Before the
               FEDERAL COMMUNICATIONS COMMISSION
                    Washington, D.C.  20554


In the Matter of                        )
                                   )
Requests for Waiver of                  )
Section 24.711(b)(3) of the                  )    
Commission's Rules Establishing the               )    
Interest Rate on Installment Payments for         )    
C Block PCS Licensees                   )
                                   )
Petitions for Reconsideration of Note and         )    
Security Agreement for C Block PCS Licensees )
                                
                  MEMORANDUM OPINION AND ORDER
                                

     Adopted:  June 1, 1999                            Released:  June 2, 1999


 By the Commission:
               
     1.     The Commission has before it an Application for Review filed by Omnipoint
Corporation ("Omnipoint"), a broadband Personal Communications Services ("PCS") C block licensee. 
Omnipoint challenges the Wireless Telecommunications Bureau's ("Bureau") 1998 Order, which denied
its request for waiver of the Commission's rule imposing a 7 percent interest rate on installment payment
plans for broadband PCS C block licenses that were conditionally granted on September 17, 1996.  Also
before the Commission are Applications for Review filed by Savannah Independent PCS Corporation
("Savannah") and the Joint C-Block Applicants ("Joint Applicants") contesting the Bureau's 1997 Order,
which dismissed Savannah's petition for reconsideration challenging the 7 percent interest rate imposed on
licenses conditionally granted on September 17, 1996.  Because these Applications for Review address
the same issues, we have opted to resolve these matters together.  For the reasons discussed below, we
dismiss the Application for Review of the Joint Applicants and deny Omnipoint's and Savannah's
Applications for Review.
          
     2.   Background.    On May 6, 1996, the Commission concluded the first auction of
broadband PCS C block licenses (Auction No. 5).  Pursuant to the Commission's rules, winning bidders
were permitted to pay for their licenses in installment payments over their license term.  The Bureau
released a public notice announcing the award of several broadband PCS C block licenses on September
17, 1996.  Under Section 24.711(b)(3) of the Commission's rules, interest on installment payments "shall
be imposed based on the rate for ten-year U.S. Treasury ["Treasury"] obligations applicable on the date the
license is granted."  As a result, for C block licenses conditionally granted on September 17, 1996, the
applicable interest rate is 7 percent, based on the Treasury's August 1996 auction. 
          
     3.   On December 16, 1996, Omnipoint filed a Request for Rule Waiver of the 7 percent
interest rate imposed pursuant to Section 24.711 on installment payment plans for licenses conditionally
granted on September 17, 1996.  Omnipoint argued that there were unique circumstances surrounding the
August 1996 Treasury auction and that application of the 7 percent interest rate is inequitable, arbitrary,
and burdensome, as well as contrary to Commission policy of setting interest rates at no more than the
government's cost of money.  Omnipoint requested that the Commission apply an interest rate of 6.5
percent to all licenses conditionally granted on September 17, 1996, and sought refund of any interest paid
in excess of that rate.  A number of other parties filed informal requests for waiver of the 7 percent
interest rate.  On June 2, 1997, the Bureau released a public notice seeking comment on all aspects of
these waiver requests.  In response, Savannah, together with the parties comprising the Joint Applicants,
filed joint reply comments.  On May 18, 1998, the Bureau released the 1998 Order denying Omnipoint's
Waiver Request, as well as the informal requests for waiver.  On June 17, 1998, Omnipoint filed its
Application for Review of the Bureau's 1998 Order. 

     4.   Also on December 16, 1996, several PCS C block licensees filed petitions for
reconsideration challenging various aspects of the Bureau's "Installment Payment Plan Note and Security
Agreement."  The Bureau addressed these petitions in the 1997 Order, concluding that because the
September 17th Public Notice constituted proper notice to petitioners under Section 1.4(b) of the
Commission's rules, these petitions for reconsideration should be dismissed as untimely filed.  On July
2, 1997, Savannah and the Joint Applicants filed their Applications for Review of the 1997 Order.

