[Federal Register Volume 69, Number 76 (Tuesday, April 20, 2004)]
[Notices]
[Pages 21099-21110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8844]
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FEDERAL COMMUNICATIONS COMMISSION
[Report No. AUC-04-56-B; DA 04-633]
Auction of 24 GHz Service Licenses Scheduled for July 28, 2004;
Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments
and Other Auction Procedures
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: This document announces the procedures, minimum opening bids,
and revised inventory for the upcoming auction of licenses in the 24
GHz Service in the 24.25-24.45 GHz and 25.05-25.25 GHz bands. This
document is intended to familiarize prospective bidders with the
procedures and minimum opening bids for this auction.
DATES: Auction No. 56 is scheduled to begin on July 28, 2004.
FOR FURTHER INFORMATION CONTACT: Auctions and Spectrum Access Division:
[[Page 21100]]
For legal questions: Howard Davenport at (202) 418-0660, for general
auction questions: Roy Knowles or Barbara Sibert at (717) 338-2888.
Media Contact: For press inquiries: Lauren Patrich at (202) 418-7944.
Broadband Division: For legal questions: Nancy Zaczek at (202) 418-
2487, for technical questions: Michael Pollak at (202) 418-2487 or
Steve Buenzow at (717) 338-2687.
SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 56
Procedures Public Notice released on March 12, 2004. The complete text
of the Auction No. 56 Procedures Public Notice, including attachments,
is available for public inspection and copying during regular business
hours at the FCC Reference Information Center, Portals II, 445 12th
Street, SW., Room CY-A257, Washington, DC 20554. The Auction No. 56
Procedures Public Notice may also be purchased from the Commission's
duplicating contractor, Qualex International, Portals II, 445 12th
Street, SW., Room CY-B402, Washington, DC 20554, telephone 202-863-
2893, facsimile 202-863-2898, or via e-mail [email protected] This
document is also available on the Internet at the Commission's Web
site: http://wireless.fcc.gov/auctions/56/.
I. General Information
A. Introduction
1. The Auction No. 56 Procedures Public Notice announces the
procedures and minimum opening bids for the upcoming auction of
licenses in the 24 GHz Service in the 24.25-24.45 GHz and 25.05-25.25
GHz bands scheduled for July 28, 2004 (Auction No. 56). On January 30,
2004, in accordance with the Balanced Budget Act of 1997, the Bureau
released a public notice seeking comment on reserve prices or minimum
opening bids and the procedures to be used in Auction No. 56. The
Bureau received no comments in response to the Auction No. 56 Comment
Public Notice, 69 FR 7219, February 13, 2004.
i. Background of Proceeding
2. On August 1, 2000, the Commission released the 24 GHz Report and
Order, 65 FR 59350, October 5, 2000, in which it determined that the 24
GHz band would be made available for licensing throughout the United
States by Economic Areas (``EA''). Stations in the 24 GHz Service may
render any kind of digital fixed communications service consistent with
the Commission's rules and the regulatory status of the station to
provide services on a common carrier or non-common carrier basis. The
Commission adopted rules to license the 24 GHz band by EA because EAs
not only offer economies of scale, but also serve the needs of a wider
range of entities, including both large and small service providers.
ii. Licenses To Be Auctioned
3. Auction No. 56 will offer 880 licenses in the 24 GHz Service in
the 24.25-24.45 GHz and 25.05-25.25 GHz bands. Five licenses will be
offered in each of 172 EAs and four EA-like areas: Guam and Northern
Mariana Islands; Puerto Rico and the U.S. Virgin Islands; American
Samoa; and the Gulf of Mexico. A complete list of the licenses
available in Auction No. 56 is included in Attachment A of the Auction
No. 56 Procedures Public Notice.
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Bandwidth
Channel number Channel description Frequency bands (MHz)
----------------------------------------------------------------------------------------------------------------
EA Licenses
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35............................ Two paired 40 MHz frequency blocks 24,250-24,290/25,050-25,090 MHz 80 MHz.
36............................ Two paired 40 MHz frequency blocks 24,290-24,330/25,090-25,130 MHz 80 MHz.
37............................ Two paired 40 MHz frequency blocks 24,330-24,370/25,130-25,170 MHz 80 MHz.
38............................ Two paired 40 MHz frequency blocks 24,370-24,410/25,170-25,210 MHz 80 MHz.
39............................ Two paired 40 MHz frequency blocks 24,410-24,450/25,210-25,250 MHz 80 MHz.
-------------------------------------
Grand Total............... .................................. ............................... 400 MHz.
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B. Rules and Disclaimers
i. Relevant Authority
4. Prospective applicants must familiarize themselves thoroughly
with the Commission's rules relating to the 24 GHz service contained in
title 47, part 101, of the Code of Federal Regulations, and those
relating to application and auction procedures, contained in title 47,
part 1, of the Code of Federal Regulations. Prospective applicants must
also be thoroughly familiar with the procedures, terms and conditions
(collectively, ``terms'') contained in the Auction No. 56 Procedures
Public Notice; the Auction No. 56 Comment Public Notice; 24 GHz Report
& Order and the 24 GHz Reconsideration Order (as well as prior and
subsequent Commission proceedings regarding competitive bidding
procedures).
5. The terms contained in the Commission's rules, relevant orders,
and public notices are not negotiable. The Commission may amend or
supplement the information contained in our public notices at any time,
and will issue public notices to convey any new or supplemental
information to applicants. It is the responsibility of all applicants
to remain current with all Commission rules and with all public notices
pertaining to this auction.
ii. Prohibition of Collusion
6. To ensure the competitiveness of the auction process, Sec.
1.2105(c) of the Commission's rules prohibits applicants for any of the
same geographic license areas from communicating with each other during
the auction about bids, bidding strategies, or settlements unless such
applicants have identified each other on their FCC Form 175
applications as parties with whom they have entered into agreements
under Sec. 1.2105(a)(2)(viii). Thus, applicants for any of the same
geographic license areas must affirmatively avoid all discussions with
each other that affect, or in their reasonable assessment have the
potential to affect, bidding or bidding strategy. This prohibition
begins at the short-form application filing deadline and ends at the
down payment deadline after the auction. For purposes of this
prohibition, Sec. 1.2105(c)(7)(i) defines applicant as including all
controlling interests in the entity submitting a short-form application
to participate in the auction, as well as all holders of partnership
and other ownership interests and any stock interest amounting to 10
percent or more of the entity, or outstanding stock, or outstanding
voting stock of the entity submitting a short-form application, and all
officers and directors of that entity.
7. Applicants for licenses in any of the same geographic license
areas are encouraged not to use the same individual as an authorized
bidder. A violation of the anti-collusion rule could
[[Page 21101]]
occur if an individual acts as the authorized bidder for two or more
competing applicants, and conveys information concerning the substance
of bids or bidding strategies between the applicants he or she is
authorized to represent in the auction. A violation could similarly
occur if the authorized bidders are different individuals employed by
the same organization (e.g., law firm or consulting firm). In such a
case, at a minimum, applicants should certify on their applications
that precautionary steps have been taken to prevent communication
between authorized bidders and that applicants and their bidding agents
will comply with the anti-collusion rule. However, the Bureau cautions
that merely filing a certifying statement as part of an application
will not outweigh specific evidence that collusive behavior has
occurred, nor will it preclude the initiation of an investigation when
warranted.
