, 47 C.F.R. §
1.925(b)(3)(ii), the rule waiver request that was filed by Bernard
Pasquet on December 31, 1996, IS DENIED.

8\. This action is taken under delegated authority pursuant to Sections
0.131 and 0.331 of the Commission\'s Rules, 47 C.F.R. §§ 0.131, 0.331.

FEDERAL COMMUNICATIONS COMMISSION

D\'wana R. Terry

Chief, Public Safety and Private Wireless Division

Wireless Telecommunications Bureau

# 

[^1]: Letter from Bernard Pasquet to Federal Communications Commission
    (dated Dec. 31, 1996) (Pasquet Letter).

[^2]: The Interactive Video and Data Services was renamed the 218-219
    MHz Service. Amendment of Part 95 of the Commission\'s Rules to
    Provide Regulatory Flexibility in the 218-219 MHz Service and
    Amendment of Part 95 of the Commission\'s Rules to Allow Interactive
    Video and Data Service Licensees to Provide Mobile Services, *Order,
    Memorandum Opinion and Order, and Notice of Proposed Rulemaking*, 13
    FCC Rcd 19064 (1998) (*218-219 MHz Flex Order*). Accordingly, this
    service shall be referred to as the 218-219 MHz Service.

[^3]: Implementation of Section 309(j) of the Communications Act -
    Competitive Bidding, PP Docket No. 93-253, *Second Report and
    Order*, 9 FCC Rcd. 2348 (1994) (*Competitive Bidding Second Report
    and Order*).

[^4]: *See* *Public Notice,* Announcing High Bidders for 594 Interactive
    Video and Data Services (IVDS) Licenses, Mimeo No. 44160 (rel. Aug.
    2, 1994), *erratum*, Public Notice, Mimeo No. 44265 (rel. Aug. 9,
    1994).

[^5]: *Id.*

[^6]: 47 C.F.R. §§ 1.2110(e), 95.816(d)(2)(1994).

[^7]: 47 C.F.R. §§ 95.816(c)(4), 1.2107(b), and 1.2110(e)(2)(1994).

[^8]: *Id.*

[^9]: *See Public Notice*, Announcing High Bidders for 594 Interactive
    Video and Data Services (IVDS) Licenses, Mimeo No. 44160 (rel. Aug.
    2, 1994), *erratum*, Public Notice, Mimeo No. 44265 (rel. Aug. 9,
    1994).

[^10]: *Id*; *see* 47 C.F.R. § 1.2107(b)(1994).

[^11]: *See Public Notice*, Interactive Video and Data Service (IVDS)
    Applications to be Granted February 28, 1995, DA 95-152 (rel. Feb.
    8, 1995).

[^12]: *Id.*

[^13]: Letter from Bernard Pasquet to Federal Communications Commission
    (dated Mar. 9, 1995).

[^14]: Requests to Extend Payment Deadline for the Interactive Video and
    Data Service (IVDS) Licenses, *Order*, 10 FCC Rcd. 4520 (WTB 1995)
    (*Payment Deadline Order*).

[^15]: *See, e.g.*, 47 C.F.R. § 1.2110(e)(4)(iii)(1994).

[^16]: Letter from Robert H. McNamara, Chief, Private Wireless Division,
    to Bernard Pasquet (undated).

[^17]: Pasquet Letter.

[^18]: *Id.*

[^19]: *Id.*

[^20]: Amendment of Part 95 of the Commission\'s Rules to Provide
    Regulatory Flexibility in the 218-219 MHz Service, *Report and Order
    and Memorandum Opinion and Order*, FCC 99-239, ¶ 37 (rel. Sep. 10,
    1999) (*218-219 MHz Flex Report and Order*).

[^21]: *Id.* ¶¶ 43-44.

[^22]: *Id.* ¶¶ 46-48. While we will not give an eligible licensee that
    elects amnesty any credit for the down payment that is associated
    with the surrendered license when it is subsequently auctioned,
    neither will we restrict the eligibility to reacquire the
    surrendered license in such auction. Amendment of Part 95 of the
    Commission's Rules to Provide Regulatory Flexibility in the 218-219
    MHz Service, *Order on Reconsideration*, FCC 99-372, ¶ 6 (rel. Nov.
    30, 1999).

[^23]: *218-219 MHz Flex Report and Order* at ¶ 34.

[^24]: *Id.* ¶ 54; *see* *Public Notice*, Wireless Telecommunications
    Bureau Announces Preliminary Implementation Procedures for 218-219
    MHz Service Formerly Known as Interactive Video and Data Service
    (IVDS)), DA 99-3006, f.n. 5 (rel. Dec. 28, 1999).

[^25]: *218-219 MHz Flex Report and Order* at ¶ 45.

[^26]: *Id.* ¶ 38.

[^27]: 47 C.F.R. § 1.925(b)(3)(ii)(1999); *See Northeast Cellular
    Telephone Co. v. FCC*, 897 F.2d 1164, 1166 (D.C. Cir. 1990), *citing
    WAIT Radio v. FCC*, 418 F.2d 1153, 1159 (D.C. Cir. 1969).

[^28]: Pasquet Letter.

[^29]: *Id.*

[^30]: *Id.*

[^31]: *Id.*

[^32]: 47 C.F.R. § 1.2109(c)(1994) (emphasis added).

[^33]: 47 C.F.R. § 1.2109(b)(1994).

[^34]: *See* Requests for Waivers in the First Auction of Interactive
    Video and Data Service (IVDS) Licenses, *Memorandum Opinion and
    Order*, 10 FCC Rcd. 12153, 12155 (1995).

[^35]: *Id.*

[^36]: *See* Requests for Waivers in the First Auction of 594
    Interactive Video and Data Service Licenses, *Order*, 9 FCC Rcd.
    6384, 6386 (CCB 1994); *see also Mountain Solutions, Ltd., Inc. v.
    FCC*, No. 98-1503, 1999 WL 1082874 (D.C. Cir. Dec. 3, 1999)
    (upholding Commission's denial of request seeking waiver of second
    down payment rules).

[^37]: ^35^*Competitive Bidding Second Report and Order*, 9 FCC Rcd. at
    2381.

[^38]: *See* Application of Gillett Broadcasting of Maryland, Inc., and
    Scripps Howard Broadcasting Company for Consent to the Assignment of
    the License of WMAR-TV, Baltimore, Maryland, *Memorandum Opinion and
    Order*, 6 FCC Rcd. 81, 82 (1990) (Specific facts, not speculative
    suggestions, that a rule waiver request is not in the public
    interest are necessary when seeking a denial of such request.).

[^39]: 47 C.F.R. § 1.2109(b)(1994) (A winning bidder who defaults will
    be liable for the penalty set forth in § 1.2104(g)(2). In such
    event, the Commission may conduct another auction for the license or
    offer it to the other highest bidders.); 47 C.F.R. §
    1.2104(g)(2)(1994) (If the defaulting party\'s bid is greater than
    the subsequent winning bid when the license is re-auctioned, the
    penalty will be equal to the difference between the two bids. An
    additional penalty equal to three percent of the subsequent bid will
    also be assessed. If the subsequent bid is greater, the Commission
    will only assess a penalty equal to three percent of the defaulting
    party\'s bid amount. All penalties will be deducted from any upfront
    payments or down payments that the defaulting party deposited with
    the Commission.).