Auction of FM Broadcast Construction Permits Scheduled for November 1, 2005; Comment Sought on Reserve Prices or Minimum Opening Bids and Other Auction Procedures for Auction No. 62, 21782-21786 [05-8521]
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Federal Register / Vol. 70, No. 80 / Wednesday, April 27, 2005 / Notices
FEDERAL COMMUNICATIONS
COMMISSION
[Report No. AUC–05–62–A (Auction No. 62);
DA 05–1076]
Auction of FM Broadcast Construction
Permits Scheduled for November 1,
2005; Comment Sought on Reserve
Prices or Minimum Opening Bids and
Other Auction Procedures for Auction
No. 62
https://www.BCPIWEB.com. When
ordering documents from BCPI, please
provide the appropriate FCC document
number (for example, DA 05–1076 for
the Auction No. 62 Comment PN). The
Auction No. 62 Comment Public Notice
and related documents are also available
on the Internet at the Commission’s Web
site: https://wireless.fcc.gov/
auctions/62/.
I. General Information
1. By the Auction No. 62 Comment
AGENCY: Federal Communications
Public Notice, the Wireless
Commission.
Telecommunications Bureau (WTB) and
ACTION: Notice.
the Media Bureau (MB) (collectively
SUMMARY: This document announces the referred to as the Bureaus) announce the
auction of certain FM broadcast
auction of certain FM broadcast
construction permits scheduled to
construction permits (Auction No. 62) to
commence on November 1, 2005
commence on November 1, 2005. As
(Auction No. 62). This document also
discussed in greater detail herein, the
seeks comment on reserve prices or
Bureaus propose that Auction No. 62 be
minimum opening bids and other
composed of 173 construction permits
procedures for Auction No. 62.
in the FM broadcast service as listed in
Attachment A of the Auction No. 62
DATES: Comments are due on or before
April 29, 2005, and reply comments are Comment Public Notice. The
construction permits to be auctioned
due on or before May 6, 2005.
include 143 new FM allotments, and 30
ADDRESSES: Parties who file by paper
unsold FM construction permits from
must file an original and four copies of
Auction No. 37.
each filing. U.S. Postal Service first
2. Attachment A of the Auction No. 62
class, express and priority mail must be
addressed to Office of the Secretary, 445 Comment Public Notice lists vacant FM
allotments, reflecting FM channels
12th Street, SW., Washington, DC
assigned to the Table of FM Allotments,
20554. Comments and reply comments
47 CFR 73.202(b), pursuant to the
must also be sent by electronic mail to
Commission’s established rulemaking
the following address:
procedures, designated for use in the
auction62@fcc.gov.
indicated community. Pursuant to the
FOR FURTHER INFORMATION CONTACT: For
policies established in the Broadcast
legal questions: Howard Davenport at
First Report and Order, 63 FR 48615,
(202) 418–0660. For general auction
September 11, 1998, applicants may
questions: Jeff Crooks at (202) 418–0660 apply for any vacant FM allotment, as
or Linda Sanderson at (717) 338–2888.
specified in Attachment A of the
For service rule questions, contact the
Auction No. 62 Comment Public Notice.
Audio Services Division, Media Bureau, Applicants specifying the same FM
as follows: Lisa Scanlan or Tom
allotment will be considered mutually
Nessinger at (202) 418–2700.
exclusive and, thus, the construction
SUPPLEMENTARY INFORMATION: This is a
permit for the FM allotment will be
summary of the Commission’s Public
awarded by competitive bidding
Notice released April 14, 2005, Auction
procedures. The reference coordinates
No. 62 Comment Public Notice. The
for each vacant FM allotment are also
complete text of the Auction No. 62
listed in Attachment A of the Auction
Comment Public Notice, including
No. 62 Comment Public Notice.
3. Auction No. 62 will use the FCC’s
attachments and any related
Integrated Spectrum Auction System
Commission documents is available for
(ISAS or FCC Auction System), an
public inspection and copying during
extensive redesign of the previous
regular business hours at the FCC
Reference Information Center, Portals II, auction application and bidding
systems. The redesign includes FCC
445 12th Street, SW., Room CY–A257,
Washington, DC 20554. The Auction No. Form 175 application enhancements
such as discrete data elements in place
62 Comment Public Notice and related
of free-form exhibits and improved data
Commission documents may also be
accuracy through automated checking of
purchased from the Commission’s
FCC Form 175 applications.
duplicating contractor, Best Copy and
Printing, Inc. (BCPI), Portals II, 445 12th Enhancements have also been made to
the FCC Form 175 application search
Street, SW., Room CY–B402,
Washington, DC 20554, telephone (202) function. The auction bidding system
has also been updated for easier
488–5300, facsimile (202) 488–5563, or
navigation, customizable results, and
you may contact BCPI at its Web site:
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improved functionality. More
information about ISAS is available via
the ‘‘About ISAS’’ link on the Auctions
Web page at https://wireless.fcc.gov/
auctions/.
4. Section 309(j)(3) of the
Communications Act of 1934, as
amended, requires the Commission to
‘‘ensure that, in the scheduling of any
competitive bidding under this
subsection, an adequate period is
allowed * * * before issuance of
bidding rules, to permit notice and
comment on proposed auction
procedures * * *.’’ Consistent with the
provisions of Section 309(j)(3) and to
ensure that potential bidders have
adequate time to familiarize themselves
with the specific rules that will govern
the day-to-day conduct of an auction,
the Commission directed the Bureaus,
under existing delegated authority, to
seek comment on a variety of auctionspecific procedures prior to the start of
each auction. We therefore seek
comment on the following issues
relating to Auction No. 62.
II. Auction Structure
A. Simultaneous Multiple-Round
Auction Design
5. The Bureaus propose to award all
construction permits included in
Auction No. 62 in a simultaneous
multiple-round auction. This
methodology offers every construction
permit for bid at the same time with
successive bidding rounds in which
bidders may place bids. That is, bidding
will remain open on all construction
permits until bidding stops on every
construction permit. We seek comment
on this proposal.
B. Upfront Payments and Bidding
Eligibility
6. The Bureaus have delegated
authority and discretion to determine an
appropriate upfront payment for each
FM construction permit being
auctioned, taking into account such
factors as the efficiency of the auction
process and the potential value of
similar spectrum. As described further
below, the upfront payment is a
refundable deposit made by each bidder
to establish eligibility to bid on FM
construction permits. Upfront payments
related to the specific spectrum subject
to auction protect against frivolous or
insincere bidding and provide the
Commission with a source of funds from
which to collect payments owed at the
close of the auction. With these
guidelines in mind, we propose the
schedule of upfront payments for each
construction permit as set forth in
Attachment A of the Auction No. 62
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Comment Public Notice. We seek
comment on this proposal.
