[Federal Register Volume 64, Number 76 (Wednesday, April 21, 1999)]
[Notices]
[Pages 19530-19540]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9765]
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FEDERAL COMMUNICATIONS COMMISSION
[DA 99-474; Report No. AUC-99-24-B (Auction No. 24)]
Phase II 220 MHz Service Spectrum Auction; Notice and Filing
Requirements for Auction of Phase II 220 MHz Service Spectrum Scheduled
for June 8, 1999; Minimum Opening Bids and Other Procedural Issues
AGENCY: Federal Communications Commission.
ACTION: Notice.
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[[Page 19531]]
SUMMARY: This is a summary of a Public Notice (DA 99-474) released on
March 8, 1999, establishing minimum opening bids and procedures for the
upcoming auction of Phase II 220 MHz Service Spectrum (Auction No. 24),
in accordance with the Balanced Budget Act of 1997.
DATES: Auction No. 24 is scheduled to begin on June 8, 1999.
ADDRESSES: See the text of the Public Notice and attachments for
information regarding important addresses.
FOR FURTHER INFORMATION CONTACT:
Media Contact: Meribeth McCarrick, (202) 418-0654.
Auctions Division: Ruby Hough, Operations; Bob Reagle, Auctions
Analysis; or Anne Napoli, Legal, (202) 418-0660.
Commercial Wireless Division: Scott Mackoul, (202) 418-0620.
SUPPLEMENTARY INFORMATION: The complete text of this Public Notice,
including nine attachments that do not appear in this summary, is
available for inspection and copying Monday through Thursday from 9
a.m. to 4 p.m., and Friday from 9 a.m. to 2 p.m., in the Wireless
Telecommunications Bureau's Public Reference Room (Room 5608), 2025 M
Street, N.W., Washington, D.C. 20554, and on the Commission's World
Wide Web page, located at: http://www.fcc.gov/wtb/auctions/auc24/
auc24.html. Please note that the Wireless Telecommunications Bureau's
Public Reference Room will cease operations at the M Street location on
Monday, April 26, 1999, and will reopen on Monday, May 3, 1999 at the
Commission's new headquarters, located at 445 Twelfth Street, S.W.,
Room CY-A257, Washington, D.C. 20554. Copies also may be purchased from
the Commission's copy contractor, International Transcription Services,
Inc. (ITS), 1231 20th Street, N.W., Washington, D.C. 20036, (202) 857-
3800. The nine attachments that do not appear in this summary, but are
available as described above, are: Attachment A (Summary of Licenses to
be Auctioned, Upfront Payments, Minimum Opening Bids); Attachment B
(List of Cases Pending Before the Commission Involving Non-Nationwide
Phase I 220 MHz Licensees); Attachment C (Guidelines for Completing FCC
Forms 175 and 159 and Exhibits); Attachment D (Auction-Specific
Instructions for FCC Remittance Advice (FCC Form 159)); Attachment E
(Electronic Filing and Review of FCC Form 175); Attachment F (Accessing
the FCC Network Using Windows 95/98); Attachment G (FCC Remote Bidding
Software Order Form); Attachment H (Summary Listing of Documents from
the Commission and the Wireless Telecommunications Bureau Addressing
Application of the Anti-Collusion Rules); and Attachment I (Auction
Seminar Registration Form).
Synopsis
I. Introduction
1. The Federal Communications Commission (``FCC'' or
``Commission'') will hold an auction of 225 licenses to operate in the
220-222 MHz band. This auction offers 216 100-kHz licenses in 87
Economic Areas (EAs), and nine 150-kHz licenses in four Economic Area
Groups (EAGs) designated for the Phase II 220 MHz auction. The number
of 100-kHz licenses available in each EA varies from one to five, while
the number of 150-kHz licenses available in each EAG varies from two to
three. No nationwide licenses are available in this auction. A list of
each license that will be available in Auction No. 24, along with its
upfront payment and minimum opening bid, is included in the full text
of this Public Notice as Attachment A (see ``Supplementary
Information,'' supra, for further details).
2. Auction Date: The auction will commence on June 8, 1999. 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 will be conducted on each business day until bidding
has stopped on all licenses.
3. Bidding Methodology: Simultaneous multiple round bidding.
Bidding will be permitted only from remote locations, either
electronically (by computer) or telephonically. Pre-Auction Dates and
Deadlines:
Auction Seminar: April 21, 1999.
Short Form Application (FCC Form 175): May 10, 1999; 5:30
p.m. ET.
Upfront Payments (via wire transfer): May 24, 1999; 6:00
p.m. ET.
Orders for Remote Bidding Software: May 25, 1999.
Mock Auction June 4, 1999.
Telephone Contacts:
FCC National Call Center: (888) CALL-FCC ((888) 225-5322)
or (717) 338-2888 (direct dial). For general auction information and
seminar registration, press option #2 at the prompt. Hours: 8 a.m.-5:30
p.m. ET, Monday through Friday.
FCC Technical Support Hotline: (202) 414-1250 (voice),
(202) 414-1255 (text telephone (TTY)). Hours of service: 8 a.m.-6 p.m.
ET, Monday through Friday.
A. Background
4. In the 220 MHz Third Report and Order (62 FR 15978, April 3,
1997), the Commission restructured the licensing framework that governs
the 220 MHz Service. Site-specific licensing, used in the Phase I 220
MHz Service, was replaced with a geographic-based system in the Phase
II 220 MHz Service, which is the subject of the upcoming auction. This
geographic-based licensing methodology is similar to that used in other
commercial mobile radio services (``CMRS''). The Commission developed
three types of geographic area licenses for the Phase II 220 MHz
Service. The first type of license was based upon Economic Areas (EAs),
developed by the Bureau of Economic Analysis of the U.S. Department of
Commerce (60 FR 13114, March 10, 1995). In addition, the Commission
created three EA-type license areas to cover the following United
States territories: American Samoa; the U.S. Virgin Islands and Puerto
Rico; and Guam and the Northern Mariana Islands. The second type of
license, known as Economic Area Groupings (EAGs), included 6 groups of
EAs, which collectively encompassed all of the EA and EA-type licenses.
Finally, the Commission designed three nationwide licenses, each of
which encompassed all six EAGs. Service and operational requirements
for the Phase II 220 MHz Service are contained in Part 90 of the
Commission's Rules, 47 CFR Part 90.
