Rural Digital Opportunity Fund Phase I Auction Scheduled for October 29, 2020; Notice and Filing Requirements and Other Procedures for Auction 904, 36758-36786 [2020-13216]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 85, Number 118 (Thursday, June 18, 2020)]
[Rules and Regulations]
[Pages 36758-36786]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13216]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 54

[AU Docket No. 20-34; WC Docket No. 10-90; WC Docket No. 19-126; FCC 
20-77; FRS 16853]


Rural Digital Opportunity Fund Phase I Auction Scheduled for 
October 29, 2020; Notice and Filing Requirements and Other Procedures 
for Auction 904

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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SUMMARY: This document summarizes procedures for the Rural Digital 
Opportunity Fund Phase I Auction (Auction 904). The Auction 904 
Procedures Public Notice summarized here is intended to familiarize 
applicants with the procedures and other requirements governing 
participation in Auction 904 by providing details regarding the 
procedures, terms, conditions, dates, and deadlines, as well as an 
overview of the post-auction application processes.

DATES: Applications to participate in Auction 904 must be submitted 
prior to 6 p.m. Eastern Time (ET) on July 15, 2020. Bidding in Auction 
904 is scheduled to begin on October 29, 2020.

FOR FURTHER INFORMATION CONTACT: For further information regarding this 
proceeding, contact Mark Montano in the Auctions Division of the Office 
of Economics and Analytics at (202) 418-0660 or Heidi Lankau in the 
Telecommunications Access and Policy Division, Wireline Competition 
Bureau, (202) 418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Public Notice 
(Auction 904 Procedures Public Notice), AU Docket No. 20-34; WC Docket 
No. 10-90; WC Docket No. 19-126; FCC 20-77, adopted on June 9, 2020, 
and released on June 11, 2020. The complete text of the document, 
including attachments and any related documents, is available for 
public inspection and copying from 8 a.m. to 4:30 p.m. ET Monday 
through Thursday or from 8 a.m. to 11:30 a.m. ET on Fridays in the FCC 
Reference Information Center, 445 12th Street SW, Room CY-A257, 
Washington, DC 20554, except when Commission Headquarters is otherwise 
closed to visitors. See Public Notice, Restrictions on Visitors to FCC 
Facilities, March 12, 2020. The complete text is also available on the 
Commission's website at https://www.fcc.gov/auction/904 or by using the 
search function for AU Docket No. 20-34 on the Commission's ECFS web 
page at www.fcc.gov/ecfs/. Alternative formats (braille, large print, 
electronic files, audio format) 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. Introduction

    1. By the Auction 904 Procedures Public Notice, the Commission 
establishes procedures for Phase I of the Rural Digital Opportunity 
Fund auction (Auction 904). The auction will award up to $16 billion 
over 10 years to service providers that commit to offer voice and 
broadband services to fixed locations in eligible unserved high-cost 
census blocks. Bidding in the auction is scheduled to begin on October 
29, 2020.
    2. Auction 904 will be the Commission's second auction to award 
ongoing high-cost universal service support through competitive bidding 
in a multiple-round, reverse auction and follows the successful Connect 
America Fund Phase II auction (Auction 903) in

[[Page 36759]]

2018. The bidding procedures will be implemented through the Auction 
904 bidding system, which will enable a bidder to express in a simple 
and orderly way the amount of support it needs to provide a specified 
level of service to a specified set of eligible areas.
    3. Prospective applicants should review carefully the Commission's 
orders and public notices relating to the Rural Digital Opportunity 
Fund, including the Rural Digital Opportunity Fund Order, 85 FR 13773 
(Mar. 10, 2020). Prospective applicants should also familiarize 
themselves with the Commission's general universal service rules, 
contained in 47 CFR part 54, including Sec. Sec.  54.313, 54.316, and 
54.320; the rules for the Rural Digital Opportunity Fund specifically, 
contained in 47 CFR 54.801-54.806; and the competitive bidding rules 
for universal service support contained in 47 CFR 1.21000-1.21004. 
Additionally, prospective Auction 904 bidders may find it helpful to 
familiarize themselves with the Commission's generally applicable 
competitive bidding rules, including recent amendments and 
clarifications, as well as Commission decisions in proceedings 
regarding competitive bidding procedures, application requirements, and 
obligations of Commission licensees and authorization holders.
    4. The terms contained in the Commission's rules, relevant orders, 
and public notices are generally applicable to all bidders. 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 interested parties. The Office of 
Economics and Analytics (OEA) and the Wireline Competition Bureau 
(Bureau) may establish further procedures during the course of this 
auction. It is the responsibility of all applicants to remain current 
with all Commission rules and with all public notices pertaining to 
this auction.

II. Auction Specifics

    5. Auction Title and Start Date. The auction will be referred to as 
Auction 904--Rural Digital Opportunity Fund Phase I. Bidding in Auction 
904 will begin on October 29, 2020. The initial schedule for bidding 
rounds will be announced by public notice approximately one week before 
the start of the auction.
    6. Auction Dates and Deadlines. The Auction Application Tutorial 
will be available via the internet by June 15, 2020. The Short-Form 
Application (FCC Form 183) filing window opens July 1, 2020 at 12:00 
noon ET. The Short-Form Application (FCC Form 183) filing window 
deadline is July 15, 2020 at 6:00 p.m. ET. The Auction Bidding Tutorial 
will be available via the internet by October 14, 2020. The mock 
auction begins October 26, 2020. The auction bidding begins on October 
29, 2020.
    7. Requirements for Participation. Those wishing to participate in 
this auction must submit a short-form application (FCC Form 183) 
electronically prior to 6:00 p.m. ET, July 15, 2020, following the 
electronic filing procedures that will be provided in a public notice 
to be released in advance of the opening of the short-form application 
filing window and comply with all provisions outlined in the document 
and applicable Commission rules.

III. Public Interest Obligations

    8. Each long-form applicant that is authorized to receive Rural 
Digital Opportunity Fund support after the close of the auction will be 
required to offer voice and broadband services meeting the relevant 
performance requirements to fixed locations in exchange for receiving 
monthly payments of support over the 10-year support term. It must make 
these services available to the required number of locations associated 
with the eligible census blocks covered by its winning bids along with 
certain other newly built locations upon reasonable request. The 
initial number of locations that a support recipient is required to 
serve in the eligible census blocks is aggregated to the census block 
group (CBG) level. In the auction, the Commission will accept bids for 
service at one of four performance tiers, each with its own minimum 
download and upload speed and usage allowance, and for either high or 
low latency service. Long-form applicants that become authorized to 
receive Rural Digital Opportunity Fund support must deploy broadband 
service that meets the performance tier and latency requirements 
associated with their winning bids. Support recipients must also test 
and certify compliance with the relevant performance requirements in 
accordance with the uniform framework that has been adopted for 
measuring and reporting on the performance of high-cost support 
recipients' service.

----------------------------------------------------------------------------------------------------------------
            Performance tier                         Speed              Monthly usage allowance       Weight
----------------------------------------------------------------------------------------------------------------
Minimum.................................  >= 25/3 Mbps..............  >= 250 GB or U.S. median,               50
                                                                       whichever is higher.
Baseline................................  >= 50/5 Mbps..............  >= 250 GB or U.S. median,               35
                                                                       whichever is higher.
Above Baseline..........................  >= 100/20 Mbps............  >= 2 terabytes (TB).......              20
Gigabit.................................  >= 1 Gbps/500 Mbps........  >= 2 TB...................               0
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
              Latency                    Requirement          Weight
------------------------------------------------------------------------
Low Latency.......................  <=100 ms............               0
High Latency......................  <=750 ms & MOS >=4..              40
------------------------------------------------------------------------

    9. Rural Digital Opportunity Fund support recipients are permitted 
to offer a variety of broadband service offerings as long as they offer 
at least one standalone voice plan and one service plan that provides 
broadband at the relevant performance tier and latency requirements, 
and these plans must be offered at rates that are reasonably comparable 
to rates offered in urban areas. For voice service, a support recipient 
will be required to certify that the pricing of its service is no more 
than the applicable reasonably comparable rate benchmark that the 
Bureau releases each year. For broadband services, a support recipient 
will be required to certify that the pricing of a service that meets 
the required performance tier and latency performance requirements is 
no more than the applicable reasonably comparable rate benchmark, or 
that it is no more than the non-promotional price the support recipient 
charges for a

[[Page 36760]]

comparable fixed wireline broadband service in urban areas in the state 
or U.S. territory where the eligible telecommunications carrier (ETC) 
receives support.
    10. The Commission has adopted specific service milestones that 
require each long-form applicant authorized to receive Rural Digital 
Opportunity Fund support to offer service to a portion of the number of 
locations associated with the eligible census blocks included in its 
authorized winning bids in a state. Each support recipient must begin 
commercially offering service to 40 percent of the CAM-calculated 
number of locations covered by authorized winning bids in a state by 
the end of the third full calendar year following the funding 
authorization, and to an additional 20 percent each year thereafter. A 
support recipient is deemed to be commercially offering voice and/or 
broadband service to a location if it provides service to the location 
or could provide it within 10 business days upon request. All ETCs must 
advertise the availability of their voice services throughout their 
service areas, and support recipients must also advertise the 
availability of their broadband services within their service areas.
    11. The Commission directed the Bureau to publish revised location 
counts before the end of service milestone year six. In areas where the 
revised location total is higher than the number of CAM-calculated 
locations, support recipients will be required to have begun 
commercially offering service to 100 percent of the CAM-calculated 
location count by the end of the sixth calendar year. Such support 
recipients must then offer service to 100 percent of the revised 
location count by the end of the eighth calendar year. In areas where 
there are fewer locations than calculated by the CAM, support 
recipients must notify the Bureau no later than March 1 following the 
fifth year of deployment. Upon confirmation by the Bureau, such a 
support recipient will be required to reach 100 percent of the new 
number by the end of the sixth calendar year. All support recipients 
must also offer service on reasonable request to locations built 
subsequently to the revised location count announced by the Bureau but 
prior to the end of service milestone year eight.
    12. Compliance with service milestones will be determined at the 
state level. The Commission will verify that the support recipient 
offers the required service to the total number of locations across all 
the eligible census blocks included in all of the support recipient's 
authorized bid areas (i.e., CBGs) in a state. If a support recipient is 
authorized to receive support in a state for different performance tier 
and latency combinations, it will be required to demonstrate that it is 
offering service meeting the relevant performance requirements to the 
required number of locations for each performance tier and latency 
combination within that state.
    13. The Commission adopted reporting requirements for support 
recipients in the Rural Digital Opportunity Fund Order. These include 
reporting a list of geocoded locations each year to which the support 
recipient is offering the required voice and broadband services, making 
a certification when the support recipient has met service milestones, 
and submitting the annual FCC Form 481 report. A support recipient that 
fails to offer service to the required number of locations by a service 
milestone will be subject to non-compliance measures. A support 
recipient will also be subject to any non-compliance measures that have 
been adopted in conjunction with the methodology for high-cost support 
recipients to measure and report network performance.
    14. All Auction 904 support recipients will be subject to the 
Commission's National Security Supply Chain proceeding, including the 
rule that ``no universal service support may be used to purchase, 
obtain, maintain, improve, modify, or otherwise support any equipment 
or services produced or provided by any company posing a national 
security threat to the integrity of communications networks or the 
communications supply chain.'' The prohibition on using universal 
service funds applies ``to upgrades and maintenance of existing 
equipment and services.''

IV. Eligible Areas

    15. The Commission will use CBGs containing one or more eligible 
census blocks as the minimum biddable area in the auction. The Bureau 
released an initial list of eligible census blocks for Auction 904 on 
March 17, 2020, based on June 30, 2019 FCC Form 477 data. The list 
includes just under 65,000 CBGs containing eligible census blocks and 
just over 33,000 census tracts containing eligible census blocks based 
on FCC Form 477 data as of June 30, 2019.
    16. The Commission will round the reserve price for each CBG to the 
nearest dollar consistent with the rounding approach for the CAF II 
auction. In the Rural Digital Opportunity Fund Order, the Commission 
adopted a methodology for calculating area-specific reserve prices. 
Because auction participants will place bids for annual support 
amounts, the Commission will multiply the monthly reserve price for a 
CBG by 12 and round that figure to the nearest dollar. Thus, any CBG 
that has an annual reserve price of less than $0.50 would be rounded 
down to $0 and will be ineligible for Auction 904.
    17. Prior to the short-form application deadline, the Bureau will 
release a list and map of eligible census blocks based on the most 
recent publicly available FCC Form 477 data and incorporating comments 
received during the limited challenge process. The list will include 
the reserve price for each CBG containing eligible census blocks and 
the number of locations associated with each CBG as determined by the 
CAM.
    18. The U.S. Department of Agriculture (USDA) announced that April 
15, 2020 was the application deadline for Round 2 of its ReConnect 
Program. The Commission directs the Bureau to remove from that list any 
areas that will be substantially overlapped by an announced ReConnect 
Program awardee and to publish a final list of eligible areas at least 
14 days prior to the October 29 auction start date.

V. Applying To Participate in Auction 904

    19. General Information Regarding Short-Form Applications. An 
application to participate in Auction 904, referred to as a short-form 
application or FCC Form 183, provides information used to determine 
whether the applicant has the legal, technical, and financial 
qualifications to participate in a Commission auction for universal 
service support. The short-form application is the first part of the 
Commission's two-phased auction application process. In the first 
phase, eligibility to participate in the auction is based on an 
applicant's short-form application and certifications. A potential 
applicant must take seriously its duties and responsibilities and 
carefully determine before filing a short-form application that it is 
able to meet the public interest obligations associated with Rural 
Digital Opportunity Fund support if it ultimately becomes a winning 
bidder in the auction. The Commission's determination that an applicant 
is qualified to participate in Auction 904 does not guarantee that the 
applicant will also be deemed qualified to receive support if it 
becomes a winning bidder. In the second phase of the process, each 
winning bidder (or its designee) must file a more comprehensive long-
form application (FCC Form 683), which the Commission will review to 
determine if

[[Page 36761]]

the applicant should be authorized to receive support for the winning 
bids.
    20. An entity seeking to participate in Auction 904 must file a 
short-form application electronically via the Auction Application 
System prior to 6:00 p.m. ET on July 15, 2020, following the procedures 
prescribed in the FCC Form 183 Instructions. An applicant must submit 
operational and financial information demonstrating that it can meet 
the public interest obligations associated with the performance tier 
and latency combination(s) for which it intends to bid. An applicant 
that files a short-form application is subject to the Commission's rule 
prohibiting certain communications beginning at the deadline for filing 
short-form applications--6:00 p.m. ET on July 15, 2020.
    21. An applicant bears full responsibility for submitting an 
accurate, complete, and timely short-form application. An applicant 
should consult the Commission's rules to ensure that, in addition to 
the materials described in the document, all required information is 
included in its short-form application. To the extent the information 
in the document 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 904 and/
or use the contact information provided in the document to consult with 
Commission staff well in advance of the application deadline.
    22. Each applicant must make a series of certifications under 
penalty of perjury on its FCC Form 183 related to the information 
provided in its application and its participation in the auction, and 
each applicant must confirm that it is legally, technically, 
financially, and otherwise qualified to receive Rural Digital 
Opportunity Fund support. If an Auction 904 applicant fails to make the 
required certifications in its FCC Form 183 by the filing deadline, its 
application will be deemed unacceptable for filing and cannot be 
corrected after the filing deadline.
    23. An applicant should note that submitting a short-form 
application (and any amendments thereto) constitutes a representation 
by the certifying official that he or she is an authorized 
representative of the applicant 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, 
the forfeiture of universal service support, license forfeitures, 
ineligibility to participate in future auctions, and criminal 
prosecution.
    24. The same entity may not bid based on more than one auction 
application, i.e., as more than one applicant. Therefore, an entity 
should not submit more than one short-form application for Auction 904. 
If an entity submits multiple short-form applications, only one 
application may be the basis for that entity to become qualified to 
bid. Similarly, the filing of applications in Auction 904 by multiple 
entities controlled by the same individual or set of individuals will 
not be permitted.
    25. Commission staff will review all timely submitted applications 
to determine whether each application complies with the application 
requirements and contains 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. This 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. After the review of resubmitted applications 
is complete, a public notice will be released identifying the 
applicants that are qualified to bid in the auction.
    26. Disclosure of Agreements and Bidding Arrangements. An applicant 
must identify in its short-form application all real parties in 
interest to any agreements relating to the participation of the 
applicant in the competitive bidding for Rural Digital Opportunity Fund 
support. This disclosure requirement applies to any arrangements with 
parties that are applying to participate in Auction 904 as well as 
parties that are not. An applicant that discloses any such agreement(s) 
must provide in its short-form application a brief description of each 
agreement.
    27. An applicant must certify under penalty of perjury in its 
short-form application that it has disclosed all real parties-in-
interest to any agreements involving the applicant's participation in 
Auction 904. An applicant must also certify under penalty of perjury 
that it has not entered into any explicit or implicit agreements, 
arrangements, or understandings of any kind related to the support to 
be sought through Auction 904, other than those disclosed in its 
application.
    28. If parties agree in principle on all material terms prior to 
the application filing deadline, each party to the agreement that is 
submitting an auction application must provide a brief description of, 
and identify the other party or parties to, the agreement on its 
respective FCC Form 183, even if the agreement has not been reduced to 
writing.
    29. Ownership Disclosure Requirements. Each applicant must comply 
with the ownership disclosure requirements in Sec. Sec.  1.2112(a) and 
54.804(a)(1) of the Commission's rules. 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 
percent or more. Each applicant is responsible for ensuring that 
ownership information submitted in its short-form application is 
complete and accurate.
    30. An applicant may have previously filed an FCC Form 602 
ownership disclosure information report or filed an application for a 
previous auction in which the applicant disclosed ownership 
information. The most current ownership information contained in any 
FCC Form 602 or previous auction application on file with the 
Commission that used the same FRN the applicant is using to submit its 
FCC Form 183 will automatically be pre-filled into certain ownership 
sections on the applicant's FCC Form 183 if such information is in an 
electronic format compatible with FCC Form 183. Each applicant must 
carefully review any ownership information automatically entered into 
its FCC Form 183, including any ownership attachments, to confirm that 
all information supplied on FCC Form 183 is complete and accurate as of 
the application filing deadline for Auction 904. Any information that 
needs to be corrected or updated must be changed directly in FCC Form 
183.
    31. Specific Universal Service Certifications. An applicant must 
certify that it is in compliance with all statutory and regulatory 
requirements for receiving the universal service support it seeks. 
Alternatively, an applicant may certify that it acknowledges that it 
must be in compliance with such requirements before being authorized to 
receive Rural Digital Opportunity Fund support.
    32. An applicant must certify that it will make any default payment 
that may be required pursuant to Sec.  1.21004, and that it is aware 
that if its application is shown to be defective, the application

