$//PN,Grace period for IVDS auction licensees,DA 95-1617//$
$/1.2110 Designated entities/$
                                                 Released:  June 26, 1995



            Wireless Telecommunications Bureau Staff Clarifies 
             "Grace Period" Rule for IVDS "Auction" Licensees 
                      Paying by Installment Payments 


Section 1.2110(e) of the Commission's auction rules, 47 C.F.R.  1.2110(e), provides that in
the event a licensee defaults on its installment payment obligation, the FCC may cancel the
license.  In the Second Report and Order in PP Docket No. 93-253, 9 FCC Rcd 2348, 
2391  240 (1994), the Commission stated that it would "consider providing a three to six
month grace period before a delinquent payor's license cancels."   Recently, the Wireless
Telecommunications Bureau staff clarified this payment rule in the context of Personal 
Communications Service (PCS) auctions.  See FCC Public Notice, "Wireless
Telecommunications Bureau Staff Responds to Questions About the Broadband PCS C Block
Auction," Mimeo 54270, released June 8, 1995.  In response to inquiries, the staff now
clarifies that this interpretation applies to Interactive Video and Data Service (IVDS) licensees
as well.  Interested parties should understand that this advice and rule interpretation constitute
informal staff opinion, not an official Commission decision or ruling.

IVDS licensees that elect to pay for their licenses in installments will have their licenses
conditioned upon full and timely performance of all installment payment obligations.  The
Commission's rules provide that a licensee will be deemed in default on its installment
payments if it is more than 90 days delinquent in making a payment to the government. 

Any time prior to the expiration of the 90 days following the payment due date, a licensee
may request a grace period.  Generally, where a licensee submits a showing, supported by an
affidavit, that it is in bankruptcy, foreclosure or financial distress, there will be a presumption
in favor of granting a three-month grace period (commencing ninety days after the missed
payment date).  Any request for a grace period based on financial distress must state with
particularity the grounds for asserting such financial distress.  Such grounds may include the
existence of payment defaults on other third party debt, or the general inability to pay debts 
as they become due in the ordinary course of business.  If no grace period is granted, then the
FCC may declare a licensee in default and cancel the license any time after 90 days from the
missed payment.

Where the Commission grants a grace period and the default is not cured at the conclusion of
such a grace period, the FCC may cancel the license.  However, the FCC may in its discretion
extend or grant additional grace periods where circumstances warrant. 

The first IVDS installment payment is due June 30, 1995.  IVDS licensees not making their
first installment payment with the Commission by September 28, 1995, will be deemed to be
in default.  Requests for the additional three-month grace period should contain the detailed
justification described above, and be sent to the following address:  Federal Communications
Commission, Wireless Telecommunications Bureau, Private Wireless Division, 2025 M Street,
N.W., Room 8010, Washington, D.C.  20554, Attention:  Stop Code 2000-F. 

    Wireless Telecommunications Bureau contact:  Joy Alford at 418-0680
                                                                   

                                    - FCC-