PUBLIC NOTICE

FEDERAL COMMUNICATIONS COMMISSION    News Media Information: (202) 418-0500
445 12th STREET, S.W.                         Fax-On-Demand: (202) 418-2830
WASHINGTON, D.C.  20554                        Internet: http://www.fcc.gov
                                                    ftp.fcc.gov

                                                               
                                                      DA 00-899
                                                 April 20, 2000
  FREQUENTLY ASKED QUESTIONS REGARDING THE RESTRUCTURING RULES
                  FOR THE 218-219 MHZ SERVICE 
                                
In this Public Notice, the staff of the Wireless Telecommunication Bureau provides guidance on
issues that have been brought to our attention concerning the restructuring of installment
payment financing and remedial bidding credits for the 218-219 MHz service. The advice and
rule interpretations provided in this Public Notice constitute informal staff opinion and are not
binding on the Commission as official decisions or rulings.

     I.   BACKGROUND

What changes did the Commission make to the 218-219 MHz Service in a
recent Order?

The 218-219 MHz Order that the Federal Communications Commission ("Commission")
adopted on September 10, 1999, essentially does three things.  First, it offers financial
restructuring to current licensees ("Eligible Licensees") and debt forgiveness to previous
licensees who made their first and second down payments, but were not current in their payments
as of March 16, 1998, and/or did not have a timely filed grace period request on file ("Ineligible
Entities").  Second, it provides a remedial bidding credit to all small businesses, eliminating the
women- and minority-owned business bidding credits.  Third, it changes the service rules,
increasing the flexibility of licenses in the 218-219 MHz service and changing the license term
from five (5) to ten (10) years.

The following Frequently Asked Questions (FAQ) address the financial restructuring offered and
the application of remedial bidding credits.

     II.  SCOPE OF THE ORDER

Who is subject to the Order?

The 218-219 MHz Order applies generally to all current and prior 218-219 MHz licensees that
were not in default on their first or second down payments.  This also includes all licensees who
acquired previously auctioned licenses as a result of a valid assignment or transfer.  However, the
election options portion of the 218-219 MHz Order does not apply to licensees who obtained
their licenses through the lottery process, licensees that have paid for their licenses in full, or to
entities that are deemed to be "ineligible."  In addition, only those licensees that met the small
business qualifications at the time of the July 1994 auction are subject to the remedial bidding
credit provision. 

Current and previous licensees who participated in the installment payment program are divided
into two categories: Eligible Licensees and Ineligible Entities.  "Eligible Licensees" are existing
licensees that: (i) were current in installment payments as of March 16, 1998; (ii) were less than
ninety days delinquent on the last payment due before March 16, 1998; or (iii) had properly filed
grace period requests under the former installment payment rules.  "Ineligible Entities" are those
entities that made second down payments and (i) made some installment payments, but were not
current in their installment payments as of March 16, 1998, and did not have a grace period
request on file in conformance with the former rules; and/or (ii) entities that never made any
installment payments and did not have a timely filed grace period request on file.  The licenses
of Ineligible Entities automatically cancelled so the entities are no longer "licensees."

In addition, any 218-219 MHz licensee that paid its first and second down payment, met the
small business qualifications at the time of auction, and did not already receive a bidding credit
as a women- or minority- owned business, will have a refund processed based on the 25%
remedial bidding credit.

What does being an Ineligible Entity mean?

The licenses of Ineligible Entities have already automatically cancelled.  Nevertheless, under the
218-219 MHz Order Ineligible Entities are entitled to debt forgiveness of the original principal
balance and all interest payments due thereon.  In addition, Ineligible Entities are entitled to a
refund of any previously paid installment payments.  The Commission will release a separate
Public Notice detailing the procedures by which entities may obtain a refund.

What does being an Eligible Licensee Mean?

Being an Eligible Licensee means that you may participate in the restructuring options offered in
the 218-219 MHz Order.

Can I be both an Eligible Licensee and an Ineligible Entity?

Yes, you may meet the criteria to be an Eligible Licensee for one license, but not for another. 
For example, if you had two licenses and made all of your payments on one license, but failed to
make any payments (or file a timely grace period request) on the other license, you would be an
Eligible Licensee with respect to the first license and an Ineligible Entity with respect to the
second license.

What are the restructuring options offered to Eligible Licensees?

Eligible Licensees may choose between three options: (i) Reamortization and Resumption of
Payments; (ii) Amnesty; or (iii) Prepayment (Prepayment-Return and Prepayment-Retain).

