Auction of FM Broadcast Construction Permits Scheduled for March 26, 2013; Comment Sought on Competitive Bidding Procedures for Auction 94, 60690-60695 [2012-24544]

Download as PDF 60690 Federal Register / Vol. 77, No. 193 / Thursday, October 4, 2012 / Notices Dated: September 28, 2012. Sharon A. Whitt, Agency Clearance Officer. [FR Doc. 2012–24480 Filed 10–3–12; 8:45 am] BILLING CODE 6690–01–P FEDERAL COMMUNICATIONS COMMISSION [AU Docket No. 12–239; DA 12–1411] Auction of FM Broadcast Construction Permits Scheduled for March 26, 2013; Comment Sought on Competitive Bidding Procedures for Auction 94 Federal Communications Commission. ACTION: Notice. AGENCY: This document announces the auction of certain FM broadcast construction permits scheduled to commence on March 26, 2013. This document also seeks comment on competitive bidding procedures for Auction 94. DATES: Comments are due on or before October 10, 2012, and reply comments are due on or before October 24, 2012. ADDRESSES: All filings in response to this public notice must refer to AU Docket No. 12–239. The Wireless Telecommunications and Media Bureaus strongly encourage interested parties to file comments electronically, and request that an additional copy of all comments and reply comments be submitted electronically to the following address: auction94@fcc.gov. Comments may be submitted by any of the following methods: D Federal eRulemaking Portal: https://www.regulations.gov. Follow the instructions for submitting comments. D Federal Communications Commission’s Web Site: https://fjallfoss. fcc.gov/ecfs2/. Follow the instructions for submitting comments. D Paper Filers: Parties who choose to file by paper must file an original and four copies of each filing. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s Secretary, Attn: WTB/ASAD, Office of the Secretary, Federal Communications Commission. D All hand-delivered or messengerdelivered paper filings for the Commission’s Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW–A325, Washington, DC 20554. All hand deliveries must be held together with rubber bands or fasteners. Any emcdonald on DSK67QTVN1PROD with NOTICES SUMMARY: VerDate Mar<15>2010 15:21 Oct 03, 2012 Jkt 229001 envelopes must be disposed of before entering the building. D Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. D People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: 202–418–0530 or TTY: 202– 418–0432. FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, Auctions and Spectrum Access Division: For auction legal questions: Howard Davenport at (202) 418–0660; for general auction questions: Jeff Crooks at (202) 418–0660 or Linda Sanderson at (717) 338–2868. Audio Division, Media Bureau: For FM service rule questions: Lisa Scanlan or Tom Nessinger at (202) 418–2700. SUPPLEMENTARY INFORMATION: This is a summary of the Auction 94 Comment Public Notice released on September 11, 2012. The complete text of the Auction 94 Comment Public Notice, including an attachment and related Commission documents, is available for public inspection and copying from 8 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday or 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 94 Comment Public Notice and related Commission documents also may be purchased from the Commission’s duplicating contractor, Best Copy and Printing, Inc. (BCPI), 445 12th Street SW., Room CY–B402, Washington, DC 20554, telephone 202–488–5300, fax 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 12–1411. The Auction 94 Comment Public Notice and related documents also are available on the Internet at the Commission’s Web site: https://wireless. fcc.gov/auctions/94/, or by using the search function for AU Docket No. 12– 239 on the Commission’s Electronic Comment Filing System (ECFS) Web page at https://www.fcc.gov/cgb/ecfs/. I. Introduction 1. The Wireless Telecommunications and Media Bureaus (the Bureaus) announce an auction of certain FM broadcast construction permits and seek comment on the procedures to be used for this auction. This auction is PO 00000 Frm 00020 Fmt 4703 Sfmt 4703 scheduled to commence on March 26, 2013, and is designated as Auction 94. II. Construction Permits in Auction 94 2. Auction 94 will offer 117 construction permits in the FM broadcast service. The construction permits to be auctioned are for 117 new FM allotments, including 26 construction permits that were offered but not sold or were defaulted upon in prior auctions. Attachment A of the Auction 94 Comment Public Notice lists the specific vacant FM allotments for which the Federal Communications Commission (FCC or Commission) will offer construction permits, along with the reference coordinates for each vacant FM allotment. These comprise FM channels added to the Table of FM Allotments, 47 CFR 73.202(b), pursuant to the Commission’s established rulemaking procedures, and designated for use in the indicated communities. An applicant may apply for any vacant FM allotment listed in Attachment A of the Auction 94 Comment Public Notice. If two or more short-form applications (FCC Form 175) specify the same FM allotment, they will be considered mutually exclusive, and the construction permit for that FM allotment will be awarded by competitive bidding procedures. Once mutual exclusivity exists for auction purposes, then, even if only one applicant is qualified to bid for a particular construction permit in Auction 94, that applicant is required to submit a bid in order to obtain the construction permit. Any applicant that submits a short-form application, but fails to timely submit an upfront payment, will retain its status as an applicant in Auction 94 and will remain subject to the rules prohibiting certain communications but, having purchased no bidding eligibility, will not be eligible to bid. III. Due Diligence 3. Each potential bidder is solely responsible for investigating and evaluating all technical and marketplace factors that may have a bearing on the value of the construction permits for broadcast facilities that it is seeking in this auction. Each bidder is responsible for assuring that, if it wins a construction permit, it will be able to build and operate facilities in accordance with the Commission’s rules. The FCC makes no representations or warranties about the use of this spectrum for particular services. Each applicant should be aware that an FCC auction represents an opportunity to become an FCC permittee in the broadcast service, E:\FR\FM\04OCN1.SGM 04OCN1 emcdonald on DSK67QTVN1PROD with NOTICES Federal Register / Vol. 77, No. 193 / Thursday, October 4, 2012 / Notices subject to certain conditions and regulations. An FCC auction does not constitute an endorsement by the FCC of any particular service, technology, or product, nor does an FCC construction permit or license constitute a guarantee of business success. 4. An applicant should perform its due diligence research and analysis before proceeding, as it would with any new business venture. In particular, the Bureaus strongly encourage each potential bidder to review all underlying Commission orders, such as the specific Report and Order amending the FM Table of Allotments and allotting the FM channel(s) on which it plans to bid. A Report and Order adopted in an FM allotment rulemaking proceeding may include anomalies such as site restrictions or expense reimbursement requirements. Additionally, each potential bidder should perform technical analyses and/ or refresh any previous analyses to assure itself that, should it become a winning bidder for any Auction 94 construction permit, it will be able to build and operate facilities that will fully comply with all applicable technical and legal requirements. The Bureaus strongly encourage each applicant to inspect any prospective transmitter sites located in, or near, the service area for which it plans to bid; confirm the availability of such sites; and familiarize itself with the Commission’s rules regarding the National Environmental Policy Act. 5. The Bureaus strongly encourage each applicant to conduct its own research prior to Auction 94 in order to determine the existence of pending administrative or judicial proceedings, including pending allocations rulemaking proceedings, that might affect its decisions regarding participation in the auction. 6. The Bureaus strongly encourage participants in Auction 94 to continue such research throughout the auction. The due diligence considerations mentioned in the Auction 94 Comment Public Notice do not comprise an exhaustive list of steps that should be undertaken prior to participating in this auction. As always, the burden is on the potential bidder to determine how much research to undertake, depending upon the specific facts and circumstances related to its interests. IV. Bureaus Seek Comment on Auction Procedures 7. The Commission directed the Bureaus, under delegated authority, to seek comment on a variety of auctionspecific procedures prior to the start of each auction. Therefore the Bureaus VerDate Mar<15>2010 15:21 Oct 03, 2012 Jkt 229001 seek comment on the following issues relating to the conduct of Auction 94. A. Auction Structure i. Simultaneous Multiple-Round Auction Design 8. The Bureaus propose to auction all construction permits included in Auction 94 using the Commission’s standard simultaneous multiple-round auction format. This type of auction offers every construction permit for bid at the same time and consists of successive bidding rounds in which eligible bidders may place bids on individual construction permits. Typically, bidding remains open on all construction permits until bidding stops on every construction permit. The Bureaus seek comment on this proposal. ii. Bidding Rounds 9. Auction 94 will consist of sequential bidding rounds, each followed by the release of round results. The initial bidding schedule will be announced in a public notice to be released at least one week before the start of the auction. Details on viewing round results, including the location and format of downloadable round results files, will be included in the same public notice. 10. The Commission will conduct Auction 94 over the Internet using the Commission’s Integrated Spectrum Auction System (FCC Auction System). Bidders will also have the option of placing bids by telephone through a dedicated Auction Bidder Line. The toll-free telephone number for the Auction Bidder Line will be provided to qualified bidders prior to the start of the auction. 