Auction of Construction Permits for Low Power Television and TV Translator Stations Scheduled for September 10, 2019; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 104, 37128-37142 [2019-15811]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 84, Number 147 (Wednesday, July 31, 2019)]
[Rules and Regulations]
[Pages 37128-37142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15811]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 73 and 74

[AU Docket No. 19-61, GN Docket No. 12-268, MB Docket No. 16-306; DA 
19-477]


Auction of Construction Permits for Low Power Television and TV 
Translator Stations Scheduled for September 10, 2019; Notice and Filing 
Requirements, Minimum Opening Bids, Upfront Payments, and Other 
Procedures for Auction 104

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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SUMMARY: This document summarizes the procedures, terms and conditions, 
together with the upfront payment amounts and minimum opening bid 
amounts, for an upcoming auction of construction permits for low power 
television station (LPTV) and TV translator stations. The Public Notice 
summarized here also provides an overview of the post-auction 
application and payment processes governing Auction 104.

DATES: Applications to participate in Auction 104 were required to be 
submitted prior to 6 p.m. Eastern Time (ET) on July 22, 2019. Upfront 
payments for Auction 104 must be received by 6 p.m. ET on August 14, 
2019. Bidding in Auction 104 is scheduled to start on September 10, 
2019.

FOR FURTHER INFORMATION CONTACT: For auction legal questions, Lynne 
Milne in the Office of Economics and Analytics' Auctions Division at 
(202) 418-0660. For auction process and procedures, the Auctions 
Hotline at (717) 338-2868. For LPTV and translator station service 
questions, Shaun Maher or Hossein Hashemzadeh in the Media Bureau's 
Video Division at (202) 418-1600. To request materials in accessible 
formats (Braille, large print, electronic files, or audio format) for 
people with disabilities, send an email to [email protected] or call the 
Consumer and Governmental Affairs Bureau at (202) 418-0530 or (202) 
418-0432 (TTY).

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 104 
Procedures

[[Page 37129]]

Public Notice, released June 6, 2019. The complete text of the Auction 
104 Procedures Public Notice, including attachment and any related 
document, is available for public inspection and copying from 8:00 a.m. 
to 4:30 p.m. 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 104 Procedures 
Public Notice and related documents also are available on the internet 
at the Commission's website: www.fcc.gov/auction/104, or by using the 
search function for AU Docket No. 19-61 on the Commission's Electronic 
Comment Filing System (ECFS) web page at https://www.fcc.gov/ecfs/.

I. General Information

    1. Background. Certain LPTV stations and TV translator stations 
(collectively referred to as LPTV/translator stations) were displaced 
by the broadcast incentive auction which resulted in channel 
reassignments of certain full power and Class A television stations. As 
a result, a number of LPTV/translator stations were displaced from 
their channels.
    2. Displacement applications for eligible LPTV/translator stations 
filed during the 2018 Special Displacement Window permitted staff to 
determine which applicant engineering proposals were mutually exclusive 
with other applicant proposals. After opportunity to resolve mutual 
exclusivity (MX) by settlement or technical modification of their 
engineering proposals, the MX LPTV/translator engineering proposals 
that remain will be resolved by competitive bidding.
    3. The Incentive Auction Task Force (IATF) and Media Bureau (MB), 
in conjunction with the Office of Economics and Analytics (OEA), 
released a public notice seeking comment on competitive bidding 
procedures to be used in Auction 104 to resolve the then-remaining 6 
groups of MX applications. A summary of that public notice was 
published at 84 FR 15167, April 15, 2019.
    4. Five entities with pending MX LPTV applications filed six 
comments and/or reply comments in response to the Auction 104 Comment 
Public Notice. Several commenters request that the Commission resolve 
prior to the start of the auction outstanding pleadings that were filed 
against applicants in the MX groups to provide potential bidders with 
greater certainty and to encourage settlements. On April 26, 2019, the 
Media Bureau issued rulings denying the outstanding pleadings. In light 
of those actions, comments seeking action on the informal objections 
are now moot. In addition, one reply commenter argued that the 
Commission should allow those decisions, and any subsequent petitions 
for reconsideration or applications for review, to become final before 
bidding in the auction begins. The Media Bureau, however, has acted on 
all outstanding pleadings and settlement proposals that involve parties 
that can become eligible to bid in Auction 104. There will be no delay 
in bidding to await final resolution of any such legal challenges.
    5. Starting on April 18, 2019, the freeze was lifted on the filing 
of displacement and digital companion channel applications related to 
LPTV/translator stations. Applicants listed in Attachment A of the 
Auction 104 Procedures Public Notice were free to continue to enter 
into and submit settlement agreements for their MX groups up until 6 
p.m. on July 22, 2019, the short-form application deadline for Auction 
104. At that point, the prohibition on certain communications between 
auction applicants applies and no further discussions with other 
Auction 104 applicants regarding the auction, including settlements and 
bids or bidding strategies, will be permitted until after the close of 
the auction when the prohibition no longer applies. Thus, after 6 p.m. 
ET on July 22, 2019, applicants listed in Attachment A will not be able 
to resolve their application's mutual exclusivity except through the 
competitive bidding process, including payment of the applicable 
minimum opening bid.
    6. Relevant Authority. An applicant listed in Attachment A of the 
Auction 104 Procedures Public Notice may become qualified to bid only 
if it complies with the competitive bidding filing, qualification, and 
payment requirements, and otherwise conforms to applicable rules, 
policies, and procedures. Accordingly, Auction 104 applicants should 
familiarize themselves thoroughly with the Commission's general 
competitive bidding rules (47 CFR part 1, subpart Q), including recent 
amendments and clarifications, as well as Commission decisions in 
proceedings regarding competitive bidding procedures, application 
requirements, and obligations of Commission licensees. Applicants 
should also familiarize themselves with the Commission's rules relating 
to the television broadcast service, as well as Commission orders 
concerning competitive bidding for broadcast construction permits. 
Applicants must also be thoroughly familiar with the procedures, terms 
and conditions contained in the Auction 104 Procedures Public Notice 
and any future public notices that may be released in this proceeding.
    7. The terms contained in the Commission's rules, relevant orders, 
and public notices are not negotiable. The Commission may amend or 
supplement the information contained in its public notices at any time, 
and it will issue public notices to convey any new or supplemental 
information to applicants. It is the responsibility of all applicants 
to remain current with all Commission rules and with all public notices 
pertaining to this auction.
    8. Construction Permits and Entities Eligible to Participate in 
Auction 104. Auction 104 is a closed auction; only those individuals or 
entities listed in Attachment A to the Auction 104 Procedures Public 
Notice are eligible to complete the remaining steps to become 
applicants qualified to bid in this auction. Each listed applicant may 
become a qualified bidder only for the construction permit(s) specified 
for that applicant in Attachment A of the same public notice. Each of 
the engineering proposals within each MX group is directly mutually 
exclusive with one another; therefore, no more than one construction 
permit will be awarded for each MX group identified in Attachment A. 
Once mutually exclusive applications are accepted and thus mutual 
exclusivity exists for auction purposes, an applicant cannot obtain a 
construction permit without placing a bid, even if no other applicant 
for that particular construction permit becomes qualified to bid or in 
fact places a bid.
    9. If parties entered into and submitted prior to 6 p.m. on July 
22, 2019, a settlement agreement and supporting documentation that is 
determined to be fully in accordance with the Commission's rules and 
which completely resolves the mutual exclusivity, that MX group will be 
removed from the auction and any remaining engineering proposals of 
that MX group will be processed under standard licensing procedures.

II. Applying To Participate in Auction 104

    10. General Information Regarding Short-Form Applications. An 
application to participate in Auction 104, referred to as a short-form 
application or FCC Form 175, provides information that the Commission 
uses to determine whether the applicant is legally, technically, and 
financially qualified to participate in Commission auctions for 
licenses or permits. The short-form application is the first part of

[[Page 37130]]

