Auction of Advanced Wireless Services Licenses Scheduled for November 13, 2014; Comment Sought on Competitive Bidding Procedures for Auction 97, 31327-31335 [2014-12824]
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[FR Doc. 2014–12616 Filed 5–30–14; 8:45 am]
BILLING CODE 6690–01–P
FEDERAL COMMUNICATIONS
COMMISSION
[AU Docket No. 14–78; DA 14–669]
Auction of Advanced Wireless
Services Licenses Scheduled for
November 13, 2014; Comment Sought
on Competitive Bidding Procedures for
Auction 97
Federal Communications
Commission.
ACTION: Notice.
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AGENCY:
SUMMARY: This document announces the
auction of Advanced Wireless Services
licenses in the 1695–1710 MHz, 1755–
1780 MHz, and 2155–2180 MHz (AWS–
3) bands scheduled to commence
November 13, 2014. This document also
seeks comment on competitive bidding
procedures for Auction 97.
DATES: Comments are due on or before
June 9, 2014, and reply comments are
due on or before June 23, 2014. Bidding
for licenses in Auction 97 is scheduled
to begin on November 13, 2014.
ADDRESSES: All filings in response to
this notice must refer to AU Docket No.
14–78. The Wireless
Telecommunications Bureau strongly
encourages interested parties to file
comments electronically, and requests
that an additional copy of all comments
and reply comments be submitted
electronically to the following address:
auction97@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://
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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
five 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. All hand-delivered or
messenger-delivered paper filings for
the Commission’s Secretary must be
delivered to FCC Headquarters at 445
12th Street 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. 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. U.S.
Postal Service first-class, Express, and
Priority mail must be addressed to 445
12th Street SW., Washington, DC 20554.
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: Valerie
Barrish at (202) 418–0660; for general
auction questions: Jeff Crooks at (202)
418–0660 or Linda Sanderson at (717)
338–2868. Broadband Division, WTB:
For AWS–3 service rules questions:
Nancy Zaczek (legal) or Janet Young
(technical) at (202) 418–2487.
SUPPLEMENTARY INFORMATION: This is a
summary of the Auction 97 Comment
Public Notice released on May 19, 2014.
The complete text of the Auction 97
Comment Public Notice, including all
attachments and related Commission
documents, is available for public
inspection and copying from 8:00 a.m.
to 4:30 p.m. Eastern Time (ET) Monday
through Thursday or from 8:00 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 97
Comment Public Notice and its
attachments, as well as 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
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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 14–669. The Auction
97 Comment Public Notice and related
documents also are available on the
Internet at the Commission’s Web site:
https://wireless.fcc.gov/auctions/97/, or
by using the search function for AU
Docket No. 14–78 on the Commission’s
Electronic Comment Filing System
(ECFS) Web page at https://www.fcc.gov/
cgb/ecfs/.
I. Introduction
1. The Wireless Telecommunications
Bureau (Bureau) announces an auction
of 1,614 licenses in the 1695–1710 MHz,
1755–1780 MHz, and 2155–2180 MHz
bands (the AWS–3 bands), and seeks
comment on the procedures to be used
for this auction. This auction, which is
designated as Auction 97, is scheduled
to commence on November 13, 2014.
2. The Commission is offering the
licenses in Auction 97 pursuant to the
Middle Class Tax Relief and Job
Creation Act of 2012 (Spectrum Act).
The Spectrum Act requires, among other
things, that the Commission allocate for
commercial use and license spectrum in
certain specified frequency bands using
a system of competitive bidding no later
than February 2015. In February 2013,
the National Telecommunications and
Information Administration (NTIA)
identified the 1695–1710 MHz band for
reallocation from Federal use to nonFederal use in satisfaction of its
Spectrum Act obligation. In the AWS–3
Report and Order, FCC 14–31, the
Commission identified the 1755–1780
MHz band in satisfaction of the
Spectrum Act’s requirement that it
identify fifteen megahertz of contiguous
spectrum in addition to the bands
specifically identified in the Spectrum
Act.
II. Licenses To Be Offered in Auction 97
A. Description of Licenses
3. The 65 megahertz of AWS–3
spectrum available in Auction 97 will
be licensed on a geographic area basis.
Of the 1,614 licenses offered in Auction
97, 880 will be Economic Area (EA)
licenses and 734 will be Cellular Market
Area (CMA) licenses. The AWS–3
frequencies will be licensed in five and
ten megahertz blocks, with each license
having a total bandwidth of five, ten, or
twenty megahertz.
4. The 1695–1710 MHz band will be
licensed in an unpaired configuration
for low-power mobile transmit (i.e.,
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uplink) operations. The 1755–1780 MHz
band will be licensed paired with the
2155–2180 MHz band, with the 1755–
1780 MHz band authorized for lowpower mobile transmit (i.e., uplink)
operations and the 2155–2180 MHz
band authorized for base station and
fixed (i.e., downlink) operations. A
complete list of the licenses offered in
Auction 97 is available in Attachment A
to the Auction 97 Comment Public
Notice, available at https://
wireless.fcc.gov/auctions/
default.htm?job=auction_
summary&id=97.
B. Incumbency Issues
5. In the AWS–3 Report and Order,
the Commission allocated the 1695–
1710 MHz and 1755–1780 MHz bands
for commercial use. Licenses in 1695–
1710 MHz band are being made
available on a shared basis with
incumbent Federal meteorologicalsatellite (MetSat) data users. Licenses in
1755–1780 MHz band are being made
available on a shared basis with a
limited number of Federal incumbents
indefinitely, while many of the Federal
systems will over time relocate out of
the band. Operations in the 1695–1710
MHz and 1755–1780 MHz bands are
subject to successful coordination with
Federal incumbents in the applicable
Protection Zones adopted by the
Commission in the AWS–3 Report and
Order. Federal systems in the 1695–
1710 MHz and 1755–1780 MHz bands
that are located in these established
Protection Zones will operate on a coequal, primary basis with commercial
AWS licensees. Licenses to operate in
the 1695–1710 MHz and 1755–1780
MHz bands are subject to the condition
that the licensee must not cause harmful
interference to an incumbent Federal
entity relocating from these bands under
an approved Transition Plan. This
condition remains in effect until NTIA
terminates the applicable authorization
of the incumbent Federal entity. The
2155–2180 MHz band is already
allocated for exclusive non-Federal,
commercial use. Although there are no
Federal users currently licensed or
operating in this band, there are nonFederal incumbent Fixed Microwave
and Broadband Radio Service licensees
in the band. AWS–3 licensees will have
to protect or relocate and/or share in the
cost of relocating such incumbent
licensees.
C. Commercial Spectrum Enhancement
Act/Spectrum Act Requirements
6. The spectrum in the 1695–1710
MHz and 1755–1780 MHz bands is
covered by a Congressional mandate
that requires that auction proceeds fund
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the estimated relocation or sharing costs
of incumbent Federal entities. In 2004,
the Commercial Spectrum Enhancement
Act (CSEA) established a Spectrum
Relocation Fund (SRF) to reimburse
eligible Federal agencies operating on
certain frequencies that have been
reallocated from Federal to non-Federal
use for the cost of relocating their
operations. The SRF is funded with cash
proceeds attributable to ‘‘eligible
frequencies’’ in an auction of licenses
involving such frequencies. The CSEA
requires the NTIA to notify the
Commission at least six months in
advance of a scheduled auction of
eligible frequencies of eligible Federal
entities’ estimated relocation or sharing
costs and the timelines for such
relocation or sharing.
7. On May 13, 2014, pursuant to the
CSEA, the NTIA notified the
Commission of the estimated relocation
or sharing costs and relocation timelines
for eligible Federal entities assigned to
frequencies in the 1695–1710 MHz and
1755–1780 MHz bands. The NTIA
reported that the total estimated
relocation or sharing costs for the 1695–
1710 MHz band equal $527,069,000,
and that the total estimated relocation or
sharing costs for the 1755–1780 MHz
band equal $4,575,603,000. This
information can be found at https://
www.ntia.doc.gov/category/aws-3transition.
8. In addition to requiring that
specified auction proceeds be deposited
in the SRF, the CSEA, as amended by
the Spectrum Act, requires that the total
cash proceeds from any auction of
eligible frequencies must equal at least
110 percent of the estimated relocation
or sharing costs provided to the
Commission by NTIA, and prohibits the
Commission from concluding any
auction of eligible frequencies that falls
short of this revenue requirement. The
Commission previously determined that
‘‘total cash proceeds,’’ for purposes of
meeting the CSEA’s revenue
requirement, means winning bids net of
any applicable bidding credit discounts
at the end of bidding. Thus, whether
CSEA’s revenue requirements regarding
eligible frequencies have been met at the
end of an auction involving such
frequencies depends upon whether
winning bids that are attributable to
such spectrum, net of any applicable
bidding credit discounts, equal at least
110 percent of estimated relocation
costs. The Commission also previously
modified its reserve price rule pursuant
to the CSEA to ensure that the CSEA’s
revenue requirement would be met.
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III. Due Diligence
9. 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 licenses that it is seeking in
this auction. Each bidder is responsible
for assuring that, if it wins a license, it
will be able to build and operate
facilities in accordance with the
Commission’s rules. The Commission
makes no representations or warranties
about the use of this spectrum for
particular services. Each applicant
should be aware that a Commission
auction represents an opportunity to
become a Commission licensee, subject
to certain conditions and regulations. A
Commission 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.
10. An applicant should perform its
due diligence research and analysis
before proceeding, as it would with any
new business venture. 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 97 license, it will be able to
build and operate facilities that will
fully comply with all applicable
technical and regulatory requirements.
The Bureau strongly encourages each
applicant to inspect any prospective
transmitter sites located in, or near, the
geographic 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.
11. The Bureau strongly encourages
each applicant to conduct its own
research prior to Auction 97 in order to
determine the existence of pending
administrative, rulemaking, or judicial
proceedings that might affect its
decisions regarding participation in the
auction.
12. The Bureau strongly encourages
participants in Auction 97 to continue
such research throughout the auction.
The due diligence considerations
mentioned in the Auction 97 Comment
Public Notice do not constitute 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.
13. In addition to the foregoing due
diligence considerations, which the
Bureau encourages in all auctions, the
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Bureau calls particular attention in this
auction to the unique requirements
presented by the occupancy of some of
the available frequencies by incumbent
Federal users. AWS–3 licensees can
expect to share portions of the AWS–3
bands with various incumbent Federal
users for a period of time as such users
transition out of the bands, which may
vary by geography and frequency.
Moreover, some Federal users will
remain in the AWS–3 bands, with
shared use continuing indefinitely. The
Commission and the NTIA intend to
release additional information regarding
the extent of sharing in the AWS–3
bands and the methods of coordination
between commercial and Federal users.
