Auction of 800 MHz Air-Ground Radiotelephone Service Licenses Scheduled for May 10, 2006; Notice of Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Procedures for Auction No. 65, 11645-11658 [E6-3287]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 71, Number 45 (Wednesday, March 8, 2006)]
[Notices]
[Pages 11645-11658]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-3287]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-06-65-B (Auction No. 65); DA 06-299]


Auction of 800 MHz Air-Ground Radiotelephone Service Licenses 
Scheduled for May 10, 2006; Notice of Filing Requirements, Minimum 
Opening Bids, Upfront Payments and Other Procedures for Auction No. 65

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 new nationwide commercial Air-Ground 
Radiotelephone Service licenses in the 800 MHz band. This document is 
intended to familiarize prospective bidders with the procedures and 
minimum opening bids for this auction.

DATES: Auction No. 65 is scheduled to begin on May 10, 2006.

FOR FURTHER INFORMATION CONTACT: For legal questions: Brian Carter at 
(202) 418-0660.
    For general auction questions: Jeff Crooks at (202) 418-0660.
    For service rules questions: Erin McGrath or Richard Arsenault 
(legal); or Jay Jackson or Moslem Sawez (technical) at (202) 418-0620.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 65 
Procedures Public Notice released on February 21, 2006. The complete 
text of the Auction No. 65 Procedures Public Notice, including 
attachments and related Commission documents is available for public 
inspection and copying from 8 a.m. to 4:30 p.m. Monday through Thursday 
or from 8 a.m. to 11:30 a.m. on Friday at the FCC Reference Information 
Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 
20554. The Auction No. 65 Procedures Public Notice and related 
Commission documents may also be purchased from the Commission's 
duplicating contractor, Best Copy and Printing, Inc. (BCPI), Portals 
II, 445 12th Street, SW., Room CY-B402, Washington, DC, 20554, 
telephone 202-488-5300, facsimile 202-488-5563, or 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 06-299. The Auction No. 65 Procedures Public Notice and related 
documents are also available on the Internet at the Commission's Web 
site:[hairsp]https://wireless.fcc.gov/auctions/65/.

I. General Information

A. Introduction

    1. The Wireless Telecommunications Bureau announces the procedures 
and minimum opening bid amounts for the upcoming auction of new 
nationwide commercial Air-Ground Radiotelephone Service licenses in the 
800 MHz band scheduled for May 10, 2006 (Auction No. 65). On January 
10, 2006, in accordance with section 309(j)(3) of the Communications 
Act of 1934, as amended, the Bureau released a public notice seeking 
comment on a reserve price and minimum opening bid amounts and the 
procedures to be used in Auction No. 65. The Bureau received one 
comment in response to the Auction No. 65 Comment Public Notice, 71 FR 
3513, January 23, 2006.
i. Background of Proceeding
    2. On February 22, 2005, the Commission released the Air-Ground 
Order, 70 FR 19377, April 13, 2005, in which it adopted a flexible 
regulatory approach to determine the future band configuration of the 
four megahertz of dedicated spectrum in the 800 MHz commercial Air-
Ground Radiotelephone Service. Based on the band configuration 
proposals submitted by interested parties in the proceeding, the 
Commission decided to assign nationwide air-ground licenses under one 
of three alternative band configurations, implementing the band plan 
receiving the highest gross aggregate bid in an auction. The Commission 
also requested comment on competitive bidding rules for the 800 MHz 
commercial Air-Ground Radiotelephone Service.
    3. On December 9, 2005, the Commission released the Air-Ground 
Reconsideration Order and R&O, 70 FR 76414, December 27, 2005, in which 
it resolved petitions for reconsideration of the Air-Ground Order and 
adopted competitive bidding rules for the 800 MHz commercial Air-Ground 
Radiotelephone Service.
    4. Licensees in the 800 MHz Air-Ground Radiotelephone Service will 
be permitted to provide any type of air-ground service (i.e., voice 
telephony, broadband Internet, data, etc.) to aircraft

[[Page 11646]]

of any type, and serve any or all aviation markets (commercial, 
government, and general). A licensee must provide service to aircraft 
and may not provide ancillary land mobile or fixed services in the 800 
MHz air-ground spectrum.
ii. Licenses To Be Auctioned
    5. Auction No. 65 will offer nationwide commercial licenses in the 
800 MHz band in three alternative band configurations: (1) Band Plan 1, 
comprised of two overlapping, shared, cross-polarized 3 MHz licenses 
(Licenses A and B, respectively), (2) Band Plan 2, comprised of an 
exclusive 3 MHz license and an exclusive 1 MHz license (Licenses C and 
D, respectively), and (3) Band Plan 3, comprised of an exclusive 1 MHz 
license and an exclusive 3 MHz license (Licenses E and F, 
respectively), with the blocks at opposite ends of the band from Band 
Plan 2. Licenses in only one of these mutually incompatible band 
configurations will be awarded. The band plan that receives the highest 
aggregate gross bid in the auction will be implemented, and licenses 
composing that configuration will be awarded to winning bidders subject 
to review of their long-form license applications. Because the three 
band configurations are mutually incompatible, applications for 
licenses in different band plans will be mutually exclusive.
    6. No party may obtain a controlling interest, either at auction or 
by a post-auction transaction, in new licenses for more than three 
megahertz of spectrum (either shared or exclusive) in the band. No 
single party, therefore, may win or hold more than one license in any 
of the available band configurations.
    7. A complete list of the licenses available in Auction No. 65 and 
their descriptions is also included in Attachment A of the Auction No. 
65 Procedures Public Notice.