the Commission's two-phased auction application process. In the first 
phase, parties desiring to participate in the auction must file a 
streamlined, short-form application in which they certify under penalty 
of perjury as to their qualifications. Eligibility to participate in 
bidding is based on the applicant's short-form application and 
certifications, and on its upfront payment, as explained below.
    11. A party whose engineering proposal is listed on Attachment A of 
the Auction 104 Procedures Public Notice who wished to participate in 
the bidding in Auction 104 was required to file a short-form 
application (FCC Form 175) electronically via the Auction Application 
System prior to 6 p.m. ET on July 22, 2019, following the instructions 
prescribed in Attachment B to the Auction 104 Procedures Public Notice. 
Applications could have been filed for Auction 104 at any time 
beginning at noon ET on July 16, 2019, until the filing window closed 
at 6 p.m. ET on July 22, 2019. Applicants were strongly encouraged to 
file early and are responsible for allowing adequate time for filing 
their applications. There are no limits or restrictions on the number 
of times an application can be updated or amended until the initial 
filing deadline on July 22, 2019.
    12. An applicant must always click on the CERTIFY & SUBMIT button 
on the Certify & Submit screen to successfully submit its FCC Form 175 
and any modifications; otherwise, the application or changes to the 
application will not be received or reviewed by Commission staff. The 
Commission periodically performs scheduled maintenance of its IT 
systems. During scheduled maintenance activities, which typically occur 
over the weekends, every effort is made to minimize any downtime to 
auction-related systems, including the auction application system. 
However, there are occasions when auction-related systems may be 
temporarily unavailable.
    13. An applicant bears full responsibility for submitting an 
accurate, complete and timely short-form application. Each applicant 
must certify on its short-form application under penalty of perjury 
that it is legally, technically, financially and otherwise qualified to 
hold a license. Each applicant should read carefully the instructions 
set forth in Attachment B to the Auction 104 Procedures Public Notice 
and should consult the Commission's rules to ensure that, in addition 
to the materials described below, all the information required is 
included within its short-form application.
    14. An individual or entity may not submit more than one short-form 
application for a single auction. If a party submits multiple short-
form applications, only one application may be accepted for filing.
    15. Each applicant should note that submission of a short-form 
application (and any amendments thereto) constitutes a representation 
by the certifying official that he or she is an authorized 
representative of the applicant, that he or she has read the form's 
instructions and certifications, and that the contents of the 
application, its certifications, and any attachments are true and 
correct. Applicants are not permitted to make major modifications to 
their applications; such impermissible changes include a change of the 
certifying official to the application. Submission of a false 
certification to the Commission may result in penalties, including 
monetary forfeitures, license forfeitures, ineligibility to participate 
in future auctions, and/or criminal prosecution.
    16. Authorized Bidders. An applicant must designate at least one 
authorized bidder, and no more than three, in its FCC Form 175. The 
Commission's rules prohibit an individual from serving as an authorized 
bidder for more than one auction applicant. Accordingly, the same 
individual may not be listed as an authorized bidder in more than one 
FCC Form 175 for Auction 104.
    17. Construction Permits in Short-Form Application. Auction 104 
applicants will not select permits when filing the FCC Form 175; the 
permit(s) on which the applicant is eligible to bid will automatically 
display on the FCC Form 175.
    18. Disclosure of Agreements Relating to Permits Subject to 
Auction. An applicant must provide in its FCC Form 175 a brief 
description of, and identify each party to, any partnership, joint 
venture, consortium, or agreement, arrangement, or understanding of any 
kind relating to the LPTV/translator station permits that may be 
subject to auction, including any agreement that addresses or 
communicates directly or indirectly bids (including specific prices), 
bidding strategies (including the specific construction permit(s) or 
license(s) on which to bid or not to bid), or the post-auction market 
structure, to which the applicant, or any party that controls or is 
controlled by the applicant, is a party. For this purpose, a 
controlling interest includes all individuals or entities with positive 
or negative de jure or de facto control of the applicant or licensee. 
In connection with the agreement disclosure requirements, the applicant 
must certify under penalty of perjury in its FCC Form 175 that it has 
described, and identified each party to, any agreement, arrangement, or 
understanding of any kind relating to the permits being auctioned or 
relating directly or indirectly to bidding at auction with any other 
applicant, among others, into which the applicant has entered, or any 
party that it controls or is controlled by it, has entered. An auction 
applicant that enters into any agreement relating to the licenses being 
auctioned during an auction is subject to the same disclosure 
obligations it would be for agreements existing at the FCC Form 175 
filing deadline, and it must maintain the accuracy and completeness of 
the information in its pending auction application.
    19. For purposes of making the required agreement disclosures on 
the FCC Form 175, if parties agree in principle on all material terms 
prior to the application filing deadline, each party to the agreement 
that is submitting an auction application must provide a brief 
description of, and identify the other party or parties to, the 
agreement on its respective FCC Form 175, even if the agreement has not 
been reduced to writing. However, if the parties have not agreed in 
principle by the FCC Form 175 filing deadline, they should not 
describe, or include the names of parties to, the discussions on their 
applications.
    20. In connection with 2015 amendments to the Part 1 competitive 
bidding rules, the Commission now prohibits any joint bidding 
arrangement, including arrangements relating to the permits being 
auctioned that address or communicate, directly or indirectly, bidding 
at the auction, bidding strategies, including arrangements regarding 
price or the specific permits on which to bid, and any such 
arrangements relating to the post-auction market structure. Joint 
bidding arrangements include arrangements relating to the construction 
permits or licenses being auctioned that address or communicate, 
directly or indirectly, bids or bidding strategies, including 
arrangements regarding price or the specific construction permits or 
licenses on which to bid, as well as any such arrangements relating to 
the post-auction market structure. The revised rule provides limited 
exceptions for a communication within the scope of any arrangement 
consistent with the exclusion from the rule prohibiting joint bidding, 
provided such arrangement is disclosed on the applicant's auction 
application. An applicant may continue to communicate pursuant to any 
pre-existing agreements, arrangements, or understandings that are 
solely

[[Page 37131]]

operational or that provide for transfer or assignment of licenses, 
provided that such agreements, arrangements or understandings are 
disclosed on its application and do not both relate to the permits at 
auction and address or communicate bids (including amounts), bidding 
strategies, or the particular permits or licenses on which to bid or 
the post-auction market structure.
    21. Although the Commission's rules do not prohibit auction 
applicants from communicating about matters that are within the scope 
of an agreement that has been excepted under the provisions of 47 CFR 
1.2105(a)(2)(ix)(A)-(C), and that has been disclosed in that 
applicant's FCC Form 175, the Commission reminds applicants that 
certain discussions or exchanges could nonetheless touch upon 
impermissible subject matters, and that compliance with the 
Commission's rules will not insulate a party from enforcement of the 
antitrust laws.
    22. Each applicant that is a winning bidder will be required 
following the close of the auction to disclose in an amendment to its 
displacement application the specific terms, conditions, and parties 
involved in any agreement relating to the licenses being auctioned into 
which it had entered prior to the time bidding was completed. This 
applies to any bidding consortia, joint venture, partnership, or other 
agreement, arrangement, or understanding of any kind entered into 
relating to the competitive bidding process, including any agreements 
relating to the permits being auctioned that address or communicate 
directly or indirectly bids (including specific prices), bidding 
strategies (including the specific permits on which to bid or not to 
bid), or the post-auction market structure, to which the applicant, or 
any party that controls or is controlled by the applicant, is a party. 
Failure to comply with the Commission's rules can result in enforcement 
action.
    23. Ownership Disclosure Requirements. Each applicant must comply 
with the uniform part 1 ownership disclosure requirements and provide 
information required by 47 CFR 1.2105 and 1.2112, and, where 
applicable, 47 CFR 1.2110. Specifically, in completing the FCC Form 
175, an applicant will be required to fully disclose information on the 
real party- or parties-in-interest and the ownership structure of the 
applicant, including both direct and indirect ownership interests of 
10% or more, as prescribed in 47 CFR 1.2105 and 1.2112, and, where 
applicable, 47 CFR 1.2110. Each applicant is responsible for ensuring 
that information submitted in its FCC Form 175 is complete and 
accurate.
    24. Foreign Ownership Disclosure Requirements. Section 310 of the 
Act requires the Commission to review foreign investment in radio 
station licenses and imposes specific restrictions on who may hold 
certain types of radio licenses. In completing the FCC Form 175, an 
applicant will be required to certify that it is in compliance with the 
foreign ownership provisions contained in 47 U.S.C. 310. See 47 CFR 
1.2105(a)(2)(vi).
    25. Prohibited Communications. The rules prohibiting certain 
communications set forth in 47 CFR 1.2105(c) and 73.5002(d) and (e) of 
the rules apply to each applicant that files a short-form application 
(FCC Form 175) in Auction 104. Section 1.2105(c)(1) of the Commission's 
rules provides that, subject to specified exceptions, after the 
deadline for filing a short-form application, all applicants are 
prohibited from cooperating or collaborating with respect to, 
communicating with or disclosing, to each other in any manner the 
substance of their own, or each other's, or any other applicant's bids 
or bidding strategies (including post-auction market structure), or 
discussing or negotiating settlement agreements, until after the down 
payment deadline.
    26. Entities Subject to 47 CFR 1.2105(c). An applicant for purposes 
of this rule includes the officers and directors of the applicant, all 
controlling interests in the entity submitting the FCC Form 175, as 
well as all holders of interests amounting to 10% or more of that 
entity.
    27. A party that submits an application becomes an applicant under 
the rule at the application filing deadline and that status does not 
change based on later developments. Thus, an auction applicant that 
does not correct deficiencies in its application, fails to submit a 
timely and sufficient upfront payment, or does not otherwise become 
qualified, remains an applicant for purposes of the rule and remains 
subject to the prohibition on certain communications until the 
applicable down payment deadline.
    28. Scope of Prohibition on Communications. The Commission updated 
and revised 47 CFR 1.2105(c)'s prohibition on communications by auction 
applicants in recent years. Significantly, the Commission in 2015 
amended 47 CFR 1.2105(c) to extend the prohibition on communications to 
cover all applicants for an auction regardless of whether the 
applicants seek permits or licenses in the same geographic area or 
market.
    29. In addition to express statements of bids and bidding 
strategies, the prohibition against communicating in any manner 
includes public disclosures as well as private communications and 
indirect or implicit communications. Consequently, an applicant must 
take care to determine whether its auction-related communications may 
reach another applicant.
    30. Parties subject to 47 CFR 1.2105(c) should take special care in 
circumstances where their officers, directors, and employees may 
receive information directly or indirectly relating to any applicant's 
bids or bidding strategies. Such information may be deemed to have been 
received by the applicant under certain circumstances. For example, 
Commission staff have found that, where an individual serves as an 
officer and director for two or more applicants, the bids and bidding 
strategies of one applicant are presumed conveyed to the other 
applicant through the shared officer, which creates an apparent 
violation of the rule.
    31. Subject to the exception described above, 47 CFR 1.2105(c)(1) 
prohibits applicants from communicating with specified other parties 
only with respect to their own, or each other's, or any other 
applicant's bids or bidding strategies. Moreover, a communication 
conveying bids or bidding strategies (including post-auction market 
structure) must also relate to the licenses being auctioned in order to 
be covered by the prohibition. Thus, the prohibition is limited in 
scope and does not apply to all communications between or among the 
specified parties.
    32. Business discussions and negotiations that are unrelated to 
bidding in Auction 104 and that do not convey information about the 
bids or bidding strategies, including the post-auction market 
structure, of an applicant in either auction, are not prohibited by the 
rule. While 47 CFR 1.2105(c) does not prohibit business discussions and 
negotiations among auction applicants that are not auction related, 
each applicant must remain vigilant not to communicate, directly or 
indirectly, information that affects, or could affect, bids or bidding 
strategies. Certain discussions might touch upon subject matters that 
could convey price or geographic information related to bidding 
strategies. Such subject areas include, but are not limited to, 
management, sales, local marketing agreements, and other transactional 
agreements.
    33. Communicating with Third Parties. Section 1.2105(c) does not 
prohibit an applicant from