Additionally, the CSEA, as amended by
the Spectrum Act, stipulates that
Federal agencies that will receive
reimbursement for their costs in
relocating their operations from, or
sharing, the ‘‘eligible frequencies’’
offered in this auction based on their
approved transition plans, which the
NTIA will make available to the public.
The Bureau expects that all of this
information will be material to an
applicant’s potential participation in
Auction 97. Therefore, the Bureau
strongly encourages each applicant to
closely follow releases from the
Commission and the NTIA concerning
these issues and to carefully consider
the technical and economic
implications for commercial use of the
AWS–3 bands.
IV. Bureau Seeks Comment on Auction
Procedures
14. The Commission directed the
Bureau, under its existing delegated
authority, to seek comment on a variety
of auction-specific procedures prior to
the start of each auction. We therefore
seek comment on the following issues
relating to the conduct of Auction 97.
A. Auction Design
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i. Simultaneous Multiple Round
Auction
15. The Bureau proposes to conduct
Auction 97 using a simultaneous
multiple-round (SMR) auction format.
An SMR auction offers every license for
bid at the same time and consists of
successive bidding rounds in which
eligible bidders may place bids.
Typically, bidding remains open on all
licenses until bidding stops on every
license. The Bureau seeks comment on
this proposal.
ii. Anonymous Bidding
16. Consistent with past practice, the
Bureau proposes to adopt procedures for
limited information disclosure or
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‘‘anonymous bidding’’ for Auction 97.
Specifically, the Bureau proposes to
withhold, until after the close of
bidding, public release of (1) bidders’
license selections on their short-form
applications (FCC Form 175), (2) the
amounts of bidders’ upfront payments
and bidding eligibility, and (3)
information that may reveal the
identities of bidders placing bids and
taking other bidding-related actions.
17. Under these proposed limited
information procedures, the amount of
every bid placed and whether a bid was
withdrawn (if withdrawals are
permitted) would be disclosed after the
close of every round, but the identities
of bidders placing specific bids or
withdrawals (if permitted) and the net
bid amounts (reflecting bidding credits)
would not be disclosed until after the
close of the auction.
18. Bidders would have access to
additional information about their own
bids. For example, bidders would be
able to view their own level of
eligibility, before and during the
auction, through the FCC Auction
System.
19. Moreover, for the purpose of
complying with 47 CFR 1.2105(c),
which prohibits certain
communications between applicants
(formerly referred to as the ‘‘anticollusion rule’’), applicants would be
made aware of other applicants with
which they will not be permitted to
cooperate, collaborate, or
communicate—including discussing
bids, bidding strategies, or post-auction
market structure. Specifically, the
Bureau would notify separately each
applicant with a short-form application
on file for participation in Auction 97
whether applicants with short-form
applications to participate in a pending
auction, including but not limited to
Auction 97, have applied for licenses in
any of the same or overlapping
geographic areas as that applicant.
20. After the close of bidding, bidders’
license selections, upfront payment
amounts, bidding eligibility, bids, and
other bidding-related actions would be
made publicly available.
21. The Bureau seeks comment on the
details of its proposal for implementing
anonymous bidding in Auction 97. The
Bureau also seeks comment on
alternatives to the use of anonymous
bidding procedures for Auction 97.
When the Commission originally
proposed limited information disclosure
procedures, it did so in response to
analysis suggesting that under certain
circumstances the competitiveness and
economic efficiency of a simultaneous
multiple-round auction may be
enhanced if such information is
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withheld until after the close of the
auction. The Bureau encourages parties
to provide information about the
benefits and costs of complying with
limited information procedures in this
auction as compared with the benefits
and costs of alternative procedures that
would provide for the disclosure of
more information on bidder identities
and interests in the auction. If
commenters believe that the Bureau
should not adopt procedures to limit the
disclosure of certain bidder-specific
information in Auction 97 until after the
auction, they should explain their
reasoning.
iii. Acknowledgement for Auction 97
Applicants
22. There are Federal incumbent users
in the 1695–1710 MHz and 1755–1780
MHz bands, and the Commission
adopted rules in the AWS–3 Report and
Order to address commercial operations
in these bands in light of the temporary
and indefinite sharing of the bands by
Federal incumbent users and
commercial licensees, including a
requirement that commercial licensees
operate on a co-equal, primary
operations with Federal systems within
specified geographic zones, and a
requirement that licensees in the 1755–
1780 MHz band accept interference
from Federal systems as long as such
systems remain in the band. To
implement these rules, the Bureau
proposes to require an Auction 97
applicant to submit with its short-form
application a signed statement
acknowledging that the applicant’s
operations in the 1755–1780 MHz band
may be subject to interference from
Federal systems in certain geographic
zones, that the applicant must accept
interference from such Federal systems
in those zones, and that the applicant
has considered these risks before
submitting any bids for applicable
licenses in Auction 97. The Bureau
seeks comment on this proposal.
B. Auction Structure
i. Bidding Rounds
23. Auction 97 will consist of
sequential bidding rounds. The initial
bidding schedule will be announced in
a public notice to be released at least
one week before the start of the auction.
24. The Commission will conduct
Auction 97 over the Internet using the
FCC Auction System. Bidders will also
have the option of placing bids by
telephone through a dedicated, toll-free
Auction Bidder Line. The toll-free
telephone number for the Auction
Bidder Line will be provided to
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qualified bidders prior to the start of the
auction.
25. The Bureau proposes 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. Under this proposal, the
Bureau may change the amount of time
for bidding rounds, the amount of time
between rounds, or the number of
rounds per day, depending upon
bidding activity and other factors. The
Bureau seeks comment on this proposal.
Commenters 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.
ii. Stopping Rule
26. The Bureau has discretion to
establish stopping rules before or during
multiple round auctions in order to
complete the auction within a
reasonable time. The Bureau proposes to
employ a simultaneous stopping rule
approach in Auction 97, which means
all licenses will remain available for
bidding until bidding stops on every
license. More specifically, bidding will
close on all licenses after the first round
in which no bidder submits any new
bids, applies a proactive waiver, or
withdraws any provisionally winning
bids (if withdrawals are permitted).
Thus, unless the Bureau announces
alternative stopping procedures, the
simultaneous stopping rule will be used
in this auction, and bidding will remain
open on all licenses until bidding stops
on every license, regardless of whether
bids are placed on individual licenses of
licenses. Consequently, it is not possible
to determine in advance how long
Auction 97 will last.
27. The Bureau proposes to retain the
discretion to exercise any of the
following options during Auction 97: (a)
Use a modified version of the
simultaneous stopping rule that would
close the auction for all licenses after
the first round in which no bidder
applies a waiver, withdraws a
provisionally winning bid, or places any
new bids on a license for which it is not
the provisionally winning bidder. Thus,
absent any other bidding activity, a
bidder placing a new bid on a license
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 licenses after
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the first round in which no bidder
applies a waiver, withdraws a
provisionally winning bid, or places any
new bids on a license that is not FCCheld. Thus, absent any other bidding
activity, a bidder placing a new bid on
a license that does not already have a
provisionally winning bid (an ‘‘FCCheld’’ license) 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); (d)
Declare that the auction will end after
a specified number of additional rounds
(special stopping rule). If the Bureau
invokes this special stopping rule, it
will accept bids in the specified final
round(s), after which the auction will
close; and (e) Keep the auction open
even if no bidder places any new bids,
applies a waiver, or withdraws (if
withdrawals are permitted) any
provisionally winning bids. 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.
28. The Bureau proposes 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 Bureau is likely to attempt
to change the pace of the auction by, for
example, changing the number of
bidding rounds per day and/or the
minimum acceptable bids. The Bureau
proposes to retain the discretion to
exercise any of these options with or
without prior announcement during the
auction. The Bureau seeks comment on
these proposals.
iii. Information Relating to Auction
Delay, Suspension, or Cancellation
29. The Bureau proposes that it may
delay, suspend, or cancel Auction 97 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. Additionally, the
CSEA requires the Commission to
cancel an auction of ‘‘eligible
frequencies’’ if the total cash proceeds
attributable to those frequencies do not
meet CSEA’s revenue requirement. The
Bureau will notify participants of any
such delay, suspension or cancellation
by public notice and/or through the FCC
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Auction System’s announcement
function. If the auction is delayed or
suspended, the Bureau may, in its 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 Bureau to delay or suspend
the auction. The Bureau emphasizes
that it will exercise this authority solely
at its discretion, and note that the
exercise of its authority in this regard is
not intended to be a substitute for
situations in which bidders may wish to
apply their activity rule waivers. The
Bureau seeks comment on this proposal.
C. Auction Procedures
i. Upfront Payments and Bidding
Eligibility
30. The Bureau has delegated
authority and discretion to determine an
appropriate upfront payment for each
license being auctioned, taking into
account such factors as the efficiency of
the auction process and the potential
value of similar licenses. An upfront
payment is a refundable deposit made
by each bidder to establish its eligibility
to bid on licenses. Upfront payments
that are related to the specific licenses
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. For
Auction 97, the Bureau proposes to
make the upfront payments equal to
approximately half the proposed
minimum opening bids. The proposed
upfront payments are similar to those
used in the recent auction of H Block
licenses in the 1915–1920 MHz and
1995–2000 MHz bands. The upfront
payments for each license are set forth
in Attachment A to the Auction 97
Comment Public Notice. The Bureau
seeks comment on this proposal.
31. The Bureau further proposes that
the amount of the upfront payment
submitted by a bidder will determine its
initial bidding eligibility in bidding
units. The Bureau proposes to assign
each license a specific number of
bidding units, equal to one bidding unit
per dollar of the upfront payment
proposed for the license. The specific
bidding units for each license are set
forth in Attachment A to the Auction 97
Comment Public Notice. The number of
bidding units for a given license is fixed
and does not change during the auction
as prices change. A bidder’s upfront
payment is not attributed to specific
licenses of licenses. Rather, a bidder
may place bids on any combination of
the licenses it selected on its short-form
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application (FCC Form 175), provided
that the total number of bidding units
associated with those licenses 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 Bureau
seeks comment on these proposals.
ii. Activity Rule
32. An activity rule requires bidders
to bid actively throughout the auction,
rather than wait until late in the auction
before participating. A bidder’s activity
in a round will be the sum of the
bidding units associated with any
licenses upon which it places bids
during the current round and the
bidding units associated with any
licenses for which it holds provisionally
winning bids placed in previous rounds.
Bidders are required to be active on a
specific percentage of their current
bidding eligibility during each round of
the auction. Failure to maintain the
requisite activity level will result in the
use of an activity rule waiver, if any
remain, or a reduction in the bidder’s
eligibility, possibly curtailing or
eliminating the bidder’s ability to place
additional bids in the auction.
33. The Bureau proposes to divide the
auction into at least two stages, each
characterized by a different activity
requirement. The auction will start in
Stage One. The Bureau proposes to
advance the auction to the next stage by
announcement during the auction. In
exercising this discretion, the Bureau
will consider a variety of measures of
auction activity, including but not
limited to the percentage of bidding
units associated with licenses on which
there are new bids, the number of new
bids, and the increase in revenue. The
Bureau seeks comment on these
proposals.
