[Federal Register Volume 74, Number 102 (Friday, May 29, 2009)]
[Notices]
[Pages 25737-25744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12523]
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FEDERAL COMMUNICATIONS COMMISSION
[AU Docket No. 09-21; DA 09-810]
Auction of FM Broadcast Construction Permits Scheduled for
September 1, 2009; Notice and Filing Requirements, Minimum Opening
Bids, Upfront Payments, and Other Procedures for Auction 79
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 FM broadcast construction permits
(Auction 79). This document is intended to familiarize prospective
bidders with the procedures and minimum opening bids for the auction.
DATES: Applications to participate in Auction 79 must be filed prior to
6 p.m. Eastern Time (ET) on June 25, 2009. Bidding for permits in
Auction 79 is scheduled to begin on September 1, 2009.
FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau,
Auctions and Spectrum Access Division: For legal questions: Howard
Davenport or Lynne Milne at (202) 418-0660. For general auction
questions: Debbie Smith
[[Page 25738]]
or Linda Sanderson at (717) 338-2868. Media Bureau, Audio Division: For
licensing information and service rule questions: Lisa Scanlan or Tom
Nessinger at (202) 418-2700. To request materials in accessible formats
(braille, large print, electronic files or audio format) for people
with disabilities, send an e-mail to [email protected] 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 79
Procedures Public Notice, which was released on April 17, 2009. The
complete text of the Auction 79 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. ET Monday
through Thursday and 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 79 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, using document number DA 09-810 for the Auction
79 Procedures Public Notice. The Auction 79 Procedures Public Notice
and related documents are also available on the Internet at the
Commission's Web site: http://wireless.fcc.gov/auctions/79/.
I. General Information
A. Introduction
1. By this Public Notice, the Wireless Telecommunications Bureau
and the Media Bureau (collectively, the Bureaus) announced the
procedures and minimum opening bid amounts for the upcoming auction of
certain FM broadcast construction permits. This auction, which is
designated as Auction 79, is scheduled to commence on September 1,
2009. On February 27, 2009, the Bureaus released a public notice
seeking comment on competitive bidding procedures to be used in Auction
79. Interested parties submitted three comments and four reply comments
in response to the Auction 79 Comment Public Notice, 74 FR 10578, March
11, 2009.
i. Construction Permits To Be Offered in Auction 79
2. Auction 79 will offer 122 construction permits in the FM
broadcast service as listed in Attachment A of the Auction 79
Procedures Public Notice. The construction permits to be auctioned are
for 122 new FM allotments, and include construction permits for three
FM allotments that were defaulted on after a previous auction, and a
construction permit for one FM allotment that was offered but not sold
in Auctions 37 and 62. These construction permits are for vacant FM
allotments, reflecting FM channels assigned to the FM Table of
Allotments (Table), pursuant to the Commission's established rulemaking
procedures, and are designated for use in the indicated communities.
3. The Bureaus denied one commenter's request that the Bureaus add
to the Auction 79 inventory construction permits for two specified
vacant allotments, added to the Table October 10, 2008, as well as a
second commenter's request to add all new FM allotments approved in a
specified rulemaking proceeding. Further, the Bureaus explained that a
request for a low power television station allotment or construction
permit was beyond the scope of this proceeding, which is confined to
developing competitive bidding procedures for an FM auction.
4. Applicants may apply for any vacant FM allotment listed in
Attachment A of the Auction 79 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 submit a timely
upfront payment, will retain its status as an applicant in Auction 79
and will remain subject to the Commission's anti-collusion rules, but,
having purchased no bidding eligibility, will not be eligible to bid.
B. Rules and Disclaimers
i. Relevant Authority
5. 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 the Auction 79 Procedures
Public Notice and the Commission's decisions in proceedings regarding
competitive bidding procedures, application requirements, and
obligations of Commission licensees. The Commission may amend or
supplement the information contained in its public notices at any time.
