DA 03-3006

October 1, 2003

**REGIONAL NARROWBAND PCS**

**SPECTRUM AUCTION CLOSES**

**Winning Bidder Announced**

Down Payments Due October 16, 2003

FCC Forms 601 and 602 Due October 16, 2003

*Ten-Day Petition to Deny Period*

**Report No. AUC-03-51-F (Auction No. 51)**

On September 25, 2003, the Federal Communications Commission completed
the auction of six regional narrowband Personal Communications Services
("narrowband PCS") licenses in the 900 MHz band ("Auction No. 51"),
raising (in net bids) a total of \$134,250. In this auction, one winning
bidder won a total of five licenses.

This *Public Notice* provides detailed information concerning the
winning bidder, down payments, deposits, FCC Forms 601 and 602 filing
requirements, requests for rule waivers, and licensing matters. Key
information appears in the following attachments:

**Attachment A:** "Round Results, Winning Bids" lists the winning
bidder, and both the gross winning bid and net amount of the winning
bid.

> **Attachment B:** "Bidder Payment/Refund Report" lists down payments
> owed by the winning bidder, if any.
>
> **Attachment C:** "Instructions for Completing FCC Form 601 & 602"
> provides detailed information about how a winning bidder should
> complete the required FCC Form 601 and FCC Form 602 for 900 MHz band
> license applications.
>
> **Attachment D:** "Instructions for Using ULS to Associate Call Signs
> with the FRN and File FCC Form 601 Electronically."

**Attachment E: "**Accessing the FCC Network using Windows 95/98/2000/XP
for ULS Filing."

> A copy of this *Public Notice* will be sent via overnight mail to each
> bidder.

## Down Payments

The Commission's rules require that within ten business days after the
release of this *Public Notice*, in this case before **6:00 p.m. ET on
October 16, 2003**, the winning bidder in Auction No. 51 must have on
deposit with Mellon Bank in Pittsburgh, Pennsylvania, enough funds to
cover the down payment on its winning bids. The winning bidder's total
deposit must be twenty (20) percent of its net winning bid. If the
winning bidder's upfront payment is not sufficient to meet this
requirement, the winning bidder must deposit additional funds.[^1] In
this case the winning bidder's upfront payment is sufficient to meet
this requirement.

## Final Payments

After the termination of the licensing pleading cycle,[^2] the
Commission will issue a public notice announcing that it is prepared to
grant the licenses. Within ten business days after the date of that
public notice, the winning bidder will be required to make full payment
of the balance of its winning bid.[^3] The licenses will be granted only
after the full and timely payment of the winning bid and any applicable
late fees, in accordance with Section 1.2109(a).[^4]

## Method of Payment

All payments must be in U.S. dollars and made in the form of a wire
transfer. No personal checks, credit card payments, or other forms of
payment will be accepted. All payments must be accompanied by a
completed FCC Remittance Advice Form (FCC Form 159).[^5] Because the
winning bidder's upfront payment is sufficient to meet its down payment
requirement, an FCC Form 159 need not be filed at this time. A future
public notice will provide instructions for making final payment.

## Default and Disqualification Payments

The Commission imposes payments on bidders that default on payments due
after an auction closes or those that are disqualified.[^6] The
Commission recently adopted a special rule for calculating default
payments in connection with package bidding.[^7] In the event a winning
bidder defaults on payments due after an auction closes or is
disqualified after the auction, a default payment will be assessed. The
default payment will consist of a deficiency portion and an additional
payment of twenty-five percent (25%) of the lesser of the subsequent
winning bid and the defaulted bid.[^8]

The deficiency portion will make up any loss to the Commission that
results when defaulted bid(s) are replaced by subsequent winning bid(s).
If the subsequent winning bid(s) exceed the defaulted bid(s), no
deficiency portion will be assessed. Even in the absence of a deficiency
portion, however, an additional 25% payment will be due.

