DA 00-1486

July 3, 2000

**AUCTION OF LICENSES IN THE 747 -- 762 AND 777 -- 792 MHz BANDS
SCHEDULED FOR SEPTEMBER 6, 2000**

**PROCEDURES IMPLEMENTING PACKAGE BIDDING FOR AUCTION NO. 31**

**BIDDER SEMINAR SCHEDULED FOR JULY 24, 2000**

Report No. AUC-00-31-H (Auction No. 31)

I. INTRODUCTION AND GENERAL INFORMATION
[1](#introduction-and-general-information)

A. Introduction [1](#introduction)

B. Auction Specifics [3](#auction-specifics)

1\. Auction Procedures and New Dates and Deadlines
[3](#auction-procedures-and-new-dates-and-deadlines)

2\. Licenses and Packages To Be Auctioned
[4](#licenses-and-packages-to-be-auctioned)

3\. Bidding Methodology [6](#bidding-methodology)

4\. Requirements for Participation [6](#requirements-for-participation)

5\. Auction Registration and Remote Electronic Bidding Software
[6](#auction-registration-and-remote-electronic-bidding-software)

II\. AUCTION EVENT [6](#auction-event)

A. Auction Structure [7](#auction-structure)

1\. Simultaneous Multiple Round with Package Bidding
[7](#simultaneous-multiple-round-with-package-bidding)

2\. Maximum Eligibility [9](#maximum-eligibility)

3\. Activity Rules [9](#activity-rules)

4\. Activity Rule Waivers and Reducing Eligibility
[12](#activity-rule-waivers-and-reducing-eligibility)

5\. Auction Stages and Stage Transitions
[13](#auction-stages-and-stage-transitions)

6\. Auction Stopping Rules [14](#auction-stopping-rules)

7\. Auction Delay, Suspension, or Cancellation
[15](#auction-delay-suspension-or-cancellation)

B. Bidding Procedures [15](#bidding-procedures)

1\. Round Structure [15](#round-structure)

2\. Reserve Price or Minimum Opening Bid
[16](#reserve-price-or-minimum-opening-bid)

3\. Minimum Accepted Bids and Bid Increments
[16](#minimum-accepted-bids-and-bid-increments)

4\. Last and Best Bids [21](#last-and-best-bids)

5\. Renewed Bids [21](#renewed-bids)

6\. Winning and Provisionally Winning Bids
[21](#winning-and-provisionally-winning-bids)

7\. Bidding [27](#bidding)

8\. Bid Removal and Bid Withdrawal [28](#bid-removal-and-bid-withdrawal)

9\. Bid Composition Restriction [29](#bid-composition-restriction)

10\. Default [30](#default)

11\. Round Results [30](#round-results)

12\. Auction Announcements [30](#auction-announcements)

13\. Maintaining the Accuracy of FCC Form 175 Information
[30](#maintaining-the-accuracy-of-fcc-form-175-information)

C. Post-Auction Procedures: Refund of Remaining Upfront Payment Balance
[31](#post-auction-procedures-refund-of-remaining-upfront-payment-balance)

D. Contact Information [32](#contact-information)

APPENDIX A: List of Commenters

ATTACHMENT A: Licenses to be Auctioned

ATTACHMENT B: FCC Auction Seminar Registration Form

ATTACHMENT C: Electronic Filing and Review of the FCC Form 175

ATTACHMENT D: Guideline for Completion of FCC Form 175 and Exhibits

ATTACHMENT E: Accessing the FCC Network to Submit FCC Form 175
Applications

# INTROduction AND GENERAL INFORMATION

## Introduction

This public notice announces revised procedures to allow for package
bidding for the upcoming auction of licenses for services in the 747-762
and 777-792 MHz bands[^1] ("Auction No. 31"). On February 18, 2000, the
Wireless Telecommunications Bureau ("Bureau") announced the procedures
and minimum opening bids for Auction No. 31.[^2] On May 18, 2000, the
Bureau released a public notice seeking comment on modifying those
procedures to allow combinatorial (or "package") bidding for Auction No.
31.[^3] The Bureau received twelve comments, five reply comments, and a
number of *ex parte* communications in response.[^4] On June 22, 2000,
the Commission adopted the *700 MHz Memorandum Opinion and Order and
Further Notice of Proposed Rulemaking* in which it stated that the
Bureau may implement a combinatorial auction design for Auction No. 31
pursuant to its existing delegated authority if, after review of the
comments, the Bureau finds combinatorial bidding to be appropriate and
feasible.[^5]

In general, package bidding should be an improvement over our usual
auction design when (1) there are strong complementarities among
licenses for some bidders, and (2) the pattern of those
complementarities varies for different bidders. Under these
circumstances, package bidding should yield the more efficient outcome,
with licenses being sold to those bidders who value them the most. The
comments we previously received in this docket have suggested these
conditions are true for Auction No. 31. For example, some potential
bidders have expressed the importance of acquiring a nationwide
footprint, and others the importance of acquiring all 30 MHz in a
region.[^6] The comments we received in response to the *Auction No. 31
Package Bidding Comment Public Notice* largely concur that package
bidding is appropriate for the types of licenses being sold in Auction
No. 31.

Under the procedures we establish here, as discussed more fully below,
bidders may place bids on individual licenses, as under our usual
auction procedures, and may also place all-or-nothing bids on up to
twelve packages of licenses of their own design.[^7] This approach
allows bidders to better express the value of any synergies (benefits
from combining complementary items) that may exist among licenses. The
winning bids are the set of "consistent" bids[^8] on individual licenses
and packages that maximize total revenue when the auction closes.

The specific procedures we establish are designed to meet a number of
objectives. They are designed to be efficient, and to avoid both
*exposure problems* --- the risk of bidders winning licenses they do not
desire --- and *threshold problems* --- the difficulty that multiple
bidders desiring the single licenses (or smaller packages) that
constitute a larger package may have in outbidding a single bidder
bidding for the larger package. The procedures are also designed to
allow the auction to proceed at an appropriate pace; to encourage
straightforward bidding and deter gaming; and to be simple for
straightforward bidders while permitting bidders to employ flexible
backup strategies.

As a general matter, bidders in our simultaneous multiple round auction
that wish to acquire a certain combination of licenses, and only that
combination, may face an *exposure problem*. Although they desire either
all of the licenses or none, by bidding on the licenses individually
they risk winning only some of the licenses. They therefore risk either
acquiring licenses they do not desire or paying more for each license
than they would have paid if they knew that the license was not going to
be part of the combination they desired.[^9] With the package bidding
procedures we establish today, however, this risk can be avoided. For
example, a bidder desiring an aggregation of all six 20 MHz licenses in
order to implement a nationwide service could bid on the six licenses as
a package and thereby avoid the risk of winning only some of the desired
licenses or of paying more for those licenses than it wishes.

Allowing package bidding, however, introduces a *threshold problem* ---
the difficulty that multiple bidders for the single licenses (or smaller
packages) that constitute a larger package may have in outbidding a
single bidder on the larger package, even though the multiple bidders
may value the sum of the parts more than the single bidder values the
whole. This may occur because bidders for parts of a larger package each
have an incentive to hold back in the hope that a bidder for another
part will increase its bid sufficiently for the bids on the pieces
collectively to beat the bid on the larger package. The package bidding
procedures that we establish are designed to facilitate the emergence of
bids that will overcome this problem.

The changes we adopt from our initial package bidding proposal respond
to three design weaknesses that were identified by commenters. First,
the proposal to allow only nine specific packages was too restrictive.
Second, in some circumstances the rules could have resulted in bidders
being caught with retained but non-winning bids[^10] that they no longer
wished to hold. This possibility could have chilled bidding and made
bidders unable to switch to backup strategies. Third, the pace of the
auction could be too slow because there were inadequate incentives for
bidders to make bids that would be or could become provisional winning
bids, as opposed to bids that merely preserved bidders' eligibility but
were unlikely to become winning. In addition, implementation of package
bidding procedures for Auction No. 31 makes unnecessary the nationwide
bid withdrawal procedure we established in the *Auction No. 31
Procedures Public Notice*.[^11]

## Auction Specifics

### Auction Procedures and New Dates and Deadlines

The auction procedures announced in the February 18, 2000, *Auction No.
31 Procedures Public Notice* remain in effect except as modified by (1)
the dates announced in the May 2, 2000, *Postponement Public Notice*,
and (2) the package bidding and other auction procedures established
here.[^12] The new schedule is as follows:

Filing Window Opens for FCC Form 175 July 17, 2000

Bidder Seminar July 24, 2000

Filing Deadline for FCC Form 175 August 1, 2000, 6:00 PM ET

Upfront Payment Deadline August 18, 2000, 6:00 PM ET

Mock Auction August 31, 2000

Auction Start Date September 6, 2000

### Licenses and Packages To Be Auctioned

The licenses available in this auction consist of one 20 megahertz
license (consisting of paired 10 megahertz blocks) and one 10 megahertz
license (consisting of paired 5 megahertz blocks) in each of six regions
to be known as the 700 MHz Band Economic Area Groupings ("700 MHz Band
EAGs"). These licenses are listed in this public notice in Attachment A
and are shown in the following table.

  -------- ------------------- -------------- ------------ ------------ ------------ ------------
           [700 MHz Band                                                             
           EAGs]{.underline}                                                         

           Northeast           Mid-Atlantic   Southeast    Great Lakes  Central /    Pacific
                                                                        Mountain     

  10 MHz   WXEAG701-C          WXEAG702-C     WXEAG703-C   WXEAG704-C   WXEAG705-C   WXEAG706-C

  20 MHz   WXEAG701-D          WXEAG702-D     WXEAG703-D   WXEAG704-D   WXEAG705-D   WXEAG706-D
  -------- ------------------- -------------- ------------ ------------ ------------ ------------

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed to permit bidders to submit all-or-nothing bids on nine
packages of licenses: a global package of all of the licenses; a
nationwide package of either 10 MHz or 20 MHz consisting of the six 10
MHz or the six 20 MHz licenses, respectively; or six regional 30 MHz
packages consisting of the 10 MHz license and the 20 MHz license for a
particular 700 MHz Band EAG. We also sought comment on whether the
Commission should allow all possible packages composed of the twelve
individual licenses, or only certain additional packages.

Nextel Communications, Inc. ("Nextel") supports the packages identified
in the *Auction No. 31 Package Bidding Comment Public Notice* and
opposes allowing bidders to create their own packages as it would add
excessive complexity to the auction.[^13] SBC Wireless, Inc. and
BellSouth Cellular Corporation ("SBC/BellSouth") also argue in their
joint comments that bidders should not be able to create any package
they choose, stating that the proposed nine packages represents a
reasonable balance for the Commission's first package bidding
auction.[^14] On the other hand, Verizon Wireless ("Verizon") states
that bidders should be able to choose more than just those few packages
already identified; for example, bidders should be able to choose
packages containing licenses in adjacent 700 MHz Band EAGs.[^15] Prof.
Frank Kelly and Dr. Richard Steinberg ("Kelly/Steinberg") believe that
all possible packages should be allowed.[^16] Telephone Data Systems
("TDS") notes that limiting the number of packages may be inefficient
and favors bidders whose choices coincide with the Commission's.[^17]
Prof. Charles Plott and Dr. Tim Salmon ("Plott/Salmon") believe any
restriction on the number of packages is unnecessary but may be a
reasonable choice for the Commission's first combinatorial auction.[^18]
Spectrum Exchange Group, LLC ("Spectrum Exchange") similarly favors
allowing a larger collection of packages than proposed but understands
why the Commission might wish to limit the number of packages in its
initial combinatorial auction.[^19] We also note that the comments of
participants at the Combinatorial Bidding conference[^20] were in favor
of allowing significantly more packages than were proposed.

We agree with Verizon and others that limiting packages to those
identified by the Commission is overly restrictive and may lead to
inefficient results. On the other hand, we are also concerned that
allowing an unlimited number of packages would be needlessly complex and
could facilitate strategic bidding. It is highly unlikely that any
serious bidder actually needs to bid on all 4,095 combinations of
licenses that are possible in this auction.[^21] Moreover, allowing
bidders to bid upon an unlimited number of packages would introduce the
risk of bidders "parking" bids[^22] which could lead to an unacceptable
pace for the auction. Finally, from a purely practical view, allowing
4,095 possible packages may lead to computational difficulties.

Bidders will be permitted to create and bid on up to twelve different
packages of their own choosing during the course of the auction.[^23]
This is a somewhat larger number than the nine packages originally
proposed, and does not wed bidders to the Commission's choice of
packages (although bidders may very well choose to bid on some of the
packages already identified.) We believe that this provides bidders with
sufficient flexibility to achieve any reasonable business plan, while
maintaining simplicity for bidders and the Commission, as well as
limiting the opportunity for "parking" on an unlimited number of
packages. Bidders will not be required to identify or create their
packages before start of the auction, but may create their packages as
the auction progresses.[^24] Bidders may modify or delete a package
after they create the package but before they bid on it. Once a bidder
bids on a package, however, the package may not be modified or deleted
and counts as one of the bidder's twelve allowable packages.[^25]

### Bidding Methodology

The bidding methodology for Auction No. 31 will be simultaneous multiple
round combinatorial (package) bidding.[^26] Bidding will be permitted
only from remote locations, either electronically (by computer) or
telephonically.

### Requirements for Participation 

Those wishing to participate in the auction must:

-   Submit a short form application (FCC Form 175) electronically by
    6:00 p.m. EDT, August 1, 2000.

-   Submit a sufficient upfront payment and an FCC Remittance Advice
    Form (FCC Form 159) by 6:00 p.m. EDT, August 18, 2000.

-   Comply with all provisions outlined in this public notice and the
    February 18, 2000, *Auction No. 31 Procedures Public Notice*.

-   Comply with all rules set forth in the Commission's orders in WT
    Docket No. 99-168, Service Rules for the 746-764 and 776-794 MHz
    Bands, and Revisions to Part 27 of the Commission's Rules.

### Auction Registration and Remote Electronic Bidding Software

Procedures for replacement of lost security identification and access to
remote electronic bidding software will be announced in a future Public
Notice.

# auction event

The first round of bidding for Auction No. 31 will begin on September 6,
2000. The initial bidding schedule will be announced in the public
notice listing the qualified bidders, which is released approximately 10
days before the start of the auction.

## Auction Structure

### Simultaneous Multiple Round with Package Bidding

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed to award 12 licenses in the 700 MHz bands in a single,
simultaneous multiple round auction with package bidding.[^27] A
majority of the commenters state that the Commission should implement a
package bidding design for this auction.[^28] Nextel observes that this
auction "is particularly suited for the Commission's first use of
combinatorial bidding."[^29] Some commenters, however, while generally
supportive of package bidding, argue that insufficient time exists to
implement package bidding for this auction.[^30] For example, Verizon
argues that the proposal is too complicated to be understood by bidders
in the limited time before the auction short-form applications are
due.[^31] TDS states that the Commission should not adopt package
bidding as proposed for this auction, but should instead consider
package bidding in separate proceedings.[^32] Finally, VoiceStream
Wireless Corp. ("VoiceStream") argues that nothing has occurred since
the Commission's conclusion in the *700 MHz First Report and Order*[^33]
that would warrant a change in the conclusion that package bidding
should not be used for this auction and states that further study and
testing are required.[^34] VoiceStream is also concerned that package
bidding may encourage the award of nationwide packages, whereas it
believes that regional or local packages will lead to the quicker
deployment of services.[^35]

We conclude that it is appropriate and operationally feasible to
implement the package bidding design described below for Auction No. 31.
We believe that package bidding provides many advantages over our
current simultaneous multiple round auction design. For the reasons we
stated in the introduction, we believe that package bidding will allow
bidders in this auction to take advantage of any synergies that exist
among licenses and will lead to the most efficient outcome consistent
with our objectives under Section 309(j) of the Communications Act of
1934.[^36] Although VoiceStream expresses concern that package bidding
may encourage nationwide bidders to win licenses, we note that one of
the objectives of developing large service areas, as the Commission did
here, is "\[t\]o provide optimum opportunity for alternative aggregation
approaches to suit a wide variety of possible services and business
plans such as building a nationwide footprint or acquiring both licenses
in a particular region."[^37] We believe that package bidding promotes
this objective.