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 and Compliance With Antitrust Laws
6. Applicants for Auction 79 are reminded that they remain subject
to the provisions of the Commission's anti-collusion rules, 47 CFR
1.2105(c) and 73.5002(d), against any communication, directly or
indirectly, about bids, bidding strategy, or the post-auction market
structure, until the down payment deadline after the auction, which
will be announced in a future public notice. This prohibition applies
to all applicants regardless of whether such applicants become
qualified bidders or actually bid. Applicants are also reminded that,
for purposes of this prohibition on certain communications, 47 CFR
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. The Auctions 79 Procedures Public Notice
contains additional guidance concerning the application of the anti-
collusion rules. Potential applicants are strongly encouraged to review
that guidance and seek additional information should they have any
questions.
7. If an applicant makes or receives a communication that appears
to violate the anti-collusion rule, it must report
[[Page 25739]]
such communication in writing to the Commission immediately, and in no
case later than five business days after the communication occurs. The
applicant's obligation to report any such communication continues
beyond the five-day period, even if the report is not made within the
five-day period. Parties reporting communications pursuant to 47 CFR
1.2105(a)(2) or 1.2105(c)(6) must take care to ensure that any reports
of prohibited communications do not themselves give rise to a violation
of the anti-collusion rule. Parties also are encouraged to coordinate
with the Auctions and Spectrum Access Division staff if they have any
questions about the procedures for submitting such reports.
8. 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.
9. Applicants must be aware that failure to comply with the
Commission's rules can result in enforcement action. 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 D of
the Auction 79 Procedures Public Notice. Most of these documents are
available on the Commission's auction anti-collusion Web page.
10. Applicants are also reminded that, regardless of compliance
with the Commission's rules, they remain subject to the antitrust laws.
Compliance with the disclosure requirements of the Commission's anti-
collusion rule will not insulate a party from enforcement of the
antitrust laws.
iii. Due Diligence
11. 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. Applicants should perform their
individual due diligence before proceeding as they would with any new
business venture. The Commission makes no representations or warranties
about the use of this spectrum for particular purposes.
12. Applicants are strongly encouraged to conduct their own
research prior to the beginning of bidding in Auction 79 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 79 are strongly encouraged to continue
such research throughout the auction.
13. Applicants should also be aware that certain pending and future
proceedings, including applications, applications 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
79. 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 79. 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. Additionally, potential
bidders should perform technical analyses sufficient to assure
themselves that, should they prevail in competitive bidding for a
specific FM construction permit, they will be able to build and operate
facilities that will fully comply with the Commission's technical and
legal requirements. Applicants are 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
79. 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 of Commission permittees and
licensees.
iv. Use of Integrated Spectrum Auction System
14. The Commission will make available a browser-based bidding
system to allow bidders to participate in Auction 79 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. Environmental Review Requirements
15. Permittees or licensees must comply with the Commission's rules
regarding implementation of the National Environmental Policy Act and
other Federal environmental statutes.
C. Auction Specifics
i. Auction Start Date
16. Bidding in Auction 79 will begin on Tuesday, September 1, 2009.
Although two commenters suggested that bidding be postponed, the
Bureaus decided that bidding would begin on the date initially
proposed. The initial schedule for bidding will be announced by public
notice at least one week before the start of the auction. Moreover,
unless otherwise announced, bidding on all construction permits will be
conducted on each business day until bidding has stopped on all
construction permits.
ii. Bidding Methodology
17. The bidding methodology for Auction 79 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.
iii. Pre-Auction Dates and Deadlines
18. The following dates and deadlines apply:
Auction Seminar................................ June 16, 2009.
Short-Form Application (FCC Form 175), Filing June 16, 2009; 12 noon ET.
Window Opens.
Short-Form Application (FCC Form 175), Filing June 25, 2009; prior to 6 p.m. ET.
Window Deadline.
Upfront Payments (via wire transfer)........... July 31, 2009; 6 p.m. ET.
Mock Auction................................... August 28, 2009.
[[Page 25740]]
Auction Begins................................. September 1, 2009.
iv. Requirements for Participation
19. Those wishing to participate in this auction must: (1) Submit a
short-form application (FCC Form 175) electronically prior to 6 p.m.
ET, June 25, 2009, following the electronic filing procedures set forth
in Attachment B of the Auction 79 Procedures Public Notice; (2) submit
a sufficient upfront payment and an FCC Remittance Advice Form (FCC
Form 159) by 6 p.m. ET, July 31, 2009, following the procedures and
instructions set forth in Attachment C of the Auction 79 Procedures
Public Notice; and (3) comply with all provisions outlined in the
Auction 79 Procedures Public Notice and applicable Commission rules.
