[Federal Register Volume 74, Number 242 (Friday, December 18, 2009)]
[Notices]
[Pages 67221-67226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-30164]
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FEDERAL COMMUNICATIONS COMMISSION
[AU Docket No. 09-205; DA 09-2416]
Auction of Lower and Upper Paging Bands Licenses Scheduled for
May 25, 2010; Comment Sought on Competitive Bidding Procedures for
Auction 87
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: This document announces the auction of lower and upper paging
bands licenses scheduled to commence on May 25, 2010 (Auction 87). This
document also seeks comments on competitive bidding procedures for
Auction 87.
DATES: Comments are due on or before December 21, 2009, and reply
comments are due on or before January 7, 2010.
ADDRESSES: You may submit comments, identified by AU Docket No. 09-205,
by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web Site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
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. All filings must be
addressed to the Commission's Secretary, Attn: WTB/ASAD, Office of the
Secretary, Federal Communications Commission.
Through December 24, 2009, 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.
For filings on or after December 28, 2009, all hand-
delivered or messenger-delivered paper filings for the Commission's
Secretary must be delivered to FCC Headquarters at 445 12th St., SW.,
Room TW-A325, Washington, DC 20554. All hand deliveries must be held
together with rubber bands or fasteners. Any envelopes must be disposed
of before entering the building.
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.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: [email protected] or telephone: 202-
418-0530 or TTY: 202-418-0432.
The Wireless Telecommunications Bureau requests that a
copy of all comments and reply comments be submitted electronically to
the following address: [email protected].
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau,
Auctions and Spectrum Access Division: For auction legal questions:
Scott Mackoul at (202) 418-0660. For general auction questions: Roy
Knowles or Barbara Sibert at (717) 338-2868; Mobility Division: For
paging service rule questions: Michael Connelly (legal) or Melvin Spann
(technical) at (202) 418-0620.
SUPPLEMENTARY INFORMATION: This is a summary of the Auction 87 Comment
Public Notice released on November 30, 2009. The complete text of the
Auction 87 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,
[[Page 67222]]
SW., Room CY-A257, Washington, DC 20554. The Auction 87 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, fax 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 09-2416. The Auction 87 Comment Public Notice and related documents
also are available on the Internet at the Commission's Web site: http://wireless.fcc.gov/auctions/87/, or by using the search function for AU
Docket No. 09-205 on the ECFS Web page at http://www.fcc.gov/cgb/ecfs/.
I. Introduction
1. The Wireless Telecommunications Bureau (Bureau) announces an
auction of 9,603 paging licenses to commence on May 25, 2010, which has
been designated Auction 87. These licenses consist of 7,752 licenses in
the lower paging bands (35-36 MHz, 43-44 MHz, 152-159 MHz, 454-460 MHz)
and 1,851 licenses in the upper paging bands (929-931 MHz).
II. Licenses To Be Offered in Auction 87
2. Auction 87 will include licenses that remained unsold from a
previous auction, licenses on which a winning bidder in a previous
auction defaulted, and licenses for spectrum previously associated with
licenses that cancelled or terminated. In a few cases, the available
license does not cover the entire geographic area due to an excluded
area or previous partitioning.
3. Attachment A of the Auction 87 Comment Public Notice provides a
summary of the licenses available in Auction 87. Due to the large
number of licenses in Auction 87, the complete list of licenses
available for this auction will be provided in electronic format only,
available as separate Attachment A files at http://wireless.fcc.gov/auctions/87/ or through the Commission's duplicating contractor. Tables
containing the block/frequency cross-reference list for the paging
bands are included in Attachment B of the Auction 87 Comment Public
Notice.
A. Incumbency Issues
4. There are pre-existing paging incumbent licenses. Incumbent
(non-geographic) paging licensees operating under their existing
authorizations are entitled to full protection from co-channel
interference. Geographic area licensees are likewise afforded co-
channel interference protection from incumbent licensees. Adjacent
geographic area licensees are obligated to resolve possible
interference concerns of adjacent geographic area licensees by
negotiating a mutually acceptable agreement with the neighboring
geographic licensee.
III. Bureau Seeks Comment on Auction Procedures
A. Auction Design
i. Auction Format
5. The Bureau proposes to auction all licenses included in Auction
87 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
6. The Bureau proposes to conduct Auction 87 using certain
procedures for limited information disclosure, also referred to as
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. Under these proposed limited
information procedures, the amount of every bid placed and whether a
bid was withdrawn would be disclosed after the close of every round,
but the identities of bidders placing specific bids or withdrawals and
the net bid amounts would not be disclosed until after the close of the
auction. Bidders, moreover, would have access to additional information
about their own bids. After the close of bidding, bidders' license
selections, upfront payment amounts, bidding eligibility, bids, and
other bidding-related actions would be made publicly available.
