Auction No. 43 Multi-Radio Service Auction Scheduled for January 10, 2002; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Procedural Issues

Note: EPA no longer updates this information, but it may be useful as a reference or resource.

[Federal Register: November 1, 2001 (Volume 66, Number 212)]
[Notices]
[Page 55180-55195]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01no01-59]

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FEDERAL COMMUNICATIONS COMMISSION
[Report No. AUC-01-43-B (Auction No. 43); DA 01-2315]

Auction No. 43 Multi-Radio Service Auction Scheduled for January
10, 2002; Notice and Filing Requirements, Minimum Opening Bids, Upfront
Payments 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 licenses in the Phase II 220 MHz
Service, 800 MHz Specialized Mobile Radio (``SMR'') Service General
Category Frequencies, and Location and Monitoring Service (``LMS'')
scheduled for January 10, 2002 (Auction No. 43).

DATES: Auction No. 43 is scheduled for January 10, 2002.

FOR FURTHER INFORMATION CONTACT: Auctions and Industry Analysis
Division: Howard Davenport, Legal Branch, or Lyle Ishida, Auctions
Operations Branch, at (202) 418-0660; Barbara Sibert, Auctions
Operations Branch, at (717) 338-2888, Media Contact: Meribeth McCarrick
at (202) 418-0654, Commercial Wireless Division: Amal Abdallah, Policy
and Rules Branch, or Dwain Livingston, Licensing and Technical Analysis
Branch, at (202) 418-0620.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 43
Procedures Public Notice released October 10, 2001. The complete text
of the Auction No. 43 Procedures Public Notice, including attachments,
is available for public inspection and copying during regular business
hours at the FCC Reference Information Center, Portals II, 445 12th
Street, SW., Room CY-A257, Washington, DC, 20554. The Auction No. 43
Procedures Public Notice may also be purchased from the Commission's
duplicating contractor, Qualex International, Portals II, 445 12th
Street, SW., Room CY-B402, Washington, DC, 20554, telephone 202-863-
2893, facsimile 202-863-2898, or via e-mail qualexint@aol.com.

[[Page 55181]]

I. General Information

A. Introduction

1. By the Auction No. 43 Procedures Public Notice, the Wireless
Telecommunications Bureau (``Bureau'') announces the procedures and
minimum opening bids for the upcoming auction of licenses in the Phase
II 220 MHz Service, 800 MHz Specialized Mobile Radio (``SMR'') Service
General Category Frequencies, and Location and Monitoring Service
(``LMS'') scheduled for January 10, 2002 (Auction No. 43). On September
7, 2001, in accordance with the Balanced Budget Act of 1997, the Bureau
released a public notice seeking comment on reserve prices or minimum
opening bids and the procedures to be used in Auction No. 43. The
Bureau received no comments in response to the Auction No. 43 Comment
Public Notice, 66 FR 48462 (September 20, 2001).
i. Background of Proceeding
2. Auction No. 43 will include licenses in the Phase II 220 MHz
Service, 800 MHz SMR Service General Category Frequencies, and Location
and Monitoring Service that either remain unsold from a previous
auction or were defaulted on by a winning bidder in a previous auction.
a. Phase II 220 MHz
3. In March 1997, the Commission restructured the licensing
framework that governs the 220 MHz Service. Site-specific licensing
used in the Phase I 220 MHz Service, was replaced with a geographic-
based system in the Phase II 220 MHz Service, which is the subject of
Auction No. 43. This geographic-based licensing methodology is similar
to that used in other commercial mobile radio services (``CMRS''). The
Commission developed three types of geographic area licenses for the
Phase II 220 MHz Service. The first type of license was based upon
Economic Areas (EAs), developed by the Bureau of Economic Analysis of
the U.S. Department of Commerce. In addition, the Commission created
three EA-type license areas to cover the following United States
territories: American Samoa; the U.S. Virgin Islands and Puerto Rico;
and Guam and the Northern Mariana Islands. The second type of license,
known as Economic Area Groupings (EAGs), included 6 groups of EAs,
which collectively encompassed all of the EA and EA-type licenses.
Finally, the Commission designed three nationwide licenses, each of
which encompassed all six EAGs. Service and operational requirements
for the Phase II 220 MHz Service are contained in Part 90 of the
Commission's Rules, 47 CFR 90.
b. 800 MHz SMR
4. On December 15, 1995, the Federal Communications Commission
(``FCC'' or ``Commission'') released a 800 MHz First Report and Order,
61 FR 6212 (February 16, 1996), that set forth proposals for new
licensing rules and auction procedures for the ``lower 230'' 800 MHz
SMR channels. On July 10, 1997, the Commission released a 800 MHz
Second Report and Order, 62 FR 41190 (July 31, 1997), that resolved
pending issues and established technical and operational rules for the
``lower 230'' 800 MHz SMR channels. On October 8, 1999, the Commission
released a 800 MHz Order on Reconsideration, 64 FR 71042 (December 20,
1999), that completed the implementation of a new licensing framework
for the 800 MHz SMR service.
c. LMS
5. In 1995, the Commission established rules governing the
licensing of the LMS in the 902-928 MHz frequency band. LMS refers to
advanced radio technologies designed to support the nation's
transportation infrastructure and to facilitate the growth of
Intelligent Transportation Systems. The Commission created a new
subpart M in part 90 of the Commission's rules for Transportation
Infrastructure Radio Services, which includes LMS and like services.
6. The LMS licenses offered in Auction No. 43 are multilateration
licenses. Multilateration LMS systems are designed to locate vehicles
or other objects by measuring the difference in time of arrival, or
difference in phase, of signals transmitted from a unit to a number of
fixed points, or from a number of fixed points to the unit to be
located. Such systems generally use spread-spectrum technology to
locate vehicles throughout a wide geographic area. Multilateration
technology is used, for example, by trucking companies to track
individual vehicles, by municipalities to pinpoint the location of
their buses, and by private entrepreneurs developing subscriber-based
services for recovery of stolen vehicles. The Commission defined non-
multilateration systems as LMS systems that employ any technology other
than multilateration technology. The Commission noted that unlike a
multilateration system, which determines the location of a vehicle or
object over a wide area, a typical non-multilateration system uses
narrowband technology whereby an electronic device placed in a vehicle
transfers information to and from that vehicle when the vehicle passes
near one of the system's stations. i.Licenses to Be Auctioned
7. The Auction No. 43 Comment Public Notice announced that 4
licenses in the Phase II 220 MHz Service, 23 licenses for the 800 MHz
SMR Service General Category Frequencies, and 42 multilateration
licenses in the Location and Monitoring Service (``LMS''), were to be
auctioned on January 10, 2002. A complete list of licenses available
for Auction No. 43 and their descriptions is included as Attachment A
of the Auction No. 43 Procedures Public Notice.

B. Rules and Disclaimers

i. Relevant Authority
8. Prospective bidders must familiarize themselves thoroughly with
the Commission's rules relating to the Phase II 220 MHz Service, 800
MHz SMR Service, and Location and Monitoring Service contained in title
47, part 90 of the Code of Federal Regulations, and those relating to
application and auction procedures, contained in title 47, part 1 of
the Code of Federal Regulations. Prospective bidders must also be
thoroughly familiar with the procedures, terms and conditions
(collectively, ``Terms'') contained in the Auction No. 43 Procedures
Public Notice; the Auction No. 43 Comment Public Notice; and the Part 1
Fifth Report and Order, 65 FR 52401 (August 29, 2000), (as well as
prior Commission proceedings regarding competitive bidding procedures).
a. Phase II 220 MHz
9. Auction participants bidding on licenses in the 220 MHz service
should also be familiar with the 220 MHz Third Report and Order, 62 FR
16004 (April 3, 1997); 220 MHz Memorandum Opinion and Order on
Reconsideration, 63 FR 32580 (June 12, 1998); 220 MHz Fourth Report and
Order, 62 46211 (September 2, 1997); and 220 MHz Fifth Report and
Order, 63 FR 49291 (September 15, 1998).
b. 800 MHz SMR
10. Auction participants bidding on licenses in the 800 MHz SMR
service should also be familiar with the 800 MHz First Report and
Order; 800 MHz Second Report and Order; and the 800 MHz Order on
Reconsideration.
c. LMS
11. Auction participants bidding on licenses in the Location and
Monitoring Service should also be familiar with the

[[Page 55182]]

