[Federal Register: November 27, 2006 (Volume 71, Number 227)]
[Notices]
[Page 68613-68628]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27no06-109]
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FEDERAL COMMUNICATIONS COMMISSION
[AU Docket No. 06-170; Report No. AUC-06-70-B (Auction No. 70); DA 06-
2248]
Auction of FM Broadcast Construction Permits Scheduled for March
7, 2007; Notice and Filing Requirements, Minimum Opening Bids, Upfront
Payments and Other Procedures for Auction No. 70
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: This document announces the procedures and minimum opening
bids for the upcoming auction of certain FM broadcast construction
permits. This document is intended to familiarize prospective bidders
with the procedures and minimum opening bids for this auction.
DATES: Applications to participate in FM Auction No. 70 must be filed
before 6 p.m. on December 19, 2006. Bidding for Auction No. 70 is
scheduled to begin on March 7, 2007.
FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau,
Auctions Spectrum and Access Division: For legal questions: Lynne Milne
at (202) 418-0660. For general auction questions: Jeff Crooks at (202)
418-0660 or Linda Sanderson at (717) 338-2868. Media Bureau, Audio
Division: For service rule questions: Lisa Scanlan or Thomas Nessinger
at (202) 418-0660. To request materials in accessible formats (Braille,
large print, electronic files, audio format) for people with
disabilities, send an e-mail to fcc504@fcc.gov or call the Consumer and
Governmental Affairs Bureau at (202) 418-0530 or (202) 418-0432 (TTY).
SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 70
Procedures Public Notice released on November 2, 2006. The complete
text of
[[Page 68614]]
the Auction No. 70 Procedures Public Notice, including attachments, as
well as related Commission documents are available for public
inspection and copying from 8 a.m. to 4:30 p.m. Eastern Time (ET)
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. 70 Procedures
Public Notice and related Commission documents may also be purchased
from the Commission's duplicating contractor, Best Copy and Printing,
Inc. (BCPI), Portals II, 445 12th Street, SW., Room CY-B402,
Washington, DC, 20554, telephone 202-488-5300, facsimile 202-488-5563,
or Web site: http://www.BCPIWEB.com. When ordering documents from BCPI,
please provide the appropriate FCC document number, for example, DA 06-
2248 for the Auction No. 70 Procedures Public Notice. The Auction No.
70 Procedures Public Notice and related documents are also available on
the Internet at the Commission's Web site: http://wireless.fcc.gov/auctions/70/
.
I. General Information
A. Introduction
1. The Media and Wireless Telecommunications Bureaus (collectively
the Bureaus) announce the procedures and minimum opening bid amounts
for the upcoming auction of certain FM broadcast construction permits
scheduled to begin on March 7, 2007 (Auction No. 70). On September 21,
2006, the Bureaus released a public notice seeking comment on reserve
prices or minimum opening bid amounts and the procedures to be used in
Auction No. 70. Interested parties submitted seven comments and one
reply comment in response to the Auction No. 70 Comment Public Notice,
71 FR 56977, September 28, 2006.
i. Construction Permits To Be Auctioned
2. Auction No. 70 will offer 121 construction permits in the FM
broadcast service as listed in Attachment A of the Auction No. 70
Procedures Public Notice. The construction permits to be auctioned are
121 new FM allotments. These construction permits are for vacant FM
allotments, reflecting FM channels assigned to the FM Table of
Allotments, pursuant to the Commission's established rulemaking
procedures, and are designated for use in the indicated communities.
3. Pursuant to the policies established in the Broadcast
Competitive Bidding First Report and Order, 63 FR 48615, September 11,
1998, applicants may apply for any vacant FM allotment listed in
Attachment A of the Auction No. 70 Procedures Public Notice. When two
or more short-form applications (FCC Form 175) specifying the same FM
allotment are accepted for filing, mutual exclusivity (MX) exists for
auction purposes, and thus, that construction permit for the FM
allotment will be awarded by competitive bidding procedures. Once
mutual exclusivity exists for auction purposes, even if only one
applicant for a particular construction permit 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.
70 and will remain subject to the Commission's anti-collusion rules,
but will not be eligible to bid, having purchased no bidding
eligibility.
B. Rules and Disclaimers
i. Relevant Authority
4. Prospective applicants must familiarize themselves thoroughly
with the Commission's general competitive bidding rules, including
recent amendments and clarifications, as well as Commission decisions
in proceedings regarding competitive bidding procedures, application
requirements, and obligations of Commission licensees. Broadcasters
should also familiarize themselves with the Commission's rules relating
to the FM broadcast service contained in 47 CFR 73.201-73.333 and
73.1001-73.5009. Prospective bidders must also be familiar with the
rules relating to broadcast auctions and competitive bidding
proceedings contained in 47 CFR 1.2001-1.2112 and 73.5000-73.5009.
Prospective bidders must also be thoroughly familiar with the
procedures, terms and conditions contained in this public notice, the
Auction No. 70 Comment Public Notice, the Broadcast Competitive Bidding
First Report and Order, the Broadcast Competitive Bidding First
Reconsideration Order 64 FR 24523, May 7, 1999, and the New Entrant
Bidding Credit Reconsideration Order, 64 FR 44856, August 18, 1999, and
the NCE Second Report and Order, 68 FR 26220, May 15, 2003.
5. The procedures, terms and conditions contained in the
Commission's rules, relevant orders, and public notices are not
negotiable. The Commission may amend or supplement the information
contained in its public notices at any time, and will issue public
notices to convey any new or supplemental information to applicants. It
is the responsibility of all applicants to remain current with all
Commission rules and with all public notices pertaining to this
auction.
ii. Prohibition of Collusion; Compliance with Antitrust Laws
6. To ensure the competitiveness of the auction process, 47 CFR
1.2105(c) prohibits applicants competing for construction permits in
any of the same geographic license areas from communicating with each
other about bids, bidding strategies, or settlements unless such
applicants have identified each other on their short-form applications
(FCC Forms 175) as parties with whom they have entered into agreements
pursuant to Sec. 1.2105(a)(2)(viii). Thus, unless they have identified
each other on their short-form applications as parties with whom they
have entered into agreements under Sec. 1.2105(a)(2)(viii), applicants
for construction permits in any of the same geographic license areas
must affirmatively avoid all communications with or disclosures to each
other that affect or have the potential to affect bids or bidding
strategy. In some instances, this prohibition extends to communications
regarding the post-auction market structure. This prohibition begins at
the short-form application filing deadline and ends at the down payment
deadline after the auction. This prohibition applies to all applicants
regardless of whether such applicants become qualified bidders or
actually bid.
7. The geographic license area is the market designation of the
particular service. For the FM service, the market designation is the
particular vacant FM allotment (e.g., New Hope, Alabama, Channel 278A,
Market FM502-A). In Auction No. 70, for example, the rule would apply
to applicants designating on the short-form application any of the same
FM allotments. Therefore, applicants that apply to bid for an FM
construction permit for the same allotment would be precluded from
engaging in prohibited communications during the period from the short-
form application deadline until the down payment deadline following the
close of the auction. In addition, even if auction applicants each
designate on its application only one common FM allotment, they may not
discuss with each other their bids or bidding strategies relating to
any FM allotment that either designates on its short-form application.
[[Page 68615]]
8. For purposes of this prohibition, Sec. 1.2105(c)(7)(i) defines
applicant as including all officers and directors of the entity
submitting a short-form application to participate in the auction, all
controlling interests of that entity, as well as all holders of
partnership and other ownership interests and any stock interest
amounting to 10 percent or more of the entity, or outstanding stock, or
outstanding voting stock of the entity submitting a short-form
application.
9. Applicants for construction permits for any of the same
allotments must not communicate directly or indirectly about bids or
bidding strategy. Accordingly, such applicants are encouraged not to
use the same individual as an authorized bidder. A violation of the
anti-collusion rule could occur if an individual acts as the authorized
bidder for two or more competing applicants, and conveys information
concerning the substance of bids or bidding strategies between such
applicants. Also, if the authorized bidders are different individuals
employed by the same organization (e.g., law firm or engineering firm
or consulting firm), a violation similarly could occur. In such a case,
at a minimum, applicants should certify on their applications that
precautionary steps have been taken to prevent communication between
authorized bidders and that applicants and their bidding agents will
comply with the anti-collusion rule. A violation of the anti-collusion
rule could occur in other contexts, such as an individual serving as an
officer for two or more applicants. Moreover, the Commission has found
a violation of the anti-collusion rule where a bidder used the
Commission's bidding system to disclose its bidding strategy in a
manner that explicitly invited other auction participants to cooperate
and collaborate in specific markets, and has placed auction
participants on notice that the use of its bidding system to disclose
market information to competitors will not be tolerated and will
subject bidders to sanctions. Bidders are cautioned that the Commission
remains vigilant about prohibited communications taking place in other
situations. For example, the Commission has warned that prohibited
communications concerning bids and bidding strategies may include
communications regarding capital calls or requests for additional funds
in support of bids or bidding strategies to the extent such
communications convey information concerning the bids and bidding
strategies directly or indirectly. Bidders should use caution in their
dealings with other individuals, such as members of the press,
financial analysts, or others who might become a conduit for the
communication of prohibited bidding information.
10. The Commission's rules do not prohibit applicants from entering
into otherwise lawful bidding agreements before filing their short-form
applications, as long as they disclose the existence of the
agreement(s) in their short-form application. If parties agree in
principle on all material terms prior to the short-form filing
deadline, each party to the agreement must identify the other party or
parties to the agreement on its short-form application under Sec.
1.2105(c), even if the agreement has not been reduced to writing. If
the parties have not agreed in principle by the short-form filing
deadline, they should not include the names of parties to discussions
on their applications, and they may not continue negotiations,
discussions or communications with any other applicants after the
short-form filing deadline.
