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Notice and Filing Requirements for FM Broadcast Construction Permits Auction, Minimum Opening Bids and Other Procedural Issues
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: February 5, 2001 (Volume 66, Number 24)]
[Notices]
[Page 8961-8971]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05fe01-53]
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FEDERAL COMMUNICATIONS COMMISSION
[Report No. AUC-00-37-C (Auction No. 37); DA 01-119]
Notice and Filing Requirements for FM Broadcast Construction
Permits Auction, Minimum Opening Bids and Other Procedural Issues
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: This document announces the procedures and minimum opening
bids for the upcoming auction of certain FM Broadcast construction
permits and also provides the final inventory of vacant FM allotments
to be made available for this auction.
DATES: Auction No. 37 is scheduled for May 9, 2001.
FOR FURTHER INFORMATION CONTACT: Auctions and Industry Analysis
Division: Kenneth Burnley, Legal Branch, or Jeff Crooks, Auctions
Operations Branch at (202) 418-0660; Barbara Sibert, Auctions
Operations Branch at (717) 338-2888. Audio Services Division: Lisa
Scanlan at (202) 418-2700. Media Contact: Mark Rubin at (202) 418-2924.
SUPPLEMENTARY INFORMATION: This is a summary of a Public Notice
released January 19, 2001. The complete text of the public notice,
including Attachments A through H, is available for inspection and
copying during normal business hours in the FCC Reference Center (Room
CY-A257), 445 12th Street, SW, Washington, DC. It may also be purchased
from the Commission's copy contractor, International Transcription
Services, Inc. (ITS, Inc.), 1231 20th Street, N.W. Washington, DC
20036, (202) 857-3800. It is also available on the Commission's web
site at http://www.fcc.gov.
List of Attachments available at the FCC:
Attachment A--Construction Permits To Be Auctioned
Attachment B--FCC Auction Seminar Registration Form
Attachment C--Electronic Filing and Review of the FCC Form 175
Attachment D--Guidelines for Completion of FCC Form 175 and Exhibits
Attachment E--Auction--Specific Instructions for FCC Remittance Advice
(Form 159)
Attachment F--FCC Bidding Preference/Remote Software Order Form
Attachment G--Accessing the FCC Network Using Windows 95/98
Attachment H--Summary Listing of Documents (Anti-Collusion)
I. General Information
A. Introduction
This public notice announces the procedures and minimum opening
bids for the upcoming auction of certain FM Broadcast construction
permits (``Auction No. 37''). On September 25, 2000, the Mass Media
Bureau (``MMB'') and the Wireless Telecommunications Bureau (``WTB'')
(collectively, the ``Bureaus'') released the Auction No. 37 Comment
Public Notice, 65 FR 59841 (October 6, 2000), seeking comment on the
establishment of reserve prices and/or minimum opening bids for Auction
No. 37, in accordance with the Balanced Budget Act of 1997. On
September 29, 2000, the Bureaus released a second Public Notice,
stating that eight additional vacant FM allotments would be included in
Auction No. 37 (Auction No. 37 Additional Comment Public Notice, 65 FR
59841 (October 6, 2000). In addition, the Bureaus sought comment on
procedures to be used in Auction No. 37. The Bureaus received twenty
comments and three reply comments in response to the Auction No. 37
Comment Public Notice and the Auction No. 37 Additional Comment Public
Notice.
B. Scheduling
The Auction No. 37 Comment Public Notice announced that Auction No.
37 would begin on February 21, 2001. In this public notice, the Bureaus
announce the beginning date of Auction No. 37 has been rescheduled to
May 9, 2001.
C. Construction Permits To Be Auctioned
Auction No. 37 will consist of 355 construction permits in the FM
Broadcast service for stations throughout the United States and Guam.
These construction permits are for vacant FM allotments, reflecting FM
channels assigned to the Table of FM Allotments, 47 CFR 73.202(b),
pursuant to the Commission's established rulemaking procedures,
designated for use in the indicated community. As stated in the
Broadcast First Report and Order, 63 FR 48615 (September 11, 1998),
applicants may apply for any vacant FM allotment, as specified in
[[Page 8962]]
Attachment A; applicants specifying the same FM allotment will be
considered mutually exclusive and, thus, the construction permit for
the FM allotment will be awarded by competitive bidding procedures. The
reference coordinates for each vacant FM allotment are also listed in
Attachment A.
One commenter suggests that the Bureaus should treat any allotment
that has only one bidder as not being mutually exclusive. As stated in
the Broadcast First Report and Order, all pending mutually exclusive
applications for broadcast services must be resolved through a system
of competitive bidding. Accordingly, for a specific FM allotment, if
the Commission were to receive only one FCC Form 175, Application to
Participate in an FCC Auction (``short-form application''), and, thus,
mutual exclusivity would not exist for auction purposes, the auction
for any such construction permit would cancel.
National Public Radio requests that the Commission modify its
auction procedures to permit noncommercial educational broadcast
applicants to apply for a noncommercial station utilizing any of the FM
allotments listed in Attachment A without having to compete in an
auction. However, none of the FM channels included in Auction No. 37
are reserved exclusively for noncommercial educational use, or are
otherwise exempt from competitive bidding procedures, if mutually
exclusive applications are filed.
Several commenters request that the Bureaus remove certain FM
allotments from Auction No. 37 due to the pendency of rulemaking
proceedings concerning the FM allotment, or because of other pending
challenges regarding the FM channels to be auctioned. The FM allotments
designated as FM71, FM160, FM189, and FM275 are hereby removed from
Auction No. 37. A revised Attachment A, reflecting the deletion of the
four referenced FM allotments, is appended to the Public Notice.
Two commenters request the inclusion of additional FM channels in
Auction No. 37. Ganske requests that the Commission include Channel
224C2 for Sunriver, Oregon, and Satellite requests the inclusion of
Channel 239A for Big Pine Key, Florida. The rulemaking proceeding to
add Channel 224C2 at Sunriver, Oregon to the Table of FM Allotments is
not yet final (MM Docket No. 96-7), and accordingly, FM Channel 224C2
at Sunriver, Oregon will not be added to the list of FM allotments for
Auction No. 37. Big Pine Key, Florida will be included in a subsequent
FM auction. The Auction No. 37 Comment Public Notice inadvertently
included two allotments for Channel 261A at Corrigan, TX (FM 280 and FM
281) and two allotments for Channel 291A at Kerrville, TX (FM 289 and
FM 290). Accordingly, duplicative listings FM 281 and FM 289 will be
removed from Attachment A.
D. Rules and Disclaimers
1. Relevant Authority
Prospective bidders must familiarize themselves thoroughly with the
Commission's rules relating to broadcast auctions, contained in Title
47, Part 73 of the Code of Federal Regulations.
Prospective bidders must also be thoroughly familiar with the
procedures, terms and conditions contained in this Public Notice, the
Auction No. 37 Comment Public Notice, the Auction No. 37 Additional
Comment Public Notice, the Broadcast First Report and Order, the
Broadcast Reconsideration Order, 64 FR 24523 (May 7, 1999) and the New
Entrant Bidding Credit Reconsideration Order, 64 FR 44856 (August 18,
1999). Potential bidders must also familiarize themselves with Part 1,
Subpart Q of the Commission's rules concerning competitive bidding
proceedings.
The terms contained in the Commission's rules, relevant orders and
public notices are not negotiable. The Commission may amend or
supplement the information contained in our public notices at any time,
and will issue public notices to convey any new or supplemental
information to bidders. It is the responsibility of all prospective
bidders to remain current with all Commission rules and with all public
notices pertaining to this auction. Copies of most Commission
documents, including public notices, can be retrieved from the FCC
Internet node via anonymous ftp @ftp.fcc.gov or the FCC Auctions World
Wide Web site at
http://www.fcc.gov/wtb/auctions. Additionally, documents may be
obtained for a fee by calling the Commission's copy contractor,
International Transcription Service, Inc. (ITS), at (202) 314-3070.
