FEDERAL COMMUNICATIONS COMMISSION

**445 12^th^ Street, S.W.**

**Washington, D.C. 20554**

***In Reply Refer to:***

1800B3-TSN

**DA 02-2097**

**August 27, 2002**

Mr. Larry G. Fuss, President

Delta Radio, Inc.

P.O. Box 1438

Cleveland, MS 38732

Barry D. Wood, Esq.

Wood, Maines & Brown, Chartered

1827 Jefferson Place, N.W.

Washington, DC 20036

Mondy-Burke Broadcasting Network

c/o Lauren A. Colby, Esq.

P.O. Box 113

Frederick, MD 21705-0113

Re: New(FM), Greenville, Mississippi

Delta Radio, Inc.

Facility ID No.: 16553

File No. BPH-19950417ME

Petition for Reconsideration and

Waiver

Motion for Declaratory Ruling

Dear Applicant and Counsel:

We have before us two pleadings relating to the above-captioned
application. Delta Radio, Inc. ("Delta") filed a Petition for
Reconsideration and Waiver ("Petition") on April 4, 2002, in which it
seeks relief from the Commission's Public Notice dated March 7, 2002
("*Payment Public Notice*"),[^1] wherein we directed Delta to make its
final payment pursuant to its winning bid in Closed Broadcast Auction
No. 25 for an FM broadcast station construction permit at Greenville,
Mississippi. Delta asserts that it is entitled to relief from the final
payment deadline because of the pending application for review filed by
Mondy-Burke Broadcasting Network ("MBN") of our denial of MBN's Petition
to Deny Delta's Form 301 application. MBN, in turn, filed a May 1, 2002,
Motion for Declaratory Ruling ("Motion"), in which it seeks a
declaration that, upon Delta's default, it is entitled to purchase the
Greenville construction permit for \$114,750, which was MBN's net bid in
Round 7 of Auction No. 25. [^2] Round 7 was the first round in which
MBN's bid for the Greenville construction permit exceeded the final bid
of the third-highest bidder.

For the reasons set forth below, we deny both the Petition and the
Motion. Because Delta is in default of its payment obligations, we
dismiss its application, and offer to MBN, as second-highest bidder, the
opportunity to make the payments necessary to bring its funds on deposit
with the Commission to \$54,150 (20% of its net high bid) and file any
necessary amendment to its competing application for a new FM broadcast
station at Greenville, Mississippi. However, the down payment and any
final payment made by MBN must be based upon its net high bid of
\$270,750.[^3]

**Background.** Delta, MBN, and Margaret Adele Karr ("Karr") were the
only bidders in FM Mutually Exclusive ("MX") Group 73 in Closed
Broadcast Auction No. 25. Delta was the winning bidder for the
construction permit, with a high bid of \$397,000.[^4] MBN timely filed
a Petition to Deny Delta's Form 301 application for the Greenville
construction permit, alleging that Delta did not attach a proper
divestiture commitment to its Form 175 application, and further alleging
that Delta falsely certified its financial qualifications and was not,
in fact, financially qualified to hold the Greenville construction
permit. Alfred Roberson III ("Roberson") filed an Informal Objection to
Delta's application, essentially repeating MBN's allegations regarding
Delta's financial qualifications. Both the Petition to Deny and the
Informal Objection were denied by letter dated May 17, 2000.[^5] On June
16, 2000, MBN filed an application for review of our denial of its
Petition to Deny. That application for review is currently pending.

On March 7, 2002, the Mass Media Bureau issued the *Payment Public
Notice*, announcing that the Greenville construction permit was ready
for grant upon Delta's timely payment of the balance of its winning
bid.[^6] In the *Payment Public Notice*, the Bureau set March 21, 2002
as the date on which final payment was due, further setting April 4,
2002 as the deadline by which final payment could be made along with a
5% late penalty ("late payment deadline"), as expressly provided in
Section 1.2109(a) of the Commission's Rules.[^7]

Delta failed to make its final payment by the March 21, 2002 deadline.
Delta filed its Petition on April 4, 2002, the late payment deadline,
seeking a "temporary waiver" of the final payment deadline. To date,
Delta has not made its final payment.