While commenters stated that we (and they) have not had sufficient time
to consider package bidding and that more study is needed, in fact the
Commission has been considering the possibility of implementing
combinatorial bidding since 1994.[^38] Congress has also instructed us
to experiment with this form of bidding.[^39] In 1997, the Commission
awarded research and development contracts to consultants to provide and
test combinatorial bidding approaches.[^40] Experiments and tests were
completed this spring demonstrating that combinatorial bidding is
feasible and generally leads to more efficient auction results. The
material presented at the Combinatorial Bidding Conference that occurred
this spring [^41] also supported the view that it was feasible to
implement combinatorial bidding for this auction. We have made these
studies and papers presented at the Conference available on the
Commission's web site.[^42] In addition, the delay of the auction date
provided more time to implement this auction design. We conclude that
there has been sufficient time to implement a proper package bidding
auction design for this auction. We also have carefully considered the
comments submitted in response to the *Auction No. 31 Package Bidding
Comment Public Notice* which were very helpful in our process of
determining the procedures for implementing package bidding. We are
confident that the procedures we establish today adequately address the
concerns raised in the comments.

Finally, we note that the auction will not occur for another two months.
We believe that this time is sufficient for bidders to understand the
package bidding procedures and to develop appropriate auction
strategies. Moreover, we have endeavored, to the extent possible, to
make the package bidding procedures similar to the simultaneous multiple
round auction procedures with which bidders are familiar. We therefore
believe that bidders will be able to grasp the new procedures quickly.
We also plan on extensive bidder education efforts and will be available
both before and during the auction to answer any questions bidders might
have.

### Maximum Eligibility

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed no change in upfront payments established for individual
licenses. We proposed to calculate bidding units and associated upfront
payment for a package by adding together the bidding units and
associated upfront payments of the individual licenses that make up the
package.[^43] Verizon supports this approach.[^44] We conclude that the
bidding units for a package will be calculated by adding together the
bidding units of the individual licenses that make up the package.

We also proposed no change in our procedure for determining initial
maximum eligibility, which calculates initial maximum eligibility based
on the bidding units represented by a bidder's upfront payment. We
noted, however, that, under some circumstances, bidders might wish to
purchase more eligibility than the total bidding units associated with
all licenses.[^45] Verizon comments that we should not modify our
procedure for determining initial maximum eligibility.[^46] Also,
comments filed by Professors Aleksandar Pekec and Michael H. Rothkopf
("Pekec/Rothkopf") generally support our proposal.[^47] We conclude that
we will not change our procedure for determining initial maximum
eligibility.[^48]

### Activity Rules

In order to ensure that the auction closes within a reasonable period of
time, an activity rule requires bidders to bid actively throughout the
auction, rather than wait until the end before participating. Bidders
are required to be active on a specific percentage of their maximum
eligibility during each round of the auction if they wish to maintain
their current eligibility.

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed that in each round of the auction a bidder desiring to maintain
its current eligibility would be required to be active on licenses
encompassing at least 50 percent of its current eligibility. For a
bidder that failed to meet the activity requirement in a given round, we
would reduce the bidder's eligibility for the next round to two times
its activity in the current round. Thus, a bidder's eligibility in the
current round would be the *lesser* of: (i) its eligibility in the
previous round, or (ii) twice its activity in the previous round.[^49]

Verizon comments that the 50 percent activity requirement is
appropriate.[^50] SBC/BellSouth advocate a 50 percent activity rule at
the beginning of the auction but a 66 percent minimum activity
requirement later in the auction.[^51] We adopt the 50 percent activity
requirement. We reserve the right, however, to increase to two-thirds
the proportion of bidding units on which bidders must be active to
retain their current eligibility (*i.e.*, a 66 percent activity
requirement). The two-thirds limit will ensure that bidders retain the
flexibility to switch from bidding on a 20 MHz package to a 30 MHz
package with the equivalent population. Any such change will be
announced to bidders prior to the beginning of the round in which the
change takes effect.

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed that a bid would be considered "active" if it was either a
"retained" bid[^52] from the previous round or an accepted bid in the
current round. The bidding units associated with licenses on which a
bidder was active, including retained bids, would count towards the
bidder's activity. To account for the possibility of overlapping bids,
which by definition can not simultaneously be part of the winning set,
we proposed to measure a bidder's activity in a round as the *maximum*
number of bidding units associated with the bidder's active bids that
could simultaneously be in a provisional winning set.[^53]

Verizon comments that our activity rule proposal appeared logical in the
context of combinatorial bidding, but desired more examples.[^54] We
received numerous other comments on the issue of how retained bids count
toward activity. These comments make clear that our proposal provided
inadequate incentives for bidders to make bids that would be or could
become provisional winners, as opposed to bids that would be considered
active and preserve eligibility but were unlikely to become
winning.[^55] Several commenters offered various alternative proposals
for calculating activity, but the suggestions generally focused on
different aspects of activity (especially activity for retained bids)
and did not present a consensus alternative.[^56] Prof. Ronald M.
Harstad ("Harstad") observes that a rule that requires a bidder to have
eligibility equal to the sum of the eligibility for each overlapping bid
without regard to the overlaps (*i.e.*, a rule that would count the
overlapping licenses more than once in calculating minimum eligibility
to bid on packages of license) would tend to increase upfront payments
by bidders and thus yield greater interest revenue.[^57] We note,
however, that the goal of the Commission's spectrum auction program is
not solely to maximize Federal revenues.[^58] Prof. Harstad also
considers two other possible rules, including the rule we adopt
below.[^59] Finally, we note that under the procedures we establish
today, we have not implemented the concept of "retained" bids as the
term was used in the *Auction No. 31 Package Bidding Comment Public
Notice*.[^60] We therefore cannot establish the activity rule originally
proposed in the *Auction No. 31 Package Bidding Comment Public Notice*.

To determine activity in the current round, we will count accepted new
bids made in the current round and provisionally winning bids that are
"renewed" in the current round.[^61] Bids placed in a prior round no
longer count towards a bidder's activity, except for bids that are
provisionally winning bids at the end of the previous round.[^62]
Therefore, a bidder is active on a license or package in the current
round if (1) it has a bid on the license or package that is part of the
provisionally winning set at the end of the previous round, or (2) it
submits a new accepted bid or renews a provisionally winning bid for the
license or package in the current round.

A bidder\'s activity level in a round is the maximum number of bidding
units that the bidder can win considering only the licenses and packages
on which the bidder is active --- *i.e.*, counting the set of bids with
the most bidding units in the case of mutually exclusive bids.[^63] For
example, suppose license A has 10 bidding units associated with it;
license B, 20; and license C, 20. If the only bids made by a bidder were
on packages AB and BC its activity would be 40 since AB and BC are
mutually exclusive (*i.e.*, license B is included in both packages, but
can only be awarded as part of one package) and the package BC has more
bidding units. Counting activity as the maximum number of bidding units
a bidder could win makes activity a measure of (1) a bidder's potential
contribution to moving the auction along and (2) the maximum amount of
bidding units associated with active licenses for which the bidder could
be financially responsible and for which it therefore must have
eligibility (as determined by the bidder's upfront payment).

### Activity Rule Waivers and Reducing Eligibility

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed that each bidder in the auction would be provided five activity
rule waivers that may be used in any round during the course of the
auction. Use of an activity rule waiver preserves the bidder's current
bidding eligibility despite the bidder's activity in the current round
being below the required minimum level. An activity rule waiver applies
to an entire round of bidding and not to a particular license.[^64]

One commenter, SBC/BellSouth, stated that five activity rule waivers is
too few and that the Bureau should allow each bidder at least eight
waivers.[^65] There were no other comments on this issue. Based upon our
experience in previous auctions, we adopt our proposal that each bidder
be provided five activity rule waivers that may be used in any round
during the course of the auction. We are satisfied that our practice of
providing five waivers over the course of the auction provides a
sufficient number of waivers and maximum flexibility to the bidders,
while safeguarding the integrity of the auction.

We also proposed that bidders would not have the ability to apply
waivers proactively, as they can under our current simultaneous multiple
round auction format.[^66] We received no comment on this issue. We
adopt our proposal.

We proposed, with the exception of the proactive waiver rule described
above, no other changes to activity rule waivers and reducing
eligibility. Thus, automatic waivers and reducing eligibility will
continue to function as described below.

The FCC automated auction system assumes that bidders with insufficient
activity would prefer to use an activity rule waiver (if available)
rather than lose bidding eligibility. Therefore, the system will
automatically apply a waiver at the end of any round where a bidder\'s
activity level is below the minimum required unless: (1) there are no
activity rule waivers available; or (2) the bidder overrides the
automatic application of a waiver by reducing eligibility, thereby
meeting the minimum requirements.

A bidder with insufficient activity that wants to reduce its bidding
eligibility rather than use an activity rule waiver must affirmatively
override the automatic waiver mechanism during the round by using the
reduce eligibility function in the software. In this case, the bidder\'s
eligibility is permanently reduced to bring the bidder into compliance
with the activity rules as described in the previous section. Once
eligibility has been reduced, a bidder will not be permitted to regain
its lost bidding eligibility.[^67]

### Auction Stages and Stage Transitions

As stated above in Section II.B.3. Activity Rules, in the *Auction No.
31 Package Bidding Comment Public Notice*, we proposed that in each
round of the auction a bidder desiring to maintain its current
eligibility would be required to be active on licenses encompassing at
least 50 percent of its current eligibility.[^68] We sought comment on
whether we should instead adopt multiple stages with increasing activity
requirements. Verizon supports the 50 percent activity requirement.[^69]
SBC/BellSouth supports the 50 percent activity requirement at the
beginning of the auction, but recommends a stage transition and a
two-thirds activity requirement "at or near the end of the
auction."[^70] They point out that the stage transition would have the
effects of inducing a small spurt of bidding and revealing some
information about the amount of excess demand still in the auction, but
they also caution that the Bureau must be careful not to make the stage
transition too early or with too little warning.[^71]

We adopt our proposal for a 50 percent activity requirement, but we
retain the discretion during the auction to increase to two-thirds the
proportion of bidding units on which bidders must be active to retain
their current eligibility (a 66 percent activity requirement). The
two-thirds limit will ensure that bidders retain the flexibility to
switch from bidding on a 20 MHz package to a 30 MHz package with the
equivalent population. Any such change will be announced to bidders
prior to the beginning of the round in which the change takes effect.

### Auction Stopping Rules

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed to employ a two-round simultaneous stopping rule approach.[^72]
A two-round simultaneous stopping rule means that all licenses remain
open until two consecutive rounds have occurred in which no new bids are
accepted. After the second consecutive such round, bidding closes
simultaneously on all licenses. Thus, unless circumstances dictate
otherwise, bidding would remain open on all licenses until bidding stops
on every license.

The Bureau also sought comment on a modified version of the two-round
simultaneous stopping rule that would close the auction for all licenses
after the second consecutive round in which no bidder submits a new
accepted bid on any license on which it is not the provisional winning
bidder. Thus, absent any other bidding activity, a bidder placing a new
bid on a license for which it is the provisional winning bidder would
not keep the auction open under this modified rule.

SBC/BellSouth comments that after a round in which no bids are received,
signaling that the next round could be the last in the auction, the
Commission should halt the auction until the next day.[^73]
SBC/BellSouth and Pekec/Rothkopf also suggest halting the auction until
the next day if a round ends with revenue \$1 billion or higher than at
the beginning of the day.[^74]

We weigh against SBC/BellSouth's comments our experience in past
auctions with a simultaneous stopping rule that closed the auction after
one round of no new bids (or withdrawals or proactive waivers). Based on
this experience, we believe that the two-round stopping rule we proposed
allows adequate time for bidders. We therefore adopt the two-round
simultaneous stopping rule we proposed, with one clarification. Renewed
bids are not considered new bids for purposes of the stopping rule; in
other words, a round in which the only bids that are placed are renewed
bids is considered a round with no new bids for purposes of the stopping
rule.

As in previous auctions, the Bureau proposed to retain the discretion to
keep an auction open even if no new accepted bids are submitted. The
activity rule would apply as usual, and a bidder with insufficient
activity will either lose bidding eligibility or use a remaining
activity rule waiver. We also proposed that the Bureau reserve the right
to declare that the auction will end after a specified number of
additional rounds ("special stopping rule"). The Bureau would exercise
this option only in certain circumstances, such as, for example, where
the auction is proceeding very slowly, there is minimal overall bidding
activity, or it appears likely that the auction will not close within a
reasonable period of time. Before exercising this option, the Bureau is
likely to attempt to increase the pace of the auction, for example, by
increasing the number of bidding rounds per day, and/or by increasing
the amount of the minimum bid increments for the limited number of
licenses where there is still a high level of bidding activity. We
received no comments on these proposals, and we retain the discretion to
keep an auction open or to implement a "special stopping rule." Any such
change will be announced to bidders before it takes effect.

### Auction Delay, Suspension, or Cancellation 

We proposed no change to the procedures regarding auction delay,
suspension, or cancellation. By public notice or by announcement during
the auction, the Bureau may delay, suspend or cancel the auction in the
event of natural disaster, technical obstacle, evidence of an auction
security breach, unlawful bidding activity, administrative or weather
necessity, or for any other reason that affects the fair and competitive
conduct of competitive bidding.[^75] In such cases, the Bureau, in its
sole discretion, may elect to: resume the auction starting from the
beginning of the current round; resume the auction starting from some
previous round; or cancel the auction in its entirety. Network
interruption may cause the Bureau to delay or suspend the auction. We
emphasize that exercise of this authority is solely within the
discretion of the Bureau, and its use is not intended to be a substitute
for situations in which bidders may wish to apply their activity rule
waivers

## Bidding Procedures

### Round Structure 

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed no changes in the round structure from those we have already
adopted for Auction No. 31.[^76] Spectrum Exchange agrees with this
proposal.[^77] Plott/Salmon, on the other hand, argue for continuous
bidding phases.[^78] We are concerned about the operational feasibility
of implementing continuous bidding at this time. We therefore adopt our
proposal to use the round structure previously announced.

Thus, the Commission will use an automated auction system to conduct the
package bidding auction format. The initial bidding schedule will be
announced in a public notice to be released at least one week before the
start of the auction, and will be included in the registration mailings.
The package bidding format will consist of sequential bidding rounds,
each followed by the release of round results. Multiple bidding rounds
may be conducted in a single day. Details regarding the location and
format of round results will be included in the same public notice.