[[Page 37132]]

communicating bids or bidding strategies to a third-party, such as a 
consultant or consulting firm, counsel, or lender. The applicant should 
take appropriate steps, however, to ensure that any third party it 
employs for advice pertaining to its bids or bidding strategies does 
not become a conduit for prohibited communications to other specified 
parties, as that would violate the rule. For example, an applicant 
might require a third party, such as a lender, to sign a non-disclosure 
agreement before the applicant communicates any information regarding 
bids or bidding strategy to the third party. Within third-party firms, 
separate individual employees, such as attorneys or auction 
consultants, may advise individual applicants on bids or bidding 
strategies, as long as such firms implement firewalls and other 
compliance procedures that prevent such individuals from communicating 
the bids or bidding strategies of one applicant to other individuals 
representing separate applicants. Although firewalls and/or other 
procedures should be used, their existence is not an absolute defense 
to liability if a violation of the rule has occurred.
    34. In the case of an individual, the objective precautionary 
measure of a firewall is not available. As a result, an individual that 
is privy to bids or bidding information of more than one applicant 
presents a greater risk of becoming a conduit for a prohibited 
communication. Whether a prohibited communication has taken place in a 
given case will depend on all the facts pertaining to the case, 
including who possessed what information, what information was conveyed 
to whom, and the course of bidding in the auction.
    35. Applicants may discuss the short-form application or bids for 
specific permits with their counsel, consultant, or expert of their 
choice before the short-form application deadline. Furthermore, the 
same third-party individual could continue to give advice after the 
short-form deadline regarding the application, provided that no 
information pertaining to bids or bidding strategies is conveyed to 
that individual. To the extent potential applicants can develop bidding 
instructions prior to the short-form application deadline that a third 
party could implement without changes during bidding, the third party 
could follow such instructions for multiple applicants provided that 
those applicants do not communicate with the third party during the 
prohibition period.
    36. Applicants also should use caution in their dealings with other 
parties, such as members of the press, financial analysts, or others 
who might become conduits for the communication of prohibited bidding 
information. For example, even though communicating that it has applied 
to participate in this auction will not violate the rule, an 
applicant's statement to the press that it intends to stop bidding in 
an auction could give rise to a finding of a 47 CFR 1.2105 violation. 
Similarly, an FCC Form 175 applicant's public statement of intent not 
to place bids during bidding could also violate the rule.
    37. Section 1.2105(c) Certification. By electronically submitting 
its FCC Form 175, each applicant in Auction 104 certifies its 
compliance with 47 CFR 1.2105(c) and 73.5002(d) of the rules. However, 
the mere filing of a certifying statement as part of an application 
will not outweigh specific evidence that a prohibited communication has 
occurred, nor will it preclude the initiation of an investigation when 
warranted. Any applicant found to have violated these communication 
prohibitions may be subject to sanctions.
    38. Reporting Requirements. Section 1.2105(c)(4) requires that any 
applicant that makes or receives a communication that appears to 
violate 47 CFR 1.2105(c) must report such communication in writing to 
the Commission immediately, and in no case later than five business 
days after the communication occurs. Each applicant's obligation to 
report any such communication continues beyond the five-day period 
after the communication is made, even if the report is not made within 
the five-day period.
    Procedures for Reporting Prohibited Communications. Section 
1.2105(c) requires parties to file only a single report concerning a 
prohibited communication and to file that report with Commission 
personnel expressly charged with administering the Commission's 
auctions. Any reports required by 47 CFR 1.2105(c) must be filed 
consistent with the instructions set forth in the Auction 104 
Procedures Public Notice. For Auction 104, such reports must be filed 
with the Chief of the Auctions Division, OEA, by the most expeditious 
means available. Any such report should be submitted by email to 
Margaret W. Wiener at the following email address: [email protected]. 
If you choose instead to submit a report in hard copy, any such report 
must be delivered only to: Margaret W. Wiener, Chief, Auctions 
Division, OEA, FCC, 445 12th Street SW, Washington, DC 20554.
    40. A party reporting any communication pursuant to 47 CFR 1.65 or 
1.2105(a)(2) or (c)(4) must take care to ensure that any report of a 
prohibited communication does not itself give rise to a violation of 47 
CFR 1.2105(c). For example, a party's report of a prohibited 
communication could violate the rule by communicating prohibited 
information to other applicants through the use of Commission filing 
procedures that would allow such materials to be made available for 
public inspection. A party seeking to report such a prohibited 
communication should consider submitting its report with a request that 
the report or portions of the submission be withheld from public 
inspection by following the procedures specified in 47 CFR 0.459. Such 
parties also are encouraged to coordinate with the Auctions Division 
staff about the procedures for submitting such reports.
    41. Compliance with Antitrust Laws. Regardless of compliance with 
the Commission's rules, applicants remain subject to the antitrust 
laws, which are designed to prevent anticompetitive behavior in the 
marketplace. Applicants should note that conduct that is permissible 
under the Commission's rules may be prohibited by the antitrust laws. 
Compliance with the disclosure requirements of 47 CFR 1.2105(c) will 
not insulate a party from enforcement of the antitrust laws. To the 
extent the Commission becomes aware of specific allegations that 
suggest that violations of the federal antitrust laws may have 
occurred, the Commission may refer such allegations to the United 
States Department of Justice for investigation. If an applicant is 
found to have violated the antitrust laws or the Commission's rules in 
connection with its participation in the competitive bidding process, 
it may be subject to forfeiture of its upfront payment, down payment, 
or full bid amount and may be prohibited from participating in future 
auctions, among other sanctions.
    42. New Entrant Bidding Credit. Applicants that qualify for the New 
Entrant Bidding Credit, as specified in the applicable rule, are 
eligible for a bidding credit that represents the amount by which a 
bidder's winning bid is discounted. The interests of the applicant, and 
of any individuals or entities with an attributable interest in the 
applicant, in other media of mass communications are considered when 
determining an applicant's eligibility for the New Entrant Bidding 
Credit. A medium of mass communications is defined in 47 CFR 
73.5008(b). Full-power noncommercial educational (NCE) stations, on 
both reserved and

[[Page 37133]]

non-reserved channels, are included among media of mass communication.
    43. In Auction 104, the bidder's attributable interests and, thus, 
its maximum new entrant bidding credit eligibility are determined as of 
the short-form application filing deadline. An applicant intending to 
divest a media interest or make any other ownership change, such as 
resignation of positional interests (officer or director), in order to 
avoid attribution for purposes of qualifying for the New Entrant 
Bidding Credit must have consummated such divestment transactions or 
have completed such ownership changes by no later than the FCC Form 175 
filing deadline. If, for example, on July 22, 2019, an auction 
applicant has a pending or granted application to assign or transfer 
control of a media interest, the applicant will not avoid attribution 
with respect to that interest. To avoid attribution, an applicant must 
have consummated the transaction before the FCC Form 175 filing 
deadline. Thus, an applicant could not qualify for a bidding credit, 
nor upgrade a previously claimed bidding credit, based upon ownership 
or positional changes occurring after the short-form application filing 
deadline. See 47 CFR 73.5007(a). Each prospective bidder is reminded, 
however, that events occurring after the short-form filing deadline, 
such as the acquisition of attributable interests in media of mass 
communications, may cause diminishment or loss of the bidding credit, 
and must be reported immediately. Each applicant has a duty to 
continuously maintain the accuracy of information submitted in its 
auction application.
    44. The attributable mass media interests held by an individual or 
entity with an equity and/or debt interest in an applicant shall be 
attributed to that bidder for purposes of determining its eligibility 
for the New Entrant Bidding Credit, if the equity and debt interests, 
in the aggregate, exceed 33% of the total asset value of the applicant, 
even if such an interest is non-voting. The Commission will allow the 
holder of an equity or debt interest in the applicant to exceed the 
above-noted 33% threshold without triggering attribution provided (1) 
the combined equity and debt in the eligible entity is less than 50%; 
or (2) the total debt in the eligible entity does not exceed 80% of the 
asset value, and the interest holder does not hold any equity interest, 
option, or promise to acquire an equity interest in the eligible entity 
or any related entity. An eligible entity is defined in Note 2(i) of 47 
CFR 73.3555.
    45. Application Requirements. In addition to the ownership 
information required pursuant to 47 CFR 1.2105 and 1.2112, applicants 
seeking a New Entrant Bidding Credit are required to establish on their 
short-form applications that they satisfy the eligibility requirements 
to qualify for the bidding credit. In those cases, a certification 
under penalty of perjury must be provided in completing the short-form 
application. An applicant claiming that it qualifies for a 35% New 
Entrant Bidding Credit must certify that neither it nor any of its 
attributable interest holders have any attributable interests in any 
other media of mass communications. An applicant claiming that it 
qualifies for a 25% New Entrant Bidding Credit must certify that 
neither it nor any of its attributable interest holders has any 
attributable interests in more than three media of mass communications, 
and must identify and describe such media of mass communications.
    46. Bidding Credit Size. The size of a New Entrant Bidding Credit 
depends on the number of ownership interests in other media of mass 
communications that are attributable to the bidder-entity and its 
attributable interest-holders. A 35% bidding credit will be given to a 
winning bidder if it, and/or any individual or entity with an 
attributable interest in the winning bidder, has no attributable 
interest in any other media of mass communications, as defined in 47 
CFR 73.5008. A 25% bidding credit will be given to a winning bidder if 
it, and/or any individual or entity with an attributable interest in 
the winning bidder, has an attributable interest in no more than three 
mass media facilities, as defined in 47 CFR 73.5008. No bidding credit 
will be given if any of the commonly owned mass media facilities serve 
the same area as the construction permit proposed in this auction, as 
defined in 47 CFR 73.5007(b), or if the winning bidder, and/or any 
individual or entity with an attributable interest in the winning 
bidder, has attributable interests in more than three mass media 
facilities. Any existing media of mass communications will be 
considered in the same area as a facility proposed in this auction if 
the relevant defined service areas of the existing mass media 
facilities partially overlap, or are partially overlapped by, the 
proposed facility's relevant contour. See 47 CFR 73.5007(b). For 
purposes of determining whether a construction permit offered in this 
auction is in the same area as an applicant's existing mass media 
facilities, the coverage area of the to-be-auctioned facility is 
calculated using maximum class facilities at the applicant-specified 
site coordinates, and with the relevant contour defined in 47 CFR 
73.5007(b).
    47. Bidding credits are not cumulative; qualifying applicants 
receive either the 25% or the 35% bidding credit, but not both. 
Attributable interests are defined in 47 CFR 73.3555 and note 2 of that 
section. Applicants should note that unjust enrichment provisions apply 
to a winning bidder that utilizes a bidding credit and subsequently 
seeks to assign or transfer control of its license or construction 
permit to an entity not qualifying for the same level of bidding 
credit.
    48. Provisions Regarding Former and Current Defaulters. Pursuant to 
the rules governing competitive bidding, each applicant must make 
certifications regarding whether it is a current or former defaulter or 
delinquent. A current defaulter or delinquent is not eligible to 
participate in Auction 104. An applicant is considered a current 
defaulter or a current delinquent when it, any of its affiliates, any 
of its controlling interests, or any of the affiliates of its 
controlling interests, is in default on any payment for any Commission 
construction permit or license (including a down payment) or is 
delinquent on any non-tax debt owed to any Federal agency as of the 
filing deadline for auction applications. Accordingly, each applicant 
must certify under penalty of perjury on its FCC Form 175 that the 
applicant, any of its affiliates, any of its controlling interests, and 
any of the affiliates of its controlling interests, are not in default 
on any payment for a Commission construction permit or license 
(including down payments) and that are not delinquent on any non-tax 
debt owed to any Federal agency. For purposes of this certification, 
the term affiliate is defined in 47 CFR 1.2110 and the term controlling 
interest is defined in 47 CFR 1.2105(a)(4)(i).
    49. Under the Commission's revised rule regarding applications 
filed by former defaulters, an applicant is considered a former 
defaulter or a former delinquent when, as of the FCC Form 175 filing 
deadline, it or any of its controlling interests has defaulted on any 
Commission construction permit or license or has been delinquent on any 
non-tax debt owed to any Federal agency, but has since remedied all 
such defaults and cured all of the outstanding non-tax delinquencies. A 
former defaulter or delinquent who has remedied all such defaults and 
cured all of the outstanding non-tax delinquencies prior to the FCC 
Form