11. By electronically submitting its short-form application, each
applicant certifies its compliance with 47 CFR 1.2105(c) and 73.7002.
However, the Bureaus caution that merely filing a certifying statement
as part of an application will not outweigh specific evidence that
collusive behavior has occurred, nor will it preclude the initiation of
an investigation when warranted. The Commission has stated that it
intends to scrutinize carefully any instances in which bidding patterns
suggest that collusion may be occurring. Any applicant found to have
violated the anti-collusion rule may be subject to sanctions.
12. Applicants are also reminded that, regardless of compliance
with the Commission's rules, they remain subject to the antitrust laws,
which are designed to prevent anticompetitive behavior in the
marketplace. Compliance with the disclosure requirements of the
Commission's anti-collusion rule will not insulate a party from
enforcement of the antitrust laws. For instance, a violation of the
antitrust laws could arise out of actions taking place well before any
party submits a short form application. The Commission has cited a
number of examples of potentially anticompetitive actions that would be
prohibited under antitrust laws: for example, actual or potential
competitors may not agree to divide territories horizontally in order
to minimize competition, regardless of whether they split a market in
which they both do business, or whether they merely reserve one market
for one and another for the other. Similarly, the Bureaus have long
reminded potential applicants and others that even where the applicant
discloses parties with whom it has reached an agreement on the short-
form application, thereby permitting discussions with those parties,
the applicant is nevertheless subject to existing antitrust laws. To
the extent the Commission becomes aware of specific allegations that
may give rise to violations of the federal antitrust laws, the
Commission may refer such allegations to the United States Department
of Justice for investigation. If an applicant is found to have violated
the antitrust laws or the Commission's rules in connection with its
participation in the competitive bidding process, it may be subject to
forfeiture of its upfront payment, down payment, or full bid amount and
may be prohibited from participating in future auctions, among other
sanctions.
13. As required by 47 CFR 1.65, an applicant must maintain the
accuracy and completeness of information furnished in its pending
application and must notify the Commission within 30 days of any
substantial change that may be of decisional significance to that
application. Thus, Sec. 1.65 requires an auction applicant to notify
the Commission of any substantial change to the information or
certifications included in its pending short-form application.
Applicants are therefore required by Sec. 1.65 to report to the
Commission any communications they have made to or received from
another applicant after the short-form filing deadline that affect or
have the potential to affect bids or bidding strategy unless such
communications are made to or received from parties to agreements
identified under Sec. 1.2105(a)(2)(viii). In addition, Sec.
1.2105(c)(6) requires that any applicant that makes or receives a
communication prohibited by Sec. 1.2105(c) must report such
communication to the Commission in writing immediately, and in no case
later than five business days after the communication occurs.
14. As required by 47 CFR 1.1207, applicants that are winning
bidders will be required to disclose in their long-form applications
the specific terms, conditions, and parties involved in any bidding
consortia, joint venture, partnership, or agreement or other
arrangement entered into relating to the competitive bidding process.
15. A summary listing of documents issued by the Commission and the
Bureaus addressing the application of the anti-collusion rule may be
found in Attachment E of the Auction No. 70 Procedures Public Notice.
These documents are available on the
[[Page 68616]]
Commission's auction anti-collusion web page.
iii. Due Diligence
16. Potential applicants are reminded that they are solely
responsible for investigating and evaluating all technical and
marketplace 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 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.
17. In particular, potential applicants are strongly encouraged to
review all underlying Commission orders, such as the specific report
and order amending the FM Table of Allotments and allotting the FM
channel(s) on which they plan to bid. Orders adopted in FM allotment
rulemaking proceedings often include anomalies, such as, site
restrictions or expense reimbursement requirements. Bidders are also
responsible for reviewing all pending rulemaking petitions and open
proceedings that might affect the FM allotment(s) on which they plan to
bid in order to make reasoned, appropriate decisions about their
participation in Auction No. 70 and their bidding strategy.
Additionally, potential bidders should perform technical analyses
sufficient to assure themselves that, should they prevail in
competitive bidding for a given FM allotment, they will be able to
build and operate facilities that will fully comply with the
Commission's technical and legal requirements.
18. Potential applicants are also strongly encouraged to conduct
their own research prior to the beginning of bidding in Auction No. 70
in order to determine the existence of any pending administrative or
judicial proceedings that might affect their decision to participate in
the auction. Participants in Auction No. 70 are strongly encouraged to
continue such research throughout the auction.
19. Applicants should also be aware that certain pending and future
proceedings, including applications (including those for modification),
petitions for rulemaking, requests for special temporary authority,
waiver requests, petitions to deny, petitions for reconsideration,
informal objections, and applications for review, before the Commission
may relate to particular applicants or incumbent permittees, or
incumbent licensees, or the construction permits available in Auction
No. 70. In addition, pending and future judicial proceedings may relate
to particular applicants or incumbent permittees, or incumbent
licensees, or the construction permits available in Auction No. 70.
Prospective applicants are responsible for assessing the likelihood of
the various possible outcomes, and considering their potential impact
on construction permits available in this auction.
20. Applicants should perform due diligence to identify and
consider all proceedings that may affect the construction permits being
auctioned and that could have an impact on the availability of spectrum
for Auction No. 70. In addition, although the Commission may continue
to act on various pending applications, informal objections, petitions,
and other requests for Commission relief, some of these matters may not
be resolved by the beginning of bidding in the auction.
21. Applicants are solely responsible for identifying associated
risks and for investigating and evaluating the degree to which such
matters may affect their ability to bid on, otherwise acquire, or make
use of the construction permits available in Auction No. 70. Potential
applicants are strongly encouraged to physically inspect any
prospective sites located in, or near, the service area for which they
plan to bid, and also to familiarize themselves with the environmental
review obligations.
22. Applicants may research the licensing database for the Media
Bureau on the Internet in order to determine which channels are already
licensed to incumbent licensees or previously-authorized to
construction permittees. Licensing records for the Media Bureau are
contained in the Media Bureau's Consolidated Data Base System (CDBS)
and may be researched on the Internet at http://www.fcc.gov/mb.
23. The Commission makes no representations or guarantees regarding
the accuracy or completeness of information in its databases or any
third party databases, including, for example, court docketing systems.
To the extent the Commission's databases may not include all
information deemed necessary or desirable by an applicant, applicants
may obtain or verify such information from independent sources or
assume the risk of any incompleteness or inaccuracy in said databases.
Furthermore, the Commission makes no representations or guarantees
regarding the accuracy or completeness of information that has been
provided by incumbent licensees and incorporated into its databases.
24. A commenter lists eleven conflicted channels that it contended
that certain permits must be removed from the auction. Upon further
review, three permits were removed from the auction, specifically FM-
619-C3, Crandon, Wisconsin, FM-527-A, Channel 247A, Lake City,
Colorado, and FM-299-A, Diamond Lake, Oregon.
iv. Use of Integrated Spectrum Auction System
25. The Commission will make available a browser-based bidding
system to allow bidders to participate in Auction No. 70 over the
Internet using the Commission's Integrated Spectrum Auction System
(ISAS or FCC Auction System). The Commission makes no warranty
whatsoever with respect to the FCC Auction System. In no event shall
the Commission, or any of its officers, employees or agents, be liable
for any damages whatsoever (including, but not limited to, loss of
business profits, business interruption, loss of business information,
or any other loss) arising out of or relating to the existence,
furnishing, functioning or use of the FCC Auction System that is
accessible to qualified bidders in connection with this auction.
Moreover, no obligation or liability will arise out of the Commission's
technical, programming or other advice or service provided in
connection with the FCC Auction System.
v. Bidder Alerts
26. As is the case with many business investment opportunities,
some unscrupulous entrepreneurs may attempt to use Auction No. 70 to
deceive and defraud unsuspecting investors. Information about deceptive
telemarketing investment schemes is available from the Commission, as
well as the Federal Trade Commission (FTC) and the Securities and
Exchange Commission (SEC).
vi. Environmental Review Requirements
27. Permittees or licensees must comply with the Commission's rules
regarding implementation of the National Environmental Policy Act
(NEPA) and other federal environmental statutes. The construction of a
broadcast facility is a federal action and the permittee or licensee
must comply with the Commission's environmental rules for each such
facility. The Commission's
[[Page 68617]]
environmental rules require, among other things, that the permittee or
licensee consult with expert agencies having environmental
responsibilities, including the U.S. Fish and Wildlife Service, the
relevant State Historic Preservation Office, the Army Corps of
Engineers and the Federal Emergency Management Agency (through the
local authority with jurisdiction over floodplains). In assessing the
effect of facilities construction on historic properties, the permittee
or licensee must follow the provisions of the Nationwide Programmatic
Agreement Regarding the Section 106 National Historic Preservation Act
Review Process. The permittee or licensee must prepare environmental
assessments for facilities that may have a significant impact in or on
wilderness areas, wildlife preserves, threatened or endangered species
or designated critical habitats, historical or archaeological sites,
Indian religious sites, floodplains, and surface features. The
permittee or licensee also must prepare environmental assessments for
facilities that include high intensity white lights in residential
neighborhoods or excessive radio frequency emission.
C. Auction Specifics
i. Auction Date
28. Bidding in Auction No. 70 will begin on Wednesday, March 7,
2007. The initial schedule for bidding will be announced by public
notice at least one week before the start of the auction.
29. Unless otherwise announced, bidding on construction permits
will be conducted on each business day until bidding has stopped on all
construction permits.
ii. Auction Title
30. Auction No. 70--FM Broadcast
iii. Bidding Methodology
31. The bidding methodology for Auction No. 70 will be simultaneous
multiple round bidding. The Commission will conduct this auction over
the Internet using the FCC Auction System, and telephonic bidding will
be available as well. Qualified bidders are permitted to bid
electronically via the Internet or by telephone. All telephone calls
are recorded.
iv. Dates and Deadlines
Auction Seminar......................... December 6, 2006.