**Discussion.** *Petition for Reconsideration and Waiver*: Delta
contends it is entitled to a waiver due to the "unique and compelling
circumstances" to which it has been subjected.[^8] Specifically, Delta
argues it is unable to borrow the funds necessary to make its final
payment while MBN's application for review is pending. Additionally,
Delta states its revenue has been "severely hurt by the economic
slowdown that came about in the aftermath of September 11\[, 2001\],"
and that its principals are unable to use their personal stock
portfolios as collateral for the needed loan, as the value of their
stocks has plummeted since September 11, 2001. Thus, concludes Delta,
these "unforeseeable circumstances" and the "uncertain finality" of the
construction permit justify a waiver of the final payment deadline.[^9]

We reject Delta's arguments and deny its request for reconsideration and
waiver. Delta fails to distinguish the facts of this case from those
presented to the Commission in the recent cases of *Abundant Life, Inc.*
("*Abundant Life II*"),[^10] and *Winstar Broadcasting Corp.*
("*Winstar*").[^11] In *Abundant Life II*, the winning bidder in another
Auction No. 25 MX group, Abundant Life, Inc. ("ALI"), sought a
declaratory ruling that it did not have to make its final payment while
a court challenge to its application was pending, and in the alternative
requested a waiver of the final payment deadline. The Commission
rejected ALI's arguments, holding that upon denial of a petition to
deny, the staff was required to issue a public notice establishing a
deadline for the winner bidder to submit its final payment.[^12] These
payment requirements ensure that only serious, financially qualified
bidders will receive construction permits.[^13] Additionally, the
Commission rejected ALI's waiver request, stating that it had never
granted a waiver of a final payment obligation based on a pending
challenge to an application.[^14] The auction rules regarding payment
deadlines are clear, the Commission held, and ALI had notice of the
consequences of default when it chose to participate in the auction.
Thus, there were no special circumstances warranting a waiver of the
final payment deadline, and such a waiver was not in the public
interest.

*Abundant Life II* involved a request for waiver while a challenge to
the winning bidder's application was pending in court, a fact Delta
attempts to distinguish from its own situation, in which an application
for Commission review is pending. However, in *Winstar*, winning bidder
Winstar Broadcasting Corp. ("WBC") sought a stay of the final payment
pending action on an application for review by the Commission. However,
just as in *Abundant Life II*, the Commission found WBC in default for
failing to submit its final auction payment by the announced payment
deadline, dismissed its application, and offered the construction permit
to the second-highest bidder at its final bid.[^15]

We also find unconvincing Delta's assertion that the events of September
11, 2001, and the subsequent economic downturn, are sufficiently "unique
and compelling" circumstances to justify a waiver of the final payment
deadline. The post-September 11 economic downturn has recently been held
insufficient to justify a waiver of the Commission's installment payment
rules requested by a licensee in the Specialized Mobile Radio
Service.[^16] In the *CommNet Decision*, the Wireless Telecommunications
Bureau ("WTB") held that "a downturn in economic conditions coupled with
a lack of financial participation by lenders" that decreased the
applicant's ability to fund its operation and development and make
payments, "is not a unique fact or circumstance that meets the waiver
standard."[^17] WTB pointed out that all licensees bear the risk of
changes in the market, which does not mitigate their obligation to
maintain sufficient resources to build out and pay for their
licenses.[^18] There is no reason to treat a broadcast applicant
differently, and we decline to do so here.

Delta, in summary, has failed to show special circumstances warranting
deviation from the final payment rule, nor that the public interest will
be served by waiving its deadline. Both must be shown before we will
waive the rule requiring timely final payment.[^19] Likewise, Delta does
not present facts that warrant reconsideration of our *Payment Public
Notice* under 47 C.F.R. § 1.106, as we find no error in requiring Delta
to make its final auction payment.