The Bureau has discretion to change the bidding schedule in order to
foster an auction pace that reasonably balances speed with the bidders'
need to study round results and adjust their bidding strategies. The
Bureau may increase or decrease the amount of time for the bidding
rounds and review periods, or the number of rounds per day, depending
upon the bidding activity level and other factors. Any changes will be
announced to bidders before they take effect.

### Reserve Price or Minimum Opening Bid

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed no change in the minimum opening bids from those we previously
adopted for the individual licenses.[^79] For a package, we proposed to
calculate the minimum opening bid by adding together the minimum opening
bids of the individual licenses that make up the package.

Pekec/Rothkopf generally support the proposal, although they propose a
small change to ensure that no ties occur in the bidding.[^80] We deal
with ties separately in Section II.B.4, Last and Best Bids. We adopt our
proposal for the minimum opening bids for individual licenses. For a
package, we adopt our proposal that the minimum opening bid is the sum
of the minimum opening bids of the individual licenses that make up the
package. We retain the discretion to lower the minimum opening bids
during the auction.

### Minimum Accepted Bids and Bid Increments

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed that for a bid to be accepted in any round it must be x%
greater than the minimum amount to have become a retained bid in the
previous round, where the Bureau will specify the value of x. This was
analogous to the minimum accepted bid rule in a simultaneous multiple
round auction. We also sought comment on other methods for calculating
the minimum accepted bid. We noted that one possibility was to determine
the bid increment as the maximum of (a) the increment as calculated
above and (b) an increment based on the total revenue (the provisionally
winning bids) in the previous round. Another possibility was to
determine the minimum accepted bid by allocating the total amount needed
to beat the provisional winners ("the shortfall approach").[^81] We also
proposed to set the minimum increment for a license or package initially
at five percent and retain the discretion to vary the minimum bid
increments in each round of the auction by announcement prior to each
round.

Verizon states that it prefers simple rules and therefore prefers
calculating the minimum accepted bid as the previous retained bid plus
x%.[^82] Plott/Salmon also essentially support this approach.[^83]
SBC/BellSouth makes a similar comment;[^84] however, SBC/BellSouth's
proposed minimum bid rule is part of an integrated and, in part,
complicated proposal which SBC/BellSouth contends the Bureau should
implement as a whole and should not implement only some of its
parts.[^85] Spectrum Exchange believes that several of the alternatives
we proposed have merit, although it does not state a preference for any
particular alternative.[^86] Pekec/Rothkopf state that they prefer the
shortfall approach.[^87] Salant states that minimum accepted bids should
not be based on bids of larger packages because there is no economically
acceptable method for allocating the bid for the package among the
package's components.[^88] Some commenters proposed completely different
procedures for calculating minimum accepted bids. Some commenters
suggested that the initial minimum bid increments be greater than
5%.[^89] No party commented on whether the Commission should retain
discretion to change the minimum bid increment.

We conclude that our original proposal for basing minimum accepted bids
on retained bids did not comport well with other elements of our
proposed package bidding procedures (*e.g.*, the use of contingent "or"
bids or allowing cancellation of retained but non-provisionally winning
bids) nor with other elements of the package bidding procedures we
establish today (*e.g.*, allowing bidders to place mutually exclusive
bids across rounds). With any of those procedures, the determination of
retained bids as potentially winning bids is complicated. Accordingly,
it is necessary to modify our proposal.

The major purpose of a minimum accepted bid rule is to ensure the proper
pacing for the auction even if bidders act strategically.[^90] In the
case of package bidding, a properly designed minimum accepted bid rule
also can facilitate bids that overcome the threshold problem (the
potential difficulty of combining small packages to beat larger ones).
We believe that simplicity, while obviously desirable, ranks as a lesser
factor. In this regard we note that bidders will not be required to
calculate minimum accepted bids themselves, but will have the minimum
accepted bids provided to them by the bidding software.

We adopt a variation of our first proposed alternative method for
calculating minimum accepted bids. The minimum accepted bid for any
license or package will be the greater of: (i) the minimum opening bid;
(ii) the bidder's own previous high bid on that package plus x%, where
the Bureau will specify the value of x in each round; and (iii) the
number of bidding units for the license or package multiplied by the
lowest \$/bidding unit on any provisionally winning package in the last
5 rounds. We retain the discretion to change the minimum accepted bid,
and to do so on a license-by-license and package-by-package basis, if
circumstances so dictate. We will notify bidders of any such change
before it takes effect.[^91]

Part (i) of the formula simply ensures consistency with the minimum
opening bids we have adopted. With regard to part (ii) of the formula,
by using a bidder's own prior bid as a base we ensure that the price
each bidder faces is rising, generally in small steps above the amount
it has indicated it is willing to pay. Moreover, we find that when we
allow for mutually exclusive bids across rounds[^92] and package
bidding, there are disadvantages to requiring a bidder to beat a high
bid on a package or license. One effect of allowing mutually exclusive
bids is that a bid does not necessarily have to be the highest bid on a
particular package or license in order for it to be a provisional
winner. An example will illustrate this point.

> Bidder 1 places a bid of 50 on Package A, and Bidder 2 places a bid of
> 50 on Package B. In the next round, Bidder 1 places a bid of 100 on
> Package B, which is mutually exclusive with its bid of 50 on Package A
> from the previous round. If Bidder 3 is allowed to bid 40 on Package
> A,[^93] even though it is not higher than Bidder 1's bid of 50, Bidder
> 3 will become a provisional winner (assuming that these are the only
> bids). Bidder 3's bid of 40 on Package A plus Bidder 1's bid of 100 on
> Package B totals 140, and this total is higher than Bidder 1's bid of
> 50 on Package A plus Bidder 2's bid of 50 on Package B which totals
> only 100. We wish to encourage such bids. Moreover, Bidder 3 may not
> have bid if it were required to beat Bidder 1's bid of 50 on Package
> A, which is not the efficient outcome.

Under part (iii) of the formula, we calculate the least expensive
provisionally winning "unit price" (the provisionally winning bid for a
license or package divided by the number of bidding units associated
with the bid) for the five prior rounds. To perform this calculation, we
examine all of the provisionally winning bids for the five prior rounds.
We then divide each of those provisionally winning bids by the number of
bidding units associated with it, to yield a "unit price" for each
provisionally winning bid. Finally, we determine the lowest unit price
of all of the provisionally winning bids (in other words, the lowest
unit price that any bidder has bid for any provisionally license or
package in the prior five rounds). To apply part (iii) of the formula to
a new bid, we multiply that lowest unit price by the bidding units
associated with the license or package for which the bidder is bidding.
It is possible, and indeed likely, that the lowest unit rate will come
from a different license or package than the one on which the bidder is
bidding.

Part (iii) of the formula essentially requires that bids on any license
or package be not too far from the provisionally winning bids; unless we
include such a provision, bids might not become competitive without many
rounds of bidding. Part (iii) thereby facilitates bids that will
overcome the threshold problem. By using the least expensive
provisionally winning rate for any license or package over the previous
five rounds, we believe that we have ensured that minimum accepted bids
will not be too high. Although we recognize that part (iii) may not meet
some commenters' concerns about simplicity, omitting part (iii) would
adversely and unacceptably affect the pace of the auction. We also
believe that the rule as a whole will discourage parking[^94] because
any minimum accepted bid has a reasonable chance of becoming a
provisional winner.

SBC/BellSouth comment that in the later rounds of the auction, and
especially for packages, the minimum bid increment (by which we
understand them to mean the minimum increase in their bid to make an
accepted new bid) could become quite high.[^95] SBC/BellSouth state that
it is conceivable that bidders could be required to place bids that are
\$1 billion higher than those made the previous day.[^96] They therefore
propose that the minimum bid increment on the global license be capped
at \$250 million and the minimum bid increments on smaller packages and
licenses be capped proportionately. For similar reasons, they also
propose changes to the stopping rule, which we discuss in Section
II.A.6, above.

While we are mindful of SBC/BellSouth's concerns, we decline to adopt
their proposal and do not restrict our discretion regarding the size of
minimum accepted bids. Nonetheless, we do retain the discretion to limit
minimum accepted bids when circumstances warrant, and to do so on a
round-by-round, package-by-package and license-by-license basis. We
believe that this discretion, along with our discretion to increase the
time for the bidding rounds and review periods and the number of rounds
per day, which we will exercise with sensitivity to the needs of bidders
to study round results and adjust their bidding strategies,[^97] is
sufficient to meet SBC/BellSouth's concerns, and those of others, of
having adequate time in which to make decisions involving potentially
hundreds of millions of dollars.

We note that part (ii) of the minimum accepted bid rule is specific to
each bidder. It may therefore be the case that different bidders will
have different minimum accepted bids on the same license or package. We
do not believe that this will yield an inefficient result because when
part (ii) applies the bidder's new bid is based on an amount that it has
already bid and therefore indicated it is willing to pay. Moreover, any
inefficiency or inequity caused by part (ii) of this rule is mitigated
by the ability of bidders to renew bids without increasing them and by
the last and best bid procedure, described in the next section, which
allows a bidder to make a final set of bids without regard to the
minimum accepted bid rule.

As has become standard in our auctions, we also proposed that we would
use "click box" bidding. Specifically, we proposed to allow package bids
to increase by one increment in each round, while bids on individual
licenses could increase by one to nine increments.

Under our previously adopted procedures, a bid increment was defined as
x% of the standing high bid, where x was specified by the Bureau, and
the minimum accepted bid was the standing high bid plus x%. Thus, if x
was equal to 10, bidders were permitted to made bids of the standing
high bid plus 10%, plus 20%, etc., with the maximum bid being equal to
the standing high bid plus 90%. Under the procedures we establish today,
however, there are no standing high bids and minimum accepted bids are
not based on standing high bids. We believe, however, that the prior
definition of a bid increment is one that is easy for bidders to
understand. Accordingly, we believe our new definition of a bid
increment should be analogous to the old definition. Accordingly, for
this auction, we are defining a bid increment as x% of the minimum
accepted bid, where the minimum accepted bid is determined as discussed
above. As under our previously established procedures, the Bureau will
specify the value of x in each round. The Bureau also retains the
discretion to change the bid increment, and to do so on a
license-by-license and package-by-package basis, if circumstances so
dictate. Any such change will be announced to bidders prior to the
beginning of the round in which the change takes effect

Several commenters disagreed with our proposal to restrict bidders from
raising a bid on a package by more than one increment. Because we
believe that the minimum bid rule we are adopting helps overcome the
threshold problem, we no longer find it necessary to adopt that
restriction. We note that we currently use click box bidding in our
simultaneous multiple round auctions. Click box bidding eliminates the
use of trailing digits for bid signaling. It also helps prevent bidders
from making mistakes when placing their bids. The nine-increment limit
constrains jump bidding to some degree while generally not preventing a
bidder from making up in a single bid the entire shortfall necessary to
become a provisional winner. We therefore adopt our proposal to use
click box bidding and to allow bids on either individual licenses or
packages to increase by one to nine increments. We reserve the right to
change the number of possible increments. Any such change will be
announced to bidders prior to the beginning of the round in which the
change takes effect.

### Last and Best Bids

Bidders that wish to drop out of the auction or that believe they are
about to lose their bidding eligibility will have the opportunity before
they drop out to make a "last and best" bid on any packages for which
they remain eligible. Such bids may be of any amount (in thousand dollar
increments) between their previous high bid and the minimum accepted
bid. This is a limited exception to the minimum accepted bid rule and to
click box bidding. If a bidder chooses this option, it will not be
permitted to make any further bids during the auction.

We adopt this procedure primarily as a method of ensuring that there are
no tie bids at the end of the auction. Several commenters had expressed
their concern that, especially with click box bidding, bidders could
submit tie bids. We believe that this procedure provides a fair and
efficient way to break ties should they occur, although it is not
limited to those situations where there is a tie. An example of how this
procedure would break a tie is provided below at the beginning of
Section II.B.6, Winning and Provisionally Winning Bids. The procedure
also allows bidders to bid the maximum amount they are willing to pay
for a package regardless of how the Commission sets the minimum accepted
bid, and thus mitigates the possible inefficiency that would result from
setting minimum accepted bids too high.

### Renewed Bids

Without regard to the minimum accepted bid requirement, a bidder may
"renew" in the current round the highest previous bid it made on any
license or package; that is, it may resubmit the bid without increasing
the amount bid.[^98] No activity credit will be conferred for renewing a
non-provisionally winning bid (provisionally winning bids, however,
receive activity credit whether or not they are renewed). Renewed bids
will be treated as being made in the current round.

Allowing bidders to renew bids provides several benefits. For example,
because bids made in different rounds are treated as mutually
exclusive,[^99] if a bidder wishes to win both a license for which it is
the provisional winner and another license, it must bid on both licenses
in a single round. Therefore, unless we provide bidders an opportunity
to renew their provisionally winning bids without increasing them,
provisionally winning bidders that desired additional licenses would be
forced to raise their bids on the licenses for which they were already
provisional winners. Allowing bidders to renew bids also mitigates the
potential concern that we are not retaining all potentially winning bids
and a bidder may not be able to submit a new bid on a license or package
on which it previously bid because the bid increment is too high.

### Winning and Provisionally Winning Bids

The first part of this section describes how we will determine the
winning and provisionally winning bids from among the bids we examine.
The second part describes the universe of bids we will examine and
includes a discussion of retained bids, contingent "or" bids, and bid
cancellation.

a\. In the *Auction No. 31 Package Bidding Comment Public Notice*, we
defined winning bids as the set of gross bids on individual licenses and
packages that maximizes gross revenue when the auction closes, assigning
each license to only one party (a bidder or, in the case of unsold
licenses, the Commission).[^100] We defined provisionally winning bids
as the set of bids that maximize revenue in a particular round (*i.e*.,
they would win if the auction were to close in that round), assigning
each license to only one party (a bidder or the Commission).

No commenter disagrees with how we proposed to determine the winning
bids. Accordingly, we adopt our proposal with a clarification to take
into account the fact that, as explained in section b below, for each
bidder, we will treat the bids it makes in different rounds as mutually
exclusive. The *winning bids* are the set of "consistent" bids (bids
that (i) do not overlap and (ii) are made or renewed by an individual
bidder in the same round) that maximize total revenue when the auction
closes. The *provisionally winning bids* are the consistent bids that
maximize total revenue in a particular round. The Bureau is developing
computer software to perform these tasks.[^101]

We note that, in the case of a tie among bids, the algorithm we are
using to calculate the winning and provisionally winning bids selects
the winning bid randomly.[^102] The procedure we are adopting for last
and best bids, described in Section II.B.4, above, should help ensure
that the winning bid is not the result of a tie. In the case of a tie,
the bidder(s) whose bid is not chosen has the opportunity in the next
round to make another bid. If the bidder believes that the minimum bid
increment is too high and so would ordinarily cease bidding on that
license or package, it still has the opportunity, using the last and
best bid procedure, to make one final bid on the license or package
(which may be as little as \$1,000 more).[^103] The bidder whose bid was
chosen randomly then has the opportunity in the next round to beat the
new bid.[^104]

> Bidder 1 and Bidder 2 both bid \$100 million on License A in Round 20.
> The algorithm randomly selects Bidder 1 as the provisional winner. In
> round 21, Bidder 2 may make the minimum accepted bid on License A, for
> example, \$105 million, in which case bidding on the license would
> simply continue. If, however, Bidder 2 does not value License A at
> \$105 million, and if it wishes to cease bidding on all other licenses
> and packages, it may use the last and best bid option to place any bid
> it wishes on License A between \$100,001,000 and \$104,999,000 (in
> thousand dollar increments). (If Bidder 2 wishes to continue to bid on
> other licenses or packages, it may use the last and best bid option at
> a later point in the auction.) Bidder 2 therefore bids \$103.5 million
> on License A, the maximum amount it is willing to bid. Bidder 2 is not
> permitted to place any new bids in the auction. In Round 22, Bidder 1
> has the opportunity to place the minimum accepted bid on License A,
> for example, \$108.67 million, thereby beating Bidder 2. But if Bidder
> 1 believes that the minimum bid is too high, Bidder 1 also has the
> opportunity to choose the last and best bid option to place any bid it
> wishes on License A between \$103,501,000 and \$108,670,100. He
> therefore bids \$104 million, and is not permitted to place any new
> bids in the auction. If no other bidders bid on License A, Bidder 1
> would be awarded the license at a price of \$104 million.

