Auction of Lower and Upper Paging Bands Licenses Scheduled for May 25, 2010; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 87, 8703-8718 [2010-3875]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 75, Number 37 (Thursday, February 25, 2010)]
[Notices]
[Pages 8703-8718]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-3875]


-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 09-205; DA 10-18]


Auction of Lower and Upper Paging Bands Licenses Scheduled for 
May 25, 2010; Notice and Filing Requirements, Minimum Opening Bids, 
Upfront Payments, and Other Procedures for Auction 87

AGENCY: Federal Communications Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This document announces the procedures and minimum opening 
bids for the upcoming auction of Lower and Upper Bands Licenses 
(Auction 87). This document is intended to familiarize prospective 
bidders with the procedures and minimum opening bids for the auction.

DATES: Applications to participate in Auction 87 must be filed prior to 
6 p.m. Eastern Time (ET) on March 16, 2010.

[[Page 8704]]

Bidding for licenses in Auction 87 is scheduled to begin on May 25, 
2010.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: For legal questions: Scott 
Mackoul at (202) 418-0660. For general auction questions: Roy Knowles 
or Barbara Sibert at (717) 338-2868. Mobility Division: For licensing 
information and service rule questions: Michael Connelly (legal) or 
Melvin Spann (technical) at 202-418-0620. To request materials in 
accessible formats (Braille, large print, electronic files or audio 
format) for people with disabilities, send an e-mail to fcc504@fcc.gov 
or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 
or (202) 418-0432 (TTY).

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 87 
Procedures Public Notice, which was released on January 22, 2010. The 
complete text of the Auction 87 Procedures Public Notice, including 
attachments, as well as related Commission documents, are available for 
public inspection and copying from 8 a.m. to 4:30 p.m. ET Monday 
through Thursday and from 8 a.m. to 11:30 a.m. ET on Fridays in the FCC 
Reference Information Center, 445 12th Street, SW., Room CY--A257, 
Washington, DC 20554. The Auction 87 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 Web site: 
https://www.BCPIWEB.com, using document number DA 10-18 for the Auction 
87 Procedures Public Notice. The Auction 87 Procedures Public Notice 
and related documents are also available on the Internet at the 
Commission's Web site: https://wireless.fcc.gov/auctions/87/. Due to the 
large number of licenses in Auction 87, the complete list of licenses 
available for this auction has been provided in electronic format only, 
available as separate ``Attachment A'' files at https://wireless.fcc.gov/auctions/87/. A paper copy of the complete list of 
licenses and any other documents relating to Auction 87 may also be 
purchased from the Commission's duplicating contractor, BCPI.

I. General Information

A. Introduction

    1. The Wireless Telecommunications Bureau (Bureau) announces the 
procedures and minimum opening bid amounts for the upcoming auction of 
9,603 licenses for lower and upper paging bands spectrum. This auction, 
which is designated as Auction 87, is scheduled to commence on May 25, 
2010. On November 30, 2009, the Bureau released a public notice seeking 
comment on competitive bidding procedures to be used in Auction 87. 
Interested parties submitted 1 comment and 1 reply comment in response 
to the Auction 87 Comment Public Notice, 74 FR 67221, December 18, 
2009.
i. Licenses to be Offered in Auction 87
    2. Auction 87 will offer 9,603 paging licenses consisting of 7,752 
licenses in the lower paging bands (35 MHz, 43 MHz, 152 and 158 MHz, 
454 and 459 MHz) and 1,851 licenses in the upper paging bands (929 MHz 
and 931 MHz). Auction 87 will include licenses that remained unsold 
from a previous auction, licenses on which a winning bidder in a 
previous auction defaulted, and licenses for spectrum previously 
associated with licenses that cancelled or terminated. In a few cases, 
the available license does not cover the entire geographic area due to 
an excluded area or previous partitioning.
    3. Attachment A of the Auction 87 Procedures Public Notice provides 
a summary of the licenses available in Auction 87. Due to the large 
number of licenses in Auction 87, the complete list of licenses 
available for this auction will be provided in electronic format only, 
available as separate Attachment A files at https://wireless.fcc.gov/auctions/87/. Tables containing the block/frequency cross-reference 
list for the paging bands are included in Attachment B of the Auction 
87 Procedures Public Notice.

B. Rules and Disclaimers

i. Relevant Authority
    4. Prospective applicants must familiarize themselves thoroughly 
with the Commission's general competitive bidding rules set forth in 
Title 47, Part 1, Subpart Q of the Code of Federal Regulations, 
including all amendments and clarifications; rules relating to the 
lower and upper paging bands and emerging technologies contained in 
Title 47, Part 22 and Part 90 of the Code of Federal Regulations; and 
rules relating to applications, environment, practice and procedure 
contained in Title 47, Part 1, Subpart I 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 in the Commission's decisions in 
proceedings regarding competitive bidding procedures, application 
requirements, and obligations of Commission licensees.
    5. The terms contained in the Commission's rules, relevant orders, 
and public notices are not negotiable. The Commission may amend or 
supplement the information contained in its public notices at any time, 
and will issue public notices to convey any new or supplemental 
information to applicants. It is the responsibility of all applicants 
to remain current with all Commission rules and with all public notices 
pertaining to this auction.
ii. Prohibited Communications and Compliance With Antitrust Laws
    6. To ensure the competitiveness of the auction process, 47 CFR 
1.2105(c) prohibits auction 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 Form 175) 
as parties with whom they have entered into agreements pursuant to 47 
CFR 1.2105(a)(2)(viii).
a. Entities Subject to Section 1.2105
    7. The prohibited communication provisions of 47 CFR 1.2105(c) will 
apply to any applicants that submit short-form applications seeking to 
participate in a Commission auction and select licenses in the same or 
overlapping markets. In Auction 87, the rule would prohibit any 
applicants that have selected any of the same licenses or licenses with 
overlapping markets in their short form applications from communicating 
absent a disclosed agreement.
    8. Under the terms of the rule, applicants that have applied for 
licenses covering the same or overlapping markets--unless they have 
identified each other on their short form 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 applies to all 
applicants regardless of whether such applicants become qualified 
bidders or actually bid.
    9. 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

