[Federal Register: October 7, 2005 (Volume 70, Number 194)]
[Notices]
[Page 58700-58706]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07oc05-53]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
[Report No. AUC-05-64-A (Auction No. 64); DA 05-2423]
Television Station Construction Permits
AGENCY: Federal Communications Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This document announces the auction of 11 full power
television station construction permits scheduled to commence on March
15, 2006 (Auction No. 64). This document also seeks comments on reserve
prices or minimum opening bids and other procedures for Auction No. 64.
DATES: Comments are due on or before October 14, 2005, and reply
comments are due on or before October 21, 2005.
ADDRESSES: Comments and reply comments must be sent by electronic mail
to the following address: auction64@fcc.gov. Parties who file also by
paper must file an original and four copies of each filing. U.S. Postal
Service first class, express or priority mail must be addressed to the
Office of the Secretary, 445 12th Street, SW., Washington, DC 20054.
FOR FURTHER INFORMATION CONTACT: For legal questions: Lynne Milne at
(202) 418-0660. For general auction questions: Debbie Smith or Lisa
Stover at (717) 338-2888. For service rule questions: Shaun Maher at
(202) 418-2324 or Shaleim Henry at (202) 418-1600.
SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 64
Comment Public Notice released on September 23, 2005. The complete text
of the Auction No. 64 Comment Public Notice, including attachments and
any related Commission documents, is available for public inspection
and copying from 8 a.m. to 4:30 p.m. Monday through Thursday or from 8
a.m. to 11:30 a.m. on Friday at the FCC Reference Information Center,
Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554.
The Auction No. 64 Comment 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 202-488-
5300, facsimile 202-488-5563, or BCPI Web site: http://www.BCPIWEB.com.
When ordering documents from BCPI, please provide the appropriate FCC
document number, for example, DA 05-2423 for the Auction No. 64 Comment
Public Notice. The Auction No. 64 Comment Public Notice and related
documents are also available on the Internet at the Commission's Web
site: http://wireless.fcc.gov/auctions/64/.
I. Television Construction Permits in Auction No. 64
A. Open Construction Permits
1. By the Auction No. 64 Comment Public Notice, the Wireless
Telecommunications Bureau and the Media Bureau (collectively referred
to as the Bureaus) announce that the ten construction permits listed in
Attachment A of the Auction No. 64 Comment Public Notice as open are
available to any interested party. Long-form applications (FCC Forms
301) were filed previously for some of these stations. The pending
applications for these stations are listed in Attachment A of the
Auction No. 64 Comment Public Notice. Any party filing for a station
with a pending application should understand that it is likely that its
application will be mutually exclusive with the previously-filed
application. Even if there is no pending long-form application for a
station listed in Attachment A of the Auction No. 64 Comment Public
Notice, applicants specifying the same construction permit will be
considered mutually exclusive for auction purposes. Once mutual
exclusivity exists for auction purposes, even if only one applicant for
the same construction permit in Auction No. 64 submits an upfront
payment, that applicant is required to submit a bid in order to obtain
the construction permit. Any applicant that submits a short-form
application that is accepted for filing but fails to timely submit an
upfront payment will retain its status as an applicant in Auction No.
64 and will remain subject to the Commission's anti-collusion rule, 47
CFR 1.2105(c), but, having purchased no bidding eligibility, will not
be eligible to bid.
2. The Commission's competitive bidding rules will be used to
select among mutually exclusive applicants for these 10 construction
permits in Auction No. 64. Those wishing to participate in the auction,
including those entities listed in Attachment A of the Auction No. 64
Comment Public
[[Page 58701]]
Notice with a pending long-form application, will be required to file a
short-form application (FCC Form 175) prior to the short-form deadline
which will be announced in a subsequent public notice.
B. Closed Construction Permit
3. The construction permit listed in Attachment B of the Auction
No. 64 Comment Public Notice, identified as station TV-NTSC011-51, is
the subject of pending, mutually exclusive applications for a new full
power analog television station that were filed prior to July 1, 1997.
The Commission's competitive bidding rules will be used in Auction No.
