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 FEDERAL  COMMUNICATIONS  COMMISSION  Washington,  DC  20554 
 DA  03-  2273  July  11,  2003 
 Mr.  John  Jung  Jung  on  Jung 
 350  5  th  Avenue  Suite  6107 
 New  York,  NY  100118 


 Dear  Mr.  Jung: 
 This  letter  responds  to  correspondence  filed  on  behalf  of  Jung  on  Jung  requesting  that  the  Auctions  and  Industry  Analysis  Division  (  Division)  waive  the  Commissions  installment  payment  rules.  1 
 Specifically,  Jung  on  Jung  requests  that  the  Division  waive  Jung  on  Jungs  late  fees  and  allow  an  extension  of  its  installment  payment  obligations  on  two  Multipoint  Distribution  Service  (  MDS)  licenses,  MDB010 
 (Allentown-  Bethlehem)  and  MDB488  (San  Juan,  PR).  For  the  reasons  set  forth  below,  we  deny  Jung  on  Jungs  request  for  waiver  and  extension  of  its  installment  payment  obligations. 


 1.  Background 
 On  March  28,  1996,  the  Commission  announced  that  Jung  on  Jung  was  the  high  bidder  for  two  MDS  licenses,  2  including  MDB010  (Allentown-  Bethlehem)  and  MDB488  (San  Juan,  PR),  in  Auction  No. 
 6.  As  a  small  business,  Jung  on  Jung  was  eligible  to  participate  in  the  Commissions  installment  payment  plan.  3  Grant  of  the  licenses,  MDB010  and  MDB488,  was  conditioned  upon  Jung  on  Jungs  full  and  timely 


 1  Letter  from  Jung  on  Jung,  to  Susan  A.  Donahue,  Chief,  Revenues  &  Receivables  Operation  Group,  Office  of  the 
 Managing  Director,  Federal  Communications  Commission,  dated  November  27,  2001  (  Waiver  Request)(  letter  requesting  extension  of  its  installment  payment  deadline  obligations);  Letter  from  Jung  on  Jung,  to  Susan  A. 


 Donahue,  Chief,  Revenues  &  Receivables  Operation  Group,  Office  of  the  Managing  Director,  Federal  Communications  Commission,  dated  November  30,  2001  (  Supplemental  Request)(  additional  letter  requesting 
 extension  of  its  installment  payment  deadline  obligations);  see  also  Letter  from  Jung  on  Jung,  to  Mr.  Mark  Reger,  Chief  Financial  Officer,  Federal  Communications  Commission,  dated  August  29,  2001.  The  August  29,  2001  letter 
 questioned  previous  payment  notices  with  respect  to  certain  late  fees,  and  to  the  extent  necessary,  sought  waiver  of  late  fees  associated  with  past  notices.  Specifically,  Jung  on  Jung  questioned  the  absence  of  a  late  fee  on  its 
 February  16,  2001  payment  notice.  The  issue  with  regard  to  late  fees  is  irrelevant  because  Jung  on  Jung  wholly  failed  to  make  the  May  31,  2001  quarterly  installment  payments  within  the  two  quarterly  grace  periods. 
 Accordingly,  we  dismiss  this  request  for  clarification  as  moot. 
 2  See  Public  Notice,  Winning  Bidders  in  the  Auction  of  Authorizations  to  Provide  Multipoint  Distribution  Service 
 in  493  Basic  Trading  Areas,  rel.  March  29,  1996  (  March  1996  Public  Notice).  Jung  on  Jungs  net  high  bid  for  the  B010  license  was  $  600,000  and  the  net  high  bid  for  the  B488  license  was  $716,000.  March  1996  Public  Notice, 


 Attachment  A. 
 3  47  C.  F.  R.    1.2110(  e)  and  21.960(  b)(  2001). 
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 performance  of  the  payment  obligations.  4  As  an  eligible  licensee  qualifying  as  a  small  business  under  47  C.  F.  R.    21.960(  b),  Jung  on  Jung  was  scheduled  to  make  interest-  only  payments  for  the  first  two  years  of 
 the  license  term.  5  Payments  of  interest  and  principal  are  amortized  over  the  remaining  eight  years  of  the  license  term.  6  In  accordance  with  Commission  rules,  Jung  on  Jung  made  its  scheduled  February  28,  2001 
 quarterly  installment  payments  on  August  30,  2001,  i.  e.,  within  the  two  quarterly  grace  periods.  However,  Jung  on  Jung  failed  to  make  further  quarterly  installment  payments  thereafter.  7 