[[Page 37134]]

175 filing deadline in this auction may participate so long as it is 
otherwise qualified, if the applicant makes an upfront payment that is 
50% more than would otherwise be required. For this reason, an 
applicant must certify under penalty of perjury whether it (along with 
any of its controlling interests) has ever been in default on any 
payment for a Commission construction permit or license (including a 
down payment) or has ever been delinquent on any non-tax debt owed to 
any Federal agency, subject to the exclusions described in 47 CFR 
1.2105(a)(2)(xii). For purposes of evaluating the certifications under 
47 CFR 1.2105(a)(2)(xi) and (xii), non-tax debt owed to any Federal 
agency includes, within the meaning of the rule, all amounts owed under 
Federal programs, including contributions to the Universal Service Fund 
(USF), Telecommunications Relay Services Fund, and the North American 
Numbering Plan Administration. For purposes of making this 
certification, the term controlling interest is defined in 47 CFR 
1.2105(a)(4)(i).
    50. For purposes of the certification under 47 CFR 
1.2105(a)(2)(xii), the applicant may exclude from consideration any 
cured default on a Commission construction permit or license as well as 
any cured delinquency on a non-tax debt owed to a Federal agency for 
which any of the following criteria are met: (1) The notice of the 
final payment deadline or delinquency was received more than seven 
years before the FCC Form 175 filing deadline; (2) the default or 
delinquency amounted to less than $100,000; (3) the default or 
delinquency was paid within six months after receiving the notice of 
the final payment deadline or delinquency; or (4) the default or 
delinquency was the subject of a legal or arbitration proceeding and 
was cured upon resolution of the proceeding.
    51. Applicants should review previous guidance provided on default 
and delinquency disclosure requirements in the context of the auction 
short-form application process. Applicants also are advised to consult 
with Auctions Division staff if they have questions about delinquency 
or default disclosure requirements.
    52. Optional Applicant Status Identification. An applicant owned by 
members of minority groups and/or women, as defined in 47 CFR 
1.2110(c)(3), or rural telephone companies, as defined in 47 CFR 
1.2110(c)(4), may identify itself regarding this status in filling out 
its FCC Form 175. This applicant status information is collected for 
statistical purposes only and assists the Commission in monitoring the 
participation of various groups in its auctions.
    53. Minor Modifications to Short-Form Applications. After the 
initial application filing deadline, an applicant will be permitted to 
make only minor modifications to its short-form application. Examples 
of minor changes include the deletion or addition of authorized bidders 
(to a maximum of three), revision of addresses and telephone numbers of 
the applicant, its responsible party, and its contact person, or change 
in the applicant's selected bidding option (electronic or telephonic). 
A major modification to an FCC Form 175 application (e.g., change the 
engineering proposal(s), change the certifying official, change control 
of the applicant (e.g., any change in ownership or control that would 
constitute an assignment or transfer of control of the applicant), or 
claim eligibility for a higher percentage of bidding credit) will not 
be permitted after the initial FCC Form 175 filing deadline.
    54. Any change in control of the applicant will be considered a 
major amendment. If an applicant makes a major amendment, as defined by 
47 CFR 1.2105(b)(2), the major amendment may result in the 
disqualification of the applicant from participating in the bidding. 
Even if an applicant's FCC Form 175 is dismissed, the applicant would 
remain subject to the prohibitions on certain communications of 47 CFR 
1.2105(c) until the down payment deadline for this auction. Questions 
about FCC Form 175 amendments should be directed to the Auctions 
Division at (202) 418-0660.
    55. Maintaining Current Information in Short-Form Applications. 
Each applicant has a continuing obligation to maintain the accuracy and 
completeness of information furnished in its pending application in a 
competitive bidding proceeding. An auction applicant must furnish 
additional or corrected information to the Commission within five 
business days after a significant occurrence, or amend its FCC Form 175 
no more than five business days after the applicant becomes aware of 
the need for the amendment. Changes that cause a loss of or reduction 
in the percentage of bidding credit specified on the originally-
submitted application must be reported immediately, and no later than 
five business days after the change occurs.
    56. An applicant's obligation to make modifications to a pending 
auction application in order to provide additional or corrected 
information continues in accordance with the Commission's rules. An 
applicant is obligated to amend its pending application even if a 
reported change is considered to be a major modification that may 
result in the dismissal of its application.

III. Preparing for Bidding

    57. Due Diligence. Each potential bidder is solely responsible for 
investigating and evaluating all technical and marketplace factors that 
may have a bearing on the value of the construction permit(s) it is 
seeking in this auction. The FCC makes no representations or warranties 
about the use of this spectrum or these construction permits for 
particular services. Applicants should be aware that an FCC auction 
represents an opportunity to become an FCC permittee in a broadcast 
service, subject to certain conditions and regulations. An FCC auction 
does not constitute an endorsement by the FCC of any particular 
service, technology, or product, nor does an FCC construction permit or 
license constitute a guarantee of business success.
    58. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
Each potential bidder to perform technical analyses and/or refresh its 
previous analyses to assure itself that, should it become a winning 
bidder for any Auction 104 construction permit, it will be able to 
build and operate facilities that will fully comply with all applicable 
technical and legal requirements. Each applicant should inspect any 
prospective transmitter sites located in, or near, the service area for 
which it plans to bid, confirm the availability of such sites, and to 
familiarize itself with the Commission's rules regarding the National 
Environmental Policy Act, 47 CFR part 1, subpart I.
    59. Each applicant should continue to conduct its own research 
throughout Auction 104 in order to determine the existence of pending 
or future administrative or judicial proceedings that might affect its 
decision on continued participation in the auction. Each Auction 104 
applicant is responsible for assessing the likelihood of the various 
possible outcomes and for considering the potential impact on 
construction permits available in this auction. The due diligence 
considerations mentioned in the Auction 104 Procedures Public Notice do 
not comprise an exhaustive list of steps that should be undertaken 
prior to participating in this auction. As always, the burden is on the 
potential bidder to determine how much research to

[[Page 37135]]

undertake, depending upon specific facts and circumstances related to 
its interests.
    60. Applicants are solely responsible for identifying associated 
risks and for investigating and evaluating the degree to which such 
matters may affect their ability to bid on, otherwise acquire, or make 
use of the construction permits available in Auction 104. Each 
potential bidder is responsible for undertaking research to ensure that 
any permits won in this auction will be suitable for its business plans 
and needs. Each potential bidder must undertake its own assessment of 
the relevance and importance of information gathered as part of its due 
diligence efforts.
    61. The Commission makes no representations or guarantees regarding 
the accuracy or completeness of information in its databases or any 
third party databases, including, for example, court docketing systems. 
To the extent the Commission's databases may not include all 
information deemed necessary or desirable by an applicant, it must 
obtain or verify such information from independent sources or assume 
the risk of any incompleteness or inaccuracy in said databases. 
Furthermore, the Commission makes no representations or guarantees 
regarding the accuracy or completeness of information that has been 
provided by incumbent licensees and incorporated into its databases.
    62. Online Tutorial on Auction Process. An educational auction 
tutorial was available starting on July 8, 2019, on the Education tab 
of the Auction 104 website. This tutorial will remain available and 
accessible anytime for reference.
    63. Application Processing and Corrections of Deficiencies. After 
the deadline for filing auction applications, Commission staff will 
process all timely submitted applications to determine whether each 
applicant has complied with the application requirements and provided 
all information concerning its qualifications for bidding. 
Subsequently, a public notice will be issued to identify applications 
that are complete and those that are incomplete or deficient because of 
minor defects that may be corrected. The public notice will include the 
deadline for resubmitting corrected applications. A paper copy of this 
public notice identifying initial application status will be sent to 
the contact address listed in the FCC Form 175 for each applicant by 
overnight delivery. In addition, each applicant with an incomplete 
application will be sent information on the nature of the deficiencies 
in its application, along with the name and phone number of a 
Commission staff member who can answer questions specific to the 
application.
    64. Commission staff will communicate only with an applicant's 
contact person or certifying official, as designated on the short-form 
application, unless the applicant's certifying official or contact 
person notifies the Commission in writing that applicant's counsel or 
other representative is authorized to speak on its behalf. 
Authorizations may be sent by email to [email protected]. In no event, 
however, will the FCC send auction registration materials to anyone 
other than the contact person listed on the applicant's FCC Form 175 or 
respond to a request for replacement registration materials from anyone 
other than the authorized bidder, contact person, or certifying 
official listed on the applicant's FCC Form 175.
    65. After Commission staff review resubmitted applications for 
Auction 104, Commission staff will release a public notice identifying 
applicants that have become qualified bidders before bidding in the 
auction begins. Qualified bidders are those applicants with submitted 
FCC Forms 175 that are deemed timely filed and found to comply with the 
Commission's competitive bidding rules and other requirements set forth 
in the Auction 104 Procedures Public Notice, and comply with applicable 
Commission rules, and which have made a timely and sufficient upfront 
payment (as described below).
    66. Upfront Payments. In order to be eligible to bid in this 
auction, a sufficient upfront payment and a complete and accurate FCC 
Remittance Advice Form (FCC Form 159, February 2003 edition) must be 
submitted by 6 p.m. ET on August 14, 2019, following the procedures and 
instructions outlined below and the instructions in Attachment C to the 
Auction 104 Procedures Public Notice.
    67. Making Upfront Payments by Wire Transfer. All upfront payments 
must be made by wire transfer. An applicant must initiate the wire 
transfer through its bank, authorizing the bank to wire funds from the 
applicant's account to the Commission's account at the U.S. Treasury. 
No other payment method is acceptable. The Commission will not accept 
checks, credit cards, or automated clearing house (ACH) payments. All 
payments must be made in U.S. dollars. Upfront payments for Auction 104 
go to a U.S. Treasury account number different from the accounts used 
in previous FCC auctions. This wire transfer must include the 
information specified and comply with the instructions provided in the 
Auction 104 Procedures Public Notice. The beneficiary account number is 
specific to the upfront payments for Auction 104. Do not use a 
beneficiary account number from a previous auction.
    68. Each applicant is responsible for ensuring timely submission of 
its upfront payment and for timely filing of an accurate and complete 
Form 159. To avoid untimely payments, an applicant should discuss 
arrangements and deadlines with its financial institution (including 
that financial institution's specific wire transfer requirements) 
several days before they plan to make the wire transfer, and well ahead 
of the due date, as well as allowing sufficient time for the wire 
transfer to be initiated and completed prior to the deadline. The 
Commission repeatedly has cautioned auction participants about the 
importance of planning ahead to prepare for unforeseen last-minute 
difficulties in making payments by wire transfer. Each applicant is 
responsible for obtaining confirmation from its financial institution 
that its wire transfer to U.S. Treasury was successful and from 
Commission staff that its upfront payment was timely received and that 
it was deposited into the proper account. Contact information for 
relevant staff is supplied in this public notice.
    69. Failure to deliver a sufficient upfront payment as instructed 
herein by the August 14, 2019, deadline will result in dismissal of the 
short-form application and disqualification from participation in the 
auction.
    70. Completing and Submitting FCC Form 159. An accurate and 
complete Form 159 (February 2003 edition) must be sent to the FCC to 
accompany each upfront payment. At least one hour before placing the 
order for the wire transfer (but on the same business day), applicants 
must fax a completed Form 159 to the FCC at (202) 418-2843. On the fax 
cover sheet, write Wire Transfer--Auction Payment for Auction 104. 
Alternatively, the completed form can be scanned and sent as an 
attachment to an email to [email protected].
    71. In order to meet the upfront payment deadline, an applicant's 
payment must be credited to the Commission's account for Auction 104 at 
the U.S. Treasury before the deadline. Proper completion of this form 
is critical to ensuring correct crediting of upfront payments. Detailed 
instructions for completion of FCC Form 159 are included in Attachment 
C of the Auction 104 Procedures Public Notice. An electronic pre-filled 
version of the FCC Form 159 is available after