Pursuant to the rules adopted in the 220 MHz Third Report and Order
(62 FR 15978, April 3, 1997) and the 220 MHz Memorandum Opinion and
Order on Reconsideration (63 FR 306611, June 12, 1998), the Commission
commenced the auction of 908 Phase II 220 MHz licenses on September 15,
1998. This auction closed on October 22, 1998. Forty-four winning
bidders won a total of 693 licenses. On November 24, 1998, the Bureau
released a Public Notice (DA 98-2386) (63 FR 67685, December 12, 1998)
(``Phase II 220 MHz Service Public Notice''), announcing that 225
licenses now available for auction will be included in Auction No. 24.
B. Due Diligence
5. Potential bidders are reminded that there are a number of
incumbent Phase I 220 MHz licensees already licensed and operating on
frequencies that will be subject to the upcoming auction. Such
incumbents must be protected from harmful interference by Phase II 220
MHz licensees in accordance with the Commission's Rules. See 47 CFR
90.763. These limitations may restrict the ability of such geographic
area licensees to use certain portions of the electromagnetic spectrum
or provide
[[Page 19532]]
service to certain areas in their geographic license areas.
6. In addition, potential bidders seeking licenses for geographic
areas that are near the Canadian border should be aware that the use of
some or all of the channels they acquire in the auction could be
restricted as a result of a future agreement with Canada on the use of
220-222 MHz spectrum in the border area.
7. Potential bidders should also be aware that certain applications
(including those for modification), waiver requests, petitions for
reconsideration and applications for review are pending before the
Commission that relate to particular incumbent non-nationwide 220 MHz
licensees. In addition, the decisions reached in the 220 MHz proceeding
are the subject of a judicial appeal and may be the subject of
additional reconsideration or appeal. See, e.g., PLMRS Narrowband
Corp., et al. v. Federal Communications Commission, No. 92-1432, (D.C.
Cir., filed September 18, 1992). We note that resolution of these
matters could have an impact on the availability of spectrum for EA and
EAG licensees. In addition, while 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.
8. Potential bidders are solely responsible for investigating and
evaluating the degree to which such pending matters may affect spectrum
availability in areas where they seek EA or EAG licenses.
9. To aid potential bidders, Attachment B to this Public Notice
lists matters pending before the Commission that relate to licenses or
applications for the 220 MHz service. The Commission makes no
representations or guarantees that the listed matters are the only
pending matters that could affect spectrum availability in the 220-222
MHz band.
10. Parties may submit additions or corrections to the list,
provided such additions or corrections are filed with the Commission
within ten (10) business days from release of this Public Notice. Such
submissions should be limited to identifying pleadings or papers
previously filed with the Commission. No new pleadings or arguments on
the merits will be accepted as explicitly provided by Commission Rules.
11. Corrections and additions must be filed with the Office of the
Secretary, Federal Communications Commission, 445 12th St., S.W.,
Washington, D.C. 20554. One copy of each submission should also be sent
to International Transcription Service, Inc., 1231 20th Street, N.W.,
Washington, D.C. 20036, while an additional courtesy copy should be
sent to Scott A. Mackoul, Policy and Rules Branch, Commercial Wireless
Division, Wireless Telecommunications Bureau, Federal Communications
Commission, 445 12th Street, S.W., Room 4-A230, Washington, D.C. 20554.
Parties filing additions or corrections should include the internal
reference number of this Public Notice (DA 99-474) on their
submissions. Parties are also reminded that some of the proceedings are
restricted proceedings governed by the Commission's ex parte rules.
Accordingly, any submission filed pursuant to this Public Notice that
is directed to the merits or outcome of any restricted proceeding must
be served on all parties to that restricted proceeding. See generally
47 CFR 1.1200-1.1216.
12. Additional information regarding matters identified in
Attachment B is available to the public. Licensing information is
contained in the Commission's licensing database, which is available
for inspection in the Wireless Telecommunications Bureau's Public
Reference Rooms, located at 2025 M Street, N.W., Room 5608, Washington,
D.C. 20554, and 1270 Fairfield Road, Gettysburg, PA 17325. In a future
Public Notice, the Bureau will provide the new location of the
Commission's licensing database in the Portals building. In addition,
copies of the pleadings are available for public inspection only in the
Gettysburg Public Reference Room.
13. In addition, potential bidders may search for information (but
not the pleadings) regarding incumbent 220 MHz licensees on the World
Wide Web at http://www.fcc.gov/wtb. In particular, information can be
accessed by downloading databases by selecting ``WTB Database Files''
(http://www.fcc.gov/wtb/databases.html), or searching on-line by
selecting ``Search WTB Databases'' (http://gullfoss.fcc.gov:8080/cgi-
bin/ws.exe/beta/genmen/index.hts). Any telephone inquires regarding
these matters should be directed to the Technical Support Hotline at
(202) 414-1250 (V) or (202) 414-1255 (text telephone (TTY)).
14. 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
bidders are strongly encouraged to physically inspect any sites located
in or near the geographic area for which they plan to bid.
C. Participation
15. Those wishing to participate in the auction must:
Electronically submit a short form application (FCC Form
175) by May 10, 1999.
Submit a sufficient upfront payment and an FCC Remittance
Advice Form (FCC Form 159) by May 24, 1999.
Comply with all provisions outlined in the Bidder
Information Package.
D. Prohibition of Collusion
16. To ensure the competitiveness and integrity of the auction
process, the Commission's Rules prohibit applicants for the same
geographic license area from communicating with each other during the
auction about bids, bidding strategies, or settlements. This
prohibition begins with the filing of short-form applications, and ends
on the down payment due date. Bidders competing for the same license(s)
are encouraged not to use the same individual as an authorized bidder.
A violation of the anti-collusion rule could 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 bidders he/she is authorized to represent in the
auction. Also, if the authorized bidders are different individuals
employed by the same organization (e.g., law firm or consulting firm),
a violation could similarly occur. At a minimum, in such a case,
applicants should certify 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. The
Bureau, however, 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. In Auction No. 24, for example, the
rule would apply to any applicants bidding for the same EA or EAG.
Therefore, applicants that apply to bid for ``all markets'' would be
precluded from communicating with all other applicants after filing the
FCC Form 175. However, applicants may enter into bidding agreements
before filing their FCC Form 175 short-form applications, as long as
they disclose the existence of the agreement(s) in their Form 175
short-form applications. By signing their FCC Form 175 short-form
applications, applicants are certifying their compliance with Section
1.2105(c).
