E8-10381. Closed Auction of Licenses For Cellular Unserved Service Areas Scheduled for June 17, 2008; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Procedures for Auction 77

AGENCY:

Federal Communications Commission.

ACTION:

Notice.

SUMMARY:

This document announces the procedures and minimum opening bids for the upcoming Closed Auction of Licenses for Cellular Unserved Service Areas (Auction 77). This document is intended to familiarize prospective bidders with the procedures and minimum opening bids for the auction.

DATES:

Short Form Applications to participate in Auction 77 must be filed before 6 p.m. ET on May 14, 2008. The upfront payments deadline for Auction 77 is June, 2, 2008, 6 p.m. ET. Bidding for Auction No. 77 is scheduled to begin on June 17, 2008.

FOR FURTHER INFORMATION CONTACT:

Wireless Telecommunications Bureau, Auctions Spectrum and Access Division: For legal questions: Sayuri Rajapakse at [phone]. For general auction questions: Barbara Sibert at [phone]. Mobility Division: For service rule questions: Erin McGrath (legal), Gabriel Ubieta (engineering) and Denise Walter (licensing) at [phone]. To request materials in accessible formats (Braille, large print, electronic files or audio format) for people with disabilities, send an e-mail to [e-mail] or call the Consumer and Governmental Affairs Bureau at [phone] or [phone] (TTY).

SUPPLEMENTARY INFORMATION:

This is a summary of the Auction 77 Procedures Public Notice which was released on April 25, 2008. The complete text of the Auction 77 Procedures Public Notice, including attachments, as well as related Commission documents are available for public inspection and copying at the FCC Reference Information Center. The Auction 77 Procedures Public Notice and related Commission documents may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc. (BCPI), Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone [phone], facsimile 202-488-5563, or Web site: http://www.BCPIWEB.com. The Auction 77 Procedures Public Notice and related documents are also available on the Internet at the Commission's Web site: http://wireless.fcc.gov/​auctions/​77/​.

I. General Information

A. Introduction

1. The Wireless Telecommunications Bureau (Bureau) announces the procedures and minimum opening bid amounts for the upcoming closed auction of Cellular Radiotelephone Service licenses covering two different unserved areas (Auction 77). Auction 77 is scheduled to begin on June 17, 2008.

i. Background of Proceeding

2. On March 21, 2008, in accordance with Section 309(j)(3) of the Communications Act of 1934, as amended, the Bureau released a public notice seeking comment on competitive bidding procedures to be used in Auction 77. In the Auction 77 Comment Public Notice, 73 FR 18276, April 3, 2008, the Bureau proposed to award the licenses using a single-round sealed-bid auction and sought comment on procedures for the conduct of Auction 77. The Bureau received one comment and no reply comments in response to the Auction 77 Comment Public Notice.

ii. Licenses To Be Offered in Auction 77

3. The spectrum to be auctioned is the subject of two groups of pending mutually exclusive long-form applications (FCC Form 601s) for unserved area licenses in the Cellular Radiotelephone Service. Participation in Auction 77 will be limited to those applicants identified in Attachment A of the Auction 77 Procedures Public Notice. Licenses will be auctioned for each mutually exclusive applicant group (MX group) identified in Attachment A. The winning bidder in each group will be licensed to serve only the unserved area proposed in its long-form application(s) for that MX group.

4. Consistent with the Commission's determination in the Competitive Bidding Ninth Report and Order, 61 FR 58333, November 14, 1996, all pending mutually exclusive applications for unserved area licenses in the Cellular Radiotelephone Service must be resolved through a system of competitive bidding. When the short-form applications of two or more applicants within an MX group are accepted for filing, mutual exclusivity exists for auction purposes. Once mutual exclusivity exists for auction purposes, even if only one applicant within an MX group submits an upfront payment, that applicant is required to submit a bid in order to obtain the license. Any applicant that submits a short-form application but fails to timely submit an upfront payment will not be eligible to bid.