8. The Commission's anti-collusion rules allow applicants to form
certain agreements during the auction, provided the applicants have not
applied for licenses covering the same geographic areas. In addition,
applicants that apply to bid for all markets will be precluded from
communicating with all other applicants until after the down payment
deadline. However, all applicants may enter into bidding agreements
before filing their FCC Form 175, as long as they disclose the
existence of the agreement(s) in their Form 175. If parties agree in
principle on all material terms prior to the short-form filing
deadline, those parties must be identified on the short-form
application pursuant to Sec. 1.2105(c), even if the agreement has not
been reduced to writing. If the parties have not agreed in principle by
the filing deadline, an applicant would not include the names of those
parties on its application, and may not continue negotiations. By
signing their FCC Form 175 short-form applications, applicants are
certifying their compliance with Sec. 1.2105(c).
9. Section 1.65 of the Commission's rules requires an applicant to
maintain the accuracy and completeness of information furnished in its
pending application and to notify the Commission within 30 days of any
substantial change that may be of decisional significance to that
application. Thus, Sec. 1.65 requires auction applicants that engage
in communications of bids or bidding strategies that result in a
bidding agreement, arrangement or understanding not already identified
on their short-form applications to promptly disclose any such
agreement, arrangement or understanding to the Commission by amending
their pending applications. In addition, Sec. 1.2105(c)(6) requires
all auction applicants to report prohibited discussions or disclosures
regarding bids or bidding strategy to the Commission in writing
immediately but in no case later than five business days after the
communication occurs, even if the communication does not result in an
agreement or understanding regarding bids or bidding strategy that must
be reported under Sec. 1.65.
10. Any applicant found to have violated the anti-collusion rule
may be subject to sanctions, including forfeiture of its upfront
payment, down payment or full bid amount, and may be prohibited from
participating in future auctions.
11. A summary listing of documents issued by the Commission and the
Bureau addressing the application of the anti-collusion rules may be
found in Attachment G of the Auction No. 56 Procedures Public Notice.
iii. Interference Protection
12. Among other licensing and technical rules, 24 GHz licensees
must comply with the interference protection and coordination
requirements set forth in Sec. Sec. 101.509 of the Commission's rules.
Incumbent 24 GHz Service Licensees (formerly Digital Electronic Message
Service (DEMS) licensees when they were in the 18 GHz band) authorized
to operate in Standard Metropolitan Statistical Areas (``SMSAs'') shall
retain exclusive rights to their channel(s) within their SMSA and must
be protected. 24 GHz service licensees must also protect neighboring
licensees. New EA licensees are encouraged to develop sharing
agreements with these incumbents and other new EA licensees along the
boundaries of their areas. Potential bidders seeking licenses for EAs
that border Canada or Mexico are subject to coordination arrangements
with those respective countries.
iv. Due Diligence
13. Potential applicants are reminded that there are a number of
incumbent 24 GHz Service licensees operating on 24.25-24.45 GHz and
25.05-25.25 GHz bands that are subject to the upcoming auction.
Incumbent licenses were originally granted in 1997 in 102 SMSAs.
Incumbent systems are entitled to protection as specified under Sec.
101.509 of the Commission's rules from co-channel interference by any
new entrant who obtains a 24 GHz EA license at the auction. We
therefore caution potential bidders in formulating their bidding
strategies to investigate and consider the extent to which 24 GHz
channels are occupied by incumbents. We note that the power flux
density listed in subparagraph (e) under Sec. 101.509 should read ``-
114'' instead of ``-14.''
14. Potential applicants are solely responsible for identifying
associated risks and for investigating and evaluating the degree to
which such matters may affect their ability to bid on, otherwise
acquire, or make use of licenses available in Auction No. 56.
15. Potential applicants also should be aware that certain
applications (including those for modification), petitions for
rulemaking, requests for special temporary authority (``STA''), waiver
requests, petitions to deny, petitions for reconsideration, and
applications for review may be pending before the Commission and relate
to particular applicants, incumbent licensees, or the licenses
available in Auction No. 56. In addition, certain judicial proceedings
that may relate to particular applicants or incumbent licensees, or the
licenses available in Auction No. 56, may be commenced, or may be
pending, or may be subject to further review. We note that resolution
of these matters could have an impact on the availability of spectrum
in Auction No. 56. In addition, although the Commission will continue
to act on pending applications, requests and petitions, some of these
matters may not be resolved by the time of the auction.
16. In addition, potential applicants may research the licensing
database for the Wireless Telecommunications Bureau on the Internet in
order to determine which frequencies are already licensed to incumbent
licensees. The Commission makes no representations or guarantees
regarding the accuracy or completeness of information in its databases
or any third party databases, including, for example, court docketing
systems. Furthermore, the Commission makes no representations or
guarantees regarding the accuracy or completeness of information that
has been provided by incumbent licensees and incorporated into the
database. Potential applicants are strongly encouraged to physically
inspect any sites located in, or near, the service area for which they
plan to bid.
17. Potential bidders may obtain information about licenses
available in Auction No. 56 through the Wireless Telecommunications
Bureau's licensing database on the World Wide Web at http://
wireless.fcc.gov/uls. Potential applicants may query the database
online and download a copy of their search results if desired. Detailed
instructions on using License Search (including frequency searches and
the
[[Page 21102]]
GeoSearch capability) and downloading query results are available
online by selecting the ``?'' button at the upper right-hand corner of
the License Search screen.
18. Potential applicants should direct questions regarding the
search capabilities to the FCC Technical Support hotline at (202) 414-
1250 (voice) or (202) 414-1255 (TTY), or via e-mail at [email protected]
v. Bidder Alerts
19. The FCC makes no representations or warranties about the use of
this spectrum for particular services. Applicants should be aware that
an FCC auction represents an opportunity to become an FCC licensee in
this service, subject to certain conditions and regulations. An FCC
auction does not constitute an endorsement by the FCC of any particular
services, technologies or products, nor does an FCC license constitute
a guarantee of business success. Applicants and interested parties
should perform their own due diligence before proceeding, as they would
with any new business venture.
20. As is the case with many business investment opportunities,
some unscrupulous entrepreneurs may attempt to use Auction No. 56 to
deceive and defraud unsuspecting investors.
21. Information about deceptive telemarketing investment schemes is
available from the FTC at (202) 326-2222 and from the SEC at (202) 942-
7040. Complaints about specific deceptive telemarketing investment
schemes should be directed to the FTC, the SEC, or the National Fraud
Information Center at (800) 876-7060. Consumers who have concerns about
specific proposals regarding Auction No. 56 may also call the FCC
Consumer Center at (888) CALL-FCC ((888) 225-5322).
vi. National Environmental Policy Act Requirements
22. Licensees must comply with the Commission's rules regarding the
National Environmental Policy Act (``NEPA''). The construction of a
wireless antenna facility is a federal action and the licensee must
comply with the Commission's NEPA rules for each such facility.
C. Auction Specifics
i. Auction Date
23. The auction will begin on Wednesday, July 28, 2004. The initial
schedule for bidding will be announced by public notice at least one
week before the start of the auction. Unless otherwise announced,
bidding on all licenses will be conducted on each business day until
bidding has stopped on all licenses.
ii. Auction Title
24. Auction No. 56--24 GHz Service.
iii. Bidding Methodology
25. The bidding methodology for Auction No. 56 will be simultaneous
multiple round bidding. The Commission will conduct this auction over
the Internet, and telephonic bidding will be available as well. As a
contingency plan, bidders may also dial in to the FCC Wide Area
Network. Qualified bidders are permitted to bid telephonically or
electronically.
iv. Pre-Auction Dates and Deadlines
26. The following is a list of important dates related to Auction
No. 56:
Auction Seminar--May 25, 2004.