[[Page 36762]]

may be dismissed without further consideration and penalties may apply.
    33. Specific Auction 904 Eligibility Requirements and 
Certifications. Applicants and State Selections. Each applicant must 
identify in its short-form application each state in which it intends 
to bid for support in Auction 904. An applicant will be able to place 
bids for eligible areas only in the states identified in its 
application. An applicant should take appropriate steps to ensure that 
the state(s) it selects fully reflect its bidding intentions because an 
applicant may not select any additional states in which to bid after 
the initial short-form application filing window closes.
    34. The submission of more than one application by commonly 
controlled entities for Auction 904 is prohibited. A ``controlling 
interest'' for purposes of the auction is an individual or entity with 
positive or negative de jure or de facto control of the applicant.
    35. A Divide Winning Bids process will be available to allow a 
winning bidder to assign some or all of its winning bids to related 
entities or individual members of a consortium.
    36. If Commission staff identifies separate applicants that are 
commonly controlled, all such applications would be deemed incomplete 
on initial review. The applicants would be informed of the issue, and 
at most one of the commonly controlled applicants would ultimately be 
deemed qualified to bid, assuming that there were no remaining issues 
with its application. Commonly controlled entities should coordinate on 
the submission of one application before the short-form application 
deadline.
    37. Furthermore, parties submitting separate applications are 
prohibited from entering into joint bidding arrangements for Auction 
904. ``Joint bidding arrangements'' are arrangements between or among 
applicants that (1) relate to any eligible area in Auction 904, and (2) 
address or communicate bids or bidding strategies, including 
arrangements regarding Rural Digital Opportunity Fund support levels 
(i.e., price point percentages) and specific areas on which to bid, as 
well as any arrangements relating to the post-auction market structure 
in an eligible area. If two or more applicants are parties to an 
agreement that falls within this definition, they would be prohibited 
from bidding in Auction 904.
    38. Joint ventures and bidding consortia that do not involve two or 
more entities that are individual applicants (or control or are 
controlled by an applicant) are permitted for Auction 904. Only joint 
bidding arrangements where the parties include two or more individual 
auction applicants are prohibited. The Commission cautions non-
applicant entities that any joint venture, consortium, or other 
arrangement into which they enter must be consistent with the antitrust 
laws and must not be otherwise prohibited by law.
    39. Each winning bidder is required to submit in its long-form 
application any updated information regarding the agreements, 
arrangements, or understandings related to its Auction 904 support 
disclosed in its short-form application. A winning bidder may also be 
required to disclose in its long-form application the specific terms, 
conditions, and parties involved in any agreement into which it has 
entered and the agreement itself.
    40. Operational History and Submission of Financial Statements. 
There are two pathways for an applicant to demonstrate its operational 
experience and financial qualifications to participate in Auction 904. 
These pathways vary depending on whether the applicant has at least two 
years of operational experience in the provision of voice, broadband, 
and/or electric distribution or transmission services.
    41. First Eligibility Pathway. An applicant can certify, if 
applicable, on its FCC Form 183 that it has provided voice, broadband, 
and/or electric distribution or transmission services for at least two 
years prior to the short-form application filing deadline (or that the 
applicant is the wholly owned subsidiary of an entity that has done 
so), specify the number of years it has been operating, and identify 
the services it has provided. An applicant will be deemed to have 
started providing a service on the date it began commercially offering 
that service to end users.
    42. If an applicant certifies that it has been providing voice and/
or broadband services for at least two years, it must certify that it 
(or its parent company, if it is a wholly owned subsidiary) has filed 
FCC Form 477s as required during that time period. And it must identify 
the FRNs it (or its parent company) used to file the FCC Form 477s for 
the relevant filing periods. The relevant FCC Form 477 filing periods 
include data as of December 31, 2019; June 30, 2019; and December 31, 
2018.
    43. If the applicant certifies that it has been providing only 
electric distribution or transmission services for at least two years 
(i.e., it has not also been providing voice or broadband service for at 
least two years), it must submit with its short-form application 
qualified operating or financial reports that it (or its parent 
company, if it is a wholly owned subsidiary) filed with the relevant 
financial institution (i.e., the Rural Utilities Service (RUS), the 
National Rural Utilities Cooperative Finance Corporation (CFC), or 
CoBank) in 2018 and 2019 that demonstrate that the applicant (or its 
parent company) has been operating for at least two years. The 
applicant must also submit a certification that the submission is a 
true and accurate copy of the forms that were submitted to the relevant 
financial institution. The Commission will accept the RUS Form 7, 
Financial and Operating Report Electric Distribution; the RUS Form 12, 
Financial and Operating Report Electric Power Supply; the CFC Form 7, 
Financial and Statistical Report; the CFC Form 12, Operating Report; 
the CoBank Form 7; or the functional replacement of one of these 
reports.
    44. If an applicant meets the foregoing requirements and it (or its 
parent company) is audited in the ordinary course of business, the 
applicant must also submit its (or its parent company's) financial 
statements from the prior fiscal year, including balance sheets, net 
income, and cash flow, along with an opinion letter from an independent 
certified public accountant and the accompanying notes. An applicant 
must submit its (or its parent company's) 2018 audited financial 
statements. However, an applicant may submit its fiscal year-end 2019 
audited financial statements if they are finalized before the short-
form application deadline.
    45. If an applicant (or its parent company) is not audited in the 
ordinary course of business and the applicant does not submit its 
audited financial statements with the short-form application, it must 
submit its (or its parent company's) fiscal year-end 2018 unaudited 
financial statements with its short-form application, including balance 
sheet, net income, and cash flow, and certify that the long-form 
applicant will obtain and submit its (or its parent company's) audited 
financial statements from the prior fiscal year within 180 days after 
being announced as a winning bidder. If an applicant certifies in its 
short-form application that it will submit audited financial statements 
during the long-form application process, but such audited financial 
statements are not submitted when required, the winning bidder or long-
form applicant will be deemed to be in default and subject to a base 
forfeiture of $50,000.
    46. Second Eligibility Pathway. An applicant that does not have at 
least two years of operational experience must submit with its short-
form application its (or its parent company's) financial

[[Page 36763]]

statements that are audited by an independent certified public 
accountant from the three most recent fiscal years (i.e., 2016, 2017, 
and 2018), including balance sheets, net income, and cash flow as well 
as the audit opinion and accompanying notes. Such an applicant must 
also submit with its short-form application a letter of interest from a 
qualified bank stating that the bank would provide a letter of credit 
to the applicant if the applicant becomes a winning bidder and is 
selected for bids of a certain dollar amount. The letter should include 
the maximum dollar amount for which the bank would be willing to issue 
a letter of credit to the applicant and a statement that the bank would 
be willing to issue a letter of credit that is substantially in the 
same form as set forth in the model letter of credit provided in the 
Rural Digital Opportunity Fund Order.
    47. Financial Qualifications. An applicant submitting audited 
financial statements with its short-form application must identify 
whether it has a clean opinion letter on its submitted audited 
financial statements. An opinion letter is clean if it has an 
unmodified opinion without an emphasis-of-matter paragraph about the 
entity's ability to continue as a going concern. An unmodified opinion 
is one where ``the auditor concludes that the [audited] financial 
statements are presented fairly, in all material respects, in 
accordance with the applicable financial reporting framework.''
    48. An applicant that submits the required audited financial 
statements and has a clean opinion letter on the submitted audited 
financial statements would be deemed financially qualified to 
participate in the auction.
    49. For an applicant that does not have a clean opinion letter on 
all submitted audited financial statements, Commission staff will first 
determine whether the issue is material to the applicant's 
participation in the auction. If so, any such applicants--and any 
applicants that submit unaudited financial statements--will be subject 
to a review of the full set of financial statements submitted with the 
short-form application, as well as other information submitted with the 
application and/or information submitted to the Commission in other 
contexts (e.g., financials filed with a FCC Form 481, revenues reported 
in FCC Form 499, etc.). To the extent this information does not 
sufficiently demonstrate that an applicant is financially qualified, 
the application will be deemed incomplete, and Commission staff may 
request further information from the applicant during the application 
resubmission period.
    50. The Commission staff's determination at the short-form stage 
that an applicant is financially qualified to bid does not preclude a 
determination at the long-form application review stage that an 
applicant is not authorized to receive Rural Digital Opportunity Fund 
support. During the long-form application stage, a winning bidder must: 
(1) Certify that it will have available funds for all project costs 
that exceed the amount of Rural Digital Opportunity Fund support for 
the first two years, (2) submit a description of how the required 
construction will be funded, and (3) obtain a letter of credit from a 
bank meeting the Commission's requirements.
    51. Eligibility to Bid for Performance Tier and Latency 
Combination. The Commission will collect information to determine, at 
the short-form application stage and in advance of the start of bidding 
in the auction, each applicant's eligibility to bid for the performance 
tier and latency combinations it has selected in its application for 
each state.
    52. The Commission will use the short-form application to assess 
the likelihood that an applicant would not default if selected as a 
winning bidder. If the applicant becomes qualified to bid in Auction 
904 and subsequently becomes a winning bidder, Commission staff will 
evaluate the information submitted in the long-form application and 
will rely on an eligible bank's willingness to issue the applicant a 
letter of credit to determine whether an applicant is reasonably 
capable of meeting its Rural Digital Opportunity Fund auction 
obligations in the specific areas where it has winning bids. 
``Reasonably capable'' refers to the Commission staff's reasonable 
expectation that the applicant can meet those obligations. A 
determination at the short-form stage that an applicant is eligible to 
bid for a performance tier and latency combination would not preclude a 
determination at the long-form application stage that an applicant does 
not meet the technical qualifications for the performance tier and 
latency combination and thus will not be authorized to receive Rural 
Digital Opportunity Fund support. In addition, the Commission's 
adoption of certain non-compliance measures in the event of default--
both before a winning bidder is authorized for support and if a support 
recipient does not fulfill its Rural Digital Opportunity Fund 
obligations after it has been authorized--should encourage each 
applicant to select performance tier and latency combinations with 
public interest obligations that it can reasonably expect to meet. The 
Commission adopts (1) the information and showing each applicant must 
submit to establish its qualifications for the performance tier and 
latency combinations it has selected on its application, and (2) the 
process Commission staff will use to determine whether an applicant is 
eligible to bid on those combination(s).
    53. Selecting Performance Tier and Latency Combinations. Each 
applicant must select in its short-form application the performance 
tier and latency combination(s) for which it intends to bid in each 
state where it seeks support. An applicant may select more than one 
performance tier and latency combination in a state. For each tier and 
latency combination, an applicant must indicate the technology or 
technologies it intends to use to meet the associated requirements. If 
an applicant intends to use spectrum, it must also indicate the 
spectrum band(s) and total amount of uplink and downlink bandwidth (in 
megahertz) that it has access to for the last mile for each performance 
tier and latency combination it selected in each state.
    54. Operational Information. An applicant must submit in its short-
form application sufficient operational information regarding its 
experience providing voice, broadband, and/or electric distribution or 
transmission service and its plans for provisioning service if awarded 
support. An applicant must submit high-level operational information to 
complete its operational showing and demonstrate that it can be 
expected to be reasonably capable of meeting the public interest 
obligations (e.g., speed, usage, latency, and service milestones) for 
each performance tier and latency combination selected.
    55. Eligibility to bid for specific tier and latency combinations 
will be determined on a state-by-state basis. For each selected 
performance tier and latency combination, an applicant will be required 
to demonstrate that it is reasonably capable of meeting the relevant 
public interest obligations for each state it selects and to explain 
how it intends to provision service if awarded support.
    56. An applicant must answer the questions listed in Appendix A to 
the Auction 904 Comment Public Notice for each state it selects in its 
application. If an applicant is a consortium/joint venture, or holding/
parent company, it should answer the questions for each operating 
company that intends to provide service if the consortium/joint

[[Page 36764]]

venture or holding/parent company is named as a winning bidder.
    57. An applicant must address both voice and broadband services in 
response to the questions. An applicant that intends to implement a new 
system to meet its voice requirements must provide additional specific 
information about that system. An ETC must offer qualifying voice 
service using its own facilities, at least in part, and the Commission 
expects that an applicant will conduct the due diligence necessary to 
ensure that it can meet this requirement.
    58. If Commission staff is unable to find that an applicant can 
reasonably be expected to meet the relevant public interest obligations 
based on the information submitted in its short-form application, 
Commission staff would deem the application incomplete, and the 
applicant would have another opportunity during the application 
resubmission period to submit additional information to demonstrate 
that it meets this standard. Commission staff would notify the 
applicant that additional information is required to assess the 
applicant's eligibility to bid for any or all of the specific states 
and performance tier and latency combinations selected in its short-
form application. During the application resubmission period, an 
applicant would be able to submit additional information to establish 
its eligibility to bid for the relevant performance tier and latency 
combinations. An applicant would also have the option of selecting a 
lesser performance tier and latency combination for which it might be 
more technically qualified. Once the application resubmission period 
has ended, Commission staff would make its final determination of an 
applicant's eligibility to bid for any or all of the specific states 
and performance tier and latency combinations selected in its 
application, and then notify each applicant in which states and for 
which performance tier and latency combinations it is eligible to bid. 
The bidding system will be configured to permit a bidder to bid only in 
the state(s) and for the performance tier and latency combinations on 
which it is deemed eligible to bid.
    59. Responses to the questions in Appendix A to the Auction 904 
Procedures Public Notice and any associated supporting documentation 
will be treated as confidential and withheld from routine public 
inspection. An applicant need not submit a Sec.  0.459 confidentiality 
request to seek protection of this information from public disclosure.
    60. Assumptions. The Commission adopts certain assumptions that an 
applicant will need to make about network usage and subscription rates 
when determining, for purposes of its short-form application, whether 
it can meet the public interest obligations for its selected 
performance tier and latency combination(s) if it becomes a winning 
bidder and is authorized to receive Auction 904 support.
    61. First, an applicant must assume that it will offer service to 
at least 95 percent of the required number of locations across its bids 
in each state. The Commission's rules require that each long-form 
applicant provide in its long-form application a certification by a 
professional engineer that the applicant's proposed network can deliver 
the required service to at least 95 percent of the required number of 
locations. Rural Digital Opportunity Fund support recipients will 
ultimately be required to offer service to 100 percent of the actual 
locations in their service areas and offer service to newly built 
locations upon reasonable request that were built prior to milestone 
year eight. Consequently, Commission staff will also review the 
information provided in the short-form and long-form applications to 
verify that the applicant has the plans and capability to scale the 
network if necessary. The Commission cautions potential bidders that, 
after the close of a round, each bid represents an irrevocable offer to 
meet the terms of the bid if it becomes a winning bid. Each winning 
bidder that is authorized to receive Rural Digital Opportunity Fund 
support will be required to offer service in areas where it is 
authorized to receive support. Accordingly, an applicant that becomes a 
qualified bidder should assume for each round of the auction that it 
could be required to offer service meeting the relevant requirements to 
the number of locations across all the bids that it places in each 
state.
    62. Each service provider is required to assume a subscription rate 
of at least 70 percent for both voice services and broadband services 
by the final service milestone when determining whether it can meet the 
public interest obligations for its selected performance tiers and 
latency combinations. A support recipient will not be required to 
demonstrate that it has achieved at least a 70 percent subscription 
rate. Instead, the Commission requires an applicant to assume for 
purposes of its application that it will achieve at least a 70 percent 
subscription rate when engineering its network. Because it may take 
time for an applicant that becomes a winning bidder and is authorized 
to receive Auction 904 support to obtain customers as it builds out its 
network, the Commission will permit an applicant to factor this into 
its engineering submission and make reasonable assumptions about how 
the subscription rate will scale during the build-out term.
    63. Regardless of the assumptions an applicant makes about its 
subscription rate when engineering its network, the applicant must keep 
in mind that its network must be capable of scaling to meet demand. A 
Rural Digital Opportunity Fund recipient cannot report in the High Cost 
Universal Service Broadband Portal that a location is served until it 
can provide service meeting the relevant performance requirements to 
that location within 10 business days after receiving a request.
    64. Spectrum Access. The Rural Digital Opportunity Fund auction 
rules require a short-form applicant that plans to use radiofrequency 
spectrum to demonstrate that it has (1) the proper spectrum use 
authorizations, if applicable; (2) access to operate in the spectrum it 
intends to use; and (3) sufficient spectrum resources to cover peak 
network usage and meet the minimum performance requirements to serve 
the fixed locations in eligible areas. For the described spectrum 
access to be sufficient as of the date of the short-form application, 
the applicant must have obtained any necessary approvals from the 
Commission for the spectrum, if applicable. The Rural Digital 
Opportunity Fund auction short-form application rules also require an 
applicant to certify that it will retain such authorizations for 10 
years.
    65. To demonstrate sufficient access to spectrum, an applicant must 
(i) identify the spectrum bands it will use for last mile, backhaul, 
and any other parts of the network; (ii) describe the total amount of 
uplink and downlink bandwidth (in megahertz) that it has access to in 
such spectrum band(s) for the last mile; (iii) describe the 
authorizations (including leases) it has obtained to operate in the 
spectrum, if applicable; and (iv) list the call signs and/or 
application file numbers associated with its spectrum authorizations, 
if applicable. If an applicant is a consortium/joint venture, or 
holding/parent company, it should make this demonstration for each 
operating company that intends to provide service if the consortium/
joint venture or holding/parent company is named as a winning bidder.
    66. Any applicant that intends to provide service using satellite 
technology must describe in its short-form application its expected 
timing for