B. Rules and Disclaimers

i. Relevant Authority
    8. Prospective applicants must familiarize themselves thoroughly 
with the Commission's general competitive bidding rules set forth in 
Title 47, part 1, of the Code of Federal Regulations, including recent 
amendments and clarifications; rules relating to the 800 MHz Air-Ground 
Radiotelephone Service contained in Title 47, part 22, of the Code of 
Federal Regulations; and rules relating to applications, practice and 
procedure contained in Title 47, part 1, of the Code of Federal 
Regulations. Prospective applicants must also be thoroughly familiar 
with the procedures, terms and conditions (collectively, terms) 
contained in this public notice and the Commission's decisions in 
proceedings regarding competitive bidding procedures, application 
requirements, and obligations of Commission licensees.
    9. The terms contained in the Commission's rules, relevant orders, 
and public notices are not negotiable. The Commission may amend or 
supplement the information contained in our public notices at any time, 
and will issue public notices to convey any new or supplemental 
information to applicants. It is the responsibility of all applicants 
to remain current with all Commission rules and with all public notices 
pertaining to this auction. Copies of most auctions-related Commission 
documents, including public notices, can be retrieved from the FCC 
Auctions Internet site at https://wireless.fcc.gov/auctions.
ii. Prohibition of Collusion
    10. To ensure the competitiveness of the auction process, 47 CFR 
1.2105(c) of the Commission's rules prohibits applicants for licenses 
in any of the same geographic license areas from communicating with 
each other about bids, bidding strategies, or settlements unless such 
applicants have identified each other on their short-form applications 
(FCC Forms 175) as parties with whom they have entered into agreements 
under 47 CFR 1.2105(a)(2)(viii). Because all of the licenses available 
in Auction No. 65 have the same service area, i.e., they are 
nationwide, this prohibition will apply to all applicants. Thus, all 
applicants (unless they have identified each other on their FCC Form 
175 applications as parties with whom they have entered into agreements 
under 47 CFR 1.2105(a)(2)(viii)) must affirmatively avoid all 
communications with or disclosures to each other that affect or have 
the potential to affect bids or bidding strategy, which may include 
communications regarding the post-auction market structure. This 
prohibition begins at the short-form application filing deadline and 
ends at the down payment deadline after the auction. This prohibition 
applies to all applicants regardless of whether such applicants become 
qualified bidders or actually bid.
    11. For purposes of this prohibition, 47 CFR 1.2105(c)(7)(i) 
defines applicant as including all officers and directors of the entity 
submitting a short-form application to participate in the auction, all 
controlling interests of that entity, as well as all holders of 
partnership and other ownership interests and any stock interest 
amounting to 10 percent or more of the entity, or outstanding stock, or 
outstanding voting stock of the entity submitting a short-form 
application.
    12. Applicants for licenses for any of the same geographic license 
areas must not communicate directly or indirectly about bids or bidding 
strategy. Because all of the licenses available in Auction No. 65 have 
the same service area, all applicants 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 applicants, and conveys information concerning 
the substance of bids or bidding strategies between such applicants. 
Also, if the authorized bidders are different individuals employed by 
the same organization (e.g., law firm, engineering firm, or consulting 
firm), a violation similarly could occur. In such a case, at a minimum, 
applicants should certify on their applications that precautionary 
steps have been taken to prevent communication between authorized 
bidders and that applicants and their bidding agents will comply with 
the anti-collusion rule. A violation of the anti-collusion rule could 
occur in other contexts, such as an individual serving as an officer of 
two or more applicants.
    13. The Commission's rules do not prohibit applicants from entering 
into otherwise lawful bidding agreements before filing their short-form 
applications, as long as they disclose the existence of the 
agreement(s) in their short-form applications. If parties agree in 
principle on all material terms prior to the short-form filing 
deadline, each party to the agreement must identify the other party or 
parties to the agreement on its short-form application under 47 CFR 
1.2105(c), even if the agreement has not been reduced to writing. If 
the parties have not agreed in principle by the short-form filing 
deadline, they should not include the names of parties to discussions 
on their applications, and they may not continue negotiations, 
discussions or communications with any other applicants after the 
short-form filing deadline.
    14. By electronically submitting its short-form application, each 
applicant certifies its compliance with 47 CFR 1.2105(c). 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.
    15. Section 1.65 of the Commission's rules requires an applicant to 
maintain the accuracy and completeness of

[[Page 11647]]