64 to select among mutually exclusive applicants for construction
permit TV-NTSC011-51. Pursuant to the Congressional directive of 47
U.S.C. Section 309(l)(3) and procedures set forth in the Broadcast
Auctions First Report and Order, 63 FR 48615 (September 11, 1998),
participation in competitive bidding for a construction permit for
station TV-NTSC011-51 will be limited to those nine applicants
identified in Attachment B of the Auction No. 64 Comment Public Notice:
Edward I. St. Pe, Fant Broadcasting Development, LLC, George S. Flinn,
Jr., KB Communications Corp., KM Communications, Inc., Marri
Broadcasting, LP, Natchez Trace Broadcasting Company, United
Television, Inc., and Winstar Broadcasting Corp.
C. FRN Submission Requirement
4. The nine applicants identified in Attachment B of the Auction
No. 64 Comment Public Notice that wish to participate in the auction
are required to file a short-form application (FCC Form 175) and select
TV-NTSC011-51 prior to the short-form deadline which will be announced
in a subsequent public notice. In addition, each applicant identified
in Attachment B of the Auction No. 64 Comment Public Notice that wishes
to remain eligible for competitive bidding for station TV-NTSC011-51
must provide its FCC Registration Number (FRN) prior to 5 p.m. Eastern
Time (ET) on November 16, 2005. An FRN for an applicant identified in
Attachment B is necessary in order for the FCC Auction System to
display TV-NTSC011-51 in the construction permit selection list on its
electronic short-form application. If an applicant fails to provide
this information in the prescribed manner and before the deadline
specified, the applicant will not be able to select a construction
permit for station TV-NTSC011-51 in its electronic short-form
application, its long-form application will be dismissed, and it will
no longer be eligible for competitive bidding for a construction permit
for station TV-NTSC011-51.
5. To submit an FRN for association with construction permit TV-
NTSC011-51, each applicant listed in Attachment B of the Auction No. 64
Comment Public Notice must provide, prior to 5 p.m. ET on November 16,
2005, its precise applicant name and FRN in an e-mail to
auction64@fcc.gov or by facsimile to Kathryn Garland at (717) 338-2850.
Applicants that do not have an FRN must obtain one by registering using
the FCC's Commission Registration system (CORES). To access CORES,
click on the CORES link under Related Sites on the FCC Auctions page at
http://wireless.fcc.gov/auctions/. Next, follow the directions provided
to register and receive an FRN. Each applicant should retain this
number and password and keep such information strictly confidential.
6. Interested parties should note that some of the stations listed
in Attachment A of the Auction No. 64 Comment Public Notice are single
channel, digital-only television stations. Those stations are
identified in Attachment A of the Auction No. 64 Comment Public Notice
as DTV. These stations must be operated in digital television mode.
Those stations indicated in Attachments A and B of the Auction No. 64
Comment Public Notice as NTSC are single-channel stations that must be
operated as either NTSC analog stations or, if they meet the
Commission's interference requirements, may be operated as DTV
stations.
7. To allow an adequate period of time before issuance of bidding
rules, to permit notice and comment on proposed auction procedures, and
to ensure that potential bidders have adequate time to familiarize
themselves with the specific rules that will govern the day-to-day
conduct of an auction, the Bureaus seek comment on a variety of
auction-specific procedures prior to the start of Auction No. 64.
II. Auction Structure
A. Simultaneous Multiple-Round Auction Design
8. Auction No. 64 will use the FCC's Integrated Spectrum Auction
System (ISAS or FCC Auction System), a redesign of the previous auction
application and bidding systems. The Bureaus propose to award all
construction permits included in Auction No. 64 in a simultaneous
multiple-round auction. As described further below, this methodology
offers every construction permit for bid at the same time with
successive bidding rounds in which eligible bidders may place bids.
That is, bidding will remain open on all construction permits until
bidding stops on every construction permit. The Bureaus seek comment on
this proposal.
