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 Federal  Communications  Commission  DA  04-  3867 
 1 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 

 In  the  Matter  of 
 Summit  Wireless  WOW,  LLC,  Debtor-  In-Possession,  Summit  Wireless  Billings,  LLC, 
 Debtor-  In-  Possession,  Summit  Wireless,  LLC,  Debtor-  In-  Possession 

 and 
 Summit  Wireless  Liquidating  Trust 
 Applications  for  Consent  to  the  Assignment  of  Licenses  Pursuant  to  Section  310(  d)  of  the 
 Communications  Act 

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 File  Nos.  0001895955,  0001896022,  0001896051 

 MEMORANDUM  OPINION  AND  ORDER 
 Adopted:  December  8,  2004  Released:  December  8,  2004 
 By  the  Chief,  Wireless  Telecommunications  Bureau: 
 I.  INTRODUCTION 
 1.  We  have  before  us  three  related  applications  filed  by  Summit  Wireless  WOW,  LLC,  Debtor-In-  Possession,  Summit  Wireless  Billings,  LLC,  Debtor-  In-  Possession,  and  Summit  Wireless,  LLC,  Debtor-In- 

 Possession  (the  Summit  DIPs)  together  with  Summit  Wireless  Liquidating  Trust  (the  Liquidating  Trust  and  collectively  with  Summit  DIPs,  the  Applicants)  seeking  approval  for  the  assignment  of 
 broadband  Personal  Communication  Services  (  PCS)  licenses  (the  Licenses)  from  the  Summit  DIPs  to  the  Liquidating  Trust  (the  Assignment  Applications).  1  The  Applicants  also  seek  a  waiver  of  section 
 1.2111(  c)  of  the  Commissions  rules,  2  to  the  extent  necessary,  to  allow  for  the  transfer  of  the  Licenses  from  the  Summit  DIPs  to  the  Liquidating  Trust  in  accordance  with  the  terms  of  a  settlement  between  the 
 Federal  Communications  Commission  (  Commission  or  FCC)  and  the  debtors  that  is  embodied  in  a 

 1  See  ULS  File  Nos.  0001895955,  0001896022,  0001896051,  filed  October  20,  2004. 
 2  Id.  at  Exhibit  E  (  Waiver  Request). 
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 Consent  Motion  filed  by  the  Summit  DIPs  with  the  agreement  and  consent  of  the  Commission  3  (the  Settlement),  a  Liquidating  Trust  Agreement,  4  and  an  Order  of  the  United  States  Bankruptcy  Court  For 
 the  Southern  District  of  Mississippi.  5 
 2.  As  discussed  below,  we  conclude,  pursuant  to  our  review  under  Section  310(  d)  of  the  Communications  Act  of  1934,  as  amended  (the  Communications  Act),  that  approval  of  the  Assignment 

 Applications  will  serve  the  public  interest,  convenience,  and  necessity.  6  Moreover,  we  grant  the  Applicants  a  limited  waiver  of  certain  of  the  payment  and  timing  requirements  of  section  1.2111(  c)  of  the 
 Commissions  rules  to  facilitate  the  settlement  of  the  Commissions  claims  against  the  Summit  bankruptcy  estate  and  to  permit  the  Liquidating  Trust  to  undertake  the  disposition  of  the  Licenses  in  accordance  with 
 the  terms  of  the  Settlement,  the  Liquidating  Trust  Agreement,  the  Consent  Motion,  and  the  Bankruptcy  Courts  Sale  Order.  7 

 II.  BACKGROUND 
 3.  On  July  24,  2003,  Summit  voluntarily  sought  protection  under  Chapter  11  of  the  United  States  Bankruptcy  Code  in  the  Bankruptcy  Court  for  the  Southern  District  of  Mississippi  (  Bankruptcy  Court).  8 

 Subsequent  to  filing  for  bankruptcy,  Summit  filed  applications  with  the  Commission  for  approval  of  the  involuntary  assignment  of  the  Licenses  to  the  Summit  DIPs.  9 

 4.  On  May  10,  2004,  Summit  and  the  Summit  DIPs  (collectively  the  Debtors)  filed  a  motion  with  the  Bankruptcy  Court  seeking  authority  under  Section  363  of  the  United  States  Bankruptcy  Code  to 
 sell  assets  outside  the  ordinary  course  of  business  and  free  and  clear  of  liens,  claims  and  interests,  but  subject  to  the  Commissions  first  priority  liens  and  security  interests  relating  to  installment  debt  on  the 

 3  See  Motion  Pursuant  to    363  For  Authority  to  Sell  Assets  Outside  the  Ordinary  Course  of  Business  and  Free 
 and  Clear  of  Liens,  Claims  and  Interests,  Case  Nos.  03-  04323-  5,  U.  S.  Bankruptcy  Court  (S.  D.  Miss.)  (May  10,  2004)  (  Consent  Motion). 

 4  Assignment  Applications  at  Exhibit  D,  Liquidating  Trust  Agreement  between  William  H.  Crispin,  Trustee  for 
 the  Summit  Wireless  Liquidating  Trust  and  QUALCOMM,  Incorporated  (July  27,  2004)  (  Liquidating  Trust  Agreement) 

 5  See  Assignment  Applications  at  Ex.  B,  Order  Authorizing  Sale  of  Assets  Free  and  Clear  of  Liens,  Claims  and 
 Interests,  Case  Nos.  03-  04323-  5,  U.  S.  Bankruptcy  Court  (S.  D.  Miss.)  (July  16,  2004)  (  Sale  Order). 
 6  47  U.  S.  C.    310(  d). 

