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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 ) ) Tel-Com Wireless Cable TV Corporation, ) File No. BMDS960510HAS BTA No. B189 ) Multipoint Distribution Service ) ORDER Adopted: May 23, 1997 Released: May 23, 1997 By the Chief, Video Services Division: 1. By this action, we set forth the default payment obligations and procedures for Tel- Com Wireless Cable TV Corporation (Tel-Com), resulting from its failure to remit the required down payment on an authorization for which it was the winning bidder in the Multipoint Distribution Service (MDS) auction. Pursuant to the Commission's rules, Tel-Com is in default on its down payment obligations for the Hickory, North Carolina Basic Trading Area (BTA) B189 authorization, and is subject to an initial default payment in the amount of $55,711.81. 2. Background. On March 28, 1996, the Commission concluded the MDS auction. Tel- Com was the winning bidder on three BTA authorizations in the auction. Tel-Com qualified as a small business entity and was therefore eligible for reduced upfront payments, a bidding credit and an installment payment plan. On March 29, 1996, the Commission announced by Public Notice that, pursuant to Section 21.955 of the Commission's rules, 47 C.F.R.  21.955, winning bidders that qualified as small businesses would be required to submit, within five business days, sufficient funds to bring their total deposits with the Commission to ten percent of the sum of their winning bids, less the applicable fifteen percent bidding credit. Consequently, pursuant to Section 21.960(b)(1), on April 5, 1996, Tel-Com submitted initial down payments for the authorizations in the amount of $239,512 bringing its total amount on deposit with the Commission for these three authorizations, including its upfront payments of $65,120, to $304,632. 3. On June 28, 1996, the Mass Media Bureau announced by Public Notice that the three BTA authorizations were ready to be issued and that Tel-Com was required to bring its total amount on deposit with the Commission up to twenty percent of its net winning bids by July 8, 1996. On July 8, 1996, Tel-Com made a wire transfer payment of $118,936, bringing its total amount on deposit to $423,568. By letter dated September 6, 1996, Tel-Com indicated that it "wishes to default on its bid for the BTA 189" (Hickory, North Carolina), recognizing that it "will be subject to a penalty for default." 4. Discussion. Under the Commission's rules, an applicant who fails to remit the required down payment for an authorization for which it was the winning bidder within five business days after the Commission declares that it is prepared to issue that applicant's BTA authorization shall be deemed to be in default on that authorization. The Commission's rules provide that under such circumstances, the applicant's long-form application must be dismissed. Also, a defaulting bidder is subject to certain default payment obligations. Specifically, such bidder is required to pay the difference between the amount bid and the amount of the winning bid the next time the authorization is offered by the Commission (so long as the subsequent winning bid is less than the amount bid), plus an additional payment equal to three percent of the defaulter's bid or the subsequent winning bid, whichever is less. In the event that an authorization is reauctioned for an amount greater than or equal to the defaulted bid, the total default payment is equal to three percent of the defaulted bid. In the event that the default payment cannot be determined (i.e., because an authorization has not yet been reauctioned), we will assess an initial default payment of three percent of the defaulted bid price until the final amount of the default payment can be determined. Finally, the Commission's payment rules provide that withdrawal and default payments "will be deducted from any upfront payments or down payments that the withdrawing, defaulting or disqualified bidder has deposited with the Commission." 5. Tel-Com failed to remit the required payment for an authorization for which it was the successful high bidder in the MDS auction. As a result, it is in default, and is subject to the default payment provisions specified in Sections 21.959 and 1.2104(g) of the Commission's rules. Because the Hickory, North Carolina BTA has yet to be reauctioned and we cannot yet determine the final amount of the default payment, we will assess a deposit toward the default payment ultimately owed by Tel-Com. Three percent of Tel-Com's net bid for the Hickory BTA is $55,711.81, and pursuant to Section 21.959(a), this initial default payment will be deducted from the $185,706.05 that Tel-Com has deposited with the Commission for the Hickory, North Carolina BTA. Consequently, $129,994.24 remains on deposit with the Commission for the Hickory, North Carolina BTA and will be applied toward the additional default payment due, if any, following the reauctioning of the Hickory BTA, and toward future installment payments on Tel- Com's remaining BTAs. If, following the reauction of the authorization for Hickory, North Carolina, an additional default payment is required, a second Order will assess the additional default payment due. We note that if the authorization for the Hickory BTA is reauctioned for an amount equal to or greater than Tel-Com's bid for the authorization, the total default payment due will be three percent of Tel-Com's defaulted bid. 47 C.F.R.  21.959(a)(2). See also 47 C.F.R.  1.2104(g). Consequently, a three percent payment is the minimum amount which Tel- Com could owe under even the most favorable circumstances. ORDERING CLAUSES 6. It is ORDERED That, Tel-Com is assessed an initial default payment of $55,711.81. 7. It is FURTHER ORDERED That, if an additional payment is required once the Hickory, North Carolina BTA is reauctioned and the actual default payment is determined, Tel- Com will be subject to the balance as specified in Section 21.959 of the Commission's rules, 47 C.F.R.  21.959. 8. It is FURTHER ORDERED That Tel-Com's Statement of Intention filed for the Hickory BTA, File Number BMDS960510HAS, IS HEREBY DISMISSED pursuant to 47 C.F.R.  21.959(c). 9. This Order shall be sent to the applicant by certified mail, return receipt requested. This action is taken pursuant to delegated authority, 47 C.F.R.  0.283. FEDERAL COMMUNICATIONS COMMISSION Barbara A. Kreisman Chief, Video Services Division Mass Media Bureau