11. The Bureaus propose to retain the discretion to change the bidding schedule in order to foster an auction pace that reasonably balances speed with the bidders’ need to study round results and adjust their bidding strategies. The Bureaus may change the amount of time for the bidding rounds, the amount of time between rounds, or the number of rounds per day, depending upon bidding activity and other factors. The Bureaus seek comment on this proposal. Commenters on this issue should address the role of the bidding schedule in managing the pace of the auction, specifically discussing the tradeoffs in managing auction pace by bidding schedule changes, by changing the activity requirements or bid amount parameters, or by using other means. iii. Stopping Rule 12. The Bureaus have discretion to establish stopping rules before or during PO 00000 Frm 00021 Fmt 4703 Sfmt 4703 60691 multiple round auctions in order to complete the auction within a reasonable time. For Auction 94, the Bureaus propose to employ a simultaneous stopping rule approach, which means all construction permits remain available for bidding until bidding stops on every construction permit. More specifically, bidding will close on all construction permits after the first round in which no bidder submits any new bids, applies a proactive waiver, or withdraws any provisionally winning bids (if bid withdrawals are permitted in this auction). Thus, unless the Bureaus announce alternative procedures, the simultaneous stopping rule will be used in this auction, and bidding will remain open on all construction permits until bidding stops on every construction permit. Consequently, it is not possible to determine in advance how long the bidding in this auction will last. 13. Further, the Bureaus propose to retain the discretion to exercise any of the following options during Auction 94: (a) Use a modified version of the simultaneous stopping rule that would close the auction for all construction permits after the first round in which no bidder applies a waiver, withdraws a provisionally winning bid (if withdrawals are permitted in this auction), or places any new bids on a construction permit for which it is not the provisionally winning bidder. Thus, absent any other bidding activity, a bidder placing a new bid on a construction permit for which it is the provisionally winning bidder would not keep the auction open under this modified stopping rule; (b) Use a modified version of the simultaneous stopping rule that would close the auction for all construction permits after the first round in which no bidder applies a waiver, withdraws a provisionally winning bid (if withdrawals are permitted in this auction), or places any new bids on a construction permit that is not FCC held. Thus, absent any other bidding activity, a bidder placing a new bid on a construction permit that does not already have a provisionally winning bid (an FCC-held construction permit) would not keep the auction open under this modified stopping rule; (c) Use a modified version of the simultaneous stopping rule that combines (a) and (b) above; (d) Declare the auction will end after a specified number of additional rounds (special stopping rule). If the Bureaus invoke this special stopping rule, they will accept bids in the specified final round(s), after which the auction will close; and (e) Keep the E:\FR\FM\04OCN1.SGM 04OCN1 60692 Federal Register / Vol. 77, No. 193 / Thursday, October 4, 2012 / Notices auction open even if no bidder places any new bids, applies a waiver, or withdraws any provisionally winning bids (if withdrawals are permitted in this auction). In this event, the effect will be the same as if a bidder had applied a waiver. The activity rule will apply as usual, and a bidder with insufficient activity will either lose bidding eligibility or use a waiver. 14. The Bureaus propose to exercise these options only in certain circumstances, for example, where the auction is proceeding unusually slowly or quickly, there is minimal overall bidding activity, or it appears likely that the auction will not close within a reasonable period of time or will close prematurely. Before exercising these options, the Bureaus are likely to attempt to change the pace of the auction. For example, the Bureaus may adjust the pace of bidding by changing the number of bidding rounds per day and/or the minimum acceptable bids. The Bureaus propose to retain the discretion to exercise any of these options with or without prior announcement during the auction. The Bureaus seek comment on these proposals. emcdonald on DSK67QTVN1PROD with NOTICES iv. Information Relating to Auction Delay, Suspension, or Cancellation 15. For Auction 94, the Bureaus propose that they may delay, suspend, or cancel the auction in the event of a natural disaster, technical obstacle, administrative or weather necessity, evidence of an auction security breach or unlawful bidding activity, or for any other reason that affects the fair and efficient conduct of competitive bidding. The Bureaus will notify participants of any such delay, suspension or cancellation by public notice and/or through the FCC Auction System’s announcement function. If the auction is delayed or suspended, the Bureaus may, in their sole discretion, elect to resume the auction starting from the beginning of the current round or from some previous round, or cancel the auction in its entirety. Network interruption may cause the Bureaus to delay or suspend the auction. The Bureaus emphasize that they will exercise this authority solely at their discretion, and not as a substitute for situations in which bidders may wish to apply their activity rule waivers. The Bureaus seek comment on this proposal. B. Auction Procedures i. Upfront Payments and Bidding Eligibility 16. The Bureaus have delegated authority and discretion to determine an VerDate Mar<15>2010 15:21 Oct 03, 2012 Jkt 229001 appropriate upfront payment for each construction permit being auctioned, taking into account such factors as the efficiency of the auction process and the potential value of similar construction permits. The upfront payment is a refundable deposit made by each bidder to establish eligibility to bid on construction permits. Upfront payments that are related to the specific construction permits being auctioned protect against frivolous or insincere bidding and provide the Commission with a source of funds from which to collect payments owed at the close of the auction. With these considerations in mind, the Bureaus propose the upfront payments set forth in Attachment A of the Auction 94 Comment Public Notice. The Bureaus seek comment on the upfront payments specified in Attachment A of the Auction 94 Comment Public Notice. 17. The Bureaus further propose that the amount of the upfront payment submitted by a bidder will determine its initial bidding eligibility in bidding units. The Bureaus propose to assign each construction permit a specific number of bidding units, equal to one bidding unit per dollar of the upfront payment listed in Attachment A of the Auction 94 Comment Public Notice. The number of bidding units for a given construction permit is fixed and does not change during the auction as prices change. A bidder may place bids on multiple construction permits, provided that the total number of bidding units associated with those construction permits does not exceed its current eligibility. A bidder cannot increase its eligibility during the auction; it can only maintain its eligibility or decrease its eligibility. Thus, in calculating its upfront payment amount and hence its initial bidding eligibility, an applicant must determine the maximum number of bidding units on which it may wish to bid (or hold provisionally winning bids) in any single round, and submit an upfront payment amount covering that total number of bidding units. The Bureaus request comment on these proposals. ii. Activity Rule 18. In order to ensure that the auction closes within a reasonable period of time, an activity rule requires bidders to bid actively throughout the auction, rather than wait until late in the auction before participating. The Bureaus propose a single stage auction with the following activity requirement: In each round of the auction, a bidder desiring to maintain its current bidding eligibility is required to be active on one hundred percent (100%) of its bidding PO 00000 Frm 00022 Fmt 4703 Sfmt 4703 eligibility. A bidder’s activity in a round will be the sum of the bidding units associated with any construction permits upon which it places bids during the current round and the bidding units associated with any construction permits for which it holds provisionally winning bids. Failure to maintain the requisite activity level will result in the use of an activity rule waiver, if any remain, or a reduction in the bidder’s eligibility, possibly curtailing or eliminating the bidder’s ability to place additional bids in the auction. The Bureaus seek comment on this proposal. If commenters believe the auction should be conducted with multiple stages, they should explain the reason for doing so. iii. Activity Rule Waivers and Reducing Eligibility 19. When a bidder’s eligibility in the current round is below the required minimum level, it may preserve its current level of eligibility through an activity rule waiver. An activity rule waiver applies to an entire round of bidding, not to a particular construction permit. Activity rule waivers can be either proactive or automatic. Activity rule waivers are principally a mechanism for a bidder to avoid the loss of bidding eligibility in the event that exigent circumstances prevent it from bidding in a particular round. 20. The FCC Auction System assumes that a bidder that does not meet the activity requirement would prefer to use an activity rule waiver (if available) rather than lose bidding eligibility. Therefore, the system will automatically apply a waiver at the end of any bidding round in which a bidder’s activity level is below the minimum required unless (1) the bidder has no activity rule waivers remaining; or (2) the bidder overrides the automatic application of a waiver by reducing eligibility, thereby meeting the activity requirement. If a bidder has no waivers remaining and does not satisfy the required activity level, the bidder’s current eligibility will be permanently reduced, possibly curtailing or eliminating the ability to place additional bids in the auction. 