B. Rules and Disclaimers

i. Relevant Authority

5. Prospective applicants must familiarize themselves thoroughly with the Commission's general competitive bidding rules set forth in 47 CFR part 1 and 22 including recent amendments and clarifications; rules relating to the Cellular Radiotelephone Service and rules relating to applications, environment, practice and procedure. Prospective applicants must also be thoroughly familiar with the procedures, terms and conditions (collectively, terms) contained in the Auction 77 Procedures Public Notice and the Commission's decisions in proceedings regarding competitive bidding procedures, application requirements, and obligations of Commission licensees.

6. 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 its 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 Auction 77.

ii. Prohibition of Collusion; Compliance With Antitrust Laws

7. To ensure the competitiveness of the auction process, 47 CFR 1.2105(c) of the Commission's rules prohibits auction applicants for licenses in any of the same geographic license areas from communicating with each other about bids, bidding strategies, or settlements unless such applicants have identified each other on their short-form applications (FCC Forms 175) as parties with whom they have entered into agreements pursuant to 47 CFR 1.2105(a)(2)(viii). This prohibition applies to all applicants regardless of whether such applicants become qualified bidders or actually bid. Section 1.2105(c)'s anti-collusion prohibition begins at the short-form application filing deadline and ends at the down payment deadline after the auction. If an applicant makes or receives a communication that appears to violate the anti-collusion rule, it must report such communication in writing to the Commission immediately and in no case later than five business days after the communication occurs. The Auction 77 Procedures Public Notice contains specific guidance for applicants on the applicability of and compliance with the Commission's anti-collusion rule and antitrust laws. A summary listing of documents issued by the Commission and the Bureau addressing the application of the anti-collusion rule may be found in Attachment D of the Auction 77 Procedures Public Notice.

iii. Due Diligence

8. The FCC makes no representations or warranties about the use of this spectrum for particular services. Applicants should perform their individual due diligence before proceeding as they would with any new business venture.

9. Potential bidders are strongly encouraged to conduct their own research prior to the beginning of bidding in Auction 77 in order to determine the existence of any pending legislative, administrative or judicial proceedings that might affect their decision regarding participation in the auction. Participants in Auction 77 are strongly encouraged to continue such research throughout the auction. In addition, potential bidders should perform technical analyses sufficient to assure themselves that, should they prevail in competitive bidding for a specific license, they will be able to build and operate facilities that will fully comply with the Commission's technical and legal requirements as well as other applicable Federal, state, and local laws.

10. Applicants should perform due diligence to identify and consider all proceedings that may affect the spectrum licenses being auctioned and that could have an impact on the availability of spectrum for Auction 77. In addition, although the Commission may continue to act on various pending applications, informal objections, petitions, and other requests for Commission relief, some of these matters may not be resolved by the beginning of bidding in the auction.

11. 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 being offered.

iv. Use of Integrated Spectrum Auction System

12. The Commission will make available a browser-based bidding system to allow bidders to participate in Auction 77 over the Internet using the Commission's Integrated Spectrum Auction System (ISAS or FCC Auction System). The Commission makes no warranty whatsoever with respect to the FCC Auction System. In no event shall the Commission, or any of its officers, employees or agents, be liable for any damages whatsoever (including, but not limited to, loss of business profits, business interruption, loss of business information, or any other loss) arising out of or relating to the existence, furnishing, functioning or use of the FCC Auction System that is accessible to qualified bidders in connection with Auction 77. Moreover, no obligation or liability will arise out of the Commission's technical, programming or other advice or service provided in connection with the FCC Auction System.

C. Auction Specifics

i. Auction 77 Start Date

13. Bidding in Auction 77 will be held on Tuesday, June 17, 2008. Unless otherwise announced, the licenses to provide cellular service in the two different unserved areas will be offered at the same time.