Short-Form Application (FCC Form 175) December 6, 2006; 12:00 noon
Filing Window Opens. ET.
Short-Form Application (FCC Form 175) December 19, 2006; before 6:00
Filing Window Deadline. p.m. ET.
Upfront Payments (via wire transfer).... February 5, 2006; 6:00 p.m.
ET.
Mock Auction............................ March 5, 2007.
Auction Begins.......................... March 7, 2007.
v. Requirements for Participation
32. Those wishing to participate in the auction must: (1) Submit a
short-form application (FCC Form 175) electronically prior to 6 p.m.
Eastern Time (ET), on December 19, 2006, following the electronic
filing procedures set forth in Attachment C of the Auction No. 70
Procedures Public Notice; (2) submit a sufficient upfront payment and
an FCC Remittance Advice Form (FCC Form 159) before 6:00 p.m. ET, on
February 5, 2007; and (3) comply with all provisions outlined in the
Auction No. 70 Procedures Public Notice and applicable Commission
rules.
II. Short-Form Application (FCC Form 175) Requirements
33. An application to participate in an FCC auction, referred to as
a short-form application or FCC Form 175, provides information used in
determining whether the applicant is legally, technically, and
financially qualified to participate in Commission auctions for
licenses or permits. The short-form application is the first part of
the Commission's two-phased auction application process. In the first
phase of this process, parties desiring to participate in the auction
file streamlined, short-form applications in which they certify under
penalty of perjury as to their qualifications. Eligibility to
participate in bidding is based on the applicants' short-form
applications and certifications, as well as their upfront payments. In
the second phase of the process, winning bidders file a more
comprehensive long-form application.
34. Entities and individuals seeking construction permits available
in Auction No. 70 must file a short-form application electronically via
the FCC Auction System prior to 6 p.m. ET on December 19, 2006,
following the procedures prescribed in Attachment C of the Auction No.
70 Procedures Public Notice. If an applicant claims eligibility for a
bidding credit, the information provided in its FCC Form 175 will be
used in determining whether the applicant is eligible for the claimed
bidding credit. Applicants bear full responsibility for submitting
accurate, complete and timely short-form applications. All applicants
must certify under penalty of perjury on their short-form applications
that they are legally, technically, financially and otherwise qualified
to hold a license. Applicants should read the instructions set forth in
Attachment C of the Auction No. 70 Procedures Public Notice carefully
and should consult the Commission's rules to ensure that all the
information that is required under the Commission's rules and relevant
public notices is included with their short-form applications.
35. An entity may not submit more than one short-form application
for a single auction. In the event that a party submits multiple short-
form applications, only one application will be accepted for filing.
36. Applicants also should note that submission of a short-form
application constitutes a representation by the certifying official
that he or she is an authorized representative of the applicant, that
he or she has read the form's instructions and certifications, and that
the contents of the application, its certifications, and any
attachments are true, complete and correct. Applicants are not
permitted to make major modifications to their applications; such
impermissible changes include a change of the certifying official to
the application. Submission of a false certification to the Commission
may result in penalties, including monetary forfeitures, license
forfeitures, ineligibility to participate in future auctions, and/or
criminal prosecution.
A. Noncommercial Educational Facilities
37. The opening of a window for nonreserved vacant FM allotments
provides a filing opportunity for an applicant to apply for both
noncommercial educational (NCE) and commercial facilities. However,
while non-mutually exclusive NCE applications will not be resolved
through competitive bidding, any applications specifying NCE facilities
that are mutually exclusive with any applications specifying commercial
facilities will be returned as unacceptable for filing pursuant to 47
CFR 73.5002(b).
[[Page 68618]]
38. As with the previous two FM auction proceedings, applicants for
NCE broadcast stations will be allowed to submit Form 175 applications
for the specific non-reserved spectrum to be auctioned in Auction No.
70 in the forthcoming filing window. The instant public notice
recognizes the opportunity for NCE applicants to participate in the
upcoming auction process and amply addresses the process for
participation.
B. New Entrant Bidding Credit
39. The Commission has adopted a tiered New Entrant Bidding Credit
for broadcast auction applicants with no, or very few, other media
interests.
40. The interests of the applicant, and of any individuals or
entities with an attributable interest in the applicant, in other media
of mass communications, including both NCE and commercial full-power
broadcast stations, shall be considered when determining an applicant's
eligibility for the New Entrant Bidding Credit. The bidder's
attributable interests shall be determined as of the short-form
application (FCC Form 175) filing deadline--December 19, 2006. Thus,
the applicant's maximum new entrant bidding credit eligibility will be
determined as of the short-form application filing deadline. Applicants
intending to divest a media interest or make any other ownership
changes, such as resignation of positional interests, in order to avoid
attribution for purposes of qualifying for the New Entrant Bidding
Credit must have consummated such divestment transactions or have
completed such ownership changes by no later than the short-form filing
deadline--December 19, 2006. Prospective bidders are reminded, however,
that events occurring after the short-form filing deadline, such as the
acquisition of attributable interests in media of mass communications,
may cause diminishment or loss of the bidding credit, and must be
reported immediately.
41. Under traditional broadcast attribution rules, including 47 CFR
73.3555 Note 2, those entities or individuals with an attributable
interest in a bidder include: (1) All officers and directors of a
corporate bidder; (2) any owner of 5 percent or more of the voting
stock of a corporate bidder; (3) all partners and limited partners of a
partnership bidder, unless the limited partners are sufficiently
insulated; and (4) all members of a limited liability company, unless
sufficiently insulated.
42. In cases where an applicant's spouse or close family member
holds other media interests, such interests are not automatically
attributable to the bidder. The Commission decides attribution issues
in this context based on certain factors traditionally considered
relevant. Applicants should note that the mass media attribution rules
were revised in 1999.
43. Bidders are also reminded that, by the New Entrant Bidding
Credit Reconsideration Order, the Commission further refined the
eligibility standards for the New Entrant Bidding Credit, judging it
appropriate to attribute the media interests held by very substantial
investors in, or creditors of, an applicant claiming new entrant
status. Specifically, the attributable mass media interests held by an
individual or entity with an equity and/or debt interest in an
applicant shall be attributed to that bidder for purposes of
determining its eligibility for the New Entrant Bidding Credit, if the
equity and debt interests, in the aggregate, exceed 33 percent of the
total asset value of the applicant, even if such an interest is non-
voting.
44. Generally, media interests will be attributable for purposes of
the New Entrant Bidding Credit to the same extent that such other media
interests are considered attributable for purposes of the broadcast
multiple ownership rules. Further, any bidder asserting new entrant
status must have de facto as well as de jure control of the entity
claiming the bidding credit pursuant to 47 CFR 73.5007. Typically, de
jure control is evidenced by ownership of at least 50.1 percent of an
entity's voting stock or equivalent level of interest in cases where
the bidder is not a corporate entity. De facto control is determined on
a case-by-case basis.
45. However, attributable interests held by a winning bidder in
existing low power television, television translator or FM translator
facilities will not be counted among the bidder's other mass media
interests in determining its eligibility for a New Entrant Bidding
Credit. A medium of mass communications is defined in 47 CFR
73.5008(b). Full service noncommercial educational stations, on both
reserved and nonreserved channels, are included among media of mass
communications as defined in Sec. 73.5008(b).
C. Application Requirements
46. In addition to the ownership information required pursuant to
47 CFR 1.2112, applicants are required to establish on their short-form
applications that they satisfy the eligibility requirements to qualify
for a New Entrant Bidding Credit. In those cases where a New Entrant
Bidding Credit is being sought, a certification under penalty of
perjury must be provided in completing the applicant's short-form
application. An applicant claiming that it qualifies for a 35 percent
new entrant bidding credit must certify that neither it nor any of its
attributable interest holders have any attributable interests in any
other media of mass communications. An applicant claiming that it
qualifies for a 25 percent new entrant bidding credit must certify that
neither it nor any of its attributable interest holders have any
attributable interests in more than three media of mass communications,
and must identify and describe such media of mass communications.
i. Bidding Credits
47. Applicants that qualify for the New Entrant Bidding Credit, as
specified in 47 CFR 73.5007, are eligible for a bidding credit that
represents the amount by which a bidder's winning bid is discounted.
The size of a New Entrant Bidding Credit depends on the number of
ownership interests in other media of mass communications that are
attributable to the bidder-entity and its attributable interest-
holders: (1) A 35 percent bidding credit will be given to a winning
bidder if it, and/or any individual or entity with an attributable
interest in the winning bidder, has no attributable interest in any
other media of mass communications, as defined in 47 CFR 73.5008; (2) a
25 percent bidding credit will be given to a winning bidder if it, and/
or any individual or entity with an attributable interest in the
winning bidder, has an attributable interest in no more than three mass
media facilities, as defined in 47 CFR 73.5008; (3) no bidding credit
will be given if any of the commonly owned mass media facilities serve
the same area as the proposed broadcast station, as defined in 47 CFR
73.5007(b), or if the winning bidder, and/or any individual or entity
with an attributable interest in the winning bidder, has attributable
interests in more than three mass media facilities.
48. Bidding credits are not cumulative; qualifying applicants
receive either the 25 percent or the 35 percent bidding credit, but not
both. Attributable interests are defined in 47 CFR 73.3555 and Note 2
of that section. Applicants should note that unjust enrichment
provisions apply to a winning bidder that utilizes a bidding credit and
subsequently seeks to assign or transfer control of its license or
construction permit to an entity not qualifying for the same level of
bidding credit.
