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Final Withdrawal Payment Letter for East Kentucky Network

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Released: April 3, 2012
Federal Communications Commission
Washington, D.C. 20554
April 3, 2012

DA 12-519

Via Certified Mail, Return Receipt Requested

Mr. Michael Huffman
Chief Financial Officer
East Kentucky Network, LLC
101 Technology Drive
Ivel, KY 41642

Re: Final Bid Withdrawal Payment on Auction 73 License WY-CMA681-B

DO NOT DISCARD THIS IMPORTANT NOTICE

OF A DEMAND FOR PAYMENT

OF A DEBT OWED THE UNITED STATES AND ORDER OF PAYMENT

Dear Mr. Huffman:
This Order provides notice and demands payment of a debt owed to the United States based on
East Kentucky Network, LLC’s (“East Kentucky”) withdrawal of a provisionally winning bid placed
during the course of Auction 73.
East Kentucky Network, LLC withdrew a provisionally winning bid during Auction 73 for a 700
MHz Band license in Lee, Virginia (WY-CMA681-B). Thus, pursuant to the Commission’s rules,1 East
Kentucky owes a bid withdrawal payment, which is a debt owed to the United States.2 In 2008, the
Commission assessed East Kentucky an interim bid withdrawal payment of $143,400.00 from the
monies it had on deposit.3 A new license for the same spectrum was offered in a subsequent auction of
700 MHz Band licenses (Auction 92), and because it received a winning bid,4 the Commission is now
able to calculate East Kentucky’s final bid withdrawal obligation with respect to its withdrawn bid in
Auction 73.5



1 See 47 C.F.R. § 1.2104(g)(1).
2 See 31 U.S.C. § 3701(b)(1).
3 See Auction of 700 MHz Band Licenses Closes; Winning Bidders Announced for Auction 73, Public Notice, 23
FCC Rcd 4572, 4627, 4637-38 (WTB 2008).
4 See Auction of 700 MHz Band Licenses Closes, Winning Bidders Announced for Auction 92, Public Notice, 26
FCC Rcd 10,494, 10,503 (WTB 2011).
5 See 47 C.F.R. § 1.2104(g)(1).

East Kentucky Network, LLC

DA 12-519

April 3, 2012
Page 2
Under the Commission’s rules, a bidder that withdraws a provisionally winning bid during the
course of an auction is subject to a bid withdrawal payment equal to the difference between the amount
of the withdrawn bid and the amount of the subsequent winning bid.6 Under the rule in effect at the time
of Auction 73, if a high bid is withdrawn on a license that remains unsold at the close of the auction, the
withdrawing bidder is required to make an interim payment equal to ten percent (10%) of the net amount
of the withdrawn bid.7 This payment amount is deducted from any upfront payments or down payments
deposited for the withdrawing bidder’s account with the Commission.8 If, in a subsequent auction, that
license receives a winning bid in an amount equal to or greater than the withdrawn bid amount, then no
final bid withdrawal payment is assessed, and, upon appropriate request, the Commission refunds the
interim ten percent (10%) payment.9 If, in a subsequent auction, the winning bid for that license is less
than the bidder’s withdrawn amount, then the bidder is required to make a final bid withdrawal payment
equal to either the difference between the bidder’s net withdrawn bid and the subsequent net winning
bid, or the difference between the bidder’s gross withdrawn bid and the subsequent gross winning bid,
whichever is less.10
As shown in Attachment A, in accordance with section 1.2104(g)(1) of the Commission’s
rules,11 we have completed the final bid withdrawal payment calculation and, after applying any interim
bid withdrawal payment or monies East Kentucky has on deposit, East Kentucky owes an outstanding
balance of $1,147,600.00. This debt to the United States is payable in full and without further demand
within 30 days of the date of this Order in accordance with the Notice Information provided below and
Payment Instructions in Attachment B.

