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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554


                                )
In re Applications of           )  File Nos.
                                )  00200CWL96     00430CWL96
GWI PCS, Inc.                   )  00406CWL96     00436CWL96
                                )  00410CWL96     00442CWL96
For Authority to Construct and  )  00413CWL96     00447CWL96
Operate Broadband PCS Systems   )  00417CWL96     00455CWL96
Operating on Frequency Block C  )  00420CWL96     00459CWL96
                                )  00424CWL96     00462CWL96


                  MEMORANDUM OPINION AND ORDER


   Adopted:  January 27, 1997           Released:  April 4, 1997

By the Chief, Wireless Telecommunications Bureau:

            I.  INTRODUCTION AND EXECUTIVE SUMMARY 

     1.  By this Memorandum Opinion and Order, we grant applications for fourteen Broadband
C Block Personal Communication Services (PCS) licenses for which GWI PCS, Inc. (GWI PCS)
was the high bidder.  A list of the licenses is set forth in Appendix A.  We also dismiss as moot the
"Petition to Deny, or Alternatively, Informal Objection" (Informal Objection) filed jointly by
Antigone Communications Limited Partnership and PCS Devco, Inc. (Antigone/Devco) against these
applications.  Antigone/Devco argues that GWI PCS' foreign ownership exceeded the benchmark
set forth in Section 310(b)(4) of The Communications Act of 1934, as amended (the Act), and that
GWI PCS violated Section 1.2105(c) of the Commission's rules prohibiting collusion among auction
applicants.  We have independently investigated these issues and find there to be no substantial and
material questions of fact.  We therefore dismiss Antigone/Devco's Informal Objection as moot. 

                         II.  BACKGROUND
     2.  GWI PCS was the high bidder for 14 C Block PCS licenses.   GWI PCS is the wholly
owned subsidiary of General Wireless, Inc. (GWI or the Parent).  On May 22, 1996, GWI PCS
electronically filed a Form 600 application with the Commission.  Subsequently, on May 31, 1996,
the Commission released a Public Notice accepting GWI PCS' application for filing and setting July
1, 1996, as the cut-off date for filing petitions to deny.  On July 17, 1996, sixteen days after that cut-
off date, Antigone/Devco jointly filed its Informal Objection.  On July 31, 1996, GWI PCS filed an
"Opposition to Informal Objection" disputing Antigone/Devco's claims.  Antigone/Devco responded
to GWI PCS' opposition on August 16, 1996. 

     3.  Antigone/Devco's Informal Objection argues that a June 28, 1996 stock registration filing
with the Securities Exchange Commission (SEC) revealed, for the first time, GWI's relationship with
Hyundai Electronics of America (Hyundai).  Hyundai, a wholly-owned subsidiary of a Korean
corporation, was also an attributable investor in U.S. Airwaves, Inc., the parent of U.S. Airwaves
Holding, Inc. (U.S. Airwaves) which was eligible to bid for, and nominally bid in, all markets in the
C Block auction.  Antigone/Devco argues that since GWI's SEC information was not publicly
available for several days after the June 28 filing, the Commission should accept its late-filed
petition, or alternatively, consider its pleading as an informal objection and address the merits.    

     4.  Because the Wireless Telecommunications Bureau (Bureau) needed additional
information to determine the qualifications of GWI PCS to be a Commission licensee, we invoked
our investigative powers under Section 308(b) of the Act to gather more information about Hyundai's
relationship with GWI, GWI PCS and U.S. Airwaves.  Pursuant to Section 308(b), letters of inquiry
were sent by the Bureau to GWI, Hyundai and U.S. Airwaves regarding GWI's foreign investment,
and the extent and timing of GWI's financial arrangements with Hyundai.  Responses to the inquiry
and documentary support were submitted by GWI, Hyundai and U.S. Airwaves on November 25,
1996.  On December 5, 1996, the Bureau sent the parties a supplemental letter of inquiry requesting
additional information and documents.  Responses and the requested documents were received by
the Bureau on December 16, 1996.   