14. The start and finish time of bidding will be announced by public notice approximately ten days before the start of the auction.

ii. Bidding Methodology

15. The bidding methodology for Auction 77 will be single-round sealed-bid. The single-round sealed-bid format will consist of one bidding round followed by the release of auction results. In the event of tied bids in an MX group, the Commission will post an announcement in the FCC Auction System to announce an additional round of bidding for that MX group. The Commission will conduct Auction 77 over the Internet using the FCC Auction System, and telephonic bidding will be available as well. All telephone calls are recorded.

iii. Pre-Auction Dates and Deadlines

16. The following dates and deadlines apply:

Auction 77 Short-Form Application (FCC Form 175) Filing Window Opens—May 14, 2008; 9 a.m. ET.

Auction 77 Short-Form Application (FCC Form 175) Filing Window Deadline—May 16, 2008; prior to 6 p.m. ET.

Auction 77 Upfront Payment Deadline (via wire transfer)—June 2, 2008; 6 p.m. ET.

Auction 77 Begins—June 17, 2008.

iv. Requirements for Participation in Auction 77

17. Those wishing to participate in Auction 77 must: (1) Submit a short-form application (FCC Form 175) electronically prior to 6 p.m. ET, May 16, 2008, following the electronic filing procedures set forth in Attachment B of the Auction 77 Procedures Public Notice; (2) submit a sufficient upfront payment and an FCC Remittance Advice Form (FCC Form 159) by 6 p.m. ET, June 2, 2008, following the procedures and instructions set forth in Attachment C of the Auction 77 Procedures Public Notice; and (3) comply with all provisions outlined in the Auction 77 Procedures Public Notice and applicable Commission rules.

II. Short-Form Application (FCC Form 175) Requirements

18. Entities seeking licenses available in Auction 77 must file a short-form application (FCC Form 175) electronically following the procedures prescribed in Attachment B of the Auction 77 Procedures Public Notice. Applicants filing a short-form application are subject to the Commission's anti-collusion rules beginning on the deadline for filing. Applicants bear full responsibility for submitting accurate, complete and timely short-form applications. All applicants must certify on their short-form applications under penalty of perjury that they are legally, technically, financially and otherwise qualified to hold a license. Applicants should read the instructions set forth in Attachment B of the Auction 77 Procedures Public Notice carefully and should consult the Commission's rules to ensure that all the information that is required under the Commission's rules is included with their short-form applications.

19. An entity may not submit more than one short-form application for Auction 77. If a party submits multiple short-form applications for Auction 77, only one application will be accepted for filing.

20. Applicants also should note that submission of a short-form application (and any amendments thereto) constitutes a representation by the certifying official that he or she is an authorized representative of the applicant, that he or she has read the form's instructions and certifications, and that the contents of the application, its certifications, and any attachments are true and correct. Applicants are not permitted to make major modifications to their applications; such impermissible changes include a change of the certifying official to the application. 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.

A. License Selection

21. On its short-form application for Auction 77, an applicant must select the license for which it has filed a long-form application. Applicants will not be able to select the license for which they have not filed a long-form application.

22. Applicants will not be able to change their license selections after the short-form application filing deadline. Applicants interested in participating in Auction 77 must have selected license(s) available in the respective auction by the short-form application deadline. Applicants must confirm their license selections before the deadline for submitting FCC Form 175. The FCC Auction System will not accept bids from an applicant on individual licenses that the applicant has not selected on its FCC Form 175.

B. Disclosure of Bidding Arrangements

23. Applicants will be required to identify in their short-form application for Auction 77 all parties with whom they have entered into any agreements, arrangements, or understandings of any kind relating to the licenses being auctioned in Auction 77, including any agreements relating to post-auction market structure.

24. Applicants also will be required to certify under penalty of perjury in their short-form applications that they have not entered and will not enter into any explicit or implicit agreements, arrangements or understandings of any kind with any parties, other than those identified in the application to participate in Auction 77 regarding the amount of their bids, bidding strategies, or the particular licenses on which they will or will not bid. If an applicant has had discussions, but has not reached an agreement by the short-form application filing deadline, it would not include the names of parties to the discussions on its application and may not continue such discussions with any applicants after the deadline.