When ordering documents from ITS, please provide the appropriate FCC
number (for example, FCC 98-194 for the Broadcast First Report and
Order and FCC 99-74 for the Broadcast Reconsideration Order).
2. Prohibition of Collusion
To ensure the competitiveness of the auction process, the
Commission's rules prohibit applicants for the same market from
communicating with each other during the auction about bids, bidding
strategies, or settlements. This prohibition begins at the short-form
application filing deadline and ends at the down payment deadline after
the auction. Bidders competing for construction permits in the same
market are encouraged not to use the same individual as an authorized
bidder. A violation of the anti-collusion rule could occur if an
individual acts as the authorized bidder for two or more competing
applicants, and conveys information concerning the substance of bids or
bidding strategies between the bidders he or she is authorized to
represent in the auction. Also, if the authorized bidders are different
individuals employed by the same organization (e.g., law firm or
consulting firm), a violation could similarly occur. In such a case, at
a minimum, applicants should certify on their applications that
precautionary steps have been taken to prevent communication between
authorized bidders and that applicants and their bidding agents will
comply with the anti-collusion rule.
However, the Bureaus caution that merely filing a certifying
statement as part of an application will not outweigh specific evidence
that collusive behavior has occurred, nor will it preclude the
initiation of an investigation when warranted. In Auction No. 37, for
example, the rule would apply to any applicants bidding for the same
market (i.e., Bethel, Alaska, Channel 252C3, Market FM1). Therefore,
applicants that apply to bid for any FM construction permit in the same
market would be precluded from communicating after filing the FCC Form
175 short-form application with any other applicant for a FM
construction permit in that same market. However, applicants may enter
into bidding agreements before filing their FCC Form 175, as long as
they disclose the existence of the agreement(s) in their FCC Form 175.
If parties agree in principle on all material terms prior to the short-
form filing deadline, those parties must be identified on the short-
form application under 1.2105(c), even if the agreement has not been
reduced to writing. If the parties have not agreed in principle by the
filing deadline, an applicant would not include the names of those
parties on its application, and may not continue negotiations with
other applicants for the same market. By signing their FCC Form 175
short-form applications, applicants are certifying their compliance
with 1.2105(c) and 73.5002. In addition, 1.65 of the Commission's rules
requires an applicant to maintain
[[Page 8963]]
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. Thus, 1.65 requires an auction applicant to notify the
Commission of any violation of the anti-collusion rules immediately
upon learning of such violation.
A summary listing of documents from the Commission and the Bureaus
addressing the application of the anti-collusion rules may be found in
Attachment H of the Public Notice.
3. Due Diligence
Potential bidders are solely responsible for investigating and
evaluating all technical and market place factors that may have a
bearing on the value of the FM broadcast facilities. The FCC makes no
representations or warranties about the use of this spectrum for
particular services. Applicants should be aware that a FCC auction
represents an opportunity to become a FCC permittee in the broadcast
service, subject to certain conditions and regulations. A FCC auction
does not constitute an endorsement by the FCC of any particular
service, technology, or product, nor does a FCC construction permit or
license constitute a guarantee of business success. Applicants should
perform their individual due diligence before proceeding as they would
with any new business venture.
Potential bidders are strongly encouraged to conduct their own
research prior to Auction No. 37 in order to determine the existence of
pending proceedings that might affect their decisions regarding
participation in the auction. Participants in Auction No. 37 are
strongly encouraged to continue such research during the auction.
4. Bidder Alerts
All applicants must certify on their FCC Form 175 applications
under penalty of perjury that they are legally, technically,
financially and otherwise qualified to hold a construction permit, and
not in default on any payment for Commission construction permits or
licenses (including down payments) or delinquent on any non-tax debt
owed to any Federal agency. Prospective bidders are reminded that
submission of a false certification to the Commission is a serious
matter that may result in severe penalties, including monetary
forfeitures, construction permit or license revocations, exclusion from
participation in future auctions, and/or criminal prosecution.
As is the case with many business investment opportunities, some
unscrupulous entrepreneurs may attempt to use Auction No. 37 to deceive
and defraud unsuspecting investors. Common warning signals of fraud
include the following:
The first contact is a ``cold call'' from a telemarketer,
or is made in response to an inquiry prompted by a radio or television
infomercial.
The offering materials used to invest in the venture
appear to be targeted at IRA funds, for example by including all
documents and papers needed for the transfer of funds maintained in IRA
accounts.
The sales representative makes verbal representations
that: (a) The Internal Revenue Service (``IRS''), Federal Trade
Commission (``FTC''), Securities and Exchange Commission (``SEC''),
FCC, or other government agency has approved the investment; (b) the
investment is not subject to state or federal securities laws; or (c)
the investment will yield unrealistically high short-term profits. In
addition, the offering materials often include copies of actual FCC
releases, or quotes from FCC personnel, giving the appearance of FCC
knowledge or approval of the solicitation.
Information about deceptive telemarketing investment schemes is
available from the FTC at (202) 326-2222 and from the SEC at (202) 942-
7040. Complaints about specific deceptive telemarketing investment
schemes should be directed to the FTC, the SEC, or the National Fraud
Information Center at (800) 876-7060. Consumers who have concerns about
specific proposals may also call the FCC Consumer Center at (888) CALL-
FCC ((888) 225-5322).
5. National Environmental Policy Act (NEPA) Requirements
The permittee must comply with the Commission's rules regarding the
National Environmental Policy Act (NEPA). The construction of a
broadcast facility is a federal action and the permittee must comply
with the Commission's NEPA rules for each such facility. The
Commission's NEPA rules require that, among other things, the permittee
consult with expert agencies having NEPA responsibilities, including
the U.S. Fish and Wildlife Service, the State Historic Preservation
Office, the Army Corp of Engineers and the Federal Emergency Management
Agency (through the local authority with jurisdiction over
floodplains). The permittee must prepare environmental assessments for
broadcast facilities that may have a significant impact in or on
wilderness areas, wildlife preserves, threatened or endangered species
or designated critical habitats, historical or archaeological sites,
Indian religious sites, floodplains, and surface features. The
permittee must also prepare environmental assessments for broadcast
facilities that include high intensity white lights in residential
neighborhoods or excessive radio frequency emission.
E. Auction Specifics
1. Auction Date
The auction will begin on Wednesday, May 9, 2001. The initial
schedule for bidding will be announced by public notice at least one
week before the start of the auction. Unless otherwise announced,
bidding will be conducted on each business day until bidding has
stopped on all construction permits.
2. Auction Title
Auction No. 37--FM Broadcast
3. Bidding Methodology
The bidding methodology for Auction No. 37 will be a simultaneous,
multiple-round, ascending auction. Bidding will be permitted only from
remote locations, either electronically (by computer) or
telephonically.
4. Pre-Auction Dates and Deadlines
Auction Seminar: March 7, 2001
Short-Form Application Filing Deadline
(FCC Form 175): March 19, 2001; 6:00 p.m. ET
Orders for Remote Bidding Software: March 19, 2001; 6:00 p.m. ET
Upfront Payments (via wire transfer): April 16, 2001; 6:00 p.m. ET
Mock Auction: May 7, 2001
Auction Begins: May 9, 2001
5. Requirements for Participation
Those wishing to participate in the auction must:
Submit a short form application (FCC Form 175)
electronically by 6:00 p.m. ET, March 19, 2001. No other application
may be substituted for the FCC Form 175.