     5.  As set forth in detail in Section III(A), below, our Section 308(b) investigation found that
GWI PCS's foreign ownership falls below the twenty five percent benchmark of Section 310(b)(4)
of the Act.  In Section III(B), below, we also found insufficient evidence to warrant a finding of a
violation of Section 1.2105(c)'s prohibition of collusion.  Because our 308(b) investigation addressed
the issues raised by Antigone/Devco and found there to be no substantial and material questions of
fact, we dismiss the Informal Objection without reaching the procedural issues raised by the parties. 
We find that GWI PCS is qualified to be a Commission licensee and that grant of licenses to GWI
PCS is in the public interest.  Accordingly, on January 27, 1997, concurrently with the adoption of
this Memorandum Opinion and Order, the Bureau released a Public Notice granting GWI PCS
licenses for the 14 markets in which it was the high bidder.  The grant was conditioned upon GWI
PCS's timely submission of its remaining down payment, which has been paid, and satisfaction of
its installment payment obligations.
 
                         III.  DISCUSSION
     A. Foreign Ownership

     6.  Pursuant to the limitations set forth in the Act, we must consider whether GWI PCS
exceeds the twenty five percent foreign ownership benchmark of Section 310(b)(4). Absent a
public interest showing, a licensee cannot be directly or indirectly controlled by an entity that has
more than twenty five percent foreign ownership.  GWI PCS' Form 600 provided the Commission
with a detailed listing of both the domestic and foreign owners of its sole shareholder and parent
company, GWI, and certified that GWI's foreign ownership fell below the statutory benchmark of
Section 310(b)(4).    

     7.  Exhibit J of GWI PCS' Form 600, however, summarized a Loan Agreement, Stock
Purchase Agreement, Equipment Purchase Agreement, Employee Training Agreement, and  Senior
Promissory Note between GWI and Hyundai.   These agreements (collectively referred to hereinafter
as the "Hyundai Loan Agreement") comprise the totality of the financial arrangements between GWI
and Hyundai.  Hyundai, a wholly owned subsidiary of a Korean corporation, was not included in
GWI PCS' Form 600 foreign ownership calculations.  Pursuant to our authority under Section 308(b)
of the Act, we sought additional information regarding the number of shares of GWI stock held by
foreign shareholders as well as the amount of capital contributed by foreign investors, including
Hyundai.  Based on the information and documentary support received in response to our
inquiries, we conclude that GWI's foreign ownership falls below the statutory benchmark of
Section 310(b)(4). 

     1.  Consideration of Stock Ownership and Capital Contributions under Section
310(b)(4) of the Act.

     8.  As a threshold matter, Section 310(b)(4) confers an affirmative duty upon applicants and
licensees to report to the Commission all foreign ownership that may exceed the twenty five percent
benchmark.  The Commission's decision in Fox I states that "[a]n applicant must specifically and
directly inform the Commission that the ownership structure under consideration may exceed the
foreign ownership benchmark, and that absent such explicit notification and an express finding by
the Commission that allowing the applicant to exceed the benchmark is in the public interest, an
applicant may not exceed the benchmark."  Accordingly, we affirm that it is an applicant or
licensee's obligation to notify the Commission of any foreign ownership that may exceed the statute's
twenty five percent benchmark by providing the Commission with information regarding both the
number of its foreign-held shares of stock as well as the amount of its capital contributed by foreign
investors.    

     9.  A Section 310(b)(4) inquiry turns on a two-pronged analysis, one pertaining to voting
interests and the second to ownership interests.  The first prong of a Section 310(b)(4) analysis
requires that we calculate the percentage of outstanding shares of foreign-owned stock in a parent
corporation, while the second prong seeks to measure the benefits of ownership.  The Commission
has consistently stated, "[s]tock ownership in a corporation generally measures an investor's benefit
of ownership in that corporation, including voting rights and distributions of dividends, and
generally reflects the amount of shareholder capital contributed to the corporation."  It is axiomatic
that a prudent investor invests funds that fairly reflect the benefits that it expects to receive in return
for its investment.  Thus, where the ownership of corporate shares does not correspond to the capital
contributed to a corporation, we evaluate both stock ownership and capital contributions to
determine the percentage of ownership interests held by an individual investor.   

     10.  Bona fide debt, however, is immaterial in a Section 310(b)(4) analysis.  Fox II and
NextWave affirmed that "debentures, warrants, options and other convertible instruments do not
constitute 'capital stock'" and are not relevant in a Section 310(b)(4) inquiry.   In Univision, the
Commission explained that under normal lending conditions, creditors do not possess either an
ownership or voting interest in a licensee so "the direct restrictions embodied in [S]ection 310(b) are
not applicable to debt interests."  Following this reasoning, we exclude bona fide debt from our
Section 310(b)(4) foreign ownership calculations.  Future interests are also not factored into Section
310(b) determinations.  Following Commission precedent, in DCR PCS, Inc. the Bureau held that
"an option held by a foreigner to buy stock in a licensee or the parent of a licensee is not cognizable
until it is exercised."  Although we will not factor bona fide debt or legitimate future interests into
our Section 310(b)(4) calculations, we will not accept a licensee's nomenclature at face value.  