21. A bidder with insufficient activity may wish to reduce its bidding eligibility rather than use an activity rule waiver. If so, the bidder must affirmatively override the automatic waiver mechanism during the bidding round by using the reduce eligibility function in the FCC Auction System. In this case, the bidder’s eligibility is permanently reduced to bring it into compliance with the activity rule. Reducing eligibility is an irreversible action; once eligibility has been E:\FR\FM\04OCN1.SGM 04OCN1 Federal Register / Vol. 77, No. 193 / Thursday, October 4, 2012 / Notices emcdonald on DSK67QTVN1PROD with NOTICES reduced, a bidder will not be permitted to regain its lost bidding eligibility, even if the round has not yet closed. 22. Under the proposed simultaneous stopping rule, a bidder may apply an activity rule waiver proactively as a means to keep the auction open without placing a bid. If a bidder proactively applies an activity rule waiver (using the apply waiver function in the FCC Auction System) during a bidding round in which no bids are placed or withdrawn (if bid withdrawals are permitted in this auction), the auction will remain open and the bidder’s eligibility will be preserved. An automatic waiver applied by the FCC Auction System in a round in which there are no new bids, withdrawals (if bid withdrawals are permitted in this auction), or proactive waivers will not keep the auction open. A bidder cannot apply a proactive waiver after bidding in a round, and applying a proactive waiver will preclude it from placing any bids in that round. Applying a waiver is irreversible; once a proactive waiver is submitted, it cannot be unsubmitted, even if the round has not yet closed. 23. Consistent with recent FCC auctions, the Bureaus propose that each bidder in Auction 94 be provided with three activity rule waivers that may be used at the bidder’s discretion during the course of the auction. The Bureaus seek comment on this proposal. iv. Reserve Price or Minimum Opening Bids 24. Normally, a reserve price is an absolute minimum price below which an item will not be sold in a given auction. A minimum opening bid, on the other hand, is the minimum bid price set at the beginning of the auction below which no bids are accepted. It is generally used to accelerate the competitive bidding process. It is possible for the minimum opening bid and the reserve price to be the same amount. 25. The Bureaus propose to establish minimum opening bid amounts for Auction 94. The Bureaus believe that a minimum opening bid amount, which has been used in other broadcast auctions, is an effective bidding tool for accelerating the competitive bidding process. The Bureaus do not propose to establish separate reserve prices for the construction permits to be offered in Auction 94. 26. For Auction 94, the Bureaus propose minimum opening bid amounts determined by taking into account the type of service and class of facility offered, market size, population covered by the proposed broadcast facility, and recent broadcast transaction data. VerDate Mar<15>2010 15:21 Oct 03, 2012 Jkt 229001 Attachment A of the Auction 94 Comment Public Notice lists a proposed minimum opening bid amount for each construction permit available in Auction 94. The Bureaus seek comment on the minimum opening bid amounts specified in Attachment A. 27. If commenters believe that these minimum opening bid amounts will result in unsold construction permits, are not reasonable amounts, or should instead operate as reserve prices, they should explain why this is so and comment on the desirability of an alternative approach. The Bureaus ask commenters to support their claims with valuation analyses and suggested amounts or formulas for reserve prices or minimum opening bids. In establishing the minimum opening bid amounts, the Bureaus particularly seek comment on factors that could reasonably have an impact on valuation of the broadcast spectrum, including the type of service and class of facility offered, market size, population covered by the proposed FM broadcast facility, and any other relevant factors. v. Bid Amounts 28. The Bureaus propose that, in each round, an eligible bidder will be able to place a bid on a given construction permit in any of up to nine different amounts. Under this proposal, the FCC Auction System interface will list the acceptable bid amounts for each construction permit. 29. The first of the acceptable bid amounts is called the minimum acceptable bid amount. The minimum acceptable bid amount for a construction permit will be equal to its minimum opening bid amount until there is a provisionally winning bid for the construction permit. After there is a provisionally winning bid for a construction permit, the minimum acceptable bid amount will be a certain percentage higher. That is, the FCC will calculate the minimum acceptable bid amount by multiplying the provisionally winning bid amount times one plus the minimum acceptable bid percentage. If, for example, the minimum acceptable bid percentage is 10 percent, the minimum acceptable bid amount will equal (provisionally winning bid amount) * (1.10), rounded. If bid withdrawals are permitted in this auction, in the case of a construction permit for which the provisionally winning bid has been withdrawn, the minimum acceptable bid amount will equal the second highest bid received for the construction permit. 30. The FCC will calculate the eight additional bid amounts using the minimum acceptable bid amount and a PO 00000 Frm 00023 Fmt 4703 Sfmt 4703 60693 bid increment percentage, which need not be the same as the percentage used to calculate the minimum acceptable bid amount. The first additional acceptable bid amount equals the minimum acceptable bid amount times one plus the bid increment percentage, rounded. If, for example, the bid increment percentage is 5 percent, the calculation is (minimum acceptable bid amount) * (1 + 0.05), rounded, or (minimum acceptable bid amount) * 1.05, rounded; the second additional acceptable bid amount equals the minimum acceptable bid amount times one plus two times the bid increment percentage, rounded, or (minimum acceptable bid amount) * 1.10, rounded; etc. The Bureaus will round the results using the Commission’s standard rounding procedures for auctions. 31. For Auction 94, the Bureaus propose to use a minimum acceptable bid percentage of 10 percent. This means that the minimum acceptable bid amount for a construction permit will be approximately 10 percent greater than the provisionally winning bid amount for the construction permit. To calculate the additional acceptable bid amounts, the Bureaus propose to use a bid increment percentage of 5 percent. The Bureaus seek comment on these proposals. 32. The Bureaus retain the discretion to change the minimum acceptable bid amounts, the minimum acceptable bid percentage, the bid increment percentage, and the number of acceptable bid amounts if the Bureaus determine that circumstances so dictate. Further, the Bureaus retain the discretion to do so on a construction permit-by-construction permit basis. The Bureaus also retain the discretion to limit (a) the amount by which a minimum acceptable bid for a construction permit may increase compared with the corresponding provisionally winning bid, and (b) the amount by which an additional bid amount may increase compared with the immediately preceding acceptable bid amount. For example, the Bureaus could set a $10,000 limit on increases in minimum acceptable bid amounts over provisionally winning bids. Thus, if calculating a minimum acceptable bid using the minimum acceptable bid percentage results in a minimum acceptable bid amount that is $12,000 higher than the provisionally winning bid on a construction permit, the minimum acceptable bid amount would instead be capped at $10,000 above the provisionally winning bid. The Bureaus seek comment on the circumstances under which the Bureaus should employ such a limit, factors the Bureaus E:\FR\FM\04OCN1.SGM 04OCN1 60694 Federal Register / Vol. 77, No. 193 / Thursday, October 4, 2012 / Notices should consider when determining the dollar amount of the limit, and the tradeoffs in setting such a limit or changing other parameters, such as changing the minimum acceptable bid percentage, the bid increment percentage, or the number of acceptable bid amounts. If the Bureaus exercise this discretion, they will alert bidders by announcement in the FCC Auction System during the auction. emcdonald on DSK67QTVN1PROD with NOTICES vi. Provisionally Winning Bids 33. Provisionally winning bids are bids that would become final winning bids if the auction were to close in that given round. At the end of a bidding round, the FCC Auction System determines a provisionally winning bid for each construction permit based on the highest bid amount received. If identical high bid amounts are submitted on a construction permit in any given round (i.e., tied bids), the FCC Auction System will use a random number generator to select a single provisionally winning bid from among the tied bids. (The Auction System assigns a random number to each bid when the bid is entered. The tied bid with the highest random number wins the tiebreaker.) The remaining bidders, as well as the provisionally winning bidder, can submit higher bids in subsequent rounds. However, if the auction were to end with no other bids being placed, the winning bidder would be the one that placed the provisionally winning bid. If the construction permit receives any bids in a subsequent round, the provisionally winning bid again will be determined by the highest bid amount received for the construction permit. 34. A provisionally winning bid will be retained until there is a higher bid on the construction permit at the close of a subsequent round, unless the provisionally winning bid is withdrawn (if bid withdrawals are permitted in this auction). The Bureaus reminds bidders that provisionally winning bids count toward activity for purposes of the activity rule. vii. Bid Removal and Bid Withdrawal 35. For Auction 94, the Bureaus propose the following bid removal procedures. Before the close of a bidding round, a bidder has the option of removing any bid placed in that round. By removing a selected bid in the FCC Auction System, a bidder may effectively ‘‘unsubmit’’ any bid placed within that round. In contrast to the bid withdrawal provisions, a bidder removing a bid placed in the same round is not subject to a withdrawal payment. Once a round closes, a bidder VerDate Mar<15>2010 15:21 Oct 03, 2012 Jkt 229001 may no longer remove a bid. The Bureaus seek comment on this bid removal proposal. 36. The Bureaus also seek comment on whether bid withdrawals should be permitted in Auction 94. When permitted in an auction, bid withdrawals provide a bidder with the option of withdrawing bids placed in prior rounds that have become provisionally winning bids. A bidder may withdraw its provisionally winning bids using the ‘‘withdraw bids’’ function in the FCC Auction System. A bidder that withdraws its provisionally winning bid(s), if permitted, is subject to the bid withdrawal payment provisions of the Commission rules. 