B. Upfront Payments and Bidding Eligibility
9. The Bureaus have delegated authority and discretion to determine
an appropriate upfront payment for each construction permit being
auctioned, taking into account such factors as the efficiency of the
auction process and the potential value of similar spectrum. As
described further below, the upfront payment is a refundable deposit
made by each bidder to establish eligibility to bid on construction
permits. Upfront payments related to the specific spectrum subject to
auction protect against frivolous or insincere bidding and provide the
Commission with a source of funds from which to collect payments owed
at the close of the auction. With these guidelines in mind, the Bureaus
propose the schedule of upfront payments for each construction permit
as set forth in Attachments A and B of the Auction No. 64 Comment
Public Notice. The Bureaus seek comment on this proposal.
10. The Bureaus further propose that the amount of the upfront
payment submitted by a bidder will determine the maximum number of
bidding units on which a bidder may place bids. This limit is a
bidder's initial bidding eligibility. Each construction permit is
assigned a specific number of bidding units equal to the upfront
payment listed in Attachments A and B of the Auction No. 64 Comment
Public Notice, on a bidding unit per dollar basis. Bidding units for a
given construction permit do not change as prices rise during the
auction. A bidder's upfront payment is not attributed to specific
construction permits. Rather, a bidder may place bids on any
combination of construction permits as long as the total number of
bidding units associated with those construction permits does not
exceed the bidder's current eligibility. In order to bid on a
construction permit, qualified bidders must have an eligibility level
that meets the number of bidding units assigned to that construction
permit. Eligibility cannot be increased during the auction; it can only
remain the same or decrease. Thus, in calculating its upfront payment
amount, an applicant must determine the maximum number of bidding units
on which it may wish to bid (or hold
[[Page 58702]]
provisionally winning bids) in any single round, and submit an upfront
payment amount covering that total number of bidding units.
Provisionally winning bids are bids that would become final winning
bids if the auction were to close in that given round. The Bureaus seek
comment on this proposal.
C. Activity Rules
11. In order to ensure that the auction closes within a reasonable
period of time, an activity rule requires bidders to bid actively
throughout the auction, rather than wait until late in the auction
before participating. A bidder's activity will be the sum of the
bidding units associated with the construction permits upon which it
places a bid during the current round and the bidding units associated
with the construction permits upon which it holds provisionally winning
bids. Bidders are required to be active on a specific percentage of
their current bidding eligibility during each round of the auction.
Failure to maintain the requisite activity level will result in the use
of an activity rule waiver, if any remain, or a reduction in the
bidder's eligibility, possibly curtailing the bidder's ability to bid
on some construction permits or eliminating the bidder from further
bidding in the auction.
12. The Bureaus propose to divide the auction into two stages, each
characterized by a different activity requirement. The auction will
start in Stage One. The Bureaus propose that the auction generally will
advance from Stage One to Stage Two when the auction activity level, as
measured by the percentage of bidding units receiving new provisionally
winning bids, is approximately twenty percent or below for three
consecutive rounds of bidding. However, the Bureaus further propose
that the Bureaus retain the discretion to change stages unilaterally by
announcement during the auction. In exercising this discretion, the
Bureaus will consider a variety of measures of bidder activity,
including, but not limited to, the auction activity level, the
percentage of construction permits (as measured in bidding units) on
which there are new bids, the number of new bids, and the percentage
increase in revenue. For example, when monitoring activity for
determining when to change stages, we may consider the percentage of
bidding units of the construction permits receiving new provisionally
winning bids, excluding any FCC-held construction permits. The Bureaus
seek comment on these proposals.
13. For Auction No. 64, the Bureaus propose the following activity
requirements:
Stage One: In each round of the first stage of the auction, a
bidder desiring to maintain its current bidding eligibility is required
to be active on construction permits representing at least 75 percent
of its current bidding eligibility. Failure to maintain the requisite
activity level will result in a reduction in the bidder's bidding
eligibility in the next round of bidding (unless an activity rule
waiver is used). During Stage One, a bidder's reduced eligibility for
the next round will be calculated by multiplying the bidder's current
round activity by four-thirds (4/3).
Stage Two: In each round of the second stage, a bidder desiring to
maintain its current bidding eligibility is required to be active on 95
percent of its current bidding eligibility. Failure to maintain the
requisite activity level will result in a reduction in the bidder's
bidding eligibility in the next round of bidding (unless an activity
rule waiver is used). During Stage Two, a bidder's reduced eligibility
for the next round will be calculated by multiplying the bidder's
current round activity by twenty-nineteenths (20/19).
