Auction of FM Broadcast Construction Permits Scheduled for April 28, 2020; Notice of Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 106; Auction 106 Freeze Announced for FM Minor Change Applications, 5147-5163 [2020-01654]
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Federal Register / Vol. 85, No. 19 / Wednesday, January 29, 2020 / Rules and Regulations
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[FR Doc. 2020–00057 Filed 1–28–20; 8:45 am]
BILLING CODE 6820–FM–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Parts 1 and 73
[AU Docket No. 19–290; DA 19–1256; DA
19–1265]
Auction of FM Broadcast Construction
Permits Scheduled for April 28, 2020;
Notice of Filing Requirements,
Minimum Opening Bids, Upfront
Payments, and Other Procedures for
Auction 106; Auction 106 Freeze
Announced for FM Minor Change
Applications
Federal Communications
Commission.
ACTION: Final action; requirements and
procedures.
AGENCY:
This document summarizes
public notices that announce the
procedures and upfront payments
amounts and minimum opening bids for
the auction of certain FM broadcast
construction permits as well as a
temporary freeze on the filing of minor
change applications for FM stations.
The Auction 106 Procedures Public
Notice summarized here is intended to
familiarize applicants with the
procedures and other requirements for
participation in Auction 106.
DATES: Applications to participate in
Auction 106 must be submitted before 6
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SUMMARY:
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p.m. Eastern Time (ET) on February 11,
2020. FM commercial and
noncommercial educational minor
change applications may not be filed
during a period starting on January 29,
2020, and ending on February 11, 2020.
Upfront payments for Auction 106 must
be received by 6 p.m. ET on March 20,
2020. Bidding in Auction 106 is
scheduled to start on April 28, 2020.
FOR FURTHER INFORMATION CONTACT: For
auction legal questions, Lynne Milne or
Daniel Habif in the OEA Auctions
Division at (202) 418–0660. For general
auction questions, the Auction Hotline
at (717) 338–2868. For FM Broadcast
service questions, Lisa Scanlan, Thomas
Nessinger, or James Bradshaw in the MB
Audio Division at (202) 418–2700. To
request materials in accessible formats
(Braille, large print, electronic files, or
audio format) for people with
disabilities, send an email to fcc504@
fcc.gov or call the Consumer and
Governmental Affairs Bureau at (202)
418–0530 or (202) 418–0432 (TTY).
SUPPLEMENTARY INFORMATION: This is a
summary of the Auction 106 Procedures
Public Notice, released on December 13,
2019, and the Auction 106 Freeze Public
Notice, also released on December 13,
2019. The complete text of the Auction
106 Procedures Public Notice, including
attachments and any related document,
and the complete text of the Auction
106 Freeze Public Notice are available
for public inspection and copying from
8 a.m. to 4:30 p.m. ET Monday through
Thursday or from 8 a.m. to 11:30 a.m.
ET on Fridays in the FCC Reference
Information Center, 445 12th Street SW,
Room CY–A257, Washington, DC 20554.
These public notices and related
documents also are available on the
internet at the Commission’s website:
www.fcc.gov/auction/106, or by using
the search function for DA 19–1256 or
DA 19–1265 on the Commission’s
EDOCS web page at https://www.fcc.gov/
edocs/.
I. General Information
1. Construction Permits in Auction
106. Auction 106 will offer 130
construction permits in the FM
broadcast service for 130 new FM
allotments, including 34 construction
permits that were offered but not sold or
were defaulted upon in prior auctions.
These construction permits are for
vacant FM allotments, reflecting FM
channels added to the Table of FM
Allotments pursuant to the
Commission’s established rulemaking
procedures, and assigned at the
indicated communities specified in 47
CFR 73.202(b). Attachment A of the
Auction 106 Procedures Public Notice
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5147
lists the reference coordinates for each
vacant FM allotment offered in Auction
106. Each Auction 106 applicant may
submit in its FCC Form 175 a set of
preferred site coordinates for any of its
selected construction permits as an
alternative to the reference coordinates
for that vacant FM allotment.
2. The set of construction permits
listed in Attachment A of the Auction
106 Procedures Public Notice is
unchanged from the list of construction
permits that were proposed for this
auction in the Auction 106 Comment
Public Notice. Two commenters request
the addition of specific construction
permits in Auction 106. Those requests
cannot be granted because the
underlying allotments must first be
added to the Table of Allotments
through separate administrative
processes. Likewise, a third
commenter’s request to delete a specific
allocation from the Table of Allotments
cannot be granted because it is beyond
the scope of this proceeding.
3. Pursuant to the policies established
in the Broadcast Competitive Bidding
Order, applicants may apply for any
vacant FM allotment listed in
Attachment A. If two or more \FCC
Forms 175 specify the same FM
allotment in Auction 106, mutual
exclusivity exists for auction purposes,
and that construction permit must be
awarded by competitive bidding
procedures. Once mutual exclusivity
exists for auction purposes, even if only
one applicant is qualified to bid for a
particular construction permit in
Auction 106, that applicant is required
to submit a bid in order to obtain the
construction permit.
4. Media Bureau Freeze Public Notice.
Pursuant to the Auction 106 Freeze
Announced for FM Minor Change
Applications Public Notice, DA 19–1265
(Dec. 13, 2019), the Media Bureau (MB)
will not accept FM commercial and
noncommercial educational (NCE)
minor change applications filed during
the Auction 106 short-form application
(FCC Form 175) filing window. This
freeze ensures that there will not be a
mutual exclusivity conflict between
stations proposed in an Auction 106
Form 175 and a minor change
application. Accordingly, this freeze
promotes a more certain and speedier
auction process.
5. Auction Dates and Deadlines. The
following dates and deadlines apply:
Auction Tutorial Available (via
internet): by January 22, 2020
FCC Form 175 Initial Filing Window
Opens: January 29, 2020, 12:00 noon
ET
FCC Form 175 Initial Filing Deadline:
February 11, 2020, 6:00 p.m. ET
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Upfront Payments (via wire transfer):
March 20, 2020, 6:00 p.m. ET
Mock Auction: April 24, 2020
Auction Bidding Begins: April 28, 2020
6. Requirements for Participation.
Those wishing to bid in Auction 106
must: (1) Submit a FCC Form 175
electronically prior to 6:00 p.m. ET, on
February 11, 2020, following the
procedures set forth in Attachment B to
the Auction 106 Procedures Public
Notice, that complies with the
Commission’s competitive bidding rules
and other requirements set forth in the
Auction 106 Procedures Public Notice;
(2) submit a sufficient upfront payment
and a complete and accurate FCC
Remittance Advice Form (FCC Form
159) by 6:00 p.m. ET on March 20, 2020,
following the procedures and
instructions set forth in Attachment C to
the Auction 106 Procedures Public
Notice; and (3) comply with all
provisions outlined in the Auction 106
Procedures Public Notice and applicable
Commission rules.
II. Applying To Participate in Auction
106
7. Relevant Authority. Auction 106
applicants must familiarize themselves
thoroughly with the Commission’s
general competitive bidding rules, 47
CFR pt. 1, subpart Q, as well as
Commission decisions in proceedings
regarding competitive bidding
procedures, application requirements,
and obligations of Commission
licensees. Broadcasters should also
familiarize themselves with the
Commission’s FM broadcast service
competitive bidding requirements
contained in 47 CFR pt. 73, 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 106
Procedures Public Notice and any future
public notices that may be released in
the proceeding.
8. The terms contained in the
Commission’s rules, relevant orders,
and public notices are not negotiable.
The Commission may amend or
supplement the information contained
in its public notices at any time, and
will issue public notices to convey any
new or supplemental information to
applicants. It is the responsibility of all
applicants to remain current with all
Commission rules and with all public
notices pertaining to this auction.
Copies of most auctions-related
Commission documents, including
public notices, can be retrieved from the
FCC Auctions internet site at
www.fcc.gov/auctions and at the
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Commission’s headquarters, Reference
Information Center, located at 445 12th
Street SW, Washington, DC 20554.
9. General Information Regarding
Short-Form Applications. An
application to participate in Auction
106, 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
the Commission’s two-phased auction
application process. In the first phase,
parties desiring to participate in the
auction must file a streamlined, shortform 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.
10. If an applicant claims eligibility
for a bidding credit, the information
provided in its FCC Form 175 will be
used to determine whether the applicant
is eligible for the claimed bidding
credit. Applicants filing a short-form
application are subject to the
Commission’s rules against prohibited
communications beginning at the
deadline for filing.
11. An applicant bears full
responsibility for submitting an
accurate, complete and timely shortform application. Each applicant must
certify on its FCC Form 175 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 106 Procedures Public
Notice and should consult the
Commission’s rules to ensure that all
the information required is included
within its short-form application.
12. 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,
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ineligibility to participate in future
auctions, and/or criminal prosecution.
13. Pursuant to 47 CFR 1.2105(a)(3),
the same party may not bid on more
than one auction application, i.e., as
more than one applicant. If a party
submits multiple FCC Forms 175 for an
auction, only one application may be
the basis for that party to become
qualified to bid in that auction.
14. Consistent with the Commission’s
general prohibition of joint bidding
agreements, a party is generally
permitted to participate in a
Commission auction only through a
single bidding entity. Accordingly, the
filing of applications in Auction 106 by
multiple entities controlled by the same
individual or set of individuals will
generally not be permitted.
15. An applicant should consult the
Commission’s rules to ensure that all
required information is included in its
short-form application. To the extent the
information in the Auction 106
Procedures Public Notice does not
address a potential applicant’s specific
operating structure, or if the applicant
needs additional information or
guidance concerning the following
disclosure requirements, the applicant
should review the educational materials
for Auction 106 and/or use the contact
information provided in the Auction
106 Procedures Public Notice to consult
with Commission staff to better
understand the information it must
submit in its short-form application.
16. Authorized Bidders. An applicant
must designate at least one authorized
bidder, and no more than three, in its
FCC Form 175. According to 47 CFR
1.2105(a)2)(iii), an individual is
prohibited 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 in a given auction.
17. Permit Selection. An applicant
must select on its FCC Form 175 the
construction permit or permits, from the
list of available permits in Attachment
A, on which it wants to bid. An
applicant must carefully review and
verify its construction permit selections
before the deadline for submitting the
FCC Form 175, because those selections
cannot be changed after the auction
application filing deadline. The FCC
auction bidding system will not accept
bids on construction permits that were
not selected on the applicant’s FCC
Form 175.
18. Disclosure of Agreements Relating
to Permits Subject to Auction. As
required by 47 CFR 1.2105(a)(2)(viii), an
applicant must provide in its FCC Form
175 a brief description of, and identify
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each party to, any partnership, joint
venture, consortium, or agreement,
arrangement, or understanding of any
kind relating to the FM construction
permits being auctioned, 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 postauction market structure, to which the
applicant, or any party that controls or
is controlled by the applicant, is a party.
As defined in 47 CFR 1.2105(a)(4)(i), a
controlling interest for purposes of this
rule includes all individuals or entities
with positive or negative de jure or de
facto control of the applicant or
licensee. The applicant must certify
under penalty of perjury in its FCC
Form 175 that it has described, and
identified each party to, any such
agreement, arrangement, or
understanding into which it has
entered. An auction applicant that
enters into any agreement relating to the
permits or licenses being auctioned is
subject to the same disclosure
obligations it would have 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. The Commission’s rules generally
prohibit joint bidding and other
arrangements involving auction
applicants (including any party that
controls or is controlled by, such
applicants). For purposes of the
prohibition on joint bidding
arrangements, joint bidding
arrangements include 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.
20. To implement the prohibition on
joint bidding arrangements, 47 CFR
1.2105(a)(2)(viii)–(ix) require each
auction applicant to certify in its shortform application that it has disclosed
any arrangements or understandings of
any kind relating to the licenses being
auctioned to which it (or any party that
controls or is controlled by it) is a party.
The applicant must also certify that it
(or any party that controls or is
controlled by it) has not entered and
will not enter into any arrangement or
understanding of any kind relating
directly or indirectly to bidding at
auction with, among others, any other
applicant.
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21. Although the Commission’s rules
do not prohibit auction applicants from
communicating about matters that are
within the scope of an agreement
excepted pursuant to 47 CFR
1.2105(a)(2)(ix)(A)–(C) and that has been
disclosed in an FCC Form 175,certain
discussions or exchanges could
nonetheless touch upon impermissible
subject matters, and compliance with
the Commission’s rules will not insulate
a party from enforcement of the antitrust
laws.
22. A winning bidder will be required
to disclose in its long-form application
(FCC Form 2100, Schedule 301–FM)
following the close of the auction the
specific terms, conditions and parties
involved in any agreement relating to
the permits or licenses being auctioned
into which it had entered prior to the
time bidding closed. This applies to any
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.
23. Ownership Disclosure
Requirements. Each applicant must
comply with the ownership and control
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(ies)-in-interest and the
ownership structure of the applicant,
including both direct and indirect
ownership interests of 10% or more.
24. In certain circumstances, an
applicant may have previously filed an
FCC Form 175 for a previous auction or
an FCC Form 602 in which ownership
information was disclosed. The most
current ownership information
contained in any previous FCC Form
175 or FCC Form 602 on file with the
Commission that used the same FRN the
applicant is using to submit its FCC
Form 175 in this auction will
automatically be pre-filled into certain
ownership sections on the applicant’s
FCC Form 175, if such information is in
an electronic format compatible with
FCC Form 175. Each applicant must
carefully review any ownership
information automatically entered into
its FCC Form 175, including any
ownership attachments, to confirm that
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5149
all information supplied on its FCC
Form 175 is complete and accurate as of
the application filing deadline in this
auction. Any information that needs to
be corrected or updated must be
changed directly in the FCC Form 175
for this auction.
25. Foreign Ownership Disclosure
Requirements. The Commission is
required by 47 U.S.C. 310 to review
foreign investment in radio station
licenses and specific restrictions on who
may hold certain types of radio licenses.
In its FCC Form 175, an applicant must
report citizenship or jurisdiction of
formation for the applicant and for each
disclosable interest holder (DIH). In
completing the FCC Form 175, an
applicant also will be required to certify
that it is in compliance with the foreign
ownership provisions contained in
section 310 of the Communications Act
of 1934, as amended. According to 47
CFR 1.2105(a)(2)(vi), the Commission
will accept an auction application
certifying that a request for waiver or
other relief from the requirements of
section 310 is pending. If such a request
concerning section 310 is pending or
was granted previously, this information
needs to be reported in an attachment to
the applicant’s FCC Form 175.
26. Prohibited Communications and
Compliance with Antitrust Laws. The
rules prohibiting certain
communications set forth in 47 CFR
1.2105(c) and 73.5002(d), (e) apply to
each applicant that files an FCC Form
175 in Auction 106. Section 1.2105(c)(1)
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.
27. Entities Subject to Section 1.2105.
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. See 47 CFR 1.2105(c)(1). 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
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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; Prohibition on Joint
Bidding Agreements. The Commission
in 2015 amended section 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. The
Commission’s rules now prohibit any
joint bidding arrangement, including
arrangements relating to the permits
being auctioned that address or
communicate, directly or indirectly,
bidding in the auction, bidding
strategies, including arrangements
regarding price or the specific permits
on which to bid, and any such
arrangements relating to the postauction market structure. The revised
rule provides limited exceptions for a
communication within the scope of any
arrangement consistent with the
exclusions from the Commission’s rule
prohibiting joint bidding specified at 47
CFR 1.2105(a)(2)(ix)(A)–(C), 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 operational or that provide for
transfer or assignment of licenses,
provided that such agreements,
arrangements or understandings are
disclosed on its auction 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 postauction market structure.
29. 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 auctionrelated communication may reach
another applicant. Applicants must
determine whether their
communications with other parties are
permissible under the rule once the
prohibition begins at the deadline for
submitting applications, even before the
public notice identifying applicants is
released.
30. Parties subject to section 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
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bidding strategies. Such information
may be deemed to have been received
by the applicant under certain
circumstances. For example,
Commission staff have determined 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 or director, which creates an
apparent violation of the rule.
31. Section 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 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.
The Commission consistently has made
clear that application of the rule
prohibiting communications has never
required total suspension of essential
ongoing business. Entities subject to the
prohibition may negotiate agreements
during the prohibition period, provided
that the communications involved do
not relate both (1) to the construction
permits or licenses being auctioned and
(2) to bids or bidding strategies or postauction market structure.