37. Based on this guidance and on the Bureaus’ experience with past auctions of FM broadcast construction permits, the Bureaus propose to prohibit bidders from withdrawing any bids after the close of the round in which bids were placed. The Bureaus make this proposal in light of the site-specific nature and wide geographic dispersion of the permits available in this auction, which suggests that potential applicants for this auction may have fewer incentives to aggregate permits through the auction process (as compared with bidders in many auctions of wireless licenses). Thus, the Bureaus believe that it is unlikely that bidders will have a need to withdraw bids in this auction. The Bureaus also remain mindful that bid withdrawals, particularly those made late in this auction, could result in delays in licensing new FM stations and attendant delays in the offering of new broadcast service to the public. The Bureaus seek comment on our proposal to prohibit bid withdrawals. C. Post-Auction Payments i. Interim Withdrawal Payment Percentage 38. In the event the Bureaus allow bid withdrawals in Auction 94, the Bureaus propose the interim bid withdrawal payment be 20 percent of the withdrawn bid. A bidder that withdraws a bid during an auction is subject to a withdrawal payment equal to the difference between the amount of the withdrawn bid and the amount of the winning bid in the same or a subsequent auction. However, if a construction permit for which a bid has been withdrawn does not receive a subsequent higher bid or winning bid in the same auction, the FCC cannot calculate the final withdrawal payment until that construction permit receives a higher bid or winning bid in a subsequent auction. In such cases, when that final withdrawal payment cannot PO 00000 Frm 00024 Fmt 4703 Sfmt 4703 yet be calculated, the FCC imposes on the bidder responsible for the withdrawn bid an interim bid withdrawal payment, which will be applied toward any final bid withdrawal payment that is ultimately assessed. 39. The amount of the interim bid withdrawal payment may range from three percent to twenty percent of the withdrawn bid amount, with the percentage generally being higher where there is greater risk of bid withdrawals being used for anti-competitive purposes, such as when there is little need for bidders to aggregate permits. The Bureaus propose to use the maximum interim bid withdrawal payment percentage allowed by 47 CFR 1.2104(g)(1) in the event bid withdrawals are allowed. The Bureaus request comment on using twenty percent for calculating an interim bid withdrawal payment amount in Auction 94. Commenters advocating the use of bid withdrawals should also address the percentage of the interim bid withdrawal payment. ii. Additional Default Payment Percentage 40. Any winning bidder that defaults or is disqualified after the close of an auction (i.e., fails to remit the required down payment within the prescribed period of time, fails to submit a timely long-form application, fails to make full and timely final payment, or is otherwise disqualified) is liable for a default payment under 47 CFR 1.2104(g)(2). This payment consists of a deficiency payment, equal to the difference between the amount of the Auction 94 bidder’s winning bid and the amount of the winning bid the next time a construction permit covering the same spectrum is won in an auction, plus an additional payment equal to a percentage of the defaulter’s bid or of the subsequent winning bid, whichever is less. 41. The Commission’s rules provide that, in advance of each auction, it will establish a percentage between three percent and twenty percent of the applicable bid to be assessed as an additional default payment. As the Commission has indicated, the level of this additional payment in each auction will be based on the nature of the service and the construction permits being offered. 42. For Auction 94, the Bureaus propose to establish an additional default payment of twenty percent. Defaults weaken the integrity of the auction process and may impede the deployment of service to the public, and an additional twenty percent default payment will be more effective in E:\FR\FM\04OCN1.SGM 04OCN1 Federal Register / Vol. 77, No. 193 / Thursday, October 4, 2012 / Notices deterring defaults than the three percent used in some earlier auctions. In light of these considerations, the Bureaus propose for Auction 94 an additional default payment of twenty percent of the relevant bid. Moreover, a twenty percent additional default payment amount is consistent with the percentage used in recent auctions of FM permits. The Bureaus seek comment on this proposal. V. Ex Parte Rules 43. This proceeding has been designated as a ‘‘permit-but-disclose’’ proceeding in accordance with the Commission’s ex parte rules. Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must contain summaries of the substance of the presentations and not merely a listing of the subjects discussed. More than a one or two sentence description of the views and arguments presented is generally required. Other provisions pertaining to oral and written ex parte presentations in permit-but-disclose proceedings are set forth in 47 CFR 1.1206(b). Federal Communications Commisison. Gary D. Michaels, Deputy Chief, Auctions and Spectrum Access Division, WTB. [FR Doc. 2012–24544 Filed 10–3–12; 8:45 am] BILLING CODE 6712–01–P FEDERAL DEPOSIT INSURANCE CORPORATION Agency Information Collection Activities: Submission for OMB Review; Comment Request; Registration of Mortgage Loan Originators (3064–0171) Federal Deposit Insurance Corporation (FDIC). AGENCY: Withdrawal of notice and request for comment. ACTION: The FDIC is withdrawing the Notice of Submission for OMB Review; Comment Request; Registration of Mortgage Loan Originators (3064–0171) published in the Federal Register on September 27, 2012 (77 FR 59397). The September 27, 2012 publication was an inadvertent duplication of the Notice of Submission for OMB Review; Comment Request; Registration of Mortgage Loan Originators (3064–0171) published in the Federal Register on September 26, 2012 (77 FR 59192). emcdonald on DSK67QTVN1PROD with NOTICES SUMMARY: Dated: September 27, 2012. VerDate Mar<15>2010 15:21 Oct 03, 2012 Jkt 229001 Federal Deposit Insurance Corporation. Pamela Johnson, Regulatory Editing Specialist. [FR Doc. 2012–24502 Filed 10–3–12; 8:45 am] BILLING CODE 6714–01–P FEDERAL RESERVE SYSTEM Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB Board of Governors of the Federal Reserve System. SUMMARY: Notice is hereby given of the final approval of proposed information collection by the Board of Governors of the Federal Reserve System (Board) under OMB delegated authority, as per 5 CFR 1320.16 (OMB Regulations on Controlling Paperwork Burdens on the Public). Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. Copies of the Paperwork Reduction Act Submission, supporting statements and approved collection of information instrument(s) are placed into OMB’s public docket files. The Federal Reserve may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number. On July 6, 2012 the Federal Reserve published a notice in the Federal Register (77 FR 40051) requesting public comment for 60 days to extend for three years, with revision, the FR Y– 14A/Q/M. The comment period for this notice expired on September 4, 2012. The Federal Reserve received eight comment letters. The substantive comments are summarized and addressed below. FOR FURTHER INFORMATION CONTACT: Federal Reserve Board Clearance Officer—Cynthia Ayouch—Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, DC 20551 (202) 452–3829. Telecommunications Device for the Deaf (TDD) users may contact (202) 263–4869, Board of Governors of the Federal Reserve System, Washington, DC 20551. OMB Desk Officer—Shagufta Ahmed —Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street, NW.,Washington, DC 20503. AGENCY: PO 00000 Frm 00025 Fmt 4703 Sfmt 4703 60695 Final approval under OMB delegated authority of the extension for three years, with revision, of the following report: Report title: Capital Assessments and Stress Testing information collection. Agency form number: FR Y–14A/Q/ M. OMB Control number: 7100–0341. Effective Date: September 30, 2012. Frequency: Annually, quarterly, and monthly. Reporters: Large banking organizations that meet an annual threshold of $50 billion or more in total consolidated assets (large Bank Holding Companies or large BHCs), as defined by the Capital Plan rule (12 CFR 225.8).1 Estimated annual reporting hours: FR Y–14A: Summary, 25,080 hours; Macro scenario, 930 hours; Counterparty credit risk (CCR), 2,292 hours; Basel III/DoddFrank, 600 hours; and Regulatory capital, 600 hours. FR Y–14 Q: Securities risk, 1,200 hours; Retail risk, 1,920 hours; Pre-provision net revenue (PPNR), 75,000 hours; Wholesale corporate loans, 6,720 hours; Wholesale commercial real estate (CRE) loans, 6,480 hours; Trading risk, 41,280 hours; Basel III/Dodd-Frank, 1,800 hours; Regulatory capital, 3,600 hours; and Operational risk, 3,360 hours; and Mortgage Servicing Rights (MSR) Valuation, 864 hours; Supplemental, 960 hours; and Retail Fair Value Option/Held for Sale (Retail FVO/HFS), 1,216 hours. FR Y–14M: Retail 1st lien mortgage, 129,000 hours; Retail home equity, 123,840 hours; and Retail credit card, 77,400 hours. FR Y–14 Implementation and On-Going Automation: Start-up for new respondents, 79,200 hours; and Ongoing revisions for existing respondents, 9,120 hours. Estimated average hours per response: FR Y–14A: Summary, 836 hours; Macro scenario, 31 hours; CCR, 382 hours; Basel III/Dodd-Frank, 20 hours; and Regulatory capital, 20 hours. FR Y–14Q: Securities risk, 10 hours; Retail risk, 16 hours; PPNR, 625 hours; Wholesale corporate loans, 60 hours; Wholesale CRE loans, 60 hours; Trading risk, 1,720 hours; Basel III/Dodd-Frank, 20 hours; Regulatory capital, 40 hours; Operational risk, 28 hours, MSR Valuation, 24 hours; Supplemental, 8 hours; and Retail FVO/HFS, 16 hours. FR Y–14M: Retail 1st lien mortgage, 430 hours; Retail home equity, 430 hours; and Retail credit card, 430 hours. FR Y– 14 Implementation and On-Going 1 The Capital Plan rule applies to every top-tier large BHC. This asset threshold is consistent with the threshold established by section 165 of the Dodd-Frank Act relating to enhanced supervision and prudential standards for certain BHCs. E:\FR\FM\04OCN1.SGM 04OCN1