LMS Second Report and Order, 63 FR 40659 (July 30, 1998); Memorandum
Opinion and Order and Further Notice of Proposed Rule Making, 62 FR
52036 (October 6, 1997).
d. Phase II 220 MHz, 800 MHz SMR, and LMS
12. 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 its 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
Auctions Internet site at http://www.fcc.gov/wtb/auctions.
Additionally, documents are available for public inspection and copying
during regular business hours at the FCC Reference Information Center,
Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC, 20554
or may be purchased from the Commission's duplicating contractor,
Qualex International, Portals II, 445 12th Street, SW., Room CY-B402,
Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898,
or via e-mail qualexint@aol.com. When ordering documents from Qualex,
please provide the appropriate FCC number (for example, FCC 98-157 for
the LMS Second Report and Order).
i. Prohibition of Collusion
13. To ensure the competitiveness of the auction process, the
Commission's rules prohibit applicants for the same geographic license
area 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 licenses in the same
geographic license areas 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. A violation could similarly
occur if the authorized bidders are different individuals employed by
the same organization (e.g., law firm or consulting firm). 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.
14. However, the Bureau cautions 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. Furthermore, the rule
would apply to an applicant bidding for an EAG and another applicant
bidding for an EA within that EAG, regardless of service. In addition,
applicants that apply to bid for ``all markets'' would be precluded
from communicating with all other applicants until after the down
payment deadline. 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 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 pursuant to Sec. 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 licenses covering the same geographic areas. By
signing their FCC Form 175 short-form applications, applicants are
certifying their compliance with Sec. 1.2105(c).
15. In addition, Sec. 1.65 of the Commission's rules requires an
applicant to maintain the accuracy and completeness of information
furnished in its pending application and to notify the Commission
within 30 days of any substantial change that may be of decisional
significance to that application. Thus, Sec. 1.65 requires an auction
applicant to notify the Commission of any violation of the anti-
collusion rules upon learning of such violation. Bidders therefore are
required to make such notification to the Commission immediately upon
discovery.
16. The Commission recently amended Sec. 1.2105 to require auction
applicants to report prohibited communications in writing to the
Commission immediately, but in no case later than five business days
after the communication occurs. This rule takes November 28, 2001.
17. A summary listing of documents from the Commission and the
Bureau addressing the application of the anti-collusion rules may be
found in Attachment H of the Auction No. 43 Procedures Public Notice.
iii. Due Diligence
a. 220 MHz
18. Potential bidders are reminded that there are a number of
incumbent Phase I 220 MHz licensees already licensed and operating on
frequencies that will be subject to the upcoming auction. Such
incumbents must be protected from harmful interference by Phase II 220
MHz licensees in accordance with the Commission's rules. See 47 CFR
90.763. These limitations may restrict the ability of such geographic
area licensees to use certain portions of the electromagnetic spectrum
or provide service to certain areas in their geographic license areas.
19. In addition, potential bidders seeking licenses for geographic
areas that are near the Canadian border should be aware that the use of
some or all of the channels they acquire in the auction could be
restricted by the agreement with Canada on the use of 220-222 MHz
spectrum in the border area.
20. Potential bidders should also be aware that certain
applications (including those for modification), petitions for
rulemaking, requests for special temporary authority (``STA''), waiver
requests, petitions to deny, petitions for reconsideration, and
applications for review may be pending before the Commission that
relate to particular applicants or incumbent non-nationwide 220 MHz
licensees. In addition, the decisions reached in the 220 MHz proceeding
are the subject of a judicial appeal and may be the subject of
additional reconsideration or appeal. See, e.g., PLMRS Narrowband
Corp., et al. v. Federal Communications Commission, No. 92-1432, (D.C.
Cir., filed September 18, 1992). The Bureau notes that resolution of
these matters could have an impact on the availability of spectrum for
EA and EAG licensees. In addition, while the Commission will continue
to act on pending applications, requests and petitions, some of these
matters may not be resolved by the time of the auction.
b. 800 MHz
21. Potential bidders are reminded that there are incumbent
licensees operating on frequencies that are subject to the upcoming
auction. Incumbent licensees retain the exclusive right to use those
channels within their self-defined service areas. The holder of an EA
authorization thus will be required

[[Page 55183]]

to implement its facilities to protect incumbents from harmful
interference. These limitations may restrict the ability of such
geographic area licenses to use certain portions of the electromagnetic
spectrum or provide service to certain areas in their geographic
license areas. Specifically, an EA authorization holder will be
required to coordinate with the incumbent licensees by using the
interference protection criteria in Secs. 90.683 and 90.621(b) of the
Commission's rules. However, operational agreements are encouraged
between the parties. Should an incumbent lose its license, the
incumbent's service area(s) will convey to the relevant authorized
holder of the EA. The relevant authorized holder of the EA will then be
entitled to operate within the forfeited service area(s) located within
its EA, without being subject to further competitive bidding.
22. Potential bidders should be aware that certain applications
(including those for modification), petitions for rulemaking, requests
for special temporary authority (``STA''), waiver requests, petitions
to deny, petitions for reconsideration, and applications for review may
be pending before the Commission that relate to particular applicants
or incumbent licensees. The Bureau notes that resolution of these
matters could have an impact on the availability of spectrum for EA
licensees in the 800 MHz SMR general category. While the Commission
will continue to act on pending applications, requests and petitions,
some of these matters may not be resolved by the time of the auction.
Potential bidders are solely responsible for investigating and
evaluating the degree to, which such pending matters may affect
spectrum availability in areas where they seek EA licenses.
23. In addition, licenses in EAs that border Canada may be subject
to the Arrangement Between the Department of Communications of Canada
and the Federal Communications Commission of the United States
Concerning the Use of 806-890 MHz Band along the Canada-United States
Border. Licenses in EAs that border Mexico may be subject to the
Agreement Between the Government of the United States of America and
the Government of the United Mexican States Concerning the Allocation
and Use of Frequency Bands by Terrestrial Non-Broadcasting
Radiocommunication Services Along the Common Border.
c. LMS
24. Potential bidders are reminded that LMS operates in the 902-928
MHz frequency band. This band is allocated for primary use by Federal
Government radiolocation systems. Next, in order of priority, are
Industrial, Scientific and Medical devices. Federal Government fixed
and mobile and LMS systems are secondary to these uses. The remaining
uses of the 902-928 MHz band include licensed amateur radio operations
and unlicensed part 15 equipment, both of which are secondary to all
other uses of the band. Part 15 low power devices include, but are not
limited to, those used for automatic meter reading, inventory control,
package tracking and shipping control, alarm services, local area
networks, internet access, and cordless telephones. The amateur radio
service is used by technically inclined private citizens to engage in
self-training, information exchange, and radio experimentation. In the
LMS Report and Order, 60 FR 15248 (March 23, 1995), the Commission
recognized the important contribution to the public provided by Part 15
technologies and amateur radio operators and sought to develop a band
plan that would maximize the ability of these services to coexist with
LMS systems.
25. The Commission adopted the LMS Report and Order with an eye
toward minimizing potential interference within and among the various
users of the 902-928 MHz band. The Commission's band plan accordingly
permits secondary operations across the entire band by users of
unlicensed part 15 devices and amateur licensees. At the same time, the
band plan separates non-multilateration from multilateration LMS
systems in all but one subband so as to avert interference. The LMS
Report and Order also established limitations on LMS systems'
interconnection with the public switched network and set forth a number
of technical requirements intended to ensure successful coexistence of
all the services authorized to operate in the band.
26. Potential bidders should also be aware that certain
applications (including those for modification), petitions for
rulemaking, waiver requests, requests for special temporary authority
(``STA''), petitions to deny, petitions for reconsideration, and
applications for review may be pending before the Commission that
relate to particular applicants or incumbent LMS licensees. While the
Commission will continue to act on pending applications, requests and
petitions, some of these matters may not be resolved by the time of the
auction.
d. 220 MHz, 800 MHz, and LMS
27. Potential bidders are solely responsible for identifying
associated risks and for investigating and evaluating the degree to
which such matters may affect their ability to bid on, otherwise
acquire, or make use of licenses available in Auction No. 43.
28. To aid potential bidders, Attachment B to the Auction No. 43
Procedures Public Notice lists 220 MHz, SMR 800 MHz, and LMS matters
pending before the Commission that relate to licenses or applications
in these services. The Commission makes no representations or
guarantees that the listed matters are the only pending matters that
could affect spectrum availability in these services.
29. Copies of pleadings from pending cases relating to the 220 MHz,
SMR 800 MHz, and LMS matters identified in Attachment B, of the Auction
No. 43 Procedures Public Notice, are available for public inspection
and copying during normal reference room hours at: Office of Public
Affairs (OPA), Reference Operations Division, 445 12th Street, SW.,
Room CY-C314, Washington, DC 20554.
30. In addition, potential bidders may research the Bureau's
licensing database on the Internet in order to determine which
frequencies are already licensed to incumbent licensees. The Commission
makes no representations or guarantees regarding the accuracy or
completeness of information in its databases or any third party
databases, including, for example, court docketing systems.
Furthermore, the Commission makes no representations or guarantees
regarding the accuracy or completeness of information that has been
provided by incumbent licensees and incorporated into the database.
Potential bidders are strongly encouraged to physically inspect any
sites located in, or near, the EA or EAG for which they plan to bid.
31. Licensing records for the 220 MHz, SMR 800 MHz, and LMS are
contained in the Bureau's Universal Licensing System (ULS) and may be
researched on the Internet at http://www.fcc.gov/wtb/uls by selecting
the ``License Search'' button. Potential bidders may query the database
online and download a copy of their search results if desired. The
Bureau recommends that potential bidders select the ``Frequency''
option under License Search, specify the desired frequency or frequency
range, select Status ``A'' (Active), and use the ``GeoSearch'' button
at the bottom of the screen to limit their searches to a particular
geographic area. Detailed instructions on using License Search
(including frequency searches and the GeoSearch capability) and
downloading query results are available online by selecting the ``?''
button at the bottom