     11.  In Fox I, an Australian company contributed ninety-nine percent of Fox's paid-in capital
but only owned twenty four percent of its voting stock.  Although Fox contended that its licenses
should be renewed because its foreign ownership of stock fell below the twenty five percent statutory
benchmark, the Commission explained that "[u]sing a simple 'count the shares' approach may not
accurately reflect the actual extent of alien ownership interests in a corporation, particularly when
the corporation issues more than one class of stock and, those classes have widely divergent
characteristics."  Fox I, therefore, also considered the amount of foreign capital contributed to a
corporation to determine compliance with the statutory ownership benchmark.  The Commission
granted the renewal of Fox's licenses conditioned upon a promise that Fox would restructure its
foreign equity capital contributions to fall within Section 310(b)(4). 
 
     12.  Fox's restructuring failed because the Commission determined that Fox's $1.4 billion
debt instrument was not bona fide debt but rather, paid-in equity.  To distinguish debt from equity,
Fox II applied the following five factors recommended by Congress: "[1] whether there [was] a
written unconditional promise to repay the money on demand and to pay a fixed rate of interest; [2]
whether there [was] subordination to or preference over any indebtedness of the company; [3] the
company's debt/equity ratio; [4] whether the alleged debt [was] convertible to stock; and, [5] what
[was] the relationship between holdings of stock in the corporation and holdings of the interest in
question."  In so doing, Fox II "examine[d] the economic realities of the transactions under review
and not simply the labels attached by the parties to their corporate incidents."  Pursuant to this
analysis, where debt disguises paid-in equity, it is included in foreign ownership calculations.  

     13.  We recently considered the application of the Fox II factors in NextWave.  In
NextWave, the applicant sought C Block PCS licenses where its parent corporation's foreign stock
ownership and foreign capital contributions exceeded the statutory benchmark of Section 310(b)(4).
Applying the factors enunciated in Fox II, the Bureau examined NextWave's debt instruments and
determined that certain financial agreements were more properly characterized as equity.  The
Bureau granted NextWave's licenses conditioned on its restructuring to conform its foreign
ownership to the twenty five percent statutory benchmark of Section 310(b)(4) within a six month
time period.   
     
     14.  Applying Commission precedent and examining the economic realities of the
Hyundai/GWI relationship, we find that, based on a totality of the circumstances, the Hyundai Loan
Agreement constitutes bona fide debt. Thus, GWI's foreign ownership falls below the twenty five
percent benchmark of Section 310(b)(4).  This conclusion is based on the analysis set forth below. 
 

          2.  GWI's Foreign Investment Falls Below the Statutory Benchmark
     
     15.  GWI has authorized three classes of common stock: Class A, Class B, and Class C.  GWI
has issued 3 shares of Class A stock, 105,472 shares of Class B stock, and 609,239 shares of Class
C stock.  Of the 714,714 shares issued, 148,300 shares of GWI's stock are held by foreign owners. 
Thus, the amount of GWI's foreign-held shares of stock falls below the Section 310(b)(4) statutory
benchmark because 20.7 percent of GWI's issued stock is foreign owned.  Similarly, GWI has
received $67,598,790 in paid-in-capital, of which $14,830,000 was contributed by foreign investors. 
Because 21.9 percent of GWI's paid-in capital has been provided by foreign sources, GWI's foreign
capital contributions also fall below the statutory threshold for foreign ownership.  These
calculations, however, exclude any interest of Hyundai in GWI by virtue of the Hyundai Loan
Agreement.  

     16.  GWI has negotiated a loan with Hyundai for $50 million and has given a promissory
note for that sum.  Once the Hyundai loan is made to GWI, it will be GWI's only outstanding debt
other than the $954 million it owes to the United States Government for the financing of its purchase
of GWI PCS' fourteen C Block licenses.  Under the terms of the Hyundai Loan Agreement, GWI
may draw upon the principal of the loan once the Commission grants GWI PCS its licenses.  As the
Commission stated in Fox II, our review under Section 310(b)(4) "will apply an analysis based on
the economic realities of the situation to any proposed transaction to which a distinction between
debt and equity is pertinent."  In the instant matter, the Bureau examined the Hyundai Loan
Agreement in accordance with Commission precedent to determine whether it should be
characterized as equity or bona fide debt.  Applying the Fox II factors to the Hyundai Loan
Agreement, we conclude that, based on a totality of the circumstances, the Hyundai transaction
constitutes bona fide debt and is therefore not relevant to our Section 310(b)(4) calculations.  Our
analysis applying the five Fox factors is as follows: 

