Auction of Priority Access Licenses for the 3550-3650 MHz Band; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 105, 22622-22646 [2020-07584]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 85, Number 79 (Thursday, April 23, 2020)]
[Rules and Regulations]
[Pages 22622-22646]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07584]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 96

[AU Docket No. 19-244; FCC 20-18; DA 20-330; FRS 16634]


Auction of Priority Access Licenses for the 3550-3650 MHz Band; 
Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, 
and Other Procedures for Auction 105

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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SUMMARY: This document summarizes the procedures and deadlines for the 
upcoming auction of Priority Access Licenses for the 3350-3650 MHz 
Band. The Auction 105 Procedures Public Notice summarized here is 
intended to familiarize applicants with the procedures and other 
requirements governing participation in Auction 105 by providing 
details regarding the procedures, terms, conditions, dates, and 
deadlines, as well as an overview of the post-auction application and 
payment processes. This document also summarizes a subsequent 
announcement of changes to various dates associated with Auction 105 
made in light of COVID-19 pandemic.

DATES: Applications to participate in Auction 105 must be submitted 
prior to 6:00 p.m. ET on May 7, 2020. Upfront payments for Auction 105 
must be received by 6:00 p.m. ET on June 19, 2020. Bidding in Auction 
105 is scheduled to begin on July 23, 2020.

FOR FURTHER INFORMATION CONTACT: For auction legal questions, Mary 
Lovejoy in the Auctions Division of the Office of Economics and 
Analytics at (202) 418-0660. For general auction questions, the 
Auctions Hotline at (717) 338-2868. For Priority Access License 
questions, Jessica Quinley in the Mobility Division of the Wireless 
Telecommunications Bureau at (202) 418-1991.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 105 
Procedures Public Notice, AU Docket No. 19-244, FCC 20-18, adopted on 
February 28, 2020, and released on March 2, 2020. This summary 
incorporates the revised schedule for the auction as announced in a 
subsequent public notice, AU Docket No. 19-244, DA 20-330, released

[[Page 22623]]

on March 25, 2020. The complete text of these documents, including 
attachments and any related documents, are available for public 
inspection and copying from 8:00 a.m. to 4:30 p.m. ET Monday through 
Thursday or from 8:00 a.m. to 11:30 a.m. ET on Fridays in the FCC 
Reference Information Center, located in Room CY-A257, of the FCC 
Headquarters, 445 12th Street SW, Washington, DC 20554, except when FCC 
Headquarters is otherwise closed to visitors. See, e.g., Public Notice, 
Restrictions on Visitors to FCC Facilities, March 12, 2020. The 
complete text of both public notices is also available on the 
Commission's website at www.fcc.gov/auction/105 or by using the search 
function for AU Docket No. 19-244 on the Commission's ECFS web page at 
www.fcc.gov/ecfs. Alternative formats are available to persons with 
disabilities by sending an email to [email protected] or by calling the 
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 
418-0432 (TTY).

I. General Information

A. Introduction

    1. With the Auction 105 Procedures Public Notice, the Commission 
established the procedures for the upcoming auction of Priority Access 
Licenses (PALs) in the Citizens Broadband Radio Service in the 3550-
3650 MHz Band (Auction 105).
    2. The bidding for new licenses in Auction 105 is scheduled to 
commence on July 23, 2020. The Auction 105 Procedures Public Notice 
provides details regarding the procedures, terms, conditions, dates, 
and deadlines governing participation in Auction 105 bidding, and an 
overview of the post-auction application and payment processes. Dates 
and deadlines that were announced in the Auction 105 Procedures Public 
Notice were revised in a subsequent announcement, and this summary 
includes those revised dates.

B. Background and Relevant Authority

    3. In the 2015 3.5 GHz Report and Order, 80 FR 34119, June 23, 
2015, the Commission made available 150 megahertz of spectrum in the 
3550-3700 MHz band (3.5 GHz band) for both licensed and licensed-by-
rule use. In that Order, the Commission established licensing and 
operating rules for the 3.5 GHz band, including the assignment of up to 
seven Priority Access Licenses (PALs) per geographic license area 
through the use of competitive bidding. Each PAL consists of a 10-
megahertz unpaired channel within the 3550-3650 MHz band. In the 2018 
3.5 GHz Report and Order, 83 FR 63076, December 7, 2018, the Commission 
adopted a county-based geographic license area for PALs, as well as a 
10-year renewable license term, and it affirmed the Commission's prior 
decision to permit licensees to aggregate no more than four PALs per 
license area.
    4. On September 27, 2019, in accordance with section 309(j)(3) of 
the Communications Act of 1934, as amended, the Commission released the 
Auction 105 Comment Public Notice, 84 FR 56743, October 23, 2019, 
seeking comment on certain competitive bidding procedures and various 
other procedures to be used in Auction 105. The Commission received 
comments from 17 parties in response to the Auction 105 Comment Public 
Notice, and 12 reply comments. These comments are available under 
proceeding 19-244 in the Commission's Electronic Comment Filing System 
(ECFS). The ECFS home page is publicly accessible at: www.fcc.gov/ecfs. 
In the Auction 105 Procedures Public Notice, the Commission resolved 
all open issues raised in the Auction 105 Comment Public Notice and 
addressed the comments received.
    5. Prospective applicants should familiarize themselves with the 
Commission's general competitive bidding rules, including recent 
amendments and clarifications thereto, as well as Commission decisions 
regarding competitive bidding procedures, application requirements, and 
obligations of Commission licensees. Prospective applicants also should 
familiarize themselves with the Commission's rules regarding Citizens 
Broadband Radio Service. Applicants must be thoroughly familiar with 
the procedures, terms, and conditions contained in the Auction 105 
Procedures Public Notice and any future public notices that may be 
released in this proceeding.
    6. 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. Additionally, the Wireless 
Telecommunications Bureau (Bureau) and the Office of Economics and 
Analytics (OEA) retain the authority to establish further procedures 
during the course of the auction. It is the responsibility of all 
applicants to remain current with all Commission rules and with all 
public notices pertaining to Auction 105. Copies of most auctions-
related Commission documents, including public notices, can be 
retrieved from the Commission's FCC Auctions internet site at 
www.fcc.gov/auctions. Additionally, documents are available at the 
Commission's headquarters during normal business hours.

C. Description of Licenses To Be Offered in Auction 105

    7. Auction 105 will offer seven PALs in each county-based license 
area. For purposes of this auction, counties shall be defined using the 
United States Census Bureau's data reflecting county legal boundaries 
and names valid through January 1, 2017. Information regarding PALs, 
including a map and list of 2017 counties, can be found at https://www.fcc.gov/35-ghz-band-overview. Each PAL consists of a 10-megahertz 
unpaired channel within the 3550-3650 MHz band. Auction 105 will offer 
a total of 22,631 PALs. A summary of the licenses offered in Auction 
105 is available in Attachment A to the Auction 105 Comment Public 
Notice, which is available on the Auction 105 website at www.fcc.gov/auction/105. PALs are 10-year renewable licenses. A Priority Access 
Licensee may hold up to four 10-megahertz channel licenses (out of a 
total of seven) within the band in any license area at any given time.
    8. A frequency coordinator called a Spectrum Access System (SAS) 
will assign the specific channel for a particular licensee on a dynamic 
basis. An individual PAL will not be identified by specific spectrum 
blocks. Although a Priority Access Licensee may request a particular 
channel or frequency range from an SAS following the auction, bidders 
should be mindful that licensees are not guaranteed a particular 
assignment. Potential bidders should also understand that an SAS may 
dynamically reassign a PAL to a different channel as needed to 
accommodate a higher priority Incumbent Access user. To the extent 
feasible, an SAS will assign geographically contiguous PALs held by the 
same Priority Access Licensee to the same channels in each geographic 
area and assign multiple channels held by the same Priority Access 
Licensee to contiguous channels in the same License Area. An SAS may, 
however, temporarily reassign individual PALs to non-contiguous 
channels to the extent necessary to protect incumbent users from 
harmful interference or if necessary, to perform its required 
functions. On January 27, 2020, the Bureau and the Office of 
Engineering and Technology certified the following SASs to begin full 
commercial

[[Page 22624]]

operations: CommScope, Federated Wireless, Inc., Google, and Sony, Inc.
    9. Each Priority Access Licensee must register its Citizens 
Broadband Radio Service Devices (CBSDs) with an SAS before operating 
those devices in the band. A CBSD registration includes its geographic 
location, antenna height, CBSD class, requested authorization status, 
FCC identification number, call sign, user contact information, air 
interface technology, unique manufacturer's serial number, sensing 
capabilities (if supported), and information on its deployment profile. 
An SAS relies on this information to coordinate access for Priority 
Access Licensees and General Authorized Access (GAA) users, and an SAS 
Administrator may charge Priority Access Licensees and GAA users a 
reasonable fee for its services.

D. Auction Specifics

1. Auction Title and Start Date
    10. The auction of PALs in the 3550-3650 MHz band will be referred 
to as Auction 105. Bidding in Auction 105 will begin on Thursday, July 
23, 2020. The initial schedule for bidding rounds in Auction 105 will 
be announced by public notice at least one week before bidding in the 
auction starts.
    11. Unless otherwise announced, bidding on all licenses will be 
conducted on each business day until bidding has stopped on all 
licenses.
2. Auction Dates and Deadlines
    12. The following dates and deadlines apply to Auction 105:

Auction Application Tutorial Available      No later than March 9, 2020.
 (via internet).
Short-Form Application (FCC Form 175):
  Filing Window Opens.....................  April 23, 2020, 12:00 p.m.
                                             Eastern Time (ET).
Short-Form Application (FCC Form 175):
  Filing Window Deadline..................  May 7, 2020, 6:00 p.m. ET.
  Upfront Payments (via wire transfer)....  June 19, 2020, 6:00 p.m. ET.
  Bidding Tutorial Available (via           No later than July 9, 2020.
   internet).
  Mock Auction............................  July 20, 2020.
  Bidding Begins in Auction 105...........  July 23, 2020.
 

3. Requirements for Participation
    13. Those wishing to participate in Auction 105 must: Submit a 
short-form application (FCC Form 175) electronically prior to 6:00 p.m. 
ET on May 7, 2020, following the electronic filing procedures set forth 
in the FCC Form 175 Instructions (available in the Education section of 
the Auction 105 website at www.fcc.gov/auctions/105); submit a 
sufficient upfront payment and an FCC Remittance Advice Form (FCC Form 
159) by 6:00 p.m. ET on June 19, 2020; and comply with all provisions 
outlined in the Auction 105 Procedures Public Notice and applicable 
Commission rules.

II. Applying To Participate in Auction 105

A. General Information Regarding Short-Form Applications

    14. An application to participate in Auction 105, referred to as a 
short-form application or FCC Form 175, provides information that the 
Commission uses to determine whether the applicant has the legal, 
technical, and financial qualifications to participate in a Commission 
auction for spectrum licenses. The short-form application is the first 
part of the Commission's two-phased auction application process. In the 
first phase, a party seeking to participate in Auction 105 must file a 
short-form application in which it certifies, under penalty of perjury, 
that it is qualified to participate. Eligibility to participate in 
Auction 105 is based on an applicant's short-form application and 
certifications, and on the applicant's submission of a sufficient 
upfront payment for the auction. In the second phase of the process, 
each winning bidder must file a more comprehensive post-auction, long-
form application (FCC Form 601) for the licenses it wins in the 
auction, and it must have a complete and accurate ownership disclosure 
information report (FCC Form 602) on file with the Commission. Being 
deemed qualified to bid in Auction 105 does not constitute a 
determination that a party is qualified to hold a Commission license or 
is eligible for a designated entity bidding credit.
    15. A party seeking to participate in Auction 105 must file an FCC 
Form 175 electronically via the Auction Application System prior to 
6:00 p.m. ET on May 7, 2020, following the procedures prescribed in the 
FCC Form 175 Instructions. If an applicant claims eligibility for a 
bidding credit, then the information provided in its FCC Form 175 as of 
the filing date will be used to determine whether the applicant may 
request the claimed bidding credit. An applicant that files an FCC Form 
175 for Auction 105 will be subject to the Commission's rule 
prohibiting certain communications. An applicant is subject to the 
prohibition beginning at the deadline for filing short-form 
applications--6:00 p.m. ET on May 7, 2020. The prohibition will end for 
applicants on the post-auction down payment deadline for Auction 105.
    16. An applicant bears full responsibility for submitting an 
accurate, complete, and timely short-form application. Each applicant 
must make a series of certifications under penalty of perjury on its 
FCC Form 175 related to the information provided in its application and 
its participation in the auction, and it must confirm that it is 
legally, technically, financially, and otherwise qualified to hold a 
license. If an Auction 105 applicant fails to make the required 
certifications in its FCC Form 175 by the filing deadline, then its 
application will be deemed unacceptable for filing and cannot be 
corrected after the filing deadline.
    17. An applicant should note that submitting an FCC Form 175 (and 
any amendments thereto) constitutes a representation by the certifying 
official that he or she is an authorized representative of the 
applicant with authority to bind 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. Submitting 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.
    18. Applicants are cautioned that, because the required information 
submitted in FCC Form 175 bears on each applicant's qualifications, 
requests for confidential treatment will not be routinely granted. The 
Commission generally has held that it may publicly release confidential 
business information where the party has put that information at issue 
in a Commission proceeding or where the Commission has identified a 
compelling public interest in disclosing the information. The 
Commission specifically has held that information submitted in support 
of receiving bidding credits in auction proceedings should be made 
available to the public.
    19. An applicant must designate at least one individual as an 
authorized bidder, and no more than three, in its FCC Form 175. The 
Commission's rules prohibit an individual from serving as an authorized 
bidder for more than one auction applicant.
    20. No individual or entity may file more than one short-form 
application or have a controlling interest in more than one short-form 
application. If a party submits multiple short-form applications for an 
auction, then only one application may form the basis for

[[Page 22625]]

that party to become qualified to bid in that auction.
    21. A party is generally permitted to participate in a Commission 
auction only through a single bidding entity. The filing of 
applications in Auction 105 by multiple entities controlled by the same 
individual or set of individuals generally will not be permitted. This 
restriction applies across all applications, without regard to the 
geographic areas selected. There is a limited exception to the general 
prohibition of the filing of multiple applications by commonly 
controlled entities for qualified rural wireless partnerships and 
individual members of such partnerships. Under this limited exception, 
each qualifying rural wireless partnership and its individual members 
will be permitted to participate separately in an auction.
    22. After the initial short-form application filing deadline, 
Commission staff will review all timely submitted applications for 
Auction 105 to determine whether each application complies with the 
application requirements and whether the applicant has provided all 
required information concerning the applicant's qualifications for 
bidding. After this review is completed, a public notice will be 
released announcing the status of applications and identifying the 
applications that are complete and those that are incomplete because of 
minor defects that may be corrected. That public notice also will 
establish an application resubmission filing window, during which an 
applicant may make permissible minor modifications to its application 
to address identified deficiencies. The public notice will include the 
deadline for resubmitting modified applications. To become a qualified 
bidder, an applicant must have a complete application (i.e., have 
timely filed an application that is deemed complete after the deadline 
for correcting any identified deficiencies), and must make a timely and 
sufficient upfront payment. Qualified bidders will be identified by 
public notice at least 10 days prior to the mock auction.
    23. 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 105 
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 105 (see the Education section of the Auction 105 website at 
www.fcc.gov/auction/105) and/or use the contact information provided to 
consult with Commission staff to better understand the information it 
must submit in its short-form application.

B. License Area Selection

    24. An applicant must select all the county-based license areas on 
which it may want to bid from the list of available counties on its FCC 
Form 175. An applicant must carefully review and verify its county 
selections before the FCC Form 175 filing deadline because those 
selections cannot be changed after the auction application filing 
deadline. The FCC Auction Bidding System (bidding system) will not 
accept bids for blocks located in counties that the applicant did not 
select in its FCC Form 175. The auction application system, however, 
will provide an applicant the option to select ``all counties.''