[[Page 55184]]

right-hand corner of the License Search screen.
32. Potential bidders should direct questions regarding the search
capabilities to the FCC Technical Support hotline at (202) 414-1250
(voice) or (202) 414-1255 (TTY), or via e-mail at ulscomm@fcc.gov. The
hotline is available to assist with questions Monday through Friday,
from 7 AM to 10 PM ET, Saturday, 8 AM to 7 PM ET, and Sunday, 12 noon
to 6 PM ET. In order to provide better service to the public, all calls
to the hotline are recorded.
33. Licenses may, in some EAs and EAGs, be required to protect
quiet zones. See 47 CFR 1.923(g) and 1.924.
iv. Bidder Alerts
34. 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 license, and not in
default on any payment for Commission 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, license revocations,
exclusion from participation in future auctions, and/or criminal
prosecution.
35. The FCC makes no representations or warranties about the use of
this spectrum for particular services. Applicants should be aware that
an FCC auction represents an opportunity to become an FCC licensee in
this service, subject to certain conditions and regulations. An FCC
auction does not constitute an endorsement by the FCC of any particular
services, technologies or products, nor does an FCC license constitute
a guarantee of business success. Applicants and interested parties
should perform their own due diligence before proceeding, as they would
with any new business venture.
36. As is the case with many business investment opportunities,
some unscrupulous entrepreneurs may attempt to use Auction No. 43 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 amount of investment is less than $25,000.
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.
37. 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 regarding Auction No. 43 may also call the FCC
Consumer Center at (888) CALL-FCC ((888) 225-5322).
v. National Environmental Policy Act (``NEPA'') Requirements
38. Licensees must comply with the Commission's rules regarding the
National Environmental Policy Act (NEPA). The construction of a
wireless antenna facility is a federal action and the licensee must
comply with the Commission's NEPA rules for each such facility. See 47
CFR 1.1305 through 1.1319. The Commission's NEPA rules require, among
other things, that the licensee 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 licensee must prepare
environmental assessments for 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 licensee must also prepare environmental assessments for
facilities that include high intensity white lights in residential
neighborhoods or excessive radio frequency emission.

C. Auction Specifics

i. Auction Date
39. The auction will begin on Thursday, January 10, 2002. 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 on all licenses will be conducted on each business
day until bidding has stopped on all licenses.
40. The Commission announces that bidding for Auction No. 43 will
be temporarily suspended January 21, 2002, in observance of the Federal
holiday.
ii. Auction Title
41. Auction No. 43--Multi-Radio Service
iii. Bidding Methodology
42. The bidding methodology for Auction No. 43 will be simultaneous
multiple round bidding. The Commission will conduct this auction over
the Internet. Telephonic bidding will also be available. As a
contingency, the FCC Wide Area Network, which requires access to a 900
number telephone service, will be available as well. Qualified bidders
are permitted to bid telephonically or electronically.
iv. Pre-Auction Dates and Deadlines
43. These are important dates relating to Auction No. 43:

Auction Seminar--November 7, 2001
Short-Form Application (FCC FORM 175)--November 16, 2001; 6 p.m. ET
Upfront Payments (via wire transfer)--December 7, 2001; 6 p.m. ET
Mock Auction--January 7, 2002
Auction Begins--January 10, 2002
v. Requirements for Participation
44. Those wishing to participate in the auction must:
Submit a short-form application (FCC Form 175)
electronically by 6:00 p.m. ET, November 16, 2001.
Submit a sufficient upfront payment and an FCC Remittance
Advice Form (FCC Form 159) by 6:00 p.m. ET, December 7, 2001.
Comply with all provisions outlined in this public notice.
vi. General Contact Information
45. The following is a list of general contract information
relating to Auction No. 43:
General Auction Information: General Auction Questions, Seminar
Registration.

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

[[Page 55185]]

Auction Legal Information: Auction Rules, Policies, Regulations.

Auctions and Industry Analysis Division, Legal Branch (202) 418-0660

Licensing Information: Rules, Policies, Regulations, Licensing
Issues, Due Diligence, Incumbency Issues.

Commercial Wireless Division, (202) 418-0620

Technical Support: Electronic Filing, Automated Auction System.

FCC Auctions Technical Support Hotline, (202) 414-1250 (Voice), (202)
414-1255 (TTY), Hours of service: Monday through Friday 7 a.m. to 10:00
p.m. ET, Saturday, 8:00 a.m. to 7:00 p.m., Sunday, 12:00 noon to 6:00
p.m.

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.

Qualex International, Portals II, 445 12th Street, SW., Room CY-B402,
Washington, DC 20554, (202) 863-2893, (202) 863-2898 (Fax),
qualexint@aol.com (E-mail)

Press Information: Meribeth McCarrick (202) 418-0654.
FCC Forms: (800) 418-3676 (outside Washington, DC), (202) 418-3676
(in the Washington Area), http://www.fcc.gov/formpage.html
FCC Internet Sites: http://www.fcc.gov, http://www.fcc.gov/wtb/
auctions, http://www.fcc.gov/wtb/uls

II. Short-Form (FCC Form 175) Application Requirements

46. Guidelines for completion of the short-form (FCC Form 175) are
set forth in Attachment E of the Auction No. 43 Procedures Public
Notice. The short-form application seeks the applicant's name and
address, legal classification, status, small or very small business
bidding credit eligibility, identification of the license(s) sought,
the authorized bidders and contact persons. 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
license and, as discussed in section II.E (Provisions Regarding
Defaulters and Former Defaulters), that they are not in default on any
payment for Commission licenses (including down payments) or delinquent
on any non-tax debt owed to any Federal agency.

A. License Selection

47. In Auction No. 43, Form 175 will include a mechanism that
allows an applicant to filter the licenses by Service, Market Number,
and/or Block to create customized lists of licenses. The applicant will
make selections for one or more of the filter criteria and the system
will produce a list of licenses satisfying the specified criteria. The
applicant may apply for all the licenses in the customized list by
using the ``Save all filtered licenses'' option; select and save
individual licenses separately from the list; or create a second
customized list without selecting any of the licenses from the first
list. Applicants also will be able to select licenses from one
customized list and then create a second customized list to select
additional licenses.

B. Ownership Disclosure Requirements (FCC Form 175 Exhibit A)

48. All applicants must comply with the uniform part 1 ownership
disclosure standards and provide information required by Secs. 1.2105
and 1.2112 of the Commission's rules. Specifically, in completing FCC
Form 175, applicants will be required to file an ``Exhibit A''
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 Sec. 1.2112 of the Commission's rules.

C. Consortia And Joint Bidding Arrangements (FCC Form 175 Exhibit B)

49. 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 licenses
being auctioned, including any agreements relating to post-auction
market structure. 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 licenses on which they will
or will not bid. 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
geographic license area(s) after the deadline. Where applicants have
entered into consortia or joint bidding arrangements, applicants must
submit an ``Exhibit B'' to the FCC Form 175.
50. 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 licenses in the same geographic license area 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.