[[Page 37136]]

submitting the FCC Form 175. Payers using the pre-filled FCC Form 159 
are responsible for ensuring that all of the information on the form, 
including payment amounts, is accurate.
    72. Upfront Payments and Bidding Eligibility. The specific upfront 
payment amounts and bidding units for each construction permit are set 
forth in Attachment A of the Auction 104 Procedures Public Notice. 
Applicants must make upfront payments sufficient to obtain bidding 
eligibility on the construction permit(s) on which they will bid. The 
amount of the upfront payment determines a bidder's initial bidding 
eligibility, the maximum number of bidding units on which a bidder may 
place bids in any single round. In order to bid on a particular 
construction permit, otherwise qualified bidders that are designated in 
Attachment A of the Auction 104 Procedures Public Notice for that 
construction permit must have a current eligibility level that meets or 
exceeds the number of bidding units assigned to that construction 
permit. At a minimum, therefore, an applicant's total upfront payment 
must be enough to establish eligibility to bid on at least one of the 
construction permits designated for that applicant in Attachment A of 
the Auction 104 Procedures Public Notice, or else the applicant will 
not be eligible to participate in the auction. The total upfront 
payment does not affect the total dollar amount the bidder may bid on 
any given construction permit.
    73. An applicant does not have to make an upfront payment to cover 
all construction permits designated for that applicant in Attachment A 
of the Auction 104 Procedures Public Notice, but only enough to cover 
the maximum number of bidding units that are associated with 
construction permits on which they wish to place bids and hold 
provisionally winning bids in any given round. Provisionally winning 
bids are bids that would become final winning bids if the auction were 
to close after the given round.
    74. In calculating its upfront payment amount, an applicant should 
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 number of bidding units. A 
qualified bidder's maximum eligibility will not exceed the sum of the 
bidding units associated with the total number of construction permits 
identified for that applicant in Attachment A of the Auction 104 
Procedures Public Notice. In order to make this calculation, an 
applicant should add together the bidding units for all construction 
permits on which it seeks to be active in any given round. Applicants 
should check their calculations carefully, as there is no provision for 
increasing a bidder's eligibility after the upfront payment deadline.
    75. Applicants that are former defaulters, as described above, must 
pay upfront payments 50% greater than non-former defaulters. For 
purposes of this classification as a former defaulter or a former 
delinquent, defaults and delinquencies of the applicant itself and its 
controlling interests are included. For this purpose, the term 
controlling interest is defined in 47 CFR 1.2105(a)(4)(i). If an 
applicant is a former defaulter, it must calculate its upfront payment 
for all of its identified construction permits by multiplying the 
number of bidding units on which it wishes to be active by 1.5. In 
order to calculate the number of bidding units to assign to former 
defaulters, the Commission will divide the upfront payment received by 
1.5 and round the result up to the nearest bidding unit.
    76. If a former defaulter fails to submit a sufficient upfront 
payment to establish eligibility to bid on at least one of the 
construction permits designated for that applicant in Attachment A of 
the Auction 104 Procedures Public Notice, the applicant will not be 
eligible to participate in the auction. This applicant will retain its 
status as an applicant in Auction 104 and will remain subject to 47 CFR 
1.2105(c) and 73.5002(d).
    77. Auction Registration. All qualified bidders are automatically 
registered for the auction. Registration materials will be distributed 
prior to the auction by overnight mail. For security reasons, the 
mailing will be sent only to the contact person at the contact address 
listed in the FCC Form 175 and will include the SecurID[supreg] tokens 
that will be required to place bids, the web address and instructions 
for accessing and logging in to the auction bidding system, an FCC 
assigned username (User ID) for each authorized bidder, and the Auction 
Bidder Line phone number.
    78. Qualified bidders that do not receive this registration mailing 
will not be able to submit bids. Therefore, if this mailing is not 
received by noon on September 4, 2019, a qualified bidder must call the 
Auctions Hotline. Receipt of this registration mailing is critical to 
participating in the auction, and each applicant is responsible for 
ensuring it has received all of the registration material.
    79. In the event that SecurID[supreg] tokens are lost or damaged, 
only a person who has been designated as an authorized bidder, the 
contact person, or the certifying official on the applicant's short-
form application may request replacements. To request replacement of 
these items, call the Auction Bidder Line at the telephone number 
provided in the registration materials or the Auctions Hotline.
    80. Each authorized bidder must have its own SecurID[supreg] token, 
which the Commission will provide at no charge. Each applicant with one 
authorized bidder will be issued two SecurID[supreg] tokens, while 
applicants with two or three authorized bidders will be issued three 
tokens. Each SecurID[supreg] token is tailored to a specific auction. 
SecurID[supreg] tokens issued for other auctions or obtained from a 
source other than the FCC will not work for Auction 104.
    81. Remote Electronic Bidding via the FCC Auction Bidding System. 
Only qualified bidders are permitted to bid. All bidding will take 
place remotely. There will be no on-site bidding during Auction 104. 
Qualified bidders will be able to place bids in Auction 104 over the 
internet using the FCC auction bidding system. Telephonic bidding will 
be available as well. All telephone calls are recorded. Telephonic bid 
assistants are required to use a script when entering bids placed by 
telephone. Telephonic bidders are therefore reminded to allow 
sufficient time to bid by placing their calls well in advance of the 
close of a round. The length of a call to place a telephonic bid may 
vary; please allow a minimum of ten minutes.
    82. The Commission makes no warranties whatsoever with respect to 
the FCC auction application system and the auction bidding system. In 
no event shall the Commission, or any of its officers, employees, or 
agents, be liable for any damages whatsoever (including, but not 
limited to, loss of business profits, business interruption, loss of 
business information, or any other loss) arising out of or relating to 
the existence, furnishing, functioning, or use of the FCC auction 
systems that are accessible to qualified bidders in connection with 
this auction. Moreover, no obligation or liability will arise out of 
the Commission's technical, programming, or other advice or service 
provided in connection with the FCC auction systems.
    83. To the extent an issue arises with the Auction System itself, 
the Commission will take all appropriate measures to resolve such 
issues quickly and equitably. The Commission periodically performs 
scheduled maintenance of its IT systems. During scheduled maintenance 
activities, which typically occur over the

[[Page 37137]]

weekends, every effort is made to minimize any downtime to auction-
related systems, including the Commission's bidding system. However, 
there are occasions when auction-related systems may be temporarily 
unavailable. Should an issue arise that is outside the Auction System 
or attributable to a bidder, including, but not limited to, a bidder's 
hardware, software, or internet access problem that prevents the bidder 
from submitting a bid prior to the end of a round, the Commission shall 
have no obligation to resolve or remediate such an issue on behalf of 
the bidder. Similarly, if an issue arises due to bidder error using the 
Auction System, the Commission shall have no obligation to resolve or 
remediate such an issue on behalf of the bidder. Accordingly, after the 
close of a bidding round, the results of bid processing will not be 
altered absent evidence of any failure in the Auction System.
    84. Mock Auction. All qualified bidders will be eligible to 
participate in a mock auction on September 6, 2019. The mock auction 
will enable qualified bidders to become familiar with the FCC auction 
bidding system prior to the auction. We strongly recommend that all 
authorized bidders participate in the mock auction. Details will be 
announced by public notice.