C. Disclosure of Agreements and Bidding Arrangements

    25. An applicant must provide in its FCC Form 175 a brief 
description of, and identify each party to, any partnerships, joint 
ventures, consortia or agreements, arrangements, or understandings of 
any kind relating to the licenses being auctioned, including any 
agreements that address or communicate directly or indirectly bids 
(including specific prices), bidding strategies (including the specific 
licenses 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. A controlling interest 
includes all individuals or entities with positive or negative de jure 
or de facto control of the 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 agreements, arrangements, or 
understandings to which it (or any party that controls it or that it 
controls) is a party. If, after the FCC Form 175 filing deadline, an 
auction applicant enters into any agreement relating to the licenses 
being auctioned, then it is subject to these same disclosure 
obligations. All applicants must maintain the accuracy and completeness 
of the information in their pending auction application.
    26. If parties agree in principle on all material terms prior to 
the application filing deadline, then each party to the agreement that 
is submitting an auction application must provide a brief description 
of, and identify the other party or parties to, the agreement on its 
respective FCC Form 175, even if the agreement has not been reduced to 
writing. Parties that have not agreed in principle by the FCC Form 175 
filing deadline should not describe, or include the names of parties 
to, the discussions on their applications.
    27. 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). A joint bidding 
arrangement includes any arrangement relating to the licenses being 
auctioned that addresses or communicates, directly or indirectly, 
bidding at the auction, bidding strategies, including arrangements 
regarding price or the specific licenses on which to bid, and any such 
arrangement relating to the post-auction market structure.
    28. This prohibition applies to joint bidding arrangements 
involving two or more nationwide providers, as well as joint bidding 
arrangements involving a nationwide provider and one or more non-
nationwide providers, where at least one party to the arrangement is an 
applicant for the auction. The Commission considers AT&T, Sprint, T-
Mobile, and Verizon Wireless to be nationwide providers for the purpose 
of implementing the Commission's competitive bidding rules in Auction 
105. A ``non-nationwide provider'' refers to any provider of 
communications services that is not a nationwide provider.
    29. Non-nationwide provider may enter into an agreement to form a 
consortium or a joint venture (as applicable) that results in a single 
party applying to participate in an auction. A designated entity can 
participate in one consortium or joint venture in an auction, and non-
nationwide providers that are not designated entities may participate 
in an auction through only one joint venture. A non-nationwide provider 
may enter into only one agreement to form a consortium or joint venture 
(as applicable), and such consortium or joint venture shall be the 
exclusive bidding vehicle for its members in the auction. The general 
prohibition of joint bidding arrangements excludes certain agreements, 
including those that are solely operational in nature. Under the 
Commission's rules, agreements that are solely operational in nature 
are those that address operational aspects of providing a mobile 
service, such as agreements for roaming, device acquisition, and 
spectrum leasing and other spectrum use arrangements, provided that any 
such agreement does not both relate to the licenses at auction and 
address or communicate, directly or indirectly, bidding at auction 
(including

[[Page 22626]]

specific prices to be bid) or bidding strategies (including the 
specific licenses on which to bid or not to bid) or post-auction market 
structure.
    30. The Commission's rules require each 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 or a nationwide provider.
    31. Although the Commission's rules do not prohibit auction 
applicants from communicating about matters that are within the scope 
of an excepted agreement 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.
    32. A winning bidder will be required to disclose in its FCC Form 
601 post-auction application the specific terms, conditions, and 
parties involved in any agreement relating to the licenses being 
auctioned into which it had entered prior to the time bidding was 
completed. This applies to any bidding consortium, 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 licenses being auctioned that 
address or communicate directly or indirectly bids (including specific 
prices), bidding strategies (including the specific licenses 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.

D. Ownership Disclosure Requirements

    33. Each applicant must comply with the applicable part 1 ownership 
disclosure requirements and provide information required by sections 
1.2105 and 1.2112, and, where applicable, section 1.2110, of the 
Commission's rules. In completing FCC Form 175, an applicant must fully 
disclose information regarding the real party- or parties-in-interest 
in the applicant or application and the ownership structure of the 
applicant, including both direct and indirect ownership interests of 
10% or more. Each applicant is responsible for ensuring that 
information submitted in its short-form application is complete and 
accurate.
    34. In certain circumstances, an applicant may have previously 
filed an FCC Form 602 ownership disclosure information report or filed 
an auction application for a previous auction in which ownership 
information was disclosed. The most current ownership information 
contained in any FCC Form 602 or previous auction application on file 
with the Commission that used the same FCC Registration Number (FRN) 
the applicant is using to submit its FCC Form 175 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. Applicants are encouraged to submit an FCC Form 602 ownership 
report or update any ownership information on file with the Commission 
in an FCC Form 602 ownership report prior to starting an application 
for Auction 105 to ensure that their most recent ownership information 
is pre-filled into their short-form applications. 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 FCC Form 175 is complete and accurate as of 
the application filing deadline. Any information that needs to be 
corrected or updated must be changed directly in FCC Form 175.

E. Foreign Ownership Disclosure Requirements

    35. Section 310 of the Communications Act requires the Commission 
to review foreign investment in radio station licenses and imposes 
specific restrictions on who may hold certain types of radio licenses. 
Section 310 applies to applications for initial radio licenses, 
applications for assignments and transfers of control of radio 
licenses, and spectrum leasing arrangements under the Commission's 
secondary market rules. In completing FCC Form 175, an applicant is 
required to disclose information concerning foreign ownership of the 
applicant. If an applicant has foreign ownership interests in excess of 
the applicable limit or benchmark set forth in section 310(b), then it 
may seek to participate in Auction 105 as long as it has filed a 
petition for declaratory ruling with the Commission prior to the FCC 
Form 175 filing deadline. An applicant must certify in its FCC Form 175 
that, as of the deadline for filing its application to participate in 
the auction, the applicant either is in compliance with the foreign 
ownership provisions of section 310 or has filed a petition for 
declaratory ruling requesting Commission approval to exceed the 
applicable foreign ownership limit or benchmark in section 310(b) that 
is pending before, or has been granted by, the Commission. Additional 
information concerning foreign ownership disclosure requirements is 
provided in the FCC Form 175 Filing Instructions.

F. Information Procedures During the Auction Process

    36. The Commission is limiting information available in Auction 105 
in order to prevent the identification of bidders placing particular 
bids until after the bidding has closed. The Commission will not make 
public until after bidding has closed: (1) The license areas that an 
applicant selects for bidding in its short-form application, (2) the 
amount of any upfront payment made by or on behalf of an applicant, (3) 
any applicant's bidding eligibility, and (4) any other bidding-related 
information that might reveal the identity of the bidder placing a bid.
    37. Once the bidding begins in Auction 105, under the limited 
information procedures (sometimes also referred to as anonymous 
bidding), information to be made public after each round of bidding 
will include for licenses in each geographic area, the supply, the 
aggregate demand, the price at the end of the last completed round, and 
the price for the next round. The identities of bidders placing 
specific bids and the net bid amounts (reflecting bidding credits) will 
not be disclosed until after the close of bidding.
    38. Bidders will have access to additional information related to 
their own bidding and bidding eligibility through the Commission's 
bidding system. For example, bidders will be able to view their own 
level of eligibility, both before and during the auction.
    39. After the close of bidding, bidders' county selections, upfront 
payment amounts, bidding eligibility, bids, and other bidding-related 
actions will be made publicly available.
    40. The direct or indirect communication to other applicants or the 
public disclosure of non-public information (e.g., reductions in 
eligibility, identities of bidders) could violate the Commission's rule 
prohibiting certain communications. To the extent an applicant believes 
that such a disclosure is required by law or regulation, including 
regulations issued by the U.S. Securities Exchange Commission, the 
applicant should consult with the Commission staff in the

[[Page 22627]]

Auctions Division before making such disclosure.

G. Prohibited Communications and Compliance With Antitrust Laws

    41. The rules prohibiting certain communications set forth in 
section 1.2105(c) apply to each applicant that files a short-form 
application (FCC Form 175) in Auction 105. Section 1.2105(c)(1) of the 
Commission's rules provides that, subject to specified exceptions, 
after the short-form application filing deadline, all applicants are 
prohibited from cooperating or collaborating with respect to, 
communicating with or disclosing, to each other or any nationwide 
provider of communications services that is not an applicant, or, if 
the applicant is a nationwide provider, any non-nationwide provider 
that is not an applicant, in any manner the substance of their own, or 
each other's, or any other applicants' bids or bidding strategies 
(including post-auction market structure), or discussing or negotiating 
settlement agreements, until after the down payment deadline.
1. Entities Subject to Section 1.2105(c)
    42. An applicant for purposes of this rule includes all controlling 
interests in the entity submitting the FCC Form 175 auction 
application, as well as all holders of interests amounting to 10% or 
more of the entity, and all officers and directors of that entity. A 
party that submits an application becomes an applicant under the rule 
at the application deadline, and that status does not change based on 
later developments. Thus, an auction applicant that does not correct 
deficiencies in its application, fails to submit a timely and 
sufficient upfront payment, or does not otherwise become qualified, 
remains an ``applicant'' for purposes of the rule and remains subject 
to the prohibition on certain communications until the Auction 105 down 
payment deadline.
    43. The Commission considers AT&T, Sprint, T-Mobile, and Verizon 
Wireless to be nationwide providers for the purposes of the prohibited 
communications rule for Auction 105.
2. Prohibition Applies Until Down Payment Deadline
    44. Section 1.2105(c)'s prohibition of certain communications 
begins at an auction's short-form application filing deadline and ends 
at the auction's down payment deadline after the auction closes, which 
will be announced in a future public notice.
3. Scope of Prohibition of Communications; Prohibition of Joint Bidding 
Agreements
    45. Section 1.2105(c) of the Commission's rules prohibits certain 
communications between applicants for an auction, regardless of whether 
the applicants seek permits or licenses in the same geographic area or 
market. The rule also applies to communications by applicants with non-
applicant nationwide providers of communications services and by 
nationwide applicants with non-applicant non-nationwide providers. The 
rule further prohibits joint bidding arrangements, including 
arrangements relating to the permits or licenses being auctioned that 
address or communicate, directly or indirectly, bidding at the auction, 
bidding strategies, including arrangements regarding price or the 
specific permits or licenses on which to bid, and any such arrangements 
relating to the post-auction market structure. The rule allows for 
limited exceptions for communications within the scope of any 
arrangement consistent with the exclusion from the Commission's rules 
prohibiting joint bidding, provided such arrangement is disclosed on 
the applicant's auction application. Applicants may communicate 
pursuant to any pre-existing agreements, arrangements, or 
understandings that are solely operational or that provide for the 
transfer or assignment of licenses, provided that such agreements, 
arrangements, or understandings are disclosed on their applications and 
do not both relate to the licenses 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.
    46. The prohibition against communicating in any manner includes 
public disclosures as well as private communications and indirect or 
implicit communications. Consequently, an applicant must take care to 
determine whether its auction-related communications may reach another 
applicant. 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.
    47. 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 found that, where an individual serves as an 
officer and director for two or more applicants, the bids and bidding 
strategies of one applicant are presumed conveyed to the other 
applicant through the shared officer, which creates an apparent 
violation of the rule.
    48. 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. A 
communication conveying bids or bidding strategies (including post-
auction market structure) must also relate to the licenses being 
auctioned in order to be covered by the prohibition. Thus, the 
prohibition is limited in scope and does not apply to all 
communications between or among the specified parties. 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 to both: (1) The licenses being auctioned and 
(2) bids or bidding strategies or post-auction market structure.
    49. Business discussions and negotiations that are unrelated to 
bidding in Auction 105 and that do not convey information about the 
bids or bidding strategies, including the post-auction market 
structure, of an applicant are not prohibited by the rule. Moreover, 
not all auction-related information is covered by the prohibition. For 
example, communicating merely whether a party has or has not applied to 
participate in Auction 105 will not violate the rule. In contrast, 
communicating how a party will participate, including specific 
geographic areas selected, specific bid amounts, and/or whether or not 
the party is placing bids, would convey bids or bidding strategies and 
would be prohibited.
    50. 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

[[Page 22628]]

agreements, and other transactional agreements.
    51. Bids or bidding strategies may be communicated outside of 
situations that involve one party subject to the prohibition 
communicating privately and directly with another such party. For 
example, the Commission has warned that prohibited communications 
concerning bids and bidding strategies may include communications 
regarding capital calls or requests for additional funds in support of 
bids or bidding strategies to the extent such communications convey 
information concerning the bids and bidding strategies directly or 
indirectly. Moreover, the Commission found a violation of the rule 
against prohibited communications when an applicant used the 
Commission's bidding system to disclose its bidding strategy in a 
manner that explicitly invited other auction participants to cooperate 
and collaborate in specific markets, and has placed auction 
participants on notice that the use of its bidding system to disclose 
market information to competitors will not be tolerated and will 
subject bidders to sanctions.
    52. When completing a short-form application, each applicant should 
avoid any statements or disclosures that may violate section 1.2105(c). 
An applicant should avoid including any information in its short-form 
application that might convey information regarding its county 
selections, such as referring to certain markets in describing 
agreements, including any information in application attachments that 
will be publicly available that may otherwise disclose the applicant's 
county selections, or using applicant names that refer to licenses 
being offered.
    53. Applicants also should be mindful that communicating non-public 
application or bidding information publicly or privately to another 
applicant may violate section 1.2105(c) even though that information 
subsequently may be made public during later periods of the application 
or bidding processes.
4. Communicating With Third Parties
    54. 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, as long as such firms implement firewalls and other 
compliance procedures that prevent such individuals from communicating 
the bids or bidding strategies of one applicant to other individuals 
representing separate applicants. Although firewalls and/or other 
procedures should be used, their existence is not an absolute defense 
to liability if a violation of the rule has occurred.
    55. In the case of an individual, the objective precautionary 
measure of a firewall is not available. 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.
    56. Potential applicants may discuss the short-form application or 
bids for specific licenses or license areas with the counsel, 
consultant, or expert of their choice before the short-form application 
deadline. The same third-party individual could continue to give advice 
after the short-form deadline regarding the application, provided that 
no information pertaining to bids or bidding strategies, including 
counties selected on the short-form application, 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.
    57. Applicants also should use caution in their dealings with other 
parties, such as members of the press, financial analysts, or others 
who might become conduits for the communication of prohibited bidding 
information. For example, even though communicating that it has applied 
to participate in the auction will not violate the rule, an applicant's 
statement to the press that it intends to stop bidding in an auction 
could give rise to a finding of a section 1.2105 violation. Similarly, 
an applicant's public statement of intent not to place bids during 
bidding in Auction 105 could also violate the rule.
5. Section 1.2105(c) Certifications
    58. By electronically submitting its FCC Form 175 auction 
application, each applicant certifies its compliance with section 
1.2105(c) of the rules. If an applicant has a non-controlling interest 
with respect to more than one application, the applicant must certify 
that it has established internal control procedures to preclude any 
person acting on behalf of the applicant from possessing information 
about the bids or bidding strategies of more than one applicant or 
communicating such information with respect to either applicant to 
another person acting on behalf of and possessing such information 
regarding another applicant. 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.
6. Duty To Report Prohibited Communications
    59. 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.
7. Procedures for Reporting Prohibited Communications
    60. A party reporting any information or 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 parties specified under the rule 
through the use of Commission filing procedures that allow such 
materials to be made available for public inspection.
    61. Parties must file only a single report concerning a prohibited

[[Page 22629]]

communication and must file that report with the 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 
105 Procedures Public Notice. Such reports must be filed with the Chief 
of the Auctions Division, Office of Economics and Analytics, by the 
most expeditious means available. Any such report should be submitted 
by email to the Auctions Division Chief and sent to [email protected]. 
If you choose to submit a report in hard copy, contact Auctions 
Division staff at [email protected] or (202) 418-0660 for guidance.
    62. 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 section 0.459 of the Commission's 
rules. Filers requesting confidential treatment of documents must be 
sure that the cover page of the filing prominently displays that the 
documents seek confidential treatment. For example, a filing might 
include a cover page stamped with ``Request for Confidential Treatment 
Attached'' or ``Not for Public Inspection.'' Any such request must 
cover all the material to which the request applies. Such parties are 
encouraged coordinate with the Auctions Division staff about the 
procedures for submitting such reports.
8. Winning Bidders Must Disclose Terms of Agreements
    63. Each applicant that is a winning bidder will be required to 
provide as part of its long-form application any agreement or 
arrangement it has entered into and a summary of the specific terms, 
conditions, and parties involved in any agreement it has entered into. 
Such agreements must have been entered into prior to the filing of 
short-form applications. This applies to any bidding consortia, joint 
venture, partnership, or agreement, understanding, or other arrangement 
entered into relating to the competitive bidding process, including any 
agreement relating to the post-auction market structure. Failure to 
comply with the Commission's rules can result in enforcement action.
9. Additional Information Concerning Prohibition of Certain 
Communications in Commission Auctions
    64. A summary listing of documents issued by the Commission and the 
Bureau/OEA addressing the application of section 1.2105(c) is available 
on the Commission's auction web page at www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications.
10. Antitrust Laws
    65. Applicants remain subject to the antitrust laws. Compliance 
with the disclosure requirements of section 1.2105(c)(4) will not 
insulate a party from enforcement of the antitrust laws. For instance, 
a violation of the antitrust laws could arise out of actions taking 
place well before any party submits a short-form application. The 
Commission has cited a number of examples of potentially 
anticompetitive actions that would be prohibited under antitrust laws: 
For example, actual or potential competitors may not agree to divide 
territories in order to minimize competition, regardless of whether 
they split a market in which they both do business, or whether they 
merely reserve one market for one and another market for the other.
    66. 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 further in Auction 105 and in future auctions, among 
other sanctions.

