[Federal Register: May 12, 2009 (Volume 74, Number 90)]
[Notices]
[Page 22166-22170]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12my09-40]
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FEDERAL COMMUNICATIONS COMMISSION
[AU Docket No. 09-56; DA 09-843]
Auction of FM Broadband Radio Service (BRS) Licenses Scheduled
for October 27, 2009; Comment Sought on Competitive Bidding Procedures
for Auction 86
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: This document announces the auction of unassigned Broadband
Radio Service (BRS) licenses scheduled to commence on October 27, 2009
(Auction 86). This document also seeks comments on competitive bidding
procedures for Auction 86.
DATES: Comments are due on or before May 15, 2009, and reply comments
are due on or before May 29, 2009.
ADDRESSES: Comments and reply comments must be identified by AU Docket
No. 09-56. Comments may be filed electronically using the Internet by
accessing the Federal Communications Commission's Electronic Comment
Filing System (ECFS) at http://www.fcc.gov/cgb/ecfs. Filers should
follow the instructions provided on the Web site for submitting
comments. The Wireless Telecommunications Bureau requests that a copy
of all comments and reply comments be submitted electronically to the
following address: auction86@fcc.gov. In addition, comments and reply
comments may be submitted by any of the following methods:
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. Filings can be sent by
hand or messenger delivery, by commercial overnight courier, or by
first-class or overnight U.S. Postal Service mail (although the Bureaus
continue to experience delays in receiving U.S. Postal Service mail).
All filings must be addressed to the Commission's Secretary, Attn: WTB/
ASAD, Office of the Secretary, Federal Communications Commission.
The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. Eastern Time (ET). All hand
deliveries must be held together with rubber bands or fasteners.
Commercial overnight mail (other than U.S. Postal Service Express Mail
and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol
Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
People With Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or telephone: 202-
418-0530 or TTY: 202-418-0432.
FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau,
Auctions and Spectrum Access Division: For auction legal questions:
Sayuri Rajapakse at (202) 418-0660. For general auction questions: Jeff
Crooks at (202) 418-0660 or Lisa Stover at (717) 338-2868; Broadband
Division: For BRS service rule questions: Nancy Zaczek (legal) or
Stephen Zak (technical) at (202) 418-2487.
SUPPLEMENTARY INFORMATION: This is a summary of the Auction 86 Comment
Public Notice released on April 24, 2009. The complete text of the
Auction 86 Comment Public Notice, including Attachments A and B, and
related Commission documents, are available for public inspection and
copying from 8 a.m. to 4:30 p.m. ET Monday through Thursday or from 8
a.m. to 11:30 a.m. ET on Fridays in the FCC Reference Information
Center, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The
Auction 86 Comment Public Notice and related Commission documents also
may be purchased from the Commission's duplicating contractor, Best
Copy and Printing, Inc. (BCPI), 445 12th Street, SW., Room CY-B402,
Washington, DC 20554, telephone 202-488-5300, facsimile 202-488-5563,
or you may contact BCPI at its Web site: http://www.BCPIWEB.com. When
ordering documents from BCPI, please provide the appropriate FCC
document number, for example, DA 09-843. The Auction 86 Comment Public
Notice and related documents also are available on the Internet at the
Commission's website: http://wireless.fcc.gov/auctions/86/, or by using
the search function for AU Docket No. 09-56 on the ECFS Web page at
http://www.fcc.gov/cgb/ecfs/.
I. Licenses To Be Offered in Auction 86
1. The licenses to be offered in Auction 86 consist of the
available spectrum in 78 BRS service areas. BRS service areas are BTAs
or additional service areas similar to BTAs adopted by the Commission.
Overlay licenses for 75 of the BTAs originally offered in Auction 6 are
available now as a result of default, cancellation, or termination.
This auction will also include three
[[Page 22167]]
additional licenses for BRS service areas in the Gulf of Mexico. A
complete list of licenses available for Auction 86 is included as
Attachment A of the Auction 86 Comment Public Notice.
2. Where unencumbered, the licenses to be auctioned consist of 76.5
megahertz of spectrum at 2496-2502, 2602-2614, 2614-2615, 2616-2618,
and 2618-2673.5 MHz. The Bureau notes that the licenses issued pursuant
to this auction will be issued pursuant to the post-transition band
plan contained in 47 CFR 27.5(i)(2). A table showing the channelization
of this spectrum is included as Attachment B of the Auction 86 Comment
Public Notice.