Where a defaulting bidder won licenses in package(s), and in a
subsequent auction the licenses are won either (a) in the same
package(s), or (b) in smaller packages or as individual licenses that
correlate to the defaulted package(s), the deficiency portion will be
determined on a package-by-package basis. In the event a defaulting
bidder defaults on more than one such bid, the differences between the
amount originally bid and the amount(s) subsequently bid will not be
aggregated to determine a net amount owed.[^9] Thus, in this situation,
the deficiency portion will be calculated in a manner analogous to where
the licenses are sold individually. However, with regard to each
individual package, where the licenses are subsequently sold
individually or as part of smaller packages, the amounts received in the
subsequent auction will be aggregated in order to determine any
deficiency.

Where a defaulting bidder or bidders won licenses either individually or
as part of packages, and in a subsequent auction the licenses are won as
larger packages or different packages (not including the situation
described in the preceding paragraph), the deficiency portion will be
calculated by subtracting the aggregate amount originally bid for the
licenses from the aggregate amount bid in the subsequent auction for the
licenses.[^10] Thus, in this situation, the deficiency portion will not
be calculated on a bid-by-bid basis.

In the event that a bidding credit applies to any applicable bid(s), the
Bureau will assess the deficiency portion of the default payment using
the lesser of the difference between gross bids and the difference
between net bids. (In the event that a bidder does not have a bidding
credit, the bidder's gross bid and net bid are the same.) In other
words, the Bureau will compare (i) the sum of the gross defaulted
Auction No. 51 bid(s) minus the gross subsequent winning bid(s) and (ii)
the sum of the net defaulted Auction No. 51 bid(s) minus the net
subsequent winning bid(s). The Bureau will impose the lesser of (i) and
(ii) as the deficiency portion.[^11]

As noted at the outset, the default payment consists of the deficiency
portion **and** an additional 25% payment. The additional payment will
be 25% of the lesser of the subsequent winning bid(s) and the defaulted
bid(s).[^12] The Bureau will use the same gross or net bid(s) that it
used to calculate the deficiency portion when assessing the additional
25% payment. That is, the Bureau will compare the defaulted and
subsequent bid(s) according to the methods described above for
calculation of the deficiency portion of the default payment when
determining whether the defaulted bid(s) or the subsequent winning
bid(s) is the lesser amount. Should there be no difference between the
gross or net bid(s) for purposes of assessing the deficiency portion,
the Bureau will assess the additional 25% payment using the lesser of
the gross or net bid(s).

If the winning bidder fails to remit the required down payment within
ten (10) business days after the Commission has released this *Public
Notice*, in this case by October 16, 2003, the bidder will be deemed to
have defaulted, its application will be dismissed, and it will be liable
for a default payment as described above. In such event, the Commission,
at its discretion, may re-auction the spectrum to existing or new
applicants.[^13]

If the winning bidder fails to pay the balance of its winning bids in a
lump sum by the applicable deadline as specified by the Commission, it
will be allowed to make payment within ten (10) business days after the
payment deadline provided that it also pays a late fee equal to five (5)
percent of the amount due. If the winning bidder fails to pay the
balance of its winning bid plus late fee by the late payment deadline,
it is considered to be in default on its license(s) and subject to the
applicable default payments.

Licenses will be awarded upon the full and timely payment of winning
bids and any applicable late fees.[^14] A winning bidder that is found
unqualified to be a licensee, fails to remit the balance of its winning
bid in a timely manner, or defaults or is disqualified for any reason
after having made the required down payment, will be deemed to have
defaulted and will be liable for the payment set forth in Section
1.2104(g)(2).[^15] In such event, the Commission may re-auction the
spectrum to existing or new applicants.[^16]

Additionally, bidders that are found to have violated the antitrust laws
or the Commission's rules in connection with their participation in the
competitive bidding process may be subject, in addition to any other
applicable sanctions, to forfeiture of their upfront payment, down
payment, or full bid amount, and may be prohibited from participating in
future auctions.[^17]

## E. Refund of Excess Upfront Payments  {#e.-refund-of-excess-upfront-payments .unnumbered}

Upfront monies on deposit that are in excess of the required down
payment, and/or default payment amounts will be refunded to the payer of
record as identified on FCC Form 159 promptly upon receipt of the
necessary wire transfer instructions. Such instructions must be faxed to
Gail Glasser at 202-418-2843. Any questions concerning refunds should be
referred to Gail Glasser at 202-418-0578 or Tim Dates at 202-418-0496.