Agencies

FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 77, Number 193 (Thursday, October 4, 2012)]
[Notices]
[Pages 60690-60695]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-24544]

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FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 12-239; DA 12-1411]

Auction of FM Broadcast Construction Permits Scheduled for March
26, 2013; Comment Sought on Competitive Bidding Procedures for Auction
94

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the auction of certain FM broadcast
construction permits scheduled to commence on March 26, 2013. This
document also seeks comment on competitive bidding procedures for
Auction 94.

DATES: Comments are due on or before October 10, 2012, and reply
comments are due on or before October 24, 2012.

ADDRESSES: All filings in response to this public notice must refer to
AU Docket No. 12-239. The Wireless Telecommunications and Media Bureaus
strongly encourage interested parties to file comments electronically,
and request that an additional copy of all comments and reply comments
be submitted electronically to the following address:
auction94@fcc.gov. Comments may be submitted by any of the following
methods:
[ssquf] Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
[ssquf] Federal Communications Commission's Web Site: https://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
[ssquf] Paper Filers: Parties who choose to file by paper must file
an original and four copies of each filing. Filings can be sent by hand
or messenger delivery, by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail. All filings must be
addressed to the Commission's Secretary, Attn: WTB/ASAD, Office of the
Secretary, Federal Communications Commission.
[ssquf] All hand-delivered or messenger-delivered paper filings for
the Commission's Secretary must be delivered to FCC Headquarters at 445
12th St. SW., Room TW-A325, Washington, DC 20554. All hand deliveries
must be held together with rubber bands or fasteners. Any envelopes
must be disposed of before entering the building.
[ssquf] Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
[ssquf] People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau,
Auctions and Spectrum Access Division: For auction legal questions:
Howard Davenport at (202) 418-0660; for general auction questions: Jeff
Crooks at (202) 418-0660 or Linda Sanderson at (717) 338-2868. Audio
Division, Media Bureau: For FM service rule questions: Lisa Scanlan or
Tom Nessinger at (202) 418-2700.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 94 Comment
Public Notice released on September 11, 2012. The complete text of the
Auction 94 Comment Public Notice, including an attachment and related
Commission documents, is available for public inspection and copying
from 8 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday or
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 94 Comment Public Notice and related Commission
documents also may be purchased from the Commission's duplicating
contractor, Best Copy and Printing, Inc. (BCPI), 445 12th Street SW.,
Room CY-B402, Washington, DC 20554, telephone 202-488-5300, fax 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 12-1411. The Auction
94 Comment Public Notice and related documents also are available on
the Internet at the Commission's Web site: https://wireless.fcc.gov/auctions/94/, or by using the search function for AU Docket No. 12-239
on the Commission's Electronic Comment Filing System (ECFS) Web page at
https://www.fcc.gov/cgb/ecfs/.

I. Introduction

1. The Wireless Telecommunications and Media Bureaus (the Bureaus)
announce an auction of certain FM broadcast construction permits and
seek comment on the procedures to be used for this auction. This
auction is scheduled to commence on March 26, 2013, and is designated
as Auction 94.

II. Construction Permits in Auction 94

2. Auction 94 will offer 117 construction permits in the FM
broadcast service. The construction permits to be auctioned are for 117
new FM allotments, including 26 construction permits that were offered
but not sold or were defaulted upon in prior auctions. Attachment A of
the Auction 94 Comment Public Notice lists the specific vacant FM
allotments for which the Federal Communications Commission (FCC or
Commission) will offer construction permits, along with the reference
coordinates for each vacant FM allotment. These comprise FM channels
added to the Table of FM Allotments, 47 CFR 73.202(b), pursuant to the
Commission's established rulemaking procedures, and designated for use
in the indicated communities. An applicant may apply for any vacant FM
allotment listed in Attachment A of the Auction 94 Comment Public
Notice. If two or more short-form applications (FCC Form 175) specify
the same FM allotment, they will be considered mutually exclusive, and
the construction permit for that FM allotment will be awarded by
competitive bidding procedures. Once mutual exclusivity exists for
auction purposes, then, even if only one applicant is qualified to bid
for a particular construction permit in Auction 94, that applicant is
required to submit a bid in order to obtain the construction permit.
Any applicant that submits a short-form application, but fails to
timely submit an upfront payment, will retain its status as an
applicant in Auction 94 and will remain subject to the rules
prohibiting certain communications but, having purchased no bidding
eligibility, will not be eligible to bid.

