[Federal Register Volume 61, Number 76 (Thursday, April 18, 1996)]
[Notices]
[Page 16914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9490]
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FEDERAL COMMUNICATIONS COMMISSION
[DA 96-481]
Wireless Telecommunications Bureau Will Strictly Enforce Default
Payment Rules; Bureau To Re-Auction Licenses Quickly
Released: April 4, 1996.
The Wireless Telecommunications Bureau (``Bureau'') has received
numerous inquiries concerning the Commission's rules on bidder defaults
in the various spectrum auctions. In response to these inquiries, the
Bureau reminds bidders that the Commission's rules concerning default
payments will be strictly enforced in all auctions. Under 47 CFR
1.2109(b), if a winning bidder fails to submit the required down
payment(s) within the time frame designated by the applicable auction
rules, the bidder will be deemed to have defaulted, its application
will be dismissed, and it will be subject to the default payment
specified in 47 CFR 1.2104(g)(2). All funds, including upfront payments
and down payments, will be applied first to satisfy outstanding bid
withdrawal and default payments before being applied toward the down
payment on licenses the bidder has won and seeks to acquire. 47 CFR
1.2104(g)(2). As indicated in the Fifth Report and Order in PP Docket
No. 93-253 and the Broadband PCS C Block Supplemental Bidder Package,
if the amount of the bid withdrawal or default payment cannot be
determined, the bidder will be required to make a deposit of 20 percent
of the amount bid on such licenses.\1\
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\1\ See, Fifth Report and Order in PP Docket No. 93-253, FCC 94-
178, 9 FCC Rcd 5532, released July 15, 1994 at fn. 51; Broadband PCS
C Block Supplemental Bidder Package at page 39.
Example: Bidder X submitted an upfront payment of $5 to
participate in an auction. At the close of an auction, Bidder X is
the high bidder on licenses A, B and C. Bidder X submitted high bids
of $1,000 for license A, $1,500 for license B, and $2,000 for
license C. Within five days of the close of the auction, Bidder X
must supplement its upfront payment with down payments sufficient to
bring its total deposits up to five percent of its winning bids.
Thus, Bidder X must submit down payments totalling $220 ($225 minus
its $5 upfront payment) to be in compliance with the down payment
requirements. If Bidder X submits $120 as down payments for licenses
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A and B only, it will be in default on license C.
Under our rules, all of Bidder X's funds on deposit with the
Commission will be applied first to satisfy the default payment on
license C. Because the amount of the default payment cannot be
determined until the license is re-auctioned, Bidder X is required to
make a deposit of 20 percent of the amount it bid on license C, or
$400. Thus, all of the $125 that Bidder X has submitted to the
Commission will be applied toward satisfying the default payment
obligation on license C. Because Bidder X still owes $275 to satisfy
its default payment on license C, Bidder X will be considered to be in
default on licenses A and B as well. Bidder X will then owe the
Commission $775 for its default payments (twenty percent of the amount
bid on all three licenses (or $900) minus the amount it has on deposit
(or $125)). Bidder X can avoid defaulting on licenses A and B only if
it is able to deposit sufficient funds to cover the down payments on
all three licenses ($225) or the default payment on license C and the
down payments on licenses A and B ($625).
Should a winning bidder fail to submit the required down
payment(s), the Bureau will either re-auction the license(s) to
existing or new applicants, or offer the license(s) to the other
highest bidders (in descending order) at their final bids. 47 CFR
1.2109(b). For defaults on licenses that occur after the down payments
are due (or, in the case of small business applicants, after the first
down payment is due), the Bureau will move to re-auction these licenses
as quickly as possible. 47 CFR 1.2109(c).
For further information, please contact James W. Hedlund, Wireless
Telecommunications Bureau, Auctions Division at (202) 418-0660.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 96-9490 Filed 4-17-96; 8:45 am]
BILLING CODE 6712-01-P
