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Sd'WASHINGTON, D.C. 20554`(#k DA 98947 ă  1 yx dddhy  aE@#5\  P6QАP#News media information 202/4180500 FaxOnDemand 202/4182830 Internet: http://www.fcc.gov ftp.fcc.gov  X4#XP\  P6QXP#`(# Released: May 18, 1998 ă  XK 4 FREQUENTLY ASKED QUESTIONS REGARDING THE ORDER ON XRECONSIDERATION OF THE SECOND REPORT AND ORDER CONCERNING vTHE BROADBAND PERSONAL COMMUNICATIONS SERVICES (PCS)  X '= C AND F BLOCK INSTALLMENT PAYMENT PLANS ă In this Public Notice, the staff of the Wireless Telecommunications Bureau (Bureau) provides guidance on several issues that have been brought to our attention concerning the modification  X34of installment payment financing for Broadband PCS C and F block licensees pursuant to the  X4Order on Reconsiderationz^6 {O'ԍSee Amendment of the Commission's Rules Regarding Installment Payment Financing for Personal  {OS'Communications Services (PCS) Licensees, WT Docket 9782, Order on Reconsideration of the Second Report  {O'and Order, FCC 9846 (Order on Reconsideration) (released March 24, 1998).z that the Commission adopted on March 23, 1998, which generally  X4affirmed the Second Report and Order^6 {O'ԍSee Amendment of the Commission's Rules Regarding Installment Payment Financing for Personal  {OX'Communications Services (PCS) Licensees, WT Docket 9782, Second Report and Order and Further Notice of  {O"'Proposed Rule Making (Second Report and Order), 12 FCC Rcd. 16,436 (released Oct. 16, 1997). that the Commission adopted on September 25, 1997."6 {O'ԍCopies of the Order on Reconsideration and the Second Report and Order are available from the Commission's Internet site (www.fcc.gov), the Wireless Telecommunication Bureau's Public Reference Room, 2025 M Street, N.W., Room 5608, Washington, D.C. 20554, (202)4181350, or International Transcription Services, 1231 20th Street, N.W., Washington, D.C. 20037, (202)8573800. The advice and rule interpretations provided in this Public Notice constitute informal staff  X4opinion and are not official Commission decisions or rulings., 6 {OZ!'ԍSee 220 Television Inc., 81 FCC 2d 575, 577 (1980); see also AMOR Family Broadcasting Group v.  {O$"'FCC, 918 F.2d 960, 962 (D.C. Cir. 1990); AAT Electronics Corp. v. FCC, 743 F.2d 918, 931 (D.C. Cir. 1984).,  XB4 WHO IS SUBJECT TO THE ORDER ON RECONSIDERATION?  X4 The Order on Reconsideration applies to all C and F block licensees.dZ 6 {O('ԍSee Order on Reconsideration,  7476.d It does not apply to licensees in the A, B, D and E blocks, nor does it apply to any other Commission licensees.  Xs4 WHAT DOES THE ORDER ON RECONSIDERATION REQUIRE ME TO DO? s,,,ge@d;[!;6,L2=fmgviewer;Normal; '# 00 hWindow-3=fmgnavigatԌ X'ԙ A. C Block Licensees  X4 All  C block licensees must elect either to resume making payments under their existing  X4Note(s)KJ {O'ԍId.,  2130.K or one of the following three options: (1) amnesty;KZJ {O'ԍId.,  3137.K (2) disaggregation;KJ {O5'ԍId.,  4960.K or (3)  Xv4prepayment.K v~J {O 'ԍId.,  3848.K Each of these alternatives is fully described in the Order on Reconsideration.  X2'X B. F Block Licensees (#  X4The Order on Reconsideration requires that all F block licensees resume making installment  X4payments under their existing Note(s).K J {O'ԍId.,  7476.K See below "When Is My First Payment Due?" The  X4amnesty, disaggregation and prepayment options are  not  available to F Block licensees.: J {O'ԍId.:  X? ' HOW DOES A C BLOCK LICENSEE MAKE AN ELECTION?  X 4 All C block licensees must make an election by filing an Election Notice with the Commission, either electronically through the Universal Licensing System (ULS) or in writing (manual filing). The specific procedures for filing an Election Notice with the Commission  X4are described in the Implementation Procedures for the Order on Reconsideration of the Second Report and Order Concerning the Broadband Personal Communications Services  XJ4(PCS) C and F Block Installment Payment Plans, Public Notice, DA 98946 (released May  X)418, 1998) (Implementation Procedures). A copy of the Implementation Procedures is available from the Commission's Internet site (www.fcc.gov/wtb), the Wireless Telecommunication Bureau's Public Reference Room, 2025 M Street, N.W., Room 5608, Washington, D.C. 20554, (202)4181350, or International Transcription Services, 1231 20th Street, N.W., Washington, D.C. 20037, (202)8573800.  