Mr. Robert Pettit

Wiley, Rein & Fielding

1776 K Street, NW

Washington, DC 20006

Dear Mr. Pettit:

This is in response to your letter dated December 20, 2000, on behalf of
Noverr Publishing, Inc. ("NPI"), which seeks clarification of the
anti-collusion rule with respect to auction applicants, such as NPI,
that failed to submit upfront payments and, therefore, never became
qualified to bid.

Your letter states that NPI, holds a controlling interest in
Noverr-Omnipoint Wireless, Inc. ("NOW"), which holds PCS licenses in a
number of basic trading areas ("BTAs") in Michigan, including the BTA of
Mount Pleasant, Michigan. According to your letter, NOW filed a
short-form application (FCC Form 175) indicating an intent to bid only
on the Mount Pleasant, Michigan BTA in the now ongoing C and F block PCS
broadband auction, Auction No. 35, which opened on December 12, 2000.
Your letter further states that NOW never made an upfront payment for
the auction and was not listed as a qualified bidder for Auction No. 35.

NPI claims that it wishes to sell its controlling interest in NOW, but
that potential buyers of that interest are unwilling to discuss the
sale/purchase of NPI's interest because they believe that such
discussions might violate the Commission's anti-collusion rule. NPI,
therefore, requests that we clarify that the anti-collusion rule does
not prohibit NPI from discussing with other bidders the sale of NPI's
interest in NOW, or alternatively, that we permit NOW to withdraw its
auction application so that NOW would not be deemed an applicant for
purposes of the anti-collusion rule.

The Commission's anti-collusion rule, at 47 C.F.R. § 1.2105(c), states:

\[A\]fter the short-form application filing deadline, all applicants are
prohibited from cooperating, collaborating, discussing or disclosing in
any manner the substance of their bids or bidding strategies, or
discussing or negotiating settlement agreements, with other applicants
until after the down payment deadline . . . .

For purposes of the anti-collusion rule the term "applicant" includes
"all controlling interests in the entity submitting a short-form
application to participate in an auction." 47 C.F.R. § 1.2105(c)(6)(i).

As NPI holds a controlling interest in NOW, which filed a short-form
application, NPI is an applicant subject to the anti-collusion rule even
though it is not a bidder in the auction.[^1] The Commission has
declined to except such entities from coverage by the anti-collusion
rule and we decline to except NPI here.[^2] Nevertheless, as we have
noted in the past, the anti-collusion rule does not prohibit all
business discussions among applicants for licenses in the same
geographic license areas, including discussions concerning the sale of
an interest in an applicant's business.[^3] Therefore, such discussions
with other applicants for licenses in the same geographic license areas
must be conducted with great care not to convey the substance of bids or
bidding strategies of any such applicant.[^4]

Sincerely,

Margaret W. Wiener

> Chief, Auctions and Industry Analysis Division

cc: Eric DeSilva

[^1]: *See* Implementation of Section 309(j) of the Communications Act
    -- Competitive Bidding, PP Docket No. 93-253, *Second Report and
    Order*, 9 FCC Rcd 2348, 2387-88 para. 225 (1994) and Implementation
    of Section 309(j) of the Communications Act -- Competitive Bidding,
    PP Docket No. 93-253, *Second Memorandum Opinion and Order*, 9 FCC
    Rcd 7245, 7254 paras. 51-52 (1994).

[^2]: *See* Implementation of Section 309(j) of the Communications
    Act---Competitive Bidding, PP Docket No. 93-253, *Fourth Memorandum
    Opinion & Order*, 9 FCC Rcd 6858, 6867 paras. 48-51 (1994); Letter
    to Mark Grady from Kathleen O\'Brien Ham, Chief, Auctions Division,
    Wireless Telecommunications Bureau, DA 96-587, 11 FCC Rcd 10895
    (1996).

[^3]: *See* Letter to David L. Nace from Kathleen O\'Brien Ham, Chief,
    Auctions Division, Wireless Telecommunications Bureau, DA 96-1566,
    11 FCC Rcd 11363 (1996); "Wireless Telecommunications Bureau
    Provides Guidance on the Anti-Collusion Rule for D, E, and F Block
    Bidders," *Public Notice*, 11 FCC Rcd 10134 (1996); Amendment of
    Part 1of the Commission\'s Rules \-- Competitive Bidding Procedures,
    Allocation of Spectrum Below 5 GHz Transferred from Federal
    Government Use, 4660-4685 MHz, WT Docket No. 97-82, ET Docket No.
    94-32, *Third Report and Order and Second Further Notice of Proposed
    Rule Making*, 13 FCC Rcd. 374, 467 para. 163 (1997).

[^4]: *Id*.