We therefore believe that by adopting the last and best bid procedure,
we have mitigated any adverse effects the algorithm may have on winning
bids. We acknowledge, however, a bidder that submits a tie bid and whose
bid is not selected as part of the provisionally winning set will have a
higher minimum accepted bid in the next round than the bidder whose bid
was selected and who need not raise its bid in order to be considered
active on that license or package.

We also proposed that licenses on which no bids have been submitted
would be treated as if the minimum opening bid had been submitted.
SBC/BellSouth state that licenses for which no bids have been made
should be treated as having a bid of \$0. Prof. Paul Milgrom ("Milgrom")
disagrees.[^105]

In determining provisionally winning bids, individual licenses on which
no bids are available to be considered when solving for the
provisionally winning set will be treated as having a bid at the minimum
opening bid.[^106] We believe that at the end of the auction there will
not be any licenses on which bids no bids have been made (either
directly or as part of a package), and if it appears that this will
occur, the Commission retains the discretion during the auction to lower
the minimum opening bid and the minimum accepted bid. Thus, the question
of how to treat licenses for which no bids are currently available is
one that mostly affects the pace of the auction and the computational
simplicity in the early rounds. We believe that treating the licenses as
having bids at the opening minimum bid is the better course.

b\. *Mutually Exclusive Bids.* In order to determine the provisionally
winning bids at the end of each round, we proposed to consider both the
bids made in the current round and "retained" bids. We defined
"retained" bids as the provisionally winning bids plus bids that have
the potential to become provisionally winning bids because of changes in
other bids in subsequent rounds. Somewhat simplified, retained bids were
the standing high bids for any package or license (except that a bid on
a package that was not greater than the sum of the bids on its best
components would not be retained).

Commenters have various views of our proposed use of retained bids in
calculating provisionally winning bids. Some commenters suggest that we
retain all bids. If some or all bids are retained, commenters variously
suggest that we permit non-provisionally winning bids to be cancelled,
or that we permit contingent "or" bids.[^107] We had proposed both of
these alternatives in the *Auction No. 31 Package Bidding Public
Notice*.[^108] We agree with those commenters that state that without
one of these procedures (cancellation or contingent "or" bids) bidders
face the risk that they will have retained but non-provisionally winning
bids that they do not desire, which both consumes some of their
eligibility and leads to the possibility that they ultimately may win
more licenses than they wish. This risk could make bidders unable to
switch to backup strategies and could generally chill bidding.

In the *Auction No. 31 Package Bidding Public Notice*, we noted that
contingent "or" bids could provide a bidder greater flexibility to
aggressively bid on licenses that it considers substitutes by overcoming
the exposure problem. For computational simplicity and transparency, we
proposed a number of restrictions on the use of 'or" bids. We also noted
that we would need to modify our method for determining retained bids.
With regard to bid cancellation, we noted that it could avoid the
possible complexity of "or" bids while overcoming exposure problems and
thereby allow bidders to explore bids that would overcome the threshold
problem. On the other hand, by allowing potential partnering bids to be
cancelled, bid cancellation could also make it more difficult to
overcome the threshold problem. It also could facilitate adverse
strategic bidding, and adversely affect the pace of the auction.
Finally, we noted that if we permitted bid cancellation, we would
probably retain all bids and modify the activity rules and the
procedures for calculating minimum accepted bids.

We received several comments on contingent "or" bids and bid
cancellation. Verizon states that contingent "or" bids should be
permitted on any combination of licenses, but that the number of "or"
bids should be limited for the sake of simplicity.[^109] Verizon further
notes that "or" bids are complicated and that bidders need time to
understand it.[^110] Verizon also states that there should be no
restrictions on bid withdrawal in order to allow bidders to change
strategy and correct mistakes.[^111] SBC/BellSouth believe that "or"
bids are unnecessary, would add little to the auction, and are
complicated to understand and compute.[^112] SBC/BellSouth propose that
bidders choose licenses to bid on and then switch if they change their
minds; they also would allow bidders to cancel non-provisionally winning
bids.[^113] Pekec/Rothkopf oppose using "or" bids and would instead
allow the cancellation of non-provisionally winning bids but only if
bidders submit other accepted bids.[^114] Plott/Salmon find that "or"
bids have complications and would permit non-provisionally winning bids
to be cancelled.[^115]

We conclude that calculating provisionally winning bids using the
definition of retained bids as set forth in the *Auction No. 31 Package
Bidding Comment Public Notice* does not necessarily "retain" all
potentially winning bids when bidders are permitted to submit bids that
are mutually exclusive across rounds ("or" bids). As illustrated above
in Section II.B.3, Minimum Accepted Bids and Bid Increments, a bid does
not have to be the highest bid on a particular package in order for it
to be a provisional winner. The definition of retained bids, however,
would not retain a bid unless it was the highest bid on a particular
package.

We also conclude that it is not computationally feasible at this time to
calculate provisionally winning bids using all of the bids that are made
throughout the auction (*i.e.*, to retain all bids) when "or" bids are
permitted. Similarly, we conclude that permitting unrestricted "or" bids
is computationally too complicated to implement for this auction.
Finally, we do not favor allowing bidders to freely cancel bids because,
as stated above, bid cancellation could be used strategically and
because other bidders on a smaller package attempting to beat a larger
package need some certainty about what bids are available in order to
overcome the threshold problem.

We conclude that the nature of package bidding requires that we devise
some system for retaining non-provisionally winning bids so that more
than just the bids made in the current round are considered in
determining the new provisionally winning bids. Otherwise, it would be
very difficult to overcome the threshold problem. Bidders on individual
licenses or smaller packages need to know what other bids are available
that, when considered along with their bids, could beat a larger
package.

We believe that the following procedure meets our objectives and
responds to the design weaknesses discussed above. First, we will treat
the bids a bidder makes in the current round as mutually exclusive with
the bids that same bidder made in prior rounds.[^116] If a bidder does
not want a bid from the previous round (including a provisionally
winning bid) to be considered mutually exclusive with bids made in the
current round, it can resubmit the bid in the current round. A bidder
may either "renew" a bid without increasing the amount bid or increase
the bid.[^117]

Second, to determine the provisionally winning bids, we will consider
(i) the bids made by each bidder in the most recent two rounds in which
that bidder placed new or renewed bids and (ii) all provisionally
winning bids from the prior round.[^118] This approach ensures that
bidders in the current round will have bids by other bidders available
for them to "partner" with so they can make a bid that would have made
them a provisional winner in the last round.[^119] It thereby assists
bidders in overcoming the threshold problem. This approach also helps
ensure that bidding is sincere since bidders are held to their bids even
after they stop bidding. Bidders should be willing to pay the amount
they previously bid even if they are not willing to raise their bids.

The auction design we establish today therefore takes elements from both
contingent "or" bids and bid cancellation. By making a bidder's own bids
mutually exclusive across rounds, we have implicitly provided for a
limited number of "or" bids without the imposition of excessive
computational burdens. Moreover, by considering only a bidder's two most
recent rounds in which it made a bid (either an accepted new bid or a
renewed bid), plus any provisionally winning bids, we have essentially
cancelled all of the bidder's other bids.

More importantly, treating each participant's bids across rounds as
mutually exclusive meets the objectives that both of these methods were
attempting to accomplish without either the complications or the risks.
As with "or" bids and bid cancellation, bidders may pursue back-up
strategies without exposing themselves to the risk that they will win
both sets of licenses. [^120] Also, bidders may achieve all of the
flexibility of using "or" bids within a round by bidding
straightforwardly across rounds. And by considering a bidder's two most
recent rounds of bids in which accepted new bids or renewed bids were
made (plus its provisionally winning bids), we allow bidders to explore
ways to partner with other bids in order to beat bids on larger
packages. Yet the bidding method we are adopting, by automatically
canceling bids instead of leaving it to the bidder's discretion, lessens
the risk of strategic bidding. We believe that this bidding method meets
both the commenters' concerns and their desires.

### Bidding

During a bidding round, a bidder may submit individual bids for as many
licenses as it wishes, subject to its eligibility; may submit bids on
any packages it has designed, subject to its eligibility and a limit of
bidding on twelve different packages throughout the auction; may renew
bids it has previously made; may remove bids placed in that round before
the round closes; may use an activity rule waiver, and may permanently
reduce eligibility. Bidders may make certain mutually exclusive bids
(*i.e.*, overlapping bids) in a bidding round. For example, a bidder may
place a bid on License A and a bid on a package consisting of Licenses A
and B. The bids are mutually exclusive because it is not possible that
both bids can become provisionally winning bids. Bidders have the option
of making multiple submissions and removals in each bidding round.

Bidders should note that all bidding will take place remotely either
through the automated bidding software or by telephonic bidding.
(Telephonic bid assistants are required to use a script when entering
bids placed by telephone. Telephonic bidders are therefore reminded to
allow sufficient time to bid by placing their calls well in advance of
the close of a round, especially since this is the first combinatorial
auction conducted by the Commission. For the simultaneous multiple round
auctions, normally, four to five minutes were necessary to complete a
bid submission. Bid submissions may take longer for combinatorial
auctions.) There will be no on-site bidding during Auction No. 31.

A bidder\'s ability to bid on specific licenses and packages in the
first round of the auction is determined by two factors: (1) the
licenses applied for on FCC Form 175; and (2) the upfront payment amount
deposited. The bid submission screens will be tailored for each bidder
to include only those licenses for which the bidder applied on its FCC
Form 175. Bidders must create packages on the package creation screen
before they are permitted to bid on the packages. Bidders are reminded
that they will be able to create only those packages (i) that contain
only the licenses for which they applied on FCC Form 175, and (ii) for
which they have eligibility based on their upfront payments.

The bidding software requires each bidder to log in to the FCC auction
system during the bidding round using its FCC-supplied security
identification. Procedures for obtaining security information and
accessing the FCC auction system will be announced in a future Public
Notice. Bidders are strongly encouraged to download and print bid
confirmations *after* they submit their bids.

The bid entry screen of the automated auction system software for
Auction No. 31 allows bidders to place multiple increment bids. In
addition to placing the minimum accepted bid, bidders may increase the
minimum accepted bid by from one to nine bid increments. The bidding
software will display allowable bids for each license and package
created by the bidder.

To place a new bid on a license or package, the bidder must place a
minimum accepted bid, and may place a bid up to nine times the bid
increment. A bidder may also place a renewed bid on a license or
package. Both actions are done by clicking the desired bid amount in the
Amount Bid box displayed on the bidding screen and then clicking the
submit button.

### Bid Removal and Bid Withdrawal

Bid "removal" is the voiding of a bid made in the current round. Bid
"withdrawal" is the voiding of a provisionally winning bid. Bid
"cancellation" is the voiding of a non-provisionally winning bid. We
discuss bid cancellation above in Section II.B.6.b, Winning and
Provisionally Winning Bids. For the reasons set forth below and in
Section II.B.6.b, we permit only the removal of bids placed in the
current round. The withdrawal or cancellation of bids made in previous
rounds is *prohibited*.

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed to retain the bid removal procedures that we previously
established.[^121] Spectrum Exchange endorses the proposal[^122] and no
commenter objects. Accordingly, we retain the bid removal procedures
previously announced. At any time before the close of a bidding round, a
bidder has the option of removing any bids placed in that round. By
using the remove bid function in the software, a bidder may effectively
"unsubmit" any bid placed within that round. This is not the same as
withdrawing a bid, which, in our simultaneous multiple round auction
system, can occur in rounds subsequent to the round in which the high
bid was placed. A bidder removing a bid placed in the same round is not
subject to withdrawal payments.[^123] Once a round closes, a bidder may
no longer remove a bid.

We also proposed not to allow bidders to withdraw provisionally winning
bids from previous rounds. If a bid is declared the winner and the
bidder does not pay the amount due, it is liable for a default payment
as set forth in the Commission's Rules.[^124] Spectrum Exchange agrees
that bid withdrawals are unnecessary.[^125] Verizon seeks to allow
unlimited bid withdrawals in order to allow the correcting of mistakes
and changes in strategy.[^126]

We believe that by making bids placed in different rounds mutually
exclusive, we have eliminated a bidder's exposure risk when changing
strategies. Bidders will win at most one set of bids, not both.
Moreover, the bid withdrawal procedure was designed to allow bidders to
back out of failed aggregations --- to avoid winning some licenses that
are worth less to them than the amount bid without the other licenses
they need to implement their business plan. Therefore, since bidders may
make package bids on all combinations of licenses with significant
complementarities, the use of withdrawals to mitigate such risk is no
longer necessary. Moreover, while there is no offsetting benefit from
allowing bid withdrawals, there would still be potential harm.
Withdrawals may be used strategically to provide incorrect price signals
during the auction and lead other bidders to place inefficient bids.
Also, when withdrawals are permitted, one cannot ensure that the auction
will proceed at an acceptable pace. Moreover, the harm associated with
withdrawals is likely to be more severe in auctions with package bidding
since a single withdrawal of a bid (on either an individual license or a
package) can affect the entire provisionally winning set. Accordingly,
we will *not* permit bidders to withdraw their provisionally winning
bids.

Finally, we proposed that the previously announced special 30 MHz
nationwide bid withdrawal procedure[^127] would no longer apply. No
commenter objects. We believe that such a special procedure is
unnecessary once package bidding is generally permitted. Accordingly,
upon approval by the Commission, we will not apply the previously
announced special 30 MHz nationwide bid withdrawal procedure.[^128]

### Bid Composition Restriction

We sought comment on bid composition restrictions to deter bidders
without complementarities from strategically bidding on large packages
in order to create a threshold problem for competitors that want only
parts of the larger package. For example, the Milgrom-McAfee bid
composition restriction[^129] would not allow a bidder that is active in
a round on a package, but not on a subset of that package, to bid
subsequently for the subset. No commenter believes that such a bid
composition restriction is necessary for this auction.[^130] We agree.
Therefore, we are not adopting any restrictions on bid composition
(other than limiting bidders to creating and bidding on at most twelve
packages).

### Default

In the *Auction No. 31 Package Bidding Comment Public Notice*, we
proposed to modify the default procedures and rules to take into account
package bidding. In the *700 MHz Memorandum Opinion and Order and
Further Notice of Proposed Rulemaking*, the Commission stated that after
the Bureau has reviewed the record in this proceeding and determined
whether or not to implement package bidding, which we do today, it will
adopt any necessary rule changes, such as changes to the general
competitive bidding default payment rule, in a further reconsideration
order to be adopted prior to the due date for the filing of short forms
for Auction No. 31.[^131] Accordingly, we leave for the Commission the
discussion of the proposed modifications to the default rule and the
comments received to that proposal.