32. Business discussions and
negotiations that are unrelated to
bidding in Auction 106 and that do not
convey information about the bids or
bidding strategies of an applicant,
including the post-auction market
structure, are not prohibited by the rule.
While section 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
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
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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, so 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. Potential 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 thirdparty individual could continue to give
advice regarding the application after
the short-form application deadline,
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 shortform 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 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, an
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applicant’s statement to the press that it
intends to stop bidding in an auction
could give rise to a finding of a Section
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 106
certifies its compliance with 47 CFR
1.2105(c) and 73.5002(d). 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. Duty to Report Prohibited
Communications. Section 1.2105(c)(4)
requires that any applicant that makes
or receives a communication that
appears to violate section 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.
39. 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. This rule is
designed to minimize the risk of
inadvertent dissemination of
information in such reports. Any reports
required by section 1.2105(c) must be
filed consistent with the instructions set
forth in the Auction 106 Procedures
Public Notice. For Auction 106, 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: auction106@fcc.gov. 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 sections
1.65, 1.2105(a)(2), or 1.2105(c)(4) must
take care to ensure that any report of a
prohibited communication does not
itself give rise to a violation of section
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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 such as
submission through the FCC Office of
the Secretary or ECFS. 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. Antitrust Laws. 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 section 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 a forfeiture
and may be prohibited from
participating in future auctions, among
other sanctions. See 47 CFR 1.2109(d).
42. New Entrant Bidding Credit. Two
commenters observed that the Auction
106 Comment Public Notice did not
invite comments on the use of new
entrant bidding credits in this auction,
and seek confirmation that new entrant
bidding credits will be available to
eligible applicants in this auction. This
proceeding concerning procedures for
conducting this auction does not alter
the applicability of the Commission’s
rules for broadcast auctions; thus, a new
entrant bidding credit will be available
in Auction 106.
43. Applicants that qualify for the
new entrant bidding credit, as specified
in 47 CFR 73.5007, are eligible for a
bidding credit in this auction that
represents the amount by which a
bidder’s winning bid is discounted. The
size of the new entrant bidding credit
depends on the number of ownership
interests in other media of mass
communications that are attributable to
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the bidder entity and its attributable
interest-holders. A 35% bidding credit
will be given to a winner 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 section
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 section 73.5008. No bidding
credit will be given if any of the
commonly owned mass media facilities
serve the same area as the broadcast
permit proposed in the auction, as
defined in section 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. For purposes of determining
whether a broadcast permit offered in
this auction is in the same area as an
applicant’s existing mass media
facilities, the coverage area of the to-beauctioned facility is calculated using
maximum class facilities at the
allotment reference coordinates, not any
applicant-specified preferred site
coordinates. Bidding credits are not
cumulative; qualifying applicants
receive either the 25% or the 35%
bidding credit, but not both. 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. Attributable
interests are defined in section 73.3555
and note 2 of that section. In Auction
106, the bidder’s attributable interests
and, thus, its maximum new entrant
bidding credit eligibility are determined
as of the short-form application filing
deadline. Events occurring after the
short-form application 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, specifically no later than
five business days after the change
occurs. Each applicant has a duty to
continuously maintain the accuracy of
information submitted in its auction
application.
44. 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
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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. Thus, an
applicant could not qualify for a bidding
credit, nor upgrade a previously claimed
bidding credit, based upon ownership
or officer/director positional changes
occurring after the FCC Form 175 filing
deadline.
45. Under broadcast attribution rules,
those entities or individuals with an
attributable interest in a bidder include:
All officers and directors of a corporate
bidder; any owner of 5% or more of
voting stock of a corporate bidder; all
partners and limited partners of a
partnership bidder, unless the limited
partners are sufficiently insulated; and
all members of a limited liability
company, unless sufficiently insulated.
46. In cases where an applicant’s
spouse or close family member holds
other media interests, such interests are
not automatically attributable to the
bidder. The Commission decides
attribution issues in this context based
on certain factors traditionally
considered relevant. See Clarification of
Commission Policies Regarding Spousal
Attribution, MM Docket No. 91–122,
Policy Statement, 57 FR 8845, Mar. 13,
1992.
47. In the New Entrant Bidding Credit
Reconsideration Order, the Commission
attributed the media interests held by
very substantial investors in, or
creditors of, an applicant claiming new
entrant status. Specifically, 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. See 47 CFR
73.5008(c).
48. In the Diversity Order, the
Commission relaxed the equity/debt
plus (EDP) attribution standard, to allow
for higher investment opportunities in
entities meeting the definition of
eligible entities. An eligible entity is
defined in Note 2(i) of section 73.3555.
On September 23, 2019, the United
States Court of Appeals for the Third
Circuit issued a decision in Prometheus
Radio Project v. FCC, vacating the
Commission’s eligible entity definition,
and remanding those provisions of the
Quadrennial Second Report and Order
that rely on the eligible entity
definition. As a result of this ongoing
litigation, the relaxed EDP rule for
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eligible entities as the basis for the New
Entrant Bidding Credit will be
unavailable in Auction 106.
49. Generally, media interests will be
attributable for purposes of the New
Entrant Bidding Credit to the same
extent that such other media interests
are considered attributable for purposes
of the broadcast multiple ownership
rules. Further, any bidder asserting new
entrant status must have de facto as well
as de jure control of the entity claiming
the bidding credit. See47 CFR 73.5007.
Typically, de jure control is evidenced
by ownership of at least 50.1% of an
entity’s voting stock or equivalent level
of interest in cases where the bidder is
not a corporate entity. De facto control
is determined on a case-by-case basis.
However, attributable interests held by
a winning bidder in existing low power
television, television translator, or FM
translator facilities will not be counted
among the applicant’s other mass media
interests in determining its eligibility for
a New Entrant Bidding Credit. A
medium of mass communications is
defined in Section 73.5008(b). Full
power noncommercial educational
stations, on both reserved and nonreserved channels, are included among
media of mass communications as
defined in section 73.5008(b).
50. Application Requirements. In
addition to the ownership information
required pursuant to sections 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.
51. Unjust Enrichment. Applicants
should note that the unjust enrichment
provisions of 47 CFR 73.5007(c) 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.
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52. Provisions regarding Former and
Current Defaulters. 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 106. 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
they are not delinquent on any non-tax
debt owed to any Federal agency. For
purposes of making 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).
53. 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
175 filing deadline in this auction may
participate so long as it is otherwise
qualified and 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 of 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 described in 47 CFR
1.2105(a)(2)(xii). For purposes of
making this certification, the term
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controlling interest is defined in 47 CFR
1.2105(a)(4)(i).
54. For purposes of evaluating the
certifications required by sections
1.2105(a)(2)(xi) and (xii), non-tax debt
owed to any Federal agency includes all
amounts owed under Federal programs,
including contributions to the Universal
Service Fund, Telecommunications
Relay Services Fund, and the North
American Numbering Plan
Administration, notwithstanding that
the administrator of any such fund may
not be considered a Federal agency
under the Debt Collection Improvement
Act of 1996. Public Law 104–134, 110
Stat. 1321 (1996).
55. We encourage applicants to
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.
56. The Commission considers
outstanding debts owed to the United
States Government, in any amount, to be
a serious matter. The Commission
adopted rules, including a provision
referred to as the red light rule, that
implement its obligations under the
Debt Collection Improvement Act of
1996, which governs the collection of
debts owed to the United States. Under
the red light rule, applications and other
requests for benefits filed by parties that
have outstanding debts owed to the
Commission will not be processed. The
Commission’s adoption of the red light
rule does not alter the applicability of
any of its competitive bidding rules,
including the provisions and
certifications of sections 1.2105 and
1.2106, with regard to current and
former defaults or delinquencies.
57. The Commission’s Red Light
Display System, which provides
information regarding debts currently
owed to the Commission, may not be
determinative of an auction applicant’s
ability to comply with the default and
delinquency disclosure requirements of
section 1.2105. While the red light rule
ultimately may prevent the processing
of long-form applications by auction
winners, an auction applicant’s lack of
current red light status is not necessarily
determinative of its eligibility to
participate in an auction (or whether it
may be subject to an increased upfront
payment obligation). A prospective
applicant in Auction 106 should note
that any long-form application filed
after the close of bidding will be
reviewed for compliance with the
Commission’s red light rule, and such
review may result in the dismissal of a
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winning bidder’s long-form application.
Applicants that have their long-form
applications dismissed will be deemed
to have defaulted and will be subject to
default payments under 47 CFR
1.2104(g) and 1.2109(c).
58. Each applicant should carefully
review all records and other available
Federal agency databases and
information sources to determine
whether the applicant, or any of its
affiliates, or any of its controlling
interests, or any of the affiliates of its
controlling interests, owes or was ever
delinquent in the payment of non-tax
debt owed to any Federal agency.
59. Optional Applicant Status
Identification. An applicant owned by
members of minority groups and/or
women, as defined in section
1.2110(c)(3), or rural telephone
companies, as defined in section
1.2110(c)(4), may identify itself as such
in its FCC Form 175. This applicant
status information is optional and
collected for statistical purposes only
because it assists the Commission in
monitoring the participation of various
groups in its auctions.
60. Noncommercial Educational
Status Election. In the NCE Second
Report and Order, the Commission held
that applications for noncommercial
educational (NCE) FM stations on nonreserved spectrum, filed during an FM
filing window, will be returned as
unacceptable for filing if mutually
exclusive with any application for a
commercial station. Auction
applications specifying the same FM
station construction permit are
considered mutually exclusive. If an
FCC Form 175 filed during the Auction
106 filing window identifying the
application’s proposed station as NCE is
mutually exclusive with any application
filed during that window for a
commercial station, the NCE application
will be returned as unacceptable for
filing. In the NCE Second Report and
Order, the Commission determined that
short-form applications that do not
identify the facilities proposed in the
FCC Form 175 as NCE will be
considered, as a matter of law,
applications for commercial broadcast
stations. For this reason, each
prospective applicant in this auction
should consider carefully whether it
wishes to propose NCE operation for
any FM station acquired in this auction.
This NCE election cannot be reversed
after the initial application filing
deadline.
61. Only Minor Modifications to FCC
Form 175 Allowed. After the initial FCC
Form 175 filing deadline, an Auction
106 applicant will be permitted to make
only minor modifications to its short-
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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). Major modifications to an
FCC Form 175 application (e.g., change
of construction permit selection, change
in required certifications, change in
control of the applicant such as any
change in ownership or control that
would constitute an assignment or
transfer of control of the applicant,
claim eligibility for a higher percentage
of bidding credit, or change of the
identification of the application’s
proposed facilities as noncommercial
educational) will not be permitted after
the initial FCC Form 175 filing deadline.
If an applicant makes a major
amendment, as defined by section
1.2105(b)(2), the major amendment may
result in disqualification of the
applicant from participating in 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.
62. 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 days after a significant occurrence,
or amend its FCC Form 175 no more
than five days after the applicant
becomes aware of the need for the
amendment. An applicant’s obligation
to make modifications to a pending
auction application to provide
additional or corrected information
continues beyond the five-day period,
even if the report is not made within the
five-day period. 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. 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.
63. Modifying an FCC Form 175.
During the initial filing window, an
applicant will be able to make any
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necessary modifications to its FCC Form
175 in the Auction Application System.
An applicant that has certified and
submitted its FCC Form 175 before the
close of the initial filing window may
continue to make modifications as often
as necessary until the close of that
window; however, the applicant must
re-certify and re-submit its FCC Form
175 before the close of the initial filing
window to confirm and effect its latest
application changes. After each
submission, a confirmation page will be
displayed stating the submission time
and submission date.
64. As with filing the FCC Form 175,
any amendment(s) to the application
and related statements of fact must be
certified by an authorized representative
of the applicant with authority to bind
the applicant. Applicants should note
that submissions of any such
amendment or related statement of fact
constitutes a representation by the
person certifying that he or she is an
authorized representative with such
authority and that the contents of the
amendment or statement of fact are true
and correct.
III. Preparing for Bidding
65. 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. Each Applicant 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.
This includes the established authority
of the Commission to alter the terms of
existing licenses by rulemaking, which
is equally applicable to licenses
awarded by auction. 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.
66. An applicant should perform its
due diligence research and analysis
before proceeding, as it would with any
new business venture. Each potential
bidder should perform technical
analyses and/or refresh its previous
analyses to assure itself that, should it
become a winning bidder for any
Auction 106 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
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inspect any prospective transmitter sites
located in, or near, the service area for
which it plans to bid, to confirm the
availability of such sites, and to
familiarize itself with the Commission’s
rules regarding any applicable federal,
state or local requirements. See 47 CFR
pt. 1, subpart I.
67. Each applicant should continue to
conduct its own research throughout
Auction 106 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 106 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 106 Procedures Public
Notice do not comprise an exhaustive
list of steps that should be undertaken
prior to participating in Auction 106.
The burden is on the potential bidder to
determine how much research to
undertake, depending upon specific
facts and circumstances related to its
interests.
68. 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 106. 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.
69. 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.
70. Bidder Education—Online
Tutorial on Auction Process. An
educational auction tutorial will be
available on the Auction 106 web page
by Tuesday, January 22, 2020. This
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online tutorial will provide information
about pre-auction procedures, the FCC
auction application system, completing
short-form applications, auction
conduct, the FCC auction bidding
system, auction rules, and broadcast
services rules. The online auction
tutorial will be accessible on the
Education tab of the Auction 106
website at www.fcc.gov/auction/106.
Once posted, this tutorial will remain
available and accessible anytime for
reference in connection with the
procedures outlined in the Auction 106
Procedures Public Notice.
71. Short-Form Applications: Due
Before 6:00 p.m. ET on February 11,
2020. In addition to other requirements,
in order to be eligible to bid in Auction
106, an applicant must first submit an
FCC Form 175 electronically via the
Auction Application System, following
the instructions set forth in Attachment
B to the Auction 106 Procedures Public
Notice. The FCC Form 175 will become
available with the opening of the initial
filing window and must be submitted
prior to 6:00 p.m. on February 11, 2020.
Late applications will not be accepted.
No application fee is required.
72. Applications may be filed at any
time beginning at noon ET on January
29, 2020, until the filing window closes
at 6:00 p.m. ET on February 11, 2020.
Applicants are 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
February 11, 2020.
73. 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.
Additional information about accessing,
completing, and viewing the FCC Form
175 is included in Attachment B to the
Auction 106 Procedures Public Notice.
Applicants requiring technical
assistance should contact FCC Auctions
Technical Support at (877) 480–3201,
option nine; (202) 414–1250; or (202)
414–1255 (text telephony (TTY)); hours
of service are Monday through Friday,
from 8:00 a.m. to 6:00 p.m. ET. All calls
to Technical Support are recorded. 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 auctionrelated systems, including the auction
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application system. However, there are
occasions when auction-related systems
may be temporarily unavailable.
74. Public Notice of Applicant’s Initial
Application Status and Opportunity for
Minor Modifications. After the deadline
for filing auction applications,
Commission staff will review all timely
submitted applications to determine
whether each applicant has complied
with the application requirements and
provided all information concerning its
qualifications for bidding. Commission
staff will issue a public notice with
applicants’ initial application status
identifying (1) those that are complete;
(2) those that are rejected; or (3) 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, and a paper copy will be
sent by overnight delivery to the contact
address listed in the FCC Form 175 for
each applicant. 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.
75. Non-mutually exclusive
applications will be listed in a
subsequent public notice to be released
by the Office of Economics and
Analytics (OEA) and MB. Such
applications will not proceed to auction,
but will proceed in accordance with
instructions set forth in that public
notice. All mutually exclusive
applications will be considered under
the relevant procedures for conflict
resolution. Mutually exclusive
applications proposing commercial
stations will proceed to auction.
76. Commission staff will
communicate only with an applicant’s
contact person or certifying official, as
designated on the FCC Form 175, 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 auction106@fcc.gov.