D. Eligibility

i. Bidding Credit Eligibility (FCC Form 175 Exhibit C)
51. Bidding credits are available to small and very small business,
or consortia, thereof, as defined in 47 CFR 90.1021 for Phase II 220
MHz, 47 CFR 90.912 for 800 MHz SMR, and 47 CFR 90.1103 for LMS. A
bidding credit represents the amount by which a bidder's winning bids
are discounted. The size of the bidding credit depends on the average
of the aggregated annual gross revenues for each of the preceding three
years of the bidder, its affiliates, its controlling interests, and the
affiliates of its controlling interests:
A bidder with attributed average annual gross revenues of
not more than $15 million for the preceding three years receives a 25
percent discount on its winning bids for 220 MHz, 800 MHz SMR, and LMS
licenses;
A bidder with attributed average annual gross revenues of
not more than $3 million for the preceding three years receives a 35
percent discount on its winning bids for 220 MHz, 800 MHz SMR, and LMS
licenses;
Bidding credits are not cumulative; qualifying applicants receive
either the 25 percent or the 35 percent bidding credit, but not both.
ii. Tribal Land Bidding Credit
52. To encourage the growth of wireless services in federally
recognized tribal lands the Commission has

[[Page 55186]]

implemented a tribal land bidding credit. See Part V.C. of the Auction
No. 43 Procedures Public Notice.
iii. Applicability of Part 1 Attribution Rules
53. Controlling interest standard. On August 14, 2000, the
Commission released the Part 1 Fifth Report and Order, in which the
Commission, inter alia, adopted a ``controlling interest'' standard for
attributing to auction applicants the gross revenues of their investors
and affiliates in determining small business eligibility for future
auctions. The Commission observed that the rule modifications adopted
in the various Part 1 orders would result in discrepancies and/or
redundancies between certain of the new Part 1 rules and existing
service-specific rules, and the Commission delegated to the Bureau the
authority to make conforming edits to the Code of Federal Regulations
(CFR) consistent with the rules adopted in the part 1 proceeding. Part
1 rules that superseded inconsistent service-specific rules will
control in Auction No. 43. Accordingly, the ``controlling interest''
standard as set forth in the Part 1 rules will be in effect for Auction
No. 43, even if conforming edits to the CFR are not made prior to the
auction.
54. Control. The term ``control'' includes both de facto and de
jure control of the applicant. Typically, ownership of at least 50.1
percent of an entity's voting stock evidences de jure control. De facto
control is determined on a case-by-case basis. The following are some
common indicia of de facto control:
The entity constitutes or appoints more than 50 percent of
the board of directors or management committee;
The entity has authority to appoint, promote, demote, and
fire senior executives that control the day-to-day activities of the
licensee; or
The entity plays an integral role in management decisions.
55. Attribution for small and very small business eligibility. In
determining which entities qualify as small or very small businesses,
the Commission will consider the gross revenues of the applicant, its
affiliates, its controlling interests, and the affiliates of its
controlling interests. The Commission does not impose specific equity
requirements on controlling interest holders. Once the principals or
entities with a controlling interest are determined, only the revenues
of those principals or entities, the affiliates of those principals or
entities, the applicant and its affiliates, will be counted in
determining small business eligibility.
56. A consortium of small or very small businesses is a
``conglomerate organization formed as a joint venture between or among
mutually independent business firms,'' each of which individually must
satisfy the definition of small or very small business in
Secs. 1.2110(f), 90.912, 90.1021, and 90.1103. Thus, each consortium
member must disclose its gross revenues along with those of its
affiliates, its controlling interests, and the affiliates of its
controlling interests. The Bureau notes that although the gross
revenues of the consortium members will not be aggregated for purposes
of determining eligibility for small or very small business credits,
this information must be provided to ensure that each individual
consortium member qualifies for any bidding credit awarded to the
consortium.
iv. Supporting Documentation
57. Applicants should note that they will be required to file
supporting documentation to their FCC Form 175 short-form applications
to establish that they satisfy the eligibility requirements to qualify
as small or very small businesses (or consortia of small or very small
businesses) for this auction.
58. Applicants should further note that submission of an FCC Form
175 application constitutes a representation by the certifying official
that he or she is an authorized representative of the applicant, has
read the form's instructions and certifications, and that the contents
of the application and its attachments are true and correct. Submission
of a false certification to the Commission may result in penalties,
including monetary forfeitures, license forfeitures, ineligibility to
participate in future auctions, and/or criminal prosecution.
59. Small or very small business eligibility (Exhibit C). Entities
applying to bid as small or very small businesses (or consortia of
small or very small businesses) will be required to disclose on Exhibit
C to their FCC Form 175 short-form applications, separately and in the
aggregate, the gross revenues for the preceding three years of each of
the following: (i) the applicant, (ii) its affiliates, (iii) its
controlling interests, and (4) the affiliates of its controlling
interests. Certification that the average annual gross revenues for the
preceding three years do not exceed the applicable limit is not
sufficient. A statement of the total gross revenues for the preceding
three years is also insufficient. The applicant must provide separately
for itself, its affiliates, its controlling interests, and the
affiliates of its controlling interests, a schedule of gross revenues
for each of the preceding three years, as well as a statement of total
average gross revenues for the three-year period. If the applicant is
applying as a consortium of small or very small businesses, this
information must be provided for each consortium member.

E. Provisions Regarding Defaulters and Former Defaulters (FCC Form 175
Exhibit D)

60. 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,
its affiliates, its controlling interests, or the affiliates of its
controlling interest have ever been in default on any Commission
licenses or have ever been delinquent on any non-tax debt owed to any
Federal agency. The applicant must provide such information for itself,
for each of its controlling interests and affiliates, and for each
affiliate of its controlling interests, as defined by Sec. 1.2110 of
the Commission's rules (as amended in the Part 1 Fifth Report and
Order). Applicants must include this statement as Exhibit D of the FCC
Form 175. 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.
61. ``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. 43, provided that they are otherwise qualified.
However, as discussed infra in section III.D.3, former defaulters are
required to pay upfront payments that are fifty percent more than the
normal upfront payment amounts.

F. Installment Payments

61. Installment payment plans will not be available in Auction No.
43.

[[Page 55187]]

G. Other Information (FCC Form 175 Exhibits E and F)

62. Applicants owned by minorities or women, as defined in 47 CFR
1.2110(c)(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.

H. Minor Modifications to Short-Form Applications (FCC Form 175)

63. After the short-form filing deadline (November 16, 2001),
applicants may make only minor changes to their FCC Form 175
applications. Applicants will not be permitted to make major
modifications to their applications (e.g., change their license
selections or proposed service areas, change the certifying official or
change control of the applicant or change bidding credits). See 47 CFR
1.2105. Permissible minor changes include, for example, deletion and
addition of authorized bidders (to a maximum of three) and revision of
exhibits. Applicants should make these changes on-line, and submit a
letter to Margaret Wiener, Chief, Auctions and Industry Analysis
Division, Wireless Telecommunications Bureau, Federal Communications
Commission, 445 12th Street, SW., Suite 4-A760, Washington, DC 20554,
briefly summarizing the changes. Questions about other changes should
be directed to Howard Davenport of the Auctions and Industry Analysis
Division at (202) 418-0660.

I. Maintaining Current Information in Short-Form Applications (FCC Form
175)

64. 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.

III. Pre-Auction Procedures

A. Auction Seminar

65. On Wednesday, November 7, 2001, the FCC will sponsor a free
seminar for Auction No. 43 at the Federal Communications Commission,
located at 445 12th Street, SW., Room 8-B516, Washington, DC. The
seminar will provide attendees with information about pre-auction
procedures, conduct of the auction, the FCC Automated Auction System,
and the Multi-Radio Service (Phase II 220 MHz, 800 MHz SMR, and LMS)
spectrum and auction rules. The seminar will also provide an
opportunity for prospective bidders to ask questions of FCC staff.
66. To register, complete Attachment C of the Auctions No. 43
Procedures Public Notice and submit it by Monday, November 5, 2001.
Registrations are accepted on a first-come, first-served basis.