III. Due Diligence

3. Each potential bidder is solely responsible for investigating
and evaluating all technical and marketplace factors that may have a
bearing on the value of the construction permits for broadcast
facilities that it is seeking in this auction. Each bidder is
responsible for assuring that, if it wins a construction permit, it
will be able to build and operate facilities in accordance with the
Commission's rules. The FCC makes no representations or warranties
about the use of this spectrum for particular services. Each applicant
should be aware that an FCC auction represents an opportunity to become
an FCC permittee in the broadcast service,

[[Page 60691]]

subject to certain conditions and regulations. An FCC auction does not
constitute an endorsement by the FCC of any particular service,
technology, or product, nor does an FCC construction permit or license
constitute a guarantee of business success.
4. An applicant should perform its due diligence research and
analysis before proceeding, as it would with any new business venture.
In particular, the Bureaus strongly encourage each potential bidder to
review all underlying Commission orders, such as the specific Report
and Order amending the FM Table of Allotments and allotting the FM
channel(s) on which it plans to bid. A Report and Order adopted in an
FM allotment rulemaking proceeding may include anomalies such as site
restrictions or expense reimbursement requirements. Additionally, each
potential bidder should perform technical analyses and/or refresh any
previous analyses to assure itself that, should it become a winning
bidder for any Auction 94 construction permit, it will be able to build
and operate facilities that will fully comply with all applicable
technical and legal requirements. The Bureaus strongly encourage each
applicant to inspect any prospective transmitter sites located in, or
near, the service area for which it plans to bid; confirm the
availability of such sites; and familiarize itself with the
Commission's rules regarding the National Environmental Policy Act.
5. The Bureaus strongly encourage each applicant to conduct its own
research prior to Auction 94 in order to determine the existence of
pending administrative or judicial proceedings, including pending
allocations rulemaking proceedings, that might affect its decisions
regarding participation in the auction.
6. The Bureaus strongly encourage participants in Auction 94 to
continue such research throughout the auction. The due diligence
considerations mentioned in the Auction 94 Comment Public Notice do not
comprise an exhaustive list of steps that should be undertaken prior to
participating in this auction. As always, the burden is on the
potential bidder to determine how much research to undertake, depending
upon the specific facts and circumstances related to its interests.

IV. Bureaus Seek Comment on Auction Procedures

7. The Commission directed the Bureaus, under delegated authority,
to seek comment on a variety of auction-specific procedures prior to
the start of each auction. Therefore the Bureaus seek comment on the
following issues relating to the conduct of Auction 94.

A. Auction Structure

i. Simultaneous Multiple-Round Auction Design
8. The Bureaus propose to auction all construction permits included
in Auction 94 using the Commission's standard simultaneous multiple-
round auction format. This type of auction offers every construction
permit for bid at the same time and consists of successive bidding
rounds in which eligible bidders may place bids on individual
construction permits. Typically, bidding remains open on all
construction permits until bidding stops on every construction permit.
The Bureaus seek comment on this proposal.
ii. Bidding Rounds
9. Auction 94 will consist of sequential bidding rounds, each
followed by the release of round results. The initial bidding schedule
will be announced in a public notice to be released at least one week
before the start of the auction. Details on viewing round results,
including the location and format of downloadable round results files,
will be included in the same public notice.
10. The Commission will conduct Auction 94 over the Internet using
the Commission's Integrated Spectrum Auction System (FCC Auction
System). Bidders will also have the option of placing bids by telephone
through a dedicated Auction Bidder Line. The toll-free telephone number
for the Auction Bidder Line will be provided to qualified bidders prior
to the start of the auction.
11. The Bureaus propose to retain the discretion to change the
bidding schedule in order to foster an auction pace that reasonably
balances speed with the bidders' need to study round results and adjust
their bidding strategies. The Bureaus may change the amount of time for
the bidding rounds, the amount of time between rounds, or the number of
rounds per day, depending upon bidding activity and other factors. The
Bureaus seek comment on this proposal. Commenters on this issue should
address the role of the bidding schedule in managing the pace of the
auction, specifically discussing the tradeoffs in managing auction pace
by bidding schedule changes, by changing the activity requirements or
bid amount parameters, or by using other means.
iii. Stopping Rule
12. The Bureaus have discretion to establish stopping rules before
or during multiple round auctions in order to complete the auction
within a reasonable time. For Auction 94, the Bureaus propose to employ
a simultaneous stopping rule approach, which means all construction
permits remain available for bidding until bidding stops on every
construction permit. More specifically, bidding will close on all
construction permits after the first round in which no bidder submits
any new bids, applies a proactive waiver, or withdraws any
provisionally winning bids (if bid withdrawals are permitted in this
auction). Thus, unless the Bureaus announce alternative procedures, the
simultaneous stopping rule will be used in this auction, and bidding
will remain open on all construction permits until bidding stops on
every construction permit. Consequently, it is not possible to
determine in advance how long the bidding in this auction will last.
13. Further, the Bureaus propose to retain the discretion to
exercise any of the following options during Auction 94: (a) Use a
modified version of the simultaneous stopping rule that would close the
auction for all construction permits after the first round in which no
bidder applies a waiver, withdraws a provisionally winning bid (if
withdrawals are permitted in this auction), or places any new bids on a
construction permit for which it is not the provisionally winning
bidder. Thus, absent any other bidding activity, a bidder placing a new
bid on a construction permit for which it is the provisionally winning
bidder would not keep the auction open under this modified stopping
rule; (b) Use a modified version of the simultaneous stopping rule that
would close the auction for all construction permits after the first
round in which no bidder applies a waiver, withdraws a provisionally
winning bid (if withdrawals are permitted in this auction), or places
any new bids on a construction permit that is not FCC held. Thus,
absent any other bidding activity, a bidder placing a new bid on a
construction permit that does not already have a provisionally winning
bid (an FCC-held construction permit) would not keep the auction open
under this modified stopping rule; (c) Use a modified version of the
simultaneous stopping rule that combines (a) and (b) above; (d) Declare
the auction will end after a specified number of additional rounds
(special stopping rule). If the Bureaus invoke this special stopping
rule, they will accept bids in the specified final round(s), after
which the auction will close; and (e) Keep the

[[Page 60692]]

auction open even if no bidder places any new bids, applies a waiver,
or withdraws any provisionally winning bids (if withdrawals are
permitted in this auction). In this event, the effect will be the same
as if a bidder had applied a waiver. The activity rule will apply as
usual, and a bidder with insufficient activity will either lose bidding
eligibility or use a waiver.
14. The Bureaus propose to exercise these options only in certain
circumstances, for example, where the auction is proceeding unusually
slowly or quickly, there is minimal overall bidding activity, or it
appears likely that the auction will not close within a reasonable
period of time or will close prematurely. Before exercising these
options, the Bureaus are likely to attempt to change the pace of the
auction. For example, the Bureaus may adjust the pace of bidding by
changing the number of bidding rounds per day and/or the minimum
acceptable bids. The Bureaus propose to retain the discretion to
exercise any of these options with or without prior announcement during
the auction. The Bureaus seek comment on these proposals.
iv. Information Relating to Auction Delay, Suspension, or Cancellation
15. For Auction 94, the Bureaus propose that they may delay,
suspend, or cancel the auction in the event of a natural disaster,
technical obstacle, administrative or weather necessity, evidence of an
auction security breach or unlawful bidding activity, or for any other
reason that affects the fair and efficient conduct of competitive
bidding. The Bureaus will notify participants of any such delay,
suspension or cancellation by public notice and/or through the FCC
Auction System's announcement function. If the auction is delayed or
suspended, the Bureaus may, in their sole discretion, elect to resume
the auction starting from the beginning of the current round or from
some previous round, or cancel the auction in its entirety. Network
interruption may cause the Bureaus to delay or suspend the auction. The
Bureaus emphasize that they will exercise this authority solely at
their discretion, and not as a substitute for situations in which
bidders may wish to apply their activity rule waivers. The Bureaus seek
comment on this proposal.