77. Public Notice of Applicant’s Final
Application Status After Upfront
Payment Deadline. After review of
resubmitted applications for Auction
106 and consideration of upfront
payments, Commission staff will release
a public notice identifying applicants
that have become qualified bidders. A
Qualified Bidders Public Notice will be
issued before bidding in the auction
begins. Qualified bidders are those
applicants with submitted FCC Form
175 applications that are deemed timely
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filed and complete, and which have
made a timely and sufficient upfront
payment.
78. Upfront Payments. In addition to
other requirements, 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 before 6:00 p.m. ET on
March 20, 2020, following the
procedures described in the Auction 106
Procedures Public Notice and the
instructions in its Attachment C. After
completing its short-form application,
an applicant will have access to an
electronic version of the FCC Form 159.
This FCC Form 159 can be printed and
the completed form must be sent by fax
to the FCC at (202) 418–2843, or by
email to RROGWireFaxes@fcc.gov.
79. 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 106 go to a U.S. Treasury
account number different from the
accounts used in previous FCC auctions.
The beneficiary account number is
specific to the upfront payments for
Auction 106. Do not use a beneficiary
account number from a previous
auction. Wire transfer information is
specified in the Making Upfront
Payments by Wire Transfer section of
the Auction 106 Procedures Public
Notice.
80. 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 it plans to make the
wire transfer, and well ahead of the due
date, as well as allow 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
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and from Commission staff that its
upfront payment was timely received
and that it was deposited into the
proper account. To receive confirmation
from Commission staff, contact Scott
Radcliffe of the Office of Managing
Director’s Revenue & Receivables
Operations Group/Auctions at (202)
418–7518, or Theresa Meeks at (202)
418–2945.
81. Failure to deliver a sufficient
upfront payment by the March 20, 2020
deadline will result in dismissal of the
short-form application and
disqualification from participation in
the auction.
82. 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
106. Alternatively, the completed form
can be scanned and sent as an
attachment to an email to
RROGWireFaxes@fcc.gov.
83. Upfront Payments and Bidding
Eligibility. In the Auction 106 Comment
Public Notice, an upfront payment
amount was proposed for each
construction permit, taking into account
various factors related to the efficiency
of the auction process and the potential
value of similar construction permits,
and comment was sought on the
proposed upfront payment amounts.
84. A commenter suggests that we
reduce to zero the upfront payments for
certain allotments. This comment fails
to recognize that the refundable upfront
payments not only establish each
qualified bidder’s bidding eligibility and
ensure that the pace of bidding is
managed appropriately, but the upfront
payments also protect against frivolous
or insincere bidding and provide the
Commission with a source of funds from
which to collect payments owed at the
close of the bidding. For these reasons,
this proposal was rejected and the
upfront payment amounts specified for
those allotments were retained. The
upfront payment amounts proposed in
the Auction 106 Comment Public Notice
are unchanged from those proposed,
and the specific upfront payment
amounts and bidding units for each
construction permit are set forth in
Attachment A of the Auction 106
Procedures Public Notice.
85. An applicant must make an
upfront payment sufficient to obtain
bidding eligibility on the construction
permits on which it will bid. It was
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proposed in the Auction 106 Comment
Public Notice that the amount of the
upfront payment would determine a
bidder’s initial bidding eligibility, the
maximum number of bidding units on
which a bidder may place bids in any
single round. Under that proposal, in
order to bid on a particular construction
permit, a qualified bidder must have
selected the construction permit on its
FCC Form 175 and 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 selected on
its FCC Form 175, or else the applicant
will not be qualified to participate in the
auction. An applicant does not have to
make an upfront payment to cover all
construction permits the applicant
selected on its FCC Form 175, but only
enough to cover the maximum number
of bidding units that are associated with
construction permits on which the
applicant wishes 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. The total upfront payment
does not affect the total dollar amount
the bidder may bid on any given
construction permit. No comments on
this proposal were submitted, and it is
adopted. Each applicant’s upfront
payment amount will determine that
bidder’s initial bidding eligibility.
86. In calculating its upfront payment
amount, an applicant should determine
the maximum number of bidding units
on which it may wish to be active (bid
on or hold provisionally winning bids
on) in any single round, and submit an
upfront payment amount covering that
number of bidding units. 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.
87. An applicant that is a former
defaulter must pay an upfront payment
50% greater than that required of an
applicant that is not a former defaulter.
Defaults and delinquencies of the
applicant itself and its controlling
interests are included. If an applicant is
a former defaulter, it must calculate its
upfront payment for all of its selected
construction permits by multiplying the
number of bidding units on which it
wishes to be active by 1.5. To calculate
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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.
88. If a former defaulter fails to submit
a sufficient upfront payment to establish
eligibility to bid on at least one of the
construction permits selected in its FCC
Form 175, the applicant will not be
eligible to participate in bidding in the
auction. That applicant will retain its
status as an Auction 106 applicant and
will remain subject to 47 CFR 1.2105(c),
73.5002(d), (e).
89. Auction Registration. All qualified
bidders for Auction 106 are
automatically registered for the auction.
Registration materials will be
distributed prior to the auction by
overnight mail. The mailing will be sent
only to the contact person at the contact
address listed in the FCC Form 175 and
will include the SecurID® 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.
90. Qualified bidders that do not
receive this registration mailing will not
be able to submit bids. Therefore, if this
mailing is not received by the contact
representative for a qualified bidder by
noon on Wednesday, April 22, 2020,
call the Auctions Hotline at (717) 338–
2868. Receipt of this registration mailing
is critical to participating in the auction,
and each qualified bidder is responsible
for ensuring it has received all of the
registration materials.
91. If SecurID® tokens are lost or
damaged, only an authorized bidder, the
contact person, or the certifying official
on the applicant’s FCC Form 175 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 at
(717) 338–2868.
92. Remote Electronic Bidding via the
FCC Auction Bidding System. The
Commission will conduct this auction
remotely over the internet, and
telephonic bidding will be available as
well. There will be no on-site bidding
during Auction 106. Only qualified
bidders are permitted to bid. Each
authorized bidder must have its own
SecurID® token, which the Commission
will provide at no charge. Each qualified
bidder with one authorized bidder will
be issued two SecurID® tokens, while
qualified bidders with two or three
authorized bidders will be issued three
tokens. For security purposes, the
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SecurID® tokens, bidding system web
address, FCC assigned username, and
the telephonic bidding telephone
number are only mailed to the contact
person at the contact address listed on
the FCC Form 175. Each SecurID® token
is tailored to a specific auction.
SecurID® tokens issued for other
auctions or obtained from a source other
than the FCC will not work for Auction
106.
93. 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.
94. To the extent an issue arises with
the auction bidding 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 which
typically occur over the 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.
95. Should an issue arise that is
outside the auction bidding 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 remedy such an issue on
behalf of the bidder. Similarly, if an
issue arises due to bidder error using the
auction bidding system, the
Commission shall have no obligation to
resolve or remedy such an issue on
behalf of the bidder. After the close of
a bidding round, the results of bid
processing will not be altered absent
evidence of any failure in the auction
bidding system.
96. Mock Auction. All qualified
bidders will be eligible to participate in
a mock auction on Friday, April 24,
2020. The mock auction will enable
bidders to become familiar with the FCC
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auction bidding system prior to the
auction. Bidders are strongly
encouraged to participate in the mock
auction. Details will be announced by
public notice.
97. Fraud Alert. Some unscrupulous
entrepreneurs may attempt to use
Auction 106 to deceive and defraud
unsuspecting investors. Information
about deceptive telemarketing
investment schemes is available from
the FCC, FTC, and SEC. Information for
potential bidders and investors may be
obtained from the following sources: (1)
The FCC’s Consumer Call Center at
(888) 225–5322 or by visiting
www.fcc.gov/general/frauds-scams-andalerts-guides; (2) the FTC at (877) FTC–
HELP ((877) 382–4357) or by visiting
www.consumer.ftc.gov/articles/0238investment-risks; or (3) the SEC at (202)
942–7040 or by visiting www.sec.gov/
investor. Complaints about specific
deceptive telemarketing investment
schemes should be directed to the FTC,
the SEC, or the National Fraud
Information Center at (202) 835–0618.
98. Environmental Review
Requirements. Permittees or licensees
must comply with the Commission’s
rules for environmental review under
the National Environmental Policy Act,
the National Historic Preservation Act,
and other federal environmental
statutes. The construction of a broadcast
facility is a federal action, and the
permittee or licensee must comply with
the Commission’s environmental rules
for each such facility. These
environmental rules require, among
other things, that the permittee or
licensee consult with expert agencies
having environmental responsibilities,
including the U.S. Fish and Wildlife
Service, the State Historic Preservation
Office, the U.S. Army Corps of
Engineers, and the Federal Emergency
Management Agency (through the local
authority with jurisdiction over
floodplains). In assessing the effect of
facility construction on historic
properties, the permittee or licensee
must follow the provisions of the FCC’s
Nationwide Programmatic Agreement
Regarding the Section 106 National
Historic Preservation Act Review
Process. The permittee or licensee must
prepare environmental assessments for
any facility that may have a significant
impact in or on wilderness areas,
wildlife preserves, threatened or
endangered species, or designated
critical habitats, historical or
archaeological sites, Indian religious
sites, floodplains, and surface features.
In addition, the permittee or licensee
must prepare environmental
assessments for facilities that include
high intensity white lights in residential
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neighborhoods or excessive radio
frequency emission.
IV. Bidding
A. Auction Structure
99. Simultaneous Multiple Round
Auction. In the Auction 106 Comment
Public Notice, it was proposed to
auction all construction permits listed
in Attachment A of the Auction 106
Procedures Public Notice in a single
auction using the Commission’s
standard simultaneous multiple-round
auction format. This type of auction
offers every construction permit for bid
at the same time and consists of
successive bidding rounds in which
qualified bidders may place bids on
individual construction permits. No
comment was received for this proposal,
and this proposal is adopted. Unless
otherwise announced, bids will be
accepted on all construction permits in
each round of the auction until bidding
stops on every construction permit.
100. FCC Auction Bidding System.
The Commission will conduct this
auction over the internet using the FCC
auction bidding system. Qualified
bidders are permitted to bid
electronically via the internet or by
telephone using the telephonic bidding
option. For this reason, each applicant
should indicate its bidding preference,
electronic or telephonic, on its FCC
Form 175. Telephonic bid assistants are
required to use a script when entering
bids placed by telephone. Telephonic
bidders must 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. All such telephone calls
are recorded.
101. An Auction 106 bidder’s ability
to bid on specific construction permits
is determined by two factors: (1) The
construction permits selected by that
applicant in its FCC Form 175 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 the bidder selected
on its FCC Form 175.
102. 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®
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.
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103. Round Structure. The initial
schedule of bidding rounds will be
announced in the public notice listing
the qualified bidders in the auction,
which is released at least one week
before bidding in the auction starts.
Each bidding round is followed by the
release of round results. Multiple
bidding rounds may be conducted each
day. Moreover, unless otherwise
announced, bidding on all construction
permits will be conducted on each
business day until bidding has stopped
on all construction permits.
104. Commission staff 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. Commission staff may change
the amount of time for the bidding
rounds, the amount of time between
rounds, or the number of rounds per
day, depending upon bidding activity
and other factors, by prior
announcement.
105. Eligibility and Activity Rules.
Upfront payments will determine initial
(maximum) bidding eligibility (as
measured in bidding units) for Auction
106. 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 listed in Attachment A to
the Auction 106 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 selected on its FCC
Form 175 as long as the total number of
bidding units associated with those
construction permits does not exceed
the bidder’s current eligibility.
Eligibility cannot be increased during
the auction; it can only remain the same
or decrease. In calculating its upfront
payment amount, an applicant must
determine the maximum number of
bidding units it may wish to bid on or
hold provisionally winning bids on in
any single round, and submit an upfront
payment amount covering that total
number of bidding units. At a
minimum, an applicant’s upfront
payment must cover the bidding units
for at least one of the construction
permits it selected on its FCC Form 175.
The total upfront payment does not
affect the total dollar amount a bidder
may bid on any given construction
permit.
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106. 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. 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.
Provisionally winning bids are bids that
would become final winning bids if the
auction were to close after the given
round.
107. The minimum required activity
is expressed as a percentage of the
bidder’s current eligibility, and it
increases by stage as the auction
progresses. 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 curtaining or
eliminating the bidder’s ability to place
additional bids in the auction.
108. To provide bidders with
flexibility to pursue backup strategies if
they so desire, a more flexible activity
requirement is adopted than that
proposed in the Auction 106 Comment
Public Notice for this auction of well
over 100 permits in which applicants
are not limited in their permit selections
and may seek to implement backup
plans as price information is made
available during bidding rounds.
Initially two activity requirements are
adopted: An 80% requirement for the
beginning of the auction and a 95%
requirement that will be used later in
the auction.
109. Auction Stages. Auction 106 will
be conducted in at least two stages as
described below. A bidder desiring to
maintain its current bidding eligibility
will be required to be active on
construction permits representing at
least 80% of its current eligibility
during each round of Stage One, and on
at least 95% of its current bidding
eligibility in Stage Two.
110. Stage One: During the first stage
of the auction, a bidder desiring to
maintain its current bidding eligibility
will be required to be active on
construction permits representing at
least 80% of its current bidding
eligibility in each bidding round.
Failure to maintain the required activity
level will result in the use of an activity
rule waiver or, if the bidder has no
activity rule waivers remaining, a
reduction in the bidder’s bidding
eligibility in the next round. During
Stage One, reduced eligibility for the
next round will be calculated by
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multiplying the bidder’s current round
activity (the sum of bidding units of the
bidder’s provisionally winning bids and
bids during the current round) by fivefourths (5⁄4).
111. Stage Two: During the second
stage of the auction, a bidder desiring to
maintain its current bidding eligibility
is required to be active on 95% of its
current bidding eligibility. Failure to
maintain the required activity level will
result in the use of an activity rule
waiver or, if the bidder has no activity
rule waivers remaining, a reduction in
the bidder’s bidding eligibility in the
next round. During Stage Two, reduced
eligibility for the next round will be
calculated by multiplying the bidder’s
current round activity (the sum of
bidding units of the bidder’s
provisionally winning bids and bids
during the current round) by twentynineteenths (20/19).
Since activity requirements increase
in Stage Two, bidders must carefully
check their activity during the first
round following a stage transition to
ensure that they are meeting the
increased activity requirement. This is
especially critical for bidders that have
provisionally winning bids and do not
plan to submit new bids. In past
auctions, some bidders have
inadvertently lost bidding eligibility or
used an activity rule waiver because
they did not re-verify their activity
status at stage transitions. Bidders may
check their activity against the required
activity level by logging into the FCC
auction bidding system. Prior to any
move from Stage One to Stage Two,
bidders will be alerted during the
auction by announcement in the auction
bidding system.
112. Stage Transitions. The auction
will advance from Stage One to Stage
Two after Commission staff consider a
variety of measures of auction activity,
including, but not limited to, the
percentages of construction permits (as
measured in bidding units) on which
there are new bids, the number of new
bids, and the increase in revenue.
113. The auction will start in Stage
One. The stage of the auction does not
affect the auction stopping rules; the
auction may conclude in Stage One.
Commission staff will regulate the pace
of the auction by announcement in the
auction bidding system.
114. Commission staff retain the
discretion to change the activity
requirements during the auction as
circumstances warrant, and also have
other mechanisms to influence the
speed of the auction. For example, there
may be no transition to Stage Two if the
auction is progressing satisfactorily
under the Stage One activity
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requirement, or there may be a
transition to Stage Two with an activity
requirement that is higher or lower than
95%, or add an additional stage with a
higher activity requirement. This
determination will be based on a variety
of measures of auction activity,
including, but not limited to, the
number of new bids and the percentages
of construction permits (as measured in
bidding units) on which there are new
bids.
115. If Commission staff implement a
stage with an activity requirement other
than 80% or 95%, a bidder’s reduced
eligibility for the next round will be
calculated by multiplying that bidder’s
current round activity by the reciprocal
of the activity requirement. For
example, if there is a 98% activity
requirement, the bidder’s current round
activity would be multiplied by 50/49;
if there is a 100 percent activity
requirement, the bidder’s current round
activity would become its bidding
eligibility (current round activity would
be multiplied by 1⁄1).
