[Federal Register Volume 60, Number 180 (Monday, September 18, 1995)]
[Notices]
[Pages 48110-48137]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23162]
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FEDERAL COMMUNICATIONS COMMISSION
[Report No. AUC-95-06]
Auction Notice and Filing Requirements for 493 BTA Authorizations
for Multipoint Distribution Service in the 2 GHz Band, Scheduled for
November 13, 1995
agency: Federal Communications Commission.
action: Public notice.
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summary: This Public Notice, released September 5, 1995, announced the
auction and filing requirements for the 493 BTA authorizations for the
Multipoint and/or Multichannel Distribution Service (MDS) in the 2 GHz
[[Page 48111]]
Band, scheduled to begin November 13, 1995. The Public Notice included,
as an Appendix, an upfront payment schedule. On September 12, 1995, the
FCC's Wireless Telecommunications Bureau issued another Public Notice
with a revised upfront payment schedule, which differed slightly from
September 5, 1995 Appendix and supersedes the schedule previously
published. Both the September 5, 1995 and the September 12, 1995 Public
Notices should be read together. These Public Notices are directed
toward the Commission's goal of efficiently distributing the unused MDS
spectrum through competitive bidding, and are designed to assist
prospective bidders in preparing for the upcoming MDS auction.
for further information contact: The FCC auction contractor, Tradewinds
International, Inc., at (202) 637-FCC1 (637-3221).
The complete text of the Public Notice dated September 5, 1995
follows. Copies of this item is available for public inspection in Room
207, 2033 M Street, NW., Washington, DC and may also be obtained from
the FCC copy contractor, ITS, Inc. at (202) 418-0620, and the FCC
auction contractor, Tradewinds International, Inc. at (202) 637-FCC1
(637-3221).
Report No. AUC-95-06, Auction No. 6, September 5, 1995
I. Introduction
On Monday, November 13, 1995, the Federal Communications Commission
(FCC or Commission) will commence a simultaneous multiple round auction
for 493 authorizations to provide single channel Multipoint
Distribution Service (MDS) and Multichannel Multipoint Distribution
Service (MMDS), collectively referred to as MDS. The frequencies
allocated to MDS are as follows: 2150-2156 MHz (designated as Channel
1); 2156-2162 MHz (designated as Channel 2) or 2156-2160 (designated as
Channel 2A); 2596-2602 MHz, 2608-2614 MHz, 2620-2626 MHz, and 2632-2638
MHz (designated as Channels E1, E2, E2, and E4, respectively); 2602-
2608 MHz, 2614-2620 MHz, 2626-2632 MHz, and 2638-2644 MHz (designated
as Channels F1, F2, F3 and F4, respectively); 2650-2656 MHz, 2662-2668
MHz, and 2674-2680 MHz (designated as Channels H1, H2 and H3,
respectively). In 1992, the frequency spectrum of 2160-2162 MHz was
reallocated to emerging technologies, and thus, any subsequent MDS use
of these 2 MHz will be secondary. The authorizations to be auctioned
will authorize the construction of facilities to provide service on the
usable MDS channels within the 493 Basic Trading Area (BTAs) and BTA-
like areas in the United States. A channel is usable if the proposed
station design is in compliance with the Commission's interference
standards. The channels allocated to MDS, when supplemented with leased
channels from the Instructional Television Fixed Service (ITFS), are
generally used to provide multichannel video programming service
(popularly referred to as ``wirless cable'') to subscribers.
In each of the 493 BTAs, one authorization will be offered for bid.
Bidders should note that MDS is a service heavily encumbered with
previously authorized and proposed MDS and ITFS facilities. Most of the
thirteen MDS channels have already been authorized in the largest
metropolitan areas, especially in the eastern half of the United
States. Given the limited amount of usable MDS spectrum remaining and
the presence of incumbents in most BTAs, each prospective bidder should
carefully evaluate the BTAs in which it is interested prior to the
commencement of bidding. The attached Appendix lists the market number,
authorization number and population of each BTA, as well as the upfront
payment amount associated with each BTA and reduced upfront payment
amount for eligible small businesses.
The precise schedule for bidding in the first week of the auction
will be announced approximately two weeks prior to the start of the
auction. Unless otherwise announced, bidding will be conducted on each
business day until bidding has stopped on all BTA service areas.
Bidding in this auction will only be permitted from remote locations,
either electronically (by computer) or telephonically.
Those wishing to participate in the auction must submit a ``short-
form'' application on FCC Form 175-M in accordance with the
Commission's rules and instructions in this Public Notice and in the
Bidder Information Package. Applicants should be aware that the FCC
Form 175-M is a revised form specifically for this MDS auction and will
be the only form accepted for filing. The FCC Form 175-M must be
received no later than 5:30 p.m. Eastern Daylight Time on Tuesday,
October 10, 1995, and must be received either electronically or
manually pursuant to the instructions set forth in the Bidder
Information Package. Applicants for the MDS auction are encouraged to
file their FCC Form 175-M electronically. Applicants should also be
aware that only those applicants who file applications electronically
will be permitted the option to bid electronically. Applicants who file
their applications manually will only be permitted to bid
telephonically. Limited instructions regarding electronic filing are
contained in this Public Notice. More detailed instructions on
electronic filing will be contained in the Bidder Information Package.