7. The Bureaus further propose that
the amount of the upfront payment
submitted by a bidder will determine
the maximum number of bidding units
on which a bidder may place bids. This
limit is a bidder’s initial bidding
eligibility. Each FM construction permit
is assigned a specific number of bidding
units equal to the upfront payment
listed in Attachment A of the Auction
No. 62 Comment Public Notice, on a
bidding unit per dollar basis. Bidding
units for a given construction permit do
not change as prices rise during the
auction. A bidder’s upfront payment is
not attributed to specific construction
permits. Rather, a bidder may place bids
on any combination of construction
permits as long as the total number of
bidding units associated with those
construction permits does not exceed
the bidder’s current eligibility. In order
to bid on a construction permit,
qualified bidders must have an
eligibility level that meets the number of
bidding units assigned to that
construction permit. Eligibility cannot
be increased during the auction; it can
only remain the same or decrease. Thus,
in calculating its upfront payment
amount, an applicant must determine
the maximum number of bidding units
it may wish to bid on (or hold
provisionally winning bids on) in any
single round, and submit an upfront
payment amount covering that total
number of bidding units. Provisionally
winning bids are bids that would
become final winning bids if the auction
were to close in that given round. We
seek comment on this proposal.
C. Activity Rules
8. In order to ensure that the auction
closes within a reasonable period of
time, an activity rule requires bidders to
bid actively throughout the auction,
rather than wait until late in the auction
before participating. A bidder’s activity
will be the sum of the bidding units
associated with the construction permits
upon which it places a bid during the
current round and the bidding units
associated with the construction permits
upon which it holds provisionally
winning bids. Bidders are required to be
active on a specific percentage of their
current bidding eligibility during each
round of the auction. Failure to
maintain the requisite activity level will
result in the use of an activity rule
waiver, if any remain, or a reduction in
the bidder’s eligibility, possibly
eliminating the bidder from further
bidding in the auction.
9. The Bureaus propose to divide the
auction into two stages, each
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characterized by a different activity
requirement. The auction will start in
Stage One. We propose that the auction
generally will advance from Stage One
to Stage Two when the auction activity
level, as measured by the percentage of
bidding units receiving new
provisionally winning bids, is
approximately twenty percent or below
for three consecutive rounds of bidding.
However, we further propose that the
Bureaus retain the discretion to change
stages unilaterally by announcement
during the auction. In exercising this
discretion, the Bureaus will consider a
variety of measures of bidder activity,
including, but not limited to, the
auction activity level, the percentage of
construction permits (as measured in
bidding units) on which there are new
bids, the number of new bids, and the
percentage increase in revenue. We seek
comment on these proposals.
10. For Auction No. 62, the Bureaus
propose the following activity
requirements:
Stage One: In each round of the first
stage of the auction, a bidder desiring to
maintain its current bidding eligibility
is required to be active on construction
permits representing at least 75 percent
of its current bidding eligibility. Failure
to maintain the requisite 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, a bidder’s
reduced eligibility for the next round
will be calculated by multiplying the
bidder’s current round activity by fourthirds (4⁄3).
Stage Two: In each round of the
second stage, a bidder desiring to
maintain its current bidding eligibility
is required to be active on 95 percent of
its current bidding eligibility. Failure to
maintain the requisite 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 Two, a bidder’s
reduced eligibility for the next round
will be calculated by multiplying the
bidder’s current round activity by
twenty-nineteenths (20⁄19).
11. The Bureaus seek comment on
these proposals. Commenters that
believe these activity rules should be
modified should explain their reasoning
and comment on the desirability of an
alternative approach. Commenters are
advised to support their claims with
analyses and suggested alternative
activity rules.
D. Activity Rule Waivers and Reducing
Eligibility
12. Use of an activity rule waiver
preserves the bidder’s current bidding
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eligibility despite the bidder’s activity
in the current round being below the
required minimum level. An activity
rule waiver applies to an entire round
of bidding and not to a particular
construction permit. Activity rule
waivers can be either proactive or
automatic and are principally a
mechanism for auction participants to
avoid the loss of bidding eligibility in
the event that exigent circumstances
prevent them from placing a bid in a
particular round.
13. The FCC Auction System assumes
that bidders with insufficient activity
would prefer to apply an activity rule
waiver (if available) rather than lose
bidding eligibility. Therefore, the
system will automatically apply a
waiver at the end of any bidding round
where a bidder’s activity level is below
the minimum required unless: (i) the
bidder has no activity rule waivers
available; or (ii) the bidder overrides the
automatic application of a waiver by
reducing eligibility, thereby meeting the
minimum requirement.
Note: If a bidder has no waivers remaining
and does not satisfy the required activity
level, its eligibility will be permanently
reduced, possibly eliminating the bidder
from further bidding in the auction.
14. A bidder with insufficient activity
may wish to reduce its bidding
eligibility rather than use an activity
rule waiver. If so, the bidder must
affirmatively override the automatic
waiver mechanism during the bidding
round by using the ‘‘reduce eligibility’’
function in the FCC Auction System. In
this case, the bidder’s eligibility is
permanently reduced to bring the bidder
into compliance with the activity rules
as described above. Once eligibility has
been reduced, a bidder will not be
permitted to regain its lost bidding
eligibility.
15. A bidder may apply an activity
rule waiver proactively as a means to
keep the auction open without placing
a bid. If a bidder proactively applies an
activity rule waiver (using the ‘‘apply
waiver’’ function in the FCC Auction
System) during a bidding round in
which no bids or withdrawals are
submitted, the auction will remain open
and the bidder’s eligibility will be
preserved. An automatic waiver applied
by the FCC Auction System in a round
in which there are no new bids or
withdrawals will not keep the auction
open. The submission of a proactive
waiver cannot occur after a bid has been
submitted in a round and will preclude
a bidder from placing any bids later in
that round. Applying a waiver is
irreversible; once a proactive waiver is
submitted that waiver cannot be
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unsubmitted, even if the round has not
yet closed.
16. The Bureaus propose that each
bidder in Auction No. 62 be provided
with three activity rule waivers that may
be used at the bidder’s discretion during
the course of the auction as set forth
above. We seek comment on this
proposal.
E. Information Relating to Auction
Delay, Suspension, or Cancellation
17. For Auction No. 62, we propose
that, by public notice or by
announcement during the auction, the
Bureaus 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 efficient
conduct of competitive bidding. In such
cases, the Bureaus, in their sole
discretion, may elect to resume the
auction starting from the beginning of
the current round, resume the auction
starting from some previous round, or
cancel the auction in its entirety.
Network interruption may cause the
Bureaus to delay or suspend the
auction. We emphasize that exercise of
this authority is solely within the
discretion of the Bureaus, and its use is
not intended to be a substitute for
situations in which bidders may wish to
apply their activity rule waivers. We
seek comment on this proposal.
III. Bidding Procedures
A. Round Structure
18. The Commission will conduct
Auction No. 62 over the Internet.
Alternatively, telephonic bidding will
also be available. The toll-free telephone
number for telephonic bidding will be
provided to bidders.
19. The initial bidding schedule will
be announced in a public notice to be
released at least one week before the
start of the auction. The simultaneous
multiple-round format will consist of
sequential bidding rounds, each
followed by the release of round results.
Details on viewing round results,
including the location and format of
downloadable round results files will be
included in the same public notice.
20. The Bureaus have the discretion to
change the bidding schedule in order to
foster an auction pace that reasonably
balances speed with the bidders’ need to
study round results and adjust their
bidding strategies. The Bureaus 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
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activity level and other factors. We seek
comment on this proposal.