116. Activity Rule Waivers. Each
qualified bidder in the auction will be
provided with three activity rule
waivers, which 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
bidders eligibility despite its activity in
the current round being below the
required minimum activity level. An
activity rule waiver applies to an entire
round of bidding, not to a particular
construction permit. A bidder may use
an activity rule waiver in any round of
the auction as long as the bidder has not
used all of its waivers.
117. 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 waiver remaining or
(2) the bidder overrides the automatic
application of a waiver by reducing
eligibility, therefore 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 its ability to place
additional bids in the auction.
118. A bidder with insufficient
activity may wish to reduce its bidding
eligibility rather than use an activity
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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. The bidder’s eligibility would
be permanently reduced to bring it into
compliance with the activity rule.
Reducing eligibility is an irreversible
action; once eligibility has been
reduced, a bidder cannot regain its lost
bidding eligibility.
119. A bidder may apply an activity
rule waiver proactively as a means to
keep the auction open without placing
a bid. If a bidder proactively applies an
activity rule waiver during a bidding
round in which no bids are 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.
120. Auction Stopping Rules. For
Auction 106, a simultaneous stopping
rule approach was proposed, 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.
121. Comment was sought on
alternative versions of the simultaneous
stopping rule for Auction 106: Option 1.
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 on 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. Option 2. 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 any construction permit that
already has a provisionally winning bid.
Thus, absent any other bidding activity,
a bidder placing a new bid on an FCCheld construction permit (a construction
permit that does not have a
provisionally winning bid) would not
keep the auction open under this
modified stopping rule. Option 3. The
auction would close using a modified
version of the simultaneous stopping
rule that combines Option 1 and Option
2. Option 4. The auction would close
after a specified number of additional
rounds (special stopping rule) to be
announced in advance in the FCC
auction bidding system. If this special
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stopping rule is invoked, bids will be
accepted in the specified final round(s),
after which the auction will close.
Option 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. Thus, the activity
rule will apply as usual, and a bidder
with insufficient activity will either lose
bidding eligibility or use a waiver.
122. These proposed 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, Commission staff may attempt
to change the pace of bidding in the
auction. For example, the number of
bidding rounds per day and/or the
minimum acceptable bids may change.
Commission staff retain the discretion to
exercise any of these options with or
without prior announcement during the
auction.
123. Auction Delay, Suspension, or
Cancellation. By public notice or by
announcement through the FCC auction
bidding system, Commission staff may
delay, suspend, or cancel bidding in the
auction in the event of natural disaster,
technical obstacle, network
interruption, 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.
124. In such cases, Commission staff,
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. This authority
will be exercised solely at the discretion
of Commission staff, and not as a
substitute for situations in which
bidders may wish to apply their activity
rule waivers.
B. Bidding Procedures
125. Bid Amounts. In each round of
Auction 106 a qualified bidder will be
able to place a bid on a given
construction permit in any of up to nine
different amounts if a bidder has
sufficient eligibility to place a bid on the
particular construction permit. The FCC
auction bidding system interface will
list the nine acceptable bid amounts for
each construction permit.
126. No comments were received on
the proposal to use a minimum
acceptable bid increment percentage of
10% to calculate the first of the
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acceptable bid amounts. This means
that the minimum acceptable bid
amount for a construction permit will be
approximately 10% greater than the
provisionally winning bid amount for
the construction permit. No comments
were received on the proposal to use an
additional bid increment percentage of
5% to calculate the eight additional
acceptable bid amounts. Therefore, the
auction will begin with a minimum
acceptable bid increment percentage of
10% and an additional bid increment
percentage of 5%.
127. In Auction 106, 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—i.e., provisionally winning
bid amount * 1.10, rounded.
128. In Auction 106, the FCC auction
bidding system will calculate the eight
additional bid amounts by multiplying
the minimum acceptable bid amount by
the additional bid increment percentage
of 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. Because the additional bid
increment percentage is 5%, the
calculation of the additional increment
amount is (minimum acceptable bid
amount) * (0.05), rounded. 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.
129. The result of the calculation of a
minimum acceptable bid increment and
the result of the calculation of each
additional bid increment is subject to a
minimum of $100. Any results above
$10,000 will be rounded to the nearest
$1,000, results below $10,000 but above
$1,000 will be rounded to the nearest
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$100, while results below $1,000 will be
rounded to the nearest $10.
130. Commission staff retain the
discretion to change the minimum
acceptable bid amounts, the minimum
acceptable bid increment percentage,
the additional bid increment percentage,
and the number of acceptable bid
amounts, with the discretion to do so on
a construction permit-by-construction
permit basis, as well as to 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, Commission
staff could set a $1,000 limit on
increases in minimum acceptable bid
amounts over provisionally winning
bids. Thus, if calculating a minimum
acceptable bid using the minimum
acceptable bid increment percentage
results in a minimum acceptable bid
amount that is $1,200 higher than the
provisionally winning bid on a
construction permit, the minimum
acceptable bid amount would instead be
capped at $1,000 above the
provisionally winning bid. If we
exercise this discretion, we will alert
bidders by announcement in the FCC
auction bidding system during the
auction.
131. Provisionally Winning Bids. In
Auction 106, 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.
Provisionally winning bids count
toward activity for purposes of the
activity requirement.
132. A pseudo-random number
generator will be used to select a single
provisionally winning bid in the event
that identical high bid amounts are
submitted on a construction permit in a
given round (i.e., tied bids). The FCC
auction bidding system will assign a
pseudo-random number to each bid
upon submission. The tied bid with the
highest pseudo-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
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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.
133. 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.
134. 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.
135. Bidding Results. Bids placed
during a round will not be made public
until the conclusion of that round. After
a round closes, Commission staff will
compile reports of all bids placed,
current provisionally winning bids, new
minimum acceptable bid amounts for
the following round, whether the
construction permit is FCC-held, and
bidder eligibility status (bidding
eligibility and activity rule waiver), and
post the reports for public access.
136. Auction Announcements.
Commission staff will use auction
announcements to report necessary
information to bidders, such as schedule
changes. All auction announcements
will be available by clicking a link in
the FCC auction bidding system.
V. Post-Auction Procedures
137. Shortly after bidding has closed,
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 long-form applications
(FCC Forms 2100, Schedule 301–FM).
138. 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 106 to 20% of
the net amount of its winning bid(s)
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(gross bid(s) less any applicable new
entrant bidding credit(s)).
139. Final Payments. As required by
section 1.2109(a), each winning bidder
will be required to 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.
140. Long-Form Applications. Within
30 days following the close of bidding
and notification to the winning bidders,
unless a longer period is specified by
public notice, winning bidders must
electronically submit a properly
completed long-form application (FCC
Form 2100, Schedule 301–FM,
Commercial FM Station Construction
Permit Application), and required
exhibits for each construction permit
won through Auction 106. A winning
bidder in a commercial broadcast
spectrum auction is required to submit
an application filing fee with its postauction long-form application. Winning
bidders claiming new entrant status
must include an exhibit demonstrating
their eligibility for the bidding credit.
Further instructions on these and other
filing requirements will be provided to
winning bidders in the auction closing
public notice.
141. 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 within the prescribed
period of time, fails to submit a timely
long-form application, fails to make a
full and timely final payment, or is
otherwise disqualified) is liable for a
default payment as described in 47 CFR
1.2104(g)(2). This default payment
consists of a deficiency payment, equal
to the difference between the amount of
the Auction 106 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. An additional
payment for defaults in Auction 106
under 47 CFR 1.2104(g)(2) will be
assessed at 20% of the applicable bid.
142. In the event of a default, the
Commission has the discretion to reauction 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
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institution of proceedings to revoke any
existing authorizations held by the
applicant.
143. 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 provided in the Auction
106 Procedures Public Notice.
VI. Procedural Matters
144. Paperwork Reduction Act. The
Office of Management and Budget
(OMB) has approved the information
collections in the Application to
Participate in an FCC Auction, FCC
Form 175. The Auction 106 Procedures
Public Notice 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).
145. Congressional Review Act. The
Commission will submit the Auction
106 Procedures Public Notice to the
Administrator of OMB’s Office of
Information and Regulatory Affairs for
concurrence as to whether these
procedures are major or non-major
under the Congressional Review Act, 5
U.S.C. 804(2). The Commission will
send a copy of the Auction 106
Procedures Public Notice in a report to
Congress and the Government
Accountability Office pursuant to the
Congressional Review Act, 5 U.S.C.
801(a)(1)(A).
146. 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 106 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 106
will be conducted. In this proceeding, a
Supplemental Initial Regulatory
Flexibility Analysis (Supplemental
IRFA) was incorporated in the Auction
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106 Comment Public Notice, 84 FR
59605, Nov. 5, 2019. The Commission
sought written public comment on the
proposals in the Auction 106 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 106
Procedures Public Notice and conforms
to the RFA.
147. Need for, and Objectives of, the
Public Notice. The procedures for the
conduct of Auction 106 as described in
the Auction 106 Procedures Public
Notice implement the Commission’s
competitive bidding rules, which have
been adopted by the Commission in
multiple notice-and-comment
rulemaking proceedings. More
specifically, the Auction 106 Procedures
Public Notice provides an overview of
the procedures, terms and conditions
governing Auction 106 and the postauction application and payment
processes, as well as setting the
minimum opening bid amount for each
of the FM broadcast construction
permits that are subject to being
assigned by competitive bidding.
148. To promote the efficient and fair
administration of the competitive
bidding process for all Auction 106
participants, including small
businesses, the Auction 106 Procedures
Public Notice announces the following
procedures: (1) Use of a simultaneous
multiple-round auction format,
consisting of sequential bidding rounds
with a simultaneous procedure; (2) a
specific upfront payment amount for
each construction permit; (3) a specific
minimum opening bid amount for each
construction permit; (4) a specific
number of bidding units for each
construction permit; (5) a bidder’s
initial bidding eligibility will be based
on the amount of that bidder’s upfront
payment; (6) a two-stage auction with an
activity requirement in which a bidder
is required to be active on 80% of its
bidding eligibility in stage one and 95%
of its bidding eligibility in stage two; (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 the methodology for calculating
such amounts; (9) a procedure for
breaking ties if identical high bid
amounts are submitted on one permit in
a given round; (10) a prohibition on bid
withdrawals; and (11) establishment of
an additional default payment
percentage of 20% of the applicable bid
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under 47 CFR 1.2104(g)(2) in the event
that a winning bidder defaults or is
disqualified after the auction.
149. 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.
150. 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 106
Comment Public Notice.
151. 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(a)(1), (a)(2)(A).
152. The specific competitive bidding
procedures and minimum opening bid
amounts described in the Auction 106
Procedures Public Notice will affect all
applicants participating in Auction 106.
The number of entities that may apply
to participate in Auction 106 is
unknown. Based on the number of
applicants in prior FM auctions, the
estimate is that the number of
applicants for Auction 106 may range
from approximately 175 to 260. This
estimate is based on the number of
applicants who filed short-form
applications to participate in previous
auctions of FM construction permits
held to date, an average of 1.98 shortform applications were filed per
construction permit offered, with a
median of 1.365 applications per
permit. The actual number of applicants
for Auction 106 could vary significantly
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as any individual’s or entity’s decision
to participate may be affected by a
number of factors beyond the
Commission’s knowledge.
153. Radio Stations. This Economic
Census category comprises
establishments primarily engaged in
broadcasting aural programs by radio to
the public. Programming may originate
in their own studio, from an affiliated
network, or from external sources. The
SBA has established a small business
size standard for this category as firms
having $41.5 million or less in annual
receipts. Economic Census data for 2012
shows that 2,849 radio station firms
operated during that year. Of that
number, 2,806 firms operated with
annual receipts of less than $25 million
per year, 17 with annual receipts
between $25 million and $49,999,999
and 26 with annual receipts of $50
million or more. Therefore, based on the
SBA’s size standard, the majority of
such entities are small entities.
154. According to Commission staff
review of the BIA/Kelsey, LLC’s Media
Access Pro Radio Database as of
September 17, 2019, about 11,033 (or
about 99.95%) of 11,039 commercial
radio stations had revenues of $41.5
million or less and thus qualify as small
entities under the SBA definition. 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 106.
155. Also, 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 106
competitive bidding rules may apply
does not exclude any radio station from
the definition of a small business on
these bases and is therefore overinclusive to that extent. Furthermore, it
is not possible at this time to define or
quantify the criteria that would
establish whether a specific radio
station is dominant in its field of
operation. In addition, it is difficult to
assess these criteria in the context of
media entities and therefore these
estimates of small businesses to which
they apply may be over-inclusive to this
extent.
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156. It is not possible to accurately
develop an estimate of how many of the
entities in this auction would be 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).
157. According to the SBA, a radio
station is a small business concern if it
has annual revenue of $41.5 million or
less. Based on Commission staff review
of the BIA/Kelsey, LLC’s Media Access
Pro Radio Database, 6,739 (99.91%) of
6,745 FM radio stations fall at or under
that revenue threshold. Accordingly,
based on this data, it is estimated that
the majority of Auction 106 applicants
would likely meet the SBA’s definition
of a small business concern.
158. 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. For all
spectrum auctions, in the first part of
the Commission’s two-phased
application process, 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. In the second
phase of the auction application
process, there are additional compliance
requirements for winning bidders.
159. Auction 106 applicants,
including small entities, will become
qualified to bid in Auction 106 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 that the applicant
selected on its FCC Form 175,
accompanied by a complete and
accurate FCC Form 159.
160. 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. In addition, each
Auction 106 applicant must maintain
the accuracy of its previously filed
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short-form application electronically
using the FCC auction application
system.
161. In the second phase of the
process, there are additional compliance
requirements only applicable to
winning bidders. As with other winning
bidders, any small entity that is a
winning bidder will be required to
comply with the terms of the following
rules, among others: (1) 47 CFR
1.2107(b) by submitting as a down
payment within 10 business days of
release of the auction closing public
notice sufficient funds (in addition to its
upfront payment) to bring its total
amount of money on deposit with the
Commission for Auction 106 to 20% of
the net amount of its winning bids; and
(2) 47 CFR 1.2109(a) by submitting
within 10 business days after the down
payment deadline the balance of the
amount for each of its winning bids; and
(3) 47 CFR 73.5005(a) by electronically
filing a properly completed long-form
application (FCC Form 2100, Schedule
301–FM, Commercial FM Station
Construction Permit Application) and
required exhibits for each construction
permit won through Auction 106,
within 30 days following release of a
closing public notice for Auction 106,
unless a longer period is specified by
public notice.
162. 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 the Auction 106
Procedures Public Notice.
163. 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).
164. OEA and MB anticipate that the
steps taken to make numerous resources
available to small entities and other
auction participants at no cost should
minimize any economic impact of the
auction processes and procedures on
small entities and should result in both
E:\FR\FM\29JAR1.SGM
29JAR1
Federal Register / Vol. 85, No. 19 / Wednesday, January 29, 2020 / Rules and Regulations
operational and administrative cost
savings for small entities and other
auction participants. For example, prior
to the beginning of bidding in this
auction, the Commission will hold a
mock auction to allow qualified bidders
the opportunity to familiarize
themselves with both the processes and
systems that will be utilized in Auction
106. During the auction, participants
will be able to access and participate in
bidding via the internet using a webbased system, or telephonically,
providing two cost effective methods of
participation and 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 a telephone hotline for
assistance with auction processes and
procedures as well as a technical
support telephone hotline to assist with
issues such as access to or navigation
within the electronic FCC Form 175 and
use of the FCC’s auction bidding system.
In addition, all auction participants,
including small business entities, 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. These resources, coupled with
the description and communication of
the bidding procedures before bidding
begins in Auction 106, should ensure
that the auction will be administered
predictably, efficiently and fairly, thus
providing certainty for small entities as
well as other auction participants.
165. Notice to SBA. The Commission
will send a copy of the Auction 106
Procedures Public Notice, including this
Supplemental FRFA, to the Chief
Counsel for Advocacy of the SBA.
Federal Communications Commission.
Gary Michaels,
Deputy Chief, Auctions Division, Office of
Economics and Analytics.