[[Page 8705]]

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.
    10. Information concerning applicants' license selections will not 
be available to the public. Therefore, the Commission will inform each 
applicant by letter of the identity of each of the other applicants 
that has applied for licenses covering any of the same or overlapping 
geographic areas as the licenses that it has selected in its short-form 
application.
    11. Entities and parties subject to 47 CFR 1.2105(c)'s prohibition 
on certain communications should take special care in circumstances 
where their employees may receive information directly or indirectly 
from a competing applicant relating to any competing applicant's bids 
or bidding strategies. In situations where 47 CFR 1.2105(c)(7)(i) views 
the same person as the applicant with respect to two different entities 
filing competing applications, under Bureau precedent the bids and 
bidding strategies of one applicant are necessarily conveyed to the 
other and, absent a disclosed bidding agreement, an apparent violation 
of the rule occurs. The Bureau has not addressed situations where 
employees who do not qualify as the applicant (e.g., are not officers 
or directors) receive information regarding a competing applicant's 
bids or bidding strategies and thus has not ruled on whether that 
information might be deemed to be necessarily conveyed to the 
applicant. The Bureau notes that the exception to 47 CFR 1.2105(c) 
providing that non-controlling interest holders may have interests in 
more than one competing bidder without violating the rule, provided 
specified conditions are met (including a certification that no 
prohibited communications have occurred or will occur), does not extend 
to controlling interest holders.
b. Prohibition Applies Until Down Payment Deadline
    12. 47 CFR 1.2105(c)'s prohibition on certain communications take 
effect at the short-form application filing deadline and continue until 
the down payment deadline after the auction.
c. Prohibited Communications
    13. Applicants for the upcoming Auction 87 and other parties that 
may be engaged in discussion with such applicants are cautioned on the 
need to comply with 47 CFR 1.2105(c). The rule prohibits not only a 
communication about an applicant's own bids or bidding strategy, but 
also a communication of another applicant's bids or bidding strategy. 
While 47 CFR 1.2105(c) does not prohibit business negotiations among 
auction applicants, applicants must remain vigilant so as not to 
communicate directly or indirectly information that affects, or could 
affect, bids or bidding strategy, or the negotiation of settlement 
agreements.
    14. The Commission remains vigilant about communications taking 
place in other situations. For example, the Commission has warned that 
prohibited communications concerning bids and bidding strategies may 
include communications regarding capital calls or requests for 
additional funds in support of bids or bidding strategies to the extent 
such communications convey information concerning the bids and bidding 
strategies directly or indirectly.
    15. Applicants are hereby placed on notice that disclosure of 
information relating to bidder interests and bidder identities that has 
not yet been made public by the Commission at the time of disclosure 
may violate the provisions of 47 CFR 1.2105(c) that prohibit certain 
communications. This is so even though similar types of information 
were revealed prior to and during other Commission auctions subject to 
different information procedures. Bidders should use caution in their 
dealings with other parties, such as members of the press, financial 
analysts, or others who might become a conduit for the communication of 
prohibited bidding information. For example, where limited information 
disclosure procedures are in place, as for Auction 87, a qualified 
bidder's statement to the press that it has lost bidding eligibility 
and stopped bidding in the auction could give rise to a finding of a 
violation of 47 CFR 1.2105(c). Similarly, an applicant's public 
statement of intent not to participate in Auction 87 bidding could also 
violate the rule.
    16. Applicants selecting licenses for any of the same or 
overlapping geographic license areas must not communicate directly or 
indirectly about bids or bidding strategy. Accordingly, such applicants 
are encouraged not to use the same individual as an authorized bidder. 
A violation of 47 CFR 1.2105(c) could occur if an individual acts as 
the authorized bidder for two or more competing applicants, and conveys 
information concerning the substance of bids or bidding strategies 
between such applicants. Also, if the authorized bidders are different 
individuals employed by the same organization (e.g., law firm or 
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 47 CFR 1.2105(c) prohibition on 
certain communications.
    17. A violation of 47 CFR 1.2105(c) could occur in other contexts, 
such as an individual serving as an officer for two or more applicants. 
Moreover, the Commission has found a violation of the rule where a 
bidder used the Commission's bidding system to disclose its bidding 
strategy in a manner that explicitly invited other auction participants 
to cooperate and collaborate in specific markets, and has placed 
auction participants on notice that the use of its bidding system to 
disclose market information to competitors will not be tolerated and 
will subject bidders to sanctions.
    18. In addition, when completing short-form applications, 
applicants should avoid any statements or disclosures that may violate 
47 CFR 1.2105(c), particularly in light of the limited information 
procedures in effect for Auction 87. Specifically, applicants should 
avoid including any information in their short-form applications that 
might convey information regarding their license selection, such as 
using applicant names that refer to licenses being offered, referring 
to certain licenses or markets in describing bidding agreements, or 
including any information in attachments that may otherwise disclose 
applicants' license selections.
d. Disclosure of Bidding Agreements and Arrangements
    19. 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 application 
filing deadline, each party to the agreement must identify the other 
party or parties to the agreement on its short-form application, even 
if the agreement has not been reduced to writing. If the parties have 
not agreed in principle by the short-form application 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 for licenses covering any of 
the same or overlapping geographic

