******************************************************** 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. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of C & W SYSTEMS, LTD. Request for Waiver of Commission's Rules in Order to Provide 39 GHz Fixed Microwave Service at Various Locations in the United States ) ) ) ) ) ) ) FCC File No. 0000129660 ORDER Adopted: February 1, 2001 Released: February 5, 2001 By the Chief, Public Safety and Private Wireless Division, Wireless Telecommunications Bureau: I. INTRODUCTION 1. On May 26, 2000, C & W Systems, Ltd. (C & W) requested waiver of the Commission's Rules regarding the filing of exhibits with FCC Form 601 (long-form application) for authorization to provide 38.6 to 40.0 GHz (39 GHz) fixed microwave service. For the reasons discussed below, we grant a waiver of these rules and accept C & W's late submission of its exhibits. II. BACKGROUND 2. On May 8, 2000, the Commission's 39 GHz band auction (Auction No. 30) concluded. On May 10, 2000, the Wireless Telecommunications Bureau (Bureau) released a Public Notice that announced the winning bidders in Auction No. 30. All winning bidders were required to electronically file a complete long-form application no later than 6:00 p.m. Eastern Standard Time on May 24, 2000. In the Public Notice, the Bureau informed all winning bidders that incomplete or defective applications may be returned to the applicant. 3. For a long-form application to be deemed complete, all winning bidders must attach an exhibit (Exhibit A) that provides full and complete disclosure of all relevant ownership information. Winning bidders may provide some of the information required in Exhibit A by attaching a copy of their current FCC Form 602. A long-form application that does not include an Exhibit A is defective and subject to dismissal. The Commission's Rules require that winning bidders claiming small business status, and thus, eligibility for a bidding credit, attach an exhibit (Exhibit C) which demonstrates that average gross revenues for the preceding three years did not exceed the requisite eligibility thresholds, and another exhibit (Exhibit D) which lists and summarizes all agreements and other instruments pertaining to such status. A winning bidder who claims small business status and fails to include the requisite exhibits supporting the claim is deemed ineligible for the bidding credits and thus must pay the gross winning bid. 4. C & W, an applicant claiming status as a "very small business," was the winning bidder for authorizations to serve the following Basic Economic Areas (BEAs): BEA009 (channel block F), BEA011 (channel block B), BEA054 (channel block B), BEA068 (channel blocks A, B and D), BEA162 (channel block B), and BEA166 (channel block B). C & W did not attach any exhibits when it electronically filed its long-form application on May 13, 2000. C & W states that, on the day of the filing, the principals of C & W departed for Geneva, Switzerland for a May 15 to 19, 2000 International Telecommunication Union meeting, and remained in Europe until May 23, 2000. 5. On May 26, 2000, C & W manually and electronically filed a FCC Form 602, and also requested a waiver of the Commission's Rules regarding the timely filing of a complete long-form application, as well as a waiver of the Commission's Rules regarding the timely filing of a FCC Form 602. In the waiver request, the president of C & W states that, until her return from Europe, she did not realize that C & W was required to attach exhibits to the long-form application. On June 23, 2000, C & W amended the long-form application by submitting an Exhibit A and C. The Exhibit C listed average taxable income for the preceding three years, rather than average gross revenues. On June 26, 2000, C & W amended its long-form application again when it attached another Exhibit C, which listed the average gross revenues for the preceding three years, and an Exhibit D. The amended application C & W filed on June 23, 2000, was accepted for filing on June 28, 2000. III. DISCUSSION 6. The Commission may grant a waiver request if it is demonstrated that 1) the underlying purpose of the rule(s) would not be served or would be frustrated by application to the instant case, and grant of the requested waiver would be in the public interest; or 2) the "unique or unusual circumstances of the instant case" make application of the rules "inequitable, unduly burdensome or contrary to the public interest, or the applicant has no reasonable alternative." While we are not persuaded that C & W's arguments in its waiver request constitute sufficient grounds for the requested relief, we nonetheless will waive, on our own motion and for other reasons, the rules regarding the timely submission of the attached exhibits. 