*Post-default procedure / Motion for Declaratory Ruling*: Under the
Commission's rules, a bidder who fails to remit the required down or
final payment for a license for which it was the high bidder is in
default, and is subject to a default payment and dismissal of its
application.[^20] Further, Section 1.2109(c) of the Commission's rules
provides that, if a winning bidder defaults, "the Commission may either
re-auction the license to existing or new applicants or offer it to the
other highest bidders (in descending order) at their final bids."[^21]
For purposes of Closed Broadcast Auction No. 25, the Commission has
already determined that, in the event that a winning bidder defaults on
a down or final payment obligation, the construction permit is to be
offered to the next-highest bidder at its final bid.[^22]

Delta's application will be dismissed, and under our rules and
Commission procedure the Greenville construction permit will be offered
to MBN, the next highest bidder, at its final bid amount. However, MBN
has filed a Motion for Declaratory Ruling, requesting we declare that it
be permitted to purchase the Greenville construction permit, assuming it
is qualified, for the sum of \$114,750. This is neither MBN's final net
bid amount, which was \$270,750, nor its final gross bid amount of
\$361,000, but rather its net bid amount in Round 7 of the auction,
which is the first round in which MBN's bid exceeded the final bid of
Karr, the third-highest bidder. MBN asserts that since Delta was not
financially qualified to hold the construction permit, Delta's bids
should be disregarded, and MBN should only be required to pay the amount
by which it finally outbid the only other qualified applicant.

We reject this contention. Our rules state that, in the event a winning
bidder is found unqualified, the Commission may offer the permit to the
other highest bidders, in descending order, at their *final* bids.[^23]
The rule clearly contemplates groups with more than two bidders, yet
still provides that the amounts the remaining bidders are to pay are
their final bids, not any other sums. Declaratory rulings may be issued
where necessary to "terminat\[e\] a controversy or remov\[e\]
uncertainty."[^24] Here, there is no uncertainty to be removed or
controversy to be terminated, and a declaratory ruling is therefore
unwarranted.[^25] Thus, the Greenville construction permit will be
offered to MBN at its net final bid of \$270,750.[^26]

Delta is further subject to the default payment provisions specified in
47 C.F.R. § 1.2104(g).[^27] Specifically, Delta is liable for an amount
equal to the difference between the amount that it bid and the amount of
the subsequent winning bidder's high bid.[^28] In addition, Delta is
liable for an amount equal to three percent of its defaulted bid or the
subsequent winning bid, whichever is less.[^29] Delta's default payment
will be calculated following resolution of the procedures set forth in
the *Broadcast First Report and Order* and applicable rules.[^30]

**Conclusion / Ordering clauses.** Accordingly, IT IS ORDERED that the
Petition for Reconsideration and Waiver filed by Delta Radio, Inc. IS
DENIED.

IT IS FURTHER ORDERED that the application of Delta Radio, Inc., for a
construction permit at Greenville, Mississippi, File No. BPH-19950417ME,
IS HEREBY DISMISSED as Delta is in default. Delta's default payment,
pursuant to 47 C.F.R. § 1.2104(g), will be calculated following
resolution of the procedures for defaulting auction bidders set forth in
the rules and the *Broadcast First Report and Order*, and the staff will
issue a subsequent Order setting forth the default payment and any
required refund or deficiency.

IT IS FURTHER ORDERED that the Motion for Declaratory Ruling filed by
Mondy-Burke Broadcasting Network IS DENIED. The Greenville construction
permit is offered to MBN at its net final bid of \$270,750. Pursuant to
the provisions of 47 C.F.R. § 1.2107, Mondy-Burke Broadcasting Network
shall have ten (10) business days from the date of this letter to make
its down payment by depositing with Mellon Bank in Pittsburgh,
Pennsylvania, such funds as are necessary to bring its total deposits up
to \$54,150, twenty percent (20%) of its final net bid. If, after
submitting its down payment, MBN defaults on its final payment or is
disqualified, it shall be subject to the provisions of 47 C.F.R. §
1.2104(g). If MBN makes a timely down payment, MBN shall have thirty
(30) days from the date of this letter in which to submit any necessary
amendment to its previously filed Form 301 application (File No.
BPH-19950413MC).

