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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 ) ) DUNBAR TELEVISION CORPORATION ) ) Request for Rule Waiver and ) Request for Grace Period for ) Station KIVD206 in Lansing-East Lansing, ) Michigan, and Station KIVD240 in York, ) Pennsylvania ) ORDER Adopted: October 13, 1999 Released: October 14, 1999 By the Chief, Public Safety and Private Wireless Division, Wireless Telecommunications Bureau: I. INTRODUCTION 1. On May 22, 1997, Dunbar Television Corporation (Dunbar) filed rule waiver and grace period requests for the above-captioned 218-219 MHz service licenses. Dunbar requests a waiver of Section 1.2110(e)(4)(iii) of the Commission's Rules and a limited grace period for its sixth installment payment. It also requests a three-month grace period for its seventh installment payment. Dunbar argues that the circumstances surrounding the late submission of its sixth installment payment justify a waiver of Section 1.2110(e)(4)(iii) of the Commission's Rules. For the reasons that follow, we dismiss Dunbar's waiver request as moot. Dunbar also argues that its payment history justifies grant of the two grace periods. For the reasons that follow, we dismiss Dunbar's grace period request for its sixth and seventh installment payments. With respect to its seventh installment payment, we find that Dunbar is eligible to elect one of the three payment options that the Commission described in the 218-219 Flex Report and Order that was released on September 10, 1999. II. BACKGROUND 2. In the Competitive Bidding Second Report and Order, the Commission determined that 218- 219 MHz service licenses should be awarded through competitive bidding. On July 28 and 29, 1994, Dunbar participated in the auction of licenses for the 218-219 MHz service. Dunbar successfully bid on the markets in Lansing-East Lansing, Michigan, and York, Pennsylvania. Winning bidders that qualified as small businesses were allowed to pay twenty percent of their net bid as a down payment and the remaining eighty percent in installments over the five-year term of the license, with interest-only payments for the first two years, and interest and principal payments amortized over the remaining three years. Dunbar paid twenty percent of its net bid when it promptly submitted its initial and final down payment on these licenses. The subsequent grant of the subject licenses was conditioned upon Dunbar paying the remaining portion of its winning bids in quarterly installment payments. Dunbar submitted its first five installment payments in a timely fashion. 3. On December 2, 1996, Dunbar entered into an agreement with Wincom Corp., whereby Wincom agreed to assume the obligation of making all future installment payments on Dunbar's 218-219 MHz service licenses. Although Dunbar's sixth installment payment was due to the Commission on March 31, 1997, no payment was received on such date. On May 22, 1997, Dunbar submitted the sixth installment payment, a request for a waiver of Section 1.2110(e)(4)(iii) of the Commission's Rules, a limited grace period request for the sixth installment payment, and a three-month grace period request for the seventh installment payment. Dunbar's seventh installment payment was not due until June 30, 1997. Dunbar argues that under Section 1.2110(e)(4)(ii) of the Commission's Rules, it merits these grace periods because it has a good payment history. 4. On January 28, 1997, a group of petitioners requested a reamortization plan for 218-219 MHz licensees. On March 13, 1998, the same group of petitioners requested the opportunity to choose among options for making installment payments that would include an amnesty component. On September 17, 1998, the Commission stayed decisions on grace period requests that were properly filed under the pre-1998 rules, pending resolution of the proposals for payment restructuring options. On September 10, 1999, the Commission adopted three payment restructuring options for those 218-219 MHz service licensees who were current on their installment payments; were less than ninety days delinquent as of March 16, 1998; or had properly filed grace period requests under the former installment payment rules. The three options are: (a) reamortization of principal and interest installment payments over a ten- year period with subsequent resumption of payments; (b) amnesty, wherein eligible licensees surrender any licenses they choose to the Commission for subsequent auction and, in return, have all the outstanding debt on those licenses forgiven, subject to Department of Justice approval and pursuant to applicable federal claims collections standards; or (c) prepayment, whereby licensees may prepay the outstanding principal of any license it wishes to retain with cash and prepayment credits generated from down payments on spectrum returned to the Commission and any installment payments previously made. Eligible licensees must elect one of the three restructuring options by filing a written notice with the Bureau by the last day of the third month following the month on which the 218-219 MHz Flex Report and Order appears in the Federal Register. As a result of the adoption of the payment restructuring options, the Commission dismissed all of the pending grace period requests. III. DISCUSSION 5. Rule Waiver Request. As previously indicated, on July 28 and 29, 1994, Dunbar was the winning bidder on two IVDS licenses. Grant of these licenses was conditioned upon Dunbar paying its bids in quarterly installment payments. An entity that was more than ninety days delinquent in any installment payment was in default. Dunbar failed to make its sixth installment payment, which was due on March 31, 1997. On May 22, 1997, Dunbar submitted the payment. Dunbar was fifty-two, not ninety, days delinquent and thus, it was not within the Commission's definition of default. Therefore, we conclude that Dunbar does not require a waiver of Section 1.2110(e)(4)(iii) of the Commission's Rules. Consequently, Dunbar's request for a waiver of Section 1.2110(e)(4)(iii) of the Commission's Rules for its sixth installment payment is dismissed as moot. 6. Grace Period Request. Licensees who anticipated default were permitted to request a grace period of three to six months pursuant to former Section 1.2110(e)(4)(ii) of the Commission's Rules. On May 22, 1997, Dunbar requested a three-month grace period for its seventh installment payment, which was due on June 30, 1997. We find that Dunbar timely filed a grace period request for its seventh installment payment. While the Commission has dismissed all pending grace period requests, as a licensee who properly filed a grace period request for its seventh installment payment, Dunbar is eligible to elect one of the following payment restructuring options: (a) reamortization and resumption of payments, (b) amnesty, or (c) prepayment. As indicated, Dunbar must elect one of the three restructuring options by filing a written notice with the Bureau by the last day of the third month following the month on which the Report and Order appears in the Federal Register. Should Dunbar fail to make a timely election of an option, it will be placed automatically in the amnesty category. V. ORDERING CLAUSES 7. ACCORDINGLY, IT IS ORDERED pursuant to Sections 4(i) and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303(r), the request to waive Section 1.2110(e)(4)(iii) of the Commission's Rules, 47 C.F.R.  1.2110(e)(4)(iii), filed by Dunbar Television Corporation on May 22, 1997, IS DISMISSED. 8. IT IS FURTHER ORDERED pursuant to Sections 4(i) and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303(r), and Section 1.2110(e)(4)(ii) of the Commission's Rules, 47 C.F.R.  1.2110(e)(4)(ii), the grace period request for a sixth installment payment, filed by Dunbar Television Corporation on May 22, 1997, IS DISMISSED. 9. IT IS ORDERED pursuant to Sections 4(i) and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303(r), and Section 1.2110(e)(4)(ii) of the Commission's Rules, 47 C.F.R.  1.2110(e)(4)(ii), the grace period request for a seventh installment payment, filed by Dunbar Television Corporation on May 22, 1997, IS DISMISSED. 10. This action is taken under delegated authority pursuant to Sections 0.131 and 0.331 of the Commission's Rules, 47 C.F.R.  0.131, 0.331. FEDERAL COMMUNICATIONS COMMISSION D'wana R. Terry Chief, Public Safety and Private Wireless Division Wireless Telecommunications Bureau