34. The Bureau proposes the
following activity requirements, while
noting again that the Bureau retains the
discretion to change stages unilaterally
by announcement during the auction:
Stage One—In each round of the first
stage of the auction, a bidder desiring to
maintain its current bidding eligibility
is required to be active on bidding units
associated with licenses representing at
least 80 percent of its current bidding
eligibility. Failure to maintain the
required activity level will result in the
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use of an activity rule waiver or a
reduction in the bidder’s bidding
eligibility for the next round of bidding.
During Stage One, a bidder’s reduced
eligibility for the next round will be
calculated by multiplying the bidder’s
current round activity by five-fourths (5/
4); Stage Two—In each round of the
second stage, a bidder desiring to
maintain its current bidding eligibility
is required to be active on 95 percent of
its current bidding eligibility. Failure to
maintain the required activity level will
result in the use of an activity rule
waiver or a reduction in the bidder’s
bidding eligibility for the next round of
bidding. During Stage Two, a bidder’s
reduced eligibility for the next round
will be calculated by multiplying the
bidder’s current round activity by
twenty-nineteenths (20/19).
35. The Bureau seeks comment on
these activity requirements. Under this
proposal, the Bureau will retain the
discretion to change the activity
requirements during the auction. For
example, the Bureau could decide to
add an additional stage with a higher
activity requirement, not to transition to
Stage Two if it believes the auction is
progressing satisfactorily under the
Stage One activity requirement, or to
transition to Stage Two with an activity
requirement that is higher or lower than
the 95 percent proposed herein. If the
Bureau exercises this discretion, it will
alert bidders by announcement in the
FCC Auction System.
iii. Activity Rule Waivers and Reducing
Eligibility
36. 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 bid. Activity
rule waivers, which can be either
proactive or automatic, 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.
37. 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
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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.
38. 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
described above. Reducing eligibility is
an irreversible action; once eligibility
has been reduced, a bidder will not be
permitted to regain its lost bidding
eligibility, even if the round has not yet
closed.
39. 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, 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 permitted), 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.
40. Consistent with recent
Commission auctions, the Bureau
proposes that each bidder in Auction 97
be provided with a total of three activity
rule waivers that may be used as at the
bidder’s discretion during the course of
the auction. The Bureau seeks comment
on this proposal.
iv. Reserve Price and Minimum
Opening Bids
41. The Commission has directed the
Bureau to seek comment on the use of
a minimum opening bid amount and/or
reserve price prior to the start of each
auction. Normally, a reserve price is an
absolute minimum price below which
an item or items will not be sold in a
given auction. If a reserve price is
utilized, the specific amount of the
reserve price may be disclosed or
undisclosed. A minimum opening bid,
on the other hand, is the minimum bid
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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.
42. Among other factors the Bureau
must consider in deciding whether to
employ either or both of these
mechanisms is the amount of spectrum
being auctioned, levels of incumbency,
the availability of technology to provide
service, the size of the geographic
service areas, the extent of interference
with other spectrum bands, and any
other relevant factors that could have an
impact on the spectrum being
auctioned.
a. Reserve Price
43. The Commission is statutorily
obliged to consider and balance a
variety of public interests and objectives
when establishing service rules and
licensing procedures with respect to the
public spectrum resource. These
objectives include promoting recovery
for the public a portion of the value of
that resource. Certain of the frequencies
in the AWS–3 bands are ‘‘eligible
frequencies’’ under the CSEA, and the
CSEA requires that auction proceeds
fund the estimated relocation or sharing
costs of incumbent federal entities
operating on these frequencies. In view
of this, the Bureau will establish reserve
prices for the AWS–3 licenses offered in
Auction 97.
44. The CSEA requires that the total
cash proceeds attributable to ‘‘eligible
frequencies’’ be at least 110 percent of
the total estimated relocation or sharing
costs provided to the Commission
pursuant to the CSEA before the
Commission may conclude an auction
involving such frequencies. If this
condition is not met, the CSEA requires
the Commission to cancel the auction.
For purposes of determining whether
the CSEA’s revenue requirement has
been met, the Commission has
determined that ‘‘total cash proceeds’’
means winning bids net of any
applicable bidding credit discounts at
the end of bidding (e.g., exclusive of any
Tribal lands bidding credit).
45. The NTIA has notified the
Commission that the total estimated
relocation or sharing costs for the 1695–
1710 MHz band equal $527,069,000,
and that the total estimated relocation or
sharing costs for the 1755–1780 MHz
band equal $4,575,603,000.
Accordingly, the Bureau proposes one
aggregate reserve price for the 1695–
1710 MHz band and a separate aggregate
reserve price for the paired 1755–1780/
2155–2180 MHz band.
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46. The Bureau proposes to establish
an aggregate reserve price of
$579,775,900 for the licenses in the
1695–1710 MHz band. This aggregate
reserve price is 110 percent of total
estimated relocation or sharing costs of
$527,069,000 provided by the NTIA for
this band and, therefore, the minimum
reserve price required by the CSEA.
Given that the 1695–1710 MHz band
consists entirely of ‘‘eligible
frequencies,’’ the Bureau proposes that
the winning bid for each license in this
band, net of any applicable bidding
credit discounts at the end of bidding
(e.g., exclusive of any Tribal lands
bidding credit), will be counted toward
meeting the reserve price for the band.
Thus, the aggregate reserve price will be
met if the total winning bids for the
licenses in the 1695–1710 MHz band,
net of any applicable bidding credit
discounts at the end of bidding (e.g.,
exclusive of any Tribal lands bidding
credit), is at least $579,775,900.
47. The 1755–1780 MHz band will be
licensed paired with the 2155–2180
MHz band. The lower half of the
frequencies in each paired license, i.e.,
those in the 1755–1780 MHz band, are
‘‘eligible frequencies’’ and are thus
subject to CSEA requirements. To meet
CSEA’s requirements, the Bureau
proposes to establish an aggregate
reserve price of $5,033,163,300 for the
1755–1780 MHz frequencies. This
aggregate reserve price is 110 percent of
total estimated relocation or sharing
costs of $4,575,603,000 for the 1755–
1780 MHz band provided by the NTIA
and, therefore, the minimum reserve
price required by CSEA. Because these
frequencies are one half of the
frequencies authorized for use by each
of the 1755–1780/2155–2180 MHz
paired licenses, the Bureau proposes
that one-half of each winning bid for
each of the paired 1755–1780/2155–
2180 MHz licenses, net of any
applicable bidding credit discounts at
the end of bidding, will be counted
toward meeting the reserve price. The
aggregate reserve price will be met if
one half of the total winning bids for the
paired 1755–1780/2155–2180 MHz
licenses in, net of any applicable
bidding credit discounts at the end of
bidding (e.g., exclusive of any Tribal
lands bidding credit), is at least
$5,033,163,300. Therefore, the winning
‘‘net’’ bids for the paired 1755–1780/
2155–2180 MHz licenses must be at
least twice that amount, or
$10,066,326,600, in order for the
Commission to conclude the auction.
48. The Bureau seeks comment on its
proposed reserve prices for Auction 97
and its proposals for implementing
them. The Bureau encourages
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commenters to address any additional
specific issues related to the use of
reserve prices. The Bureau asks that
commenters describe in detail the
specific factors that lead them to their
conclusions.
49. In light of the proposal to adopt
procedures for limited information
disclosure for Auction 97, if information
regarding net bid amounts is not
provided during the auction, the Bureau
proposes to issue an announcement in
the FCC Auction System, viewable by
bidders and the general public, stating
that a reserve price has been met
immediately following the first round in
which that occurs. However, due to
factors such as bid withdrawals and the
effect of bidding credits, an
announcement that the reserve price has
been met following a round of the
auction does not guarantee that the
reserve price will continue to be met.
Accordingly, the Bureau will make a
further announcement in the FCC
Auction System after any round in
which the reserve price status changes.
The Bureau seeks comment this
proposal.
b. Minimum Opening Bids
50. The Bureau proposes to establish
minimum opening bid amounts for
Auction 97. The Bureau believes a
minimum opening bid amount, which
has been used in other auctions, is an
effective bidding tool for accelerating
the competitive bidding process. The
Bureau proposes minimum opening
bids that should accelerate the progress
of the auction toward meeting (1) the
reserve prices established to meet CSEA
requirements and (2) the Spectrum Act
deadline for licensing identified
frequencies. The proposed minimum
opening bids are higher than the
proposed upfront payments so that the
competitive bidding process can be
accelerated without increasing the cost
of eligibility.
51. The Bureau proposes to calculate
minimum opening bid amounts for
Auction 97 on a license-by-license basis
using a formula based on bandwidth
and license area population, similar to
its approach in many previous spectrum
auctions. The Bureau proposes to use a
calculation based on $0.15 per
megahertz of bandwidth per population
(per ‘‘MHz-pop’’) for paired licenses and
$0.05 per MHz-pop for unpaired
licenses, adjusted for past geographic
variations. Specifically, the Bureau
proposes to incorporate pricing
information from previous auctions to
adjust the minimum opening bid
calculations based on an index of
relative winning bid amounts for
licenses in each CMA and EA in
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Auctions 66, 73, and 96, subject to a
minimum of $0.01 per MHz-pop. This
modification results in amounts ranging
from $0.01 per MHz-pop to $0.53 per
MHz-pop. The Bureau further proposes
a minimum of $2,500 per license. The
Bureau proposes to set the minimum
opening bid amounts for the licenses
covering the Gulf of Mexico at $2,000
per megahertz.
52. The proposed minimum opening
bid amount for each AWS–3 license
available in Auction 97, calculated
pursuant to these procedures is set forth
in Attachment A to the Auction 97
Comment Public Notice.
53. The Bureau seeks comment on its
proposals concerning minimum opening
bids. If commenters believe that these
minimum opening bid amounts will
result in unsold licenses, or are not
reasonable amounts, they should
explain why this is so and comment on
the desirability of an alternative
approach. If a commenter requests an
alternative approach for a specific
frequency block or a lower minimum
opening bid amount for a specific
license, it should justify the requested
change in detail. If commenters disagree
with the Bureau’s proposed use of $0.15
per MHz-pop and $0.05 per MHz-pop,
its approach to tailoring minimum
opening bid amounts to account for
relative prices among the CMAs and
EAs in past auctions, or its selection of
which past results to consider, the
Bureau asks commenters to support
their claims with valuation analyses and
suggested minimum opening bid
amount levels or formulas.
54. In establishing minimum opening
bid amounts, the Bureau particularly
seeks comment on factors that could
reasonably have an impact on valuation
of the licenses being auctioned,
including the amount of spectrum being
auctioned, levels of incumbency, the
availability of technology to provide
service, the size of the service areas, the
size of the geographic service areas,
issues of interference with other
spectrum bands and any other relevant
factors. The Bureau also seeks comment
on whether the public interest would be
served by having no minimum opening
bid amount.