Important Notice Information

The following provides notification of procedures and information required by the Debt
Collection Improvement Act of 1996 (“DCIA”).12 The outstanding balance shown in Attachment A is a
debt East Kentucky owes to the United States. It is payable in full and without further demand, and
payment must be received no later than the payment due date, which is 30 days from the date of this
Order (“Due Date”).13 Any portion of the debt unpaid at the end of the Due Date will be considered
delinquent and administrative charges (incurred for processing and handling delinquent debts),14
interest,15 and penalties16 will accrue beginning from that date. Interest accrues at a minimum annual


6 Id.
7 Id.; See Auction of 700 MHz Band Licenses Scheduled for January 24, 2008, Notice and Filing Requirements,
Minimum Opening Bids, Reserve Prices, Upfront Payments, and Other Procedures for Auctions 73 and 76, Public
Notice,
22 FCC Rcd 18,141, 18,211 ¶¶ 267-68 (WTB 2007).
8 See 47 C.F.R. § § 1.2104(g)(1), 1.2106(d) and (e).
9 See 47 C.F.R. § 1.2104(g)(1).
10 Id.
11 Id.
12 Public Law 104-134, 110 Stat. 1321, 1358 (Apr. 26, 1996) codified in relevant part at 31 U.S.C. §§ 3716
(administrative offset) and 3717 (interest and penalty on claims); see also 47 C.F.R. §§ 1.1911, 1.1912, and 1.1940.
13 As noted at Attachment B, if the 30th day falls on a non-business day, payment must be received on the next
business day.
14 31 U.S.C § 3717(e)(1); 47 C.F.R. § 1.1940(c).
15 31 U.S.C. § 3717(b); 47 C.F.R. § 1.1940(b).

East Kentucky Network, LLC

DA 12-519

April 3, 2012
Page 3
rate established annually by the United States Treasury in accordance with 31 U.S.C. § 3717.17 A
penalty of six percent (6%) accrues on any portion of the debt that remains unpaid for more than 90 days
from the Due Date.18 However, the Commission will waive payment of the accrued interest, if the full
amount of the debt is paid within 30 days of the Due Date.19 In addition to these charges, the
Commission may initiate administrative offset20 and it may refer the delinquent debt to the United States
Treasury or the Department of Justice (“DOJ”) for further collection action.21 The United States
Treasury will impose an additional administrative collection charge,22 and it may also commence
administrative offset.23 An additional surcharge may be imposed, if DOJ initiates judicial action to
recover judgment.24 Furthermore, any portion of the debt that is unpaid after the Due Date is a
delinquent debt, which will trigger application of the Commission’s red light procedures at 47 C.F.R. §
1.1910.

Ordering Clauses

Accordingly, IT IS ORDERED that, pursuant to sections 4(i) and 309 of the Communications Act
of 1934 as amended, 47 U.S.C. §§ 154(i), 309, and section 1.2104(g)(1) of the Commission’s rules, 47
C.F.R. § 1.2104(g)(1), East Kentucky Network, LLC is ASSESSED a final bid withdrawal payment as
computed in Attachment A.
IT IS FURTHER ORDERED that, pursuant to sections 1.2104 and 1.2106 of the Commission’s
rules, 47 C.F.R. §§ 1.2104 and 1.2106, East Kentucky Network, LLC’s interim bid withdrawal payment or
funds on deposit will be applied towards the sum of the final bid withdrawal payment.
IT IS FURTHER ORDERED that East Kentucky Network, LLC’s debt of $1,147,600.00 is
payable in full and without further demand, and it must be paid within 30 days of the date of this Order
(the Due Date), in accordance with the payment instructions in Attachment B, and any portion of the
debt unpaid after the Due Date is delinquent, and under 31 U.S.C. § 3717, administrative charges,
interest, and penalties will accrue.