 7  47  C.  F.  R.    1.2111(  c)(  1).  The  Commission  has  previously  clarified  that  the  approval  of  an  assignment  or 
 transfer  that  results  in  installment  payment  unjust  enrichment  is  conditioned  upon  the  full  payment  of  the  required  unjust  enrichment  payment  on  or  before  the  consummation  date.  See  In  Matter  of  Amendment  of  Part  1  of  the 

 Commissions  Rules    Competitive  Bidding  Procedures,  WT  Docket  97-  82,  Order  on  Reconsideration  of  the  Third  Report  and  Order,  Fifth  Report  and  Order,  and  Fourth  Further  Notice  of  Proposed  Rulemaking,  15  FCC 
 Rcd.  15,239,  15,314  at    37  (2000). 
 8  Voluntary  Petition  Under  Chapter  11,  In  re:  Summit  Wireless,  LLC  et  al.,  Case  No.  09-  04323  JEE  (Bankr.,  S. 
 D.  Miss.)  filed  July  24,  2003. 
 9  See  ULS  File  Nos.  0001610650,  0001610645,  0001610641,  filed  February  17,  2004. 
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 Licenses  as  well  as  the  Commissions  regulatory  authority.  10  The  Commission,  the  Debtors,  the  Department  of  Justice,  and  the  Debtors  pre-  petition  secured  lender,  QUALCOMM  Incorporated 
 (  Qualcomm),  reached  a  Settlement  embodied  in  the  Consent  Motion.  11  The  Consent  Motion  was  filed  to  gain  Bankruptcy  Court  approval  of  the  terms  of  the  Settlement  and  in  satisfaction  of  a  Bankruptcy  Court 
 authorized  credit  agreement  between  the  Debtors  and  Qualcomm.  12  In  the  Consent  Motion,  the  Debtors  stated  that  Qualcomm  had,  in  accordance  with  its  rights,  offered  a  credit  bid  for  all  of  the  Licenses  in  the 
 amount  of  $20  million  to  be  credited  against  the  over  $30  million  in  outstanding  obligations  that  were  owed  by  the  Debtors  to  Qualcomm.  13  As  further  detailed  in  the  Consent  Motion,  if  the  Debtors  accepted 
 and  the  Court  approved  the  credit  bid,  the  Licenses  could  be  transferred  from  the  Summit  DIPs  to  a  Liquidating  Trust,  subject  to  the  Commissions  liens  and  security  interests  and  applicable  regulatory 
 requirements.  14  In  accordance  with  the  terms  of  the  Settlement  and  the  Liquidating  Trust  Agreement,  the  Trustee  would  then  hold,  market  and  dispose  of  the  Licenses  for  the  benefit  of  Qualcomm,  after  repaying 
 the  outstanding  indebtedness  to  the  FCC.  15 
 5.  Pursuant  to  the  Settlement  and  as  explained  in  the  Consent  Motion  and  the  Liquidating  Trust  Agreement,  the  Trustee  must  abide  by  certain  terms  in  its  disposition  of  the  Licenses.  16  In  relevant  regard, 

 if  the  Trustee  can  find  a  buyer  for  the  Licenses,  and  the  necessary  prior  Commission  approval  for  such  a  sale  is  obtained,  the  proceeds  of  any  such  sale  will  be  applied  first  to  the  outstanding  debt  owed  to  the 
 Commission,  and  the  balance,  if  any,  will  be  paid  to  Qualcomm.  17  Furthermore,  in  accordance  with  the  terms  of  the  Settlement  and  the  Liquidating  Trust  Agreement,  the  Trustee  cannot  accept  an  offer  for  a 
 license  that  does  not  satisfy,  in  full,  all  outstanding  indebtedness  owed  to  the  Commission.  18  If  the  Trustee  is  unable  to  find  a  buyer  under  those  terms,  the  Trustee  will  return  such  license  to  the  Commission 
 for  cancellation  in  exchange  for  the  forgiveness  of  the  indebtedness  owed  with  respect  to  the  license.  19  The  Commission  and  the  Department  of  Justice  authorized  the  Debtors  to  state  that  the  Government 
 consented  to  the  granting  of  the  Consent  Motion  and  the  terms  stated  therein.  20 

 10  See  Consent  Motion  at    7,  11. 
 11  See  generally,  Consent  Motion. 
 12  Id.  at    5-  6. 
 13  Id.  at    8. 
 14  Id.  at    9. 
 15  Id.  at    9-  12;  see  also  Liquidating  Trust  Agreement  at  Article  6. 
 16  See  Consent  Motion  at    11;  Liquidating  Trust  Agreement  at  Article  3.  3(  a);  Sale  Order  at    11-  14. 
 17  Consent  Motion  at    11;  Liquidating  Trust  Agreement  at  Article  3.3(  a). 
 18  For  the  purposes  of  the  Sale  Order  and  granting  the  relief  requested  in  the  Consent  Motion,  the  Settlement 
 specifically  defines  outstanding  indebtedness  to  the  FCC.  See  Consent  Motion  at    11;  see  also  infra  para.  6. 
 19  Consent  Motion  at    11;  see  also  Sale  Order  at    J. 

 20  Consent  Motion  at    25.  We  note  that  the  Commissions  consent  to  the  Consent  Motion  did  not  constitute  the 
 regulatory  consent  that  is  required  before  the  Debtors  Licenses  can  be  assigned  to  the  Liquidating  Trust.  That  (continued.) 
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 6.  On  July  16,  2004,  the  Bankruptcy  Court  issued  the  Sale  Order  approving  the  Consent  Motion.  21  As  outlined  in  the  Consent  Motion,  the  Liquidating  Trust  could  then  seek  a  buyer  for  the 
 Licenses  consistent  with  the  terms  of  the  Settlement,  including  that  [  a]  ny  offer  to  purchase  the  FCC  licenses  from  the  Liquidating  Trust  shall  include  the  prepayment  in  cash  of  all  outstanding  FCC  Debt  and 
 specifically  shall  not  involve  the  assumption  of  any  of  the  outstanding  FCC  Debt  on  the  Auction  5  and  11  Licenses.  22  Pursuant  to  the  definition  of  outstanding  indebtedness  to  the  FCC  that  was  agreed  to  in 
 the  Settlement  and  included  in  the  Consent  Motion,  the  Sale  Order  confirms  that  for  determining  the  amount  the  FCC  must  be  paid  upon  the  sale  of  any  license  for  which  debt  is  owing  to  the  FCC,  the 
 outstanding  indebtedness  to  the  FCC  is  defined  as  the  unpaid  principal  debt  on  the  license,  plus  any  pre-petition  accrued  interest  and/  or  penalties,  as  reflected  in  the  proofs  of  claim  filed  by  the  FCC  in  these 
 cases;  plus  post-  petition  interest  on  the  unpaid  principal  debt  at  the  interest  rate  specified  in  the  applicable  promissory  note  executed  by  Summit  in  favor  of  the  FCC,  running  from  the  Petition  Date  until  the  date  of 
 entry  of  this  Order.  .  .  .  23 
 7.  After  the  Bankruptcy  Court  released  the  Sale  Order,  the  Summit  DIPs  filed  the  instant  Assignment  Applications  seeking  the  Commissions  consent  to  assign  the  Licenses  to  the  Liquidating 