B. Reserve Price or Minimum Opening
Bid
21. Section 309(j) calls upon the
Commission to prescribe methods for
establishing a reasonable reserve price
or a minimum opening bid amount
when FCC licenses or construction
permits are subject to auction, unless
the Commission determines that a
reserve price or minimum opening bid
amount is not in the public interest.
Consistent with this mandate, the
Commission has directed the Bureaus to
seek comment on the use of minimum
opening bid amounts and/or reserve
price prior to the start of each auction
of broadcast construction permits.
22. Normally, a reserve price is an
absolute minimum price below which
an item will not be sold in a given
auction. Reserve prices can be either
published or unpublished. A minimum
opening bid amount, on the other hand,
is the minimum bid price set at the
beginning of the auction below which
no bids are accepted. It is generally used
to accelerate the competitive bidding
process. Also, the auctioneer often has
the discretion to lower the minimum
opening bid amount later in the auction.
It is also possible for the minimum
opening bid amount and the reserve
price to be the same amount.
23. In light of the requirements in
section 309(j), the Bureaus propose to
establish minimum opening bid
amounts for Auction No. 62. The
Bureaus believe a minimum opening bid
amount, which has been used in other
auctions, is an effective bidding tool.
24. For Auction No. 62, the proposed
minimum opening bids were
determined by taking into account
various factors related to the efficiency
of the auction and the potential value of
the spectrum, including the type of
service and class of facility offered,
market size, population covered by the
proposed FM broadcast facility,
industry cash flow data and recent
broadcast transactions. The specific
minimum opening bid for each
construction permit available in
Auction No. 62 is set forth in
Attachment A of the Auction No. 62
Comment Public Notice. We seek
comment on this proposal.
25. If commenters believe that these
minimum opening bid amounts will
result in substantial numbers of unsold
construction permits, or are not
reasonable amounts, or should instead
operate as reserve prices, they should
explain why this is so, and comment on
the desirability of an alternative
approach. Commenters are advised to
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support their claims with valuation
analyses and suggested reserve prices or
minimum opening bid amount levels or
formulas. In establishing the minimum
opening bid amounts, we particularly
seek comment on such factors as the
potential value of the spectrum being
auctioned including the type of service
and class of facility offered, market size,
population covered by the proposed FM
broadcast facility and other relevant
factors that could reasonably have an
impact on valuation of the broadcast
spectrum. We also seek comment on
whether, consistent with section 309(j),
the public interest would be served by
having no minimum opening bid
amount or reserve price.
C. Minimum Acceptable Bid Amounts
and Bid Increments
26. In each round, eligible bidders
will be able to place bids on a given
construction permit in any of nine
different amounts. The FCC Auction
System interface will list the nine
acceptable bid amounts for each
construction permit.
27. The minimum acceptable bid
amount for a construction permit will be
equal to its minimum opening bid
amount until there is a provisionally
winning bid for the construction permit.
After there is a provisionally winning
bid for a construction permit, the
minimum acceptable bid amount for
that construction permit will be equal to
the amount of the provisionally winning
bid plus an additional amount. The
minimum acceptable bid amount will be
calculated by multiplying the
provisionally winning bid amount times
one plus the minimum acceptable bid
percentage—e.g., if the minimum
acceptable bid percentage is 10 percent,
the minimum acceptable bid amount
will equal (provisionally winning bid
amount) ✻ (1.10), rounded. We will
round the result using our standard
rounding procedures.
28. The nine acceptable bid amounts
for each construction permit consist of
the minimum acceptable bid amount
and additional amounts calculated
using the minimum acceptable bid
amount and the bid increment
percentage. We will round the results
using our standard rounding
procedures. The first additional
acceptable bid amount equals the
minimum acceptable bid amount times
one plus the bid increment percentage,
rounded—e.g., if the increment
percentage is 10 percent, the calculation
is (minimum acceptable bid amount) ✻
(1 + 0.10), rounded, or (minimum
acceptable bid amount) ✻ 1.10, rounded;
the second additional acceptable bid
amount equals the minimum acceptable
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bid amount times one plus two times
the bid increment percentage, rounded,
or (minimum acceptable bid amount) ✻
1.20, rounded; the third additional
acceptable bid amount equals the
minimum acceptable bid amount times
one plus three times the bid increment
percentage, rounded, or (minimum
acceptable bid amount) ✻ 1.30, rounded;
etc. Note that the bid increment
percentage need not be the same as the
minimum acceptable bid percentage.
29. In the case of a construction
permit for which the provisionally
winning bid has been withdrawn, the
minimum acceptable bid amount will
equal the second highest bid received
for the construction permit.
30. For Auction No. 62, the Bureaus
propose to use a minimum acceptable
bid percentage of 10 percent and a bid
increment percentage of 10 percent.
This means that the minimum
acceptable bid amount for a
construction permit will be
approximately 10 percent greater than
the provisionally winning bid amount
for the construction permit, and
additional acceptable bid amounts for a
construction permit will be
approximately 10–80 percent greater (in
intervals of 10 percent) than the
minimum acceptable bid amount for the
construction permit.
31. The Bureaus retain the discretion
to change the minimum acceptable bid
amounts, the minimum acceptable bid
percentage, and the bid increment
percentage if it determines that
circumstances so dictate. The Bureaus
will do so by announcement in the FCC
Auction System during the auction. We
seek comment on these proposals.
D. Provisionally Winning Bids
32. At the end of a bidding round, a
provisionally winning bid amount for
each construction permit will be
determined based on the highest bid
amount received for the construction
permit. In the event of identical high bid
amounts being submitted on a
construction permit in a given round
(i.e., tied bids), we propose to use a
random number generator to select a
single provisionally winning bid from
among the tied bids. If the auction were
to end with no higher bids being placed
for that construction permit, the
winning bidder would be the one that
placed the selected provisionally
winning bid. However, the remaining
bidders, as well as the provisionally
winning bidder, can submit higher bids
in subsequent rounds. If any bids are
received on the construction permit in
a subsequent round, the provisionally
winning bid again will be determined
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by the highest bid amount received for
the construction permit.
33. A provisionally winning bid will
remain the provisionally winning bid
until there is a higher bid on the same
construction permit at the close of a
subsequent round, unless the
provisionally winning bid is withdrawn.
Bidders are reminded that provisionally
winning bids confer credit for activity.
E. Information Regarding Bid
Withdrawal and Bid Removal
34. For Auction No. 62, the Bureaus
propose the following bid removal and
bid withdrawal procedures. Before the
close of a bidding round, a bidder has
the option of removing any bid placed
in that round. By removing selected bids
in the FCC Auction System, a bidder
may effectively ‘‘unsubmit’’ any bid
placed within that round. A bidder
removing a bid placed in the same
round is not subject to a withdrawal
payment. Once a round closes, a bidder
may no longer remove a bid.
35. A bidder may withdraw its
provisionally winning bids using the
‘‘withdraw bids’’ function in the FCC
Auction System. A bidder that
withdraws its provisionally winning
bid(s) is subject to the bid withdrawal
payment provisions of the Commission
rules. We seek comment on these bid
removal and bid withdrawal
procedures.