     5.   Discussion.    First, we note that Joint Applicants did not participate in the prior
proceeding that resulted in the 1997 Order, and provided no explanation for their lack of participation. 
Accordingly, we dismiss Joint Applicants' Application for Review pursuant to Section 1.115(a) of the
Commission's rules.  Notwithstanding our dismissal, the substantive issues raised by the Joint Applicants
mirror those raised by Omnipoint and Savannah, and will be addressed below. 
     
     6.   Although their Applications for Review have come before the Commission by different
paths, both Omnipoint and Savannah raise the same issues in seeking an interest rate of 6.5 percent, rather
than the 7 percent interest rate applied by the Bureau under the Commission's rules.  Omnipoint contends
that the circumstances surrounding the August 1996 Treasury auction were unusual in that the Treasury set
a coupon rate of 7 percent, despite an auction yield of 6.535 percent.  Under these circumstances,
Omnipoint argues that waiver of the 7 percent rate is warranted.  In addition, Omnipoint argues that waiver
is appropriate because application of the 7 percent rate is contrary to the Commission's policy of offering
financing to small businesses at a rate not exceeding the government's cost of money.  Similarly,
Savannah challenges the 7 percent rate on the grounds that, with respect to the August 1996 auction, the
yield rather than the coupon rate reflects the government's cost of money and is the appropriate rate under
Commission policy.  We agree with the Bureau that Omnipoint fails to make either of the showings
necessary for grant of a waiver.  Accordingly, we also find that Savannah's arguments do not convince us
to apply a rate other than the 7 percent interest rate applicable under the rules to installment payment plans
for licenses conditionally granted on September 17, 1996.  

     7.   First, contrary to Omnipoint's contention, we find that the Bureau properly afforded
Omnipoint's Waiver Request a "hard look" as required by WAIT Radio.  The Bureau considered all the
facts presented by Omnipoint and properly concluded that application of the rule does not impose undue
burdens, thwart the underlying purpose of the rule, or contravene the public interest.  "[A] strict
adherence to a general rule may be justified by the gain in certainty and administrative ease, even if it
appears to result in some hardship in individual cases."  Although the August 1996 Treasury auction may
have been unusual, a uniform application of our rules and procedures outweighs any hardship Omnipoint
claims.  We agree with the Bureau that although application of the rule results in licensees paying
varying interest rates, this variation is clearly contemplated by the rule, and is one of the risks that
licensees assumed in return for favorable 10-year financing terms.  
     
     8.   In addition, we disagree with the contentions of Omnipoint and Savannah that the 7
percent interest rate is inconsistent with the Commission's policy of setting interest rates at no more than
the government's cost of money.  The Commission has recognized that Treasury auctions provide an
identifiable benchmark on which to base interest rates for installment payments, but may not always reflect
the government's cost of money.  The policy behind our installment payment plan was to facilitate small
business participation in our auction process by, among other things, application of the low interest rates
used in the Treasury auctions.  Finally, with respect to the contention that the yield, not the coupon rate,
should be used, our rule states ". . . interest shall be imposed based on the rate for ten-year U.S. Treasury
obligations. . . "  It is our intention to mirror the Treasury's interest rate and not the yield, for its 10-year
notes.  The Treasury clearly delineates between its "interest rate" (coupon rate) and "yield."  We find the
Bureau's application of the 7 percent interest rate to be consistent with our policy to provide small
businesses with below market financing rates.  


                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                         ORDERING CLAUSES
     9.   Accordingly, IT IS ORDERED that for the reasons set forth above, the July 2, 1997
Application for Review filed by the Joint C-Block Applicants is DISMISSED pursuant to 47 C.F.R. 
1.115 of the Commission's rules.

     10.  IT IS FURTHER ORDERED that for the reasons set forth above, the June 17, 1997
Application for Review filed by Omnipoint Corporation and the July 2, 1997 Application for Review filed
by Savannah Independent PCS Corporation ARE HEREBY DENIED.

                              FEDERAL COMMUNICATIONS COMMISSION

                    
                              Magalie Roman Salas 
                              Secretary