## F. FCC Form 601  {#f.-fcc-form-601 .unnumbered}

By **6:00 p.m. ET on October 16, 2003,** the winning bidder must submit
a completed long-form application(s) covering each license for which
they were the winning bidder. **Attachment C** sets out instructions for
completing the FCC Form 601. Applications **must** be filed
electronically. Detailed instructions for filing the Form 601
electronically are set out in **Attachment D**.

**Failure to timely file the required FCC Form 601 application(s) will
result in default. Late-filed applications will not be accepted without
a showing of good cause.**[^18]

## G. Tribal Land Bidding Credit  {#g.-tribal-land-bidding-credit .unnumbered}

The Commission has implemented a tribal land bidding credit to encourage
the growth of wireless services in federally recognized tribal lands.
For information relating to the tribal land bidding credit, *see*
**Attachment C**.

## H. FCC Form 602  {#h.-fcc-form-602 .unnumbered}

Pursuant to Section 1.919 of the Commission's rules, an applicant for a
license in an auctionable service must have on file with the Commission
a current FCC Form 602 regarding ownership information of the
applicant.[^19] Therefore, unless the applicant already has a current
FCC Form 602 on file with the Commission, the applicant must submit one
at the time the FCC Form 601 is filed. Any late-filed FCC Form 602 must
contain a request for waiver of the filing requirement in 47 C.F.R. §
1.919.

Filing an FCC Form 602 is a [separate]{.underline} requirement from, and
in addition to, the ownership reporting requirements associated with
filing FCC Form 601, Exhibit A, as set forth in **Attachment C**.
However, to avoid duplication, applicant may provide certain information
required in Exhibit A by attaching a copy of its FCC Form 602 (in Adobe
PDF Format) to their FCC Form 601 submission. Applicant is reminded,
however, that an FCC Form 602 still must be filed electronically via the
Universal Licensing System (ULS).[^20] For further information, see
Instructions in **Attachment C.**

##  {#section .unnumbered}

## I. Maintaining Accuracy of Information {#i.-maintaining-accuracy-of-information .unnumbered}

After the auction closes, applicants are required to make all changes in
the ULS system (Form 601). Applicants are no longer required to maintain
accuracy and completeness of information furnished on their FCC Form 175
and exhibits.

## J. Application Processing and License Grant {#j.-application-processing-and-license-grant .unnumbered}

Pursuant to 47 C.F.R. § 1.2108(b) and the Balanced Budget Act of
1997,[^21] interested parties will have **ten (10) days** to file
petitions to deny after the Commission releases a public notice
announcing the long-form (FCC Form 601) applications that are acceptable
for filing. An applicant may file an opposition to any petition to deny
within **five (5) business days** after the time for filing petitions to
deny has expired.[^22] The petitioner may file a reply to such
opposition within **five (5) business days** after the time for filing
oppositions has expired.[^23] If the Commission determines an applicant
is qualified and there is no substantial and material issue of fact
concerning that determination, the Commission will issue a public notice
announcing that it is prepared to grant the application conditioned upon
the full and timely payment of the remaining balance of the applicant's
winning bid. Once the Commission has received full payment of the
applicant's winning bid, it will issue a public notice announcing grant
of the license (or licenses) to the applicant.