[[Page 36765]]

applying for earth station licenses if it has not already obtained 
these licenses. An applicant that intends to obtain microwave 
license(s) for backhaul to meet its public interest obligations must 
describe in its short-form application its expected timing for applying 
for such license(s), if it has not already obtained them.
    67. This spectrum information, combined with the operational and 
financial information submitted in the short-form application, will 
allow an applicant to demonstrate that it has sufficient spectrum 
resources and is reasonably capable of meeting the public interest 
obligations required by its selected performance tier and latency 
combination(s). If a license, lease, or other authorization is set to 
expire prior to the end of the 10-year support term, the Commission 
will infer that the authorization will be able to be renewed when 
determining at the short-form application stage whether an applicant 
has sufficient access to spectrum. However, this inference will in no 
way influence or prejudge the resolution of any future renewal 
application, and if the authorization is not renewed during the support 
term and the support recipient is unable to meet its Rural Digital 
Opportunity Fund obligations, that support recipient will be in default 
and subject to any applicable non-compliance measures.
    68. In Appendix B to the Auction 904 Procedures Public Notice, the 
Commission identifies the licensed and unlicensed spectrum bands that 
it anticipates could be used by a service provider operating in these 
bands to, at a minimum, offer service meeting the requirements for the 
Minimum performance tier provided that the service provider is using 
sufficient bandwidth in the spectrum band(s) and a technology that can 
operate in these spectrum bands consistent with applicable rules and 
regulations. This is a non-exhaustive list of spectrum bands that an 
applicant could potentially use to meet its performance obligations.
    69. In the Rural Digital Opportunity Fund Order, the Commission 
decided that it would permit an applicant that plans to operate in the 
3550-3650 MHz band using a priority access license that will be subject 
to auction with bidding scheduled to begin in July 2020 (Auction 105) 
to indicate the status of its participation in that auction (consistent 
with auction procedures regarding the disclosure of non-public auction-
related information) as long as it provides alternatives for how it 
intends to meet its obligations if it were not awarded a license. The 
Commission will allow an applicant to do the same if it intends to 
participate in the 2.5 GHz Rural Tribal Priority Window this year or is 
in the process of applying for a license following Auction 102 or 
Auction 103. The Commission also extends this option to applicants that 
intend to participate in the 3.7 GHz Service band auction (Auction 107) 
and the Lower 37 GHz band proceeding and to applicants that intend to 
operate in the unlicensed 6 GHz band once it is available. An applicant 
that intends to use this spectrum to meet its Rural Digital Opportunity 
Fund public interest obligations must indicate in its short-form 
application the status of its participation in any relevant proceeding 
and must provide alternatives for if it does not ultimately obtain a 
license or if the timing for these proceedings change such that it is 
not able to obtain a license or otherwise operate in these bands in 
time to meet the interim service milestones.
    70. Collection and Use of Identifiers Associated with Information 
Submitted to the Commission in Other Contexts. Any relevant information 
that an applicant has submitted to the Commission in other contexts may 
be considered for purposes of determining whether the applicant is 
expected to be reasonably capable of meeting the public interest 
obligations for its selected performance tier and latency 
combination(s) if it becomes a winning bidder and is authorized to 
receive Rural Digital Opportunity Fund support. This other information 
would include the following: data reported in FCC Form 477 Local 
Telephone Competition and Broadband Report (FCC Form 477), FCC Form 481 
Carrier Annual Reporting Data Collection Form (FCC Form 481), and FCC 
Form 499-A Annual Telecommunications Reporting Worksheet (FCC Form 499-
A), including non-public information. For example, whether an applicant 
already offers service that meets the public interest obligations 
associated with its selected performance tier and latency 
combination(s) and the number of subscribers to that service may be 
considered.
    71. Applicants must submit in the short-form application any FCC 
Registration Numbers (FRNs) that an applicant or its parent company--
and in the case of a holding company applicant, the operating companies 
identified in its application--has used to submit its FCC Form 477 data 
during the past two years. The Commission will collect FCC Form 477 
FRNs that were used for the following filing periods: data as of 
December 31, 2019; June 30, 2019; and December 31, 2018. Requiring 
submission of the FRNs that an applicant has used for FCC Form 477, 
will allow reviewers to cross-reference FCC Form 477 data that an 
applicant (or a related entity) has filed during the past two years. 
All interested parties should ensure that they have filed and will 
timely file all required FCC Form 477 data.
    72. An applicant must submit in the short-form application any 
study area codes (SACs) indicating that the applicant (or its parent 
company/subsidiaries) is an existing ETC. A holding-company applicant 
must submit the SACs of its operating companies identified in the 
application. An applicant is required by the Commission's short-form 
application rules to disclose its status as an ETC if applicable.
    73. An applicant must submit in the short-form application any FCC 
Form 499 filer identification numbers that the applicant or its parent 
company and, in the case of a holding company, its operating companies 
identified in the application have used to file an FCC Form 499-A in 
the past year, if applicable. Applicants must submit filer 
identification numbers that were used for the April 1, 2020 filing.
    74. Limiting Eligibility to Bid for Certain Performance Tier and 
Latency Combinations. Only applicants that can make a case to bid in 
the Gigabit performance tier are those applicants proposing to use a 
technology: (1) That has a proven track record of offering mass market 
voice and broadband services directly to residential consumers; and (2) 
where there are concrete examples of such technology being used to 
offer service at speeds that would meet the requirements for the higher 
speed tiers or at latency levels meeting the low latency requirements. 
Thus, an applicant that intends to use any form of satellite 
technology, whether geostationary, high earth orbit, medium earth 
orbit, or low earth orbit, will not be allowed to select the Gigabit 
performance tier. An applicant that intends to use geostationary, high 
earth orbit or medium earth orbit satellite technology will not be 
allowed to select low latency. An applicant proposing to use fixed 
wireless or DSL will have the opportunity to demonstrate in its short-
form application to Commission staff that it is reasonably capable of 
offering service meeting the Gigabit performance tier public interest 
obligations even if it has not previously reported offering Gigabit 
broadband service. Likewise, an applicant proposing to use low earth 
orbit satellite technology will have the opportunity to demonstrate in 
its short-form application to Commission staff that it is reasonably 
capable of offering

[[Page 36766]]

service meeting the low latency requirements. For the Above Baseline, 
Baseline, and Minimum performance tiers and for high latency, the 
Commission will review all technologies on a case-by-case basis.
    75. Gigabit Performance Tier. The Commission will prohibit service 
providers that intend to use any form of satellite technology from 
selecting the Gigabit performance tier.
    76. Service providers that intend to use fixed wireless or DSL 
technologies may make a case for bidding in the Gigabit performance 
tier. While an applicant will be permitted to select the Gigabit 
performance tier in its application if it intends to use fixed wireless 
or DSL technologies for meeting its Auction 904 public interest 
obligations, such applicants face a high burden to persuade Commission 
staff that it is reasonably capable of meeting the public interest 
obligations and thus qualified to bid for the Gigabit performance tier. 
The Commission does not anticipate that an applicant using DSL 
technologies would be able to demonstrate that it is reasonably capable 
of offering a service that meets the Gigabit performance tier public 
interest obligations absent a hybrid approach that relies mostly on 
fiber. Likewise, Likewise, given distance limitations, spectrum bands 
attributes, channel bandwidths requirements, backhaul and medium haul 
requirements, tower siting requirements, capacity constraints, required 
upstream speeds, required minimum monthly usage allowances, and other 
issues raised in the record, the Commission expects it will be 
similarly challenging for a fixed wireless provider to make a case that 
it can offer a mass market service meeting the Gigabit performance tier 
public interest obligations in the less dense areas eligible for 
Auction 904. This is so especially for entities lacking an operational 
history of offering Gigabit service in rural areas.
    77. The Commission anticipates that the fixed wireless and DSL 
technology solutions are likely to be customized for each applicant to 
account for the challenges in deploying Gigabit speeds in rural areas. 
Accordingly, rather than develop a set of one-size-fits-all standards 
for the review, Commission staff will benefit from having the 
opportunity to discuss network plans with each applicant through the 
Commission's existing resubmission process. An applicant proposing to 
deploy fixed wireless and DSL technologies to offer Gigabit speeds and 
any engineers that assisted with the application must be prepared to 
engage in follow-up conference calls upon request with Commission staff 
to elaborate on their Appendix A responses with a particular focus on 
concerns raised in the record
    78. The Commission reminds potential applicants that they are 
certifying under penalty of perjury in their short-form applications 
that they are technically qualified to meet the public interest 
obligations for each performance tier and latency combination they 
select. The Commission may initiate enforcement proceedings against 
applicants that submit threadbare or wholly unrealistic technical 
showings while selecting the Gigabit or other higher performance tiers. 
An applicant will be deemed in default if at the long-form application 
stage, Commission staff determines the applicant is not reasonably 
capable of meeting the public interest obligations associated with its 
winning bids. The base default forfeiture already adopted for Auction 
904 will be subject to adjustment upward or downward as appropriate 
based on the criteria set forth in the Commission's forfeiture 
guidelines. Accordingly, all applicants should conduct due diligence 
and consider seriously whether they will be able to meet the relevant 
public interest obligations before selecting performance tier and 
latency combinations in their applications.
    79. Low Latency. Providers that intend to use geostationary, high 
earth orbit, or medium earth orbit satellite technology are prohibited 
from selecting low latency in combination with any of the performance 
tiers.
    80. Other Performance Tiers and High Latency. For the lower 
performance tiers--i.e., Above Baseline, Baseline, and Minimum--and for 
high latency, the Commission will not adopt any presumptions or exclude 
any type of technology. The Commission will permit an applicant to 
propose using any technology to meet the relevant performance 
obligations.
    81. Due Diligence Certification. Each applicant has sole 
responsibility for investigating and evaluating all technical and 
marketplace factors that may have a bearing on the level of support for 
which it will seek to bid in Auction 904 if it becomes a qualified 
bidder. The Commission makes no representations or warranties about the 
use of this support for particular services. Auction 904 represents an 
opportunity to apply for Rural Digital Opportunity Fund support, 
subject to certain conditions and regulations. A Commission auction 
does not constitute an endorsement by the Commission of any particular 
service, technology, or product, nor does the award of Rural Digital 
Opportunity Fund support constitute a guarantee of business success.
    82. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
In particular, each potential bidder should perform technical and 
financial analyses and/or refresh its previous analyses to assure 
itself that, should it become a winning bidder for any support, it will 
be able to build and operate facilities that provide service to a 
particular area in accordance with the public interest obligations and 
the Commission's rules generally.
    83. Each applicant in Auction 904 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 support 
available in an auction. The due diligence considerations mentioned in 
the document do not constitute an exhaustive list of steps that should 
be undertaken prior to participating in Auction 904. 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.
    84. 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 or otherwise receive Rural 
Digital Opportunity Fund support. Each potential bidder is responsible 
for undertaking research to ensure that any support won in this auction 
will be suitable for its business plans and needs. Each potential 
bidder must undertake its own assessment of the relevance and 
importance of information gathered as part of its due diligence 
efforts.
    85. 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, an applicant 
must obtain or verify such information from independent sources or 
assume the risk of any incompleteness or inaccuracy in said databases. 
The Commission makes no representations or guarantees regarding the 
accuracy or completeness of

[[Page 36767]]

information that has been provided by outside entities and incorporated 
into its databases.
    86. Each applicant must make the following certification in its 
short-form application under penalty of perjury:

    The applicant acknowledges that it has sole responsibility for 
investigating and evaluating all technical and marketplace factors 
that may have a bearing on the level of Rural Digital Opportunity 
Fund support it submits as a bid, and that if the applicant wins 
support, it will be able to build and operate facilities in 
accordance with the Rural Digital Opportunity Fund obligations and 
the Commission's rules generally.

    87. Eligible Telecommunications Carrier Certification. An applicant 
must acknowledge in its short-form application that it must be 
designated as an ETC for the areas in which it will receive support 
prior to being authorized to receive support. Only ETCs designated 
pursuant to Sec.  214(e) of the Communications Act of 1934, as amended 
(the Act) ``shall be eligible to receive specific Federal universal 
service support.'' Section 214(e)(2) gives states the primary 
responsibility for ETC designation. However, Sec.  214(e)(6) provides 
that the Commission is responsible for processing requests for ETC 
designation when the service provider is not subject to the 
jurisdiction of any state commission. Support is disbursed only after 
the provider receives an ETC designation and satisfies the other long-
form application requirements.
    88. An applicant need not already be an ETC as of the initial 
short-form application filing deadline for Auction 904, but that it 
must obtain a high-cost ETC designation for the areas covered by its 
winning bids within 180 days after being announced as a winning bidder. 
Long-form applicants subject to state jurisdiction must petition the 
relevant state commissions for ETC designation and should follow state 
rules and requirements to apply for designation(s). Long-form 
applicants not subject to state jurisdiction must petition the 
Commission for designation(s). The Commission places the burden of 
proof upon the petitioner seeking a Commission ETC designation to 
demonstrate that the Commission has jurisdiction. Such demonstration 
may be made through the submission of an affirmative statement from the 
relevant state commission declining jurisdiction. In addition, the 
Bureau will consider state legislation specifically declining 
jurisdiction over the type of service offered by the long-form 
applicant to be relevant. Petitioners seeking an ETC designation to 
serve Tribal lands may also petition the Commission directly so long as 
they have not initiated an ETC designation proceeding before the 
relevant state commission. Petitioners taking this approach should 
verify that the intended service area is completely on Tribal lands. If 
not, the petitioner must petition the relevant state commission for 
waiver of the state's jurisdiction over the non-Tribal areas.
    89. All applicants should be familiar with the requirements that 
are applicable to ETCs and conduct due diligence to ensure that they 
can meet the requirements. For example, each Auction 904 support 
recipient must offer Lifeline voice and broadband service throughout 
the eligible areas covered by its winning bids to qualifying low-income 
consumers pursuant to the Lifeline program rules. While an Auction 904 
long-form applicant is not required to obtain an ETC designation that 
is limited only to the eligible census blocks covered by its winning 
bids, it may only use its Auction 904 support to offer the required 
voice and broadband services to locations in eligible census blocks. If 
an Auction 904 support recipient has obtained an ETC designation that 
covers more area than the eligible census blocks in its winning bids, 
that support recipient has the obligation to provide Lifeline services 
throughout its designated service area, including in areas where it 
cannot use its Auction 904 support. A high-cost ETC may also be subject 
to state-specific requirements imposed by the state that designates it 
as an ETC.
    90. Additionally, ETCs must offer qualifying voice service using 
their own facilities, at least in part. The Commission has interpreted 
the term ``facilities,'' for purposes of Sec.  214(e) of the Act, to 
mean ``any physical components of the telecommunications network that 
are used in the transmission or routing of the services designated for 
support under Sec.  254(c)(1).'' As explained by the Commission, ``a 
carrier need not offer universal service wholly over its own facilities 
in order to be designated as eligible because the statute allows an 
eligible carrier to offer the supported services through a combination 
of its own facilities and resale.'' Facilities are the ETC's ``own'' if 
the ETC has exclusive right to use the facilities to provide the 
supported services or when service is provided by any affiliate within 
the holding company structure.
    91. An ETC satisfies its obligation to ``offer'' qualifying 
services by being legally responsible for dealing with customer 
problems, providing quality of service guarantees, and meeting 
universal service fund-related requirements. Accordingly, a broadband 
provider may satisfy its voice obligation by offering voice service 
through an affiliate or by offering a managed voice solution (including 
VoIP) through a third-party vendor, but a provider cannot simply rely 
on the availability of over-the-top voice options to satisfy this 
obligation.
    92. Procedures for Limited Disclosure of Application Information. 
The Commission will withhold from the public, as well as other 
applicants, the following information related to the short-form 
application process at least until the auction closes and the results 
are announced:
     The state(s) selected by an applicant.
     The state(s) for which the applicant has been determined 
to be qualified to bid.
     The performance tier and latency combination(s) selected 
by an applicant.
     The spectrum access attachment submitted with the short-
form application.
     The performance tier and latency combination(s) for which 
the applicant has been determined to be eligible to bid and the 
associated weight for each combination.
     An applicant's responses to the questions in Appendix A to 
the document and any supporting documentation submitted in any 
attachment(s) that are intended to demonstrate an applicant's ability 
to meet the public interest obligations for each performance tier and 
latency combination that the applicant has selected in its application.
     Any financial information contained in an applicant's 
short-form application for which the applicant has requested 
confidential treatment under the abbreviated process.
     An applicant's letter of interest from a qualified bank 
that the bank would provide a letter of credit to the applicant.

All other application information that is not subject to a request for 
confidential treatment under Sec.  0.459 of the Commission's rules will 
be publicly available upon the release of the public notice announcing 
the status of submitted short-form applications after initial review.
    93. Any applicant may use the abbreviated process under Sec.  
0.459(a)(4) to request confidential treatment of the financial 
information contained in its short-form application. The abbreviated 
process allows all applicants to answer a simple ``yes/no'' question on 
FCC Form 183 as to whether they wish their information to be withheld 
from public

[[Page 36768]]

inspection. The Commission will not grant requests to withhold 
financial data that applicants elsewhere disclose to the public, and 
that information will be disclosed in the normal course. An applicant 
that seeks confidential treatment of the financial information 
contained in its short-form application need not submit a statement 
that conforms with the requirements of Sec.  0.459(b) unless and until 
its request for confidential treatment is challenged.
    94. The Sec.  0.459(a)(4) abbreviated process for requesting 
confidential treatment may not be used by an applicant to request 
confidential treatment of any information in its short-form application 
other than its financial information. Thus, an applicant that wishes to 
seek confidential treatment of any other portion(s) of its short-form 
application must file a regular Sec.  0.459 request for confidential 
treatment of any such information with its short-form application 
(other than responses to the questions in Appendix A to the document 
and associated supporting documentation and a letter of interest that 
the Commission presumes to be competitively sensitive). This request 
must include a statement of the reasons for withholding those portions 
of the application from public inspection. Additionally, in the event 
an applicant's abbreviated request for confidential treatment of the 
financial information contained in its short-form application is 
challenged, the applicant must submit a request for confidential 
treatment of its financial information that conforms with the 
requirements of Sec.  0.459 within 10 business days after receiving 
notice of the challenge.
    95. After the close of bidding and announcement of auction results, 
the Commission will make publicly available all short-form application 
information, except for an applicant's operational information, letter 
of interest, and confidential financial information.
    96. Prohibited Communications and Compliance with Antitrust Laws. 
The Commission's rules prohibit an applicant from communicating certain 
auction-related information to another applicant from the auction 
short-form application filing deadline until the post-auction deadline 
for winning bidders to file long-form applications for support. More 
specifically, Sec.  1.21002 of the Commission's rules prohibits an 
applicant in Auction 904 from cooperating or collaborating with any 
other applicant with respect to its own, or one another's, or any other 
competing applicant's bids or bidding strategies, and from 
communicating with any other applicant in any manner the substance of 
its own, or one another's, or any other competing applicant's bids or 
bidding strategies during the prohibition period. The rule's exception 
for communications between applicants that are members of a joint 
bidding arrangement shall not apply in Auction 904.
    97. Entities Covered by Sec.  1.21002. Section 1.21002's 
prohibition of certain communications will apply to any applicant that 
submits a short-form application to participate in Auction 904. This 
prohibition applies to all applicants that submit short-form 
applications regardless of whether such applicants become qualified 
bidders or actually bid in the auction.
    98. An ``applicant'' for purposes of this rule includes the entity 
filing the application, each party capable of controlling the 
applicant, and each party that may be controlled by the applicant or by 
a party capable of controlling the applicant.
    99. All applicants applying to obtain support are ``competing 
applicants'' under the rule.
    100. Prohibition Applies Until Long-Form Application Deadline. 
Section 1.21002's prohibition of certain communications begins at the 
short-form application filing deadline and ends at the long-form 
application deadline. Long-form applications will be due within a 
specified number of days after release of the Auction 904 closing 
public notice.
    101. Scope of Prohibition of Communications. Section 1.21002 
prohibits an applicant from communicating with another applicant with 
respect to ``its own, or one another's, or any other competing 
applicant's bids or bidding strategies.'' In addition to express 
statements of bids and bidding strategies, the prohibition against 
communicating ``in any manner'' includes public disclosures as well as 
private communications and indirect or implicit communications. 
Consequently, an applicant must take care to determine whether its 
auction-related communications may reach another applicant.
    102. Parties subject to Sec.  1.21002 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 to be conveyed to the other 
applicant through the shared officer, which creates an apparent 
violation of the rule.
    103. A communication must convey ``bids or bidding strategies'' to 
be covered by the prohibition. Thus, the prohibition is limited in 
scope and does not apply to all communications between or among the 
specified parties. The Commission consistently has made clear that 
application of the rule prohibiting communications has never required 
total suspension of essential ongoing business. Entities subject to the 
prohibition may negotiate agreements during the prohibition period, 
provided that the communications involved do not relate both (1) to the 
eligible areas in the auction and (2) to bids or bidding strategies or 
post-auction market structure.
    104. Accordingly, neither business discussions and negotiations 
that are unrelated to Auction 904 nor those that do not convey 
information about the bids or bidding strategies of an applicant in 
Auction 904 or the post-auction market structure are prohibited by the 
rule. 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 904 will not violate the 
rule. In contrast, communicating, among other things, how an applicant 
will participate, including specific states selected, specific bid 
amounts, and/or whether or not the applicant is placing bids, would 
convey bids or bidding strategies and would thus be prohibited.
    105. While Sec.  1.21002 does not prohibit business discussions and 
negotiations among auction applicants that are not auction related, 
each applicant must remain vigilant not to communicate, directly or 
indirectly, information that affects, or could affect, bids or bidding 
strategies. Certain discussions might touch upon subject matters that 
could convey cost or geographic information related to bidding 
strategies. Such subject areas include, but are not limited to, 
management, sales, local marketing agreements, and other transactional 
agreements.
    106. 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