If I did not receive a letter announcing my eligibility, do I still have to file an
Election Notice?

Yes.  It is the sole responsibility and obligation of all previous and current licensees to keep the
Commission apprised of any change of address.  If you are subject to the 218-219 MHz Order
and have not received a letter of eligibility, you should contact the Commission immediately. 
However, in an effort to keep all entities informed, the Commission has made a significant effort
to notify all previous and current licensees to advise them of their eligibility status for
participation in this restructuring.  If an Eligible Licensee fails to make an election because the
Licensee did not receive a letter regarding its status, the sole responsibility for this falls on the
Licensee and its licenses will be automatically placed in the Amnesty category.

III. ELECTION OPTIONS

What does "Reamortization and Resumption of Payments" mean to me?

"Reamortization and Resumption of payments" means that the Eligible Licensee has chosen to
retain one or more of its licenses and remain in the installment payment plan.  The loan will be
"reamortized" over the remaining term of the license.  The interest rate will be the same interest
rate as on the original installment payment plan.  All unpaid and accrued interest from grant date
through the Election Date, the last business day of the first full month after the Order on
Reconsideration is released by the Commission, will be capitalized (i.e. added to) the outstanding
principal balance to create a new principal amount.  The new principal amount will be fully
amortized over the remaining term of the license.  For examples of how the reamortized
payments are calculated, see Appendix A.  In order to participate in Reamortization/Resumption,
the licensee will be required to: (1) sign the Installment Payment Acknowledgement (2) begin
making principal and interest payments at the end of the third month after the Election Date; and
(3) continue to make principal and interest payments on the last day of every third month
thereafter, through and including the maturity date of the loan.  In addition, the licensee may be
required to execute a Uniform Commercial Code financing statement (UCC-1).

How are the Reamortized payments calculated?

For examples of how reamortized payments are calculated, see Appendix A.

If I choose Reamortization/Resumption, when will my first payment be due?

Your first payment, which will include both principal and interest, must be paid on or before the
end of the third month after the Election Date.  Furthermore, under Part 1 late payment rules for
installment payments, licensees will have the option of utilizing two ninety-day non-payment
periods, subject to late payment fees, if licensees require additional time to avoid default.

What does Amnesty mean for me?

Electing Amnesty means the licensee is returning the license to the Commission in exchange for
debt forgiveness of the outstanding principal balance and all interest payments due thereon.  The
Commission retains the down payment.

What happens to my installment payments if I elect Amnesty?

A licensee that elects Amnesty for all of its licenses and made any installment payment(s), will
have its installment payment(s) refunded.  For licensees that made any installment payment(s)
and elect Amnesty for some licenses and Reamortization/Resumption for others, their installment
payment(s) will be credited towards the retained licenses; first toward the accrued interest and
then toward any principal owed. 

The Commission issued an Order on Reconsideration that changed the terms
of the Amnesty option, what did they change?

On November 30, 1999, the Commission issued the 218-219 MHz Order on Reconsideration
altering the terms of the Amnesty election option.  Essentially, the Commission eliminated the
licensee's option to obtain a credit for seventy (70%) percent of its down payment and the two
year bar against reacquiring the surrendered licenses through either auction or a secondary
market transaction.

What does Prepayment mean to me?

Eligible Licensees electing Prepayment may return or retain as many licenses as they wish. 
This option applies to all of the licenses held by a licensee and cannot be combined with
Amnesty or Reamortization/Resumption.  Eligible Licensees electing Prepayment must pay off
the original principal balances of all the licenses they retain; all interest due on the licenses from
grant date until the Election Date is forgiven.  

Eligible Licensees are given a prepayment credit toward their retained licenses equal to 85% of
the down payment(s) made on the license(s) they returned to the Commission and 100% of the
installment payment(s).  If the original principal balance(s) of the license(s) the Eligible
Licensee wishes to retain is greater than the prepayment credit, the additional amount due is
called "new money" and is due at the end of the third month after the Election Date.  If the
prepayment credit is greater than the original principal balance(s), then the excess prepayment
credits will be refunded to the licensee to the extent that the funds were generated from
installment payments.  No excess prepayment credits generated from down payments will be
refunded.  

Is there a difference between Amnesty and Prepayment-Return?

Yes.  A Licensee electing Amnesty does not get credit for its down payment.  A Licensee
electing Prepayment-Return gets an 85% credit for its down payment, towards the amount owed
on the licenses for which Prepayment-Retain is elected. 