X4' WHERE CAN I GET A LIST OF C BLOCK LICENSEES? A list of C block licensees and the licenses that they hold is attached to the Implementation Procedures, which is available from the sources described above. A list of C block licensees will also be available from the Commission's Internet site (www.fcc.gov/wtb/uls) beginning on May 20, 1998.  X' WHEN MUST A C BLOCK LICENSEE FILE ITS ELECTION NOTICE? "4 ,**"Ԍ X4ԙ All C block licensees must make an election no later than June 8, 1998 .  f J {Oy'ԍId.,  23; Implementation Procedures at 12.f Licensees may file manually with the Commission between 8:00 a.m. and 5:30 p.m. from now until June 8,  X41998. ZJ yO'ԍAll references to time in this Public Notice are to eastern daylight saving time. Licensees may also file electronically 24 hours per day using ULS from 8:00 a.m. on June 2, 1998 to 5:30 p.m. on June 8, 1998. The ULS Technical Support Hotline, (202)4141250, is available from 8:00 a.m. to 6:00 p.m., Monday through Friday, beginning on May 20, 1998 to answer questions regarding the electronic filing of Election Notices. All calls to the Technical Support Hotline are recorded.  X' WHAT HAPPENS IF A C BLOCK LICENSEE FAILS TO FILE AN ELECTION  X'NOTICE BY JUNE 8, 1998?  X\ 4Any C block licensee that fails to file a timely Election Notice will be treated as having elected to resume making payments under its existing Note(s) and will be required, by July 31, 1998, to pay all unpaid interest accruing from the date of the license grant through July  X 431, 1998.] J {O'ԍSee Order on Reconsideration,  65.] C block licensees failing to file an Election Notice will  not be eligible to repay Suspension Interest in a series of eight equal payments.  X' CAN A C BLOCK LICENSEE CHANGE ITS ELECTION AFTER IT HAS FILED ITS  XE'ELECTION NOTICE? Yes. After a licensee files its Election Notice, either electronically or manually, the licensee may change its election until 5:30 p.m. on June 8, 1998. The procedures for changing an  X4election are described in the Implementation Procedures.]|J {O'ԍSee Implementation Procedures at 3, 6.]  XP' IF A C BLOCK LICENSEE HOLDS LICENSES IN MORE THAN ONE MTA, CAN  X-'THAT LICENSEE MAKE MORE THAN ONE ELECTION? Yes. A C block licensee must make an election for every license that it holds. The licensee must make the same election for all Basic Trading Area (BTA) licenses that it holds in a given Major Trading Area (MTA), but the licensee may make different elections for different  X~4MTAs.]~J {O=%'ԍSee Order on Reconsideration,  17.]  X' IF A LICENSE ASSIGNMENT IS PENDING BEFORE THE COMMISSION, WHO  X'MUST FILE THE ELECTION NOTICE? " ,**P!"ԌThe current licensee on the day that the election notice is filed must file the Election Notice. Therefore, if you filed an application with the Commission to assign your license to another  X4party (including pro forma assignment/transfer of control applications), and your application is still pending on the date that the election notice is filed, then you (the current licensee) must  Xv4file the Election Notice.vJ {O'ԍSee 47 U.S.C.  310(d) (prior Commission application and approval of assignment or transfer of control is necessary).  XS4  X ' WHEN IS MY FIRST PAYMENT DUE?  