[[Page 36769]]

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.''
    107. Likewise, when completing a short-form application, each 
applicant should avoid any statements or disclosures that may violate 
Sec.  1.21002, particularly considering the limited information 
procedures in effect for Auction 904. Specifically, an applicant should 
avoid including any information in its short-form application that 
might convey information regarding its state selection, such as 
referring to certain states or markets in describing agreements, 
including any information in attachments that will be publicly 
available that may otherwise disclose the applicant's state selections, 
or, to the extent it has an alternative option, using applicant names 
that refer to states or locations within a state.
    108. Applicants also should be mindful that communicating non-
public application or bidding information publicly or privately to 
another applicant may violate Sec.  1.21002 even though that 
information subsequently may be made public during later periods of the 
application or bidding processes.
    109. Communicating with Third Parties. Section 1.21002 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 applicants, 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.
    110. In the case of an individual, the precautionary measure of a 
firewall is not available. As a result, an individual that is privy to 
bids or bidding information of more than one applicant presents a 
greater risk of engaging in a prohibited communication. Whether a 
prohibited communication has taken place in each case will depend upon 
the totality of circumstances, including who possessed what 
information, what information was conveyed to whom, and the course of 
bidding in the auction.
    111. Separate Auction 904 applicants should not specify the same 
individual on their short-form applications to serve as an authorized 
bidder. A violation of Sec.  1.21002 could occur if an individual acts 
as the authorized bidder for two or more applicants because a single 
individual may, even unwittingly, be influenced by the knowledge of the 
bids or bidding strategies of multiple applicants, in his or her 
actions on behalf of such applicants. Also, if the authorized bidders 
are different individuals employed by the same organization (e.g., a 
law firm, engineering firm, or consulting firm), a violation similarly 
could occur. In the latter case, at a minimum, applicants should 
certify on their applications that specific precautionary steps have 
been taken to prevent communication between authorized bidders, and 
that the applicant and its bidders will comply with Sec.  1.21002.
    112. Potential applicants may discuss the short-form application or 
bids for specific eligible areas with the counsel, consultant, or 
expert of their choice before the short-form application deadline. 
Furthermore, the same third-party individual could continue to give 
advice after the short-form deadline regarding the application, 
provided that no information pertaining to bids or bidding strategies, 
including state(s) selected on the short-form application, is conveyed 
to that individual. With respect to bidding, the same third-party 
individual could, before the short-form application deadline, assist 
more than one potential applicant with calculating how much support the 
specific applicant would require to provide service in each eligible 
area for which it is interested in bidding. If such work can be 
completed in advance of the short-form application deadline, it would 
eliminate the need for third-party bidding advice during the auction. 
Finally, 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.
    113. Applicants should use an abundance of caution in their 
dealings with other parties. This would include communications with 
public entities concerning state or federal loan or support programs. 
Applicants should also take care in any communications to 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 the auction could give rise to a finding 
of a Sec.  1.21002 violation. Similarly, an applicant's public 
statement of intent not to place bids during Auction 904 bidding could 
also violate the rule.
    114. Section 1.21001(b)(4) Certification. By electronically 
submitting a short-form application, each applicant in Auction 904 
certifies its compliance with Sec. Sec.  1.21001(b)(4) and 1.21002. In 
particular, an applicant must certify under penalty of perjury that the 
application discloses all real parties in interest to any agreements 
involving the applicant's participation in the competitive bidding for 
Rural Digital Opportunity Fund support. Also, the applicant must 
certify that it and all applicable parties have complied with and will 
continue to comply with 47 CFR 1.21002.
    115. Merely filing 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 Sec.  1.21002(b) may be 
subject to sanctions.
    116. Duty to Report Prohibited Communications. Section 1.21002(c) 
provides that any applicant that makes or receives a communication that 
appears to violate Sec.  1.21002 must report such communication in 
writing to the Commission immediately, and in no

[[Page 36770]]

case later than five business days after the communication occurs. An 
applicant's obligation to make such a report continues until the report 
has been made.
    117. In addition, Sec.  1.65 of the Commission's rules requires an 
applicant to maintain the accuracy and completeness of information 
furnished in its pending application and to notify the Commission of 
any substantial change that may be of decisional significance to that 
application. Thus, Sec.  1.65 requires an Auction 904 applicant to 
notify the Commission of any substantial change to the information or 
certifications included in its pending short-form application. An 
applicant is therefore required by Sec.  1.65 to report to the 
Commission any communication the applicant has made to or received from 
another applicant after the short-form application filing deadline that 
affects or has the potential to affect bids or bidding strategy.
    118. Sections 1.65(a) and 1.21002 of the Commission's rules require 
each applicant in competitive bidding proceedings to furnish additional 
or corrected information within five days of a significant occurrence, 
or to amend its short-form application no more than five days after the 
applicant becomes aware of the need for amendment. Enforcement actions 
were initiated against two applicants in Auction 903 for failing to 
timely report communications that potentially violated the rule.
    119. Procedure for Reporting Prohibited Communications. A party 
reporting any prohibited communication pursuant to Sec. Sec.  1.65, 
1.21001(b), or 1.21002(c) must take care to ensure that any report of 
the prohibited communication does not itself give rise to a violation 
of Sec.  1.21002. For example, a party's report of a prohibited 
communication could violate the rule by communicating prohibited 
information to other applicants through the use of Commission filing 
procedures that allow such materials to be made available for public 
inspection.
    120. Parties must file only a single report concerning a prohibited 
communication and must file that report with the Commission personnel 
expressly charged with administering the Commission's auctions. Any 
reports required by Sec.  1.21002(c) must be filed consistent with the 
instructions set forth in the document. For Auction 904, such reports 
must be filed with Jonathan Campbell, 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 Mr. Campbell 
at the following email address: [email protected]. If a report must be 
submitted in hard copy, any such report shall be delivered only to 
Jonathan Campbell, Chief, Auctions Division, Office of Economics and 
Analytics, Federal Communications Commission, 45 L St. NE, Washington, 
DC 20554.
    121. 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 Sec.  0.459 of the Commission's 
rules. Such parties should coordinate with the Auctions Division staff 
about the procedures for submitting such reports.
    122. Winning Bidders Must Disclose the Terms of Agreements. Each 
applicant that is a winning bidder may be required to disclose in its 
long-form application the specific terms, conditions, and parties 
involved in any agreement into which it has entered. This may apply to 
any bidding consortium, 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 and sanctions.
    123. Additional Information Concerning Prohibition of Certain 
Communications in Commission Auctions. A summary listing of Commission 
documents addressing the application of the prohibited communications 
rule is available on the Commission's auction web page at www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications. Applicants utilizing these precedents should 
keep in mind the specific language of the rule applied in past 
decisions, as well as any differences in the context of the applicable 
auctions.
    124. Antitrust Laws. Regardless of compliance with the Commission's 
rules, applicants remain subject to the antitrust laws, which are 
designed to prevent anticompetitive behavior in the marketplace. 
Compliance with the disclosure requirements of Sec.  1.21002 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.
    125. 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 904 and in future auctions, among 
other sanctions.
    126. Red Light Rule. Applicants seeking to participate in Auction 
904 are subject to the Commission's red light rule. Unless otherwise 
expressly provided for, the Commission would withhold action on an 
application by any entity found to be delinquent in its debt to the 
Commission.
    127. The Commission finds good cause to provide a limited waiver of 
the red light rule for any applicant seeking to participate in Auction 
904 that is red-lighted for debt owed to the Commission at the time it 
timely files a short-form application. Specifically, a red-lighted 
applicant seeking to participate in Auction 904 will have until the 
close of the application resubmission filing window to pay any debt(s) 
associated with the red light. No further opportunity to cure will be 
allowed. If an applicant has not resolved its red light issue(s) by the 
close of the initial filing window, its application will be deemed 
incomplete. If the applicant has not resolved its red light issue(s) by 
the close of the application resubmission window, Commission staff will 
immediately cease all processing of the applicant's short-form 
application, and the applicant will be deemed not qualified to bid in 
the auction. Because this waiver is limited, it does not waive or 
otherwise affect the Commission's right or obligation to collect any 
debt owed to the Commission by an Auction 904 applicant by any means 
available to the Commission, including set off, referral of debt to the 
United States Treasury for collection, and/or by red lighting other 
applications or requests filed by an Auction 904 applicant.
    128. Potential applicants for Auction 904 should review their own 
records, as well as the Commission's Red Light

[[Page 36771]]

Display System (RLD), to determine whether they owe any non-tax debt to 
the Commission and should try to resolve and pay any outstanding 
debt(s) prior to submitting a short-form application. The RLD enables a 
party to check the status of its account by individual FCC Registration 
Numbers (FRNs) and links other FRNs sharing the same Tax Identification 
Number (TIN) when determining whether there are outstanding delinquent 
debts. The RLD is available at https://www.fcc.gov/redlight/. Additional 
information is available at https://www.fcc.gov/debt_collection/.
    129. Additionally, an Auction 904 applicant may incur debt to the 
Commission after it files its short-form application and may fail to 
pay that debt when due. An applicant should note that the Commission 
will conduct additional red light checks prior to authorizing support. 
Qualified bidders should continue to review their own records as well 
as the RLD periodically during the auction and to resolve and pay all 
outstanding debts to the Commission as soon as possible. The Commission 
will not authorize any winning bidder to receive support until its red 
light issues have been resolved.
    130. USF Debarment. The Commission's rules provide for the 
debarment of those convicted of or found civilly liable for defrauding 
the high-cost support program. Those rules apply with equal force to 
high-cost support assigned by Auction 904.
    131. Modifications to FCC Form 183. Only Minor Modifications 
Allowed. After the initial FCC Form 183 filing deadline, an Auction 904 
applicant will be permitted to make only minor changes to its 
application consistent with the Commission's rules. Examples of minor 
changes include the deletion or addition of authorized bidders (to a 
maximum of three bidders) and the revision of addresses and telephone 
numbers of the applicant, its responsible party, and its contact 
person. Major modifications to an FCC Form 183 (e.g., adding a state in 
which the applicant intends to bid, certain changes in ownership that 
would constitute an assignment or transfer of control of the applicant, 
change in the required certifications, or change in applicant's legal 
classification that results in a change in control) will not be 
permitted after the initial FCC Form 183 filing deadline. If an 
amendment reporting changes is a ``major amendment,'' as described in 
Sec.  1.21001(d)(4), the major amendment will not be accepted and may 
result in dismissal of the application.
    132. Duty to Maintain Accuracy and Completeness of FCC Form 183. 
Pursuant to Sec.  1.65 of the Commission's rules, 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 the Auction 904. An applicant for Auction 
904 must furnish additional or corrected information to the Commission 
within five business days after a significant occurrence, or amend its 
FCC Form 183 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.
    133. Modifying an FCC Form 183. An entity seeking to participate in 
Auction 904 must file an FCC Form 183 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 183 in the Auction Application System. An applicant that has 
certified and submitted its FCC Form 183 before the close of the 
initial filing window may continue to make modifications as often as 
necessary until the close of that window; however, the applicant must 
re-certify and resubmit its FCC Form 183 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.
    134. An applicant will also be allowed to modify its FCC Form 183 
in the Auction Application System, except for certain fields, during 
the resubmission filing window and after the release of the public 
notice announcing the Auction 904 qualified bidders. During these 
times, if an applicant needs to make permissible minor changes to its 
FCC Form 183, or must make changes in order to maintain the accuracy 
and completeness of its application pursuant to Sec.  1.65, it must 
make the change(s) in the Auction Application System and then re-
certify and re-submit its application to confirm and effect the 
change(s).
    135. An applicant's ability to modify its FCC Form 183 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 Auction 904 
qualified bidders. During these periods, an applicant will be able to 
view its submitted application, but it 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 183 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 183, or changes to 
maintain the accuracy and completeness of its application pursuant to 
Sec.  1.65, the applicant must submit a letter briefly summarizing the 
changes to its FCC Form 183 via email to [email protected]. The email 
summarizing the changes must include a subject line referring to 
Auction 904 and the name of the applicant, for example, ``Re: Changes 
to Auction 904 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 183 application electronically in the Auction Application System 
once it is again open and available to applicants.
    136. 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, it must submit a written request by email 
to [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 recertify and resubmit its FCC Form 183 
in the Auction Application System to confirm and effect the change(s).
    137. As with filing the FCC Form 183, any amendment(s) to the 
application and related statements of fact must be certified by an 
authorized representative of the applicant with authority to bind the 
applicant. Applicants should note that 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.

[[Page 36772]]

    138. Applicants must not submit application-specific material 
through the Commission's Electronic Comment Filing System. Further, 
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 Sec.  1.21002 
or the limited information procedures adopted for Auction 904. An 
applicant seeking to submit, outside of the Auction Application System, 
information that might reflect non-public information, such as an 
applicant's state and/or performance tier and latency selection(s) or 
specific information about bid(s), 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 of certain 
communications pursuant to Sec.  1.21002.
    139. Questions about FCC Form 183 amendments should be directed to 
the Auctions Division at (202) 418-0660 or [email protected].

VI. Preparing for Bidding in Auction 904

    140. Bidder Education. Prior to the deadline for applications to 
participate in Auction 904, detailed educational information will be 
provided in various formats to would-be participants. OEA, in 
conjunction with the Bureau, will 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 183. In addition, 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.
    141. In advance of the start of the mock auction, OEA will provide 
educational materials on the bidding processes for Auction 904, 
beginning with release of a user guide for the bidding system and 
bidding system file formats, followed by an online bidding procedures 
tutorial.
    142. 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, 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 
904 website at www.fcc.gov/auction/904. Once posted, the tutorials will 
be accessible at any time.
    143. Finally, the Commission's Office of Communications Business 
Opportunities will engage with small providers interested in the 
auction process.
    144. Sort-Form Applications: Due Before 6:00 p.m. ET on July 15, 
2020. In order to be eligible to bid in this auction, applicants must 
first follow the procedures to submit a short-form application (FCC 
Form 183) electronically via the Auction Application System, following 
the instructions set forth in the FCC Form 183 Instructions. This 
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 
July 15, 2020. Late applications will not be accepted. No application 
fee is required.
    145. Applications may be filed at any time beginning at noon ET on 
July 1, 2020, until the filing window closes at 6:00 p.m. ET on July 
15, 2020. Applicants are strongly encouraged to file early and in 
advance of the deadline. Applicants 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 filing deadline on July 15, 2020.
    146. An applicant must always click on the CERTIFY & SUBMIT button 
on the ``Certify & Submit'' screen to successfully submit its FCC Form 
183 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 183 will be provided in a separate public notice. Applicants 
requiring technical assistance should contact FCC Auctions Technical 
Support at (877) 480-3201, option nine; (202) 414-1250; or (202) 414-
1255 (text telephone (TTY)); hours of service are Monday through 
Friday, from 8:00 a.m. to 6:00 p.m. ET. In order to provide better 
service to the public, all calls to Auctions Technical Support are 
recorded.
    147. Application Processing and Minor Modifications. Public Notice 
of Applicant's Initial Application Status and Opportunity for Minor 
Modifications. 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, 
and subsequently 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 to the contact 
address listed in the FCC Form 183 for each applicant by overnight 
delivery. In addition, each applicant with an incomplete application 
will be sent information on the nature of the deficiencies in its 
application, along with the name and phone number of a Commission staff 
member who can answer questions specific to the application.
    148. After the initial application filing deadline on July 15, 
2020, applicants can make only minor modifications to their 
applications. Major modifications (e.g., change control of the 
applicant, change the certifying official, or selecting additional 
states in which to bid) 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 904.
    149. Commission staff will communicate only with an applicant's 
contact person or certifying official, as designated on the applicant's 
FCC Form 183, 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. Authorizations may be 
sent by email to [email protected].
    150. Public Notice of Applicant's Final Application Status. After 
Commission staff review resubmitted applications, OEA will release a 
public notice identifying applicants that have become qualified 
bidders. The Auction 904 Qualified Bidders Public Notice will be issued 
before bidding in Auction 904 begins. Qualified bidders are those 
applicants with submitted FCC Form 183 applications that are deemed 
timely filed and complete.
    151. Auction Registration. All qualified bidders 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 183. The mailing will

[[Page 36773]]

include the SecurID[supreg] tokens that will be required to place bids 
and the Auction Bidder Line phone number.
    152. Qualified bidders that do not receive this registration 
mailing will not be able to submit bids. Therefore, any qualified 
bidder that has not received this mailing by noon on October 21, 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.
    153. 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.
    154. Remote Electronic Bidding via the Rural Digital Opportunity 
Fund Bidding System. Bidders will be able to participate in Auction 904 
over the internet using the Rural Digital Opportunity Fund Bidding 
System. 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 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 183. 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 904. SecurID[supreg] tokens can be recycled and should 
be returned to the FCC. Pre-addressed envelopes will be provided to 
return the tokens once the auction has ended.
    155. The Commission makes no warranties, 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 (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.
    156. 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. After the close of a bidding round, the results of bid 
processing will not be altered absent evidence of a failure in the 
bidding system.
    157. Mock Auction. All qualified bidders will be eligible to 
participate in a mock auction, which will begin on October 26, 2020. 
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, 
should participate in the mock auction to ensure 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 Auction 904 Qualified Bidders Public Notice.