*Frivolous Pleadings.* The Commission reminds parties to our proceedings
and their attorneys that the Commission intends to use its authority
fully to deter the filing of frivolous pleadings.[^24]

## K. Anti-collusion Rules  {#k.-anti-collusion-rules .unnumbered}

To ensure the competitiveness of the auction process, the Commission's
rules prohibit competing applicants for any of the same geographic
license areas from communicating with each other during the auction
about bids, bidding strategies, or settlements. As explained more fully
in the *Auction No. 51 Procedures Public Notice*,[^25] this prohibition
began with the filing of short-form applications and ends on the down
payment due date, or October 16, 2003.[^26] The prohibition ends on the
down payment due date regardless of whether a winning bidder must
supplement its upfront payment to cover its down payment. Applicants
certified their compliance with Section 1.2105(c) when their FCC Form
175 short-form applications were signed.

## L. Return of SecurID Cards {#l.-return-of-securid-cards .unnumbered}

Bidders are encouraged to return their SecurID cards to the FCC by
October 16, 2003, for recycling. The Commission will send bidders a copy
of this *Public Notice* and a pre-addressed, stamped envelope. All
bidders should use the envelope to return the cards now that the auction
is over. Please note that each SecurID card is tailored to a specific
auction, therefore, the cards issued for this auction will not work for
future auctions.

\* \* \* \* \*

**For further information, contact**

+-------------------------------+--------------------------------------+
| News Media:                   | Chelsea Fallon at 202-418-7991       |
+-------------------------------+--------------------------------------+
|                               |                                      |
+-------------------------------+--------------------------------------+
| Technical Support Hotline:    | Technical Support Personnel at       |
|                               |                                      |
|                               | 202-414-1250 (V)                     |
|                               |                                      |
|                               | or 202-414-1255 (text telephone      |
|                               | (TTY))                               |
+-------------------------------+--------------------------------------+
|                               |                                      |
+-------------------------------+--------------------------------------+
| Office of the Managing        | Gail Glasser at 202-418-0578         |
| Director                      |                                      |
|                               |                                      |
| Auctions Accounting Group     |                                      |
|                               |                                      |
| (Payment, FCC Form 159 and    |                                      |
| refund questions)             |                                      |
+-------------------------------+--------------------------------------+
|                               |                                      |
+-------------------------------+--------------------------------------+
| Wireless Telecommunications   | Joanne Epps, Analyst, at             |
| Bureau,                       | 202-418-1342                         |
|                               |                                      |
| Commercial Wireless Division  | Dwain Livingston, Electronics        |
|                               | Engineer, at 202-418-1338            |
+-------------------------------+--------------------------------------+
| (FCC Form 601and 602          | Evan Baranoff, Attorney,             |
| questions)                    | 202-418-7142                         |
+-------------------------------+--------------------------------------+
|                               | Nicole Dumangane, Attorney,          |
|                               | 202-418-7531                         |
+-------------------------------+--------------------------------------+
|                               |                                      |
+-------------------------------+--------------------------------------+
| Wireless Telecommunications   | Lisa Stover, Project Manager at      |
| Bureau, Auctions and Industry | 717-338-2888                         |
| Analysis Division             |                                      |
| (Auction-related questions)   | Christopher Shields, Attorney, at    |
|                               | 202-418-0660                         |
+-------------------------------+--------------------------------------+

\- FCC -

[^1]: 47 C.F.R. § 1.2107(b).

[^2]: 47 C.F.R. § 1.2108.

[^3]: 47 C.F.R. §§ 1.2107(b), 1.2109.

[^4]: 47 C.F.R. § 1.2109(a).

[^5]: Copies of the FCC Form 159 may be obtained by calling the
    Commission's Forms Distribution Center at 1-800-418-3676 (outside
    Washington, D.C.) or 202-418-3676 (in the Washington D.C. area).
    Copies of the FCC Form 159 can also be obtained via the Internet
    (http://www.fcc.gov/formpage.html) or by calling the Commission's
    Fax-On-Demand at 202-418-2830.

[^6]: *See* 47 C.F.R. §§ 1.2104(g), 1.2109.

