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

In the Matter of                )
                                )  File No. 00138-CW-L-96
Longstreet Communications International, Inc.)              
Request for Waiver of           )            
Section 24.711(a)(2) of the     )            
Commission's Rules Regarding    )            
Market No. B012                 )


                             ORDER


   Adopted: February 4, 1997            Released: February 4, 1997  

By the Chief, Wireless Telecommunications Bureau:

                 I.  INTRODUCTION AND BACKGROUND
     1.  By this Order, we resolve a request for waiver of Section 24.711(a)(2) of the
Commission's rules filed by Longstreet Communication International, Inc. (LCI), the winning
bidder in Market No. 012 in Altoona, Pennsylvania in the Broadband C Block Personal
Communications Services (PCS).  On September 17, 1996, the Wireless Telecommunications
Bureau released a Public Notice conditionally granting various applications for BTA licenses in
the C Block, including those filed by LCI.  In that Public Notice, applicants were notified that
grant of each license is conditioned on payment within five business days of the remaining
portion of the ten percent down payment due on the license.  Accordingly, the second down
payment was due on September 24, 1996.  

     2.  The down payment amount owed by LCI was $110,925.00.  However, LCI was
unaware of the release of the Public Notice and thus missed the payment deadline.  On
September 26, the FCC contacted LCI and informed one of its employees that it had missed the
payment deadline.  LCI filed a request for waiver of the second down payment deadline and
submitted the balance of $110,925.00 on October 3, 1996.

     3.  On October 18, 1996, the Wireless Telecommunications Bureau and the Mass Media
Bureau released a joint Public Notice seeking comment on several other down payment waiver
requests by C Block, 900 MHz Specialized Mobile Radio (SMR), and Multipoint Distribution
System (MDS) applicants.  Most of the waiver applicants filed comments supporting the grant
of waivers under the circumstances described.  However, four out of 27 commenters urged the
Commission to deny the requests on the grounds of fairness and on the basis that such defaults
are evidence of bad faith.

                         II.  DISCUSSION
     4.  The procedure for the submission of winning bid down payments is set forth in Section
24.711(a)(2) of the Commission's rules:

     Each winning bidder shall make a down payment equal to ten percent of its winning
     bid (less applicable bidding credits); a winning bidder shall bring its total amount on
     deposit with the Commission (including upfront payment) to five percent of its net
     winning bid within five business days after the auction closes, and the remainder of
     the down payment (five percent) shall be paid within five business days after the
     application required by  24.809(b) is granted.

     5.  LCI argues that it failed to send its remaining down payment due to a
"miscommunication between the FCC payment processing and [its] management on proper
process of submitting payment."  LCI contends that during the week of September 9, the FCC
contacted Ms. Sheila Chen of LCI and informed her that the Public Notice would be released the
following week.  Ms. Chen also contends that the FCC informed her that a package with
payment information would be mailed to LCI.  According to Ms. Chen, while she was out of
town, she informed LCI staff to anticipate a package from the FCC as well as a Public Notice
regarding payment information.  LCI argues that it did not receive a package, nor did it receive
the Public Notice regarding payment information.  On September 26, the FCC informed LCI that
the Public Notice had been released and LCI had missed the payment deadline.  Accordingly,
LCI took action to rectify the situation and payment was tendered on October 3, 1996.

     6.  To receive a waiver of the down payment rule, a waiver request must be made which
demonstrates either "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 "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."  As the Commission has previously noted, the integrity and functioning of the auction
process is dependent on having payment obligations on winning bids promptly met.  Timeliness
of such payments is a necessary indication to the Commission that the winning bidder is
financially able to meet its obligations on the license and intends to use the license for the
provision of services to the public.  In the Second Report and Order in the competitive bidding
docket, the Commission noted that this requirement would also deter defaults by discouraging
insincere or financially unqualified bidders from "shopping" a winning bid in order to obtain
financing for a down payment. 

     7.  We believe that LCI has presented sufficient facts to meet the standard for a partial
waiver of the down payment rule.  The record indicates that prior to the second down payment,
LCI made all previously required auction payments on time and in full.  In addition, LCI paid the
second down payment as soon as it realized its error.  There is no indication in the record that the
payment delinquency was part of a deliberate effort by LCI to delay payment.  We note that upon
receiving notice from the Commission that its account was delinquent, LCI paid the balance due. 
Thus, LCI's actions demonstrate that, but for the miscommunication, it would have been able to
meet its payment obligations on time.  

     8.  Under the circumstances presented by LCI, we conclude that the public interest would
not be served by rigid enforcement of the second down payment deadline, which would result in
cancellation of LCI's conditional license and imposition of a substantial default penalty.  In
reaching this conclusion, we give considerable weight to the applicant's prior record of
compliance, its good faith efforts to make payment on time, and its prompt action to remedy the
delinquency.  These facts indicate that LCI was not a financially unqualified applicant attempting
to "shop" its licenses to investors.  We also recognize that unlike the upfront and first down
payments, the second down payment does not affect the timing of the auction or the
Commission's review of the applicant's qualifications.  Thus, while we have consistently denied
requests to waive these earlier payment deadlines, we believe that once the first down payment
is made and a license conditionally granted, some flexibility may be appropriate in addressing a
minor delinquency with respect to the final down payment.

     9.  We do not believe that LCI is entitled to a complete waiver of the default rules,
however.  LCI admits that the delinquency occurred because it was unaware of the Public Notice
setting the payment deadline.  Such an error is the applicant's responsibility, and does not excuse
its failure to make a timely payment.  Under the circumstances, we conclude that LCI should be
subject to a late fee of five percent of the $110,925.00 that was not timely paid.  This amount is
commercially reasonable and serves to underscore the importance of making timely payment of
all auction payments.  In addition, for future auctions, we intend to provide applicants with direct
notice of the exact amount owed for each applicant's down payment.  Therefore, we will not
entertain future waiver requests for lack of payment based on alleged "communication errors." 

     10.  For the reasons stated above, the request for waiver filed by Longstreet
Communication International, Inc. IS HEREBY GRANTED IN PART, subject to a five  percent
late fee, as specified above.  Such late fee of $5,546.25 must be paid within five business days
after the release of this order.  This action is taken under delegated authority pursuant to Section
0.331 of the Commission's rules.


                    



                    Michele C. Farquhar
                    Chief, Wireless Telecommunications Bureau