 Trust  and  requesting  waiver  of  certain  aspects  of  the  unjust  enrichment  provisions  in  section  1.2111(  c)  of  the  Commissions  rules.  24  The  Assignment  Applications  were  placed  on  public  notice  by  the  Wireless 
 Telecommunications  Bureau  on  October  27,  2004.  25  No  petitions  to  deny  or  comments  were  filed. 
 III.  DISCUSSION 
 A.  Public  Interest  Considerations 
 8.  In  considering  assignment  applications,  the  Commission  must  determine,  pursuant  to  Section  310(  d)  of  the  Communications  Act,  whether  the  Applicants  have  demonstrated  that  the  proposed 

 assignment  of  licenses  will  serve  the  public  interest,  convenience,  and  necessity.  26  The  legal  standards  that  govern  our  public  interest  analysis  require  that  we  weigh  the  potential  public  interest  harms  of  the 
 proposed  transaction  against  the  potential  public  interest  benefits  to  ensure  that,  on  balance,  the  proposed  transaction  will  serve  the  public  interest.  27  In  applying  our  public  interest  test,  we  must  assess  whether  the 

 (Continued  from  previous  page)  consent  is  addressed  herein.  Thus,  the  Debtors  continue  to  hold  the  licenses  until  the  consummation  of  the 
 transaction  approved  herein. 
 21  Sale  Order  at    11-  14. 

 22  Sale  Order  at    J-  K;  M. 
 23  Id.  at    K. 
 24  See  Assignment  Applications  filed  on  October  20,  2004. 
 25  Wireless  Telecommunications  Bureau  Assignment  of  Licenses  Authorization  Applications,  Transfer  of  Control 
 of  Licensee  Applications,  and  De  Facto  Transfer  Lease  Applications  Accepted  for  Filing,  Public  Notice,  Report  Number  1974  (October  27,  2004). 

 26  47  U.  S.  C.    310(  d). 
 27  See,  e.  g.,  Applications  for  Consent  to  the  Assignment  of  Licenses  Pursuant  to  Section  310(  d)  of  the 
 Communications  Act  from  NextWave  Personal  Communications,  Inc.,  Debtor-  in-  Possession,  and  NextWave  Power  Partners,  Inc.,  Debtor-  in  Possession,  to  Subsidiaries  of  Cingular  Wireless  LLC,  WT  Docket  03-  217, 

 (continued.) 
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 proposed  transaction  complies  with  the  specific  provisions  of  the  Communications  Act,  the  Commissions  rules,  and  federal  communications  policy.  28  Our  public  interest  analysis  considers  the  likely  competitive 
 effects  of  the  proposed  transaction  and  whether  such  assignments  raise  significant  anticompetitive  concerns.  29  In  addition,  we  consider  the  efficiencies  and  other  public  interest  benefits  that  are  likely  to 
 result  from  the  proposed  assignment  of  the  licenses.  30 
 9.  As  a  threshold  matter,  the  Commission  must  determine  whether  the  Applicants  meet  the  requisite  qualifications  to  hold  and  assign  licenses  under  Section  310(  d)  of  the  Act  and  the  Commissions 

 rules.  31  As  a  general  rule,  the  Commission  does  not  re-  evaluate  the  qualifications  of  assignors  unless  issues  related  to  basic  qualifications  have  been  designated  for  hearing  by  the  Commission  or  have  been 
 sufficiently  raised  in  petitions  to  warrant  the  designation  of  a  hearing.  32  Because  no  petitions  were  filed 
 (Continued  from  previous  page)  Memorandum  Opinion  and  Order,  19  FCC  Rcd.  2570,  2580-  81,    24  (2004)  (Cingular-  NextWave  Order);  General 

 Motors  Corporation  and  Hughes  Electronics  Corporation,  Transferors,  and  The  News  Corporation  Limited,  Transferee,  MB  Docket  No.  03-  124,  Memorandum  Opinion  and  Order,  19  FCC  Rcd.  473,  483,    15  (2004) 
 (GM-  News  Corp.  Order);  WorldCom,  Inc.  and  Its  Subsidiaries  (Debtors-  in-  Possession),  Transferor,  and  MCI,  Inc.,  Transferee,  WC  Docket  No.  02-  215,  Memorandum  Opinion  and  Order,  18  FCC  Rcd.  26484,  26492-  93,    12 
 (2003)  (WorldCom  Order);  Applications  for  Consent  to  the  Transfer  of  Control  of  Licenses  from  Comcast  Corporation  and  AT&  T  Corp.,  Transferors,  to  AT&  T  Comcast  Corporation,  Transferee,  MB  Docket  No.  02-  70, 
 Memorandum  Opinion  and  Order,  17  FCC  Rcd.  23246,  23255,    26  (2002);  Application  of  EchoStar  Communications  Corporation  (A  Nevada  Corporation),  General  Motors  Corporation,  and  Hughes  Electronics 
 Corporation  (Transferors)  and  EchoStar  Communications  Corporation  (A  Delaware  Corporation)  (Transferee),  CS  Docket  No.  01-  348,  Hearing  Designation  Order,  17  FCC  Rcd.  20559,  20574,    25  (2002)  (EchoStar-  DirecTV 
 HDO);  VoiceStream  Wireless  Corporation,  PowerTel,  Inc.,  Transferors,  and  Deutsche  Telekom  AG,  Transferee,  IB  Docket  No.  00-  187,  Memorandum  Opinion  and  Order,  16  FCC  Rcd.  9779,  9789,    17  (2001)  (Deutsche 
 Telekom-  VoiceStream  Order);  Application  of  GTE  Corporation,  Transferor,  and  Bell  Atlantic  Corporation,  Transferee,  CC  Docket  No.  98-  184,  Memorandum  Opinion  and  Order,  15  FCC  Rcd.  14032,  14046,    22  (2000) 
 (Bell  Atlantic-  GTE  Order);  Applications  to  Assign  Wireless  Licenses  from  WorldCom  Inc.  (Debtor-  in-Possession)  to  Nextel  Spectrum  Acquisition  Corp.,  WT  Docket  No.  03-  203,  Memorandum  Opinion  and  Order,  19 
 FCC  Rcd.  6232,  6241-  42,    23  (WTB,  MB  2004)  (Nextel-  WorldCom  Order);  Global  Crossing  LTD.  (Debtor-  in-Possession),  Transferor,  and  GC  Acquisition  Limited,  Transferee,  IB  Docket  No.  02-  286,  Order  and 
 Authorization,  18  FCC  Rcd.  20301,  20315-  16,    17  (IB,  WTB,  WCB  2003)  (Global  Crossing  Order). 
 28  See,  e.  g.,  Cingular-  NextWave  Order  at  2580-  81,    24;  GM-  News  Corp.  Order  at  483-  84,    16;  EchoStar-DirecTV 
 HDO  at  20574,    25;  Nextel-  WorldCom  Order  at  6241-  42,    23;  TeleCorp-  Tritel  Order  at  3721-  22,    12. 
 29  See,  e.  g.,  Cingular-  NextWave  Order  at  2580-  81,    24;  WorldCom  Order  at  26492-  93,    12;  Global  Crossing 
 Order  at  20315-  16,    17;  Nextel-  WorldCom  Order  at  6241-  42,    23. 
 30  See,  e.  g.,  Cingular-  NextWave  Order  at  2580-  81,    24;  WorldCom  Order  at  26492-  93,    12;  Global  Crossing 
 Order  at  20315-  16,    17;  Nextel-  WorldCom  Order  at  6241-  42,    23. 
 31  47  U.  S.  C.    310(  d).  See  47  C.  F.  R.    1.948.  See  also,  e.  g.,  Cingular-  NextWave  Order  at  2581-  82,    25;  GM-News 
 Corp.  Order  at  483,    15;  WorldCom  Order  at  26493-  94,    13;  Deutsche  Telekom-  VoiceStream  Order  at  9790,    19;  Global  Crossing  Order  at  20316-  17,    18;  Nextel-  WorldCom  Order  at  6242,    24;  Northcoast 