[[Page 8706]]

areas after the short-form application filing deadline.
e. Section 1.2105(c) Certification
    20. By electronically submitting a short-form application following 
the electronic filing procedures set forth in Attachment C of the 
Auction 87 Procedures Public Notice, 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 prohibited behavior has occurred, nor 
will it preclude the initiation of an investigation when warranted. The 
Commission has stated that it intends to scrutinize carefully any 
instances in which bidding patterns suggest that collusion may be 
occurring. Any applicant found to have violated 47 CFR 1.2105(c) may be 
subject to sanctions.
f. Antitrust Laws
    21. Applicants are also reminded that, regardless of compliance 
with the Commission's rules, they remain subject to the antitrust laws, 
which are designed to prevent anticompetitive behavior in the 
marketplace. Compliance with the disclosure requirements of 47 CFR 
1.2105(c) will not insulate a party from enforcement of the antitrust 
laws. For instance, a violation of the antitrust laws could arise out 
of actions taking place well before any party submits a short-form 
application.
    22. To the extent the Commission becomes aware of specific 
allegations that suggest that violations of the federal antitrust laws 
may have occurred, the Commission may refer such allegations to the 
United States Department of Justice for investigation. 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, among other sanctions.
g. Duty To Report Prohibited Communications; Reporting Procedure
    23. 47 CFR 1.2105(c)(6) provides that any applicant that makes or 
receives a communication that appears to violate 47 CFR 1.2105(c) must 
report such communication in writing to the Commission immediately, and 
in no case later than five business days after the communication 
occurs. The Commission has clarified that each applicant's obligation 
to report any such communication continues beyond the five-day period 
after the communication is made, even if the report is not made within 
the five day period.
    24. In addition, 47 CFR 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 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 of bids or bidding strategies that result 
in a bidding arrangement, agreement, or understanding after the short-
form filing application deadline.
    25. The Commission recently amended 47 CFR 1.65(a) and 1.2105(c) to 
require applicants in competitive bidding proceedings to furnish 
additional or corrected information within five days of a significant 
occurrence, or to amend their short-form applications no more than five 
days after the applicant becomes aware of the need for amendment. The 
Commission made this change to facilitate the auction process, by 
making the information available promptly to all participants and 
enabling the Bureau to act expeditiously on those changes when such 
action is necessary.
    26. Parties reporting communications pursuant to 47 CFR 1.65 or 
1.2105(c)(6) must take care to ensure that any such reports of 
prohibited communications do not themselves give rise to a violation of 
47 CFR 1.2105(c). For example, a party's report of a prohibited 
communication could violate the rule by communicating prohibited 
information to other applicants through the use of Commission filing 
procedures that would allow such materials to be made available for 
public inspection.
    27. The Commission recently amended 47 CFR 1.2105(c) to minimize 
the risk of inadvertent dissemination by requiring parties to file only 
a single report and to file that report with Commission personnel 
expressly charged with administering the Commission's auctions. 
Pursuant to the amended rule, any reports required by 47 CFR 1.2105(c) 
must be filed consistent with the instructions set forth in the Auction 
87 Procedures Public Notice. For Auction 87, such reports should be 
filed with the Chief of the Auctions and Spectrum Access Division, 
Wireless Telecommunications Bureau, by the most expeditious means 
available. Specifically, any such reports should be submitted by e-mail 
at the following address: auction87@fcc.gov, or delivered to the 
following address: Margaret W. Wiener, Chief, Auctions and Spectrum 
Access Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, 445 12th Street, SW., Room 6423, Washington, 
DC 20554. Parties submitting such a report should include a cover sheet 
to avoid the inadvertent dissemination of information contained in the 
report.
    28. A party seeking to report such prohibited communications should 
consider submitting its report with a request that the report or 
portions of the submission be withheld from public inspection. Such 
parties are also encouraged to consult with the Auctions and Spectrum 
Access Division staff if they have any questions about the procedures 
for submitting such reports. Applicants must be aware that failure to 
comply with the Commission's rules can result in enforcement action.
h. Winning Bidders Must Disclose Terms of Agreements
    29. Applicants that are winning bidders will be required to 
disclose in their long-form applications the specific terms, 
conditions, and parties involved in any bidding consortia, joint 
ventures, partnerships, and other arrangements entered into relating to 
the competitive bidding process.
i. Additional Information Concerning Rule Prohibiting Certain 
Communications
    30. A summary listing of documents issued by the Commission and the 
Bureau addressing the application of 47 CFR 1.2105(c) may be found in 
Attachment E of the Auction 87 Procedures Public Notice.
iii. Incumbency Issues
    31. There are pre-existing paging incumbent licenses, including 
public safety entities licensed under either 47 U.S.C. 337 or 47 CFR 
1.925. Incumbent (non-geographic) paging licensees operating under 
their existing authorizations are entitled to full protection from co-
channel interference. Geographic area licensees are likewise afforded 
co-channel interference protection from incumbent licensees. Adjacent 
geographic area licensees are obligated to resolve possible 
interference concerns of adjacent geographic area licensees by 
negotiating a mutually acceptable agreement with the neighboring 
geographic licensee.
a. International Coordination
    32. Potential bidders seeking licenses for geographic areas 
adjacent to the