Applicants whose FCC Forms 175-M have been accepted will be required to
submit an upfront payment (in U.S. dollars) to be eligible to
participate in the auction. As detailed in Section II.B. of this Public
Notice, the upfront payment must be made by wire transfer or cashier's
check payable to the ``Federal Communications Commission'' or ``FCC''
and must be received on or before Monday, October 30, 1995, at the
Mellon Bank in Pittsburgh, Pennsylvania. No other form of payment will
be accepted.
A. Bidder Information Package
Prospective bidders who have already contacted the FCC Auction
Hotline expressing an interest in MDS will receive the Bidder
Information Package for the MDS auction approximately ten to fifteen
business days from the issuance of this Public Notice. Other
prospective applicants may obtain the Bidder Information Package for
the MDS auction by contacting Tradewinds International, Inc., at (202)
637-FCC1 (637-3221).
The FCC recently issued a Report and Order (WT Docket No. 95-69, 60
Fed. Reg. 38,276 (July 26, 1995)) establishing fair and reasonable fees
for Bidder Information Packages. Although all prospective applicants
who request a Bidder Information Package will receive their first copy
of this package for free, additional copies will be provided at a cost
of $16.00 per package (including postage). Payment for additional
Bidder Information Packages may be made by Visa/Master Card or check
payable to the ``Federal Communications Commission'' or ``FCC'' and
mailed to Tradewinds International, Inc.
The Bidder Information Package will contain the following
information:
1. A list of BTA authorizations to be offered simultaneously;
2. Detailed procedures, terms and conditions of the auction;
3. Detailed instructions regarding the completion and filing of the
FCC Form 175-M, including instructions on electronic filing and remote
access of FCC Form 175-M applications filed with the Commission;
4. Electronic and telephone bidding procedures;
5. All applications/forms needed to participate in the FCC Auction:
[[Page 48112]]
a. A short-form application to participate in the auction (FCC Form
175-M) for bidders who intend to file manually, Additionally, a
supplemental form (FCC Form 175-S) will be included for those who wish
to apply for more than five markets.
b. An FCC Remittance Advice Form (FCC Form 159) to be submitted by
each bidder with its upfront payment, and by each winning bidder with
its down payment, final payment and installment payments, if applicable
(as described below), including instructions on filling out the form
and samples of completed FCC Form 159s;
c. A registration form to participate in the FCC's Auction Seminar
to be held at the FCC's auction facility in Washington, D.C. on
Tuesday, October 24, 1995. This seminar is only for applicants whose
FCC Forms 175-M have been filed;
d. An order form for the purchase of remote electronic bidding
software;
6. Wire transfer instructions;
7. A partial bibliography of auction specific FCC rules and
regulations;
8. The Report and Order in MM Docket No. 94-131 and PP Docket No.
93-253, FCC 95-230 (released June 30, 1995), summarized at 60 Fed. Reg.
36,524 (July 17, 1995) (MDS Report and Order), which modified the MDS
application process and adopted competitive bidding procedures for MDS.
This MDS Report and Order contains the amended part 21 rules pertaining
to MDS and a draft application for an MDS authorization (FCC Form 304
or ``long-form'' application) to be submitted after the auction by
winning bidders to obtain a station license;
9. An FCC Licensee Qualification Report (FCC Form 430), which must
be submitted after the auction by winning bidders as part of their Form
304 long-form applications or statements of intention; and
10. Other general auction information.
B. Relevant Authority
Prospective Bidders must familiarize themselves thoroughly with the
procedures, terms and conditions (collectively, ``Terms'') contained in
the Second Report and order in PP Docket No. 93-253, 9 FCC Rcd 2348
(1994), 59 Fed. Reg. 22,980 (May 4, 1994), Second Memorandum Opinion
and Order in PP Docket No. 93-253, 9 FCC Rcd 7245 (1994), 59 Fed. Reg.
44,272 (Aug. 26, 1994); the Erratum to the Second Memorandum Opinion
and Order in PP Docket No. 93-253 (Oct. 19, 1994); and the MDS Report
and Order (collectively referred to as ``the Relevant Orders''). The
rules contained in the Relevant Orders, this Public Notice, and Terms
in the Bidder Information Package are not negotiable. Prospective
bidders should review these auction documents thoroughly prior to the
auction to make certain that they understand all of the provisions and
are willing to be bound by all of the Terms before participating in the
auction.
Potential bidders should also be aware of several items pending
before the Commission that affect MDS. Thirteen petitions for
reconsideration have been filed requesting that the Commission
reconsider and/or clarify certain aspects of the MDS Report and Order.
In addition, numerous members of the wireless cable industry have filed
a request for a declaratory ruling asking that the Commission examine
current MDS and ITFS operational requirements that were adopted before
digital compression technology was envisioned, and reinterpret them
appropriately for digital operations. Further, the Commission has
announced the opening of an ITFS filing window from October 16-20,
1995. Prospective bidders should consider the impact of these pending
matters in their valuation of the BTA service areas before submitting
any bids in the auction.
The information contained in this Public Notice and in the Bidder
Information Package may be amended or supplemented by the Commission at
any time. The Commission will issue Public Notices to convey the new or
supplemental information to prospective bidders. It is the
responsibility of all prospective bidders to remain current with all
FCC rules and with all Public Notices pertaining to this auction.