7. C & W makes no argument that application of the rules would be inconsistent with their underlying purpose. Indeed, it is clear in this particular case that applying the rule that all long-form applications must have an ownership disclosure exhibit upholds the rule's underlying purpose (i.e., to allow the Commission to determine the real party in interest, compliance with the rules prohibiting collusion and restricting foreign ownership). By the same token, we believe that the underlying purpose of the rules regarding Exhibits C and D (i.e., to allow the Commission to ensure that winning bidders claiming small business status qualify for such status) is upheld by application of those rules to this case. 8. As for the second waiver element, we do not believe that a scheduled trip to Europe constitutes an "unique or unusual circumstance." Furthermore, there is no evidence that, absent the trip to Europe, C & W would have been more thorough in its review of the Public Notice and thus more observant of the Commission's Rules that govern the filing of the long-form application and the attached exhibits. In this regard, C & W does not contend that the trip to Europe was the reason that it was unaware of the filing requirements. Specifically, the president of C & W states that she did not realize, until her return from Europe, that C & W's long-form application required exhibits on ownership, average gross revenues for the preceding three years, and agreements and other instruments in support of its claimed very small business status. We conclude that ignorance of the Commission's Rules is no excuse for noncompliance. It is particularly inexcusable in this case because the May 10, 2000 Public Notice, which C & W received on May 12, 2000, presented winning bidders with a detailed explanation of the Commission's Rules regarding the filing of the long-form application and the attached exhibits. In addition, we are concerned that a grant of the requested waiver for the reasons given by C & W could encourage winning bidders in future Commission spectrum auctions to engage in similar conduct. 9. Although, as noted, we reject the arguments that C & W made in its waiver request, we will, nevertheless, waive the rules regarding the timely submission of a long-form application ownership disclosure exhibit, very small business eligibility exhibits, and FCC Form 602. Our decision to grant C & W's waiver request is partly based on our recognition that C & W's failure to timely submit the exhibits as well as a FCC Form 602 was a post-auction delinquency that did not disrupt the auction process nor undermine the Commission's policy of facilitating rapid implementation of reliable communications service to the public. Under the circumstances presented, we believe that grant of a waiver here would further the public interest and expedite the licensing of and provision of service in the BEAs and 39 GHz band spectrum covered by the subject application. We nonetheless note that our decision to waive these rules in this instance should not suggest that such waivers will be routine. On the contrary, in the future, absent extraordinary circumstances, we will not allow winning bidders to submit untimely exhibits to long-form applications. Further, in instances where the untimely submitted exhibits disclose ownership information, the application will be dismissed immediately in accordance with Section 1.2107(c) of the Commission's Rules. IV. ORDERING CLAUSES 10. Accordingly, IT IS ORDERED pursuant to Sections 4(i) and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303(r), and Section 1.925(b)(3) of the Commission's Rules, 47 C.F.R.  1.925(b)(3), that the request to waive Sections 1.919, 1.2107(e), 1.2110(i), and 1.2112 of the Commission's Rules, 47 C.F.R.  1.919, 1.2107(e), 1.2110(i), 1.2112, filed by C & W Systems, Ltd. on May 26, 2000 IS DENIED. 11. IT IS FURTHER ORDERED pursuant to Sections 4(i) and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303(r), and Section 1.925(b)(3) of the Commission's Rules, 47 C.F.R.  1.925(b)(3), that on our motion a waiver of Sections 1.919, 1.2107(e), 1.2110(i), and 1.2112 of the Commission's Rules, 47 C.F.R.  1.919, 1.2107(e), 1.2110(i), 1.2112, IS GRANTED. 12. This action is taken under delegated authority pursuant to Sections 0.131 and 0.331 of the Commission's Rules, 47 C.F.R.  0.131, 0.331. FEDERAL COMMUNICATIONS COMMISSION D'wana R. Terry Chief, Public Safety and Private Wireless Division Wireless Telecommunications Bureau