II. Short-Form Application (FCC Form 175) Requirements
A. Short-Form Applications
20. Entities and individuals seeking construction permits available
in Auction 79 must file a short-form application electronically via the
FCC Auction System prior to 6 p.m. ET on June 25, 2009, following the
procedures prescribed in Attachment B of the Auction 79 Procedures
Public Notice. Mailings for Auction 79 will be sent by the Bureaus only
to the contact's address listed in the applicant's short-form
application.
21. Any application for a noncommercial educational station that is
mutually exclusive with any application for a commercial station will
be returned as unacceptable for filing. Applications specifying the
same FM station construction permit are considered mutually exclusive.
A short-form application that does not identify its proposed station(s)
as a noncommercial educational station(s) will be considered to be an
application for a commercial broadcast station(s).
22. Applicants bear full responsibility for submitting accurate,
complete and timely short-form applications. Each applicant should read
carefully the instructions provided in the Auction 79 Procedures Public
Notice, including its Attachment B, and should consult the Commission's
rules to ensure that all of the information that is required by the
Commission's rules and relevant public notices is included with its
short-form application. 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 filing a short-form application are subject
to the Commission's anti-collusion rules beginning at the deadline for
filing.
23. Applicants also should note that submission of a short-form
application, and any amendments, constitutes a representation by the
certifying official that the certifier is an authorized representative
of the applicant, that the certifier has read the form's instructions
and certifications, and that the contents of the application, its
certifications, and any attachments are true and correct.
B. Permit Selection
24. An applicant must select on its short-form application the
construction permits on which it wants to bid from the Eligible Permits
list. Applicants will not be able to change their construction permit
selections after the short-form application filing deadline.
C. New Entrant Bidding Credit
25. Applicants may be able to qualify for either a 35 or 25 percent
new entrant bidding credit, the amount by which a bidder's winning bid
is discounted, depending on the number of other media of mass
communications that are attributable to the applicant and its
attributable interest holders. Media of mass communications are defined
in 47 CFR 73.5008, and include both commercial and noncommercial
educational full-power broadcast stations.
26. Attributable interests are defined in 47 CFR 73.3555 and its
Note 2. The media interests held by very substantial investors in, or
creditors of, an applicant claiming new entrant status are attributed.
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. In 2008, the Commission relaxed the equity/debt plus
attribution standard, to allow for higher investment opportunities in
entities meeting the definition of eligible entities. An eligible
entity is defined in Note 2(i) of 47 CFR 73.3555. The Commission will
allow the holder of an equity or debt interest in the applicant to
exceed the 33 percent threshold without triggering attribution provided
the combined equity and debt in the eligible entity is less than 50
percent, or the total debt in the eligible entity does not exceed 80
percent of the asset value, and the interest holder does not hold any
equity interest, option, or promise to acquire an equity interest in
the eligible entity or any related entity.
27. The applicant's attributable interests, and therefore, its
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 application filing
deadline. Thus, an applicant could not qualify for a bidding credit,
nor upgrade a previously claimed bidding credit, based upon ownership
or positional changes occurring after the short-form filing deadline.
Prospective bidders are reminded, however, that events occurring after
the short-form application 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.
28. The unjust enrichment provisions of 47 CFR 73.5007(c) apply to
a winning bidder who utilizes a bidding credit, and subsequently seeks
to assign or transfer its construction permit or license to an entity
not qualifying for the same level of bidding credit.
29. The Bureaus were unable to adopt the suggestions of three
commenters to revise the criteria for and the amount of the new entrant
bidding credit. Commenters sought to re-define new entrant, to limit
the number of facilities to which the new entrant bidding credit may be
applied, and to impose a holding period for facilities obtained using
the new entrant bidding credit. These changes would require amendment
of the Commission's competitive bidding and broadcast service rules,
which can only be accomplished through a rulemaking proceeding.
30. For the same reasons, the Bureaus were not able to consider one
commenter's proposal to adopt a new discount on the filing fees when an
application is submitted for a new allocation by anyone who has not
owned a Commission licensed station within five years prior to the date
of filing or previously filed for a new allocation. This particular
proposal is
[[Page 25741]]
beyond the scope of the Bureaus developing competitive bidding
procedures for Auction 79.
