**Before the**

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | * |                              |
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| Advance Acquisition, Inc.        | ) |                              |
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| Request for Waiver of Bid        | * |                              |
| Withdrawal Payment               |   |                              |
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+----------------------------------+---+------------------------------+

Order

**Adopted: October 22, 2007 Released: October 22, 2007**

By the Chief, Wireless Telecommunications Bureau:

# InTroduction 

1.  We have before us a Request for Waiver and an Amended Request for
    Waiver submitted by Advance Acquisition, Inc. ("Advance"), seeking
    relief from the bid withdrawal payment obligation that Advance
    incurred under Section 1.2104(g) of the Commission's rules as a
    result of withdrawing a provisionally winning bid during Auction No.
    37.[^1] During this auction of FM broadcast construction permits,
    Advance withdrew its provisionally winning bid on the construction
    permit for Yarnell, Arizona.[^2] At the end of the auction, the
    Yarnell permit remained unsold and a final bid withdrawal payment
    could not be calculated; therefore, Advance was assessed an interim
    bid withdrawal payment in accordance with Section 1.2104(g)(1).[^3]
    The Yarnell permit was subsequently sold in Auction No. 62 for an
    amount less than Advance's withdrawn bid, and a final bid withdrawal
    payment was then assessed, again pursuant to Section 1.2104(g)(1).
    In its Request for Waiver, Advance seeks a reduction of its bid
    withdrawal payment to the amount of the interim assessment. In its
    Amended Request for Waiver, Advance requests that the Wireless
    Telecommunications Bureau and the Media Bureau ("Bureaus") waive
    Section 1.2104(g)(1) generally. For the reasons discussed below, we
    grant Advance's request for a waiver of that portion of Section
    1.2104(g)(1) that prescribes final bid withdrawal payments. We do
    not, however, waive the part of the rule that prescribes interim bid
    withdrawal payments.

# BACKGROUND

2.  Prior to Auction No. 37, which began on November 3, 2004, and
    concluded on November 23, 2004, the Bureaus jointly released a
    public notice outlining the terms, conditions, and procedures for
    the auction.[^4] As with most previous auctions, the Bureaus
    announced that each bidder would be allowed to make limited use of
    bid withdrawals; for Auction No. 37, the Bureaus specified that each
    bidder would be permitted to withdraw a high bid in no more than two
    rounds.[^5] The *Auction No. 37 Procedures Public Notice* also
    explained that a "high bidder that withdraws its standing high bid
    from a previous round during the auction is subject to the bid
    withdrawal payments specified in 47 C.F.R. § 1.2104(g)."[^6] The
    *Auction No. 37 Procedures Public Notice* described how interim and
    final bid withdrawal payments would be calculated under Section
    1.2104(g)(1). Under this provision, if a high bid is withdrawn
    during an auction, the bid withdrawal payment is the difference
    between the withdrawn bid and the ultimate winning bid for the
    license or permit. If a license or permit remains unsold at the end
    of the auction in which the bid is withdrawn, an interim bid
    withdrawal payment is assessed, and the final bid withdrawal payment
    is calculated once the license or permit is sold in a subsequent
    auction.[^7] At the time of Auction No. 37, Section 1.2104(g)(1)
    provided that the interim bid withdrawal payment would be 3 percent
    of the withdrawn bid.[^8]

3.  Advance applied to participate in Auction No. 37 and was found
    qualified to do so.[^9] In Round 45 of the auction, Advance
    submitted a bid of \$6,850,000 for the Yarnell permit. Advance
    withdrew this bid in Round 52, and the permit remained unsold at the
    close of the auction.[^10] On December 1, 2004, the Bureaus jointly
    released a public notice announcing the close of the bidding in
    Auction No. 37.[^11] Among other things, this public notice
    quantified the interim and final bid withdrawal payments for bidders
    that had withdrawn bids during the auction, including Advance.
    Advance's interim bid withdrawal payment was \$205,500, i.e., 3
    percent of its withdrawn bid of \$6,850,000.[^12] Pursuant to
    Section 1.2104(g)(1), the amount of \$205,500 was deducted from the
    upfront payment Advance had submitted to qualify for participation
    in Auction No. 37.[^13]