[[Page 8707]]

Canadian and Mexican border should be aware that the use of some or all 
of the channels they acquire in the auction could be restricted as a 
result of current or future agreements with Canada or Mexico. Licensees 
on the lower paging channels must submit an FCC Form 601 to obtain 
authorization to operate stations north of Line A or east of Line C 
because these channels are subject to the Above 30 Megacycles per 
Second Agreement with Industry Canada. Although the upper paging 
channels do not require coordination with Canada, the U.S.-Canada 
Interim Coordination Considerations for the Band 929-932 MHz, as 
amended, assigns specific 929 MHz and 931 MHz frequencies to the United 
States for licensing along certain longitudes above Line A, and assigns 
other specific 929 MHz and 931 MHz frequencies to Canada for licensing 
along certain longitudes along the U.S.-Canada border. In addition, the 
929 MHz and 931 MHz frequencies assigned to Canada are unavailable for 
use by U.S. licensees above Line A as set out in the agreement.
b. Quiet Zones
    33. Paging licensees must individually apply for and receive a 
separate license for each transmitter if the proposed operation would 
affect the radio quiet zones set forth in the Commission's rules.
iv. Due Diligence
    34. Potential bidders are reminded that there are a number of 
incumbent licensees already licensed and operating on frequencies that 
will be subject to the upcoming auction. Geographic area licensees in 
accordance with the Commission's rules must protect such incumbents 
from harmful interference. These limitations may restrict the ability 
of such geographic area licensees to use certain portions of the 
electromagnetic spectrum or provide service to certain areas in their 
geographic license areas.
    35. The Bureau cautions potential applicants formulating their 
bidding strategies to investigate and consider the extent to which 
these frequencies are occupied. For example, there are incumbent 
operations already licensed and operating in the bands that must be 
protected. These limitations may restrict the ability of paging 
licensees to use certain portions of the electromagnetic spectrum or 
provide service to certain areas in their geographic license areas. 
Bidders should become familiar with the status of these operations and 
applicable Commission rules, orders and any pending proceedings related 
to the service, in order to make reasoned, appropriate decisions about 
their participation in this auction and their bidding strategy.
    36. 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 licenses being offered in 
this auction. The Commission makes no representations or warranties 
about the use of this spectrum for particular services. Applicants 
should be aware that a Commission auction represents an opportunity to 
become a licensee subject to certain conditions and regulations. The 
auction does not constitute an endorsement by the Commission of any 
particular service, technology, or product, nor does a Commission 
license constitute a guarantee of business success. Applicants should 
perform their individual due diligence before proceeding as they would 
with any new business venture.
    37. Potential bidders are strongly encouraged to conduct their own 
research prior to the beginning of bidding in Auction 87 in order to 
determine the existence of any pending legislative, administrative, or 
judicial proceedings that might affect their decision regarding 
participation in the auction. Participants in Auction 87 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 as well as other applicable Federal, 
state, and local laws.
    38. Applicants should also be aware that certain pending and future 
proceedings, including rulemaking proceedings or petitions for 
rulemaking, applications (including those for modification), 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 87. Pending 
and future judicial proceedings may also relate to particular 
applicants or incumbent licensees, or to the licenses available in 
Auction 87. 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.
    39. 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 87. 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 beginning of bidding in the auction.
    40. 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 being offered.
    41. Potential bidders may research the Bureau's licensing database 
on the Internet in order to determine which frequencies are already 
licensed to incumbent licensees. Applicants may obtain information 
about licenses available in Auction 87 through the Bureau's online 
licensing databases at https://wireless.fcc.gov/uls. Applicants may 
query the database online and download a copy of their search results 
if desired.
    42. The Commission makes no representations or guarantees regarding 
the accuracy or completeness of information in its databases or any 
third party databases, including, for example, court docketing systems. 
To the extent the Commission's databases may not include all 
information deemed necessary or desirable by an applicant, applicants 
may obtain or verify such information from independent sources or 
assume the risk of any incompleteness or inaccuracy in said databases. 
Furthermore, the Commission makes no representations or guarantees 
regarding the accuracy or completeness of information that has been 
provided by incumbent licensees and incorporated into its databases.
    43. Potential applicants are strongly encouraged to physically 
inspect any prospective sites located in, or near, the geographic area 
for which they plan to bid, and also to familiarize themselves with the 
environmental review obligations described in the Auction 87 Procedures 
Public Notice.
v. Use of Integrated Spectrum Auction System
    44. The Commission will make available a browser-based bidding 
system to allow bidders to participate in Auction 87 over the Internet 
using the Commission's Integrated Spectrum Auction System (ISAS or FCC 
Auction System). The Commission makes no warranty whatsoever with 
respect to the

[[Page 8708]]

FCC Auction System. In no event shall the Commission, or any of its 
officers, employees or agents, be liable for any damages whatsoever 
(including, but not limited to, loss of business profits, business 
interruption, loss of business information, or any other loss) arising 
out of or relating to the existence, furnishing, functioning or use of 
the FCC Auction System that is accessible to qualified bidders in 
connection with this auction. Moreover, no obligation or liability will 
arise out of the Commission's technical, programming or other advice or 
service provided in connection with the FCC Auction System.
vi. Environmental Review Requirements
    45. Licensees must comply with the Commission's rules regarding 
implementation of the National Environmental Policy Act and other 
federal environmental statutes. The construction of a wireless antenna 
facility is a federal action, and the licensee must comply with the 
Commission's environmental rules for each such facility.