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, 47 CFR 1.65 requires 
an auction applicant to notify the Commission of any substantial change 
to the information or certifications included in its pending short-form 
application. Applicants are therefore required by 47 CFR 1.65 to report 
to the Commission any communications they have made to or received from 
another applicant after the short-form filing deadline that affect or 
have the potential to affect bids or bidding strategy unless such 
communications are made to or received from parties to agreements 
identified under 47 CFR 1.2105(a)(2)(viii). In addition, 47 CFR 
1.2105(c)(6) provides that any applicant that makes or receives a 
communication prohibited by 47 CFR 1.2105(c) must report such 
communication to the Commission in writing immediately, and in no case 
later than five business days after the communication occurs.
    16. Applicants that are winning bidders will be required to 
disclose in their long-form applications the specific terms, 
conditions, and parties involved in all bidding consortia, joint 
ventures, partnerships, and other arrangements entered into relating to 
the competitive bidding process.
    17. Any applicant found to have violated the anti-collusion rule 
may be subject to sanctions. Applicants are also reminded that, 
regardless of compliance with the Commission's rules, they are subject 
to the antitrust laws, which are designed to prevent anticompetitive 
behavior in the marketplace. Compliance with the disclosure 
requirements of the Commission's anti-collusion rule will not 
necessarily insulate a party from enforcement of the antitrust laws. If 
an applicant is found to have violated the antitrust laws or the 
Commission's rules in connection with its participation in the 
competitive bidding process, it may be subject to forfeiture of its 
upfront payment, down payment, or full bid amount and may be prohibited 
from participating in future auctions.
    18. A summary listing of documents issued by the Commission and the 
Bureau addressing the application of the anti-collusion rule may be 
found in Attachment E of the Auction No. 65 Procedures Public Notice. 
These documents are available on the Commission's auction anti-
collusion Web page.
iii. Incumbent Licensee
    19. In the Air-Ground Order, the Commission granted Verizon Airfone 
Inc., (Verizon Airfone or Airfone) the only incumbent service provider 
in the 800 MHz air-ground band, a nonrenewable license to operate in 
the band for five years. This license will expire on May 13, 2010. 
Verizon Airfone must remove its incumbent narrowband operations from 
three megahertz of spectrum in the band within two years of the initial 
grant date of a new license in the band, but may continue to operate in 
the remaining one megahertz of the band until the expiration of its 
nonrenewable license. The Commission has directed the Bureau to adopt 
reporting requirements so that Airfone's transition of its base 
stations and its subscribers' aircraft to operations in one megahertz 
of the 800 MHz air-ground band may be monitored. Accordingly, the 
Bureau issued a public notice enumerating such requirements on February 
6, 2006. Airfone must file its initial transition status report with 
the Commission six months from the date of the grant of any new license 
in the band and at each of the three six-month intervals thereafter.
    20. In addition, if Airfone, or an affiliate of Airfone, wins an 
exclusive 3 MHz license at auction, the Bureau will issue a public 
notice within 60 days of the grant of such a license that will require 
the company (1) to include in each status report information regarding 
the transition of its existing subscribers from its narrowband system 
to a broadband system and (2) to file additional status reports at six-
month intervals from the conclusion of the two-year transition period 
until the expiration of its five-year nonrenewable license.
iv. Interference Protection
    21. Ground stations in the Air-Ground Radiotelephone Service that 
operate in the 849-851 MHz range will be subject to the same 
interference abatement obligation rules adopted for cellular services 
in the 800 MHz Order.
a. International Coordination
    22. To promote interoperable communications and to manage 
interference, some of the ground station locations in North America and 
channel block assignments of the 800 MHz air-ground band have been 
predetermined consistent with bilateral agreements with Mexico and with 
Canada. These agreements, which provide for coordinated use of the 800 
MHz air-ground frequencies over North American airspace, are based on a 
narrow bandwidth channel scheme, and therefore may need to be 
renegotiated to provide for more flexible use of this spectrum based on 
the band plan configuration that is implemented as a result of the 
auction.
b. Quiet Zone
    23. Stations in the 800 MHz Air-Ground Radiotelephone Service must 
protect the radio quiet zones set forth in the Commission's rules. 
Licensees are cautioned that they must receive the appropriate 
approvals directly from the relevant quiet zone entity prior to 
operating within the areas described in the Commission's rules.
v. Spectrum Sharing Plan
    24. If Band Plan 1, which is comprised of two overlapping 3 MHz 
licenses, is implemented, the new licensees will be required to jointly 
file a spectrum sharing and site selection plan with the Bureau within 
six months of the initial grant of their spectrum licenses, and they 
will be required to notify the Bureau of any changes to the plan. The 
Bureau will issue a public notice prior to the commencement of Auction 
No. 65 in which it will specify the filing requirements for such a 
plan. This approach will provide parties with overlapping spectrum 
licenses flexibility to configure their systems without having to 
adhere to minimum spacing requirements or site locations predetermined 
by the Commission.
vi. Due Diligence
    25. Potential bidders are reminded that they are solely responsible 
for investigating and evaluating all technical and marketplace factors 
that may have a bearing on the value of the 800 MHz Air-Ground 
Radiotelephone Service licenses 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 licensee in the 800 MHz Air-
Ground Radiotelephone 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 
license constitute a guarantee of business success. Applicants should 
perform their individual due diligence before proceeding as they would 
with any new business venture.
    26. Potential bidders are strongly encouraged to conduct their own 
research prior to the beginning of bidding in Auction No. 65 in order 
to determine the existence of any pending

[[Page 11648]]

administrative or judicial proceedings that might affect their decision 
regarding participation in the auction. Participants in Auction No. 65 
are strongly encouraged to continue such research throughout the 
auction. In addition, potential bidders should perform technical 
analyses sufficient to assure themselves that, should they prevail in 
competitive bidding for a specific license, they will be able to build 
and operate facilities that will fully comply with the Commission's 
technical and legal requirements.
    27. Applicants should also be aware that certain pending and future 
applications (including those for modification), petitions for 
rulemaking, requests for special temporary authority, waiver requests, 
petitions to deny, petitions for reconsideration, informal oppositions, 
and applications for review before the Commission may relate to 
particular applicants or incumbent licensees or the licenses available 
in Auction No. 65. In addition, pending and future judicial proceedings 
may relate to particular applicants or incumbent licensees or the 
licenses available in Auction No. 65. Prospective bidders are 
responsible for assessing the likelihood of the various possible 
outcomes, and considering their potential impact on spectrum licenses 
available in this auction.
    28. Applicants should perform due diligence to identify and 
consider all proceedings that may affect the spectrum licenses being 
auctioned and that could have an impact on the availability of spectrum 
for Auction No. 65. In addition, although the Commission may continue 
to act on various pending applications, informal objections, petitions, 
and other requests for Commission relief, some of these matters may not 
be resolved by the time of the auction.
    29. Applicants are solely responsible for identifying associated 
risks and for investigating and evaluating the degree to which such 
matters may affect their ability to bid on, otherwise acquire, or make 
use of licenses available in Auction No. 65.
    30. The Commission makes no representations or guarantees regarding 
the accuracy or completeness of information in its databases or any 
third party databases.
    31. Potential applicants are strongly encouraged to physically 
inspect any prospective ground station sites and also to familiarize 
themselves with the environmental assessment obligations.
vii. Bidder Alerts
    32. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 65 to 
deceive and defraud unsuspecting investors.
    33. 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.
viii. National Environmental Policy Act Requirements
    34. Licensees must comply with the Commission's rules regarding 
implementation of 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. 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 Corps of Engineers and the Federal 
Emergency Management Agency.