VII. Bidding in Auction 904

    158. Auction Structure: Reverse Auction Mechanism. Multi-Round 
Reserve Auction Format. The Commission will conduct Auction 904 using a 
multi-round, descending clock auction. Bidding in Auction 904 will work 
as follows: In each round of the auction, a bidder will be asked 
whether it is willing to provide service to an area, at a performance 
tier and latency it indicates, in exchange for a support amount that is 
at least as high as an amount announced by the bidding system. In each 
subsequent round, the announced support amount will be less than the 
amount from the previous round. To the extent that the bidder is 
willing to accept the announced amount, it will so indicate by 
submitting a ``bid'' on a spreadsheet indicating the area, the tier and 
latency, and the current amount that it accepts. If the current round's 
announced support amount becomes too low for the bidder, the bidder can 
simply stop bidding for the area or, alternatively, can enter a bid 
that indicates the lowest amount it will accept (an amount higher than 
the round's announced amount and lower than the last round's announced 
amount) in exchange for providing the service.
    159. The announced support amount to which the bidder responds in a 
round depends on a percentage--applicable to bidding for all areas--as 
well as the reserve price for the specific area and the level of 
service that the bidder proposes to provide if it is assigned support 
for the area. These factors are linked through a formula. The bidding 
template--the spreadsheet--will show the support amount for a bid as 
well as the various factors determining that support amount in a given 
bidding round. Therefore, to bid effectively, a bidder need only 
determine the lowest amount of support it will accept in exchange for 
providing service to an area and bid for support that is at least that 
amount.
    160. Minimum Geographic Area for Bidding. The Commission will use 
CBGs containing one or more eligible census blocks as the minimum 
biddable area in the auction. In March 2020, the Bureau released a 
preliminary list of eligible census blocks based on June 30, 2019 FCC 
Form 477 data. This list included just under 858,000 eligible census 
blocks, which are located in just under 65,000 CBGs. The Bureau will 
release a revised map and list of eligible census blocks.
    161. Auction Delay, Suspension, or Cancellation. By announcement in 
the bidding system, the auction may be delayed, suspended, or cancelled 
in the event of natural disaster, technical obstacle, network 
disruption, evidence of an auction security breach or unlawful bidding 
activity, administrative or weather necessity, or for any other reason 
that affects the fair and efficient conduct of the competitive bidding. 
In such cases, OEA and the Bureau, in their sole discretion, may elect 
to resume the auction starting from the point at which the auction was 
suspended or cancel the auction in its entirety.
    162. Bidding Procedures. Bidding Overview. The Commission will use 
a descending clock auction to identify (1) the areas that will receive 
Rural Digital Opportunity Fund support; (2) the provider that will be 
assigned to receive

[[Page 36774]]

support in each such area; and (3) the amount of support that each 
winning bidder will be eligible to receive, subject to post-auction 
application review. In the Rural Digital Opportunity Fund Order, the 
Commission concluded that bids for different areas at specified 
performance tier and latency levels will be compared to each other 
based on the percentage each bid represents of their respective areas' 
reserve prices; however, once the budget has cleared, the Commission 
will prioritize bids with lower tier and latency weights. OEA, in 
conjunction with the Bureau, will release a guide that provides further 
technical and mathematical detail regarding the bidding, assignment, 
and support amount determination procedures.
    163. The auction will be conducted over the internet, and bidders 
will upload bids in a specified file format for processing by the 
bidding system. The bidding system will announce a clock percentage 
before each round. The clock percentage is used to delimit the range of 
acceptable bid percentages in each round of the auction and as a common 
unit to compare bids for different performance tiers and latencies, 
which were assigned weights (``T+L weights'') in the Rural Digital 
Opportunity Fund Order.
    164. The clock percentage will begin at a high level, implying a 
support amount that is equal to or close to the full reserve price, 
even for bids at the largest T+L weight, and descend from one round to 
the next. In a round, a bidder can submit a bid for a given area at a 
specified performance tier and latency combination at any percentage 
that is greater than or equal to the round's clock percentage and less 
than the previous round's clock percentage. A bid indicates that the 
bidder is willing to provide service to the area that meets the 
specified performance tier and latency requirements in exchange for 
support that is no less than the support amount implied by the bid 
percentage.
    165. The clock percentage will continue to descend in a series of 
bidding rounds, implying diminishing support amounts, until the 
aggregate amount of requested support represented by the bids placed in 
a round at the clock percentage is no greater than the budget. At that 
point, when the budget ``clears,'' the bidding system will begin to 
assign support, prioritizing bids with lower T+L weights. Bidding will 
continue for areas that were bid at the round's clock percentage and 
have not been assigned, and the clock will continue to descend in 
subsequent rounds. When there is no longer competition for any area, 
the auction will end. Because of the second-price rule, a winning 
bidder will be assigned support in amounts at least as high as the 
support amounts corresponding to its bid percentages.
    166. Reserve Prices. In the Rural Digital Opportunity Fund Order, 
the Commission decided to use the CAM to set reserve prices for the 
Rural Digital Opportunity Fund Phase I auction; that the reserve price 
for each CBG will be no greater than the CAM-calculated support amount 
for the eligible census blocks in the CBG; and that a cap will be 
imposed in the amount of support per location provided to extremely 
high-cost census blocks. For high-cost census blocks, the CAM 
calculates a reserve price equal to the cost-per-location for all 
locations in the census block minus the funding threshold of $40.00 per 
location, or $30.00 per location in Tribal areas or areas lacking 10/1 
Mbps. For extremely high-cost census blocks, support-per-location is 
capped at $212.50, or $222.50 in Tribal areas or areas lacking 10/1.
    167. Bid Collection. Round Structure. Auction 904 will consist of 
sequential bidding rounds according to an announced schedule providing 
the start time and closing time of each bidding round. The Commission 
retains the discretion to change the bidding schedule with advance 
notice to bidders. OEA may modify the amount of time for bidding 
rounds, the amount of time between rounds, or the number of rounds per 
day, depending on bidding activity and other factors.
    168. Clock Percentages and Implied Support Amounts Based on 
Performance Tier and Latency Weights. The clock will be denominated in 
terms of a percentage, which will be decremented for each round. To 
determine the annual support amount for an area implied at each 
percentage, the percentage is adjusted for the T+L weight of the bid 
and multiplied by the reserve price of the area.
    169. The bidding system will accept bids for four performance tiers 
with varying speed and usage allowances and, for each performance tier, 
will provide for bids at either high or low latency. All bids will be 
considered simultaneously so that bidders proposing varying performance 
standards will compete directly against each other for the limited 
Rural Digital Opportunity Fund budget, but with an assignment 
preference for bids with lower T+L weights once the budget has cleared. 
Also, bidders will bid for support expressed as a percentage of an 
area's reserve price.
    170. In the Rural Digital Opportunity Fund Order, the Commission 
adopted weights to compare bids for the different performance tiers and 
latency combinations. The Commission determined that Minimum 
performance tier bids will have a 50 weight; Baseline performance tier 
bids will have a 35 weight; Above Baseline performance tier bids will 
have a 20 weight; and Gigabit performance tier bids will have zero 
weight. Moreover, high-latency bids will have a 40 weight and low 
latency bids will have zero weight added to their respective 
performance tier weight. The lowest possible weight for a performance 
tier and latency is 0, and the highest possible weight is 90. Each 
weight uniquely defines a performance tier and latency combination, as 
shown in the table below.

                                                       Weights for Performance Tiers and Latencies
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Minimum                                   Baseline                       Above baseline                        Gigabit
--------------------------------------------------------------------------------------------------------------------------------------------------------
           High latency              Low latency      High latency     Low latency      High latency     Low latency      High latency     Low latency
--------------------------------------------------------------------------------------------------------------------------------------------------------
90...............................              50               75               35               60               20               40                0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    171. The clock percentage in each round will imply a total amount 
of annual support in dollars for each area available for bidding, based 
on the area's reserve price and the T+L weight specified in the bid. 
The annual support amount implied at the clock percentage will be the 
smaller of the reserve price and the annual support amount obtained by 
using a formula that incorporates the T+L weights. Specifically:

[[Page 36775]]

[GRAPHIC] [TIFF OMITTED] TR18JN20.002

Where:
R denotes the area's reserve price
T denotes the tier weight
L denotes the latency weight
C denotes the clock percentage

    172. Because the highest implied support amount can never exceed an 
area's reserve price, when the clock percentage is greater than 100, 
the total implied annual support for lower weighted performance tier 
and latency combinations may remain at an area's reserve price for one 
or more rounds, while the total implied annual support of one or more 
higher weighted performance tier and latency combinations may be lower 
than an area's reserve price. When the clock percentage is decremented 
below 100, the implied annual support for any performance tier and 
latency combination will be below an area's respective reserve price.
    173. The ``implied support formula'' can be used to determine the 
implied support at any price point percentage by substituting a given 
percentage for the clock percentage.
    174. Acceptable Bid Amounts. In the first round, a bidder may place 
a bid at any price point percentage equal to or greater than the clock 
percentage and equal to or less than the opening percentage, specified 
up to two decimal places. In each subsequent round, a bidder may place 
a bid at any price point percentage equal to or greater than the clock 
percentage and less than the previous round's clock percentage, 
specified up to two decimal places.
    175. Bids must imply a support amount that is one percent or more 
of an area's reserve price to be acceptable. For a given performance 
tier and latency combination, when the price point percentage equals 
T+L, the formula implies that the annual support amount is zero. When 
the price point percentage equals T+L+1, the formula implies an annual 
support amount that is one percent of the area's reserve price. Hence, 
a bid percentage must be at least T+L+1 for the bid to be accepted by 
the bidding system.
    176. Bidding for Geographic Areas. A bid for support in a CBG is a 
bid for support for the locations within all eligible census blocks 
within that area.
    177. A bidder may place only one bid on a given geographic area in 
a round, whether that area is bid on singly or included in a package 
bid.
    178. The total implied support of a single bidder's bids at the 
clock percentage in any round may not exceed the total Rural Digital 
Opportunity Fund budget.
    179. Bid for a Single Area. A bid is an offer to serve all 
locations in eligible census blocks within the indicated CBG at the 
indicated performance tier and latency combination for a total annual 
amount of support that is not less than the implied annual support at 
the price point percentage specified by the bidder and not more than 
the reserve price. In each round, a bid for a single available CBG with 
reserve price R consists of two pieces: A T+L weight and a price point 
that is a percentage not less than the current round's clock percentage 
and less than the previous round's clock percentage. For a given round, 
a CBG can be included in at most one bid--whether a bid on a single 
area or a package bid on multiple areas--made by a bidder, and a bidder 
can only bid on areas that are in states that the bidder selected on 
its application and for which it qualified.
    180. Bidders will not be allowed to change the performance tier and 
latency combination in a bid for a particular area from round to round. 
Once a bidder has submitted a bid for an area at a particular 
performance tier and latency combination (which must be a performance 
tier and latency combination for the state for which the bidder 
qualified at the application stage) any bids in subsequent rounds by 
that bidder for the same area must specify the same performance tier 
and latency combination.
    181. Bid for a Package of Areas. The Commission adopts package 
bidding procedures that will give bidders the option to place bids to 
serve a bidder-specified list of CBGs. However, corresponding bid 
processing procedures may assign fewer than the full list of areas to 
the bidder as long as the funding associated with the assigned areas is 
at least equal to a bidder-specified percentage of the funding 
requested for the complete list of areas in the package. A bidder can 
specify a package bid by providing a list of CBGs, a single performance 
tier and latency combination, a single price point for the areas in the 
list, and a minimum scale percentage for the package. The minimum scale 
percentage must be no higher than 75 percent for Auction 904. Thus, a 
package bid is an offer by the bidder to serve any subset of areas in 
the list at the support amount implied at the bid percentage, provided 
that the ratio of the total implied support of the subset to the total 
implied support of the list meets or exceeds the bidder-specified 
minimum scale percentage.
    182. A bidder must bid to serve each area in the package bid at the 
same performance tier and latency combination. Moreover, every area in 
a package bid must be in the same state. For a given round, a CBG can 
appear in at most one bid--either a single bid or a package bid--made 
by a given bidder. A bidder may change the minimum scale percentage in 
any package bid from round to round.
    183. Bids Placed by Proxy Bidding Instructions. The Commission will 
permit proxy bidding. With proxy bidding, a bidder may submit 
instructions for the system to continue to bid automatically for an 
area with a specified performance tier and latency combination in every 
round until either (1) the clock percentage falls below a bidder-
specified proxy amount, (2) the bidder intervenes to change its bid, or 
(3) the area is assigned, whichever happens first. Proxy bidding 
instructions for a single area or a package of areas will contain all 
the information required for these bids, and the specified price point 
percentage will potentially be valid for multiple rounds. Proxy bidding 
instructions cannot include instructions for changes to the minimum 
scale percentage of a package bid nor to the specified area or areas.
    184. During a round, the bidding system will generate a bid at the 
clock percentage on behalf of the bidder as long as the percentage 
specified in the proxy instruction is less than or equal to the current 
clock percentage. If the proxy percentage exceeds the current clock 
percentage but is lower than the prior round's clock percentage, then 
the bidding system will generate a bid at the price point percentage of 
the proxy. These bids will be treated by the auction system in the same 
way as any other bids placed in the auction. During a bidding round, a 
bidder may cancel or enter new proxy bidding instructions. Because 
proxy instructions may expire as the clock percentage descends and as 
areas get assigned, even with proxy bidding, bidders are strongly urged 
to monitor the progress of the auction to ensure that they do not need 
to cancel or adjust their proxy instructions.
    185. Proxy bidding instructions will be treated as confidential 
information and will not be disclosed to the public at any time because 
they may reveal cost information that would not otherwise be made 
public (e.g., if proxy bidding instructions are not fully implemented

[[Page 36776]]

because the clock percentage does not fall as low as the specified 
proxy percentage). All submitted bids and the amount of support awarded 
for any assigned bid, regardless of whether they were placed by the 
bidder or by the bidding system according to proxy bidding 
instructions, will be publicly disclosed after the auction concludes.
    186. Activity Rules. The Commission will measure a bidder's bidding 
activity in a round in terms of implied support dollars. The Commission 
adopts activity rules that prevent a bidder's activity in a round from 
exceeding its activity in the previous round.
    187. A bidder's activity in a round: (1) Is calculated as the sum 
of the implied support amounts (calculated at the bid percentage) for 
all the areas bid for in the round; and (2) may not exceed its activity 
from the previous round. A bidder will be limited in its ability to 
switch to bidding for support in different areas from round to round. 
Specifically, a bidder's activity in a round from areas that the bidder 
did not bid on at the previous round's clock percentage cannot exceed 
an amount determined by a percentage (the ``switching percentage'') of 
the bidder's total implied support from bids at the previous round's 
clock percentage. This switching percentage will be 20 percent for the 
second round of the auction only, and 10 percent for subsequent rounds, 
and OEA has the discretion to change the switching percentage, with 
adequate notice, before a round begins. The Commission also will not 
allow any switching once the budget has cleared. That is, once the 
budget has cleared, a bidder will be allowed to bid for an area only if 
the bidder bid for that area at the previous round's clock percentage 
and if that area has not yet been assigned.
    188. Bid Processing. Once a bidding round closes, the bidding 
system will consider the submitted bids to determine whether an 
additional round of bidding at a lower clock percentage is needed to 
bring the amount of requested support down to a level within the 
available budget. If the total requested support at the clock 
percentage exceeds the budget, another bidding round occurs. In a round 
in which the amount of overall requested support falls to a level 
within the budget (i.e., the budget ``clears''), bid processing will 
take the additional steps of beginning to assign support.
    189. If, after the bids have been processed in the clearing round, 
some areas bid at the clock percentage have not been assigned (e.g., 
because there were multiple bids for an area at the same T+L weight--
and no bids at a lower T+L weight--at the clock percentage), the 
bidding system will commence another round of bidding to resolve the 
competition, and rounds will continue with bidding for these areas at 
lower clock percentages.
    190. As a result, the bids that can be assigned under the budget in 
the round when the budget clears and in any later rounds will determine 
the areas that will be provided Rural Digital Opportunity Fund support. 
At most, one bid per area will be assigned support. The specifications 
of that bid, in turn, determine the performance tier and latency 
combination at which service will be provided to the eligible locations 
in the area. Additional details and examples of bid processing will be 
provided in the technical guide.
    191. Clock Percentage. In each of a series of discrete bidding 
rounds, a bidder will be offered an amount of support for an area at a 
specified performance tier and latency combination that is determined 
by the clock percentage for the round and the area's reserve price. By 
bidding at that clock percentage, the bidder indicates that it is 
willing to provide the required service in the bid area in exchange for 
a payment at least as large as that implied by the clock percentage and 
the T+L weight. The opening percentage will determine the highest 
support amount that the bidder will be offered in the auction for a 
given area and performance tier and latency combination.
    192. Opening Percentage. The opening percentage will be set to 100 
percent plus an additional percentage equal to the largest T+L weight 
that is submitted by any qualified bidder in the auction, as proposed. 
Therefore, if any applicant is qualified to bid to provide service at 
the Minimum performance tier and high latency--a performance tier and 
latency combination assigned a weight of 90--the opening percentage 
will be set at 190 percent.
    193. Clock Decrements. The Commission will begin the auction by 
decrementing the clock percentage by 10 points in each round. Also, the 
Commission provides OEA with the discretion to change that amount 
during the auction if it appears that a lower or higher decrement would 
better manage the pace of the auction. For example, if bidding is 
proceeding particularly slowly, OEA may increase the bid decrement to 
speed up the auction, recognizing that bidders have the option of 
bidding at an intra-round price point percentage if the clock 
percentage falls to a percentage corresponding to an amount of support 
that is no longer sufficient. The Commission will begin the auction 
with a decrement of 10 percent and limit any further changes to the 
decrement to between 5 percent and 20 percent.
    194. Bid Processing After a Clock Round Before the Clearing Round. 
Aggregate Cost at the Clock Percentage. After each round until the 
budget has cleared, the bidding system will calculate an ``aggregate 
cost,'' an estimate of what it would cost to assign support at the 
clock percentage to the bids submitted in the round, in order to 
determine whether the budget will clear in that round. More precisely, 
the aggregate cost is the sum of the implied support amounts for all 
the areas receiving bids at the clock percentage for the round, 
evaluated at the clock percentage. The calculation counts each area 
only once, even if the area receives bids, potentially including 
package bids, from multiple bidders. If there are multiple bids for an 
area at different performance tier and latency combinations, the 
calculation uses the bid with the highest implied support amount. If 
the aggregate cost for the round exceeds the budget, the bidding system 
will implement another round with a lower clock percentage.
    195. Clearing Determination. The first round in which the aggregate 
cost is less than or equal to the overall support budget is considered 
the ``clearing round.'' In the clearing round, the bidding system will 
further process bids submitted in the round and, if necessary, bids 
submitted at the previous round's clock percentage, to determine those 
areas that can be assigned and the support amounts winning bidders will 
receive.
    196. Bid Processing in the Clearing Round. In the clearing round, 
the bidding system will consider bids in more detail to determine which 
can be identified as winning, or ``assigned,'' bids in that round; the 
``second prices'' to be paid for winning bids; and which bids will 
carry forward to an additional bidding round.
    197. Assignment. Once bid processing has determined that the 
current round is the clearing round, the bidding system will begin to 
assign winning bids, awarding support to at most one bid for a given 
area. The system considers all the bids submitted in the round in 
ascending order of price point percentage to determine which bids can 
be assigned within the budget. Bids at the same price point are 
considered in ascending order of T+L weight.
    198. As it considers bids in ascending price point percentage order 
and then in ascending T+L weight order, the system assigns a bid with a 
given T+L weight if no other bid for the same area has already been 
assigned, as long as the