14. The Bureaus seek comment on these proposals. Commenters that
believe these activity rules should be modified should explain their
reasoning and comment on the desirability of an alternative approach.
Commenters are advised to support their claims with analyses and
suggested alternative activity rules.
D. Activity Rule Waivers and Reducing Eligibility
15. 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 construction
permit. Activity rule waivers can be either proactive or automatic and
are principally a mechanism for auction participants to avoid the loss
of bidding eligibility in the event that exigent circumstances prevent
them from placing a bid in a particular round.
16. The FCC Auction System assumes that bidders with insufficient
activity would prefer to apply an activity rule waiver (if available)
rather than lose bidding eligibility. Therefore, the system will
automatically apply a waiver at the end of any bidding round where a
bidder's activity level is below the minimum required unless: (1) the
bidder has no activity rule waivers available; or (2) the bidder
overrides the automatic application of a waiver by reducing
eligibility, thereby meeting the minimum requirement. If a bidder has
no waivers remaining and does not satisfy the required activity level,
its eligibility will be permanently reduced, possibly eliminating the
bidder from further bidding in the auction.
17. A bidder with insufficient activity may wish to reduce its
bidding eligibility rather than use an activity rule waiver. If so, the
bidder must affirmatively override the automatic waiver mechanism
during the bidding round by using the reduce eligibility function in
the FCC Auction System. In this case, the bidder's eligibility is
permanently reduced to bring the bidder into compliance with the
activity rules as described above. Once eligibility has been reduced, a
bidder will not be permitted to regain its lost bidding eligibility.
18. A bidder may apply an activity rule waiver proactively as a
means to keep the auction open without placing a bid. If a bidder
proactively applies an activity rule waiver (using the apply waiver
function in the FCC Auction System) during a bidding round in which no
bids or withdrawals are submitted, the auction will remain open and the
bidder's eligibility will be preserved. An automatic waiver applied by
the FCC Auction System in a round in which there are no new bids or
withdrawals will not keep the auction open. A bidder cannot submit a
proactive waiver after submitting a bid in a round, and submitting a
proactive waiver will preclude a bidder from placing any bids in that
round. Applying a waiver is irreversible; once a proactive waiver is
submitted that waiver cannot be unsubmitted, even if the round has not
yet closed.
19. The Bureaus propose that each bidder in Auction No. 64 be
provided with three activity rule waivers that may be used at the
bidder's discretion during the course of the auction as set forth
above. The Bureaus seek comment on this proposal.
E. Information Relating to Auction Delay, Suspension, or Cancellation
20. For Auction No. 64, the Bureaus propose that, by public notice
or by announcement during the auction, the Bureaus 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 efficient conduct of competitive bidding. In
such cases, the Bureaus, in their sole discretion, may elect to resume
the auction starting from the beginning of the current round, resume
the auction
[[Page 58703]]
starting from some previous round, or cancel the auction in its
entirety. Network interruption may cause the Bureaus to delay or
suspend the auction. The Bureaus emphasize that exercise of this
authority is solely within the discretion of the Bureaus, and its use
is not intended to be a substitute for situations in which bidders may
wish to apply their activity rule waivers. The Bureaus seek comment on
this proposal.
III. Bidding Procedures
A. Round Structure
21. The Commission will conduct Auction No. 64 over the Internet.
Alternatively, telephonic bidding will also be available. The toll-free
telephone number for telephonic bidding will be provided to qualified
bidders.
22. The initial bidding schedule will be announced in a public
notice to be released at least one week before the start of the
auction. The simultaneous multiple-round format will consist of
sequential bidding rounds, each followed by the release of round
results. Details on viewing round results, including the location and
format of downloadable round results files will be included in the same
public notice.
23. The Bureaus have the 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 Bureaus 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. The
Bureaus seek comment on this proposal.