[FR Doc. 2020–01654 Filed 1–28–20; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 73
lotter on DSKBCFDHB2PROD with RULES
[MB Docket Nos. 14–50, 09–182, 07–294, 04–
256, 17–289; DA 19–1303; FRS 16410]
2010/2014 Quadrennial Regulatory
Review; Rules and Policies To
Promote New Entry and Ownership
Diversity in the Broadcasting Services
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
VerDate Sep<11>2014
15:53 Jan 28, 2020
Jkt 250001
This document amends the
broadcast ownership rules to reflect the
mandate of the U.S. Court of Appeals for
the Third Circuit, which vacated and
remanded the Commission’s 2018
Incubator Order and 2017 Order on
Reconsideration in their entirety, and
the definition of eligible entities
adopted in the Commission’s 2016
Second Report and Order. This
document implements the Third
Circuit’s mandate and clarifies which
rules are currently in effect.
DATES: Effective January 29, 2020.
FOR FURTHER INFORMATION CONTACT: Ty
Bream, Ty.Bream@fcc.gov, or 202–418–
0644.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Order,
DA 19–1303, in MB Docket Nos. 14–50,
09–182, 07–294, 04–256, 17–289,
adopted and released on December 20,
2019. The complete text of this
document is available electronically via
the search function on the FCC’s
Electronic Document Management
System (EDOCS) web page at https://
apps.fcc.gov/edocs_public/ (https://
apps.fcc.gov/edocs_public/). The
complete document is available for
inspection and copying in the FCC
Reference Information Center, 445 12th
Street SW, Room CY–A257,
Washington, DC 20554 (for hours of
operation, see https://www.fcc.gov/
general/fcc-reference-informationcenter). To request materials in
accessible formats for people with
disabilities (Braille, large print,
electronic files, audio format), send an
email to fcc504@fcc.gov (mail to:
fcc504@fcc.gov) or call the FCC’s
Consumer and Governmental Affairs
Bureau at (202) 418–0530 (voice), (202)
418–0432 (TTY).
SUMMARY:
Synopsis
1. In Prometheus Radio Project v.
FCC, the United States Court of Appeals
for the Third Circuit vacated and
remanded the Commission’s 2018
Incubator Order (83 FR 43773, Aug. 28,
2018) and its 2017 Order on
Reconsideration (83 FR 755, Jan. 8,
2018) in their entirety, as well as the
definition of eligible entities adopted in
the Commission’s 2016 Second Report
and Order (81 FR 76262, Nov. 1, 2016).
Pursuant to F. R. App. P. 41(b), the court
issued its mandate on November 29,
2019, which vacated, as of that date, the
rule changes adopted in the Incubator
Order and Order on Reconsideration
and the eligible entity definition as
adopted in the Second Report and
Order. With this Order, we amend our
rules to reflect the court’s mandate and
clarify which rules are currently in
PO 00000
Frm 00035
Fmt 4700
Sfmt 4700
5163
effect. Nothing in this Order shall be
construed to affect the right of the
Commission or any other party to the
Prometheus litigation to seek further
review of the Third Circuit’s decision in
the U.S. Supreme Court, or to limit the
Commission’s discretion in the event
that the Supreme Court were to take
further action in that litigation.
Consistent with the court’s mandate,
this Order repeals changes adopted in
the Incubator Order and Order on
Reconsideration and the eligible entity
definition as adopted in the Second
Report and Order. As a result of the
court’s decision and these revisions, the
newspaper/broadcast cross-ownership
rule, radio/television cross-ownership
rule, local television ownership rule,
local radio ownership rule, and
television joint sales agreement
attribution rule are reinstated as they
existed prior to the Order on
Reconsideration. For clarity, because the
Order on Reconsideration is vacated in
its entirety, the presumption under the
local radio ownership rule that would
apply a two-prong test for waiver
requests involving existing parent
markets with multiple embedded
markets is repealed and unavailable to
applicants. Note 5 to § 73.3555 is
reinstated with a reference to the
streamlined procedures adopted in
March 2019 for reauthorizing television
satellite stations when such stations are
assigned or transferred. In addition, the
eligible entity standard and its
application to regulatory measures as set
forth in the Second Report and Order
are repealed. Apart from the portions of
the order related to the now vacated
eligible entity definition, the remainder
of the Second Report and Order is in
effect and provides additional guidance
with respect to the reinstated rules.
Finally, the regulatory measures
adopted in the Incubator Order are
similarly repealed and unavailable to
applicants.
2. The Bureau finds that notice and
comment are unnecessary for these rule
amendments under 5 U.S.C. 553(b),
because this ministerial order merely
implements the mandate of the United
States Court of Appeals for the Third
Circuit, and the Commission lacks
discretion to depart from this mandate.
Because this Order is being adopted
without notice and comment, the
Regulatory Flexibility Act does not
apply.
3. Accordingly, it is ordered that
§ 73.3555 of the Commission’s rules, 47
CFR 73.3555, is amended as set forth in
the Final Rules, effective upon
publication in the Federal Register.
While the effect of the court’s mandate
was to vacate certain rule changes and
E:\FR\FM\29JAR1.SGM
29JAR1
Agencies
[Federal Register Volume 85, Number 19 (Wednesday, January 29, 2020)]
[Rules and Regulations]
[Pages 5147-5163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-01654]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1 and 73
[AU Docket No. 19-290; DA 19-1256; DA 19-1265]
Auction of FM Broadcast Construction Permits Scheduled for April
28, 2020; Notice of Filing Requirements, Minimum Opening Bids, Upfront
Payments, and Other Procedures for Auction 106; Auction 106 Freeze
Announced for FM Minor Change Applications
AGENCY: Federal Communications Commission.
ACTION: Final action; requirements and procedures.
-----------------------------------------------------------------------
SUMMARY: This document summarizes public notices that announce the
procedures and upfront payments amounts and minimum opening bids for
the auction of certain FM broadcast construction permits as well as a
temporary freeze on the filing of minor change applications for FM
stations. The Auction 106 Procedures Public Notice summarized here is
intended to familiarize applicants with the procedures and other
requirements for participation in Auction 106.
DATES: Applications to participate in Auction 106 must be submitted
before 6 p.m. Eastern Time (ET) on February 11, 2020. FM commercial and
noncommercial educational minor change applications may not be filed
during a period starting on January 29, 2020, and ending on February
11, 2020. Upfront payments for Auction 106 must be received by 6 p.m.
ET on March 20, 2020. Bidding in Auction 106 is scheduled to start on
April 28, 2020.
FOR FURTHER INFORMATION CONTACT: For auction legal questions, Lynne
Milne or Daniel Habif in the OEA Auctions Division at (202) 418-0660.
For general auction questions, the Auction Hotline at (717) 338-2868.
For FM Broadcast service questions, Lisa Scanlan, Thomas Nessinger, or
James Bradshaw in the MB Audio Division at (202) 418-2700. 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 106
Procedures Public Notice, released on December 13, 2019, and the
Auction 106 Freeze Public Notice, also released on December 13, 2019.
The complete text of the Auction 106 Procedures Public Notice,
including attachments and any related document, and the complete text
of the Auction 106 Freeze Public Notice are available for public
inspection and copying from 8 a.m. to 4:30 p.m. ET Monday through
Thursday or from 8 a.m. to 11:30 a.m. ET on Fridays in the FCC
Reference Information Center, 445 12th Street SW, Room CY-A257,
Washington, DC 20554. These public notices and related documents also
are available on the internet at the Commission's website: www.fcc.gov/auction/106, or by using the search function for DA 19-1256 or DA 19-
1265 on the Commission's EDOCS web page at https://www.fcc.gov/edocs/.
I. General Information
1. Construction Permits in Auction 106. Auction 106 will offer 130
construction permits in the FM broadcast service for 130 new FM
allotments, including 34 construction permits that were offered but not
sold or were defaulted upon in prior auctions. These construction
permits are for vacant FM allotments, reflecting FM channels added to
the Table of FM Allotments pursuant to the Commission's established
rulemaking procedures, and assigned at the indicated communities
specified in 47 CFR 73.202(b). Attachment A of the Auction 106
Procedures Public Notice lists the reference coordinates for each
vacant FM allotment offered in Auction 106. Each Auction 106 applicant
may submit in its FCC Form 175 a set of preferred site coordinates for
any of its selected construction permits as an alternative to the
reference coordinates for that vacant FM allotment.
2. The set of construction permits listed in Attachment A of the
Auction 106 Procedures Public Notice is unchanged from the list of
construction permits that were proposed for this auction in the Auction
106 Comment Public Notice. Two commenters request the addition of
specific construction permits in Auction 106. Those requests cannot be
granted because the underlying allotments must first be added to the
Table of Allotments through separate administrative processes.
Likewise, a third commenter's request to delete a specific allocation
from the Table of Allotments cannot be granted because it is beyond the
scope of this proceeding.
3. Pursuant to the policies established in the Broadcast
Competitive Bidding Order, applicants may apply for any vacant FM
allotment listed in Attachment A. If two or more \FCC Forms 175 specify
the same FM allotment in Auction 106, mutual exclusivity exists for
auction purposes, and that construction permit must be awarded by
competitive bidding procedures. Once mutual exclusivity exists for
auction purposes, even if only one applicant is qualified to bid for a
particular construction permit in Auction 106, that applicant is
required to submit a bid in order to obtain the construction permit.
4. Media Bureau Freeze Public Notice. Pursuant to the Auction 106
Freeze Announced for FM Minor Change Applications Public Notice, DA 19-
1265 (Dec. 13, 2019), the Media Bureau (MB) will not accept FM
commercial and noncommercial educational (NCE) minor change
applications filed during the Auction 106 short-form application (FCC
Form 175) filing window. This freeze ensures that there will not be a
mutual exclusivity conflict between stations proposed in an Auction 106
Form 175 and a minor change application. Accordingly, this freeze
promotes a more certain and speedier auction process.
5. Auction Dates and Deadlines. The following dates and deadlines
apply:
Auction Tutorial Available (via internet): by January 22, 2020
FCC Form 175 Initial Filing Window Opens: January 29, 2020, 12:00 noon
ET
FCC Form 175 Initial Filing Deadline: February 11, 2020, 6:00 p.m. ET
[[Page 5148]]
Upfront Payments (via wire transfer): March 20, 2020, 6:00 p.m. ET
Mock Auction: April 24, 2020
Auction Bidding Begins: April 28, 2020
6. Requirements for Participation. Those wishing to bid in Auction
106 must: (1) Submit a FCC Form 175 electronically prior to 6:00 p.m.
ET, on February 11, 2020, following the procedures set forth in
Attachment B to the Auction 106 Procedures Public Notice, that complies
with the Commission's competitive bidding rules and other requirements
set forth in the Auction 106 Procedures Public Notice; (2) submit a
sufficient upfront payment and a complete and accurate FCC Remittance
Advice Form (FCC Form 159) by 6:00 p.m. ET on March 20, 2020, following
the procedures and instructions set forth in Attachment C to the
Auction 106 Procedures Public Notice; and (3) comply with all
provisions outlined in the Auction 106 Procedures Public Notice and
applicable Commission rules.
II. Applying To Participate in Auction 106
7. Relevant Authority. Auction 106 applicants must familiarize
themselves thoroughly with the Commission's general competitive bidding
rules, 47 CFR pt. 1, subpart Q, as well as Commission decisions in
proceedings regarding competitive bidding procedures, application
requirements, and obligations of Commission licensees. Broadcasters
should also familiarize themselves with the Commission's FM broadcast
service competitive bidding requirements contained in 47 CFR pt. 73, 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 106
Procedures Public Notice and any future public notices that may be
released in the proceeding.
8. The terms contained in the Commission's rules, relevant orders,
and public notices are not negotiable. The Commission may amend or
supplement the information contained in its public notices at any time,
and will issue public notices to convey any new or supplemental
information to applicants. It is the responsibility of all applicants
to remain current with all Commission rules and with all public notices
pertaining to this auction. Copies of most auctions-related Commission
documents, including public notices, can be retrieved from the FCC
Auctions internet site at www.fcc.gov/auctions and at the Commission's
headquarters, Reference Information Center, located at 445 12th Street
SW, Washington, DC 20554.
9. General Information Regarding Short-Form Applications. An
application to participate in Auction 106, 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
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.
10. If an applicant claims eligibility for a bidding credit, the
information provided in its FCC Form 175 will be used to determine
whether the applicant is eligible for the claimed bidding credit.
Applicants filing a short-form application are subject to the
Commission's rules against prohibited communications beginning at the
deadline for filing.
11. An applicant bears full responsibility for submitting an
accurate, complete and timely short-form application. Each applicant
must certify on its FCC Form 175 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 106 Procedures Public Notice and
should consult the Commission's rules to ensure that all the
information required is included within its short-form application.
12. 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.
13. Pursuant to 47 CFR 1.2105(a)(3), the same party may not bid on
more than one auction application, i.e., as more than one applicant. If
a party submits multiple FCC Forms 175 for an auction, only one
application may be the basis for that party to become qualified to bid
in that auction.
14. Consistent with the Commission's general prohibition of joint
bidding agreements, a party is generally permitted to participate in a
Commission auction only through a single bidding entity. Accordingly,
the filing of applications in Auction 106 by multiple entities
controlled by the same individual or set of individuals will generally
not be permitted.
15. An applicant should consult the Commission's rules to ensure
that all required information is included in its short-form
application. To the extent the information in the Auction 106
Procedures Public Notice does not address a potential applicant's
specific operating structure, or if the applicant needs additional
information or guidance concerning the following disclosure
requirements, the applicant should review the educational materials for
Auction 106 and/or use the contact information provided in the Auction
106 Procedures Public Notice to consult with Commission staff to better
understand the information it must submit in its short-form
application.
16. Authorized Bidders. An applicant must designate at least one
authorized bidder, and no more than three, in its FCC Form 175.
According to 47 CFR 1.2105(a)2)(iii), an individual is prohibited 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 in a given auction.
17. Permit Selection. An applicant must select on its FCC Form 175
the construction permit or permits, from the list of available permits
in Attachment A, on which it wants to bid. An applicant must carefully
review and verify its construction permit selections before the
deadline for submitting the FCC Form 175, because those selections
cannot be changed after the auction application filing deadline. The
FCC auction bidding system will not accept bids on construction permits
that were not selected on the applicant's FCC Form 175.
18. Disclosure of Agreements Relating to Permits Subject to
Auction. As required by 47 CFR 1.2105(a)(2)(viii), an applicant must
provide in its FCC Form 175 a brief description of, and identify
[[Page 5149]]
each party to, any partnership, joint venture, consortium, or
agreement, arrangement, or understanding of any kind relating to the FM
construction permits being auctioned, 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. As defined
in 47 CFR 1.2105(a)(4)(i), a controlling interest for purposes of this
rule includes all individuals or entities with positive or negative de
jure or de facto control of the applicant or licensee. The applicant
must certify under penalty of perjury in its FCC Form 175 that it has
described, and identified each party to, any such agreement,
arrangement, or understanding into which it has entered. An auction
applicant that enters into any agreement relating to the permits or
licenses being auctioned is subject to the same disclosure obligations
it would have 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. The Commission's rules generally prohibit joint bidding and
other arrangements involving auction applicants (including any party
that controls or is controlled by, such applicants). For purposes of
the prohibition on joint bidding arrangements, joint bidding
arrangements include 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.
20. To implement the prohibition on joint bidding arrangements, 47
CFR 1.2105(a)(2)(viii)-(ix) require each auction applicant to certify
in its short-form application that it has disclosed any arrangements or
understandings of any kind relating to the licenses being auctioned to
which it (or any party that controls or is controlled by it) is a
party. The applicant must also certify that it (or any party that
controls or is controlled by it) has not entered and will not enter
into any arrangement or understanding of any kind relating directly or
indirectly to bidding at auction with, among others, any other
applicant.
21. Although the Commission's rules do not prohibit auction
applicants from communicating about matters that are within the scope
of an agreement excepted pursuant to 47 CFR 1.2105(a)(2)(ix)(A)-(C) and
that has been disclosed in an FCC Form 175,certain discussions or
exchanges could nonetheless touch upon impermissible subject matters,
and compliance with the Commission's rules will not insulate a party
from enforcement of the antitrust laws.
22. A winning bidder will be required to disclose in its long-form
application (FCC Form 2100, Schedule 301-FM) following the close of the
auction the specific terms, conditions and parties involved in any
agreement relating to the permits or licenses being auctioned into
which it had entered prior to the time bidding closed. This applies to
any 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.