C. Auction Specifics

i. Auction Start Date
    46. Bidding in Auction 87 will begin on Tuesday, May 25, 2010, as 
announced in the Auction 87 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. Bidding Methodology
    47. The bidding methodology for Auction 87 will be simultaneous 
multiple round (SMR) bidding. The Commission will conduct this auction 
over the Internet using the FCC Auction System, and telephonic bidding 
will be available as well. Qualified bidders are permitted to bid 
electronically via the Internet or by telephone. All telephone calls 
are recorded.
iii. Pre-Auction Dates and Deadlines
    48. The following dates and deadlines apply:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Auction Tutorial Available (via Internet).  March 4, 2010.
Short-Form Application (FCC Form 175)       March 4, 2010; 12 noon ET.
 Filing Window Opens.
 Short-Form Application (FCC Form 175)      March 16, 2010; prior to 6
 Filing Window Deadline.                     p.m. ET.
Upfront Payments (via wire transfer)......  April 23, 2010; 6 p.m. ET.
Mock Auction..............................  May 21, 2010.
Auction Begins............................  May 25, 2010.
------------------------------------------------------------------------

iv. Requirements for Participation
    49. Those wishing to participate in this auction must: (1) Submit a 
short-form application (FCC Form 175) electronically prior to 6 p.m. 
ET, March 16, 2010, following the electronic filing procedures set 
forth in Attachment C of the Auction 87 Procedures Public Notice; (2) 
submit a sufficient upfront payment and an FCC Remittance Advice Form 
(FCC Form 159) by 6 p.m. ET, April 23, 2010, following the procedures 
and instructions set forth in Attachment D of the Auction 87 Procedures 
Public Notice; and (3) comply with all provisions outlined in the 
Auction 87 Procedures Public Notice and applicable Commission rules.

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

A. General Information Regarding Short-Form Applications

    50. 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 
must 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 applicants' short-form 
applications and certifications as well as their upfront payments. In 
the second phase of the process, winning bidders must file a more 
comprehensive long-form application (FCC Form 601) and have a complete 
and accurate ownership disclosure information report (FCC Form 602) on 
file with the Commission.
    51. Entities seeking licenses available in Auction 87 must file 
short-form applications electronically via the FCC Auction System prior 
to 6 p.m. ET on March 16, 2010, following the procedures prescribed in 
Attachment C of the Auction 87 Procedures Public Notice. Applicants 
filing short-form applications are subject to the Commission's rule 
prohibiting certain communications beginning on the deadline for 
filing. The information provided in its short-form application will be 
used in determining, among other things, if the applicant is eligible 
for a bidding credit.
    52. 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 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.
    53. An entity may not submit more than one short-form application 
for a single auction. If a party submits multiple short-form 
applications, only one application may become qualified to bid.
    54. Applicants also should note that submission of a short-form 
application (and any amendments thereto) 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. An applicant cannot change the certifying official to its 
application. 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.

B. License Selection

    55. An applicant must select the licenses on which it wants to bid 
from the Eligible Licenses list on its short-form application. To 
assist applicants in identifying licenses of interest that will be 
available in Auction 87, the FCC Auction System includes a filtering 
mechanism that allows an applicant to filter the Eligible Licenses 
list.
    56. Applicants will not be able to change their license selections 
after the short-form application filing deadline. Applicants interested 
in participating in this auction must have selected license(s) 
available in Auction 87 by the short-form application deadline. 
Applicants must confirm their license selections before the deadline 
for submitting short-form applications. The FCC Auction System will not 
accept bids from an applicant on licenses that the applicant has not 
selected on its short-form application.

[[Page 8709]]

C. Disclosure of Bidding Arrangements

    57. Applicants will be required to identify in their short-form 
applications all parties with whom they have entered into any 
agreements, arrangements, or understandings of any kind relating to the 
licenses being auctioned, including any agreements relating to post-
auction market structure.
    58. Applicants will also 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 
an agreement by the short-form application filing deadline, it should 
not include the names of parties to the discussions on its application 
and it may not continue such discussions with any applicants after the 
deadline.
    59. While 47 CFR 1.2105(c) of the rules does 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. Further, as discussed 
above, compliance with the disclosure requirements of 47 CFR 1.2105(c) 
will not insulate a party from enforcement of the antitrust laws.

D. Ownership Disclosure Requirements

    60. All applicants must comply with the uniform ownership 
disclosure standards set forth in Title 47, Part 1 of the Code of 
Federal Regulations, and provide information required by 47 CFR 1.2105 
and 1.2112. 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. 
The ownership disclosure standards for the short-form application are 
prescribed in 47 CFR 1.2105 and 1.2112. Each applicant is responsible 
for information submitted in its short-form application being complete 
and accurate.
    61. 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) (such as information submitted with an 
ownership disclosure information report (FCC Form 602) or in a short-
form application (FCC Form 175) filed for a previous auction using 
ISAS) will automatically be entered into the applicant's short-form 
application. An applicant is responsible for ensuring that the 
information submitted in its short-form application for Auction 87 is 
complete and accurate. Accordingly, applicants should carefully review 
any information automatically entered to confirm that it is complete 
and accurate as of the Auction 87 deadline for filing the short-form 
application. If any information that was entered automatically needs to 
be changed, applicants must do so directly in the short-form 
application.