C. Ownership Disclosure Requirements

25. All applicants must comply with the uniform part 1 ownership disclosure standards and provide information required by 47 CFR 1.2105 and 1.2112 of the Commission's rules. Specifically, in completing the short-form application for Auction 77, applicants will be required to fully disclose information on the real party or parties-in-interest and ownership structure of the applicant. The ownership disclosure standards for the short-form application are prescribed in 47 CFR 1.2105 and 1.2112 of the Commission's rules. Each applicant is responsible for information submitted in its short-form application being complete and accurate.

D. Provisions Regarding Former and Current Defaulters

26. Each applicant must state under penalty of perjury on its short-form application whether or not the applicant, its affiliates, its controlling interests, and the affiliates of its controlling interests, as defined by 47 CFR 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. In addition, each applicant must certify under penalty of perjury on its short-form application that, as of the short-form filing deadline, the applicant, its affiliates, its controlling interests, and the affiliates of its controlling interests, as defined by 47 CFR 1.2110, are not in default on any payment for Commission licenses (including down payments) and that they are not delinquent on any non-tax debt owed to any Federal agency. Prospective applicants are reminded that submission of a false certification to the Commission is a serious matter that may result in severe penalties, including monetary forfeitures, license revocations, exclusion from participation in future auctions, and/or criminal prosecution. These statements and certifications are prerequisites to submitting an application in the FCC Auction System.

27. Former defaulters—i.e., applicants, including any of their affiliates, any of their controlling interests, or any of the affiliates of their controlling interests, that in the past have 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 77, provided that they are otherwise qualified. However, former defaulters are required to pay upfront payments that are fifty percent more than the normal upfront payment amounts.

28. Current defaulters—i.e., applicants, including any of their affiliates, any of their controlling interests, or any of the affiliates of their controlling interests, that are in default on any payment for any Commission licenses (including down payments) or are delinquent on any non-tax debt owed to any Federal agency as of the filing deadline for short-form applications—are not eligible to bid in Auction 77.

29. Applicants are encouraged to review the Bureau's previous guidance on default and delinquency disclosure requirements in the context of the short-form application process.

E. Minor Modifications to Short-Form Applications (FCC Form 175)

30. Applicants are not permitted to make major modifications to their short-form applications (e.g., change their license selections, change control of the applicant, or change the certifying official) after the short-form application deadline. Thus, any change in control of an applicant, resulting from a merger for example, will be considered a major modification to the applicant's FCC Form 175, which will consequently be dismissed.

31. Applicants are, however, permitted to make only minor changes to their FCC Form 175 after the short-form application deadline. Permissible minor changes include, for example, deletion and addition of authorized bidders (to a maximum of three) and revision of addresses and telephone numbers of the applicants and their contact persons.

32. The Auction 77 Procedures Public Notice also provides information on the mechanics of making permissible minor changes to its short-form application.

F. Maintaining Current Information in Short-Form Applications (FCC Form 175)

33. 47 CFR 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. If an amendment reporting substantial changes is a major amendment as defined by 47 CFR 1.2105, the major amendment will not be accepted and may result in the dismissal of the short-form application.

34. The Auction 77 Procedures Public Notice contains instructions on how to make minor changes to their short-form applications.

III. Pre-Auction Procedures

A. Short-Form Applications (FCC Form 175)—Due Prior to 6 p.m. ET on May 16, 2008

35. In order to be eligible to bid in Auction 77, applicants must first follow the procedures set forth in Attachment B of the Auction 77 Procedures Public Notice to submit an FCC Form 175 application electronically via the FCC Auction System. This application must be received at the Commission prior to 6 p.m. ET on May 16, 2008. Late applications will not be accepted. There is no application fee required when filing an FCC Form 175, but an applicant must submit an upfront payment to be eligible to bid.