However, under both election options Eligible Licensees return licenses to the Commission and
receive a 100% credit/refund for any installment payments.

If I elect Prepayment, when will my payment be due?

The licensee is required to pay the balance of any money owed on the retained license(s), the
"new money" balance, by the end of the third month after the Election Date.

How do I calculate the amount of "New Money" I owe?

For an example of how to calculate the amount of "new money" owed on licenses for which
Prepayment-Retain has been elected, see Appendix A.

If I elect Prepayment, am I eligible for a grace period? 

No.  "New money" for the prepayment of licenses is due at the end of the third month after the
Election Date, and there are no grace periods permitted for this payment.  However, the licensee
may pay the "new money" balance within ten (10) days of the due date, subject to a 5% late fee. 
Failure to pay the "new money" balance(s) within ten (10) days of the end of the third month
after the Election Date, with applicable late fees, will result in the automatic and immediate
cancellation of the 218-219 MHz licenses held by the licensee.

What does "automatic cancellation" mean?

Automatic cancellation means that the license cancels without any action on the part of the
Commission.  The license cancels by operation of the Commission's rules, which require full and
timely payment.  The Commission does not send out, or publish, a notice when a license cancels
automatically.

If I elect Prepayment, how do I submit my "new money" payment to the
Commission?

Appendix A of the Implementation Procedures Public Notice contains precise payment
instructions.

IV.  ASSIGNMENT OF LICENSES

What is an "assignment" of a license or a "transfer of control"?

Both assignments and transfers of control relate to those instances where ownership and/or
control of a license passes from one entity to another.  Both require prior FCC approval, and are
subject to limitations (for example, because of federal laws relating to foreign ownership of
communication licenses, transfers or assignments to foreign corporations are restricted). 
Generally, an assignment occurs when the license moves from one entity to another (e.g.,
corporation A sells its license to corporation B); a transfer of control involves a change of
ownership of the licensee (e.g., corporation A is acquired by corporation B).  You must file an
application for assignment or transfer of control of a 218-219 MHz Service license and receive
FCC approval before assigning or transferring your license.

If I have been assigned a license from another party, am I eligible to file an
election?

Yes.  If the assignment was properly filed, consented to by the Commission (granted),
consummated by the parties and the license is determined to be "eligible" according to the
criteria set forth in the 218-219 MHz Order, then you are eligible to file an election.

If I have acquired licenses through assignment or transfer, do I receive credit
for the down payments and installment payments made by the prior license
holder(s)?

Yes.  The licensee of record as of the Election Date will receive credit and/or refund in the
amounts discussed above for the down payments and installment payments made on the licenses
it owns on the Election Date.  However, please note that only the original payer of the down
payment will receive any refund of the down payment amount resulting from the remedial
bidding credit.  For purposes of making an election, it does not matter who was the payer of the
down payment(s) and/or installment payment(s).

Can I assign my license(s) prior to the Election Date?

Yes.  The Commission will accept assignment applications prior to the Election Date.  However,
there are no assurances that the assignment process will be completed prior to the Election Date. 
Again, licensees should note only the valid license-holder of record is eligible to make an
election.  

How do I go about assigning my license during the election process?

Assignment applications must be filed on FCC Forms 600 and 1046.  For a transfer of control
application, use FCC Form 703.  Note: Applicants may also use new Form 603 for these
purposes.  Applications will be evaluated under the rules adopted in the September 10, 1999,
218-219 MHz Order.

If an assignment is pending before the Commission, who must file the
Election Notice?

The licensee of record, on the day that the Election Notice is filed, must file the Election Notice. 
Therefore, if you filed an application with the Commission to assign your license to another
party, and the application is still pending on the Election Date, then you as the current licensee
must file the Election Notice.

If the assignment of licenses is not consented to or consummated by the
Election Date, may I change my election after the Election Date?

No.  Elections may not be changed after the Election Date.  If the assignment of license is not
granted or consummated, the licensee of record is responsible for the election made.  For
example, if the licensee of record elects to prepay licenses because it believes that it would assign
its licenses to another party who would make the new money payment and the assignment was
not consummated, the licensee of record is still responsible to pay any new money due the
Commission.  Failure to pay the new money due will trigger default and result in the automatic
cancellation of the license(s).

V.   ELECTION PROCEDURES

Detailed instructions regarding the election procedures may be obtained from the Implementation
Procedures Public Notice.
  

When do I have to choose an option?