Submit a sufficient upfront payment and a FCC Remittance
Advice Form (FCC Form 159) by 6:00 p.m. ET, April 16, 2001.
Comply with all provisions outlined in this public notice
and applicable Commission rules.
6. General Contact Information
The following is a list of general contact information relating to
Auction No. 37:
[[Page 8964]]
General Auction Information:
General Auction Questions, Seminar Registration, Orders for Remote
Bidding Software: FCC Auctions Hotline, (888) 225-5322, Press Option #2
or direct (717) 338-2888, Hours of service: 8 a.m.-5:30 p.m. et.
Auction Legal Information:
Auction Rules, Policies, Regulations: Auctions and Industry
Analysis Division, Legal Branch, (202) 418-0660
Licensing Information:
Rules, Policies, Regulations, Licensing Issues, Engineering Issues:
Audio Services Division, (202) 418-2700
Technical Support:
Electronic Filing Assistance, Software Downloading: FCC Auctions
Technical Support Hotline, (202) 414-1250 (Voice), (202) 414-1255 (TTY)
Hours of service: Monday-Friday, 7 a.m. to 10 p.m. ET, Saturday, 8
a.m. to 7 p.m., ET, Sunday, 12 noon to 6 p.m., ET
Payment Information:
Wire Transfers, Refunds: FCC Auctions Accounting Branch, (202) 418-
1995, (202) 418-2843 (Fax)
Telephonic Bidding: Will be furnished only to qualified bidders
FCC Copy Contractor:
Additional Copies of Commission Documents: International
Transcription Services, Inc., 445 12th Street, SW, Room CY-B400,
Washington, DC 20554, (202) 314-3070
Press Information: Mark Rubin (202) 418-2924
FCC Forms:
(800) 418-3676 (outside Washington, DC), (202) 418-3676 (in the
Washington Area)
FCC Internet Sites:
http://www.fcc.gov/wtb/auctions http://www.fcc.gov/ftp://
ftp.fcc.gov
II. Short-form (FCC Form 175) Application Requirements
Guidelines for completion of the short-form (FCC Form 175) are set
forth in Attachment D to the public notice. The short-form application
seeks the applicant's name and address, legal classification, status,
new entrant bidding credit eligibility, identification of the
construction permit(s) sought, the authorized bidders and contact
persons. To participate in Auction No. 37, no other application may be
substituted for the FCC Form 175.
One commenter urges the Bureaus to eliminate the ``ALL'' box in the
FCC Form 175 for this auction. The Bureaus agree. The capability to
select the ALL box originated in the context of, and was designed for
use in, wireless auctions. Use of an ALL box, however, is inappropriate
in the broadcast context and accordingly, an ALL box will not be
included in the FCC Form 175 for use in Auction No. 37.
A. Ownership Disclosure Requirements (FCC Form 175 Exhibit A)
The Commission indicated in the Broadcast First Report and Order,
that, for purposes of determining eligibility to participate in a
broadcast auction, the uniform Part 1 ownership standards would apply.
Therefore, in completing FCC Form 175, all applicants will be required
to file an ``Exhibit A'' and provide information required by 1.2105 and
1.2112 of the Commission's rules, thus providing a full and complete
statement of the ownership of the bidding entity. The ownership
disclosure standards for the short-form are set forth in 1.2112 of the
Commission's rules.
B. Consortia And Joint Bidding Arrangements (FCC Form 175 Exhibit B)
Applicants will be required to identify on their short-form
applications any parties with whom they have entered into any
consortium arrangements, joint ventures, partnerships or other
agreements or understandings which relate in any way to the
construction permits being auctioned, including any agreements relating
to post-auction market structure. See 47 CFR 1.2105(a)(2)(viii) and
1.2105(c)(1). Applicants will also be required to certify on their
short-form applications that they have not entered into any explicit or
implicit agreements, arrangements or understandings of any kind with
any parties, other than those identified, regarding the amount of their
bids, bidding strategies, or the particular construction permits on
which they will or will not bid. See 47 CFR 1.2105(a)(2)(ix). As
discussed, if an applicant has had discussions, but has not reached a
joint bidding agreement by the short-form deadline, it would not
include the names of parties to the discussions on its applications and
may not continue discussions with applicants for the same market after
the deadline. Where applicants have entered into consortia or joint
bidding arrangements, applicants must submit an ``Exhibit B'' to the
FCC Form 175.
A party holding a non-controlling, attributable interest in one
applicant will be permitted to acquire an ownership interest in, form a
consortium with, or enter into a joint bidding arrangement with other
applicants for construction permits in the same market provided that
(i) the attributable interest holder certifies that it has not and will
not communicate with any party concerning the bids or bidding
strategies of more than one of the applicants in which it holds an
attributable interest, or with which it has formed a consortium or
entered into a joint bidding arrangement; and (ii) the arrangements do
not result in a change in control of any of the applicants. While the
anti-collusion rules do not prohibit non-auction related business
negotiations among auction applicants, bidders are reminded that
certain discussions or exchanges could touch upon impermissible subject
matters because they may convey pricing information and bidding
strategies.
C. New Entrant Bidding Credit (Form 175 Exhibit C)
To fulfill its obligations under 309(j) and further its long-
standing commitment to the diversification of broadcast facility
ownership, the Commission adopted a tiered New Entrant Bidding Credit
for broadcast auction applicants with no, or very few, other media
interests.
1. Eligibility
The interests of the bidder, and of any individuals or entities
with an attributable interest in the bidder, in other media of mass
communications shall be considered when determining a bidder's
eligibility for the New Entrant Bidding Credit. The bidder's
attributable interests shall be determined as of the short-form (FCC
Form 175) filing deadline--March 19, 2001. Bidders intending to divest
a media interest or make any other ownership changes, such as
resignation of positional interests, in order to avoid attribution for
purposes of qualifying for the New Entrant Bidding Credit must have
consummated such divestment transactions or have completed such
ownership changes by no later than the short-form filing deadline--
March 19, 2001.
Under traditional broadcast attribution rules, those entities or
individuals with an attributable interest in a bidder include:
All officers and directors of a corporate bidder;
Any owner of 5 percent or more of the voting stock of a
corporate bidder;
All partners and limited partners of a partnership bidder,
unless the limited partners are sufficiently insulated; and
All members of a limited liability company, unless
sufficiently insulated.
In cases where a bidder's spouse or close family member holds other
media
[[Page 8965]]
interests, such interests are not automatically attributable to the
bidder. The Commission decides attribution issues in this context based
on certain factors traditionally considered relevant. Bidders should
note that the mass media attribution rules were recently revised.
Bidders are also reminded that, by the New Entrant Bidding Credit
Reconsideration Order, 64 FR 44856 (August 18, 1999), the Commission
further refined the eligibility standards for the New Entrant Bidding
Credit, judging it appropriate to attribute the media interests held by
very substantial investors in, or creditors of, a bidder claiming new
entrant status.
Generally, media interests will be attributable for purposes of the
New Entrant Bidding Credit to the same extent that such other media
interests are considered attributable for purposes of the broadcast
multiple ownership rules. However, attributable interests held by a
winning bidder in existing low power television, television translator
or FM translator facilities will not be counted among the bidders'
other mass media interests in determining its eligibility for a New
Entrant Bidding Credit. A medium of mass communications is defined in
47 CFR 73.5008(b).
2. Application Requirements
In addition to the ownership information required on Exhibit A,
applicants are required to file supporting documentation on Exhibit C
to their FCC Form 175 short-form applications to establish that they
satisfy the eligibility requirements to qualify for a New Entrant
Bidding Credit.
3. Bidding Credits
Applicants that qualify for the New Entrant Bidding Credit, as set
forth in 47 CFR 73.5007, are eligible for a bidding credit that
represents the amount by which a bidder's winning bid is discounted.