 Communications,  LLC  and  Cellco  Partnership  d/  b/  a  Verizon  Wireless,  WT  Docket  No.  03-  19,  Memorandum  Opinion  and  Order,  18  FCC  Rcd.  6490,  6492    5  (WTB-  CWD  2003)  (Verizon-  Northcoast  Order). 

 32  See,  e.  g.,  Cingular-  NextWave  Order  at  2581-  82,    25;  GM-  News  Corp.  Order  at  485,    18;  WorldCom  Order  at 
 26493-  94,    13;  Deutsche  Telekom-  VoiceStream  Order  at  9790,    19;  Applications  of  SBC  Communications  Inc.  and  BellSouth  Corporation,  WT  Docket  No.  00-  81,  Memorandum  Opinion  and  Order,  15  FCC  Rcd.  25459, 

 25465,    14  (2000)  (SBC-  BellSouth  Order);  Applications  of  Vodafone  AirTouch,  PLC  and  Bell  Atlantic  (continued.) 
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 regarding  these  Assignment  Applications,  we  find  no  reason  to  re-  evaluate  the  qualifications  of  the  Summit  DIPs.  Also,  as  a  part  of  our  public  interest  analysis,  Section  310(  d)  requires  the  Commission  to 
 consider  whether  the  proposed  assignee  or  transferee  is  qualified  to  hold  Commission  licenses.  33  In  this  proceeding,  no  issues  have  been  raised  with  respect  to  the  basic  qualifications  of  the  Liquidating  Trust,  and 
 our  review  of  the  Assignment  Applications  (which  attest  to  the  Trusts  qualifications)  reveals  no  independent  reason  to  examine  further  the  Liquidating  Trusts  qualifications.  Based  on  our  review  of  the 
 Assignment  Applications,  we  find  that  the  Liquidating  Trust  is  qualified  to  acquire  the  Licenses. 
 10.  Finally,  when  evaluating  the  likely  competitive  effects  and  public  interest  benefits  of  a  proposed  transaction,  the  Commission  performs  a  case-  by-  case  review  of  the  transaction  in  order  to  fulfill 

 the  Commissions  statutory  mandate  to  preserve  and  enhance  competition  in  relevant  markets,  ensure  diversity  of  license  holdings,  accelerate  private  sector  deployment  of  advanced  services,  and  manage  the 
 spectrum  in  the  public  interest.  34  Neither  the  Assignment  Applications  nor  our  own  analysis  leads  to  the  conclusion  that  there  is  likely  to  be  substantial  competitive  harm  as  a  result  of  this  transaction. 
 Furthermore,  no  petitions  were  filed  arguing  that  this  transaction  would  result  in  competitive  harm.  Therefore,  we  find  that  the  potential  benefits  outweigh  any  potential  harm  and  that  the  proposed 
 transaction  is  in  the  public  interest. 
 B.  Request  for  Waiver  of  the  Unjust  Enrichment  Rules 
 11.  As  indicated  above,  the  Applications  also  include  a  request  for  waiver  of  limited  aspects  of  the  Commissions  unjust  enrichment  rules  to  the  extent  necessary  to  allow  for  the  transfer  of  the  Licenses  to 

 the  Liquidating  Trust  in  accordance  with  the  terms  of  the  Settlement,  the  Liquidating  Trust  Agreement,  the  Consent  Motion,  and  the  Bankruptcy  Courts  Sale  Order.  35  In  sum,  because  certain  of  the  Licenses  in  the 
 proposed  transaction  are  subject  to  the  Commissions  installment  financing  program,  the  transfer  of  such  licenses  requires  an  unjust  enrichment  analysis.  Many  of  the  licenses  in  the  instant  transaction  were 
 eligible  to  be  paid  for  in  installments  because  the  bidder  who  won  them  at  auction  qualified  as  either  a  small  or  very  small  business.  36  With  respect  to  broadband  PCS  licenses,  an  entity  will  be  considered  a 
 small  business  or  very  small  business  if  it,  together  with  its  affiliates,  has  less  than  $40  million  or  $15 
 (Continued  from  previous  page)  Corporation,  WTB  Rpt.  No.  371,  Memorandum  Opinion  and  Order,  15  FCC  Rcd.  16507,  16513,    14  (2000) 