36. In the Part 1 Third Report and
Order, 63 FR 2315, January 15, 1998, the
Commission explained that allowing bid
withdrawals facilitates efficient
aggregation of licenses and construction
permits and the pursuit of efficient
backup strategies as information
becomes available during the course of
an auction. The Commission noted,
however, that, in some instances,
bidders may seek to withdraw bids for
improper reasons. The Bureaus,
therefore, have discretion, in managing
the auction, to limit the number of
withdrawals to prevent any bidding
abuses. The Commission stated that the
Bureaus should assertively exercise
their discretion, consider limiting the
number of rounds in which bidders may
withdraw bids, and prevent bidders
from bidding on a particular
construction permit if the Bureaus find
that a bidder is abusing the
Commission’s bid withdrawal
procedures.
37. Applying this reasoning, we
propose to limit each bidder in Auction
No. 62 to withdrawing provisionally
winning bids in no more than one round
during the course of the auction. To
permit a bidder to withdraw bids in
more than one round may encourage
insincere bidding or the use of
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withdrawals for anti-competitive
purposes. The round in which
withdrawals may be used will be at the
bidder’s discretion; withdrawals
otherwise must be in accordance with
the Commission’s rules. There is no
limit on the number of provisionally
winning bids that may be withdrawn in
the round in which withdrawals are
used. Withdrawals will remain subject
to the bid withdrawal payment
provisions specified in the
Commission’s rules. We seek comment
on this proposal.
F. Stopping Rule
38. The Bureaus have discretion ‘‘to
establish stopping rules before or during
multiple round auctions in order to
terminate the auction within a
reasonable time.’’ For Auction No. 62,
the Bureaus propose to employ a
simultaneous stopping rule approach. A
simultaneous stopping rule means that
all construction permits remain
available for bidding until bidding
closes simultaneously on all
construction permits.
39. Bidding will close simultaneously
on all construction permits after the first
round in which no bidder submits any
new bids, applies a proactive waiver, or
places any withdrawals. Thus, unless
circumstances dictate otherwise,
bidding will remain open on all
construction permits until bidding stops
on every construction permit.
40. However, the Bureaus propose to
retain the discretion to exercise any of
the following options during Auction
No. 62:
i. Use a modified version of the
simultaneous stopping rule. The
modified stopping rule would close the
auction for all construction permits after
the first round in which no bidder
applies a waiver, places a withdrawal or
submits any new bids on any
construction permit for which it is not
the provisionally winning bidder. Thus,
absent any other bidding activity, a
bidder placing a new bid on a
construction permit for which it is the
provisionally winning bidder would not
keep the auction open under this
modified stopping rule. The Bureaus
further seek comment on whether this
modified stopping rule should be used
at any time or only in stage two of the
auction.
ii. Keep the auction open even if no
bidder submits any new bids, applies a
waiver or places any withdrawals. In
this event, the effect will be the same as
if a bidder had applied a waiver. The
activity rule, therefore, will apply as
usual and a bidder with insufficient
activity will either lose bidding
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eligibility or use a remaining activity
rule waiver.
iii. Declare that the auction will end
after a specified number of additional
rounds (‘‘special stopping rule’’). If the
Bureaus invoke this special stopping
rule, it will accept bids in the specified
final round(s) and the auction will
close.
41. The Bureaus propose to exercise
these options only in certain
circumstances, for example, where the
auction is proceeding very slowly, there
is minimal overall bidding activity, or it
appears likely that the auction will not
close within a reasonable period of time.
Before exercising these options, the
Bureaus are likely to attempt to increase
the pace of the auction by, for example,
increasing the number of bidding
rounds per day, and/or increasing the
minimum acceptable bid percentage for
the limited number of construction
permits on which there is still a high
level of bidding activity. We seek
comment on these proposals.
IV. Due Diligence
42. Potential bidders are solely
responsible for investigating and
evaluating all technical and market
place factors that may have a bearing on
the value of the broadcast facilities in
this auction. 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
permittee in the broadcast service,
subject to certain conditions and
regulations. An FCC auction does not
constitute an endorsement by the FCC of
any particular service, technology, or
product, nor does an FCC construction
permit or license constitute a guarantee
of business success. Applicants should
perform their individual due diligence
before proceeding as they would with
any new business venture. In particular,
potential bidders are strongly
encouraged to review all underlying
Commission orders, such as the specific
Report and Order amending the FM
Table of Allotments and allotting the
FM channel(s) on which they plan to
bid. Reports and Orders adopted in FM
allotment rulemaking proceedings often
include anomalies such as site
restrictions or expense reimbursement
requirements. Additionally, potential
bidders should perform technical
analyses sufficient to assure them that,
should they prevail in competitive
bidding for a given FM construction
permit, they will be able to build and
operate facilities that will fully comply
with the Commission’s technical and
legal requirements. Applicants are
VerDate jul<14>2003
17:39 Apr 26, 2005
Jkt 205001
strongly encouraged to inspect any
prospective transmitter sites located in,
or near, the service area for which they
plan to bid, and also to familiarize
themselves with the Commission’s rules
regarding the National Environmental
Policy Act.
43. Potential bidders are strongly
encouraged to conduct their own
research prior to Auction No. 62 in
order to determine the existence of
pending proceedings that might affect
their decisions regarding participation
in the auction. Participants in Auction
No. 62 are strongly encouraged to
continue such research during the
auction.
V. Conclusion
44. Comments are due on or before
April 29, 2005, and reply comments are
due on or before May 6, 2005. All filings
must be addressed to the Commission’s
Secretary, Attn: WTB/ASAD, Office of
the Secretary, Federal Communications
Commission. Parties who file by paper
must file an original and four copies of
each filing. U.S. Postal Service firstclass, Express, and Priority mail should
be addressed to Office of the Secretary,
445 12th Street, SW., Washington, DC
20554. Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail. The
Bureaus also require that all comments
and reply comments be filed
electronically to the following address:
auction62@fcc.gov. The electronic mail
containing the comments or reply
comments must include a subject or
caption referring to ‘‘Auction No. 62
Comments’’ and the name of the
commenting party. The Bureaus request
that parties format any attachments to
electronic mail as Adobe Acrobat
(pdf) or Microsoft Word documents.
Copies of comments and reply
comments will be available for public
inspection between 8 a.m. and 4:30 p.m.
Monday through Thursday or 8 a.m. to
11:30 a.m. on Friday in the FCC
Reference Information Center, Room
CY–A257, 445 12th Street, SW.,
Washington, DC 20554, and will also be
posted on the Web page for Auction No.
62 at https://wireless.fcc.gov/auctions/62.
45. This proceeding has been
designated as a ‘‘permit-but-disclose’’
proceeding in accordance with the
Commission’s ex parte rules. Persons
making oral ex parte presentations are
reminded that memoranda summarizing
the presentations must contain
summaries of the substance of the
presentations and not merely a listing of
the subjects discussed. More than a one
or two sentence description of the views
and arguments presented is generally
PO 00000
Frm 00057
Fmt 4703
Sfmt 4703
required. Other rules pertaining to oral
and written ex parte presentations in
permit-but-disclose proceedings are set
forth in § 1.1206(b) of the Commission’s
rules.
Federal Communications Commission.
Gary Michaels,
Deputy Chief, Auctions and Spectrum Access
Division, WTB.