The size of a New Entrant Bidding Credit depends on the number of
ownership interests in other media of mass communications that are
attributable to the bidder-entity and its attributable interest-
holders:
A 35 percent bidding credit will be given to a winning
bidder if it, and/or any individual or entity with an attributable
interest in the winning bidder, has no attributable interest in any
other media of mass communications, as defined in 47 CFR 73.5008;
A 25 percent bidding credit will be given to a winning
bidder if it, and/or any individual or entity with an attributable
interest in the winning bidder, has an attributable interest in no more
than three mass media facilities, as defined in 47 CFR 73.5008;
No bidding credit will be given if any of the commonly
owned mass media facilities serve the same area as the proposed
broadcast station, as defined in 47 CFR 73.5007, or if the winning
bidder, and/or any individual or entity with an attributable interest
in the winning bidder, has attributable interests in more than three
mass media facilities.
Bidding credits are not cumulative; qualifying applicants receive
either the 25 percent or the 35 percent bidding credit, but not both.
Attributable interests are defined in 47 CFR 73.3555 and Note 2 of that
section. Bidders should note that unjust enrichment provisions apply to
a winning bidder that utilizes a bidding credit and subsequently seeks
to assign or transfer control of its license or construction permit to
an entity not qualifying for the same level of bidding credit.
Summit Media Broadcasting contends that the Commission should make
allowances for small businesses to participate in auctions, such as
partial payment provisions of the established minimum opening bid, or
the submission of an accountant or bank report attesting to fund
availability. However, as recognized by the Commission in the broadcast
competitive bidding rulemaking proceeding, in the Broadcast First
Report and Order, the Broadcast Reconsideration Order, and the New
Entrant Bidding Credit Reconsideration Order, the designated entity
provision adopted and specified for use in broadcast auctions--the New
Entrant Bidding Credit--is particularly suitable to promote opportunity
for participation in competitive bidding for construction permits in
broadcast auctions.
D. Provisions Regarding Defaulters and Former Defaulters (Form 175
Exhibit
Each applicant must certify on its FCC Form 175 application that it
is not in default on any Commission licenses and that it is not
delinquent on any non-tax debt owed to any Federal agency. In addition,
each applicant must attach to its FCC Form 175 application a statement
made under penalty of perjury indicating whether or not the applicant,
or any of the applicant's controlling interests or their affiliates,
has ever been in default on any Commission licenses or has ever been
delinquent on any non-tax debt owed to any federal agency. Applicants
must include this statement as Exhibit D of the FCC Form 175. If any of
an applicant's controlling interests holders or their affiliates, as
defined by 1.2110 of the Commission's rules, have ever been in default
on any Commission license, or have ever been delinquent on any non-tax
debt owed to any Federal agency, the applicant must include such
information as part of the same attached statement. Prospective bidders
are reminded that the statement must be made under penalty of perjury
and, further, submission of a false certification to the Commission is
a serious matter that may result in severe penalties, including
monetary forfeitures, license revocations, exclusion from participation
in future auctions, and/or criminal prosecution.
``Former defaulters''--i.e., applicants, including their
attributable interest holders, that in the past have defaulted on any
Commission licenses or been delinquent on any non-tax debt owed to any
Federal agency, but that have since remedied all such defaults and
cured all of their outstanding non-tax delinquencies--are eligible to
bid in Auction No. 37, provided that they are otherwise qualified.
However, former defaulters are required to pay upfront payments that
are fifty percent more than the normal upfront payment amounts.
E. Other Information (FCC Form 175 Exhibits E and F)
Applicants owned by minorities or women, as defined in 47 CFR
1.2110(b)(2), may attach an exhibit (Exhibit E) regarding this status.
This applicant status information is collected for statistical purposes
only and assists the Commission in monitoring the participation of
``designated entities'' in its auctions. Applicants wishing to submit
additional information may do so on Exhibit F (Miscellaneous
Information) to the FCC Form 175.
F. Maintaining Current Information in Short-Form Applications (FCC Form
175)
Applicants have an obligation under 47 CFR 1.65, to maintain the
completeness and accuracy of information in their short-form
applications. Amendments reporting substantial changes of possible
decisional significance in information contained in FCC Form 175
applications, as defined by 47 CFR 1.2105(b)(2), will not be accepted
and may in some instances result in the dismissal of the FCC Form 175
application.
[[Page 8966]]
III. Pre-Auction Procedures
A. Auction Seminar
On March 7, 2001 the FCC will sponsor a free seminar for Auction
No. 37 at the Federal Communications Commission, located at 445 12th
Street, S.W., Washington, D.C. The seminar will provide attendees with
information about pre-auction procedures, conduct of the auction, FCC
remote bidding software, and the broadcast service and auction rules.
B. Short-Form Application (FCC Form 175)--Due March 19, 2001
In order to be eligible to bid in this auction, applicants must
first submit an FCC Form 175 application. This application must be
submitted electronically beginning at 12:00 noon ET on March 7, 2001
and must be received at the Commission no later than 6:00 p.m. ET on
March 19, 2001. Late applications will not be accepted.
There is no application fee required when filing an FCC Form 175.
However, to be eligible to bid, an applicant must submit an upfront
payment. See Part III.D, infra.
Pursuant to procedures established in the Broadcast First Report
and Order, the Mass Media Bureau will impose a temporary freeze on the
filing of FM minor modification applications during the period that FCC
Form 175 applications may be filed for FM Auction No. 37. A public
notice will be released in this regard.
1. Electronic Filing
Applicants must file their FCC Form 175 applications
electronically. For Auction No. 37, applications may generally be filed
at any time beginning at 12:00 noon ET on March 7, 2001, until 6:00
p.m. ET on March 19, 2001. Applicants are strongly encouraged to file
early and are responsible for allowing adequate time for filing their
applications. Applicants may update or amend their electronic
applications multiple times until the filing deadline on March 19,
2001.
Applicants must press the ``Submit Form 175'' button on the
``Submit'' page of the electronic form to successfully submit their FCC
Form 175. Any form that is not submitted will not be reviewed by the
FCC. Information about accessing the FCC Form 175 is included in
Attachment C. Technical support is available at (202) 414-1250 (voice)
or (202) 414-1255 (text telephone (TTY)); the hours of service are
Monday through Friday, from 7:00 a.m. to 10:00 p.m. ET, Saturday, from
8:00 a.m. to 7:00 p.m. ET, and Sunday, from 12:00 noon to 6:00 p.m. ET.
In order to provide better service to the public, all calls to the
hotline are recorded.
2. Completion of the FCC Form 175
Applicants should carefully review 47 CFR 1.2105, and must complete
all items on the FCC Form 175. Instructions for completing the FCC Form
175 are in Attachment D of the public notice. Applicants are encouraged
to begin preparing the required attachments for FCC Form 175 prior to
submitting the form. Attachments C and D to the public notice provide
information on the required attachments and appropriate formats.
3. Electronic Review of FCC Form 175
The FCC Form 175 electronic review software may be used to review
and print applicants' FCC Form 175 information. Applicants may also
view other applicants' completed FCC Form 175s after the filing
deadline has passed and the FCC has issued a public notice explaining
the status of the applications. For this reason, it is important that
applicants do not include their Taxpayer Identification Numbers (TINs)
on any exhibits to their FCC Form 175 applications. There is no fee for
accessing this system. See Attachment C of the Public Notice for
details on accessing the review system.
C. Application Processing and Minor Corrections
After the deadline for filing the FCC Form 175 applications has
passed, the FCC will process all timely submitted applications to
determine which are acceptable for filing, and subsequently will issue
a public notice identifying: (1) Those applications accepted for filing
(including FCC account numbers and the construction permits for which
they applied); (2) those applications rejected; and (3) those
applications which have minor defects that may be corrected, and the
deadline for filing such corrected applications.