 The  Commissions  installment  payments  rule  allows  licensees  to  use  up  to  two  quarterly  grace  periods,  subject  to  late  payment  fees,  if  the  licensees  require  additional  time  to  submit  payment.  8  If  a 
 licensee  fails  to  make  an  installment  payment  within  that  time  period,  it  is  considered  to  be  in  default  of  its  installment  payment  obligations,  and  its  license  automatically  cancels.  Therefore,  in  accordance  with 
 the  Commissions  rules,  when  Jung  on  Jung  failed  to  make  the  May  31,  2001  quarterly  installment  payments  with  the  associated  late  fees  within  the  two  quarterly  grace  periods,  i.  e.,  by  December  1,  2001, 
 it  was  in  default,  its  license  automatically  canceled,  and  it  is  subject  to  debt  collection  procedures.  9 
 2.  Discussion 
 Jung  on  Jung  requests  a  waiver  of  the  installment  payment  rules  alleging  that  economic  conditions,  including  an  accelerated  decline  in  Jung  on  Jungs  business  after  the  September  11,  2001  events,  have 
 undermined  its  financial  ability  to  meet  its  installment  payment  obligations  as  well  as  its  ability  to  operate  as  a  small  business.  10  Accordingly,  Jung  on  Jung  requests  that  the  Commission  waive  Jung  on  Jungs  late  fees 
 and  allow  an  extension  of  its  installment  payment  obligations  on  both  the  MDB010  (Allentown-  Bethlehem)  and  MDB488  (San  Juan,  PR)  licenses. 


 To  obtain  a  waiver  of  the  Commissions  rules,  Jung  on  Jung  must  show:  (i)  that  the  underlying  purpose  of  the  rule  would  not  be  served,  or  would  be  frustrated,  by  its  application  in  this  particular  case, 


 4  47  C.  F.  R.    1.2110(  e)  and  21.960(  b)(  2001)  (  An  MTA  license  issued  to  an  eligible  small  business  that  elects 
 installment  payments  will  be  conditioned  on  the  full  and  timely  performance  of  the  license  holder  quarterly  payments.). 


 5  47  C.  F.  R.    21.960(  b)(  2001). 
 6  Id. 
 7  See  Waiver  Request  at  1;  Supplemental  Request  at  2  (noting  that  there  was  a  slim  likelihood  that  Jung  on  Jung 
 would  make  its  May  31,  2001  quarterly  installment  payments  within  the  two  quarterly  grace  periods). 
 8  47  C.  F.  R.    1.2110(  g)(  4)(  i)-(  ii). 


 9  47  C.  F.  R.    1.2110(  g)(  4)(  iv);  see  also  Wireless  Telecommunications  Bureau  Provides  Guidance  on  Grace  Period 
 and  Installment  Payment  Rules,  13  FCC  Rcd  18213,  18214  (1998)  (  WTB  Guidance  PN)  (  Any  licensee  that  becomes  more  than  one-  hundred  eighty  (180)  days  delinquent  on  an  installment  payment  shall  be  in  default,  and  the 


 license  shall  automatically  cancel  without  further  action  by  the  Commission.  In  that  event,  the  debt  shall  be  transferred  to  the  Department  of  Treasury  for  collection  subject  to  the  Debt  Collection  Improvement  Act  of  1996). 