23. Ownership Disclosure Requirements. Each applicant must comply
with the ownership and control 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(ies)-in-interest and the ownership structure of the
applicant, including both direct and indirect ownership interests of
10% or more.
24. In certain circumstances, an applicant may have previously
filed an FCC Form 175 for a previous auction or an FCC Form 602 in
which ownership information was disclosed. The most current ownership
information contained in any previous FCC Form 175 or FCC Form 602 on
file with the Commission that used the same FRN the applicant is using
to submit its FCC Form 175 in this auction will automatically be pre-
filled into certain ownership sections on the applicant's FCC Form 175,
if such information is in an electronic format compatible with FCC Form
175. Each applicant must carefully review any ownership information
automatically entered into its FCC Form 175, including any ownership
attachments, to confirm that all information supplied on its FCC Form
175 is complete and accurate as of the application filing deadline in
this auction. Any information that needs to be corrected or updated
must be changed directly in the FCC Form 175 for this auction.
25. Foreign Ownership Disclosure Requirements. The Commission is
required by 47 U.S.C. 310 to review foreign investment in radio station
licenses and specific restrictions on who may hold certain types of
radio licenses. In its FCC Form 175, an applicant must report
citizenship or jurisdiction of formation for the applicant and for each
disclosable interest holder (DIH). In completing the FCC Form 175, an
applicant also will be required to certify that it is in compliance
with the foreign ownership provisions contained in section 310 of the
Communications Act of 1934, as amended. According to 47 CFR
1.2105(a)(2)(vi), the Commission will accept an auction application
certifying that a request for waiver or other relief from the
requirements of section 310 is pending. If such a request concerning
section 310 is pending or was granted previously, this information
needs to be reported in an attachment to the applicant's FCC Form 175.
26. Prohibited Communications and Compliance with Antitrust Laws.
The rules prohibiting certain communications set forth in 47 CFR
1.2105(c) and 73.5002(d), (e) apply to each applicant that files an FCC
Form 175 in Auction 106. Section 1.2105(c)(1) 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.
27. Entities Subject to Section 1.2105. 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. See 47 CFR 1.2105(c)(1). 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
[[Page 5150]]
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; Prohibition on Joint
Bidding Agreements. The Commission in 2015 amended section 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. The Commission's rules now
prohibit any joint bidding arrangement, including arrangements relating
to the permits being auctioned that address or communicate, directly or
indirectly, bidding in 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. The revised rule provides limited exceptions for a
communication within the scope of any arrangement consistent with the
exclusions from the Commission's rule prohibiting joint bidding
specified at 47 CFR 1.2105(a)(2)(ix)(A)-(C), 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 operational or that
provide for transfer or assignment of licenses, provided that such
agreements, arrangements or understandings are disclosed on its auction
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.
29. 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 communication may reach another
applicant. Applicants must determine whether their communications with
other parties are permissible under the rule once the prohibition
begins at the deadline for submitting applications, even before the
public notice identifying applicants is released.
30. Parties subject to section 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 determined 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 or director, which creates an
apparent violation of the rule.
31. Section 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 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. The Commission consistently has made clear
that application of the rule prohibiting communications has never
required total suspension of essential ongoing business. Entities
subject to the prohibition may negotiate agreements during the
prohibition period, provided that the communications involved do not
relate both (1) to the construction permits or licenses being auctioned
and (2) to bids or bidding strategies or post-auction market structure.
32. Business discussions and negotiations that are unrelated to
bidding in Auction 106 and that do not convey information about the
bids or bidding strategies of an applicant, including the post-auction
market structure, are not prohibited by the rule. While section
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 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, so 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. Potential 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 regarding
the application after the short-form application deadline, 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 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 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, an
[[Page 5151]]
applicant's statement to the press that it intends to stop bidding in
an auction could give rise to a finding of a Section 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 106 certifies its
compliance with 47 CFR 1.2105(c) and 73.5002(d). 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. Duty to Report Prohibited Communications. Section 1.2105(c)(4)
requires that any applicant that makes or receives a communication that
appears to violate section 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.
39. 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. This rule is designed to minimize the risk of inadvertent
dissemination of information in such reports. Any reports required by
section 1.2105(c) must be filed consistent with the instructions set
forth in the Auction 106 Procedures Public Notice. For Auction 106,
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 sections 1.65,
1.2105(a)(2), or 1.2105(c)(4) must take care to ensure that any report
of a prohibited communication does not itself give rise to a violation
of section 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 such as submission through the FCC Office of the
Secretary or ECFS. 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. Antitrust Laws. 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 section 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 a forfeiture and may be prohibited from
participating in future auctions, among other sanctions. See 47 CFR
1.2109(d).
42. New Entrant Bidding Credit. Two commenters observed that the
Auction 106 Comment Public Notice did not invite comments on the use of
new entrant bidding credits in this auction, and seek confirmation that
new entrant bidding credits will be available to eligible applicants in
this auction. This proceeding concerning procedures for conducting this
auction does not alter the applicability of the Commission's rules for
broadcast auctions; thus, a new entrant bidding credit will be
available in Auction 106.
43. Applicants that qualify for the new entrant bidding credit, as
specified in 47 CFR 73.5007, are eligible for a bidding credit in this
auction that represents the amount by which a bidder's winning bid is
discounted. The size of the 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 winner 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 section 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 section 73.5008. No bidding credit will be given if any of
the commonly owned mass media facilities serve the same area as the
broadcast permit proposed in the auction, as defined in section
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. For purposes of
determining whether a broadcast 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 allotment reference coordinates, not
any applicant-specified preferred site coordinates. Bidding credits are
not cumulative; qualifying applicants receive either the 25% or the 35%
bidding credit, but not both. 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. Attributable interests are defined in section 73.3555 and note
2 of that section. In Auction 106, the bidder's attributable interests
and, thus, its maximum new entrant bidding credit eligibility are
determined as of the short-form application filing deadline. Events
occurring after the short-form application 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, specifically no later than five business days
after the change occurs. Each applicant has a duty to continuously
maintain the accuracy of information submitted in its auction
application.
44. 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
[[Page 5152]]
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.
Thus, an applicant could not qualify for a bidding credit, nor upgrade
a previously claimed bidding credit, based upon ownership or officer/
director positional changes occurring after the FCC Form 175 filing
deadline.
45. Under broadcast attribution rules, those entities or
individuals with an attributable interest in a bidder include: All
officers and directors of a corporate bidder; any owner of 5% or more
of voting stock of a corporate bidder; all partners and limited
partners of a partnership bidder, unless the limited partners are
sufficiently insulated; and all members of a limited liability company,
unless sufficiently insulated.
46. In cases where an applicant's spouse or close family member
holds other media interests, such interests are not automatically
attributable to the bidder. The Commission decides attribution issues
in this context based on certain factors traditionally considered
relevant. See Clarification of Commission Policies Regarding Spousal
Attribution, MM Docket No. 91-122, Policy Statement, 57 FR 8845, Mar.
13, 1992.
47. In the New Entrant Bidding Credit Reconsideration Order, the
Commission attributed the media interests held by very substantial
investors in, or creditors of, an applicant claiming new entrant
status. Specifically, 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.
See 47 CFR 73.5008(c).
48. In the Diversity Order, the Commission relaxed the equity/debt
plus (EDP) attribution standard, to allow for higher investment
opportunities in entities meeting the definition of eligible entities.
An eligible entity is defined in Note 2(i) of section 73.3555. On
September 23, 2019, the United States Court of Appeals for the Third
Circuit issued a decision in Prometheus Radio Project v. FCC, vacating
the Commission's eligible entity definition, and remanding those
provisions of the Quadrennial Second Report and Order that rely on the
eligible entity definition. As a result of this ongoing litigation, the
relaxed EDP rule for eligible entities as the basis for the New Entrant
Bidding Credit will be unavailable in Auction 106.
49. Generally, media interests will be attributable for purposes of
the New Entrant Bidding Credit to the same extent that such other media
interests are considered attributable for purposes of the broadcast
multiple ownership rules. Further, any bidder asserting new entrant
status must have de facto as well as de jure control of the entity
claiming the bidding credit. See47 CFR 73.5007. Typically, de jure
control is evidenced by ownership of at least 50.1% of an entity's
voting stock or equivalent level of interest in cases where the bidder
is not a corporate entity. De facto control is determined on a case-by-
case basis. However, attributable interests held by a winning bidder in
existing low power television, television translator, or FM translator
facilities will not be counted among the applicant's other mass media
interests in determining its eligibility for a New Entrant Bidding
Credit. A medium of mass communications is defined in Section
73.5008(b). Full power noncommercial educational stations, on both
reserved and non-reserved channels, are included among media of mass
communications as defined in section 73.5008(b).
50. Application Requirements. In addition to the ownership
information required pursuant to sections 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.
51. Unjust Enrichment. Applicants should note that the unjust
enrichment provisions of 47 CFR 73.5007(c) 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.
52. Provisions regarding Former and Current Defaulters. 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 106. 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 they are not delinquent on any non-
tax debt owed to any Federal agency. For purposes of making 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).
53. 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 175 filing
deadline in this auction may participate so long as it is otherwise
qualified and 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 of 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 described in 47 CFR
1.2105(a)(2)(xii). For purposes of making this certification, the term
[[Page 5153]]
controlling interest is defined in 47 CFR 1.2105(a)(4)(i).
54. For purposes of evaluating the certifications required by
sections 1.2105(a)(2)(xi) and (xii), non-tax debt owed to any Federal
agency includes all amounts owed under Federal programs, including
contributions to the Universal Service Fund, Telecommunications Relay
Services Fund, and the North American Numbering Plan Administration,
notwithstanding that the administrator of any such fund may not be
considered a Federal agency under the Debt Collection Improvement Act
of 1996. Public Law 104-134, 110 Stat. 1321 (1996).
55. We encourage applicants to 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.
56. The Commission considers outstanding debts owed to the United
States Government, in any amount, to be a serious matter. The
Commission adopted rules, including a provision referred to as the red
light rule, that implement its obligations under the Debt Collection
Improvement Act of 1996, which governs the collection of debts owed to
the United States. Under the red light rule, applications and other
requests for benefits filed by parties that have outstanding debts owed
to the Commission will not be processed. The Commission's adoption of
the red light rule does not alter the applicability of any of its
competitive bidding rules, including the provisions and certifications
of sections 1.2105 and 1.2106, with regard to current and former
defaults or delinquencies.
57. The Commission's Red Light Display System, which provides
information regarding debts currently owed to the Commission, may not
be determinative of an auction applicant's ability to comply with the
default and delinquency disclosure requirements of section 1.2105.
While the red light rule ultimately may prevent the processing of long-
form applications by auction winners, an auction applicant's lack of
current red light status is not necessarily determinative of its
eligibility to participate in an auction (or whether it may be subject
to an increased upfront payment obligation). A prospective applicant in
Auction 106 should note that any long-form application filed after the
close of bidding will be reviewed for compliance with the Commission's
red light rule, and such review may result in the dismissal of a
winning bidder's long-form application. Applicants that have their
long-form applications dismissed will be deemed to have defaulted and
will be subject to default payments under 47 CFR 1.2104(g) and
1.2109(c).
58. Each applicant should carefully review all records and other
available Federal agency databases and information sources to determine
whether the applicant, or any of its affiliates, or any of its
controlling interests, or any of the affiliates of its controlling
interests, owes or was ever delinquent in the payment of non-tax debt
owed to any Federal agency.
59. Optional Applicant Status Identification. An applicant owned by
members of minority groups and/or women, as defined in section
1.2110(c)(3), or rural telephone companies, as defined in section
1.2110(c)(4), may identify itself as such in its FCC Form 175. This
applicant status information is optional and collected for statistical
purposes only because it assists the Commission in monitoring the
participation of various groups in its auctions.
60. Noncommercial Educational Status Election. In the NCE Second
Report and Order, the Commission held that applications for
noncommercial educational (NCE) FM stations on non-reserved spectrum,
filed during an FM filing window, will be returned as unacceptable for
filing if mutually exclusive with any application for a commercial
station. Auction applications specifying the same FM station
construction permit are considered mutually exclusive. If an FCC Form
175 filed during the Auction 106 filing window identifying the
application's proposed station as NCE is mutually exclusive with any
application filed during that window for a commercial station, the NCE
application will be returned as unacceptable for filing. In the NCE
Second Report and Order, the Commission determined that short-form
applications that do not identify the facilities proposed in the FCC
Form 175 as NCE will be considered, as a matter of law, applications
for commercial broadcast stations. For this reason, each prospective
applicant in this auction should consider carefully whether it wishes
to propose NCE operation for any FM station acquired in this auction.
This NCE election cannot be reversed after the initial application
filing deadline.
61. Only Minor Modifications to FCC Form 175 Allowed. After the
initial FCC Form 175 filing deadline, an Auction 106 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). Major modifications to an FCC Form 175
application (e.g., change of construction permit selection, change in
required certifications, change in control of the applicant such as any
change in ownership or control that would constitute an assignment or
transfer of control of the applicant, claim eligibility for a higher
percentage of bidding credit, or change of the identification of the
application's proposed facilities as noncommercial educational) will
not be permitted after the initial FCC Form 175 filing deadline. If an
applicant makes a major amendment, as defined by section 1.2105(b)(2),
the major amendment may result in disqualification of the applicant
from participating in 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.
62. 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 days
after a significant occurrence, or amend its FCC Form 175 no more than
five days after the applicant becomes aware of the need for the
amendment. An applicant's obligation to make modifications to a pending
auction application to provide additional or corrected information
continues beyond the five-day period, even if the report is not made
within the five-day period. 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. 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.
63. Modifying an FCC Form 175. During the initial filing window, an
applicant will be able to make any
[[Page 5154]]
necessary modifications to its FCC Form 175 in the Auction Application
System. An applicant that has certified and submitted its FCC Form 175
before the close of the initial filing window may continue to make
modifications as often as necessary until the close of that window;
however, the applicant must re-certify and re-submit its FCC Form 175
before the close of the initial filing window to confirm and effect its
latest application changes. After each submission, a confirmation page
will be displayed stating the submission time and submission date.
64. As with filing the FCC Form 175, any amendment(s) to the
application and related statements of fact must be certified by an
authorized representative of the applicant with authority to bind the
applicant. Applicants should note that submissions of any such
amendment or related statement of fact constitutes a representation by
the person certifying that he or she is an authorized representative
with such authority and that the contents of the amendment or statement
of fact are true and correct.
III. Preparing for Bidding
65. 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. Each Applicant 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. This includes
the established authority of the Commission to alter the terms of
existing licenses by rulemaking, which is equally applicable to
licenses awarded by auction. 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.
66. An applicant should perform its due diligence research and
analysis before proceeding, as it would with any new business venture.
Each potential bidder should perform technical analyses and/or refresh
its previous analyses to assure itself that, should it become a winning
bidder for any Auction 106 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, to confirm the availability of such sites, and
to familiarize itself with the Commission's rules regarding any
applicable federal, state or local requirements. See 47 CFR pt. 1,
subpart I.
67. Each applicant should continue to conduct its own research
throughout Auction 106 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 106 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 106 Procedures Public Notice do not comprise
an exhaustive list of steps that should be undertaken prior to
participating in Auction 106. The burden is on the potential bidder to
determine how much research to undertake, depending upon specific facts
and circumstances related to its interests.
68. 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 106. 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.
69. 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.
70. Bidder Education--Online Tutorial on Auction Process. An
educational auction tutorial will be available on the Auction 106 web
page by Tuesday, January 22, 2020. This online tutorial will provide
information about pre-auction procedures, the FCC auction application
system, completing short-form applications, auction conduct, the FCC
auction bidding system, auction rules, and broadcast services rules.
The online auction tutorial will be accessible on the Education tab of
the Auction 106 website at www.fcc.gov/auction/106. Once posted, this
tutorial will remain available and accessible anytime for reference in
connection with the procedures outlined in the Auction 106 Procedures
Public Notice.
71. Short-Form Applications: Due Before 6:00 p.m. ET on February
11, 2020. In addition to other requirements, in order to be eligible to
bid in Auction 106, an applicant must first submit an FCC Form 175
electronically via the Auction Application System, following the
instructions set forth in Attachment B to the Auction 106 Procedures
Public Notice. The FCC Form 175 will become available with the opening
of the initial filing window and must be submitted prior to 6:00 p.m.
on February 11, 2020. Late applications will not be accepted. No
application fee is required.