D. Disclosure of Bidding Arrangements
31. An applicant must identify in its short-form application each
party with whom it has entered into any agreement, arrangement, or
understanding of any kind relating to the construction permits being
auctioned, including any agreement relating to a 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 an agreement by the short-form application filing deadline,
it should not include the names of parties to the discussions on its
application and may not continue such discussions with any applicants
after the deadline. The Auction 79 Procedures Public Notice contains
further guidance on these disclosure requirements.
E. Provisions Regarding Former and Current Defaulters
32. Current defaulters are not eligible to participate in Auction
79, but former defaulters can participate so long as they are otherwise
qualified and make upfront payments that are fifty percent more than
the normal upfront payment amounts. For purposes of this rule, a
defaulter (current or former) includes the applicant itself, its
affiliates, its controlling interests, and affiliates of its
controlling interests, as defined by 47 CFR 1.2110. A default includes
any default on any payment for any Commission construction permit or
license, as well as any delinquency on any non-tax debt owed to any
Federal agency, as of the filing deadline for short-form applications.
An applicant, its affiliate, its controlling interest, or an affiliate
of its controlling interest is considered a ``former defaulter'' only
if it has remedied all such defaults and cured all of the outstanding
non-tax delinquencies before the filing deadline for short-form
applications.
F. Minor Modifications to Short-Form Applications
33. After the deadline for filing short-form applications (FCC Form
175) at 6 p.m. ET on June 25, 2009, applicants are permitted to make
only minor changes to their applications. Applicants are not permitted
to make major modifications to their short-form applications. Such
impermissible changes include, but are not limited to, a change of
certifying official, a change of a construction permit selection, a
change of control of the applicant, a claim of eligibility for a higher
percentage of bidding credit, or a change of identification of the
application's proposed facilities from noncommercial educational to
commercial.
G. Maintaining Current Information in Short-Form Applications
34. 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 a bidding credit percentage must be reported
immediately.
III. Pre-Auction Procedures
A. Auction Seminar--June 16, 2009
35. On Tuesday, June 16, 2009, the Commission will conduct a
seminar for parties interested in participating in Auction 79 at FCC
headquarters, located at 445 12th Street, SW., Washington, DC. The
seminar will provide attendees with information about pre-auction
procedures, completing FCC Form 175, auction conduct, the FCC Auction
System, auction rules, and 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. For
individuals who are unable to attend, a webcast of this seminar will be
available from the Commission's Auction 79 Web page at http://wireless.fcc.gov/auctions/79/.
B. Short-Form Applications--Due Prior to 6 p.m. ET on June 25, 2009
36. In order to be eligible to bid in this auction, applicants must
first follow the procedures set forth in Attachment B of the Auction 79
Procedures Public Notice to submit a short-form application (FCC Form
175) electronically via the FCC Auction System. This application must
be received at the Commission prior to 6 p.m. ET on June 25, 2009. Late
applications will not be accepted.
C. Application Processing and Minor Corrections
37. After the deadline for filing FCC Form 175 applications, the
Commission subsequently will issue a public notice identifying: (1)
Those applications that are complete; (2) those applications that are
rejected; and (3) those applications that are incomplete because of
minor defects that may be corrected and the deadline for resubmitting
corrected applications.
D. Upfront Payments--Due July 31, 2009
38. In order to be eligible to bid in this auction, applicants must
submit an upfront payment accompanied by an FCC Remittance Advice Form
(FCC Form 159). After completing its short-form application, an
applicant will have access to an electronic version of the FCC Form 159
that can be printed and sent by fax to U.S. Bank in St. Louis,
Missouri. All upfront payments must be made as instructed in this
Public Notice and must be received in the proper account at U.S. Bank
before 6 p.m. ET on July 31, 2009.
i. Making Upfront Payments by Wire Transfer
39. Wire transfer payments must be received before 6 p.m. ET on
July 31, 2009, consistent with instruction set forth in the Auction 79
Procedures Public Notice. The applicant is responsible for obtaining
confirmation from its financial institution that U.S. Bank has timely
received its upfront payment and deposited it into the proper FCC
account. The Commission will not accept checks, credit cards, or
automated clearing house (ACH) payments.
ii. FCC Form 159
40. A completed FCC Remittance Advice Form (FCC Form 159, Revised
2/03) must be faxed to U.S. Bank to accompany each upfront payment.