3. Incumbency Issues. There are pre-existing BRS incumbent
licenses. The service area for each of those site-based licenses is a
35-mile circle centered at the station's reference coordinates, and is
bounded by the chord(s) drawn between the intersection points of the
licensee's previous protected service area and those of respective
adjacent market, co-channel licensees. Any licenses granted pursuant to
this auction will not include the geographic service areas of any
overlapping, co-channel incumbent licenses. If an incumbent license
cancels or is forfeited, however, the right to operate within that area
shall revert to the overlay licensee that holds the license for the BRS
service area that encompasses that BTA. BRS incumbent licenses are
entitled to interference protection in accordance with the applicable
technical rules.
4. In addition, on the E and F channel groups, grandfathered
Educational Broadband Service licenses originally issued on those
channels prior to 1983 may continue to operate indefinitely. Such
grandfathered EBS licenses must be protected in accordance with the
applicable technical rules.
5. Operations within the 2614-2618 MHz band are secondary to
adjacent channel operations.
6. Finally, in the 2496-2500 MHz band, BRS licensees must share the
band on a co-primary basis with the Code Division Multiple Access
Mobile Satellite Service, grandfathered Broadcast Auxiliary Service
stations, and grandfathered land mobile and microwave licenses licensed
under Parts 90 and 101 of the Commission's rules, respectively. In
addition, the 2400-2500 MHz band is allocated for use by Industrial,
Scientific, and Medical equipment under Part 18 of the Commission's
rules.
II. Bureau Seeks Comment on Auction Procedures
A. Auction Structure
i. Simultaneous Multiple-Round Auction Design
7. The Bureau proposed to auction all licenses included in Auction
86 using the Commission's standard simultaneous multiple-round auction
format. This type of auction offers every license for bid at the same
time and consists of successive bidding rounds in which eligible
bidders may place bids on individual licenses. Typically, bidding
remains open on all licenses until bidding stops on every license. The
Bureau seeks comment on this proposal.
ii. Anonymous Bidding
8. The Bureau proposes to conduct Auction 86 using certain
procedures for limited information disclosure or anonymous bidding.
Specifically, the Bureau proposes to withhold, until after the close of
bidding, public release of (1) Bidders' license selections on their
short-form applications (FCC Form 175), (2) the amounts of bidders'
upfront payments and bidding eligibility, and (3) information that may
reveal the identities of bidders placing bids and taking other bidding-
related actions.
9. The Bureau seeks comment on the details regarding our proposal
for implementation of anonymous bidding in Auction 86, and on
alternative proposals for anonymous bidding or other information
disclosure procedures.
iii. Bidding Rounds
10. Auction 86 will consist of sequential bidding rounds. The
initial bidding schedule will be announced in a public notice to be
released at least one week before the start of the auction.
11. The Commission will conduct Auction 86 over the Internet, and
telephonic bidding will be available as well. The toll-free telephone
number for the Auction Bidder Line will be provided to qualified
bidders.
12. The Bureau proposes to retain 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. Under this proposal, the Bureau may change
the amount of time for bidding rounds, the amount of time between
rounds, or the number of rounds per day, depending upon bidding
activity and other factors. The Bureau seeks comment on this proposal.
Commenters may wish to address the role of the bidding schedule in
managing the pace of the auction and the tradeoffs in managing auction
pace by bidding schedule changes, by changing the activity requirements
or bid amount parameters, or by using other means.
iv. Stopping Rule
13. For Auction 86, the Bureau proposes to employ a simultaneous
stopping rule approach. A simultaneous stopping rule means that all
licenses remain available for bidding until bidding closes
simultaneously on all licenses. More specifically, bidding will close
simultaneously on all licenses after the first round in which no bidder
submits any new bids, applies a proactive waiver, or withdraws any
provisionally winning bids. Thus, unless the Bureau announces
alternative stopping procedures, bidding will remain open on all
licenses until bidding stops on every license. Consequently, it is not
possible to determine in advance how long the auction will last.
14. Further, the Bureau proposes to retain the discretion to
exercise any of the following options during Auction 86: (1) Use a
modified version of the simultaneous stopping rule. The modified
stopping rule would close the auction for all licenses after the first
round in which no bidder applies a waiver, withdraws a provisionally
winning bid, or places any new bids on any license for which it is not
the provisionally winning bidder. Thus, absent any other bidding
activity, a bidder placing a new bid on a license for which it is the
provisionally winning bidder would not keep the auction open under this
modified stopping rule; (2) declare that the auction will end after a
specified number of additional rounds (special stopping rule). If the
Bureau invokes this special stopping rule, it will accept bids in the
specified final round(s) after which the auction will close; and (3)
keep the auction open even if no bidder submits any new bids, applies a
waiver, or withdraws any provisionally winning bids. In this event, the
effect will be the same as if a bidder had applied a waiver. The
activity rule, therefore, will apply as usual and a bidder with
insufficient activity will either lose bidding eligibility or use a
waiver.