     17.  A written unconditional promise by GWI to repay the principal amount of the Hyundai
loan on demand and to pay a fixed interest rate. The Hyundai Loan Agreement bears a 6.5 percent
interest rate and is due and payable one year from the anniversary of the signing of the senior
promissory note.  If the debt is not retired upon the one year anniversary of the signing of the senior
promissory note, then there is a renewal option and the interest rate increases to 9 percent per annum
on the outstanding principal balance of the note until the obligation is fully paid.  While we note
that a 6.5 percent interest rate was lower than the prime rate of 8.25 percent at the time the loan was
signed, this factor standing alone is not significant enough to warrant a finding that the Hyundai
Loan Agreement should be characterized equity rather than debt.  

     18.  Accordingly, we find that GWI's unconditional promise to repay Hyundai on demand
at a fixed interest rate, coupled with the additional factors analyzed below, leads to the conclusion
that the Hyundai Loan Agreement constitutes bona fide debt.  Our decision acknowledges the
principle propounded by tax courts, that parties are not precluded "from exercising sound business
judgment in obtaining needed investment funds at the most favorable rate possible, whether it be a
commercial loan, or more likely, . . . a loan from private interested sources with sufficient faith in
the success of the venture and their ultimate repayment to delete or minimize the 'risk factor' in their
rate of return."
    
     19.  Whether there is subordination to or preference over any indebtedness of GWI.  This
factor determines the extent to which debt is subordinated to other indebtedness, and to what extent
the debt has a repayment preference over any other indebtedness.  In a corporation's capital
structure, one of the risks of equity ownership is its inferior liquidation preference which is
subordinated to outstanding debt.  Generally, where a creditor's only hope for repayment is after
obligations to the debtor's other creditors are satisfied, such subordination indicates that the advances
are capital contributions and not debt.   

     20.  We have assessed the overall subordination obligations and preference rights in the
Hyundai Loan Agreement with GWI, and we find that these subordination and preference rights are
characteristic of debt.  Any amounts due under the Hyundai Loan Agreement with GWI will be
subordinated only to the United States Government financing of $954 million for GWI PCS's 14 C
Block licenses.  With the exception of the Federal Government financing, the Hyundai Loan
Agreement provides for superior liquidation preferences to any other indebtedness of GWI, and GWI
is not permitted to incur debt senior to, or of the same parity as, the Hyundai Loan Agreement.  We
find the fact that the Hyundai Loan Agreement is subordinated only to the Federal Government
financing to be further evidence that Hyundai has a debt interest, and not an equity stake, in GWI.

     21.  GWI's debt to equity ratio. A high debt to equity ratio can provide strong evidence that
debt is not bona fide.   Where too little equity supports large debt, it is assumed that any repayment
of the debt would likely be dependent upon the ultimate success of the venture.  This is so because
potentially any material business loss to the company could be likely to result in its inability to repay
the obligation in question.   Thus, advances to a thinly capitalized company are generally indicative
of venture capital rather than traditional bona fide debt because of the substantial degree of risk to
the lender. 

     22.  A debt-to-equity ratio compares a company's total liabilities with its stockholder's
equity.  Stockholder's equity includes "the difference between the assets and the liabilities" of the
company.  In calculating GWI's debt-to-equity ratio, we include the $954 million debt owed to the
United States Government under the government's installment plan for the payment of GWI PCS'
C Block licenses.  The Hyundai Loan Agreement appears to be GWI's only indebtedness other than
its Federal Government financing.  Thus, the Hyundai Loan Agreement and the Federal Government
financing constitute an integral part of GWI's financial structure and contribute to generate a debt-to-
equity ratio of approximately 7.6 to 1.  GWI's financial leverage is within commercially reasonable
bounds for a start-up venture.  Notably, a 7.6 to 1 debt-to-equity ratio falls below those recognized
by tax courts as reflecting bona fide debt arrangements.  
     23.  Whether the alleged debt is convertible to stock.  Under the terms of the Hyundai Loan
Agreement, GWI can elect to repay its obligation in the form of either cash, Class C stock,  Class
C warrants, or a combination thereof.  While GWI is entitled to repay its obligation through the
issuance of its Class C stock or Class C warrants, such repayment is permissible only to the extent
GWI will not exceed the Section 310(b)(4) benchmark.  In the event that there is an issuance of stock
in violation of Section 310(b)(4), the terms of the Hyundai Loan Agreement provide for a reversal
of the violating transaction through a stock repurchase plan.  Further, if GWI elects to repay through
the issuance of warrants, those warrants will be valued based upon the market price of the shares at
the time of repayment.  Although the senior promissory note is renewable for a second year if any
principal balance remains outstanding on the obligation, and although the senior promissory note
can be repaid through the issuance of stock or warrants, we note that such repayment does not occur
through automatic conversion.