72. Applications may be filed at any time beginning at noon ET on
January 29, 2020, until the filing window closes at 6:00 p.m. ET on
February 11, 2020. Applicants are 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 February 11, 2020.
73. 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.
Additional information about accessing, completing, and viewing the FCC
Form 175 is included in Attachment B to the Auction 106 Procedures
Public Notice. Applicants requiring technical assistance should contact
FCC Auctions Technical Support at (877) 480-3201, option nine; (202)
414-1250; or (202) 414-1255 (text telephony (TTY)); hours of service
are Monday through Friday, from 8:00 a.m. to 6:00 p.m. ET. All calls to
Technical Support are recorded. 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
[[Page 5155]]
application system. However, there are occasions when auction-related
systems may be temporarily unavailable.
74. Public Notice of Applicant's Initial Application Status and
Opportunity for Minor Modifications. After the deadline for filing
auction applications, Commission staff will review all timely submitted
applications to determine whether each applicant has complied with the
application requirements and provided all information concerning its
qualifications for bidding. Commission staff will issue a public notice
with applicants' initial application status identifying (1) those that
are complete; (2) those that are rejected; or (3) 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, and a paper copy will be sent by overnight delivery to
the contact address listed in the FCC Form 175 for each applicant. 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.
75. Non-mutually exclusive applications will be listed in a
subsequent public notice to be released by the Office of Economics and
Analytics (OEA) and MB. Such applications will not proceed to auction,
but will proceed in accordance with instructions set forth in that
public notice. All mutually exclusive applications will be considered
under the relevant procedures for conflict resolution. Mutually
exclusive applications proposing commercial stations will proceed to
auction.
76. Commission staff will communicate only with an applicant's
contact person or certifying official, as designated on the FCC Form
175, 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].
77. Public Notice of Applicant's Final Application Status After
Upfront Payment Deadline. After review of resubmitted applications for
Auction 106 and consideration of upfront payments, Commission staff
will release a public notice identifying applicants that have become
qualified bidders. A Qualified Bidders Public Notice will be issued
before bidding in the auction begins. Qualified bidders are those
applicants with submitted FCC Form 175 applications that are deemed
timely filed and complete, and which have made a timely and sufficient
upfront payment.
78. Upfront Payments. In addition to other requirements, 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 before 6:00 p.m. ET on March
20, 2020, following the procedures described in the Auction 106
Procedures Public Notice and the instructions in its Attachment C.
After completing its short-form application, an applicant will have
access to an electronic version of the FCC Form 159. This FCC Form 159
can be printed and the completed form must be sent by fax to the FCC at
(202) 418-2843, or by email to [email protected].
79. 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 106
go to a U.S. Treasury account number different from the accounts used
in previous FCC auctions. The beneficiary account number is specific to
the upfront payments for Auction 106. Do not use a beneficiary account
number from a previous auction. Wire transfer information is specified
in the Making Upfront Payments by Wire Transfer section of the Auction
106 Procedures Public Notice.
80. 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 it plans to make the wire transfer, and well ahead
of the due date, as well as allow 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. To receive confirmation from Commission staff,
contact Scott Radcliffe of the Office of Managing Director's Revenue &
Receivables Operations Group/Auctions at (202) 418-7518, or Theresa
Meeks at (202) 418-2945.
81. Failure to deliver a sufficient upfront payment by the March
20, 2020 deadline will result in dismissal of the short-form
application and disqualification from participation in the auction.
82. 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 106.
Alternatively, the completed form can be scanned and sent as an
attachment to an email to [email protected].
83. Upfront Payments and Bidding Eligibility. In the Auction 106
Comment Public Notice, an upfront payment amount was proposed for each
construction permit, taking into account various factors related to the
efficiency of the auction process and the potential value of similar
construction permits, and comment was sought on the proposed upfront
payment amounts.
84. A commenter suggests that we reduce to zero the upfront
payments for certain allotments. This comment fails to recognize that
the refundable upfront payments not only establish each qualified
bidder's bidding eligibility and ensure that the pace of bidding is
managed appropriately, but the upfront payments also protect against
frivolous or insincere bidding and provide the Commission with a source
of funds from which to collect payments owed at the close of the
bidding. For these reasons, this proposal was rejected and the upfront
payment amounts specified for those allotments were retained. The
upfront payment amounts proposed in the Auction 106 Comment Public
Notice are unchanged from those proposed, and the specific upfront
payment amounts and bidding units for each construction permit are set
forth in Attachment A of the Auction 106 Procedures Public Notice.
85. An applicant must make an upfront payment sufficient to obtain
bidding eligibility on the construction permits on which it will bid.
It was
[[Page 5156]]
proposed in the Auction 106 Comment Public Notice that the amount of
the upfront payment would determine a bidder's initial bidding
eligibility, the maximum number of bidding units on which a bidder may
place bids in any single round. Under that proposal, in order to bid on
a particular construction permit, a qualified bidder must have selected
the construction permit on its FCC Form 175 and 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 selected
on its FCC Form 175, or else the applicant will not be qualified to
participate in the auction. An applicant does not have to make an
upfront payment to cover all construction permits the applicant
selected on its FCC Form 175, but only enough to cover the maximum
number of bidding units that are associated with construction permits
on which the applicant wishes 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. The total upfront payment does not affect the total
dollar amount the bidder may bid on any given construction permit. No
comments on this proposal were submitted, and it is adopted. Each
applicant's upfront payment amount will determine that bidder's initial
bidding eligibility.
86. In calculating its upfront payment amount, an applicant should
determine the maximum number of bidding units on which it may wish to
be active (bid on or hold provisionally winning bids on) in any single
round, and submit an upfront payment amount covering that number of
bidding units. 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.
87. An applicant that is a former defaulter must pay an upfront
payment 50% greater than that required of an applicant that is not a
former defaulter. Defaults and delinquencies of the applicant itself
and its controlling interests are included. If an applicant is a former
defaulter, it must calculate its upfront payment for all of its
selected construction permits by multiplying the number of bidding
units on which it wishes to be active by 1.5. 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.
88. If a former defaulter fails to submit a sufficient upfront
payment to establish eligibility to bid on at least one of the
construction permits selected in its FCC Form 175, the applicant will
not be eligible to participate in bidding in the auction. That
applicant will retain its status as an Auction 106 applicant and will
remain subject to 47 CFR 1.2105(c), 73.5002(d), (e).
89. Auction Registration. All qualified bidders for Auction 106 are
automatically registered for the auction. Registration materials will
be distributed prior to the auction by overnight mail. The mailing will
be sent only to the contact person at the contact address listed in the
FCC Form 175 and will include the SecurID[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.
90. Qualified bidders that do not receive this registration mailing
will not be able to submit bids. Therefore, if this mailing is not
received by the contact representative for a qualified bidder by noon
on Wednesday, April 22, 2020, call the Auctions Hotline at (717) 338-
2868. Receipt of this registration mailing is critical to participating
in the auction, and each qualified bidder is responsible for ensuring
it has received all of the registration materials.
91. If SecurID[supreg] tokens are lost or damaged, only an
authorized bidder, the contact person, or the certifying official on
the applicant's FCC Form 175 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 at (717) 338-2868.
92. Remote Electronic Bidding via the FCC Auction Bidding System.
The Commission will conduct this auction remotely over the internet,
and telephonic bidding will be available as well. There will be no on-
site bidding during Auction 106. Only qualified bidders are permitted
to bid. Each authorized bidder must have its own SecurID[supreg] token,
which the Commission will provide at no charge. Each qualified bidder
with one authorized bidder will be issued two SecurID[supreg] tokens,
while qualified bidders with two or three authorized bidders will be
issued three tokens. For security purposes, the SecurID[supreg] tokens,
bidding system web address, FCC assigned username, and the telephonic
bidding telephone number are only mailed to the contact person at the
contact address listed on the FCC Form 175. 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 106.
93. 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.
94. To the extent an issue arises with the auction bidding 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 which typically occur over the
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.
95. Should an issue arise that is outside the auction bidding
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 remedy such an issue
on behalf of the bidder. Similarly, if an issue arises due to bidder
error using the auction bidding system, the Commission shall have no
obligation to resolve or remedy such an issue on behalf of the bidder.
After the close of a bidding round, the results of bid processing will
not be altered absent evidence of any failure in the auction bidding
system.
96. Mock Auction. All qualified bidders will be eligible to
participate in a mock auction on Friday, April 24, 2020. The mock
auction will enable bidders to become familiar with the FCC
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auction bidding system prior to the auction. Bidders are strongly
encouraged to participate in the mock auction. Details will be
announced by public notice.
97. Fraud Alert. Some unscrupulous entrepreneurs may attempt to use
Auction 106 to deceive and defraud unsuspecting investors. Information
about deceptive telemarketing investment schemes is available from the
FCC, FTC, and SEC. Information for potential bidders and investors may
be obtained from the following sources: (1) The FCC's Consumer Call
Center at (888) 225-5322 or by visiting www.fcc.gov/general/frauds-scams-and-alerts-guides; (2) the FTC at (877) FTC-HELP ((877) 382-4357)
or by visiting www.consumer.ftc.gov/articles/0238-investment-risks; or
(3) the SEC at (202) 942-7040 or by visiting www.sec.gov/investor.
Complaints about specific deceptive telemarketing investment schemes
should be directed to the FTC, the SEC, or the National Fraud
Information Center at (202) 835-0618.
98. Environmental Review Requirements. Permittees or licensees must
comply with the Commission's rules for environmental review under the
National Environmental Policy Act, the National Historic Preservation
Act, and other federal environmental statutes. The construction of a
broadcast facility is a federal action, and the permittee or licensee
must comply with the Commission's environmental rules for each such
facility. These environmental rules require, among other things, that
the permittee or licensee consult with expert agencies having
environmental responsibilities, including the U.S. Fish and Wildlife
Service, the State Historic Preservation Office, the U.S. Army Corps of
Engineers, and the Federal Emergency Management Agency (through the
local authority with jurisdiction over floodplains). In assessing the
effect of facility construction on historic properties, the permittee
or licensee must follow the provisions of the FCC's Nationwide
Programmatic Agreement Regarding the Section 106 National Historic
Preservation Act Review Process. The permittee or licensee must prepare
environmental assessments for any facility that may have a significant
impact in or on wilderness areas, wildlife preserves, threatened or
endangered species, or designated critical habitats, historical or
archaeological sites, Indian religious sites, floodplains, and surface
features. In addition, the permittee or licensee must prepare
environmental assessments for facilities that include high intensity
white lights in residential neighborhoods or excessive radio frequency
emission.
IV. Bidding
A. Auction Structure
99. Simultaneous Multiple Round Auction. In the Auction 106 Comment
Public Notice, it was proposed to auction all construction permits
listed in Attachment A of the Auction 106 Procedures Public Notice in a
single auction using the Commission's standard simultaneous multiple-
round auction format. This type of auction offers every construction
permit for bid at the same time and consists of successive bidding
rounds in which qualified bidders may place bids on individual
construction permits. No comment was received for this proposal, and
this proposal is adopted. Unless otherwise announced, bids will be
accepted on all construction permits in each round of the auction until
bidding stops on every construction permit.
100. FCC Auction Bidding System. The Commission will conduct this
auction over the internet using the FCC auction bidding system.
Qualified bidders are permitted to bid electronically via the internet
or by telephone using the telephonic bidding option. For this reason,
each applicant should indicate its bidding preference, electronic or
telephonic, on its FCC Form 175. Telephonic bid assistants are required
to use a script when entering bids placed by telephone. Telephonic
bidders must 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. All
such telephone calls are recorded.
101. An Auction 106 bidder's ability to bid on specific
construction permits is determined by two factors: (1) The construction
permits selected by that applicant in its FCC Form 175 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 the bidder selected on its FCC Form 175.
102. 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.
103. Round Structure. The initial schedule of bidding rounds will
be announced in the public notice listing the qualified bidders in the
auction, which is released at least one week before bidding in the
auction starts. Each bidding round is followed by the release of round
results. Multiple bidding rounds may be conducted each day. Moreover,
unless otherwise announced, bidding on all construction permits will be
conducted on each business day until bidding has stopped on all
construction permits.
104. Commission staff 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. Commission staff may change the amount of time for
the bidding rounds, the amount of time between rounds, or the number of
rounds per day, depending upon bidding activity and other factors, by
prior announcement.
105. Eligibility and Activity Rules. Upfront payments will
determine initial (maximum) bidding eligibility (as measured in bidding
units) for Auction 106. 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 listed in Attachment A
to the Auction 106 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 selected on its FCC Form 175 as long as the total number of
bidding units associated with those construction permits does not
exceed the bidder's current eligibility. Eligibility cannot be
increased during the auction; it can only remain the same or decrease.
In calculating its upfront payment amount, an applicant must determine
the maximum number of bidding units it may wish to bid on or hold
provisionally winning bids on in any single round, and submit an
upfront payment amount covering that total number of bidding units. At
a minimum, an applicant's upfront payment must cover the bidding units
for at least one of the construction permits it selected on its FCC
Form 175. The total upfront payment does not affect the total dollar
amount a bidder may bid on any given construction permit.
[[Page 5158]]
106. 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. 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. Provisionally winning bids are bids that would
become final winning bids if the auction were to close after the given
round.
107. The minimum required activity is expressed as a percentage of
the bidder's current eligibility, and it increases by stage as the
auction progresses. 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 curtaining or
eliminating the bidder's ability to place additional bids in the
auction.
108. To provide bidders with flexibility to pursue backup
strategies if they so desire, a more flexible activity requirement is
adopted than that proposed in the Auction 106 Comment Public Notice for
this auction of well over 100 permits in which applicants are not
limited in their permit selections and may seek to implement backup
plans as price information is made available during bidding rounds.
Initially two activity requirements are adopted: An 80% requirement for
the beginning of the auction and a 95% requirement that will be used
later in the auction.
109. Auction Stages. Auction 106 will be conducted in at least two
stages as described below. A bidder desiring to maintain its current
bidding eligibility will be required to be active on construction
permits representing at least 80% of its current eligibility during
each round of Stage One, and on at least 95% of its current bidding
eligibility in Stage Two.
110. Stage One: During the first stage of the auction, a bidder
desiring to maintain its current bidding eligibility will be required
to be active on construction permits representing at least 80% of its
current bidding eligibility in each bidding round. Failure to maintain
the required activity level will result in the use of an activity rule
waiver or, if the bidder has no activity rule waivers remaining, a
reduction in the bidder's bidding eligibility in the next round. During
Stage One, reduced eligibility for the next round will be calculated by
multiplying the bidder's current round activity (the sum of bidding
units of the bidder's provisionally winning bids and bids during the
current round) by five-fourths (\5/4\).
111. Stage Two: During the second stage of the auction, a bidder
desiring to maintain its current bidding eligibility is required to be
active on 95% of its current bidding eligibility. Failure to maintain
the required activity level will result in the use of an activity rule
waiver or, if the bidder has no activity rule waivers remaining, a
reduction in the bidder's bidding eligibility in the next round. During
Stage Two, reduced eligibility for the next round will be calculated by
multiplying the bidder's current round activity (the sum of bidding
units of the bidder's provisionally winning bids and bids during the
current round) by twenty-nineteenths (20/19).
Since activity requirements increase in Stage Two, bidders must
carefully check their activity during the first round following a stage
transition to ensure that they are meeting the increased activity
requirement. This is especially critical for bidders that have
provisionally winning bids and do not plan to submit new bids. In past
auctions, some bidders have inadvertently lost bidding eligibility or
used an activity rule waiver because they did not re-verify their
activity status at stage transitions. Bidders may check their activity
against the required activity level by logging into the FCC auction
bidding system. Prior to any move from Stage One to Stage Two, bidders
will be alerted during the auction by announcement in the auction
bidding system.
112. Stage Transitions. The auction will advance from Stage One to
Stage Two after Commission staff consider a variety of measures of
auction activity, including, but not limited to, the percentages of
construction permits (as measured in bidding units) on which there are
new bids, the number of new bids, and the increase in revenue.