C. Auction Specifics

i. Auction Date
    35. Bidding in Auction No. 65 will begin on Wednesday, May 10, 
2006, as announced in the Auction No. 65 Comment Public Notice. 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.
ii. Auction Title
    36. Auction No. 65--800 MHz Air-Ground Radiotelephone.
iii. Bidding Methodology
    37. The bidding methodology for Auction No. 65 will be simultaneous 
multiple round bidding. The Commission will conduct this auction over 
the Internet using the FCC's Integrated Spectrum Auction System (ISAS 
or FCC Auction System), and telephonic bidding will be available as 
well. Qualified bidders are permitted to bid electronically via the 
Internet or by telephone.
iv. Pre-Auction Dates and Deadlines
    38. Dates and Deadlines.

Auction Seminar--March 14, 2006
Short-Form Application (FCC Form 175) Filing Window Opens--March 14, 
2006; 12 p.m. ET
Short-Form Application (FCC Form 175) Filing Deadline--March 24, 2006; 
6 p.m. ET
Upfront Payment (via wire transfer) Deadline--April 17, 2006; 6 p.m. ET
Mock Auction--May 8, 2006
Auction Begins--May 10, 2006
v. Requirements for Participation
    39. Those wishing to participate in the auction must: submit a 
short-form application (FCC Form 175) electronically prior to 6 p.m. 
Eastern Time (ET), March 24, 2006, following the electronic filing 
procedures set forth in Attachment C to the Auction No. 65 Procedures 
Public Notice; submit a sufficient upfront payment and an FCC 
Remittance Advice Form (FCC Form 159) before 6 p.m. ET, April 17, 2006; 
comply with all provisions outlined in this Public Notice and 
applicable Commission rules.
vi. General Contact Information
    40. See Auction No. 65 Procedures Public Notice for the General 
Contact Information Table.

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

    41. An application to participate in an FCC auction, referred to as 
a short-form application or FCC Form 175, provides information used in 
determining whether the applicant is legally, technically, and 
financially qualified to participate in Commission auctions for 
licenses or permits. The short-form application is the first part of 
the Commission's two-phased auction application process. In the first 
phase of this process, parties desiring to participate in the auction 
file streamlined, short-form applications in which they certify under 
penalty of perjury as to their qualifications. Eligibility to 
participate in bidding is based on the applicant's short-form 
application and certifications as well as its upfront payment. In the 
second phase of the process, winning bidders file a more comprehensive 
long-form application.
    42. Entities seeking licenses available in Auction No. 65 must file 
a short-form application electronically via the FCC Auction System 
before 6 p.m. ET on March 24, 2006, following the procedures prescribed 
in Attachment C of the Auction No. 65 Procedures Public Notice. If an 
applicant claims eligibility for a bidding credit, the information 
provided in its FCC Form 175 will be used in determining whether the 
applicant is eligible for the claimed

[[Page 11649]]

bidding credit. Applicants bear full responsibility for submitting 
accurate, complete and timely short-form applications. All applicants 
must certify on their short-form applications under penalty of perjury 
that they are legally, technically, financially and otherwise qualified 
to hold a license. Applicants should read the instructions set forth in 
Attachment C of the Auction No. 65 Procedures Public Notice carefully 
and should consult the Commission's rules to ensure that, in addition 
to the materials all the information that is required under the 
Commission's rules is included with their short-form applications.
    43. An entity may not submit more than one short-form application 
for a single auction. In the event that a party submits multiple short-
form applications, only one application will be accepted for filing.
    44. Applicants also should note that submission of a short-form 
application constitutes a representation by the certifying official 
that he or she is an authorized representative of the applicant, that 
he or she has read the form's instructions and certifications, and that 
the contents of the application, its certifications, and any 
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.

A. Preferences for Small Businesses

i. Bidding Credits
    45. A bidding credit represents the amount by which a bidder's 
winning bid will be discounted. For Auction No. 65 bidding credits will 
be available to small businesses and very small businesses, and 
consortia thereof, as follows: a bidder with attributed average annual 
gross revenues that exceed $15 million and do not exceed $40 million 
for the preceding three years (small business) will receive a 15 
percent discount on its winning bid; and a bidder with attributed 
average annual gross revenues that do not exceed $15 million for the 
preceding three years (very small business) will receive a 25 percent 
discount on its winning bid.
    46. Bidding credits are not cumulative; a qualifying applicant 
receives either the 15 percent or 25 percent bidding credit on its 
winning bid, but not both.
    47. Every applicant that claims eligibility for a bidding credit as 
either a small business or a very small business, or a consortium of 
small businesses or very small businesses, will be required to provide 
information regarding revenues attributable to the applicant, its 
affiliates, its controlling interests, and the affiliates of its 
controlling interests on its FCC Form 175 short-form application to 
establish that it satisfies the applicable eligibility requirement. 
Applicants considering claiming eligibility as a designated entity in 
Auction No. 65 should review carefully the recently released CSEA/Part 
1 Designated Entity FNPRM, 71 FR 6992, February 10, 2006. In the CSEA/
Part 1 Designated Entity FNPRM, the Commission tentatively concluded 
that it should ``restrict the award of designated entity benefits to an 
otherwise qualified designated entity where it has a material 
relationship with a large in-region incumbent wireless service 
provider,'' and sought comment on how to define the elements of such a 
restriction. The Commission also sought comment on whether to restrict 
the award of designated entity benefits where an otherwise qualified 
designated entity has a material relationship with a large entity that 
has a significant interest in communications services. The Commission 
further proposed that in the event that any designated entity 
applicants have filed an application to participate in an auction prior 
to the effective date of any designated entity rule changes adopted 
pursuant to the CSEA/Part 1 Designated Entity FNPRM, such applicants be 
required to amend their applications on or after the effective date of 
the rule changes with a statement declaring, under penalty of perjury, 
that the applicant is qualified as a designated entity pursuant to 47 
CFR 1.2110 of the Commission's rules effective as of the date of the 
statement. Finally, the Commission noted that under this proposal the 
Bureau will establish any detailed procedures necessary for making 
required amendments and announce such procedures by public notice. 
Accordingly, applicants considering claiming eligibility as a 
designated entity in Auction No. 65 should monitor further proceedings 
pursuant to the CSEA/Part 1 Designated Entity FNPRM to assure their 
ability to comply with any changes to the designated entity rules that 
the Commission may adopt that are applicable to applicants in Auction 
No. 65.
ii. Tribal Land Bidding Credits
    48. Tribal land bidding credits will not be available in Auction 
No. 65. The Commission's tribal land bidding credits are intended to 
provide incentives for wireless telecommunications carriers to serve 
individuals living on tribal lands. More specifically, tribal land 
bidding credits are intended for winning bidders that use licenses to 
deploy facilities and provide service to federally recognized tribal 
areas that are either unserved by any telecommunications carrier or 
that have a wireline telephone subscription or penetration rate of 85 
percent or less. Commercial Air-Ground Radiotelephone Service licenses, 
however, must be used to provide service to aircraft and may not be 
used to provide ancillary land mobile or fixed services. Because 800 
MHz air-ground licenses may not be used to provide terrestrial 
telephone service, tribal land bidding credits will not be available to 
winning bidders in Auction No. 65 under 47 CFR 1.2110(f)(3).
iii. Installment Payments
    49. Installment payment plans will not be available in Auction No. 
65.

