[Federal Register: November 19, 2007 (Volume 72, Number 222)]
[Notices]
[Page 65022-65023]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19no07-47]
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FEDERAL COMMUNICATIONS COMMISSION
[AU Docket No. 07-157; Report No. AUC-07-73-D (Auctions 73 and 76); DA
07-4514]
Auction of 700 MHz Band Licenses Revised Procedure for Auctions
73 and 76; Additional Default Payment for D Block Set at Ten Percent of
Winning Bid Amount
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: This document announces a revised procedure for the upcoming
auction(s) of 700 MHz Band licenses scheduled to begin on January 24,
2008 (Auctions 73 and 76), specifically setting the additional default
payment percentage at ten percent for the D Block license, and provides
further guidance regarding negotiation of the Network Sharing Agreement
between the winning bidder of D Block license and the new national
Public Safety Broadband Licensee.
FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau,
Auctions Spectrum and Access Division: For legal questions: William
Huber or Scott Mackoul 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 Auctions 73 and 76
Revised Procedure Public Notice released on November 2, 2007. The
complete text of the Auctions 73 and 76 Revised Procedure Public
Notice, 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 Auctions 73 and 76 Revised
Procedure 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 07-
4514 for the Auctions 73 and 76 Revised Procedure Public Notice. The
Auctions 73 and 76 Revised Procedure Public Notice and related
documents are also available on the Internet at the Commission's Web
site: http://wireless.fcc.gov/auctions/73/.
1. The Wireless Telecommunications Bureau (Bureau) announces a
revised procedure for the upcoming auction(s) of licenses for services
in the 700 MHz Band scheduled to begin on January 24, 2008 (Auctions 73
and 76). Specifically, the Bureau sets the additional default payment
percentage at ten percent for the D Block license. The additional
default payment percentage amount for licenses in the A, B, and E
Blocks remains at fifteen percent, as previously announced. The Chiefs
of the Public Safety and Homeland Security Bureau and the Wireless
Telecommunications Bureau also provide further guidance as to how they
intend to exercise their delegated authority in the event that disputes
arise during the negotiation of the terms of the Network Sharing
Agreement between the winning bidder for the D Block license and the
new national Public Safety Broadband Licensee.
2. Any winning bidder that defaults or is disqualified after the
close of an auction is liable for a default payment under Sec.
1.2104(g)(2) of the Commission's rules. This payment consists of a
deficiency payment, equal to the difference between the amount of the
bidder's bid and the amount of the winning bid the next time a license
covering 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. In the 700 MHz Auction
Procedures Public Notice, 72 FR 62360, November 2, 2007, the Bureau set
the additional default payment percentage at fifteen percent of the
defaulted bid for all licenses in blocks that are not subject to
package bidding, including the D Block.
3. In establishing the percentage used to calculate the additional
default payment, the Bureau seeks to deter defaults and thereby promote
the public interest in rapid deployment of new wireless services. As
the Bureau noted in the 700 MHz Auction Procedures Public Notice, the
public interest costs of a default on the D Block are likely to be high
given the role of the D Block in the establishment of a public/private
partnership for the provision of public safety broadband services. At
the same time, the Bureau recognizes that factors that may contribute
to a default by a winning bidder for the D Block may be different in
nature from those affecting winning bidders in other blocks. For
example, the D Block winning bidder must negotiate and enter into a
Commission-approved Network Sharing Agreement with the new national
Public Safety Broadband Licensee consistent with terms and procedures
set forth in the 700 MHz Second Report and Order, 72 FR 48814, August
24, 2007.
4. In the 700 MHz Auction Comment Public Notice, 72 FR 48272,
August 23, 2007, the Bureau proposed adopting a fifteen percent
additional default payment for the A, B, D and E Blocks. The Bureau
made this proposal with respect to the A, B, and E Blocks because the
possibility that no licenses in those blocks will be assigned if the
reserve price is not met may give bidders an additional incentive to
bid on a license and later default (after determination that the
reserve price has been met), in order to help ensure that the reserve
price is met and other initial licenses in the block are assigned. In
contrast, the Bureau made its proposal with respect to the D Block, for
which there is a single nationwide license which will not be assigned
unless the D Block reserve price is met, because a default by the
winning bidder will delay the especially time-sensitive process of
establishing a public/private partnership for the provision of public
safety broadband services. As noted in the 700 MHz Auction Procedures
Public Notice, none of the parties responding to the 700 MHz Auction
Comment Public Notice addressed the specific percentage for the
additional default payment for licenses in any of the blocks.
5. On further review, the Bureau concludes that a slightly lower
percentage should be used for the additional default payment in the
case of the D Block license. The Commission must balance the public
interest in avoiding defaults on winning bids against the risk of
deterring otherwise qualified bidders from participating in the
auction. A winning bidder of the D Block license may be presented with
unique issues that may result in the bidder defaulting on its bid. The
potential impact of those issues is difficult to quantify, and may vary
from bidder to bidder. On further review, the Bureau concludes that the
additional default percentage on the D Block
[[Page 65023]]
should be lower than it is with respect to the A, B, and E Blocks,
where the structure of the auction actually may provide an incentive
for bidders to default. Accordingly, for the D Block license the Bureau
sets the additional default payment percentage at ten percent of the
defaulted bid or of the subsequent winning bid, whichever is less.
While the Bureau remains mindful that a default could harm the public
interest by delaying the deployment of service to the public safety
community as well as to consumers, the Bureau concludes that the ten
percent additional payment used in several recent auctions serves as a
sufficient deterrent to defaults for the D Block.
6. In the 700 MHz Second Report and Order, the Commission delegated
to the Chiefs of the Public Safety and Homeland Security Bureau and the
Wireless Telecommunications Bureau (Bureaus) the authority to take
certain actions jointly in the public interest in the event of a
dispute between the winning bidder for the D Block license and the
Public Safety Broadband Licensee at the end of the six-month
negotiation period for the Network Sharing Agreement (NSA), or on their
own motion at any time. In particular, the Commission indicated that
these actions may include but are not limited to one or more of the
following: (1) Granting additional time for negotiation; (2) issuing a
decision on the disputed issues and requiring the submission of a draft
agreement consistent with that decision; (3) directing the parties to
further brief the remaining issues in full for immediate Commission
decision; and/or (4) immediate denial of the long-form application
filed by the winning bidder for the D Block license.
7. The Bureaus believe that it is in the public interest to provide
potential bidders for the D Block license, as well as the public safety
community, with further guidance as to how the Bureaus intend to
exercise their delegated authority in the event that disputes arise
with respect to the negotiation of the terms of the NSA. As a result,
the Bureaus announce that they will not exercise their authority for
immediate denial of the long-form application filed by the winning
bidder for the D Block license, as a result of any dispute over the
negotiation of the terms of the NSA, until the Bureaus take one of two
steps: (1) Issuing a decision on the disputed issues and requiring the
submission of a draft agreement consistent with their decision; or (2)
referring the issues to the Commission for an immediate decision and
the Commission issues such a decision.
Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. E7-22501 Filed 11-16-07; 8:45 am]
BILLING CODE 6712-01-P