49. The Bureaus are unable to adopt for Auction No. 70 the
suggestions by commenters to revise the criteria for and
[[Page 68619]]
the amount of the new entrant bidding credit, and to adopt new bidding
credits based on other criteria. Implementation of these proposals
would require amendment of the Commission's competitive bidding and
broadcast service rules, which can only be accomplished through a
rulemaking proceeding. The Bureaus' process for seeking comment on
auction procedures is not the appropriate forum in which to raise such
rule changes. Such rule change suggestions should have been raised in
the context of the rulemaking proceeding establishing bidding credits
for the FM broadcast service.
ii. Installment Payments
50. Installment payment plans will not be available in Auction No.
70.
D. Permit Selection
51. In Auction No. 70, applicants must select the construction
permits on which they want to bid from the Eligible Permits list. There
will be no opportunity to change construction permit selection after
the short-form filing deadline. It is critically important that an
applicant confirm its construction permit selections before submitting
its short-form application because the FCC Auction System will not
accept bids on construction permits that an applicant has not selected
on its short-form application.
E. Disclosure of Bidding Arrangements
52. Applicants will be required to identify in their short-form
applications all parties with whom they have entered into any
agreements, arrangements, or understandings of any kind relating to the
construction permits being auctioned, including any agreements relating
to post-auction market structure. Applicants also will be required to
certify under penalty of perjury in their short-form applications that
they have not entered and will not enter into any explicit or implicit
agreements, arrangements or understandings of any kind with any
parties, other than those identified in the application, regarding the
amount of their bids, bidding strategies, or the particular
construction permits on which they will or will not bid. If an
applicant has had discussions, but has not reached a joint bidding
agreement by the short-form application filing deadline, it would not
include the names of parties to the discussions on its application and
may not continue such discussions with any applicants after the
deadline.
53. After the filing of short-form applications, the Commission's
rules do not prohibit a party holding a non-controlling, attributable
interest in one applicant from acquiring an ownership interest in or
entering into a joint bidding arrangement with other applicants
provided that: (i) The attributable interest holder certifies that it
has not and will not communicate with any party concerning the bids or
bidding strategies of more than one of the applicants in which it holds
an attributable interest, or with which it has entered into a joint
bidding arrangement; and (ii) the arrangements do not result in a
change in control of any of the applicants. While the anti-collusion
rules do not prohibit non-auction-related business negotiations among
auction applicants, applicants are reminded that certain discussions or
exchanges could touch upon impermissible subject matter because they
may convey pricing information and bidding strategies. Such subject
areas include, but are not limited to, issues such as management sales,
local marketing agreements, rebroadcast agreements, and other
transactional agreements. Further, as discussed above, compliance with
the disclosure requirements of the Commission's anti-collusion rule
will not insulate a party from enforcement of the antitrust laws.
F. Ownership Disclosure Requirements
54. The Commission specified in the Broadcast Competitive Bidding
First Report and Order that, for purposes of determining eligibility to
participate in a broadcast auction, all applicants must comply with the
uniform part 1 ownership disclosure standards and provide information
required by 47 CFR 1.2105 and 1.2112. Specifically, in completing the
short-form application, applicants will be required to fully disclose
information on the real party-or parties-in-interest and ownership
structure of the applicant. The ownership disclosure standards for the
short-form application are prescribed in 47 CFR 1.2105 and 1.2112. Each
applicant is responsible for information submitted in its short-form
application being complete and accurate.
55. In certain circumstances, an applicant's most current ownership
information on file with the Commission, if in an electronic format
compatible with the short-form application (FCC Form 175) (such as
information submitted in an on-line FCC Form 602 or in an FCC Form 175
filed for a previous auction using ISAS) will automatically be entered
into the applicant's short-form application. Applicants are responsible
for ensuring that the information submitted in their short-form
application for Auction No. 70 is complete and accurate. Accordingly,
applicants should carefully review any information automatically
entered to confirm that it is complete and accurate as of the deadline
for filing the short-form application. Applicants can update directly
in the short-form application any information that was entered
automatically and needs to be changed.
G. Provisions Regarding Former and Current Defaulters
56. Each applicant must state under penalty of perjury on its
short-form application whether or not the applicant, its affiliates,
its controlling interests, and the affiliates of its controlling
interests, as defined by 47 CFR 1.2110, have ever been in default on
any Commission construction permit or license or have ever been
delinquent on any non-tax debt owed to any Federal agency. In addition,
each applicant must certify under penalty of perjury on its short-form
application that as of the short-form filing deadline, the applicant,
its affiliates, its controlling interests, and the affiliates of its
controlling interests, as defined by 47 CFR 1.2110, are not in default
on any payment for a Commission construction permit or license
(including a down payment) and that they are not delinquent on any non-
tax debt owed to any Federal agency. Prospective applicants are
reminded that submission of a false certification to the Commission is
a serious matter that may result in severe penalties, including
monetary forfeitures, license revocations, exclusion from participation
in future auctions, and/or criminal prosecution.
57. Former defaulters--i.e., applicants, including any of their
affiliates, any of their controlling interests, or any of the
affiliates of their controlling interests, that in the past have
defaulted on any Commission construction permit or license or been
delinquent on any non-tax debt owed to any Federal agency, but that
have since remedied all such defaults and cured all of their
outstanding non-tax delinquencies--are eligible to bid in Auction No.
70, provided that they are otherwise qualified. However, former
defaulters are required to pay upfront payments that are fifty percent
more than the normal upfront payment amounts.
58. Current defaulters--i.e., applicants, including any of their
affiliates, any of their controlling interests, or any of the
affiliates of their controlling interests, that are in default on any
payment for any Commission construction permit or license (including a
down payment) or are
[[Page 68620]]
delinquent on any non-tax debt owed to any Federal agency as of the
filing deadline for applications to participate in this auction--are
not eligible to bid in Auction No. 70.
59. Applicants are encouraged to review the Wireless
Telecommunications Bureau's previous guidance on default and
delinquency disclosure requirements in the context of the short-form
application process. For example, it has been determined that to the
extent that Commission rules permit late payment of regulatory or
application fees accompanied by late fees, such debts will become
delinquent for purposes of 47 CFR 1.2105(a) and 1.2106(a) only after
the expiration of a final payment deadline. Therefore, with respect to
regulatory or application fees, the provisions of 47 CFR 1.2105(a) and
1.2106(a) regarding default and delinquency in connection with
competitive bidding are limited to circumstances in which the relevant
party has not complied with a final Commission payment deadline.
However, even where Commission rules expressly permit late payment
subject to payment of an additional late fee, and do not imposed a
final payment deadline, the Commission may in some cases issue a demand
for payment by a certain date. Failure to comply with the terms of a
particular demand letter in the time period provided may render the
subject debt delinquent, notwithstanding rules generally permitting
late payments.
60. The Commission considers outstanding debts owed to the United
States Government, in any amount, to be a serious matter. The
Commission adopted rules, including a provision referred to as the red
light rule, that implement the Commission's obligations under the Debt
Collection Improvement Act of 1996, which governs the collection of
claims owed to the United States. Under the red light rule, the
Commission will not process applications and other requests for
benefits filed by parties that have outstanding debts owed to the
Commission. In the same rulemaking order, the Commission explicitly
declared, however, that the Commission's competitive bidding rules are
not affected by the red light rule. As a consequence, the Commission's
adoption of the red light rule does not alter the applicability of any
of the Commission's competitive bidding rules, including the provisions
and certifications of 47 CFR 1.2105 and 1.2106, with regard to current
and former defaults or delinquencies. Applicants are reminded, however,
that the Commission's Red Light Display System, which provides
information regarding debts owed to the Commission, may not be
determinative of an auction applicant's ability to comply with the
default and delinquency disclosure requirements of 47 CFR 1.2105. Thus,
while the red light rule ultimately may prevent the processing of long-
form applications by auction winners, an auction applicant's red light
status is not necessarily determinative of its eligibility to
participate in this auction or of its upfront payment obligation.
61. Prospective applicants in Auction No. 70 should note that any
long-form applications filed after the close of competitive bidding
will be reviewed for compliance with the Commission's red light rule,
and such review may result in the dismissal of a winning bidder's long-
form application. Applicants that have their long-form application
dismissed will be deemed to have defaulted and will be subject to
default payments under 47 CFR 1.2104(g) and 1.2109(c).
H. Other Information
62. Applicants owned by members of minority groups and/or women, as
defined in 47 CFR 1.2110(c)(3), may identify themselves in filling out
their short-form applications regarding this status. This applicant
status information is collected for statistical purposes only and
assists the Commission in monitoring the participation in its auctions
of designated entities, which include rural telephone companies.
I. Minor Modifications to Short-Form Applications (FCC Forms 175)
63. After the deadline for filing short-form applications (FCC
Forms 175) at 6 p.m. ET on December 19, 2006, applicants are permitted
to make only minor changes to their applications. Applicants are not
permitted to make major modifications to their applications (e.g.,
change their construction permit selections, change control of the
applicant, change the certifying official, claim eligibility for a
higher percentage of bidding credit or change their identification of
the application's proposed facilities as noncommercial educational).
Permissible minor changes include, for example, deletion and addition
of authorized bidders (to a maximum of three) and revision of addresses
and telephone numbers of the applicants and their contact persons.
64. Any application amendment and related statements of fact must
be certified by: (1) The applicant, if the applicant is an individual,
(2) one of the partners if the applicant is a partnership, (3) an
officer, director, or duly authorized employee, if the applicant is a
corporation, (4) by a member who is an officer, if the applicant is an
unincorporated association, (5) the trustee if the applicant is an
amateur radio service club, or (6) a duly elected or appointed official
who is authorized to make such certifications under the laws of the
applicable jurisdiction, if the applicant is a governmental entity.