IV. Bidding

    85. Simultaneous Multiple Round Auction. The Commission's standard 
simultaneous multiple-round auction format will be used for Auction 
104. This type of auction offers every construction permit for bid at 
the same time and consists of successive bidding rounds in which 
qualified bidders may place bids on individual construction permits. 
Unless otherwise announced, bids will be accepted on all construction 
permits in each round of the auction until bidding stops on every 
construction permit. Moreover, unless otherwise announced, bidding on 
all construction permits will be conducted on each business day until 
bidding has stopped on all construction permits.
    86. Auction Bidding System. An Auction 104 bidder's ability to bid 
on specific construction permits is determined by two factors: (1) The 
construction permits designated for that applicant in Attachment A of 
the Auction 104 Procedures Public Notice and (2) the bidder's bidding 
eligibility measured in bidding units. The FCC auction bidding system 
will allow bidders to submit bids on only those construction permits 
designated for that applicant in Attachment A of the Auction 104 
Procedures Public Notice.
    87. In order to access the bidding function of the FCC auction 
bidding system, bidders must be logged in during a bidding round using 
the passcode generated by the SecurID[supreg] token and a personal 
identification number (PIN) created by the bidder. Bidders are strongly 
encouraged to print a round summary for each round after they have 
completed all of their activity for that round.
    88. Round Structure. The initial schedule of bidding rounds will be 
announced in the public notice listing the qualified bidders, which 
will be released at least one week before the start of bidding in the 
auction. Each bidding round is followed by the release of round 
results. Multiple bidding rounds may be conducted each day.
    89. IATF, MB and OEA retain the discretion to change the bidding 
schedule in order to foster an auction pace that reasonably balances 
speed with the bidders' need to study round results and adjust their 
bidding strategies. The amount of time for the bidding rounds, the 
amount of time between rounds, or the number of rounds per day, may be 
changed depending upon bidding activity and other factors, by prior 
announcement.
    90. Eligibility and Activity Rules. For Auction 104, the amount of 
the upfront payment submitted by a bidder determines initial bidding 
eligibility, the maximum number of bidding units on which a bidder may 
be active. Each construction permit is assigned a specific number of 
bidding units as listed in Attachment A of the Auction 104 Procedures 
Public Notice. Bidding units assigned to each construction permit do 
not change as prices rise during the auction. Upfront payments are not 
attributed to specific construction permits. Rather, a bidder may place 
bids on any of the construction permits for which it is designated an 
applicant in Attachment A of the Auction 104 Procedures Public Notice 
as long as the total number of bidding units associated with those 
construction permits does not exceed its current eligibility. 
Eligibility cannot be increased during the auction; it can only remain 
the same or decrease. The total upfront payment does not affect the 
total dollar amount a bidder may bid on any given construction permit.
    91. To ensure that an auction closes within a reasonable period of 
time, an activity rule requires bidders to bid actively throughout the 
auction, rather than wait until late in the auction before 
participating. Bidders are required to be active on a specific 
percentage of their current bidding eligibility during each round of 
the auction. Note that the bidding units associated with construction 
permits for which the bidder has removed bids in that round do not 
count towards current activity.
    92. A bidder's activity level in a round is the sum of the bidding 
units associated with construction permits covered by the bidder's new 
bids in the current round and provisionally winning bids from the 
previous round. A provisionally winning bid is a bid that would become 
a final winning bid if the auction were to close after the given round.
    93. In Auction 104, a bidder is required to be active on 100% of 
its current eligibility during each round of the auction. That is, a 
bidder must either place a bid or be a provisionally winning bidder 
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.
    94. Activity Rule Waivers. Activity rule waivers are principally a 
mechanism for a bidder to avoid the loss of bidding eligibility in the 
event that exigent circumstances prevent it from bidding in a 
particular round. Use of an activity rule waiver preserves the bidder's 
eligibility despite its activity in the current round being below the 
required minimum activity level. In Auction 104, each bidder is 
provided with three activity rule waivers. Bidders may use an activity 
rule waiver in any round during the course of the auction. An activity 
rule waiver applies to an entire round of bidding, not to a particular 
construction permit. Activity rule waivers can be either proactive or 
automatic.
    95. The FCC auction bidding system will assume 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.
    96. A bidder with insufficient activity may wish to reduce its 
bidding

[[Page 37138]]

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 bidding system. In this case, the bidder's eligibility would be 
permanently reduced to bring it into compliance with the Auction 104 
activity rule. Reducing eligibility is an irreversible action; once 
eligibility has been reduced, a bidder cannot regain its lost bidding 
eligibility.
    97. Also, 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 were to apply an activity rule waiver (using the proactive 
waiver function in the FCC auction bidding system) during a bidding 
round in which no bid is placed, the auction will remain open and the 
bidder's eligibility will be preserved. An automatic waiver applied by 
the FCC auction bidding system in a round in which there is no new bid 
or a proactive waiver will not keep the auction open.
    98. Auction Stopping Rule. For Auction 104, a simultaneous stopping 
rule approach will be employed, which means all construction permits 
remain available for bidding until bidding stops on every construction 
permit. Specifically, bidding will close on all construction permits 
after the first round in which no bidder submits any new bid or applies 
a proactive waiver.
    99. Alternative versions of the simultaneous stopping procedure 
also may be employed for Auction 104. (1) The auction would close for 
all construction permits after the first round in which no bidder 
applies a waiver or places any new bid on a construction permit for 
which it is not the provisionally winning bidder. Thus, absent any 
other bidding activity, a bidder placing a new bid on a construction 
permit for which it is the provisionally winning bidder would not keep 
the auction open under this modified stopping rule. (2) The auction 
would close for all construction permits after the first round in which 
no bidder applies a proactive waiver or places any new bid on a 
construction permit that already has a provisionally winning bid. Thus, 
absent any other bidding activity, a bidder placing a new bid on an 
FCC-held construction permit (a construction permit that does not have 
a provisionally winning bid) would not keep the auction open under this 
modified stopping rule. (3) The auction would close using a modified 
version of the simultaneous stopping rule that combines options (1) and 
(2). (4) The auction would close after announcement of a specified 
number of additional rounds (special stopping rule). If this special 
stopping rule is invoked, bids in the specified final round(s) will be 
accepted, after which the auction will close. (5) The auction would 
remain open even if no bidder places any new bids or applies a waiver. 
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.
    100. These options will be exercised 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, it is 
likely that there will be an attempt to change the pace of the auction, 
such as, changing the number of bidding rounds per day and/or the 
minimum acceptable bids. IATF, MB and OEA retain the discretion to 
exercise any of these options with or without prior announcement during 
the auction.
    101. Auction Delay, Suspension or Cancellation. By public notice 
and/or by announcement through the FCC auction bidding system, IATF, MB 
and OEA may delay, suspend, or cancel bidding in the auction in the 
event of 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. In such cases, IATF, MB and 
OEA, in their sole discretion, may 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 us 
to delay or suspend the auction. This authority will be exercised 
solely at the discretion of IATF, MB and OEA, and not as a substitute 
for situations in which bidders may wish to apply their activity rule 
waivers.
    102. Bid Amounts. If the qualified bidder has sufficient 
eligibility to place a bid on a particular construction permit, 
eligible bidders will be able to place bids on a given construction 
permit in each round in any of up to nine pre-defined bid amounts. For 
each construction permit, the FCC auction bidding system interface will 
list the 9 acceptable bid amounts in a drop-down box. Bidders use the 
drop-down box to select from among the acceptable bid amounts. The FCC 
auction bidding system also includes an upload function that allows 
bidders to upload text files containing bid information.
    103. Until a bid has been placed on a construction permit, the 
minimum acceptable bid amount for that permit will be equal to its 
minimum opening bid amount. Once there are bids on a permit, minimum 
acceptable bids for the following round will be determined as described 
below.
    104. During a round, an eligible bidder may submit bids for 
construction permits (providing that it is eligible to bid on the 
specific permits), remove bids placed in the current bidding round, or 
permanently reduce eligibility. If multiple bids are submitted for the 
same construction permit in the same round, the system takes the last 
bid entered as that bidder's bid for the round.
    105. Reserve Price and Minimum Opening Bids. Normally a reserve 
price is an absolute minimum price below which a construction permit or 
license will not be sold in a specific auction. Auction 104 will be 
conducted without reserve prices for specific construction permits. In 
contrast to a reserve price, a minimum opening bid is the minimum bid 
price set at the beginning of the auction below which no bids are 
accepted. The specific minimum opening bid amounts for each of the 
construction permits in Auction 104 are specified in Attachment A to 
the Auction 104 Procedures Public Notice.
    106. Minimum Acceptable Bids. For calculation of the 9 acceptable 
bid amounts for each construction permit, Auction 104 will begin with a 
minimum acceptable bid increment percentage of 10% and an additional 
bid increment percentage of 5%. In Auction 104, the minimum acceptable 
bid amount for a construction permit will be equal to its minimum 
opening bid amount until there is a provisionally winning bid for the 
construction permit. After there is a provisionally winning bid for a 
construction permit, the minimum acceptable bid amount will be 
calculated by multiplying the provisionally winning bid amount by one 
plus the minimum acceptable bid percentage--e.g., provisionally winning 
bid amount * 1.10, rounded using the Commission's standard rounding 
procedures for auctions as described in the Auction 104 Procedures 
Public Notice.
    107. Additional Bid Amounts. In Auction 104, the FCC auction 
bidding system will calculate the 8 additional bid amounts by 
multiplying the minimum acceptable bid amount by the additional bid 
increment percentage of

[[Page 37139]]