[FR Doc. 05–8521 Filed 4–26–05; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
[DA 05–619]
Basic Reconfiguration Schedule Put
Forth in the Transition Administrator’s
800 MHz Regional Prioritization Plan
Federal Communications
Commission.
ACTION: Notice.
AGENCY:
SUMMARY: In July 2004, the Federal
Communications Commission (FCC)
adopted a Report and Order, in the 800
MHz Public Safety Proceeding
establishing rules that reconfigure the
800 MHz band to eliminate interference
to public safety and other 800 MHz land
mobile communication systems. As
specified in the Commission’s Report
and Order, the band reconfiguration
process is being overseen by a
Transition Administrator (TA) whose
duties include providing the
Commission with a plan detailing when
band reconfiguration will commence in
each of the fifty-five 800 MHz National
Public Safety Planning Advisory
Committee (NPSPAC) regions. On
January 31, 2005, the TA filed the plan
(Regional Prioritization Plan or RPP),
containing a general schedule for
implementing 800 MHz band
reconfiguration.
FOR FURTHER INFORMATION CONTACT:
Roberto Mussenden,
Roberto.Mussenden@FCC.gov, Public
Safety and Critical Infrastructure
Division, Wireless Telecommunications
Bureau, (202) 418–0680, TTY (202) 418–
7233.
SUPPLEMENTARY INFORMATION: This is a
summary of a public notice released on
March 11, 2005.
1. The TA plan assigns each of the
fifty-five NPSPAC regions to one of four
basic ‘‘prioritization waves’’ with
staggered approximate starting dates.
Under the RPP, the first wave
commences on June 27, 2005, (Wave 1),
the second wave on October 3, 2005
(Wave 2), the third wave on January 3,
2006 (Wave 3) and the fourth wave on
E:\FR\FM\27APN1.SGM
27APN1
]]>Agencies
[Federal Register Volume 70, Number 80 (Wednesday, April 27, 2005)]
[Notices]
[Pages 21782-21786]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-8521]
[[Page 21782]]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
[Report No. AUC-05-62-A (Auction No. 62); DA 05-1076]
Auction of FM Broadcast Construction Permits Scheduled for
November 1, 2005; Comment Sought on Reserve Prices or Minimum Opening
Bids and Other Auction Procedures for Auction No. 62
AGENCY: Federal Communications Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This document announces the auction of certain FM broadcast
construction permits scheduled to commence on November 1, 2005 (Auction
No. 62). This document also seeks comment on reserve prices or minimum
opening bids and other procedures for Auction No. 62.
DATES: Comments are due on or before April 29, 2005, and reply comments
are due on or before May 6, 2005.
ADDRESSES: Parties who file by paper must file an original and four
copies of each filing. U.S. Postal Service first class, express and
priority mail must be addressed to Office of the Secretary, 445 12th
Street, SW., Washington, DC 20554. Comments and reply comments must
also be sent by electronic mail to the following address:
auction62@fcc.gov.
FOR FURTHER INFORMATION CONTACT: For legal questions: Howard Davenport
at (202) 418-0660. For general auction questions: Jeff Crooks at (202)
418-0660 or Linda Sanderson at (717) 338-2888. For service rule
questions, contact the Audio Services Division, Media Bureau, as
follows: Lisa Scanlan or Tom Nessinger at (202) 418-2700.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Public
Notice released April 14, 2005, Auction No. 62 Comment Public Notice.
The complete text of the Auction No. 62 Comment Public Notice,
including attachments and any related Commission documents 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. 62 Comment Public
Notice and related Commission documents may also be purchased from the
Commission's duplicating contractor, Best Copy and Printing, Inc.
(BCPI), Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC
20554, telephone (202) 488-5300, facsimile (202) 488-5563, or you may
contact BCPI at its Web site: https://www.BCPIWEB.com. When ordering
documents from BCPI, please provide the appropriate FCC document number
(for example, DA 05-1076 for the Auction No. 62 Comment PN). The
Auction No. 62 Comment Public Notice and related documents are also
available on the Internet at the Commission's Web site: https://
wireless.fcc.gov/ auctions/62/.
I. General Information
1. By the Auction No. 62 Comment Public Notice, the Wireless
Telecommunications Bureau (WTB) and the Media Bureau (MB) (collectively
referred to as the Bureaus) announce the auction of certain FM
broadcast construction permits (Auction No. 62) to commence on November
1, 2005. As discussed in greater detail herein, the Bureaus propose
that Auction No. 62 be composed of 173 construction permits in the FM
broadcast service as listed in Attachment A of the Auction No. 62
Comment Public Notice. The construction permits to be auctioned include
143 new FM allotments, and 30 unsold FM construction permits from
Auction No. 37.
2. Attachment A of the Auction No. 62 Comment Public Notice lists
vacant FM allotments, reflecting FM channels assigned to the Table of
FM Allotments, 47 CFR 73.202(b), pursuant to the Commission's
established rulemaking procedures, designated for use in the indicated
community. Pursuant to the policies established in the Broadcast First
Report and Order, 63 FR 48615, September 11, 1998, applicants may apply
for any vacant FM allotment, as specified in Attachment A of the
Auction No. 62 Comment Public Notice. Applicants specifying the same FM
allotment will be considered mutually exclusive and, thus, the
construction permit for the FM allotment will be awarded by competitive
bidding procedures. The reference coordinates for each vacant FM
allotment are also listed in Attachment A of the Auction No. 62 Comment
Public Notice.
3. Auction No. 62 will use the FCC's Integrated Spectrum Auction
System (ISAS or FCC Auction System), an extensive redesign of the
previous auction application and bidding systems. The redesign includes
FCC Form 175 application enhancements such as discrete data elements in
place of free-form exhibits and improved data accuracy through
automated checking of FCC Form 175 applications. Enhancements have also
been made to the FCC Form 175 application search function. The auction
bidding system has also been updated for easier navigation,
customizable results, and improved functionality. More information
about ISAS is available via the ``About ISAS'' link on the Auctions Web
page at https://wireless.fcc.gov/auctions/.
4. Section 309(j)(3) of the Communications Act of 1934, as amended,
requires the Commission to ``ensure that, in the scheduling of any
competitive bidding under this subsection, an adequate period is
allowed * * * before issuance of bidding rules, to permit notice and
comment on proposed auction procedures * * *.'' Consistent with the
provisions of Section 309(j)(3) and to ensure that potential bidders
have adequate time to familiarize themselves with the specific rules
that will govern the day-to-day conduct of an auction, the Commission
directed the Bureaus, under existing delegated authority, to seek
comment on a variety of auction-specific procedures prior to the start
of each auction. We therefore seek comment on the following issues
relating to Auction No. 62.
II. Auction Structure
A. Simultaneous Multiple-Round Auction Design
5. The Bureaus propose to award all construction permits included
in Auction No. 62 in a simultaneous multiple-round auction. This
methodology offers every construction permit for bid at the same time
with successive bidding rounds in which bidders may place bids. That
is, bidding will remain open on all construction permits until bidding
stops on every construction permit. We seek comment on this proposal.
