WASHINGTON-Portland, Ore.-based Mountain SMR Group L.L.C., which is in default on the 800 MHz specialized mobile radio service license it purchased last winter during a Federal Communications Commission auction, is liable for $86,628 in back payments plus any money that could be due following a reauction of the Honolulu property.
The company has submitted a petition for reconsideration on the matter, and its principal, Jack Bond, refused to detail particular comments made within the petition prior to it entering the public domain.
In a Feb. 26 letter from Auction Division Chief Kathleen O’Brien Ham to Bond, she turned down his requests, submitted last December, for both a reduction in auction withdrawal fees and a waiver of the payment deadline.
Bond originally petitioned the Wireless Telecommunications Bureau Dec. 5, just prior to the end of the 800 MHz auction, to lower his final bid made on the Honolulu property to one made just prior to its $521,000 bid in Round 47, which he withdrew after “realizing that funding the down payment might become a problem.” Bond also cited his inexperience with auctions, his failure to understand the rules and his lack of computer expertise. He blamed the commission for its failure to “guide or give advice.”
“This started with the Form 175, in which MSMRG indicated interest in only the E172-A license in the Honolulu market on its application,” Bond continued. “No advice was given in the Public Notice instructions that this one-market stance severely limits auction participation to only bidding or reducing eligibility to zero due to the percentage participation requirements … The fact that MSMRG was approved for only one market was published in the Public Notice and was available to all bidders. During the auction, MSMRG was unable to bid against the Hawaiian SMR Co. in other markets or transfer its bidding units to other markets; but Hawaiian SMR Co. could bid against MSMRG, artificially raising the bid, and then withdraw.”
Claiming that his only way of coping with penalties would be to declare bankruptcy, Bond also told the commission granting his request to lower the final bid was in the public interest, and that the “assessing of penalties to punish Jack Bond” seems to serve no useful public-interest purpose.
In his Dec. 18 petition, Bond asked that the Dec. 23 down-payment deadline be waived for him because he had been unsuccessful in filing his Form 601 electronically, despite help from the FCC; he did not receive paper forms as expected; and he could not secure them via either the commission’s fax-on-demand service or by regular mail. “I am willing to make a 3-percent default assessment from the upfront payment,” he wrote. “If the waivers are not to be granted, I have no choice to make a payment beyond that amount and will have to file for bankruptcy to limit the amounts that can be collected. I prefer to negotiate a purchase.”
The commission denied the petitions. “After reviewing the facts presented, we deny Mountain SMR’s requests for waiver,” Ham wrote. “A waiver of bid-repayment rules would threaten the economic efficiency of the auction process and could encourage future bidders to submit `mistaken’ bids intentionally in order to gain insight into a competitor’s valuation of licenses. In this case, Mountain SMR deliberately bid $521,000 for the particular license.”