 (Bell  Atlantic-  Vodafone  AirTouch  Order);  Global  Crossing  Order  at  20316-  17,    18;  Nextel-  WorldCom  Order  at  6242,    24;  Verizon-  Northcoast  Order  at  6492,  5;  TeleCorp-  Tritel  Order  at  3722,    13.  See  also  Stephen  F. 
 Sewell,  Assignments  and  Transfers  of  Control  of  FCC  Authorizations  under  Section  310(  d)  of  the  Communications  Act  of  1934,  43  FED.  COMM.  L.  J.  277,  339-  40  (1991).  The  policy  of  not  approving  assignments 
 or  transfers  when  issues  regarding  the  licensees  basic  qualifications  remain  unresolved  is  designed  to  prevent  licensees  from  evading  responsibility  for  misdeeds  committed  during  the  license  period.  See  id. 

 33  See,  e.  g.,  Cingular-  NextWave  Order  at  2581-  82,    25;  GM-  News  Corp.  Order  at  486-  87,    23;  WorldCom  Order 
 at  26493-  94,    13;  EchoStar-  DirecTV  HDO  at  20574,  20576,    25,  28;  SBC-  BellSouth  Order  at  25465,    14;  Bell  Atlantic-  GTE  Order  at  14227,    429;  Bell  Atlantic-  Vodafone  AirTouch  Order  at  16513,    14;  Nextel-  WorldCom 

 Order  at  6242,    24. 
 34  See  GM-  News  Corp  Order  at  483-  84,    16;  EchoStar  Direct  TV  HDO  at  20574,    26.  See  also  2000  Biennial 
 Regulatory  Review  Spectrum  Aggregation  Limits  For  Commercial  Mobile  Radio  Services,  Report  and  Order,  16  FCC  Rcd.  22668,  22696,    55  (2001),  citing  47  U.  S.  C.    301,  303,  309(  j),  310(  d). 

 35  See  supra  para  7;  see  also  generally,  Waiver  Request. 
 36  See  47  C.  F.  R.    24.711(  c). 
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 million,  respectively,  in  average  annual  gross  revenues  for  the  preceding  three  years.  37  Only  eligible  entities  are  permitted  to  participate  in  the  Commissions  installment  payment  program,  and  where  the 
 transfer  of  a  license  to  an  ineligible  entity  is  contemplated,  the  Commission  must  ensure  that  it  recoups  any  unjust  enrichment.  38 

 12.  For  assignments  of  spectrum  licenses,  section  1.2111  of  the  Commissions  rules  places  the  obligation  on  the  assignor  to  ensure  that  the  Commission  receives  full  payment  of  any  outstanding  debt 
 where  the  assignee  is  not  eligible  to  participate  in  the  installment  financing  program.  39  Specifically,  section  1.2111(  c)(  1)  states,  [  i]  f  a  licensee  that  utilizes  installment  financing  under  this  section  seeks  to 
 assign  or  transfer  control  of  its  license  to  an  entity  not  meeting  the  eligibility  standards  for  installment  payments,  the  licensee  must  make  full  payment  of  the  remaining  unpaid  principal  and  any  unpaid  interest 
 accrued  through  the  date  of  assignment  or  transfer  as  a  condition  of  approval.  40  In  the  context  of  the  proposed  transaction,  our  rules  therefore  place  the  responsibility  of  full  payment  at  the  transfer  of  certain 
 of  the  Licenses  with  the  Summit  DIPs.  The  Applicants  Waiver  Request  concedes  that  [  a]  bsent  a  waiver  in  this  case,  the  Summit  DIPs,  bankrupt  entities,  would  be  required  to  pay  the  unjust  enrichment  payment 
 upon  assignment  to  Summit  Wireless  Liquidating  Trust,  an  entity  with  few  assets,  created  solely  to  market  the  licenses  for  eventual  assignment  to  a  qualified  entity,  in  accordance  with  the  Bankruptcy  Courts  Order 
 and  subject  to  FCC  approval.  41 
 13.  The  Applicants  therefore  maintain  that  a  waiver  of  certain  aspects  of  section  1.2111(  c)  is  necessary  so  that  the  payment  of  the  outstanding  installment  debt  can  be  made  to  the  Commission  by  the 

 Liquidating  Trust  in  accordance  with  the  terms  of  the  Settlement,  the  Liquidating  Trust  Agreement,  the  Consent  Motion  and  the  Bankruptcy  Courts  Sale  Order.  Specifically,  the  Applicants  explain  that  a  waiver 
 of  the  timing  of  Section  1.2111(  c)  is  necessary  so  as  to  defer  the  payment  until  the  consummation  of  the  eventual  assignment  of  the  licenses  from  the  Summit  Wireless  Liquidating  Trust  to  qualified  third-  party 
 buyers.  42  Further,  the  Applicants  request  that  Summit  Wireless  Liquidating  Trust  be  made  responsible  for  the  payment  since,  at  the  time  the  payment  will  be  made,  it  is  likely  that  Summit  DIPs  will  not  be  in 
 existence.  43 

 37  See  47  C.  F.  R.    24.720(  b). 
 38  47  C.  F.  R.    1.2111(  c). 
 39  Id. 
 40  Id.  The  Commission  has  previously  clarified  that  the  approval  of  an  assignment  or  transfer  that  results  in 
 installment  payment  unjust  enrichment  is  conditioned  upon  the  full  payment  of  the  required  unjust  enrichment  payment  on  or  before  the  consummation  date.  See  In  the  Matter  of  Amendment  of  Part  1  of  the  Commissions 

 Rules    Competitive  Bidding  Procedures,  WT  Docket  97-  82,  Order  on  Reconsideration  of  the  Third  Report  and  Order,  Fifth  Report  and  Order,  and  Fourth  Further  Notice  of  Proposed  Rulemaking,  15  FCC  Rcd.  15,239,  15,314 
 at    37  (2000). 
 41  See  generally,  Waiver  Request. 