B. Reserve Price or Minimum Opening Bid
24. The Bureaus seek comment on the use of minimum opening bid
amounts and/or reserve prices in Auction No. 64. Normally, a reserve
price is an absolute minimum price below which an item will not be sold
in a given auction. Reserve prices can be either published or
unpublished. A minimum opening bid amount, on the other hand, is the
minimum bid price set at the beginning of the auction below which no
bids are accepted. It is generally used to accelerate the competitive
bidding process. Also, the auctioneer often has the discretion to lower
the minimum opening bid amount later in the auction. It is also
possible for the minimum opening bid amount and the reserve price to be
the same amount.
25. The Bureaus propose to establish minimum opening bid amounts
for Auction No. 64. The Bureaus believe a minimum opening bid amount,
which has been used in other auctions, is an effective bidding tool.
26. For Auction No. 64, the proposed minimum opening bids were
determined by taking into account various factors related to the
efficiency of the auction and the potential value of the spectrum,
including the type of service, proposed population coverage, market
size, industry cash flow data and recent broadcast transactions. The
specific minimum opening bid for each construction permit available in
Auction No. 64 is set forth in Attachments A and B of the Auction No.
64 Comment Public Notice. The Bureaus seek comment on this proposal.
27. If commenters believe that these minimum opening bid amounts
will result in substantial numbers of unsold construction permits, or
are not reasonable amounts, or should instead operate as reserve
prices, they should explain why this is so, and comment on the
desirability of an alternative approach. Commenters are advised to
support their claims with valuation analyses and suggested reserve
prices or minimum opening bid amount levels or formulas. In
establishing the minimum opening bid amounts, the Bureaus particularly
seek comment on such factors as the potential value of the spectrum
being auctioned including the type of service, proposed population
coverage, market size, and other relevant factors that could reasonably
have an impact on valuation of the broadcast spectrum. The Bureaus also
seek comment on whether, consistent with 47 U.S.C. Section 309(j), the
public interest would be served by having no minimum opening bid amount
or reserve price.
C. Bid Amounts
28. In each round, eligible bidders will be able to place bids on a
particular construction permit in any of nine different amounts, if a
bidder has sufficient eligibility to place a bid on the particular
construction permit. The FCC Auction System interface will list the
nine acceptable bid amounts for each construction permit. The nine
acceptable bid amounts for each construction permit consist of the
minimum acceptable bid amount calculated using a smoothing formula and
additional amounts calculated using a bid increment percentage.
i. Minimum Acceptable Bid Amounts
29. The minimum acceptable bid amount for a construction permit
will be equal to its minimum opening bid amount until there is a
provisionally winning bid for the construction permit. After there is a
provisionally winning bid for a construction permit, the minimum
acceptable bid amount for that construction permit will be equal to the
amount of the provisionally winning bid plus an additional amount
calculated using a smoothing formula, as described below. The Bureaus
will round the result using the Bureaus standard rounding procedures,
in which results above $10,000 are rounded to the nearest $1,000,
results below $10,000 but above $1,000 are rounded to the nearest $100,
and results below $1,000 are rounded to the nearest $10.
30. For Auction No. 64, the Bureaus propose to calculate minimum
acceptable bid amounts by using a smoothing formula, as was done in
several other auctions. The smoothing formula calculates minimum
acceptable bid amounts by first calculating a percentage increment. The
percentage increment for each construction permit is a function of
bidding activity on that construction permit in prior rounds;
therefore, a construction permit that has received many bids will have
a higher percentage increment than a construction permit that has
received few bids.
31. The calculation of the percentage increment used to determine
the minimum acceptable bid amounts for each construction permit for the
next round is made at the end of each round. The computation is based
on an activity index, which is a weighted average of the number of bids
in that round and the activity index from the prior round, except for
Round 1 calculations, for which the activity index from the prior round
is set at 0 because there is no prior round. The current activity index
is equal to a weighting factor times the number of bidders that submit
bids on the construction permit 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 (10%), and the maximum
percentage increment at 0.2 (20%). Hence, at these initial settings,
the percentage increment will fluctuate between 10% and 20% depending
upon the number of bids for the construction permit. Smoothing formula
equations and examples are shown in Attachment C of the Auction No. 64
Comment Public Notice.