### Round Results

Although we did not propose any changes to the round results that would
be provided, the modified procedures we establish today change some of
the results that will be reported. As we stated in the *Auction No. 31
Procedures Public Notice*, bids placed during a round will not be
published until the conclusion of that bidding period. After a round
closes, the Commission will compile reports of all bids placed,
provisionally winning bids, whether or not there were ties for the
provisionally winning bids, and bidder eligibility status (bidding
eligibility and activity rule waivers), and post the reports for public
access.[^132] Reports reflecting bidders\' identities and bidder
identification numbers for Auction No. 31 will be available before and
during the auction. Thus, bidders will know in advance of this auction
the identities of the bidders against which they are bidding.

### Auction Announcements

The Commission will use auction announcements to announce items such as
schedule changes. All Commission auction announcements will be available
on the FCC Extranet and on the Internet.

### Maintaining the Accuracy of FCC Form 175 Information

As we stated in the *Auction No. 31 Procedures Public Notice*, after the
short-form filing deadline, applicants may make only minor changes to
their FCC Form 175 applications. For example, permissible minor changes
include deletion and addition of authorized bidders (to a maximum of
three) and certain revisions to exhibits. Impermissible changes include
changes to the selection of licenses on which the applicant wishes to
bid. Filers must make these changes on-line, and submit a letter to:

Amy Zoslov, Chief,

Auctions and Industry Analysis Division,

Wireless Telecommunications Bureau,

Federal Communications Commission,

445 12^th^ Street, S.W., Washington, D.C. 20554

A separate copy of the letter should be mailed to Howard Davenport,
Auctions and Industry Analysis Division), briefly summarizing the
changes. Questions about other changes should be directed to Howard
Davenport, Auctions and Industry Analysis Division at (202) 418-0660.

## Post-Auction Procedures: Refund of Remaining Upfront Payment Balance

The package bidding procedures we adopt here necessitate a slight change
in the post-auction procedures regarding the refund of a bidder's
remaining upfront payment balance. Because a bidder with no
provisionally winning bids during the auction may still be a winning
bidder at the end of the last round of the auction, bidders may not drop
out of the auction completely. Accordingly, bidders are no longer
eligible for a refund of their upfront payments before the close of the
auction. The refund procedures are therefore as follows:

All applicants that submitted upfront payments but were not winning
bidders for a 700 MHz license may be entitled to a refund of their
remaining upfront payment balance after the conclusion of the auction.
At the end of the auction, those bidders who are eligible for a refund
must submit a written refund request which includes wire transfer
instructions, a Taxpayer Identification Number ("TIN"), and a copy of
their bidding eligibility screen print, to:

Federal Communications Commission

Financial Operations Center

Auctions Accounting Group

Shirley Hanberry

445 12th Street, S.W., Room 1-A824

Washington, DC 20554

Bidders are encouraged to file their refund information electronically
using the Refund Information portion of the FCC Form 175, but bidders
can also fax their request to the Auctions Accounting Group at (202)
418-2843. Once the request has been approved, a refund will be sent to
the party identified in the refund information.

> NOTE: Refund processing generally takes up to two weeks to complete.
> Bidders with questions about refunds should contact Michelle Bennett
> or Gail Glasser at (202) 418-1995.

## Contact Information

**Auctions and Industry Analysis Division:** Howard Davenport, Attorney,
Auctions Legal Branch; Joel Rabinovitz, Attorney, Auctions Legal Branch,
or Craig Bomberger, Analyst, Auctions Operations Branch, at (202)
418-0660.

**Media Contact:** Meribeth McCarrick at (202) 418-0654.

\- **FCC** -

**APPENDIX A**

**Parties Submitting Comments, Reply Comments,**

**Late-Filed Comments and *Ex Parte* Comments**

**Comments**

Prof. Frank Kelly and Dr. Richard Steinberg (Kelly/Steinberg)

Prof. Dan Levin (Levin)

Motorola (Motorola)

Nextel Communications, Inc. (Nextel)

Prof. Aleksandar Pekec and Prof. Michael H. Rothkopf (Pekec/Rothkopf)

Prof. Charles Plott & Dr. Tim Salmon (Plott/Salmon)

Dr. David J. Salant (Salant)

SBC Wireless, Inc. & BellSouth Cellular Corporation (SBC/BellSouth)

Spectrum Exchange Group, LLC (Spectrum Exchange)

Prof. Rakesh Vohra & Prof. Robert J. Weber (Vohra/Weber)

Verizon Wireless (Verizon)

VoiceStream Wireless Corporation (VoiceStream)

**Reply Comments**

Prof. Paul Milgrom (Milgrom)

Prof. Aleksandar Pekec and Prof. Michael H. Rothkopf (Pekec/Rothkopf)

SBC Wireless, Inc. & BellSouth Cellular Corporation (SBC/BellSouth)

Telephone and Data Systems, Inc. (TDS)

VoiceStream Wireless Corporation (VoiceStream)

**Late Filed Comments and Ex Parte Communications**

Prof. Jeremy Bulow (Bulow)

Prof. Paul Milgrom (Milgrom) (multiple communications)

Prof. Michael H. Rothkopf (Rothkopf)

Prof. Rakesh Vohra (Vohra)

# ATTACHMENT A {#attachment-a .unnumbered}

**Auction No. 31**

**Licenses to be Auctioned**

+-----+--------+------+----------+------+-------+--------+---------+
| *   | **Lic  | **L  | **Descr  | **Po | *     | **U    | **      |
| *Ec | ense** | icen | iption** | pula | *Bidd | pfront | Minimum |
| ono |        | se** |          | tion | ing** | Pay    | Opening |
| mic | **Num  |      |          | (199 |       | ment** | Bid**   |
| A   | bers** | *    |          | 0)** | **Un  |        |         |
| rea |        | *Ban |          |      | its** |        |         |
| G   |        | dwid |          |      |       |        |         |
| rou |        | th** |          |      |       |        |         |
| pin |        |      |          |      |       |        |         |
| g** |        | *    |          |      |       |        |         |
|     |        | *(MH |          |      |       |        |         |
|     |        | z)** |          |      |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 10   | N        | 41   | 14,00 | \$14,0 | \$40,   |
| 701 | G701-C |      | ortheast | ,567 | 0,000 | 00,000 | 000,000 |
|     |        |      |          | ,654 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 10   | Mid-     | 42   | 14,00 | \$14,0 | \$40,   |
| 702 | G702-C |      | Atlantic | ,547 | 0,000 | 00,000 | 000,000 |
|     |        |      |          | ,218 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 10   | S        | 44   | 14,00 | \$14,0 | \$40,   |
| 703 | G703-C |      | outheast | ,516 | 0,000 | 00,000 | 000,000 |
|     |        |      |          | ,919 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 10   | Great    | 41   | 14,00 | \$14,0 | \$40,   |
| 704 | G704-C |      | Lakes    | ,560 | 0,000 | 00,000 | 000,000 |
|     |        |      |          | ,906 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 10   | Central  | 40   | 14,00 | \$14,0 | \$40,   |
| 705 | G705-C |      | /        | ,926 | 0,000 | 00,000 | 000,000 |
|     |        |      | Mountain | ,284 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 10   | Pacific  | 41   | 14,00 | \$14,0 | \$40,   |
| 706 | G706-C |      |          | ,427 | 0,000 | 00,000 | 000,000 |
|     |        |      |          | ,686 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
|     |        |      |          |      |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
|     |        |      | Subtotal |      | 84,00 | \$84,0 | \$240,  |
|     |        |      |          |      | 0,000 | 00,000 | 000,000 |
+-----+--------+------+----------+------+-------+--------+---------+
|     |        |      |          |      |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 20   | N        | 41   | 28,00 | \$28,0 | \$80,   |
| 701 | G701-D |      | ortheast | ,567 | 0,000 | 00,000 | 000,000 |
|     |        |      |          | ,654 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 20   | Mid-     | 42   | 28,00 | \$28,0 | \$80,   |
| 702 | G702-D |      | Atlantic | ,547 | 0,000 | 00,000 | 000,000 |
|     |        |      |          | ,218 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 20   | S        | 44   | 28,00 | \$28,0 | \$80,   |
| 703 | G703-D |      | outheast | ,516 | 0,000 | 00,000 | 000,000 |
|     |        |      |          | ,919 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 20   | Great    | 41   | 28,00 | \$28,0 | \$80,   |
| 704 | G704-D |      | Lakes    | ,560 | 0,000 | 00,000 | 000,000 |
|     |        |      |          | ,906 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 20   | Central  | 40   | 28,00 | \$28,0 | \$80,   |
| 705 | G705-D |      | /        | ,926 | 0,000 | 00,000 | 000,000 |
|     |        |      | Mountain | ,284 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
| EAG | WXEA   | 20   | Pacific  | 41   | 28,00 | \$28,0 | \$80,   |
| 706 | G706-D |      |          | ,427 | 0,000 | 00,000 | 000,000 |
|     |        |      |          | ,686 |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
|     |        |      |          |      |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
|     |        |      | Subtotal |      | 1     | \      | \$480,  |
|     |        |      |          |      | 68,00 | $168,0 | 000,000 |
|     |        |      |          |      | 0,000 | 00,000 |         |
+-----+--------+------+----------+------+-------+--------+---------+
|     |        |      |          |      |       |        |         |
+-----+--------+------+----------+------+-------+--------+---------+
|     |        |      | Total    |      | 2     | \      | \$720,  |
|     |        |      |          |      | 52,00 | $252,0 | 000,000 |
|     |        |      |          |      | 0,000 | 00,000 |         |
+-----+--------+------+----------+------+-------+--------+---------+

# Attachment b {#attachment-b .unnumbered}

FCC AUCTION SEMINAR REGISTRATION FORM

Auction No. 31

The FCC will sponsor a one-day seminar for the 747-762 and 777-792 MHz
Band auction applicants. The seminar is free of charge and will provide
information about pre-auction procedures, service and auction rules,
conduct of the auction, and the FCC remote bidding software.

Reservation will be taken on a first-come, first-served basis until room
capacity is filled.

The seminar will be held:

**Monday, July 24, 2000**

**Federal Communications Commission**

**445 12^th^ Street, S.W.**

#### Washington, DC 20554 {#washington-dc-20554 .unnumbered}

**Registration 8:30 a.m. - 9:30 a.m.**

**Seminar 9:30 a.m. - 4 p.m.**

**If hotel accommodations are needed,**

**please contact 1-888-225-5322 (option #2) for a list of hotels in the
area.**

**\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\***

**To register, complete the form below and return no later than**

**Friday, July 21, 2000,** by mail or fax to:

**FCC Auction 31**

Auctions Operations Branch

1270 Fairfield Road

Gettysburg, PA 17325-7245

FAX: 717-338-2850

Phone: 717-338-2888

I/We will attend the Auction No. 31 seminar,

**Monday, July 24, 2000.**

Name of attendee:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Name of attendee:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Company name:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Phone: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fax:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

# Attachment C {#attachment-c .unnumbered}

ELECTRONIC FILING AND REVIEW

OF THE FCC FORM 175

Applicants must submit their FCC Form 175 applications electronically,
using either the FCC Auctions System page on the Internet or the
Commission's remote access system. The remote access system will
generally be available 24 hours per day. FCC Form 175 applications must
be submitted and confirmed by **6:00 p.m. ET on Tuesday, August 1,
2000.** Late applications or unconfirmed submissions of electronic data
will not be accepted.

Applicants must press the **Submit Form 175** button on the *Submit*
page to successfully submit their FCC Form 175. The electronic filing
process consists of an initial filing period and a resubmission period
to make minor corrections. During each filing period, submitted
applications may be updated and amended multiple times until the filing
deadline.

## Minimum Hardware and Software Requirements

Applicants will need to meet the following minimum hardware and software
requirements:

### Minimum Hardware Requirements

-   CPU: Intel Pentium

-   RAM: 16 MB (more recommended if you have multiple applications open)

-   Modem: 28.8 Kbps Hayes compatible modem or faster (recommend 56.6
    Kbps)

-   Monitor: VGA or above

-   Mouse or other pointing device

### Minimum Software Requirements

-   Operating System: Microsoft Windows 95 or 98

```{=html}
<!-- -->
```
-   Web Browser: Netscape Communicator 4.73 is recommended. However, you
    can also use Netscape Communicator 4.5, 4.51, 4.61, 4.7, or 4.72
    (Internet web browser software).

> **Note:** To download Netscape Communicator 4.73 free of charge,
> access the Netscape download site at
> ***http://home.netscape.com/download/***

-   PDF Viewer: Adobe Acrobat Reader 3.0 or higher (available at
    ***http://www.adobe.com***)

```{=html}
<!-- -->
```
-   If you wish to use the download feature in the Form 175 Review, you
    will need a .tar file extraction utility, e.g., Winzip (available at
    ***http://www.winzip.com***) or Pkzip for Windows (available at
    ***http://www.pkware.com/download.html***).

## Submitting FCC Form 175 Applications

You can submit FCC Form 175 applications electronically via the
Internet. Start your Netscape Web browser. In your browser's *Location*
field, enter ***http://wtbwww15.fcc.gov*** and then click **175
Submit**.

> **Note:** If you have problems with the Internet, you may submit FCC
> Form 175 applications via the FCC Wide-Area Network, using Dial-Up
> Networking. For details, refer to the *Accessing the FCC Network to
> File FCC Form 175* attachment.

When uploading attachments in FCC Form 175 Submission, applicants may
use a variety of file formats --- including Word 97 or earlier,
WordPerfect 6.*x* or earlier, Adobe PDF, and ASCII text --- and should
verify that the files contain all exhibit information. Graphics file
uploads (e.g., *.bmp*, *.tiff*, *.jpg*) and spreadsheets (e.g., Excel,
Lotus) are not supported, and graphics images should not be imported
into any word processing files that are uploaded. ***Do not upload a
password-protected file. The FCC system will not be able to open it or
convert it.***

After you upload an attachment and it has been converted, check to see
if it converted properly by selecting the PDF filename in the rightmost
column. The conversion process generally completes within thirty
minutes. If you are unable to read this file after it has been
converted, please do the following:

1\. Re-upload the attachment.

2\. If the file still has not converted properly, then simplify the
formatting of the file.

For example, if you are using a Table structure in a WordPerfect
document, remove the Table structure and leave the contents of the
table, then re-upload the attachment.

After you have successfully re-uploaded an attachment, please delete the
old, unreadable attachment files.

Applicants must press the **Submit Form 175** button on the *Submit*
page to successfully submit their FCC Form 175. Pressing **Submit Form
175** produces a confirmation message showing the assigned FCC Account
Number. During each filing period, submitted applications may be updated
and amended multiple times until the filing deadline.

## Reviewing FCC Form 175 Applications

Once the FCC has completed the 175 Review process, you can review FCC
Form 175 applications electronically via the Internet. Start your
Netscape Web browser. In your browser's *Location* field, enter
***http://wtbwww15.fcc.gov*** and then click **175 Review**.