B. Short-Form Application (FCC Form 175)--Due November 16, 2001

67. 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 and received at the Commission no later than 6
p.m. ET on November 16, 2001. Late applications will not be accepted.
68. 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.
i. Electronic Filing
69. Applicants must file their FCC Form 175 applications
electronically. Applications may generally be filed at any time
beginning at noon ET on November 7, 2001, until 6 p.m. ET on November
16, 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 November 16, 2001.
70. Applicants must press the ``SUBMIT Application'' button on the
``Submission'' page of the electronic form to successfully submit their
FCC Form 175s. Any form that is not submitted will not be reviewed by
the FCC. Information about accessing the FCC Form 175 is included in
Attachment D of the Auctions No. 43 Procedures Public Notice. Technical
support is available at (202) 414-1250 (voice) or (202) 414-1255 (text
telephone (TTY)); the hours of service Monday through Friday, from 7 AM
to 10 PM ET, Saturday, 8 AM to 7 PM ET, and Sunday, 12 noon to 6 PM ET.
In order to provide better service to the public, all calls to the
hotline are recorded.
71. Applicants can also contact Technical Support via e-mail. To
obtain the address, click the Support tab on the Form 175 Homepage.
ii. Completion of the FCC Form 175
72. 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 E of the Auction No. 43 Procedures
Public Notice. Applicants are encouraged to begin preparing the
required attachments for FCC Form 175 prior to submitting the form.
Attachments D and E to the Auction No. 43 Procedures Public Notice
provide information on the required attachments and appropriate
formats.
iii. Electronic Review of FCC Form 175
73. The FCC Form 175 electronic review system may be used to locate
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 D of the Auction No. 43
Procedures Public Notice for details on accessing the review system.

C. Application Processing and Minor Corrections

74. 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: (i) Those applications accepted for
filing; (ii) those applications rejected; and (iii) those applications
which have minor defects that may be corrected, and the deadline for
filing such corrected applications.
75. As described more fully in the Commission's rules, after the
November 16, 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 license selections, change the certifying official,
change control of the applicant, or change bidding credit eligibility).

D. Upfront Payments--Due December 7, 2001

76. In order to be eligible to bid in the auction, applicants must
submit an upfront payment accompanied by an

[[Page 55188]]

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 December 7, 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. 43 go to a lockbox number
different from the lockboxes 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 December 7,
2001, deadline will result in dismissal of the application and
disqualification from participation in the auction.
i. Making Auction Payments by Wire Transfer
77. Wire transfer payments must be received by 6:00 p.m. ET on
December 7, 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 # 910-1182
OBI Field: (Skip one space between each information item)
``AUCTIONPAY''
TAXPAYER IDENTIFICATION NO.: (same as FCC Form 159, block 12)
PAYMENT TYPE CODE (same as FCC Form 159, block 24A: A43U)
FCC CODE 1 (same as FCC Form 159, block 28A: ``43'')
PAYER NAME (same as FCC Form 159, block 2)
LOCKBOX NO. # 358415

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.

78. Applicants must fax a completed FCC Form 159 (Revised 2/00) 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. 43.'' Bidders should confirm receipt of their upfront
payment at Mellon Bank by contacting their sending financial
institution.
ii. FCC Form 159
79. A completed FCC Remittance Advice Form (FCC Form 159, Revised
2/00) must be faxed to Mellon Bank in order to accompany each upfront
payment. Proper completion of FCC Form 159 (Revised 2/00) is critical
to ensuring correct credit of upfront payments. Detailed instructions
for completion of FCC Form 159 are included in Attachment F of the
Auction No. 43 Procedures Public Notice. An electronic version of the
FCC Form 159 is available after filing the FCC Form 175. The FCC Form
159 can be completed electronically, but must be filed with Mellon Bank
via facsimile.
iii. Amount of Upfront Payment
80. In the Part 1 Order, Memorandum Opinion and Order, and Notice
of Proposed Rule Making, 62 FR 13540 (March 21, 1997), the Commission
delegated to the Bureau the authority and discretion to determine
appropriate upfront payment(s) for each auction. In addition, in the
Part 1 Fifth Report and Order, the Commission ordered that ``former
defaulters,'' i.e., applicants that have ever been in default on any
Commission license or have ever been delinquent on any non-tax debt
owed to any Federal agency, be required to pay upfront payments fifty
percent greater than non-``former defaulters.''
81. In the Auction No. 43 Comment Public Notice, the Bureau
proposed translating bidders' upfront payments to bidding units to
define a bidder's maximum eligibility. In order to bid on a license,
otherwise qualified bidders who applied for that license on Form 175
must have an eligibility level that meets or exceeds the number of
bidding units assigned to that license. At a minimum, therefore, an
applicant's total upfront payment must be enough to establish
eligibility to bid on at least one of the licenses applied for on Form
175, or else the applicant will not be eligible to participate in the
auction. An applicant does not have to make an upfront payment to cover
all licenses for which the applicant has applied on Form 175, but
rather to cover the maximum number of bidding units that are associated
with licenses on which the bidder wishes to place bids and hold high
bids at any given time.
82. In the Auction No. 43 Comment Public Notice, the Bureau
proposed upfront payments on a license-by-license basis using the
following formula:

220 MHz
EAG Licenses: $0.01 * 0.15 MHz * License Area Population
EA Licenses: $500 per license
800 MHz
$0.005 * License Area Population with a minimum of $2,500 per
license.
LMS
Block A: $0.0004 * MHz * License Area Population with a minimum of
$500 per license.
Block B: $0.0005 * MHz * License Area Population with a minimum of
$500 per license.
Block C: $0.0005 * MHz * License Area Population with a minimum of
$500 per license.

83. Having received no comments regarding the value of the proposed
upfront payments, the Bureau therefore adopts its proposed upfront
payment amounts for Auction No. 43.
84. The specific upfront payments and bidding units for each
license are set forth in Attachment A of the Auction No. 43 Procedures
Public Notice.
85. In calculating its upfront payment amount, an applicant should
determine the maximum number of bidding units it may wish to bid on in
any single round, and submit an upfront payment covering that number of
bidding units. In order to make this calculation, an applicant should
add together the upfront payments for all licenses on which it seeks to
bid in any given round. Bidders should check their calculations
carefully, as there is no provision for increasing a bidder's maximum
eligibility after the upfront payment deadline.

Example: 800 MHz SMR Upfront Payments and Bidding Flexibility
----------------------------------------------------------------------------------------------------------------
Bidding Upfront
Market No. Block Market name Population units payment
----------------------------------------------------------------------------------------------------------------
BEA009........................... D State College, PA.. 798,826 4,000 $4,000

[[Page 55189]]

BEA011........................... DD Harrisburg-Lebanon- 1,026,459 5,100 5,100
Carlisle, PA.
----------------------------------------------------------------------------------------------------------------
If a bidder wishes to bid on both licenses in a round, it must have selected both on its FCC Form 175 and
purchased at least 9,100 bidding units (4,000 + 5,100). If a bidder only wishes to bid on one, but not both,
purchasing 5,100 bidding units would meet the requirement for either license. The bidder would be able to bid
on either license, but not both at the same time. If the bidder purchased only 4,000 bidding units, it would
have enough eligibility for the State College, PA license but not for the Harrisburg-Lebanon-Carlisle, PA
license.

86. Former defaulters should calculate their upfront payment for
all licenses by multiplying the number of bidding units they wish to
purchase by 1.5. In order to calculate the number of bidding units to
assign to former defaulters, the Commission will divide the upfront
payment received by 1.5 and round the result up to the nearest bidding
unit.

Note: An applicant may, on its FCC Form 175, apply for every
applicable license being offered, but its actual bidding in any
round will be limited by the bidding units reflected in its upfront
payment.

iv. Applicant's Wire Transfer Information for Purposes of Refunds of
Upfront Payments
87. The Commission will use wire transfers for all Auction No. 43
refunds. To ensure that refunds of upfront payments are processed in an
expeditious manner, the Commission is requesting that all pertinent
information as listed 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 December 7, 2001. All refunds will be returned to the payer
of record as identified on the FCC Form 159 unless the payer submits
written authorization instructing otherwise. 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, Taxpayer Identification Number,
Correspondent Bank (if applicable), ABA Number, Account 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 Part V.E.