[[Page 19533]]
In addition, 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, Section 1.65 requires an
auction applicant to notify the Commission of any violation of the
anti-collusion rules upon learning of such violation. Bidders are
therefore required to make such notification to the Commission
immediately upon discovery.
E. Bidder Information Package
17. No Bidder Information Package will be provided for Auction No.
24. The Commission provided a Bidder Information Package for Auction
No. 18, the initial auction of Phase II 220 MHz Service spectrum.
Although the majority of the specific software and technical
information contained therein is no longer applicable (e.g., Tabs A
through D), other information, including the auction rules and some
(but not all) of the relevant rulemakings, can be found in Tab E of the
Auction No. 18 Bidder Information Package. Upon request, the Commission
will provide one free copy of that Bidder Information Package to each
Auction No. 24 applicant. Additional copies may be ordered at a cost of
$16.00 each, including postage, payable by Visa or Master Card, or by
check payable to ``Federal Communications Commission'' or ``FCC.'' To
place an order, contact the FCC National Call Center at (888) CALL-FCC
((888) 225-5322, press option #2 at the prompt). Prospective bidders
that have already contacted the FCC at this number expressing an
interest in Auction No. 24 will receive a Bidder Information Package in
approximately four weeks, and need not call again unless they wish to
order additional copies. In addition, applicants may access updated
information about Auction No. 24 at the following address on the
Bureau's web site:
http://www.fcc.gov/wtb/auctions/auc24/auc24.html
Applicants are strongly encouraged to check this site regularly for
complete information regarding Auction No. 24.
F. Relevant Authority
18. Prospective bidders must familiarize themselves thoroughly with
the Commission's Rules relating to the Phase II 220 MHz Service,
contained in Title 47, Part 90 of the Code of Federal Regulations.
Prospective bidders must also be thoroughly familiar with the
procedures, terms and conditions contained in the 220 MHz Third Report
and Order (62 FR 15978, April 3, 1997); 220 MHz Memorandum Opinion and
Order on Reconsideration (63 FR 306611, June 12, 1998); 220 MHz Fourth
Report and Order (62 FR 46211, September 2, 1997); and 220 MHz Fifth
Report and Order (63 FR 49291, September 15, 1998). Potential bidders
must also familiarize themselves with Part 1, Subpart Q of the
Commission's Rules concerning Competitive Bidding Proceedings.
19. The terms contained in the Commission's Rules, relevant orders,
Public Notices and bidder information package are not negotiable. The
Commission may amend or supplement the information contained in our
Public Notices or the bidder information package at any time, and will
issue Public Notices to convey any new or supplemental information to
bidders. It is the responsibility of all prospective bidders to remain
current with all Commission Rules and with all Public Notices
pertaining to this auction. Copies of most Commission documents,
including Public Notices, can be retrieved from the FCC Internet node
via anonymous ftp @ftp.fcc.gov or the FCC World Wide Web site at http:/
/www.fcc.gov/wtb/auctions. Additionally, documents may be obtained for
a fee by calling the Commission's copy contractor, International
Transcription Service, Inc. (ITS), at (202) 857-3800. When ordering
documents from ITS, please provide the appropriate FCC number (e.g.,
FCC 98-93 for the Memorandum Opinion and Order on Reconsideration and
FCC 97-57 for the 220 MHz Second Report and Order).
20. Bidder Alerts: 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
should perform their individual due diligence before proceeding, as
they would with any new business venture.
21. As is the case with many business investment opportunities,
some unscrupulous entrepreneurs may attempt to use Auction No. 22 to
deceive and defraud unsuspecting investors. Common warning signals of
fraud include the following:
The first contact is a ``cold call'' from a telemarketer,
or is made in response to an inquiry prompted by a radio or television
infomercial.
The offering materials used to invest in the venture
appear to be targeted at IRA funds, for example by including all
documents and papers needed for the transfer of funds maintained in IRA
accounts.
The amount of the minimum investment is less than $25,000.
The sales representative makes verbal representations
that: (a) the Internal Revenue Service (``IRS''), Federal Trade
Commission (``FTC''), Securities and Exchange Commission (``SEC''),
FCC, or other government agency has approved the investment; (b) the
investment is not subject to state or federal securities laws; or (c)
the investment will yield unrealistically high short-term profits. In
addition, the offering materials often include copies of actual FCC
releases, or quotes from FCC personnel, giving the appearance of FCC
knowledge or approval of the solicitation.
22. 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. 22 may also call the FCC
National Call Center at (888) CALL-FCC ((888) 225-5322).
G. National Environmental Policy Act (NEPA) Requirements
23. 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 licensees must comply
with the Commission's NEPA rules for each wireless facility. See 47 CFR
1.1305-1.1319. These rules require that, among other things, licensees
consult with expert agencies having NEPA responsibilities including the
U.S. Fish and Wildlife Service, the State Historic Preservation Office,
the Army Corp of Engineers and the Federal Emergency Management Agency
(through the local authority with jurisdiction over floodplains).
Licensees must prepare environmental assessments for wireless
facilities that may have a significant impact in or on wilderness
areas, wildlife preserves, threatened or
[[Page 19534]]
endangered species or designated critical habitats, historical or
archaeologic sites, Indian religious sites, floodplains, and surface
features. Licensees must also prepare environmental assessments for
wireless facilities that include high intensity white lights in
residential neighborhoods or excessive radiofrequency emission.
II. Eligibility
A. General Eligibility Criteria
24. For the Phase II 220 MHz Service, the Commission adopted small
business provisions to promote and facilitate the participation of
small businesses in the auction, and in the provision of this and other
commercial mobile radio services.
(1) Determination of Revenues
25. For purposes of determining which entities qualify as very
small businesses or small businesses, the Commission will consider the
gross revenues of the applicant, its controlling principals, and the
affiliates of the applicant and its controlling principals. Therefore,
the gross revenues of all of the above entities must be disclosed
separately and in the aggregate as Exhibit C to an applicant's FCC Form
175. The Commission does not impose specific equity requirements on
controlling principals. The term ``controlling principal'' includes
both de facto and de jure control of the applicant. Typically, de jure
control is evidenced by ownership of at least 50.1 percent of an
entity's voting stock. De facto control is determined on a case-by-case
basis. The following are some common indicia of control:
The person/entity constitutes or appoints more than 50
percent of the board of directors or management committee;
The person/entity has authority to appoint, promote,
demote, and fire senior executives that control the day-to-day
activities of the licensee; or
The person/entity plays an integral role in management
decisions.