36. Applications may generally be filed at any time beginning at 9 a.m. ET on May 14, 2008, and the filing window will close prior to 6 p.m. ET on May 16, 2008. Applicants are strongly encouraged to file early and are responsible for allowing adequate time for filing their applications. Applicants may update or amend their applications multiple times until the filing deadline on May 16, 2008. Applicants must always click on the SUBMIT button on the Certify & Submit screen of the electronic form to successfully submit or modify their FCC Form 175.

Application Processing and Minor Corrections

37. After the deadline for filing short-form applications, the Commission will process all timely submitted applications to determine which are complete, and subsequently will issue a public notice identifying: (1) Those applications that are complete; (2) those applications rejected; and (3) those applications that are incomplete because of minor defects that may be corrected, and the deadline for resubmitting corrected applications.

B. Upfront Payments—Due June 2, 2008

38. In order to be eligible to bid in Auction 77, applicants must submit an upfront payment accompanied by an FCC Remittance Advice Form (FCC Form 159). After completing the FCC Form 175, filers will have access to an electronic version of the FCC Form 159 that can be printed and sent by facsimile to Mellon Bank in Pittsburgh, PA. All upfront payments for Auction 77 must be received in the proper account at Mellon Bank by 6 p.m. ET on June 2, 2008. The Auction 77 Procedures Public Notice contains instructions for using wire transfers to meet the upfront payment requirements.

39. Please note that: (1) All payments must be made in U.S. dollars; (2) all payments must be made by wire transfer; (3) upfront payments for Auction 77 go to a lockbox number different from the lockboxes used in previous FCC auctions, and different from the lockbox number to be used for post-auction payments; and (4) failure to deliver the upfront payment as instructed by the June 2, 2008, deadline will result in dismissal of the application and disqualification from participation in the auction.

i. FCC Form 159

40. A completed FCC Remittance Advice Form (FCC Form 159, Revised 7/05) must be sent by facsimile to Mellon Bank to accompany each upfront payment. Proper completion of FCC Form 159 (Revised 7/05) is critical to ensuring correct crediting of upfront payments. Detailed instructions for completion of FCC Form 159 are included in Attachment C to this Public Notice. An electronic pre-filled version of the FCC Form 159 is available after submitting the FCC Form 175. Payors using a pre-filled FCC Form 159 are responsible for ensuring that all of the information on the form, including payment amounts, is accurate. The FCC Form 159 can be completed electronically, but must be filed with Mellon Bank via facsimile.

ii. Upfront Payments and Bidding Eligibility

41. Applicants must make the required upfront payment in order to be able to bid in Auction 77.

42. In the Auction 77 Comment Public Notice, the Bureau proposed to set the upfront payment at $500 for each applicant. The Bureau did not receive any comments in response to the proposed upfront payments, or on its proposal that the upfront payment amount would determine a bidder's eligibility to participate in the auction. Therefore, the Bureau adopts the upfront payment for each applicant in Auction 77 as proposed and set forth in Attachment A of the Auction 77 Procedures Public Notice.

43. Former defaulters must calculate their upfront payment by multiplying the upfront payment amount by 1.5.

C. Auction Registration

44. Approximately ten days before the auction, the FCC will issue a public notice announcing all qualified bidders for Auction 77. Qualified bidders are those applicants whose FCC Form 175 applications have been accepted for filing, are complete and have timely submitted upfront payments sufficient to make them eligible to bid in Auction 77.

45. All qualified bidders are automatically registered for the auction. Registration materials will be distributed prior to the auction by overnight mail. The mailing will be sent only to the contact person at the contact address listed in the FCC Form 175 and will include the SecurID® tokens that will be required to place bids, the Integrated Spectrum Auction System (ISAS) Bidder's Guide, and the Auction Bidder Line phone number.

46. Qualified bidders that do not receive this registration mailing will not be able to submit bids. Therefore, any qualified bidder that has not received this mailing by noon on Thursday, June 12, 2008, should call [phone]. Receipt of this registration mailing is critical to participating in the auction, and each applicant is responsible for ensuring it has received all of the registration material.