E. Auction Registration

88. 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 FCC Form 175 applications
have been accepted for filing and have timely submitted upfront
payments sufficient to make them eligible to bid on at least one of the
licenses for which they applied.
89. All qualified bidders are automatically registered for the
auction. Registration materials will be distributed prior to the
auction by two separate overnight mailings, one containing the
confidential bidder identification number (BIN) required to place bids
and the other containing the SecurID cards. These mailings will be sent
only to the contact person at the contact address listed in the FCC
Form 175.
90. 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, January 3, 2002, 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.
91. Qualified bidders should note that lost bidder identification
numbers or SecurID cards can be replaced only by appearing in person at
the FCC Auction Headquarters located at 445 12th St., SW., Washington,
DC 20554. Only an authorized representative or certifying official, as
designated on an applicant's FCC Form 175, may appear in person with
two forms of identification (one of which must be a photo
identification) in order to receive replacements. Qualified bidders
requiring replacements must call technical support prior to arriving at
the FCC.

F. Electronic Bidding

92. The Commission will conduct this auction over the Internet.
Telephonic bidding will also be available. As a contingency, the FCC
Wide Area Network, which requires access to a 900 number telephone
service, will be available as well. Qualified bidders are permitted to
bid telephonically or electronically, i.e., over the Internet or the
FCC's Wide Area Network. In either case, each authorized bidder must
have its own Remote Security Access SecurID card, which the FCC will
provide at no charge. Each applicant with less than three authorized
bidders will be issued two SecurID cards, while applicants with three
authorized bidders will be issued three cards. For security purposes,
the SecurID cards and the instructions for using them are only mailed
to the contact person at the contact address listed on the FCC Form
175. Please note that each SecurID card is tailored to a specific
auction, therefore, SecurID cards issued for other auctions or obtained
from a source other than the FCC will not work for Auction No. 43. The
telephonic bidding phone number will be supplied in the first Federal
Express mailing of the confidential bidder identification number. Your
bidding preference--electronic or telephonic--is specified on the FCC
Form 175.
93. Please note that the SecurID cards can be recycled, and the
Bureau encourages bidders to return the cards to the FCC. The Bureau
will provide pre-addressed envelopes that bidders may use to return the
cards once the auction is over.

G. Mock Auction

94. All qualified bidders will be eligible to participate in a mock
auction on Monday, January 7, 2002. The mock auction will enable
applicants to become familiar with the electronic system prior to the
auction. Participation by all bidders is strongly recommended. Details
will be announced by public notice.

II. Auction Event

95. The first round of bidding for Auction No. 43 will begin on
Thursday, January 10, 2002. The initial bidding schedule will be
announced in a public notice listing the qualified bidders, which is
released approximately 10 days before the start of the auction.

[[Page 55190]]

A. Auction Structure

ii. Simultaneous Multiple Round Auction
96. In the Auction No. 43 Comment Public Notice, the Bureau
proposed to award all licenses in Auction No. 43 in a single,
simultaneous multiple round auction. The Bureau received no comments on
this issue. Therefore, the Bureau concludes that it is operationally
feasible and appropriate to auction the 220 MHz, 800 MHz, and LMS
licenses through a single, simultaneous multiple round auction. Unless
otherwise announced, bids will be accepted on all licenses in each
round of the auction. This approach allows bidders to take advantage of
any synergies that exist among licenses and is administratively
efficient.
ii. Maximum Eligibility and Activity Rules
97. In the Auction No. 43 Comment Public Notice, the Bureau
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. The Bureau received no comments on this issue.
98. For Auction No. 43, the Bureau adopts this proposal. The amount
of the upfront payment submitted by a bidder determines the initial
maximum eligibility (in bidding units) for each bidder. Note again that
upfront payments are not attributed to specific licenses, but instead
will be translated into bidding units to define a bidder's initial
maximum eligibility (see ``Amount of Upfront Payment'' in Part
III.D.iii). The total upfront payment defines the maximum number of
bidding units on which the applicant will be permitted to bid and hold
high bids. As there is no provision for increasing a bidder's maximum
eligibility during the course of an auction (as described under
``Auction Stages'' in Part IV.A.iii), prospective bidders are cautioned
to calculate their upfront payments carefully. The total upfront
payment does not affect the total dollars a bidder may bid on any given
license.
99. 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 a specific
percentage of their current eligibility during each round of the
auction.
100. A bidder's activity level in a round is the sum of the bidding
units associated with licenses on which the bidder is active. A bidder
is considered active on a license in the current round if it is either
the high bidder at the end of the previous bidding round and does not
withdraw the high bid in the current round, or if it submits an
acceptable bid in the current round (see ``Bid Increments and Minimum
Accepted Bids'' in Part IV.B.(iii)). The minimum required activity
level is expressed as a percentage of the bidder's maximum bidding
eligibility, and increases by stage as the auction progresses. Because
these procedures have proven successful in maintaining the pace of
previous auctions (as set forth under ``Auction Stages'' in Part
IV.A.iii and ``Stage Transitions'' in Part IV.A.iv), the Bureau adopts
them for Auction No. 43.
iii. Auction Stages
101. In the Auction No. 43 Comment Public Notice, the Bureau
proposed to conduct the auction in two stages and employ an activity
rule. The Bureau further proposed that, in each round of Stage One, a
bidder desiring to maintain its current eligibility would be required
to be active on licenses encompassing at least 80 percent of its
current bidding eligibility. In each round of Stage Two, a bidder
desiring to maintain its current eligibility would be required to be
active on at least 98 percent of its current bidding eligibility. The
Bureau received no comments on this proposal.
102. The Bureau adopts its proposed activity rules. The activity
levels for each stage of the auction are provided. The FCC reserves the
discretion to further alter the activity percentages before and/or
during the auction.
Stage One: During the first stage of the auction, a bidder desiring
to maintain its current eligibility will be required to be active on
licenses that represent at least 80 percent of its current bidding
eligibility in each bidding round. Failure to maintain the required
activity level will result in a reduction in the bidder's bidding
eligibility in the next round of bidding (unless an activity rule
waiver is used). During Stage One, reduced eligibility for the next
round will be calculated by multiplying the bidder's current activity
(the sum of bidding units of the bidder's standing high bids and valid
bids during the current round) by five-fourths (\5/4\).
Stage Two: During the second stage of the auction, a bidder
desiring to maintain its current eligibility is required to be active
on 98 percent of its current bidding eligibility. Failure to maintain
the required activity level will result in a reduction in the bidder's
bidding eligibility in the next round of bidding (unless an activity
rule waiver is used). In this final stage, reduced eligibility for the
next round will be calculated by multiplying the bidder's current
activity (the sum of bidding units of the bidder's standing high bids
and valid bids during the current round) by fifty-fortyninths (\50/
49\).

Caution: Since activity requirements increase in each auction
stage, bidders must carefully check their current activity during
the bidding period of the first round following a stage transition.
This is especially critical for bidders that have standing high bids
and do not plan to submit new bids. In past auctions, some bidders
have inadvertently lost bidding eligibility or used an activity rule
waiver because they did not re-verify their activity status at stage
transitions. Bidders may check their activity against the required
minimum activity level by using the bidding system's bidding module.

103. Because the foregoing procedures have proven successful in
maintaining proper pace in previous auctions, the Bureau adopts them
for Auction No. 43.
iv. Stage Transitions
104. In the Auction No. 43 Comment Public Notice, the Bureau
proposed that the auction would generally advance to the next stage
(i.e., from Stage One to Stage Two) when the auction activity level, as
measured by the percentage of bidding units receiving new high bids, is
below 20 percent for three consecutive rounds of bidding in each Stage.
The Bureau further proposed that the Bureau would retain the discretion
to change stages unilaterally by announcement during the auction. This
determination, the Bureau proposed, would be based on a variety of
measures of bidder activity, including, but not limited to, the auction
activity level, the percentages of licenses (as measured in bidding
units) on which there are new bids, the number of new bids, and the
percentage increase in revenue. The Bureau received no comments on this
subject.
105. The Bureau adopts its proposal. Thus, the auction will start
in Stage One and it will advance to the next stage (i.e., from Stage
One to Stage Two) when, in each of three consecutive rounds of bidding,
the high bid has increased on 20 percent or less of the licenses being
auctioned (as measured in bidding units). In addition, the Bureau will
retain the discretion to regulate the pace of the auction by
announcement. This determination will be based on a variety of measures
of bidder activity, including, but not limited to, the auction activity
level, the percentages of licenses (as measured in bidding units) on
which there are new bids, the number of new bids, and the percentage
increase in revenue. The

[[Page 55191]]