(2) Very Small or Small Business Consortia
26. A consortium of small businesses or very small businesses is a
conglomerate organization formed as a joint venture between or among
mutually independent business firms, each of which individually
satisfies the definition of small or very small business in Section
90.1021(b) (1) or (2). Thus, each consortium member must disclose its
gross revenues along with those of its affiliates, controlling
principals, and controlling principals' affiliates. We note that
although the gross revenues of the consortium members will not be
aggregated for purposes of determining eligibility for very small or
small business credits, this information must be provided to ensure
that each individual consortium member qualifies for any bidding credit
awarded to the consortium.
(3) Application Showing
27. Applicants should note that they will be required to file
supporting documentation as Exhibit C to their FCC Form 175 short form
applications to establish that they satisfy the eligibility
requirements to qualify as a very small business or small business (or
consortia of very small or small businesses) for this auction.
Specifically, for the Phase II 220 MHz Service auction, applicants
applying to bid as very small or small businesses (or consortia of very
small or small businesses) will be required to file all information
required under Sections 1.2105(a) and 1.2112(a) of the Commission's
Rules. See 47 CFR 90.1009. In addition, these applicants must disclose,
separately and in the aggregate, the gross revenues for the preceding
three years of each of the following: (1) the applicant; (2) the
applicant's affiliates; (3) the applicant's controlling principals; and
(4) the affiliates of the applicant's controlling principals.
Certification that the average 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, and its controlling principals, 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 to bid as a consortium of very small or small
businesses, this information must be provided for each consortium
member.
B. Bidding Credits
28. Applicants that qualify under the definitions of very small
business and small business (or consortia of very small or small
businesses), as set forth in 47 CFR 90.1021(b), are eligible for a
bidding credit that represents the amount by which a bidder's winning
bids are discounted. The size of a Phase II 220 MHz Service bidding
credit depends on the average gross revenues for the preceding three
years of the bidder, its controlling principals, and the affiliates of
both the bidder and its controlling principals:
A bidder with average gross revenues of not more than $15
million for the preceding three years receives a 25 percent discount on
its winning bids for Phase II 220 MHz Service licenses; and,
A bidder with average gross revenues of not more than $3
million for the preceding three years receives a 35 percent discount on
its winning bids for Phase II 220 MHz Service licenses.
29. Bidding credits are not cumulative: qualifying applicants
receive either the 25 percent or the 35 percent bidding credit, but not
both. Guidance on calculating gross revenues is contained in 47 CFR
90.1021(c).
30. Phase II 220 MHz Service bidders should note that unjust
enrichment provisions apply to winning bidders that use bidding credits
and subsequently assign or transfer control of their licenses to an
entity not qualifying for the same level of bidding credit. Finally,
Phase II 220 MHz Service bidders should also note that there are no
installment payment plans in the Phase II 220 MHz Service auction.
III. Pre-Auction Procedures
A. Short-Form Application (FCC Form 175)--Due May 10, 1999, 5:30 p.m.
ET
31. In order to be eligible to bid in this auction, applicants must
first submit an FCC Form 175 application. This application must be
received at the Commission by 5:30 p.m. ET on May 10, 1999. Late
applications will not be accepted. There is no application fee required
when filing an FCC Form 175. However, to be eligible to bid, an
applicant must submit an upfront payment. See Part III.C., infra.
(1) Electronic Filing
32. As of January 1, 1999, applications to participate in FCC
auctions must be filed electronically, unless it is not operationally
feasible. Applicants will be permitted to file their FCC Form 175
applications in hard copy form only in the event the FCC experiences
technical difficulties with its electronic systems. In such an event,
the FCC will announce the procedure for submitting manual applications.
33. For Auction No. 24, applicants may file applications
electronically beginning April 16, 1999. The system will generally be
open for filing on a 24-hour basis. The filing window will remain open
until 5:30 p.m. ET on May 10, 1999. Applicants are strongly encouraged
to file early, and applicants are responsible for allowing adequate
time for filing their applications. Applicants may update or amend
their electronic applications multiple times until the filing deadline
of May 10, 1999. Information about installing and
[[Page 19535]]
running the FCC Form 175 application software will be included in a
future Public Notice. Technical support is available at (202) 414-1250
(voice) or (202) 414-1255 (text telephone (TTY)); the hours of service
are 8 a.m.-6 p.m. ET, Monday-Friday.
(2) Completion of the FCC Form 175
34. 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 B of this Public Notice. Applicants
should not consider their form submitted to the FCC until they press
the ``Submit Form 175'' button on the ``Submit'' page and receive
confirmation from the filing system that the form has been received by
the Commission.
(3) Electronic Review of FCC Form 175
35. The FCC Form 175 review software may be used to review and
print applicants' FCC Form 175 applications. 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. For this reason, it is important that applicants do
not include their Taxpayer Identification Numbers (TINs) on any
Exhibits to their FCC Form 175 applications. There is a fee of $2.30
per minute for accessing this system. For details, see Attachment E of
the full text of the Public Notice (see SUPPLEMENTARY INFORMATION
above).
B. Application Processing and Minor Corrections
36. 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: (1) those applications accepted for filing
(including FCC account numbers and the licenses for which they
applied); (2) those applications rejected; and (3) those applications
that have minor defects that may be corrected, and the deadline for
filing such corrected applications.
37. As described more fully in the Commission's Rules, after the
May 10, 1999, short form filing deadline, applicants may make only
minor corrections 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
or change control of the applicant). See 47 CFR 1.2105.
C. Upfront Payments--Due May 24, 1999
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). Applicants will have access to an electronic version of
the FCC Form 159 (July 1997 version) after completing the electronic
FCC Form 175. Earlier versions of this form will not be accepted. All
upfront payments must be received at Mellon Bank in Pittsburgh, PA, by
6 p.m. ET on May 24, 1999.
Please note that:
All payments must be made in U.S. dollars.
All payments must be made by wire transfer.
Upfront payments for Auction No. 24 go to a lockbox number
different from the ones used in previous FCC auctions, and different
from the lockbox number to be used for post-auction payments.
Failure to deliver the upfront payment by the May 24, 1999
deadline will result in dismissal of the application and
disqualification from participation in the auction.