The deadline for submitting an election to the Commission is 7:00 p.m. on the Election Date, the
last business day of the first full month after the Order on Reconsideration is released by the
Commission.

How do I submit my Election Notice to the Commission?

Election Notices may be filed with the Commission from 8:00 a.m. to 7:00 p.m. starting on the
date of this Public Notice and ending at 7:00 p.m. on the Election Date, the last business day of
the first full month after the Order on Reconsideration is released by the Commission.  NO
ELECTIONS OR CHANGES TO ELECTIONS WILL BE ACCEPTED AFTER 7:00 P.M.
ON THE ELECTION DATE, THE LAST BUSINESS DAY OF THE FIRST FULL
MONTH AFTER THE ORDER ON RECONSIDERATION IS RELEASED BY THE
COMMISSION.  Notices should be sent to the Office of the Secretary, Room TW-B204,
Federal Communications Commission, 445 12th Street, S.W., Washington, D.C. 20554.  In
addition, a copy of each Election Notice should be sent to Ms. Rachel Kazan, Room 4-A460,
Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, Federal
Communications Commission, 445 12th Street, S.W., Washington, D.C. 20554.  

Eligible Licensees are solely responsible for ensuring the accurate and timely delivery of their
Election Notices.  Submissions of Election Notices by FAX  or electronic mail will NOT be
accepted.

What kind of information/format is suggested for my Election Notice
submission?

See Appendix A in the Implementation Procedures Public Notice for a sample format, and
information that should be contained in the Election Notice.

Can I change my election choice after I have submitted the Election Notice?
How?

Yes.  A licensee may change its election until 7:00 p.m. on the Election Date, the last business
day of the first full month after the Order on Reconsideration is released by the Commission.  No
changes will be accepted after 7:00 p.m. on the Election Date, last business day of the first full
month after the Order on Reconsideration is released by the Commission.  See the
Implementation Procedures Public Notice for specific instructions.

Can I choose more than one of the election options for my licenses?

Yes.  However, there is only one election option combination available.  If you have more than
one eligible license, you may elect either Amnesty, Reamortization/Resumption, or both.  There
are no other election combinations available to licensees.  The Prepayment option cannot be
combined with Amnesty and/or Reamortization/Resumption.  In addition, only one election
option per license may be selected.

What happens if I don't file an Election Notice?

An Eligible Licensee failing to make a specific, valid election for each of its licenses by the
Election Date (the last business day of the first full month after the Order on Reconsideration is
released by the Commission) will automatically be placed in the Amnesty category.

VI.  FINANCIAL TRANSACTIONS

If I am an Eligible Licensee, how do I calculate my refund?

Refunds and/or credits for installment payments depend upon the election(s) made by the
licensee:

Amnesty

For an Eligible Licensee that elects Amnesty for all of its licenses, the Commission will retain
the down payment (less any remedial bidding credit refund) and forgive the original principal
balance and all interest payments due thereon.  In addition, for Eligible Licensees in this
category that have previously made installment payments, the Commission will refund
installment payments in their entirety.

Amnesty and Reamortization/Resumption

For an Eligible Licensee that holds more than one license and elects Amnesty for one or more of
its licenses, and Reamortization/Resumption for its other license(s), all installment payments
made on the Amnesty license(s) will be credited towards the outstanding balance due on the
license(s) for which Reamortization/Resumption was elected.  The installment payment credits
will be applied against the accrued and unpaid interest on the retained license(s), with any excess
funds being applied to the principal balance on each retained license.  The installment payment
credits will be prorated based on the net high bids of the retained licenses.

Prepayment (Prepayment-Retain/Prepayment-Return)

Eligible Licensees electing Prepayment may retain or return as many licenses as they wish.  The
Commission will forgive all of the interest due on the retained licenses from grant date until the
Election Date, however Eligible Licensees must pay off the original principal balance of the
license(s) they retain.  Eligible Licensees will be given a prepayment credit equal to 85% of the
down payment and 100% of the installment payment(s) made on the license(s) they return to the
Commission.  If the original principal balance of the license(s) the Eligible Licensee wishes to
retain is greater than the prepayment credit, the additional amount due is called "new money,"
and must be remitted to the Commission on or before the end of the third month after the
Election Date.  If the prepayment credit is greater than the original principal balances, the
excess prepayment credits will be refunded to the licensee to the extent that the funds were
generated from installment payments.  No excess prepayment credits generated from down
payments will be refunded.

