********************* **************************** ******* NOTICE ********************* **************************** ******* This document was converted from WordPerfect or Word to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ********************* **************************** **************** January 19, 2001 J. Dominic Monahan, Esq. Luvaas, Cobb, Richards & Fraser, P.C. 777 High Street, Suite 300 Eugene, Oregon 97440-2787 Re: ROB ALLEN HAUSER Request for Refund of Upfront Payment For MX Group FM 130 in Closed Broadcast Auction No. 25 Dear Mr. Monahan: This letter is in response to your Request for Refund of Upfront Payment ("Request") filed April 20, 2000, on behalf of Mr. Rob Allen Hauser, the winning bidder in MX Group FM 130 in the Closed Broadcast Auction No. 25. For the reasons set forth below, we deny your Request. The Commission received three mutually exclusive long-form applications for construction permits for MX Group FM 130 FM Channel 249A at Pullman, Washington. Those applications were filed by Radio Palouse, Inc. ("Radio Palouse"), Lamonica Media, LLC ("Lamonica Media"), and Mr. Hauser. The Mass Media Bureau and the Wireless Telecommunications Bureau issued a Public Notice on July 9, 1999 announcing that these applicants would be eligible to participate in an auction to begin on September 28, 1999. The July 9th Public Notice stated that, in order to participate in the auction, all applicants would have to submit a FCC Form 175 (short-form application) by the deadline of August 20, 1999. The Broadcast First Report & Order stated that if only one acceptable short-form application was received for a particular construction permit, the auction would be cancelled for that construction permit. The July 9th Public Notice also stated that "if an applicant were to submit a short-form application but fail to timely tender an upfront payment, it would retain its place in the MX Group but, having purchased no bidding eligibility, would not be eligible to bid." It further stated that if " . . . two or more parties file short-form applications in their MX Group, but only one submits an upfront payment, mutual exclusivity would exist for auction purposes (since multiple short-form applications are tendered) and, in such case, the party making its upfront payment is not entitled to both a refund and the grant of a construction permit." In this case, short-form applications were submitted by Mr. Hauser, Radio Palouse, and Lamonica Media. Subsequently, the auction staff issued a Public Notice on September 3, 1999 accepting for filing Mr. Hauser's short-form application and listing as incomplete the short-form applications of Radio Palouse and Lamonica Media. The September 3rd Public Notice stated that applicants with incomplete short-form applications could become qualified to bid in the auction only if they made the required upfront payment by 6:00 p.m. on Monday September 13, 1999, and resubmitted complete applications by 5:30 p.m. on September 14, 1999. Radio Palouse did not resubmit its short-form application before the deadline. Lamonica Media did resubmit its short-form application before the deadline. Thus for MX Group FM 130, the Commission received two acceptable short-form applications, one from Mr. Hauser and the other from Lamonica Media. However, Lamonica Media failed to submit an upfront payment and therefore, Lamonica Media was not qualified to bid in the auction. In the first round of bidding for Auction No. 25, Mr. Hauser placed the minimum opening bid equal to his upfront payment ($25,000) on FM Channel 249A, Pullman, Washington. As the highest and only bidder in MX Group FM 130, Mr. Hauser was awarded the license. In his Request, Mr. Hauser argues that because he was the only qualified bidder for the construction permit for Channel 249A at Pullman, Washington, the Commission was precluded from assigning the permit through competitive bidding. Section 309(j) of the Communications Act requires the Commission to assign any initial license or construction permit through an auction when mutually exclusive short-form applications are accepted for filing. In other words, if the Commission has received more than one acceptable short-form application for the same license or construction permit, the statute requires that the Commission conduct an auction. The Commission received two acceptable, mutually exclusive short-form applications for a construction permit for channel 249A at Pullman, Washington: one from Mr. Hauser and one from Lamonica Media. In light of these competing short-form applications for the same license, the Commission was required to assign the license through an auction. The factual circumstances present in this case were clearly addressed in the July 9th Public Notice. Because both Mr. Hauser and Lamonica Media submitted acceptable short-form applications, mutual exclusivity existed, regardless of the fact that Lamonica Media did not purchase bidding eligibility by timely tendering an upfront payment. Mr. Hauser argues that a statement in the Broadcast MO&O supports his Request. Specifically, Mr. Hauser relies on the statement that the Commission would ". . .conduct competitive bidding for any broadcast permit only where competing applicants have submitted acceptable short-form applications for any broadcast permit and have been found qualified to bid." This statement is taken out of context. In the Broadcast MO&O, the Commission considered and rejected a suggestion to adopt a "post-auction" evidentiary procedure to determine whether a winning bidder was the sole qualified applicant and therefore entitled to a grant of license without remittance of its winning bid. In the context of rejecting this "post-auction" procedure, the Commission stated that because all prospective bidders were found qualified to bid before being allowed to participate in an auction it was unnecessary and redundant to adopt a "post-auction" procedure. In this sentence, the Commission was not addressing the determination of mutual exclusivity because mutual exclusivity is a "pre-auction" determination. Thus, the cited language is not useful in a discussion of mutual exclusivity, and does not alter the Commission's statutory obligation to use competitive bidding. Mr. Hauser's Request is an untimely attempt to revise the rules after the auction has been conducted. The July 9th Public Notice anticipated and clearly addressed the factual circumstances that developed for MX Group FM 130. All of the bidders in Auction No. 25, including Mr. Hauser, had notice of the auction procedures that would apply. Because acceptable, mutually exclusive short-form applications for FM Channel 249A at Pullman, Washington were filed, Mr. Hauser has failed to establish that a refund would be appropriate. Accordingly, IT IS ORDERED, that the Request for Refund of Upfront Payment filed by Rob Allen Hauser, IS DENIED. Sincerely, Margaret W. Wiener Chief, Auctions and Industry Analysis Division Wireless Telecommunications Bureau