As described more fully in the Commission's rules, after the March
19, 2001 short-form filing deadline, applicants may make only minor
corrections to their FCC Form 175 applications. Applicants will not be
permitted to make major modifications to their applications (e.g.,
change their construction permit selections, change the certifying
official, change control of the applicant, or change New Entrant
Bidding Credit eligibility).
D. Upfront Payments--Due April 16, 2001
In order to be eligible to bid in the auction, applicants must
submit an upfront payment accompanied by a FCC Remittance Advice Form
(FCC Form 159). After completing the FCC Form 175, filers will have
access to an electronic version of the FCC Form 159 that can be printed
and faxed to Mellon Bank in Pittsburgh, PA. All upfront payments must
be received at Mellon Bank by 6:00 p.m. ET on April 16, 2001.
Please note that:
All payments must be made in U.S. dollars;
All payments must be made by wire transfer;
Upfront payments for Auction No. 37 go to a lockbox number
different from the ones used in previous FCC auctions, and different
from the lockbox number to be used for post-auction payments;
Failure to deliver the upfront payment by the April 16,
2001 deadline will result in dismissal of the application and
disqualification from participation in the auction.
1. Auction Payments by Wire Transfer
Wire transfer payments must be received by 6:00 p.m. ET on April
16, 2001. To avoid untimely payments, applicants should discuss
arrangements (including bank closing schedules) with their banker
several days before they plan to make the wire transfer, and allow
sufficient time for the transfer to be initiated and completed before
the deadline. Applicants will need the following information:
ABA Routing Number: 043000261
Receiving Bank: Mellon Pittsburgh
BNF: FCC/ACCOUNT# 910-1211
OBI Field: (Skip one space between each information item)
``AUCTIONPAY''
TAXPAYER IDENTIFICATION NO. (same as FCC Form 159, block 26)
PAYMENT TYPE CODE (enter ``A37U'')
FCC CODE 1 (same as FCC Form 159, block 23A: ``37'')
PAYER NAME (same as FCC Form 159, block 2)
LOCKBOX NO. # 358435
Note: The BNF and Lockbox number are specific to the upfront
payments for this auction; do not use BNF or Lockbox numbers from
previous auctions.
Applicants must fax a completed FCC Form 159 to Mellon Bank at
(412) 209-6045 at least one hour before placing the order for the wire
transfer (but on the same business day). On the cover sheet of the fax,
write ``Wire Transfer--Auction Payment for Auction Event No. 37.''
Bidders should confirm the timely transmission and receipt of their
upfront payment at Mellon Bank by contacting their sending financial
institution.
2. FCC Form 159
A completed FCC Remittance Advice Form (FCC Form 159) must be faxed
to
[[Page 8967]]
Mellon Bank to accompany each upfront payment. Proper completion of FCC
Form 159 is critical to ensuring correct credit of upfront payments.
Detailed instructions for completion of FCC Form 159 are included in
Attachment E of the public notice. An electronic version of the FCC
Form 159 is available after filing the FCC Form 175. The FCC Form 159
must be completed electronically and must be filed with Mellon Bank via
facsimile.
3. Amount of Upfront Payment
The Bureaus have delegated authority to determine an appropriate
upfront payment for the FM construction permits being auctioned, taking
into account such factors as the efficiency of the auction process and
the potential value of the spectrum. Any auction applicant that has
previously been in default on any Commission license or has previously
been delinquent on any non-tax debt owed to any Federal agency must
submit an upfront payment equal to 50 percent more than that set for
each particular construction permit. See 47 CFR 1.2106.
4. Applicant's Wire Transfer Information for Purposes of Refunds
The Commission will use wire transfers for all Auction No. 37
refunds. To ensure that refunds of upfront payments are processed in an
expeditious manner, the Commission is requesting that all pertinent
information as listed below be supplied to the FCC. Applicants can
provide the information electronically during the initial short form
filing window after the form has been submitted. Wire Transfer
Instructions can also be manually faxed to the FCC, Financial
Operations Center, Auctions Accounting Group, ATTN: Tim Dates or Gail
Glasser, at (202) 418-2843 by March 19, 2001. Should the payer fail to
submit the requested information, the refund will be returned to the
original payer. For additional information, please call (202) 418-1995.
Name of Bank
ABA Number
Contact and Phone Number
Account Number to Credit
Name of Account Holder
Correspondent Bank (if applicable)
ABA Number
Account Number
Tax ID Number
(Applicants should also note that implementation of the Debt Collection
Improvement Act of 1996 requires the FCC to obtain a Taxpayer
Identification Number (TIN) before it can disburse refunds.)
Eligibility for refunds is discussed in Section V.E.
E. Auction Registration
Approximately ten days before the auction, the FCC will issue a
public notice announcing all qualified bidders for the auction.
Qualified bidders are those applicants whose short-form applications
have been accepted for filing and that have timely submitted an upfront
payment.
All qualified bidders are automatically registered for the auction.
Registration materials will be distributed prior to the auction by two
separate overnight mailings, each containing part of the confidential
identification codes required to place bids. These mailings will be
sent only to the contact person at the contact address listed in the
short-form application.
Applicants that do not receive both registration mailings will not
be able to submit bids. Therefore, any qualified applicant that has not
received both mailings by noon on Thursday, May 3, 2001, should contact
the Auctions Hotline at (717) 338-2888. Receipt of both registration
mailings is critical to participating in the auction and each applicant
is responsible for ensuring it has received all of the registration
material.
Qualified bidders should note that lost login codes, passwords, or
bidder identification numbers can be replaced only by appearing in
person at the FCC Auction Headquarters located at 445 12th Street, SW.,
Washington, DC 20554. Only an authorized representative or certifying
official, as designated on an applicant's short-form application, may
appear in person with two forms of identification (one of which must be
a photo identification) in order to receive replacement codes.
Qualified bidders requiring replacement codes must call technical
support prior to arriving at the FCC to arrange preparation of new
codes.
F. Remote Electronic Bidding Software
Qualified bidders are allowed to bid electronically or by
telephone. If choosing to bid electronically, each bidder must purchase
their own copy of the remote electronic bidding software. Electronic
bids will only be accepted from those applicants purchasing the
software. However, the software may be copied by the applicant for use
by its authorized bidders at different locations. The price of the
FCC's remote bidding software is $175.00 and must be ordered by Monday,
March 19, 2001. For security purposes, the software is only mailed to
the contact person at the contact address listed on the short-form
application. Please note that auction software is tailored to a
specific auction, so software from prior auctions will not work for
Auction No. 37. If bidding telephonically, the telephonic bidding phone
number will be supplied in the first Federal Express mailing of
confidential login codes. Qualified bidders that do not purchase the
software may only bid telephonically. To indicate your bidding
preference, an FCC Bidding Preference/Remote Software Order Form can be
accessed when submitting the FCC Form 175. Bidders should complete this
form electronically, print it out and fax to (717) 338-2850. A manual
copy of this form is also included as Attachment F of the public
notice.
G. Mock Auction
All qualified bidders will be eligible to participate in a mock
auction on Monday, May 7, 2001. The mock auction will enable applicants
to become familiar with the electronic software prior to the auction.
Free demonstration software will be available for use in the mock
auction. Participation by all bidders is strongly recommended. Details
will be announced by public notice.
IV. Auction Event
The first round of bidding for Auction No. 37 will begin on
Wednesday, May 9, 2001. The initial bidding schedule will be announced
in the public notice listing the qualified bidders, which is released
approximately 10 days before the start of the auction.