[[Page 58704]]
32. In the case of a construction permit for which the
provisionally winning bid has been withdrawn, the minimum acceptable
bid amount will equal the second highest bid received for the
construction permit.
ii. Additional Bid Amounts
33. The acceptable bid amounts in addition to the minimum
acceptable bid amount for each construction permit are calculated using
a bid increment percentage. The first additional acceptable bid amount
equals the minimum acceptable bid amount times one plus the bid
increment percentage, rounded--e.g., if the increment percentage is 10
percent, the calculation is (minimum acceptable bid amount) * (1 +
0.10), rounded, or (minimum acceptable bid amount) * 1.10, rounded; the
second additional acceptable bid amount equals the minimum acceptable
bid amount times one plus two times the bid increment percentage,
rounded, or (minimum acceptable bid amount) * 1.20, rounded; the third
additional acceptable bid amount equals the minimum acceptable bid
amount times one plus three times the bid increment percentage,
rounded, or (minimum acceptable bid amount) * 1.30, rounded; etc.
34. The Bureaus retain the discretion to change the minimum
acceptable bid amounts, the smoothing formula parameters, and the bid
increment percentage if they determine that circumstances so dictate.
The Bureaus will do so by announcement in the FCC Auction System during
the auction. The Bureaus seek comment on these proposals.
D. Provisionally Winning Bids
35. At the end of a bidding round, a provisionally winning bid
amount for each construction permit will be determined based on the
highest bid amount received for the construction permit. In the event
of identical high bid amounts being submitted on a construction permit
in a given round (i.e., tied bids), the Bureaus will use a random
number generator to select a single provisionally winning bid from
among the tied bids. If the auction were to end with no higher bids
being placed for that construction permit, the winning bidder would be
the one that placed the selected provisionally winning bid. However,
the remaining bidders, as well as the provisionally winning bidder, can
submit higher bids in subsequent rounds. If any bids are received on
the construction permit in a subsequent round, the provisionally
winning bid again will be determined by the highest bid amount received
for the construction permit.
36. A provisionally winning bid will remain the provisionally
winning bid until there is a higher bid on the same construction permit
at the close of a subsequent round, unless the provisionally winning
bid is withdrawn. Bidders are reminded that provisionally winning bids
confer activity.
E. Information Regarding Bid Removal and Bid Withdrawal
37. For Auction No. 64, the Bureaus propose the following bid
removal and bid withdrawal procedures. Before the close of a bidding
round, a bidder has the option of removing any bid placed in that
round. By removing bids in the FCC Auction System, a bidder may
effectively unsubmit any bid placed in that round. Once a round closes,
a bidder may no longer remove a bid. In contrast to the bid withdrawal
provisions described below, a bidder removing a bid placed in the same
round is not subject to a withdrawal payment.
38. For auctions for which bid withdrawals are permitted, a bidder
may withdraw its provisionally winning bids using the withdraw bids
function in the FCC Auction System. A bidder that withdraws its
provisionally winning bid(s) is subject to the bid withdrawal payment
provisions of 47 CFR 1.2104(g) and 1.2109. The Bureaus seek comment on
these bid removal and bid withdrawal procedures.
39. In the Part 1 Third Report and Order, 63 FR 2315 (Jan. 15,
1998), the Commission explained that allowing bid withdrawals
facilitates efficient aggregation of licenses and construction permits
and the pursuit of efficient backup strategies as information becomes
available during the course of an auction. The Commission noted,
however, that, in some instances, bidders may seek to withdraw bids for
improper reasons. The Bureaus, therefore, have discretion in managing
the auction to limit the number of withdrawals to prevent any bidding
abuses. The Commission stated that the Bureaus should assertively
exercise their discretion, consider limiting the number of rounds in
which bidders may withdraw bids, and prevent bidders from bidding on a
particular construction permit if the Bureaus find that a bidder is
abusing the Commission's bid withdrawal procedures.