Copies of FCC documents, including Public Notices, may be obtained for
a fee by calling International Transcription Service, Inc. at (202)
857-3800. Additionally, prospective bidders may retrieve some of these
documents from the FCC Internet node via anonymous [email protected]
II. Bidder Eligibility
In order to be eligible to bid in the MDS auction, bidders must (i)
satisfy the Commission's eligibility requirements; (ii) submit a short-
form application on FCC Form 175-M (and Form 175-S if necessary); and
(iii) remit an upfront payment in compliance with applicable FCC rules
and regulations. To meet the eligibility requirements for participation
in this auction, prospective bidders must be qualified to receive a BTA
authorization and an MDS station license. See 47 C.F.R. Sec. 21.923.
All prospective applicants should review carefully each of the rules
contained in subparts A, B, C, D, E and K of Part 21 of the
Commission's rules, as amended by the MDS Report and Order, as well as
Subparts I and Q of Part 1 of the Commission's rules.
Bidders that qualify as small businesses or as small business
consortia are eligible for reduced upfront payments (see Section II.B),
bidding credits of 15% (a discount on the winning bid price) and
installment payments (which allow eligible winning bidders to pay the
net amount of their winning bids in installments). Small businesses are
entities that, together with their affiliates, have average annual
gross revenues that are not more than $40 million for the preceding
three calendar years. See 47 C.F.R. Secs. 21.960 and 21.961 for
eligibility criteria and other terms pertaining to reduced upfront
payments, bidding credits and installments payments. These special
measures available to small businesses in the MDS auction are also
discussed in the Bidder Information Package.
Winning bidders claiming eligibility as small businesses should
note that they will be required to file supporting documentation to
establish that they qualify as small businesses. See 47 C.F.R.
Sec. 21.960(e). Winning bidders claiming eligibility as small
businesses may be subject to audits by the Commission to confirm bidder
eligibility. See 47 C.F.R. Sec. 21.960(f) and (g).
A. Short-Form Application (FCC Form 175-M)
In order to be eligible to bid, applicants must submit an FCC Form
175-M application to the Commission. This application must be received
by the FCC no later than 5:30 p.m. Eastern Daylight Time on Tuesday,
October 10, 1995. Late applications will not be accepted. Applications
may be submitted electronically, by hand delivery, by certified U.S.
mail (return receipt requested) or by private courier. Applicants
should consult the detailed application procedures provided in the
Bidder Information Package before submitting their FCC Form 175-M.
1. Completion of Form 175-M
Because of the significance of the FCC Form 175-M application to
the auction, it is important to take note of the following
requirements. Applicants will be required to complete all the items on
the FCC Form 175-M. Applicants should carefully review
Secs. 1.2105(a)(2), 21.952 and 21.960(e) of the Commission's rules
prior to completing FCC Form 175-M. In completing an FCC Form 175-M,
applicants should note the following:
[[Page 48113]]
a. Applicants should apply for all authorizations for which they
seek bidding eligibility. Bids will not be accepted for authorizations
for which a applicant has not applied on its FCC Form 175-M.
b. For ``Auction Number,'' applicants filing manually should enter
``6''.
c. Applicants will be required to create a ten-digit FCC Account
Number, which the Commission will use to identify and track
applications. Applicants must create this FCC Account Number by using
their taxpayer identification number (TIN) with a prefix of ``O''
(i.e., 0123456789). If, and only if, an applicant does not have a
taxpayer identification number, the applicant may use its ten-digit
area code and telephone number (i.e., 5552345678). Each applicant must
use this same number when submitting additional information or material
regarding its application, including on its FCC Form 159 (FCC
Remittance Advice) accompanying any required auction deposits or
payments submitted to the Commission. This number also must be used
whenever an applicant writes, calls, or otherwise inquires about its
application. Qualified bidders will need this number to participate in
the auction.
d. Applicants must indicate on their FCC Form 175-M, if applicable,
their status as a rural telephone company, minority-owned business,
women-owned business and/or small business. See 47 C.F.R.
Secs. 1,2110(b), 21.961. The indication of applicants' status as a
rural telephone company, minority-owned business or woman-owned
business is for statistical purposes only. In Item #10, by checking the
appropriate box to indicate status as a small business, an applicant
certifies that it is eligible for the special measures available to
small businesses, i.e., that, together with its affiliates, the
applicant has annual gross revenues of less than $40 million. See 47
C.F.R. Secs. 21.960, 21.961(b). All applicants should pay particular
attention to the provisions of 47 C.F.R. Secs. 1.2110, 21,960 and
21.961, relating to designed entities.
e. Applicants must identify on the FCC Form 175-M the market number
for each authorization on which they seek bidding eligibility. The
market number for each BTA is listed in the attached Appendix. The
upfront payment amounts for each BTA are also included in this Appendix
so that applicants can calculate upfront payments amounts required to
be eligible to bid on the largest combination of ``activity'' or
``bidding'' units on which the applicants anticipate being active in
any single round of bidding. See Section II.B below and the MDS Report
and Order for detailed information about upfront payments. Applicants
should note that the BTAs in the attached Appendix have been organized
within the corresponding Major Trading Area (MTA). BTA service areas
are based on Rand McNally 1992 Commercial Atlas & Marketing Guide,
123rd Edition, at pages 38-39. Rand McNally organizes the 50 states and
the District of Columbia into 487 BTAs. Six additional BTA-like areas
will be licensed separately. They are:
(1) American Samoa;
(2) Guam;
(3) Northern Mariana Islands;
(4) Mayaguez/Aguadilla-Ponce, Puerto Rico. Consisting of the
following municipos: Adjuntas, Aguada, Aguadilla, Anasco, Arroyo, Cabo
Rojo, Coama, Guanica, Guayama, Guayanilla, Hormigueros, Isabela,
Jayuya, Juana Diaz, Lajas, Las Marias, Mayaguez, Maricao, Maunago,
Moca, Patillas, Penuelas, Ponce, Quebradillas, Rincon, Sabana Grande,
Salinas, San German, Santa Isabel, Villalba, and Yauco;
(5) San Juan, Puerto Rico (including all other municipos not
included in Mayaguez/Aguadilla-Ponce); and
(6) United States Virgin Islands.