65. An applicant must make permissible minor changes to its short-
form application, as such changes are defined by 47 CFR 1.2105(b),
electronically, using the FCC Auction System. Applicants must click on
the SUBMIT button in the FCC Auction System for the changes to be
submitted and considered by the Commission. After the revised
application has been submitted, a confirmation page will be displayed
that states the submission time and date, along with a unique file
number. Applicants should note, however, that after the filing window
has closed, the FCC Auction System will not permit applicants to make
certain changes , such as legal classification or NCE identification.
66. In addition, an applicant should submit a letter briefly
summarizing the changes and subsequently update their short-form
applications in ISAS as soon as possible. Any letter describing changes
to an applicant's short-form application must be submitted by
electronic mail to the following address: auction70@fcc.gov. The
electronic mail summarizing the changes must include a subject or
caption referring to Auction No. 70 and the name of the applicant. The
Bureaus request that parties format any attachments to electronic mail
as Adobe[supreg] Acrobat[supreg] (pdf) or Microsoft[supreg] Word
documents.
67. Applicants must not submit application-specific material
through the Commission's Electronic Comment Filing System (ECFS), which
was used for submitting comments regarding Auction No. 70 procedures.
J. Maintaining Current Information in Short-Form Applications (FCC Form
175)
68. 47 CFR 1.65 requires an applicant to maintain the accuracy and
completeness of information furnished in its pending application and to
notify the Commission within 30 days of any substantial change that may
be of decisional significance to that application. Changes that cause a
loss of or reduction in the percentage of bidding credit specified on
the originally submitted Form 175 application must be reported
[[Page 68621]]
immediately. If an amendment reporting substantial changes is a major
amendment as defined by 47 CFR 1.2105, the major amendment will not be
accepted and may result in the dismissal of the short-form application.
69. After the short-form filing deadline, applicants may make only
minor changes to their FCC Form 175 applications, for example, deletion
and addition of authorized bidders (to a maximum of three). Applicants
must click on the SUBMIT button in the FCC Auction System for the
changes to be submitted and considered by the Commission. In addition,
applicants must submit a letter, briefly summarizing the changes, by
electronic mail at the following address: auction70@fcc.gov. The
electronic mail summarizing the changes must include a subject or
caption referring to Auction No. 70 and the name of the applicant. The
Bureaus requests that parties format any attachments to electronic mail
as Adobe[supreg] Acrobat[supreg] (pdf) or Microsoft[supreg] Word
documents.
70. Applicants must not submit application-specific material
through the Commission's electronic comment filing system (ECFS) into
the record of the proceeding concerning Auction No. 70 procedures.
III. Pre-Auction Procedures
A. Auction Seminar
71. On Wednesday, December 6, 2006, the FCC will sponsor a free
seminar for parties interested in participating in Auction No. 70 at
the FCC headquarters, located at 445 12th Street, SW., Washington, DC.
The seminar will provided attendees with information about pre-auction
procedures, completing FCC Form 175, auction conduct, the FCC Auction
System, auction rules, and the FM broadcast service rules. The seminar
will also provide an opportunity for prospective bidders to ask
questions of FCC staff concerning the auction, auction procedures,
filing requirements and other matters related to this auction.
72. To register, complete the registration form in Attachment B of
the Auction No. 70 Procedures Public Notice and submit it by Monday,
December 4, 2006. Registrations are accepted on a first-come, first-
served basis. For individuals who are unable to attend, an Audio/Video
webcast of this seminar will be available from the FCC's Auction No. 70
web page at http://wireless.fcc.gov/auctions/70/.
B. Short-Form Application (FCC Form 175)--Due Before 6:00 p.m. ET on
December 19, 2006
73. In order to be eligible to bid in this auction, applicants must
first submit an FCC Form 175 application electronically via the FCC
Auction System. This application must be received at the Commission
prior to 6 p.m. ET on December 19, 2006. Late applications will not be
accepted. There is no application fee required when filing an FCC Form
175. However, to be eligible to bid, an applicant must submit an
upfront payment.
74. Applications may generally be filed at any time beginning at
noon ET on December 6, 2006, and the filing window will close at 6 p.m.
ET on December 19, 2006. Applicants are strongly encouraged to file
early and are responsible for allowing adequate time for filing their
applications. Applicants may update or amend their applications
multiple times until the filing deadline on December 19, 2006.
75. An applicant must always click on the SUBMIT button on the
Certify & Submit screen of the electronic form to successfully submit
its FCC Form 175 or modifications. Any form that is not submitted will
not be reviewed by the FCC. Information about accessing, completing,
and viewing the FCC Form 175 is included in Attachment C of the Auction
No. 70 Procedures Public Notice.
C. Application Processing and Minor Corrections
76. After the deadline for filing the FCC Form 175 applications has
passed, the FCC will process all timely submitted applications to
determine which are acceptable for filing, and subsequently will issue
a public notice identifying: (1) Those applications accepted for
filing; (2) those applications rejected; and (3) those applications
which have minor defects that may be corrected, and the deadline for
resubmitting corrected applications.
77. Non-mutually exclusive applications will be listed in a
subsequent public notice to be released by the Bureaus. Such
applications will not proceed to auction, but will proceed in
accordance with instructions set forth in that public notice. All
mutually exclusive applications will be considered under the relevant
procedures for conflict resolution. Mutually exclusive commercial
applications will proceed to auction. Applications for NCE FM stations
on nonreserved spectrum, filed during an FM filing window, will be
returned as unacceptable for filing if mutually exclusive with any
application for a commercial station. Accordingly, if an FCC Form 175
filed during the Auction No. 70 filing window identifying the applicant
as noncommercial educational is mutually exclusive with any application
filed during that window by an applicant for a commercial station, the
former will be returned as unacceptable for filing. However, if
stations are not identified as NCE by applicants on the short-for
application, the applications will be considered, as a matter of law,
as applications for commercial broadcast stations.
78. After the short-form filing deadline on December 19, 2006,
applicants may make only minor corrections to their FCC Form 175
applications. Applicants will not be permitted to make major
modifications to their applications.
D. Upfront Payments--Due February 5, 2007
79. In order to be eligible to bid in the auction, applicants must
submit an upfront payment accompanied by an FCC Remittance Advice Form
(FCC Form 159). After completing the FCC Form 175, filers will have
access to an electronic version of the FCC Form 159 that can be printed
and sent by facsimile to Mellon Bank in Pittsburgh, PA. All upfront
payments must be received in the proper account at Mellon Bank before 6
p.m. ET on February 5, 2007.
i. Making Auction Payments by Wire Transfer
80. To avoid untimely payments, applicants should discuss
arrangements (including bank closing schedules) with their banker
several days before they plan to make the wire transfer, and allow
sufficient time for the transfer to be initiated and completed before
the deadline.
81. At least one hour before placing the order for the wire
transfer (but on the same business day), applicants must send by
facsimile a completed FCC Form 159 (Revised 2/03) to Mellon Bank, using
the specified telephone number. In order to meet the Commission's
upfront payment deadline, an applicant's payment must be credited to
the Commission's account before the deadline. Applicants are
responsible for obtaining confirmation from their financial institution
that Mellon Bank has timely received their upfront payment and
deposited it in the proper account.
82. Please note that: (1) All payments must be made in U.S.
dollars; (2) all payments must be made by wire transfer; (3) upfront
payments for Auction No. 70 go to a lockbox number
[[Page 68622]]
different from the lockboxes used in previous FCC auctions, and
different from the lockbox number to be used for post-auction payments;
and (4) failure to deliver the upfront payment by the specified
deadline on February 5, 2007 will result in dismissal of the
application and disqualification from participation in the auction.
ii. FCC Form 159
83. A completed FCC Remittance Advice Form (FCC Form 159, Revised
2/03) must be sent by facsimile to Mellon Bank to accompany each
upfront payment. Proper completion of FCC Form 159 (Revised 2/03) is
critical to ensuring correct crediting of upfront payments. Detailed
instructions for completion of FCC Form 159 are included in Attachment
D of the Auction No. 70 Procedures Public Notice. An electronic pre-
filled version of the FCC Form 159 is available after submitting the
FCC Form 175. Payors using a pre-filled FCC Form 159 are responsible
for ensuring that all of the information on the form, including payment
amounts, is accurate. The FCC Form 159 can be completed electronically,
but must be filed with Mellon Bank via facsimile.
iii. Upfront Payments and Bidding Eligibility
84. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed that the amount of the upfront payment would determine a
bidder's initial bidding eligibility, the maximum number of bidding
units on which a bidder may place bids. In order to bid on a
construction permit, otherwise qualified bidders that selected that
construction permit on FCC Form 175 must have a current eligibility
level that meets or exceeds the number of bidding units assigned to
that construction permit. At a minimum, therefore, an applicant's total
upfront payment must be enough to establish eligibility to bid on at
least one of the construction permits selected on its FCC Form 175, or
else the applicant will not be eligible to participate in the auction.
An applicant does not have to make an upfront payment to cover all
construction permits the applicant selected on its FCC Form 175, but
rather to cover the maximum number of bidding units that are associated
with construction permits on which the bidder wishes to place bids and
hold provisionally winning bids at any given time. Provisionally
winning bids are bids that would become final winning bids if the
auction were to close after the given round.
85. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed upfront payments for each construction permit taking into
account various factors related to the efficiency of the auction
process and the potential value of similar spectrum and sought comment
on this proposal. The Bureaus received no comments in response to the
proposed upfront payments. The specific upfront payments and bidding
units for each construction permit are set forth in Attachment A of the
Auction No. 70 Procedures Public Notice.
86. Applicants must make upfront payments sufficient to obtain
bidding eligibility on the construction permits on which they will bid.