     24.  Conversion rights within a financing agreement established by a lender generally benefit
the lender by permitting it to determine whether, and the extent to which, it chooses to convert all
or part of its creditor relationship to become an equity holder or whether it maintains a
creditor/debtor relationship.  Where, as here, the repayment of debt is with cash or through the
issuance of stock or warrants, and is under the sole control and at the discretion of the debtor, we
find it less likely that the arrangement is designed to disguise equity holdings. 

     25.  The relationship between Hyundai's stock holdings in GWI and holdings of the debt in
question.  The Bureau has no evidence to suggest that Hyundai is currently a shareholder in GWI. 
Further, the Hyundai Loan Agreement does not create rights similar to those normally reserved for
an equity holder.  While GWI may retire its $50 million obligation to Hyundai partially in the form
of stock or warrants, the residual loan balance will perform in accordance with the terms of the
Hyundai Loan Agreement.  Given GWI's current capital structure and foreign ownership levels,
approximately $2.7 million (5.4%) of the $50 million loan may be retired in the form of stock,
thereby preserving Hyundai's creditor status.  Also, at any time the principal outstanding on loan
exceeds $10 million, Hyundai is entitled to one of nine GWI Board seats and may cast one of seven
Board votes.  However, once the loan is retired below $10 million, the board seat is rescinded. 
Such factors lend support to the conclusion that the Hyundai Loan Agreement constitutes bona fidedebt.  

     26.  Analyzing the Hyundai/GWI relationship in accordance with the five factors adopted in
Fox II, we conclude that, based on a totality of the circumstances, the agreement represents bona fidedebt.  Because we find the Hyundai Loan Agreement is bona fide debt, it is not included in our
Section 310(b)(4) analysis.  As stated above, both GWI's foreign-held shares of stock and foreign
capital contributions fall below the twenty five percent statutory benchmark of Section 310(b)(4). 
Accordingly, we find that GWI's level of foreign ownership would not prevent grant to GWI PCS
of the fourteen C Block licenses.  

     B. Compliance with Collusion Rules

     27.  We next consider whether the financial investment by Hyundai in GWI violated Section
1.2105(c) of the Commission's rules prohibiting collusion between applicants bidding in the same
geographic area.  At the time U.S. Airwaves filed its C Block short form application (FCC Form
175), Hyundai held a 7.1 percent equity interest in U.S. Airwaves' parent company, and held debt
instruments with stock conversion rights representing an additional 16.6 percent of the fully diluted
equity of the parent company, U.S. Airwaves, Inc. (the Parent).  U.S. Airwaves was a wholly owned
subsidiary of the Parent.  U.S. Airwaves was eligible to bid in all of the 493 markets in the initial
C Block auction.  Consequently U.S. Airwaves was a mutually exclusive applicant with all
participants in the auction, including GWI PCS. 

     28.  On February 15, 1996, U.S. Airwaves withdrew from the C Block auction.  On February
20, 1996, representatives from Hyundai and GWI entered into negotiations for Hyundai to extend
a loan to GWI.  On March 15, 1996, Hyundai and GWI executed the Hyundai Loan Agreement
which was conditioned upon GWI PCS receiving "the grant of PCS licenses for at least 10 million
POPs within the top 50 BTAs."   An earlier, unexecuted draft of the Hyundai Loan Agreement
contains language that conditions the loan upon GWI PCS receiving licenses for any one or more
of the following: a) 10 million POPs in the top 50 BTAs, (including Las Vegas, West Palm Beach,
and Austin), or b) San Francisco, or c) Los Angeles, or d) Houston and Dallas.  