Bureau believes that these stage transition rules, having proven
successful in prior auctions, are appropriate for use in Auction No.
43.
v. Activity Rule Waivers and Reducing Eligibility
106. In the Auction No. 43 Comment Public Notice, the Bureau
proposed that each bidder in the auction would be provided three
activity rule waivers. Bidders may use an activity rule waiver in any
round during the course of the auction. The Bureau received no comments
on this issue.
107. Based upon the Bureau's experience in previous auctions, it
adopts its proposal that each bidder be provided three 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 license. The Bureau is
satisfied that its practice of providing three 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.
108. The FCC Automated 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: (i) there are no activity rule waivers
available; or (ii) the bidder overrides the automatic application of a
waiver by reducing eligibility, thereby meeting the minimum
requirements.
109. 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 bidding system. In this
case, the bidder's eligibility is permanently reduced to bring the
bidder into compliance with the activity rules as described in
``Auction Stages'' (see Part IV.A.iii discussion). Once eligibility has
been reduced, a bidder will not be permitted to regain its lost bidding
eligibility.
110. 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 system) during a round in which no bids are submitted, the
auction will remain open and the bidder's eligibility will be
preserved. However, an automatic waiver triggered during a round in
which there are no new valid bids or withdrawals will not keep the
auction open.
vi. Auction Stopping Rules
111. For Auction No. 43, the Bureau proposed to employ a
simultaneous stopping rule. Under this rule, bidding will remain open
on all licenses until bidding stops on every license. The auction will
close for all licenses when one round passes during which no bidder
submits a new acceptable bid on any license, applies a proactive
waiver, or withdraws a previous high bid. After the first such round,
bidding closes simultaneously on all licenses.
112. The Bureau also proposed retaining discretion to implement a
modified version of the simultaneous stopping rule. The modified
version will close the auction for all licenses after the first round
in which no bidder submits a proactive waiver, a withdrawal, or a new
bid on any license on which it is not the standing high bidder. Thus,
absent any other bidding activity, a bidder placing a new bid on a
license for which it is the standing high bidder will not keep the
auction open under this modified stopping rule.
113. The Bureau further proposed retaining the discretion to keep
the 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).
114. In addition, the Bureau proposed that it reserve the right to
declare that the auction will end after a designated 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 licenses on which the high bid increased in at least one of
the preceding specified number of rounds. The Bureau 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,
moving the auction into the next stage (where bidders will be required
to maintain a higher level of bidding activity), increasing the number
of bidding rounds per day, and/or adjusting the amount of the minimum
bid increments for the licenses.
115. The Bureau received no comments on the subject therefore it
adopts all of the proposals concerning the auction stopping rules.
Auction No. 43 will begin under the simultaneous stopping rule and the
Bureau will retain the discretion to invoke the other versions of the
stopping rule. The Bureau believes that these stopping rules are most
appropriate for Auction No. 43, because its experience in prior
auctions demonstrates that the auction stopping rules balance the
interests of administrative efficiency and maximum bidder
participation.
vii. Auction Delay, Suspension, or Cancellation
116. In the Auction No. 43 Comment Public Notice, the Bureau
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 conduct of competitive
bidding.
117. Because this approach has proven effective in resolving
exigent circumstances in previous auctions, the Bureau adopts its
proposed auction cancellation rules. 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.
In such cases, the Bureau, in its 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. The Bureau emphasizes 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.

[[Page 55192]]

B. Bidding Procedures

i. Round Structure
118. 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 results formats and locations will
also be included in the public notice referenced.
119. 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.
ii. Reserve Price or Minimum Opening Bid
120. Background. The Balanced Budget Act 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 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. Consistent with this mandate, the
Commission directed the Bureau to seek comment on the use of a minimum
opening bid and/or reserve price prior to the start of each auction.
Among other factors, the Bureau must consider the amount of spectrum
being auctioned, levels of incumbency, the availability of technology
to provide service, the size of the geographic service areas, the
extent of interference with other spectrum bands, and any other
relevant factors that could have an impact on the spectrum being
auctioned. The Commission concluded that the Bureau should have the
discretion to employ either or both of these mechanisms for future
auctions.
121. In the Auction No. 43 Comment Public Notice, the Bureau
proposed to establish minimum opening bids for Auction No. 43 and to
retain discretion to lower the minimum opening bids. Specifically, for
Auction No. 43, the Bureau proposed the following license-by-license
formula for calculating minimum opening bids:

220 MHz
EAG Licenses: $0.0125 * 0.15 MHz * License Area Population.
EA Licenses: $500 per license.
800 MHz
$0.005 * License Area Population with a minimum of $2,500 per
license.
LMS
Block A: $0.0004 * MHz * License Area Population with a minimum of
$500 per license.
Block B: $0.0005 * MHz * License Area Population with a minimum of
$500 per license.
Block C: $0.0005 * MHz * License Area Population with a minimum of
$500 per license.

122. In the alternative, the Bureau sought comment on whether,
consistent with the Balanced Budget Act, the public interest would be
served by having no minimum opening bid or reserve price. Having
received no comments regarding the value of the proposed minimum
opening bids, the Bureau therefore adopts its proposed minimum opening
bids amounts for Auction No. 43.
123. The specific minimum opening bids for each license are set
forth in Attachment A of the Auction No. 43 Procedures Public Notice.
124. The minimum opening bids that the Bureau adopts are reducible
at its discretion. The Bureau emphasizes, however, that such discretion
will be exercised, if at all, sparingly and early in the auction, i.e.,
before bidders lose all waivers and begin to lose substantial
eligibility. During the course of the auction, the Bureau will not
entertain any requests to reduce the minimum opening bid on specific
licenses.
iii. Bid Increments and Minimum Accepted Bids
125. In the Auction No. 43 Comment Public Notice, the Bureau
proposed to use a smoothing methodology to calculate minimum acceptable
bids. The Bureau further proposed to retain the discretion to change
the minimum acceptable bids and bid increments if circumstances so
dictate. The Bureau received no comment on this issue.
126. The Bureau adopts its proposal for a smoothing formula. The
smoothing methodology is designed to vary the increment for a given
license between a maximum and minimum value based on the bidding
activity on that license. This methodology allows the increments to be
tailored to the activity level of a license, decreasing the time it
takes for active licenses to reach their final value. The formula used
to calculate this increment is included as Attachment G of the Auction
No. 43 Procedures Public Notice.
127. The Bureau adopts its proposal of initially setting the
weighing factor at 0.5, the minimum percentage increment at 0.1 (10
percent), and the maximum at 0.2 (20 percent). The Bureau retains the
discretion to change the minimum acceptable bids and bid increments if
it determines that circumstance so dictate. The Bureau will do so by
announcement in the Automated Auction System. Under its discretion, the
Bureau may also implement an absolute dollar floor for the bid
increment to further facilitate a timely close of the auction. The
Bureau may also use its discretion to adjust the minimum bid increment
without prior notice if circumstances warrant. The Bureau also retains
the discretion to use alternate methodologies, such as a flat
percentage increment for all licenses, for Auction No. 43 if
circumstances warrant.
iv. High Bids
128. At the end of each round, the Automated Auction System
determines the standing high bid for each license based on the gross
dollar amounts of the bids received for each license.
129. In the case of tied high bids, an implementation of the
Lecuyer pseudo-random generator will be used to determine the standing
high bid. A random number will be assigned to each bid. The tie bid
having the highest random number will become the standing high bid.
v. Bidding
130. During a bidding round, a bidder may submit bids for as many
licenses 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 license in the same
round, the system takes the last bid entered as that bidder's bid for
the round.
131. Please note that all bidding will take place remotely either
through the Automated Auction System 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. 43.
132. A bidder's ability to bid on specific licenses in the first
round of the