f. Applicants must list the name(s) of the person(s) authorized to
represent them at the auction (up to a maximum of three). Only those
individuals listed on the Form 175-M will be authorized to submit and
withdraw high bids for the applicant during the auction.
g. Applicants should read the ``certifications'' on the FCC Form
175-M carefully before submitting their application. Applicants who
file their FCC Form 175-M applications electronically will not be
required to transmit an original or electronic signature. However,
similar to a manually filed FCC Form-M, upon submission, the certifying
official has made the representation that he/she is an authorized
representative of the applicant for the authorization(s) selected, and
that he/she has read the instructions and the certifications and that
all matters and things stated in the application and attachments,
including exhibits, are true and correct. These certifications help to
ensure a fair and competitive auction and require, among other things,
disclosure of certain information on agreements or arrangements
concerning the auction. Submission of a false certification to the
Commission may result in penalties, including monetary forfeitures, BTA
authorization and/or station license forfeitures, and ineligibility to
participate in future auctions, and/or criminal prosecution.
h. If the Commission wishes to communication with the applicant by
mail, telephone or fax, such communications will be directed to the
contact person identified on the FCC Form 175-M. A space has been
provided for both a telephone number and a fax number. All written
communications will be directed to the applicant at the address
specified on the FCC Form 175-M. (Applicants must provide a street
address; P.O. Box addresses should not be used.)
i. Applicants must attach an exhibit providing the name,
citizenship and address of all partners, if the applicant is a
partnership; of a responsible officer or director, if the applicant is
a corporation; of the trustee, if the applicant is a trust; or, if the
applicant is none of the foregoing, list the name, address and
citizenship of a principal or other responsible person.
j. Applicants must attach an exhibit identifying all parties with
whom they have entered into any consortium arrangements, joint
ventures, partnerships or other agreements or understandings which
relate in any way to this auction.
k. Microfiche copies of the FCC Form 175-M and 175-S are required
for all manual submissions in excess of five pages. For this auction,
the FCC will allow submission of a 3.5'' diskette, in lieu of
microfiche, which contains ASCII text (.TXT) files of all exhibit
documentation attached to the FCC Form 175-M.
2. Electronic Filing of FCC Form 175-M Applications
The Commission recently implemented a remote access system to allow
applicants to submit their FCC Form 175-M applications electronically.
The remote access system for initial filing of the FCC Form 175-M
applications will generally be available 24 hours per day beginning at
approximately the same time as the release of the Bidder Information
Package. FCC Form 175-M applications that are filed electronically
using this remote access system must be submitted and confirmed by 5:30
p.m. Eastern Daylight Time on Tuesday, October 10, 1995. Late
applications or unconfirmed submissions of electronic data will not be
accepted. The electronic filing process consists of an initial filing
period and a resubmission period to make minor corrections. (See
Paragraph 5. Procedures after FCC Form 175-M Applications are Filed and
Process for Minor Corrections below.) Detailed filing instructions will
be provided in the Bidder Information Package.
[[Page 48114]]
Those applicants who wish to file their FCC Form 175-M
electronically or review other FCC Form 175-M applications on-line will
need the following hardware and software.
Hardware Requirements
CPU: Intel 80386 or above (80486 or faster recommended).
RAM: 8MB RAM (more recommended if you have multiple
applications open).
Hard Disk: 10MB available disk space.
1.44MB 3.5'' Floppy Drive (to install the remote system).
Modem: v.32bis 14.4kbps Hayes compatible Modem.
Monitor: VGA or above.
Mouse or other pointing device.
Three 1.44MB Floppy Disks.
Software Requirements
FCC-provided application software (will be available via
Internet or the FCC Bulletin Board Service).
PPP Asynchronous Communications Package that is Winsock
v1.1 compliant (tested--Trumpet v2.0b, NetManage Chaneleon v4.1,
Wollongong Pathway Access for Windows v3.2.\1\
\1\ The FCC is in the process of testing Windows95. Contact the
FCC Technical Support Hotline at (202) 414-1260.
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Microsoft Windows 3.1 or above, or Microsoft Windows for
WorkGroups v.3.11 or above.\1\
Applicants who wish to file their FCC Form 175-M applications
electronically through the FCC Remote Access System must first download
the FCC-provided application software from either the Internet or the
FCC Bulletin Board System. Applicants should note that previous
versions of the Remote FCC Form 175 software will not work. Applicants
must download the version specific to this auction, FCC175v3.exe.
Internet Access
In order to download the compressed file from Internet, you will
need to have access to the Internet and an ftp client software as
follows:
FTP: The following instructions are for the command line version
of ftp.
(1) Connect to the FCC ftp server by typing ftp fcc.gov.
(2) At the user name prompt, type anonymous [Enter].