## Help

For technical assistance with installing or using FCC software, contact
the FCC Technical Support Hotline at (202) 414‑1250 (V) or (202)
414-1255 (TTY). The FCC Technical Support Hotline is generally available
Monday through Friday from 7 a.m. to 10 p.m. ET, Saturday from 8 a.m. to
7 p.m. ET, and Sunday from 12 p.m. to 6 p.m. ET. *All calls to the FCC
Technical Support Hotline are recorded.*

# ATTACHMENT d {#attachment-d .unnumbered}

**GUIDELINES FOR COMPLETION**

**OF FCC FORM 175 AND EXHIBITS**

**A. FCC Form 175**

Because of the significance of the FCC Form 175 application to the
auction, bidders should especially note the following:

**Applicant Name:** Name given is used as your bidder name in the
auction.

**Address:** Give a street address (not a Post Office box number) for
the applicant, suitable for mail or private parcel delivery.

**Applicant Classification:** Applicants must indicate their legal
classification. The FCC Form 175 requires the applicant to classify
itself as an individual, joint venture, partnership, trust, corporation,
consortium, association, limited liability company (LLC) or government
entity.

**Applicant Status:** Applicants are also requested to indicate their
status as a rural telephone company, minority-owned business and/or
women-owned business, so that the FCC can monitor its performance in
promoting economic opportunities for these designated entities.

**Bidding Credit Eligibility:** Be advised that this is the sole
opportunity applicants have to elect small business or very small
business status and bidding credit level (if applicable), and there is
no opportunity to change the election once the short-form filing
deadline passes.

-   Small business or very small business applicants should enter the
    applicable bidding credit from the drop down menu. Applicants should
    be aware that this is the sole opportunity that they will have to
    elect the appropriate bidding credit.

    **License Selection:** Applicants should identify all licenses on
    which they want to be eligible to bid in the auction. Be advised
    that there is no opportunity to change this list once the short-form
    filing deadline passes. It is critically important that you confirm
    the licenses that you have selected because the FCC auction system
    will not accept bids on licenses for which an applicant has not
    applied on its FCC Form 175. **Note that there are twelve licenses
    offered in Auction 31 (*e.g.*, EAG701 Channel Block C, EAG701
    Channel Block D, EAG702 Channel Block C, etc.) Each of the six
    regions (Markets) consists of two licenses: one for Channel Block C
    and one for Channel Block D. To be eligible to bid on a license,
    individually or as part of a package, that license must be selected.
    (That is, to be eligible to bid on license EAG701 Channel Block C, a
    bidder must select EAG701 Channel Block C; to be eligible to bid on
    EAG701 Channel Block D, a bidder must select EAG701 Channel Block D;
    to be eligible to bid on the Northeast Region, a package consisting
    of licenses EAG701 Channel Block C and EAG701 Channel Block D, a
    bidder must select both EAG701 Channel Block C and EAG701 Channel
    Block D.)** Please confirm your license selection, by clicking on
    the "Confirm" button.

    **Authorized Bidders:** Applicants must list the name(s) of the
    person(s) (no more than three) authorized to represent them at the
    auction. Only those individuals listed on the FCC Form 175 will be
    authorized to place or withdraw bids for the applicant during the
    auction. **Note: Applicants may only share a common authorized
    bidder(s) if each applicant has selected separate markets. *See* 47
    CFR § 1.2105(c)**.

    **Certifications:** Applicants should carefully read the list of
    certifications on the FCC Form 175. These certifications help to
    ensure a fair and competitive auction and require, among other
    things, disclosure to the Commission of certain information on
    applicant ownership and agreements or arrangements concerning the
    auction. Submission of an FCC Form 175 application constitutes a
    representation by the certifying official that he or she is an
    authorized representative of the applicant, has read the form's
    instructions and certifications, and that the contents of the
    application and its attachments are true and correct. Submission of
    a false certification to the Commission may result in penalties,
    including monetary forfeitures, license forfeitures, ineligibility
    to participate in future auctions, and/or criminal prosecution.

    **Contact person/address:** If the Commission wishes to communicate
    with the applicant by telephone or fax, those communications will be
    directed to the contact person identified on the FCC Form 175. Space
    is provided for an address, telephone number, fax number, and e-mail
    address. All written communication and registration information will
    be directed to the applicant's contact person at the address
    specified on the FCC Form 175. Applicants must provide a street
    address; no P.O. Box addresses may be used.

    **Completeness:** Applicants must submit all information required by
    the FCC Form 175 and by applicable rules. Failure to submit required
    information by the resubmission date will result in dismissal of the
    application and inability to participate in the auction. *See* 47
    C.F.R. § 1.2105(b).

NOTE: Applicants must press the "Submit Form 175" button on the "Submit"
page to successfully submit their FCC Form 175.

**Continuing Accuracy:** Each applicant is responsible for the
continuing accuracy and completeness of information furnished in the FCC
Form 175 and its exhibits. *See* 47 C.F.R. § 1.65. It is the FCC's
position that during the conduct of an auction, thirty business days
from a reportable change is a reasonable period of time. Applicants are
reminded that they consent to be audited in the certification section of
the FCC Form 175 (see certification item number 6).

**B. Exhibits and Attachments**

In addition to the FCC Form 175 itself, applicants must submit
additional information required by the FCC's rules. Although the FCC
does not require a particular format for this information, it has
developed the following guidelines that will facilitate the processing
of short-form applications. The FCC encourages applicants to submit this
information using the following format.

*If you find that an attachment has not converted properly to Adobe PDF
format, take the following steps:*

*1) Simplify the formatting of the file. For example, if using a Table
structure in a WordPerfect document, remove the Table structure leaving
the contents of the table, re‑save the document.*

*2) Re‑upload the attachment.*

*3) When the re-uploaded attachment has successfully converted, delete
the failed attachment.*

NOTE: Applicants should not list their TIN numbers on any Exhibits to
their FCC Form 175s.

**Exhibit A --- Applicant Identity and Ownership Information**: 47
C.F.R. § 1.2105(a)(2)(ii) requires each applicant to fully disclose the
real party or parties-in-interest in an exhibit to its FCC Form 175
application. Each member of an applicant applying to bid as a small or
very small business consortium must provide this information. The
following information is required:

**1. General Information**

***Applicant Status Required Information***

General Partnership Name, citizenship, and address of all partners, and
the share or interest participation of each partner

Limited Partnership Name, citizenship, and address of each limited
partner whose interest in the applicant is equal to or greater than 10
percent (as calculated according to the percentage of equity paid in and
the percentage of distribution of profits and losses) Corporation
Corporate name and address; and name, title, and citizenship of a
responsible officer or director Limited Liability Corporate name and
address; and name, address, and citizenship Corporation of all members
Trust Name, citizenship, and address of trustee

None of the above Name, citizenship, title or other relation to the
applicant, and address of a principal or other responsible person

**2. Ownership Information**

***Applicant Status Required Information***

All applicants Name, citizenship, and address of all controlling
interests of the applicant as defined in Part II.C.1 of this public
notice.

All applicants Name, citizenship, and address of all parties holding 10
percent or more of each class of stock, warrants, options or debt
securities and the amount and percentage held.

All applicants Name of all parties holding a 10 percent or greater
interest in the applicant and the specific amount held.

All applicants List of any FCC-licensed entity or applicant for an FCC
license, in which

> a\. the applicant;
>
> b\. any party with a 10 percent or greater interest in the applicant;
> or
>
> c\. a controlling interest (as discussed in Part II.C.1 of this public
> notice) of the applicant owns a 10 percent or greater interest or 10
> percent or more of any class of stock, warrants, options or debt
> securities. (See also 47 C.F.R. §§ 101.1209 and 1.2110) This list must
> include a description of each such entities' principal business and a
> description of each such entities' relationship to the applicant.
>
> *Example of a*: The applicant owns 10 percent of Company A (an
> FCC-licensed entity or an applicant for an FCC license). The applicant
> must list Company A on its Form 175 Exhibit A and provide the required
> information.
>
> *Example of b*: Company A owns 10 percent of the applicant and 10
> percent of Company B (an FCC-licensed entity or an applicant for an
> FCC license). The applicant must list both Company A and Company B on
> its Form 175 Exhibit A and provide the required information.
>
> *Example of c*: Company A owns 55% of the applicant and owns 10
> percent of Company B (an FCC-licensed entity or an Applicant for an
> FCC license). The applicant must list both Company A and Company B on
> its Form 175 Exhibit A and provide the required information.

All applicants List of all parties holding indirect ownership interests
in the applicant as determined by successive multiplication of the
ownership percentages in each link of the vertical ownership chain, that
equals 10 percent or more of the applicant, except that if the ownership
percentage for any link in the chain exceeds 50 percent or represents
actual control, it shall be reported as if it were a 100 percent
interest.

> *Example*: Company A owns 10% of Company B, which owns 60% of Company
> C, which owns 25% of the applicant. Company B's interest in the
> applicant would be 25% (the same as Company C's interest since Company
> B's interest in Company C exceeds 50%), and Company A's interest in
> the applicant would be 2.5% (0.1 \* 0.25). Under the 10% attribution
> benchmark, Company B's interest in the applicant must be reported on
> the applicant's FCC Form 175 Exhibit A, while Company A's interest in
> the applicant need not be reported. However, if Company A owned 40% of
> Company B in the above example, then Company A's interest in the
> applicant would be 10% (0.4 \* 0.25), and the applicant would need to
> report it on the applicant's FCC Form 175 Exhibit A.

**Exhibit B --- Agreements with Other Parties/Joint Bidding
Arrangements:** Applicants must attach an exhibit identifying all
parties with which they have entered into any agreements, arrangements
or understandings which relate in any way to the licenses being
auctioned, including any relating to the post-auction market structure.
*See* 47 C.F.R. §1.2105(a)(2)(viii).

Be aware that pursuant to Certification (4) on the FCC Form 175, the
applicant certifies that it will not enter into any explicit or implicit
agreements or understandings of any kind with parties not identified in
the application regarding bid amounts, bidding strategies, or the
particular licenses the applicant will or will not bid. *See* 47 C.F.R.§
1.2105(a)(2)(ix). *To prevent collusion, the Commission's Rules
generally prohibit communication among applicants for the same license
areas between the initial short-form applications filing deadline and
the down payment on licenses won, when such communications concern bids,
bidding strategies, or settlements.* 47 C.F.R. § 1.2105(c).

**Exhibit C --- Status as a Small Business or Very Small Business**:
Applicants claiming status as a very small business or small business
must attach an exhibit providing the following information regarding
this status.

***Entity Required Information***

Applicant Average gross revenues for the preceding three years set forth
both separately (e.g., for each of the three preceding three years
individually) and in the aggregate (for all of the preceding three years
combined). Certification that the average gross revenues for the
preceding three years do not exceed the required limit, or providing
average gross revenues for the 3-year period without providing the gross
revenues for each of the preceding three years, is insufficient.

Applicant's Affiliates

*see* 47 CFR § 101.1209 Same information required as discussed above

Applicant's

Controlling Interests

*See* Part II.C.1, *supra*.

*See also Report and*

*Order and Second*

*NPRM* at ¶¶ 148-54. Same information required as discussed above

> *Example.* The applicant had gross revenues of \$500,000 in 1997,
> \$1,000,000 in 1998, and \$3,000,000 in 1999, with average gross
> revenues for that time period of \$1,500,000.
>
> The applicant owns 60% of Company A, making Company A an affiliate of
> the applicant under Section 1.2110(b)(4)(i)(B), and Company B owns 52%
> of the applicant (making Company B a controlling interest of the
> applicant, as defined in Part II.C.1 of this public notice. The
> applicant's Exhibit C would look like this:
>
> Applicant Name
>
> 1997 gross revenues \$ 500,000
>
> 1998 gross revenues \$ 1,000,000
>
> 1999 gross revenues \$ 3,000,000
>
> Average gross revenues
>
> for the preceding 3 years \$ 1,500,000
>
> Company A (an affiliate of the applicant)
>
> 1997 gross revenues \$ enter amount
>
> 1998 gross revenues \$ enter amount
>
> 1999 gross revenues \$ enter amount
>
> Average gross revenues
>
> for the preceding 3 years \$ enter amount
>
> Company B (a controlling interest in the applicant)
>
> 1997 gross revenues \$ enter amount
>
> 1998 gross revenues \$ enter amount
>
> 1999 gross revenues \$ enter amount
>
> Average gross revenues
>
> for the preceding 3 years \$ enter amount
>
> **TOTAL: combined average gross** **revenues for the preceding three
> years of the applicant, the applicant's affiliates and their
> controlling interests**

NOTE: Each member of an applicant that is applying to bid as a
consortium of small or very small businesses must provide this
information and qualify for the claimed status.

**Exhibit D --- Information Requested of Designated Entities:**
Applicants owned by minorities or women, as defined in 47 C.F.R. §
1.2110(b), or that are rural telephone companies, may attach an exhibit
regarding this status. This information, in conjunction with the
information requested in Block 10 of the FCC Form 175, will assist the
Commission in monitoring the participation of these "designated
entities" in its auctions.

**Exhibit E --- Miscellaneous Information**: Applicants wishing to
submit additional information should include it in Exhibit E.

Applicants are reminded that all information required in connection with
applications to participate in spectrum auctions is necessary to
determine the applicants' qualifications, and as such will be available
for public inspection. Required proprietary information may be redacted,
or confidentiality may be requested, following the procedures set forth
in 47 C.F.R. § 0.459. Such requests must be submitted in writing to Amy
Zoslov, Chief, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau, Federal Communications Commission, 445 12^th^
Street, S.W., Room 4-A760, Washington, D.C. 20554 (with a separate copy
mailed to Howard Davenport, Legal Branch, Auctions and Industry Analysis
Division, Room 4-A435), in which case the applicant must indicate in
Exhibit E that it has filed a confidentiality request. Because the
required information bears on applicants' qualifications, the FCC
envisions that confidentiality requests will not be routinely granted.

**Waivers:** Applicants requesting waiver of any rules must submit a
statement of reasons sufficient to justify the waiver sought. *See* 47
C.F.R. § 1.3.

# Attachment e {#attachment-e .unnumbered}

ACCESSING THE FCC NETWORK

TO FILE FCC FORM 175

This attachment describes how to access the FCC Network from a system
that is running the Microsoft Windows 95 or Microsoft Windows 98
operating system. This involves configuring dial-up network access and
then performing the dial-up procedure.

> **Note:** Dial-up access to the FCC Network is ***not*** required to
> submit or review FCC Form 175 applications. You can perform those
> functions from the Internet, by entering location
> ***http://wtbwww15.fcc.gov/*** on your Netscape Web browser and
> clicking the **175 Submit** or **175 Review** button, respectively.
> For more details, refer to the *Electronic Filing and Review of the
> FCC Form 175* attachment.

**[Conventions]{.underline}**

The instructions in this section use the following typographical
conventions:

**bold** Represents objects on the screen that you click with the mouse
pointer, including buttons, Internet links, icons, tabs, menu items
(e.g., **Cancel** button, **Auctions** link, **Save** option in the File
menu).

*italic* Represents field names or areas of a screen (e.g., *Applicant*
field, *Selected Licenses* area of a screen).

***bold italic*** Represents characters that you must type exactly as
they appear in the instructions. For example, if you are instructed to
type ***http://wtbwww15.fcc.gov***, you should type all of the
characters shown in bold italic exactly as they are printed.

[Small Caps]{.smallcaps} Represents keys on the keyboard (e.g., [Enter,
Ctrl, Esc]{.smallcaps}).

***Note:*** Throughout these instructions, "enter" means to type the
appropriate information and then press the [Enter]{.smallcaps} key.

## Accessing the FCC Network to Submit FCC Form 175 Applications

The following section provides the instructions for configuring the
dial-up network access in preparation for submitting FCC Form 175
applications. The subsequent section gives the dial-up procedure.

