DA 96-2156
 
                            Before the
                FEDERAL COMMUNICATIONS COMMISSION
                      Washington D.C.  20554


In the Matter of                   )
                              )
PCS 2000, L.P.,                    )                   
Request for Waiver of              ) 
Section 24.704(a)(1)               )
of the Commission's Rules               )                             
                              )
PCS 2000, L. P.,                   )
Bid Withdrawal Payment             )
for License B332                   )    
(Omaha, Nebraska)                  )


                             ORDER
                                

Adopted: December 19, 1996              Released: December 20, 1996  


By The Chief, Wireless Telecommunications Bureau: 

     1.    The Wireless Telecommunications Bureau ("Bureau") has before it a request for
waiver of Section 24.704(a)(1) of the Commission's rules filed by PCS 2000, L.P. ("PCS 

2000").  By this Order, we hereby resolve PCS 2000's request.  Specifically, this Order reduces
PCS 2000's bid withdrawal payment for License B324 (Norfolk, Virginia) to two times the
minimum bid increment for that license for Round 11 of the broadband Personal Communications
Services ("PCS") C Block auction, or $3,273,374.  In addition, this Order assesses a bid
withdrawal payment of $1,257,771 for License B332 (Omaha, Nebraska) from the broadband
PCS C block auction, which PCS 2000 has not contested.   

       2.     Background.   On January 23, 1996, in Round 11 of the broadband PCS C Block
auction, PCS 2000 submitted a bid of $180,060,000 for License B324 (Norfolk, Virginia). 
Following the Commission's release of bidding results for Round 11 to the public, one of PCS
2000's representatives telephoned Commission auction staff to report that its recorded bid for
License B324 was incorrect.  Specifically, he indicated that it was ten times PCS 2000's intended
bid of $18,006,000.  In Round 12, PCS 2000 withdrew its bid for the license.  On January 26,
1996, PCS 2000 filed with the Commission a "Request for Expedited Waiver or Reduction of the
Withdrawal Penalty."  On February 21, 1996, PCS 2000 amended its Request for Waiver, citing
the discovery of new information relating to the submission of its Round 11 bid.  On May 6,
1996, the Commission completed the broadband PCS C Block auction.  

       3.    The Commission recently addressed the partial waiver of the bid withdrawal
provisions in the context of the 900 MHz Specialized Mobile Radio ("SMR") and broadband PCS
C Block auctions.  The Commission's Order resolved the waiver requests of several applicants
who submitted erroneous bids which were later withdrawn.  The Order also delegated authority to
the Bureau to resolve requests for waiver of the bid withdrawal provisions involving similar
factual circumstances.  The Order indicated that for a party to be eligible for such a waiver, it
must submit a request for waiver demonstrating that the bid in 
question was submitted in error.  The waiver request also must be accompanied by a sworn
declaration attesting to the veracity of the factual circumstances surrounding the erroneous bid
submission.  In addition, the Bureau was directed to consider such requests on a case-by-case
basis.

       4.    PCS 2000's Request.   In its Request for Waiver, PCS 2000 stated that it  erroneously
had submitted a bid for License B324 in Round 11 of the auction which was ten times higher than
it intended.  PCS 2000 argued that a waiver or reduction of the bid withdrawal payment was
justified because the imposition of the full bid withdrawal payment amount would not serve the
public interest.  PCS 2000 further argued that grant of its waiver request would not undermine
the purpose of Section 24.704 of the Commission's rules because it had presented unique
circumstances.  In support of its Request for Waiver, PCS 2000 argued that its authorized
bidding agent immediately contacted Commission auction staff by telephone upon learning of the
erroneous bid, and withdrew the bid the following day in Round 12 of the auction.  In addition,
PCS 2000 alleged that "[t]he error appears to have occurred in PCS 2000's bid preparation and
submission process and was likely caused by some combination of a departure from previously
established internal procedures, human error, and the inability to conduct a complete cross-check
of the submitted bids against other data prior to the conclusion of the bidding period because of a
lack of time.  In addition, discovery of the error was delayed because the FCC's confirmation of
the bid was not received due to a print server malfunction."  PCS 2000 further noted that the
results reported by the FCC did not reflect the bid that PCS 2000 believed it had submitted, and
that its authorized bidding agent supplied the FCC with copies of spreadsheet printouts indicating
the bids that PCS 2000 believed it had submitted.  


      5.    On February 7, 1996, the Bureau requested additional information from PCS 2000
regarding the circumstances surrounding the submission of the allegedly erroneous bid.  On
February 14, 1996, PCS 2000 filed a "Progress Report" responding to the Bureau's inquiry. 
Among other things, PCS 2000 stated that on February 6, 1996, "for the first time [PCS 2000]
received information calling into question the representations made in the January 26 waiver
request."  In response to this new information, PCS 2000 stated that it retained independent
counsel to investigate the factual discrepancies surrounding the bid submission and to help
provide further answers to the Bureau's February 7, 1996 request for additional information.    

       6.    On February 21, 1996, PCS 2000 filed the subject Amended Request for Waiver
seeking elimination or reduction of the required bid withdrawal payment.  On that date, PCS 2000
also filed a Declaration of Javier O. Lamoso, President of Unicom Corporation, PCS 2000's sole
general partner, in response to the Bureau's February 7, 1996 letter regarding PCS 2000's
submission of the allegedly erroneous bid.   In the Declaration, Mr. Lamoso states that while
"the submission of a $180,060,000 bid on behalf of PCS 2000 for the Norfolk market was the
result of an innocent, inadvertent error, [i]t now appears, however, that certain other statements
contained in the waiver request were not entirely accurate."  Mr. Lamoso notes that the
Amended Request for Waiver is being filed to set the record straight.  In 
particular, the Amended Request for Waiver deletes statements made in the Request for Waiver
that the results reported by the FCC did not reflect the bid that PCS 2000 believed it had
submitted, as well as the reference to copies of spreadsheet printouts provided to the FCC
indicating the bids that PCS 2000 believed it had submitted.  PCS 2000 now states that the
"results reported by the FCC did not reflect the bid that PCS 2000 intended to submit."   The
Amended Request for Waiver also deletes the statement claiming that the print server malfunction
resulted in a delay in discovering the bidding error.