H. Provisions for Small Businesses and Rural Service Providers

    67. In Auction 105, bidding credits will be available to applicants 
demonstrating eligibility for a small business or a rural service 
provider bidding credit and subsequently winning license(s). A bidding 
credit represents an amount by which a bidder's winning bid will be 
discounted. These bidding credits will not be cumulative--an applicant 
is permitted to claim either a small business bidding credit or a rural 
service provider bidding credit, but not both. Each applicant must also 
certify that it is eligible for the claimed bidding credit in its FCC 
Form 175. Each applicant should review carefully the Commission's 
decisions regarding the designated entity provisions as well as the 
part 1 rules.
    68. Applicants applying for designated entity bidding credits 
should take due account of the requirements of the Commission's rules 
and implementing orders regarding de jure and de facto control of such 
applicants. These rules include a prohibition, which applies to all 
applicants (whether they seek bidding credits or not), against changes 
in ownership of the applicant that would constitute an assignment or 
transfer of control. Applicants should not expect to receive any 
opportunities to revise their ownership structure after the filing of 
their short- and long-form applications, including making revisions to 
their agreements or other arrangements with interest holders, lenders, 
or others in order to address potential concerns relating to compliance 
with the designated entity bidding credit requirements.
1. Small Business Bidding Credit
    69. For Auction 105, bidding credits will be available to eligible 
small businesses and consortia thereof. Under the service rules 
applicable to the PALs to be offered in Auction 105, the level of 
bidding credit available is determined as follows: A bidder with 
attributed average annual gross revenues that do not exceed $55 million 
for the preceding three years is eligible to receive a 15% discount on 
its winning bid; a bidder with attributed average annual gross revenues 
that do not exceed $20 million for the preceding three years is 
eligible to receive a 25% discount on its winning bid.
    70. Small business bidding credits are not cumulative; an eligible 
applicant may receive either the 15% or the 25% bidding credit on its 
winning bid, but not both. The Commission's unjust enrichment 
provisions also apply to a winning bidder that uses a bidding credit 
and subsequently seeks to assign or transfer control of its license 
within a certain period to an entity not qualifying for at least the 
same level of small business bidding credit. Thus, for example, the 
Commission's unjust enrichment provisions would not apply to a winning 
bidder that uses the 15% small business bidding credit and seeks to 
transfer control of its license to an entity that qualifies for either 
the 15% small business bidding credit or the rural service provider 
bidding credit. The provisions would apply, however, if that same 
winning bidder uses the 25% small business bidding credit, unless the 
proposed transferee also qualifies for the 25% small business bidding 
credit.

[[Page 22630]]

    71. Each applicant claiming a small business bidding credit must 
disclose the gross revenues for the preceding three years for each of 
the following: (1) The applicant, (2) its affiliates, (3) its 
controlling interests, and (4) the affiliates of its controlling 
interests. The applicant must also submit an attachment that lists all 
parties with which the applicant has entered into any spectrum use 
agreements or arrangements for any licenses that may be won by the 
applicant in Auction 105. In addition, to the extent that an applicant 
has an agreement with any disclosable interest holder for the use of 
more than 25% of the spectrum capacity of any license that may be won 
in Auction 105, the identity and the attributable gross revenues of any 
such disclosable interest holder must be disclosed. This attribution 
rule will be applied on a license-by-license basis. As a result, an 
applicant may be eligible for a bidding credit on some, but not all, of 
the licenses for which it is bidding in Auction 105. If an applicant is 
applying as a consortium of small businesses, then the disclosures 
described in this paragraph must be provided for each consortium 
member.
2. Rural Service Provider Bidding Credit
    72. An eligible applicant may request a 15% discount on its winning 
bid using a rural service provider bidding credit, subject to the cap 
discussed below. To be eligible for a rural service provider bidding 
credit, an applicant must: (1) Be a service provider that is in the 
business of providing commercial communications services and, together 
with its controlling interests, affiliates, and the affiliates of its 
controlling interests, has fewer than 250,000 combined wireless, 
wireline, broadband, and cable subscribers; and (2) serve predominantly 
rural areas, defined as counties with a population density of 100 or 
fewer persons per square mile. An applicant seeking a rural service 
provider bidding credit must provide the number of subscribers served 
as of the short-form application deadline. An applicant may count any 
subscriber as a single subscriber even if that subscriber receives more 
than one service. For instance, a subscriber receiving both wireline 
and telephone service and broadband would be counted as a single 
subscriber.
    73. Each applicant seeking a rural service provider bidding credit 
must disclose the number of its subscribers, along with the number of 
subscribers of its affiliates, controlling interests, and the 
affiliates of its controlling interests. The applicant must also submit 
an attachment that lists all parties with which the applicant has 
entered into any spectrum use agreements or arrangements for any 
licenses that may be won by the applicant in Auction 105. To the extent 
that an applicant has an agreement with any disclosable interest holder 
for the use of more than 25% of the spectrum capacity of any license 
that may be won in Auction 105, the identity and the attributable 
subscribers of any such disclosable interest holder must be disclosed. 
Eligible rural service providers may form a consortium. If an applicant 
is applying as a consortium of rural service providers, then the 
disclosures described in this paragraph, including the certification, 
must be provided for each consortium member.
3. Caps on Bidding Credits
    74. Eligible applicants claiming either a small business or rural 
service provider bidding credit will be subject to certain caps on the 
total amount of bidding credit discounts that any eligible applicant 
may receive. The Commission adopted a $25 million cap on the total 
amount of bidding credit discounts that may be awarded to an eligible 
small business, and a $10 million cap on the total amount of bidding 
credit discounts that may be awarded to an eligible rural service 
provider in Auction 105. No winning designated entity bidder will 
receive more than $10 million in bidding credit discounts in total for 
licenses won in counties located within any Partial Economic Area (PEA) 
with a population of 500,000 or less. To the extent an applicant 
seeking a small business bidding credit does not claim the full $10 
million in bidding credits in those smaller markets, it may apply the 
remaining balance to its winning bids on licenses in larger markets, up 
to the aggregate $25 million cap.
4. Attributable Interests
a. Controlling Interests and Affiliates
    75. An applicant's eligibility for designated entity benefits is 
determined by attributing the gross revenues (for those seeking small 
business benefits) or subscribers (for those seeking rural service 
provider benefits) of the applicant, its affiliates, its controlling 
interests, and the affiliates of its controlling interests. Controlling 
interests of an applicant include individuals and entities with either 
de facto or de jure control of the applicant. Typically, ownership of 
greater than 50% of an entity's voting stock evidences de jure control. 
De facto control is determined on a case-by-case basis based on the 
totality of the circumstances. The following are some common indicia of 
de facto control: The entity constitutes or appoints more than 50% of 
the board of directors or management committee; the entity has 
authority to appoint, promote, demote, and fire senior executives that 
control the day-to-day activities of the licensee; and the entity plays 
an integral role in management decisions.
    76. Applicants should refer to section 1.2110(c)(2) of the 
Commission's rules and the FCC Form 175 Instructions to understand how 
certain interests are calculated in determining control for purposes of 
attributing gross revenues. For example, officers and directors of an 
applicant are considered to have a controlling interest in the 
applicant.
    77. Affiliates of an applicant or controlling interest include an 
individual or entity that: (1) Directly or indirectly controls or has 
the power to control the applicant, (2) is directly or indirectly 
controlled by the applicant, (3) is directly or indirectly controlled 
by a third party that also controls or has the power to control the 
applicant, or (4) has an ``identity of interest'' with the applicant. 
The Commission's definition of an affiliate of the applicant 
encompasses both controlling interests of the applicant and affiliates 
of controlling interests of the applicant.
    78. An applicant seeking a small business bidding credit must 
demonstrate its eligibility for the bidding credit by: (1) Meeting the 
applicable small business size standard, based on the controlling 
interest and affiliation rules, and (2) retaining control, on a 
license-by-license basis, over the spectrum associated with the 
licenses for which it seeks small business benefits. Control and 
affiliation may arise through, among other things, ownership interests, 
voting interests, management and other operating agreements, or the 
terms of any other types of agreements--including spectrum lease 
agreements--that independently or together create a controlling, or 
potentially controlling, interest in the applicant's or licensee's 
business as a whole. Except under the limited provisions provided for 
spectrum manager lessors, the Commission's decision to discontinue its 
policy requiring designated entity licensees to operate as primarily 
facilities-based providers of service directly to the public does not 
alter the rules that require the Commission to consider whether any 
particular use agreement may confer control of or create affiliation 
with the applicant. Once an applicant demonstrates eligibility as a 
small business under the first prong, it must also be eligible for 
benefits on a license-by-license basis

[[Page 22631]]

under the second prong. As part of making the FCC Form 175 
certification that it is qualified as a designated entity under section 
1.2110, an applicant is certifying that it does not have any spectrum 
use or other agreements that would confer either de jure or de facto 
control of any license it seeks to acquire with bidding credits. For 
instance, if an applicant has a spectrum use agreement on a particular 
license that calls into question whether, under the Commission's 
affiliation rules, the user's revenues should be attributed to the 
applicant for that particular license, rather than for its overall 
business operations, the applicant could be ineligible to acquire or 
retain benefits with respect to that particular license.
    79. If an applicant executes a spectrum use agreement that does not 
comply with the Commission's relevant standard of de facto control, 
then it will be subject to unjust enrichment obligations for the 
benefits associated with that particular license, as well as the 
penalties associated with any violation of section 310(d) of the 
Communications Act and related regulations, which require Commission 
approval of transfers of control. Although in this scenario the 
applicant may not be eligible for a bidding credit and may be subject 
to the Commission's unjust enrichment rules, the applicant need not be 
eligible for small business benefits on each of the spectrum licenses 
it holds in order to demonstrate its overall eligibility for such 
benefits. If that spectrum use agreement (either alone or in 
combination with the designated entity controlling interest and 
attribution rules) goes so far as to confer control of the applicant's 
overall business, then the gross revenues of the additional interest 
holders will be attributed to the applicant, which could render the 
applicant ineligible for all current and future small business benefits 
on all licenses. The Commission applies the same de facto control 
standard to designated entity spectrum manager lessors that is applied 
to non-designated entity spectrum manager lessors.
b. Limitation on Spectrum Use
    80. The Commission's rules, the gross revenues (or the subscribers, 
in the case of a rural service provider) of an applicant's disclosable 
interest holder are attributable to the applicant, on a license-by-
license basis, if the disclosable interest holder has an agreement with 
the applicant to use, in any manner, more than 25% of the spectrum 
capacity of any license won by the applicant and acquired with a 
bidding credit during the five-year unjust enrichment period for the 
applicable license. A disclosable interest holder of an applicant 
seeking designated entity benefits is defined as any individual or 
entity holding a 10% or greater interest of any kind in the applicant, 
including but not limited to, a 10% or greater interest in any class of 
stock, warrants, options, or debt securities in the applicant or 
licensee. Any applicant seeking a bidding credit for licenses won in 
Auction 105 will be subject to this attribution rule and must make the 
requisite disclosures.
    81. Certain disclosable interest holders may be excluded from this 
attribution rule. An applicant claiming the rural service provider 
bidding credit may have spectrum license use agreements with a 
disclosable interest holder, without having to attribute the 
disclosable interest holder's subscribers, so long as the disclosable 
interest holder is independently eligible for a rural service provider 
credit and the use agreement is otherwise permissible under the 
Commission's existing rules. If applicable, the applicant must attach 
to its FCC Form 175 any additional information as may be required to 
indicate any license (or license area) that may be subject to this 
attribution rule or to demonstrate its eligibility for the exception 
from this attribution rule. The Commission intends to withhold from 
public disclosure all information contained in any such attachments 
until after the close of Auction 105.
c. Exceptions From Attribution Rules for Small Businesses and Rural 
Service Providers
    82. Applicants claiming designated entity benefits may be eligible 
for certain exceptions from the Commission's attribution rules. For 
example, in calculating an applicant's gross revenues under the 
controlling interest standard, the Commission will not attribute to the 
applicant the personal net worth, including personal income, of its 
officers and directors. To the extent that the officers and directors 
of the applicant are controlling interest holders of other entities, 
the gross revenues of those entities will be attributed to the 
applicant. Moreover, if an officer or director operates a separate 
business, the gross revenues derived from that separate business would 
be attributed to the applicant, although any personal income from such 
separate business would not be attributed. The Commission has also 
exempted from attribution to the applicant the gross revenues of the 
affiliates of a rural telephone cooperative's officers and directors, 
if certain conditions specified in section 1.2110(b)(4)(iii) of the 
Commission's rules are met. An applicant claiming this exemption must 
provide, in an attachment, an affirmative statement that the applicant, 
affiliate and/or controlling interest is an eligible rural telephone 
cooperative within the meaning of section 1.2110(b)(4)(iii), and the 
applicant must supply any additional information as may be required to 
demonstrate eligibility for the exemption from the attribution rule.
    83. An applicant claiming a rural service provider bidding credit 
may be eligible for an exception from the Commission's attribution 
rules as an existing rural partnership. To qualify for this exception, 
an applicant must be a rural partnership providing service as of July 
16, 2015, and each member of the rural partnership must individually 
have fewer than 250,000 combined wireless, wireline, broadband, and 
cable subscribers. The Commission will evaluate eligibility for an 
existing rural wireless partnership on the same basis as it would for 
an applicant applying for a bidding credit as a consortium of rural 
service providers. A partnership that includes a nationwide provider as 
a member will not be eligible for the benefit. Members of such 
partnerships that fall under this exception may also apply as 
individual applicants or members of a consortium (to the extent that it 
is otherwise permissible to do so under the Commission's rules) and 
seek eligibility for a rural service provider bidding credit.
    84. A consortium of small businesses or rural service providers may 
seek an exception from the Commission's attribution rules. A consortium 
of small businesses or rural service providers is a conglomerate 
organization composed of two or more entities, each of which 
individually satisfies the definition of small business or rural 
service provider. A consortium must provide additional information for 
each member demonstrating each member's eligibility for the claimed 
bidding credit in order to show that the applicant satisfies the 
eligibility criteria for the bidding credit. The gross revenue or 
subscriber information of each consortium member will not be aggregated 
for purposes of determining the consortium's eligibility for the 
claimed bidding credit. This information must be provided to ensure 
that each consortium member qualifies for the bidding credit sought by 
the consortium.