15. The Bureau proposed to exercise these options only in certain
circumstances, for example, where the auction is proceeding unusually
slowly or quickly, there is minimal overall bidding activity, or it
appears likely that the auction will not close within a reasonable
period of time or will close
[[Page 22168]]
prematurely. Before exercising certain of these options, the Bureau is
likely to attempt to change the pace of the auction by, for example,
changing the number of bidding rounds per day and/or changing minimum
acceptable bids. The Bureau proposes to retain the discretion to
exercise any of these options with or without prior announcement during
the auction. The Bureau seeks comment on these proposals.
v. Information Relating to Auction Delay, Suspension, or Cancellation
16. For Auction 86, the Bureau proposes that, by public notice or
by announcement during the auction, the Bureau may delay, suspend, or
cancel the auction in the event of natural disaster, technical
obstacle, administrative or weather necessity, evidence of an auction
security breach or unlawful bidding activity, or for any other reason
that affects the fair and efficient conduct of competitive bidding. The
Bureau seeks comment on this proposal.
B. Auction Procedures
i. Upfront Payments and Bidding Eligibility
17. The Bureau proposes that the amount of the upfront payment
submitted by a bidder will determine the bidder's initial bidding
eligibility in bidding units. The Bureau proposes that each license be
assigned a specific number of bidding units equal to the upfront
payment listed in Attachment A of the Auction 86 Comment Public Notice.
18. The proposed number of bidding units for each license and
associated upfront payment amounts are listed in Attachment A. The
Bureau seeks comment on these proposals.
ii. Activity Rule
19. In order to ensure that the auction closes within a reasonable
period of time, an activity rule requires bidders to bid actively
throughout the auction, rather than wait until late in the auction
before participating. A bidder's activity in a round will be the sum of
the bidding units associated with any licenses upon which it places
bids during the current round and the bidding units associated with any
licenses for which it holds provisionally winning bids. Bidders are
required to be active on a specific percentage of their current bidding
eligibility during each round of the auction. Failure to maintain the
requisite activity level will result in the use of an activity rule
waiver, if any remain, or a reduction in the bidder's eligibility,
possibly curtailing or eliminating the bidder's ability to place
additional bids in the auction.
20. The Bureau proposes to divide the auction into at least two
stages, each characterized by a different activity requirement. The
auction will start in Stage One. The Bureau proposes to advance the
auction to the next stage by announcement during the auction. In
exercising this discretion, the Bureau will consider a variety of
measures of auction activity, including but not limited to the
percentage of licenses (as measured in bidding units) on which there
are new bids, the number of new bids, and the increase in revenue. The
Bureau seeks comment on these proposals.
iii. Activity Rule Waivers and Reducing Eligibility
21. Use of an activity rule waiver preserves the bidder's
eligibility despite the bidder's activity in the current round being
below the required minimum level. An activity rule waiver applies to an
entire round of bidding, not to particular licenses. Activity rule
waivers can be either proactive or automatic and are principally a
mechanism for bidders to avoid the loss of bidding eligibility in the
event that exigent circumstances prevent them from bidding in a
particular round.
22. The Bureau proposes that each bidder in Auction 86 be provided
with three activity rule waivers that may be used as set forth above at
the bidder's discretion during the course of the auction. The Bureau
seeks comment on this proposal.
iv. Reserve Price or Minimum Opening Bids
23. The Bureau proposes to establish minimum opening bid amounts
for Auction 86. The Bureau believes a minimum opening bid amount, which
has been used in other auctions, is an effective bidding tool for
accelerating the competitive bidding process. The Bureau does not
propose a separate reserve price for the licenses to be offered in
Auction 86. Specifically, for Auction 86, the Bureau proposes to
calculate minimum opening bid amounts on a license-by-license basis
using a formula based on bandwidth and license area population. The
Bureau seeks comment on this approach, and, whether, consistent with
Section 309(j), the public interest would be served by having no
minimum opening bid amount or reserve price.
v. Bid Amounts
24. The Bureau proposes that, in each round, eligible bidders be
able to place a bid on a given license using one or more pre-defined
bid amounts. Under this proposal, the FCC Auction System interface will
list the acceptable bid amounts for each license.
a. Minimum Acceptable Bids
25. The first of the acceptable bid amounts is called the minimum
acceptable bid amount. The minimum acceptable bid amount for a license
will be equal to its minimum opening bid amount until there is a
provisionally winning bid on the license. After there is a
provisionally winning bid for a license, the minimum acceptable bid
amount for that license will be equal to the amount of the
provisionally winning bid plus a percentage of that bid amount. In
general, the percentage will be higher for a license receiving many
bids than for a license receiving few bids. In the case of a license
for which the provisionally winning bid has been withdrawn, the minimum
acceptable bid amount will equal the second highest bid received for
the license.