     29.  Except for narrowly defined exceptions, Section 1.2105(c)(1) of the Commission's rules
strictly prohibits any applicant after the filing of its FCC Form 175 from "cooperating, collaborating,
discussing or disclosing in any manner the substance of their bids or bidding strategies until after
the high bidder makes the required down payment."  Bids or bidding strategies include capital calls
or requests for additional funds in support of bids or bidding strategies.  For purposes of the
collusion rule, the term "applicant" includes the entity submitting the application, holders of
ownership interests amounting to 5 percent or greater of an applicant, and officers and directors of
the entity submitting the application.  At least with regard to bidding consortia, the Commission
has stated that the fact that one bidder has withdrawn its application before entering into a
consortium does not reduce the importance of our collusion rules and has declined to allow
applicants to form mid-auction bidding consortia with applicants who had withdrawn from the
auction.  The Commission's concern is that such consortium arrangements, particularly in an
environment where bidder identities are known, might bring undue pressure to bear on smaller
bidders to withdraw in exchange for teaming up with other larger bidders, or sham applications
might be filed to demand payment from other applicants.  

     30.  Although prohibited contact includes discussions that disclose in any manner
information that affects bidding strategy,  Section 1.2105(c)(4) of the Commission's rules allows
non-controlling attributable investors to invest in multiple bidders in the same geographic area, after
the filing of short form applications, so long as (1) those investors certify to the Commission that
they have not, and will not communicate with more than one applicant concerning bids or bidding
strategies, and (2) the investment does not change the control of an applicant.  The Commission
has defined bids or bidding strategies to include, inter alia, which licenses an applicant will or will
not bid on.  In establishing the exception to the collusion rules, the Commission recognized the
importance of facilitating the flow of capital to applicants by enabling parties to make non-
controlling investments in multiple applicants for licenses in the same geographic license areas
while ensuring that these investments will not lead to collusion among bidders.  The certification
requirement was intended as a deterrent and enforcement mechanism to those who might otherwise
enter into anti-competitive arrangements under the exception.   In enforcing the collusion rules, the
Bureau will consider all relevant factors in each particular case, including whether both parties
knew or should have known that the activities in question would affect bidding or bidding
strategies, and that the activities in fact had such an effect.  

     1.  Application of the Collusion Rules to Hyundai and GWI.

     31.  Under Section 1.2105(c)(6), Hyundai's 7.1 percent equity ownership interest in U.S.
Airwaves qualifies Hyundai as an applicant, and therefore Hyundai is subject to the Section
1.2105(c) prohibition of collusion among applicants.  The record evidences that U.S. Airwaves and
GWI PCS identified common markets on their FCC Form 175s.  We, therefore, must examine
whether Hyundai's subsequent loan to GWI falls within the exception to the Commission's collusion
rule.  Hyundai made a Section 1.2105(c)(4) certification on March 26, 1996, notifying the
Commission of the Hyundai/GWI relationship, and certifying that there would be no transfer of
bidding information to GWI. 

     32.  To be eligible for the exception to the collusion rule, we must determine whether
Hyundai was a non-controlling attributable investor in U.S. Airwaves.  Hyundai will be deemed
a "non-controlling" attributable investor if it exercised neither de jure nor de facto control over U.S.
Airwaves.  We find that Hyundai was an attributable investor in U.S. Airwaves, but did not have
de jure or de facto control of U.S. Airwaves.  U.S. Airwaves was organized under the 25 percent
equity requirement of Section 24.709(b)(5), of the Commission's C Block eligibility rules.  U.S.
Airwaves Management L.L.C., (AWM) was the qualifying investor, and owned 15 percent of U.
S. Airwaves fully diluted equity through shares of Class A Common Stock.  Kleiner, Perkins,
Caufield & Byers (KPCB), an institutional investor, owned 10 percent of U. S. Airwaves fully
diluted equity through shares of Series A Preferred Stock.  To satisfy the de jure control
requirement of Section 24.709(b)(5)(i)(B), the Class A Common and Series A Preferred Stock
controlled 50.1 percent of the voting rights of U. S. Airwaves and elected 8 of 13 members of the
Board of Directors.  Under the terms of a stockholders agreement, AWM voted the shares of
KPCB.  In contrast, Hyundai held 7.1 percent of U.S. Airwaves' fully diluted equity through Series
B Preferred Stock, and could elect 2 of 13 members of the Board of Directors.  

     33.   Although a finding of de facto control necessarily turns on the facts of each case, the
Commission has provided guidance on evaluating when rights granted to minority investors
constitute indicia of de facto control.  In the Fifth Memorandum Opinion and Order, the
Commission stated: "[N]on-majority or non-voting shareholders may be given a decision-making
role in major corporate decisions that fundamentally affect their interests as shareholders without
being deemed to be in de facto control."   Such major corporate decisions include: issuance or
reclassification of stock, setting compensation for senior management, expenditures that
significantly affect market capitalization, incurring significant corporate debt or otherwise
encumbering corporate assets, sale of major corporate assets, and fundamental changes in corporate
structure, including merger or dissolution. 