IV. Auction 77

47. Auction 77 will be held on Tuesday, June 17, 2008. The start and finish time of the bidding round will be announced in a public notice listing the qualified bidders, which is to be released approximately 10 days before the start of the auction.

A. Auction 77 Structure

i. Single-Round Sealed-Bid Auction

48. In the Auction 77 Comment Public Notice, the Bureau proposed to award the licenses included in Auction 77 using a single-round sealed-bid auction. A commenter supports the Bureau's proposal. The Bureau concludes that it is operationally feasible and appropriate to auction the cellular unserved service area licenses through a single-round sealed-bid auction.

ii. Auction Delay, Suspension, or Cancellation

49. In the Auction 77 Comment Public Notice, the Bureau proposed that, 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, administrative or weather necessity, evidence of an auction security breach or unlawful bidding activity, or for any other reason that affects the fair and efficient conduct of competitive bidding. The Bureau received no comment on this issue.

50. Because the Bureau's approach to notification of delay during an auction has proven effective in resolving exigent circumstances in previous auctions, the Bureau adopts its proposed rules regarding auction delay, suspension, or cancellation.

B. Bidding Procedures

i. Round Structure

51. The Commission will conduct Auction 77 over the Internet, and telephonic bidding will be available as well. The toll-free telephone number for the Auction Bidder Line will be provided to qualified bidders. The start and finish time of the bidding round will be announced in the public notice listing qualified bidders, which is released approximately 10 days before the start of the auction.

52. The single-round sealed-bid format will consist of one bidding round followed by the release of auction results. In the event of tied bids in an MX group, the Commission will post an announcement in the FCC Auction System to announce an additional round of bidding for that MX group. The commenter supports the proposal.

ii. Reserve Price or Minimum Bid

53. In the Auction 77 Comment Public Notice, the Bureau proposed to set the minimum bid at $500 for each of the two cellular unserved areas in Auction 77. The Bureau received no comments concerning this proposal. Therefore, the minimum bid for each of the two cellular unserved areas is set at $500 and is set forth in Attachment A of the Auction 77 Procedures Public Notice.

iii. Bid Amounts

54. Bidders will be able to place a bid in any whole dollar amount equal to or greater than the minimum bid for the cellular unserved area for which they applied.

55. Bidders are also cautioned that they should type their bid amounts carefully because, even if mistakenly or erroneously made, bidders still assume a binding obligation to pay their full bid amount.

iv. Bid Removal and Bid Withdrawal

56. Bid Removal. Before the close of a bidding round, a bidder has the option of removing any bids placed in that round. Once a round closes, a bidder may no longer remove a bid. By using the remove bids function in the FCC Auction System, a bidder may effectively unsubmit any bid placed within that round. This procedure will enhance bidder flexibility during the auction, and therefore the Bureau adopts these proposals for Auction 77.

57. Bid Withdrawal. With respect to bid withdrawals, we proposed not to allow any bid withdrawals (withdrawal of provisionally winning bids from previous rounds) in Auction 77. The Bureau received no comments on this issue. Therefore, the Bureau adopts its proposal.

v. Auction Results

58. At the end of the bidding round, the winning bid for each cellular unserved area will be determined based on the highest bid amount received for the area. Bids placed during a round will be made public at the conclusion of that round. Specifically, after a round closes, the Bureau will compile reports of all bids placed and which bidders made them, the random numbers assigned to each bid (for tie-breaking purposes), new minimum acceptable bid amounts, and will post the reports for public access.