In calculating its upfront payment amount, an applicant should
determine the maximum number of bidding units on which it may wish to
be active (bid on or hold provisionally winning bids on) in any single
round, and submit an upfront payment amount covering that number of
bidding units. In order to make this calculation, an applicant should
add together the upfront payments for all construction permits on which
it seeks to be active in any given round. Applicants should check their
calculations carefully, because it is not possible to increase a
bidder's eligibility after the upfront payment deadline. In some cases,
a qualified bidder's maximum eligibility may be less than the amount of
its upfront payment because the qualified bidder, pursuant to 47 CFR
1.1206(a), has either previously been in default on a Commission
license or delinquent on a non-tax debt owned to a Federal agency, or
has submitted an upfront payment that exceeds the total amount of
bidding units associated with the construction permits the applicant
selected on its FCC Form 175 application.
87. Applicants that are former defaulters are required to pay
upfront payments 50 percent greater than non-former defaulters. For
purposed of this calculation, the applicant includes the applicant
itself, its affiliates, its controlling interests, and affiliates of
its controlling interest, as defined by 47 CFR 1.2110. Accordingly,
former defaulters should calculate their upfront payment for all
construction permits by multiplying the number of bidding units on
which they wish to be active by 1.5. In order to calculate the number
of bidding units to assign to former defaulters, the Commission will
divide the upfront payment received by 1.5 and round the result up to
the nearest bidding unit. If a former defaulter fails to submit a
sufficient upfront payment to establish eligibility to bid on at least
one of the construction permits for which the applicant applied on its
FCC Form 175, the applicant will not be eligible to participate in the
auction.
iv. Applicant's Wire Transfer Information for Purposes of Refunds of
Upfront Payments
88. To ensure that refunds of upfront payments are processed in an
expeditious manner, the Commission is requesting that all pertinent
information specified in the Auction No. 70 Procedures Public Notice be
supplied to the FCC. For example, the Commission must be provided with
a Taxpayer Identification Number (TIN) before it can disburse refunds.
Applicants can provide the information electronically during the
initial short-form application filing window after the application has
been submitted. (Applicants are reminded that information submitted as
part of an FCC Form 175 will be available to the public; for that
reason, wire transfer information should not be included in an FCC Form
175.) Wire Transfer Instructions can also be manually sent by facsimile
to the FCC, Financial Operations Center, Auctions Accounting Group,
ATTN: Gail Glasser, using the specified telephone number. All refunds
will be returned to the payer of record as identified on the FCC Form
159 unless the payer submits written authorization instructing
otherwise.
E. Auction Registration
89. Approximately ten days before the auction, the FCC will issue a
public notice announcing all qualified bidders for the auction.
Qualified bidders are those applicants whose FCC Form 175 applications
have been accepted for filing and have timely submitted upfront
payments sufficient to make them eligible to bid on at least one of the
construction permits for which they applied.
90. All qualified bidders are automatically registered for the
auction. Registration materials will be distributed prior to the
auction by overnight mail. The mailing will be sent only to the contact
person at the contact address listed in the FCC Form 175 and will
include the SecurID[supreg] cards that will be required to place bids,
the Integrated Spectrum Auction System (ISAS) Bidder's Guide, and the
Auction Bidder Line phone number.
91. Qualified bidders that do not receive this registration mailing
will not be able to submit bids. Therefore, any qualified bidder that
has not received this mailing by noon on Thursday, March 1, 2007,
should call (717) 338-2868. Receipt of this registration mailing is
critical to participating in the auction, and each applicant is
responsible for
[[Page 68623]]
ensuring it has received all of the registration material.
92. In the event that SecurID[supreg] cards are lost or damaged,
only a person who has been designated as an authorized bidder, the
contact person, or the certifying official on the applicant's short-
form application may request replacement registration material.
Qualified bidders requiring the replacement of these items must call
Technical Support.
F. Remote Electronic Bidding
93. The Commission will conduct this auction over the Internet, and
telephonic bidding will be available as well. Qualified bidders are
permitted to bid electronically and telephonically. Each applicant
should indicate its bidding preference--electronic or telephonic--on
the FCC Form 175. In either case, each authorized bidder must have its
own SecurID[supreg] card, which the FCC will provide at no charge. Each
applicant with one authorized bidder will be issued two SecurID[supreg]
cards, while applicants with two or three authorized bidders will be
issued three cards. For security purposes, the SecurID[supreg] cards,
the telephonic bidding telephone number, and the Integrated Spectrum
Auction System (ISAS) Bidder's Guide are only mailed to the contact
person at the contact address listed on the FCC Form 175. Please note
that each SecurID[supreg] card is tailored to a specific auction;
therefore, SecurID[supreg] cards issued for other auctions or obtained
from a source other than the FCC will not work for Auction No. 70.
G. Mock Auction--March 5, 2007
94. All qualified bidders will be eligible to participate in a mock
auction on Monday, March 5, 2007. The mock auction will enable
applicants to become familiar with the FCC Auction System prior to the
auction. Participation by all bidders is strongly recommended. Details
will be announced by public notice.
IV. Auction Event
95. The first round of bidding for Auction No. 70 will begin on
Wednesday, March 7, 2007. The initial bidding schedule will be
announced in a public notice listing the qualified bidders, which is to
be released approximately 10 days before the start of the auction.
A. Auction Structure
i. Simultaneous Multiple Round Auction
96. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed to auction all construction permits in Auction No. 70 in a
single auction using the Commission's standard simultaneous multiple-
round (SMR) auction format. This type of auction offers every
construction permit for bid at the same time and consists of successive
bidding rounds in which eligible bidders may place bids on individual
construction permits. A bidder may bid on, and potentially win, any
number of construction permits. Typically, bidding remains open on all
construction permits until bidding stops on every construction permit,
unless a modified stopping rule is invoked.
97. Despite the suggestions made by one commenter, the Bureaus
therefore concluded that it is operationally feasible and appropriate
to auction these FM broadcast stations construction permits through a
simultaneous multiple round auction and the Bureaus declined to adopt
the commenter's proposal. Unless otherwise announced, bids will be
accepted on all construction permits in each round of the auction until
bidding stops on every construction permit.
ii. Eligibility and Activity Rules
98. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed that the amount of the upfront payment submitted by a bidder
would determine the initial (maximum) eligibility (as measured in
bidding units) for each bidder. The Bureaus received no comments
concerning the eligibility rule.
99. Accordingly, the Bureaus adopted the proposed use of upfront
payments to determine initial (maximum) eligibility (as measured in
bidding units) for Auction No. 70. The amount of the upfront payment
submitted by a bidder determines initial bidding eligibility, the
maximum number of bidding units on which a bidder may be active. As
noted earlier, each construction permit is assigned a specific number
of bidding units equal to the upfront payment listed in Attachment A of
the Auction No. 70 Procedures 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 of the construction permits selected on its FCC Form
175 as long as the total number of bidding units associated with those
construction permits does not exceed its current eligibility.
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 it may
wish to bid on or hold provisionally winning bids on in any single
round, and submit an upfront payment amount covering that total number
of bidding units. The total upfront payment does not affect the total
dollar amount a bidder may bid on any given construction permit.
100. In order to ensure that an 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. Bidders are required to be active on a specific
percentage of their current bidding eligibility during each round of
the auction.
101. A bidder's activity level in a round is the sum of the bidding
units associated with construction permits on which the bidder is
active. A bidder is considered active on a construction permit in the
current round if it is either the provisionally winning bidder at the
end of the previous bidding round or if it submits a bid in the current
round. The minimum required activity is expressed as a percentage of
the bidder's current eligibility, and increases by stage as the auction
progresses. Because these procedures have proven successful in
maintaining the pace of previous auctions, the Bureaus adopted them for
Auction No. 70. 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 or
eliminating the bidder's ability to place bids in the auction.
iii. Auction Stages
102. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed to conduct the auction in two stages and employ an activity
rule. The Bureaus further proposed that, in each round of Stage One, a
bidder desiring to maintain its current bidding eligibility would be
required to be active on construction permits representing at least 75
percent of its current bidding eligibility. Finally, the Bureaus
proposed that in each round of Stage Two, a bidder desiring to maintain
its current bidding eligibility would be required to be active on at
least 95 percent of its current bidding eligibility. The Bureaus also
invited comment on conducting the auction with a single stage that
would use an activity requirement of 100 percent. The Bureaus received
no comments on any of these proposals.
103. The Bureaus adopted their proposals for the activity rules and
stages, while reserving the discretion to further alter the activity
percentages
[[Page 68624]]
before and/or during the auction. As explained further in the Auction
No. 70 Procedures Public Notice, during Stage One, reduced eligibility
for the next round will be calculated by multiplying the bidder's
current round activity (the sum of bidding units of the bidder's
provisionally winning bids and bids during the current round) by four-
thirds (\4/3\). During Stage Two, reduced eligibility for the next
round will be calculated by multiplying the bidder's current round
activity (the sum of bidding units of the bidder's provisionally
winning bids and bids during the current round) by twenty-nineteenths
(\20/19\). Because the procedures have proven successful in maintaining
the proper pace in previous auctions, the Bureaus adopted them for
Auction No. 70.
104. Failure by a bidder to maintain the required activity level
will result in a reduction in the bidder's bidding eligibility in the
next round of bidding unless an activity rule waiver is used, if any
remain. Because activity requirements increase in Stage Two, bidders
must carefully check their activity during the first round following a
stage transition to ensure that they are meeting the increased activity
requirement. This is especially critical for bidders that have
provisionally winning bids and do not plan to submit new bids. In past
auctions, some bidders have inadvertently lost bidding eligibility or
used an activity rule waiver because they did not re-verify their
activity status at stage transitions. Bidders may check their activity
against the required activity level by logging in to the FCC Auction
System.
iv. Stage Transitions
105. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed that the auction would generally advance to the next stage
(i.e., from Stage One to Stage Two) when the auction activity level, as
measured by the percentage of bidding units receiving new provisionally
winning bids, is approximately 20 percent or lower for three
consecutive rounds of bidding. The Bureaus further proposed that the
Bureaus would retain the discretion to change stages unilaterally by
announcement during the auction. This determination, the Bureaus
proposed, would be based on a variety of measures of bidder activity,
including, but not limited to, the auction activity level, the
percentages 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. The Bureaus received no comments on this issue.