55. Commenters may also wish to
address the general role of minimum
opening bids in managing the pace of
the auction. For example, commenters
could compare using minimum opening
bids—e.g., by setting higher minimum
opening bids to reduce the number of
rounds it takes licenses to reach their
final prices—to other means of
controlling auction pace, such as
changes to bidding schedules or activity
requirements.
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v. Bid Amounts
56. The Bureau proposes that, in each
round, an eligible bidder will be able to
place a bid on a given license using one
or more pre-defined bid amounts. Under
this proposal, the FCC Auction System
interface will list the acceptable bid
amounts for each license. The Bureau
proposes to calculate bid amounts in the
following manner.
a. Minimum Acceptable Bids
57. The first of the acceptable bid
amounts is called the minimum
acceptable bid amount. The minimum
acceptable bid amount for a license will
be equal to its minimum opening bid
amount until there is a provisionally
winning bid on the license. The Bureau
proposes to calculate minimum
acceptable bids based on provisionally
winning bids and an activity-based
formula.
58. After there is a provisionally
winning bid for a license, the minimum
acceptable bid amount for that license
will be equal to the amount of the
provisionally winning bid plus a
percentage of that bid amount
calculated using an activity-based
formula. In general, the percentage will
be higher for a license receiving many
bids than for a license receiving few
bids. In the case of a license for which
the provisionally winning bid has been
withdrawn, the minimum acceptable
bid amount will equal the second
highest bid received for the license.
59. The percentage of the
provisionally winning bid used to
establish the minimum acceptable bid
amount (‘‘the additional percentage’’) is
calculated based on an activity index at
the end of each round. The activity
index is a weighted average of (a) the
number of distinct bidders placing a bid
on the license in that round, and (b) the
activity index from the prior round. The
additional percentage is determined as
one plus the activity index times a
minimum percentage amount, with the
result not to exceed a given maximum.
The additional percentage is then
multiplied by the provisionally winning
bid amount to obtain the minimum
acceptable bid for the next round. The
Bureau proposes initially to set the
weighting factor at 0.5, the minimum
percentage at 0.1 (10%), and the
maximum percentage at 0.3 (30%).
Hence, at these initial settings, the
minimum acceptable bid for a license
will be between ten percent and thirty
percent higher than the provisionally
winning bid, depending upon the
bidding activity for the license.
Equations and examples are shown in
Attachment B to the Auction 97
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Comment Public Notice. The Bureau
seeks comment on whether to use this
activity-based formula or a different
approach.
b. Additional Bid Amounts
60. The Bureau proposes to calculate
any additional bid amounts using the
minimum acceptable bid amount and a
bid increment percentage—more
specifically, by multiplying the
minimum acceptable bid by one plus
successively higher multiples of the bid
increment percentage. If, for example,
the bid increment percentage is 5
percent, the calculation of the first
additional acceptable bid amount 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 Bureau will
round the results using the
Commission’s standard rounding
procedures for auctions. The Bureau
proposes initially to set the bid
increment percentage at 5 percent.
61. For Auction 97, the Bureau
proposes to begin the auction with nine
acceptable bid amounts per license (the
minimum acceptable bid amount and
eight additional bid amounts).
c. Bid Amount Changes
62. The Bureau retains the discretion
to change the minimum acceptable bid
amounts, the additional bid amounts,
the number of acceptable bid amounts,
and the parameters of the formulas used
to calculate minimum acceptable bid
amounts and additional bid amounts if
the Bureau determines that
circumstances so dictate. Further, the
Bureau retains the discretion to do so on
a license-by-license basis. The Bureau
also retains the discretion to limit (a) the
amount by which a minimum
acceptable bid for a license 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 Bureau could set a $10
million limit on increases in minimum
acceptable bid amounts over
provisionally winning bids. Thus, if the
activity-based formula calculates a
minimum acceptable bid amount that is
$20 million higher than the
provisionally winning bid on a license,
the minimum acceptable bid amount
would instead be capped at $10 million
above the provisionally winning bid.
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The Bureau seeks comment on the
circumstances under which it should
employ such a limit, factors it 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 Bureau exercises this discretion, it
will alert bidders by announcement in
the FCC Auction System.
63. The Bureau seeks comment on
these proposals. If commenters disagree
with the proposal to begin the auction
with nine acceptable bid amounts per
license, they should suggest an
alternative number of acceptable bid
amounts to use at the beginning of the
auction and an alternative number to
use later in the auction. Commenters
may wish to address the role of the
minimum acceptable bids and the
number of acceptable bid amounts in
managing the pace of the auction and
the tradeoffs in managing auction pace
by changing the bidding schedule,
activity requirements, or bid amounts,
or by using other means.
vi. Provisionally Winning Bids
64. 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 license based on the highest bid
amount received for the license. These
bids become the provisionally winning
bids for the round.
65. If identical high bid amounts are
submitted on a license 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.
66. The set of provisionally winning
bids is determined after every round in
which new bids are submitted. The
provisionally winning bids at the end of
the auction become winning bids,
provided that any applicable reserve
prices have been met. The Bureau
reminds bidders that provisionally
winning bids count toward activity for
purposes of the activity rule.
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vii. Bid Removal
67. For Auction 97, the Bureau
proposes 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 ‘‘undo’’ any bid placed
within that round. Once a round closes,
a bidder may no longer remove a bid.
The Bureau seeks comment on this bid
removal proposal.
viii. Bid Withdrawal
68. 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. The
Commission has explained that
allowing bid withdrawals facilitates
efficient aggregation of licenses and the
pursuit of backup strategies as
information becomes available during
the course of an auction, but has
recognized that in some instances,
bidders may seek to withdraw bids for
improper reasons. The Bureau therefore
has discretion in managing the auction
to limit the number of withdrawals to
prevent any bidding abuses. Applying
this reasoning to Auction 97, the Bureau
proposes to allow each bidder to
withdraw provisionally winning bids in
no more than two rounds during the
course of the auction. To permit a
bidder to withdraw bids in more than
two rounds may encourage insincere
bidding or the use of withdrawals for
anti-competitive purposes. The two
rounds in which a bidder may withdraw
provisionally winning bids will be at
the bidder’s discretion, and there is no
limit on the number of provisionally
winning bids that a bidder may
withdraw in either of the rounds in
which it withdraws bids. Withdrawals
must be in accordance with the
Commission’s rules, including the bid
withdrawal payment provisions
specified in 47 CFR 1.2104(g).
69. The Bureau seeks comment on
this proposal. If commenters disagree
with this proposal, the Bureau asks
them to support their arguments by
taking into account the licenses
available, the impact on auction
dynamics and the pricing mechanism,
and the effects on the bidding strategies
of other bidders.
D. Post-Auction Payments
i. Interim Withdrawal Payment
Percentage
70. The Bureau seeks comment on the
appropriate percentage of a withdrawn
bid that should be assessed as an
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interim withdrawal payment in the
event that a final withdrawal payment
cannot be determined at the close of the
auction. In general, the Commission’s
rules provide that 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
subsequent auction(s). If a bid is
withdrawn and no subsequent higher
bid is placed and/or the license is not
won in the same auction, the final
withdrawal payment cannot be
calculated until after the close of a
subsequent auction in which a higher
bid for the license (or the equivalent to
the license) is placed or the license is
won. When that final payment cannot
yet be calculated, the bidder responsible
for the withdrawn bid is assessed an
interim bid withdrawal payment, which
will be applied toward any final bid
withdrawal payment that is ultimately
assessed. 47 CFR 1.2104(g)(1) requires
that the percentage of the withdrawn
bid to be assessed as an interim bid
withdrawal payment be between three
percent and twenty percent and that it
be set in advance of the auction.
71. The Commission has determined
that the level of the interim withdrawal
payment in a particular auction will be
based on the nature of the service and
the inventory of the licenses being
offered. The Commission has noted that
it may impose a higher interim
withdrawal payment percentage to deter
the anti-competitive use of withdrawals
when, for example, bidders likely will
not need to aggregate the licenses being
offered in the auction, such as when few
licenses are offered that are on adjacent
frequencies or in adjacent areas, or
when there are few synergies to be
captured by combining licenses. With
respect to the AWS–3 licenses being
offered in Auction 97, the service rules
permit a wide variety of advanced
services, some of which may best be
offered by combining licenses on
adjacent frequencies or in adjacent
areas, and the licenses will be offered
under different geographic licensing
schemes and bandwidth sizes.
Balancing the potential need for bidders
to use withdrawals to avoid winning
incomplete combinations of licenses
with the Bureau’s interest in deterring
undesirable strategic use of
withdrawals, the Bureau proposes a
percentage below the maximum twenty
percent permitted under the current
rules but above the three percent
previously provided by the
Commission’s rules. Specifically, the
Bureau proposes to establish an interim
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bid withdrawal payment of ten percent
of the withdrawn bid for this auction.
The Bureau seeks comment on this
proposal.
Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access
Division, WTB.
ii. Additional Default Payment
Percentage
[FR Doc. 2014–12824 Filed 5–30–14; 8:45 am]
BILLING CODE 6712–01–P
72. 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 97 bidder’s winning bid and
the amount of the winning bid the next
time a license 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.
73. The Commission’s rules provide
that, in advance of each auction, it will
establish a percentage between three
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 vary based
on the nature of the service and the
inventory of the licenses being offered.
74. Defaults weaken the integrity of
the auction process and may impede the
deployment of service to the public,
however, the Bureau does not believe
the detrimental effects of any defaults in
Auction 97 are likely to be unusually
great. Balancing these considerations,
for Auction 97, the Bureau proposes to
establish an additional default payment
of fifteen percent of the applicable bid.
The Bureau seeks comment on this
proposal.
sroberts on DSK5SPTVN1PROD with NOTICES
V. Ex Parte Rules
75. 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).
VerDate Mar<15>2010
18:59 May 30, 2014
Jkt 232001
31335
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
[Document Identifiers: CMS–10277 and
CMS–10518]
FEDERAL RESERVE SYSTEM
Change in Bank Control Notices;
Acquisitions of Shares of a Bank or
Bank Holding Company
Agency Information Collection
Activities: Submission for OMB
Review; Comment Request
ACTION:
The notificants listed below have
applied under the Change in Bank
Control Act (12 U.S.C. 1817(j)) and
§ 225.41 of the Board’s Regulation Y (12
CFR 225.41) to acquire shares of a bank
or bank holding company. The factors
that are considered in acting on the
notices are set forth in paragraph 7 of
the Act (12 U.S.C. 1817(j)(7)).
The notices are available for
immediate inspection at the Federal
Reserve Bank indicated. The notices
also will be available for inspection at
the offices of the Board of Governors.
Interested persons may express their
views in writing to the Reserve Bank
indicated for that notice or to the offices
of the Board of Governors. Comments
must be received not later than June 17,
2014.