7. The Bureau seeks comment on the details regarding its proposal
for implementation of anonymous bidding in Auction 87. The Bureau also
seeks comment on alternatives to the use of anonymous bidding
procedures for Auction 87. Because of the large number of licenses
available in Auction 87 and the circumstances the Bureau anticipates
for this paging auction, the potential gains to economic efficiency and
competitiveness from using limited information procedures may not
warrant the costs and burdens of those procedures in this case. The
Bureau encourages parties to provide information about the benefits and
costs of complying with limited information procedures as compared with
the benefits and costs of alternative procedures that would provide for
the disclosure of more information on bidder identities and interests
in the auction. If commenters believe that the Bureau should not adopt
procedures to limit the disclosure of certain bidder-specific
information until after the auction, they should explain their
reasoning.
B. Auction Structure
i. Round Structure
8. Auction 87 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.
9. The Commission will conduct Auction 87 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.
10. 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.
ii. Stopping Rule
11. For Auction 87, 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,
[[Page 67223]]
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.
12. Further, the Bureau proposes to retain the discretion to
exercise any of the following options during Auction 87: (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.
13. The Bureau proposes 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 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.
iii. Information Relating to Auction Delay, Suspension, or Cancellation
14. For Auction 87, 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.
C. Auction Procedures
i. Upfront Payments and Bidding Eligibility
15. For Auction 87, the Bureau proposes to make the upfront
payments equal to the minimum opening bids. The specific upfront
payments for each license are set forth in the complete list of
licenses available for Auction 87, available as separate Attachment A
files at http://wireless.fcc.gov/auctions/87/. The Bureau seeks comment
on this proposal.
16. 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 for the license, on a bidding unit per dollar basis. The
specific bidding units for each license are set forth in the complete
list of licenses available for Auction 87, available as separate
Attachment A files at http://wireless.fcc.gov/auctions/87/. The number
of bidding units for a given license is fixed and does not change
during the auction as prices rise. A bidder's upfront payment is not
attributed to specific licenses. Rather, a bidder may place bids on any
combination of licenses it selected on its short-form application (FCC
Form 175) as long as the total number of bidding units associated with
those licenses does not exceed its current eligibility.
17. Eligibility cannot be increased during the auction; it can only
remain the same or decrease. Thus, in calculating its upfront payment
amount and hence its initial bidding eligibility, 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.
Provisionally winning bids are bids that would become final winning
bids if the auction were to close in that given round.
18. 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.
21. The Bureau proposes the following activity requirements, while
noting again that the Bureau retains the discretion to change stages
unilaterally by announcement during the auction. In each round of the
first stage of the auction (Stage One), a bidder desiring to maintain
its current bidding eligibility is required to be active on licenses
representing at least 80 percent of its current bidding eligibility.
Failure to maintain the required activity level will result in the use
of an activity rule waiver or a reduction in the bidder's bidding
eligibility for the next round of bidding. During Stage One, a bidder's
reduced eligibility for the next round will be calculated by
multiplying the bidder's current round activity by five-fourths (\5/
4\). In each round of the second stage (Stage Two), a bidder desiring
to maintain its current bidding eligibility is required to be active on
95 percent of its current bidding eligibility. Failure to maintain the
required activity level will result in the use of an activity rule
waiver or a reduction in the bidder's bidding eligibility for the next
round of bidding. During Stage Two, a bidder's reduced eligibility for
the next round will be calculated by multiplying the bidder's current
round activity by twenty-nineteenths (\20/19\).
[[Page 67224]]
22. Under this proposal, the Bureau would retain the discretion to
change the activity requirements during the auction. For example, the
Bureau could decide to add an additional stage with a higher activity
requirement, not to transition to Stage Two if it believes the auction
is progressing satisfactorily under the Stage One activity requirement,
or to transition to Stage Two with an activity requirement that is
higher or lower than the 95 percent proposed herein. If the Bureau
exercised this discretion, it would alert bidders by announcement in
the FCC Auction System.
iii. Activity Rule Waivers and Reducing Eligibility
23. 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. The Auction 87 Comment Public Notice provides
additional, more detailed information on how activity rule waivers
operate.
24. The Bureau proposes that each bidder in Auction 87 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
25. The Bureau proposes to establish minimum opening bid amounts
for Auction 87. 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 87.
26. For previous auctions of paging licenses (Auctions 40 and 48),
the Commission set minimum opening bid amounts based on the winning bid
amounts from a previous auction for paging licenses in the same area.
The results of these calculations were subject to a minimum amount--
e.g., a floor of $500 in Auction 48. In Auction 48, a large proportion
of the licenses won were won at or near the minimum opening bid amount.
Given the history of these licenses, the Bureau proposes to set the
minimum opening bid for each license available in Auction 87 at $500.