I. Provisions Regarding Former and Current Defaulters

    85. Each applicant must make certifications regarding whether it is 
a current or former defaulter or

[[Page 22632]]

delinquent. A current defaulter or delinquent is not eligible to 
participate in Auction 105, but a former defaulter or delinquent may 
participate so long as it is otherwise qualified and makes an upfront 
payment that is 50% more than would otherwise be necessary. 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. 
Non-tax debt owed to any Federal agency includes, within the meaning of 
the rule, all amounts owed under Federal programs, including 
contributions to the Universal Service Fund, 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. For example, an applicant with a past due USF contribution 
as of the auction application filing deadline would be disqualified 
from participating in Auction 105 under the Commission's rules. If the 
applicant cures the overdue debt prior to the auction application 
filing deadline (and such debt does not fall within one of the 
exclusions described in section 1.2105(a)(2)(xii)), it may be eligible 
to participate in Auction 105 as a former defaulter. Each applicant 
must certify under penalty of perjury on its FCC Form 175 that it, its 
affiliates, its controlling interests, and 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 it is not delinquent on any non-tax debt owed to any Federal 
agency. Additionally, an applicant must certify under penalty of 
perjury whether it (along with its controlling interests) has ever been 
in default on any payment for a Commission construction permit or 
license (including down payments) or has ever been delinquent on any 
non-tax debt owed to any Federal agency, subject to the exclusions. The 
term ``controlling interest'' is defined in section 1.2105(a)(4)(i) of 
the Commission rules.
    86. An applicant is considered a former defaulter or a former 
delinquent when, as of the FCC Form 175 deadline, the applicant 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. The 
applicant may exclude from consideration any cured default on a 
Commission construction permit or license or cured delinquency on a 
non-tax debt owed to a Federal agency for which any of the following 
criteria are met: (1) The notice of the final payment deadline or 
delinquency was received more than seven years before the FCC Form 175 
filing deadline, (2) the default or delinquency amounted to less than 
$100,000, (3) the default or delinquency was paid within two quarters 
(i.e., six months) after receiving the notice of the final payment 
deadline or delinquency, or (4) the default or delinquency was the 
subject of a legal or arbitration proceeding and was cured upon 
resolution of the proceeding. Notice to a debtor may include notice of 
a final payment deadline or notice of delinquency and may be express or 
implied depending on the origin of any Federal non-tax debt giving rise 
to a default or delinquency. The date of receipt of the notice of a 
final default deadline or delinquency by the intended party or debtor 
will be used for purposes of verifying receipt of notice. A debt will 
not be deemed to be in default or delinquent until after the expiration 
of a final payment deadline. To the extent that the rules providing for 
payment of a specific federal debt permit payment after an original 
payment deadline accompanied by late fee(s), such debts would not be in 
default or delinquent for purposes of applying the former defaulter 
rules until after the late payment deadline. Any winning bidder that 
fails to timely pay its post-auction down payment or the balance of its 
final winning bid amount(s) or is disqualified for any reason after the 
close of an auction will be in default and subject to a default 
payment. Commission staff provide individual notice of the amount of 
such a default payment as well as procedures and information required 
by the Debt Collection Improvement Act of 1996, including the payment 
due date and any charges, interest, and/or penalties that accrue in the 
event of delinquency. Such notice provided by Commission staff 
assessing a default payment arising out of a default on a winning bid, 
constitutes notice of the final payment deadline with respect to a 
default on a Commission license.
    87. Applicants are encouraged to review previous guidance on 
default and delinquency disclosure requirements in the context of the 
auction short-form application process. Parties are also encouraged to 
consult with Auctions Division staff if they have any questions about 
default and delinquency disclosure requirements.
    88. The Commission considers outstanding debts owed to the United 
States Government, in any amount, to be a serious matter. The 
Commission has previously 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.
    89. 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. 
Thus, 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 105 should note that any long-form applications 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 sections 1.2104(g) and 
1.2109(c) of the Commission's rules. 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. To access the 
Commission's Red Light Display

[[Page 22633]]

System, go to: https://apps.fcc.gov/redlight/login.cfm.

J. Optional Applicant Status Identification

    90. Applicants owned by members of minority groups and/or women, as 
defined in section 1.2110(c)(3), and rural telephone companies, as 
defined in section 1.2110(c)(4), may identify themselves regarding this 
status in filling out their FCC Form 175 applications. This applicant 
status information is collected for statistical purposes only and 
assists the Commission in monitoring the participation of various 
groups in its auctions.

K. Modifications to FCC Form 175

1. Only Minor Modifications Allowed
    91. After the initial FCC Form 175 filing deadline, an Auction 105 
applicant will be permitted to make only minor changes to its 
application consistent with the Commission's rules. Minor amendments 
include any changes that are not major, such as correcting 
typographical errors and supplying or correcting information as 
requested to support the certifications made in the application. 
Examples of minor changes include the deletion or addition of 
authorized bidders (to a maximum of three) and the revision of 
addresses and telephone numbers of the applicant, its responsible 
party, and its contact person. Major modification to an FCC Form 175 
(e.g., change of county selection, certain changes in ownership that 
would constitute an assignment or transfer of control of the applicant, 
change in the required certifications, change in applicant's legal 
classification that results in a change in control, or change in 
claimed eligibility for a higher percentage of bidding credit) will not 
be permitted after the initial FCC Form 175 filing deadline. If an 
amendment reporting changes is a ``major amendment,'' as described in 
section 1.2105(b)(2), the major amendment will not be accepted and may 
result in the dismissal of the application. Any change in control of an 
applicant will be considered a major modification, and the application 
will consequently be dismissed. Even if an applicant's FCC Form 175 is 
dismissed, the applicant would remain subject to the communication 
prohibitions of section 1.2105(c) until the down-payment deadline for 
Auction 105.
2. Duty To Maintain Accuracy and Completeness of FCC Form 175
    92. Each applicant has a continuing obligation to maintain the 
accuracy and completeness of information furnished in a pending 
application, including a pending application to participate in Auction 
105. An applicant's FCC Form 175 and associated attachments will remain 
pending until the release of a public notice announcing the close of 
the auction. Auction 105 applicants remain subject to the section 
1.2105(c) prohibition of certain communications until the post-auction 
deadline for making down payments on winning bids in Auction 105. An 
applicant's post-auction application (FCC Form 601) is considered 
pending from the time it is accepted for filing by the Commission until 
a Commission grant or denial of the application is no longer subject to 
reconsideration by the Commission or to review by any court. An 
applicant for Auction 105 must furnish additional or corrected 
information to the Commission within five business days after a 
significant occurrence or amend its FCC Form 175 no more than five 
business days after the applicant becomes aware of the need for the 
amendment. An applicant is obligated to amend its pending application 
even if a reported change may result in the dismissal of the 
application because it is subsequently determined to be a major 
modification.
3. Modifying an FCC Form 175
    93. A party seeking to participate in Auction 105 must file an FCC 
Form 175 electronically via the FCC's Auction Application System. 
During the initial filing window, an applicant will be able to make any 
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; 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. Applicants 
are advised to retain a copy of this confirmation page.
    94. An applicant will also be allowed to modify its FCC Form 175 in 
the Auction Application System, except for certain fields, during the 
resubmission filing window and after the release of the public notice 
announcing the qualified bidders for an auction. An applicant will not 
be allowed to modify electronically in the Auction Application System 
the applicant's legal classification, the applicant's name, or the 
certifying official. During the resubmission filing window and after 
the release of the public notice announcing the qualified bidders for 
an auction, if an applicant needs to make permissible minor changes to 
its FCC Form 175 or must make changes in order to maintain the accuracy 
and completeness of its application pursuant to sections 1.65 and 
1.2105(b)(4), then it must make the change(s) in the Auction 
Application System and re-certify and re-submit its application to 
confirm and effect the change(s).
    95. An applicant's ability to modify its FCC Form 175 in the 
Auction Application System will be limited between the closing of the 
initial filing window and the opening of the application resubmission 
filing window, and between the closing of the resubmission filing 
window and the release of the public notice announcing the qualified 
bidders for an auction. During these periods, an applicant will be able 
to view its submitted application, but will be permitted to modify only 
the applicant's address, responsible party address, and contact 
information (e.g., name, address, telephone number, etc.) in the 
Auction Application System. An applicant will not be able to modify any 
other pages of the FCC Form 175 in the Auction Application System 
during these periods. If, during these periods, an applicant needs to 
make other permissible minor changes to its FCC Form 175, or changes to 
maintain the accuracy and completeness of its application, the 
applicant must submit a letter briefly summarizing the changes to its 
FCC Form 175 via email to [email protected]. The email summarizing the 
changes must include a subject line referring to Auction 105 and the 
name of the applicant, for example, ``Re: Changes to Auction 105 
Auction Application of XYZ Corp.'' Any attachments to the email must be 
formatted as Adobe[supreg] Acrobat[supreg] (PDF) or Microsoft[supreg] 
Word documents. An applicant that submits its changes in this manner 
must subsequently modify, certify, and submit its FCC Form 175 
application(s) electronically in the Auction Application System once it 
is again open and available to applicants.
    96. Applicants should also note that even at times when the Auction 
Application System is open and available to applicants, the system will 
not allow an applicant to make certain other permissible changes itself 
(e.g., correcting a misstatement of the applicant's legal 
classification). If an applicant needs to make a permissible minor 
change of this nature, then it must submit a written request by email 
to the Auctions Division Chief, via

[[Page 22634]]

[email protected], requesting that the Commission manually make the 
change on the applicant's behalf. Once Commission staff has informed 
the applicant that the change has been made in the Auction Application 
System, the applicant must then re-certify and re-submit its FCC Form 
175 in the Auction Application System to confirm and effect the 
change(s).
    97. 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. Submission 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.
    98. Applicants must not submit application-specific material 
through the Commission's Electronic Comment Filing System. Parties 
submitting information related to their applications should use caution 
to ensure that their submissions do not contain confidential 
information or communicate information that would violate section 
1.2105(c) or the limited information procedures adopted for Auction 
105. An applicant seeking to submit, outside of the Auction Application 
System, information that might reflect non-public information, such as 
an applicant's county selection(s), upfront payment amount, or bidding 
eligibility, should consider including in its email a request that the 
filing or portions of the filing be withheld from public inspection 
until the end of the prohibition on certain communications.
    99. Questions about FCC Form 175 amendments should be directed to 
the Auctions Division at (202) 418-0660.

III. Preparing for Bidding in Auction 105

A. Due Diligence

    100. Each potential bidder is solely responsible for investigating 
and evaluating all technical and marketplace factors that may have a 
bearing on the value of the licenses that it is seeking in Auction 105. 
The Commission makes no representations or warranties about the use of 
this spectrum or these licenses for particular services. Each applicant 
should be aware that a Commission auction represents an opportunity to 
become a Commission licensee, subject to certain conditions and 
regulations. 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. A Commission auction does 
not constitute an endorsement by the Commission of any particular 
service, technology, or product, nor does a Commission license 
constitute a guarantee of business success.
    101. 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 105 license, 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 
sites for communications facilities located in, or near, the geographic 
area for which it plans to bid, confirm the availability of such sites, 
and to familiarize itself with the Commission's rules regarding the 
National Environmental Policy Act (NEPA), the National Historic 
Preservation Act (NHPA), and other environmental statutes.
    102. Each applicant in Auction 105 should continue to conduct its 
own research throughout the auction in order to determine the existence 
of pending or future administrative or judicial proceedings that might 
affect its decision on continued participation in the auction. Each 
applicant is responsible for assessing the likelihood of the various 
possible outcomes and for considering the potential impact on licenses 
available in an auction. The due diligence considerations mentioned in 
the Auction 105 Procedures Public Notice do not constitute an 
exhaustive list of steps that should be undertaken prior to 
participating in Auction 105. The burden is on the potential bidder to 
determine how much research to undertake, depending upon the specific 
facts and circumstances related to its interests.
    103. 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 licenses available in Auction 105. Each potential bidder is 
responsible for undertaking research to ensure that any licenses won in 
the 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.
    104. 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.

B. Licensing Considerations

1. Incumbency and Sharing Issues
    105. Potential applicants in Auction 105 should consider carefully 
the implications of the Commission's sharing scheme for the 3550-3650 
MHz band. The 3550-3700 MHz band (collectively, the 3.5 GHz band) is 
governed by a three-tiered spectrum authorization framework. The three 
tiers of authorization are: Incumbent Access, Priority Access, and 
General Authorized Access (GAA). SASs will facilitate sharing among the 
three tiers of authorized users. Incumbent users receive protection 
from Priority Access Licensees and GAA users, while Priority Access 
Licensees receive protection from GAA users. The three-tiered structure 
is designed to accommodate a variety of commercial uses on a shared 
basis with incumbent federal and non-federal uses of the band. The 
Citizens Broadband Radio Service includes Priority Access Licensees in 
the 3550-3650 MHz band and GAA users throughout the 3.5 GHz band.
    106. Potential applicants in Auction 105 should consider carefully 
the operations of incumbent licensees currently in the 3550-3650 MHz 
portion of the 3.5 GHz band when developing business plans, assessing 
market conditions, and evaluating the availability of equipment for 
Citizens Band Radio Service operations. Each applicant should follow 
closely releases from the Commission concerning these issues and 
consider carefully the technical and economic implications for 
commercial use of the 3550-3650 MHz band. Each applicant should also be 
aware of the exclusion zones for federal radiolocation sites posted on 
the National Telecommunications and Information Administration (NTIA) 
website, available at https://www.ntia.doc.gov/category/3550-3650-mhz.