Short-Form Application (FCC Form 175) Filing Window Opens--May 25,
2004; 12 p.m. e.t.
Short-Form Application (FCC Form 175) Filing Window Deadline--June 4,
2004; 6 p.m. e.t.
Upfront Payments (via wire transfer)--June 29, 2004; 6 p.m. e.t.
Mock Auction--July 23, 2004.
Auction Begins--July 28, 2004.
v. Requirements for Participation
27. Those wishing to participate in the auction must:
<> Submit a short-form application (FCC Form 175)
electronically by 6 p.m. e.t., June 4, 2004.
<> Submit a sufficient upfront payment and an FCC
Remittance Advice Form (FCC Form 159) by 6 p.m. e.t., June 29, 2004.
<> Comply with all provisions outlined in the
Auction No. 56 Procedures Public Notice.
vi. General Contact Information
28. The following is a list of general contact information related
to Auction No. 56:
General Auction Information
General Auction Questions
Seminar Registration
FCC Auctions Hotline, (888) 225-5322, Press Option 2, or
direct (717) 338-2888, Hours of service: 8 a.m.-5:30 p.m. e.t., Monday
through Friday
Auction Legal Information
Auction Rules, Policies, Regulations
Auctions and Spectrum Access Division, Legal Branch (202) 418-0660
Licensing Information
Rules, Policies, Regulations
Licensing Issues
Due Diligence
Incumbency Issues
Broadband Division, (202) 418-2487
Technical Support
Electronic Filing
FCC Automated Auction System
FCC Auctions Technical Support Hotline, (202) 414-1250, (202) 414-
1255 (TTY), Hours of service: 8 a.m.-6 p.m. e.t., Monday through Friday
Payment Information
Wire Transfers
Refunds
FCC Auctions Accounting Branch, (202) 418-0578, (202) 418-2843
(Fax)
Telephonic Bidding
Will be furnished only to qualified bidders
Press Information
Lauren Patrich (202) 418-7944
FCC Forms
(800) 418-3676 (outside Washington, DC), (202) 418-3676 (in the
Washington Area), http://www.fcc.gov/formpage.html
FCC Internet Sites
http://www.fcc.gov, http://wireless.fcc.gov/auctions, http://
wireless.fcc.gov/uls
II. Short-Form (FCC Form 175) Application Requirements
29. Guidelines for completion of the short-form (FCC Form 175) are
set forth in Attachment D of the Auction No. 56 Procedures Public
Notice.
A. Ownership Disclosure Requirements (FCC Form 175 Exhibit A)
30. All applicants must comply with the uniform Part 1 ownership
disclosure standards and provide information required by Sec. Sec.
1.2105 and 1.2112 of the Commission's rules. Specifically, in
completing FCC Form 175, applicants will be required to file an
``Exhibit A'' providing a full and complete statement of the ownership
of the bidding entity. The ownership disclosure standards for the
short-form are set forth in Sec. 1.2112 of the Commission's rules.
B. Consortia and Joint Bidding Arrangements (FCC Form 175 Exhibit B)
31. Applicants will be required to identify on their short-form
applications any parties with whom they have entered into any
consortium
[[Page 21103]]
arrangements, joint ventures, partnerships or other agreements or
understandings that relate in any way to the licenses being auctioned,
including any agreements relating to post-auction market structure.
Applicants will also be required to certify on their short-form
applications that they have not entered into any explicit or implicit
agreements, arrangements or understandings of any kind with any
parties, other than those identified, regarding the amount of their
bids, bidding strategies, or the particular licenses on which they will
or will not bid.
32. A party holding a non-controlling, attributable interest in one
applicant will be permitted to acquire an ownership interest in, form a
consortium with, or enter into a joint bidding arrangement with other
applicants for licenses in the same geographic license area provided
that (i) the attributable interest holder certifies that it has not and
will not communicate with any party concerning the bids or bidding
strategies of more than one of the applicants in which it holds an
attributable interest, or with which it has formed a consortium or
entered into a joint bidding arrangement; and (ii) the arrangements do
not result in a change in control of any of the applicants. While the
anti-collusion rules do not prohibit non-auction related business
negotiations among auction applicants, applicants are reminded that
certain discussions or exchanges could touch upon impermissible subject
matters because they may convey pricing information and bidding
strategies.
C. Eligibility
i. Bidding Credit Eligibility (FCC Form 175 Exhibit C)
33. A bidding credit represents the amount by which a bidder's
winning bids are discounted. The size of the bidding credit depends on
the average of the aggregated annual gross revenues for each of the
preceding three years of the bidder, its affiliates, its controlling
interests, and the affiliates of its controlling interests.
34. In the 24 GHz Report and Order, the Commission adopted bidding
credits to promote and facilitate the participation of small businesses
in the competitive bidding for licenses in the 24 GHz service. For
Auction No. 56, bidding credits will be available to small businesses
or consortia thereof, as follows:
<> A bidder with attributed average annual gross
revenues of not more than $40 million for the preceding three years
(``entrepreneur'') will receive a 15 percent discount on its winning
bids;
<> A bidder with attributed average annual gross
revenues of not more than $15 million for the preceding three years
(``small business'') will receive a 25 percent discount on its winning
bids;
<> A bidder with attributed average annual gross
revenues of not more than $3 million for the preceding three years
(``very small business'') will receive a 35 percent discount on its
winning bids.
35. Small business bidding credits are not cumulative; a qualifying
applicant receives the 15 percent, the 25 percent or 35 percent bidding
credit on its winning bid, but only one credit per license.
36. To encourage the growth of wireless services in federally
recognized tribal lands the Commission has implemented a tribal land
bidding credit. See section V.F. of the Auction No. 56 Procedures
Public Notice.
37. Attribution for entrepreneur, small business, and very small
business eligibility. In determining which entities qualify as
entrepreneurs, small businesses, or very small businesses, the
Commission will consider the gross revenues of the applicant, its
affiliates, its controlling interests, and the affiliates of its
controlling interests. The Commission does not impose specific equity
requirements on controlling interest holders. Once the principals or
entities with a controlling interest are determined, only the revenues
of those principals or entities, the affiliates of those principals or
entities, and the applicant and its affiliates, will be counted in
determining small business eligibility.
38. Each member of a consortium of entrepreneurs, small businesses
or very small businesses must disclose its gross revenues along with
those of its affiliates, its controlling interests, and the affiliates
of its controlling interests.
ii. Supporting Documentation
39. Applicants should note that they will be required to file
supporting documentation to their FCC Form 175 short-form applications
to establish that they satisfy the eligibility requirements to qualify
as entrepreneur, small business, or very small business (or consortia
of entrepreneurs, small businesses, or very small businesses) for this
auction.
40. Applicants should further note that submission of an FCC Form
175 application constitutes a representation by the certifying official
that he or she is an authorized representative of the applicant, has
read the form's instructions and certifications, and that the contents
of the application and its attachments are true and correct. Submission
of a false certification to the Commission may result in penalties,
including monetary forfeitures, license forfeitures, ineligibility to
participate in future auctions, and/or criminal prosecution.