 10  Waiver  Request  at  1;  Supplemental  Request  at  1.  Jung  on  Jung  does  not  assert  that  it  lost  facilities  during  the 
 September  11,  2001  events,  rather,  Jung  on  Jung  blames  its  financial  problems  on  its  business  location  being  within  20  miles  of  the  collapsed  World  Trade  Center  and  the  subsequent  downturn  in  the  economy. 
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 and  that  grant  of  the  requested  waiver  would  be  in  the  public  interest;  or  (ii)  that  the  unique  facts  and  circumstances  of  the  particular  case  render  application  of  the  rule  inequitable,  unduly  burdensome  or 
 otherwise  contrary  to  the  public  interest,  or  that  Jung  on  Jung  has  no  reasonable  alternative.  11  For  the  reasons  discussed  below,  we  find  that  Jung  on  Jungs  waiver  request  fails  to  meet  the  Commissions 
 standard  for  granting  a  waiver. 
 Jung  on  Jung  fails  to  show  how  the  underlying  purpose  of  our  installment  payment  rules  would  not  be  served,  or  would  be  frustrated,  by  application  of  the  rules  in  this  instance,  or  that  grant  of  the 
 requested  waiver  would  be  in  the  public  interest.  In  designing  a  licensing  system  that  employs  competitive  bidding  pursuant  to  Section  309(  j)  12  of  the  Communications  Act,  the  Commission  determined 
 that  the  Acts  objectives  would  best  be  served  by  awarding  licenses  to  those  who  value  them  most  highly.  13  The  Commission  has  repeatedly  emphasized  that  strict  enforcement  of  the  installment  payment 
 rules  enhances  the  integrity  of  the  auction  and  licensing  process  by  ensuring  that  winning  bidders  have  the  necessary  financial  capacity  to  build  out  its  systems  and  provide  service,  and  that  spectrum  is  awarded 
 to  those  qualified  bidders  who  value  the  spectrum  most.  14  Requiring  licensees  to  comply  with  the  full  and  timely  payment  rule  is  essential  to  a  fair  and  efficient  licensing  process.  15  Moreover,  it  is  fair  to  all 
 participants  in  our  auctions,  including  those  who  won  licenses  in  the  auction  and  those  who  did  not,  and  it  fosters  the  promotion  of  economic  opportunity  and  competition  in  the  marketplace  and  rapid  deployment 
 of  new  services  for  the  benefit  of  the  public.  16 
 11  47  C.  F.  R.    1.925. 
 12  47  U.  S.  C.    309(  j). 
 13  Implementation  of  Section  309(  j)  of  the  Communications  Act  -  Competitive  Bidding,  PP  Docket  No.  93-  253, 
 Second  Report  and  Order,  9  FCC  Rcd.  2348    70  (1994)  (  Competitive  Bidding  Second  Report  and  Order). 
 14  Southern  Communications  Systems,  Inc.,  Request  for  Limited  Rule  Waiver  to  Comply  with  PCS  Installment 
 Payment  for  C  Block  Licenses  in  the  Cleveland,  TN  BTA,  Memorandum  Opinion  &  Order,  15  FCC  Rcd  25103,  25110-  11  at    15  (2000)  (  Southern  Communications  MO&  O),  further  recon.  denied  Second  Memorandum 


 Opinion  and  Order,  FCC  01-  298  (rel.  Oct.  12,  2001);  Licenses  of  21st  Century  Telesis,  Inc.,  For  Facilities  in  the  Broadband  Personal  Communications  Service,  Memorandum  Opinion  &  Order,  15  FCC  Rcd  25113,  25117-  18  at   
 10  (2000)  (  21st  Century  MO&  O),  affd  21st  Century  Telesis  Joint  Venture  and  21st  Century  Bidding  Corporation  v.  Federal  Communications  Commission,  318  F.  3d  192  (D.  C.  Cir.  2003);  Wireless  Telecommunications  Bureau 
 Will  Strictly  Enforce  Default  Payment  Rules;  Bureau  to  Re-  Auction  Licenses  Quickly,  Public  Notice,  11  FCC  Rcd  10853  (1996);  see  WTB  Guidance  PN,  13  FCC  Rcd  at  18214. 


 15  Amendment  of  the  Commissions  Rules  Regarding  Installment  Payment  Financing  of  Personal  Communications 
 (PCS)  Licensees,  Order  on  Reconsideration  of  the  Second  Report  and  Order,  13  FCC  Rcd  8345,  8348  at    8  (1998);  see  also  In  the  Matter  of  Amendment  of  Part  1  of  the  Commissions  Rules,  Competitive  Bidding  Procedures,  WT 


 Docket  No.  97-  82,  Allocation  of  Spectrum  Below  5  GHz  Transferred  from  Federal  Government  Use,  ET  Docket  No.  94-  32,  4660-  4685  MHz,  Third  Report  and  Order  and  Second  Further  Notice  of  Proposed  Rule  Making,  13 
 FCC  Rcd  374,  429,  430    95-  96  (1998);  Southern  Communications  MO&  O,  15  FCC  Rcd  at  25106,    7;  Letter  to  Messrs.  Stephen  Diaz  Gavin  and  Paul  C.  Besozzi,  Counsel  for  U.  S.  Telemetry  Corporation,  from  Margaret  Wiener, 
 Chief,  Auctions  and  Industry  Analysis  Division,  Wireless  Telecommunications  Bureau,  17  FCC  Rcd  6442,  6446  (2002)  (  U.  S.  Telemetry  Corporation  Letter). 


