Federal Communications Commission

Washington, D.C. 20554

DA 00-1791

August 7, 2000

James A. LaBelle

Chairman and Chief Executive Officer

21^st^ Century Telesis, Inc.

11415 Sturgen Bay Lane

Indianapolis, Indiana 46236

Re: Request for Extension of Installment Payment Due Date

Dear Mr. LaBelle:

This letter responds to your letters on behalf of 21^st^ Century Telesis
Joint Venture and 21^st^ Century Bidding Corporation (collectively,
"21^st^ Century") requesting an extension of time for installment
payments or, alternatively, a waiver of the Commission's installment
payment rules, and providing documentation of the availability of funds
to cover an installment payment for which the final late payment
deadline was January 27, 2000.[^1] For the reasons set forth below, we
deny 21^st^ Century's requests.

21^st^ Century seeks an extension of time or a waiver of the
Commission's rules regarding late installment payments for the 19
broadband PCS licenses set forth in Attachment A. Rule 1.2110(f)
provides an automatic 90-day grace period after the installment payment
due date ("non-delinquency period") and requires a five percent late
fee.[^2] If remittance of the missed installment payment and the five
percent late fee is not made before expiration of the non-delinquency
period, the rule provides for a second automatic 90-day period ("grace
period") and requires an additional late fee equal to ten percent of the
missed payment.[^3] 21^st^ Century requested extension or a waiver of
the January 27, 2000, deadline after the expiration of this second
90-day period, which would be the last day to pay to avoid default and
automatic license cancellation.[^4] 21^st^ Century did not make its
installment payment on January 27, 2000 and as a result its licenses
automatically cancelled, without further action by the Commission.[^5]
On February 2, 2000, well after the expiration of the

grace period and after its licenses had already cancelled, 21^st^
Century filed a request for an extension of time or waiver of the
installment payment rule.

In support of its waiver request, 21^st^ Century asserts that it did not
receive some of its

payment notifications until late in the afternoon on January 27, 2000,
the date on which payment was due.[^6] It further asserts that at the
time of its waiver request, it had not yet received several payment
notifications.[^7] Additionally, 21^st^ Century supports its waiver
request by attempting to show that as of February 2, 2000, six days
after the due date, it had sufficient funds available to cover its
January 27, 2000, installment payment obligation.[^8] However, in its
February 2nd Letter and its April 25^th^ Letter, 21^st^ Century also
stated that it did not intend to transmit the amounts it owed until it
received assurance from the Commission that its licenses are "current
and valid."[^9] In its July 25^th^ Letter, 21^st^ Century offers to pay
what would have been its installment payment obligations, including
interest and late fees, due on January 27, 2000, April 26, 2000, and
July 25, 2000, if it had not defaulted and its licenses had not
cancelled.[^10]

We decline to grant 21^st^ Century's request for waiver of the January
27, 2000 late payment deadline. In order for a waiver of the
Commission's rules to be granted, one of two tests must be met. The
entity requesting a waiver must demonstrate either that: (1) "\[t\]he
underlying purpose of the rule(s) 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) "\[I\]n view of
unique or unusual factual circumstances of the instant case, application
of the rule(s) would be inequitable, unduly burdensome or contrary to
the public interest, or the applicant has no reasonable alternative."
21^st^ Century's waiver request does not meet either of these tests.

We reject 21^st^ Century's argument that its payment deadline should be
waived because it received some payment notifications on the payment
deadline date or may not have received some notifications until after
the payment deadline. First, we note that in neither its February 2^nd^
Letter, nor its April 25^th^ Letter, did 21^st^ Century state with any
specificity the license or installment

payment obligation for which it had not received notification by January
27, 2000.[^11] However, even if 21^st^ Century had provided such
specific information, we would nevertheless find that such facts do not
justify a waiver of our installment payment rules, because 21^st^
Century was aware of the deadline for submission of the installment
payment and had ample time to secure financing.[^12]

First, each of the installment payment plan notes, signed by the
President or the Secretary of the corporation, set forth the specific
due date for each installment payment. Second, on the face of each
license issued to 21^st^ Century, reference is made to the pertinent
rules that set forth the time frames for submitting installment
payments. Third, the Wireless Telecommunications Bureau emphasized its
payment policy in a *Public Notice*[^13], in which it stated that
licensees that miss the payment deadline by more than 180 days shall be
in default and their licenses shall automatically cancel. Fourth, the
Commission emphasized the importance of full and timely payments in its
PCS restructuring orders issued in October of 1997 and March of
1998.[^14]

The inability to secure financing prior to the expiration of the
deadline does not constitute "unique facts and circumstances," nor is it
a basis upon which a waiver may be granted.[^15] Given the settled state
of the Commission's policy, a prudent licensee would have secured
financing or taken alternative steps before the late payment deadline,
instead of filing a request for a waiver, as did 21^st^ Century, after
the cancellation date. In addition, we do not believe the underlying
purpose of our rules would be frustrated by their application here or
that it would serve the public interest to waive their enforcement. On
the contrary, the Commission's requirement of full and timely payment
has an essential regulatory purpose **\--** as an indication that the
winning bidder is and continues to be financially able to meet its
obligations on the license and intends to use the license for providing
services to the public.[^16] An extension of the second automatic 90-day
payment period

would only serve to undermine the Commission's enforcement of its
payment deadlines. As the Commission observed in its *Order on
Reconsideration of the C Block Second Report and Order*, "\[n\]o matter
what deadline we establish, it is inevitable that some licensees will
seek more time to pay."[^17] Thus, the Commission has strictly enforced
these payment deadlines.