Proper completion of FCC Form 159 is critical to ensuring correct
crediting of upfront payments. Detailed instructions for completion of
FCC Form 159 are included in Attachment C to the Auction 79 Procedures
Public Notice. An electronic pre-filled version of the FCC Form 159 is
available after submitting the FCC Form 175. Payors using the 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
U.S. Bank by fax.
[[Page 25742]]
iii. Upfront Payments and Bidding Eligibility
41. Applicants must make upfront payments to obtain bidding
eligibility. The amount of the upfront payment determines a bidder's
initial bidding eligibility, the maximum number of bidding units on
which a bidder may place bids. The Bureaus declined to adopt for
Auction 79 a commenter's suggestion to impose additional upfront
payment requirements on applicants selecting more than ten percent of
the FM construction permits in Auction 79.
42. In order to bid on a particular construction permit, a
qualified bidder must have selected the construction permit on its FCC
Form 175 and 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
only enough 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.
43. 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, as there is no provision for increasing a
bidder's eligibility after the upfront payment deadline.
44. Applicants that are former defaulters must pay upfront payments
50 percent greater than non-former defaulters. For purposes of this
calculation, the applicant includes the applicant itself, its
affiliates, its controlling interests, and affiliates of its
controlling interests, as defined by 47 CFR 1.2110. If an applicant is
a former defaulter, it must calculate its upfront payment for all of
its selected construction permits by multiplying the number of bidding
units on which it wishes 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 selected on its short-form application,
the applicant will not be eligible to participate in the auction.
E. Remote Electronic Bidding
45. The Commission will conduct this auction over the Internet, and
telephonic bidding will be available as well. Only qualified bidders
are permitted to bid. Each applicant should indicate its bidding
preference--electronic or telephonic--on its FCC Form 175.
F. Mock Auction--August 28, 2009
46. All qualified bidders will be eligible to participate in a mock
auction on Friday, August 28, 2009. 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
47. The first round of bidding for Auction 79 will begin on
Tuesday, September 1, 2009. 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
48. The Bureaus will auction all construction permits in Auction 79
in a single auction using the Commission's standard simultaneous
multiple-round 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.
ii. Eligibility and Activity Rules
49. The Bureaus will use upfront payments to determine initial
(maximum) eligibility (as measured in bidding units) for Auction 79.
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. Each construction permit is assigned a
specific number of bidding units as listed in Attachment A of the
Auction 79 Procedures Public Notice. 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 short-form application 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. At
a minimum, an applicant's upfront payment must cover the bidding units
for at least one of the construction permits it selected on its short-
form application. The total upfront payment does not affect the total
dollar amount a bidder may bid on any given construction permit.
50. 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
minimum percentage of their current bidding eligibility during each
round of the auction.
51. A bidder's activity level in a round is the sum of the bidding
units associated with any construction permits covered by new and
provisionally winning bids. 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.
52. 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.
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iii. Auction Stages
53. A bidder desiring to maintain its current bidding eligibility
will be required to be active on construction permits representing at
least 75 percent of its current bidding eligibility, during each round
of Stage One, and at least 95 percent of its current bidding
eligibility in Stage Two. The Bureaus have the discretion to further
alter the activity requirements before and/or during the auction as
circumstances warrant, and also have other mechanisms by which they may
influence the speed of an auction.
iv. Activity Rule Waivers
54. Each bidder in the auction will be provided with three activity
rule waivers. An activity rule waiver applies to an entire round of
bidding and not to a particular construction permit.
v. Auction Stopping Rules
55. To reduce the need for a provisionally winning bidder to
monitor subsequent bidding rounds for higher bids, two commenters
proposed alternative stopping procedures for this auction, which differ
from the stopping procedures proposed by the Bureaus by halting bidding
on a particular construction permit before bidding closes
simultaneously on all construction permits. Because these alternative
stopping procedures would reduce the flexibility of bidders to
implement backup strategies in response to price information revealed
as bidding continues in multiple bidding rounds, the Bureaus will
employ a simultaneous stopping rule approach for Auction 79. A
simultaneous stopping rule means that all construction permits remain
available for bidding until bidding closes simultaneously on all
construction permits. More specifically, bidding will close
simultaneously on all construction permits after the first round in
which no bidder submits any new bids or applies a proactive waiver.