 42  Id. 
 43  Id. 
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 Commission.  In  considering  each  of  these  aspects  of  the  rule  and  the  proposed  transaction,  we  find  that  the  Settlement  serves  the  public  interest  and  that,  therefore,  the  Applicants  have  met  the  Commissions 
 waiver  standard  with  respect  to  each  of  the  Commissions  regulatory  requirements. 
 17.  As  a  general  matter,  we  find  that  the  Settlement  serves  the  public  interest  and  will  ultimately  benefit  consumers.  But  for  the  Settlement,  the  Summit  bankruptcy  may  have  been  prolonged  for  far 

 longer,  thereby  leaving  valuable  spectrum  to  languish.  Moreover,  by  reaching  the  Settlement  reflected  in  the  terms  of  the  Sale  Order,  the  United  States  Government  has  been  ensured  of  the  recovery  of  debts  owed 
 to  the  Commission  and  absent  such  recovery  under  the  agreed  to  terms,  the  Government  has  been  ensured  that  the  Licenses  must  be  returned  to  the  Commission  in  exchange  for  debt  forgiveness.  For  these  reasons 
 as  well  as  those  we  discuss  below,  we  find  that  the  grant  of  a  limited  waiver  to  allow  for  the  disposition  of  the  Licenses  in  accordance  with  the  terms  of  the  Settlement,  the  Liquidating  Trust  Agreement,  the  Consent 
 Motion  and  the  Sale  Order  does  not  undermine  the  underlying  purpose  of  the  unjust  enrichment  rule. 
 18.  First,  because  the  Settlement  reflected  in  the  Consent  Motion  and  the  Sale  Order  provides  for  the  payment  of  the  entire  principal  amount  owed  to  the  Commission  47  as  well  as  the  relevant  late  fees  and 

 the  majority  of  any  accrued  interest  for  those  licenses  that  were  subject  to  installment  payment  financing,  we  recognize  that,  at  most,  we  need  only  grant  a  waiver  of  certain  limited  amounts  of  interest  that  could 
 have  otherwise  accrued  under  section  1.2111(  c)  of  the  Commissions  rules  On  balance,  we  find  that  strict  enforcement  of  the  rules  interest  payment  requirement  is  not  warranted  in  this  case  and  that  the  grant  of  a 
 limited  waiver  does  not  undermine  the  underlying  purpose  of  the  unjust  enrichment  rules. 
 19.  The  general  purpose  of  the  Commissions  unjust  enrichment  rules  is  to  prevent  designated  entities  from  profiting  by  the  rapid  sale  of  licenses  acquired  through  the  benefit  of  preference  policies.  48 

 Here,  similar  to  the  decision  the  Commission  faced  in  Cingular-  NextWave,  49  we  are  confronted  with  a  request  to  determine  whether  the  proffer  of  a  significant  payment,  which  fully  satisfies  the  Applicants 
 obligations  to  pay  the  entire  principal  amount  owed,  and  most  of  the  interest  owed,  warrants  a  departure  from  the  strict  application  of  the  Commissions  installment  payment  unjust  enrichment  rules.  Moreover, 
 we  have  been  asked  to  do  so  in  the  context  where  the  proffered  payment  has  been  determined  to  be  an  acceptable  Settlement  by  the  United  States  Government  in  a  negotiated  agreement  with  a  licensee  whose 
 debt  under  the  installment  payment  program  will  ultimately  be  forgiven  and  licenses  will  be  returned  if  the  Licenses  cannot  be  disposed  of  in  accordance  with  the  terms  of  the  Settlement.  50  Under  these 
 circumstances,  we  find,  consistent  with  the  Commissions  decision  in  Cingular-  Nextwave,  that  the  Settlements  terms  reflected  in  the  Courts  Sale  Order  warrant  a  limited  waiver  of  section  1.2111(  c)  s 
 requirement  to  pay  all  of  the  interest  that  could  have  accrued  under  the  rule. 
 20.  We  reach  this  determination  mindful  of  the  fact  that  the  recovery  of  the  outstanding  indebtedness  to  the  FCC  as  defined  by  the  Settlement  and  embodied  in  the  Sale  Order  will  benefit  the 

 U.  S.  Treasury  and  is  consistent  with  the  intent  of  Section  309(  j)(  3)(  C)  of  the  Act,  to  recover  for  the  public 
 47  See  supra  para  6;  see  also  Sale  Order  at    K  (explaining  that  the  Settlement  defines  outstanding  indebtedness 
 to  the  FCC  to  include  the  repayment  of  all  principal.). 
 48  Implementation  of  Section  309(  j)  of  the  Communications  Act    Competitive  Bidding,  PP  Docket  No.  93-  235,  9 
 FCC  Rcd.  2348,  2394,    258  (1994)  (Competitive  Bidding  Second  R&  O). 
 49  See,  e.  g.,  Cingular-  NextWave  Order  at  2588-  2589,    43. 

 50  See  Sale  Order  at    J. 
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 a  portion  of  the  value  of  the  public  spectrum  resource.  51  Continued  litigation  in  bankruptcy  may  only  hinder  our  ability  to  recover  such  value.  Moreover,  the  approval  of  the  proposed  transaction  is  not  the  type 
 of  rapid  sale  of  licenses  acquired  through  the  benefit  of  preference  policies  that  the  Commissions  anti-trafficking  rules  were  designed  to  prevent.  52  Instead,  in  the  instant  transaction,  the  acceptance  of 
 Qualcomms  credit  bid  was  reached  through  a  process  supervised  and  approved  by  the  Bankruptcy  Court  rather  than  as  the  result  of  capitalizing  upon  preferences  reserved  for  designated  entities.  53  Moreover,  the 
 interest  at  issue  here  is  limited,  and  a  waiver  of  the  obligation  to  pay  it  will  not  encourage  abuse  of  these  preference  policies.  Thus,  for  these  reasons,  granting  a  limited  waiver  of  the  amount  of  interest  that  could 
 have  accrued  under  a  strict  interpretation  of  section  1.2111(  c)  does  not  undermine  the  underlying  purpose  of  the  rule. 