### Configuring Dial-Up Networking

1\. To start dial-up networking:

> a\. Click the Windows 95/98 **Start** button.
>
> b\. Click the **Programs** option to display the Programs menu.
>
> c\. Click the **Accessories** option to display the Accessories menu.
>
> d\. In Windows 95, click **Dial-Up Networking**.
>
> In Windows 98, click **Communications**, then **Dial-Up Networking**.
>
> If **Dial-Up Networking** is not an option on your Accessories menu,
> you should install it from your Windows 95/98 CD or diskettes.

2\. When the Dial-Up Networking window appears, double-click the **Make
New Connection** icon.

The Make New Connection window appears.

3\. Type ***FCC Auctions 877#*** in the field titled *Type a name for
the computer you are dialing.*

4\. In Windows 95, click the down arrow at the right of the *Select a
modem* field and select your modem from the menu of available modems.

> In Windows 98, click the down arrow at the right of the *Select a
> device* field and select your modem from the menu of available
> devices.
>
> If your modem does not appear on this list, you must install your
> modem driver according to the modem manufacturer installation
> procedures, which are usually described in your modem's user manual.

5\. Click the **Next** button.

6.  Type ***877*** and ***844-2788*** in the *Area Code* and *Telephone
    Number* fields, respectively.

> If you need to dial *9* or some other digit to get an outside line,
> include that digit in the *Area Code* field. For example, you might
> type ***9, 1 877*** in this field.

7\. Verify that the correct country is selected in the *Country code*
field.

> If necessary, click the down arrow at the right of the *Country code*
> field and select the appropriate country from the menu of available
> countries.

8\. Click the **Next** button.

9\. Click the **Finish** button.

> An icon labeled *FCC Auctions 877#* appears in the Dial-Up Networking
> window.

10\. Verify that properties are configured correctly before attempting a
dial-up session. Put the mouse pointer on the icon and click the
**right** mouse button to display a menu. Click **Properties** from the
menu.

11\. Click the **Configure** button. Click the **Options** tab at the
top of the Properties window.

12\. In the *Connection control* area of the Options tab, verify that
*[neither]{.underline}* option is selected. If either option is
selected, click the check box at the left of the option to deselect it.
Then click **OK**.

13\. In Windows 95, click the **Server Type\...** button.

In Windows 98, click the **Server Types** tab at the top of the
Properties window.

14\. In the *Advanced Options* area, verify that **only** *Enable
software compression* is selected. If it is not selected, click the
check box at the left of the option to select it. If either of the other
options is selected, click the check box to deselect it.

15\. In the *Allowed Network Protocols* area, **verify that only
*TCP/IP* is selected**.

> If it is not selected, click the check box at the left of the option
> to select it. If either of the other options is selected, click the
> check box to deselect it.

16\. Click the **TCP/IP Settings** button. On the TCP/IP Settings
window, select *Server assigned IP addresses* at the top and select
*Specify name server addresses* midway down the window.

17\. Type ***165.135.79.95*** as the Primary DNS and
***165.135.241.149*** as the Secondary DNS. Ensure that these two
options are checked:

-   Use IP header compression

-   Use default gateway or remote network

18. Click **OK** on the *TCP/IP Settings* window and the *Server Type*
    window.

19. Close the *Dial-Up Networking* window.

20\. a. Click the Windows 95/98 **Start** button, then click the
**Settings** option to display the Settings menu.

> b\. Click **Control Panel** and then double-click the **Network**
> icon.
>
> c\. Highlight the *TCP/IP Protocol* and click **Properties**. If there
> are multiple TCP/IP protocols, highlight *TCP/IP \--\> Dial-Up
> Adapter* and click **Properties**.
>
> In a Windows 98 environment, a confirmation dialog appears. Read the
> information on the dialog, then click the **OK** button.
>
> d\. Click the **DNS Configuration** tab and then click the **Enable
> DNS** radio button at the top.

e.  Type ***bidder*** in the *Host* box and type ***fcc.gov*** in the
    *Domain* box.

> **Note:** You are limited to three DNS entries. If you already have
> three DNS entries, you must delete two of them before performing the
> next two steps. To do this, click the first entry you want to delete
> and click the **Remove** button. Then click the second entry you want
> to delete and click the **Remove** button again.

f.  Type ***165.135.79.95*** in the DNS Server Search Order box and
    click the **Add** button.

g.  Type ***165.135.241.149*** in the DNS Server Search Order box and
    click **Add** again.

h.  Click **OK** on the TCP/IP Properties windows, then click **OK** on
    the Network windows.

> If you are prompted to restart your computer, click **Yes** to
> restart, then beginthe Dial-Up Procedure.

### Dial-Up Procedure

1.  If the Dial-Up Networking window is not currently open, do the
    following:

> a\. Click the Windows 95/98 **Start** button.
>
> b\. Click the **Programs** option to display the Programs menu.
>
> c\. Click the **Accessories** option to display the Accessories menu.
>
> d\. In Windows 95, click **Dial-Up Networking**
>
> In Windows 98, click **Communications**, then **Dial-Up Networking**.

The Dial-Up Networking window appears.

2\. In the Dial-Up Networking window, double-click the **FCC Auctions
877#** icon.

3\. Click the **Connect** button on the window. *[Do not enter User name
or Password]{.underline}*.

> The Connection window appears, indicating the status of your
> connection as your modem dials into the system. This window must
> remain running during your dial-up session. You may minimize the
> window, if you wish.
>
> If your modem fails to establish a connection, please see the
> *Troubleshooting* section.

## Submitting FCC Form 175 Applications

After you have connected to the FCC Network, start your Netscape Web
browser. In your browser's *Location* field, enter
***http://wtbwww15.fcc.gov*** (primary location) or
***http://wtbwww34.fcc.gov*** (secondary location) and then click **175
Submit**.

> **Note:** The *wtbwww34* location can only be accessed through dial-up
> networking; it cannot be accessed through the Internet.

When uploading attachments in FCC Form 175 Submission, applicants may
use a variety of file formats --- including Word 97 or earlier,
WordPerfect 6.*x* or earlier, Adobe PDF, and ASCII text --- and should
verify that the files contain all exhibit information. Graphics file
uploads (e.g., *.bmp*, *.tiff*, *.jpg*) and spreadsheets (e.g., Excel,
Lotus) are not supported, and graphics images should not be imported
into any word processing files that are uploaded. ***Do not upload a
password-protected file. The FCC system will not be able to open it or
convert it.***

After you upload an attachment and it has been converted, check to see
if it converted properly by selecting the PDF filename in the rightmost
column. The conversion process generally completes within thirty
minutes. If you are unable to read this file after it has been
converted, please do the following:

1.  Re-upload the attachment.

2.  If the file still has not converted properly, then simplify the
    formatting of the file.

> For example, if you are using a Table structure in a WordPerfect
> document, remove the Table structure and leave the contents of the
> table, then re-upload the attachment.

After you have successfully re-uploaded an attachment, please delete the
old, unreadable attachment files.

Applicants must press the **Submit Form 175** button on the *Submit*
page to successfully submit their FCC Form 175. Pressing **Submit Form
175** produces a confirmation message showing the assigned FCC Account
Number. During each filing period, submitted applications may be updated
and amended multiple times until the filing deadline.

When you have finished, exit your Web browser; then click the
**Disconnect** button on the Connection window to end your dial-up
session.

## Removing the Dial-Up Networking Service

Once you have finished using the dial-up networking service, you can
remove it from your computer, as follows:

1.  Click the Windows 95/98 **Start** button, then click the
    **Settings** option to display the Settings menu.

2.  Click **Control Panel** and then double-click the **Network** icon.

3.  Highlight the *TCP/IP Protocol* and click **Properties**. If there
    are multiple TCP/IP protocols, highlight *TCP/IP \--\> Dial-Up
    Adapter* and click **Properties**.

> In a Windows 98 environment, a confirmation dialog appears. Read the
> information on the dialog, then click the **OK** button.

4.  Click the **DNS Configuration** tab.

5.  Click the DNS Server Search Order box containing ***165.135.79.95***
    to select it, then click the **Remove** button.

6.  Similarly, click the DNS Server Search Order box containing
    ***165.135.241.149*** to select it, then click the **Remove**
    button.

7.  Click **OK** on the TCP/IP Properties windows, then click **OK** on
    the Network windows.

8.  If you are prompted to restart your computer, click **Yes** to
    restart.

9.  Remove the **FCC Auctions 877#** icon from your desktop. That is,
    click the icon with your *right* mouse button and then click the
    **Delete** option in the pull-down menu.

## Troubleshooting

Following are problems you may encounter and possible solutions for
resolving or isolating them.

### Modem does not respond

1.  Confirm that all physical connections for the modem are present.

2.  Confirm that the phone line is active by connecting it to a
    telephone and checking for a dial-tone.

3.  Confirm that the correct modem driver is installed for your modem.

### Modem dials but does not connect

1.  Confirm that the number the modem is dialing is correct.

```{=html}
<!-- -->
```
2.  Confirm that the modem prefix, if any, is correct.

***Using a Backup Dial-In Number.*** If the number and prefix are
correct, the 877 number being dialed may be experiencing problems. In
this case, you can reconfigure the dial-up software using an alternate
dial-in number, which is also toll-free. To use the backup number,
perform the *Configuring Dial-Up Networking* procedure again, but this
time make the following changes:

-   In Step 3, type ***FCC Auctions 800#*** in the field titled *Type a
    name for the computer you are dialing.*

-   In Step 6, type ***800*** and ***378-7435*** in the *Area Code* and
    *Telephone Number* fields, respectively.

-   In Step 17, type ***165.135.241.149*** as the Primary DNS.

-   In Step 20f, type ***165.135.241.149*** in the DNS Server Search
    Order box.

### Modem dials and connects, but nothing appears when you enter the Location in the Web browser 

1.  Verify the Dial-Up Networking settings specified in the *Configuring
    Dial-Up* *Networking* section.

2.  Confirm that your Web browser is not using proxies:

```{=html}
<!-- -->
```
a)  On your browser, click the **Preferences** option in the Edit menu.

b)  In the Category area at the left, double-click **Advanced**.

c)  Click the Advanced structure's **Proxies** option.

d)  Click the radio button labeled **Direct connection to the
    Internet**.

e)  Click the **OK** button at the bottom of the window.

### Receive an Internal Server error in the Web browser 

1.  Confirm that the *Location* is set to ***http://wtbwww15.fcc.gov***
    or ***http://wtbwww34.fcc.gov***

2.  On your browser, click the **Preferences** option in the Edit menu.
    In the Category area at the left, double-click **Advanced**. In the
    area at the top, confirm that *Enable Java* and *Enable JavaScript*
    are selected. In the Cookies area, confirm that *Accept all cookies*
    is selected.

## Help

For technical assistance with installing or using FCC software, contact
the FCC Technical Support Hotline at (202) 414‑1250 (V) or (202)
414-1255 (TTY). The FCC Technical Support Hotline is generally available
Monday through Friday from 7 a.m. to 10 p.m. ET, Saturday from 8 a.m. to
7 p.m. ET, and Sunday from 12 p.m. to 6 p.m. ET. *All calls to the FCC
Technical Support Hotline are recorded.*

[^1]: *See* Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, *First Report and Order*, FCC 00-5 (rel. Jan. 7, 2000) at ¶
    15, 15 FCC Rcd 476, 483 (2000) (describing types of services
    permitted).

[^2]: ^?^ *See* "Auction of Licenses in the 747-762 and 777-792 MHz
    Bands; Auction Notice and Filing Requirements for 12 Licenses in the
    700 MHz Bands Auction Scheduled for May 10, 2000; Minimum Opening
    Bids and Other Auction Procedural Issues," *Public Notice*, DA
    00-292, 15 FCC Rcd 2921 (rel. Feb. 18, 2000), 65 Fed. Reg. 12251
    (Mar. 8, 2000) *(*"*Auction No. 31 Procedures Public Notice*");
    \"Auction of Licenses for the 747-762 and 777-792 MHz Bands
    Postponed until September 6, 2000,\" *Public Notice*, DA 00-942
    (rel. May 2, 2000), 65 Fed. Reg. 30598 (May 12, 2000)
    ("*Postponement PN*").

[^3]: *See* "Auction of Licenses in the 747-762 and 777-792 MHz Bands
    Scheduled for September 6, 2000; Comment Sought On Modifying The
    Simultaneous Multiple Round Auction Design To Allow Combinatorial
    (Package) Bidding," *Public Notice*, DA 00-1075 (rel. May 18, 2000),
    65 Fed. Reg. 35636 (June 5, 2000) *(*"*Auction No. 31 Package
    Bidding Comment Public Notice*").

[^4]: A list of commenters is contained in Appendix A. Copies of the
    filings may be found at the Bureau's Auctions web site at
    <http://www.fcc.gov/wtb/auctions/700/700.html#comments>.

[^5]: Service Rules for the 746-764 and 776-794 MHz Bands, and Revisions
    to Part 27 of the Commission's Rules, WT Docket No. 99-168,
    *Memorandum Opinion and Order and Further Notice of Proposed
    Rulemaking*, FCC 00‑224 (rel. June 30, 2000) at ¶ 76 ("*700 MHz
    Memorandum Opinion and Order and Further Notice of Proposed
    Rulemaking*").

[^6]: *See Auction No. 31 Procedures Public Notice* at 32-36, 15 FCC Rcd
    at 2952-56.

[^7]: Bidders may design their 12 packages at any point during the
    auction.

[^8]: Consistent bids are bids that (i) do not overlap and (ii) are made
    or renewed by an individual bidder in the same round (bids made by
    an individual bidder in different rounds are treated as mutually
    exclusive under the procedures we are establishing for this
    auction).

[^9]: In other words, a bidder may be willing to pay \$50 per license if
    it can acquire all of the licenses in the combination it desires,
    but only \$30 per license if it acquires only some of those
    licenses.

[^10]: A "retained" bid was defined as a provisionally winning bid or a
    bid that has the potential to become a provisionally winning bid
    because of changes in other bids in subsequent rounds.

[^11]: *See* *Auction No. 31 Procedures Public Notice* at 32-36, 15 FCC
    Rcd at 2952-56.

[^12]: The Public Notices regarding this auction can be found on the
    Bureau's Auction web site at
    http://www.fcc.gov/wtb/auctions/700/700.html#PN.

[^13]: Nextel Comments at 3.

[^14]: SBC/BellSouth Comments at 5.

[^15]: Verizon Comments at 6-7.

[^16]: Kelly/Steinberg Comments at 1.

[^17]: TDS Comments, Attachment of Prof. Robert J. Weber ("Weber
    attachment") at 1.

[^18]: Plott/Salmon Comments at 4.

[^19]: Spectrum Exchange Comments at 6.

[^20]: Conference on Combinatorial Bidding jointly sponsored by the
    Federal Communications Commission, the Stanford Institute for
    Economic Policy Research and the National Science Foundation, May
    5-7, 2000. Once again, the Bureau wishes to express its gratitude
    for the time and invaluable assistance of those who participated in
    the conference, as well as those who have submitted comments here.

[^21]: With twelve licenses, there are (2^12^-1) possible packages, or
    4,095.

[^22]: Parking is the placing of a bid that a bidder does not expect to
    become a winning bid for the purpose of maintaining eligibility
    and/or keeping the auction open.

[^23]: Each variation of a package is considered a separate package.