E. Auction Structure
1. Multiple Round, Ascending Auction
In the Auction No. 37 Comment Public Notice, we proposed to award
the construction permits for FM Broadcast stations in a simultaneous,
multiple-round, ascending auction. We received no comments on this
issue. We conclude that it is operationally feasible and appropriate to
auction the construction permits using this auction design. Unless
otherwise announced, bids will be accepted on all construction permits
in successive rounds of bidding.
2. Maximum Eligibility and Activity Rules
In the Auction No. 37 Comment Public Notice, we proposed that the
amount of the upfront payment submitted by a bidder would determine the
initial maximum eligibility (as measured in bidding units) for each
bidder.
For Auction No. 37, we will adopt the maximum eligibility proposal
for Auction No. 37. The amount of the upfront payment submitted by a
bidder
[[Page 8968]]
determines the initial maximum eligibility (in bidding units) for each
bidder. Note again that the upfront payments are not attributed to
specific construction permits, but instead will be translated into
bidding units to define a bidder's initial maximum eligibility. The
total upfront payment defines the maximum number of bidding units on
which the applicant will be permitted to bid. As there is no provision
for increasing a bidder's maximum eligibility during the course of an
auction, prospective bidders are cautioned to calculate their upfront
payments carefully. The total upfront payment does not define the total
dollars a bidder may bid on any given construction permit.
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 the end before
participating. Bidders are required to be active on 100 percent of
their maximum eligibility during each round of the auction.
A bidder's activity level in a round is the sum of the bidding
units associated with construction permits on which the bidder is
active. A bidder is considered active on a construction permit in the
current round if it is either the high bidder at the end of the
previous round and does not withdraw the high bid in the current round,
or if it submits an acceptable bid in the current round. Failure to
maintain the requisite activity level will result in the use of an
activity rule waiver, if any remain, or a permanent reduction in the
bidder's bidding eligibility to bring them into compliance with the
activity rule.
3. Activity Rule Waivers and Reducing Eligibility
In the Auction No. 37 Comment Public Notice, we proposed that each
bidder in the auction would be provided five activity rule waivers that
may be used in any round during the course of the auction.
Based upon our experience in previous auctions, we adopt our
proposal and each bidder will be provided five activity rule waivers
that may be used in any round during the course of the auction. Use of
an activity rule waiver preserves the bidder's current bidding
eligibility despite the bidder's activity in the current round being
below the required minimum level. An activity rule waiver applies to an
entire round of bidding and not to a particular construction permit. We
are satisfied that our practice of providing five waivers over the
course of the auction provides a sufficient number of waivers and
maximum flexibility to the bidders, while safeguarding the integrity of
the auction.
The FCC auction system assumes that bidders with insufficient
activity would prefer to use an activity rule waiver (if available)
rather than lose bidding eligibility. Therefore, the system will
automatically apply a waiver (known as an ``automatic waiver'') at the
end of any round where a bidder's activity level is below the minimum
required unless: (1) There are no activity rule waivers available; or
(2) the bidder overrides the automatic application of a waiver by
reducing eligibility, thereby meeting the minimum requirements.
A bidder with insufficient activity that wants to reduce its
bidding eligibility rather than use an activity rule waiver must
affirmatively override the automatic waiver mechanism during the round
by using the reduce eligibility function in the software. In this case,
the bidder's eligibility is permanently reduced to bring the bidder
into compliance with the activity rules. Once eligibility has been
reduced, a bidder will not be permitted to regain its lost bidding
eligibility.
Finally, a bidder may proactively use an activity rule waiver as a
means to keep the auction open without placing a bid. If a bidder
submits a proactive waiver (using the proactive waiver function in the
bidding software) during a round in which no bids are submitted, the
auction will remain open and the bidder's eligibility will be
preserved. An automatic waiver invoked in a round in which there are no
new valid bids or withdrawals will not keep the auction open.
4. Auction Stopping Rules
For Auction No. 37, the Bureau proposed to employ a simultaneous
stopping rule. Under this rule, bidding will remain open on all
construction permits until bidding stops on every construction permit.
The auction will close for all construction permits when one round
passes during which no bidder submits a new acceptable bid on any
construction permit, a withdrawal, or applies a proactive waiver. After
the first such round, bidding closes simultaneously on all construction
permits.
The Bureau also sought comment on a modified version of the
stopping rule. The modified version of the stopping rule would close
the auction after the first round in which no bidder submits a
proactive waiver, a withdrawal, or a new bid on a construction permit
when it is not the standing high bidder. Thus, absent any other bidding
activity, a bidder placing a new bid on a construction permit for which
it is the standing high bidder would not keep the auction open under
this modified stopping rule.
The Bureau further proposed retaining the discretion to keep an
auction open even if no new acceptable bids or proactive waivers are
submitted and no previous high bids are withdrawn in a round. In this
event, the effect will be the same as if a bidder had submitted a
proactive waiver. Thus, the activity rule will apply as usual, and a
bidder with insufficient activity will either lose bidding eligibility
or use an activity rule waiver (if it has any left).
In addition, we proposed that the Bureau reserve the right to
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 final round(s)
only for construction permits on which the high bid increased in at
least one of the preceding specified number of rounds. We proposed to
exercise this option only in circumstances such as where the auction is
proceeding very slowly, where there is minimal overall bidding
activity, or where it appears likely that the auction will not close
within a reasonable period of time. Before exercising this option, the
Bureau is likely to attempt to increase the pace of the auction by, for
example, increasing the number of bidding rounds per day, and/or
adjusting the amount of the minimum bid increments for construction
permits.
We adopt all of the above proposals concerning the auction stopping
rules. Auction No. 37 will begin under the simultaneous stopping rule,
and the Bureau will retain the discretion to invoke the other versions
of the stopping rule.
5. Auction Delay, Suspension, or Cancellation
In the Auction No. 37 Comment Public Notice, we proposed 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, evidence of an auction security breach, unlawful
bidding activity, administrative or weather necessity, or for any other
reason that affects the fair and competitive conduct of competitive
bidding.
Because this approach has proven effective in resolving exigent
circumstances in previous auctions, we will adopt our proposed auction
cancellation rules. By public notice or by announcement during the
auction, the Bureau may delay, suspend, or
[[Page 8969]]
cancel the auction in the event of natural disaster, technical
obstacle, evidence of an auction security breach, unlawful bidding
activity, administrative or weather necessity, or for any other reason
that affects the fair and competitive conduct of competitive bidding.
In such cases, the Bureau, in their sole discretion, may elect to:
Resume the auction starting from the beginning of the current round;
resume the auction starting from some previous round; or cancel the
auction in its entirety. Network interruption may cause the Bureau to
delay or suspend the auction. We emphasize that exercise of this
authority is solely within the discretion of the Bureau, and its use is
not intended to be a substitute for situations in which bidders may
wish to apply their activity rule waivers.
B. Bidding Procedures
1. Round Structure
The initial bidding schedule will be announced in the public notice
listing the qualified bidders, which is released approximately 10 days
before the start of the auction. This public notice will be included in
the registration mailings. The round structure for each bidding round
contains a single bidding round followed by the release of the round
results. Multiple bidding rounds may be conducted in a given day.
Details regarding round result formats and locations will also be
included in the public notice.
The FCC has discretion to change the bidding schedule in order to
foster an auction pace that reasonably balances speed with the bidders'
need to study round results and adjust their bidding strategies. The
FCC may increase or decrease the amount of time for the bidding rounds
and review periods, or the number of rounds per day, depending upon the
bidding activity level and other factors.