A. Federal Reserve Bank of St. Louis
(Yvonne Sparks, Community
Development Officer) P.O. Box 442, St.
Louis, Missouri 63166–2034:
1. David Leon Barnett and Linda Kay
Barnett, both of Summersville,
Missouri, jointly; to acquire voting
shares of Summersville Bancorporation,
Inc., and thereby indirectly acquire
voting shares of Community Bank, N.A.,
both in Summersville, Missouri.
B. Federal Reserve Bank of Dallas (E.
Ann Worthy, Vice President) 2200
North Pearl Street, Dallas, Texas 75201–
2272:
1. Kenneth D. Willmon, individually
and as co-trustee of AIM Bancshares,
Inc. 401(k) and Employee Stock
Ownership Program; Lanny B.
Modawell; Marjorie Willmon; and Debra
Willmon, all of Lubbock, Texas; to retain
voting shares of AIM Bancshares, Inc.,
Lovelland, Texas, and thereby indirectly
retain voting shares of AimBank,
Littlefield, Texas.
Board of Governors of the Federal Reserve
System, May 28, 2014.
Michael J. Lewandowski,
Associate Secretary of the Board.
[FR Doc. 2014–12672 Filed 5–30–14; 8:45 am]
BILLING CODE 6210–01–P
PO 00000
Frm 00053
Fmt 4703
Sfmt 4703
Notice.
SUMMARY: The Centers for Medicare &
Medicaid Services (CMS) is announcing
an opportunity for the public to
comment on CMS’ intention to collect
information from the public. Under the
Paperwork Reduction Act of 1995
(PRA), federal agencies are required to
publish notice in the Federal Register
concerning each proposed collection of
information, including each proposed
extension or reinstatement of an existing
collection of information, and to allow
a second opportunity for public
comment on the notice. Interested
persons are invited to send comments
regarding the burden estimate or any
other aspect of this collection of
information, including any of the
following subjects: (1) The necessity and
utility of the proposed information
collection for the proper performance of
the agency’s functions; (2) the accuracy
of the estimated burden; (3) ways to
enhance the quality, utility, and clarity
of the information to be collected; and
(4) the use of automated collection
techniques or other forms of information
technology to minimize the information
collection burden.
DATES: Comments on the collection(s) of
information must be received by the
OMB desk officer by June 30, 2014.
ADDRESSES: When commenting on the
proposed information collections,
please reference the document identifier
or OMB control number. To be assured
consideration, comments and
recommendations must be received by
the OMB desk officer via one of the
following transmissions: OMB, Office of
Information and Regulatory Affairs,
Attention: CMS Desk Officer, Fax
Number: (202) 395–5806 OR, Email:
OIRA_submission@omb.eop.gov.
To obtain copies of a supporting
statement and any related forms for the
proposed collection(s) summarized in
this notice, you may make your request
using one of following:
1. Access CMS’ Web site address at
https://www.cms.hhs.gov/
PaperworkReductionActof1995.
2. Email your request, including your
address, phone number, OMB number,
E:\FR\FM\02JNN1.SGM
02JNN1
Agencies
[Federal Register Volume 79, Number 105 (Monday, June 2, 2014)]
[Notices]
[Pages 31327-31335]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12824]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
[AU Docket No. 14-78; DA 14-669]
Auction of Advanced Wireless Services Licenses Scheduled for
November 13, 2014; Comment Sought on Competitive Bidding Procedures for
Auction 97
AGENCY: Federal Communications Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This document announces the auction of Advanced Wireless
Services licenses in the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180
MHz (AWS-3) bands scheduled to commence November 13, 2014. This
document also seeks comment on competitive bidding procedures for
Auction 97.
DATES: Comments are due on or before June 9, 2014, and reply comments
are due on or before June 23, 2014. Bidding for licenses in Auction 97
is scheduled to begin on November 13, 2014.
ADDRESSES: All filings in response to this notice must refer to AU
Docket No. 14-78. The Wireless Telecommunications Bureau strongly
encourages interested parties to file comments electronically, and
requests that an additional copy of all comments and reply comments be
submitted electronically to the following address: auction97@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 five 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. All hand-delivered or
messenger-delivered paper filings for the Commission's Secretary must
be delivered to FCC Headquarters at 445 12th Street 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. 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. U.S. Postal Service
first-class, Express, and Priority mail must be addressed to 445 12th
Street SW., Washington, DC 20554.
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:
Valerie Barrish at (202) 418-0660; for general auction questions: Jeff
Crooks at (202) 418-0660 or Linda Sanderson at (717) 338-2868.
Broadband Division, WTB: For AWS-3 service rules questions: Nancy
Zaczek (legal) or Janet Young (technical) at (202) 418-2487.
SUPPLEMENTARY INFORMATION: This is a summary of the Auction 97 Comment
Public Notice released on May 19, 2014. The complete text of the
Auction 97 Comment Public Notice, including all attachments and related
Commission documents, is available for public inspection and copying
from 8:00 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday
or from 8:00 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 97 Comment Public Notice and its attachments, as
well as 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 14-669. The Auction 97 Comment Public Notice and related documents
also are available on the Internet at the Commission's Web site: https://wireless.fcc.gov/auctions/97/, or by using the search function for AU
Docket No. 14-78 on the Commission's Electronic Comment Filing System
(ECFS) Web page at https://www.fcc.gov/cgb/ecfs/.
I. Introduction
1. The Wireless Telecommunications Bureau (Bureau) announces an
auction of 1,614 licenses in the 1695-1710 MHz, 1755-1780 MHz, and
2155-2180 MHz bands (the AWS-3 bands), and seeks comment on the
procedures to be used for this auction. This auction, which is
designated as Auction 97, is scheduled to commence on November 13,
2014.
2. The Commission is offering the licenses in Auction 97 pursuant
to the Middle Class Tax Relief and Job Creation Act of 2012 (Spectrum
Act). The Spectrum Act requires, among other things, that the
Commission allocate for commercial use and license spectrum in certain
specified frequency bands using a system of competitive bidding no
later than February 2015. In February 2013, the National
Telecommunications and Information Administration (NTIA) identified the
1695-1710 MHz band for reallocation from Federal use to non-Federal use
in satisfaction of its Spectrum Act obligation. In the AWS-3 Report and
Order, FCC 14-31, the Commission identified the 1755-1780 MHz band in
satisfaction of the Spectrum Act's requirement that it identify fifteen
megahertz of contiguous spectrum in addition to the bands specifically
identified in the Spectrum Act.
II. Licenses To Be Offered in Auction 97
A. Description of Licenses
3. The 65 megahertz of AWS-3 spectrum available in Auction 97 will
be licensed on a geographic area basis. Of the 1,614 licenses offered
in Auction 97, 880 will be Economic Area (EA) licenses and 734 will be
Cellular Market Area (CMA) licenses. The AWS-3 frequencies will be
licensed in five and ten megahertz blocks, with each license having a
total bandwidth of five, ten, or twenty megahertz.
4. The 1695-1710 MHz band will be licensed in an unpaired
configuration for low-power mobile transmit (i.e.,
[[Page 31328]]
uplink) operations. The 1755-1780 MHz band will be licensed paired with
the 2155-2180 MHz band, with the 1755-1780 MHz band authorized for low-
power mobile transmit (i.e., uplink) operations and the 2155-2180 MHz
band authorized for base station and fixed (i.e., downlink) operations.
A complete list of the licenses offered in Auction 97 is available in
Attachment A to the Auction 97 Comment Public Notice, available at
https://wireless.fcc.gov/auctions/default.htm?job=auction_summary&id=97.
B. Incumbency Issues
5. In the AWS-3 Report and Order, the Commission allocated the
1695-1710 MHz and 1755-1780 MHz bands for commercial use. Licenses in
1695-1710 MHz band are being made available on a shared basis with
incumbent Federal meteorological-satellite (MetSat) data users.
Licenses in 1755-1780 MHz band are being made available on a shared
basis with a limited number of Federal incumbents indefinitely, while
many of the Federal systems will over time relocate out of the band.
Operations in the 1695-1710 MHz and 1755-1780 MHz bands are subject to
successful coordination with Federal incumbents in the applicable
Protection Zones adopted by the Commission in the AWS-3 Report and
Order. Federal systems in the 1695-1710 MHz and 1755-1780 MHz bands
that are located in these established Protection Zones will operate on
a co-equal, primary basis with commercial AWS licensees. Licenses to
operate in the 1695-1710 MHz and 1755-1780 MHz bands are subject to the
condition that the licensee must not cause harmful interference to an
incumbent Federal entity relocating from these bands under an approved
Transition Plan. This condition remains in effect until NTIA terminates
the applicable authorization of the incumbent Federal entity. The 2155-
2180 MHz band is already allocated for exclusive non-Federal,
commercial use. Although there are no Federal users currently licensed
or operating in this band, there are non-Federal incumbent Fixed
Microwave and Broadband Radio Service licensees in the band. AWS-3
licensees will have to protect or relocate and/or share in the cost of
relocating such incumbent licensees.
C. Commercial Spectrum Enhancement Act/Spectrum Act Requirements
6. The spectrum in the 1695-1710 MHz and 1755-1780 MHz bands is
covered by a Congressional mandate that requires that auction proceeds
fund the estimated relocation or sharing costs of incumbent Federal
entities. In 2004, the Commercial Spectrum Enhancement Act (CSEA)
established a Spectrum Relocation Fund (SRF) to reimburse eligible
Federal agencies operating on certain frequencies that have been
reallocated from Federal to non-Federal use for the cost of relocating
their operations. The SRF is funded with cash proceeds attributable to
``eligible frequencies'' in an auction of licenses involving such
frequencies. The CSEA requires the NTIA to notify the Commission at
least six months in advance of a scheduled auction of eligible
frequencies of eligible Federal entities' estimated relocation or
sharing costs and the timelines for such relocation or sharing.
7. On May 13, 2014, pursuant to the CSEA, the NTIA notified the
Commission of the estimated relocation or sharing costs and relocation
timelines for eligible Federal entities assigned to frequencies in the
1695-1710 MHz and 1755-1780 MHz bands. The NTIA reported that the total
estimated relocation or sharing costs for the 1695-1710 MHz band equal
$527,069,000, and that the total estimated relocation or sharing costs
for the 1755-1780 MHz band equal $4,575,603,000. This information can
be found at https://www.ntia.doc.gov/category/aws-3-transition.