B. Upfront Payments and Bidding Eligibility
6. The Bureaus have delegated authority and discretion to determine
an appropriate upfront payment for each FM construction permit being
auctioned, taking into account such factors as the efficiency of the
auction process and the potential value of similar spectrum. As
described further below, the upfront payment is a refundable deposit
made by each bidder to establish eligibility to bid on FM construction
permits. Upfront payments related to the specific spectrum subject to
auction protect against frivolous or insincere bidding and provide the
Commission with a source of funds from which to collect payments owed
at the close of the auction. With these guidelines in mind, we propose
the schedule of upfront payments for each construction permit as set
forth in Attachment A of the Auction No. 62
[[Page 21783]]
Comment Public Notice. We seek comment on this proposal.
7. The Bureaus further propose that the amount of the upfront
payment submitted by a bidder will determine the maximum number of
bidding units on which a bidder may place bids. This limit is a
bidder's initial bidding eligibility. Each FM construction permit is
assigned a specific number of bidding units equal to the upfront
payment listed in Attachment A of the Auction No. 62 Comment Public
Notice, on a bidding unit per dollar basis. Bidding units for a given
construction permit do not change as prices rise during the auction. A
bidder's upfront payment is not attributed to specific construction
permits. Rather, a bidder may place bids on any combination of
construction permits as long as the total number of bidding units
associated with those construction permits does not exceed the bidder's
current eligibility. In order to bid on a construction permit,
qualified bidders must have an eligibility level that meets the number
of bidding units assigned to that construction permit. Eligibility
cannot be increased during the auction; it can only remain the same or
decrease. Thus, in calculating its upfront payment amount, an applicant
must determine the maximum number of bidding units it may wish to bid
on (or hold provisionally winning bids on) in any single round, and
submit an upfront payment amount covering that total number of bidding
units. Provisionally winning bids are bids that would become final
winning bids if the auction were to close in that given round. We seek
comment on this proposal.
C. Activity Rules
8. In order to ensure that the auction closes within a reasonable
period of time, an activity rule requires bidders to bid actively
throughout the auction, rather than wait until late in the auction
before participating. A bidder's activity will be the sum of the
bidding units associated with the construction permits upon which it
places a bid during the current round and the bidding units associated
with the construction permits upon which it holds provisionally winning
bids. Bidders are required to be active on a specific percentage of
their current bidding eligibility during each round of the auction.
Failure to maintain the requisite activity level will result in the use
of an activity rule waiver, if any remain, or a reduction in the
bidder's eligibility, possibly eliminating the bidder from further
bidding in the auction.
9. The Bureaus propose to divide the auction into two stages, each
characterized by a different activity requirement. The auction will
start in Stage One. We propose that the auction generally will advance
from Stage One to Stage Two when the auction activity level, as
measured by the percentage of bidding units receiving new provisionally
winning bids, is approximately twenty percent or below for three
consecutive rounds of bidding. However, we further propose that the
Bureaus retain the discretion to change stages unilaterally by
announcement during the auction. In exercising this discretion, the
Bureaus will consider a variety of measures of bidder activity,
including, but not limited to, the auction activity level, the
percentage of construction permits (as measured in bidding units) on
which there are new bids, the number of new bids, and the percentage
increase in revenue. We seek comment on these proposals.
10. For Auction No. 62, the Bureaus propose the following activity
requirements:
Stage One: In each round of the first stage of the auction, a
bidder desiring to maintain its current bidding eligibility is required
to be active on construction permits representing at least 75 percent
of its current bidding eligibility. Failure to maintain the requisite
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, a bidder's reduced eligibility for
the next round will be calculated by multiplying the bidder's current
round activity by four-thirds (\4/3\).
Stage Two: In each round of the second stage, a bidder desiring to
maintain its current bidding eligibility is required to be active on 95
percent of its current bidding eligibility. Failure to maintain the
requisite 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 Two, a bidder's reduced eligibility
for the next round will be calculated by multiplying the bidder's
current round activity by twenty-nineteenths (\20/19\).
11. The Bureaus seek comment on these proposals. Commenters that
believe these activity rules should be modified should explain their
reasoning and comment on the desirability of an alternative approach.
Commenters are advised to support their claims with analyses and
suggested alternative activity rules.
D. Activity Rule Waivers and Reducing Eligibility
12. Use of an activity rule waiver preserves the bidder's current
bidding eligibility despite the bidder's activity in the current round
being below the required minimum level. An activity rule waiver applies
to an entire round of bidding and not to a particular construction
permit. Activity rule waivers can be either proactive or automatic and
are principally a mechanism for auction participants to avoid the loss
of bidding eligibility in the event that exigent circumstances prevent
them from placing a bid in a particular round.
13. The FCC Auction System assumes that bidders with insufficient
activity would prefer to apply an activity rule waiver (if available)
rather than lose bidding eligibility. Therefore, the system will
automatically apply a waiver at the end of any bidding round where a
bidder's activity level is below the minimum required unless: (i) the
bidder has no activity rule waivers available; or (ii) the bidder
overrides the automatic application of a waiver by reducing
eligibility, thereby meeting the minimum requirement.
Note: If a bidder has no waivers remaining and does not satisfy
the required activity level, its eligibility will be permanently
reduced, possibly eliminating the bidder from further bidding in the
auction.
14. A bidder with insufficient activity may wish to reduce its
bidding eligibility rather than use an activity rule waiver. If so, the
bidder must affirmatively override the automatic waiver mechanism
during the bidding round by using the ``reduce eligibility'' function
in the FCC Auction System. In this case, the bidder's eligibility is
permanently reduced to bring the bidder into compliance with the
activity rules as described above. Once eligibility has been reduced, a
bidder will not be permitted to regain its lost bidding eligibility.
15. A bidder may apply an activity rule waiver proactively as a
means to keep the auction open without placing a bid. If a bidder
proactively applies an activity rule waiver (using the ``apply waiver''
function in the FCC Auction System) during a bidding round in which no
bids or withdrawals are submitted, the auction will remain open and the
bidder's eligibility will be preserved. An automatic waiver applied by
the FCC Auction System in a round in which there are no new bids or
withdrawals will not keep the auction open. The submission of a
proactive waiver cannot occur after a bid has been submitted in a round
and will preclude a bidder from placing any bids later in that round.
Applying a waiver is irreversible; once a proactive waiver is submitted
that waiver cannot be
[[Page 21784]]
unsubmitted, even if the round has not yet closed.
16. The Bureaus propose that each bidder in Auction No. 62 be
provided with three activity rule waivers that may be used at the
bidder's discretion during the course of the auction as set forth
above. We seek comment on this proposal.
E. Information Relating to Auction Delay, Suspension, or Cancellation
17. For Auction No. 62, we propose that, by public notice or by
announcement during the auction, the Bureaus 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 efficient conduct of competitive bidding. In
such cases, the Bureaus, in their sole discretion, may elect to resume
the auction starting from the beginning of the current round, resume
the auction starting from some previous round, or cancel the auction in
its entirety. Network interruption may cause the Bureaus to delay or
suspend the auction. We emphasize that exercise of this authority is
solely within the discretion of the Bureaus, and its use is not
intended to be a substitute for situations in which bidders may wish to
apply their activity rule waivers. We seek comment on this proposal.