[[Page 36777]]

area did not receive bids at the clock percentage at the same or at a 
lower T+L weight and the areas to be assigned in a package bid meet the 
bid's minimum scale percentage. The bidding system also checks to 
ensure that sufficient budget is available to assign the bid.
    199. To determine whether there is sufficient budget to support a 
bid, the bidding system keeps a running sum of support costs. This cost 
calculation at price point percentages between and including the 
current and previous clock percentages extends the concept of the 
aggregate cost calculation (which identifies the clearing round) to 
take into account, at sequential intermediate price points, the cost of 
bids that have been assigned so far and the estimated cost for areas 
bid at the clock percentage that have not been assigned.
    200. At each ascending price point increment, starting at the clock 
percentage, the running cost calculation is the sum of support for 
three types of bids: (1) For assigned bids for which there were no 
other bids for support for their respective areas at price points lower 
than the currently-considered price point percentage, the system 
calculates the cost of providing support as the amount of support 
implied by the currently considered price point; (2) for assigned bids 
for areas that did receive other bids at price points lower than the 
currently-considered price point, support is generally calculated as 
the amount implied by the next-higher price point at which the area 
received a bid (where next-higher is relative to the price point of the 
assigned bid, not the currently-considered price point); and (3) bids 
at the clearing round's clock percentage that have not been assigned 
are evaluated as they were in the pre-clearing aggregate cost 
calculation: only one bid per area is included in the calculation, 
namely, the bid with the highest implied support amount (i.e., the 
lowest T+L weight) evaluated at the clock percentage.
    201. Once the system has determined which of the bids submitted in 
the round are assigned, it then determines the highest price point 
percentage at which the total support cost of the assigned bids does 
not exceed the budget (the ``clearing price point''). There will be no 
assigned bids at price point percentages above the clearing price 
point.
    202. Once the system has processed all the bids submitted in the 
round, if the system has determined that the clearing price point is 
equal to the clock percentage of the previous round and there is still 
available budget, the system will proceed to consider bids submitted at 
the clock percentage of the previous round. These carried-forward bids 
will be considered in ascending order of T+L weights, and bid-specific 
pseudo-random numbers will be used to break ties.
    203. Support Amount Determination. To determine the support amount 
for an assigned area, the system considers whether there were any other 
bids for the area in the round below the clearing price point. If there 
were no other bids below the clearing price point, the assigned area is 
supported at the clearing price point.
    204. If a bid is assigned for an area that received more than one 
bid in the round below the clearing price point, the assigned bid is 
generally supported at the next higher price point percentage at which 
there is a bid for the area. For example, if there are two bids for an 
area below the clearing price point, the lower bid is supported at the 
bid percentage of the higher bid.
    205. For any carried-forward bids assigned in the clearing round, 
the support amounts will be calculated based on the clock percentage of 
the previous round. A carried-forward bid can be assigned in the 
clearing round only if the system has determined that the clearing 
price point is equal to the clock percentage of the previous round.
    206. Bids and Bid Processing in Rounds After the Budget Clears. 
Carried-Forward and Acceptable Bids. Once the budget clears, further 
bidding resolves competition for areas that were bid at the clock 
percentage of the previous round and have not yet been assigned. 
Therefore, bidding rounds continue after the clearing round at lower 
clock percentages, but bids are restricted to areas for which the 
bidder had bid at the previous round's clock percentage but that could 
not be assigned. Such bids may be for a given unassigned area that 
received multiple single bids, package bids that were not assigned 
because the bidder's minimum scale percentage for the package was not 
met, or remainders of package bids--unassigned areas that formed part 
of package bids that were partially assigned.
    207. Bids at the clock percentage for unassigned areas will carry 
forward automatically to the next bidding round at the previous round's 
clock percentage, since the bidder had previously accepted that 
percentage. In the round into which the bids carry forward, the bidder 
may also bid for support for these areas at the current round's clock 
percentage or at intermediate price points. In rounds after the 
clearing round, a bidder cannot switch to bidding for an area for which 
it did not bid at the previous round's clock percentage.
    208. While bids for unassigned packages will carry forward at the 
previous clock percentage, the bidder for such a package may group the 
bids for the areas in the package into smaller packages and bid on 
those smaller packages at the current round's percentages. However, the 
unassigned remainders of package bids partially assigned to the bidder 
will carry forward as individual area bids. Any bids the bidder places 
for the remainder areas at the new round's percentages must be bids for 
individual areas--that is, the bidder cannot create a new package of 
any of the unassigned remainders.
    209. Proxy instructions, if at a price point percentage below the 
clock percentage of the previous round, generally continue to apply in 
rounds after the clearing round under the same conditions that apply to 
other bids. In the case of a proxy instruction for a package bid that 
is only partially assigned to the bidder, the proxy instruction 
continues to apply to the unassigned areas in the package bid. That is, 
the price point percentage specified in the proxy instructions would 
apply to bids for the individual remainder areas.
    210. Bid Processing. When processing the bids of a round occurring 
after the clearing round, the system considers bids for assignment and 
support amount determination in ascending order of T+L weight and then 
in ascending order of price point percentage. The system assigns a bid 
with a given T+L weight if the area has not already been assigned, as 
long as the area did not receive bids at the clock percentage at the 
same or at a lower T+L weight and, in the case of a package bid, as 
long as the areas to be assigned in the package meet the bid's minimum 
scale percentage.
    211. To determine the support amount for an assigned area, the 
system considers whether there were any other bids for the area in the 
round at the same or at a lower T+L weight. If there were no other 
bids, the assigned area is supported at the clock percentage of the 
previous round, consistent with the second-price rule. If a bid is 
assigned for an area that received more than one bid in the round at 
the same or at a lower T+L weight, the assigned bid is generally 
supported at the next higher price point percentage at which there was 
a bid for the area at the same or at a lower T+L weight.
    212. If, after the bids of the round have been processed, one or 
more of the areas with bids at the clock percentage

[[Page 36778]]

have not yet been assigned, there will be another bidding round at a 
lower clock percentage, with the same restrictions on bids and 
following the same assignment and pricing procedures.
    213. Closing Conditions. The auction will end once the overall 
budget has cleared if all areas that were bid at the round's clock 
percentage were assigned during the bid processing of the round.
    214. Availability of Bidding Information. Bidders will have secure 
access to certain non-public bidding information while bidding is 
ongoing. After each round, and before the next round begins, the 
Commission will make the following information available to individual 
bidders:
     The clock percentage for the upcoming round.
     The aggregate cost at the previous round's clock 
percentage for rounds prior to the clearing round.
    [cir] The aggregate cost at the clock percentage is not disclosed 
for the clearing round or any later round.
     For all eligible areas in all states, including those in 
which the bidder was not qualified to bid or is not bidding, whether 
the number of bidders that placed bids at the previous round's clock 
percentage was 0, 1, or 2 or more, and for areas that received 1 bid or 
2 or more bids, the lowest T+L weight that was associated with a bid in 
the previous round for the area.
    [cir] For the clearing round and any subsequent round, bidders are 
also informed about which areas have been assigned.
     Bidder-specific results:

    [cir] The implied support of the bidder's carried-forward bids for 
the next round and a list of those carried-forward bids.
    [cir] The number of areas for which proxy instructions are in 
effect for future rounds.
    [cir] After the clearing round, areas and support amounts that have 
been assigned to the bidder.
     Summary statistics of the bidder's bidding in the previous 
round, including:
    [cir] The bidder's activity, based on all bids in the previous 
round, and the implied support of the bidder's bids at the clock 
percentage.
    [cir] The number of areas for which the bidder bid, at the clock 
percentage and at other price points.
    215. Prior to each round, the Commission will also make available 
to each bidder the implied support amounts at the round's clock 
percentage for the areas and performance tier and latency combinations 
for which the bidder is eligible to bid.
    216. The bidding system will make available to bidders the T+L 
weight associated with the bid in an area that received a single bid in 
the previous round, and it will disclose the lowest T+L weight of any 
bid received in the previous round in an area with 2 or more bids.
    217. The Commission will withhold information on the progress of 
the auction from the general public until after the close of bidding 
when auction results are announced. Accordingly, during the auction, 
the public will not have access to such interim information as the 
current round, the clock percentage, the aggregate cost, or any summary 
statistics on bidding or assigned bids.
    218. After the close of bidding and announcement of auction 
results, the Commission will make publicly available all bidding data, 
except for proxy bidding instructions.
    219. Auction Announcements. The bidding system will report 
necessary information to bidders through auction announcements. All 
auction announcements will be available by clicking a link in the Rural 
Digital Opportunity Fund Bidding System.
    220. Auction Results. OEA will determine the winning bids as 
described in the document. After OEA and the Bureau announce the 
auction results, they will provide a means for the public to view and 
download bidding and results data.

VIII. Post-Auction Procedures

    221. General Information Regarding Long-Form Applications. Pursuant 
to Sec.  1.21004(a), each Auction 904 winning bidder is required to 
file an application for Rural Digital Opportunity Fund support, 
referred to as a long-form application, by the applicable deadline. 
Shortly after bidding has ended, OEA and the Bureau will issue a public 
notice declaring the auction closed, identifying the winning bidders, 
and establishing the deadline for the long-form application. Winning 
bidders will then have the opportunity to assign their winning bids to 
related entities or individual members of a consortium. Winning bidders 
or their designees will use the FCC Form 683 and the Auction 
Application System to participate in the Divide Winning Bids process 
and to submit their long-form applications. The Commission expects 
long-form applicants to expeditiously complete their applications and 
respond in a timely manner to staff requests for additional or missing 
information.
    222. Details regarding the submission and processing of long-form 
applications will be provided in a public notice after the close of the 
bidding. After a long-form applicant's application has been reviewed 
and is considered to be complete, and after the long-form applicant has 
submitted an acceptable letter of credit and accompanying Bankruptcy 
Code opinion letter, a public notice will be released authorizing the 
long-form applicant to receive Rural Digital Opportunity Fund support.
    223. Divide Winning Bids. Any winning bidder that intends to assign 
some or all of its winning bids to related entities must do so by 
submitting the Divide Winning Bids portion of the FCC Form 683 during 
the Divide Winning Bids filing window. The Divide Winning Bids filing 
window will be announced in the public notice declaring the auction 
closed.
    224. A winning bidder in Auction 904 may only assign its winning 
bids to a related entity that is named in its short-form application or 
that was formed after the short-form application deadline (i.e., July 
15, 2020). A related entity is an entity that is controlled by the 
winning bidder or is a member of (or an entity controlled by a member 
of) a consortium/joint venture of which the winning bidder is a member. 
Thus, if a holding company/parent company is a winning bidder, the 
winning bidder may designate at least one operating company that it 
controls to complete the long-form application to receive Rural Digital 
Opportunity Fund support for some or all of the winning bids in a 
state. If a consortium/joint venture is a winning bidder, the entity 
may designate at least one member of (or an entity controlled by a 
member of) the consortium/joint venture to complete the long-form 
application to receive Rural Digital Opportunity Fund support for some 
or all of the winning bids in a state.
    225. A winning bidder may assign winning bids to more than one 
entity in a single state, but it cannot assign a single winning bid to 
more than one entity. Thus, a winning bidder may not split among 
multiple entities either: (1) Eligible census blocks within a winning 
bid for an individual CBG, or (2) separate CBGs within a winning 
package bid.
    226. Each entity that is assigned a winning bid through the Divide 
Winning Bids process is the entity that must file the long-form 
application portion of FCC Form 683 in its own name. Except for one 
limited exception, that long-form applicant must be designated as the 
eligible telecommunications carrier to serve the relevant area(s), be 
named in the requisite letter(s) of credit, and fulfill the public 
interest obligations

[[Page 36779]]

associated with receiving Rural Digital Opportunity Fund support.
    227. If a winning bidder is a holding/parent company that has 
multiple operating companies in a state and intends to assign its 
winning bids to multiple operating companies in a state, it may choose 
one of those entities to be the lead operating company. In such 
circumstances, the winning bids should be assigned to that lead 
operating company, the long-form application should be filed in the 
name of the lead operating company, the letter of credit should be in 
the name of the lead operating company, and payments will be made to 
the study area code associated with the lead operating company. 
However, the long-form application must identify which operating 
companies will meet the public interest obligations for which CBGs and 
documentation must be submitted that demonstrates that each of the 
operating companies has an ETC designation covering the relevant CBGs. 
Compliance with the service milestones will be determined on a 
statewide basis across all the relevant operating companies.
    228. A winning bidder that assigns some or all its winning bids to 
a related entity must make a number of certifications in the Divide 
Winning Bids portion of FCC Form 683. In particular, it must certify 
and acknowledge that it: (1) Has assigned the winning bids to related 
entities that were named in the short-form application or are newly 
formed, (2) will inform each entity of its filing obligation and cause 
each entity to submit a timely FCC Form 683 long-form application, (3) 
will be at risk for default if any of the related entities do not 
submit a timely FCC Form 683 long-form application, and (4) will submit 
a timely FCC Form 683 long-form application for any of the winning bids 
that it did not assign to another entity.
    229. Long-Form Application: Disclosures and Certifications. Within 
the number of days specified by the Auction 904 closing public notice, 
a long-form applicant must electronically submit a properly completed 
long-form application (FCC Form 683) for the areas for which it (or its 
parent/holding company or consortium/joint venture) was deemed a 
winning bidder. Further instructions and filing requirements will be 
provided to long-form applicants in the auction closing public notice.
    230. Ownership Disclosure. A long-form applicant must fully 
disclose in its long-form application its ownership structure as well 
as information regarding the real party- or parties-in-interest in the 
applicant or application as set forth in Sec.  1.2112(a). A long-form 
applicant that was also a winning bidder will already have ownership 
information on file with the Commission that was submitted in its 
short-form application during the pre-auction process, which may simply 
need to be updated as necessary.
    231. General Universal Service Certifications. A long-form 
applicant must certify in its long-form application that it is in 
compliance with all statutory and regulatory requirements for receiving 
the universal service support that it seeks as of the long-form 
application filing deadline, or that it will be in compliance with such 
requirements before being authorized to receive Rural Digital 
Opportunity Fund support. A long-form applicant must also certify that 
it will comply with all program requirements, including service 
milestones. In addition, a long-form applicant must certify that it is 
aware that if it is not authorized to receive support based on its 
application, the application may be dismissed without further 
consideration and penalties may apply.
    232. Financial and Technical Capability Certification. A long-form 
applicant must certify in its long-form application that it is 
financially and technically capable of meeting the relevant public 
interest obligations for each performance tier and latency combination 
in the geographic areas in which it seeks support. A long-form 
applicant should be aware that in making a certification to the 
Commission it exposes itself to liability for a false certification. A 
long-form applicant should take care to review its resources and its 
plans before making the required certification.
    233. Public Interest Obligations Certification. A long-form 
applicant must certify in its long-form application that it will meet 
the relevant public interest obligations for each performance tier and 
latency combination for which it (or its parent/holding company or 
consortium/joint venture) was deemed a winning bidder, including the 
requirement that it will offer service at rates that are equal to or 
lower than the Commission's reasonable comparability benchmarks for 
fixed services offered in urban areas.
    234. Eligible Telecommunications Carrier Certification. A long-form 
applicant must acknowledge in its long-form application that it must be 
designated as an ETC in the relevant areas prior to being authorized to 
receive Rural Digital Opportunity Fund support in those areas. 
Specifically, the long-form applicant must certify that, if it has 
already been designated as an ETC in the relevant areas, it has 
provided a certification of its status in each such area and the 
relevant documentation supporting that certification in its long-form 
application. If the long-form applicant has not yet been designated as 
an ETC in the relevant areas, the long-form applicant must certify that 
it will submit a certification of its status as an ETC in each such 
area and the relevant documentation supporting that certification prior 
to being authorized to receive such support. This certification of ETC 
status and documentation must be submitted by the applicant within 180 
days after the release of the Auction 904 closing public notice.
    235. Description of Technology and System Design. Each long-form 
applicant will be required to demonstrate that it has a design plan 
with supportable technologies to meet the relevant Rural Digital 
Opportunity Fund public interest obligations in the areas covered by 
the winning bids by submitting technical information to support the 
operational assertions made in the short-form application. A long-form 
applicant is required to submit a detailed technology and system design 
description that explains how the design and technologies chosen will 
meet the relevant performance requirements, including information 
regarding quality, coverage, voice service, network management and on-
going operations. This submission must include a detailed network 
diagram. The network diagram must be certified by a professional 
engineer that ``the network is capable of delivering, to at least 95 
percent of the required number of locations in each relevant state, 
voice and broadband service that meets the requisite performance 
requirements.'' Because it may take time for a long-form applicant to 
create a detailed technology and system design description that is 
tailored to such areas, it will submit its technology and system design 
description in two stages.
    236. Stage I--Initial Overview. A long-form applicant must submit 
with its long-form application (due within the number of business days 
specified after the release of the Auction 904 closing public notice) 
an overview of its intended technology and system design for each state 
in which winning bids were made. The overview must describe at a high 
level how the long-form applicant will meet its Rural Digital 
Opportunity Fund public interest obligations for the relevant 
performance tier and latency combination(s) using Rural Digital 
Opportunity Fund support (e.g., building a new network or expanding an 
existing network, deploying new technology or existing