(1) Making Auction Payments by Wire Transfer
39. Wire transfer payments must be received by 6:00 p.m. ET on May
24, 1999. 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. Applicants will need the following information:
ABA Routing Number: 043000261
Receiving Bank: Mellon Pittsburgh
BNF: FCC/AC 9100180
OBI Field: (Skip one space between each information item).
``AUCTIONPAY''
Taxpayer Identification No.: (same as FCC Form 159, block 26)
Payment Type Code: (enter ``A24U'')
FCC Code: 1 (same as FCC Form 159, block 23A: ``24'')
Payer Name: (same as FCC Form 159, block 2)
Lockbox No.: # 358420.
Note: The BNF and Lockbox number are specific to the upfront
payments for this auction; do not use BNF or Lockbox numbers from
previous auctions.
Applicants must fax a completed FCC Form 159 to Mellon Bank at
(412) 236-5702 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. 24.''
Bidders may confirm receipt of their upfront payment at Mellon Bank by
contacting their sending financial institution.
(2) FCC Form 159
41. Each upfront payment must be accompanied by a completed FCC
Remittance Advice Form (FCC Form 159). Proper completion of FCC Form
159 is critical to ensuring correct credit of upfront payments.
Detailed instructions for completion of FCC Form 159 will be included
in a future Public Notice.
(3) Amount of Upfront Payment
42. As proposed in the Phase II 220 MHz Service Public Notice, the
following upfront payments will apply in Auction No. 24:
(1) EAG Licenses: $0.01 * 0.15 MHz * License Population (the result
rounded up to the next dollar).
(2) EA Licenses: $500 per license.
The upfront payment amount for each license has been calculated and is
listed in Attachment A. Please note that upfront payments are not
attributed to specific licenses, but instead will be translated to
bidding units to define a bidder's maximum bidding eligibility. For
Auction No. 24, the amount of the upfront payment will be translated
into bidding units on a one-to-one basis, e.g., a $25,000 upfront
payment provides the bidder with 25,000 bidding units. The total
upfront payment defines the maximum amount of bidding units on which
the applicant will be permitted to bid (including standing high bids)
in any single round of bidding. Thus, an applicant does not have to
make an upfront payment to cover all licenses for which the applicant
has selected on FCC Form 175, but rather to cover the maximum number of
bidding units associated with licenses on which the bidder wishes to
place bids and hold high bids on at any given time.
43. To be able to place a bid on a license, in addition to having
specified that license on the FCC Form 175, a bidder must have an
eligibility level that meets or exceeds the number of bidding units
assigned to that license. At a minimum, an applicant's total upfront
payment must be enough to establish eligibility to bid on at least one
of the licenses applied for on the FCC Form 175, or else the applicant
will not be eligible to participate in the auction.
44. In calculating the upfront payment amount, an applicant should
determine the maximum number of bidding units it may wish to bid on in
any single
[[Page 19536]]
round, and submit an upfront payment covering that number of bidding
units. Bidders should check their calculations carefully as there is no
provision for increasing a bidder's maximum eligibility after the
upfront payment deadline.
45. Note: An applicant may, on its FCC Form 175, apply for every
license being offered, but its actual bidding in any round will be
limited by the bidding units reflected in its upfront payment.
(4) Applicant's Wire Transfer Information for Purposes of Refunds
46. Because experience with prior auctions has shown that in most
cases wire transfers provide quicker and more efficient refunds than
paper checks, the Commission will use wire transfers for all Auction
No. 24 refunds. To avoid delays in processing refunds, applicants
should include wire transfer instructions with any refund request they
file; they may also provide this information in advance by faxing it to
the FCC Billings and Collections Branch, ATTN: Linwood Jenkins or
Geoffrey Idika, at (202) 418-2843. Please include the following
information:
Name of Bank
ABA Number
Account Number to Credit
Correspondent Bank (if applicable)
ABA Number
Account Number
Contact and Phone Number
(Applicants should also note that implementation of the Debt Collection
Improvement Act of 1996 requires the FCC to obtain an applicant's
Taxpayer Identification Number (TIN) before it can disburse refunds.)
Eligibility for refunds is discussed in Part V.D., infra.
D. Auction Registration
47. Approximately ten days before the auction, the FCC will issue a
Public Notice announcing all qualified bidders for Auction No. 24.
Qualified bidders are those applicants whose FCC Form 175 applications
have been accepted for filing and that have timely submitted upfront
payments sufficient to make them eligible to bid on at least one of the
licenses for which they applied.
48. All qualified bidders are automatically registered for the
auction. Registration materials will be distributed prior to the
auction by two separate overnight mailings, each containing part of the
confidential identification codes required to place bids. These
mailings will be sent only to the contact person at the applicant
address listed in the FCC Form 175.
49. 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 June 3, 1999 should contact the
FCC National Call Center at (888) CALL-FCC ((888) 225-5322, press
option #2 at the prompt). 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.
50. Qualified bidders should note that lost login codes, passwords
or bidder identification numbers can be replaced only by appearing in
person at the FCC Auction Headquarters located at 2 Massachusetts
Avenue, N.E., Washington, D.C. 20002. 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 replacement codes.
E. Remote Electronic Bidding Software
51. Qualified bidders must purchase remote electronic bidding
software for $175.00 by May 25, 1999. (Auction software is tailored to
a specific auction, so software from prior auctions will not work for
Auction No. 24.) A software order form is included in this Public
Notice.
F. Auction Seminar
52. On April 21, 1999, the FCC will sponsor a seminar for the Phase
II 220 MHz Service auction at the Park Hyatt Washington, 1201 24th
Street, N.W., Washington, D.C. 20037. The seminar will provide
attendees with information about pre-auction procedures, conduct of the
auction, FCC remote bidding software, and the Phase II 220 MHz Service
service and auction rules.
53. To register, complete the registration form included as
Attachment I to this Public Notice. The registration form includes
details about the time and location of the seminar. Registrations are
accepted on a first-come, first-served basis.
G. Mock Auction
54. All applicants whose FCC Form 175 and 175-S have been accepted
for filing will be eligible to participate in a mock auction on June 4,
1999. The mock auction will enable applicants to become familiar with
the electronic software prior to the auction. Free demonstration
software will be available for use in the mock auction. Participation
by all bidders is strongly recommended. Details will be announced by
Public Notice.
IV. Auction Event
55. The first round of the auction will begin on June 8, 1999. The
initial round schedule will be announced in a Public Notice listing the
qualified bidders, to be released approximately 10 days before the
start of the auction.