III. Bidding Procedures
A. Round Structure
18. The Commission will conduct Auction No. 62 over the Internet.
Alternatively, telephonic bidding will also be available. The toll-free
telephone number for telephonic bidding will be provided to bidders.
19. The initial bidding schedule will be announced in a public
notice to be released at least one week before the start of the
auction. The simultaneous multiple-round format will consist of
sequential bidding rounds, each followed by the release of round
results. Details on viewing round results, including the location and
format of downloadable round results files will be included in the same
public notice.
20. The Bureaus have the discretion to change the bidding schedule
in order to foster an auction pace that reasonably balances speed with
the bidders' need to study round results and adjust their bidding
strategies. The Bureaus 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. We seek
comment on this proposal.
B. Reserve Price or Minimum Opening Bid
21. Section 309(j) calls upon the Commission to prescribe methods
for establishing a reasonable reserve price or a minimum opening bid
amount when FCC licenses or construction permits are subject to
auction, unless the Commission determines that a reserve price or
minimum opening bid amount is not in the public interest. Consistent
with this mandate, the Commission has directed the Bureaus to seek
comment on the use of minimum opening bid amounts and/or reserve price
prior to the start of each auction of broadcast construction permits.
22. Normally, a reserve price is an absolute minimum price below
which an item will not be sold in a given auction. Reserve prices can
be either published or unpublished. A minimum opening bid amount, on
the other hand, is the minimum bid price set at the beginning of the
auction below which no bids are accepted. It is generally used to
accelerate the competitive bidding process. Also, the auctioneer often
has the discretion to lower the minimum opening bid amount later in the
auction. It is also possible for the minimum opening bid amount and the
reserve price to be the same amount.
23. In light of the requirements in section 309(j), the Bureaus
propose to establish minimum opening bid amounts for Auction No. 62.
The Bureaus believe a minimum opening bid amount, which has been used
in other auctions, is an effective bidding tool.
24. For Auction No. 62, the proposed minimum opening bids were
determined by taking into account various factors related to the
efficiency of the auction and the potential value of the spectrum,
including the type of service and class of facility offered, market
size, population covered by the proposed FM broadcast facility,
industry cash flow data and recent broadcast transactions. The specific
minimum opening bid for each construction permit available in Auction
No. 62 is set forth in Attachment A of the Auction No. 62 Comment
Public Notice. We seek comment on this proposal.
25. If commenters believe that these minimum opening bid amounts
will result in substantial numbers of unsold construction permits, or
are not reasonable amounts, or should instead operate as reserve
prices, they should explain why this is so, and comment on the
desirability of an alternative approach. Commenters are advised to
support their claims with valuation analyses and suggested reserve
prices or minimum opening bid amount levels or formulas. In
establishing the minimum opening bid amounts, we particularly seek
comment on such factors as the potential value of the spectrum being
auctioned including the type of service and class of facility offered,
market size, population covered by the proposed FM broadcast facility
and other relevant factors that could reasonably have an impact on
valuation of the broadcast spectrum. We also seek comment on whether,
consistent with section 309(j), the public interest would be served by
having no minimum opening bid amount or reserve price.
C. Minimum Acceptable Bid Amounts and Bid Increments
26. In each round, eligible bidders will be able to place bids on a
given construction permit in any of nine different amounts. The FCC
Auction System interface will list the nine acceptable bid amounts for
each construction permit.
27. The minimum acceptable bid amount for a construction permit
will be equal to its minimum opening bid amount until there is a
provisionally winning bid for the construction permit. After there is a
provisionally winning bid for a construction permit, the minimum
acceptable bid amount for that construction permit will be equal to the
amount of the provisionally winning bid plus an additional amount. The
minimum acceptable bid amount will be calculated by multiplying the
provisionally winning bid amount times one plus the minimum acceptable
bid percentage--e.g., if the minimum acceptable bid percentage is 10
percent, the minimum acceptable bid amount will equal (provisionally
winning bid amount) [star25] (1.10), rounded. We will round the result
using our standard rounding procedures.
28. The nine acceptable bid amounts for each construction permit
consist of the minimum acceptable bid amount and additional amounts
calculated using the minimum acceptable bid amount and the bid
increment percentage. We will round the results using our standard
rounding procedures. The first additional acceptable bid amount equals
the minimum acceptable bid amount times one plus the bid increment
percentage, rounded--e.g., if the increment percentage is 10 percent,
the calculation is (minimum acceptable bid amount) [star25] (1 + 0.10),
rounded, or (minimum acceptable bid amount) [star25] 1.10, rounded; the
second additional acceptable bid amount equals the minimum acceptable
[[Page 21785]]
bid amount times one plus two times the bid increment percentage,
rounded, or (minimum acceptable bid amount) [star25] 1.20, rounded; the
third additional acceptable bid amount equals the minimum acceptable
bid amount times one plus three times the bid increment percentage,
rounded, or (minimum acceptable bid amount) [star25] 1.30, rounded;
etc. Note that the bid increment percentage need not be the same as the
minimum acceptable bid percentage.
29. In the case of a construction permit for which the
provisionally winning bid has been withdrawn, the minimum acceptable
bid amount will equal the second highest bid received for the
construction permit.
30. For Auction No. 62, the Bureaus propose to use a minimum
acceptable bid percentage of 10 percent and a bid increment percentage
of 10 percent. This means that the minimum acceptable bid amount for a
construction permit will be approximately 10 percent greater than the
provisionally winning bid amount for the construction permit, and
additional acceptable bid amounts for a construction permit will be
approximately 10-80 percent greater (in intervals of 10 percent) than
the minimum acceptable bid amount for the construction permit.
31. The Bureaus retain the discretion to change the minimum
acceptable bid amounts, the minimum acceptable bid percentage, and the
bid increment percentage if it determines that circumstances so
dictate. The Bureaus will do so by announcement in the FCC Auction
System during the auction. We seek comment on these proposals.
D. Provisionally Winning Bids
32. At the end of a bidding round, a provisionally winning bid
amount for each construction permit will be determined based on the
highest bid amount received for the construction permit. In the event
of identical high bid amounts being submitted on a construction permit
in a given round (i.e., tied bids), we propose to use a random number
generator to select a single provisionally winning bid from among the
tied bids. If the auction were to end with no higher bids being placed
for that construction permit, the winning bidder would be the one that
placed the selected provisionally winning bid. However, the remaining
bidders, as well as the provisionally winning bidder, can submit higher
bids in subsequent rounds. If any bids are received on the construction
permit in a subsequent round, the provisionally winning bid again will
be determined by the highest bid amount received for the construction
permit.
33. A provisionally winning bid will remain the provisionally
winning bid until there is a higher bid on the same construction permit
at the close of a subsequent round, unless the provisionally winning
bid is withdrawn. Bidders are reminded that provisionally winning bids
confer credit for activity.
E. Information Regarding Bid Withdrawal and Bid Removal
34. For Auction No. 62, the Bureaus propose the following bid
removal and bid withdrawal procedures. Before the close of a bidding
round, a bidder has the option of removing any bid placed in that
round. By removing selected bids in the FCC Auction System, a bidder
may effectively ``unsubmit'' any bid placed within that round. A bidder
removing a bid placed in the same round is not subject to a withdrawal
payment. Once a round closes, a bidder may no longer remove a bid.