Sincerely,

Peter H. Doyle, Chief

Audio Division

Office of Broadcast License Policy

Media Bureau

cc: Ms. Margaret Adele Karr

[^1]: *Public Notice*: "FCC Announces It Is Prepared to Grant Broadcast
    Construction Permits After Final Payment Is Made," 17 FCC Rcd 4278
    (2002).

[^2]: In addition to the Petition, the following pleadings have been
    filed: an Opposition to Petition for Reconsideration and Waiver,
    filed April 12, 2002, by MBN; a Reply to Opposition to Petition for
    Reconsideration and Waiver, filed April 30, 2002, by Delta; a
    Supplement to Reply to Opposition, filed by Delta May 10, 2002, as
    part of its opposition to MBN's Motion; a Further Supplement to
    Reply to Opposition, filed by Delta May 28, 2002; Errata to the
    Further Supplement to Reply to Opposition, filed by Delta May 30,
    2002; and an Opposition to Further Supplement to Reply to
    Opposition, filed June 7, 2002, by MBN.

    In addition to MBN's Motion, the following pleadings have been
    filed: an Opposition to Motion for Declaratory Ruling, Supplement to
    Opposition to Application for Review, and Supplement to Reply to
    Opposition, filed by Delta May 10, 2002; and a Reply to Opposition
    to Motion for Declaratory Ruling, Supplement to Opposition to
    Application for Review, and Supplement to Reply to Opposition, filed
    May 16, 2002, by MBN.

[^3]: MBN's gross high bid was \$361,000; however, MBN claimed a 25% new
    entrant bidding credit pursuant to 47 C.F.R. § 73.5007(a).

[^4]: *Public Notice*, "Closed Broadcast Auction No. 25 Closes; 91
    Winning Bidders in the Auction of 118 Broadcast Construction
    Permits," 14 FCC Rcd 17186, 17197 (1999). Since Delta did not claim
    eligibility for a bidding credit, its high gross bid is also its
    high net bid.

[^5]: *Letter to Mr. Alfred L. Roberson III, Lauren A. Colby, Esq., and
    Mr. Larry G. Fuss from Linda Blair, Chief, Audio Services Division,
    Mass Media Bureau*, Ref. No. 1800B3-ALB (May 17, 2000).

[^6]: *Id*.

[^7]: *Payment* *Public Notice*, 16 FCC Rcd at 5410-11; *see also* 47
    C.F.R. §§ 1.2109(a), 73.5003(c).

[^8]: Petition, p. 1.

[^9]: Petition, pp. 5-6.

[^10]: 17 FCC Rcd 4006 (2002).

[^11]: 17 FCC Rcd 6126 (2002).

[^12]: 17 FCC Rcd 4007 n.5.

[^13]: *See*, *e.g.*, *BDPCS, Inc.*, 12 FCC Rcd 3230, 3235 (1997),
    *recon. denied in part and granted in part*, 12 FCC Rcd 15341 (1997)
    ("\[I\]n order to maintain the integrity of the auction process, and
    to ensure the efficient provision of services to the public, auction
    participants are held to certain obligations, such as meeting
    relevant financial deadlines."). *See also* *Mountain Solutions LTD,
    Inc.*, 12 FCC Rcd 5904, 5907-08 (Wireless Telecomm. Bureau 1997),
    *aff'd*, 13 FCC Rcd 21983 (1997) ("*The purpose of the second down
    payment rule is to ensure the financial viability of a license
    winner and to provide an indication as to the capability of the
    winning bidder to actually build out its system.*") (emphasis in
    original), *review denied in part and dismissed in part*, *Mountain
    Solutions LTD, Inc. v. F.C.C.*, 197 F.3d 512 (D.C. Cir. 1999).