106. The Bureaus believed that these stage transition rules, having
proven successful in prior auctions, are appropriate for use in Auction
No. 70. Thus, the Bureaus adopted their proposal. The auction will
start in Stage One and will generally advance to Stage Two when, in
each of three consecutive rounds of bidding, the provisionally winning
bids have been placed on 20 percent or less of the construction permits
being auctioned (as measured in bidding units). In addition, the
Bureaus will retain the discretion to regulate the pace of the auction
by announcement.
v. Activity Rule Waivers
107. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed that each bidder in the auction be provided with three
activity rule waivers. The Bureaus received no comments on this issue.
The Bureaus adopted their proposal that each bidder be provided three
activity rule waivers.
108. Bidders may use an activity rule waiver in any round during
the course of the auction. Use of an activity rule waiver preserves the
bidder's current bidding eligibility despite the bidder's activity in
the current round being below the required minimum activity 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
applied proactively by the bidder (a proactive waiver) or applied
automatically by the FCC Auction System (an automatic waiver) 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.
109. 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) There
are no activity rule waivers available; or (2) the bidder overrides the
automatic application of a waiver by reducing eligibility. If a bidder
has no waivers remaining and does not satisfy the activity requirement,
the FCC Auction System will permanently reduce the bidder's
eligibility, possibly curtailing or eliminating the bidder's ability to
place additional bids in the auction.
110. A bidder with insufficient activity that wants to reduce its
bidding eligibility rather than use an activity rule waiver must
affirmatively override the automatic waiver mechanism during the
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.
Once eligibility has been reduced, a bidder will not be permitted to
regain its lost bidding eligibility even if the round has not yet
closed.
111. Finally, 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 waiver (using the APPLY
WAIVER function in the FCC Auction System) during a bidding round in
which no bids are submitted, the auction will remain open and the
bidder's eligibility will be preserved. However, an automatic waiver
applied by the FCC Auction System in a round in which there are no new
bids or proactive waivers 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.
vi. Auction Stopping Rules
112. For Auction No. 70, the Bureaus proposed to employ a
simultaneous stopping rule approach. The Bureaus also sought comment on
a modified version of the simultaneous stopping rule (modified 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 or submits any new bids on any construction permit on 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.
113. The Bureaus further proposed retaining the discretion to keep
the auction open even if no new bids or proactive waivers are submitted
in a round. In this event, the effect will be the same as if a bidder
had applied a waiver. Thus, the activity rule will apply as usual, and
a bidder with insufficient activity will either use an activity rule
waiver (if it has any left) or lose bidding eligibility.
114. In addition, the Bureaus proposed that the Bureaus reserve the
right to declare that the auction will end
[[Page 68625]]
after a specified number of additional rounds (special stopping rule).
If the Bureaus invoke this special stopping rule, they will accept bids
in the specified final round(s) and the auction will close.
115. The Bureaus proposed to exercise these options only in
circumstances such as where the auction is proceeding very slowly,
where there is minimal overall bidding activity or where it appears
likely that the auction will not close within a reasonable period of
time. The Bureaus noted that 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 amount of the minimum bid increments for the limited
number of construction permits where there is still a high level of
bidding activity.
116. The Bureaus received no comments on the proposals about
stopping rules. The Bureaus found that the proposed stopping rules are
appropriate for Auction No. 70, because experience in prior auctions
demonstrates that these stopping rules balance interests of
administrative efficiency and maximum bidder participation. Therefore,
the Bureaus adopted the stopping rule proposals made in the Auction No.
70 Comment Public Notice. Auction No. 70 will begin under the
simultaneous stopping rule approach, and the Bureaus will retain the
discretion to employ the other versions of the stopping rule. Moreover,
the Bureaus will retain the discretion to use the modified stopping
rule with or without prior announcement during the auction.
vii. Auction Delay, Suspension, or Cancellation
117. Because the Bureaus approach to notification of delay during
an auction has proven effective in resolving exigent circumstances in
previous auctions, the Bureaus adopted their proposal 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 conduct of competitive bidding. Network
interruption may cause the Bureaus to delay or suspend the auction. The
Bureaus, in their sole discretion, may elect to resume the auction
starting from the beginning of the current round, resume the auction
starting from some previous round, or cancel the auction in its
entirety. The Bureaus emphasized 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.
B. Bidding Procedures
i. Round Structure
118. The initial schedule of bidding rounds will be announced in
the public notice listing the qualified bidders, which is released
approximately 10 days before the start of the auction. Each bidding
round is followed by the release of round results. Multiple bidding
rounds may be conducted in a given day.
119. 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.
ii. Reserve Price and Minimum Opening Bids
120. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed to establish minimum opening bids for Auction No. 70,
reasoning that a minimum opening bid, successfully used in other
broadcast auctions, is a valuable tool, effectively regulating the pace
of the auction. Specifically, a minimum opening bid was proposed for
each construction permit listed in Attachment A of the Auction No. 70
Procedures Public Notice. The minimum opening bid was determined by
taking into account various factors relating to the efficiency of the
auction and the potential value of the spectrum, including the type of
service and class of facility offered, market size, population covered
by the proposed FM broadcast facility, industry cash flow data, and
recent broadcast transactions. The Bureaus sought comment on the
proposed minimum opening bids. In the alternative, the Bureaus sought
comment on whether, consistent with 47 U.S.C. 309(j), the public
interest would be served by having no minimum opening bid or reserve
price.
121. A commenter sought to reduce the minimum opening bid amount
for MM-FM 620-A, Ephraim, Wisconsin, Channel 295A. The Bureaus were
persuaded that lowering the minimum opening bid amount for Ephraim,
Wisconsin, Channel 295A, to $5,000 would serve the public interest, and
adopted this change.
122. The Bureaus concluded that the proposed minimum opening bid
amounts with the exception of Ephraim, Wisconsin, are appropriate, and
the Bureaus adopted those proposed amounts. The Bureaus did not receive
any comments in response to the proposal in the Auction No. 70 Comment
Public Notice that the Bureaus would retain the discretion to lower the
minimum opening bid amounts. Thus, the Bureaus adopted this proposal.
The minimum opening bid amounts the Bureaus adopted for Auction No. 70
are reducible at the discretion of the Bureaus. The Bureaus emphasized,
however, that such discretion will be exercised, if at all, sparingly
and early in the auction, i.e., before bidders lose all waivers and
begin to lose substantial eligibility. During the course of the
auction, the Bureaus will not entertain requests to reduce the minimum
opening bid amount on specific construction permits. The Bureaus noted
that effectively the minimum opening bid amounts operate as reserve
prices.
123. The specific minimum opening bid amounts for each construction
permit available in Auction No. 70 are set forth in Attachment A of the
Auction No. 70 Procedures Public Notice.
iii. Bid Amounts
124. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed that in each round, eligible bidders be able to place a bid on
a given construction permit in any of nine different amounts. Under the
proposal, the FCC Auction System interface will list the nine
acceptable bid amounts for each construction permit. Contrary to the
suggestion of one commenter that, as an alternative to using large
minimum opening bids, the Commission increase the number of acceptable
bid amounts so that the maximum acceptable bid amount is three times
higher than the current bid, the Bureaus decided that the minimum
opening bid amounts and the number of additional bid amounts that the
Bureaus have established for this auction should help ensure that the
bidding moves at a sufficient pace and will help promote an efficient
outcome. Based on experience in prior auctions, the Bureaus adopted
this proposal.
125. The first of the nine acceptable bid amounts is called the
minimum acceptable bid amount. 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
[[Page 68626]]
provisionally winning bid for a permit, the minimum acceptable bid
amount will be calculated by multiplying the provisionally winning bid
amount times one plus the minimum acceptable bid percentage. For
example, if the minimum acceptable bid percentage is 10 percent, the
minimum acceptable bid amount will equal (provisionally winning bid
amount) * (1.10). The Bureaus will round the result using its standard
rounding procedures.
126. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed to use a minimum acceptable bid percentage of 10 percent. The
Bureaus did not receive any comments on this proposal. Experience in
the previous FM auctions provides assurance that a bid increment
percentage of 10 percent is sufficient to ensure active bidding.
Therefore, the Bureaus will begin the auction with a minimum acceptable
bid percentage of 10 percent.
127. The eight additional bid amounts are calculated using the
minimum acceptable bid amount and a bid increment percentage. The first
additional acceptable bid amount equals the minimum acceptable bid
amount times one plus the bid increment percentage, rounded. If, for
example, 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. The Bureaus will round the
results of these calculations using its standard rounding procedures.
Note that the bid increment percentage need not be the same as the
minimum acceptable bid percentage.
128. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed to use a bid increment percentage of 10 percent. The Bureaus
received no comment on this issue. Believing that a bid increment
percentage of 10 percent will give bidders the flexibility to speed up
the pace of the auction, if appropriate, the Bureaus therefore adopted
their proposal, and will begin the auction with a bid increment
percentage of 10 percent.
129. The Bureaus did not receive any comments on their proposal to
retain the discretion to change the minimum acceptable bid amounts, the
minimum acceptable bid percentage, 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.
iv. Provisionally Winning Bids
130. At the end of each bidding round, a provisionally winning bid
will be determined based on the highest bid amount received for each
construction permit. 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. Provisionally
winning bids at the end of the auction become the winning bids. Bidders
are reminded that provisionally winning bids count toward activity for
purposes of the activity rule.
131. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed to use a random number generator to select a single
provisionally winning bid in the event of identical high bid amounts
being submitted on a construction permit in a given round (i.e., tied
bids). No comments were received on this proposal. Therefore, the
Bureaus adopted their proposal.
132. A pseudo-random number generator based on the L'Ecuyer
algorithms will be used to assign a random number to each bid. The tied
bid with the highest random number wins the tiebreaker, and becomes the
provisionally winning bid. The remaining eligible bidders, as well as
the provisionally winning bidder, can submit higher bids in subsequent
rounds. However, if the auction were to end with no other bids being
placed, the winning bidder would be the one that placed the selected
provisionally winning bid.
v. Bidding
133. During a round, a bidder may submit bids for as many
construction permits as it wishes (providing that it is eligible to
bid), remove bids placed in the current bidding round, or permanently
reduce eligibility. Bidders also have the option of submitting and
removing multiple bids during a round. If a bidder submits multiple
bids for a single construction permit in the same round, the system
takes the last bid entered as that bidder's bid for the round. Bidders
should note that the bidding units associated with construction permits
for which the bidder has removed its bid do not count towards the
bidder's current activity.
134. All bidding will take place remotely either through the FCC
Auction System or by telephonic bidding. There will be no on-site
bidding during Auction No. 70. Please note that telephonic bid
assistants are required to use a script when entering bids placed by
telephone. Telephonic bidders are therefore reminded to allow
sufficient time to bid by placing their calls well in advance of the
close of a round. Normally, five to ten minutes are necessary to
complete a telephonic bid submission.
135. A bidder's ability to bid on specific construction permits is
determined by two factors: (1) The construction permits selected on the
bidder's FCC Form 175 and (2) the bidder's eligibility. The bid
submission screens will allow bidders to submit bids on only those
construction permits the bidder selected on its FCC Form 175.
136. In order to access the bidding function of the FCC Auction
System, bidders must be logged in during the bidding round using the
passcode generated by the SecurID[supreg] card and a personal
identification number (PIN) created by the bidder. Bidders are strongly
encouraged to print a round summary for each round after they have
completed all of their activity for that round.
137. In each round, eligible bidders will be able to place bids on
a given construction permit in any of nine different amounts, if the
bidder has sufficient eligibility to place a bid on the particular
construction permit. For each construction permit, the FCC Auction
System will list the nine acceptable bid amounts in a drop-down box.
Bidders use the drop-down box to select from among the acceptable bid
amounts. The FCC Auction System also includes an upload function that
allows bidders to upload text files containing bid information.
138. Until a bid has been placed on a construction permit, the
minimum acceptable bid amount for that construction permit will be
equal to its minimum opening bid amount. Once there are bids on a
construction permit, minimum acceptable bids for a construction permit
for the following round will be determined.
vi. Bid Removal
139. In the Auction No. 70 Comment Public Notice, the Bureaus
proposed bid removal procedures. Before the close of a bidding round, a
bidder has the option of removing any bids placed in that round. By
using the REMOVE BIDS function in the FCC Auction System, a bidder may
effectively unsubmit any bid placed within that round. A bidder
removing a bid placed in the same round is not subject to withdrawal
[[Page 68627]]
payments. Removing a bid will affect a bidder's activity for the round
in which it is removed, i.e., a bid that is removed does not count
toward bidding activity. Once a round closes, a bidder may no longer
remove a bid. The Bureaus received no comments on the issue of bid
removals. To enhance bidder flexibility during the auction, the Bureaus
adopted their proposed procedures concerning bid removals for Auction
No. 70.
vii. Bid Withdrawal
140. Once a round closes, a bidder may no longer remove a bid. In
the Auction No. 70 Comment Public Notice, the Bureaus proposed bid
withdrawal procedures. The Bureaus proposed to prohibit bidders from
withdrawing any bids after the round in which bids were placed has
closed. This proposal was made in recognition of the site-specific
nature and wide geographic dispersion of the permits available in this
auction. As an alternative, the Bureaus sought comment on whether to
permit each bidder to withdraw provisionally winning bids in no more
than one round during the course of the auction.
141. Experience with auctions generally, and with past FM auctions
in particular, convinces the Bureaus that bid withdrawals are
unnecessary in FM broadcast auctions. Because of the stand-alone nature
of FM facilities, it is not necessary for bidders to aggregate
facilities being offered in the same FM auction in order to realize
full value from those facilities, or to put the spectrum to effective
and efficient use. On the other hand, evidence suggests that some
bidders may have used the bid withdrawal mechanism improperly to keep
new facilities out of the hands of competitors, thus delaying
implementation of new service. Accordingly, the Bureaus adopted their
proposal prohibiting bid withdrawals in FM Auction No. 70. Bidders are
cautioned to select bid amounts carefully because no bid withdrawals
will be allowed in Auction No. 70, even if a bid was mistakenly or
erroneously made.
viii. Round Results
142. Bids placed during a round will not be made public until the
conclusion of that round. After a round closes, the Bureaus will
compile reports of all bids placed, current provisionally winning bids,
new minimum acceptable bid amounts for the following round, whether the
construction permit is FCC held, and bidder eligibility status (bidding
eligibility and activity rule waivers), and post the reports for public
access. Reports reflecting bidders' identities for Auction No. 70 will
be available before and during the auction. Thus, bidders will know in
advance of this auction the identities of the bidders against which
they are bidding.
ix. Auction Announcements
143. The Commission will use auction announcements to announce
items such as schedule changes and stage transitions. All auction
announcements will be available by clicking a link in the FCC Auction
System.
V. Post-Auction Procedures
A. Down Payments
144. After bidding has ended, the Commission will issue a public
notice declaring the auction closed and identifying winning bidders,
down payments and final payments due.
145. Within ten business days after release of the auction closing
notice, each winning bidder must submit sufficient funds (in addition
to its upfront payment) to bring its total amount of money on deposit
with the Commission for Auction No. 70 to 20 percent of the net amount
of its winning bids (gross bids less any applicable new entrant bidding
credits).
B. Final Payments
146. Recognizing the public benefit of maintaining a consistent set
of auction procedures across the various auctionable services, in the
CSEA/Part 1 Report and Order, 71 FR 6214, February 7, 2006, the
Commission recently conformed the broadcast final payment procedures to
the analogous part 1 requirements. Specifically, the part 1 rules
provide that, unless otherwise specified by public notice, auction
winners are required to pay the balance of their winning bids in a lump
sum within ten business days following the release of a public notice
establishing the payment deadline. In recent spectrum auctions, the
Commission has required each winning bidder to submit the balance of
the net amount of its winning bid(s) within ten business days after the
deadline for submitting down payments. Consistent with this approach,
in the Auction No. 70 Comment Public Notice, the Bureaus announced that
for this auction each winning bidder will be required to submit the
balance of the net amount of its winning bids within 10 business days
after the deadline for submitting down payments.
C. Long-Form Application
147. Within thirty days after the release of the auction closing
notice, winning bidders must electronically submit a properly completed
FCC Form 301, Application for FM Construction Permit, and required
exhibits for each construction permit won through Auction No. 70.
Winning bidders claiming new entrant status must include an exhibit
demonstrating their eligibility for the bidding credit. Further filing
instructions will be provided to auction winners at the close of the
auction.
D. Default and Disqualification
148. Any winning bidder that defaults or is disqualified after the
close of the auction (i.e., fails to remit the required down payment
within the prescribed period of time, fails to submit a timely long-
form application, fails to make full payment, or is otherwise
disqualified) will be subject to the payments prescribed in 47 CFR
1.2104(g)(2). The payments include both a deficiency payment, equal to
the difference between the amount of the bidder's bid and the amount of
the winning bid the next time a construction permit covering the same
spectrum is won in an auction, plus an additional payment equal to a
percentage of the defaulter's bid or of the subsequent winning bid,
whichever is less. Pursuant to recent modifications to the rule
governing default payments, the percentage of the applicable bid to be
assessed as an additional payment for defaults in a particular auction
is established in advance of the auction. Accordingly, in the Auction
No. 70 Comment Public Notice, the Bureaus proposed to set the
additional default payment for the auction of these FM broadcast
construction permits at twenty percent (20%) of the applicable bid. The
Bureaus sought comment on their proposal. No comments were received on
this proposal. Based on experience and the record before the Bureaus,
the additional default payment for this auction of FM broadcast
construction permits was set at twenty percent (20%) of the applicable
bid.
149. Finally, the Bureaus note that in the event of a default, the
Commission may re-auction the construction permit or offer it to the
next highest bidder (in descending order) at its final bid amount. In
addition, if a default or disqualification involves gross misconduct,
misrepresentation, or bad faith by an applicant, the Commission may
declare the applicant and its principals ineligible to bid in future
auctions, and may take any other action that it deems necessary,
including institution of proceedings to revoke any existing
authorizations held by the applicant.
[[Page 68628]]
E. Refund of Remaining Upfront Payment Balance
150. All applicants that submit upfront payments but after the
close of the auction are not winning bidders for a construction permit
in Auction No. 70 may be entitled to a refund of their remaining
upfront payment balance after the conclusion of the auction. All
refunds will be returned to the payer of record, as identified on the
FCC Form 159, unless the payer submits written authorization
instructing otherwise.
151. Bidders that drop out of the auction completely may be
eligible for a refund of their upfront payments before the close of the
auction. Qualified bidders that have exhausted all of their activity
rule waivers and have no remaining bidding eligibility may also be
eligible for a refund of their upfront payment before the close of the
auction. Instructions for seeking refunds may be found in the Auction
No. 70 Procedures Public Notice.
Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. E6-20006 Filed 11-24-06; 8:45 am]
BILLING CODE 6712-01-P