35. A bidder may withdraw its provisionally winning bids using the
``withdraw bids'' function in the FCC Auction System. A bidder that
withdraws its provisionally winning bid(s) is subject to the bid
withdrawal payment provisions of the Commission rules. We seek comment
on these bid removal and bid withdrawal procedures.
36. In the Part 1 Third Report and Order, 63 FR 2315, January 15,
1998, the Commission explained that allowing bid withdrawals
facilitates efficient aggregation of licenses and construction permits
and the pursuit of efficient backup strategies as information becomes
available during the course of an auction. The Commission noted,
however, that, in some instances, bidders may seek to withdraw bids for
improper reasons. The Bureaus, therefore, have discretion, in managing
the auction, to limit the number of withdrawals to prevent any bidding
abuses. The Commission stated that the Bureaus should assertively
exercise their discretion, consider limiting the number of rounds in
which bidders may withdraw bids, and prevent bidders from bidding on a
particular construction permit if the Bureaus find that a bidder is
abusing the Commission's bid withdrawal procedures.
37. Applying this reasoning, we propose to limit each bidder in
Auction No. 62 to withdrawing provisionally winning bids in no more
than one round during the course of the auction. To permit a bidder to
withdraw bids in more than one round may encourage insincere bidding or
the use of withdrawals for anti-competitive purposes. The round in
which withdrawals may be used will be at the bidder's discretion;
withdrawals otherwise must be in accordance with the Commission's
rules. There is no limit on the number of provisionally winning bids
that may be withdrawn in the round in which withdrawals are used.
Withdrawals will remain subject to the bid withdrawal payment
provisions specified in the Commission's rules. We seek comment on this
proposal.
F. Stopping Rule
38. The Bureaus have discretion ``to establish stopping rules
before or during multiple round auctions in order to terminate the
auction within a reasonable time.'' For Auction No. 62, the Bureaus
propose to employ a simultaneous stopping rule approach. A simultaneous
stopping rule means that all construction permits remain available for
bidding until bidding closes simultaneously on all construction
permits.
39. Bidding will close simultaneously on all construction permits
after the first round in which no bidder submits any new bids, applies
a proactive waiver, or places any withdrawals. Thus, unless
circumstances dictate otherwise, bidding will remain open on all
construction permits until bidding stops on every construction permit.
40. However, the Bureaus propose to retain the discretion to
exercise any of the following options during Auction No. 62:
i. Use a modified version of the simultaneous stopping rule. The
modified stopping rule would close the auction for all construction
permits after the first round in which no bidder applies a waiver,
places a withdrawal or submits any new bids on any construction permit
for which it is not the provisionally winning bidder. Thus, absent any
other bidding activity, a bidder placing a new bid on a construction
permit for which it is the provisionally winning bidder would not keep
the auction open under this modified stopping rule. The Bureaus further
seek comment on whether this modified stopping rule should be used at
any time or only in stage two of the auction.
ii. Keep the auction open even if no bidder submits any new bids,
applies a waiver or places any withdrawals. In this event, the effect
will be the same as if a bidder had applied a waiver. The activity
rule, therefore, will apply as usual and a bidder with insufficient
activity will either lose bidding
[[Page 21786]]
eligibility or use a remaining activity rule waiver.
iii. Declare that the auction will end after a specified number of
additional rounds (``special stopping rule''). If the Bureaus invoke
this special stopping rule, it will accept bids in the specified final
round(s) and the auction will close.
41. The Bureaus propose to exercise these options only in certain
circumstances, for example, where the auction is proceeding very
slowly, there is minimal overall bidding activity, or it appears likely
that the auction will not close within a reasonable period of time.
Before exercising these options, the Bureaus are likely to attempt to
increase the pace of the auction by, for example, increasing the number
of bidding rounds per day, and/or increasing the minimum acceptable bid
percentage for the limited number of construction permits on which
there is still a high level of bidding activity. We seek comment on
these proposals.
IV. Due Diligence
42. Potential bidders are solely responsible for investigating and
evaluating all technical and market place factors that may have a
bearing on the value of the broadcast facilities in this auction. 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 permittee in the
broadcast service, subject to certain conditions and regulations. An
FCC auction does not constitute an endorsement by the FCC of any
particular service, technology, or product, nor does an FCC
construction permit or license constitute a guarantee of business
success. Applicants should perform their individual due diligence
before proceeding as they would with any new business venture. In
particular, potential bidders are strongly encouraged to review all
underlying Commission orders, such as the specific Report and Order
amending the FM Table of Allotments and allotting the FM channel(s) on
which they plan to bid. Reports and Orders adopted in FM allotment
rulemaking proceedings often include anomalies such as site
restrictions or expense reimbursement requirements. Additionally,
potential bidders should perform technical analyses sufficient to
assure them that, should they prevail in competitive bidding for a
given FM construction permit, they will be able to build and operate
facilities that will fully comply with the Commission's technical and
legal requirements. Applicants are strongly encouraged to inspect any
prospective transmitter sites located in, or near, the service area for
which they plan to bid, and also to familiarize themselves with the
Commission's rules regarding the National Environmental Policy Act.
43. Potential bidders are strongly encouraged to conduct their own
research prior to Auction No. 62 in order to determine the existence of
pending proceedings that might affect their decisions regarding
participation in the auction. Participants in Auction No. 62 are
strongly encouraged to continue such research during the auction.
V. Conclusion
44. Comments are due on or before April 29, 2005, and reply
comments are due on or before May 6, 2005. All filings must be
addressed to the Commission's Secretary, Attn: WTB/ASAD, Office of the
Secretary, Federal Communications Commission. Parties who file by paper
must file an original and four copies of each filing. U.S. Postal
Service first-class, Express, and Priority mail should be addressed to
Office of the Secretary, 445 12th Street, SW., Washington, DC 20554.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail. The Bureaus also require that all comments and reply comments be
filed electronically to the following address: auction62@fcc.gov. The
electronic mail containing the comments or reply comments must include
a subject or caption referring to ``Auction No. 62 Comments'' and the
name of the commenting party. The Bureaus request that parties format
any attachments to electronic mail as Adobe [supreg] Acrobat [supreg]
(pdf) or Microsoft [supreg] Word documents. Copies of comments and
reply comments will be available for public inspection between 8 a.m.
and 4:30 p.m. Monday through Thursday or 8 a.m. to 11:30 a.m. on Friday
in the FCC Reference Information Center, Room CY-A257, 445 12th Street,
SW., Washington, DC 20554, and will also be posted on the Web page for
Auction No. 62 at https://wireless.fcc.gov/auctions/62.
45. This proceeding has been designated as a ``permit-but-
disclose'' proceeding in accordance with the Commission's ex parte
rules. Persons making oral ex parte presentations are reminded that
memoranda summarizing the presentations must contain summaries of the
substance of the presentations and not merely a listing of the subjects
discussed. More than a one or two sentence description of the views and
arguments presented is generally required. Other rules pertaining to
oral and written ex parte presentations in permit-but-disclose
proceedings are set forth in Sec. 1.1206(b) of the Commission's rules.
Federal Communications Commission.
Gary Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 05-8521 Filed 4-26-05; 8:45 am]
BILLING CODE 6712-01-P