 21.  Second,  while  the  terms  of  the  Settlement,  Liquidating  Trust  Agreement,  Consent  Motion  and  Sale  Order  contemplate  that  the  Applicants  will  satisfy  the  debt  owed  to  the  Commission  under  section 
 1.2111(  c),  albeit,  as  explained  above,  with  a  limited  waiver  of  certain  accrued  interest,  those  terms  do  not  provide  that  such  payment  be  made  until  after  a  grant  and  prior  to  consummation  of  a  subsequent  transfer 
 to  a  qualified  entity    an  arrangement  that  specifically  conflicts  with  the  timing  requirement  of  section  1.2111(  c).  54  Under  the  Commissions  rules,  payment  of  any  remaining  unpaid  principal  and  accrued 
 interest  is  required  on  or  before  consummation  of  the  assignment  of  licenses  to  the  Liquidating  Trust.  55  The  purpose  of  this  timing  requirement  is  two-  fold:  (a)  to  ensure  that  full  payment  is  made  promptly,  and 
 (b)  to  prevent  the  unjust  enrichment  that  a  non-  designated  entity  would  receive  if  it  were  given  the  opportunity  to  participate  in  an  installment  program  reserved  for  those  eligible  for  such  a  benefit. 

 22.  In  applying  the  timing  aspect  of  the  rule  to  the  particular  facts  of  this  case,  however,  we  find  that  strict  application  of  this  requirement  would  neither  serve  its  underlying  purpose  nor  the  public  interest. 
 Rather,  on  balance,  we  find  that  a  limited  waiver  is  warranted.  In  granting  this  waiver,  we  take  into  account  the  primary  public  interest  benefit  arising  from  the  arrangement  outlined  in  the  Settlement  and  the 
 Sale  Order    i.  e.,  the  favorable  settlement  of  the  Commissions  claim  in  the  Summit  bankruptcy  case,  which  will  allow  for  the  expeditious  recovery  of  the  obligations  owed  to  the  Commission  under  section 

 51  See  47  U.  S.  C.    309(  j)(  3)(  C). 
 52  See  Cingular-  NextWave  Order  at  2590,    46  (citing  Competitive  Bidding  Second  R&  O  at  2394,    258). 
 53  See  Sale  Order  at    11-  12. 
 54  47  C.  F.  R.    1.2111(  c).  The  Commission  has  previously  clarified  that  the  approval  of  an  assignment  or  transfer 
 of  control  that  results  in  installment  payment  unjust  enrichment  is  conditioned  upon  the  full  payment  of  the  required  unjust  enrichment  payment  on  or  before  the  consummation  date.  See  In  Matter  of  Amendment  of  Part  1 

 of  the  Commissions  Rules    Competitive  Bidding  Procedures,  WT  Docket  97-  82,  Order  on  Reconsideration  of  the  Third  Report  and  Order,  Fifth  Report  and  Order,  and  Fourth  Further  Notice  of  Proposed  Rulemaking,  15 
 FCC  Rcd.  15239,  15314,    37  (2000).  Thus,  we  must  grant  a  limited  waiver  of  the  timing  of  section  1.2111(  c)  in  order  to  permit  the  implementation  of  the  Liquidating  Trust  Agreement. 

 55  47  C.  F.  R.    1.2111(  c).  Specifically,  section  1.2111(  c)(  1)  states  [  i]  f  a  licensee  that  utilizes  installment 
 financing  under  this  section  seeks  to  assign  or  transfer  control  of  its  license  to  an  entity  not  meeting  the  eligibility  standards  for  installment  payments,  the  licensee  must  make  full  payment  of  the  remaining  unpaid  principal  and 

 any  unpaid  interest  accrued  through  the  date  of  assignment  or  transfer  as  a  condition  of  approval. 
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 1.2111(  c),  without  the  delay  of  further  litigation.  56  We  also  take  into  account  the  public  interest  benefit  of  implementing  the  decision  of  the  Bankruptcy  Court  in  the  Sale  Order.  57  In  light  of  these  benefits,  it  is 
 clear  that  the  prompt  and  certain  payment  component  of  our  rule  is  best  served  by  the  grant  of  a  limited  waiver.  58 

 23.  Moreover,  we  find  that  such  waiver  will  not  frustrate  the  unjust  enrichment  purpose  of  the  timing  component  of  the  rule.  As  stated  above,  the  timing  provision  of  the  rule  prevents  non-  designated 
 entities  from  being  unjustly  enriched  by  participating  in  a  payment  program  that  was  intended  to  benefit  only  eligible  small  businesses.  There  is  no  such  unjust  enrichment  arising  from  the  present  circumstances. 
 Under  the  terms  of  the  Settlement,  the  Liquidating  Trust  Agreement,  the  Consent  Motion  and  the  Sale  Order,  the  Liquidating  Trust  is  not  continuing  to  participate  in  the  Commissions  installment  plan  and  is 
 therefore  not  subject  to  section  1.2110  of  the  Commissions  rules.  Instead,  in  order  to  resolve  the  bankruptcy  proceeding,  the  Commission  as  a  creditor  of  the  Summit  DIPs,  has  consented  to  the  relief 
 requested  in  the  Consent  Motion,  which  was  subsequently  granted  in  the  Sale  Order,  in  order  to  ensure  the  receipt  of  the  payments  due  to  the  Commission  without  the  need  for  further  litigation  in  the  bankruptcy 
 court  proceeding.  Thus,  the  timing  of  payment  to  the  Commission  contemplated  under  the  terms  of  the  Settlement,  Liquidating  Trust  Agreement,  Consent  Motion,  and  Sale  Order  does  not  frustrate  the 
 underlying  purpose  of  the  rule. 
 24.  Accordingly,  we  grant,  to  the  extent  necessary,  a  limited  waiver  of  the  timing  provisions  of  section  1.2111(  c)  so  that  the  Settlement  may  be  implemented.  59  We  therefore  consent  to  the  assignment  of 

 the  Licenses  from  the  Summit  DIPs  to  the  Liquidating  Trust,  including  any  licenses  that  have  outstanding  installment  debt,  and  we  will  allow  the  payment  of  outstanding  installment  obligations  to  the  Commission 
 to  be  paid  on  or  before  consummation  of  the  transfer  of  any  such  license  to  a  subsequent  qualified  entity,  subject  to  the  Commissions  regulatory  authority  and  the  terms  of  the  Settlement,  Liquidating  Trust 
 Agreement,  the  Consent  Motion  and  the  Sale  Order.  Thus,  while  the  outstanding  indebtedness  to  the  FCC,  as  agreed  in  the  Settlement  and  described  in  the  Sale  Order,  will  be  calculated  at  the  time  of  the 
 consummation  of  the  assignment  of  the  Licenses  to  the  Liquidating  Trust,  we  will  waive  the  rule  to  allow  this  payment  to  be  made  as  we  describe  above. 