8. In addition to requiring that specified auction proceeds be
deposited in the SRF, the CSEA, as amended by the Spectrum Act,
requires that the total cash proceeds from any auction of eligible
frequencies must equal at least 110 percent of the estimated relocation
or sharing costs provided to the Commission by NTIA, and prohibits the
Commission from concluding any auction of eligible frequencies that
falls short of this revenue requirement. The Commission previously
determined that ``total cash proceeds,'' for purposes of meeting the
CSEA's revenue requirement, means winning bids net of any applicable
bidding credit discounts at the end of bidding. Thus, whether CSEA's
revenue requirements regarding eligible frequencies have been met at
the end of an auction involving such frequencies depends upon whether
winning bids that are attributable to such spectrum, net of any
applicable bidding credit discounts, equal at least 110 percent of
estimated relocation costs. The Commission also previously modified its
reserve price rule pursuant to the CSEA to ensure that the CSEA's
revenue requirement would be met.
III. Due Diligence
9. 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 licenses that it is seeking in this
auction. Each bidder is responsible for assuring that, if it wins a
license, it will be able to build and operate facilities in accordance
with the Commission's rules. The Commission makes no representations or
warranties about the use of this spectrum for particular services. Each
applicant should be aware that a Commission auction represents an
opportunity to become a Commission licensee, subject to certain
conditions and regulations. A Commission 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.
10. An applicant should perform its due diligence research and
analysis before proceeding, as it would with any new business venture.
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 97 license, it will be able to build and operate
facilities that will fully comply with all applicable technical and
regulatory requirements. The Bureau strongly encourages each applicant
to inspect any prospective transmitter sites located in, or near, the
geographic 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.
11. The Bureau strongly encourages each applicant to conduct its
own research prior to Auction 97 in order to determine the existence of
pending administrative, rulemaking, or judicial proceedings that might
affect its decisions regarding participation in the auction.
12. The Bureau strongly encourages participants in Auction 97 to
continue such research throughout the auction. The due diligence
considerations mentioned in the Auction 97 Comment Public Notice do not
constitute 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.
13. In addition to the foregoing due diligence considerations,
which the Bureau encourages in all auctions, the
[[Page 31329]]
Bureau calls particular attention in this auction to the unique
requirements presented by the occupancy of some of the available
frequencies by incumbent Federal users. AWS-3 licensees can expect to
share portions of the AWS-3 bands with various incumbent Federal users
for a period of time as such users transition out of the bands, which
may vary by geography and frequency. Moreover, some Federal users will
remain in the AWS-3 bands, with shared use continuing indefinitely. The
Commission and the NTIA intend to release additional information
regarding the extent of sharing in the AWS-3 bands and the methods of
coordination between commercial and Federal users. Additionally, the
CSEA, as amended by the Spectrum Act, stipulates that Federal agencies
that will receive reimbursement for their costs in relocating their
operations from, or sharing, the ``eligible frequencies'' offered in
this auction based on their approved transition plans, which the NTIA
will make available to the public. The Bureau expects that all of this
information will be material to an applicant's potential participation
in Auction 97. Therefore, the Bureau strongly encourages each applicant
to closely follow releases from the Commission and the NTIA concerning
these issues and to carefully consider the technical and economic
implications for commercial use of the AWS-3 bands.
IV. Bureau Seeks Comment on Auction Procedures
14. The Commission directed the Bureau, under its existing
delegated authority, to seek comment on a variety of auction-specific
procedures prior to the start of each auction. We therefore seek
comment on the following issues relating to the conduct of Auction 97.
A. Auction Design
i. Simultaneous Multiple Round Auction
15. The Bureau proposes to conduct Auction 97 using a simultaneous
multiple-round (SMR) auction format. An SMR auction offers every
license for bid at the same time and consists of successive bidding
rounds in which eligible bidders may place bids. Typically, bidding
remains open on all licenses until bidding stops on every license. The
Bureau seeks comment on this proposal.
ii. Anonymous Bidding
16. Consistent with past practice, the Bureau proposes to adopt
procedures for limited information disclosure or ``anonymous bidding''
for Auction 97. Specifically, the Bureau proposes to withhold, until
after the close of bidding, public release of (1) bidders' license
selections on their short-form applications (FCC Form 175), (2) the
amounts of bidders' upfront payments and bidding eligibility, and (3)
information that may reveal the identities of bidders placing bids and
taking other bidding-related actions.
17. Under these proposed limited information procedures, the amount
of every bid placed and whether a bid was withdrawn (if withdrawals are
permitted) would be disclosed after the close of every round, but the
identities of bidders placing specific bids or withdrawals (if
permitted) and the net bid amounts (reflecting bidding credits) would
not be disclosed until after the close of the auction.
18. Bidders would have access to additional information about their
own bids. For example, bidders would be able to view their own level of
eligibility, before and during the auction, through the FCC Auction
System.
19. Moreover, for the purpose of complying with 47 CFR 1.2105(c),
which prohibits certain communications between applicants (formerly
referred to as the ``anti-collusion rule''), applicants would be made
aware of other applicants with which they will not be permitted to
cooperate, collaborate, or communicate--including discussing bids,
bidding strategies, or post-auction market structure. Specifically, the
Bureau would notify separately each applicant with a short-form
application on file for participation in Auction 97 whether applicants
with short-form applications to participate in a pending auction,
including but not limited to Auction 97, have applied for licenses in
any of the same or overlapping geographic areas as that applicant.
20. After the close of bidding, bidders' license selections,
upfront payment amounts, bidding eligibility, bids, and other bidding-
related actions would be made publicly available.
21. The Bureau seeks comment on the details of its proposal for
implementing anonymous bidding in Auction 97. The Bureau also seeks
comment on alternatives to the use of anonymous bidding procedures for
Auction 97. When the Commission originally proposed limited information
disclosure procedures, it did so in response to analysis suggesting
that under certain circumstances the competitiveness and economic
efficiency of a simultaneous multiple-round auction may be enhanced if
such information is withheld until after the close of the auction. The
Bureau encourages parties to provide information about the benefits and
costs of complying with limited information procedures in this auction
as compared with the benefits and costs of alternative procedures that
would provide for the disclosure of more information on bidder
identities and interests in the auction. If commenters believe that the
Bureau should not adopt procedures to limit the disclosure of certain
bidder-specific information in Auction 97 until after the auction, they
should explain their reasoning.
iii. Acknowledgement for Auction 97 Applicants
22. There are Federal incumbent users in the 1695-1710 MHz and
1755-1780 MHz bands, and the Commission adopted rules in the AWS-3
Report and Order to address commercial operations in these bands in
light of the temporary and indefinite sharing of the bands by Federal
incumbent users and commercial licensees, including a requirement that
commercial licensees operate on a co-equal, primary operations with
Federal systems within specified geographic zones, and a requirement
that licensees in the 1755-1780 MHz band accept interference from
Federal systems as long as such systems remain in the band. To
implement these rules, the Bureau proposes to require an Auction 97
applicant to submit with its short-form application a signed statement
acknowledging that the applicant's operations in the 1755-1780 MHz band
may be subject to interference from Federal systems in certain
geographic zones, that the applicant must accept interference from such
Federal systems in those zones, and that the applicant has considered
these risks before submitting any bids for applicable licenses in
Auction 97. The Bureau seeks comment on this proposal.
B. Auction Structure
i. Bidding Rounds
23. Auction 97 will consist of sequential bidding rounds. The
initial bidding schedule will be announced in a public notice to be
released at least one week before the start of the auction.
24. The Commission will conduct Auction 97 over the Internet using
the FCC Auction System. Bidders will also have the option of placing
bids by telephone through a dedicated, toll-free Auction Bidder Line.
The toll-free telephone number for the Auction Bidder Line will be
provided to
[[Page 31330]]
qualified bidders prior to the start of the auction.
25. The Bureau proposes 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. Under this proposal, the Bureau may change
the amount of time for bidding rounds, the amount of time between
rounds, or the number of rounds per day, depending upon bidding
activity and other factors. The Bureau seeks comment on this proposal.
Commenters 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.
ii. Stopping Rule
26. The Bureau has discretion to establish stopping rules before or
during multiple round auctions in order to complete the auction within
a reasonable time. The Bureau proposes to employ a simultaneous
stopping rule approach in Auction 97, which means all licenses will
remain available for bidding until bidding stops on every license. More
specifically, bidding will close on all licenses after the first round
in which no bidder submits any new bids, applies a proactive waiver, or
withdraws any provisionally winning bids (if withdrawals are
permitted). Thus, unless the Bureau announces alternative stopping
procedures, the simultaneous stopping rule will be used in this
auction, and bidding will remain open on all licenses until bidding
stops on every license, regardless of whether bids are placed on
individual licenses of licenses. Consequently, it is not possible to
determine in advance how long Auction 97 will last.
27. The Bureau proposes to retain the discretion to exercise any of
the following options during Auction 97: (a) Use a modified version of
the simultaneous stopping rule that would close the auction for all
licenses after the first round in which no bidder applies a waiver,
withdraws a provisionally winning bid, or places any new bids on a
license for which it is not the provisionally winning bidder. Thus,
absent any other bidding activity, a bidder placing a new bid on a
license 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 licenses after the first round in which no bidder applies a
waiver, withdraws a provisionally winning bid, or places any new bids
on a license that is not FCC-held. Thus, absent any other bidding
activity, a bidder placing a new bid on a license that does not already
have a provisionally winning bid (an ``FCC-held'' license) 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); (d) Declare that the auction will end after a specified number
of additional rounds (special stopping rule). If the Bureau invokes
this special stopping rule, it will accept bids in the specified final
round(s), after which the auction will close; and (e) Keep the auction
open even if no bidder places any new bids, applies a waiver, or
withdraws (if withdrawals are permitted) any provisionally winning
bids. 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.
28. The Bureau proposes 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 Bureau is likely to attempt to change the pace of the
auction by, for example, changing the number of bidding rounds per day
and/or the minimum acceptable bids. The Bureau proposes to retain the
discretion to exercise any of these options with or without prior
announcement during the auction. The Bureau seeks comment on these
proposals.
iii. Information Relating to Auction Delay, Suspension, or Cancellation
29. The Bureau proposes that it may delay, suspend, or cancel
Auction 97 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.
Additionally, the CSEA requires the Commission to cancel an auction of
``eligible frequencies'' if the total cash proceeds attributable to
those frequencies do not meet CSEA's revenue requirement. The Bureau
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 Bureau may, in
its 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 Bureau
to delay or suspend the auction. The Bureau emphasizes that it will
exercise this authority solely at its discretion, and note that the
exercise of its authority in this regard is not intended to be a
substitute for situations in which bidders may wish to apply their
activity rule waivers. The Bureau seeks comment on this proposal.
C. Auction Procedures
i. Upfront Payments and Bidding Eligibility
30. The Bureau has delegated authority and discretion to determine
an appropriate upfront payment for each license being auctioned, taking
into account such factors as the efficiency of the auction process and
the potential value of similar licenses. An upfront payment is a
refundable deposit made by each bidder to establish its eligibility to
bid on licenses. Upfront payments that are related to the specific
licenses 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. For Auction 97, the Bureau
proposes to make the upfront payments equal to approximately half the
proposed minimum opening bids. The proposed upfront payments are
similar to those used in the recent auction of H Block licenses in the
1915-1920 MHz and 1995-2000 MHz bands. The upfront payments for each
license are set forth in Attachment A to the Auction 97 Comment Public
Notice. The Bureau seeks comment on this proposal.