E. Designated Entity Provisions

    62. Eligible applicants in Auction 87 may claim small business 
bidding credits. Applicants should review carefully the Commission's 
decisions regarding the designated entity provisions.
i. Bidding Credits for Small Businesses
    63. A bidding credit represents an amount by which a bidder's 
winning bid will be discounted. For Auction 87, bidding credits will be 
available to small businesses and consortia thereof.
a. Bidding Credit Eligibility Criteria
    64. The level of bidding credit is determined as follows: (1) A 
bidder with attributed average annual gross revenues that do not exceed 
$15 million for the preceding three years will receive a 25 percent 
discount on its winning bid; and (2) a bidder with attributed average 
annual gross revenues that do not exceed $3 million for the preceding 
three years will receive a 35 percent discount on its winning bid. 
Bidding credits are not cumulative. A qualifying applicant may claim 
either a 25 percent or 35 percent bidding credit on its winning bid.
b. Revenue Disclosure on Short-Form Application
    65. An entity applying as a small business must provide gross 
revenues for the preceding three years of each of the following: (1) 
The applicant, (2) its affiliates, (3) its controlling interests, (4) 
the affiliates of its controlling interests, and (5) the entities with 
which it has an attributable material relationship. 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. Additionally, if an applicant is applying as a consortium 
of small businesses, this information must be provided for each 
consortium member.
ii. Attributable Interests
a. Controlling Interests
    66. Controlling interests of an applicant include individuals and 
entities with either de facto or de jure control of the applicant. 
Typically, ownership of greater than 50 percent of an entity's voting 
stock evidences de jure control. De facto control is determined on a 
case-by-case basis.
    67. Applicants should refer to 47 CFR 1.2110(c)(2) and Attachment C 
of the Auction 87 Procedures Public Notice to understand how certain 
interests are calculated in determining control. For example, pursuant 
to 47 CFR 1.2110(c)(2)(ii)(F), officers and directors of an applicant 
are considered to have controlling interest in the applicant.
b. Affiliates
    68. Affiliates of an applicant or controlling interest include an 
individual or entity that: (1) Directly or indirectly controls or has 
the power to control the applicant; (2) is directly or indirectly 
controlled by the applicant; (3) is directly or indirectly controlled 
by a third party that also controls or has the power to control the 
applicant; or (4) has an identity of interest with the applicant. The 
Commission's definition of an affiliate of the applicant encompasses 
both controlling interests of the applicant and affiliates of 
controlling interests of the applicant. For more information regarding 
affiliates, applicants should refer to 47 CFR 1.2110(c)(5) and 
Attachment C of the Auction 87 Procedures Public Notice.
c. Material Relationships
    69. The Commission requires the consideration of certain leasing 
and resale (including wholesale) relationships--referred to as material 
relationships--in determining designated entity eligibility for bidding 
credits. Material relationships fall into two categories: Impermissible 
and attributable.
    70. An applicant or licensee has an impermissible material 
relationship when it has agreements with one or more other entities for 
the lease or resale (including under a wholesale agreement) of, on a 
cumulative basis, more than 50 percent of the spectrum capacity of any 
of its licenses. If an applicant or a licensee has an impermissible 
material relationship, it is, as a result, (i) ineligible for the award 
of designated entity benefits, and (ii) subject to liability for unjust 
enrichment on a license-by-license basis.
    71. An applicant or licensee has an attributable material 
relationship when

[[Page 8710]]

it has one or more agreements with any individual entity for the lease 
or resale (including under a wholesale agreement) of, on a cumulative 
basis, more than 25 percent of the spectrum capacity of any individual 
license held by the applicant or licensee. The attributable material 
relationship will cause the gross revenues of that entity and its 
attributable interest holders to be attributed to the applicant or 
licensee for the purposes of determining the applicant's or licensee's 
(i) eligibility for designated entity benefits and (ii) liability for 
unjust enrichment on a license-by-license basis.
    72. The Commission grandfathered material relationships in 
existence before the release of the Designated Entity Second Report and 
Order, 71 FR 26245, May 5, 2006, meaning that those preexisting 
relationships alone would not cause the Commission to examine a 
designated entity's ongoing eligibility for benefits or its liability 
for unjust enrichment. The Commission did not, however, grandfather 
preexisting material relationships for determinations of an applicant's 
or licensee's designated entity eligibility for future auctions or in 
the context of future assignments, transfers of control, spectrum 
leases, or other reportable eligibility events. Rather, the occurrence 
of any of those eligibility events after the release date of the 
Designated Entity Second Report and Order triggers a reexamination of 
the applicant's or licensee's designated entity eligibility, taking 
into account all existing material relationships, including those 
previously grandfathered.
d. Gross Revenue Exceptions
    73. The Commission has also made other modifications to its rules 
governing the attribution of gross revenues for purposes of determining 
designated entity eligibility. For example, the Commission has 
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.
    74. The Commission has also exempted from attribution to the 
applicant the gross revenues of the affiliates of a rural telephone 
cooperative's officers and directors, if certain conditions specified 
in 47 CFR 1.2110(b)(3)(iii) are met. An applicant claiming this 
exemption must provide, in an attachment, an affirmative statement that 
the applicant, affiliate and/or controlling interest is an eligible 
rural telephone cooperative within the meaning of 47 CFR 
1.2110(b)(3)(iii), and the applicant must supply any additional 
information as may be required to demonstrate eligibility for the 
exemption from the attribution rule. Applicants seeking to claim this 
exemption must meet all of the conditions.
e. Bidding Consortia
    75. A consortium of small businesses is a conglomerate organization 
composed of two or more entities, each of which individually satisfies 
the definition of a small business. Thus, each member of a consortium 
of small businesses that applies to participate in Auction 87 must 
individually meet the criteria for small businesses. Each consortium 
member must disclose its gross revenues along with those of its 
affiliates, its controlling interests, the affiliates of its 
controlling interests, and any entities having an attributable material 
relationship with the member. Although the gross revenues of the 
consortium members will not be aggregated for purposes of determining 
the consortium's eligibility as a small business, this information must 
be provided to ensure that each individual consortium member qualifies 
for any bidding credit awarded to the consortium.

