[Federal Register Volume 63, Number 224 (Friday, November 20, 1998)]
[Notices]
[Pages 64509-64510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31033]


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FEDERAL COMMUNICATIONS COMMISSION

[DA 98-1897]


Wireless Telecommunications Bureau Provides Guidance on Grace 
Period and Installment Payment Rules

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: In this Public Notice, the Wireless Telecommunications Bureau 
(Bureau) provides guidance to licensees participating in installment 
payment programs regarding the revised rules governing grace periods 
and installment payments. This Notice is intended to assist licensees 
in the transition from the prior rules for late payments to the new 
rules and policies that are now effective.

FOR FURTHER INFORMATION CONTACT: Rachel Kazan or Rita Cookmeyer, 
Auctions and Industry Analysis Division, Wireless Telecommunications 
Bureau at (202) 418-0660.

SUPPLEMENTARY INFORMATION: This public notice was released on September 
18, 1998 and is available for inspection and copying during normal 
business hours in the FCC Reference Center, Room CY-C404, 445 Twelfth 
Street, SW, Washington, DC and also may be purchased from the 
Commission's copy contractor, International Transcription Services, 
(202) 857-3800, fax (202) 857-3805, 1231 20th Street, NW, Washington, 
DC 20036.

Synopsis of the Public Notice

Background

A. Prior Rules for Late Payment

    Installment payment rules, including late payment and grace period 
rules, are generally codified at 47 CFR 1.2110. Before this rule was 
amended, it permitted a licensee to make a payment up to 90 days late 
without being assessed a late payment charge and without being 
considered in default. If a licensee required additional time to pay 
beyond the 90 day period, it could submit a formal request for a 
``grace period'' of up to 6 months. The licensee would not be 
considered in default during a grace period, nor would the licensee be 
declared in default during the pendency of such request.

B. New Rules Now Apply

    The Commission recently amended 47 CFR 1.2110 to provide that 
licensees that do not make an installment payment on or before a due 
date are automatically granted a 90 day grace period (``non-delinquency 
period'') and assessed a late fee equal to 5 percent of the missed 
installment payment (``late fee''). If remittance of the missed 
installment payment and the 5 percent late fee is not made on or before 
expiration of the non-delinquency period, a second 90 day period 
(``grace period'') is automatically granted and an additional late fee 
equal to 10 percent of the missed installment payment is assessed. 
Licensees are not required to make an application to the Commission to 
receive the non-delinquency period or the grace period. Furthermore, 
licensees are not required to remit the 5 percent late fee prior to the 
expiration of the non-delinquency period to be eligible for the grace 
period. Late fees accrue on the first business day after a missed 
installment payment and upon the expiration of the non-delinquency 
period.
    Specifically, under the revised rule, a licensee must pay the 
missed installment payment, the 5 percent late fee, the 10 percent late 
fee (if applicable) and any lender advances the licensee may be 
obligated to pay (including but not limited to Uniform Commercial Code 
filing fees and attorney fees for debt collection). This payment must 
be made in full, in one payment, before the expiration of the non-
delinquency period or grace period. Payments made during a non-
delinquency period or a grace period shall be applied in the following 
order of priorities: (i) Lender advances, (ii) late fees, (iii) 
interest payable, and (iv) principal owed.
    Any licensee that becomes more than one-hundred eighty (180) days 
delinquent on an installment payment shall be in default, and the 
license shall automatically cancel without further action by the 
Commission. In that event, the debt shall be transferred to the 
Department of Treasury for collection subject to the Debt Collection 
Improvement Act of 1996.
    Payment due dates for missed installment payments and accompanying 
late fee(s) are independent of the regular installment payment 
schedules. Licensees should be aware that the late payment provisions 
are calculated on a 90 calendar day basis, while installment payments 
are based on a quarterly payment schedule. Quarterly payments may cover 
up to 92 calendar days, depending upon the month in which the payment 
is due. In many instances, missed installment payments and accompanying 
late fee(s) may be due before the next quarterly installment payment. 
Payments of missed installment payments and accompanying late fee(s) 
must be made simultaneously and in a timely manner. Partial payments 
will not be sufficient to avoid default.

C. Pending Grace Period Requests

    The amendments to 47 CFR 1.2110 became effective March 16, 1998, 60 
days after publication of those amendments in the Federal Register. 
Installment payments which were due prior to March 16, 1998, will 
continue to be processed under the former Sec. 1.2110 of the 
Commission's rules. Any properly filed requests for a grace period 
pending under the former Section 1.2110 will be addressed. Furthermore, 
the late payment and automatic cancellation provisions of amended 
Sec. 1.2110 will not apply to licenses with properly filed grace period 
requests until such time as the Bureau addresses these grace period 
requests. After the resolution of grace period requests, licensees will 
be subject to the revised grace period rules for future installment 
payment obligations.

D. Example

    The following illustrates how the late payment procedures will now 
operate. ABC Company has a $100,000 installment payment due on March 
31. If ABC Company is able to make its installment payment on March 31, 
then it must remit $100,000 to the Commission. If ABC Company makes its 
installment payment anytime from April 1 until June 29 (the end of the 
90 day non-delinquency period), then ABC Company must remit $105,000 to 
the Commission to be considered current on its March 31 installment 
payment. If ABC Company does not make its March 31 installment payment 
by June 29, then it must remit $115,000 on or before September 27, 
which is 180 calendar days after March 1. If ABC Company does not remit 
the required $115,000 by September 27 (the end of the 90 day grace 
period), then it will be considered in default and its license will 
automatically cancel on September 28 without further action by the 
Commission.
    ABC Company's June 30 installment payment of $100,000 remains due 
on June 30 regardless of the payment status of the March 31 installment 
payment. The late payment terms apply to June 30 installment payment 
independently of the March installment payment. Thus, if ABC Company 
does not make its March 31 installment payment until June 30,

[[Page 64510]]

the total amount due to the Commission on June 30 is $215,000, which 
consists of the March installment payment, the March 5% non-delinquency 
late fee, the March 10% grace period late fee and the June 30 payment.

Federal Communications Commission.
Dan Phythyon,
Chief, Wireless Telecommunications Bureau.
[FR Doc. 98-31033 Filed 11-19-98; 8:45 am]
BILLING CODE 6712-01-P