113. The auction will start in Stage One. The stage of the auction
does not affect the auction stopping rules; the auction may conclude in
Stage One. Commission staff will regulate the pace of the auction by
announcement in the auction bidding system.
114. Commission staff retain the discretion to change the activity
requirements during the auction as circumstances warrant, and also have
other mechanisms to influence the speed of the auction. For example,
there may be no transition to Stage Two if the auction is progressing
satisfactorily under the Stage One activity requirement, or there may
be a transition to Stage Two with an activity requirement that is
higher or lower than 95%, or add an additional stage with a higher
activity requirement. This determination will be based on a variety of
measures of auction activity, including, but not limited to, the number
of new bids and the percentages of construction permits (as measured in
bidding units) on which there are new bids.
115. If Commission staff implement a stage with an activity
requirement other than 80% or 95%, a bidder's reduced eligibility for
the next round will be calculated by multiplying that bidder's current
round activity by the reciprocal of the activity requirement. For
example, if there is a 98% activity requirement, the bidder's current
round activity would be multiplied by 50/49; if there is a 100 percent
activity requirement, the bidder's current round activity would become
its bidding eligibility (current round activity would be multiplied by
\1/1\).
116. Activity Rule Waivers. Each qualified bidder in the auction
will be provided with three activity rule waivers, which 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 bidders eligibility despite its activity in the current round being
below the required minimum activity level. An activity rule waiver
applies to an entire round of bidding, not to a particular construction
permit. A bidder may use an activity rule waiver in any round of the
auction as long as the bidder has not used all of its waivers.
117. 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 waiver
remaining or (2) the bidder overrides the automatic application of a
waiver by reducing eligibility, therefore 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 its ability to
place additional bids in the auction.
118. A bidder with insufficient activity may wish to reduce its
bidding eligibility rather than use an activity
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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. The bidder's
eligibility would be permanently reduced to bring it into compliance
with the activity rule. Reducing eligibility is an irreversible action;
once eligibility has been reduced, a bidder cannot regain its lost
bidding eligibility.
119. A bidder may apply an activity rule waiver proactively as a
means to keep the auction open without placing a bid. If a bidder
proactively applies an activity rule waiver during a bidding round in
which no bids are 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.
120. Auction Stopping Rules. For Auction 106, a simultaneous
stopping rule approach was proposed, 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.
121. Comment was sought on alternative versions of the simultaneous
stopping rule for Auction 106: Option 1. 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 on 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.
Option 2. 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 any 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. Option 3. The auction would close
using a modified version of the simultaneous stopping rule that
combines Option 1 and Option 2. Option 4. The auction would close after
a specified number of additional rounds (special stopping rule) to be
announced in advance in the FCC auction bidding system. If this special
stopping rule is invoked, bids will be accepted in the specified final
round(s), after which the auction will close. Option 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. Thus, the activity rule will apply as usual, and a
bidder with insufficient activity will either lose bidding eligibility
or use a waiver.
122. These proposed 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, Commission staff may attempt to change the pace of bidding in
the auction. For example, the number of bidding rounds per day and/or
the minimum acceptable bids may change. Commission staff retain the
discretion to exercise any of these options with or without prior
announcement during the auction.
123. Auction Delay, Suspension, or Cancellation. By public notice
or by announcement through the FCC auction bidding system, Commission
staff may delay, suspend, or cancel bidding in the auction in the event
of natural disaster, technical obstacle, network interruption,
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.
124. In such cases, Commission staff, 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. This authority will be exercised solely at the discretion of
Commission staff, and not as a substitute for situations in which
bidders may wish to apply their activity rule waivers.
B. Bidding Procedures
125. Bid Amounts. In each round of Auction 106 a qualified bidder
will be able to place a bid on a given construction permit in any of up
to nine different amounts if a bidder has sufficient eligibility to
place a bid on the particular construction permit. The FCC auction
bidding system interface will list the nine acceptable bid amounts for
each construction permit.
126. No comments were received on the proposal to use a minimum
acceptable bid increment percentage of 10% to calculate the first of
the acceptable bid amounts. This means that the minimum acceptable bid
amount for a construction permit will be approximately 10% greater than
the provisionally winning bid amount for the construction permit. No
comments were received on the proposal to use an additional bid
increment percentage of 5% to calculate the eight additional acceptable
bid amounts. Therefore, the auction will begin with a minimum
acceptable bid increment percentage of 10% and an additional bid
increment percentage of 5%.
127. In Auction 106, 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--i.e., provisionally winning bid amount * 1.10, rounded.
128. In Auction 106, the FCC auction bidding system will calculate
the eight additional bid amounts by multiplying the minimum acceptable
bid amount by the additional bid increment percentage of 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. Because the additional bid increment
percentage is 5%, the calculation of the additional increment amount is
(minimum acceptable bid amount) * (0.05), rounded. 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.
129. The result of the calculation of a minimum acceptable bid
increment and the result of the calculation of each additional bid
increment is subject to a minimum of $100. Any results above $10,000
will be rounded to the nearest $1,000, results below $10,000 but above
$1,000 will be rounded to the nearest
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$100, while results below $1,000 will be rounded to the nearest $10.
130. Commission staff retain the discretion to change the minimum
acceptable bid amounts, the minimum acceptable bid increment
percentage, the additional bid increment percentage, and the number of
acceptable bid amounts, with the discretion to do so on a construction
permit-by-construction permit basis, as well as to 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, Commission staff could set a $1,000
limit on increases in minimum acceptable bid amounts over provisionally
winning bids. Thus, if calculating a minimum acceptable bid using the
minimum acceptable bid increment percentage results in a minimum
acceptable bid amount that is $1,200 higher than the provisionally
winning bid on a construction permit, the minimum acceptable bid amount
would instead be capped at $1,000 above the provisionally winning bid.
If we exercise this discretion, we will alert bidders by announcement
in the FCC auction bidding system during the auction.
131. Provisionally Winning Bids. In Auction 106, 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. Provisionally winning bids count toward activity for purposes of
the activity requirement.
132. A pseudo-random number generator will be used to select a
single provisionally winning bid in the event that identical high bid
amounts are submitted on a construction permit in a given round (i.e.,
tied bids). The FCC auction bidding system will assign a pseudo-random
number to each bid upon submission. The tied bid with the highest
pseudo-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.
133. 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.
134. 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.
135. Bidding Results. Bids placed during a round will not be made
public until the conclusion of that round. After a round closes,
Commission staff will compile reports of all bids placed, current
provisionally winning bids, new minimum acceptable bid amounts for the
following round, whether the construction permit is FCC-held, and
bidder eligibility status (bidding eligibility and activity rule
waiver), and post the reports for public access.
136. Auction Announcements. Commission staff will use auction
announcements to report necessary information to bidders, such as
schedule changes. All auction announcements will be available by
clicking a link in the FCC auction bidding system.
V. Post-Auction Procedures
137. Shortly after bidding has closed, 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 long-form applications (FCC Forms 2100, Schedule
301-FM).
138. 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 106 to 20% of the net amount of its winning
bid(s) (gross bid(s) less any applicable new entrant bidding
credit(s)).
139. Final Payments. As required by section 1.2109(a), each winning
bidder will be required to 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.
140. Long-Form Applications. Within 30 days following the close of
bidding and notification to the winning bidders, unless a longer period
is specified by public notice, winning bidders must electronically
submit a properly completed long-form application (FCC Form 2100,
Schedule 301-FM, Commercial FM Station Construction Permit
Application), and required exhibits for each construction permit won
through Auction 106. A winning bidder in a commercial broadcast
spectrum auction is required to submit an application filing fee with
its post-auction long-form application. Winning bidders claiming new
entrant status must include an exhibit demonstrating their eligibility
for the bidding credit. Further instructions on these and other filing
requirements will be provided to winning bidders in the auction closing
public notice.
141. 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 within the prescribed period of time, fails
to submit a timely long-form application, fails to make a full and
timely final payment, or is otherwise disqualified) is liable for a
default payment as described in 47 CFR 1.2104(g)(2). This default
payment consists of a deficiency payment, equal to the difference
between the amount of the Auction 106 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. An additional payment for defaults in
Auction 106 under 47 CFR 1.2104(g)(2) will be assessed at 20% of the
applicable bid.
142. 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
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institution of proceedings to revoke any existing authorizations held
by the applicant.
143. 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 provided in the Auction 106
Procedures Public Notice.
VI. Procedural Matters
144. Paperwork Reduction Act. The Office of Management and Budget
(OMB) has approved the information collections in the Application to
Participate in an FCC Auction, FCC Form 175. The Auction 106 Procedures
Public Notice 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).
145. Congressional Review Act. The Commission will submit the
Auction 106 Procedures Public Notice to the Administrator of OMB's
Office of Information and Regulatory Affairs for concurrence as to
whether these procedures are major or non-major under the Congressional
Review Act, 5 U.S.C. 804(2). The Commission will send a copy of the
Auction 106 Procedures Public Notice in a report to Congress and the
Government Accountability Office pursuant to the Congressional Review
Act, 5 U.S.C. 801(a)(1)(A).
146. 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 106
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 106 will be conducted. In this proceeding, a
Supplemental Initial Regulatory Flexibility Analysis (Supplemental
IRFA) was incorporated in the Auction 106 Comment Public Notice, 84 FR
59605, Nov. 5, 2019. The Commission sought written public comment on
the proposals in the Auction 106 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
106 Procedures Public Notice and conforms to the RFA.
147. Need for, and Objectives of, the Public Notice. The procedures
for the conduct of Auction 106 as described in the Auction 106
Procedures Public Notice implement the Commission's competitive bidding
rules, which have been adopted by the Commission in multiple notice-
and-comment rulemaking proceedings. More specifically, the Auction 106
Procedures Public Notice provides an overview of the procedures, terms
and conditions governing Auction 106 and the post-auction application
and payment processes, as well as setting the minimum opening bid
amount for each of the FM broadcast construction permits that are
subject to being assigned by competitive bidding.
148. To promote the efficient and fair administration of the
competitive bidding process for all Auction 106 participants, including
small businesses, the Auction 106 Procedures Public Notice announces
the following procedures: (1) Use of a simultaneous multiple-round
auction format, consisting of sequential bidding rounds with a
simultaneous procedure; (2) a specific upfront payment amount for each
construction permit; (3) a specific minimum opening bid amount for each
construction permit; (4) a specific number of bidding units for each
construction permit; (5) a bidder's initial bidding eligibility will be
based on the amount of that bidder's upfront payment; (6) a two-stage
auction with an activity requirement in which a bidder is required to
be active on 80% of its bidding eligibility in stage one and 95% of its
bidding eligibility in stage two; (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
the methodology for calculating such amounts; (9) a procedure for
breaking ties if identical high bid amounts are submitted on one permit
in a given round; (10) a prohibition on bid withdrawals; and (11)
establishment of an additional default payment percentage of 20% of the
applicable bid under 47 CFR 1.2104(g)(2) in the event that a winning
bidder defaults or is disqualified after the auction.
149. 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.
150. 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 106 Comment Public Notice.
151. 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(a)(1), (a)(2)(A).
152. The specific competitive bidding procedures and minimum
opening bid amounts described in the Auction 106 Procedures Public
Notice will affect all applicants participating in Auction 106. The
number of entities that may apply to participate in Auction 106 is
unknown. Based on the number of applicants in prior FM auctions, the
estimate is that the number of applicants for Auction 106 may range
from approximately 175 to 260. This estimate is based on the number of
applicants who filed short-form applications to participate in previous
auctions of FM construction permits held to date, an average of 1.98
short-form applications were filed per construction permit offered,
with a median of 1.365 applications per permit. The actual number of
applicants for Auction 106 could vary significantly
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as any individual's or entity's decision to participate may be affected
by a number of factors beyond the Commission's knowledge.
153. Radio Stations. This Economic Census category comprises
establishments primarily engaged in broadcasting aural programs by
radio to the public. Programming may originate in their own studio,
from an affiliated network, or from external sources. The SBA has
established a small business size standard for this category as firms
having $41.5 million or less in annual receipts. Economic Census data
for 2012 shows that 2,849 radio station firms operated during that
year. Of that number, 2,806 firms operated with annual receipts of less
than $25 million per year, 17 with annual receipts between $25 million
and $49,999,999 and 26 with annual receipts of $50 million or more.
Therefore, based on the SBA's size standard, the majority of such
entities are small entities.
154. According to Commission staff review of the BIA/Kelsey, LLC's
Media Access Pro Radio Database as of September 17, 2019, about 11,033
(or about 99.95%) of 11,039 commercial radio stations had revenues of
$41.5 million or less and thus qualify as small entities under the SBA
definition. 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 106.
155. Also, 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 106 competitive bidding rules may
apply does not exclude any radio 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 radio station is
dominant in its field of operation. In addition, it is difficult to
assess these criteria in the context of media entities and therefore
these estimates of small businesses to which they apply may be over-
inclusive to this extent.
156. It is not possible to accurately develop an estimate of how
many of the entities in this auction would be 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).
157. According to the SBA, a radio station is a small business
concern if it has annual revenue of $41.5 million or less. Based on
Commission staff review of the BIA/Kelsey, LLC's Media Access Pro Radio
Database, 6,739 (99.91%) of 6,745 FM radio stations fall at or under
that revenue threshold. Accordingly, based on this data, it is
estimated that the majority of Auction 106 applicants would likely meet
the SBA's definition of a small business concern.
158. 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. For all spectrum auctions, in the first part of the
Commission's two-phased application process, 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. In
the second phase of the auction application process, there are
additional compliance requirements for winning bidders.
159. Auction 106 applicants, including small entities, will become
qualified to bid in Auction 106 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 that the
applicant selected on its FCC Form 175, accompanied by a complete and
accurate FCC Form 159.
160. 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. In addition, each Auction 106 applicant must maintain the
accuracy of its previously filed short-form application electronically
using the FCC auction application system.
161. In the second phase of the process, there are additional
compliance requirements only applicable to winning bidders. As with
other winning bidders, any small entity that is a winning bidder will
be required to comply with the terms of the following rules, among
others: (1) 47 CFR 1.2107(b) by submitting as a down payment within 10
business days of release of the auction closing public notice
sufficient funds (in addition to its upfront payment) to bring its
total amount of money on deposit with the Commission for Auction 106 to
20% of the net amount of its winning bids; and (2) 47 CFR 1.2109(a) by
submitting within 10 business days after the down payment deadline the
balance of the amount for each of its winning bids; and (3) 47 CFR
73.5005(a) by electronically filing a properly completed long-form
application (FCC Form 2100, Schedule 301-FM, Commercial FM Station
Construction Permit Application) and required exhibits for each
construction permit won through Auction 106, within 30 days following
release of a closing public notice for Auction 106, unless a longer
period is specified by public notice.
162. 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 the Auction 106 Procedures Public Notice.
163. 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).
164. OEA and MB anticipate that the steps taken to make numerous
resources available to small entities and other auction participants at
no cost should minimize any economic impact of the auction processes
and procedures on small entities and should result in both
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operational and administrative cost savings for small entities and
other auction participants. For example, prior to the beginning of
bidding in this auction, the Commission will hold a mock auction to
allow qualified bidders the opportunity to familiarize themselves with
both the processes and systems that will be utilized in Auction 106.
During the auction, participants will be able to access and participate
in bidding via the internet using a web-based system, or
telephonically, providing two cost effective methods of participation
and 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 a telephone hotline for assistance with auction
processes and procedures as well as a technical support telephone
hotline to assist with issues such as access to or navigation within
the electronic FCC Form 175 and use of the FCC's auction bidding
system. In addition, all auction participants, including small business
entities, 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. These resources,
coupled with the description and communication of the bidding
procedures before bidding begins in Auction 106, should ensure that the
auction will be administered predictably, efficiently and fairly, thus
providing certainty for small entities as well as other auction
participants.
165. Notice to SBA. The Commission will send a copy of the Auction
106 Procedures Public Notice, including this Supplemental FRFA, to the
Chief Counsel for Advocacy of the SBA.
Federal Communications Commission.
Gary Michaels,
Deputy Chief, Auctions Division, Office of Economics and Analytics.
[FR Doc. 2020-01654 Filed 1-28-20; 8:45 am]
BILLING CODE 6712-01-P