27. The Bureau seeks comment on this proposal. If commenters
believe that these minimum opening bid amounts will deter substantial
numbers of bidders from placing bids on licenses, or are not reasonable
amounts, or should instead operate as a reserve price, they should
explain why this is so, and comment on the desirability of an
alternative approach. Commenters are advised to support their claims
with valuation analyses and suggested reserve prices or minimum opening
bid amount levels or formulas. In establishing minimum opening bid
amounts, the Bureau particularly seeks comment on such factors as the
amount of spectrum being auctioned, levels of incumbency within these
spectrum bands, the availability of technology to provide service, the
size of the service areas, issues of interference with other spectrum
bands and any other relevant factors that could reasonably have an
impact on valuation of the licenses being auctioned. The Bureau has not
attempted to adjust minimum opening bid amounts for licenses based on
precise levels of incumbency within particular geographic areas, and
has instead proposed a formula that is more easily administered, and
that is intended to reflect overall incumbency levels. The Bureau seeks
comment on this approach and on whether the public interest would be
served by having no minimum opening bid amount or reserve price.
v. Bid Amounts
28. 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. 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 will be a certain percentage
higher. That is, the minimum acceptable bid amount will be calculated
by multiplying the provisionally winning bid amount times one plus the
minimum acceptable bid percentage. If, for example, the minimum
acceptable bid percentage is 10 percent, the minimum acceptable bid
amount will equal (provisionally winning bid amount) * (1.10), rounded.
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.
29. For Auction 87, the Bureau proposes to use a minimum acceptable
bid percentage of 10 percent. This means that the minimum acceptable
bid amount for a license will be approximately 10 percent greater than
the provisionally winning bid amount for the license.
30. Any additional bid amounts are calculated using the minimum
acceptable bid amount and a bid increment percentage, which need not be
the same as the percentage used to calculate the minimum acceptable bid
amount. The first additional acceptable bid amount equals the minimum
acceptable bid amount times one plus the bid increment percentage,
rounded. If, for example, the bid increment percentage is 5 percent,
the calculation is (minimum acceptable bid amount) * (1 + 0.05),
rounded, or (minimum acceptable bid amount) * 1.05, 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) * 1.10, rounded; etc. The Bureau
will round the results using the Commission's standard rounding
procedures for auctions.
31. 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, in the event that anonymous bidding is
implemented for Auction 87. In particular, commenters should address
the issue of additional bid amounts in light of particular
circumstances of Auction 87, including the nature of the license
inventory. If the Bureau allows additional bid amounts, it proposes to
use a bid increment percentage of 5 percent. If the Bureau does not
adopt anonymous bidding procedures for Auction 87, the Bureau proposes
to start with only one bid amount per license (the minimum acceptable
bid amount and no additional bid amounts).
32. The Bureau retains the discretion to change the minimum
acceptable bid amounts, the minimum acceptable bid percentage, the bid
increment percentage, and the number of acceptable bid amounts if the
Bureau determines that circumstances so dictate. Further, the Bureau
retains the discretion to make such changes on a license-by-license
basis.
33. The Bureau seeks comment on the above proposals. Commenters may
wish to address the role of the minimum
[[Page 67225]]
acceptable bids and the number of acceptable bid amounts in managing
the pace of the auction and the tradeoffs in managing auction pace by
changing the bidding schedule, activity requirements, or bid amounts,
or by using other means.
vi. Provisionally Winning Bids
34. 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), the Bureau 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.
35. 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
36. For Auction 87, 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. Once a round
closes, a bidder may no longer remove a bid.
viii. Bid Withdrawal
37. 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.
38. For Auction 87, 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.
If commenters believe that each bidder should be allowed to withdraw
provisionally winning bids in more than one round during the course of
the auction, or should not be permitted to withdraw any bids, they
should state how many bid withdrawal rounds they seek and explain what
specific factors lead them to that conclusion.
D. Post-Auction Procedures
i. Establishing the Interim Withdrawal Payment Percentage
39. 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. 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.
40. 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 when
there are few synergies to be captured by combining licenses.
41. With respect to the licenses being offered in Auction 87, the
service rules permit a variety of fixed, mobile, and paging services,
though the opportunities for combining licenses on adjacent frequencies
or in adjacent areas are more limited than has been the case in
previous auctions of paging licenses. Balancing the potential need for
bidders to use withdrawals to avoid winning incomplete combinations of
licenses with the Bureau's interest in deterring undesirable strategic
use of withdrawals, the Bureau proposes a percentage below the maximum
twenty percent permitted under the current rules but above the three
percent previously provided by the Commission's rules. Specifically,
the Bureau proposes to establish an interim bid withdrawal payment of
ten percent of the withdrawn bid for this auction. The Bureau seeks
comment on this proposal.
ii. Establishing the Additional Default Payment Percentage
42. 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, failing to submit a timely long-
form application, or failing to make full payment--or is otherwise
disqualified is liable for a default payment under 47 CFR 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.
43. For Auction 87, the Bureau proposes to establish an additional
default payment of ten percent. As previously noted by the Commission,
defaults weaken the integrity of the auction process and impede the
deployment of service to the public.
[[Page 67226]]
Given the nature of the service and the inventory of the licenses being
offered in Auction 87, the Bureau does not believe the detrimental
effects of any defaults in Auction 87 are likely to be unusually great.
The Bureau seeks comment on this proposal.
IV. Commission Ex Parte Rules
44. 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. E9-30164 Filed 12-17-09; 8:45 am]
BILLING CODE 6712-01-P