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File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** $// O, Requests for Waiver of Section 24.270(f) of the broadband PCS Rules, DA95-1641//$ $/ 24.720(f) Entrepreneurs' Block eligibility requirements/$ $/24.419 waiver of PCS rules based on affirmative showing/$ Record Only DA 95-1641 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) B&P PCS, Inc. ) ) and ) ) R&S PCS, Inc. ) ) Requests for Waiver of ) Section 24.720(f) of the ) Commission's Broadband) PCS Rules ) ORDER By the Chief, Auctions Division, Wireless Telecommunications Bureau: Adopted: July 26, 1995 Released: I. INTRODUCTION 1. On July 21, 1995, B&P PCS, Inc. filed a request for a de minimis waiver of Section 24.720(f) of the Commission's rules. B&P is a potential applicant for the broadband PAS C Block auction, whose affiliates are BET Holdings, Inc. ("BHI") and Mile Hi Cable Partners, L.P. ("Mile Hi"). On July 25, 1995, R & S PCS, Inc., a potential applicant for the broadband PCS C Block auction with identical affiliates, filed an identical waiver request. As both entities are wholly-owned by Robert L. Johnson, they are referred to collectively as "B&P/R&S." 2. Section 24.720(f) of the Commission's Rules provides that for determining compliance with the entrepreneurs' block eligibility requirements and small business definition, gross revenues includes all income received as evidenced by audited financial statements for the relevant number of calendar years preceding January 1, 1994, or, if audited financial statements were not prepared on a calendar-year basis, for the most recently completed fiscal years preceding the filing of the applicant's short-form application. In the Sixth Report and Order, the Commission noted that the distinction between the fiscal and calendar years was made when the broadband PCS applications for the C Block auction were to be filed in early 1995, when audited calendar year 1994 financial statements for most firms were not yet available and when it was unlikely that there would be a substantial difference between calendar and fiscal years for accounting purposes. The Commission indicated that, pursuant to delegated authority, the Wireless Telecommunications Bureau could resolve the waiver requests (filed pursuant to Section 24.419) of C Block applicants that argue that the distinction presents an undue hardship on the basis of the company's particular accounting practices. 3. B&P/R&S request a waiver to consider BHI's financial statements for fiscal years 1991, 1992 and 1993 in determining B&P's eligibility as a small business. B&P/R&S represent that a waiver will enable them to aggregate BHI's gross revenues, as reported on a fiscal-year basis, with the 1991, 1992, and 1993 calendar-year gross revenues of Mile Hi. In the alternative, B&P/R&S request a waiver to aggregate BHI's estimated calendar-year gross revenues for 1991, 1992 and 1993, with Mile Hi's calendar-year figures in those years to determine both B&P's and R&S's eligibility and bidding status. II. DISCUSSION 4. Section 24.419 of the Commission's rules provides that the Commission may grant a waiver of the PCS rules based on an affirmative showing: (i) that the underlying purpose of the rule will not be served, or would be frustrated, by its application in a particular case, and that grant of the waiver is otherwise in the public interest; or (ii) that the unique facts and circumstances of a particular case render application of the rule inequitable, unduly burdensome or otherwise contrary to the public interest. Under the rule, applicants must also show the lack of a reasonable alternative. We find that B&P/R&S have shown good cause to warrant a waiver of Section 24.720(f) to consider BHI's financial statements on a fiscal-year basis. Without such a waiver, each may be disqualified from participating in the C Block auction simply because one of their affiliates, BHI, accounts for its revenues on a fiscal year that concludes on July 31 and, due to the recent changes in the Commission's rules, would have to consider the relevant years for aggregating BHI's revenues 1992, 1993 and 1994. Strict application of the rule to B&P/R&S would create an anomaly because a similarly situated company whose affiliates prepared their financial statements on a calendar-year basis would have to aggregate the revenues for 1991, 1992 and 1993. Thus, the rule may have the unintended effect of excluding B&P/R&S from the auction based simply on the choice of accounting method of their affiliate. This waiver will also serve the Commission's overall goal of affording small businesses a meaningful opportunity to participate in the competitive bidding process for spectrum-based services. III. CONCLUSION 5. Accordingly, IT IS ORDERED that, pursuant to Sections 0.331 and 24.419 of the Commission's rules, B&P PCS, Inc.'s request for waiver of Section 24.720(f) IS HEREBY GRANTED, to the extent it allows B&P to aggregate Mile Hi's calendar-year figures for 1991, 1992, and 1993 with BHI's fiscal-year figures for 1991, 1992 and 1993. 6. IT IS FURTHER ORDERED that, pursuant to Sections 0.331 and 24.419 of the Commission's rules, R&S PCS, Inc.'s request for waiver of Section 24.720(f) IS HEREBY GRANTED, to the extent it allows R&S to aggregate Mile Hi's calendar-year figures for 1991, 1992, and 1993 with BHI's fiscal-year figures for 1991, 1992 and 1993. FEDERAL COMMUNICATIONS COMMISSION Kathleen O'Brien Ham Chief, Auctions Division Wireless Telecommunications Bureau