Who may receive a refund based on the application of the remedial bidding
credit for small businesses?

Where an Eligible Licensee or Ineligible Entity paid its first and second down payment and met
the small business qualifications at the time of the July 1994 auction, but did not receive a
woman- or minority-owned small business bidding credit at the time of auction, the Commission
will process a refund based on the 25% remedial bidding credit.  Because entities that registered
as a woman- or minority-owned small business received a biding credit at the time of auction, no
refund is generated by the small business bidding credit.  Where licensees paid for their licenses
in full and met the qualifications for a small business at the time of auction, and did not receive
the credit as a women- or minority- owned business, the Commission will process a refund based
on the remedial bidding credit.  The Commission will issue a separate Public Notice detailing the
procedures by which entities may obtain a refund.  Additional information on remedial bidding
credits for small businesses may be found in the Implementation Procedures Public Notice.

If I am due a refund based on the application of the remedial bidding credit
for small businesses, how do I go about getting it?

Entities that are due a refund as a result of the remedial bidding credit for small businesses will
have them processed via Automated Clearing House (ACH) Credits (i.e. electronic fund
transfer).  In order for the Commission to issue payment, all entities due a refund must submit the
information necessary for an automatic deposit.  The Commission will issue a separate Public
Notice detailing the necessary information and procedure for submission.  A refund of excess
down payment to Ineligible Entities, as a result of the remedial bidding credit for small
businesses, does not change their "ineligible" status.

If I am due a refund, when will I receive it?

The Commission will endeavor to issue appropriate refund payments (assuming the necessary
information has been provided) within approximately 60 days of the Election Date.  The
Commission will issue a separate Public Notice with instructions detailing the procedures by
which entities may obtain a refund.

What are the tax implications of debt forgiveness?

The Federal Communications Commission is required by federal law and regulation to report
certain discharges of indebtedness to the Internal Revenue Service.  The Commission does not
make a determination, or offer comment on the tax consequences, of the information reported. 
Each license holder should fully consider the financial consequences of the election options. 
Questions involving matters in this area should be addressed to the license holder's individual
advisors with appropriate expertise in these fields.  The Commission neither endorses nor
recommends a particular election, and it does not comment on, or advise in, matters involving
the fiscal consequences of any particular election or course of action.  

When will I receive my loan documents?

Eligible Licensees electing Reamortization/Resumption are required to execute loan documents
in the form of an Installment Payment Acknowledgement.  The Installment Payment
Acknowledgement must be executed and returned to the Commission (or its agent) within ten
business days of receipt. 

The Commission will notify and deliver the Installment Payment Acknowledgement to these
licensees at some time following the Election Date.  However, Eligible Licensees electing
Reamortization/Resumption are required to resume payments at the end of the third month after
the Election Date, subject to applicable late payment rules, in accordance with the 218-219
MHz Order without regard to whether the Installment Payment Acknowledgement has been
issued, executed, or returned.  Licensees may also be required to execute a Uniform
Commercial Code financing statement (UCC-1).

What happens if I don't execute the loan document(s)?

The Installment Payment Acknowledgement and, if required, a Uniform Commercial Code
financing statement (UCC-1) must be executed and returned to the Commission (or its agent)
within ten business days of receipt.  Failure to fully and timely execute and deliver any required
loan document(s) will result in the automatic and immediate cancellation of your license(s).

VII. FUTURE ELIGIBILITY

Does being an "Ineligible Entity" affect my ability to participate in future
auctions? 

No.  For purposes of future auctions that do not involve the extension of credit by the
government, entities determined to be ineligible (former licensees) will be deemed "former
defaulters" and eligible to participate in future elections provided they can make the
certification required under Section 1.2105(a)(2)(x) of the Commission's general competitive
bidding rules.

Do any of the election options available to "Eligible Licensees" affect my
ability to participate in future auctions? 

No, they do not.

VIII.     MISCELLANEOUS

Is there a difference between "accrued and unpaid" and "unpaid" interest
under the Reamortization option?

No.  "Accrued and unpaid" interest and "unpaid" interest are the same.  Both terms refer to the
unpaid interest on the license from grant date through the Election Date, the last business day of
the first full month after the Order on Reconsideration is released by the Commission.  This
amount also includes the two uncollected installment (interest only) payments for September 30,
1995 and December 31, 1995.

Will I receive a revised radio station authorization (license)? When?