41. Entrepreneur, small business, or very small business
eligibility (Exhibit C). Entities applying to bid as entrepreneurs,
small businesses, or very small businesses (or consortia of
entrepreneurs, small businesses, or very small businesses) will be
required to disclose on Exhibit C to their FCC Form 175 short-form
applications, separately and in the aggregate, the gross revenues for
the preceding three years of each of the following: (i) The applicant,
(ii) its affiliates, (iii) its controlling interests, and (iv) the
affiliates of its controlling interests. Certification that the average
annual gross revenues for the preceding three years do not exceed the
applicable limit is not sufficient. A statement of the total gross
revenues for the preceding three years is also insufficient. The
applicant must provide separately for itself, its affiliates, its
controlling interests, and the affiliates of its controlling interests,
a schedule of gross revenues for each of the preceding three years, as
well as a statement of total average gross revenues for the three-year
period. If the applicant is applying as a consortium of entrepreneurs,
small businesses, or very small businesses, this information must be
provided for each consortium member.
C. Provisions Regarding Defaulters and Former Defaulters (FCC Form 175
Exhibit D)
42. Each applicant must certify on its FCC Form 175 application
under penalty of perjury that the applicant, its controlling interests,
its affiliates, and the affiliates of its controlling interests, as
defined by Sec. 1.2110, are not in default on any payment for
Commission licenses (including down payments) and not delinquent on any
non-tax debt owed to any Federal agency. In addition, each applicant
must attach to its FCC Form 175 application a statement made under
penalty of perjury indicating whether or not the applicant, its
affiliates, its controlling interests, or the affiliates of its
controlling interests, as defined by Sec. 1.2110, have ever been in
default on any Commission licenses or have ever been delinquent on any
non-tax debt owed to any Federal agency. Applicants must include this
statement as Exhibit D of the FCC Form 175.
43. ``Former defaulters''--i.e., applicants, including their
attributable interest holders, that in the past have
[[Page 21104]]
defaulted on any Commission licenses or been delinquent on any non-tax
debt owed to any Federal agency, but that have since remedied all such
defaults and cured all of their outstanding non-tax delinquencies--are
eligible to bid in Auction No. 56, provided that they are otherwise
qualified. However, as discussed infra in section III.D.3, former
defaulters are required to pay upfront payments that are fifty percent
more than the normal upfront payment amounts.
D. Installment Payments
44. Installment payment plans will not be available in Auction No.
56.
E. Other Information (FCC Form 175 Exhibits E and F)
45. Applicants owned by minorities or women, as defined in 47 CFR
1.2110(c)(2), may attach an exhibit (Exhibit E) regarding this status.
This applicant status information is collected for statistical purposes
only and assists the Commission in monitoring the participation of
``designated entities'' in its auctions. Applicants wishing to submit
additional information may do so on Exhibit F.
F. Minor Modifications to Short-Form Applications (FCC Form 175)
46. After the short-form filing deadline (6 p.m. e.t. June 4,
2004), applicants may make only minor changes to their FCC Form 175
applications. Applicants will not be permitted to make major
modifications to their applications (e.g., change their license
selections, change the certifying official, change control of the
applicant, or change bidding credits). See 47 CFR 1.2105. Permissible
minor changes include, for example, deletion and addition of authorized
bidders (to a maximum of three) and revision of exhibits. Applicants
must make these modifications to their FCC Form 175 electronically and
submit a letter, briefly summarizing the changes, by electronic mail to
the attention of Margaret Wiener, Chief, Auctions and Spectrum Access
Division, at the following address: [email protected] The electronic
mail summarizing the changes must include a subject or caption
referring to Auction No. 56. The Bureau requests that parties format
any attachments to electronic mail as Adobe[reg] Acrobat[reg] (pdf) or
Microsoft[reg] Word documents.
47. A separate copy of the letter should be faxed to the attention
of Kathryn Garland at (717) 338-2850.
G. Maintaining Current Information in Short-Form Applications (FCC Form
175)
48. Section 1.65 of the Commission's rules requires an applicant to
maintain the accuracy and completeness of information furnished in its
pending application and to notify the Commission within 30 days of any
substantial change that may be of decisional significance to that
application. Amendments reporting substantial changes of possible
decisional significance in information contained in FCC Form 175
applications, as defined by 47 CFR 1.2105(b)(2), will not be accepted
and may in some instances result in the dismissal of the FCC Form 175
application.
III. Pre-Auction Procedures
A. Auction Seminar
49. On Tuesday, May 25, 2004, the FCC will sponsor a free seminar
for Auction No. 56 at the Federal Communications Commission, located at
445 12th Street, SW., Washington, DC. The seminar will provide
attendees with information about pre-auction procedures, auction
conduct, the FCC Automated Auction System, auction rules, and the 24
GHz service rules.
B. Short-Form Application (FCC Form 175)--Due June 4, 2004
50. In order to be eligible to bid in this auction, applicants must
first submit an FCC Form 175 application. This application must be
submitted electronically and received at the Commission no later than 6
p.m. e.t. on June 4, 2004. Late applications will not be accepted.
i. Electronic Filing
51. Applicants must file their FCC Form 175 applications
electronically. Applications may generally be filed at any time
beginning at noon e.t. on May 25, 2004, until 6 p.m. e.t. on June 4,
2004. Applicants are strongly encouraged to file early and are
responsible for allowing adequate time for filing their applications.
Applicants may update or amend their electronic applications multiple
times until the filing deadline on June 4, 2004.
52. Applicants must press the ``SUBMIT Application'' button on the
``Submission'' page of the electronic form to successfully submit their
FCC Form 175s. Any form that is not submitted will not be reviewed by
the FCC. Information about accessing the FCC Form 175 is included in
Attachment C of the Auction No. 56 Procedures Public Notice. Technical
support is available at (202) 414-1250 (voice) or (202) 414-1255 (text
telephone (TTY)); hours of service are Monday through Friday, from 8
a.m. to 6 p.m. e.t. In order to provide better service to the public,
all calls to the hotline are recorded.
ii. Completion of FCC Form 175
53. Applicants should carefully review 47 CFR 1.2105, and must
complete all items on the FCC Form 175. Instructions for completing the
FCC Form 175 are in Attachment D of the Auction No. 56 Procedures
Public Notice.
iii. Electronic Review of FCC Form 175
54. The FCC Form 175 electronic review system may be used to locate
and print applicants' FCC Form 175 information. There is no fee for
accessing this system. See Attachment C of the Auction No. 56
Procedures Public Notice for details on accessing the review system.
55. Applicants may also view other applicants' completed FCC Form
175s after the filing deadline has passed and the FCC has issued a
public notice explaining the status of the applications.
Note: Applicants should not include sensitive information (i.e.,
TIN/EIN) on any exhibits to their FCC Form 175 applications.
C. Application Processing and Minor Corrections
56. After the deadline for filing the FCC Form 175 applications has
passed, the FCC will process all timely submitted applications to
determine which are acceptable for filing, and subsequently will issue
a public notice identifying: (i) Those applications accepted for
filing; (ii) those applications rejected; and (iii) those applications
which have minor defects that may be corrected, and the deadline for
filing such corrected applications.
D. Upfront Payments--Due June 29, 2004
57. In order to be eligible to bid in the auction, applicants must
submit an upfront payment accompanied by an FCC Remittance Advice Form
(FCC Form 159) (Revised 2/03). All upfront payments must be received by
Mellon Bank in Pittsburgh, PA by 6 p.m. e.t. on June 29, 2004. Failure
to deliver the upfront payment by the June 29, 2004, deadline will
result in dismissal of the application and disqualification from
participation in the auction. For specific details regarding upfront
payments, see III.D. of the Auction No. 56 Procedures Public Notice.