2. Reserve Price or Minimum Opening Bid
The Balanced Budget Act of 1997 calls upon the Commission to
prescribe methods by which a reasonable reserve price will be required
or a minimum opening bid established when FCC licenses or construction
permits are subject to auction (i.e., because they are mutually
exclusive), unless the Commission determines that a reserve price or
minimum opening bid is not in the public interest. Congress has enacted
a presumption that unless the Commission determines otherwise, minimum
opening bids or reserve prices are in the public interest. In
conformity with this mandate, the Commission has directed the Bureaus
to seek comment on the use of a minimum opening bid and/or reserve
price prior to the start of each auction.
In the Auction No. 37 Comment Public Notice, the Bureaus proposed
to establish minimum opening bids for Auction No. 37. The minimum
opening bid was determined by taking into account various factors
relating to the efficiency of the auction and the potential value of
the spectrum, including the type of service and class of facility
offered, market size, population covered by the proposed FM broadcast
facility, industry cash flow data, and recent broadcast transactions.
Several commenters asserted that the minimum opening bids and/or
upfront payments identified in Attachment A of the Auction No. 37
Additional Comment Public Notice are excessive and seek reductions
thereof. In general, most commenters claim that the minimum opening
bids, as well as the upfront payments, may not accurately reflect the
value of the proposed FM construction permits, as determined by class
of facility, market size and anticipated population coverage, and that
many of the proposals are not consistent with the minimum opening bids
and upfront payments for similar facilities auctioned in Auction No.
25.
After careful consideration of the concerns raised by commenters,
we have adjusted the minimum opening bids and upfront payments to
reduce the possibility of unsold construction permits and the
likelihood that excessive minimum opening bid and upfront payment
amounts could discourage auction participation. We believe the modified
minimum opening bids and upfront payments remain sufficient to deter
insincere bidding. The revised minimum opening bids and upfront payment
amounts are reflected on Attachment A to the Public Notice.
3. Bid Increments and Minimum Accepted Bids
In the Auction No. 37 Comment Public Notice, we proposed to apply a
minimum bid increment of 10 percent. We further proposed to retain the
discretion to change the minimum bid increment if circumstances so
dictate.
We adopt the proposal contained in the Auction No. 37 Comment
Public Notice. Once there is a standing high bid on the construction
permit, there will be a bid increment associated with that bid
indicating the minimum amount by which the bid on that permit can be
raised. For Auction No. 37, we will use a flat, across-the-board
increment of 10 percent to calculate the minimum bid increment. The
Bureaus retain the discretion to compute the minimum bid increment
through other methodologies if it determines circumstances so dictate.
Advanced notice of the Bureau's decision to do so will be announced via
the Automated Auction System.
4. High Bids
Each bid will be date- and time-stamped when it is entered into the
FCC computer system. In the event of tie high bids (identical gross bid
amounts) for a construction permit during a round, the earliest of the
tied bids will be the standing high bid at the end of the round. The
bidding software allows bidders to make multiple submissions in a
round. As each bid is individually date- and time-stamped according to
when it was submitted, bids submitted by a bidder earlier in a round
will have an earlier date and time stamp than bids submitted later in a
round.
5. Bidding
During a bidding round, a bidder may submit bids for as many
construction permits as it wishes (subject to its eligibility),
withdraw high bids from previous bidding rounds, remove bids placed in
the same bidding round, or permanently reduce eligibility. Bidders also
have the option of making multiple submissions and withdrawals in each
bidding round. If a bidder submits multiple bids for a single
construction permit in the same round, the system takes the last bid
entered as that bidder's bid for the round, and the date- and time-
stamp of that bid reflects the latest time the bid was submitted.
Please note that all bidding will take place remotely either
through the automated bidding software or by telephonic bidding.
(Telephonic bid assistants are required to use a script when entering
bids placed by telephone. Telephonic bidders are therefore reminded to
allow sufficient time to bid by placing their calls well in advance of
the close of a round. Normally, four to five minutes are necessary to
complete a bid submission.) There will be no on-site bidding during
Auction No. 37.
A bidder's ability to bid on specific construction permits in the
first round of the auction is determined by two factors: (1) The
construction permits applied for on FCC Form 175; and (2) the upfront
payment amount deposited. The bid submission screens will be tailored
for each bidder to include only those construction permits for which
the bidder applied on its FCC Form 175. A bidder also has the option to
further tailor its bid submission screens to call up specified groups
of construction permits.
[[Page 8970]]
The bidding software requires each bidder to login to the FCC
auction system during the bidding round using the FCC account number,
bidder identification number, and the confidential security codes
provided in the registration materials. Bidders are strongly encouraged
to download and print bid confirmations after they submit their bids.
The bid entry screen of the automated auction system software for
Auction No. 37 allows bidders to place multiple increment bids.
Specifically, high bids may be increased from one to nine bid
increments. A single bid increment is defined as the difference between
the standing high bid and the minimum acceptable bid for a construction
permit. The bidding software will display the bid increment for each
construction permit.
To place a bid on a construction permit, the bidder must increase
the standing high bid by one to nine times the bid increment. This is
done by entering a whole number between 1 and 9 in the bid increment
multiplier (Bid Mult) field in the software. This value will determine
the amount of the bid (Amount Bid) by multiplying the bid increment
multiplier by the bid increment and adding the result to the high bid
amount according to the following formula:
Amount Bid = High Bid + (Bid Mult * Bid Increment)
Thus, bidders may place a bid that exceeds the standing high bid by
between one and nine times the bid increment. For example, to bid the
minimum acceptable bid, which is equal to one bid increment, a bidder
will enter ``1'' in the bid increment multiplier column and press
submit.
For any construction permit on which the FCC is designated as the
high bidder (i.e., a construction permit that has not yet received a
bid in the auction or where the high bid was withdrawn and a new bid
has not yet been placed), bidders will be limited to bidding only the
minimum acceptable bid. In both of these cases no increment exists for
the construction permit, and bidders should enter ``1'' in the Bid Mult
field. Note that in this case, any whole number between 1 and 9 entered
in the multiplier column will result in a bid value at the minimum
acceptable bid amount. Finally, bidders are cautioned in entering
numbers in the Bid Mult field because, as explained in the following
section, a high bidder that withdraws its standing high bid from a
previous round, even if mistakenly or erroneously made, is subject to
bid withdrawal payments.
6. Bid Removal and Bid Withdrawal
In the Auction No. 37 Comment Public Notice, we proposed bid
removal and bid withdrawal rules. With respect to bid withdrawals, we
proposed limiting each bidder to withdrawals in no more than two rounds
during the course of the auction. The two rounds in which withdrawals
are utilized, we proposed, would be at the bidder's discretion.
In previous auctions, we have detected bidder conduct that,
arguably, may have constituted strategic bidding through the use of bid
withdrawals. While we continue to recognize the important role that bid
withdrawals play in an auction, we conclude that, for Auction No. 37,
adoption of a limit on their use to two rounds is the most appropriate
outcome. By doing so we believe we strike a reasonable compromise that
will allow bidders to use withdrawals. Our decision on this issue is
based upon our experience in prior auctions, particularly the PCS D, E
and F block auctions, and 800 MHz SMR auction, and is in no way a
reflection of our view regarding the likelihood of any speculation or
``gaming'' in this auction.
The Bureau will therefore limit the number of rounds in which
bidders may place withdrawals to two rounds. These rounds will be at
the bidder's discretion and there will be no limit on the number of
bids that may be withdrawn in either of these rounds. Withdrawals
during the auction will still be subject to the bid withdrawal payments
specified in 47 CFR 1.2104(g). Bidders should note that abuse of the
Commission's bid withdrawal procedures could result in the denial of
the ability to bid on construction permits. If a high bid is withdrawn,
the construction permit will be offered in the next round at the second
highest bid price, which may be less than, or equal to, in the case of
tie bids, the amount of the withdrawn bid, without any bid increment.