X' A. Suspension Interest C block licensees (i) electing to resume making payments, or (ii) electing the disaggregation option and choosing to resume making payments on the retained spectrum, and all F block  X; 4licensees, must pay oneeighth of their total Suspension Interest on or before July 31, 1998.]; "J {O'ԍSee Order on Reconsideration,  27.] Those licensees will then pay oneeighth of their Suspension Interest with each regular  X 4installment payment they make thereafter until their Suspension Interest is paid in full.: J {OZ'ԍId.:  X' B. Deferred Interest from April 1, 1998 to July 31, 1998 C block licensees (i) electing to resume making payments, or (ii) electing the disaggregation option and choosing to resume making payments on the retained spectrum, and all F block licensees must pay, on or before July 31, 1998, all interest deferred from and including April  X41, 1998 through July 31, 1998.:FJ {O'ԍId.:  X' C. Regular Installment Payment For all C block licensees (i) electing to resume making payments, or (ii) electing the disaggregation option and choosing to resume making payments on the retained spectrum, and  X.4all F block licensees, regular installment payments resume three months  after  July 31, 1998,  X 4and are due on October 29, 1998.: J {O"'ԍId.:  X' WHEN WILL I RECEIVE MY LOAN DOCUMENTS?  X]4The Commission will be sending generic (i.e. master blank versions, not for execution) modified loan documents to C Block licensees during May for their review. The Commission has already sent generic modified loan documents to F block licensees reflecting the payment of Suspension Interest over eight equal payments."j ,** "ԌThe Commission will use its best efforts to issue modified loan documents to licensees within three weeks of the date they file their Election Notices with the Commission. Depending on which elections are chosen, licensees will be required to execute and return their new/modified loan documents, together with any required UCC filing fees, to the Commission within the time period specified by the Bureau, which will be no less than seven calendar days. Specific procedures for the issuance, execution and return of modified loan documents, and the payment of UCC filing fees, are set forth in the Implementation Procedures under the  X 4caption "Issuance of New Licenses, Notes and Filing of UCC Financing Statements."P J yO'ԍImplementation Procedures at 7.P  X' WHEN WILL I RECEIVE MY MODIFIED LICENSE(S)? The Commission will endeavor to issue modified licenses as quickly as possible. However, as discussed below, the date you receive your modified license(s) depends on which election you have made.  X ' A. Resumption of Payments C block licensees that elect to continue making payments, and all F block licensees, will not receive modified licenses because they are continuing to operate under their existing licenses.  X!' B. Amnesty C block licensees electing amnesty will not receive modified licenses because they have agreed to surrender their existing licenses.  Xr' C. Disaggregation The Commission will issue modified licenses as expeditiously as possible. Licensees electing to disaggregate and continue making payments on their retained spectrum will receive a license conditioned on the timely payment of their installment obligations. Licenses for these licensees will not be issued until after the Commission has filed the UCC1 financing statements. Licensees electing to disaggregate and prepay their retained spectrum will receive a modified license without an installment payment condition. Although a licensee electing disaggregation will hold a 30 MHz license until it receives its modified license, the licensee  X74may  not  use the 15 MHz of spectrum surrendered to the Commission.]7XJ {O@"'ԍSee Order on Reconsideration,  60.]  X' D. Prepayment The Commission will issue modified licenses as expeditiously as possible. These modified licenses are necessary to reflect that the licensee's operating authority is no longer conditioned on making regular installment payments.  X%' WHEN WILL I RECEIVE A REFUND OF MY INSTALLMENT PAYMENTS IF I AM"%,**0&"  X'DUE A FULL OR PARTIAL REFUND OF INSTALLMENT PAYMENTS? The Commission will endeavor to issue full or partial refunds of installment payments that are  X4due to C block licensees  within approximately 30 days of the date they file their Election  Xt4Notices with the Commission.PtJ yO'ԍImplementation Procedures at 8.P Any lender advances for financing fees (UCC filings) will  XQ4be netted out of the refund.