Separate Statement
                                    of
                       Commissioner James H. Quello



                                         
Re:   Amendment of the Commission's Rules Regarding Installment Payment Financing for 
C Block Personal Communications Service (PCS) Licensees, WT Docket No. 97-82.



    I support the multi-option approach that we adopt in this Second Report and Order and
Further Notice of Proposed Rule Making.  We provide some limited relief for those C-Block
licensees that find themselves in financial distress.  My goal throughout this lengthy and complex
process has been to protect the integrity of our rules, including the auction processes, while
providing some "breathing room" for those licensees that were in a cash flow crunch.

    I  originally proposed a much simpler plan, i.e., to delay repayments for a period of
time.  That approach gathered no support -- here at the Federal Communications Commission,
anyway.  The Congressional leadership supported my position.  I  favored  a plan that would
have allowed our licensees to seek additional financing in the private markets by suspending the
installment payments of principle and interest for some period of time.  I believed that this is
within our existing discretion, would be minimally intrusive, and comply with Congressional
intent.  

    The Congressional leadership of both the House and Senate contacted the FCC to express
its collective opinion that we treat our licensees equitably by considering a variety of plans but
also reminded this Commission of the importance of protecting the integrity of the auction
process.  I shared these Congressional concerns.
   
    I am acutely aware of the benefits in efficiency that licensing by auctions has brought to
our processes.  I was serving as Chairman when Congress decided to entrust the FCC with
auctioning authority.  The responsibility to translate this authority into practice by writing the
auction rules was handled capably by the FCC under the subsequent leadership of Chairman
Hundt.

    I  fervently believe that all parties  --  applicants, auction winners and losers, licensees
and this Commission -- should always "play by the existing rules".  This is particularly true in
the context of auctions where the applicants themselves make the business judgments that
determine success  or  failure.  It  could be considered the epitome of bureaucratic irrespon-
sibility to change the rules after the fact.  This would subject the rewritten rules to challenge in
the courts.  Nevertheless, our rules should be and are flexible enough to accommodate
unforeseen circumstances.  

    For these reasons, I worked with the other Commissioners in reviewing many detailed
and diverse plans over the course of many weeks to determine how to structure a plan for those
licensees in financial distress.  I entered into this process with the caveat of doing so only if we
could formulate a plan within our existing rules.  I did not favor re-writing our general rules to
benefit any particular class of licensees.  Additionally, I did not favor having the government
re-structure our licensees' debt involuntarily.  Anything that we did had to apply generally to
all similarly situated licensees and to take into account the disappointed bidders who were not
successful in the C-Block auction.

    Accordingly, I could not support a mandatory reauction.  I am reminded that this
Commission resisted the pressure to intervene during the conduct of the C-Block auction when
some critics opined that the bids were "too high" or "out of line".  I  believed that the Chairman
spoke for us all when he stated that the Commission would not interfere with private sector
decision making regarding monetary value of spectrum licenses and that all parties were aware
of and would be held to the full measure of our rules.  Furthermore, the overwhelming majority
(over one hundred entities out of the approximately one hundred thirty-four licensees) asked us
to simply enforce the existing rules.

    Because this Commission acts by majority vote of the Commissioners, I have worked
with my fellow Commissioners to craft a balanced and fair plan that provides options.  I stress
that these are options; they are not mandatory.  If any one of the four of us would have had our
own way, this item would be radically different.  The wisdom of the administrative process,
however, is that we must arrive at a joint decision.  That we have done.

    Is the multi-option plan "perfect"?  No, but it is fair and balanced.  We cannot let our
desire for the perfect be the enemy of the good.  Will these options ensure success by any
licensee?  No, but that is not our role.  Our mission is to provide the opportunity for competitors
to serve the communications needs of the American public.  Therefore, I can and do support this
multi-option plan for installment payment financing for C-Block PCS licensees and concur in the
separate statements of Commissioners Chong and Ness.