[[Page 21105]]
i. Making Auction Payments by Wire Transfer
58. Wire transfer payments must be received by 6 p.m. e.t. on June
29, 2004. To avoid untimely payments, applicants should discuss
arrangements (including bank closing schedules) with their banker
several days before they plan to make the wire transfer, and allow
sufficient time for the transfer to be initiated and completed before
the deadline.
59. Applicants must fax a completed FCC Form 159 to Mellon Bank at
(412) 209-6045 at least one hour before placing the order for the wire
transfer (but on the same business day). On the cover sheet of the fax,
write ``Wire Transfer--Auction Payment for Auction Event No. 56.'' In
order to meet the Commission's upfront payment deadline, an applicant's
payment must be credited to the Commission's account by the deadline.
Applicants are responsible for obtaining confirmation from their
financial institution that Mellon Bank has timely received their
upfront payment and deposited it in the proper account.
ii. Amount of Upfront Payment
60. In the Part 1 Order, 62 FR 13540, March 21, 1997, the
Commission delegated to the Bureau the authority and discretion to
determine appropriate upfront payment(s) for each auction. In addition,
in the Part 1 Fifth Report and Order, 65 FR 52323, August 29, 2000, the
Commission ordered that ``former defaulters,'' i.e., applicants that
have ever been in default on any Commission license or have ever been
delinquent on any non-tax debt owed to any Federal agency, be required
to pay upfront payments 50 percent greater than non-''former
defaulters.'' For purposes of this calculation, the ``applicant''
includes the applicant itself, its affiliates, its controlling
interests, and affiliates of its controlling interests, as defined by
Sec. 1.2110 of the Commission's rules.
61. The amount of the upfront payment will determine the number of
bidding units on which a bidder may place bids. In order to bid on a
license, otherwise qualified bidders that applied for that license on
Form 175 must have an eligibility level that meets or exceeds the
number of bidding units assigned to that license. At a minimum,
therefore, an applicant's total upfront payment must be enough to
establish eligibility to bid on at least one of the licenses applied
for on Form 175, or else the applicant will not be eligible to
participate in the auction. An applicant does not have to make an
upfront payment to cover all licenses for which the applicant has
applied on Form 175, but rather to cover the maximum number of bidding
units that are associated with licenses on which the bidder wishes to
place bids and hold high bids at any given time.
62. For Auction No. 56 the Commission adopts upfront payments on a
license-by-license basis using the following formula: $0.00015 * MHz *
License Area Population with a minimum of $2,500 per license.
63. The specific upfront payments and bidding units for each
license are set forth in Attachment A of the Auction No. 56 Procedures
Public Notice. Attachment A of the Auction No. 56 Procedures Public
Notice also includes the number of bidding units for each license.
64. In calculating its upfront payment amount, an applicant should
determine the maximum number of bidding units on which it may wish to
be active (bidding units associated with licenses on which the bidder
has the standing high bid from the previous round and licenses on which
the bidder places a bid in the current round) in any single round, and
submit an upfront payment covering that number of bidding units. In
order to make this calculation, an applicant should add together the
upfront payments for all licenses on which it seeks to bid in any given
round. Applicants should check their calculations carefully, as there
is no provision for increasing a bidder's maximum eligibility after the
upfront payment deadline.
65. Former defaulters should calculate their upfront payment for
all licenses by multiplying the number of bidding units they wish to
purchase by 1.5. In order to calculate the number of bidding units to
assign to former defaulters, the Commission will divide the upfront
payment received by 1.5 and round the result up to the nearest bidding
unit.
iii. Applicant's Wire Transfer Information for Purposes of Refunds of
Upfront Payments
66. The Commission will use wire transfers for all Auction No. 56
refunds. To ensure that refunds of upfront payments are processed in an
expeditious manner, the Commission is requesting that the following
pertinent information be supplied to the FCC: Name of Bank; ABA Number;
Contact and Phone Number; Account Number to Credit; Name of Account
Holder; FCC Registration Number (FRN); Taxpayer Identification Number;
Correspondent Bank (if applicable); Account Number. All refunds will be
returned to the payer of record as identified on the FCC Form 159
unless the payer submits written authorization instructing otherwise.
E. Auction Registration
67. Approximately ten days before the auction, the FCC will issue a
public notice announcing all qualified bidders for the auction.
Qualified bidders are those applicants whose FCC Form 175 applications
have been accepted for filing and have timely submitted upfront
payments sufficient to make them eligible to bid on at least one of the
licenses for which they applied.
68. All qualified bidders are automatically registered for the
auction. Registration materials will be distributed prior to the
auction by two separate overnight mailings, one containing the
confidential bidder identification number (BIN) and the other
containing the SecurID cards, both of which are required to place bids.
These mailings will be sent only to the contact person at the contact
address listed in the FCC Form 175.
69. Applicants that do not receive both registration mailings will
not be able to submit bids. Therefore, any qualified applicant that has
not received both mailings by noon on Wednesday, July 21, 2004, should
contact the Auctions Hotline at (717) 338-2888. Receipt of both
registration mailings is critical to participating in the auction, and
each applicant is responsible for ensuring it has received all of the
registration material.
70. Qualified bidders should note that lost bidder identification
numbers or SecurID cards can be replaced only by appearing in person at
the FCC headquarters, located at 445 12th St., SW., Washington, DC
20554. Only an authorized representative or certifying official, as
designated on an applicant's FCC Form 175, may appear in person with
two forms of identification (one of which must be a photo
identification) in order to receive replacements. Qualified bidders
requiring replacements must call technical support prior to arriving at
the FCC.
F. Remote Electronic Bidding
71. The Commission will conduct this auction over the Internet, and
telephonic bidding will be available as well. As a contingency plan,
bidders may also dial in to the FCC Wide Area Network. Qualified
bidders are permitted to bid telephonically or electronically. Each
applicant should indicate its bidding preference--electronic or
telephonic--on the FCC Form 175. In either case, each authorized bidder
must have its own SecurID card, which the FCC will provide at no
charge. For security
[[Page 21106]]
purposes, the SecurID cards and the FCC Automated Auction System user
manual are only mailed to the contact person at the contact address
listed on the FCC Form 175. Each SecurID card is tailored to a specific
auction; therefore, SecurID cards issued for other auctions or obtained
from a source other than the FCC will not work for Auction No. 56. The
telephonic bidding phone number will be supplied in the first overnight
mailing, which also includes the confidential bidder identification
number.
G. Mock Auction
72. All qualified bidders will be eligible to participate in a mock
auction on Friday, July 23, 2004. The mock auction will enable
applicants to become familiar with the FCC Automated Auction System
prior to the auction. Participation by all bidders is strongly
recommended.
III. Auction Event
73. The first round of bidding for Auction No. 56 will begin on
Wednesday, July 28, 2004. The initial bidding schedule will be
announced in a public notice listing the qualified bidders, which is
released approximately 10 days before the start of the auction.
H. Auction Structure
i. Simultaneous Multiple Round Auction
74. The Commission will award all licenses in Auction No. 56 in a
simultaneous multiple round auction. Unless otherwise announced, bids
will be accepted on all licenses in each round of the auction. This
approach allows bidders to take advantage of synergies that exist among
licenses and is administratively efficient.
ii. Maximum Eligibility and Activity Rules
75. The amount of the upfront payment submitted by a bidder will
determine the initial (maximum) eligibility (as measured in bidding
units) for each bidder.