@QXJ {OZ'ԍId.@ C block licensees seeking refunds should comply with the  X.4refund instructions described in the Implementation Procedures.:.J {O 'ԍId.:  X' HOW IS SUSPENSION INTEREST CALCULATED UNDER THE  X'DISAGGREGATION OPTION? Under the disaggregation option, a C block licensee is required to return half of its spectrum  X9 4to the Commission.]9 |J {Of'ԍSee Order on Reconsideration,  49.] In exchange, the Commission will reduce the licensee's outstanding  X 4principal balance by 50 percent.D J {O'ԍId.,  51.D Thereafter, Suspension Interest is calculated using the C block licensee's new (reduced) principal balance after the disaggregation. Any installment payments the licensee previously made will be credited against the amount of Suspension  X4Interest due.:J {O'ԍId.:  XD' HOW DO I CALCULATE MY PREPAYMENT CREDIT? A licensee's Prepayment Credit consists of two parts: (1) a percentage of the licensee's down payments on licenses returned to the Commission, plus (2) installment payments previously  X4paid on licenses returned to the Commission.D2 J {O 'ԍId.,  41.D A licensee can determine the amount of its down payments and the amount of installment payments it has previously paid to the Commission by looking at the most recent account statement it received from the  XO4Commission.O J yO$'ԍIf a licensee has lost its most recent account statement, a duplicate of the account statement can be obtained by contacting Larry White, United States Department of the Treasury, (205)9126341. Using these amounts, a licensee can then calculate the specific amount of its credit from each license as described below. The total of a licensee's credits from each of its licenses equals its Prepayment Credit.  X' A. Resumption of Payments ",**p"ԌA C block licensee electing to resume payments on a license under its existing Note(s) does not receive any credit toward its Prepayment Credit.  X' B. Amnesty  XQ4A C block licensee electing amnesty for  all  of its licenses does not receive any credit toward its Prepayment Credit.  X4A C block licensee electing amnesty for  fewer than all  of its licenses and choosing  not to bid  on those surrendered licenses at the reauction receives a credit of 70 percent of the down payment on any surrendered license and will have any previously paid installment payments  X 4on the surrendered license added to its Prepayment Credit.e J {O 'ԍSee Order on Reconsideration,  37, 41.e  X; 4A C block licensee electing amnesty for  fewer than all  of its licenses and choosing  to bid  on those surrendered licenses at the reauction receives no credit for its down payments on those  X 4licenses.D! ZJ {O'ԍId.,  37.D If the licensee is prepaying any other licenses, then any installment payments  X 4previously paid on the surrendered license will be added to the licensee's Prepayment Credit.D" J {Op'ԍId.,  41.D Any installment payments (but not down payments) that remain unspent after all licenses selected for prepayment have been prepaid will be credited toward Suspension Interest or refunded. If a licensee elects resumption of payments or disaggregation with resumption of payments, the unspent installment payments will be applied first to reduce the Suspension Interest on any licenses for which the licensee is resuming installment payments, and the balance, if any, will be applied to the regular installment payments next due on those licenses. The licensee must specify the amount of its installment payments to be allocated to each such license. If a licensee is not continuing in the installment payment program, the unspent  Xu4installment payments will be refunded.]#u~J {O'ԍSee Implementation Procedures at 4, 8.]  