DA 96-1825
Before the
FEDERAL COMMUNICATIONS COMMISSION 
Washington D.C. 20554
In the Matter of
C.H. PCS, Inc., BTA No. B347 ) 
Frequency Block C )
ORDER
Adopted: November 4, 1996 Released: November 4, 1996
By The Chief, Wireless Telecommunications Bureau:
1. By this action, we set forth the default payment obligations and procedures for 
C.H. PCS, Inc. ("CHPCS"), resulting from its failure to remit the required down payment on 
the license for which it was the successful high bidder in the Broadband Personal 
Communications Services ("PCS") C Block reauction. Pursuant to the Commission's rules, 
CHPCS is in default on its down payment obligations for license number B347, and is subject 
to an initial default payment in the amount of $5,031,232.50.
2. Background. On July 3, 1996, the Commission began the reauction of 18 PCS C 
Block licenses on which successful bidders had defaulted.1 In the reauction, which closed on 
July 16, 1996,2 CHPCS was the successful bidder for one license - license number B347 for 
the Phoenix, Arizona BTA - with a net total bid of $213,807,750.00. Consequently, CHPCS 
was required to submit an initial down payment for the license in the amount of
1 Seff"\8 Defaulted PCS Licenses To Be Reauctioned. Reauction To Begin July 3rd," Public Notice DA 
872 (rel. May 30, 1996).
"Entrepreneurs' C Block Reauction Closes," Public Notice DA 96-1153 (rel. July 17, 1996).
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$9,307,387.50 by July 24, 1996, to bring its total amount on deposit with the Commission for 
that license to $10,690,387.50.3
3. On July 24, 1996, CHPCS filed an Emergency Petition for Waiver of Section 
24.71 l(aX2), requesting that the Commission extend the deadline for submission of its down 
payment on license number B347.4 On August 9, 1996, the Wireless Telecommunications 
Bureau ("Bureau") denied CHPCS's request, finding that CHPCS had failed to meet the 
standards required to justify such a waiver, and was therefore in default on the initial down 
payment for the Phoenix, Arizona BTA5 On November 4, 1996, the Bureau announced by 
Public Notice that the Phoenix, Arizona BTA would be reauctioned, with the date of the 
reauction to be determined.6
4. Discussion. Under the Commission's rules, a bidder who fails to remit the 
required down payment for the licenses for which it was the high bidder within five business 
days after the Commission declares the auction closed shall be deemed to be in default on 
those licenses.7 The Commission's rules also provide that under such circumstances, the 
Commission will dismiss the bidder's application.8 As a result, the defaulting bidder is 
subject to certain default payment obligations.9 This payment is equal to the difference
  ,fc*47C.F.R. 5 24.71 l(a)(2).
C.H. PCS. Inc. Emergency Petition for Waiver of Section 24.71 l(a)(2) of the Commission's Rules (filed 
July 24, 1996).
' In re C.H. PCS, Inc., Request for Waiver of Section 24.71 l(a)(2) of the Commission's Rules, Order, ^ 96-
1P73 frpl AiiDimi 9 HJQfO 'f'HPrSl suhspmipntlv mpt with Rnrpan staff tn Hi<5rn<:<; thp nirnnmRtanrpi! IpaHinn tn
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between the amount bid and the amount of the winning bid the next time the license 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.10 In the event that a license 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 
a license has not yet been reauctioned), the Commission has stated that it will assess an initial 
default payment of 20 percent of the defaulted bid price until the full amount of the default 
payment can be determined.11 Finally, the Commission's payment rules provide that if a 
defaulting bidder does not submit the default payment assessed by the Commission in the 
time required, any amounts overdue "will be deducted from any upfront payments or down 
payments that the defaulting or disqualified bidder has deposited with the Commission."12
5. CHPCS failed to remit the required down payment amount for license number 
B347 in the Broadband PCS C Block reauction. As such, it is in default, and is subject to the 
payment provisions specified in Sections 24.704(a)(2) and 1.2104(g) of the Commission's 
rules.13 Because the Phoenix, Arizona BTA has yet to be reauctioned and we cannot yet 
determine the full amount of the default payment, we will assess a deposit towards the default 
payment ultimately owed by CHPCS.14 Although the Commission provided that this deposit 
amount will be 20 percent of the bid price on which CHPCS defaulted,15 we note that if 
license number B347 is reauctioned for an amount greater than CHPCS's bid for the license,
defaulting bidder will be subject to [a penalty equal to the difference between the 
amount bid and the amount of the winning bid the next time the license of offered by 
the Commission] plus an additional penalty equal to 3 percent of the subsequent 
winning bid. If the subsequent winning bid exceeds the defaulting bidder's bid amount, 
the 3 percent penalty will be calculated based on the defaulting bidder's bid amount."