5%, and that result (rounded) is the additional increment amount. The 
first additional acceptable bid amount equals the minimum acceptable 
bid amount plus the additional increment amount. The second additional 
acceptable bid amount equals the minimum acceptable bid amount plus two 
times the additional increment amount; the third additional acceptable 
bid amount is the minimum acceptable bid amount plus three times the 
additional increment amount; etc. With an additional bid increment 
percentage of 5%, the calculation of the additional increment amount is 
(minimum acceptable bid amount) * (0.05), rounded using the 
Commission's standard rounding procedures for auctions as described in 
the Auction 104 Procedures Public Notice. The first additional 
acceptable bid amount equals (minimum acceptable bid amount) + 
(additional increment amount); the second additional acceptable bid 
amount equals (minimum acceptable bid amount) + (2 * (additional 
increment amount)); the third additional acceptable bid amount equals 
(minimum acceptable bid amount) + (3 * (additional increment amount)); 
etc.
    108. Bid Amount Changes. IATF, MB and OEA retain the discretion to 
change the minimum acceptable bid amounts, the minimum acceptable bid 
percentage, the additional bid increment percentage, and the number of 
acceptable bid amounts if circumstances so dictate. Further, IATF, MB 
and OEA retain the discretion to do so on a construction permit-by-
construction permit basis. IATF, MB and OEA also retain the discretion 
to limit (a) the amount by which a minimum acceptable bid for a 
construction permit may increase compared with the corresponding 
provisionally winning bid, and (b) the amount by which an additional 
bid amount may increase compared with the immediately preceding 
acceptable bid amount. For example, a $1,000 limit on increases in 
minimum acceptable bid amounts over provisionally winning bids could be 
set. Thus, if calculating a minimum acceptable bid using the minimum 
acceptable bid percentage results in a minimum acceptable bid amount 
that is $1,200 higher than the provisionally winning bid on a 
construction permit, then the minimum acceptable bid amount would 
instead be capped at $1,000 above the provisionally winning bid. If any 
such discretion is exercised, bidders will be alerted by announcement 
in the FCC auction bidding system during the auction.
    109. Provisionally Winning Bids. In Auction 104, the FCC auction 
bidding system at the end of each bidding round will determine a 
provisionally winning bid for each construction permit based on the 
highest bid amount received for that permit. A provisionally winning 
bid will remain the provisionally winning bid until there is a higher 
bid on the same construction permit at the close of a subsequent round. 
Provisionally winning bids at the end of the auction become the winning 
bids.
    110. The FCC auction bidding system will assign a pseudo-random 
number to each bid upon submission. In the event of identical high bid 
amounts being submitted on a construction permit in a given round 
(i.e., tied bids), the tied bid with the highest random number wins the 
tiebreaker, and becomes the provisionally winning bid. The remaining 
bidders, as well as the provisionally winning bidder, can submit higher 
bids in subsequent rounds. However, if the auction were to close with 
no other bids being placed, the winning bidder would be the one that 
placed the provisionally winning bid. If the construction permit 
receives any bids in a subsequent round, the provisionally winning bid 
again will be determined by the highest bid amount received for the 
construction permit.
    111. A provisionally winning bid will be retained until there is a 
higher bid on the construction permit at the close of a subsequent 
round. As a reminder, provisionally winning bids count toward activity 
for purposes of the activity rule.
    112. Bid Removal and Bid Withdrawal. Each qualified bidder has the 
option of removing any bids placed in a round provided that such bids 
are removed before the close of that bidding round. By removing a bid 
within a round, a bidder effectively unsubmits the bid. A bidder 
removing a bid placed in the same round is not subject to withdrawal 
payments. Removing a bid will affect a bidder's activity because a 
removed bid no longer counts toward bidding activity for the round. 
Once a round closes, a bidder may no longer remove a bid.
    113. In Auction 104, bidders are prohibited from withdrawing any 
bid after close of the round in which that bid was placed. Bidders are 
cautioned to select bid amounts carefully because no bid withdrawals 
will be allowed, even if a bid was mistakenly or erroneously made.
    114. Auction Announcements. The Commission will use auction 
announcements to report necessary information such as schedule changes. 
All auction announcements will be available by clicking a link in the 
FCC auction bidding system.

V. Post-Auction Procedures

    115. Shortly after bidding has ended, the Commission will issue a 
public notice declaring the auction closed, identifying the winning 
bidders, and establishing the deadlines for submitting down payments, 
final payments, and minor amendments to each winning bidder's pending 
displacement application filed initially in the 2018 Special 
Displacement Window.
    116. Down Payments. As required by 47 CFR 1.2107(b), within ten 
business days after release of the auction closing public notice, each 
winning bidder must submit sufficient funds (in addition to its upfront 
payment) to bring its total amount of money on deposit with the 
Commission for Auction 104 to 20% of the net amount of its winning bids 
(gross bid(s) less any applicable new entrant bidding credit(s)).
    117. Final Payments. As required by 47 CFR 1.2109(a), each winning 
bidder must submit the balance of the net amount for each of its 
winning bids within ten business days after the applicable deadline for 
submitting down payments.
    118. Long-Form Applications. Each party eligible to apply for 
Auction 104 has already filed a displacement application, Schedule C 
(Schedule for a Construction Permit for a LPTV or TV Translator 
Broadcast Station) of FCC Form 2100 (Application for Media Bureau Video 
Service Authorization) during the 2018 Special Displacement Window. A 
winning bidder will not be required to submit a separate long-form 
application following close of bidding in Auction 104. A winning 
bidder, however, will be required to submit minor amendments to their 
previously filed displacement application by a deadline to be 
determined after the close of the auction. Amendments must be filed 
electronically in the Media Bureau's Licensing and Management System 
(LMS). As required by 47 CFR 73.5006, winning bidders' applications, as 
amended, will be placed on public notice, triggering the appropriate 
period for the filing of petitions to deny pursuant to 47 CFR 73.5006. 
Further instructions will be provided to winning bidders in the auction 
closing public notice.
    119. Default and Disqualification. Any winning bidder that defaults 
or is disqualified after the close of the auction (i.e., fails to remit 
the required down payment by the specified deadline, fails to make a 
full and timely final payment, fails to timely amend its pending 
displacement application, or is otherwise disqualified) is liable for

[[Page 37140]]

default payments as described in 47 CFR 1.2104(g)(2). This payment 
consists of a deficiency payment, equal to the difference between the 
amount of the Auction 104 bidder's winning bid and the amount of the 
winning bid the next time a construction permit covering the same 
spectrum is won in an auction, plus an additional payment equal to a 
percentage of the defaulter's bid or of the subsequent winning bid, 
whichever is less. The percentage of the applicable bid to be assessed 
as an additional payment for a default in Auction 104 is 20% of the 
applicable bid.
    120. In the event of a default, the Commission has the discretion 
to re-auction the construction permit or offer it to the next highest 
bidder (in descending order) at its final bid amount. In addition, if a 
default or disqualification involves gross misconduct, 
misrepresentation, or bad faith by an applicant, the Commission may 
declare the applicant and its principals ineligible to bid in future 
auctions, and may take any other action that it deems necessary, 
including institution of proceedings to revoke any existing 
authorizations held by the applicant. See 47 CFR 1.2109(d).
    121. Refund of Remaining Upfront Payment Balance. All refunds of 
upfront payment balances will be returned to the payer of record as 
identified on the FCC Form 159 unless the payer submits written 
authorization instructing otherwise. This written authorization must 
comply with the refund instructions in the Auction 104 Procedures 
Public Notice.

VI. Procedural Matters

    122. Paperwork Reduction Act. This document does not contain new or 
modified information collection requirements subject to the Paperwork 
Reduction Act of 1995 (PRA), Public Law 104-13. Therefore, it does not 
contain any new or modified information burden for small business 
concerns with fewer than 25 employees pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198. See 44 U.S.C. 
3506(c)(4).
    123. Congressional Review Act. The Commission will send a copy of 
the Auction 104 Procedures Public Notice in a report to Congress and 
the Government Accountability Office pursuant to the Congressional 
Review Act. See 5 U.S.C. 801(a)(1)(A).
    124. Supplemental Final Regulatory Flexibility Analysis. As 
required by the Regulatory Flexibility Act of 1980, as amended (RFA), 5 
U.S.C. 601-612, the Commission prepared Initial Regulatory Flexibility 
Analyses (IRFAs) in connection with the Broadcast Competitive Bidding 
Notice of Proposed Rulemaking (NPRM) and other Commission NPRMs 
(collectively Competitive Bidding NPRMs) pursuant to which Auction 104 
will be conducted. Final Regulatory Flexibility Analyses (FRFAs) 
likewise were prepared in the Broadcast Competitive Bidding Order and 
other Commission orders (collectively Competitive Bidding Orders) 
pursuant to which Auction 104 will be conducted. In this proceeding, a 
Supplemental Initial Regulatory Flexibility Analysis (Supplemental 
IRFA) was incorporated in the Auction 104 Comment Public Notice, 
published at 84 FR 15167, April 15, 2019. The Commission sought written 
public comment on the proposals in the Auction 104 Comment Public 
Notice, including comments on the Supplemental IRFA. This Supplemental 
Final Regulatory Flexibility Analysis (Supplemental FRFA) supplements 
the FRFAs in the Competitive Bidding Orders to reflect the actions 
taken in the Auction 104 Procedures Public Notice and conforms to the 
RFA.
    125. Need for, and Objectives of, the Public Notice. The Auction 
104 Procedures Public Notice implements competitive bidding rules 
adopted by the Commission in multiple notice-and-comment rulemaking 
proceedings. More specifically, the Auction 104 Procedures Public 
Notice provides an overview of the procedures, terms and conditions 
governing Auction 104 and the post-auction application and payment 
processes, as well as setting the minimum opening bid amount for the 
five construction permits for LPTV or TV translator stations available 
in Auction 104.
    126. To promote the efficient and fair administration of the 
competitive bidding process for all Auction 104 participants, the 
Auction 104 Procedures Public Notice announces the following policies: 
(1) Use of a simultaneous multiple-round auction format, consisting of 
sequential bidding rounds with a simultaneous stopping rule (with 
discretion to exercise alternative stopping rules under certain 
circumstances); (2) A specific minimum opening bid amount for each 
construction permit available in Auction 104; (3) A specific number of 
bidding units for each construction permit; (4) A specific upfront 
payment amount for each construction permit; (5) Establishment of a 
bidder's initial bidding eligibility in bidding units based on that 
bidder's upfront payment through assignment of a specific number of 
bidding units for each construction permit; (6) Use of an activity 
requirement in which a bidder is required to be active on 100% of its 
bidding eligibility in each round of the auction; (7) Provision of 
three activity waivers for each qualified bidder to allow it to 
preserve bidding eligibility during the course of the auction; (8) Use 
of minimum acceptable bid amounts and additional acceptable increments, 
along with a proposed methodology for calculating such amounts, with 
IATF, MB and OEA retaining discretion to change the methodology if 
circumstances dictate; (9) A procedure for breaking ties if identical 
high bid amounts are submitted on one permit in a given round; (10) No 
bid withdrawals are allowed in Auction 104; and (11) Establishment of 
an additional default payment of 20% under 47 CFR 1.2104(g)(2) in the 
event that a winning bidder defaults or is disqualified after the 
auction.
    127. Summary of Significant Issues Raised by Public Comments in 
Response to the IRFA. There were no comments filed that specifically 
addressed the procedures and policies proposed in the Supplemental 
IFRA.
    128. Response to Comments by the Chief Counsel for Advocacy of the 
Small Business Administration. Pursuant to the Small Business Jobs Act 
of 2010, which amended the RFA, the Commission is required to respond 
to any comment filed by the Chief Counsel for Advocacy of the Small 
Business Administration (SBA), and to provide a detailed statement of 
any change made to the proposed procedures as a result of those 
comments, 5 U.S.C. 604(a)(3). The Chief Counsel did not file any 
comments in response to the procedures that were proposed in the 
Auction 104 Comment Public Notice.
    129. Description and Estimate of the Number of Small Entities to 
Which the Procedures Will Apply. The RFA directs agencies to provide a 
description of and, where feasible, an estimate of the number of small 
entities that may be affected by the rules adopted herein. 5 U.S.C. 
604(a)(3). The RFA generally defines the term small entity as having 
the same meaning as the terms small business, small organization, and 
small governmental jurisdiction. 5 U.S.C. 601(6). In addition, the term 
small business has the same meaning as the term small business concern 
under the Small Business Act. 5 U.S.C. 601(3). A small business concern 
is one which: (1) Is independently owned and operated; (2) is not 
dominant in its field of operation; and (3) satisfies any additional 
criteria established by the SBA, 15 U.S.C. 632.
    130. Auction 104 is a closed auction. The specific competitive 
bidding procedures and minimum opening bid