[[Page 36780]]

technology). This overview should avoid highly technical terminology or 
jargon unless such language is integral to explaining the project. The 
overview will be made publicly available, so a long-form applicant 
should not include any confidential trade secrets or commercial 
information in its overview.
    237. Stage II--Detailed Description. Within the specified number of 
days after the release of the Auction 904 closing public notice, a 
long-form applicant must submit, for each state in which winning bids 
were made, a more detailed description of its technology and system 
design. This second submission must describe the network to be built or 
upgraded, demonstrate the project's feasibility, and include the 
network diagram certified by a professional engineer. It must describe 
in detail a network that fully supports the delivery of consumer voice 
and broadband service that meets the requisite performance requirements 
to at least 95 percent of the required number of locations in each 
state by the end of the six-year build-out period and for the duration 
of the 10-year support term, assuming a 70 percent subscription rate by 
the final service milestone. It also must contain sufficient detail to 
demonstrate that the long-form applicant can meet the interim service 
milestones if it becomes authorized to receive support. If a long-form 
applicant submits a technology and system design description that lacks 
sufficient detail to demonstrate that the long-form applicant has the 
technical qualifications to meet the relevant Rural Digital Opportunity 
Fund obligations, the long-form applicant will be asked to provide 
further details about its proposed network. The Commission will treat 
all the information submitted with this second submission as 
confidential and will withhold it from routine public inspection.
    238. The Commission provides guidance on how a long-form applicant 
can successfully meet the Stage II requirement in Sec.  
54.804(b)(2)(iv) to provide a description of its technology and system 
design. Specifically, the Commission describes the types of information 
it would expect a long-form applicant to include, at a minimum, in a 
detailed description of its technology and system design in order to 
demonstrate that it has the technical qualifications to meet its Rural 
Digital Opportunity Fund obligations.
    239. The Commission understands that long-form applicants will be 
in a variety of implementation stages throughout the support term. For 
example, a long-form applicant may have already completed its network 
construction, may be in the process of constructing its network, or may 
be planning how it will construct its network. Indeed, the long-form 
applicant may have portions of its network(s) in different stages at 
the same time for different states, areas, or technology design 
solutions. Therefore, the Commission expects that the detailed 
descriptions that a long-form applicant submits will be based upon its 
current actions or intentions and that changes may and in many cases 
will be made throughout the support term. The Commission is looking for 
the long-form applicant to demonstrate that it has a technically 
feasible solution that will meet the Rural Digital Opportunity Fund 
support requirements by the relevant service milestones.
    240. Overall Network Design. A long-form applicant, regardless of 
the technology (or technologies) it proposes to use, is expected to:
     Describe the proposed last mile architecture(s), design, 
and technologies.
     Describe the proposed middle mile/backhaul topology, 
architecture, design, and technologies.
     Describe the proposed interconnection architecture, 
design, and technologies solution to connect to the internet. This will 
include the likely service providers, link data-rate/size, locations, 
dual-homing, and multi-homing characteristics.
     Describe the proposed architecture that will be used to 
provide voice service. Describe whether the proposed voice services 
will: (1) Be internally provided, (2) use a managed voice service 
provider, (3) use a voice over the top service, or (4) use another type 
of voice service.
     Describe the network's scalability to support customer 
growth and network data usage growth to account for: (1) Ever 
increasing application requirements, (2) increasing quality demands, 
and (3) lower response/latency demands for ever increasing usage of 
highly interactive applications.
     Describe the design and features that it proposes to 
implement that will: Improve reliability (such as redundancy) for 
equipment, links and software; dual homing; and multi-homing 
connectivity.
     Describe network infrastructure ownership. Indicate which 
parts of the network will use the long-form applicant's or another 
party's existing network facilities, including both non-wireless and 
wireless facilities extending from the network to customers' locations. 
For non-wireless facilities that do not yet exist, the description 
should indicate whether the new facilities will be aerial, buried, or 
underground. This includes leased lines, transit services, rented tower 
space for radios, etc.
     Provide technical information about the design methods, 
``rules of thumb,'' and engineering assumptions used to size the 
capacity of the network's nodes (or gateways), links and wireless base 
stations. These are often expressed as ratios, such as 
``oversubscription ratio'' applied in the middle-mile/backhaul and 
interconnection network levels that funnel the consumer traffic to the 
internet. The information provided should demonstrate how the required 
performance for the relevant performance tier will be achieved during 
periods of peak usage, downstream and upstream speed, and latency 
assuming a 70 percent subscription rate by the final service milestone. 
The document includes a diagram showing the various oversubscription 
ratios, link media (wired, wireless, etc.), redundancy and multi-homing 
in a visual format.
     Describe how the long-form applicant's design will meet 
the peak period end-to-end performance requirements for the path from 
the consumer premises to the internet. This requires that the applicant 
detail consumer path use case(s) that the long-form applicant will use 
to move traffic to and from the consumer premises to the internet. This 
description should define the technical, planning and capacity 
parameters that a stream of packets would experience along this end-to-
end path. For example, the document includes a diagram showing five 
paths that include various oversubscription ratios, link media (wired, 
wireless, etc.), redundancy, and multi-homing characteristics. The 
Commission expects individual path use cases to describe the pathway: 
Links (media, technology, data-rates, redundancy, etc.); frequencies, 
channels, antenna and wireless parameters; topology (mesh, ring, 
hierarchical) that also note redundant links or multi-homing, etc.; 
network devices (equipment type, redundancy, reliability); protocols; 
oversubscription ratios; and ETC owned vs leased infrastructure.
    241. Project Plan. The applicant will provide a project plan that 
describes a network build-out schedule that includes but is not 
restricted to plans for constructing last mile and middle mile 
facilities.
     The build-out schedule should include when (month, quarter 
or projected date) and where (geographic description, county, city, 
town, CBG,

[[Page 36781]]

census tract; note the state or higher level is not acceptable).
     The build-out schedule should show the long-form 
applicant's projected milestones on an annual basis, including 
achievement of the interim service milestones described in Sec.  
54.802(c) of the Commission's rules and completion of the network for 
the number of locations determined by the CAM by the end of the sixth 
year of support.
     The project plan and included schedule should incorporate 
detailed information showing how the long-form applicant plans to 
offer, to at least 95 percent of the required number of locations in 
each relevant state, voice and broadband service meeting the relevant 
performance requirements when the system is complete.
    242. Network Management and On-going Operations. The applicant's 
detailed description should:
     Describe the applicant's plans for monitoring network 
usage/capacity, performance, congestion, and other parameters.
     Describe how the applicant will maintain the performance 
and quality of the service for the duration of the 10-year support 
term.
     Describe who will provide these services. Will the 
applicant: (1) Use existing internal organizations, (2) use contracted 
management service providers, (3) create new internal organizations, or 
(4) engage new contractors?
     Describe how the applicant will comply with Commission 
performance measures for speed and latency. The description should 
include whether the applicant plans to use the Measuring Broadband 
America (MBA) system, off-the-shelf testing mechanisms such as existing 
network management systems and network management tools, or provider-
developed self-testing mechanisms.
    243. Network Diagram. The network diagram must be certified by a 
professional engineer and should:
     Identify all wireline and wireless segments of the 
proposed networks. This should include applicable middle-mile/backhaul 
and interconnection network infrastructure. These are also commonly 
referred to as ``links'' between the nodes. These descriptions should 
indicate the media/link technology, data-rate/speed, and topology if 
point-to-point, ring, etc.
     Uniquely identify (i) major network nodes including their 
manufacturer and model, as well as their functions, locations, and 
throughput/capacity; (ii) access nodes or gateways, including their 
technology, manufacturer and model, location, and throughput/capacity; 
and (iii) major inter-nodal links (not last mile), and their 
throughput/capacity.
     Indicate how many locations/consumers will be offered 
service from each access node or from each gateway, and which 
performance tier or tiers will be supported at each access node.
     Indicate what parts of the network will be new deployment 
and what parts will use existing network facilities.
     Identify specialized nodes used in providing voice 
service, such as SIP servers, PSTN gateways or voice OTT providers.
     Explain how nodes or gateways are connected to the 
internet backbone and Public Switched Telephone Network. Show 
redundancy, dual- or multi-homing configurations.
    244. Terrestrial Fixed Wireless. A long-form applicant that 
proposes to use terrestrial fixed wireless technologies should:
     Explain, with technical detail, how the proposed spectrum 
can meet or exceed the relevant performance requirements at peak usage 
periods. Clearly identify the licensed and unlicensed spectrum that 
will be used.
     Provide the calculations used, for each performance tier 
and frequency band, to design the last mile link budgets in both the 
upload and download directions at the cell edge, using the technical 
specifications of the expected base station and customer premise 
equipment. Submit assumptions regarding fading statistics, cell edge 
probability of coverage, and cell loading for each relevant performance 
tier.
     Provide coverage maps for the planned and/or existing 
networks that will be used to meet the Rural Digital Opportunity Fund 
public interest obligations, indicating where the upload and download 
speeds will meet or exceed the relevant performance tier speed(s). The 
coverage maps should be provided for each interim and final service 
milestone and should display the required service areas and target 
locations (or a representation thereof).
     Provide detailed radio access network (RAN) infrastructure 
information used to generate the coverage maps for each unique cell 
including longitude, latitude, antenna height, antenna orientation, 
antenna down-tilt, antenna model, antenna system configuration, 
effective radiated power, operating spectrum amount, operating spectrum 
type, and operating radio technology.
     Describe the underlying propagation model used to prepare 
the coverage maps and how the model incorporates the operating 
spectrum, antenna heights, distances, fading statistics, terrain 
resolution, and clutter resolution.
     Describe the underlying cell site and generally, radio 
frequency (RF) access network capacity management and traffic 
engineering models or concepts. Also describe any adjunct carrier 
aggregation or spectrum sharing techniques and if the proposed system 
could accommodate these features, if needed.
     Describe, for each relevant performance tier and latency 
combination, the base station equipment that the long-form applicant 
plans to use.
     Describe the planned customer premise equipment 
configuration.
    245. Satellite Technologies. A long-form applicant that proposes to 
use primarily satellite technologies should:
     Describe how many satellites that are in view 
simultaneously from any specific location will be required to meet the 
relevant Rural Digital Opportunity Fund public interest obligations.
     Describe how many uplink and downlink gateway antenna 
beams will be required on each satellite, and the capacity of each beam 
in megabits per second. For each winning bid area/state to be served, 
provide both the uplink and downlink beams, provide the gateway call 
sign, beam ID, frequency bands used, and location (city/state).
     Describe how many uplink and downlink user antenna beams 
will be required on each satellite, and the capacity of each beam in 
megabits per second.
     Describe how the gateway capacity is connected to user 
beams on the satellite, in terms of beams and data capacity per beam.
     Describe how much satellite capacity (in gigabits per 
second) the applicant plans to reserve, by winning bid area/state, to 
serve the locations required under applicant's award and to achieve the 
required service milestones.
     Describe whether the capacity on the uplink and downlink 
beams would be able to be reallocated once a satellite commences 
operation, if the subscription rate is less than 70 percent in one beam 
but more than 70 percent in another beam. If there are circumstances in 
which such reallocation would not be possible, please describe those 
circumstances and the states impacted.
    246. Available Funds Certification and Description. A long-form 
applicant must certify in its long-form application that it will have 
available funds for all project costs that exceed the amount of

[[Page 36782]]

Rural Digital Opportunity Fund support to be received for the first two 
years of its support term. A long-form applicant must also describe how 
the required construction will be funded in each state. The description 
should include the estimated project costs for all facilities that are 
required to complete the project, including the costs of upgrading, 
replacing, or otherwise modifying existing facilities to expand 
coverage or meet performance requirements. The estimated costs must be 
broken down to indicate the costs associated with each proposed service 
area at the state level and must specify how Rural Digital Opportunity 
Fund support and other funds, if applicable, will be used to complete 
the project. The description must include financial projections 
demonstrating that the long-form applicant can cover the necessary debt 
service payments over the life of any loans. The Commission will treat 
all the information submitted with this submission as confidential and 
will withhold it from routine public inspection.
    247. Spectrum Access. A long-form applicant that intends to use 
wireless technologies to meet the relevant Rural Digital Opportunity 
fund public interest obligations must demonstrate that it currently has 
sufficient access to spectrum. Specifically, a long-form applicant 
must, in its long-form application (i) identify the spectrum band(s) it 
will use for the last mile, backhaul, and any other parts of the 
network; (ii) describe the total amount of uplink and downlink 
bandwidth (in megahertz) that it has access to in each spectrum band 
for the last mile; (iii) describe the authorizations (including leases) 
it has obtained to operate in the spectrum, if applicable; and (iv) 
list the call signs and/or application file numbers associated with its 
spectrum authorizations, if applicable. To the extent that a long-form 
applicant will use licensed spectrum, it should provide details about 
how the licensed service area covers its winning bid area(s) (e.g., 
provide a list of geographic areas that the spectrum license covers and 
describe how those areas relate to the winning bid area(s)).
    248. A long-form applicant must also certify that the description 
of the spectrum access is accurate and that it will retain such access 
for at least 10 years after the date on which it is authorized to 
receive support. Applications will be reviewed to assess the 
reasonableness of this certification.
    249. Letter of Credit Commitment Letter. Within the specified 
number of days after the release of the Auction 904 closing public 
notice, a long-form applicant must submit a letter from a bank 
acceptable to the Commission, as set forth in Sec.  54.804(b)(3), 
committing to issue an irrevocable stand-by letter of credit, in the 
required form, to the long-form applicant. The letter must, at a 
minimum, provide the dollar amount of the letter of credit and the 
issuing bank's agreement to follow the terms and conditions of the 
Commission's model letter of credit in Appendix C of the Rural Digital 
Opportunity Fund Order.
    250. Documentation of ETC Designation. Within 180 days after the 
release of the Auction 904 closing public notice, a long-form applicant 
is required to submit appropriate documentation of its high-cost ETC 
designation in all the areas for which it will receive support. 
Appropriate documentation should include the original designation 
order, any relevant modifications, e.g., expansion of service area or 
inclusion of wireless, along with any name-change orders. A long-form 
applicant is also required to provide documentation showing that the 
designated areas (e.g., census blocks, wire centers, etc.) cover the 
relevant winning bid areas so that it is clear that the long-form 
applicant has high-cost ETC status in each winning bid area. Such 
documentation could include maps of the long-form applicant's ETC 
designation area, map overlays of the winning bid areas, and/or charts 
listing designated areas. Additionally, a long-form applicant is 
required to submit a letter with its documentation from an officer of 
the company certifying that the long-form applicant's ETC designation 
for each state covers the relevant areas where the long-form applicant 
will receive support.
    251. In the event a long-form applicant is unable to obtain the 
necessary ETC designations within this timeframe, it would be 
appropriate to waive the 180-day timeframe if the long-form applicant 
is able to demonstrate that it has engaged in good faith efforts to 
obtain an ETC designation, but the proceeding is not yet complete. The 
Commission will presume that a long-form applicant acted in good faith 
if it files its ETC application with the state commission or the 
Commission as applicable within 30 days of the release of the Auction 
904 closing public notice. Absent a waiver of the deadline, a long-form 
applicant that fails to obtain the necessary ETC designations by this 
deadline will be subject to an auction forfeiture and will not be 
authorized to receive Auction 904 support.
    252. Audited Financial Statements. Within 180 days after the 
release of the Auction 904 closing public notice, a long-form applicant 
that did not submit audited financial statements in its pre-auction 
short-form application must submit the financial statements from the 
prior fiscal year that are audited by an independent certified public 
accountant. Any long-form applicant that fails to submit the audited 
financial statements as required by the 180-day deadline will be 
subject to a base forfeiture of $50,000, which will be subject to 
adjustment upward or downward as appropriate based on the criteria set 
forth in the Commission's forfeiture guidelines.
    253. Letter of Credit and Bankruptcy Code Opinion Letter. After a 
long-form applicant's application has been reviewed and is considered 
complete, the Commission will issue a public notice identifying each 
long-form applicant that may be authorized to receive Rural Digital 
Opportunity Fund support. No later than 10 business days after the 
release of the public notice, a long-form applicant must obtain one 
irrevocable standby letter of credit at the value specified in Sec.  
54.804(c)(1) from a bank acceptable to the Commission as set forth in 
Sec.  54.804(c)(2) for each state where the long-form applicant is 
seeking to be authorized. The letter of credit must be issued in 
substantially the same form as set forth in the model letter of credit 
provided in Appendix C of the Rural Digital Opportunity Fund Order. The 
first letter of credit must cover the first year of support at a 
minimum. The value of the letter of credit must increase each year 
until it has been verified that the support recipient has met certain 
milestones as described in more detail in Sec.  54.804(c)(1) of the 
Commission's rules.
    254. In addition, a long-form applicant will be required to provide 
with the letter of credit an opinion letter from outside legal counsel 
clearly stating, subject only to customary assumptions, limitations, 
and qualifications, that, in a proceeding under the Bankruptcy Code, 
the bankruptcy court would not treat the letter of credit or proceeds 
of the letter of credit as property of the long-form applicant's 
bankruptcy estate, or the bankruptcy estate of any other bidder-related 
entity requesting issuance of the letter of credit, under Sec.  541 of 
the Bankruptcy Code.
    255. Default Payment Requirements. Auction Forfeiture. Any Auction 
904 winning bidder or long-form applicant will be subject to a 
forfeiture in the event of a default before it is authorized to begin 
receiving support. A winning bidder or long-form applicant will be 
considered in default and will be subject to forfeiture if it fails to 
timely

[[Page 36783]]

file a long-form application, fails to meet the document submission 
deadlines, is found ineligible or unqualified to receive Rural Digital 
Opportunity Fund support by the Bureau on delegated authority, and/or 
otherwise defaults on its winning bids or is disqualified for any 
reason prior to the authorization of support. Any such determination by 
the Bureau shall be final, and a winning bidder or long-form applicant 
shall have no opportunity to cure through additional submissions, 
negotiations, or otherwise. Agreeing to such payment in the event of a 
default is a condition for participating in bidding in Auction 904.
    256. In the event of an auction default, the Commission will impose 
a base forfeiture per violation of $3,000 subject to adjustment upward 
or downward based on the criteria set forth in the Commission's 
forfeiture guideline. A violation is defined as any form of default 
with respect to the CBG. In other words, there shall be separate 
violations for each CBG assigned in a bid. To ensure that the amount of 
the base forfeiture is not disproportionate to the amount of a winning 
bidder's bid, the Commission will limit the total base forfeiture to 15 
percent of the bidder's total assigned support for the bid for the 
support term.
    257. Non-Compliance Measures Post-Authorization. A long-form 
applicant that has received notice from the Commission that it is 
authorized to receive Rural Digital Opportunity Fund support will be 
subject to non-compliance measures once it becomes a support recipient 
if it fails or is unable to meet its minimum coverage requirement, 
other public interest obligations, or fails to fulfill any other term 
or condition of Rural Digital Opportunity Fund support. These measures 
will scale with the extent of non-compliance, and include additional 
reporting, withholding of support, support recovery, and drawing on the 
support recipient's letter of credit if the support recipient cannot 
pay back the relevant support by the applicable deadline. A support 
recipient may also be subject to other sanctions for non-compliance 
with the terms and conditions of Rural Digital Opportunity Fund 
support, including, but not limited to, potential revocation of ETC 
designations and suspension or debarment. Additionally, support 
recipients are subject to the non-compliance measures that have been 
adopted in conjunction with the methodology for high-cost support 
recipients to measure and report speed and latency performance to fixed 
locations.