(3) At the password prompt, type your Internet e-mail address
[Enter].
(4) To allow the file to be downloaded type: binary [Enter].
(5) Change your current directory to the FCC175 directory by
typing: cd/pub/Auctions/MDS/BTA/FCC175 [Enter].
(6) Use the get command to download files from the FCC ftp server
by typing: get F175V3.EXE [Enter].
(7) If you wish to exit, type: bye [Enter].
Gopher: gopher.fcc.gov or use any gopher to get to ``all the
gophers in the world'' then `U.S.' then `DC' then `FCC'.
World Wide Web: ftp://fcc.gov.
Dial--In Access to the FCC Auction Bulletin Board System (BBS)
The FCC Auction Bulletin Board System provides dial-in access for
the FCC-provided application software. In order to access the FCC
Auction BBS, use a communications package that can handle at least
xmodem protocol (e.g., pcAnyWhere, Telix, Procomm) to dial in to (202)
682-5851. Use the settings of 8 data bits, no parity and 1 stop bit
(8,N,1).
For New Users Follow Steps 1-6, Otherwise Go to Step 7
(1) Type New, [Enter]. If the word ANSI is blinking, type Y for
yes. If the word ANSI is not blinking, type N for No.
(2) Type in your first and last name and press [Enter]. This will
be your login name.
(3) Type in your Telephone number and press [Enter].
(4) Type in your Fax number and press [Enter].
(5) Type in what you want your password to be and press [Enter].
(6) Retype the password for verification and press [Enter].
Once the Account Is Generated
(7) Type M for MDS Auction Files and press [Enter].
(8) Type P for Programs and Applications and press [Enter].
(9) Move the cursor to the file named F175V3.EXE and type
[Control]-D (hold the Ctrl key down and press the D key) for Download
and press [Enter].
(10) Type the letter representing the transfer protocol desired and
press [Enter]. How the file is downloaded and where it gets downloaded
depends on the transfer protocol package used.
(11) Repeat steps 10 and 11 to download additional files, or press
X and [Enter] to Exit the screen.
To Exit
(12) Type X to Exit and press [Enter] and continue to do so until
asked if you want to Exit the BBS. Press Y for Yes when asked to verify
your leaving.
The FCC-provided application software available through Internet
and the Auction BBS will be in a self-extracting compressed file
format. Once the compressed file has been downloaded, you will need to
generate the installation disks.
To generate the installation disks, type F175V3.EXE/! and press
[Enter].
The extracted files will be executable programs for submitting and
reviewing FCC Form 175-M applications along with a README.TXT file. The
text file will provide instructions for installing the software on the
applicant's personal computer. For technical assistance in downloading,
extracting, installing or using the FCC application software contact
the FCC Technical Support Hotline at (202) 414-1260.
3. Manual Filing of FCC Form 175-M
For those applicants who file manually, whether mailed, hand
delivered or sent by private courier, applications must be addressed
to: Office of the Secretary, Attn: Auction 6 Short-Form Processing,
Federal Communications Commission, 1919 M Street, NW., Room 222,
Washington, DC 20554.
Applications will not be accepted if delivered to any other
location. Applicants who wish to file manually should note that the FCC
Form 175-M has been revised specifically for this auction. Only the
revised FCC Form 175-M will be accepted for filing. Additionally,
applicants should be aware that if they file manually they will only be
permitted to submit their bids telephonically. Electronic bidding is
reserved for parties who submit their applications electronically.
4. Application Fee
No application fee need accompany the FCC Form 175-M for the
auction.
5. Procedures After FCC Form 175-M Applications Are Filed and
Procedures for Minor Corrections
After the deadline for filing the FCC Form 175-M applications has
passed, the Commission will process all applications to determine
whether they are acceptable for filing. The Commission will issue a
Public Notice listing all applications which are accepted for filing,
rejected, and those which have minor defects that may be corrected. The
Public Notice will also announce the deadline for filing corrected
applications. As described more fully in the Commission's general
auction rules and in the MDS Report and Order, applicants may make
minor corrections to their FCC Form 175-M applications. Applicants will
not be permitted to make major modifications to their applications. In
particular, failure to sign a manually filed FCC Form 175-M cannot be
corrected and will cause the application to be
[[Page 48115]]
dismissed and the applicant to be ineligible to participate in the
auction. See 47 C.F.R. Secs. 1.2105(b); 21.952(c). Applicants who file
their FCC Form 175-M application electronically will not be required to
transmit an original or electronic signature.
After the deadline for resubmitting corrected applications, the
Commission will release another Public Notice announcing all
applications that have been accepted for filing, including applicants
who have corrected defective applications.
B. Upfront Payments
In order to be eligible to bid in the auction, applicants must
submit an upfront payment together with an FCC Remittance Advice, FCC
Form 159. The upfront payment will be due on Monday, October 30, 1995.
A sample FCC Form 159 and further instructions for making auction
payments will be included in the Bidder Information Package.
All payments must be made in U.S. dollars, must be in the form of a
wire transfer or cashier's check, and must be made payable to the
``Federal Communications Commission'' or ``FCC.'' No other form of
payment will be accepted. Cashier's checks must be drawn on a financial
institution whose deposits are insured by the Federal Deposit Insurance
Corporation (FDIC). All payments whether by wire transfer or cashier's
check, must be made to the Mellon Bank by Pittsburgh, Pennsylvania.