Yes.  The Commission will update its records and automatically issue revised radio station
authorizations (licenses) to reflect the modified terms and conditions.  Because Eligible
Licensees may choose to relinquish their licenses under the Amnesty option, the Commission
does not anticipate issuing updated licenses until after the Election Date.  Eligible Licensees who
elect Reamortization will receive license documents conditioned on their meeting the terms of
their loans, and may not receive licenses until after the due date for the first installment payment. 
Licensees who choose Prepayment, or do not have payment obligations associated with their
licenses, will receive license documents free of these conditions.

Can I find out which option(s) each Eligible Licensee selected?

Yes.  The Commission will release a Public Notice listing Eligible Licensees and the
restructuring option(s) they elected for their license(s).

IX.  ADDDITIONAL INFORMATION

Where can I get additional information on this implementation and
underlying rule making?

To obtain additional information on implementation procedures and the underlying rule making
you may go to the Federal Communications Commission web site located at
http://www.fcc.gov/wtb/auctions/218 rest/218 rest.html.  Additionally, related documents may
be obtained from the FCC Reference Center or purchased from the Commission's copy
contractor, ITS, Inc.

Who do I call if I have a specific question?

If you have a specific question or believe that an error has occurred with regard to your eligibility
or payment history, please contact Ben Freeman or Nicole Oden of the Auctions and Industry
Analysis Division at (202) 418-0660, or Jamison Prime of the Public Safety and Private Wireless
Division at (202) 418-0680.


                           APPENDIX A

                  SAMPLE ELECTION CALCULATIONS

The following examples illustrate various election options an Eligible Licensee might select.

The examples, which use a fictitious company called "Byron Enterprises," include the following
elections:

          I.   Reamortization/Resumption - All Licenses
          II.  Amnesty   All Licenses
          III. Resume Payments On Three Licenses
     And Amnesty Two Licenses
          IV.  Prepayment (Retain 2 Licenses)
          V.   Prepayment (Retain 1 License)
          VI.  Invalid Election Filing

Byron Enterprises was the high bidder for five IVDS licenses.  It was granted the licenses on
January 18, 1995.  Byron Enterprises was a small business and was eligible to participate in the
installment payment plan for IVDS licensees.  Its loan terms are as follows:


Five-year loan term:     Two years interest-only; three years principal and interest
Payments:      Quarterly payments
Interest Rate:      6.25%
Grant Date:         January 18, 1995
     Down Payment:  20% of the Net High Bid
     Original Principal: 80% of the Net High Bid


License
Net High Bid
Down Payment
Original
Principal
Quarterly
Installment Pmt
(Interest-Only)


License 1
$30,000
$6,000
$24,000
$375


License 2
$100,000
$20,000
$80,000
$1,250


License 3
$100,000
$20,000
$80,000
$1,250


License 4
$250,000
$50,000
$200,000
$3,125


License 5
$250,000
$50,000
$200,000
$3,125


Total
$730,000
$146,000
$584,000
$9,125


Byron Enterprises made four installment payments and then filed a grace period request within
90 days of the next installment payment due date, which effectively stayed Byron Enterprises'
future installment payments.  Therefore, Byron Enterprises is an "Eligible Licensee" under the
terms of the 218-219 Order.

Prior to assessing Byron's election options, we need to calculate the accrued and unpaid interest
for all five licenses by taking the total interest due from grant date through election date (the
"accrued and unpaid interest") and subtracting the installment payments actually made.  This
calculation automatically includes the suspended "uncollected payments" i.e. the payments for
September 30, 1995 and December 31, 1995, which the Commission suspended and did not
require to be repaid until the issuance of the 219-219 Order.


License
Original
Principal
Total Interest
Due (grant
date through
2/29/00)
Installment
Payments
Made (4 pmts)
Accrued and
Unpaid Interest


License 1
$24,000
$6,202
$1,500
$4,702


License 2
$80,000
$20,672
$5,000
$15,672


License 3
$80,000
$20,672
$5,000
$15,672


License 4
$200,000
$51,680
$12,500
$39,180


License 5
$200,000
$51,680
$12,500
$39,180


Total
$584,000
$150,906
$36,500
$114,406


I.   Reamortization/Resumption of All Licenses

Byron Enterprises elected to retain all of its licenses and continue in the installment payment
plan.  Its first payment due is the end of the third month after Election Date.  The Election Date is
on the last business day of the first full month after the Order on Reconsideration is released by
the Commission.