[^7]: *See* Amendment of Part 1 of the Commission\'s Rules-Competitive
    Bidding Procedures, *Second Order on Reconsideration of the Third
    Report and Order and Order on Reconsideration of the Fifth Report
    and Order*, FCC 03-98, ¶¶ 25-31, 55 (rel. May 8, 2003) (\"*Order on
    Reconsideration of the Part 1 Fifth Report and Order*\"); Auction of
    Regional Narrowband PCS Licenses Scheduled for September 24, 2003,
    Notice and Filing Requirements, Minimum Opening Bids, Upfront
    Payments, Package Bidding and Other Auction Procedures, *Public
    Notice*, 18 FCC Rcd 11974, 12008-10 (2003) ("*Auction No. 51
    Procedures Public Notice*")

[^8]: *Order on Reconsideration of the Part 1 Fifth Report and Order* at
    ¶ 29; *See* 47 C.F.R. § 1.2104(g)(3); *Auction No. 51 Procedures
    Public Notice*, 18 FCC Rcd at 12008.

[^9]: *Id*. For example, if a bidder defaults on Package ABC (*i.e.*, a
    package consisting of Licenses A, B and C) with a bid of \$900 and
    Package DE with a bid of \$600, and in a subsequent auction, the
    licenses are won as License A for \$200, Package BC for \$600, and
    Package DE for \$700, the default payment would be calculated
    separately for Package ABC (by comparing the original bid (\$900) to
    the amounts subsequently bid for License A and Package BC (\$200 and
    \$600, which equals \$800, yielding a \$100 deficiency plus the
    additional 25% payment)) and Package DE (by comparing the original
    bid (\$600) to the amount subsequently bid for Package DE (\$700,
    yielding no deficiency, but an additional 25% payment)).

[^10]: *Id*. For example, if a bidder defaults on Package AB with a bid
    of \$200 and Package CD with a bid of \$300, and in a subsequent
    auction the licenses are sold as Package AC for \$250 and Package BD
    for \$250, the default payment would be calculated by aggregating
    the amounts originally bid (\$200 plus \$300 equals \$500) and
    comparing the aggregate to the amounts subsequently bid (\$250 plus
    \$250 equals \$500) to determine the deficiency amount (\$500 less
    \$500 equals \$0); the additional 25% payment would be based on
    either the original aggregate amount or the subsequent aggregate
    amount, whichever is less (in this case, they are the same, \$500).

[^11]: *Id*.

[^12]: *Id*.

[^13]: 47 C.F.R. § 1.2109(b).

[^14]: 47 C.F.R. §1.2109(a).

[^15]: 47 C.F.R. § 1.2104(g)(2).

[^16]: 47 C.F.R. § 1.2109(c).

[^17]: 47 C.F.R. § 1.2109(d).

[^18]: 47 C.F.R. § 1.2107(c).

[^19]: 47 C.F.R. §§ 1.919, 1.2107(f).

[^20]: Beginning December 10, 2002, electronic filing of FCC Form 602
    via the ULS became mandatory. *See* "Wireless Telecommunications
    Bureau Reminds Filers of Effective Date for Mandatory Electronic
    Filing of FCC Form 602," *Public Notice*, 17 FCC Rcd 22934 (2002).
    For more information on FCC Form 602, *see also* "Wireless
    Telecommunications Bureau Announces Revised Version of FCC Form 602
    is Now Available," *Public Notice*, 17 FCC Rcd 16197 (2002);
    "Wireless Telecommunications Bureau Answers Frequently Asked
    Questions Concerning Reporting of Ownership Information on FCC Form
    602," *Public Notice*, 14 FCC Rcd 8261 (1999).

[^21]: Pub. L. No. 105-33, 111 Stat. 251 (1997).

[^22]: 47 C.F.R. § 1.2108(c).

[^23]: *Id.*

[^24]: Commission Taking Tough Measures Against Frivolous Pleadings,
    *Public Notice*, 11 FCC Rcd 3030 (1996).

[^25]: *See Auction No. 51 Procedures Public Notice*, 18 FCC Rcd 11974,
    11980-81.

[^26]: *Id*.