F. Tribal Lands Bidding Credit

    76. To encourage the growth of wireless services in federally 
recognized tribal lands, the Commission has implemented a tribal lands 
bidding credit. Applicants do not provide information regarding tribal 
lands bidding credits on their short-form applications. Instead, 
winning bidders may apply for the tribal lands bidding credit after the 
auction when they file their more detailed, long-form applications.

G. Provisions Regarding Former and Current Defaulters

    77. Current defaulters are not eligible to participate in Auction 
87, but former defaulters can participate so long as they are otherwise 
qualified and, make upfront payments that are fifty percent more than 
the normal upfront payment amounts. An applicant is considered a 
current defaulter when it, its affiliates, its controlling interests, 
or the affiliates of its controlling interests, are in default on any 
payment for any Commission license (including down payments) or are 
delinquent on any non-tax debt owed to any Federal agency as of the 
filing deadline for short-form applications. An applicant is considered 
a former defaulter when it, its affiliates, its controlling interests, 
or the affiliates of its controlling interests, have defaulted on any 
Commission license or been delinquent on any non-tax debt owed to any 
Federal agency, but have since remedied all such defaults and cured all 
of the outstanding non-tax delinquencies.
    78. On the short-form application, an applicant must certify under 
penalty of perjury that it, 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 payments for Commission licenses 
(including down payments) and that they are not delinquent on any non-
tax debt owed to any Federal agency. Each applicant must also state 
under penalty of perjury whether or not it, its affiliates, its 
controlling interests, and the affiliates of its controlling interests, 
have ever been in default on any Commission licenses or have ever been 
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. These 
statements and certifications are prerequisites to submitting an 
application to participate in an FCC auction.
    79. 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. For example, it has been 
determined that to the extent that Commission rules permit late payment 
of regulatory or application fees accompanied by late fees, such debts 
will become delinquent for purposes of 47 CFR 1.2105(a) and 1.2106(a) 
only after the expiration of a final payment deadline. Therefore, with 
respect to regulatory or application fees, the provisions of 47 CFR 
1.2105(a) and 1.2106(a) regarding default and delinquency in connection 
with competitive bidding are limited to circumstances in which the 
relevant party has not complied with a final Commission payment 
deadline. Parties are also encouraged to coordinate with the 
Commission's Office of Managing Director or the Bureau's Auctions and 
Spectrum Access Division staff if they have any questions about default 
and delinquency disclosure requirements.
    80. The Commission considers outstanding debts owed to the United 
States Government, in any amount, to be a serious matter. The 
Commission has adopted rules, including a provision referred to as the 
red light rule, that implement the Commission's

[[Page 8711]]

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.
    81. 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 
ultimately may 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 an 
auction or of its upfront payment obligation.

H. Minor Modifications to Short-Form Applications

    82. Applicants are not permitted to make major modifications to 
their short-form applications (e.g., change their license selections, 
change control of the applicant, change the certifying official, or 
change their size to claim eligibility for a higher bidding credit) 
after the short-form application deadline. Thus, any change in control 
of an applicant, resulting from a merger, for example, will be 
considered a major modification to the applicant's short-form 
application, which will consequently be dismissed.
    83. Applicants are, however, permitted to make minor changes to 
their short-form applications after the filing deadline. Permissible 
minor changes include, for example, deletion and addition of authorized 
bidders (to a maximum of three) and revision of addresses and telephone 
numbers of the applicants and their contact persons.

I. Maintaining Current Information in Short-Form Applications

    84. 47 CFR 1.65 requires an applicant to maintain the accuracy and 
completeness of information furnished in its pending application and to 
notify the Commission of any substantial change that may be of 
decisional significance to that application. The Commission recently 
amended 47 CFR 1.65(a) to require applicants in competitive bidding 
proceedings to furnish additional or corrected information within five 
days of a significant occurrence, or to amend their short-form 
applications no more than five days after the applicant becomes aware 
of the need for amendment. Changes that cause a loss of or reduction in 
eligibility for a bidding credit should 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.
    85. After the short-form filing deadline, applicants may make only 
minor changes to their short-form applications.

III. Pre-Auction Procedures

A. Online Auction Tutorial--Available March 4, 2010

    86. On Thursday, March 4, 2010, the Commission will post an 
educational auction tutorial on the Auction 87 web page for prospective 
bidders to familiarize themselves with the auction process. This online 
tutorial will provide information about pre-auction procedures, 
completing short-form applications, auction conduct, the FCC Auction 
Bidding System, auction rules, and paging rules. The tutorial will also 
provide an avenue to ask questions of FCC staff concerning the auction, 
auction procedures, filing requirements, and other matters related to 
this auction.
    87. The Auction 87 online tutorial replaces the live bidder 
seminars that have been offered for most previous auctions. The Bureau 
believes parties interested in participating in Auction 87 will find 
this interactive, online tutorial a more efficient and effective way to 
further their understanding of the auction process.
    88. The auction tutorial will be accessible from the FCC's Auction 
87 web page at https://wireless.fcc.gov/auctions/87/ through an Auction 
Tutorial link. Once posted, this tutorial will remain available for 
reference in connection with the procedures outlined in the Auction 87 
Procedures Public Notice and accessible anytime.