A. Auction Structure
(1) Simultaneous Multiple Round Auction
56. As proposed in the Phase II 220 MHz Service Public Notice, the
225 Phase II 220 MHz Service licenses will be awarded through a single,
simultaneous multiple round auction. Unless otherwise announced, bids
will be accepted on all licenses in each round of the auction. This
approach, we believe, allows bidders to take advantage of any synergies
that exist among licenses and is most administratively efficient.
(2) Maximum Eligibility and Activity Rules
57. For Auction No. 24, the amount of the upfront payment submitted
by a bidder will determine the initial maximum eligibility (as measured
in bidding units) for each bidder. Upfront payments are not attributed
to specific licenses, but instead will be translated into bidding units
to define a bidder's initial maximum eligibility. The total upfront
payment defines the maximum number of bidding units on which the
applicant will initially be permitted to bid. There is no provision for
increasing a bidder's maximum eligibility during the course of an
auction, as discussed under ``Auction Stages'' in Part IV.A.(2), infra.
58. To ensure that the auction closes within a reasonable period of
time, an activity rule requires bidders to bid actively throughout the
auction, rather than wait until the end before participating. Bidders
are required to be active on a specific percentage of their maximum
eligibility during each round of the auction.
59. 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 an acceptable bid in the current round (see ``Minimum Accepted
Bids'' in Part IV.B.(3), infra). A bidder's activity level in a round
is the sum of the bidding units associated with licenses on which the
bidder is active. The minimum required activity level is expressed as a
percentage of the bidder's maximum bidding eligibility, and increases
as the auction progresses. These procedures have proven
[[Page 19537]]
successful in maintaining the pace of previous auctions, as discussed
in Parts IV.A.(4) and (5), infra.
(3) Activity Rule Waivers and Reducing Eligibility
60. Each bidder will be provided five 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 minimum level. An activity rule waiver applies to an entire
round of bidding and not to a particular license.
61. The FCC 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 a bidder's activity level is below the minimum
required unless: (1) There are no activity rule waivers available; or
(2) the bidder overrides the automatic application of a waiver by
reducing eligibility, thereby meeting the minimum requirements.
62. 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 software. In this case,
the bidder's eligibility is permanently reduced to bring the bidder
into compliance with the activity rules. Once eligibility has been
reduced, a bidder will not be permitted to regain its lost bidding
eligibility.
63. 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
bidding software) during a round in which no bids are submitted, the
auction will remain open and the bidder's eligibility will be
preserved. An automatic waiver invoked in a round in which there are no
new valid bids or withdrawals will not keep the auction open.
(4) Auction Stopping Rules
64. As proposed in the Phase II 220 MHz Service Public Notice,
barring extraordinary circumstances, bidding will remain open on all
licenses until bidding stops on every license. Thus, the auction will
close for all licenses when one round passes during which no bidder
submits a new acceptable bid on any license, applies a proactive
waiver, or withdraws a previous high bid. In addition, however, the
Bureau retains the discretion to 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. Thus, absent any other bidding activity, a bidder placing
a new bid on a license for which it is the standing high bidder would
not keep the auction open under this modified stopping rule.
65. The Bureau retains the discretion, however, to keep an auction
open even if no new acceptable bids or proactive waivers are submitted,
and no previous high bids are withdrawn. In this event, the effect will
be the same as if a bidder had submitted a proactive waiver. Thus, the
activity rule will apply as usual, and a bidder with insufficient
activity will either lose bidding eligibility or use an activity rule
waiver (if it has any left).
66. Further, in its discretion, the Bureau reserves the right to
declare that the auction will end after a specified number of
additional rounds (``special stopping rule''). If the FCC 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 FCC intends to exercise this
option only in extreme 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. Before exercising this option, the
FCC is likely to attempt to increase the pace of the auction by, for
example, moving the auction into the next stage (where bidders would be
required to maintain a higher level of bidding activity), increasing
the number of bidding rounds per day, and/or increasing the amount of
the minimum bid increments for the limited number of licenses where
there is still a high level of bidding activity.
(5) Auction Delay, Suspension, or Cancellation
67. As proposed in the Phase II 220 MHz Service Public Notice, 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 and competitive 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. This approach has proven effective in
resolving exigent circumstances in previous auctions. We emphasize that
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.
B. Bidding Procedures
(1) Round Structure
68. The initial bidding schedule will be announced by Public Notice
at least one week before the start of the auction, and will be included
in the registration mailings. The round structure for each bidding
round contains a single bidding round followed by the release of the
round results.
69. 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 FCC 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.
(2) Reserve Price or Minimum Opening Bid
70. As proposed in the Phase II 220 MHz Service Public Notice, the
following formulae will be used for calculating minimum opening bids on
a license-by-license basis in Auction No. 24:
(1) EAG Licenses: $0.01 * 0.15 MHz * License Population (the result
rounded up to the next dollar)
(2) EA Licenses: $500 per license.
These amounts are reducible at the discretion of the Bureau. This will
allow the Bureau flexibility to adjust the minimum opening bids if
circumstances warrant. 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 any bidder requests to
reduce the minimum opening bids on specific licenses. Based on our
experience in prior auctions, the Commission believes that minimum
opening bids speed the course of the auction and ensure that valuable
assets are not sold for nominal prices, without unduly interfering with
the efficient assignment of licenses.
[[Page 19538]]
(3) Minimum Accepted Bids and Bid Increments
71. As proposed in the Phase II 220 MHz Service Public Notice (63
FR 67685, December 8, 1998), once there is a standing high bid on a
license, there will be a bid increment associated with that bid
indicating the minimum amount by which the bid on that license can be
raised. For the Phase II 220 MHz auction, we will use a standard
exponential smoothing methodology to calculate minimum bid increments.
The Bureau retains the discretion to compute the minimum bid increment
through other methodologies if it determines that circumstance so
dictate.
72. The exponential smoothing formula calculates the bid increment
for each license based on a weighted average of the activity received
on each license in all previous rounds. This methodology will tailor
the bid increment for each license based on activity, rather than
setting a global increment for all licenses. For every license that
receives a bid, the bid increment for the next round for that license
will be established using the exponential smoothing formula.