76. Note that each license is assigned a specific number of bidding
units equal to the upfront payment listed in Attachment A of the
Auction No. 56 Procedures Public Notice on a bidding unit per dollar
basis. The total upfront payment defines the maximum number of bidding
units on which the applicant will be permitted to bid and hold high
bids in a round. As there is no provision for increasing a bidder's
eligibility after the upfront payment deadline, applicants are
cautioned to calculate their upfront payments carefully. The total
upfront payment does not affect the total dollar amount a bidder may
bid on any given license.
77. In order to ensure that the auction closes within a reasonable
period of time, an activity rule requires bidders to bid actively
throughout the auction.
78. A bidder's activity level in a round is the sum of the bidding
units associated with licenses on which the bidder is active. A bidder
is considered active on a license in the current round if it is either
the high bidder at the end of the previous bidding round and does not
withdraw the high bid in the current round, or if it submits a bid in
the current round (see ``Minimum Acceptable Bids and Bid Increments''
in section IV.B.iii). The minimum required activity is expressed as a
percentage of the bidder's current bidding eligibility, and increases
by stage as the auction progresses. Because these procedures have
proven successful in maintaining the pace of previous auctions (as set
forth under ``Auction Stages'' in section IV.A.iii and ``Stage
Transitions'' in section IV.A.iv), we adopt them for Auction No. 56.
iii. Auction Stages
79. The Commission will conduct the auction in two stages and
employ an activity rule. Listed are the activity levels for each stage
of the auction. The FCC reserves the discretion to further alter the
activity percentages before and/or during the auction.
Stage One: During the first stage of the auction, a bidder desiring
to maintain its current eligibility will be required to be active on
licenses encompassing at least 80 percent of its current bidding
eligibility in each bidding round. Failure to maintain the required
activity level will result in a reduction in the bidder's bidding
eligibility in the next round of bidding (unless an activity rule
waiver is used). During Stage One, reduced eligibility for the next
round will be calculated by multiplying the bidder's current activity
(the sum of bidding units of the bidder's standing high bids and bids
during the current round) by five-fourths (5/4).
Stage Two: During the second stage of the auction, a bidder
desiring to maintain its current eligibility is required to be active
on 95 percent of its current bidding eligibility. Failure to maintain
the required activity level will result in a reduction in the bidder's
bidding eligibility in the next round of bidding (unless an activity
rule waiver is used). During Stage Two, reduced eligibility for the
next round will be calculated by multiplying the bidder's current
activity (the sum of bidding units of the bidder's standing high bids
and bids during the current round) by twenty-nineteenths (20/19).
Caution: Since activity requirements increase in each auction
stage, bidders must carefully check their current activity during the
bidding period of the first round following a stage transition. This is
especially critical for bidders that have standing high bids and do not
plan to submit new bids. In past auctions, some bidders have
inadvertently lost bidding eligibility or used an activity rule waiver
because they did not re-verify their activity status at stage
transitions. Bidders may check their activity against the required
activity level by using the bidding system's bidding module.
80. Because the foregoing procedures have proven successful in
maintaining proper pace in previous auctions, we adopt them for Auction
No. 56.
iv. Stage Transitions
81. The auction will generally advance to the next stage (i.e.,
from Stage One to Stage Two) when the auction activity level, as
measured by the percentage of bidding units receiving new high bids, is
below 20 percent for three consecutive rounds of bidding in each Stage.
The Bureau will retain the discretion to change stages unilaterally by
announcement during the auction.
82. Thus, the Bureau will retain the discretion to regulate the
pace of the auction by announcement. This determination will be based
on a variety of measures of bidder activity, including, but not limited
to, the auction activity level, the percentages of licenses (as
measured in bidding units) on which there are new bids, the number of
new bids, and the percentage increase in revenue. We believe that these
stage transition rules are appropriate for use in Auction No. 56.
v. Activity Rule Waivers and Reducing Eligibility
83. Each bidder will be provided three activity rule waivers that
may be used in any round during the course of the auction. Use of an
activity rule waiver preserves the bidder's current bidding eligibility
despite the bidder's activity in the current round being below the
required level. An activity rule waiver applies to an entire round of
bidding and not to a particular license.
84. The FCC Automated Auction System assumes that bidders with
insufficient activity would prefer to use an activity rule waiver (if
available) rather than lose bidding eligibility. Therefore, the system
will automatically apply a waiver (known as an ``automatic waiver'') at
the end of any round where
[[Page 21107]]
a bidder's activity level is below the minimum required unless: (i)
There are no activity rule waivers available; or (ii) the bidder
overrides the automatic application of a waiver by reducing
eligibility, thereby meeting the minimum requirements. If a bidder has
no waivers remaining and does not satisfy the required activity level,
the current eligibility will be permanently reduced, possibly
eliminating the bidder from the auction.
85. A bidder with insufficient activity that wants to reduce its
bidding eligibility rather than use an activity rule waiver must
affirmatively override the automatic waiver mechanism during the round
by using the reduce eligibility function in the bidding system. In this
case, the bidder's eligibility is permanently reduced to bring the
bidder into compliance with the activity rules as described in
``Auction Stages'' (see section IV.A.iii discussion). Once eligibility
has been reduced, a bidder will not be permitted to regain its lost
bidding eligibility.
86. Finally, a bidder may proactively use an activity rule waiver
as a means to keep the auction open without placing a bid. If a bidder
submits a proactive waiver (using the proactive waiver function in the
FCC Automated Auction System) during a round in which no bids are
submitted, the auction will remain open and the bidder's eligibility
will be preserved. However, an automatic waiver triggered during a
round in which there are no new bids or withdrawals will not keep the
auction open.
Note: Once a proactive waiver is submitted during a round, that
waiver cannot be unsubmitted.
vi. Auction Stopping Rules
87. For Auction No. 56, the Commission will employ a simultaneous
stopping rule, and retain discretion to invoke a modified version of
the stopping rule. The modified version of the stopping rule would
close the auction for all licenses after the first round in which no
bidder submits a proactive waiver, a withdrawal, or a new bid on any
license on which it is not the standing high bidder.
88. In addition, the Bureau may reserve the right to declare that
the auction will end after a designated number of additional rounds
(``special stopping rule''). If the Bureau invokes this special
stopping rule, it will accept bids in the final round(s) only for
licenses on which the high bid increased in at least one of the
preceding specified number of rounds. The Bureau may exercise these
options only in certain circumstances, such as where the auction is
proceeding very slowly, where there is minimal overall bidding activity
or where it appears likely that the auction will not close within a
reasonable period of time.
vii. Auction Delay, Suspension, or Cancellation
89. By public notice or by announcement during the auction, the
Bureau may delay, suspend, or cancel the auction in the event of
natural disaster, technical obstacle, evidence of an auction security
breach, unlawful bidding activity, administrative or weather necessity,
or for any other reason that affects the fair conduct of competitive
bidding. In such cases, the Bureau in its sole discretion, may elect to
resume the auction starting from the beginning of the current round,
resume the auction starting from some previous round, or cancel the
auction in its entirety. Network interruption may cause the Bureau to
delay or suspend the auction. Exercise of this authority is solely
within the discretion of the Bureau, and its use is not intended to be
a substitute for situations in which bidders may wish to apply their
activity rule waivers.