     34.  In this case, Hyundai was entitled to elect 2 members of the Board of Directors of U.
S. Airwaves.  Moreover, under the U. S. Airwaves Certificate of Incorporation, Hyundai, as a holder
of Series B Preferred Stock, could veto certain major corporate actions including: a merger of the
corporation, a sale of all the corporate assets, a liquidation of the corporation, and amendments to
the Articles of Incorporation that would reduce the par value of the Series B Preferred Stock. 
These rights are typical minority shareholder rights designed to protect investment.  

     35.  Since Hyundai, in its certification letter, stated that it discussed bids and bidding
strategies with U. S. Airwaves, any communications or discussions with GWI relating to bids or
bidding strategies would be precluded by our rules.   Consequently, as part of our 308(b)
investigation we examined the events leading up to Hyundai's investment in GWI.  Specifically,
we examined whether the negotiation of the Hyundai Loan Agreement and related documents
provided GWI with information that in any manner affected bidding strategies.  Our examination
included a draft of the Hyundai Loan Agreement, which specified success in certain markets.  A
March 12, 1995 draft of the Hyundai Loan Agreement sent by Hyundai to GWI would have
obligated Hyundai to make the loan upon GWI PCS receiving licenses for one or more of the
following: 1) 10 million POPs in the top 50 BTAs (including West Palm Beach, Las Vegas, and
Austin) or 2) Los Angeles, or 3) San Francisco, or 4) Dallas and Houston.  The reference to
specific markets raises the issue of whether this language rises to the level of "communication"
between Hyundai and GWI, or whether this language evidences that the parties actually discussed
bids or bidding strategies in those markets.  Discussions of specific markets are of particular
relevance because they increase the possibility that information related to bids and bidding
strategies will be transferred between bidders.  

     36.   Sworn declarations filed by Baxom Kim, Hyundai's lead negotiator, and Roger
Linquist, President of GWI PCS, declare under penalty of perjury that no discussions concerning
specific markets in which GWI PCS was contemplating bidding were ever held.  Our investigation
found no evidence to refute the sworn declaration that "GWI never . . . even discussed with Hyundai
whether it would or would not bid on any of the specific licenses proposed by Hyundai to be
included in the closing condition."  In fact, we reviewed the bidding patterns of GWI PCS prior
to and subsequent to Hyundai's investment to determine if GWI PCS might have acted on any
information regarding bids or bidding strategies communicated or discussed with Hyundai.  Our
analysis of GWI PCS' actual bids both before and after the submission of the draft Hyundai Loan
agreement show consistent bidding patterns, and no evidence that GWI PCS changed its bids upon
receipt of the draft Hyundai Loan Agreement.  Where one applicant has dropped out of the auction,
subsequent discussions related to specific markets between a non-controlling investor in the first
applicant and a remaining applicant would not necessarily give rise to the type of anti-competitive
activity of concern to the Commission in creating its collusion rules. 

     37.  We also do not find evidence of collusive behavior in the final Hyundai Loan
Agreement, which references only "a grant of licenses for 10 million POPs in the top 50 BTAs."
We conclude that such a broad provision does not constitute a sharing of bidding information, and
appears to be the type of arrangement that the exception to the collusion rule was intended to
permit.  The rule against collusion does not prohibit discussions reasonably necessary to negotiate
such a loan, provided the other conditions of the exception are met.  The general, non-specific
information that was contained in the Hyundai Loan Agreement, as executed, does not qualify as
a sharing of "bidding strategies," and consequently, did not violate the prohibition of collusion. 
Accordingly, we find no evidence of a violation of the Section 1.2105(c) prohibition of collusion.

     38.  We also find that the second criteria of Section 1.2105(c)(4), has been met.  Under this
criteria, no change in control of an applicant may occur as a result of a non-controlling attributable
investor of an applicant taking an interest in other applicants in the same geographic market.  This
requirement assures that the true party in interest does not change, and that the investor may not
direct the actions of the second applicant in order to reduce its competitive relationship with the first
applicant.  As we previously stated, Hyundai had only up to approximately 24 percent holdings in
U.S. Airwaves, and therefore did not have de jure control, and otherwise did not exercise de factocontrol over that applicant.