Payments made by cashier's check must be received by 11:59 p.m. Eastern
Standard Time, Monday, October 30, 1995. Payments made by wire transfer
must be received by 3:00 p.m. Eastern Standard Time, Monday, October
30, 1995. Bidders making payments by wire transfer should allow
sufficient time for the wire transfer to be confirmed.
Failure to deliver the upfront payment in a timely manner will
result in dismissal of the application and inability to participate in
the auction.
A bidder should calculate its upfront payment on the basis of the
largest combination of ``activity'' or ``bidding'' units on which the
bidder anticipates being active in any single round of bidding. (The
number of bidding units associated with any particular BTA equals the
amount of the upfront payment for that BTA, as set forth in the
attached Appendix. These upfront payments were calculated by the
Commission, taking into account the population and the approximate
amount of usable spectrum in each BTA.) The combination of bidding
units on which a bidder is active in a round equals the sum of the
bidding units associated with the BTAs on which the bidder has
submitted a bid, or on which the bidder is the standing high bidder.
The upfront payment submitted by each applicant is not attributed to
specific BTA service areas but instead will define the largest
combination of bidding units on which the applicant will be permited to
bid in any single round of bidding. Thus, if an applicant submits a
$100,000 total upfront payment, the applicant could be active in any
single round on two BTA service areas with 50,000 bidding units each,
on five BTAs with 20,000 bidding units each, on ten BTAs with 10,000
bidding units each, or on any combination of BTAs for which the sum of
associated bidding units totals 100,000 or less. See MDS Report and
Order at Paras. 135-137.
An applicant may, on its FCC Form 175-M, apply for every
authorization being offered, but the total upfront payment submitted by
the applicant will determine the combinations of BTA service areas on
which the applicant will actually be permitted to be active in any
single round of bidding.
A prospective bidder in the MDS auction that claims status as a
small business will be eligible for a 25% reduction in its upfront
payment requirement. Thus, a bidder claiming eligibility as a small
business and wishing to be eligible to bid on a particular BTA service
area will be required to submit an upfront payment equal to 75% of the
upfront payment specified for bidders who don't qualify for the small
business credits. A small business eligible for this reduction in its
upfront payment will not have the number of its bidding units decreased
as a result of submitting a reduced upfront payment. For example, if a
small business applicant wants to be eligible to bid on a BTA with an
upfront payment of $100,000, it will be required, under the reduced
upfront payment measure, to submit only $75,000 to qualify to bid on
that BTA. This applicant will still, however, receive 100,000 bidding
units--the number of bidding units equivalent to the full upfront
payment amount associated with that BTA. See MDS Report and Order at
para. 138.
The Commission will issue a Public Notice announcing all qualified
bidders for the MDS auction. Qualified bidders are those whose FCC Form
175-M applications have been accepted for filing and who have submitted
timely upfront payments sufficient to make them eligible to bid on at
least one of the BTA authorizations applied for on the FCC Form 175-M
application.
III. Auction Event and Bidding Rounds
The MDS auction will begin at 9:00 a.m. Eastern Standard Time on
Monday, November 13, 1995. The precise schedule for bidding in the
first week of the auction will be announced two weeks prior to the
start of the auction.
Generally bids will be submitted twice each day during the first
three days of bidding. The Commission may, however, increase or
decrease the amount of time for bid submission as well as the number of
rounds per day depending upon such factors as the bidding activity
level or the aggregate amount of high bids.
IV. Auction Procedures
The BTA authorizations will be awarded through a simultaneous
multiple round auction. Bids will be accepted on all BTA service areas
in each round of the auction until bidding stops on all BTAs. See
Section IV.E for specific information about stopping rules. High bid
amounts will be posted after the end of the bid submission period in
each round of bidding. Information regarding all valid bids submitted
and all bid withdrawals in each round also will be provided along with
the minimum accepted bids for the next round.
A. Number of Authorizations That May Be Acquired
The Commission has imposed no limitations on the number of BTA
authorizations that any one entity may acquire in the MDS auction.
B. Bid Submission and Withdrawal Procedures
Bidders that are eligible to bid electronically, those that filed
their FCC Form 175-M electronically, may order the auction bidding
software by filling out the order form contained in the Bidder
Information Package. The cost of the bidding software is $175 plus $25
for shipping and handling. Qualified bidders that use the remote
electronic auction system will be charged $2.30 per minute pursuant to
the recently issued Report and Order (WT Docket No. 95-69, 60 Fed. Reg.
38,276 (July 26, 1995)). All qualified bidders also have the option to
submit and withdraw high bids telephonically through an ``800'' number
which will be provided in the registration materials.
1. Bid Submission
Details will be set forth in the Bidder Information Package on the
procedures to be used in bidding.
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2. Bid Withdrawals
A high bidder that wants to withdraw one or more of its high bids
during the course of the auction may do so during the bid withdrawal
period subject to the withdrawal penalty specified in Section
21.959(a)(1) of the Commission's rules, 47 C.F.R. Sec. 21.959(a)(1).
C. Minimum Bid Increments and Tie Bids
The minimum bid increment is the amount or percentage by which a
bid must be raised above the previous high bid in order to be accepted
as a valid bid in the current round. The amount of the minimum accepted
bid for each BTA service area (the sum of the minimum bid increment and
the high bid from the previous round) will be announced before the
beginning of each round. The Commission may, in its discretion, raise
or lower the amount of the minimum bid increment at any time during the
auction. The Commission generally will raise the amount of the minimum
bid increments early in the auction and when bidding activity is high.