56. Auction 79 will begin under the simultaneous stopping rule
approach, and the Bureaus retained the discretion to employ later a
modified stopping rule, a special stopping rule, or to keep the auction
open even if no bidder places any new bids or applies a waiver in a
round. Moreover, the Bureaus may use the modified stopping rule with or
without prior announcement during the auction.
vi. Auction Delay, Suspension, or Cancellation
57. The Bureaus 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.
B. Bidding Procedures
i. Round Structure
58. The initial schedule of bidding rounds will be announced in the
public notice listing the qualified bidders. Each bidding round is
followed by the release of round results. Multiple bidding rounds may
be conducted in a given day.
ii. Minimum Opening Bids
59. The specific minimum opening bid amounts for the construction
permits available in Auction 79 are set forth in Attachment A of the
Auction 79 Procedures Public Notice.
iii. Bid Amounts
60. In each round, eligible bidders will be able to place a bid on
a given construction permit in any of up to nine different amounts. The
FCC Auction System interface will list the nine acceptable bid amounts
for each construction permit.
iv. Provisionally Winning Bids
61. 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.
62. The Bureaus will 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.
v. Bidding
63. 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 79. 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. The length of a call to
place a telephonic bid may vary; please allow a minimum of ten minutes.
64. 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.
65. If a bidder has sufficient eligibility to place a bid on the
particular construction permit, an eligible bidder will be able to
place bids in each round on that construction permit in any of nine
different bid amounts. 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.
66. 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.
67. During a round, an eligible 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. If a bidder submits multiple bids for the same
construction permit in the same round--multiple bids on the exact same
construction permit, 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
bids do not count towards the bidder's current activity.
vi. Bid Removal and Bid Withdrawal
68. 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 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.
[[Page 25744]]
69. Bidders in Auction 79 are prohibited from withdrawing any bid
after the close of a round in which the bid was placed. Bidders are
cautioned to select bid amounts carefully because no bid withdrawals
will be allowed in Auction 79, even if a bid was mistakenly or
erroneously made.
vii. Round Results
70. Reports reflecting bidders' identities for Auction 79 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.
71. 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.
viii. Auction Announcements
72. 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
73. Shortly after bidding has ended, the Commission will issue a
public notice declaring the auction closed, identifying the winning
bidders, and establishing the deadlines for submitting down payments,
final payments, and the long-form applications (FCC Form 301).
A. Down Payments
74. 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 79 to 20 percent of the net amount of
its winning bids (gross bids less any applicable new entrant bidding
credits).
B. Final Payments
75. Each winning bidder will be required to submit the balance of
the net amount of its winning bids within ten business days after the
applicable deadline for submitting down payments.
C. Long-Form Application (FCC Form 301)
76. Within thirty days after release of the auction closing notice,
winning bidders must electronically submit a properly completed long-
form application (FCC Form 301, Application for FM Construction Permit)
and required exhibits, for each construction permit they won through
Auction 79. Winning bidders claiming new entrant status must include an
exhibit demonstrating their eligibility for the bidding credit. Further
instructions on these and other filing requirements will be provided to
winning bidders in the auction closing public notice.
D. Default and Disqualification
77. 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 described 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. The Bureaus have set the additional default payment
for this auction at twenty percent of the applicable bid.
78. Finally, 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.
E. Refund of Remaining Upfront Payment Balance
79. Applicants that are not winning bidders or are winning bidders
whose upfront payment exceeded the total net amount of their winning
bids may be entitled to a refund of some or all of their upfront
payment. All refunds will be returned to the payor of record, as
identified on the FCC Form 159, unless the payor submits written
authorization instructing otherwise. Bidders that drop out of the
auction completely (have exhausted all of their activity rule waivers
and have no remaining bidding eligibility) may request a refund of
their upfront payments before the close of the auction.
Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. E9-12523 Filed 5-28-09; 8:45 am]
BILLING CODE 6712-01-P