I. Bidding Procedures
i. Round Structure
90. The initial bidding schedule will be announced in the public
notice listing the qualified bidders, which is released approximately
10 days before the start of the auction. Each bidding round is followed
by the release of round results. Multiple bidding rounds may be
conducted in a given day. Details regarding round results formats and
locations will also be included in the qualified bidders public notice.
91. The FCC has discretion to change the bidding schedule in order
to foster an auction pace that reasonably balances speed with the
bidders' need to study round results and adjust their bidding
strategies. The Bureau may increase or decrease the amount of time for
the bidding rounds and review periods, or the number of rounds per day,
depending upon the bidding activity level and other factors.
ii. Reserve Price or Minimum Opening Bid
92. For Auction No. 56, the Bureau adopts the following license-by
license formula for calculating minimum opening bids: $0.0003 * MHz *
License Area Population with a minimum of $2,500 per license.
93. The minimum opening bids we adopt for Auction No. 56 are
reducible at the discretion of the Bureau. We emphasize, however, that
such discretion will be exercised, if at all, sparingly and early in
the auction, i.e., before bidders lose all waivers and begin to lose
substantial eligibility. During the course of the auction, the Bureau
will not entertain requests to reduce the minimum opening bid on
specific licenses.
94. The specific minimum opening bids for each license available in
Auction No. 56 are set forth in Attachment A of the Auction No. 56
Procedures Public Notice.
iii. Minimum Acceptable Bids and Bid Increments
95. In the Auction No. 56 Comment Public Notice, we will use a
smoothing methodology to calculate minimum acceptable bids. The
smoothing methodology is designed to vary the increment for a given
license between a maximum and minimum percentage based on the bidding
activity on that license. This methodology allows the increments to be
tailored to the activity on a license, decreasing the time it takes for
licenses receiving many bids to reach their final prices. The formula
used to calculate this increment is included as Attachment F of the
Auction No. 56 Procedures Public Notice. We will initially set the
weighting factor at 0.5, the minimum percentage increment at 0.1 (10%),
and the maximum percentage increment at 0.2 (20%). Hence, at these
initial settings, the percentage increment will fluctuate between 10%
and 20% depending upon the number of bids for the license. The Bureau
will retain the discretion to change the minimum acceptable bids and
bid increments if circumstances so dictate.
96. In each round, each eligible bidder will be able to place a bid
on a particular license for which it applied in any of nine different
amounts. The FCC Automated Auction System will list the nine bid
amounts for each license.
97. Once there is a standing high bid on a license, the FCC
Automated Auction System will calculate a minimum acceptable bid for
that license for the following round, as described in Attachment F of
the Auction No. 56 Procedures Public Notice. The difference between the
minimum acceptable bid and the standing high bid for each license will
define the bid increment--i.e., bid increment = (minimum acceptable
bid)--(standing high bid). The nine acceptable bid amounts for each
license consist of the minimum acceptable bid (the standing high bid
plus one bid increment) and additional amounts calculated using
[[Page 21108]]
multiple bid increments (i.e., the second bid amount equals the
standing high bid plus two times the bid increment, the third bid
amount equals the standing high bid plus three times the bid increment,
etc.).
98. At the start of the auction and until a bid has been placed on
a license, the minimum acceptable bid for that license will be equal to
its minimum opening bid. Corresponding additional bid amounts will be
calculated using bid increments defined as the difference between the
minimum opening bid times one plus the percentage increment, rounded as
described in Attachment F of the Auction No. 56 Procedures Public
Notice, and the minimum opening bid--i.e., bid increment = (minimum
opening bid)(1 + percentage increment) {rounded{time} - (minimum
opening bid). At the start of the auction and until a bid has been
placed on a license, the nine acceptable bid amounts for each license
consist of the minimum opening bid and additional amounts calculated
using multiple bid increments (i.e., the second bid amount equals the
minimum opening bid plus the bid increment, the third bid amount equals
the minimum opening bid plus two times the bid increment, etc.).
99. In the case of a license for which the standing high bid has
been withdrawn, the minimum acceptable bid will equal the second
highest bid received for the license. The additional bid amounts are
calculated using the difference between the second highest bid times
one plus the minimum percentage increment, rounded, and the second
highest bid.
100. The Bureau retains the discretion to change the minimum
acceptable bids and bid increments and the methodology for determining
the minimum acceptable bids and bid increments if it determines that
circumstances so dictate. The Bureau will do so by announcement in the
FCC Automated Auction System. The Bureau may also use its discretion to
adjust the minimum bid increment without prior notice if circumstances
warrant.
iv. High Bids
101. At the end of each bidding round, the high bids will be
determined based on the highest gross bid amount received for each
license. A high bid from a previous round is sometimes referred to as a
``standing high bid.'' A ``standing high bid'' will remain the high bid
until there is a higher bid on the same license at the close of a
subsequent round. Bidders are reminded that standing high bids count
towards bidding activity.
102. In the event of identical high bids on a license in a given
round (i.e., tied bids), a Sybase[reg] SQL pseudo-random number
generator will be used to assign a random number to each bid. The
remaining bidders, as well as the high bidder, will be able to submit a
higher bid in a subsequent round. If no bidder submits a higher bid in
a subsequent round, the high bid from the previous round will win the
license. If any bids are received on the license in a subsequent round,
the high bid will once again be determined on the highest gross bid
amount received for the license.
v. Bidding
103. During a round, a bidder may submit bids for as many licenses
as it wishes (subject to its eligibility), withdraw high bids from
previous bidding rounds, remove bids placed in the same bidding round,
or permanently reduce eligibility. Bidders also have the option of
making multiple submissions and withdrawals in each round. If a bidder
submits multiple bids for a single license in the same round, the
system takes the last bid entered as that bidder's bid for the round.
Bidders should note that the bidding units associated with licenses for
which the bidder has removed or withdrawn its bid do not count towards
the bidder's activity at the close of the round.
104. Please note that all bidding will take place remotely either
through the FCC Automated Auction System or by telephonic bidding.
(Telephonic bid assistants are required to use a script when entering
bids placed by telephone. Telephonic bidders are therefore reminded to
allow sufficient time to bid by placing their calls well in advance of
the close of a round. Normally, five to ten minutes are necessary to
complete a bid submission.)
105. A bidder's ability to bid on specific licenses in the first
round of the auction is determined by two factors: (i) The licenses
applied for on FCC Form 175 and (ii) the upfront payment amount
deposited. The bid submission screens will allow bidders to submit bids
on only those licenses for which the bidder applied on its FCC Form
175.
106. In order to access the bidding function of the FCC Automated
Auction System, bidders must be logged in during the bidding round
using the bidder identification number provided in the registration
materials, and the password generated by the SecurID card. Bidders are
strongly encouraged to print bid confirmations for each round after
they have completed all of their activity for that round.
107. In each round, eligible bidders will be able to place bids on
a given license in any of nine different amounts. For each license, the
FCC Automated Auction System interface will list the nine acceptable
bid amounts in a drop-down box. Bidders may use the drop-down box to
select from among the nine bid amounts. The FCC Automated Auction
System also includes an import function that allows bidders to upload
text files containing bid information.