47 C.F.R. § 24.704(a)(2). See also W C.F.R. § 1.2104(g). 
M
See Implementation of Section 309(j) of the Communications Act - Competitive Bidding, Fifth Report 
and Order, PP Docket No. 93-253, FCC 94-178, 9 FCC Red 5532 (rel. July 15, 1994) at n. 51 ( "Fifth Report and
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the default payment due will be only three percent of CHPCS's defaulted bid.16 
Consequently, a three percent payment is the minimum amount which CHPCS could owe 
under even the most favorable circumstances. We therefore require an initial deposit of three 
percent of CHPCS's defaulted bid for the license, or $6,414,232.50. Pursuant to Sections 
24.704 (a)(2) and 1.2104(g) of the Commission's rules, CHPCS's upfront payment of 
$1,383,000.00 for the license has been applied to this initial default payment. As a result, 
$5,031,232.50 remains due at this time. If additional payment is required following the 
reauction of license number B347, a second Order will assess such payment. If CHPCS fails 
to remit this amount in its entirety within the time required, any amounts overdue will be 
deducted from any upfront payments or down payments which CHPCS currently has on 
deposit with the Commissioa17
ORDERING CLAUSES
6. It is ORDERED that CHPCS is assessed an initial default payment in the 
amount of $6,414,232.50. It is FURTHER ORDERED that payment of $5,031,232.50 of this 
amount is to be made in accordance with the instructions set forth in Attachment A to this 
Order within thirty days from the release date of this Order.
7. It is FURTHER ORDERED that CHPCS will be subject to the balance of the 
payment specified in Section 24.704(aX2) of the Commission's rules, 47 C.F.R. § 
24.704(a)(2), once the Phoenix, Arizona BTA is reauctioned and the actual default payment is 
determined.
47 C.F.R. § 24.704(a)(2). See a/so 47 C.F.R. § 1.2104(g).
47 C.F.R. § 24.704(a)(2). In this connection, we note that CHPCS was the successful bidder for seven 
licenses in the Broadband PCS C Block auction which closed on May 6, 1996. Prior to the start of the C Block 
auction. CHPCS submitted an upfront payment of $299,000.00. As required by the Commission's rules, CHPCS 
submitted an initial down payment for these licenses of $1,206,812.50 on May 15, 1996. Consequently, prior to 
submitting any funds lor the: C Block reauction, CHPCS had a total of $1,505,812.50 on deposit with the 
Commission.
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8. It is FURTHER ORDERED that this Order shall be sent to the applicant by 
certified mail, return receipt requested. This action is taken pursuant to delegated authority, 
47C.F.R. §0.331.
FEDERAL COMMUNICATIONS COMMISSION
Mchele C. Farquhar
Chief, Wireless Telecommunications Bureau
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ATTACHMENT A
The following information is being provided to assist you in making your payment. 
PAYMENT BY WIRE TRANSFER
You must complete the FCC Remittance Advice (Form 159) when making your auction 
payment by wire transfer. Please fax a completed Form 159 to Mellon Bank at (412) 
236-5702 at least one hour before placing the order for the wire transfer. On the cover 
sheet of the fax indicate "Wire Transfer - Auction Payment for Auction Event 10." Please 
indicate on the upper left hand comer of the Form 159 the lockbox number "358850." 
The purpose of the FCC Form 159 is to identify who you are, how much you are paying 
and what you are paying for. It allows the bank to accurately process your remittance. 
Failure to accurately complete your FCC Form 159 could result in a delay in processing 
your remittance. Before completing an FCC Form 159, read the instructions below.
1) You must complete all of the blocks in the Payor Information Section, (Blocks 1 
through 10).
2) You must complete the following auction-specific information in blocks, 14(A), 15(A), 
16(a) and 17(A). 14(A) - Payment Type Code, enter the letters "AWCD"; block 
15(A) - Quantity, enter "1"; block 16(A) -$5,031,232.50; and block 17(A) - FCC Code 
1, enter "10".
When wiring funds, please give your bank the following information:
ABA Routing Number: 043000261;
Receiving Bank: Mellon Pittsburgh;
BNF: FCC/AC-9116106;
OBI Field: (Skip one space between each information item) "AUCTIONPAY"; FCC
ACCOUNT NO: 6192456536 (Exactly as on Form 159, Block #1);
PAYOR NAME (CHPCS)
PAYMENT TYPE CODE: AWCD (Block #14);
FCC CODE 1:10
PAYMENT BY CASHIER'S CHECK
Each cashier's check and corresponding FCC Remittance Advice (Form 159) must be in 
an individual envelope and specifically addressed to: Mellon Bank, P.O. Box #358850, 
Pittsburgh, PA 15251-5850, Attn: Auction Payment.
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If delivering an auction payment in person or by courier, the check and FCC Remittance 
Advice (Form 159) must be delivered to Mellon Bank, Three Mellon Bank Center, 525 
William Perm Way, 27th Floor, Room 153-2713, Pittsburgh, PA 15259-0001, (Attn: 
Wholesale Lockbox Shift Supervisor).
For fiirther information or assistance, please call Regina Dorsey, Chief, Billings and 
Collections Branch at (202) 418-1995.
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