31. The Bureau further proposes that the amount of the upfront
payment submitted by a bidder will determine its initial bidding
eligibility in bidding units. The Bureau proposes to assign each
license a specific number of bidding units, equal to one bidding unit
per dollar of the upfront payment proposed for the license. The
specific bidding units for each license are set forth in Attachment A
to the Auction 97 Comment Public Notice. The number of bidding units
for a given license is fixed and does not change during the auction as
prices change. A bidder's upfront payment is not attributed to specific
licenses of licenses. Rather, a bidder may place bids on any
combination of the licenses it selected on its short-form
[[Page 31331]]
application (FCC Form 175), provided that the total number of bidding
units associated with those licenses 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 Bureau
seeks comment on these proposals.
ii. Activity Rule
32. An activity rule requires bidders to bid actively throughout
the auction, rather than wait until late in the auction before
participating. A bidder's activity in a round will be the sum of the
bidding units associated with any licenses upon which it places bids
during the current round and the bidding units associated with any
licenses for which it holds provisionally winning bids placed in
previous rounds. Bidders are required to be active on a specific
percentage of their current bidding eligibility during each round of
the auction. Failure to maintain the requisite activity level will
result in the use of an activity rule waiver, if any remain, or a
reduction in the bidder's eligibility, possibly curtailing or
eliminating the bidder's ability to place additional bids in the
auction.
33. The Bureau proposes to divide the auction into at least two
stages, each characterized by a different activity requirement. The
auction will start in Stage One. The Bureau proposes to advance the
auction to the next stage by announcement during the auction. In
exercising this discretion, the Bureau will consider a variety of
measures of auction activity, including but not limited to the
percentage of bidding units associated with licenses on which there are
new bids, the number of new bids, and the increase in revenue. The
Bureau seeks comment on these proposals.
34. The Bureau proposes the following activity requirements, while
noting again that the Bureau retains the discretion to change stages
unilaterally by announcement during the auction: Stage One--In each
round of the first stage of the auction, a bidder desiring to maintain
its current bidding eligibility is required to be active on bidding
units associated with licenses representing at least 80 percent of its
current bidding eligibility. Failure to maintain the required activity
level will result in the use of an activity rule waiver or a reduction
in the bidder's bidding eligibility for the next round of bidding.
During Stage One, a bidder's reduced eligibility for the next round
will be calculated by multiplying the bidder's current round activity
by five-fourths (5/4); Stage Two--In each round of the second stage, a
bidder desiring to maintain its current bidding eligibility is required
to be active on 95 percent of its current bidding eligibility. Failure
to maintain the required activity level will result in the use of an
activity rule waiver or a reduction in the bidder's bidding eligibility
for the next round of bidding. During Stage Two, a bidder's reduced
eligibility for the next round will be calculated by multiplying the
bidder's current round activity by twenty-nineteenths (20/19).
35. The Bureau seeks comment on these activity requirements. Under
this proposal, the Bureau will retain the discretion to change the
activity requirements during the auction. For example, the Bureau could
decide to add an additional stage with a higher activity requirement,
not to transition to Stage Two if it believes the auction is
progressing satisfactorily under the Stage One activity requirement, or
to transition to Stage Two with an activity requirement that is higher
or lower than the 95 percent proposed herein. If the Bureau exercises
this discretion, it will alert bidders by announcement in the FCC
Auction System.
iii. Activity Rule Waivers and Reducing Eligibility
36. 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 bid.
Activity rule waivers, which can be either proactive or automatic, 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.
37. 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.
38. 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
described above. Reducing eligibility is an irreversible action; once
eligibility has been reduced, a bidder will not be permitted to regain
its lost bidding eligibility, even if the round has not yet closed.
39. 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, 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
permitted), 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.
40. Consistent with recent Commission auctions, the Bureau proposes
that each bidder in Auction 97 be provided with a total of three
activity rule waivers that may be used as at the bidder's discretion
during the course of the auction. The Bureau seeks comment on this
proposal.
iv. Reserve Price and Minimum Opening Bids
41. The Commission has directed the Bureau to seek comment on the
use of a minimum opening bid amount and/or reserve price prior to the
start of each auction. Normally, a reserve price is an absolute minimum
price below which an item or items will not be sold in a given auction.
If a reserve price is utilized, the specific amount of the reserve
price may be disclosed or undisclosed. A minimum opening bid, on the
other hand, is the minimum bid
[[Page 31332]]
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.
42. Among other factors the Bureau must consider in deciding
whether to employ either or both of these mechanisms is the amount of
spectrum being auctioned, levels of incumbency, the availability of
technology to provide service, the size of the geographic service
areas, the extent of interference with other spectrum bands, and any
other relevant factors that could have an impact on the spectrum being
auctioned.
a. Reserve Price
43. The Commission is statutorily obliged to consider and balance a
variety of public interests and objectives when establishing service
rules and licensing procedures with respect to the public spectrum
resource. These objectives include promoting recovery for the public a
portion of the value of that resource. Certain of the frequencies in
the AWS-3 bands are ``eligible frequencies'' under the CSEA, and the
CSEA requires that auction proceeds fund the estimated relocation or
sharing costs of incumbent federal entities operating on these
frequencies. In view of this, the Bureau will establish reserve prices
for the AWS-3 licenses offered in Auction 97.
44. The CSEA requires that the total cash proceeds attributable to
``eligible frequencies'' be at least 110 percent of the total estimated
relocation or sharing costs provided to the Commission pursuant to the
CSEA before the Commission may conclude an auction involving such
frequencies. If this condition is not met, the CSEA requires the
Commission to cancel the auction. For purposes of determining whether
the CSEA's revenue requirement has been met, the Commission has
determined that ``total cash proceeds'' means winning bids net of any
applicable bidding credit discounts at the end of bidding (e.g.,
exclusive of any Tribal lands bidding credit).
45. The NTIA has notified the Commission that the total estimated
relocation or sharing costs for the 1695-1710 MHz band equal
$527,069,000, and that the total estimated relocation or sharing costs
for the 1755-1780 MHz band equal $4,575,603,000. Accordingly, the
Bureau proposes one aggregate reserve price for the 1695-1710 MHz band
and a separate aggregate reserve price for the paired 1755-1780/2155-
2180 MHz band.
46. The Bureau proposes to establish an aggregate reserve price of
$579,775,900 for the licenses in the 1695-1710 MHz band. This aggregate
reserve price is 110 percent of total estimated relocation or sharing
costs of $527,069,000 provided by the NTIA for this band and,
therefore, the minimum reserve price required by the CSEA. Given that
the 1695-1710 MHz band consists entirely of ``eligible frequencies,''
the Bureau proposes that the winning bid for each license in this band,
net of any applicable bidding credit discounts at the end of bidding
(e.g., exclusive of any Tribal lands bidding credit), will be counted
toward meeting the reserve price for the band. Thus, the aggregate
reserve price will be met if the total winning bids for the licenses in
the 1695-1710 MHz band, net of any applicable bidding credit discounts
at the end of bidding (e.g., exclusive of any Tribal lands bidding
credit), is at least $579,775,900.
47. The 1755-1780 MHz band will be licensed paired with the 2155-
2180 MHz band. The lower half of the frequencies in each paired
license, i.e., those in the 1755-1780 MHz band, are ``eligible
frequencies'' and are thus subject to CSEA requirements. To meet CSEA's
requirements, the Bureau proposes to establish an aggregate reserve
price of $5,033,163,300 for the 1755-1780 MHz frequencies. This
aggregate reserve price is 110 percent of total estimated relocation or
sharing costs of $4,575,603,000 for the 1755-1780 MHz band provided by
the NTIA and, therefore, the minimum reserve price required by CSEA.
Because these frequencies are one half of the frequencies authorized
for use by each of the 1755-1780/2155-2180 MHz paired licenses, the
Bureau proposes that one-half of each winning bid for each of the
paired 1755-1780/2155-2180 MHz licenses, net of any applicable bidding
credit discounts at the end of bidding, will be counted toward meeting
the reserve price. The aggregate reserve price will be met if one half
of the total winning bids for the paired 1755-1780/2155-2180 MHz
licenses in, net of any applicable bidding credit discounts at the end
of bidding (e.g., exclusive of any Tribal lands bidding credit), is at
least $5,033,163,300. Therefore, the winning ``net'' bids for the
paired 1755-1780/2155-2180 MHz licenses must be at least twice that
amount, or $10,066,326,600, in order for the Commission to conclude the
auction.
48. The Bureau seeks comment on its proposed reserve prices for
Auction 97 and its proposals for implementing them. The Bureau
encourages commenters to address any additional specific issues related
to the use of reserve prices. The Bureau asks that commenters describe
in detail the specific factors that lead them to their conclusions.
49. In light of the proposal to adopt procedures for limited
information disclosure for Auction 97, if information regarding net bid
amounts is not provided during the auction, the Bureau proposes to
issue an announcement in the FCC Auction System, viewable by bidders
and the general public, stating that a reserve price has been met
immediately following the first round in which that occurs. However,
due to factors such as bid withdrawals and the effect of bidding
credits, an announcement that the reserve price has been met following
a round of the auction does not guarantee that the reserve price will
continue to be met. Accordingly, the Bureau will make a further
announcement in the FCC Auction System after any round in which the
reserve price status changes. The Bureau seeks comment this proposal.
b. Minimum Opening Bids
50. The Bureau proposes to establish minimum opening bid amounts
for Auction 97. The Bureau believes a minimum opening bid amount, which
has been used in other auctions, is an effective bidding tool for
accelerating the competitive bidding process. The Bureau proposes
minimum opening bids that should accelerate the progress of the auction
toward meeting (1) the reserve prices established to meet CSEA
requirements and (2) the Spectrum Act deadline for licensing identified
frequencies. The proposed minimum opening bids are higher than the
proposed upfront payments so that the competitive bidding process can
be accelerated without increasing the cost of eligibility.
51. The Bureau proposes to calculate minimum opening bid amounts
for Auction 97 on a license-by-license basis using a formula based on
bandwidth and license area population, similar to its approach in many
previous spectrum auctions. The Bureau proposes to use a calculation
based on $0.15 per megahertz of bandwidth per population (per ``MHz-
pop'') for paired licenses and $0.05 per MHz-pop for unpaired licenses,
adjusted for past geographic variations. Specifically, the Bureau
proposes to incorporate pricing information from previous auctions to
adjust the minimum opening bid calculations based on an index of
relative winning bid amounts for licenses in each CMA and EA in
[[Page 31333]]
Auctions 66, 73, and 96, subject to a minimum of $0.01 per MHz-pop.