73. The calculation of the percentage bid increment for each
license in a given round is made at the end of the previous round. The
computation is based on an activity index, which is calculated as the
weighted average of the activity in that round and the activity index
from the prior round. The activity index at the start of the auction
(round 0) will be set at 0. The current activity index is equal to a
weighting factor times the number of new bids received on the license
in the most recent bidding round plus one minus the weighting factor
times the activity index from the prior round. The activity index is
then used to calculate a percentage increment by multiplying a minimum
percentage increment by one plus the activity index with that result
being subject to a maximum percentage increment. The Commission will
initially set the weighting factor at 0.5, the minimum percentage
increment at 0.1, and the maximum percentage increment at 0.2.
Equations
Ai = (C * Bi) + ( (1 - C) * Ai-1)
Ii+1 = smaller of ( (1 + Ai) * N) and
M
where,
Ai = activity index for the current round (round i)
C = activity weight factor
Bi = number of bids in the current round (round i)
Ai-1 = activity index from previous round (round i-1),
A0 is 0
Ii+1 = percentage bid increment for the next round (round
i+1)
N = minimum percentage increment or bid increment floor
M = maximum percentage increment or bid increment ceiling
Under the exponential smoothing methodology, once a bid has been
received on a license, the minimum acceptable bid for that license in
the following round will be the new high bid plus the dollar amount
associated with the percentage increment (variable Ii+1 from
above times the high bid). This result will be rounded to the nearest
thousand if it is over ten thousand or to the nearest hundred if it is
under ten thousand.
Examples
License 1
C = 0.5, N = 0.1, M = 0.2
Round 1 (2 new bids, high bid = $1,000,000)
1. Calculation of percentage increment for round 2 using
exponential smoothing:
A1 = (0.5 * 2) + (0.5 * 0) = 1
The smaller of I2 = (1 + 1) * 0.1 = 0.2 or 0.2 (the maximum
percentage increment)
2. Minimum bid increment for round 2 using the percentage increment
(I2 from above).
0.2 * $1,000,000 = $200,000
3. Minimum acceptable bid for round 2 = 1,200,000
Round 2 (3 new bids, high bid = 2,000,000)
1. Calculation of percentage increment for round 3 using
exponential smoothing:
A2 = (0.5 * 3) + (0.5 * 1) = 2
The smaller of I3 = (1 + 2) * 0.1 = 0.3 or 0.2 (the maximum
percentage increment)
2. Minimum bid increment for round 3 using the percentage increment
(I3 from above)
0.2 * $2,000,000 = $400,000
3. Minimum acceptable bid for round 3 = 2,400,000
Round 3 (1 new bid, high bid = 2,400,000)
1. Calculation of percentage increment for round 4 using
exponential smoothing:
A3 = (0.5 * 1) + (0.5 * 2) = 1.5
The smaller of I4 = (1 + 1.5) * 0.1 = 0.25 or 0.2 (the
maximum percentage increment)
2. Minimum bid increment for round 4 using the percentage increment
(I4 from above)
0.2 * $2,400,000 = $480,000
3. Minimum acceptable bid for round 4 = 2,880,000
(4) High Bids
74. Each bid will be date- and time-stamped when it is entered into
the FCC computer system. In the event of tie bids, the Commission will
identify the high bidder on the basis of the order in which bids are
received by the Commission, starting with the earliest bid. The bidding
software allows bidders to make multiple submissions in a round. As
each bid is individually date and time-stamped according to when it was
submitted, bids submitted by a bidder earlier in a round will have an
earlier date- and time-stamp than bids submitted later in a round.
(5) Bidding
75. During a bidding round, a bidder may submit bids for as many
licenses as it wishes (subject to its eligibility), as well as 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 bidding
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, and the date- and time-stamp of that bid reflects the
latest time the bid was submitted.
76. Please note that all bidding will take place either through the
automated bidding software or by telephonic bidding. (Telephonic bid
assistants are required to use a script when handling 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, because four to five minutes are necessary to
complete a bid submission.) There will be no on-site bidding during
Auction No. 24.
77. A bidder's ability to bid on specific licenses in the first
round of the auction is determined by two factors: (1) the licenses
applied for on FCC Form 175; and (2) the upfront payment amount
deposited. The bid submission screens will be tailored for each bidder
to include only those licenses for which the bidder applied on its FCC
Form 175. A bidder also has the option to further tailor its bid
submission screens to call up specified groups of licenses.
78. The bidding software requires each bidder to login to the FCC
auction system during the bidding round using the FCC account number,
bidder identification number, and the confidential security codes
provided in the registration materials. Bidders are
[[Page 19539]]
strongly encouraged to download and print bid confirmations after they
submit their bids.
79. The bid entry screen of the Automated Auction System software
for the Phase II 220 MHz Service auction allows bidders to place
multiple increment bids which will let bidders increase high bids from
one to nine bid increments. A single bid increment is defined as the
difference between the standing high bid and the minimum acceptable bid
for a license.
80. To place a bid on a license, the bidder must enter a whole
number between 1 and 9 in the bid increment multiplier (Bid Mult)
field. This value will determine the amount of the bid (Amount Bid) by
multiplying the bid increment multiplier by the bid increment and
adding the result to the high bid amount according to the following
formula:
Amount Bid = High Bid + (Bid Mult * Bid Increment)
Thus, bidders may place a bid that exceeds the standing high bid by
between one and nine times the bid increment. For example, to bid the
minimum acceptable bid, which is equal to one bid increment, a bidder
will enter ``1'' in the bid increment multiplier column and press
submit.
81. For any license on which the FCC is designated as the high
bidder (i.e., a license that has not yet received a bid in the auction
or where the high bid was withdrawn and a new bid has not yet been
placed), bidders will be limited to bidding only the minimum acceptable
bid. In both of these cases no increment exists for the licenses, and
bidders should enter ``1'' in the Bid Mult field. Note that in this
case, any whole number between 1 and 9 entered in the multiplier column
will result in a bid value at the minimum acceptable bid amount.
Finally, bidders are cautioned in entering numbers in the Bid Mult
field because, as explained in the following section, a high bidder
that withdraws its standing high bid from a previous round, even if
mistakenly or erroneously made, is subject to bid withdrawal payments.
(6) Bid Removal and Bid Withdrawal
a. Procedure
82. As proposed in the Phase II 220 MHz Service Public Notice,
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 software, 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. This
procedure will enhance bidder flexibility and, we believe, may serve to
expedite the course of the auction.