Conversely, the Commission will generally lower the minimum bid
increments towards the end of the auction and when bidding activity is
low. There will be no minimum opening bids for any of the BTA service
areas in the MDS auction and no minimum bid increment for a BTA service
area until that BTA has received a bid.
Each bid will be date and time stamped when it is entered into the
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.
D. Activity Rule
In order to ensure that the auction closes within a reasonable
period of time, the Commission will impose an activity rule to
discourage bidders from waiting until the end of the auction before
participating. The activity rule provides for three stages with
increasing levels of bidding activity required in each stage in order
for a bidder to maintain its current eligibility.
We note that the required activity level in Stage I and Stage II of
the MDS auction will be relatively high so as to increase the pace of
the auction, which is needed to ensure a timely completion given the
large number of authorizations being offered. In Stage III of the
auction the required activity level will be higher than in Stages I and
II, but will still provide bidders with some flexibility to shift their
bids to other BTA service areas.
A bidder will be considered active on a BTA service area in the
current round if it is either the high bidder at the end of the bid
withdrawal period in the previous round or submits a bid in the current
round which meets or exceeds the minimum accepted bid. A bidder's
activity level in a round is the sum of the ``activity'' or ``bidding''
units associated with the BTA service areas on which the bidder is
active. The minimum required activity levels for each stage of the MDS
auction are as follows:
Stage One: During the first stage of the auction, a bidder that
wishes to maintain its current eligibility is required to be active on
BTA service areas encompassing at least 50% of the bidding units for
which it is currently eligible. Failure to maintain the requisite
activity level will result in a reduction in the amount of bidding
units associated with BTAs upon which a bidder will be eligible to bid
in the next round of bidding (unless an activity rule waiver is used).
During the first stage, if activity is below the required minimum
level, eligibility in the next round will be calculated by multiplying
the current round activity by two (2/1).
Stage Two: In each round of the second stage, a bidder who wishes
to maintain its current eligibility is required to be active on BTA
service areas encompassing at least 80% of the bidding units for which
it is eligible in that particular round. During the second stage, if
activity is below the required minimum level, eligibility in the next
round will be calculated by multiplying the current round activity by
five-fourths (5/4).
Stage Three: In each round of the third stage, a bidder who wishes
to maintain its current eligibility is required to be active on BTA
service areas encompassing 95% of the bidding units for which it is
eligible in that particular round. In the final stage, if activity in
the current round is below 95% of current edibility, eligibility in the
next round will be calculated by multiplying the current round activity
by twenty-nineteenths (20/19).
As stated above, activity requirements increase in each auction
stage; therefore, it is especially important for bidders to check
current activity during the bid submission period in the first round
following a stage transition. Bidders who do not wish to submit any new
bids in that round can confirm their current activity level (measured
in terms of their standing high bids) telephonically or electronically
through the FCC remote access system by entering the bid submission
module and comparing the current activity to the activity required.
Bidders will be provided five activity rule waivers that may be
used in any round during the course of the auction. If a bidder's
activity level is below the required activity level a waiver will be
applied automatically, if a bidder still has waivers remaining and does
not submit a bid or an automatic waiver override. That is, if a bidder
fails to submit a bid in a round or does not submit an automatic waiver
override, and its activity level from any standing high bids (high bids
at the end of the bid withdrawal period in the previous round) falls
below its required activity level, a waiver will be applied
automatically. A waiver will preserve current eligibility in the next
round. An activity rule waiver applies to an entire round of bidding
and not to a particular BTA service area. An automatic waiver invoked
in a round in which there are no new valid bids will not keep the
auction open.
Bidders will be afforded an opportunity to override the automatic
waiver mechanism if they wish to intentionally reduce their bidding
eligibility and do not want to use a waiver to retain their eligibility
at its current level. If a bidder overrides the automatic waiver
mechanism, its eligibility will be permanently reduced and it will not
be permitted to retain its bidding eligibility for a previous round.
Bidders also will have the option of proactively entering an
activity rule waiver during the bid submission period. If a bidder
submits a proactive waiver in a round in which no other bidding
activity occurs, the auction will remain open. Therefore in the later
rounds of the auction, if a bidder does not intend to bid but wants to
ensure that the auction does not close, it should enter a proactive
waiver in place of a bid. The submission of a proactive waiver will
prevent the auction from closing.
E. Stopping Rules
Bidding will normally remain open on all BTA service areas until
bidding stops on every service area. The auction will close after one
round passes in which no new bids or proactive waivers are submitted.
The Wireless Telecommunications Bureau retains the discretion, however,
to keep an auction open even if no new valid bids and no proactive
waivers are submitted. In the event the Bureau exercises this
discretion, the effect will be the same as if a bidder had submitted a
proactive waiver. Thus, if a bidder has any activity rule waivers left,
an automatic waiver will be applied if its activity
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from standing high bids does not meet its required activity level.
Bidders whose activity from the standing high bids does not meet its
required activity level and that have no activity rule waivers
remaining will have their maximum eligibility reduced according to the
activity rules described above.