This modification results in amounts ranging from $0.01 per MHz-pop to
$0.53 per MHz-pop. The Bureau further proposes a minimum of $2,500 per
license. The Bureau proposes to set the minimum opening bid amounts for
the licenses covering the Gulf of Mexico at $2,000 per megahertz.
52. The proposed minimum opening bid amount for each AWS-3 license
available in Auction 97, calculated pursuant to these procedures is set
forth in Attachment A to the Auction 97 Comment Public Notice.
53. The Bureau seeks comment on its proposals concerning minimum
opening bids. If commenters believe that these minimum opening bid
amounts will result in unsold licenses, or are not reasonable amounts,
they should explain why this is so and comment on the desirability of
an alternative approach. If a commenter requests an alternative
approach for a specific frequency block or a lower minimum opening bid
amount for a specific license, it should justify the requested change
in detail. If commenters disagree with the Bureau's proposed use of
$0.15 per MHz-pop and $0.05 per MHz-pop, its approach to tailoring
minimum opening bid amounts to account for relative prices among the
CMAs and EAs in past auctions, or its selection of which past results
to consider, the Bureau asks commenters to support their claims with
valuation analyses and suggested minimum opening bid amount levels or
formulas.
54. In establishing minimum opening bid amounts, the Bureau
particularly seeks comment on factors that could reasonably have an
impact on valuation of the licenses being auctioned, including the
amount of spectrum being auctioned, levels of incumbency, the
availability of technology to provide service, the size of the service
areas, the size of the geographic service areas, issues of interference
with other spectrum bands and any other relevant factors. The Bureau
also seeks comment on whether the public interest would be served by
having no minimum opening bid amount.
55. Commenters may also wish to address the general role of minimum
opening bids in managing the pace of the auction. For example,
commenters could compare using minimum opening bids--e.g., by setting
higher minimum opening bids to reduce the number of rounds it takes
licenses to reach their final prices--to other means of controlling
auction pace, such as changes to bidding schedules or activity
requirements.
v. Bid Amounts
56. The Bureau proposes that, in each round, an eligible bidder
will be able to place a bid on a given license using one or more pre-
defined bid amounts. Under this proposal, the FCC Auction System
interface will list the acceptable bid amounts for each license. The
Bureau proposes to calculate bid amounts in the following manner.
a. Minimum Acceptable Bids
57. The first of the acceptable bid amounts is called the minimum
acceptable bid amount. The minimum acceptable bid amount for a license
will be equal to its minimum opening bid amount until there is a
provisionally winning bid on the license. The Bureau proposes to
calculate minimum acceptable bids based on provisionally winning bids
and an activity-based formula.
58. After there is a provisionally winning bid for a license, the
minimum acceptable bid amount for that license will be equal to the
amount of the provisionally winning bid plus a percentage of that bid
amount calculated using an activity-based formula. In general, the
percentage will be higher for a license receiving many bids than for a
license receiving few bids. In the case of a license for which the
provisionally winning bid has been withdrawn, the minimum acceptable
bid amount will equal the second highest bid received for the license.
59. The percentage of the provisionally winning bid used to
establish the minimum acceptable bid amount (``the additional
percentage'') is calculated based on an activity index at the end of
each round. The activity index is a weighted average of (a) the number
of distinct bidders placing a bid on the license in that round, and (b)
the activity index from the prior round. The additional percentage is
determined as one plus the activity index times a minimum percentage
amount, with the result not to exceed a given maximum. The additional
percentage is then multiplied by the provisionally winning bid amount
to obtain the minimum acceptable bid for the next round. The Bureau
proposes initially to set the weighting factor at 0.5, the minimum
percentage at 0.1 (10%), and the maximum percentage at 0.3 (30%).
Hence, at these initial settings, the minimum acceptable bid for a
license will be between ten percent and thirty percent higher than the
provisionally winning bid, depending upon the bidding activity for the
license. Equations and examples are shown in Attachment B to the
Auction 97 Comment Public Notice. The Bureau seeks comment on whether
to use this activity-based formula or a different approach.
b. Additional Bid Amounts
60. The Bureau proposes to calculate any additional bid amounts
using the minimum acceptable bid amount and a bid increment
percentage--more specifically, by multiplying the minimum acceptable
bid by one plus successively higher multiples of the bid increment
percentage. If, for example, the bid increment percentage is 5 percent,
the calculation of the first additional acceptable bid amount 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 Bureau will round the
results using the Commission's standard rounding procedures for
auctions. The Bureau proposes initially to set the bid increment
percentage at 5 percent.
61. For Auction 97, the Bureau proposes to begin the auction with
nine acceptable bid amounts per license (the minimum acceptable bid
amount and eight additional bid amounts).
c. Bid Amount Changes
62. The Bureau retains the discretion to change the minimum
acceptable bid amounts, the additional bid amounts, the number of
acceptable bid amounts, and the parameters of the formulas used to
calculate minimum acceptable bid amounts and additional bid amounts if
the Bureau determines that circumstances so dictate. Further, the
Bureau retains the discretion to do so on a license-by-license basis.
The Bureau also retains the discretion to limit (a) the amount by which
a minimum acceptable bid for a license 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 Bureau could set a
$10 million limit on increases in minimum acceptable bid amounts over
provisionally winning bids. Thus, if the activity-based formula
calculates a minimum acceptable bid amount that is $20 million higher
than the provisionally winning bid on a license, the minimum acceptable
bid amount would instead be capped at $10 million above the
provisionally winning bid.
[[Page 31334]]
The Bureau seeks comment on the circumstances under which it should
employ such a limit, factors it 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 Bureau exercises this discretion, it
will alert bidders by announcement in the FCC Auction System.
63. The Bureau seeks comment on these proposals. If commenters
disagree with the proposal to begin the auction with nine acceptable
bid amounts per license, they should suggest an alternative number of
acceptable bid amounts to use at the beginning of the auction and an
alternative number to use later in the auction. Commenters may wish to
address the role of the minimum acceptable bids and the number of
acceptable bid amounts in managing the pace of the auction and the
tradeoffs in managing auction pace by changing the bidding schedule,
activity requirements, or bid amounts, or by using other means.
vi. Provisionally Winning Bids
64. 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 license based on the highest bid
amount received for the license. These bids become the provisionally
winning bids for the round.
65. If identical high bid amounts are submitted on a license 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.
66. The set of provisionally winning bids is determined after every
round in which new bids are submitted. The provisionally winning bids
at the end of the auction become winning bids, provided that any
applicable reserve prices have been met. The Bureau reminds bidders
that provisionally winning bids count toward activity for purposes of
the activity rule.
vii. Bid Removal
67. For Auction 97, the Bureau proposes 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 ``undo'' any
bid placed within that round. Once a round closes, a bidder may no
longer remove a bid. The Bureau seeks comment on this bid removal
proposal.
viii. Bid Withdrawal
68. 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. The Commission has explained that
allowing bid withdrawals facilitates efficient aggregation of licenses
and the pursuit of backup strategies as information becomes available
during the course of an auction, but has recognized that in some
instances, bidders may seek to withdraw bids for improper reasons. The
Bureau therefore has discretion in managing the auction to limit the
number of withdrawals to prevent any bidding abuses. Applying this
reasoning to Auction 97, the Bureau proposes to allow each bidder to
withdraw provisionally winning bids in no more than two rounds during
the course of the auction. To permit a bidder to withdraw bids in more
than two rounds may encourage insincere bidding or the use of
withdrawals for anti-competitive purposes. The two rounds in which a
bidder may withdraw provisionally winning bids will be at the bidder's
discretion, and there is no limit on the number of provisionally
winning bids that a bidder may withdraw in either of the rounds in
which it withdraws bids. Withdrawals must be in accordance with the
Commission's rules, including the bid withdrawal payment provisions
specified in 47 CFR 1.2104(g).
69. The Bureau seeks comment on this proposal. If commenters
disagree with this proposal, the Bureau asks them to support their
arguments by taking into account the licenses available, the impact on
auction dynamics and the pricing mechanism, and the effects on the
bidding strategies of other bidders.
D. Post-Auction Payments
i. Interim Withdrawal Payment Percentage
70. The Bureau seeks comment on the appropriate percentage of a
withdrawn bid that should be assessed as an interim withdrawal payment
in the event that a final withdrawal payment cannot be determined at
the close of the auction. In general, the Commission's rules provide
that 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
subsequent auction(s). If a bid is withdrawn and no subsequent higher
bid is placed and/or the license is not won in the same auction, the
final withdrawal payment cannot be calculated until after the close of
a subsequent auction in which a higher bid for the license (or the
equivalent to the license) is placed or the license is won. When that
final payment cannot yet be calculated, the bidder responsible for the
withdrawn bid is assessed an interim bid withdrawal payment, which will
be applied toward any final bid withdrawal payment that is ultimately
assessed. 47 CFR 1.2104(g)(1) requires that the percentage of the
withdrawn bid to be assessed as an interim bid withdrawal payment be
between three percent and twenty percent and that it be set in advance
of the auction.
71. The Commission has determined that the level of the interim
withdrawal payment in a particular auction will be based on the nature
of the service and the inventory of the licenses being offered. The
Commission has noted that it may impose a higher interim withdrawal
payment percentage to deter the anti-competitive use of withdrawals
when, for example, bidders likely will not need to aggregate the
licenses being offered in the auction, such as when few licenses are
offered that are on adjacent frequencies or in adjacent areas, or when
there are few synergies to be captured by combining licenses. With
respect to the AWS-3 licenses being offered in Auction 97, the service
rules permit a wide variety of advanced services, some of which may
best be offered by combining licenses on adjacent frequencies or in
adjacent areas, and the licenses will be offered under different
geographic licensing schemes and bandwidth sizes. Balancing the
potential need for bidders to use withdrawals to avoid winning
incomplete combinations of licenses with the Bureau's interest in
deterring undesirable strategic use of withdrawals, the Bureau proposes
a percentage below the maximum twenty percent permitted under the
current rules but above the three percent previously provided by the
Commission's rules. Specifically, the Bureau proposes to establish an
interim
[[Page 31335]]
bid withdrawal payment of ten percent of the withdrawn bid for this
auction. The Bureau seeks comment on this proposal.
ii. Additional Default Payment Percentage
72. 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 97 bidder's winning
bid and the amount of the winning bid the next time a license 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.
73. The Commission's rules provide that, in advance of each
auction, it will establish a percentage between three 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 vary based on the nature of the service
and the inventory of the licenses being offered.
74. Defaults weaken the integrity of the auction process and may
impede the deployment of service to the public, however, the Bureau
does not believe the detrimental effects of any defaults in Auction 97
are likely to be unusually great. Balancing these considerations, for
Auction 97, the Bureau proposes to establish an additional default
payment of fifteen percent of the applicable bid. The Bureau seeks
comment on this proposal.
V. Ex Parte Rules
75. 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 Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 2014-12824 Filed 5-30-14; 8:45 am]
BILLING CODE 6712-01-P