[[Page 22635]]

    107. Incumbent users, which have the highest priority, include 
federal radiolocation users in the 3550-3650 MHz band and non-Federal 
grandfathered Fixed Satellite Service (FSS) earth stations in the 3600-
3650 MHz band.
    108. The 3550-3650 MHz band segment is allocated for use by 
Department of Defense (DoD) radar systems on a primary basis and by 
Federal non-military Radiolocation Service on a secondary basis. 
Federal aeronautical radionavigation (ground-based) stations may also 
be authorized on a primary basis in the 3500-3650 MHz band when 
accommodation in the 2700-2900 MHz band is not technically or 
economically feasible. Non-Federal licensees, including Priority Access 
Licensees, may not cause harmful interference to or claim protection 
from federal stations in the aeronautical radionavigation (ground-
based) and radiolocation services in the 3550-3650 MHz band. The NTIA 
may approve frequency assignments for new and modified Federal stations 
at current or new locations.
    109. In the 3550-3650 MHz band, non-Federal stations in the 
Radiolocation Service that were licensed or had pending applications 
prior to July 23, 2015, may operate on a secondary basis to the 
Citizens Broadband Radio Service until the end of the equipment's 
useful lifetime. FSS (space-to-Earth) earth station operations in the 
3600-3650 MHz band may operate on a primary basis if the Commission 
authorized operation prior to or granted an application filed prior to 
July 23, 2015, and if the FSS licensee constructed the subject earth 
station(s) within 12 months of the initial authorization. Any new FSS 
(space-to-Earth) earth stations in the 3600-3650 MHz band assigned 
after July 23, 2015, are authorized on a secondary basis. Regardless of 
primary or secondary status, all non-Federal FSS (space-to-Earth) 
operations in the 3600-3650 MHz band are limited to international 
inter-continental systems and subject to case-by-case electromagnetic 
compatibility analysis.
    110. GAA users may operate in the 3550-3700 MHz band, but are not 
guaranteed protection from interference. GAA users may operate on any 
frequencies not in use by Priority Access Licensees (in the 3550-3650 
MHz band) or Tier 1 users (across the 3.5 GHz band). The GAA tier is 
licensed-by-rule to permit open, flexible access to the band for the 
widest possible group of potential users.
2. International Coordination
    111. Potential bidders seeking licenses for geographic areas 
adjacent to the Canadian and Mexican border should be aware that the 
use of the Citizens Broadband Radio Service frequencies they acquire in 
Auction 105 are subject to current and future agreements with the 
governments of Canada and Mexico. The Commission's rules require the 
SAS Administrators to implement the terms of any such agreements.
    112. The Commission routinely works with the United States 
Department of State and Canadian and Mexican government officials to 
ensure the efficient use of the spectrum as well as interference-free 
operations in the border areas near Canada and Mexico. Until such time 
as any adjusted agreements, as needed, between the United States, 
Mexico, and/or Canada can be agreed to, operations in the 3550-3650 MHz 
band must not cause harmful interference across the border, consistent 
with the terms of the agreements currently in force.
3. Environmental Review Requirements
    113. Licensees must comply with the Commission's rules for 
environmental review under the NEPA, the NHPA, and other environmental 
statutes. Licensees and other applicants that propose to build certain 
types of communications facilities for licensed service must follow 
Commission procedures implementing obligations under NEPA and NHPA 
prior to constructing the facilities. Under the NEPA, a licensee or 
applicant must assess if certain environmentally sensitive conditions 
specified in the Commission's rules are relevant to the proposed 
facilities, and prepare an environmental assessment (EA) when 
applicable. This assessment may require consultation with expert 
agencies having environmental responsibilities, such as U.S. Fish and 
Wildlife Service, the U.S. Army Corps of Engineers, and the Federal 
Emergency Management Agency, among others. If an EA is required, then 
facilities may not be constructed until environmental processing is 
completed. Under NHPA, a licensee or applicant must follow the 
procedures in section 1.1320 of the Commission's rules, the Nationwide 
Programmatic Agreement for Collocation of Wireless Antennas and the 
Nationwide Programmatic Agreement Regarding the Section 106 National 
Historic Preservation Act Review Process. Compliance with section 106 
of the NHPA requires tribal consultation, and if construction of the 
communications facilities would have adverse effects on historic or 
tribally significant properties, an EA must be prepared.
4. Spectrum Aggregation Limits
    114. Bidders are reminded of the Commission's spectrum aggregation 
limits applicable to the 3.5 GHz band. Priority Access Licensees may 
aggregate up to four PALs in any county license area at any given time. 
For purposes of applying this spectrum aggregation limit on Priority 
Access Licensees, the criteria in section 20.22(b) will apply in order 
to attribute partial ownership and other interests. The spectrum 
aggregation limit of 40 megahertz will ensure the availability of PALs 
for at least two users in the counties where there is the greatest 
likelihood of high demand for such spectrum.

C. Bidder Education

    115. Before the opening of the short-form filing window for Auction 
105, detailed educational information will be provided in various 
formats to would-be participants on the Auction 105 web page. The 
Commission directs OEA to provide various materials on the pre-bidding 
processes in advance of the opening of the short-form application 
window, beginning with the release of step-by-step instructions for 
completing the FCC Form 175, which OEA has made available in the 
Education section of the Auction 105 website at www.fcc.gov/auction/105. OEA will provide an online application procedures tutorial for the 
auction, covering information on pre-bidding preparation, completing 
short-form applications, and the application review process.
    116. In advance of the start of the mock auction, OEA will provide 
educational materials on the bidding procedures for Auction 105, 
beginning with release of a user guide for the bidding system and 
bidding system file formats, followed by an online bidding procedures 
tutorial. The educational materials shall be released as soon as 
reasonably possible to provide potential applicants and bidders with 
time to understand them and ask questions before bidding begins.
    117. Parties interested in participating in Auction 105 will find 
the interactive, online tutorials an efficient and effective way to 
further their understanding of the application and bidding processes. 
The online tutorials will allow viewers to navigate the presentation 
outline, review written notes, listen to audio of the notes, and search 
for topics using a text search function. Additional features of this 
web-based tool include links to auction-specific Commission releases,

[[Page 22636]]

email links for contacting Commission staff, and screen shots of the 
online application and bidding systems. The online tutorials will be 
accessible in the Education section of the Auction 105 website at 
www.fcc.gov/auction/105. Once posted, the tutorials will be accessible 
anytime.

D. Short-Form Applications: Due Before 6:00 p.m. ET on May 7, 2020

    118. In order to be eligible to bid in Auction 105, an applicant 
must first follow the procedures to submit a short-form application 
(FCC Form 175) electronically via the Auction Application System, 
following the instructions set forth in the FCC Form 175 Instructions. 
The short-form application will become available with the opening of 
the initial filing window and must be submitted prior to 6:00 p.m. ET 
on May 7, 2020. Late applications will not be accepted. No application 
fee is required.
    119. Applications may be filed at any time beginning at noon ET on 
April 23, 2020, until the filing window closes at 6:00 p.m. ET on May 
7, 2020. Applicants should 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 May 7, 2020.
    120. 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 provided in the FCC Form 175 Instructions. Applicants 
requiring technical assistance should contact FCC Auctions Technical 
Support at (877) 480-3201, option nine; (202) 414-1250; or (202) 414-
1255 (text telephone (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.
    121. Applicants are cautioned that the Commission periodically 
performs scheduled maintenance of its IT systems. During scheduled 
maintenance activities, which typically occur over the weekends, every 
effort is made to minimize any downtime to auction-related systems, 
including the Auction Application System. However, there are occasions 
when auction-related systems may be temporarily unavailable.

E. Application Processing and Minor Modifications

1. Public Notice of Applicants' Initial Application Status and 
Opportunity for Minor Modifications
    122. After the deadline for filing auction applications, the 
Commission will process all timely submitted applications to determine 
whether each applicant has complied with the application requirements 
and provided all information concerning its qualifications for bidding. 
OEA will issue a public notice with applicants' initial application 
status, identifying: (1) Those that are complete and (2) those that are 
incomplete or deficient because of 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.
    123. After the initial application filing deadline on April 9, 
2019, applicants can make only minor modifications to their 
applications. Major modifications (e.g., change of county, certain 
changes in ownership that would constitute an assignment or transfer of 
control of the applicant, change in the required certifications, change 
in applicant's legal classification that results in a change in 
control, or change in claimed eligibility for a higher percentage of 
bidding credit) will not be permitted. After the deadline for 
resubmitting corrected applications, an applicant will have no further 
opportunity to cure any deficiencies in its application or provide any 
additional information that may affect Commission staff's ultimate 
determination of whether and to what extent the applicant is qualified 
to participate in Auction 105.
    124. Commission staff will communicate only with an applicant's 
contact person or certifying official, as designated on the applicant's 
FCC Form 175, unless the applicant's certifying official or contact 
person notifies Commission staff in writing that another representative 
is authorized to speak on the applicant's behalf. In no event, however, 
will the Commission send auction registration materials to anyone other 
than the contact person listed on the applicant's FCC Form 175 or 
respond to a request for replacement registration materials from anyone 
other than the authorized bidder, contact person, or certifying 
official listed on the applicant's FCC Form 175. Authorizations may be 
sent by email to [email protected].
2. Public Notice of Applicants' Final Application Status After Upfront 
Payment Deadline
    125. After Commission staff review resubmitted applications and 
upfront payments, OEA will release a public notice identifying 
applicants that have become qualified bidders for the auction. 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 
that have made a sufficient upfront payment.

F. Upfront Payments

    126. In order to be eligible to bid in Auction 105, a sufficient 
upfront payment and a complete and accurate FCC Remittance Advice Form 
(FCC Form 159, Revised 2/03) must be submitted before 6:00 p.m. ET on 
June 19, 2020. After completing its short-form application, an 
applicant will have access to an electronic pre-filled version of the 
FCC Form 159. An accurate and complete FCC Form 159 must accompany each 
payment. Proper completion of this form is critical to ensuring correct 
crediting of upfront payments. Payers using the pre-filled FCC Form 159 
are responsible for ensuring that all the information on the form, 
including payment amounts, is accurate.
1. Making Upfront Payments by Wire Transfer for Auction 105
    127. Upfront payments for Auction 105 must be wired to, and will be 
deposited in, the U.S. Treasury. Wire transfer payments for Auction 105 
must be received before 6:00 p.m. ET on June 19, 2020. An applicant 
must initiate the wire transfer through its bank, authorizing the bank 
to wire funds from the applicant's account to the proper account at the 
U.S. Treasury. No other payment method is acceptable. To avoid untimely 
payments, applicants should discuss arrangements (including bank 
closing schedules and other specific bank wire transfer requirements, 
such as an in-person written request before a specified time of day) 
with their bankers several days before they plan to make the wire 
transfer, and must allow sufficient time for the transfer to be 
initiated and completed before the deadline. The information needed to 
place an order for a wire transfer is set

[[Page 22637]]

forth in the Auction 105 Procedures Public Notice.
    128. At least one hour before placing the order for the wire 
transfer (but on the same business day), applicants must print and fax 
a completed FCC Form 159 (Revised 2/03) to the FCC at (202) 418-2843. 
Alternatively, the completed form can be scanned and sent as an 
attachment to an email to [email protected]. On the fax cover sheet 
or in the email subject header, write ``Wire Transfer--Auction Payment 
for Auction 105''. To meet the upfront payment deadline, an applicant's 
payment must be credited to the Commission's account for Auction 105 
before the deadline.
    129. Each applicant is responsible for ensuring timely submission 
of its upfront payment and for timely filing of an accurate and 
complete FCC Form 159. An applicant should coordinate with its 
financial institution well ahead of the due date regarding its wire 
transfer and allow sufficient time for the 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 also is responsible for obtaining 
confirmation from its financial institution that its wire transfer to 
the 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.
    130. All payments must be made in U.S. dollars. All payments must 
be made by wire transfer. Upfront payments for Auction 105 go to an 
account number different from the accounts used in previous FCC 
auctions.
    131. Failure to deliver a sufficient upfront payment as instructed 
herein by the upfront payment deadline will result in dismissal of the 
short-form application and disqualification from participation in the 
auction.
2. Completing and Submitting FCC Form 159
    132. Information that supplements the standard instructions for FCC 
Form 159 (Revised 2/03) is provided in the Auction 105 Procedures 
Public Notice to help ensure correct completion of FCC Form 159 for 
upfront payments for Auction 105. Applicants need to complete FCC Form 
159 carefully, because mistakes may affect bidding eligibility and lack 
of consistency between information provided in FCC Form 159 (Revised 2/
03), FCC Form 175, long-form application, and correspondence about an 
application may cause processing delays. Appropriate cross-references 
between the FCC Form Remittance Advise and the short-form application 
are described in the Auction 105 Procedures Public Notice.
3. Upfront Payments and Bidding Eligibility
    133. The Commission has authority to determine appropriate upfront 
payments for each license being auctioned, taking into account such 
factors as the efficiency of the auction process and the potential 
value of similar licenses. An upfront payment is a refundable deposit 
made by each applicant seeking to participate in bidding to establish 
its eligibility to bid on licenses. Upfront payments that are related 
to the inventory of licenses being auctioned protect against frivolous 
or insincere bidding and provide the Commission with a source of funds 
from which to collect payments owed at the close of bidding.
    134. Applicants that are former defaulters must pay upfront 
payments 50% greater than non-former defaulters. For purposes of this 
classification as a former defaulter or a former delinquent, defaults 
and delinquencies of the applicant itself and its controlling interests 
are included.
    135. An applicant must make an upfront payment sufficient to obtain 
bidding eligibility on the generic blocks on which it will bid. Upfront 
payments are based on MHz-pops, and that the amount of the upfront 
payment submitted by an applicant will determine its initial bidding 
eligibility, the maximum number of bidding units on which a bidder may 
place bids in any single round. In order to bid for a block, qualified 
bidders must have a current eligibility level that meets or exceeds the 
number of bidding units assigned to that generic block in a county. At 
a minimum, an applicant's total upfront payment must be enough to 
establish eligibility to bid on at least one block in one of the 
counties selected on its FCC Form 175 for Auction 105, or else the 
applicant will not become qualified to participate in the auction. The 
total upfront payment does not affect the total dollar amount the 
bidder may bid.
    136. The Commission adopted upfront payments for generic block in a 
county based on $0.01 per MHz-pop, with a minimum of $500 per county. 
The upfront payment amount per block in each county is set forth in the 
Attachment A file, available at www.fcc.gov/auction/105. The upfront 
payment amounts are approximately half the minimum opening bid amounts.
    137. The Commission has assigned each generic block in a county a 
specific number of bidding units, equal to one bidding unit per $10 of 
the upfront payment. The number of bidding units for one block in a 
given county is fixed and does not change during the auction as prices 
change. Thus, in calculating its upfront payment amount, an applicant 
should determine the maximum number of bidding units on which it may 
wish to bid in any single round and submit an upfront payment amount 
for the auction covering that number of bidding units. In some cases, a 
qualified bidder's maximum eligibility may be less than the amount of 
its upfront payment because the qualified bidder has either previously 
been in default on a Commission construction permit or license or 
delinquent on non-tax debt owed to a Federal agency, see 47 CFR 
1.2106(a), or has submitted an upfront payment that exceeds the total 
amount of bidding units associated with the licenses or license areas 
it selected on its FCC Form 175. In order to make this calculation, an 
applicant should add together the bidding units for the number of 
blocks in counties 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.
    138. If an applicant is a former defaulter, it must calculate its 
upfront payment for the maximum amount of generic blocks in each county 
on which it plans to bid by multiplying the number of bidding units on 
which it wishes to be active by 1.5. In order to calculate the number 
of bidding units to assign to former defaulters, the Commission will 
divide the upfront payment received by 1.5 and round the result up to 
the nearest bidding unit. If a former defaulter fails to submit a 
sufficient upfront payment to establish eligibility to bid on at least 
one generic block in a county, the applicant will not be eligible to 
participate in Auction 105.

G. Auction Registration

    139. All qualified bidders for Auction 105 are automatically 
registered for the auction. Registration materials will be distributed 
prior to the auction by overnight delivery. The mailing will be sent 
only to the contact person at the contact address listed in the FCC 
Form

[[Page 22638]]

175 and will include the SecurID[supreg] tokens that will be required 
to place bids.
    140. Qualified bidders that do not receive this registration 
mailing will not be able to submit bids. Therefore, any qualified 
bidder for Auction 105 that has not received this mailing by noon on 
July 15, 2020, should call the Auctions Hotline at (717) 338-2868. 
Receipt of this registration mailing is critical to participating in 
the auction, and each applicant is responsible for ensuring it has 
received all the registration materials.
    141. If SecurID[supreg] tokens are lost or damaged, only a person 
who has been designated as an authorized bidder, the contact person, or 
the certifying official on the applicant's short-form application may 
request replacements. To request replacement of these items, call the 
Auction Bidder Line at the telephone number provided in the 
registration materials or the Auction Hotline at (717) 338-2868.