 16  See  Letter  to  Mr.  Kurt  Schueler,  President  of  New  England  Mobile  Communications,  Inc.,  from  Margaret 
 Wiener,  Chief,  Auctions  and  Industry  Analysis  Division,  Wireless  Telecommunications  Bureau,  16  FCC  Rcd  19355,  19357-  58  (2001)  (  New  England  Mobile  Letter). 
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 The  Commissions  late  payment  rules  for  installment  payments  provide  licensees  experiencing  financial  difficulties  a  substantial  amount  of  time  within  which  to  pursue  private  market  solutions  to  their 
 financial  difficulties.  17  The  Commission  adopted  these  provisions  for  extraordinary  circumstances    instances  of  financial  distress    for  which  temporary  relief  is  appropriate.  18  The  Commission  has 
 recognized  that  although  there  is  considerable  flexibility  in  its  payment  rules,  it  is  inevitable  that  some  licensees  will  seek  more  time  to  pay,  and,  in  this  respect,  the  Commissions  rules  cannot  accommodate 
 every  licensees  business  plans.  19  In  light  of  the  flexibility  already  present  in  the  installment  payment  rules,  to  allow  Jung  on  Jung  additional  time  would  only  serve  to  undermine  the  purpose  behind 
 enforcement  of  the  Commissions  payment  deadlines,  which  the  Commission  decided  is  best  served  by  strict  enforcement  after  the  expiration  of  the  two  quarterly  grace  periods.  20  The  circumstances  presented 
 here,  in  fact,  establish  that  strict  enforcement  serves  the  rules  underlying  purpose  because  Jung  on  Jung  neither  offers  a  definitive  time-  frame  nor  any  assurance  for  when  it  will  be  able  to  pay  for  its  licenses.  21 
 Thus,  grant  of  a  waiver  request  based  upon  Jung  on  Jungs  speculation  that  it  may  attract  potential  investors  is  not  an  adequate  basis  for  grant  of  a  waiver.  22  Accordingly,  we  find  that  Jung  on  Jung  has 
 failed  to  demonstrate  that  the  rules  purpose  would  not  be  served,  or  that  it  would  be  frustrated,  by  applying  it  to  Jung  on  Jung,  and  that  petitioner  has  failed  to  show  that  grant  of  the  requested  waiver 
 would  be  in  the  public  interest. 
 Jung  on  Jungs  arguments  concerning  the  facts  and  circumstances  of  its  particular  case  do  not  rise  to  the  level  of  unique  or  unusual  circumstances  and  therefore  do  not  change  our  analysis.  Jung  on  Jungs 
 contention  that  a  downturn  in  economic  conditions  coupled  with  a  lack  of  financial  participation 


 17  Amendment  of  Part  1  of  the  Commissions  Rules    Competitive  Bidding  Procedures,  Allocation  of  Spectrum 
 Below  5  GHz  Transferred  from  Federal  Government  Use,  4660-  4685  MHz,  WT  Docket  97-  82,  Third  Report  and  Order  and  Second  Further  Notice  of  Proposed  Rulemaking,  13  FCC  Rcd  374,  439-  440,    110  (1997)  (  Part  1  Third 


 Report  and  Order);  see  also  Southern  Communications  MO&  O,  15  FCC  Rcd  at  25110,    15;  U.  S.  Telemetry  Corporation  Letter,  17  FCC  Rcd  at  6446. 


 18  Amendment  of  Part  1  of  the  Commissions  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,  15304-  05,    19  (2000)  (  Part  1  Order  on  Recon  of  Third  Report  and  Order);  Part  1  Third  Report 


 and  Order,  13  FCC  Rcd  at  440,    110;  see  also  U.  S.  Telemetry  Corporation  Letter,  17  FCC  Rcd  at  6446. 
 19  Amendment  of  the  Commissions  Rules  Regarding  Installment  Financing  for  Personal  Communications  Services 
 (  PCS)  Licensees,  Order  on  Reconsideration  of  the  Second  Report  and  Order,  13  FCC  Rcd  8345,  8354  at    24  (1997)  (  No  matter  what  deadline  we  establish,  it  is  inevitable  that  some  licensees  will  seek  more  time  to  pay.);  see 


 also  Southern  Communications  MO&  O,  15  FCC  Rcd  at  25110,    15;  New  England  Mobile  Letter,  16  FCC  Rcd  at  19357-  58  (noting  that  the  Commissions  payment  rules  cannot  accommodate  every  business  plan). 