Auction 904 Short-Form Application Operational Questions (Appendix A)

Operational History

    1. Has the applicant previously deployed consumer broadband 
networks (Yes/No)? If so:
    a. Provide the date range when broadband service was offered and in 
which state(s) service was offered. Specify dates for each state.
    b. Provide an estimate of how many subscribers are currently served 
in each state. (If the applicant is no longer providing service in any 
state, estimate the number of customers that were served at the 
beginning of the last full year that the applicant did provide 
service.)
    c. What services (e.g., voice, video, broadband internet access) 
were or are provided in each state?
    d. List any data-usage limit (data cap) used as part of existing 
broadband access services.
    e. What specific technologies and network architecture are used for 
last-mile; middle-mile/backhaul; and internet interconnections?
    f. What are the deployed voice technologies and how are these voice 
services implemented?

Proposed Network(s) Using Funding From Auction 904

    Answer for each state the applicant selected in its application:
    2. Network Infrastructures:
    a. Briefly describe from a high-level network perspective which 
network architectures and technologies will be used in the applicant's 
proposed deployment. If there are variations by state, region, or other 
criteria, describe each network or location.
    b. Last-mile: What are the relevant topologies, technologies and 
protocols and the corresponding industry standards for the last-mile 
network infrastructure in the applicant's proposed deployment?
    c. Middle-Mile/Backhaul: What are the relevant topologies, 
technologies and protocols and the corresponding industry standards for 
the middle-mile/backhaul network infrastructure in the applicant's 
proposal?
    d. Internet Access: What are the relevant topologies, technologies 
and protocols and the corresponding industry standards for the internet 
access network infrastructure in the applicant's proposal? This is the 
connection to major IXPs, transit providers, etc.
    e. Gigabit Performance Tier: Special care must be taken to describe 
the above portions of the network, especially last-mile, when service 
providers propose to bid in the Gigabit performance tier. For example, 
if an applicant proposes to use DSL to offer Gigabit service, wire 
lengths, wire quality & capability, protocols, vendor devices and other 
factors must be detailed. Additionally, fixed wireless providers 
proposing to bid in the Gigabit performance tier must pay special and 
careful consideration in answering the questions in 4(e) below on 
Network Performance.
    f. If the applicant is proposing to use non-standard technologies 
and protocols, the applicant should identify which vendor(s) and 
product(s) are being considered and provide links to the vendors' 
websites and to publicly available technical specifications of the 
product(s). If technical specifications for the non-standard 
technologies are not available on a vendor's website, technical 
documents may be submitted with the application.
    3. Voice Services:
    a. Briefly describe the anticipated system(s) that will be used to 
provide voice services to the applicant's subscribers, including a 
standalone voice service. Examples of such solutions could include: (1) 
Internally designed and operated; (2) provided by a Managed Voice 
Service Provider; or (3) or an OTT (Over-The-Top) solution available to 
subscribers via the applicant. If the applicant is considering multiple 
solutions, provide information on each one and identify possible 
vendors or service providers.
    b. If the applicant plans to use an internally designed and 
operated system, provide specific information on any existing voice 
system the applicant operates.
    c. If the applicant plans to implement a new system to meet these 
requirements, provide specific information on the technology, 
standards, latency, planned QoS, architecture; design; protocols; 
equipment; vendors; public switched telephone network (PSTN) 
interconnections (links, speed and to whom you interconnect); capacity 
(projected peak call rates versus total projected subscribers); 
reliability and availability design and procedures; and the applicant's 
specific plans to control, manage, monitor, and recover/repair/
troubleshoot outages. If any of these issues are addressed in response 
to the other questions in Appendix A to the Auction 904 Procedures 
Public Notice, it is permissible to cross-reference that information 
here.
    4. Network Performance:
    a. Can the applicant demonstrate that the technology and the 
engineering design will fully support the proposed performance tier, 
latency and voice

[[Page 36784]]

service requirements for the requisite number of locations during peak 
periods (Yes/No)?
    b. Briefly describe the capabilities of the network technologies 
that will enable performance tier (speed and usage allowance), latency 
and (where applicable) voice service mean opinion score (MOS) 
requirements to be met. This can include traffic management, Quality of 
Service, over-building/scalability, using equipment that easily allows 
upgrades and other techniques.
    c. For both broadband and voice services, state the target or 
design peak period over-subscription ratio(s) for the last-mile, 
middle-mile/backhaul and internet interconnection that will be used. 
Additionally, describe the basic assumptions and calculations that will 
be used in determining these ratios.
    d. What general rules-of-thumb will be used to determine if any 
portion of the network infrastructure needs to be improved, upgraded or 
expanded to ensure the network is able to meet the required speed, 
latency and where required voice quality? For example, taking action 
when (1) when middle-mile link average peak period load is greater than 
70 percent; when a link peak period load exceeds 95 percent more than 
10 times; when a router's average peak period processing utilization 
exceeds 70 percent; when an internet access link load exceeds 75 
percent for a specified time period; when call setup, call drop, call 
completion rates meet or exceed applicant targets.
    e. For fixed broadband wireless access and satellite networks, 
describe how the proposed frequency band(s) and technology attributes, 
for both last mile and backhaul, will achieve the performance tier(s) 
and latency requirements to all locations for both broadband and voice 
services. Specifically, describe how the planned frequency bands, base 
station configuration, including, for example, point-to-point, point-
to-multipoint or mesh architectures, and customer premise equipment 
(CPE), channel bandwidths, minimal requirements, traffic assumptions 
and propagation assumptions and calculations yield sufficient capacity 
to all the planned locations.
    5. Network Buildout: Can the applicant demonstrate that all the 
network buildout requirements to achieve all service milestones can be 
met (Yes/No)? The applicant will be required to submit a detailed 
project plan in the long-form application if it is named as a winning 
bidder. Describe concisely the information that the applicant would 
make available in such a detailed project plan.
    6. Network Equipment, Consultants and Deployment Vendors: For the 
proposed performance tier and latency combination(s), can the applicant 
demonstrate that potential vendors, integrators and other partners are 
able to provide commercially available and fully compatible network 
equipment/systems, interconnection, last mile technology and CPE that 
will meet the performance tier(s) and latency performance requirements 
at a cost consistent with applicant's buildout budget and in time to 
meet service milestones (Yes/No)? Describe concisely the information 
and sources of such information that the applicant could make available 
to support this response.
    7. Network Management:
    a. Briefly describe the method(s) that will be used to monitor, 
operate, problem resolution, provision and optimize the network and 
associated services such as voice. Identify if the proposed solution is 
internally developed and operated; expands existing systems; uses a 
third-party network management provider; or is some variant or 
combination of these methods.
    b. Remember to include how voice operations will be monitored, 
operated, problems resolved, provisioned and optimized as appropriate.
    c. If the applicant will expand existing network management 
systems, describe how the current system provides successful 
operations.
    d. If the applicant will use a third-party network management 
provider, identify any providers the applicant is currently 
considering.
    e. If the applicant will develop, deploy and operate a new system 
can the applicant demonstrate that it can provide internally developed 
operations systems for provisioning and maintaining the proposed 
network including equipment and segments, interconnections, CPE and 
customer services at cost consistent with applicant's buildout budget 
and in time to meet service milestones (Yes/No)? If not, can the 
applicant demonstrate that potential vendors, integrators, and other 
partners are able to provide commercially available and fully 
compatible operations systems and tools for provisioning and 
maintaining the proposed network at cost consistent with applicant's 
buildout budget and in time to meet service milestones (Yes/No)? 
Describe concisely the information and sources of such information that 
the applicant could make available to support these responses.
    8. Satellite Networks: If the applicant is using satellite 
technologies, identify which satellites would be used, and describe 
concisely the total satellite capacity available, that is, capacity 
that is not currently in use for existing subscribers. In addition, 
describe how the proposed network will achieve the performance tier(s) 
and latency requirements to all planned locations in a mass-market 
consumer service.

Auction 904 Spectrum Chart (Appendix B)

----------------------------------------------------------------------------------------------------------------
                                              Paired licensed              Unpaired licensed      Unlicensed
                                 -------------------------------------------------------------------------------
      Spectrum band/service                             Downlink freq.     Uplink & downlink
                                  Uplink freq. (MHz)         (MHz)            freq. (MHz)      Unlicensed (MHz)
----------------------------------------------------------------------------------------------------------------
600 MHz.........................  663-698...........  617-652...........
Lower 700 MHz...................  698-716...........  728-746...........  716-728 (Downlink
                                                                           only).
Upper 700 MHz...................  776-787...........  746-757...........
800 MHz SMR.....................  813.5/817-824.....  858.5/862-869.....
Cellular........................  824-849...........  869-894...........
Broadband PCS...................  1850-1915.........  1930-1995.........
AWS-1...........................  1710-1755.........  2110-2155.........
AWS (H Block)...................  1915-1920.........  1995-2000.........
AWS-3...........................  1755-1780.........  2155-2180.........  1695-1710 (Uplink
                                                                           only).
AWS-4...........................  ..................  ..................  2000-2020, 2180-
                                                                           2200 (Downlink
                                                                           only).
BRS/EBS.........................  ..................  ..................  2496-2690.........
WCS.............................  2305-2315.........  2350-2360.........  2315-2320, 2345-
                                                                           2350.
CBRS (3.5 GHz)..................  ..................  ..................  3550-3700.........
3.7 GHz Service.................  ..................  ..................  3700-3800, 3800-
                                                                           3900, 3900-3980.
Lower 37 GHz....................  ..................  ..................  37000-37600.......

[[Page 36785]]

 
UMFUS (terrestrial).............  ..................  ..................  24,250-24,450,
                                                                           24,750-25,250,
                                                                           27,500-28,350,
                                                                           37,600-38,600,
                                                                           38,600-40,000,
                                                                           47,200-48,200..
                                 ----------------------------------------                    -------------------
70-80-90 GHz unpaired & 70-80     Point-to-Point Pairs for 70-80 GHz      71,000-76,000,
 GHz paired (point-to-point        71,000-76,000 with 81,000-86,000        81,000-86,000,
 terrestrial).                                                             92,000-94,000,
                                                                           94,100-95,000.
                                 ----------------------------------------                    -------------------
TV White Spaces.................  ..................  ..................  ..................  54-72, 76-88, 174-
                                                                                               216, 470-698
900 MHz.........................  ..................  ..................  ..................  902-928
2.4 GHz.........................  ..................  ..................  ..................  2400-2483.5
5 GHz...........................  ..................  ..................  ..................  5150-5250, 5250-
                                                                                               5350, 5470-5725,
                                                                                               5725-5850
6 GHz...........................  ..................  ..................  ..................  5925-6425, 6525-
                                                                                               6875
24 GHz..........................  ..................  ..................  ..................  24,000-24,250
57-71 GHz.......................  ..................  ..................  ..................  57,000-71,000
Ku Band (satellite).............  12,750-13,250,      10,700-12,700.....
                                   14,000-14,500.
Ka Band (satellite).............  27,500-30,000.....  17,700-20,200.....
V Band (satellite)..............  47,200-50,200,      37,500-42,000.....
                                   50,400-52,400.
----------------------------------------------------------------------------------------------------------------

Abbreviations
AWS Advanced Wireless Services
BRS/EBS Broadband Radio Service/Education Broadband Service
CBRS Citizens Broadband Radio Service
PCS Personal Communications Service
SMR Specialized Mobile Radio
UMFUS Upper Microwave Flexible Use Service
WCS Wireless Communications Service

IX. Procedural Matters

    258. Paperwork Reduction Act Analysis. The document implements the 
information collections adopted in the Rural Digital Opportunity Fund 
Order, 85 FR 13773 (Mar. 10, 2020), and does not contain any additional 
information collection(s) subject to the Paperwork Reduction Act of 
1995 (PRA), Public Law 104-13. The Commission received PRA approval for 
information collections related to the short-form application process 
and is seeking PRA approval for the information collections related to 
the long-form application processes. The document 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.
    259. Supplemental Final Regulatory Flexibility Analysis. As 
required by the Regulatory Flexibility Act of 1980 (RFA), the 
Commission prepared an Initial Regulatory Flexibility Analysis (IRFA) 
in connection with the Rural Digital Opportunity Fund NPRM, 84 FR 43543 
(Aug. 21, 2019), and a Final Regulatory Flexibility Analysis (FRFA) in 
connection with the Rural Digital Opportunity Fund Order, 85 FR 13773 
(Mar. 10, 2020). A Supplemental Initial Regulatory Flexibility Analysis 
(Supplemental IRFA) was also filed in the Auction 904 Comment Public 
Notice, 85 FR 15092 (Mar. 17, 2020) in this proceeding. The Commission 
sought written public comment on the proposals in the Rural Digital 
Opportunity Fund NPRM and in the Auction 904 Comment Public Notice, 
including comments on the IRFAs and the Supplemental IRFA. No comments 
were filed addressing the IRFAs. The Commission included a Final 
Regulatory Flexibility Analysis (FRFA) in connection with the Rural 
Digital Opportunity Fund Order. The Supplemental Final Regulatory 
Flexibility Analysis (Supplemental FRFA) supplements the FRFA in the 
Rural Digital Opportunity Fund Order to reflect the actions taken in 
the document and conforms to the RFA.
    260. Need for, and Objectives of, this Public Notice. The Public 
Notice establishes procedures for the Rural Digital Opportunity Fund 
auction (Auction 904). The Public Notice establishes procedures for, 
among other things, how an applicant can become qualified to bid in the 
auction, how bidders will submit bids, and how bids will be processed 
to determine winners and assign support amounts.
    261. Following the release of the Rural Digital Opportunity Fund 
Order, the Commission released the Auction 904 Comment Public Notice. 
The Auction 904 Comment Public Notice proposed specific procedures for 
implementing the rules proposed in the Rural Digital Opportunity Fund 
NPRM and adopted in the Rural Digital Opportunity Fund Order. The 
Auction 904 Comment Public Notice did not change matters adopted in the 
Rural Digital Opportunity Fund Order, but requested comment on how the 
proposals in the Auction 904 Comment Public Notice might affect the 
previous regulatory flexibility analyses in this proceeding.
    262. The document establishes procedures for awarding support in 
Auction 904 through a multi-round, reverse auction, the minimum 
biddable area for the auction, aggregating eligible areas into larger 
geographic units for bidding, setting reserve prices, and the 
availability of application and auction information to bidders and to 
the public during and after the auction. The document also establishes 
detailed bidding procedures for conducting Auction 904 using a 
descending clock auction format, including bid collection, clock 
prices, bid format, package bidding format, proxy bidding, bidder 
activity rules, bid processing, and how support amounts are determined.
    263. To implement the rules adopted by the Commission in the Rural 
Digital Opportunity Fund Order for the pre-auction process, the 
document establishes specific procedures and requirements for applying 
to participate and becoming qualified to bid in Auction 904, including 
designating the state(s) and performance tier/latency combinations in 
which an applicant intends to bid, and providing operational and 
financial information designed to allow the Commission to assess the 
applicant's qualifications to meet the public interest obligations for 
each area for which it seeks support. The document also sets forth 
information that a winning bidder will be required to submit in its 
post-auction long-form application in order to become authorized to 
receive Auction 904 support.

[[Page 36786]]

    264. Accordingly, the procedures established in the document are 
consistent with the Rural Digital Opportunity Fund Order and the prior 
regulatory flexibility analyses set forth in this proceeding, and no 
changes to the earlier analyses are required.
    265. Summary of Significant Issues Raised by Public Comments in 
Response to the Supplemental IRFA. There were no comments filed that 
specifically addressed the proposed procedures presented in the 
Supplemental IRFA.
    266. 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 comments filed by the Chief Counsel 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.
    267. The Chief Counsel did not file any comments in response to the 
auction procedures proposed in this proceeding.
    268. Description and Estimate of the Number of Small Entities to 
which the Procedures Will Apply. The RFA directs agencies to provide a 
description of and, where feasible, an estimate of the number of small 
entities that may be affected by the procedures adopted. 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.
    269. A FRFA was incorporated into the Rural Digital Opportunity 
Fund Order. In that analysis, the Commission described in detail the 
small entities that might be significantly affected. In the document, 
the Commission incorporates by reference the descriptions and estimates 
of the number of small entities from the previous FRFAs in the Rural 
Digital Opportunity Fund Order.
    270. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The data, information and 
document collection required by the Rural Digital Opportunity Fund 
Order as described in the previous FRFA and the Supplemental IRFA in 
the Auction 904 Comment Public Notice in this proceeding are 
incorporated by reference.
    271. Steps Taken to Minimize the Significant Economic Impact on 
Small Entities, and Significant Alternatives Considered. The RFA 
requires an agency to describe any significant alternatives that it has 
considered in reaching its proposed approach, which may include the 
following four alternatives (among others): ``(1) the establishment of 
differing compliance or reporting requirements or timetables that take 
into account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) and exemption 
from coverage of the rule, or any part thereof, for small entities.
    272. The analysis of the Commission's efforts to minimize the 
possible significant economic impact on small entities as described in 
the previous Rural Digital Opportunity Fund Order FRFA is incorporated 
by reference. In addition, the bidding procedures established in the 
document are designed to facilitate the participation of qualified 
service providers of all kinds, including small entities, in the Rural 
Digital Opportunity Fund program, and to give all bidders, including 
small entities, the flexibility to place bids that align with their 
intended network construction or expansion, regardless of the size of 
their current network footprints. For example, the Commission will use 
census block groups (CBGs) containing one or more eligible census 
blocks as the minimum biddable area for the auction in order to provide 
bidders, including small providers, with flexibility to target their 
intended areas of network expansion or construction without 
significantly complicating the bidding process. To help ensure that all 
bidders--both large and small--understand the bidding procedures, 
including those related to package bidding, further educational 
opportunities and materials will be provided well in advance of the 
auction.
    273. Furthermore, the pre-auction application procedures set forth 
in the document are intended to require applicants to submit enough 
information to permit the Commission to determine their qualifications 
to participate in Auction 904, without requiring so much information 
that it is cost-prohibitive for any entity, including small entities, 
to participate.
    274. Finally, recognizing that some entities may be new to 
Commission auctions, the Commission announces the types of materials 
and other information it will make available to help educate parties 
that have not previously applied to participate or bid in a Commission 
auction. Specifically, OEA will compile and release a guide that 
provides further technical and mathematical detail regarding the 
bidding, assignment, and support amount determination procedures. Two 
online tutorials will be available to serve as references for potential 
applicants and bidders. Additionally, a mock auction will be conducted 
that will enable all qualified bidders, including small entities, to 
become familiar with the bidding system and to practice submitting bids 
prior to the auction. By providing these resources, the Commission 
seeks to minimize any economic impact on small entities and help all 
entities--both large and small--fully understand the bidding and 
application procedures. The Commission's Office of Communications 
Business Opportunities will also engage with small providers.
    275. Report to Congress. The Commission will send a copy of the 
document, including this Supplemental FRFA, in a report to Congress 
pursuant to the Congressional Review Act. In addition, the Commission 
will send a copy of the document, including this Supplemental FRFA, to 
the Chief Counsel for Advocacy of the SBA. A copy of the document and 
Supplemental FRFA (or summaries thereof) will also be published in the 
Federal Register.

Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2020-13216 Filed 6-17-20; 8:45 am]
BILLING CODE 6712-01-P