108. Finally, bidders are cautioned to select their bid amounts
carefully because, as explained in the following section, bidders that
withdraw a standing high bid from a previous round, even if the bid was
mistakenly or erroneously made, are subject to bid withdrawal payments.
vi. Bid Removal and Bid Withdrawal
109. For Auction No. 56 the Commission adopts bid removal and bid
withdrawal procedures. With respect to bid withdrawals, the Commission
will limit each bidder to withdrawals in no more than two rounds during
the course of the auction. The rounds in which withdrawals are used
will be at the bidder's discretion.
110. Procedures. Before the close of a bidding round, a bidder has
the option of removing any bids placed in that round. By using the
``remove bid'' function in the bidding system, a bidder may effectively
``unsubmit'' any bid placed within that round. A bidder removing a bid
placed in the same round is not subject to withdrawal payments.
Removing a bid will affect a bidder's activity for the round in which
it is removed, i.e., a bid that is removed does not count toward
bidding activity. These procedures will enhance bidder flexibility
during the auction.
111. Once a round closes, a bidder may no longer remove a bid.
However, in later rounds, a bidder may withdraw standing high bids from
previous rounds using the withdraw bid function in the FCC Automated
Auction System (assuming that the bidder has not reached its withdrawal
limit). A high bidder that withdraws its standing high bid from a
previous round during the auction is subject to the bid withdrawal
payments specified in 47 CFR 1.2104(g).
Note: Once a withdrawal is submitted during a round, that
withdrawal cannot be unsubmitted.
112. The Bureau will limit the number of rounds in which bidders
may place withdrawals to two rounds. These rounds will be at the
bidder's discretion and there will be no limit on the number of bids
that may be withdrawn in either of these rounds. Withdrawals
[[Page 21109]]
during the auction will be subject to the bid withdrawal payments
specified in 47 CFR 1.2104(g). Bidders should note that abuse of the
Commission's bid withdrawal procedures could result in the denial of
the ability to bid on a market.
113. Calculation. Generally, the Commission imposes payments on
bidders that withdraw high bids during the course of an auction. If a
bidder withdraws its bid and there is no higher bid in the same or
subsequent auction(s), the bidder that withdrew its bid is responsible
for the difference between its withdrawn bid and the high bid in the
same or subsequent auction(s). In the case of multiple bid withdrawals
on a single license, within the same or subsequent auctions(s), the
payment for each bid withdrawal will be calculated based on the
sequence of bid withdrawals and the amounts withdrawn. No withdrawal
payment will be assessed for a withdrawn bid if either the subsequent
winning bid or any of the intervening subsequent withdrawn bids, in
either the same or subsequent auctions(s), equals or exceeds that
withdrawn bid. Thus, a bidder that withdraws a bid will not be
responsible for any withdrawal payments if there is a subsequent higher
bid in the same or subsequent auction(s).
114. In instances in which bids have been withdrawn on a license
that is not won in the same auction, the Commission will assess an
interim withdrawal payment equal to 3 percent of the amount of the
withdrawn bids. The 3 percent interim payment will be applied toward
any final bid withdrawal payment that will be assessed after subsequent
auction of the license. The Part 1 Fifth Report and Order provides
specific examples showing application of the bid withdrawal payment
rule.
vii. Round Results
115. Bids placed during a round will not be made public until the
conclusion of that bidding period. After a round closes, the Bureau
will compile reports of all bids placed, bids withdrawn, current high
bids, new minimum acceptable bids, and bidder eligibility status
(bidding eligibility and activity rule waivers), and post the reports
for public access. Reports reflecting bidders' identities for Auction
No. 56 will be available before and during the auction. Thus, bidders
will know in advance of this auction the identities of the bidders
against which they are bidding.
viii. Auction Announcements
116. The FCC will use auction announcements to announce items such
as schedule changes and stage transitions. All FCC auction
announcements will be available by clicking a link on the FCC Automated
Auction System.
IV. Post-Auction Procedures
A. Down Payments and Withdrawn Bid Payments
117. After bidding has ended, the Commission will issue a public
notice declaring the auction closed and identifying winning bidders,
down payments, final payments, and any withdrawn bid payments due.
118. Within ten business days after release of the auction closing
notice, each winning bidder must submit sufficient funds (in addition
to its upfront payment) to bring its total amount of money on deposit
with the Commission for Auction No. 56 to 20 percent of the net amount
of its winning bids (gross bids less any applicable entrepreneur, small
business, or very small business bidding credits). In addition, by the
same deadline, all bidders must pay any bid withdrawal payments due
under 47 CFR 1.2104(g), as discussed in ``Bid Removal and Bid
Withdrawal,'' section IV.B.vi. (Upfront payments are applied first to
satisfy any withdrawn bid liability, before being applied toward down
payments.)
B. Final Payments
119. Each winning bidder will be required to submit the balance of
the net amount of its winning bids within 10 business days after the
deadline for submitting down payments.
C. Long-Form Application (FCC Form 601)
120. Within ten business days after release of the auction closing
notice, winning bidders must electronically submit a properly completed
long-form application (FCC Form 601) and required exhibits for each
license won through Auction No. 56. Further filing instructions will be
provided to auction winners at the close of the auction.
D. Default and Disqualification
121. Any high bidder that defaults or is disqualified after the
close of the auction (i.e., fails to remit the required down payment
within the prescribed period of time, fails to submit a timely long-
form application, fails to make full payment, or is otherwise
disqualified) will be subject to the payments described in 47 CFR
1.2104(g)(2). In such event the Commission may re-auction the license
or offer it to the next highest bidder (in descending order) at its
final bid. In addition, if a default or disqualification involves gross
misconduct, misrepresentation, or bad faith by an applicant, the
Commission may declare the applicant and its principals ineligible to
bid in future auctions, and may take any other action that it deems
necessary, including institution of proceedings to revoke any existing
licenses held by the applicant.
E. Refund of Remaining Upfront Payment Balance
122. All applicants that submit upfront payments but are not
winning bidders for a license in Auction No. 56 may be entitled to a
refund of their remaining upfront payment balance after the conclusion
of the auction. No refund will be made unless there are excess funds on
deposit from the applicant after any applicable bid withdrawal payments
have been paid. All refunds will be returned to the payer of record, as
identified on the FCC Form 159, unless the payer submits written
authorization instructing otherwise.
123. Bidders that drop out of the auction completely may be
eligible for a refund of their upfront payments before the close of the
auction. Qualified bidders that have exhausted all of their activity
rule waivers, have no remaining bidding eligibility, and have not
withdrawn a high bid during the auction must submit a written refund
request. If a bidder has completed the refund instructions
electronically, then only a written request for the refund is
necessary. If not, the request must also include wire transfer
instructions, Taxpayer Identification Number (TIN) and FCC Registration
Number (FRN). Send refund request to: Federal Communications
Commission, Financial Operations Center, Auctions Accounting Group,
Gail Glasser, 445 12th Street, SW., Room 1-C864, Washington, DC 20554.
124. Bidders are encouraged to file their refund information
electronically using the refund information portion of the FCC Form
175, but bidders can also fax their information to the Auctions
Accounting Group at (202) 418-2843. Once the information has been
approved, a refund will be sent to the party identified in the refund
information.
Note: Refund processing generally takes up to two weeks to
complete. Bidders with questions about refunds should contact Gail
Glasser at (202) 418-0578.
[[Page 21110]]
Federal Communications Commission.
Gary Michaels,
Deputy Chief, Auction and Spectrum Access Division, WTB.
[FR Doc. 04-8844 Filed 4-19-04; 8:45 am]
BILLING CODE 6712-01-P