26. The percentage of the provisionally winning bid used to
establish the minimum acceptable bid amount (the additional percentage)
is calculated at the end of each round, based on an activity index. The
activity index is a weighted average of (a) the number of distinct
bidders placing a bid on the license, and (b) the activity index from
the prior round. Specifically, the activity index is equal to a
weighting factor times the number of bidders placing a bid covering the
license in the most recent bidding round plus one minus the weighting
factor times the activity index from the prior round. The additional
percentage is determined as one plus the activity index times a minimum
percentage amount, with the result not to exceed a given maximum. The
additional percentage is then multiplied by the provisionally winning
bid amount to obtain the minimum acceptable bid for the next round. The
Bureau proposes initially to set the weighting factor at 0.5, the
minimum percentage at 0.1 (10%), and the maximum percentage at 0.3
(30%). Hence, at these initial settings, the minimum acceptable bid for
a license will be between ten percent and thirty percent higher than
the provisionally winning bid, depending upon the bidding activity for
the license.
b. Additional Bid Amounts
27. Any additional bid amounts are calculated using the minimum
[[Page 22169]]
acceptable bid amount and a bid increment percentage--more
specifically, by multiplying the minimum acceptable bid by one plus
successively higher multiples of the bid increment percentage. If, for
example, the bid increment percentage is ten percent, the calculation
of the first additional acceptable bid amount is (minimum acceptable
bid amount) * (1 + 0.05), or (minimum acceptable bid amount) * 1.05;
the second additional acceptable bid amount equals the minimum
acceptable bid amount times one plus two times the bid increment
percentage, or (minimum acceptable bid amount) * 1.1, etc. The Bureau
will round the results of these calculations and the minimum acceptable
bid calculations using the Bureau's standard rounding procedures. The
Bureau proposes to set the bid increment percentage at 0.05.
28. The Bureau seeks comment on whether to start with eight
additional bid amounts (for a total of nine bid amounts) or with fewer
or no additional bid amounts for Auction 86. In particular, commenters
should address the issue of additional bid amounts in light of
particular circumstances of Auction 86, including the nature of the
license inventory. The Bureau retains the discretion to change the
minimum acceptable bid amounts, the additional bid amounts, the number
of acceptable bid amounts, and the parameters of the formulas used to
calculate minimum acceptable bid amounts and additional bid amounts if
it determines that circumstances so dictate. Further, the Bureau
retains the discretion to do so on a license-by-license basis.
29. The Bureau also retains the discretion to limit (a) the amount
by which a minimum acceptable bid for a license may increase compared
with the corresponding provisionally winning bid, and (b) the amount by
which an additional bid amount may increase compared with the
immediately preceding acceptable bid amount. The Bureau seeks comment
on the circumstances under which it should employ such a limit, factors
it should consider when determining the dollar amount of the limit, and
the tradeoffs in setting such a limit or changing parameters of the
activity-based formula, such as changing the minimum percentage. If the
Bureau exercises this discretion, it will alert bidders by announcement
in the FCC Auction System. The Bureau seeks comment on the above
proposals.
vi. Provisionally Winning Bids
30. Provisionally winning bids are bids that would become final
winning bids if the auction were to close in that given round. At the
end of a bidding round, a provisionally winning bid for each license
will be determined based on the highest bid amount received for the
license. In the event of identical high bid amounts being submitted on
a license in a given round (i.e., tied bids), we will use a random
number generator to select a single provisionally winning bid from
among the tied bids. (Each bid is assigned a random number, and the
tied bid with the highest random number wins the tiebreaker.) The
remaining 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 provisionally winning bid. If any bids are received
on the license in a subsequent round, the provisionally winning bid
again will be determined by the highest bid amount received for the
license.
31. A provisionally winning bid will remain the provisionally
winning bid until there is a higher bid on the license at the close of
a subsequent round, unless the provisionally winning bid is withdrawn.
Bidders are reminded that provisionally winning bids count toward
activity for purposes of the activity rule.
vii. Bid Removal
32. For Auction 86, the Bureau proposes and seeks comment on the
following bid removal procedures. Before the close of a bidding round,
a bidder has the option of removing any bid placed in that round. By
removing selected bids in the FCC Auction System, a bidder may
effectively undo any of its bids placed within that round.
viii. Bid Withdrawal
33. A bidder may withdraw its provisionally winning bids using the
withdraw bids function in the FCC Auction System. A bidder that
withdraws its provisionally winning bid(s) is subject to the bid
withdrawal payment provisions of the Commission rules.