The modified loan will be reamortized over the remaining term of the license, which expires on
January 17, 2005.  To reamortize the loan, all accrued and unpaid interest from grant date
through the Election Date (the last business day of the first full month after the Order on
Reconsideration is released by the Commission.) must be added to Byron Enterprises'
outstanding principal balance to create a "new" principal balance as of Election Day.  (The
outstanding principal balance is the same as the original principal balance because Byron
Enterprises did not make any principal and interest payment prior to Election Day.)

The new principal balance will be fully amortized over the remaining term of the loan.  The
interest rate is the same as the interest rate on the original installment payment plan.  Assuming
that the installment payments resume on May 31, 2000, and that the last payment is on January
17, 2005, there will be 20 quarterly installment payments, including the last payment due on
January 18, 2005, which will be a partial payment.

The actual calculation of an amortized installment payment is not a simple calculation that can be
shown.  To calculate the payment, you must use either an amortization table, a financial
calculator or the financial function on a computer spreadsheet (such as the PMT function in
Excel.)


License
Outstanding
(Original)
Principal
Accrued and
Unpaid
Interest
New Principal
Principal and
Interest
Installment
Payment


License 1
$24,000
$4,702
$28,702
$1,682 


License 2
$80,000
$15,672
$95,672
$5,607 


License 3
$80,000
$15,672
$95,672
$5,607 


License 4
$200,000
$39,180
$239,180
$14,017 


License 5
$200,000
$39,180
$239,180
$14,017 


Total
$584,000
$114,406
$698,406
$40,930 


II.  Amnesty All Licenses

Byron Enterprises elected amnesty for all of its licenses.  Therefore, all of Byron's licenses will
automatically cancel on Election Day.  Byron Enterprises will be refunded all of its installment
payments and the Commission will retain all of Byron Enterprises' down payments.

As previously described, Byron Enterprises made four installment payments on each of its five
licenses.  The total amount of the installment payments will be refunded to Byron Enterprises.


License
Quarterly
Installment Pmt
(Interest-Only)
Installment
Payments Made
(4 pmts)


License 1
$375
$1,500


License 2
$1,250
$5,000


License 3
$1,250
$5,000


License 4
$3,125
$12,500


License 5
$3,125
$12,500


Total to be Refunded
$9,125
$36,500



III. Resume Payments on Three Licenses And Amnesty Two Licenses

Byron Enterprises elected reamortization/resumption for three licenses and amnesty for two
licenses.  This is a valid election because the combination of reamortization/resumption and
amnesty is permitted in the 218-219 MHz Order.

The difference between electing reamortization/resumption for all of its license and
reamortization/resumption for only three of its licenses, is that the installment payments on the
licenses for which Byron Enterprises elected amnesty are applied to the accrued and unpaid
interest on the licenses which Byron Enterprises is keeping.

The installment payments on the licenses for which Byron Enterprises elected amnesty are added
together and the amount is "pro rated" across the licenses which Byron Enterprises is retaining. 
"Pro rated" means that the installment payments will be applied proportionally across the
licenses which Byron Enterprises is retaining, based on the net high bid amounts.

License   Election
License 1 Resume
License 2 Resume
License 3 Resume
License 4 Amnesty
License 5 Amnesty


Installment Payments to be applied to Reamortized/Resumed Licenses


License
Installment
Payments Made
(4 pmts)


License 4
$5,000


License 5
$12,500


Total
$17,500



Pro Ration Calculation


License
Net High Bid
Pro Rated
Amount
Total
Installment
Payments to
be Pro Rated
Pro Rated
Installment
Payment


License 1
$30,000
8%
$17,500
$1,381


License 2
$100,000
26%
$17,500
$4,605


License 3
$250,000
66%
$17,500
$11,513


Total
$380,000
100%

$17,500


Calculation of New Principal Amounts

As previously described, in order to calculate its new principal amount Byron Enterprises must
add the accrued and unpaid interest to its outstanding principal.  However, in this instance Byron
Enterprises also subtracts the pro rated amount of the installment payments from the licenses for
which it elected amnesty.


License
Outstanding
(Original)
Principal
Accrued and
Unpaid
Interest
Pro Rated
Installment
Payment
New Principal


License 1
$30,000
$4,702
$1,381
$27,302


License 2
$100,000
$15,675
$4,605
$91,067


License 3
$250,000
$15,675
$11,513
$227,667


Total
$380,000

$17,500




IV.  Prepayment (Retain 2 Licenses)

Byron Enterprises elected prepayment.  Under this election, Byron Enterprises decided to prepay
the original principal balances for two of its licenses and return three licenses to the FCC in
exchange for "Prepayment Credits".  In this example the original principal balances for the two
licenses Byron Enterprises is greater than the prepayment credits.  Therefore, Byron Enterprises
will owe additional money to pay off the principal balances.  The additional money is called
"new money" and is due on the payment resumption day, the end of the third month after the
Election Date.


