Report No.  DC-2649                     ACTION IN DOCKET CASE     
  August 30, 1994


           FCC ANNOUNCES INVESTIGATION REGARDING IVDS AUCTIONS
                           (GN DOCKET NO. 94-96)


       The Commission announced today that it has initiated an
investigation of the conduct
of certain applicants in the July 1994 Interactive Video and Data
Service (IVDS) auctions to
determine whether serious misconduct has occurred.  The
investigation will be closed to the
public and will be conducted pursuant to Section 403 of the
Communications Act of 1934.
Section 403 grants broad authority and power to the Commission to
conduct investigatory
proceedings to obtain information regarding possible violations
of the Communications Act
and the Commission's rules and regulations.

       The Order states: "It has come to the Commission's
attention that one or more bidders
in the recent IVDS auctions may have misrepresented their status
as designated entities, in
violation of the Commission's rules.  In addition, one or more
winning bidders may have
failed timely to tender their down payments under circumstances
which may involve gross
misconduct, misrepresentation or bad faith.  Moreover, one or
more bidders may have
encouraged other winning bidders to default in making down
payments in an apparent attempt
to undermine and abuse the Commission's auction process."

       The Order  notes that in adopting the auction rules, the
Commission announced that it
would be vigilant to ensure the integrity of the auction process
and to prevent abuses of the
auction rules, particularly those measures adopted to provide
opportunities for small
businesses and businesses owned by women and minorities.  The
Commission warned in the
order adopting the rules that "if an applicant for designated
entity status proves unqualified,
and the Commission determines that the application for designated
entity status involved
willful misrepresentation or other serious misconduct, the
Commission will impose severe
penalties."  The Commission also noted that "it is critically
important to the success of our
system of competitive bidding that potential bidders understand
that there will be a substantial
penalty assessed if they withdraw a high bid, are found not to be
qualified to hold licenses or
default on a balance due."  By investigating misconduct in
connection with the auctions, the
Commission seeks to protect legitimate bidders and to ensure the
integrity of the auction
process.

       Under the Section 403 investigation announced today, the
Chief Administrative Law
Judge of the Commission is authorized to subpoena materials
deemed relevant to the inquiry
and to subpoena witnesses and require them to testify in
non-public sessions.

                                  (over)


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       The Commission also announced today that in addition to
the Section 403
investigation, it will be conducting routine audits of winning
bidders.  These audits will
review filings made to the Commission and seek additional
information from winning bidders
and licensees.  These routine, on-going audits will serve as a
further measure to protect the
integrity of the auction process.

       Action by the Commission August 25, 1994, by Order (FCC
94-222).  Chairman Hundt,
Commissioners Quello, Barrett, Ness and Chong.

   - FCC -

Contact:  William E. Kennard, Office of the General Counsel,
202/418-1700.