34. For Auction 86, the Bureau proposes to limit each bidder to
withdrawing provisionally winning bids in only one round during the
course of the auction. To permit a bidder to withdraw bids in more than
one round may encourage insincere bidding or the use of withdrawals for
anti-competitive purposes. The round in which withdrawals may be used
will be at the bidder's discretion, and there is no limit on the number
of provisionally winning bids that may be withdrawn during that round.
Withdrawals must be in accordance with the Commission's rules,
including the bid withdrawal payment provisions specified in 47 CFR
1.2104(g). The Bureau seeks comment on these bid withdrawal procedures.
C. Post-Auction Procedures
i. Establishing the Interim Withdrawal Payment Percentage
35. The Bureau seeks comment on the appropriate percentage of a
withdrawn bid that should be assessed as an interim withdrawal payment
in the event that a final withdrawal payment cannot be determined at
the close of the auction. Balancing the potential need for bidders to
use withdrawals to avoid winning incomplete combinations of licenses
with our interest in deterring abuses of our bidding procedures, the
Bureau proposes an interim bid withdrawal payment level of fifteen
percent for Auction 86.
36. In general, the Commission's rules provide that a bidder that
withdraws a bid during an auction is subject to a withdrawal payment
equal to the difference between the amount of the withdrawn bid and the
amount of the winning bid in the same or subsequent auction(s). If a
bid is withdrawn and no subsequent higher bid is placed and/or the
license is not won in the same auction, the final withdrawal payment
cannot be calculated until after the close of a subsequent auction in
which a higher bid for the license (or the equivalent to the license)
is placed or the license is won. When that final payment cannot yet be
calculated, the bidder responsible for the withdrawn bid is assessed an
interim bid withdrawal payment, which will be applied toward any final
bid withdrawal payment that is ultimately assessed. 47 CFR 1.2104(g)(1)
of the Commission rules requires that the percentage of the withdrawn
bid to be assessed as an interim bid withdrawal payment be between
three percent and twenty percent and that it be set in advance of the
auction.
37. The Commission has determined that the level of the interim
withdrawal payment in a particular auction will be based on the nature
of the service and the inventory of the licenses being offered. The
Commission has noted that it may impose a higher interim withdrawal
payment percentage to deter the anti-competitive use of withdrawals
when, for example, bidders likely will not need to aggregate the
licenses being offered in the auction, such as when few licenses are
offered that are on adjacent frequencies or in adjacent areas, or
[[Page 22170]]
when there are few synergies to be captured by combining licenses.
38. For Auction 86, it is not possible to combine licenses across
multiple frequency blocks in a given geographic area, and opportunities
for combining licenses in adjacent areas are somewhat limited, so there
is likely to be little need to use withdrawals to protect against
incomplete aggregations. Therefore, the Bureau proposes to establish
the percentage of the withdrawn bid to be assessed as an interim bid
withdrawal payment at fifteen percent for this auction. The Bureau
seeks comment on this proposal.
ii. Establishing the Additional Default Payment Percentage
39. Any winning bidder that, after the close of an auction,
defaults--by, for example, failing to remit the required down payment
within the prescribed period of time, to submit a timely long-form
application, or to make full payment--or is otherwise disqualified is
liable for a default payment under 47 CFR 1.2104(g)(2). 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.
40. As previously noted by the Commission, defaults weaken the
integrity of the auctions process and impede the deployment of service
to the public. Given the nature of the service and the inventory of the
licenses being offered in Auction 86, the Bureau believes that an
additional default payment percentage of fifteen percent will provide a
sufficient deterrent to defaults. Accordingly, the Bureau proposes an
additional default payment of fifteen percent of the relevant bid for
Auction 86 and seeks comment on this proposal.
III. Commission ex parte Rules
41. This proceeding has been designated as a permit-but-disclose
proceeding in accordance with the Commission's ex parte rules. Persons
making oral ex parte presentations are reminded that memoranda
summarizing the presentations must contain summaries of the substance
of the presentations and not merely a listing of the subjects
discussed. More than a one or two sentence description of the views and
arguments presented is generally required. Other rules pertaining to
oral and written ex parte presentations in permit-but-disclose
proceedings are set forth in 47 CFR 1.1206(b).
Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. E9-11076 Filed 5-11-09; 8:45 am]
BILLING CODE 6712-01-P