B. License Selection

    50. In Auction No. 65, applicants must select the licenses on which 
they want to bid from the Eligible Licenses list. The applicant may 
select all the licenses in the list or select individual licenses from 
the list. There will be no opportunity to change license selection 
after the short-form filing deadline. It is critically important that 
an applicant confirm its license selection before submitting its short-
form application because the FCC Auction System will not accept bids on 
licenses that an applicant has not selected on its FCC Form 175.

C. Consortia and Joint Bidding Arrangements

    51. Applicants will be required to identify in their short-form 
applications all parties with whom they have entered into any 
consortium arrangements, joint ventures, partnerships or other 
agreements or understandings that relate in any way to the licenses 
being auctioned, including any agreements relating to post-auction 
market structure. Applicants also will be required to certify under 
penalty of perjury in their short-form applications that they have not 
entered and will not enter into any explicit or implicit agreements, 
arrangements or understandings of any kind with any parties, other than 
those identified in the application, regarding the amount of their 
bids, bidding strategies, or the particular 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 application filing 
deadline, it would not include the names of parties to the discussions 
on its application and may

[[Page 11650]]

not continue such discussions with any applicants after the deadline.
    52. After the filing of short-form applications, 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 
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, applicants are reminded that 
certain discussions or exchanges could touch upon impermissible subject 
matters because they may convey pricing information and bidding 
strategies.

D. Ownership Disclosure Requirements

    53. All applicants must comply with the uniform Part 1 ownership 
disclosure standards and provide information required by 47 CFR 1.2105 
and 1.2112 of the Commission's rules. Specifically, in completing the 
short-form application, applicants will be required to fully disclose 
information on the real party or parties in interest and ownership 
structure of the applicant.
    54. An applicant's most current ownership information on file with 
the Commission, if in an electronic format compatible with the short-
form application (FCC Form 175), will automatically be entered into the 
applicant's short-form application. Applicants are responsible for 
ensuring that the information submitted in their FCC Form 175 is 
complete and accurate. Accordingly, applicants should carefully review 
any information automatically entered to confirm that it is complete 
and accurate as of the deadline for filing the short-form application. 
Applicants can update any information that needs to be changed directly 
in the short-form application.

E. Bidding Credit Revenue Disclosures

    55. To determine which applicants qualify for bidding credits as 
small businesses or very small businesses, the Commission considers the 
gross revenues of the applicant, its affiliates, its controlling 
interests, and the affiliates of its controlling interests. Therefore, 
entities applying to bid as small businesses or very small businesses 
(or consortia of small businesses or very small businesses) will be 
required to disclose on their FCC Form 175 short-form applications the 
gross revenues of each of the following for the preceding three years: 
(1) The applicant, (2) its affiliates, (3) its controlling interests, 
and (4) the affiliates of its controlling interests. Certification that 
the average annual gross revenues of such entities and individuals for 
the preceding three years do not exceed the applicable limit is not 
sufficient. In order to comply with the Commission's disclosure 
requirements for bidding credit eligibility, an applicant must provide 
separately for itself, its affiliates, its controlling interests, and 
the affiliates of its controlling interests, the gross revenues for 
each of the preceding three years. If the applicant is applying as a 
consortium of small businesses or very small businesses, this 
information must be provided for each consortium member.
    56. Controlling interests include individuals and entities with 
either de facto or 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; the entity plays an integral role in 
management decisions. Officers and directors of an applicant are also 
considered to have a controlling interest in the applicant. 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, and the 
applicant and its affiliates will be counted in determining small 
business eligibility.
    57. In recent years the Commission has made modifications to its 
rules governing the attribution of gross revenues for purposes of 
determining small business eligibility. These changes include exempting 
the gross revenues of the affiliates of a rural telephone cooperative's 
officers and directors from attribution to the applicant if certain 
specified conditions are met. The Commission has also clarified that, 
in calculating an applicant's gross revenues under the controlling 
interest standard, it will not attribute the personal net worth, 
including personal income, of its officers and directors to the 
applicant.
    58. Each member of a consortium of small or very small businesses 
that applies to participate in Auction No. 65 must individually meet 
the definition of small business or very small business adopted by the 
Commission for the 800 MHz Air-Ground Radiotelephone Service. Each 
consortium member must disclose its gross revenues along with those of 
its affiliates, its controlling interests, and the affiliates of its 
controlling interests. Although the gross revenues of the consortium 
members will not be aggregated for purposes of determining the 
consortium's eligibility as a small business or very small business, 
this information must be provided to ensure that each individual 
consortium member qualifies for any bidding credit awarded to the 
consortium.