H. Remote Electronic Bidding via the FCC Auction Bidding System

    142. Bidders will be able to participate in Auction 105 over the 
internet using the FCC Auction Bidding System (bidding system). 
Telephonic bidding will not be available for Auction 105 because it 
would not be feasible given the number of county-based licenses and the 
file upload required to submit bids. However, the Auction Bidder Line 
will be available during the mock auction and actual auction for bidder 
questions. The Auction Bidder Line telephone number will be supplied in 
the registration materials sent to each qualified bidder. Only 
qualified bidders are permitted to bid. Each authorized bidder must 
have his or her own SecurID[supreg] token, which the Commission will 
provide at no charge. Each applicant with one authorized bidder will be 
issued two SecurID[supreg] tokens, while applicants with two or three 
authorized bidders will be issued three tokens. A bidder cannot bid 
without his or her SecurID[supreg] tokens. For security purposes, the 
SecurID[supreg] tokens and a telephone number for bidding questions 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 105. The 
SecurID[supreg] tokens can be recycled, and the Commission encourages 
bidders to return the tokens to the FCC. Pre-addressed envelopes will 
be provided to return the tokens once the auction has ended.
    143. The Commission makes no warranties whatsoever and shall not be 
deemed to have made any warranties, with respect to the bidding system, 
including any implied warranties of merchantability or fitness for a 
particular purpose. 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 use, revenue, or business information, or any 
other direct, indirect, or consequential damages) arising out of or 
relating to the existence, furnishing, functioning, or use of the 
bidding system. Moreover, no obligation or liability will arise out of 
the Commission's technical, programming, or other advice or service 
provided in connection with the bidding system.
    144. To the extent an issue arises with the bidding system itself, 
the Commission will take all appropriate measures to resolve such 
issues quickly and equitably. Should an issue arise that is outside the 
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 remediate such an 
issue on behalf of the bidder. Similarly, if an issue arises due to 
bidder error using the bidding system, the Commission shall have no 
obligation to resolve or remediate such an issue on behalf of the 
bidder. Accordingly, after the close of a bidding round, the results of 
bid processing will not be altered absent evidence of any failure in 
the bidding system.

I. Mock Auction

    145. All qualified bidders will be eligible to participate in a 
mock auction, which will begin on July 20, 2020. Only those bidders 
that are qualified to participate in Auction 105 will be eligible to 
participate in the mock auction. The mock auction will enable qualified 
bidders to become familiar with the bidding system and to practice 
submitting bids prior to the auction. All qualified bidders, including 
all their authorized bidders, are encouraged to participate to assure 
that they can log in to the bidding system and gain experience with the 
bidding procedures. Participating in the mock auction may reduce the 
likelihood of a bidder making a mistake during the auction. Details 
regarding the mock auction will be announced in the Qualified Bidders 
Public Notice for Auction 105.

J. Auction Delay, Suspension, or Cancellation

    146. At any time before or during the bidding process, OEA, in 
conjunction with the Bureau, may delay, suspend, or cancel bidding in 
Auction 105 in the event of a 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. This approach has proven effective in resolving exigent 
circumstances in previous auctions and the Commission finds no reasons 
to depart from it here. OEA will notify participants of any such delay, 
suspension, or cancellation by public notice and/or through the bidding 
system's announcement function. If the bidding is delayed or suspended, 
then OEA may, in its sole discretion, elect to resume the auction 
starting from the beginning of the current round or from some previous 
round, or cancel the auction in its entirety. The Commission emphasizes 
that OEA and the Bureau will exercise this authority at their 
discretion.

K. Fraud Alert

    147. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction 105 to 
deceive and defraud unsuspecting investors. Common warning signals of 
fraud include the following:
     The first contact is a ``cold call'' from a telemarketer 
or is made in response to an inquiry prompted by a radio or television 
infomercial.
     The offering materials used to invest in the venture 
appear to be targeted at IRA funds, for example, by including all 
documents and papers needed for the transfer of funds maintained in IRA 
accounts.
     The amount of investment is less than $25,000.
     The sales representative makes verbal representations 
that: (a) The Internal Revenue Service, Federal Trade Commission (FTC), 
Securities and Exchange Commission (SEC), FCC, or other government 
agency has approved the investment; (b) the investment is not subject 
to state or federal securities laws; or (c) the investment will yield 
unrealistically high short-term profits. In addition, the offering 
materials often include copies of actual FCC releases, or quotes from 
FCC personnel, giving the appearance of FCC knowledge or approval of 
the solicitation.
    148. Information about deceptive telemarketing investment schemes 
is

[[Page 22639]]

available from the FCC as well as the FTC and SEC. Additional sources 
of information for potential bidders and investors may be obtained from 
the following sources:

 The FCC's Consumer Call Center at (888) 225-5322 or by 
visiting www.fcc.gov/general/frauds-scams-and-alerts-guides
 the FTC at (877) FTC-HELP ((877) 382-4357) or by visiting 
www.consumer.ftc.gov/articles/0238-investment-risks
 the SEC at (202) 942-7040 or by visiting https://www.sec.gov/investor

    149. 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.

IV. Bidding Procedures

A. Clock Auction Design

    150. The Commission will conduct Auction 105 using an ascending 
clock auction design, in which bidders indicate their demands for 
generic license blocks in specific counties. The auction will proceed 
in a series of rounds, with bidding being conducted simultaneously for 
all spectrum blocks in all counties available in the auction. During 
each bidding round, the bidding system will announce a per-block clock 
price in each county, and qualified bidders will submit, for each 
county for which they wish to bid, the number of blocks they seek at 
the clock prices associated with the current round. Bidding rounds will 
be open for predetermined periods of time. Bidders will be subject to 
activity and eligibility rules that govern the pace at which they 
participate in the auction.
    151. In Auction 105, in each county, the clock price for a generic 
license block will increase from round to round if bidders indicate 
total demand in that county that exceeds the number of blocks 
available. The bidding rounds will continue until, for all counties, 
the total number of blocks that bidders demand does not exceed the 
supply of available blocks. At that point, those bidders indicating 
demand for a block at the final price will be deemed winning bidders. 
No assignment phase will be held to assign frequency-specific licenses, 
as was done in previous spectrum auctions that used a clock format, 
because the frequencies associated with Priority Access Licensees' PALs 
will be dynamically assigned by SASs.
    152. The specific bidding procedures that the Commission adopted in 
the Auction 105 Procedures Public Notice differ from the procedures 
proposed in the Auction 105 Comment Public Notice in that bidders will 
not be permitted to elect to bid at a Cellular Market Area (CMA) level 
for more populous CMAs; instead, all bidding will be on a county-level 
only. The auction format for Auction 105 therefore follows more closely 
the clock auction format used in Auctions 1002, 102, and 103. The 
Commission did, however, adopt its proposal to modify the bidding 
activity rules used in its prior clock auctions to allow an ``upper 
activity limit,'' which will help provide a safeguard against a bidder 
losing bidding eligibility under certain circumstances.
    153. OEA, in conjunction with the Bureau has prepared and released 
an updated technical guide that provides the mathematical details of 
the adopted auction design and algorithms for Auction 105. The 
information in the updated technical guide, which may be found on the 
Commission's website (www.fcc.gov/auction/105), supplements the 
Commission's decisions in the Auction 105 Procedures Public Notice.

B. Generic License Blocks With County-Level Bidding

    154. In accordance with the 2018 3.5 GHz Report and Order and 
consistent with the rules governing Citizens Broadband Radio Service, 
70 megahertz of spectrum designated for PALs in the 3550-3650 MHz band 
will be licensed in seven generic 10-megahertz blocks by county. 
Accordingly, in the auction, seven generic block licenses will be 
available for bidding in each county, for a total of 22,631 PALs.
    155. Limit on number of blocks per bidder. The bidding system will 
limit to four the quantity of blocks that a bidder can demand in any 
given area at any point in the auction. This implements the 
Commission's rules limiting the aggregation for PALs to 40 megahertz 
(i.e., four PALs) in any geographic area at any point in time. 
Therefore, in each bidding round, a bidder will have the opportunity to 
bid for up to four generic blocks of spectrum per county, subject to 
the eligibility rules.
    156. Bidding at the county level only; no CMA-level bidding. In the 
Auction 105 Comment Public Notice the Commission proposed procedures 
that would allow bidders to bid at a CMA level for blocks in counties 
that comprise more populous CMAs. Under that proposal, prior to the 
auction bidders would have been able to elect to bid on a CMA-by-CMA 
level for PALs in those CMAs that are classified as Metropolitan 
Statistical Areas (MSAs) and that incorporate multiple counties. Those 
electing to bid at the CMA level would not have been permitted to bid 
at the county level in that CMA, and vice versa. Based on its record 
and in light of its experience in previous auctions, the Commission 
concludes that a standard ascending clock auction with county-by-county 
bidding will offer adequate opportunity for bidders to aggregate 
licenses in order to obtain the level of coverage they desire 
consistent with their business plans and therefore does not adopt its 
CMA-level bidding proposal. Bidders will be permitted to bid on a 
county-by-county basis only.

C. Bidding Rounds

    157. Auction 105 will proceed in a series of rounds, with bidding 
conducted simultaneously for all spectrum blocks for all counties 
available in the auction. During each bidding round, the bidding system 
will announce a per-block price in each county, and qualified bidders 
will submit, for each county for which they wish to bid, the number of 
blocks they seek at the clock prices associated with the current round. 
Bidding rounds will be open for predetermined periods of time. Bidders 
will be subject to activity and eligibility rules that govern the pace 
at which they participate in the auction.
    158. In each county, the clock price for a generic license block 
will increase from round to round if bidders indicate total demand in 
that county that exceeds the number of blocks available. The bidding 
rounds will continue until, for all counties, the total number of 
blocks that bidders demand does not exceed the supply of available 
blocks. At that point, those bidders indicating demand for a block at 
the final price will be deemed winning bidders.
    159. The initial bidding schedule will be announced in a public 
notice to be released at least one week before the start of bidding. 
The bidding schedule may be changed in order to foster an auction pace 
that reasonably balances speed with the bidders' need to study round 
results and adjust their bidding strategies. Such changes may include 
the amount of time for bidding rounds, the amount of time between 
rounds, or the number of rounds per day, depending upon bidding 
activity and other factors. The bidding system will announce any such 
changes to the bidding schedule several rounds before the change 
occurs.
    160. A bidder may submit its bids using the bidding system's upload 
function that allows bid files in a comma-separated value (CSV) format 
to be uploaded. The bidding system will not allow bids to be submitted 
unless the bidder selected the counties on its

[[Page 22640]]

FCC Form 175 and the bidder has sufficient bidding eligibility.
    161. During each round of the bidding, a bidder may also remove 
bids placed in the current bidding round. If a bidder modifies its bids 
for blocks in a county in a round, the system takes the last bid 
submission as that bidder's bid for the round.

D. Stopping Rule

    162. The Commission will use a simultaneous stopping rule for 
Auction 105, under which all blocks in all counties will remain 
available for bidding until the bidding stops in every county. Bidding 
will close for blocks in all counties after the first round in which 
there is no excess processed demand in any county. Consequently, it is 
not possible to determine in advance how long the bidding in Auction 
105 will last. No bids may be withdrawn after the close of a round. 
Unlike an auction conducted using the Commission's standard 
simultaneous multiple-round auction format for bidding on frequency-
specific licenses (as opposed to generic blocks), there are no 
provisionally winning bids in a clock auction.

E. Availability of Bidding Information

    163. The Commission will make public after each round of Auction 
105, for each county: (1) The supply, (2) the aggregate demand, (3) the 
posted price of the last completed round (which is the clock price of 
the previous round if demand exceeds supply; the start-of-round price 
of the previous round if supply exceeds demand; or the price at which a 
reduction caused demand to equal supply), and (4) the clock price for 
the next round. The identities of bidders demanding blocks in a 
specific county will not be disclosed until after Auction 105 concludes 
(i.e., after the close of bidding).
    164. Each bidder will have access to additional information related 
to its own bidding and bid eligibility. After the bids of a round have 
been processed, the bidding system will inform each bidder of the 
number of blocks it holds after the round (its processed demand) for 
every county and its eligibility for the next round.
    165. Limiting the availability of bidding information during the 
auction balances the Commissions interest in providing bidders with 
sufficient information about the status of their own bids and the 
general level of bidding in all areas and license categories to allow 
them to bid confidently and effectively, while restricting the 
availability of information that may facilitate identification of 
bidders placing particular bids, which could potentially lead to 
undesirable strategic bidding.

F. Activity Rule, Activity Upper Limit, and Reducing Eligibility

    166. Bidders are required to maintain a minimum, high level of 
activity in each clock round in order to maintain bidding eligibility, 
which will help ensure that the auction moves quickly and promote a 
sound price discovery process. The activity requirement (the activity 
requirement percentage) will be between 90% and 100% of a bidder's 
bidding eligibility in all clock rounds, as proposed. The initial 
activity requirement percentage will be 95%. Failure to maintain the 
requisite activity level will result in a reduction in the bidder's 
eligibility, possibly curtailing or eliminating the bidder's ability to 
place additional bids in the auction.
    167. The Commission will use upfront payments to determine a 
bidder's initial (maximum) eligibility in terms of bidding units. Each 
spectrum block in a county will be assigned a specific number of 
bidding units based on the number of MHz-pops in the county. Therefore, 
a bidder's upfront payment will determine the maximum number of blocks 
as measured by their associated bidding units that a bidder can demand 
at the start of the auction.
    168. The activity rule will be satisfied when a bidder has bidding 
activity on blocks with bidding units that total at least the activity 
requirement percentage (set between 90 and 100%) of its eligibility in 
the round. If the activity rule is met, then the bidder's eligibility 
will not change in the next round. Bidding eligibility will be reduced 
as the auction progresses if a bidder does not meet the activity 
requirement. For example, with an activity requirement of 95%, the 
eligibility of a bidder not meeting the activity requirement would be 
calculated as the bidder's activity multiplied by 100/95.
    169. For this clock auction, a bidder's activity in a round for 
purposes of the activity rule will be the sum of the bidding units 
associated with the bidder's processed demands, which may not be equal 
to its submitted demands. For instance, if a bidder requests a 
reduction in the quantity of blocks it demands in a category, but the 
bidding system does not apply the request because demand for the 
category would fall below the available supply, the bidder's activity 
will reflect its unreduced demand. Under the ascending clock auction 
format, the FCC auction bidding system will not allow a bidder to 
reduce the quantity of blocks it demands in an individual county if the 
reduction would result in aggregate demand falling below (or further 
below) the available supply of blocks in the county.
    170. Activity upper limit. A bidder will be allowed to submit bids 
with associated bidding activity greater than its current bidding 
eligibility, noting, however, that a bidder's activity as applied by 
the auction system during bid processing will not exceed the bidder's 
current bidding eligibility. Because a bidder's eligibility for the 
next round is calculated based on the bidder's demands as applied by 
the auction system during bid processing, a bidder's eligibility may be 
reduced even if the bidder submitted bids that meet its activity 
requirement for the round. This may occur, for example, if the bidder 
bids to reduce its demand in county A by two blocks (with 10 bidding 
units each) and bids to increase its demand by one block (with 20 
bidding units) in county B. If the bidder's demand can only be reduced 
by one block in county A (because there is only one block of excess 
demand), the increase in county B cannot be applied, and absent other 
bidding activity the bidder's eligibility would be reduced. The 
Commission anticipates that adopting an ``activity upper limit'' will 
help a bidder avoid having its eligibility reduced as a result of 
submitted bids that cannot be applied during bid processing. For 
example, depending upon the bidder's overall bidding eligibility and 
the activity limit percentage, a bidder could submit an ``additional'' 
bid or bids that would be considered (in price point order with its 
other bids) and applied as available eligibility permits during the bid 
processing. When submitting bids with associated bidding activity 
greater than its current bidding eligibility, a bidder would consider 
the price points associated with each of its bids to indicate the order 
in which it wishes the bidding system to consider its bid requests. 
Therefore, if bids submitted at lower price points cannot be applied as 
requested, thereby leaving the bidder with unused eligibility, then the 
system will consider the additional bids submitted at higher price 
points to use the otherwise lost eligibility. The Commission 
emphasizes, however, that a bidder may submit bids with associated 
bidding units exceeding 100% of its current bidding eligibility, but 
its processed activity can never exceed its eligibility.
    171. After Round 1 a bidder may submit bids with bidding units 
totaling up to an activity upper limit equal to the bidder's current 
bidding eligibility for the round times a percentage (the

[[Page 22641]]

activity limit percentage) equal to or greater than 100%. An an initial 
activity limit percentage of 120% will apply to Round 2 and subsequent 
rounds. For round 1, the activity upper limit will be 100% of the 
bidder's initial bidding eligibility. In any bidding round, the auction 
bidding system will advise the bidder of its current bidding 
eligibility, its required bidding activity, and its activity upper 
limit.
    172. OEA retains the discretion to change the activity requirement 
percentage and the activity limit percentage during the auction, and to 
set the activity limit percentage within a range of 100% and 140%. The 
bidding system will announce any such changes in advance of the round 
in which they would take effect, giving bidders adequate notice to 
adjust their bidding strategies.
    173. Missing bids. Under the clock auction format, a bidder is 
required to indicate its demands in every round, even if its demands at 
the new round's prices are unchanged from the previous round. Missing 
bids--bids that are not reconfirmed--are treated by the auction bidding 
system as requests to reduce to a quantity of zero blocks for the 
county. If these requests are applied, or applied partially, then a 
bidder's bidding activity, and its bidding eligibility for the next 
round, may be reduced.
    174. For Auction 105, as for other clock auctions, the Commission 
will not provide for activity rule waivers to preserve a bidder's 
eligibility. The adoption of an activity upper limit to permit a bidder 
to submit bids with bidding activity greater than its eligibility, 
within the precise limits set forth above, addresses some of the 
circumstances under which a bidder risks losing bidding eligibility and 
otherwise could wish to use a bidding activity waiver, while minimizing 
any potential adverse impacts on either bidder incentives to bid 
sincerely or the price-setting mechanism of the clock auction.