[[Page 37141]]

amounts described in the Auction 104 Procedures Public Notice will 
affect only the 10 individuals or entities listed in Attachment A to 
the Auction 104 Procedures Public Notice who are the only parties 
eligible to complete the remaining steps to become qualified to bid in 
this auction. These 10 individuals or entities for Auction 104 include 
firms of all sizes.
    131. Television Broadcasting. This Economic Census category 
comprises establishments primarily engaged in broadcasting images 
together with sound. These establishments operate television broadcast 
studios and facilities for the programming and transmission of programs 
to the public. These establishments also produce or transmit visual 
programming to affiliated broadcast television stations, which in turn 
broadcast the programs to the public on a predetermined schedule. 
Programming may originate in their own studio, from an affiliated 
network, or from external sources. The SBA has created the following 
small business size standard for such businesses: Those having $38.5 
million or less in annual receipts. The 2012 Economic Census reports 
that 751 firms in this category operated in that year. Of that number, 
656 had annual receipts of $25 million or less, 25 had annual receipts 
between $25 million and $49,999,999 and 70 had annual receipts of $50 
million or more. Based on this data, we estimate that the majority of 
commercial television broadcast stations are small entities under the 
applicable size standard.
    132. The Commission has estimated the number of licensed commercial 
television stations to be 1,373. Of this total, 1,270 stations (or 
about 92.5%) had revenues of $38.5 million or less, according to 
Commission staff review of the BIA Kelsey, Inc. Media Access Pro 
Television Database in November of 2018, therefore qualify as small 
entities under the SBA definition. In addition, the Commission has 
estimated the number of licensed NCE television stations to be 388. 
These stations are non-profit, and therefore are considered to be small 
entities. There are also 2,295 LPTV stations, including Class A 
stations, and 3,654 TV translators. Given the nature of these services, 
it is presumed that all of these entities qualify as small entities 
under the SBA small business size standard.
    133. The SBA size standard data does not enable us to make a 
meaningful estimate of the number of small entities who may participate 
in Auction 104. There are a maximum of 10 individuals or entities that 
may become qualified bidders in Auction 104, in which applicant 
eligibility is closed. The specific procedures and minimum opening bid 
amounts announced in the Auction 104 Procedures Public Notice will 
affect directly all applicants participating in Auction 104.
    134. In assessing whether a business entity qualifies as small 
under the SBA definition, business control affiliations must be 
included. Our estimate therefore likely overstates the number of small 
entities that might be affected by this auction because the revenue 
figure on which it is based does not include or aggregate revenues from 
affiliated companies. Moreover, the definition of small business also 
requires that an entity not be dominant in its field of operation and 
that the entity be independently owned and operated. The estimate of 
small businesses to which Auction 104 competitive bidding procedures 
may apply does not exclude any LPTV or TV translator station from the 
definition of a small business on these bases and is therefore over-
inclusive to that extent. Furthermore, it is not possible at this time 
to define or quantify the criteria that would establish whether a 
specific LPTV station or TV translator applicant is dominant in its 
field of operation. In addition, it is difficult to assess these 
criteria in the context of media entities and therefore estimates of 
small businesses to which they apply may be over-inclusive to this 
extent.
    135. It is not possible to accurately develop an estimate of how 
many of these 10 individuals or entities are small businesses based on 
the number of small entities that applied to participate in prior 
broadcast auctions, because that information is not collected from 
applicants for broadcast auctions in which bidding credits are not 
based on an applicant's size (as is the case in auctions of licenses 
for wireless services).
    136. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The Commission has designed 
the auction application process itself to minimize reporting and 
compliance requirements for applicants, including small business 
applicants. In the first part of the Commission's two-phased 
application process for all spectrum auctions, parties desiring to 
participate in an auction file streamlined, short-form applications in 
which they certify under penalty of perjury as to their qualifications. 
Eligibility to participate in bidding is based on an applicant's short-
form application and certifications, as well as its upfront payment. 
More specifically as mentioned above, small entities and other Auction 
104 applicants will be qualified to bid in the auction only if they 
comply with the following: (1) Submission of a short-form application 
that is timely and is found to be substantially complete, and (2) 
timely submission of a sufficient upfront payment for at least one of 
the construction permits for which it is designated as an applicant on 
Attachment A to the Auction 104 Procedures Public Notice. In accordance 
with the terms of 47 CFR 1.2105(b)(2), an applicant whose application 
is found to contain deficiencies will have a limited opportunity to 
bring their application into compliance with the Commission's 
competitive bidding rules during a resubmission window. All qualified 
bidders will automatically be registered for the auction and mailed the 
necessary registration materials.
    137. In the second phase of the process, there are additional 
compliance requirements for winning bidders. As with other winning 
bidders, any small entity that is a winning bidder will be required to 
comply with the terms of: (1) 47 CFR 1.2107(b) by submitting within 10 
business days of release of the auction closing public notice as a down 
payment sufficient funds (in addition to its upfront payment) to bring 
its total amount of money on deposit with the Commission for Auction 
104 to 20% of the net amount of its winning bid or bids; and (2) 47 CFR 
1.2109(a) by submitting within 10 business days after the down payment 
deadline the balance of the net amount for each of its winning bids. 
Further, as required by 47 CFR 1.2105(c), reports concerning a 
prohibited communication must be filed with the Chief of the Auctions 
Division as detailed in 47 CFR 1.2105(c)(4).
    138. The processes and procedures adopted in the Auction 104 
Procedures Public Notice should minimize the need for small entities to 
hire attorneys, engineers, consultants, or other professionals. While 
we are unable to quantify the cost of compliance with the requirements, 
we do not believe that such costs of compliance will unduly burden 
small entities. The processes and procedures are consistent with 
existing Commission policies and requirements used in prior auctions 
for broadcast construction permits. Thus, some small entities may 
already be familiar with such policies and requirements and have the 
processes and procedures in place to facilitate compliance resulting in 
minimal incremental costs to comply. For those small entities that may 
be new to the Commission's auction process, the various resources that 
have been made available, including but not limited to, the 
availability of a mock auction,

[[Page 37142]]

remote electronic or telephonic bidding, and access to hotlines for 
both technical and auction assistance, should help facilitate 
participation while minimizing the need to rely on assistance from 
outside professionals and consultants.
    139. Steps Taken to Minimize the Significant Economic Impact on 
Small Entities, and Significant Alternatives Considered. The RFA 
requires an agency to describe any significant, specifically small 
business, alternatives that it has considered in reaching its proposed 
approach, which may include the following four alternatives (among 
others): (1) The establishment of differing compliance or reporting 
requirements or timetables that take into account the resources 
available to small entities; (2) the clarification, consolidation, or 
simplification of compliance and reporting requirements under the rule 
for such small entities; (3) the use of performance rather than design 
standards; and (4) an exemption from coverage of the rule, or any part 
thereof, for such small entities. See 5 U.S.C. 603(c)(1)-(4).
    140. We believe that the steps described below to facilitate 
participation in Auction 104 will result in both operational and 
administrative cost savings for small entities and other auction 
participants. In light of the numerous resources that will be available 
from the Commission at no cost, the processes and procedures adopted 
for Auction 104 should result in minimal economic impact on small 
entities. For example, prior to the auction, the Commission will hold a 
mock auction to allow eligible bidders the opportunity to familiarize 
themselves with both the processes and systems that will be utilized in 
Auction 104. During the auction, participants will be able to access 
and participate in the auction via the internet using a web-based 
system, or telephonically, providing two cost effective methods of 
participation avoiding the cost of travel for in-person participation. 
Further, small entities as well as other auction participants will be 
able to avail themselves of an auctions hotline for assistance with 
auction processes and procedures as well as a technical support hotline 
to assist with issues such as access to or navigation within the 
electronic FCC Form 175 and use of the FCC's auction system. In 
addition, small business entities as well as other auction 
participants, will have access to various other sources of information 
and databases through the Commission that will aid in both their 
understanding and participation in the process.
    141. Another step implemented in the Auction 104 Procedures Public 
Notice that can minimize the economic impact for small entities is the 
inclusion of the New Entrant Bidding Credit adopted in the 1998 
Broadcast Competitive Bidding Order to implement the statutory 
provisions of section 309(j) regarding opportunities for small, 
minority-and women-owned businesses. Applicants that qualify for the 
New Entrant Bidding Credit are eligible to discount the amount of a 
winning bidder's total bids. The size of a New Entrant Bidding Credit 
will depend on the number of ownership interests in other media of mass 
communications that are attributable to the bidder entity and its 
attributable interest holders. See 47 CFR 73.5007, 73.5008. An 
applicant can qualify for a 35% New Entrant Bidding Credit if it can 
certify that neither it nor any of its attributable interest holders 
have any attributable interests in any other media of mass 
communications or a 25% New Entrant Bidding Credit if it can certify 
that neither it nor any of its attributable interest holders has any 
attributable interests in more than three media of mass communications, 
and must identify and describe such media of mass communications. 
Because eligibility for a New Entrant Bidding Credit is not based on 
the size of the individual or entity requesting the bidding credit, 
some applicants for Auction 104 that claim eligibility for a New 
Entrant Bidding Credit may meet the definition of small entity or small 
business, as defined above.
    142. The above mechanisms are made available to facilitate 
participation in Auction 104 by all qualified bidders and may result in 
significant cost savings for small business entities that use these 
mechanisms. These steps, coupled with the advance description of the 
bidding procedures in Auction 104, should ensure that the auction will 
be administered predictably, efficiently and fairly, thus providing 
certainty for small entities as well as other auction participants.
    143. Notice to Chief Counsel for Advocacy of SBA. The Commission 
will send a copy of the Auction 104 Procedures Public Notice, including 
the Supplemental FRFA, to the Chief Counsel for Advocacy of the SBA. 5 
U.S.C. 604(b).

Fderal Communications Commission.
William Huber,
Associate Chief, Auctions Division, Office of Economics and Analytics.
[FR Doc. 2019-15811 Filed 7-30-19; 8:45 am]
 BILLING CODE 6712-01-P