59. In the event of identical high bid amounts being submitted in a cellular unserved area (i.e., tied bids), the Bureau proposed to allow an additional bidding round or rounds, if necessary, for bidders to submit higher bids for the cellular unserved area with tied bids. The minimum bid for the next round will be calculated by rounding the tied bid amount up to the next $100. The license(s) will be awarded to the bidder submitting the highest bid in the additional round. If no bids are placed in the additional round, the license(s) will be awarded to the bidder that placed the tied bid that was assigned the higher random number (a random number having previously been assigned to each bid). If there is a tie for the winning bid in the additional round, the FCC may add another tie-breaking round or rounds, or stop the auction without awarding the license(s).

60. The Commission will announce the schedule for a subsequent round via an announcement in the FCC Auction System, concurrent with the release of round results. A commenter stated that it had no objection to the proposal to conduct an additional round in the event of tied bids. The Bureau believes that this approach is efficient and therefore adopts its proposal.

61. Consistent with past practice, the Bureau will announce the winning bid shortly after the close of the auction, and the amounts of all bids submitted during the auction will be made publicly available.

vi. Auction Announcements

62. The Commission will use auction announcements to announce items such as the schedule for a subsequent round in the event of tied bids on a license. All auction announcements will be available by clicking a link in the FCC Auction System.

V. Post-Auction Procedures

A. Down Payments

63. After bidding has ended in Auction 77, the Commission will issue a public notice declaring the auction closed and identifying winning bidders, down payments and final payments due.

64. 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 licenses offered in Auction 77 to 20 percent of the net amount of its winning bids.

B. Final Payments

65. Each winning bidder will be required to submit the balance of the net amount of its winning bids within 10 business days after the applicable deadline for submitting down payments.

C. Long-Form Application (FCC Form 601)

66. Within an MX group, the previously filed long-form application(s) (FCC Form 601) of the unsuccessful bidder will be dismissed following the grant of the winning bidder's license(s).

D. Ownership Disclosure Information Report (FCC Form 602)

67. Winning bidders must ensure that ownership information reported on FCC Form 602 is accurate and up to date. Further instructions will be provided to winning bidders at the close of the auction.

E. Default and Disqualification

68. Any winning 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 make full payment, or is otherwise disqualified) will be subject to the payments described in 47 CFR 1.2104(g)(2). The payments include both a deficiency payment, equal to the difference between the amount of the bidder's bid and the amount of the winning bid the next time a license covering substantially the same spectrum and geographic area is won in an auction, plus an additional payment equal to a percentage of the defaulter's bid or of the subsequent winning bid, whichever is less.

69. The percentage of the bid that a defaulting bidder must pay in addition to the deficiency will depend in part on the auction format ultimately chosen for a particular auction, if the license is subsequently reauctioned. In package auctions without package bidding, the amount can range from three percent up to a maximum of twenty percent, established in advance of the auction and based on the nature of the service and the inventory of the licenses being offered.

70. As previously noted by the Commission, defaults weaken the integrity of the auction process and impede the deployment of service to the public, and an additional default payment of more than three percent will be more effective in deterring defaults. Accordingly, in the Auction 77 Comment Public Notice, the Bureau proposed to set the additional default payment for the auction of the two cellular unserved areas licenses at twenty percent of the applicable bid. Since Auction 77 is being conducted strictly to resolve conflicts between entities in two cellular unserved areas that were unable to resolve their mutually exclusive applications, a default by the winning bidder would suggest that the bidder has not made a good-faith effort to abide by FCC license assignment procedures, thereby weakening the integrity of the auction process. The Bureau proposed to impose the maximum payment percentage to deter such behavior. The Bureau received no comments on this proposal. Therefore, the Bureau adopts its proposal.

71. Finally, the Bureau notes that in the event of a default, the Commission may reauction the license or offer it to the next highest bidder (in descending order) at its final bid amount. 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.

F. Refund of Remaining Upfront Payment Balance

72. All upfront payments submitted by applicants in Auction 77 may be available to be refunded after the conclusion of the auction; subject to any required payments (i.e. winning bid, deficiency, and/or default payments). 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.

Federal Communications Commission.

Gary D. Michaels,

Deputy Chief, Auctions Spectrum and Access Division, WTB.