4.  In Auction No. 62, an auction of FM broadcast construction permits
    that began on January 12, 2006, and concluded on January 31, 2006,
    the Yarnell permit was offered again and was sold for
    \$2,234,000.[^14] Advance did not file an application to participate
    in Auction No. 62 and was therefore not a qualified bidder in that
    auction. On February 8, 2006, in a public notice announcing the
    close of the bidding in Auction No. 62, the Bureaus announced final
    bid withdrawal payments for bidders that had withdrawn bids in
    Auction No. 37 on construction permits that had sold in Auction No.
    62, including Advance. The amount of Advance's final bid withdrawal
    payment on the Yarnell permit was \$4,616,000, which was the
    difference between its withdrawn bid and the ultimate winning bid
    for the permit.[^15] On October 31, 2006, the Commission issued a
    letter to Advance assessing the final bid withdrawal payment for the
    Yarnell permit and instructing Advance to pay \$4,410,500, the
    balance owed after subtracting the interim bid withdrawal payment,
    within 30 days of the date of the letter.[^16]

5.  On November 20, 2006, Advance submitted its Request for Waiver, in
    which it seeks a reduction of its bid withdrawal payment to the
    amount of the interim assessment, or \$205,500.[^17] In support of
    this request, Advance states that its bidding on the Yarnell permit
    in Auction No. 37 was based on an engineering analysis that it
    performed using off-the-shelf computer software that showed that the
    Yarnell allocation could be upgraded from Class A to Class C3 with
    relocation of the station closer to Phoenix.[^18] According to
    Advance, as bidding mounted in Auction No. 37, it took the
    "precautionary" measure of obtaining an analysis from an outside
    engineering firm to confirm the technical information upon which it
    was basing its bids for the Yarnell permit. This analysis showed
    that the information on which Advance had been relying was
    wrong.[^19] Advance maintains that the "erroneous information could
    not reasonably have been foreseen" and that it and its staff "are
    not at fault for the error."[^20] Advance asserts that it did not
    "game" the auction system by the withdrawal of its high bid, that
    its withdrawal was "the result of ordinary business prudence and
    judgment" once it learned that its original technical analysis was
    wrong, and that, "under the circumstances, Advance took immediate,
    responsible action."[^21] In addition, Advance argues that the bid
    withdrawal payment it has been assessed is inequitable because it
    exceeds penalties imposed by the Commission against broadcasters
    that have violated the Commission's rules,[^22] is out of line with
    prior bid withdrawal payments and inconsistent with the average
    value of FM broadcast licenses,[^23] and is out of proportion with
    the winning bid price for the Yarnell permit in Auction No. 62.[^24]
    Advance states that while it understands that there should be "some
    consequence" for its bid withdrawal, it did nothing wrong and should
    not be subject to a punitive payment.[^25] Advance also states that
    it is financially unable to make the required payment.[^26]