The Bureau may also declare at any time after 40 rounds that the
auction will end after a specified number of additional rounds. If the
Bureau invokes this stopping rule, it will accept bids in the final
round(s) only for BTA service areas on which the high bid increased in
at least one of the preceding three rounds. The Bureau also retains the
discretion to close bidding on a particular BTA service area or areas
individually. In the unlikely event that the Bureau uses such a market-
by-market stopping rule, we would anticipate doing so only after 40
rounds, applying it first to the largest BTAs, and only if three or
more rounds have passed without any bids on these BTA service areas.
The Bureau does not intend to exercise these options except in
extreme circumstances, such as where the auction is proceeding very
slowly, there is minimal overall bidding activity and it appears
unlikely that the auction will close within a reasonable period of
time. Before exercising these options, however, the Bureau would first
attempt to increase the pace of the auction by announcing that the
auction will move into the next stage, where bidders would be required
to maintain a higher level of bidding activity. Under these
circumstances, the Bureau may also first increase the number of bidding
rounds per day and increase the amount of the minimum bid increments
for those limited number of BTA service areas where there is still a
high level of bidding activity.
F. Delay, Suspension or Cancellation of the Auction
The Commission may, by Public Notice or by announcement during the
auction, delay, suspend or cancel the auction in the event of natural
disaster, technical obstacle, evidence of an auction security breach,
unlawful bidding activity, administrative necessity, or for any other
reason that affects the fair and competitive conduct of competitive
bidding. In such cases, the Commission may, in its sole discretion,
resume the auction starting from the beginning of the current or some
previous round or cancel the auction in its entirety. The Commission
will delay the auction in the event of technical failure involving the
electronic bidding system or the telephone lines.
G. Default and Disqualification Penalties
Any high bidder who defaults by failing to remit the required down
payment within the prescribed time or is disqualified after bidding is
declared closed will be subject to the penalties described in Section
21.959(a)(2) of the Commission's rules, 47 C.F.R. Sec. 21.959(a)(2). 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
authorizations or station licenses held by the applicant. See Second
Report and Order in PP Docket No. 93-253, 9 FCC Rcd 2348 (1994), 59
Fed. Reg. 22,980 (May 4, 1994) at para. 198.
H. Releasing Bidder Identities
Bidders' identities and FCC Account Numbers will be disclosed prior
to the auction. Thus, bidders will know in advance of the auction the
identities of the bidders against whom they are bidding.
V. Post-Auction Procedures for High Bidders
A. Down Payment
The winning bidder for each BTA authorization must submit FCC Form
159 along with sufficient additional funds (a ``down payment'') to
bring the amount of money on deposit with the government to 20% of its
winning bid within five business days after bidding is declared closed
and the high bidders are announced by Public Notice. However, a winning
bidder that is a small business eligible for installment financing will
be required to bring its total deposit up to only 10% of its winning
bid (less any applicable bidding credits) within five business days
after bidding is declared closed and the high bidders are announced.
The remainder of the down payment, an additional 10% of the applicant's
net winning bid, will be due from the small business winning bidder
within five business days following the public notice announcing that
its BTA authorization is ready to be issued. See MDS Report and Order
at Paras. 142-144.
In the event that any winning bidder has withdrawn a bid or bids
and is subject to a bid withdrawal penalty or penalties, the bidder's
upfront payment will be applied to satisfy such bid withdrawal
penalties before being applied toward its down payment on the
authorizations it has won.
B. Submission of Long-Form Application (FCC Form 304) or Statement of
Intention
Within 30 business days after bidding is declared closed and high
bidders are announced, a winning bidder must timely submit for each BTA
service area for which it is the winning bidder wither: (i) a properly
completed FCC Form 304 application for an MDS station license within
the BTA service area; or (ii) a statement of intention with regard to
the BTA service area, showing the encumbered nature of the BTA,
identifying all previously authorized or proposed MDS and ITFS
facilities, and describing in detail the winning bidder's plan for
obtaining the previously authorized and/or proposed MDS stations within
the BTA. See MDS Report and Order at Paras. 150-154. FCC Form 304s,
with the applicable filing fees, must be sent to Mellon Bank in
Pittsburgh, Pennsylvania. Statements of intention must be sent to the
Office of the Secretary, Attn: MDS Post-Auction Processing Section,
Federal Communications Commission, 1919 M Street, NW., Room 222,
Washington, DC 20554.
C. Construction Build-out Requirement
Each BTA authorization holder must submit a showing to the
Commission five years after the BTA authorization is issued
demonstrating that it is providing a signal level sufficient to provide
adequate service to approximately two-thirds of the population of the
area within its control in the licensed BTA. The holder of the BTA
authorization must submit maps and other supporting documents showing
compliance with this construction build-out requirement. See MDS Report
and Order at para. 43.
VI. Bidder Alert
The terms contained in the Commission's Report and Orders, Public
Notices and in the Bidder Information Package are not negotiable.
Prospective bidders should review these auction documents thoroughly
prior to the auction to make certain that they understand all of the
provisions and are willing to be bound by all of the Terms before
making any bid.
All applicants must certify under penalty of perjury on their FCC
Form 175-M applications that they are legally, technically and
financially qualified. Prospective bidders are reminded that submission
of a false certification to the Commission is a serious matter that may
result in severe
[[Page 48118]]
penalties including monetary forfeitures, station license or BTA
authorization revocations, preclusion from participation in future
auctions, and/or criminal prosecution.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
BILLING CODE 6712-01-M
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[FR Doc. 95-23162 Filed 9-15-95; 8:45 am]
BILLING CODE 6712-01-C