F. Provisions Regarding Former and Current Defaulters

    59. Each applicant must state under penalty of perjury on its 
short-form application whether or not the applicant, its affiliates, 
its controlling interests, and the affiliates of its controlling 
interests, as defined by 47 CFR 1.2110, have ever been in default on 
any Commission licenses or have ever been delinquent on any non-tax 
debt owed to any Federal agency. In addition, each applicant must 
certify under penalty of perjury on its short-form application that, as 
of the short-form filing deadline, the applicant, its affiliates, its 
controlling interests, and the affiliates of its controlling interests, 
as defined by 47 CFR 1.2110, are not in default on any payment for 
Commission licenses (including down payments) and that they are not 
delinquent on any non-tax debt owed to any Federal agency. Prospective 
applicants 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.
    60. Former defaulters, i.e., applicants, including any of their 
affiliates, any of their controlling interests, or any of the 
affiliates of their controlling interests, 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. 65, provided that they are otherwise 
qualified. However, former

[[Page 11651]]

defaulters are required to pay upfront payments that are 50 percent 
more than the normal upfront payment amounts.
    61. Current defaulters, i.e., applicants, including any of their 
affiliates, any of their controlling interests, or any of the 
affiliates of their controlling interests, that are in default on any 
payment for any Commission licenses (including down payments) or are 
delinquent on any non-tax debt owed to any Federal agency as of the 
filing deadline for applications to participate in this auction--are 
not eligible to bid in Auction No. 65.
    62. Applicants are encouraged to review the Bureau's previous 
guidance on default and delinquency disclosure requirements in the 
context of the short-form application process. The Commission considers 
outstanding debts owed to the United States Government, in any amount, 
to be a serious matter. The Commission adopted rules, including a 
provision referred to as the red light rule, that implement the 
Commission's obligations under the Debt Collection Improvement Act of 
1996, which governs the collection of claims owed to the United States. 
Under the red light rule, the Commission will not process applications 
and other requests for benefits filed by parties that have outstanding 
debts owed to the Commission. In the same rulemaking order, the 
Commission explicitly declared, however, that the Commission's 
competitive bidding rules are not affected by the red light rule. As a 
consequence, the Commission's adoption of the red light rule does not 
alter the applicability of any of the Commission's competitive bidding 
rules, including the provisions and certifications of 47 CFR 1.2105 and 
1.2106, with regard to current and former defaults or delinquencies. 
Applicants are reminded, however, that the Commission's Red Light 
Display System, which provides information regarding debts owed to the 
Commission, may not be determinative of an auction applicant's ability 
to comply with the default and delinquency disclosure requirements of 
47 CFR 1.2105. Thus, while the red light rule may ultimately prevent 
the processing of long-form applications by auction winners, an auction 
applicant's red light status is not necessarily determinative of its 
eligibility to participate in this auction or to its upfront payment 
obligation.
    63. Prospective applicants for Auction No. 65 should note that all 
long-form applications filed after the close of competitive bidding 
will be reviewed for compliance with the Commission's red light rule, 
and such review may result in the dismissal of a winning bidder's long-
form application.

G. Other Information

    64. Applicants owned by members of minority groups and/or women, as 
defined in 47 CFR 1.2110(c)(3), may identify themselves in filling out 
their short-form applications 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.

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

    65. After the deadline for filing short-form applications (FCC 
Forms 175) at 6 p.m. ET on March 24, 2006, applicants are permitted to 
make only minor changes to their applications. Applicants are not 
permitted to make major modifications to their applications.
    66. Any application amendment and related statements of fact must 
be certified by: (1) The applicant, if the applicant is an individual, 
(2) one of the partners, if the applicant is a partnership, (3) an 
officer, director, or duly authorized employee, if the applicant is a 
corporation, (4) a member who is an officer, if the applicant is an 
unincorporated association, (5) the trustee, if the applicant is an 
amateur radio service club, or (6) a duly elected or appointed official 
who is authorized to make such certifications under the laws of the 
applicable jurisdiction, if the applicant is a governmental entity.
    67. An applicant must make permissible minor changes to its short-
form application, as such changes are defined by 47 CFR 1.2105(b), on-
line. Applicants must click on the SUBMIT button in the FCC Auction 
System for the changes to be submitted and considered by the 
Commission.
    68. In addition, applicants should submit a letter, briefly 
summarizing the changes, by electronic mail to the attention of 
Margaret Wiener, Chief, Auctions and Spectrum Access Division, at the 
following address: auction65@fcc.gov.

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

    69. Section 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. Changes that cause a loss of or reduction in eligibility 
for a bidding credit must be reported immediately. If an amendment 
reporting substantial changes is a ``major amendment'' as defined by 47 
CFR 1.2105, the major amendment will not be accepted and may result in 
the dismissal of the short-form application.

III. Pre-Auction Procedures

A. Auction Seminar--March 14, 2006

    70. On Tuesday, March 14, 2006, the FCC will conduct a seminar for 
parties interested in participating in Auction No. 65 at the Federal 
Communications Commission headquarters, located at 445 12th Street, 
SW., Washington, DC. The seminar will provide attendees with 
information about pre-auction procedures, completing FCC Form 175, 
auction conduct, the FCC Auction System, auction rules, and the 800 MHz 
Air-Ground Radiotelephone Service rules.
    71. To register, complete the registration form, Attachment B of 
the Auction No. 65 Procedures Public Notice and submit it by Monday, 
March 13, 2006. Registrations are accepted on a first-come, first-
served basis.

B. Short-Form Application (FCC Form 175)--Due Before 6 p.m. ET on March 
24, 2006

    72. In order to be eligible to bid in this auction, applicants must 
first submit an FCC Form 175 application electronically via the FCC 
Auction System. This application must be received at the Commission 
prior to 6 p.m. ET on March 24, 2006. Late applications will not be 
accepted. There is no application fee associated with filing an FCC 
Form 175. However, to be eligible to bid, an applicant must submit an 
upfront payment.
    73. Applications may generally be filed at any time beginning at 
noon ET on March 14, 2006, until 6 p.m. ET on March 24, 2006. 
Applicants are strongly encouraged to file early and are responsible 
for allowing adequate time for filing their applications. Applicants 
may update or amend their applications multiple times until the filing 
deadline on March 24, 2006.