 25.  Finally,  with  respect  to  the  rules  requirement  that  the  assignor  be  responsible  to  render  payment  of  the  installment  debt  obligation,  here  too,  we  find  that  the  strict  application  of  the  rule  is  not 
 warranted  and  that  grant  of  a  waiver  will  not  undermine  the  purpose  of  the  rule.  As  noted  above,  the  Applications  before  us  seek  approval  to  assign  the  Licenses  from  the  Summit  DIPs  (assignors)  to  the 
 Liquidating  Trust.  As  explained  in  the  Waiver  Request,  the  Liquidating  Trust  is  an  entity  with  few  assets,  created  solely  to  market  the  licenses  for  eventual  assignment  to  a  qualified  entity,  in  accordance  with  the 

 56  Applications  for  Consent  to  Assignment  of  Licenses  Pursuant  to  Section  310(  d)  of  the  Communications  Act 
 from  Leap  Wireless  International,  Inc.  and  its  subsidiaries,  Debtors-  In-  Possession  and  Leap  Wireless  International,  and  its  subsidiaries,  WT  Docket  03-  263,  Memorandum,  Opinion  &  Order,  19  FCC  Rcd.  14909, 

 14926-  14927,    34  (  Leap  Order). 
 57  See  LaRose  v.  FCC,  494  F.  2d  1145,  1150  (D.  C.  Cir.  1974). 

 58  See  Leap  Order  at  14926-  14927,    34. 
 59  See  Cingular-  NextWave  Order  at  2590,    47  (2004)  (relying  on  implementation  of  settlement  agreement  and 
 Department  of  Justice  grant  of  debt  forgiveness  as  significant  factors  in  granting  limited  waiver  of  regulatory  full  payment  requirement  under  Section  1.2111). 
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 Bankruptcy  Courts  Order  and  subject  to  FCC  approval.  60  The  Applicants  therefore  request  that  Summit  Wireless  Liquidating  Trust  be  made  responsible  for  the  payment  since,  at  the  time  the  payment  will  be 
 made,  it  is  likely  that  Summit  DIPs  will  not  be  in  existence.  61  In  the  proposed  transaction,  the  Settlement  contemplated  that  payment  to  the  Commission  would  not  to  occur  until  the  subsequent  Commission 
 approval  of  transfer  of  a  license  to  a  third-  party  qualified  buyer.  Yet,  in  accordance  with  our  regulatory  requirements,  the  entity  that  received  the  benefit  of  the  designated  entity  policies,  here  the  Summit  DIPs,  is 
 the  entity  that  is  bears  responsibility  for  ensuring  the  Commission  is  fully  compensated.  In  the  instant  transaction,  however,  strict  adherence  to  this  requirement  is  not  practical  and  is  incompatible  with  the 
 terms  of  the  Settlement  to  assign  the  Licenses.  Further,  because  the  Settlement  provides  that  the  Liquidating  Trust  will  remain  subject  to  the  same  responsibilities  that  we  would  have  imposed  on  the 
 current  licensee  (i.  e.,  payment  of  obligations  owed,  or  cancellation  of  licenses  and  return  of  the  spectrum  with  debt  forgiveness),  we  believe  it  is  appropriate  to  grant  a  waiver  to  allow  the  Liquidating  Trust  to  be 
 the  entity  ultimately  responsible  for  the  obligations  owed  or  that  may  ultimately  be  forgiven  under  section  1.2111(  c)  in  this  transaction.  62  As  noted  above,  because  the  terms  of  the  Settlement  embodied  in  the  Sale 
 Order  do  not  result  in  unjust  enrichment  as  contemplated  by  the  rules,  grant  of  a  waiver  of  this  aspect  of  the  rule  does  not  frustrate  its  underlying  purpose. 

 IV.  CONCLUSION 
 26.  We  find  that,  pursuant  to  our  review  under  Section  310(  d)  of  the  Communications  Act,  approval  of  the  Assignment  Applications  will  serve  the  public  interest,  convenience,  and  necessity.  63  The 

 licenses  in  this  transaction  that  remain  in  the  Commissions  installment  financing  program  are  subject  to  section  1.2111(  c),  however,  we  grant  a  limited  waiver  of  certain  of  the  payment  and  timing  aspects  of  the 
 rule,  as  described  above,  to  allow  for  the  transfer  of  the  Licenses  to  the  Liquidating  Trust  as  contemplated  by  the  terms  of  the  Settlement,  the  Liquidating  Trust  Agreement,  the  Consent  Motion,  and  the  Bankruptcy 
 Courts  Sale  Order.  64 
 V.  ORDERING  CLAUSES 
 27.  Accordingly,  IT  IS  ORDERED  that,  pursuant  to  the  authority  granted  in  Sections  4(  i),  309(  j),  and  310(  d)  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    154(  i),  309(  j),  310(  d),  the 

 applications  seeking  consent  for  the  assignment  of  C  and  F  block  Personal  Communications  Services  licenses  from  the  Summit  DIPs  to  the  Liquidating  Trust  are  GRANTED. 

 28.  IT  IS  FURTHER  ORDERED  that,  pursuant  to  47  C.  F.  R.    1.3,  1.925,  we  GRANT  a  limited  waiver  of  section  1.2111(  c)  of  the  Commissions  rules,  47  C.  F.  R.    1.2111(  c)  to  the  extent  described 
 herein. 

 60  See  generally,  Waiver  Request. 
 61  Id. 
 62  See  supra  para  5. 
 63  47  U.  S.  C.    310(  d). 
 64  47  C.  F.  R.    1.2111(  c). 
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 Federal  Communications  Commission  DA  04-  3867 
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 29.  These  actions  are  taken  under  delegated  authority  pursuant  to  sections  0.131  and  0.331  of  the  Commissions  rules,  47  C.  F.  R.    0.131,  0.331. 
 FEDERAL  COMMUNICATIONS  COMMISSION 

 John  B.  Muleta  Chief 
 Wireless  Telecommunications  Bureau 
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