     39.  Hyundai also does not have de jure control over GWI.  Hyundai will only be able to
take up to a 25 percent interest in GWI, who in turn holds 100 percent of the voting stock of GWI
PCS.  Hyundai, to the extent that it may receive shares upon performance of the Hyundai Loan
Agreement, will receive only Class C Shares of GWI stock.  The Class A shares, which are held
solely by members of the control group, confer 50.1 percent of the voting rights in GWI.  Further,
GWI has structured its Board to consist of nine seats but only seven votes.  Four of those votes
are controlled by the directors elected by the Class A shareholders and the remaining three votes
are cast collectively by the directors elected by the Class C shareholders.  At any time the principal
outstanding on the loan exceeds $10 million, Hyundai receives one of the three votes granted to the
directors elected by the Class C shareholders.  The directors elected by the other Class C holders
share fractional votes.  Finally, Hyundai is not part of the GWI PCS control group, which holds
50.1 percent of the total equity in GWI, thereby controlling GWI PCS. 

     40.  Nor do we find evidence that Hyundai exercises de facto control of GWI.  GWI has
verified by a letter from counsel that "Hyundai played no role in any decisions made by the GWI
board or stockholders holding shares of any class of GWI stock regarding the selection of GWI's
management, personnel, corporate financing or preparation of FCC applications."  In addition, the
fact that GWI has capitalized itself and will finance some of its infrastructure in part from Hyundai
resources does not rise to the level of de facto control.

     41. In sum, we find that Hyundai and GWI PCS did not violate the Commission's
prohibition of collusion.

     C.  Conclusion

     42.  For the forgoing reasons, we find no material or substantial questions of fact that
warrant further investigation or the designation of these matters for a hearing.  Finding that the
public interest will be served, we grant the 14 C Block PCS licenses for which GWI PCS, Inc. was
the high bidder at auction to the entities set forth in Appendix A.

     43.  GWI PCS submitted the remaining portion of the 10 percent down payment due on each
of its licenses on February 3, 1997, and opted to pay the remainder of the amount due on each
license in installments in accordance with Parts 1 and 24 of the Commission's rules.  For each
license granted, each licensee will be subject to the terms and conditions of the promissory note and
security agreement executed and returned to the United States Department of Treasury.

     D. Ordering Clauses

     44.  Accordingly, IT IS ORDERED that, pursuant to the authority delegated by Section
0.331 of the Commission's rules, 47 C.F.R.  0.331, GWI PCS, Inc.'s applications for the licenses
for which it was the high bidder in the C Block Auction ARE GRANTED, to the licensees listed
in Appendix A, each of which is subject to the conditions set forth above. 

     45.  IT IS FURTHER ORDERED that, pursuant to Sections 0.331, 47 C.F.R.  0.331 and
24.830(a)(4), 47 C.F.R.  24.803(a)(4), of the Commission's rules, Antigone/Devco's "Petition to
Dismiss or Deny, or Alternatively, Informal Objection," filed on July 17, 1996 IS DISMISSED as
moot.




                                                            Michele C. Farquhar
                                                            Chief, Wireless Telecommunications Bureau
                                                            
                              



                            APPENDIX A
                                 


                                                                                     
Market                                  CallSign
     File Number                                                                     Name


B022                                    KNLF556
     00200-CW-L-96                      GWI PCS 7, INC.

B024                                    KNLF557
     00406-CW-L-96                      GWI PCS 8, INC.

B079                                    KNLF558
     00410-CW-L-96                      GWI PCS 2, INC.

B151                                    KNLF559
     00413-CW-L-96                      GWI PCS 14, INC.

B152                                    KNLF560
     00417-CW-L-96                      GWI PCS 10, INC.

B160                                    KNLF561
     00420-CW-L-96                      GWI PCS 9, INC.

B293                                    KNLF562
     00424-CW-L-96                      GWI PCS 12, INC.

B313                                    KNLF563
     00430-CW-L-96                      GWI PCS 13, INC.

B389                                    KNLF564
     00436-CW-L-96                      GWI PCS 4, INC.

B397                                    KNLF565
     00442-CW-L-96                      GWI PCS 6, INC.

B404                                    KNLF566
     00447-CW-L-96                      GWI PCS 1, INC.

B434                                    KNLF567
     00455-CW-L-96                      GWI PCS 5, INC.

B469                                    KNLF568
     00459-CW-L-96                      GWI PCS 11, INC.

B485                                    KNLF569
     00462-CW-L-96                      GWI PCS 3, INC.