C. Application Processing and Minor Corrections

    74. After the deadline for filing FCC Form 175 applications has 
passed, the FCC will process all timely submitted applications to 
determine which are acceptable for filing, and subsequently will issue 
a public notice identifying: (1) Those applications accepted for 
filing; (2) those applications rejected; and (3)

[[Page 11652]]

those applications that have minor defects that may be corrected, and 
the deadline for resubmitting such corrected applications.
    75. As described more fully in the Commission's rules, after the 
March 24, 2006, 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 control of the 
applicant, or claim eligibility for a higher bidding credit).

D. Upfront Payments--Due April 17, 2006

    76. In order to be eligible to bid in the auction, applicants must 
submit an upfront payment accompanied by an 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 sent by facsimile to Mellon Bank in Pittsburgh, PA. All upfront 
payments must be received in the proper account at Mellon Bank before 6 
p.m. ET on April 17, 2006.
i. Making Auction Payments by Wire Transfer
    77. Wire transfer payments must be received before 6 p.m. ET on 
April 17, 2006. 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.
    78. At least one hour before placing the order for the wire 
transfer (but on the same business day), applicants must send by 
facsimile a completed FCC Form 159 (Revised 2/03) to Mellon Bank at 
(412) 209-6045. On the cover sheet of the facsimile, write ``Wire 
Transfer--Auction Payment for Auction No. 65.'' In order to meet the 
Commission's upfront payment deadline, an applicant's payment must be 
credited to the Commission's account before the deadline. Applicants 
are responsible for obtaining confirmation from their financial 
institution that Mellon Bank has timely received their upfront payment 
and deposited it in the proper account.
    79. 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. 65 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 April 17, 2006, deadline will result in dismissal of the 
application and disqualification from participation in the auction.
ii. FCC Form 159
    80. A completed FCC Remittance Advice Form (FCC Form 159, Revised 
2/03) must be faxed to Mellon Bank to accompany each upfront payment. 
Proper completion of FCC Form 159 (Revised 2/03) is critical to 
ensuring correct crediting of upfront payments. Detailed instructions 
for completion of FCC Form 159 are included in Attachment D of the 
Auction No. 65 Procedures Public Notice. An electronic pre-filled 
version of the FCC Form 159 is available after submitting the FCC Form 
175. Payors using a pre-filled FCC Form 159 are responsible for 
ensuring that all of the information on the form, including payment 
amounts, is accurate. The FCC Form 159 can be completed electronically, 
but must be filed with Mellon Bank via facsimile.
iii. Upfront Payments and Bidding Eligibility
    81. In the Part 1 Order, 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, 65 FR 522323, August 29, 2000, 
the Commission ordered that former defaulters be required to pay 
upfront payments 50 percent greater than non-former defaulters. For 
purposes of this calculation, the applicant includes the applicant 
itself, its affiliates, its controlling interests, and affiliates of 
its controlling interests, as defined by 47 CFR 1.2110 of the 
Commission's rules.
    82. In the Auction No. 65 Comment Public Notice, the Bureau 
proposed an upfront payment amount of $100,000 per license. The Bureau 
further proposed that the amount of the upfront payment would determine 
a bidder's bidding eligibility in bidding units. For Auction No. 65, 
the Bureau proposed to assign 100,000 bidding units per license. The 
number of bidding units for a given license is fixed and does not 
change during the auction as prices change.
    83. Because the mutually incompatible band configurations and the 
three megahertz eligibility restriction limit a bidder to winning only 
a single license, the Bureau proposed to permit a bidder with 100,000 
bidding units of eligibility to bid or be active simultaneously on any 
or all of the licenses it selected on its FCC Form 175, rather than 
being limited to activity on a single license with 100,000 bidding 
units as our usual activity and eligibility rules would require. Under 
our proposal, an upfront payment of $100,000, or $150,000 if the 
applicant is a former defaulter, would give a bidder 100,000 bidding 
units of eligibility, which in turn would permit the bidder to be 
active on any or all of the licenses it selected on its FCC Form 175. 
Under this proposal, it would be unnecessary to acquire more than 
100,000 bidding units of bidding eligibility. The Bureau received no 
comments concerning our proposals regarding the amount of upfront 
payments and the number of bidding units for each license available in 
Auction No. 65.
    84. The Bureau adopts the above proposals. In order to bid on a 
license, qualified bidders that applied for any or all licenses on FCC 
Form 175 must have eligibility of 100,000 bidding units. Therefore, an 
applicant that is not a former defaulter must submit a total upfront 
payment of at least $100,000 in order to have 100,000 bidding units, or 
else the applicant will not be eligible to participate in the auction. 
An applicant that is a former defaulter must submit an upfront payment 
of at least $150,000 in order to have 100,000 bidding units. If a 
former defaulter fails to submit an upfront payment of at least 
$150,000, the applicant will not be eligible to participate in the 
auction. If an applicant fails to submit the upfront payment required 
to establish eligibility to bid in the auction by the upfront payment 
deadline, it will not be permitted to establish such eligibility after 
the upfront payment deadline.
    85. With 100,000 bidding units a bidder may be active on any or all 
licenses selected on its FCC Form 175, although it may win only one 
license. 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 purchase 100,000 bidding units. The 
total upfront payment does not affect the total dollar amount a bidder 
may bid on any given license.
    86. The upfront payments and bidding units for each license are set 
forth in Attachment A of the Auction No. 65 Procedures Public Notice.
iv. Applicants' Wire Transfer Information for Purposes of Refunds of 
Upfront Payments
    87. The Commission will use wire transfers for all Auction No. 65 
refunds. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that all pertinent 
information

[[Page 11653]]

be supplied to the FCC. Applicants can provide the information 
electronically during the initial short-form filing window after the 
form has been submitted. Applicants are reminded that information 
submitted as part of their FCC Form 175 will be available to the 
public. Accordingly, the pertinent information for wire transfers 
should not be included in the FCC Form 175. Wire Transfer Instructions 
can also be manually sent by facsimile to the FCC, Financial Operations 
Center, Auctions Accounting Group, ATTN: Gail Glasser, at (202) 418-
2843. 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 Gail 
Glasser at (202) 418-0578.