83. Once a round closes, a bidder may no longer remove a bid.
However, in the next round, a bidder may withdraw standing high bids
from previous rounds using the ``withdraw bid'' function (assuming that
the bidder has not exhausted its withdrawal allowance). A high bidder
that withdraws its standing high bid from a previous round is subject
to the bid withdrawal payments specified in 47 CFR 1.2104(g) and
1.2109. The procedure for withdrawing a bid and receiving a withdrawal
confirmation is essentially the same as the bidding procedure described
in ``High Bids,'' Part IV.B.(4).
84. In previous auctions, we have detected bidder conduct that,
arguably, may have constituted strategic bidding through the use of bid
withdrawals. While we continue to recognize the important role that bid
withdrawals play in an auction, i.e., reducing risk associated with
efforts to secure various geographic area licenses in combination, we
conclude that, for the Phase II 220 MHz Service auction, adoption of a
limit on their use to two rounds is the most appropriate outcome. 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. Our
decision on this issue is based upon our experience in prior auctions,
particularly the PCS D, E and F block auction, 800 MHz SMR auction, and
LMDS auction, and is in no way a reflection of our view regarding the
likelihood of any speculation or ``gaming'' in the Phase II 220 MHz
Service auction. Withdrawals will still be subject to the bid
withdrawal payments specified in 47 CFR 1.2104(g) and 1.2109. 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.
85. If a high bid is withdrawn, the license will be offered in the
next round at the second highest bid price, which may be less than, or
equal to, in the case of tie bids, the amount of the withdrawn bid,
without any bid increment. The FCC will serve as a ``place holder'' on
the license until a new acceptable bid is submitted on that license.
b. Calculation
86. Generally, a bidder that withdraws a standing high bid during
the course of an auction will be subject to a payment equal to the
lower of: (1) the difference between the net withdrawn bid and the
subsequent net winning bid; or (2) the difference between the gross
withdrawn bid and the subsequent gross winning bid for that license.
See 47 CFR 1.2104(g) and 1.2109. No withdrawal payment will be assessed
if the subsequent winning bid exceeds the withdrawn bid.
(7) Round Results
87. The bids placed during a round are not published until the
conclusion of that bidding period. After a round closes, the FCC will
compile reports of all bids placed, bids withdrawn, current high bids,
new minimum accepted bids, and bidder eligibility status (bidding
eligibility and activity rule waivers), and post the reports for public
access.
88. Reports reflecting bidders' identities and bidder
identification numbers for Auction No. 24 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.
(8) Auction Announcements
89. The FCC will use auction announcements to announce items such
as schedule changes and stage transitions. All FCC auction
announcements will be available on the FCC remote electronic bidding
system, as well as the Internet and the FCC Bulletin Board System.
(9) Other Matters
a. Inclusion of the Gulf of Mexico in Auction No. 24
90. The Commission will not designate the Gulf of Mexico as the
seventh EAG and the 176th EA in the Phase II 220 MHz Service auction.
This issue cannot be addressed in the context of this Public Notice,
which, consistent with the Bureau's delegated authority, implements the
Commission's rules pertaining to auctions procedures. The licensing
regions for the 220 MHz Service were adopted by the Commission in the
220 Third Report and Order, 62 FR 15978, April 3, 1997, and
subsequently codified.
b. Minor Modifications to FCC Form 175 Applications
91. As noted in Section III.B., supra, after the short-form filing
deadline, applicants may make only minor changes to their FCC Form 175
applications. For example, permissible minor changes include deletion
and addition of authorized bidders (to a maximum of three) and revision
of exhibits. Filers should make these
[[Page 19540]]
changes on-line, and submit a letter (and a courtesy copy to Anne
Napoli at the same address) to Amy Zoslov, Chief, Auctions and Industry
Analysis Division, Wireless Telecommunications Bureau, Federal
Communications Commission, 445 12th Street, S.W., Suite 4-A760
Washington, D.C. 20554, briefly summarizing the changes. Questions
about other changes should be directed to Anne Napoli of the FCC
Auctions and Industry Analysis Division at (202) 418-0660.
V. Post-Auction Procedures
A. Down Payments and Withdrawn Bid Payments
After bidding has ended, the Commission will issue a Public Notice
declaring the auction closed, identifying the winning bids and bidders
for each license, and listing withdrawn bid payments due.
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 Government to 20 percent of its net winning bids (actual bids
less any applicable bidding credits). See 47 CFR 1.2107(b). In
addition, by the same deadline all bidders must pay any withdrawn bid
amounts due under 47 CFR 1.2104(g), as discussed in ``Bid Removal and
Bid Withdrawal,'' Part IV.B.(6), supra. (Upfront payments are applied
first to satisfy any withdrawn bid liability, before being applied
toward down payments.)
B. Long-Form Application
Within ten business days after release of the auction closing
notice, winning bidders must submit a properly completed long-form
application and required exhibits for each Phase II 220 MHz Service
license won through the auction. Winning bidders that are small
businesses or very small businesses must include an exhibit
demonstrating their eligibility for bidding credits. See 47 CFR
1.2112(b). Further filing instructions will be provided to auction
winners at the close of the auction.
C. Default and Disqualification
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 offer the license to the next highest
bidders (in descending order) at their final bids, or reauction the
spectrum. See 47 CFR 1.2109(b) and (c). 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. See 47 CFR
1.2109(d).
D. Refund of Remaining Upfront Payment Balance
All applicants that submitted upfront payments but were not winning
bidders for a Phase II 220 MHz Service license 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 that applicant after any applicable bid withdrawal
payments have been paid.
Bidders that drop out of the auction completely may be eligible for
a refund of their upfront payments before the close of the auction.
However, bidders that reduce their eligibility and remain in the
auction are not eligible for partial refunds of upfront payments until
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 including wire transfer instructions, a Taxpayer
Identification Number (``TIN''), and a copy of their bidding
eligibility screen print, to: Federal Communications Commission,
Billings and Collections Branch, Attn: Regina Dorsey or Linwood
Jenkins, 445 12th Street, S.W., Room 1-A824, Washington, D.C. 20554.
Bidders can also fax their request to the Billings and Collections
Branch at (202) 418-2843. Once the request has been approved, a refund
will be sent to the address provided on the FCC Form 159.
Note: Refund processing generally takes up to two weeks to
complete. Bidders with questions about refunds should contact
Linwood Jenkins or Geoffrey Idika at (202) 418-1995.
Federal Communications Commission.
Amy J. Zoslov,
Chief, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau.
[FR Doc. 99-9765 Filed 4-20-99; 8:45 am]
BILLING CODE 6712-01-P