[^24]: Bidders are limited to bidding on, and hence creating packages
    from, those licenses which they selected on their FCC Form 175 and
    for which they have eligibility. *See generally* Section II.A.2,
    Maximum Eligibility, and II.A.3, Activity Rules.

[^25]: Bidders may therefore wish to save one or more of their
    opportunities to create packages for use near the end of the
    auction.

[^26]: *See* below Section II.A.1, Simultaneous Multiple Round with
    Package Bidding.

[^27]: *Auction No. 31 Package Bidding Comment Public Notice*. To
    clarify our references, when we refer to "simultaneous multiple
    round" we mean without package bidding; when we refer to "package
    bidding" we mean simultaneous multiple round with package bidding.

[^28]: Nextel Comments at 1 ("urges the Commission to implement
    combinatorial bidding promptly"); SBC/BellSouth Comments at 1;
    Spectrum Exchange Comments at 1; Kelly/ Steinberg Comments at 1;
    Levin Comments at 1; Pekec/Rothkopf Comments at 1; Plott/Salmon
    Comments at 1.

[^29]: Nextel Comments at 3.

[^30]: Verizon Comments at 1-6; Salant Comments at 1-2.

[^31]: Verizon Comments at 1-2.

[^32]: TDS Comments at 1-5.

[^33]: *700 MHz First Report and Order* at ¶ 124, 15 FCC Rcd at 526-27.

[^34]: VoiceStream Comments at 2-6.

[^35]: VoiceStream Comments at 5-6.

[^36]: 47 U.S.C. § 309(j).

[^37]: *700 MHz First Report and Order* at ¶ 59, 15 FCC Rcd at 501.

[^38]: Implementation of Section 309(j) of the Communications Act,
    Competitive Bidding, PP Docket No. 93-253, *Second Report and
    Order*, 9 FCC Rcd 2348, 2365-66 ¶¶ 99-105 (1994).

[^39]: *See* 47 U.S.C. 309(j)(3) (Commission shall provide for the
    design and testing of competitive bidding using a contingent
    combinatorial bidding system).

[^40]: *See* The FCC Report to Congress on Spectrum Auctions, WT Docket
    No. 97-150, *Report*, FCC 97-353, at 36 (rel. Oct. 9, 1997).

[^41]: Conference on Combinatorial Bidding jointly sponsored by the
    Federal Communications Commission, the Stanford Institute for
    Economic Policy Research and the National Science Foundation, May
    5-7, 2000.

[^42]: The papers and reports presented at the Combinatorial Bidding
    Conference can be found at http://combin.fcc.gov.

[^43]: *Auction No. 31 Package Bidding Comment Public Notice* at 5.

[^44]: Verizon Comments at 8.

[^45]: *Auction No. 31 Package Bidding Comment Public Notice* at 6.

[^46]: Verizon Comments at 8.

[^47]: Pekec/Rothkopf Comments at § 5.2.

[^48]: Because, as described below, we are modifying the activity rule
    to account for mutually exclusive bids, bidders will never need to
    purchase more eligibility than the total bidding units associated
    with all licenses.

[^49]: But see the discussion of activity rule waivers in Section
    II.A.4, Activity Rule Waivers and Reducing Eligibility.

[^50]: Verizon Comments at 10.

[^51]: SBC/BellSouth Comments, attachment of Prof. Ronald M. Harstad
    ("Harstad attachment") at 41-42.

[^52]: A "retained" bid was defined as a provisionally winning bid or a
    bid that has the potential to become a provisionally winning bid
    because of changes in other bids in subsequent rounds.

[^53]: *Auction No. 31 Package Bidding Comment Public Notice* at 7.

[^54]: Verizon Comments at 9-10.

[^55]: *See, e.g.*, Plott/Salmon Comments at 2; SBC/BellSouth Comments,
    Harstad attachment at 11; Milgrom *Ex Parte* Comments (June 19,
    2000) at 4.

[^56]: Milgrom Reply Comments at 4; Pekec/Rothkopf Comments at §4-5;
    Plott/ Salmon Comments at 1-2; SBC/BellSouth Comments, Harstad
    attachment at 11-16; Salant Comments at 6-8; Spectrum Exchange
    Comments at 7-8; Vohra/Weber Comments, letter at 1.

[^57]: SBC/BellSouth Comments, Harstad attachment at 42-44. *See* 47
    U.S.C. § 309(j)(8)(c)(iii) (interest accrued on bidders' deposits
    shall be transferred to Telecommunications Development Fund).

[^58]: *Cf.* 47 U.S.C. § 309(j)(7) (limiting the Commission's
    consideration of revenues in making public interest determinations).

[^59]: *See* SBC/BellSouth comment, Harstad attachment at 42-44.

[^60]: *See* Section II.B.3, Minimum Accepted Bids and Bid Increments
    (retaining bids did not comport well with other elements of package
    bidding procedures), Section II.B.6.b, Winning and Provisionally
    Winning Bids (discussing problems with use of retained bids).

[^61]: As described below in Sec. II.B.5, Renewed Bids, a bidder may
    "renew" its prior bid on a license or package without increasing the
    amount it previously bid.

[^62]: See below, Section II.B.6, Winning and Provisionally Winning
    Bids, for the explanation of how provisionally winning bids are
    determined.

[^63]: As discussed in more detail in Section II.B.6.b, Winning and
    Provisionally Winning Bids, bids that are made by the same bidder in
    different rounds are treated as being mutually exclusive, or as
    contingent "or" bids. The bidder may win with the bids in one round,
    or the other, but not both. (Conversely, if a bidder wants to win
    with both sets of bids, it must make both sets in the same round).
    Thus, a bidder who made an accepted new bid or renewed a
    provisionally winning bid on a license or package in the current
    round and has a mutually exclusive provisionally winning bid in the
    previous round will be accorded activity credit for (and only for)
    the bid with the greater number of bidding units associated with it.
    If a provisionally winning bid is renewed and any new accepted bids
    are made, the current round will have the highest activity since
    activity in the previous round will be based on only the
    provisionally winning bid.

[^64]: *Auction No. 31 Package Bidding Comment Public Notice* at 8.

[^65]: SBC/BellSouth Comments, Harstad attachment at 31-32.

[^66]: *Auction No. 31 Package Bidding Comment Public Notice* at 8-9.

[^67]: Because a bidder's bids from the two most recent rounds in which
    it placed bids are considered in determining provisionally winning
    bids, see Section II.B.6, Winning and Provisionally Winning Bids, it
    is possible for a bidder to become a provisional winner for a
    license or package even though it does not have sufficient
    eligibility to place a new bid on that license or package. In such a
    case, the bidder will be awarded the license or package at the end
    of the auction if it has made the winning bid, but it will not be
    permitted to place any new bids on the license or package during the
    auction.

[^68]: *See Auction No. 31 Package Bidding Comment Public Notice* at 8.

[^69]: Verizon Comments at 10.

[^70]: SBC/BellSouth Comments, Harstad attachment at 41-42.

[^71]: *Id*.

[^72]: *Auction No. 31 Package Bidding Comment Public Notice* at 10.

[^73]: SBC/BellSouth Reply Comments at 7-8.

[^74]: SBC/BellSouth Comments at 4-5; Pekec/Rothkopf Comments at §11.

[^75]: *See* 47 C.F.R. § 1.2104(i).

[^76]: *See Auction No. 31 Procedures Public Notice* at 27, 15 FCC Rcd
    at 2947.

[^77]: Spectrum Exchange Comments at 8.

[^78]: Plott/Salmon Comments at 3-4.

[^79]: *See Auction No. 31 Procedures Public Notice* at 27-29, 15 FCC
    Rcd at 2947-49.

[^80]: Pekec/Rothkopf Comments at § 7.

[^81]: *See* DeMartini, Christine, Anthony M. Kwasnica, John O. Ledyard,
    and David Porter, "A New and Improved Design for Multi-Object
    Iterative Auctions," Social Science Working Paper No. 1054, November
    1998, revised March 1999. Available at
    http://masada.hss.caltech.edu/\~jledyard/Ledyard.html.

[^82]: Verizon Comments at 8-9.

[^83]: Plott/Salmon Comments at 3-4.

[^84]: SBC/BellSouth, Harstad attachment at 22-24.

[^85]: *Id*.

[^86]: Spectrum Exchange Comments at 6.

[^87]: Pekec/Rothkopf Comments at 2.

[^88]: Salant Comments at 10.

[^89]: *See*, *e.g.*, Salant Comments at 10.

[^90]: *See* Milgrom *Ex Parte* Comments (June 22, 2000).

[^91]: As described further below in Section II.B.4, Last and Best Bids,
    and Section II.B.5, Renewed Bids, there are two exceptions to the
    minimum accepted bid requirement. First, bidders who choose to place
    no further bids in the auction may place one last set of bids at any
    amount between their previous high bid and the minimum accepted bid.
    Second, at any time bidders may "renew" their highest previous bid
    on a license or package without increasing the bid; however, a
    bidder is not conferred activity credit for renewing a
    non-provisionally winning bid. Because bids in each round are
    considered mutually exclusive, renewing a provisionally winning bid
    does not double count that bid towards a bidder's total activity
    credit.

[^92]: As discussed in more detail in Section II.B.6.b, Winning and
    Provisionally Winning Bids, bids that are made by the same bidder in
    different rounds are treated as being mutually exclusive, or as
    contingent "or" bids. The bidder may win with the bids in one round,
    or the other, but not both.

[^93]: The bid of 40 must, of course, comply with the minimum accepted
    bid rule. Thus, assuming that it is Bidder 3's first bid on Package
    A, the bid must be at least as high as (1) the minimum opening bid
    for Package A (part (i) of the minimum accepted bid rule) or (2) the
    amount determined by part (iii) of the rule, which ever is greater.

[^94]: "Parking" is the placing of a bid that a bidder does not expect
    to become a winning bid for the purpose of maintaining eligibility
    and/or keeping the auction open.

[^95]: SBC/BellSouth Comments at 4, Harstad attachment at 22-26.

[^96]: *See* *id.*

[^97]: *See* Section II.B.1, Round Structure, above.

[^98]: This procedure was suggested by Milgrom. *See* Milgrom Reply
    Comments at 4.

[^99]: S*ee* note Error: Reference source not found below.

[^100]: If the auction closes with any license(s) unsold, those
    license(s) remain held by the FCC. As stated below, in determining
    the set of bids that maximizes gross revenue, FCC held licenses will
    be treated as having a bid at the minimum opening bid.

[^101]: For example, we are using the ILOG CPLEX, version 6.5 software
    for our solving algorithm. Prior to the auction date, the Bureau
    will release further information describing the computer software in
    detail. Further, we will make available a bidder aid for bidders to
    be able to determine for themselves what bid amount would have been
    necessary to beat the other bids and become a provisional winner in
    the prior round.

[^102]: To ensure randomness, we will use a National Institute of
    Standards and Technology ("NIST") tested pseudo-random generator,
    which will permute the order of the set of all bids prior to
    consideration by the solving algorithm.

[^103]: The bidder would ordinarily choose the best and final bid option
    only when it has decided to stop bidding and drop out of the auction
    altogether.

[^104]: If, however, the bidder whose bid is not chosen chooses not to
    bid and no other bidder makes a higher bid (and the provisionally
    winning bidder does not make a mutually exclusive bid on a different
    license or package), then the provisional winner will become the
    winner at the end of the auction.

[^105]: Milgrom Reply Comments at 4.

[^106]: For example, suppose Bidder 1 bids \$110 for License A, there
    are no bids for License B, which has a minimum opening bid of \$100,
    and Bidder 2 bids \$200 for Package AB. In determining the
    provisional winners, we will consider License B to have been bid on
    by the FCC at the minimum opening bid. The provisional winning set
    will therefore consist of Bidder 1 holding License A and the FCC
    holding License B because the sum of their bids (\$110 + \$100 =
    \$210) exceeds Bidder 2's bid for Package AB (\$200).

[^107]: Contingent "or" bids would allow bidders to specify that they
    wish to win one bid or the other, but not both.

[^108]: *Auction No. 31 Package Bidding Comment Public Notice* at 13-14.

[^109]: Verizon Comments at 11.

[^110]: *Id*.

[^111]: *Id*. at 10-11.

[^112]: SBC/BellSouth Comments, Harstad attachment at 44-45.

[^113]: SBC/BellSouth Reply Comments at 8-10.

[^114]: Pekec/Rothkopf Comments at § 12.

[^115]: Plott/Salmon Comments at 5.

[^116]: This approach was suggested by Milgrom. *See* Milgrom Reply
    Comments at 3-4.

[^117]: As stated above, "renewing" a non-provisionally winning bid
    confers no activity credit, while making a minimum accepted bid
    does. On the other hand, a bidder receives activity for a bid that
    is a provisionally winning bid at the end of the last round, whether
    or not it renews the bid.

[^118]: In the early and middle rounds of the auction, the bids being
    considered will most probably be those bids made in the current
    round and the prior round. Towards the end of the auction, however,
    the universe of bids being considered may include those made by
    bidders that ceased to bid several rounds earlier (whether or not
    they retained bidding eligibility).

[^119]: The use of the term "partner" does not imply collusion among
    bidders and collusion is strictly prohibited by the Commission's
    Rules. See 47 C.F.R. § 1.2105(c). It simply refers to the fact that
    in order to beat a larger package, a bidder on an individual license
    or smaller package needs others to bid on the other licenses or
    packages that make up the larger package.

[^120]: For example, if a bidder wants License A or License B, it can
    bid on License A in round 10 and bid on License B in round 11,
    knowing that it might win either License A or License B but not both
    License A and License B. Conversely, if the Bidder wants both
    License A and License B, it must bid on both in the same round
    (assuming that it has sufficient eligibility to do so).

[^121]: Auction No. 31 Procedures Public Notice, 15 FCC Rcd at 4951-52.

[^122]: Spectrum Exchange Comments at 8.

[^123]: *See* 47 C.F.R. § 1.2104(g).

[^124]: *See* *id*.

[^125]: Spectrum Exchange Comments at 8.

[^126]: Verizon Comments at 10-11. Pekec/Rothkopf, SBC/BellSouth and
    Plott/Salmon all state that they would permit bidders to withdraw
    only non-provisionally winning bids. *See* Pekec/Rothkopf Comments §
    5.3; SBC/BellSouth Reply Comments at 8-9; Plott/Salmon Comments at
    5. We have termed such a procedure bid cancellation and it is
    discussed above in Section II.B.6.b.

[^127]: *See Auction No. 31 Procedures Public Notice* at 32-36, 15 FCC
    Rcd at 2952-56.

[^128]: In the *700 MHz First Report and Order*, the Commission directed
    the Bureau to adopt a special 30 MHz nationwide withdrawal rule if
    it was operationally feasible to do so. Accordingly, the Bureau
    established such a rule in the *Auction No. 31 Procedures Public
    Notice*. As discussed below in Section II.B.10, Default, the
    Commission has stated that prior to the due date for the filing of
    short form applications for Auction No. 31, it will adopt any rule
    changes necessary to implement package bidding.

[^129]: We note that Milgrom and McAfee have a pending patent
    application for this device.

[^130]: *See, e.g.*, Plott/Salmon Comments at 6.

[^131]: *700 MHz Memorandum Opinion and Order and Further Notice of
    Proposed Rulemaking* at ¶ 76 (rel. June 30, 2000).

[^132]: *See* Attachment I.