 20  Southern  Communications  MO&  O,  15  FCC  Rcd  at  25111,    15;  21st  Century  MO&  O,  15  FCC  Rcd  at  25117-  18, 
   10;  New  England  Mobile  Letter,  16  FCC  Rcd  at  19357-  58;  U.  S.  Telemetry  Corporation  Letter,  17  FCC  Rcd  at  6446-  47. 


 21  See  supra  notes  13  &14. 
 22  Waiver  Request  at  1. 
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 by  lenders  has  decreased  its  ability  to  fund  the  operation  and  development  of  its  system  and  to  make  installment  payments,  23  while  unfortunate,  is  not  a  unique  fact  or  circumstance  that  meets  the  waiver 
 standard.  24  All  licensees  bear  the  risk  of  changes  in  the  market.  Licensees  are  obligated  to  maintain  sufficient  resources  to  both  pay  for  and  build  out  their  licenses  to  serve  the  public.  25  Jung  on  Jung  had  full 
 notice  that  the  grant  of  its  licenses  was  conditioned  upon  Jung  on  Jungs  full  and  timely  performance  of  the  payment  obligations  and  compliance  with  our  general  installment  payment  rules.  Furthermore,  Jung 
 on  Jungs  speculation  that  market  conditions  will  improve  is  not  an  adequate  basis  for  grant  of  a  waiver.  Thus,  Jung  on  Jungs  alleged  financial  difficulties  do  not  constitute  unique  circumstances  sufficient  to 
 justify  waiver  of  our  late  payment  rules.  26  Accordingly,  Jung  on  Jungs  request  is  denied. 
 Accordingly,  IT  IS  ORDERED  that,  the  Waiver  Request  filed  by  Jung  on  Jung,  dated  November  27,  2001,  and  its  Supplemental  Request,  dated  November  30,  2001,  are  DENIED. 


 IT  IS  FURTHER  ORDERED  that  the  request  dated  August  29,  2001  is  DISMISSED  as  moot. 
 IT  IS  FURTHER  ORDERED  that  this  letter  shall  be  sent  to  the  Jung  on  Jung  and  its  representatives  by  certified  mail,  return  receipt  requested. 


 23  Waiver  Request  at  1;  Supplemental  Request  at  2. 
 24  New  England  Mobile,  16  FCC  Rcd  at  19358  (holding  that  a  218-  219  MHz  licensees  inability  to  raise  sufficient 
 capital  to  build  out  and  pay  for  licenses  does  not  justify  waiver  of  the  payment  rules  particularly  when  the  licensee  assumed  such  risks  in  electing  the  resumption  option);  U.  S.  Telemetry  Corporation  Letter,  17  FCC  Rcd  at 


 6447(  holding  that  a  218-  219  MHz  licensees  contention  that  a  decline  in  the  financial  markets  decreased  its  ability  to  fund  the  operation  and  development  of  its  system  and  to  make  installment  payments  does  not  justify  waiver  of  the 
 payment  rules  since  the  licensee  accepted  the  risk  in  acquiring  the  licenses);  see  also  Southern  Communication  MO&  O,  15  FCC  Rcd  at  25107,    10  (holding  that  a  failure  to  appropriately  manage  business  arrangements  does  not 
 justify  waiver  of  the  automatic  cancellation  rule). 
 25  See  In  the  Matter  of  Requests  for  Extension  of  the  Commissions  Initial  Non-  Delinquency  Period  for  C  and  F 
 Block  Installment  Payments,  Order,  13  FCC  Rcd  22071,  22072,    4  (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),  affd.,  SouthEast  Telephone  v.  FCC,  No.  99-  1164,  1999  WL  1215855  (D.  C.  Cir.  Nov.  24,  1999). 


 26  See  Southern  Communications  MO&  O,  15  FCC  Rcd  at  25107,    10  (holding  that  a  failure  to  appropriately 
 manage  business  arrangements  does  not  justify  waiver  of  the  automatic  cancellation  rule);  U.  S.  Telemetry  Corporation  Letter,  17  FCC  Rcd  at  6447. 
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 This  action  is  taken  pursuant  to  Sections  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),  under  authority  delegated  pursuant  to 
 Section  0.331  of  the  Commissions  rules.  27 


 Sincerely, 
 Margaret  W.  Wiener  Chief,  Auctions  and  Industry  Analysis  Division 
 Wireless  Telecommunications  Bureau 


 cc:  Jung  on  Jung,  240-  72  67  th  Ave.,  2  nd  Floor,  Douglaston,  NY  11362  Mr.  Jeffrey  Craven,  2550  M  Street,  NW,  Washington,  DC  20037 
 27  47  C.  F.  R.    0.331. 
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