[[Page 55193]]

auction is determined by two factors: (i) the licenses applied for on
FCC Form 175 and (ii) the upfront payment amount deposited. The bid
submission screens will allow bidders to submit bids on only those
licenses for which the bidder applied on its FCC Form 175.
133. The FCC Automated Auction System requires each bidder to be
logged in during the bidding round using the bidder identification
number provided in the registration materials, and the generated
SecurID code. Bidders are strongly encouraged to print bid
confirmations after they submit their bids.
134. In each round, eligible bidders will be able to place bids on
a given license in any of nine different amounts. For each license, the
Automated Auction System interface will list the nine acceptable bid
amounts in a drop-down box. Bidders may use the drop-down box to select
from among the nine acceptable bid amounts. The Automated Auction
System also includes an import function that allows bidders to upload
text files containing their bid information.
135. Once there is a standing high bid on a license, the Automated
Auction System will calculate a minimum acceptable bid for that license
for the following round. The difference between the minimum acceptable
bid and the standing high bid for each license will define the bid
increment. The nine acceptable bid amounts for each license consist of
the minimum acceptable bid (the standing high bid plus one bid
increment) and additional amounts calculated using multiple bid
increments (i.e., the second bid amount equals the standing high bid
plus two times the bid increment, the third bid amount equals the
standing high bid plus three times the bid increment, etc.).
136. Until a bid has been placed on a license, the minimum
acceptable bid for that license will be equal to its minimum opening
bid. The additional bid amounts for licenses that have not yet received
a bid are calculated using the difference between the minimum opening
bid times one plus the minimum percentage increment, rounded, and the
minimum opening bid. Therefore, when the minimum percentage increment
equals 0.1, the first additional bid amount will be approximately ten
percent higher than the minimum opening bid; the second, twenty
percent; the third, thirty percent; etc.
137. In the case of a license for which the standing high bid has
been withdrawn, the minimum acceptable bid will equal the second
highest bid received for the license. The additional bid amounts are
calculated using the difference between the second highest bid times
one plus the minimum percentage increment, rounded, and the second
highest bid.
138. See Attachment G of the Auction No. 43 Procedures Public
Notice for more detail on the calculation of the various bid amounts.
139. Finally, bidders are cautioned in selecting their bid amounts
because, as explained in the following section, bidders who withdraw a
standing high bid from a previous round, even if mistakenly or
erroneously made, are subject to bid withdrawal payments.
vi. Bid Removal and Bid Withdrawal
140. In the Auction No. 43 Comment Public Notice, the Bureau
proposed bid removal and bid withdrawal rules. With respect to bid
withdrawals, the Bureau 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, the Bureau proposed, would be
at the bidder's discretion. The Bureau received no comments on this
issue.
141. 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 bidding system, a bidder may effectively
``unsubmit'' any bid placed within that round. A bidder removing a bid
placed in the same round is not subject to withdrawal payments.
Removing a bid will affect a bidder's activity for the round in which
it is removed, i.e., a bid that is subsequently removed does not count
toward the bidder's activity requirement. This procedure, about which
the Bureau received no comments, will enhance bidder flexibility during
the auction. Therefore, the Bureau adopts these procedures for Auction
No. 43.
142. 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).
143. In previous auctions, the Bureau has detected bidder conduct
that, arguably, may have constituted strategic bidding through the use
of bid withdrawals. While the Bureau continues to recognize the
important role that bid withdrawals play in an auction, i.e., reducing
risk associated with efforts to secure various licenses in combination,
it conclude that, for Auction No. 43, adoption of a limit on their use
to two rounds is the most appropriate outcome. By doing so the Bureau
believes it strikes a reasonable compromise that will allow bidders to
use withdrawals. The Bureau's decision on this issue is based upon its
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 its
view regarding the likelihood of any speculation or ``gaming'' in this
auction.
144. 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 a market. If a high bid is withdrawn, the minimum
accepted bid in the next round will be the prior round's second highest
bid price, which may be less than, or equal to, in the case of tie
bids, the amount of the withdrawn bid. The additional bid amounts are
calculated using the difference between the second highest bid times
one plus the minimum percentage increment, rounded, and the second
highest bid. The Commission will serve as a ``place holder'' on the
license until a new acceptable bid is submitted on that license.
145. 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 license, within the same or subsequent
auction(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 auction(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

[[Page 55194]]

a subsequent higher bid in the same or subsequent auction(s). This
policy allows bidders most efficiently to 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 license for evidence of anti-
competitive strategic behavior and take appropriate action when deemed
necessary.
146. In the Part 1 Fifth Report and Order, the Commission modified
Sec. 1.2104(g)(1) of the rules regarding assessments of interim bid
withdrawal payments. As amended, Sec. 1.2104(g)(1) provides that in
instances in which bids have been withdrawn on a license 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 withdrawn
bids. The 3 percent interim payment will be applied toward any final
bid withdrawal payment that will be assessed after subsequent auction
of the license. 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.
vii. Round Results
147. Bids placed during a round will not be published until the
conclusion of that bidding period. After a round closes, the Bureau
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 bidder
identification numbers for Auction No. 43 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.
viii. Auction Announcements
148. The FCC will use auction announcements to announce items such
as schedule changes and stage transitions. All FCC auction
announcements will be available by clicking a link on the FCC Automated
Auction System.
ix. Maintaining the Accuracy of FCC Form 175 Information
149. As noted in Part II.H., 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: Margaret Wiener, Chief,
Auctions and Industry Analysis Division, Wireless Telecommunications
Bureau, Federal Communications Commission, 445 12th Street, SW., Room
4-A760, Washington, DC 20554.
150. A separate copy of the letter should be mailed to Howard
Davenport, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau, Federal Communications Commission, 445 12th
Street, SW., Room 4-A435, Washington, DC 20554. Questions about other
changes should be directed to Howard Davenport at (202) 418-0660.

I. Post-Auction Procedures

A. Down Payments and Withdrawn Bid Payments

151. After bidding has ended, the Commission will issue a public
notice declaring the auction closed, identifying winning bidders, down
payments and any withdrawn bid payments due.
152. Within ten business days after release of the auction closing
notice, each winning bidder must submit sufficient funds (in addition
to its upfront payment) to bring its total amount of money on deposit
with the Government to 20 percent of its net winning bids (actual bids
less any applicable small and very small business bidding credits). See
47 CFR 1.2107(b). In addition, by the same deadline all bidders must
pay any bid withdrawal payments due under 47 CFR 1.2104(g), as
discussed in ``Bid Removal and Bid Withdrawal,'' Part IV.B.vi. (Upfront
payments are applied first to satisfy any withdrawn bid liability,
before being applied toward down payments.)

B. Long-Form Application

153. Within ten business days after release of the auction closing
notice, winning bidders must electronically submit a properly completed
long-form application (FCC Form 601) and required exhibits for each
license won through Auction No. 43. Winning bidders that are small or
very small businesses must include an exhibit demonstrating their
eligibility for small and very small business bidding credits. See 47
CFR 1.2112(b). Further filing instructions will be provided to auction
winners at the close of the auction.

C. Tribal Land Bidding Credit

154. A winning bidder that intends to use its license(s) to deploy
facilities and provide services to federally-recognized tribal lands
that are unserved by any telecommunications carrier or that have a
telephone service penetration rate equal to or below 70 percent is
eligible to receive a tribal land bidding credit as set forth in 47 CFR
1.2107 and 1.2110(f). A tribal land bidding credit is in addition to,
and separate from, any other bidding credit for which a winning bidder
may qualify.
155. Unlike other bidding credits that are requested prior to the
auction, a winning bidder applies for the tribal land bidding credit
after winning the auction when it files its long-form application (FCC
Form 601). When filing the long-form application, the winning bidder
will be required to advise the Commission whether it intends to seek a
tribal land bidding credit, for each market won in the auction, by
checking the designated box(es). After stating its intent to seek a
tribal land bidding credit, the applicant will have 90 days from the
close of the long-form filing window to amend its application to select
the specific tribal lands to be served and provide the required tribal
government certifications. Licensees receiving a tribal land bidding
credit are subject to performance criteria as set forth in 47 CFR
1.2110(f).
156. For additional information on the tribal land bidding credit,
including how the amount of the credit is calculated, applicants should
review the Commission's rule making proceeding regarding tribal land
bidding credits and related public notices. Relevant documents can be
viewed on the Commission's web site by going to
http://www.fcc.gov/wtb/auctions and clicking on Tribal Land Credits.

D. Default and Disqualification

157. 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 license
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

[[Page 55195]]

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 held by the applicant. See 47 CFR
1.2109(d).

E. Refund of Remaining Upfront Payment Balance

158. All applicants that submitted upfront payments but were not
winning bidders for a license in Auction No. 43 may be entitled to a
refund of their remaining 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. All refunds will be returned to the payer of
record, as identified on the FCC Form 159, unless the payer submits
written authorization instructing otherwise.
159. 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, Michelle Bennett, 445 12th Street, SW., Room 1-C864,
Washington, DC 20554.
160. 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.
Margaret Wiener,
Chief, Auctions and Industry Analysis Division, WTB.
[FR Doc. 01-27433 Filed 10-31-01; 8:45 am]
BILLING CODE 6712-01-P

Notices For
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994

Auction No. 43 Multi-Radio Service Auction Scheduled for January 10, 2002; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Procedural Issues

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