The following shows the calculations to determine the total original principal balances,
prepayment credits, and new money.  

Elections
License   Election
License 1 Prepay-Return
License 2 Prepay-Return
License 3 Prepay
License 4 Prepay-Return
License 5 Prepay

Licenses to be Prepaid/Retained


License
Original
Principal
Balance


License 3
$80,000


License 5
$200,000


Total
$280,000



Prepayment Credits

Prepayment credits are generated from two places: installment payments and down payments. 
More specifically, they include 100% of the installment payments made on all of the licenses and
85% of the down payments made on the licenses that are being returned to the FCC.


License
Installment
Payments
Made (4 pmts)
Down
Payment
85% of Down
Payment
Total
Prepayment
Credit


License 1
$1,500
$6,000
$5,100
$11,100


License 2
$5,000
$20,000
$17,000
$37,000


License 3
$5,000
$20,000
N/A
$5,000


License 4
$12,500
$50,000
$42,500
$92,500


License 5
$12,500
$50,000
N/A
$12,500


Total
$36,500
$146,000
$64,600
$101,100



Original Principal Balance to be Prepaid     $280,000
Total Prepayment Credit            $101,100
Amount Due (New Money)             $178,900

     V.   Prepayment (Retain 1 License)

In this example, Byron Enterprises elected prepayment again, but decided to prepay the principal
balance for only one license and to return its other four licenses to the FCC.   Under this
scenario, Byron Enterprises generated more prepayment credit than the principal balance it was
required to prepay.  Therefore, Byron Enterprises was entitled to a refund. Eligible Licensees are
entitled to the refund of excess prepayment credit to the extent that the excess prepayment credit
is generated from installment payments rather than down payments.  This example illustrates a
refund of prepayment credit generated from installment payments.

The following shows the calculations to determine the total original principal balances,
prepayment credits, and new money.  

Elections
License   Election
License 1 Prepay
License 2 Prepay-Return
License 3 Prepay-Return
License 4 Prepay-Return
License 5 Prepay-Return


Licenses to be Prepaid/Retained


License
Original
Principal
Balance


License 1
$24,000



Prepayment Credits

As discussed, prepayment credits are generated from two places: installment payments and down
payments.  They include 100% of the installment payments made on all of the licenses and 85%
of the down payments made on the licenses that are being returned to the FCC.


License
Installment
Payments
Made (4 pmts)
Down
Payment
85% of Down
Payment
Total
Prepayment
Credit


License 1
$1,500
$6,000
N/A
$1,500.00


License 2
$5,000
$20,000
$17,000
$22,000.00


License 3
$5,000
$20,000
$17,000
$22,000.00


License 4
$12,500
$50,000
$42,500
$55,000.00


License 5
$12,500
$50,000
$42,500
$55,000.00


Total
$36,500
$146,000
$119,000.00
$155,500.00



Original Principal Balance to be Prepaid     $  24,000
Total Prepayment Credit            $155,500 
Excess Prepayment Credit           $131,500

Amount of Excess Prepayment Credit
To be refunded to Byron Enterprises     $ 36,500

(The refund of prepayment credits can not exceed the total amount of installment payments made
by Byron Enterprises.)


     VI.  Invalid Election Filing

In this example Byron Enterprises thought it could elect to reamortize and resume making
payments on one license and return four licenses to the FCC and use the prepayment credits to
pay down the principal on the license it is retaining.  As discussed in the 218-219 MHz Order, a
licensee electing prepayment must prepay the entire principal balance of the licenses it is
retaining.  Therefore, this is an INVALID election.  Therefore, Byron Enterprises' election will
be changed to amnesty for all of its licenses. 

          Byron          Invalid
          Enterprises         Election
License   Election       (Amnesty)
License 1 Prepay              Amnesty
License 2 Prepay-Return       Amnesty
License 3 Prepay-Return       Amnesty
License 4 Prepay-Return       Amnesty
License 5 Prepay-Return       Amnesty

As described above in the Example 2, where Byron Enterprises elected amnesty for all of its
licenses, the FCC will refund the installment payments Byron Enterprises previously made.