We believe our reasons for denying 21^st^ Century a waiver of the
installment payment rules

or an extension of time are substantial, clearly stated, and an
appropriate exercise of our discretion.[^18] Accordingly, as a result of
21^st^ Century's default, its licenses set forth in Attachment

A cancelled on January 28, 2000, and the spectrum formerly licensed to
21^st^ Century will be subject to auction at a future date.

Sincerely,

##  Louis Sigalos 

Deputy Chief, Auctions and Industry Analysis Division

##  Wireless Telecommunications Bureau

[^1]: *See* Letter from James A. LaBelle, Chairman and Chief Executive
    Officer, 21^st^ Century Telesis, Inc. to Magalie Roman Salas
    (February 2, 2000) ("February 2nd Letter"); Letter from James A.
    LaBelle, Chairman and Chief Executive Officer, 21^st^ Century
    Telesis, Inc. to Magalie Roman Salas (April 25, 2000) ("April 25th
    Letter"); Letter from James A. LaBelle, Chairman and Chief Executive
    Officer, 21^st^ Century Telesis, Inc. to Magalie Roman Salas (July
    25, 2000) ("July 25th Letter").

[^2]: *See* 47 C.F.R. § 1.2110(f)(4)(i).

[^3]: *See* 47 C.F.R. § 1.2110(f)(4)(ii).

[^4]: *See* 47 C.F.R. § 1.2110(f)(4)(iii) and (iv).

[^5]: *Id.* In its February 2^nd^ Letter, 21^st^ Century stated: "we
    were unable to ensure that wire transfers would be received at
    Mellon Bank by Thursday afternoon, January 27, 2000." It stated
    further that funds were available but not within its control
    (*i.e*., not held in 21^st^ Century bank accounts). *See* February
    2nd Letter at 2.

[^6]: *Id.* at 2.

[^7]: *Id.* at 1.

[^8]: *See* February 2^nd^ Letter at 2; *See also* Letter from James A.
    LaBelle, Chairman and Chief Executive Officer, 21^st^ Century
    Telesis, Inc. to Magalie Roman Salas (April 25, 2000) ("April 25th
    Letter").

[^9]: *See* February 2^nd^ Letter at 2. *See also* April 25^th^ Letter
    at 2.

[^10]: *See* July 25th Letter at 1. 21^st^ Century states once again
    that it will transmit the amounts it would have owed after it
    receives assurance from the Commission that its licenses are current
    and valid. *Id.* at 2.

[^11]: The Bureau has no obligation to provide 21^st^ Century with
    notification that an installment payment is due. Any notices that
    were sent were nothing more than mere courtesies. As a Commission
    licensee, 21^st^ Century was responsible for making timely payments
    on the dates set by the Commission's rules regardless of whether or
    not it received a separate notice of payment due.

[^12]: *See* February 2^nd^ Letter at 1.

[^13]: *See* Wireless Telecommunications Bureau Provides Guidance on
    Grace Period and Installment Payment Rules, *Public Notice*, 13 FCC
    Rcd 18213 (1998).

[^14]: *See* In the Matter of Amendment of the Commission's Rules
    Regarding Installment Payment Financing for Personal Communications
    Services (PCS) Licensees, *Second Report and Order*, FCC 97-342, 12
    FCC Rcd 16436 (1997); In the Matter of Amendment of the Commission's
    Rules Regarding Installment Payment Financing for Personal
    Communications Services (PCS) Licensees, *Order on Reconsideration
    of the Second Report and Order*, FCC 98-46, 13 FCC Rcd 8345 (1998).

[^15]: *See Requests for Extension of the Commission's Initial
    Non-Delinquency Period for C and F Block Installment Payments,* FCC
    98-290, 13 FCC Rcd. 22071 (1998)

[^16]: *See also Mountain Solutions, Ltd. Inc. v. FCC*, 197 F.3d 512,
    517 (D.C. Cir. 1999) (in the context of a request for extension of
    down payment deadlines, the Court observed that the Commission has
    given fair notice of the importance attached to meeting payment
    dates).

[^17]: *See* Amendment of the Commission's Rules Regarding Installment
    Financing for Personal Communications Services ("PCS") Licensees, WT
    Docket No. 97-82, *Order on Reconsideration of the Second Report and
    Order,* FCC 98-46, 13 FCC Rcd 8345 at ¶ 24 (1997).

[^18]: *See Mountain Solutions, Ltd. Inc. v. FCC, supra,* at 517,
    wherein the court stated that " 'an agency's refusal to grant a
    waiver will not be overturned unless the agency's reasons are so
    insubstantial as to render that denial an abuse of discretion.' "
    *See also Omnipoint Corporation v. FCC*, 213 F.3d 720, 723 (D.C.
    Cir. 2000).