X/' C. Disaggregation A C block licensee electing to disaggregate a license and resume making installment payments on the retained portion of that license receives a credit of 70 percent of its down  X4payment on the license.d$J {Od$'ԍSee Order on Reconsideration,  5152.d Any previously paid installment payments on the license are  X4applied to Suspension Interest, not the Prepayment Credit.D%J {O&'ԍId.,  51.D A C block licensee electing to disaggregate a license and prepay the retained portion of that license receives a credit of 85 percent of its down payment on the license plus any installment"4 %,**"  X4payments previously paid on the license.D&J {Oy'ԍId.,  54.D  X' IF I DO NOT USE ALL OF MY PREPAYMENT CREDIT TO PREPAY LICENSES,  Xt'THEN WHAT HAPPENS TO THE EXCESS CREDIT?  X.4 When applying a Prepayment Credit, a licensee is deemed to use, first, the down payment credit portion of its Prepayment Credit, and second, the installment payment portion of its Prepayment Credit. If a licensee does not use all of its Prepayment Credit, then the down payment portion of the remainder, if any, will be forfeited. The unspent installment payment portion will be credited to Suspension Interest and regular installment payments or refunded. If a licensee elects resumption of payments or disaggregation with resumption of payments, the unspent installment payments will be applied first to reduce the Suspension Interest on any licenses for which the licensee is resuming installment payments, and the balance, if any, will be applied to the regular installment payments next due on those licenses. The licensee must specify the amount of its installment payments to be allocated to each such license. If a licensee is not continuing in the installment payment program, the unspent installment  X4payments will be refunded.\'ZJ {O'ԍSee Implementation Procedures at 35.\  Xg4  XD' WHAT IS THE AFFORDABILITY EXCEPTION? If a C block licensee elects the prepayment option, or elects the disaggregation option and chooses to prepay the retained spectrum, then the licensee must prepay all of its BTA licenses  X4in the chosen MTA.e(J {OU'ԍSee Order on Reconsideration,  43, 55.e Under the affordability exception, however, a C block licensee that cannot afford to prepay all of its BTA licenses in an MTA may purchase all of its BTA licenses in the MTA that it can afford to prepay and surrender the remaining licenses in the  XO4MTA that it cannot afford to prepay.:)O~J {O~'ԍId.: A licensee can "afford" as many BTA licenses within  X,4an MTA that it can prepay using only its Prepayment Credit.D*,J {O 'ԍId.,  43.D  X' IF I ADD "NEW MONEY" TO AN MTA, CAN I STILL USE THE AFFORDABILITY  X'EXCEPTION? No. Once a licensee adds any "new money" to make prepayment on any BTA licenses within  X74an MTA, the affordability exception does not apply.:+7J {O('ԍId.: Therefore, if a licensee adds "new money" to an MTA, the "new money" must be sufficient to prepay all of its BTA licenses"4 +,**"  X4within the MTA.:,J {Oy'ԍId.:  X' IF I USE THE AFFORDABILITY EXCEPTION, MAY I CONTINUE MAKING  Xt'PAYMENTS ON THE LICENSES I CANNOT AFFORD? No. If you use the affordability exception, you must surrender the BTA licenses that you  X 4cannot afford to prepay.:- ZJ {O 'ԍId.:  X4  X' DO I GET ANY CREDIT FOR THE DOWN PAYMENT ON A LICENSE THAT I  X 'SURRENDER UNDER THE AFFORDABILITY EXCEPTION? No. If you surrender a license under the affordability exception, you do not receive any  X 4credit for your down payment on that license.. J {O'ԍSee Order on Reconsideration,  38; Second Report and Order, 16,467,  64.  X' IF I HAVE ACQUIRED LICENSES THROUGH AN ASSIGNMENT OR TRANSFER, DO DOWN PAYMENTS AND INSTALLMENT PAYMENTS MADE BY THE PRIOR  Xg'LICENSE HOLDER(S) COUNT TOWARD MY PREPAYMENT CREDIT? Yes. It does not matter who was the payor of the down payments and/or installment payments. The current licensee at the time of the election will receive credit in the amounts discussed above for the down payments and installment payments made on the licenses it owns on the date of its election. See above "How Do I Calculate My Prepayment Credit?"  XO' WHAT IS AN AFFILIATE?  