40. Applying this reasoning, the Bureaus propose to limit each
bidder in Auction No. 64 to withdrawing provisionally winning bids in
no more than one round during the course of the auction. To permit a
bidder to withdraw bids in more than one round may encourage insincere
bidding or the use of withdrawals for anti-competitive purposes. The
one round in which withdrawals may be used will be at the bidder's
discretion; withdrawals otherwise must be in accordance with the
Commission's rules. There is no limit on the number of provisionally
winning bids that may be withdrawn in the one round in which a bidder's
one withdrawal is used. Withdrawals will remain subject to the bid
withdrawal payment provisions specified in the Commission's rules. The
Bureaus seek comment on this proposal. The Bureaus also invite comments
on whether bid withdrawals should not be permitted in Auction No. 64 in
light of the site-specific nature of television broadcast
authorizations, the small number of construction permits available in
this auction, or other factors.
F. Stopping Rule
41. The Bureaus have discretion to establish stopping rules before
or during multiple round auctions in order to terminate the auction
within a reasonable time. For Auction No. 64, the Bureaus propose to
employ a simultaneous stopping rule approach. A simultaneous stopping
rule means that all construction permits remain available for bidding
until bidding closes simultaneously on all construction permits.
42. Bidding will close simultaneously on all construction permits
after the first round in which no bidder submits any new bids, applies
a proactive waiver, or places any withdrawals. Thus, unless
circumstances dictate otherwise, bidding will remain open on all
construction permits until bidding stops on every construction permit.
43. However, the Bureaus propose to retain the discretion to
exercise any of the following options during Auction No. 64:
a. Use a modified version of the simultaneous stopping rule. The
modified stopping rule would close the auction for all construction
permits after the first round in which no bidder applies a waiver,
places a withdrawal or submits any new bids on any construction permit
for which it is not the provisionally winning bidder. Thus, absent any
other bidding activity, a bidder placing a new bid on a construction
permit for which it is the provisionally winning bidder would not keep
the auction open under this modified stopping rule. The Bureaus further
seek comment on whether this modified stopping rule should be used
[[Page 58705]]
at any time or only in stage two of the auction.
b. Keep the auction open even if no bidder submits any new bids,
applies a waiver or withdraws any provisionally winning bids. In this
event, the effect will be the same as if a bidder had applied a waiver.
The activity rule, therefore, will apply as usual and a bidder with
insufficient activity will either lose bidding eligibility or use a
remaining activity rule waiver.
c. Declare that the auction will end after a specified number of
additional rounds (which is called a special stopping rule). If the
Bureaus invoke this special stopping rule, it will accept bids in the
specified final round(s) and the auction will close.
44. The Bureaus propose to exercise these options only in certain
circumstances, for example, where the auction is proceeding very
slowly, there is minimal overall bidding activity, or it appears likely
that the auction will not close within a reasonable period of time.
Before exercising these options, the Bureaus are likely to attempt to
increase the pace of the auction by, for example, increasing the number
of bidding rounds per day, and/or increasing the minimum acceptable bid
percentage for the limited number of construction permits on which
there is still a high level of bidding activity. The Bureaus seek
comment on these proposals.
IV. Due Diligence
45. Potential bidders are solely responsible for investigating and
evaluating all technical and market place factors that may have a
bearing on the value of the broadcast facilities in this auction. 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 construction
permittee in the broadcast service, subject to certain conditions and
regulations. An FCC auction does not constitute an endorsement by the
FCC of any particular service, technology, or product, nor does an FCC
construction permit or license constitute a guarantee of business
success. Applicants should perform their individual due diligence
before proceeding as they would with any new business venture. In
particular, potential bidders are strongly encouraged to review all
underlying Commission orders, such as the specific Report and Order
amending the TV or DTV Table of Allotments and allotting the TV
channel(s) on which they plan to bid. Additionally, potential bidders
should perform technical analyses sufficient to assure them that,
should they prevail in competitive bidding for a given construction
permit, they will be able to build and operate facilities that will
fully comply with the Commission's technical and legal requirements.
Applicants are strongly encouraged to inspect any prospective
transmitter sites located in, or near, the service area for which they
plan to bid, and also to familiarize themselves with the Commission's
rules regarding the National Environmental Policy Act contained in 47
CFR chapter 1, part 1, subpart I.