B. Auction Procedures

i. Upfront Payments and Bidding Eligibility
16. The Bureaus have delegated authority and discretion to
determine an appropriate upfront payment for each construction permit
being auctioned, taking into account such factors as the efficiency of
the auction process and the potential value of similar construction
permits. The upfront payment is a refundable deposit made by each
bidder to establish eligibility to bid on construction permits. Upfront
payments that are related to the specific construction permits being
auctioned protect against frivolous or insincere bidding and provide
the Commission with a source of funds from which to collect payments
owed at the close of the auction. With these considerations in mind,
the Bureaus propose the upfront payments set forth in Attachment A of
the Auction 94 Comment Public Notice. The Bureaus seek comment on the
upfront payments specified in Attachment A of the Auction 94 Comment
Public Notice.
17. The Bureaus further propose that the amount of the upfront
payment submitted by a bidder will determine its initial bidding
eligibility in bidding units. The Bureaus propose to assign each
construction permit a specific number of bidding units, equal to one
bidding unit per dollar of the upfront payment listed in Attachment A
of the Auction 94 Comment Public Notice. The number of bidding units
for a given construction permit is fixed and does not change during the
auction as prices change. A bidder may place bids on multiple
construction permits, provided that the total number of bidding units
associated with those construction permits does not exceed its current
eligibility. A bidder cannot increase its eligibility during the
auction; it can only maintain its eligibility or decrease its
eligibility. Thus, in calculating its upfront payment amount and hence
its initial bidding eligibility, an applicant must determine the
maximum number of bidding units on which it may wish to bid (or hold
provisionally winning bids) in any single round, and submit an upfront
payment amount covering that total number of bidding units. The Bureaus
request comment on these proposals.
ii. Activity Rule
18. In order to ensure that the auction closes within a reasonable
period of time, an activity rule requires bidders to bid actively
throughout the auction, rather than wait until late in the auction
before participating. The Bureaus propose a single stage auction with
the following activity requirement: In each round of the auction, a
bidder desiring to maintain its current bidding eligibility is required
to be active on one hundred percent (100%) of its bidding eligibility.
A bidder's activity in a round will be the sum of the bidding units
associated with any construction permits upon which it places bids
during the current round and the bidding units associated with any
construction permits for which it holds provisionally winning bids.
Failure to maintain the requisite activity level will result in the use
of an activity rule waiver, if any remain, or a reduction in the
bidder's eligibility, possibly curtailing or eliminating the bidder's
ability to place additional bids in the auction. The Bureaus seek
comment on this proposal. If commenters believe the auction should be
conducted with multiple stages, they should explain the reason for
doing so.
iii. Activity Rule Waivers and Reducing Eligibility
19. When a bidder's eligibility in the current round is below the
required minimum level, it may preserve its current level of
eligibility through an activity rule waiver. An activity rule waiver
applies to an entire round of bidding, not to a particular construction
permit. Activity rule waivers can be either proactive or automatic.
Activity rule waivers are principally a mechanism for a bidder to avoid
the loss of bidding eligibility in the event that exigent circumstances
prevent it from bidding in a particular round.
20. The FCC Auction System assumes that a bidder that does not meet
the activity requirement would prefer to use an activity rule waiver
(if available) rather than lose bidding eligibility. Therefore, the
system will automatically apply a waiver at the end of any bidding
round in which a bidder's activity level is below the minimum required
unless (1) the bidder has no activity rule waivers remaining; or (2)
the bidder overrides the automatic application of a waiver by reducing
eligibility, thereby meeting the activity requirement. If a bidder has
no waivers remaining and does not satisfy the required activity level,
the bidder's current eligibility will be permanently reduced, possibly
curtailing or eliminating the ability to place additional bids in the
auction.
21. A bidder with insufficient activity may wish to reduce its
bidding eligibility rather than use an activity rule waiver. If so, the
bidder must affirmatively override the automatic waiver mechanism
during the bidding round by using the reduce eligibility function in
the FCC Auction System. In this case, the bidder's eligibility is
permanently reduced to bring it into compliance with the activity rule.
Reducing eligibility is an irreversible action; once eligibility has
been

[[Page 60693]]

reduced, a bidder will not be permitted to regain its lost bidding
eligibility, even if the round has not yet closed.
22. Under the proposed simultaneous stopping rule, a bidder may
apply an activity rule waiver proactively as a means to keep the
auction open without placing a bid. If a bidder proactively applies an
activity rule waiver (using the apply waiver function in the FCC
Auction System) during a bidding round in which no bids are placed or
withdrawn (if bid withdrawals are permitted in this auction), the
auction will remain open and the bidder's eligibility will be
preserved. An automatic waiver applied by the FCC Auction System in a
round in which there are no new bids, withdrawals (if bid withdrawals
are permitted in this auction), or proactive waivers will not keep the
auction open. A bidder cannot apply a proactive waiver after bidding in
a round, and applying a proactive waiver will preclude it from placing
any bids in that round. Applying a waiver is irreversible; once a
proactive waiver is submitted, it cannot be unsubmitted, even if the
round has not yet closed.
23. Consistent with recent FCC auctions, the Bureaus propose that
each bidder in Auction 94 be provided with three activity rule waivers
that may be used at the bidder's discretion during the course of the
auction. The Bureaus seek comment on this proposal.
iv. Reserve Price or Minimum Opening Bids
24. Normally, a reserve price is an absolute minimum price below
which an item will not be sold in a given auction. A minimum opening
bid, on the other hand, is the minimum bid price set at the beginning
of the auction below which no bids are accepted. It is generally used
to accelerate the competitive bidding process. It is possible for the
minimum opening bid and the reserve price to be the same amount.
25. The Bureaus propose to establish minimum opening bid amounts
for Auction 94. The Bureaus believe that a minimum opening bid amount,
which has been used in other broadcast auctions, is an effective
bidding tool for accelerating the competitive bidding process. The
Bureaus do not propose to establish separate reserve prices for the
construction permits to be offered in Auction 94.
26. For Auction 94, the Bureaus propose minimum opening bid amounts
determined by taking into account the type of service and class of
facility offered, market size, population covered by the proposed
broadcast facility, and recent broadcast transaction data. Attachment A
of the Auction 94 Comment Public Notice lists a proposed minimum
opening bid amount for each construction permit available in Auction
94. The Bureaus seek comment on the minimum opening bid amounts
specified in Attachment A.
27. If commenters believe that these minimum opening bid amounts
will result in unsold construction permits, are not reasonable amounts,
or should instead operate as reserve prices, they should explain why
this is so and comment on the desirability of an alternative approach.
The Bureaus ask commenters to support their claims with valuation
analyses and suggested amounts or formulas for reserve prices or
minimum opening bids. In establishing the minimum opening bid amounts,
the Bureaus particularly seek comment on factors that could reasonably
have an impact on valuation of the broadcast spectrum, including the
type of service and class of facility offered, market size, population
covered by the proposed FM broadcast facility, and any other relevant
factors.
v. Bid Amounts
28. The Bureaus propose that, in each round, an eligible bidder
will be able to place a bid on a given construction permit in any of up
to nine different amounts. Under this proposal, the FCC Auction System
interface will list the acceptable bid amounts for each construction
permit.
29. The first of the acceptable bid amounts is called the minimum
acceptable bid amount. The minimum acceptable bid amount for a
construction permit will be equal to its minimum opening bid amount
until there is a provisionally winning bid for the construction permit.
After there is a provisionally winning bid for a construction permit,
the minimum acceptable bid amount will be a certain percentage higher.
That is, the FCC will calculate the minimum acceptable bid amount by
multiplying the provisionally winning bid amount times one plus the
minimum acceptable bid percentage. If, for example, the minimum
acceptable bid percentage is 10 percent, the minimum acceptable bid
amount will equal (provisionally winning bid amount) * (1.10), rounded.
If bid withdrawals are permitted in this auction, in the case of a
construction permit for which the provisionally winning bid has been
withdrawn, the minimum acceptable bid amount will equal the second
highest bid received for the construction permit.
30. The FCC will calculate the eight additional bid amounts using
the minimum acceptable bid amount and a bid increment percentage, which
need not be the same as the percentage used to calculate the minimum
acceptable bid amount. The first additional acceptable bid amount
equals the minimum acceptable bid amount times one plus the bid
increment percentage, rounded. If, for example, the bid increment
percentage is 5 percent, the calculation is (minimum acceptable bid
amount) * (1 + 0.05), rounded, or (minimum acceptable bid amount) *
1.05, rounded; the second additional acceptable bid amount equals the
minimum acceptable bid amount times one plus two times the bid
increment percentage, rounded, or (minimum acceptable bid amount) *
1.10, rounded; etc. The Bureaus will round the results using the
Commission's standard rounding procedures for auctions.
31. For Auction 94, the Bureaus propose to use a minimum acceptable
bid percentage of 10 percent. This means that the minimum acceptable
bid amount for a construction permit will be approximately 10 percent
greater than the provisionally winning bid amount for the construction
permit. To calculate the additional acceptable bid amounts, the Bureaus
propose to use a bid increment percentage of 5 percent. The Bureaus
seek comment on these proposals.
32. The Bureaus retain the discretion to change the minimum
acceptable bid amounts, the minimum acceptable bid percentage, the bid
increment percentage, and the number of acceptable bid amounts if the
Bureaus determine that circumstances so dictate. Further, the Bureaus
retain the discretion to do so on a construction permit-by-construction
permit basis. The Bureaus also retain the discretion to limit (a) the
amount by which a minimum acceptable bid for a construction permit may
increase compared with the corresponding provisionally winning bid, and
(b) the amount by which an additional bid amount may increase compared
with the immediately preceding acceptable bid amount. For example, the
Bureaus could set a $10,000 limit on increases in minimum acceptable
bid amounts over provisionally winning bids. Thus, if calculating a
minimum acceptable bid using the minimum acceptable bid percentage
results in a minimum acceptable bid amount that is $12,000 higher than
the provisionally winning bid on a construction permit, the minimum
acceptable bid amount would instead be capped at $10,000 above the
provisionally winning bid. The Bureaus seek comment on the
circumstances under which the Bureaus should employ such a limit,
factors the Bureaus