       7.    On July 26, 1996, PCS 2000 filed an Emergency Request for Expedited Action
regarding its Amended Request for Waiver.  Specifically, PCS 2000 seeks either an immediate
decision by the Bureau on its Amended Request for Waiver, or, in the alternative, the prompt
return of all funds on deposit with the Commission in excess of the amount required to satisfy
PCS 2000's full bid withdrawal payments under Section 24.704(a)(1).  On September 24, 1996,
WillowRun, L.P. ("WillowRun"), one of PCS 2000's investors, filed a Motion for Leave to
Submit Late Pleading and an Opposition to PCS 2000's Emergency Request.  On October 9,
1996, PCS 2000 filed an Opposition to WillowRun's Motion. 
 
       8.     Discussion.    In its May 3 Order, the Commission considered the issue of waivers of
bid withdrawal payments and indicated that full application of the bid withdrawal payment
provisions in instances of erroneous bids would cause an extreme and unnecessary hardship on
most bidders.  At the same time, the Commission noted that a full waiver of the bid withdrawal
provisions could threaten the economic efficiency of the auction process.  The Commission
therefore decided to reduce the amount of the bid withdrawal payment in cases where a bid was
clearly submitted in error, taking into consideration the auction round and stage in which the
erroneous bids were submitted and withdrawn.  Among other things, the Commission decided
specifically that if a mistaken bid is withdrawn in the round immediately following the round in
which it was submitted, the withdrawal payment will be the greater of (a) two times the minimum
bid increment during the round in which the bid was submitted, or (b) the standard bid withdrawal
payment calculated as if the bidder had made a bid at one bid increment above the minimum
accepted bid.   

       9.    As an initial matter, we note that although WillowRun filed a timely petition to deny
PCS 2000's long-form applications, it did not file a timely opposition to PCS 2000's earlier waiver
request that is the subject of this Order.  Nevertheless, in light of the action of the Managing
Director with regard to WillowRun's ex parte complaint, we will grant its Motion for Leave to
Submit Late Pleading and accept its Opposition to PCS 2000's Emergency Request.  However, in
considering its Opposition, we do not believe that WillowRun's allegations are directly related to
PCS 2000's waiver request.  WillowRun's Opposition concerns alleged misrepresentations by PCS
2000's bidding agent similar to those raised in its petition to deny.   Our own investigation into
events surrounding PCS 2000's mistaken bid has also revealed that material misrepresentations
may have been made.  Those allegations of misrepresentation will be addressed in a separate
proceeding.  For purposes of  PCS 2000's Amended Request for Waiver, however, we conclude
that PCS 2000 has demonstrated that it submitted an erroneous bid of $180,060,000 for license
B324 in Round 11 of the auction.  PCS 2000 further has demonstrated that it attempted to
withdraw its bid in Round 12, immediately upon discovering its mistake.  Three days after the
submitting the erroneous bid, PCS 2000 filed a Request for Waiver of the bid withdrawal
payment, supported by a sworn affidavit attesting to what it believed at the time were the factual
circumstances surrounding the erroneous bid.  Although PCS 2000 later determined that some 
of the facts contained in its original Request for Waiver were inaccurate, those facts do not 
change the underlying basis for the waiver request which is that an erroneous bid had been made
by PCS 2000, the Commission was properly notified, and the bid was withdrawn in the next
round.  Under these circumstances, we find that full enforcement of the bid withdrawal payment
provisions in this instance would not serve the purpose of the bid withdrawal rule, 
and would be contrary to the public interest.  This action is not based on any additional reasons
presented by PCS 2000 in its Emergency Request for Expedited Action.

       10.    In accordance with the Commission's May 3 Order, we find that a partial waiver of
Section 24.704(a)(1) of the Commission's Rules is warranted.  We therefore will reduce PCS
2000's required bid withdrawal payment to two times the minimum bid increment for License
B324 in Round 11 of the broadband PCS C Block auction, or $3,273,374.


                        ORDERING CLAUSES

       11.    Accordingly, IT IS ORDERED that the Amended Request for Expedited Waiver or
Reduction of Withdrawal Payment filed by PCS 2000, L.C. IS GRANTED to the extent indicated
above.

       12.    IT IS FURTHER ORDERED that PCS 2000, L.P. is assessed a bid withdrawal
payment in the amount of $3,273,374 for License B324 (Norfolk, Virginia).

       13.    IT IS FURTHER ORDERED that PCS 2000, L.P. is assessed a bid withdrawal
payment in the amount of $ 1,257,711 for License B332 (Omaha, Nebraska).

       14.    IT IS FURTHER ORDERED that the sum of these amounts, or $4,531,085, will be
deducted from PCS 2000 L.P.'s upfront payment which remains on deposit with the Commission. 

       15.    IT IS FURTHER ORDERED that the Motion to Submit Late Filed Pleading filed by
WillowRun, L.P. IS GRANTED.

       16.  This action is taken pursuant to delegated authority, 47 C.F.R.  0.331.



                         FEDERAL COMMUNICATIONS COMMISSION





                         Michele C. Farquhar
                         Chief, Wireless Telecommunications Bureau