X 4The term "affiliate" is defined in section 1.2110(b)(4) of the Commission's rules.M/ ~J yO8 'ԍ47 C.F.R.  1.2110(b)(4).M Affiliates that want to be considered as a single entity for the purpose of making an election must  X4follow the instructions described in the Implementation Procedures.0J {O#'ԍSee Implementation Procedures at 6; see also Order on Reconsideration,  42.  XZ' HOW WILL THE COMMISSION'S REVISION OF ITS COMPETITIVE BIDDING  X7'PROCEDURES AFFECT GRACE PERIODS FOR C BLOCK LICENSEES? The Commission recently amended its rules and changed the procedures for all auctionable" 0,**s "  X4services including those applying to late payment and grace period requests.C1\J {Oy'ԍSee Amendment of Part I of the Commission's Rules Competitive Bidding Procedures, WT Docket 97 {OC'82, Third Report and Order and Second Further Notice of Proposed Rule Making (Third Report and Order), FCC 97413 (released Dec. 31, 1997).C The Third  X4Report and Order, which implemented these changes, took effect on March 16, 1998. Under the previous rules, licensees were not considered to be in default until they were more than 90  X4days late in making an installment payment.Z2J {O8'ԍSee 47 C.F.R.  1.2110(e)(4)(i).Z In addition, licensees were permitted to file a request with the Commission to obtain a three to six month grace period, during which time  XU4no installment payments need to be made.[3U~J {O 'ԍSee 47 C.F.R.  1.2110(e)(4)(ii).[ Pursuant to the new rules, licensees are entitled to two 90day extensions of their payment dates rather than the one 90day nondelinquency period under the previous rules. In addition, licensees do not need to file grace period requests under the new rules, because licensees may elect to take the second 90day extension without any prior approval from the Commission. HOWEVER, licensees will be charged a late fee equal to 5% of the unpaid installment payment for the first 90day extension and an additional late fee equal to 10% of  X= 4the unpaid installment payment for the second 90day extension.c4= J {O'ԍSee Third Report and Order,  10307.c These rules apply to all  X 4installment payments and Suspension Interest payments due after March 16, 1998 other than  X 4the payments due by July 31, 1998.]5 J {OK'ԍSee Order on Reconsideration,  26.] The payments due by July 31, 1998 are oneeighth of Suspension Interest plus all of the interest from April 1, 1998 through and including July 31, 1998. Licensees are entitled to  Xl4 only one  90day nondelinquency for payments due on July 31, 1998. If a licensee fails to remit by July 31, 1998 oneeighth of its Suspension Interest plus the interest from April 1,  X'41998 to July 31, 1998, and remains delinquent for more than 90 days (i.e., fails to make the July 31, 1998 payment on or before October 29, 1998), then that licensee's license will automatically cancel without further Commission action.  Xz' ARE C BLOCK LICENSEES THAT ELECT TO PREPAY THEIR LICENSES  XW'ELIGIBLE FOR A GRACE PERIOD? No. "New money" for the prepayment of licenses is due by June 8, 1998 and there are no grace periods allowed for this payment. Failure to make full payment for prepayment by June 8, 1998 will cause the election to be deemed defective. Only those C block licensees that resume making payments on a license, or disaggregate a license and resume making payments on the retained spectrum, are eligible for a grace period. " 4 5,**"Ԍ X' DO THE COMMISSION'S UNJUST ENRICHMENT RULES STILL APPLY TO A C  X'BLOCK LICENSEE WHO PREPAYS A LICENSE? Yes. A C Block licensee who prepays a license is still subject to the Commission's unjust enrichment rules if it seeks to assign or transfer control of the license during the term of the  XQ4initial license grant.T6QJ {O'ԍSee 47 C.F.R.  24.712(b).T  X' IF I HAVE ADDITIONAL QUESTIONS, WHOM DO I CONTACT? If you have additional questions, please contact: Rachel Kazan or Rita Cookmeyer, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, (202)4180660, or Jack Zinman, Commercial Wireless Division, Wireless Telecommunications Bureau, (202)4187240.