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 who have timely submitted upfront 
payments sufficient to make them eligible to bid.
    89. All qualified bidders are automatically registered for the 
auction. Registration materials will be distributed prior to the 
auction by overnight mail. The mailing will be sent only to the contact 
person at the contact address listed in the FCC Form 175 and will 
include the SecurID cards that will be required to place bids, the 
Integrated Spectrum Auction System (ISAS) Bidder's Guide, and the 
Auction Bidder Line phone number.
    90. Qualified bidders that do not receive this registration mailing 
will not be able to submit bids. Therefore, any qualified bidder that 
has not received this mailing by noon on Thursday, May 4, 2006, should 
call (717) 338-2888. Receipt of this registration mailing is critical 
to participating in the auction, and each applicant is responsible for 
ensuring it has received all of the registration material.
    91. In the event that SecurID cards are lost or damaged, only a 
person who has been designated as an authorized bidder, the contact 
person, or the certifying official on the applicant's short-form 
application may request replacement registration material. Qualified 
bidders requiring the replacement of these items must call Technical 
Support.

F. Remote Electronic Bidding

    92. The Commission will conduct this auction over the Internet, and 
telephonic bidding will be available as well. Qualified bidders are 
permitted to bid electronically and telephonically. Each applicant 
should indicate its bidding preference--electronic or telephonic--on 
the FCC Form 175. In either case, each authorized bidder must have its 
own SecurID card, which the FCC will provide at no charge. Each 
applicant with one authorized bidder will be issued two SecurID cards, 
while applicants with two or three authorized bidders will be issued 
three cards. For security purposes, the SecurID cards, the telephonic 
bidding phone number, and the Integrated Spectrum Auction System (ISAS) 
Bidder's Guide 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. 65.
    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--May 8, 2006

    94. All qualified bidders will be eligible to participate in a mock 
auction on Monday, May 8, 2006. The mock auction will enable applicants 
to become familiar with the FCC Auction System prior to the auction. 
Participation by all bidders is strongly recommended. Details will be 
announced by public notice.

IV. Auction Event

    95. The first round of bidding for Auction No. 65 will begin on 
Wednesday, May 10, 2006. 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.

A. Auction Structure

i. Simultaneous Multiple Round Auction
    96. In the Auction No. 65 Comment Public Notice, the Bureau 
proposed to award all licenses in Auction No. 65 in a simultaneous 
multiple round auction. The Bureau received no comments on this 
proposal. Licenses will be offered in three mutually incompatible band 
configurations, and the band plan that receives the highest gross bids 
in the auction will be implemented. The Bureau believes the 
simultaneous multiple-round auction is an appropriate auction design 
given these circumstances, and the Bureau adopts its proposal. In a 
simultaneous multiple round auction, all licenses are available during 
the entire auction, and bids are accepted on any license until the 
auction concludes. Unless otherwise announced, bids will be accepted on 
all licenses in each round of the auction until bidding stops on every 
license.
ii. Activity Rule
    97. The procedures the Bureau establish in the Auction No. 65 
Procedures Public Notice for upfront payments and bidding eligibility, 
the amount of the upfront payment submitted by a bidder determines the 
bidder's bidding eligibility in terms of bidding units. A bidder must 
have 100,000 bidding units of eligibility to participate in Auction No. 
65--i.e., to bid on at least one license--and may hold a maximum of 
100,000 bidding units of eligibility. Any reduction in a bidder's 
eligibility will effectively preclude the bidder from further bidding 
in the auction.
    98. In order to ensure that an auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively 
throughout the auction, rather than wait until late in the auction 
before participating. For Auction No. 65, the Bureau proposed the 
following activity requirement: In each round of the auction, a bidder 
desiring to maintain its eligibility to participate in the auction is 
required to be active (place a bid or hold the provisionally winning 
bid) on at least one license. Under this proposal, failure to maintain 
the required activity level has the effect of eliminating the bidder 
from further bidding in the auction unless an activity rule waiver is 
used. The Bureau received no comments on this proposal.
    99. The Bureau adopts this proposal for Auction No. 65 because the 
Bureau believes it is an appropriate procedure for ensuring that the 
auction will proceed at a reasonable pace. Thus, in Auction No. 65, in 
each round of the auction, a bidder desiring to maintain its 
eligibility to participate in the auction is required to be active on 
at least one license. A bidder is considered active on a license in the 
current round if it is either the provisionally winning bidder at the 
end of the previous bidding round or if it submits a bid in the current 
round. If a bidder fails to be active on at least one license in a 
round, it must use one of the limited number of activity rule waivers 
allotted to it in order to maintain its eligibility to continue bidding 
in the auction. If the bidder has no activity rule waivers

[[Page 11654]]

remaining, its eligibility will be reduced and it will no longer be 
permitted to place bids in the auction.
iii. Activity Rule Waivers
    100. In the Auction No. 65 Comment Public Notice, the Bureau 
proposed that each bidder in the auction be provided with three 
activity rule waivers. The Bureau received no comments on this issue. 
The Bureau adopts its proposal that each bidder be provided with three 
activity rule waivers. The Bureau are satisfied that providing three 
waivers over the course of the auction will give bidders a sufficient 
number of waivers and flexibility, while also safeguarding the 
integrity of the auction.
    101. Bidders may use an activity rule waiver 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 failure to be 
active on at least one license in the current round. An activity rule 
waiver applies to an entire round of bidding and not to a particular 
license. Activity rule waivers can be either applied proactively by the 
bidder (a proactive waiver) or applied automatically by the FCC Auction 
System (an automatic waiver) 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.
    102. 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, which in this auction would have 
the effect of precluding the bidder from further bidding in the 
auction. Therefore, the system will automatically apply a waiver at the 
end of any bidding round in which a bidder fai