[^14]: 17 FCC Rcd at 4011.

[^15]: 17 FCC Rcd at 6131.

[^16]: *See Letter to Delaney M. DiStefano, Esq. from Kelly Quinn,
    Deputy Chief, Auctions and Industry Analysis Division, Wireless
    Telecommunications Bureau*, 17 FCC Rcd 10418 (2002) ("*CommNet
    Decision*").

[^17]: 17 FCC Rcd at 10422.

[^18]: *See also Requests for Extension of the Commission's Initial
    Non-Delinquency Period for C and F Block Installment Payments,
    Order*, 13 FCC Rcd 22071, 22072 (1998) ("The challenge of raising
    capital to finance . . . licenses exists in varying degrees for all
    licensees and does not constitute 'unique facts and
    circumstances.'"), *petition for recon. denied*, 14 FCC Rcd 6080
    (1999), *aff'd sub nom*, *SouthEast Telephone v. F.C.C.*, No.
    99-1164, 1999 WL 1215855 (D.C. Cir. Nov. 24, 1999) (cited in
    *CommNet Decision*).

[^19]: *Northeast Cellular Telephone Co. v. F.C.C.*, 897 F.2d 1164, 1166
    (D.C. Cir. 1990), citing *WAIT Radio v. F.C.C.*, 418 F.2d 1153,
    1157-59 (D.C. Cir. 1969).

[^20]: 47 C.F.R. §§ 1.2104(g), 1.2109(b)-(c), 73.5004(a)-(b) (1998);
    *see also National Telecom PCS, Inc.*, 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).

[^21]: 47 C.F.R. § 1.2109(c).

[^22]: *Broadcast* *First Report and Order,*13 FCC Rcd at 15952 ¶ 86,
    15953 n.81.

[^23]: 47 C.F.R. § 1.2109(c). *See also Broadcast First Report and
    Order*, 13 FCC Rcd at 15952 ¶ 86; *Abundant Life II*, 17 FCC Rcd at
    4013-14 (construction permit offered to second-highest bidder at its
    last bid amount).

[^24]: 47 C.F.R. § 1.2.

[^25]: *See*, *e.g.*, *Petitions to Extend the January 1, 1978 Sales
    Cut-Off Date for 23-Channel CB Radios and CB Receiver/Converters*,
    66 FCC 2d 1021, 1024 n. 13 (1977) (denying request for declaratory
    ruling "in stark contravention of a clear, comprehensive rule.").

[^26]: MBN also makes a perfunctory request for waiver of the auction
    rules if necessary to provide it the relief requested. Motion for
    Declaratory Ruling, p. 4. However, its request consists of two short
    sentences, with no attempt to demonstrate the presence of the
    factors set forth in *Northeast Cellular v. F.C.C.*, *supra*, or
    *WAIT Radio v. F.C.C.*, *supra*. Accordingly, we decline to waive
    the provisions of 47 C.F.R. §§ 1.2109(c), 73.5004(b), and the
    *Broadcast First Report and Order* (*see* footnote 12), all of which
    dictate that we offer the construction permit to MBN at its final
    bid amount.

[^27]: *See also* 47 C.F.R. § 1.2109(c).

[^28]: *Id.* This portion of the default payment amount, in the event a
    bidding credit applies, is calculated on the difference between the
    net bid amounts or the gross bid amounts, whichever is less. 47
    C.F.R. §§ 1.2104(g)(1)-(2).

[^29]: 47 C.F.R. § 1.2104(g)(2). If the gross amount of the subsequent
    winning bid is utilized in calculating the bid difference payment
    (*see* footnote 16), it is also used in calculating the 3% penalty.
    *Id*.

[^30]: 47 C.F.R. § 1.2109.