G. Acceptable Bids

1. Minimum Opening Bids and Reserve Price
    175. The Commission established in the Auction 105 Procedures 
Public Notice minimum opening bid amounts for Auction 105. The bidding 
system will not accept bids lower than the minimum opening bids for 
each product.
    176. In the first bidding round of Auction 105, a bidder will 
indicate how many generic license blocks in a county it demands at the 
minimum opening bid price. Minimum opening bid amounts are calculated 
based on a formula $0.02 per MHz-pop, with a minimum of $1,000. As in 
Auction 103, the result will be rounded as follows: Results above 
$10,000 will be rounded up to the nearest $1,000; results below $10,000 
but above $1,000 will be rounded up to the nearest $100; and results 
below $1,000 will be rounded up to the nearest $10. These minimum 
opening bid amounts are specified in the Attachment A file.
    177. The Commission established in the Auction 105 Procedures 
Public Notice an aggregate reserve price of $107,991,840 for Auction 
105. Although the Commission suggested in the Auction 105 Comment 
Public Notice that no reserve price would be necessary for Auction 105, 
the Commission agrees, based on subsequent correspondence with NTIA, 
that the frequencies involved in Auction 105 contain ``eligible 
frequencies'' as described by the Commercial Spectrum Enhancement Act 
(CSEA). As required by the CSEA, the Commission provided notice of its 
intent to auction PALs to NTIA on or before September 5, 2018. NTIA, in 
turn, provided notice of estimated sharing costs and timelines for such 
sharing on December 20, 2019, more than six months prior to the 
scheduled start of bidding in Auction 105. It is therefore necessary to 
establish a reserve price of no less than 110% of the estimated 
relocation or sharing costs provided by an eligible Federal entity. 
NTIA's estimated total sharing costs of $98,174,400 yield an aggregate 
reserve price of $107,991,840. The aggregate reserve price will be met 
if, at the close of the auction, the total net winning bids exceed this 
amount.
2. Clock Price Increments
    178. After bidding in the first round and before each subsequent 
round, the FCC auction bidding system will announce the start-of-round 
price and the clock price for the upcoming round--that is, the lowest 
price and the highest price at which bidders can specify the number of 
blocks they demand during the round. As long as aggregate demand for 
blocks in the county exceeds the supply of blocks, the start-of-round 
price will be equal to the clock price from the prior round. Aggregate 
demand for a county is equal to the total number of blocks for which 
bidders have processed demand. If aggregate demand equals supply at a 
price in a previous round, either a clock price or an intra-round 
price, then the start-of-round price for the next round will be equal 
to the price at which demand equaled supply. If demand was less than 
supply in the previous round, then the start-of-round price for the 
next round will not increase.
    179. The Commission will set the clock price for blocks in a 
specific county for a round by adding a percentage increment to the 
start-of-round price. For example, if the start-of-round price for a 
block in a given county is $10,000, and the percentage increment is 
20%, then the clock price for the round will be $12,000. The total 
dollar amount of the increment (the difference between the clock price 
and the start-of-round price) will not exceed a certain amount. The cap 
on the increment is set initially at $10 million and the Commission 
retains the discretion to adjust this cap as rounds continue. Staff 
will retain the authority to adjust the cap as needed to manage the 
auction pace and ensure that bidding proceeds in an orderly fashion.
    180. The Commission will set the increment percentage within a 
range of 5% to 20% inclusive and will set the initial increment 
percentage at 10%. The Commission may adjust the increment as rounds 
continue.
3. Intra-Round Bids
    181. A bidder may make intra-round bids by indicating a point 
between the start-of-round price and the clock price at which its 
demand for blocks changes. In placing an intra-round bid, a bidder 
would indicate a specific price and a quantity of blocks it demands if 
the price for blocks should increase beyond that price. For example, if 
a bidder has processed demand of 3 blocks at the start of the round 
price of $100, but wishes to hold only 2 blocks if the price increases 
by more than $10 (assuming the bid increment is greater than $10), then 
the bidder will indicate a bid quantity of 2 at a price of $110 
($100+$10). Similarly, if the bidder wishes to reduce its demand to 0 
should the price increase at all above $100, then the bidder will 
indicate a bid quantity of 0 at the start-of-round price of $100.
    182. Intra-round bids are optional; a bidder may choose to express 
its demands only at the clock prices.

H. Bids To Change Demand and Bid Processing

    183. A bidder that is willing to maintain the same demand in a 
county at the new clock price will bid for that quantity at the clock 
price, indicating that it is willing to pay up to that price, if need 
be, for the specified quantity. Bids to maintain demand will always be 
applied by the auction bidding system. A bidder that wishes to change 
the quantity it demands in a county (relative to its demand from the

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previous round as processed by the bidding system) can express its 
demand at the clock price or at an intra-round price, but depending 
upon the bidder's eligibility and the aggregate demand for the county, 
the bidding system may not be able to apply the requested change.
    184. The auction bidding system will, after each bidding round, 
process bids to change demand to determine the processed demand of each 
bidder in each county and a posted price for each county that would 
serve as the start-of-round price for the next round.
1. No Excess Supply Rule for Bids To Reduce Demand
    185. The FCC auction bidding system will not apply a bid to reduce 
the quantity of blocks a bidder demands in an individual county if the 
reduction would result in aggregate demand falling below (or further 
below) the available supply of blocks in the county. Therefore, if a 
bidder bids to reduce the number of blocks for which it has processed 
demand as of the previous round, then the FCC auction bidding system 
will treat the bid as a request to reduce demand that will be applied 
only if the ``no excess supply'' rule would be satisfied.
2. Eligibility Rule for Bids To Increase Demand
    186. The bidding system will not allow a bidder to increase the 
quantity of blocks it demands in a product if the total number of 
bidding units associated with the bidder's demand exceeds the bidder's 
bidding eligibility for the round. Therefore, if a bidder bids to 
increase the number of blocks for which it has processed demand as of 
the previous round, the FCC auction bidding system will treat the bid 
as a request to increase demand that will be applied only if that would 
not cause the bidder's activity to exceed its eligibility.
3. Partial Application of Bids
    187. A bid that involves a reduction from the bidder's previous 
demands will be applied partially--that is, reduced by fewer blocks 
than requested in the bid--if excess demand is insufficient to support 
the entire reduction. A bid to increase a bidder's demands will be 
applied partially if the bidder's eligibility for the round is 
insufficient to apply the total number of bidding units associated with 
the bidder's increased demand.
4. Processed Demands
    188. After a round ends, the bidding system will process bids to 
change demand in order of price point, where the price point represents 
the percentage of the bidding interval for the round. For example, if 
the start-of-round price is $5,000 and the clock price is $6,000, a 
price of $5,100 will correspond to the 10% price point, since it is 10% 
of the bidding interval between $5,000 and $6,000. Bids to maintain 
demand are always applied before the bidding system considers bids to 
change demand. The bidding system will first consider intra-round bids 
in ascending order of price point and then bids at the clock price. The 
system will consider bids at the lowest price point across all 
counties, then look at bids at the next price point in all areas, and 
so on. If there are multiple bids at a single price point, the system 
will process bids in order of a bid-specific pseudo-random number. As 
it considers each submitted bid during bid processing, the bidding 
system will determine the extent to which there is excess demand in 
each county at that price point in the processing to determine whether 
a bidder's request to reduce demand can be applied. Similarly, the 
auction bidding system will evaluate the activity associated with the 
bidder's most recently determined demands at that point in the 
processing to determine whether a request to increase demand can be 
applied.
    189. Because in any given round some bidders may request to 
increase demands for licenses while others may request reductions, the 
price point at which a bid is considered by the auction bidding system 
can affect whether it is applied. Bids not applied because of 
insufficient aggregate demand or insufficient eligibility will be held 
in a queue and considered, again in order, if there should be excess 
supply or sufficient eligibility later in the processing after other 
bids are processed.
    190. Once a round closes, the auction system will process bids to 
change demand by first considering the bid submitted at the lowest 
price point and determining the maximum extent to which that bid can be 
applied given bidders' demands as determined at that point in the bid 
processing. If the bid can be applied (either in full or partially), 
the number of licenses the bidder holds at that point in the processing 
will be adjusted, and aggregate demand will be recalculated 
accordingly. If the bid cannot be applied in full, the unfulfilled bid, 
or portion thereof, will be held in a queue to be considered later 
during bid processing for that round. The bidding system will then 
consider the bid submitted at the next highest price point, applying it 
in full, in part, or not at all, given the most recently determined 
demands of bidders. Any unfulfilled requests will again be held in the 
queue, and aggregate demand will again be recalculated. Every time a 
bid or part of a bid is applied, the unfulfilled bids held in the queue 
will be reconsidered, in the order of their original price points (and 
by pseudo-random number, in the case of tied price points). The auction 
bidding system will not carry over unfulfilled bid requests to the next 
round, however. The bidding system will advise bidders of the status of 
their bids when round results are released.
5. Price Determination
    191. The Auction 105 Procedures Public Notice describes the bid 
processing procedures to determine, based on aggregate demand, the 
posted price for each county for the round that will serve as the 
start-of-round price for the next round. The uniform price for all of 
the blocks in a county will increase from round to round as long as 
there is excess demand for blocks in the county, but will not increase 
if aggregate demand does not exceed the available supply of blocks.
    192. If, at the end of a round, the aggregate demand for blocks in 
the county exceeds the supply of blocks (which is 7 for Auction 105), 
then the posted price will equal the clock price for the round. If a 
reduction in demand was applied during the round and caused demand in 
the county to equal supply, then the posted price will be the price at 
which the reduction was applied. If aggregate demand is less than or 
equal to supply and no bid to reduce demand was applied for the county, 
then the posted price will equal the start-of-round price for the 
round. The range of acceptable bid amounts for the next round will be 
set by adding the percentage increment to the posted price.
    193. When a bid to reduce demand can be applied only partially, the 
uniform price for the county will stop increasing at that point, since 
the partial application of the bid will result in demand falling to 
equal supply. Hence, a bidder that makes a bid to reduce demand that 
cannot be fully applied will not face a price for the remaining demand 
that is higher than its bid price.
    194. After the bids of the round have been processed, the FCC 
auction bidding system will announce clock prices to indicate a range 
of acceptable bids for the next round (assuming the stopping rule has 
not been met). Each bidder will be informed of its processed demand and 
the extent of excess demand for blocks in each county.

[[Page 22643]]

I. Winning Bids

    195. Bidders with processed demand in a county at the time the 
stopping rule is met will become the winning bidders of licenses 
corresponding to that number of blocks. The final price for a generic 
block in a county will be the posted price for the final round.

J. Calculating Individual License Prices

    196. While final auction payments for winning bidders will be 
calculated with bidding credit caps applied on an aggregate basis, 
rather than to individual licenses, the bidding system will also 
calculate a net per-license price for each license. Such individual 
prices may be needed if a licensee later incurs license-specific 
obligations, such as unjust enrichment payments.
    197. The gross per-license price of a license will be the final 
price. To calculate the net price, the bidding system will apportion 
any applicable bidding credit discounts in proportion to the gross 
payment for that license.

K. Auction Results

    198. The bidding system will determine winning bidders as described 
above. After release of the public notice announcing auction results, 
the public will be able to view and download bidding and results data 
through the FCC Public Reporting System (PRS).

L. Auction Announcements

    199. Commission staff will use auction announcements to report 
necessary information, such as schedule changes. All auction 
announcements will be available by clicking a link in the bidding 
system.

V. Post-Auction Procedures

    200. Shortly after bidding has ended in Auction 105, the Commission 
will issue a public notice declaring that the auction closed and 
establishing the deadlines for submitting down payments, final 
payments, and the long-form applications (FCC Form 601) for the 
auction.

A. Down Payments

    201. Within 10 business days after release of the auction closing 
public notice for Auction 105, 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 to 20% of the net 
amount of its winning bids (less any bidding credits, if applicable).

B. Final Payments

    202. Each winning bidder will be required to submit the balance of 
the net amount for each of its winning bids within 10 business days 
after the deadline for submitting down payments.

C. Long-Form Application (FCC Form 601)

    203. Within 10 business days after release of the auction closing 
public notice, winning bidders must electronically submit a properly 
completed post-auction application (FCC Form 601) for the license(s) 
they won through the auction.
    204. A winning bidder claiming eligibility for a small business 
bidding credit or a rural service provider bidding credit must 
demonstrate its eligibility in its FCC Form 601 post-auction 
application for the bidding credit sought. Further instructions on 
these and other filing requirements will be provided to winning bidders 
in the auction closing public notice for Auction 105.
    205. Winning bidders organized as bidding consortia must comply 
with the FCC Form 601 post-auction application procedures set forth in 
section 1.2107(g) of the Commission's rules. Specifically, license(s) 
won by a consortium must be applied for as follows: (a) An individual 
member of the consortium or a new legal entity comprising two or more 
individual consortium members must file for licenses covered by the 
winning bids; (b) each member or group of members of a winning 
consortium seeking separate licenses will be required to file a 
separate FCC Form 601 for its/their respective license(s) in their 
legal business name; (c) in the case of a license to be partitioned or 
disaggregated, the member or group filing the applicable FCC Form 601 
shall include the parties' partitioning or disaggregation agreement 
with the FCC Form 601; and (d) if a designated entity credit is sought 
(either small business or rural service provider), the applicant must 
meet the applicable eligibility requirements in the Commission's rules 
for the credit.

D. Ownership Disclosure Information Report (FCC Form 602)

    206. Within 10 business days after release of the auction closing 
public notice for Auction 105, each winning bidder must also comply 
with the ownership reporting requirements in sections 1.913, 1.919, and 
1.2112 of the Commission's rules by submitting an ownership disclosure 
information report for wireless telecommunications services (FCC Form 
602) with its FCC Form 601 post-auction application.
    207. If a winning bidder already has a complete and accurate FCC 
Form 602 on file in the FCC's Universal Licensing System (ULS), then it 
is not necessary to file a new report, but the winning bidder must 
certify in its FCC Form 601 application that the information on file 
with the Commission is complete and accurate. If the winning bidder 
does not have an FCC Form 602 on file, or if it is not complete and 
accurate, it must submit a new one.
    208. When a winning bidder submits an FCC Form 175, ULS 
automatically creates an ownership record. This record is not an FCC 
Form 602, but it may be used to pre-fill the FCC Form 602 with the 
ownership information submitted on the winning bidder's FCC Form 175 
application. A winning bidder must review the pre-filled information 
and confirm that it is complete and accurate as of the filing date of 
the FCC Form 601 post-auction application before certifying and 
submitting the FCC Form 602. Further instructions will be provided to 
winning bidders in the auction closing public notice.