46. Potential bidders are strongly encouraged to conduct their own
research prior to Auction No. 64 in order to determine the existence of
pending proceedings that might affect their decisions regarding
participation in the auction. Participants in Auction No. 64 are
strongly encouraged to continue such research during the auction.
47. Potential bidders should note that, in November of 1999,
Congress enacted the Community Broadcasters Protection Act of 1999
(CBPA) which established a new Class A television service. In response
to the enactment of the CBPA, the Commission adopted rules to establish
the new Class A television service, including rules to provide
interference protection for eligible Class A television stations from
new full power television stations, in the Class A Report and Order, 65
FR 29985 (May 10, 2000).
48. Given the Commission's ruling in the Class A Report and Order,
a winning bidder in Auction No. 64, upon submission of its long-form
application (FCC Form 301), will have to provide interference
protection to qualified Class A television stations. Therefore,
potential bidders are encouraged to perform engineering studies to
determine the existence of Class A television stations and their effect
on the ability to operate any full power television station proposed in
this auction. Information about the identity and location of Class A
television stations is available from the Media Bureau's Consolidated
Database System (CDBS) (public access available at: http://www.fcc.gov/mb) and on the Media Bureau's Class A television Web page: http://
http://www.fcc.gov/mb/video/files/classa.html.
49. Potential bidders for any new television facility in this
auction are also reminded that full service television stations are in
the process of converting from analog to digital operation and that
stations may have pending applications to construct and operate digital
television facilities, construction permits and/or licenses for such
digital facilities. Bidders should investigate the impact such
applications, permits and licenses may have on their ability to operate
the facilities proposed in this auction.
V. Conclusion
50. Comments are due on or before October 14, 2005, and reply
comments are due on or before October 21, 2005. All filings must be
addressed to the Commission's Secretary Attn: WTB/ASAD, Office of the
Secretary, Federal Communications Commission. Parties who file comments
by paper must file an original and four copies of each filing. U.S.
Postal Service first-class, Express, and Priority mail should be
addressed to 445 12th Street, SW., Washington, DC 20554. Filings can be
sent by hand or messenger delivery, by commercial overnight courier, or
by first-class or overnight U.S. Postal Service mail. The Commission's
contractor will receive hand-delivered or messenger-delivered paper
filings for the Commission's Secretary at 236 Massachusetts Avenue NE.,
Suite 110, Washington, DC 20002. The filing hours at this location are
8 a.m. to 7 p.m. All hand deliveries must be held together with rubber
bands or fasteners. Commercial overnight mail (other than U.S. Postal
Service Express Mail or Priority Mail) must be sent to 9300 East
Hampton Drive, Capitol Heights, MD 20743.
51. The Bureaus also require that all comments and reply comments
be filed electronically to the following address: auction64@fcc.gov.
The electronic mail containing the comments or reply comments must
include a subject or caption referring to Auction No. 64 Comments and
the name of the commenting party. The Bureaus request that parties
format any attachments to electronic mail as Adobe[supreg]
Acrobat[supreg] (pdf) or Microsoft[supreg] Word documents. Copies of
comments and reply comments will be available for public inspection
between 8 a.m. and 4:30 p.m. Monday through Thursday or 8 a.m. to 11:30
a.m. on Friday in the FCC Reference Information Center, Room CY-A257,
445 12th Street, SW., Washington, DC 20554, and will also be posted on
the Web page for Auction No. 64 at http://wireless.fcc.gov/auctions/64.
52. This proceeding has been designated as a permit-but-disclose
proceeding in accordance with the Commission's ex parte rules. Persons
making oral ex parte presentations are reminded that memoranda
summarizing the presentations must contain summaries of the substance
of the presentations and not merely a listing of
[[Page 58706]]
the subjects discussed. More than a one or two sentence description of
the views and arguments presented is generally required. Other rules
pertaining to oral and written ex parte presentations in permit-but-
disclose proceedings are set forth in 47 CFR 1.1206(b).
Federal Communications Commission.
William W. Huber,
Associate Chief, Auctions Spectrum and Access Division, WTB.
[FR Doc. 05-20355 Filed 10-6-05; 8:45 am]
BILLING CODE 6712-01-P