Before the
                FEDERAL COMMUNICATIONS COMMISSION
                      Washington, D.C. 20554

In the Matter of                )
                                )
Community Teleplay, Inc., et al.)
                                )
Petition for Relief of          )
Application of Bidding Credits in the)
Interactive Video and Data Service Auction)

                             ORDER

   Adopted:  May 28, 1998               Released:  May 28, 1998

By the Chief, Wireless Telecommunications Bureau:

                         I.  INTRODUCTION

     1.   Before the Wireless Telecommunications Bureau ("Bureau") is a Petition for Relief ("Petition")
filed on December 5, 1995, and a Supplement to Petition for Relief ("Supplement") filed on January 9, 1998, by
Community Teleplay, Inc., TV-Active, LLC, Texas Interactive Network, Inc., Hispania & Associates, Inc., Zarg
Corporation, IVDS Interactive Acquisition Partners, United Interactive Partners, Inc., and G. Ray Hale
(collectively referred to as "Petitioners").  Petitioners challenge one of the rules under which the Commission held
the July 1994 Interactive Video and Data Service ("IVDS") auction.  For the reasons stated below, we dismiss
the Petition and its Supplement.

                         II.  BACKGROUND

     2.   On July 28 and 29, 1994, the Commission conducted an auction consisting of two IVDS licenses
in each of 297 Metropolitan Statistical Areas ("MSAs"), pursuant to rules and procedures adopted in the
Competitive Bidding Fourth Report and Order.  One of those rules allowed bidding entities owned by
minorities or women to apply a 25 percent bidding credit to the purchase price of one license in each MSA.  On
January 18, 1995 and February 28, 1995, the Commission granted licenses to the winning bidders, conditioned
on the bidders' fulfillment of the terms of the auction rules, including timely payment of the full bid amount
(subject to bidding credit adjustment, if applicable).  Petitioners were among the winning bidders who were
ineligible to utilize the bidding credit on one or more of their conditionally granted licenses.  

     3.   On June 12, 1995, the Supreme Court held in Adarand Constructors, Inc. v. Pea that any
federal program in which the "government treats any person unequally because of his or her race" must satisfy
the "strict scrutiny" constitutional standard of judicial review.  Almost six months later, on December 5, 1995,
Petitioners filed their Petition alleging that the Adarand decision renders the July 1994 IVDS auction bidding
credit unconstitutional.  Relying on Harper v. Virginia Department of Taxation, Petitioners contend that
Adarand should be applied retroactively to the results of the IVDS auction.  Therefore, Petitioners seek a 25
percent reduction of their auction bids, to match the bidding credit provided to minority- and women-owned
businesses. 

     4.   At the same time, Petitioners brought their grievance to court through their involvement as
petitioners and intervenors in an appeal of the Commission's IVDS Omnibus Order denying similar relief to
Graceba Total Communications, Inc. ("Graceba").  On February 20, 1996, Petitioners filed a motion with the
Commission to hold their petition in abeyance pending the outcome of the court proceeding.  On June 20, 1997,
the D.C. Circuit dismissed Petitioners' filings because their Petition, still pending before the Commission at their
request, precluded a court challenge.  As a result, Petitioners renewed their arguments at the Commission by
filing the Supplement on January 9, 1998.  Petitioners assert that under McKesson Corp. v. Division of Alcoholic
Beverages and Tobacco, the Commission's failure to provide the requested 25 percent reduction in license
payments amounts to an unconstitutional taking of property without due process of law.  Petitioners then argue
that finality-related concerns do not bar the retroactive application of Adarand, and expand their requested
remedy to include all IVDS winning bidders who did not receive the 25 percent bidding credit.

                         III.  DISCUSSION

     5.   Petitioners' instant challenge to the IVDS bidding credit is barred by the doctrine of waiver, i.e.,
a party with sufficient opportunity to raise a challenge in a timely manner, but who fails to do so, is deemed to
have waived the challenge and is precluded from raising it in subsequent proceedings.  Petitioners acknowledge
that they had the opportunity to file comments objecting to the proposed IVDS bidding credit rule in the
proceeding resulting in the Competitive Bidding Fourth Report and Order, and did not do so.  Petitioners also
acknowledge that adoption of the Commission's rules provided an opportunity to challenge the adoption of the
bidding credit rule, yet Petitioners were not among those filing timely petitions for reconsideration of the
Competitive Bidding Fourth Report and Order.  Petitioners also could have attempted to raise the
constitutional issue upon conclusion of the auction in August 1994.  Indeed, as described above, Graceba raised
the issue of constitutionality of the bidding credit in that proceeding, albeit in a post-Adarand supplement to its
timely-filed petition for reconsideration of the public notice announcing the IVDS auction results.  Under that
unique procedural history, a panel of the U.S. Court of Appeals for the D.C. Circuit held that Graceba's claim
was a "properly presented constitutional claim."  In contrast, Petitioners' belated constitutional claim, in the
form of an informal request for Commission action submitted under Section 1.41, would be considered untimely
even under the Graceba opinion.

     6.   Petitioners also could have timely objected to the payment conditions attendant to their license
grants in January or February 1995.  In that regard, Petitioners' challenge to the payment terms -- a condition of
the license grant -- is similarly barred by Section 1.110 of the Commission's rules, "which indicates that if the
Commission grants an application with conditions, the applicant must accept those conditions unless it rejects
them within thirty days."  Even the Adarand decision date provides no milepost of timely objection, since
Petitioners filed their Petition almost six months later, and in any event, as described above, Petitioners had
numerous occasions to raise timely constitutional challenges prior to Adarand.  In view of Petitioners' failure
to properly raise their constitutional challenge despite repeated opportunities to do so, Petitioners have waived
the opportunity to raise this issue now.

                      IV.  ORDERING CLAUSES

     7.   Accordingly, for the foregoing reasons, IT IS ORDERED that the Petition for Relief filed on
December 5, 1995, and its associated Supplement filed on January 9, 1998, ARE HEREBY DISMISSED.

     8.   This action is taken pursuant to authority delegated by Section 0.331(a)(2) of the Commission's
Rules, 47 C.F.R.  0.331(a)(2).

                              FEDERAL COMMUNICATIONS COMMISSION

                              Daniel B. Phythyon
                              Chief, Wireless Telecommunications Bureau