B. Short-Form Applications--Due Prior to 6 p.m. ET on March 16, 2010

    89. In order to be eligible to bid in this auction, applicants must 
first follow the procedures set forth in Attachment C of the Auction 87 
Procedures Public Notice to submit a short-form application (FCC Form 
175) electronically via the FCC Auction System. This application must 
be received at the Commission prior to 6 p.m. ET on March 16, 2010. 
Late applications will not be accepted.

C. Application Processing and Minor Corrections

    90. After the deadline for filing short-form applications, the 
Commission will process all timely submitted applications to determine 
which are complete, and subsequently will issue a public notice 
identifying (1) those applications that are complete, (2) those 
applications that are rejected, and (3) those applications that are 
incomplete because of minor defects that may be corrected. The public 
notice will include the deadline for resubmitting corrected 
applications.
    91. After the March 16, 2010, short-form filing deadline, 
applicants may make only minor corrections to their applications. 
Applicants will not be permitted to make major modifications to their 
applications (e.g., change their license selections, change control of 
the applicant, change certifying official, or change their size to 
claim eligibility for a higher bidding credit).
    92. Applicants should be aware the Commission staff will 
communicate only with an applicant's contact person or certifying 
official, as designated on the applicant's short-form application, 
unless the applicant's certifying official or contact person notifies 
the Commission in writing that applicant's counsel or other 
representative is authorized to speak on its behalf. Authorizations may 
be submitted by e-mail at the following address: auction87@fcc.gov.

D. Upfront Payments--Due April 23, 2010

    93. In order to be eligible to bid in this auction, applicants must 
submit an upfront payment accompanied by an FCC Remittance Advice Form 
(FCC Form 159). After completing its short-form application, an 
applicant will have access to an electronic version of the FCC Form 159 
that can be printed and sent by fax to U.S. Bank in St. Louis, 
Missouri. All upfront payments must be made as instructed in this 
Public Notice and must be received in the proper account at U.S. Bank 
before 6 p.m. ET on April 23, 2010.
i. Making Upfront Payments by Wire Transfer
    94. Wire transfer payments must be received by 6 p.m. ET on April 
23, 2010.

[[Page 8712]]

No other payment method is acceptable. 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.
    95. At least one hour before placing the order for the wire 
transfer (but on the same business day), applicants must fax a 
completed FCC Form 159 (Revised 2/03) to U.S. Bank at (314) 418-4232. 
On the fax cover sheet, applicants should write Wire Transfer--Auction 
Payment for Auction 87. 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. The applicant is responsible 
for obtaining confirmation from its financial institution that U.S. 
Bank has timely received its upfront payment and deposited it in the 
proper account.
    96. Please note the following information regarding upfront 
payments: (1) All payments must be made in U.S. dollars; (2) all 
payments must be made by wire transfer; (3) upfront payments for 
Auction 87 go to a lockbox number different from the lockboxes used in 
previous FCC auctions; and (4) failure to deliver a sufficient upfront 
payment as instructed by the April 23, 2010, deadline will result in 
dismissal of the short-form application and disqualification from 
participation in the auction.
ii. FCC Form 159
    97. A completed FCC Remittance Advice Form (FCC Form 159, Revised 
2/03) must be faxed to U.S. Bank to accompany each upfront payment. 
Proper completion of FCC Form 159 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 87 Procedures 
Public Notice. An electronic pre-filled version of the FCC Form 159 is 
available after submitting the short-form application. Payors using the 
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 
U.S. Bank by fax.
iii. Upfront Payments and Bidding Eligibility
    98. The Commission has delegated to the Bureau the authority and 
discretion to determine appropriate upfront payments for each auction. 
Upfront payments help deter frivolous or insincere bidding, and provide 
the Commission with a source of funds in the event that the bidder 
incurs liability during the auction.
    99. Applicants that are former defaulters must 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.
    100. Applicants must make upfront payments sufficient to obtain 
bidding eligibility on the licenses on which they will bid. The Bureau 
proposed, in the Auction 87 Comment Public Notice, that the amount of 
the upfront payment would determine a bidder's initial bidding 
eligibility, the maximum number of bidding units on which a bidder may 
place bids. Under the Bureau's proposal, in order to bid on a 
particular license, a qualified bidder must have selected the license 
on its short-form application and must have a current eligibility level 
that meets or exceeds the number of bidding units assigned to that 
license. At a minimum, therefore, an applicant's total upfront payment 
must be enough to establish at least 500 bidding units of eligibility, 
or else the applicant will not be eligible to participate in the 
auction. An applicant does not have to make an upfront payment to cover 
all licenses the applicant selected on its short-form application, but 
only enough to cover the maximum number of bidding units that are 
associated with licenses on which the bidder wishes to place bids and 
hold provisionally winning bids at any given time.
    101. In the Auction 87 Comment Public Notice, the Bureau proposed 
to make the upfront payments equal to the minimum opening bids. The 
Bureau further proposed that each license be assigned a specific number 
of bidding units equal to the upfront payment listed for the license, 
on a bidding unit for dollar basis. The bidding unit level for each 
license will remain constant throughout the auction. The Bureau 
received no comments on this issue. The Bureau adopts its proposed 
upfront payments. The upfront payment and bidding units for each 
license will be $500 and 500 bidding units.
    102. In the Auction 87 Comment Public Notice, the Bureau noted the 
presence of pre-existing site-based incumbent licenses within some of 
the geographic areas available in Auction 87. The Bureau did n