E. Tribal Lands Bidding Credit

    209. A winning bidder that intends to use its license(s) to deploy 
facilities and provide services to federally recognized tribal lands 
that are unserved by any telecommunications carrier or that have a 
wireline penetration rate equal to or below 85% is eligible to receive 
a tribal lands bidding credit as set forth in sections 1.2107 and 
1.2110(f) of the Commission's rules. A tribal lands bidding credit is 
in addition to, and separate from, any other bidding credit for which a 
winning bidder may qualify.
    210. Unlike other bidding credits that are requested prior to the 
auction, a winning bidder applies for the tribal lands bidding credit 
after the auction when it files its FCC Form 601 post-auction 
application. When initially filing the post-auction application, the 
winning bidder will be required to inform the Commission whether it 
intends to seek a tribal lands bidding credit, for each license won in 
the auction, by checking the designated box(es). After stating its 
intent to seek a tribal lands bidding credit, the winning bidder will 
have 180 days from the close of the post-auction application filing 
window to amend its application to select the specific tribal lands to 
be served and provide the required tribal government certifications. 
Licensees receiving a tribal lands bidding credit are subject to 
performance criteria as set forth in section 1.2110(f)(3)(vii). For 
additional information on the tribal lands bidding credit, including 
how the amount of the credit is calculated, applicants should review 
the Commission's rulemaking proceeding regarding tribal lands bidding 
credits and related public notices.

[[Page 22644]]

F. Default and Disqualification

    211. Any winning bidder that defaults or is disqualified after the 
close of an auction (i.e., fails to remit the required down payment by 
the specified deadline, fails to submit a timely long-form application, 
fails to make a full and timely final payment, or is otherwise 
disqualified) is liable for default payments as described in section 
1.2104(g)(2). A default payment consists of a deficiency payment, equal 
to the difference between the amount of the bidder's winning bid and 
the amount of the winning bid the next time a license covering the same 
spectrum is won in an auction, plus an additional payment equal to a 
percentage of the defaulter's bid or of the subsequent winning bid, 
whichever is less.
    212. The percentage of the applicable bid to be assessed as an 
additional payment for defaults in a particular auction is established 
in advance of the auction. The additional default payment for Auction 
105 is 20% of the applicable bid for winning bids. The bidding system 
will calculate individual per-license prices that are separate from 
final auction payments, which are calculated on an aggregate basis. 
These prices determine the defaulted bid amount on individual licenses.
    213. Finally, in the event of a default, the Commission has the 
discretion to re-auction the license 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, then the Commission 
may declare the applicant and its principals ineligible to bid in 
future auctions and may take any other action that it deems necessary, 
including institution of proceedings to revoke any existing 
authorizations held by the applicant.

G. Refund of Remaining Upfront Payment Balance

    214. 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. Bidders are 
encouraged to use the Refund Information icon found on the Auction 
Application Manager page or the Refund Form link available on the 
Auction Application Submit Confirmation page in the FCC Auction 
Application System to access the form. After the required information 
is completed on the blank form, the form should be printed, signed, and 
submitted to the Commission by mail, fax, or email as instructed in the 
Auction 105 Procedures Public Notice.

VI. Procedural Matters

    215. Paperwork Reduction Act. Neither the Auction 105 Procedures 
Public Notice nor the Auction 105 Rescheduling Public Notice contain 
new or modified information collection requirements subject to the 
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, 
therefore, it does not contain any new or modified information 
collection 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).
    216. Congressional Review Act. The Commission has determined, and 
the Administrator of the Office of Information and Regulatory Affairs, 
Office of Management and Budget, concurs that this rule is ``non-
major'' under the Congressional Review Act, 5 U.S.C. 804(2). The 
Commission will send a copy of this Public Notice to Congress and the 
Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).
    217. Supplemental Final Regulatory Flexibility Analysis. As 
required by the Regulatory Flexibility Act of 1980, as amended (RFA), a 
Supplemental Initial Regulatory Flexibility Analysis (Supplemental 
IRFA) was incorporated in the Auction 105 Comment Public Notice 
released in September 2019. The Commission sought public comment on the 
proposals in the Auction 105 Comment Public Notice, including comments 
on the Supplemental IRFA. No comments were filed addressing the 
Supplemental IRFA. The Auction 105 Procedures Public Notice establishes 
the procedures to be used for Auction 105 and supplements the Initial 
and Final Regulatory Flexibility Analyses completed by the Commission 
in the 2017 Notice of Proposed Rulemaking, 82 FR 56193, November 29, 
2017, and the 2018 3.5 GHz Report and Order, and other Commission 
orders pursuant to which Auction 105 will be conducted. This present 
Supplemental Final Regulatory Flexibility Analysis (Supplemental FRFA) 
conforms to the RFA.
    218. Need for, and Objectives of, the Rules. The Auction 105 
Procedures Public Notice implements auction procedures for those 
entities that seek to bid to acquire licenses in Auction 105. Auction 
105 will be the Commissions first auction of mid-band spectrum in 
furtherance of the deployment of fifth-generation (5G) wireless, the 
Internet of Things (IoT), and other advanced spectrum-based services. 
The Public Notice adopts procedural rules and terms and conditions 
governing Auction 105, and the post-auction application and payment 
processes, as well as setting the minimum opening bid amounts for 
Priority Access Licenses (PALs) in the 3.5 GHz (3550-3650) band that 
will be offered in Auction 105.
    219. To promote the efficient and fair administration of the 
competitive bidding process for all Auction 105 participants, the 
Commission adopted the following procedures proposed in the Auction 105 
Comment Public Notice:
     Use of anonymous bidding/limited information procedures 
which will not make public: (1) The licenses or license areas that an 
applicant selects for bidding in its auction application (FCC Form 
175); (2) the amount of any upfront payment made by or on behalf of an 
applicant for Auction 105; (3) an applicant's bidding eligibility; and 
(4) any other bidding-related information that might reveal the 
identity of the bidder placing a bid, until after bidding has closed;
     establishment of bidding credit caps for eligible small 
businesses and rural service providers in Auction 105;
     adjustment of the bidding schedule as necessary in order 
to manage the pace of Auction 105;
     use of a simultaneous stopping rule where all blocks in 
all counties will remain open for bidding until bidding has stopped in 
every county;
     provision of discretionary authority to OEA, in 
conjunction with the Bureau, to delay, suspend, or cancel bidding in 
Auction 105 for any reason that affects the ability of the competitive 
bidding process to be conducted fairly and efficiently;
     use of a clock auction format for Auction 105 under which 
each qualified bidder will indicate in successive clock bidding rounds 
its demands for generic blocks in specific counties, and associated 
bidding and bid processing procedures to implement the clock auction 
format;
     use of an activity rule, which requires a bidder to bid 
actively during the auction on a high percentage of its bidding 
eligibility, including a modification that would allow a bidder to 
submit bids, but not to be assigned bids, that exceed its bidding 
eligibility;
     use of an activity rule that does not include a waiver of 
the rule to preserve a bidder's eligibility;
     a requirement that bidders be active on between 90% and 
100% of a bidder's bidding eligibility in all clock rounds;

[[Page 22645]]

     a specific minimum opening bid amount for generic blocks 
in each county available in Auction 105;
     a limit of four generic license blocks of spectrum per 
county that a bidder can demand at any point in Auction 105;
     a specific upfront payment amount for generic blocks in 
each county available in Auction 105;
     establishment of a bidder's initial bidding eligibility in 
bidding units based on that bidder's upfront payment through assignment 
of a specific number of bidding units for each generic block;
     establishment of acceptable bid amounts, including clock 
price increments and intra-round bids, along with a methodology for 
calculating such amounts;
     a methodology for processing bids and requests to reduce 
demand subject to the no excess supply rule for bids to reduce demand;
     use of bid processing procedures that the auction bidding 
system will use, after each bidding round, to process bids to determine 
the processed demand of each bidder and a posted price for each county 
that would serve as the start-of-round price for the next round; and
     establishment of additional default payments of 20% for 
bids pursuant to section 1.2104(g)(2) of the rules in the event that a 
winning bidder defaults or is disqualified after the auction.
    220. The procedures for the conduct of Auction 105 constitute the 
more specific implementation of the competitive bidding rules 
contemplated by Parts 1 and 96 of the Commission's rules and the 
underlying rulemaking orders, including the 2015 3.5 GHz Report and 
Order and 2018 3.5 GHz Report and Order, and relevant competitive 
bidding orders, and are fully consistent therewith.
    221. Summary of Significant Issues Raised by Public Comments in 
Response to the IRFA. There were no comments filed that specifically 
address the procedures and policies proposed in the Supplemental IRFA.
    222. 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. The Chief Counsel did not file any comments in response to 
the procedures that were proposed in the Auction 105 Comment Public 
Notice.
    223. Description and Estimate of the Number of Small Entities to 
Which the Rules 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 and policies adopted herein. 
The RFA generally defines the term ``small entity'' as having the same 
meaning as the terms ``small business,'' ``small organization,'' and 
``small governmental jurisdiction.'' In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act. 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.
    224. As noted above, Regulatory Flexibility Analyses were 
incorporated into the 2017 NPRM and 2018 3.5 GHz Report and Order. 
These orders provide the underlying authority for the procedures 
proposed in the Auction 105 Comment Public Notice and are adopted 
herein for Auction 105. In those regulatory flexibility analyses, the 
Commission described in detail the small entities that might be 
significantly affected. In the Auction 105 Procedures Public Notice, 
the Commission incorporated the descriptions and estimates of the 
number of small entities from the previous Regulatory Flexibility 
Analyses in the 2017 NPRM and 2018 3.5 GHz Report and Order.
    225. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The Commission designed the 
auction application process itself to minimize reporting and compliance 
requirements for applicants, including small business applicants. In 
the first part of the Commission's two-phased auction 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 process, winning bidders file a more comprehensive 
long-form application. Thus, an applicant which fails to become a 
winning bidder does not need to file a long-form application and 
provide the additional showings and more detailed demonstrations 
required of a winning bidder.
    226. The Commission does not expect that the processes and 
procedures adopted in the Auction 105 Procedures Public Notice will 
require small entities to hire attorneys, engineers, consultants, or 
other professionals to participate in Auction 105 and comply with the 
procedures the Commission adopts because of the information, resources, 
and guidance it make available to potential and actual participants. 
The Commission cannot quantify the cost of compliance with the 
procedures; however, the Commission does not believe that the cost of 
compliance will unduly burden small entities that choose to participate 
in the auction. The processes and procedures are consistent with 
existing Commission policies and procedures used in prior auctions. 
Thus, some small entities may already be familiar with such procedures 
and have the processes and procedures in place to facilitate compliance 
resulting in minimal incremental costs to comply. For those small 
entities that may be new to the Commission's auction process, the 
various resources that will be made available, including, but not 
limited to, the mock auction, remote electronic bidding, and access to 
hotlines for both technical and auction assistance, should help 
facilitate participation without the need to hire professionals. For 
example, the Commission will release an online tutorial that will help 
applicants understand the procedures for filing the auction short-form 
applications (FCC Form 175). The Commission will offer other 
educational opportunities for applicants in Auction 105 to familiarize 
themselves with the FCC Auction Application System and the bidding 
system. By providing these resources as well as the resources discussed 
below, the Commission expects small business entities that use the 
available resources to experience lower participation and compliance 
costs.
    227. 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 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.''
    228. The Commission has taken steps to minimize any economic impact 
of its auction procedures on small entities

[[Page 22646]]

businesses through, among other things, the many free resources the 
Commission provides to potential auction participants. Consistent with 
the past practices in prior auctions, small entities that are potential 
participants will have access to detailed educational information and 
Commission personnel to help guide their participation in Auction 105, 
which should alleviate any need to hire professionals. More 
specifically, small entities and other auction participants may seek 
clarification of or guidance on complying with competitive bidding 
rules and procedures, reporting requirements, and using the bidding 
system. Additionally, an FCC Auctions Hotline will provide to small 
entities one-on-one access to Commission staff for information about 
the auction process and procedures. Further, the FCC Auctions Technical 
Support Hotline is another resource that provides technical assistance 
to applicants, including small business entities, on issues such as 
access to or navigation within the electronic FCC Form 175 and use of 
the bidding system. Small entities and other would-be participants will 
also be provided with various materials on the pre-bidding process in 
advance of the short-form application filing window, which includes 
step-by-step instructions on how to complete FCC Form 175. In addition, 
small entities will have access to the web-based, interactive online 
tutorials produced by Commission staff to familiarize themselves with 
auction procedures, filing requirements, bidding procedures, and other 
matters related to an auction.
    229. Various databases and other sources of information, including 
the Auctions program websites and copies of Commission decisions, are 
available to the public without charge, providing a low-cost mechanism 
for small businesses to conduct research prior to and throughout the 
auction. Prior to and at the close of Auction 105, the Commission will 
post public notices on the Auctions website, which articulate the 
procedures and deadlines for the auction. The Commission will make this 
information easily accessible and without charge to benefit all Auction 
105 applicants, including small entities, thereby lowering their 
administrative costs to comply with the Commission's competitive 
bidding rules.
    230. Eligible bidders will be given an opportunity to become 
familiar with auction procedures and the bidding system by 
participating in a mock auction. Eligible bidders will have access to a 
user guide for the bidding system, bidding file formats, and an online 
bidding procedures tutorial in advance of the mock auction. Further, 
the Commission intends to conduct Auction 105 electronically over the 
internet using a web-based auction system that eliminates the need for 
small entities and other bidders to be physically present in a specific 
location. These mechanisms are made available to facilitate 
participation in Auction 105 by all eligible bidders and may result in 
significant cost savings for small entities that use these 
alternatives. Moreover, the adoption of bidding procedures in advance 
of the auction, consistent with statutory directive, is designed to 
ensure that the auction will be administered predictably and fairly for 
all participants, including small businesses.
    231. Another step taken to minimize the economic impact for small 
entities participating in Auction 105 is the Commission's adoption of 
bidding credits for small businesses. In accordance with the service 
rules applicable to the PALs to be offered in Auction 105, bidding 
credit discounts will be available to eligible small businesses and 
small business consortiums on the following basis: (1) A bidder with 
attributed average annual gross revenues that do not exceed $55 million 
for the preceding three years is eligible to receive a 15% discount on 
its winning bid or (2) a bidder with attributed average annual gross 
revenues that do not exceed $20 million for the preceding three years 
is eligible to receive a 25% discount on its winning bid. Eligible 
applicants can receive only one of the available bidding credits--not 
both.
    232. The total amount of bidding credit discounts that may be 
awarded to an eligible small business is capped at $25 million. The 
Commission adopts a $10 million cap on the overall amount of bidding 
credits that any winning small business bidder may apply to winning 
licenses in counties located within any PEA with a population of 
500,000 or less. Based on the technical characteristics of the 3550-
3650 MHz band and the Commissions analysis of past auction data, the 
Commission anticipates that the caps will allow the majority of small 
businesses to take full advantage of the bidding credit program, 
thereby lowering the relative costs of participation for small 
businesses.
    233. These procedures for the conduct of Auction 105 constitute the 
more specific implementation of the competitive bidding rules 
contemplated by Parts 1 and 96 of the Commission's rules and the 
underlying rulemaking orders, including the 2015 3.5 GHz Report and 
Order and the 2018 3.5 GHz Report and Order, and relevant competitive 
bidding orders, and are fully consistent therewith.
    234. Report to Congress. The Commission will send a copy of the 
Auction 105 Procedures Public Notice, including the Supplemental FRFA, 
in a report to Congress pursuant to the Congressional Review Act. In 
addition, the Commission will send a copy of the Auction 105 Procedures 
Public Notice, including the Supplemental FRFA to the Chief Counsel for 
Advocacy of the SBA. A copy of the Auction 105 Procedures Public 
Notice, and Supplemental FRFA (or summaries thereof), will also be 
published in the Federal Register.

Federal Communications Commission.
Cecilia Sigmund,
Federal Register Liaison Officer.
[FR Doc. 2020-07584 Filed 4-22-20; 8:45 am]
 BILLING CODE 6712-01-P