The Commission will serve as a ``place holder'' on the construction
permit until a new acceptable bid is submitted on that construction
permit.
Procedures. Before the close of a bidding round, a bidder has the
option of removing any bids placed in that round. By using the ``remove
bid'' function in the software, a bidder may effectively ``unsubmit''
any bid placed within that round. Removing a bid will affect a bidder's
activity for the round in which it is removed, i.e., a bid that is
subsequently removed does not count toward the bidder's activity
requirement. This procedure will enhance bidder flexibility during the
auction. Therefore, we will adopt these procedures for Auction No. 37.
Once a round closes, a bidder may no longer remove a bid. However,
in later rounds, a bidder may withdraw standing high bids from previous
rounds using the ``withdraw bid'' function (assuming that the bidder
has not exhausted its withdrawal allowance). A high bidder that
withdraws its standing high bid from a previous round during the
auction is subject to the bid withdrawal payments specified in 47 CFR
1.2104(g).
Calculation. Generally, the Commission imposes payments on bidders
that withdraw high bids during the course of an auction. If a bidder
withdraws its bid and there is no higher bid in the same or subsequent
auction(s), the bidder that withdrew its bid is responsible for the
difference between its withdrawn bid and the net high bid in the same
or subsequent auction(s). In the case of multiple bid withdrawals on a
single construction permit, within the same or subsequent auctions(s),
the payment for each bid withdrawal will be calculated based on the
sequence of bid withdrawals and the amounts withdrawn. No withdrawal
payment will be assessed for a withdrawn bid if either the subsequent
winning bid or any of the intervening subsequent withdrawn bids, in
either the same or subsequent auctions(s), equals or exceeds that
withdrawn bid. Thus, a bidder that withdraws a bid will not be
responsible for any withdrawal payments if there is a subsequent higher
bid in the same or subsequent auction(s). This policy allows bidder to
most efficiently allocate their resources as well as to evaluate their
bidding strategies and business plans during an auction while, at the
same time, maintaining the integrity of the auction process. The Bureau
retains the discretion to scrutinize multiple bid withdrawals on a
single construction permit for evidence of anti-competitive strategic
behavior and take appropriate action when deemed necessary.
In the Part 1 Fifth Report and Order, 65 FR 52323 (August 29,
2000), the Commission modified 1.2104(g)(1) of the rules regarding
assessments of interim bid withdrawal payments. As amended,
1.2104(g)(1) provides that in instances in which bids have been
withdrawn on a construction permit that is not won in the same auction,
the Commission will assess an interim withdrawal payment equal to 3
percent of the amount of the bid withdrawals. The 3 percent interim
payment will be applied toward any final bid withdrawal payment that
will be assessed at the close of the subsequent auction of the
[[Page 8971]]
construction permit. Assessing an interim bid withdrawal payment
ensures that the Commission receives a minimal withdrawal payment
pending assessment of any final withdrawal payment. The Part 1 Fifth
Report and Order provides specific examples showing application of the
bid withdrawal payment rule.
7. Round Results
Bids placed during a round will not be published until the
conclusion of that bidding period. After a round closes, the Commission
will compile reports of all bids placed, bids withdrawn, current high
bids, new minimum accepted bids, and bidder eligibility status (bidding
eligibility and activity rule waivers), and post the reports for public
access. Reports reflecting bidders' identities and FCC account numbers
for Auction No. 37 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.
8. Auction Announcements
The FCC will use auction announcements to announce items such as
schedule changes. All FCC auction announcements will be available on
the FCC remote electronic bidding system, as well as on the Internet.
9. Maintaining the Accuracy of Short-Form (FCC Form 175) Information
As noted in Part II.A., after the short-form filing deadline,
applicants may make only minor changes to their FCC Form 175
applications. For example, permissible minor changes include deletion
and addition of authorized bidders (to a maximum of three) and certain
revision of exhibits. Filers must make these changes on-line, and
submit a letter summarizing the changes to: Louis Sigalos, Deputy
Chief, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau, Federal Communications Commission, 445 12th
Street, S.W., Room 4-A668, Washington, D.C. 20554
A separate copy of the letter should be mailed to Kenneth Burnley,
Auctions and Industry Analysis Division, 4-B524, Wireless
Telecommunications Bureau, Federal Communications Commission, 445 12th
Street, S.W., Washington, D.C. 20554. Questions about other changes
should be directed to Kenneth Burnley at (202) 418-0660.
V. Post-Auction Procedures
A. Down Payments
After bidding has ended, the Commission will issue a public notice
declaring the auction closed, identifying the winning bids and bidders
for each construction permit, and listing bid withdrawal payments due.
Within ten business days after release of the auction closing
public 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 United States Government to 20 percent of its net
winning bid (actual bids less any applicable bidding credit). See 47
CFR 1.2107(b) and 73.5003. In addition, by the same deadline all
bidders must pay any withdrawn bid amounts due under 47 CFR 1.2104(g),
as discussed in ``Bid Removal and Bid Withdrawal,'' Part IV.B.6.
(Upfront payments are applied first to satisfy any withdrawn bid
liability, before being applied toward down payments.)
B. Long-Form Application
Within thirty days following the release of the FM auction closing
public notice, winning bidders must submit a properly completed Form
301, Application for FM Construction Permit, and required exhibits, for
each construction permit won through Auction No. 37. Winning bidders
claiming new entrant status must include an exhibit demonstrating their
eligibility for the bidding credit. See 47 CFR 1.2112(b) and 73.5005.
Further filing instructions will be provided to auction winners at the
close of the auction.
C. Auction Discount Voucher
On June 8, 2000, the Commission awarded Qualcomm, Inc. a
transferable Auction Discount Voucher in the amount of $125,273,878.00.
This Auction Discount Voucher may be used by Qualcomm or its
transferee, in whole or in part, to adjust a winning bid in any
spectrum auction prior to June 8, 2003, subject to terms and conditions
set forth in the Commission's Order.
D. Default and Disqualification
Any high 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). In
such event the Commission may re-auction the construction permit or
offer it to the next highest bidder (in descending order) at their
final bid. See 47 CFR 1.2109(b) and (c). 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 licenses or construction permits held by the
applicant. See 47 C.F.R. Sec. 1.2109(d).
E. Refund of Remaining Upfront Payment Balance
All applicants that submitted upfront payments but were not the
winning bidder for a construction permit in Auction No. 37 may be
entitled to a refund of their upfront payment balance after the
conclusion of the auction. No refund will be made unless there are
excess funds on deposit from that applicant after any applicable bid
withdrawal payments have been paid.
Qualified bidders that have exhausted all of their activity rule
waivers, have no remaining bidding eligibility, and have not withdrawn
a high bid during the auction must submit a written refund request. If
you have completed the refund instructions electronically, then only a
written request for the refund is necessary. If not, the request must
also include wire transfer instructions and a Taxpayer Identification
Number (``TIN''). Send refund request to: Federal Communications
Commission, Financial Operations Center, Auctions Accounting Group,
Gail Glasser, 445 12th Street, S.W., Room 1-A824, Washington, D.C.
20554
Bidders are encouraged to file their refund information
electronically using the refund information portion of the FCC Form
175, but bidders can also fax their information to the Auctions
Accounting Group at (202) 418-2843. Once the information has been
approved, a refund will be sent to the party identified in the refund
information. Note: Refund processing generally takes up to two weeks to
complete. Bidders with questions about refunds should contact Tim Dates
or Gail Glasser at (202) 418-1995.
Federal Communications Commission.
Lisa Scanlan,
Supervisory Attorney, Audio Services Division, Mass Media Bureau.
[FR Doc. 01-2949 Filed 2-2-01; 8:45 am]
BILLING CODE 6712-01-U