16 31 U.S.C. § 3717(e); 47 C.F.R. § 1.1940(d).
17 47 C.F.R. § 1.1940(b).
18 31 U.S.C. § 3717(e)(2); 47 C.F.R. § 1.1940(d).
19 31 U.S.C. § 3717(d); 47 C.F.R. § 1.1940(g).
20 47 C.F.R. § 1.1912. Under this provision, the Commission may refer the debt to the United States Treasury for
centralized administrative offset whereby, subject to certain exceptions, money otherwise payable to the debtor by
the United States government may be used to satisfy the debt. In addition, “unless otherwise prohibited by law,”
the Commission may conduct non-centralized, ad hoc case-by-case offsets when centralized offset is unavailable or
inappropriate. 47 C.F.R. § 1.1912(c).
21 31 U.S.C. §§ 3711(g); 3716; 28 U.S.C. § 3001, et seq.; 47 C.F.R. § 1.1912. Transfer may be made without
further notice at any time after the Due Date.
22 31 U.S.C. § 3717(e); 31 C.F.R. § 285.12(j).
23 31 U.S.C. § 3716; 47 C.F.R. § 1.1912(b) (mandatory centralized administrative offset).
24 28 U.S.C. § 3011.

East Kentucky Network, LLC

DA 12-519

April 3, 2012
Page 4
IT IS FURTHER ORDERED that this Order and a FCC Remittance Advice Form (FCC Form
159, Version 2/03) shall be sent to East Kentucky Network, LLC and its representatives by certified mail,
return receipt requested. This action is taken pursuant to authority delegated by section 0.331 of the
Commission’s rules, 47 C.F.R. § 0.331.
Sincerely,
Gary D. Michaels
Deputy Chief, Auctions and Spectrum Access Division
Wireless Telecommunications Bureau
Attachments

East Kentucky Network, LLC

DA 12-519

April 3, 2012
Page 5

ATTACHMENT A

Multi-Auction Bid Withdrawal Payment Report

License

Withdrawn

Withdrawn Net Re-auction Re-auction Net

Difference

Final

Number

Gross Bid

Bid Auction

Gross Bid

Bid

Between

Withdrawal

Frequency

Auction No. 73

No. 73

Auction No. Auction No. 92 Withdrawn Bid

Payment

Block

92

Amount and

Final Bid

Amount in

Subsequent

Auction

WY-CMA681-B
$1,434,000.00
$1,434,000.00
$143,000.00
$107,250.00
$1,291,000.00
$1,291,000.00
Final Bid Withdrawal Payment
$1,291,000.00
Less Total of Interim Withdrawal
Payment and Amounts on Deposit
$143,400.00

Outstanding Balance Due on
Final Withdrawal Payment

$1,147,600.00

East Kentucky Network, LLC

DA 12-519

April 3, 2012
Page 6

ATTACHMENT B

Payment Instructions

The following information is being provided to assist you in making your payment.
All payments must be made in U.S. currency in the form of a wire transfer. No personal checks,
cashier’s checks or other forms of payment will be accepted. Wire transfer payments must be received
by 6:00 PM Eastern Time, no later than thirty days from the date of this ORDER; however, if the 30th
day falls on a non-business day, e.g., Saturday, Sunday or holiday, it is due the next business day.
Applicants must allow sufficient time for the wire transfer to be initiated and for the transmission to be
completed prior to the deadline. To submit funds by wire, applicants will need the following information
to properly effect the transmittal:
ABA Routing Number: 021030004
Receiving Bank:

TREAS NYC

33 Liberty Street
New York, NY 10045
ACCOUNT NAME:

FCC

ACCOUNT NUMBER: 27000001
OBI Field: (Skip one space between each information item) “AUCTIONPAY”
APPLICANT FRN: (same as FCC Form 159, block 21)
PAYMENT TYPE CODE: (same as FCC Form 159, block 24A: “

AWLD

”)
FCC CODE 1: (same as FCC Form 159, Block 28A: (“73”)
PAYOR NAME: (same as FCC Form 159, Block 2)
LOCKBOX NO.: #979088
Please fax a completed remittance advice (Form 159) to U.S. Bank, St. Louis, Missouri at (314) 418-
4232 at least one hour before initiating the wire transfer (but on the same business day).
For questions regarding the submission of payment, and the FCC Form 159, contact Gail Glasser, Office
of the Managing Director, Financial Operations, Auctions Accounting Group, at (202) 418-0578.

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