[[Page 60694]]

should consider when determining the dollar amount of the limit, and
the tradeoffs in setting such a limit or changing other parameters,
such as changing the minimum acceptable bid percentage, the bid
increment percentage, or the number of acceptable bid amounts. If the
Bureaus exercise this discretion, they will alert bidders by
announcement in the FCC Auction System during the auction.
vi. Provisionally Winning Bids
33. Provisionally winning bids are bids that would become final
winning bids if the auction were to close in that given round. At the
end of a bidding round, the FCC Auction System determines a
provisionally winning bid for each construction permit based on the
highest bid amount received. If identical high bid amounts are
submitted on a construction permit in any given round (i.e., tied
bids), the FCC Auction System will use a random number generator to
select a single provisionally winning bid from among the tied bids.
(The Auction System assigns a random number to each bid when the bid is
entered. The tied bid with the highest random number wins the
tiebreaker.) The remaining bidders, as well as the provisionally
winning bidder, can submit higher bids in subsequent rounds. However,
if the auction were to end with no other bids being placed, the winning
bidder would be the one that placed the provisionally winning bid. If
the construction permit receives any bids in a subsequent round, the
provisionally winning bid again will be determined by the highest bid
amount received for the construction permit.
34. A provisionally winning bid will be retained until there is a
higher bid on the construction permit at the close of a subsequent
round, unless the provisionally winning bid is withdrawn (if bid
withdrawals are permitted in this auction). The Bureaus reminds bidders
that provisionally winning bids count toward activity for purposes of
the activity rule.
vii. Bid Removal and Bid Withdrawal
35. For Auction 94, the Bureaus propose the following bid removal
procedures. Before the close of a bidding round, a bidder has the
option of removing any bid placed in that round. By removing a selected
bid in the FCC Auction System, a bidder may effectively ``unsubmit''
any bid placed within that round. In contrast to the bid withdrawal
provisions, a bidder removing a bid placed in the same round is not
subject to a withdrawal payment. Once a round closes, a bidder may no
longer remove a bid. The Bureaus seek comment on this bid removal
proposal.
36. The Bureaus also seek comment on whether bid withdrawals should
be permitted in Auction 94. When permitted in an auction, bid
withdrawals provide a bidder with the option of withdrawing bids placed
in prior rounds that have become provisionally winning bids. A bidder
may withdraw its provisionally winning bids using the ``withdraw bids''
function in the FCC Auction System. A bidder that withdraws its
provisionally winning bid(s), if permitted, is subject to the bid
withdrawal payment provisions of the Commission rules.
37. Based on this guidance and on the Bureaus' experience with past
auctions of FM broadcast construction permits, the Bureaus propose to
prohibit bidders from withdrawing any bids after the close of the round
in which bids were placed. The Bureaus make this proposal in light of
the site-specific nature and wide geographic dispersion of the permits
available in this auction, which suggests that potential applicants for
this auction may have fewer incentives to aggregate permits through the
auction process (as compared with bidders in many auctions of wireless
licenses). Thus, the Bureaus believe that it is unlikely that bidders
will have a need to withdraw bids in this auction. The Bureaus also
remain mindful that bid withdrawals, particularly those made late in
this auction, could result in delays in licensing new FM stations and
attendant delays in the offering of new broadcast service to the
public. The Bureaus seek comment on our proposal to prohibit bid
withdrawals.

C. Post-Auction Payments

i. Interim Withdrawal Payment Percentage
38. In the event the Bureaus allow bid withdrawals in Auction 94,
the Bureaus propose the interim bid withdrawal payment be 20 percent of
the withdrawn bid. A bidder that withdraws a bid during an auction is
subject to a withdrawal payment equal to the difference between the
amount of the withdrawn bid and the amount of the winning bid in the
same or a subsequent auction. However, if a construction permit for
which a bid has been withdrawn does not receive a subsequent higher bid
or winning bid in the same auction, the FCC cannot calculate the final
withdrawal payment until that construction permit receives a higher bid
or winning bid in a subsequent auction. In such cases, when that final
withdrawal payment cannot yet be calculated, the FCC imposes on the
bidder responsible for the withdrawn bid an interim bid withdrawal
payment, which will be applied toward any final bid withdrawal payment
that is ultimately assessed.
39. The amount of the interim bid withdrawal payment may range from
three percent to twenty percent of the withdrawn bid amount, with the
percentage generally being higher where there is greater risk of bid
withdrawals being used for anti-competitive purposes, such as when
there is little need for bidders to aggregate permits. The Bureaus
propose to use the maximum interim bid withdrawal payment percentage
allowed by 47 CFR 1.2104(g)(1) in the event bid withdrawals are
allowed. The Bureaus request comment on using twenty percent for
calculating an interim bid withdrawal payment amount in Auction 94.
Commenters advocating the use of bid withdrawals should also address
the percentage of the interim bid withdrawal payment.
ii. Additional Default Payment Percentage
40. Any winning bidder that defaults or is disqualified after the
close of an auction (i.e., fails to remit the required down payment
within the prescribed period of time, fails to submit a timely long-
form application, fails to make full and timely final payment, or is
otherwise disqualified) is liable for a default payment under 47 CFR
1.2104(g)(2). This payment consists of a deficiency payment, equal to
the difference between the amount of the Auction 94 bidder's winning
bid and the amount of the winning bid the next time a construction
permit covering the same spectrum is won in an auction, plus an
additional payment equal to a percentage of the defaulter's bid or of
the subsequent winning bid, whichever is less.
41. The Commission's rules provide that, in advance of each
auction, it will establish a percentage between three percent and
twenty percent of the applicable bid to be assessed as an additional
default payment. As the Commission has indicated, the level of this
additional payment in each auction will be based on the nature of the
service and the construction permits being offered.
42. For Auction 94, the Bureaus propose to establish an additional
default payment of twenty percent. Defaults weaken the integrity of the
auction process and may impede the deployment of service to the public,
and an additional twenty percent default payment will be more effective
in

[[Page 60695]]

deterring defaults than the three percent used in some earlier
auctions. In light of these considerations, the Bureaus propose for
Auction 94 an additional default payment of twenty percent of the
relevant bid. Moreover, a twenty percent additional default payment
amount is consistent with the percentage used in recent auctions of FM
permits. The Bureaus seek comment on this proposal.

V. Ex Parte Rules

43. This proceeding has been designated as a ``permit-but-
disclose'' proceeding in accordance with the Commission's ex parte
rules. Persons making oral ex parte presentations are reminded that
memoranda summarizing the presentations must contain summaries of the
substance of the presentations and not merely a listing of the subjects
discussed. More than a one or two sentence description of the views and
arguments presented is generally required. Other provisions pertaining
to oral and written ex parte presentations in permit-but-disclose
proceedings are set forth in 47 CFR 1.1206(b).

Federal Communications Commisison.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 2012-24544 Filed 10-3-12; 8:45 am]
BILLING CODE 6712-01-P

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