6.  On May 22, 2007, Advance filed its Amended Request for Waiver.[^27]
    Advance argues that a waiver of Section 1.2104(g)(1) in this case
    will serve the public interest and will not frustrate the underlying
    purpose of the rule because the purpose of the rule "is not served
    by assessing a penalty for Advance's good faith bid."[^28]
    Reiterating its argument that it relied on generally available
    third-party software to determine its bidding strategy, Advance
    asserts that it used its best efforts to ensure that its assumptions
    regarding the value of the Yarnell permit were correct; that bidding
    by other parties appeared to confirm its original conclusion that
    the Yarnell allotment could be upgraded; that it had no reason to
    believe that the calculations derived from the third-party software
    were incorrect; that it learned that these calculations were
    defective only after placing its high bid of \$6,850,000; and that
    it then had no reasonable alternative to withdrawing its high bid
    for the permit.[^29] Advance argues that the purpose of the bid
    withdrawal payment rule, which is to deter insincere bidding, would
    not be served by its application in this case because Advance's
    bidding on the Yarnell permit "was not insincere by any
    measure."[^30] Advance also maintains that the bid withdrawal
    payment it has been assessed is inequitable because, although the
    bid withdrawal payment rule is not intended to be punitive and
    although Advance did not violate any Commission rule, the payment
    assessed is larger than the forfeiture the Commission is permitted
    to impose on a common carrier for a violation of the Commission's
    rules.[^31] Advance further asserts that its bid withdrawal payment
    is particularly inequitable because it is a subsidiary of a
    non-profit religious broadcaster and again states that it is unable
    to pay the amount owed.[^32] Finally, Advance contends that a grant
    of its waiver request will not affect the Commission's ability to
    enforce the bid withdrawal payment rule in the future because the
    circumstances of its bid withdrawal are exceptional and unlikely to
    arise again.[^33]

# discussion

7.  To obtain a waiver of the bid withdrawal payment rule, Advance must
    demonstrate that special circumstances warrant a deviation from the
    rule, or that such a deviation would serve the public interest.[^34]
    As explained below, we find that in this case special circumstances
    warrant a deviation from that part of Section 1.2104(g)(1) that
    prescribes the final bid withdrawal payment. Specifically, we find
    that the final bid withdrawal payment assessed in this case is
    exceptionally high in comparison with previous bid withdrawal
    payments in that it is the only bid withdrawal payment ever assessed
    that both exceeds \$4 million and represents more than 200 percent
    of the ultimate winning bid for the permit or license, and it is
    therefore higher than necessary to serve the purpose of the rule. We
    also find, however, that the facts of this case do not warrant a
    waiver of that part of the rule that prescribes the interim bid
    withdrawal payment. We therefore waive the amount of Advance's bid
    withdrawal payment that exceeds the interim assessment.

8.  The Commission adopted the bid withdrawal payment rule in 1994 as
    part of its original competitive bidding rules. In doing so, the
    Commission explained that "\[a\]llowing bidders to withdraw bids
    without ever paying a penalty would encourage insincere bidding.
    Insincere bidding, whether purely frivolous or strategic, distorts
    the price information generated by the auction process and reduces
    its efficiency."[^35] The Commission also noted that bid withdrawal
    payments protect the government from the loss of revenue associated
    with bid withdrawals.[^36] At the same time, the Commission
    recognized that bid withdrawal payments that were too high would be
    detrimental to the auction process because they would tend to
    discourage the efficient aggregation of licenses. As the Commission
    explained, "In either sequential or simultaneous auctions, a bidder
    may bid high on one property in the expectation that it will also
    win a complementary property, only to find that it is outbid on the
    complementary property. If the penalty for bid withdrawal is too
    high, bidders will tend to be too cautious in attempting to
    aggregate licenses."[^37] The Commission has also recognized in
    other contexts that bid withdrawal payments should not be
    excessively high. Thus, in *Atlanta Trunking Associates* the
    Commission prescribed guidelines for assessing bid withdrawal
    payments in cases where bidders made typographical errors in
    submitting bids, explaining that the guidelines would provide for
    bid withdrawal payments that are "substantial enough to discourage
    strategic placement of erroneous bids without being so severe as to
    impose an untenable burden on bidders."[^38]

9.  The amount of Advance's withdrawal payment does not trigger concern
    on grounds we have previously recognized. First, because bidders do
    not normally seek to aggregate broadcast construction permits in the
    same way they seek to aggregate wireless communications licenses,
    the efficient aggregation of licenses is not a significant concern
    in auctions of FM permits such as Auction No. 37. Advance's case
    also does not involve facts similar to those in *Atlanta Trunking
    Associates* or other early cases in which auction participants
    submitted erroneous bids due to typographical errors.[^39]
    Nevertheless, we find that the dual goal of deterring insincere
    bidding while avoiding excessive burdens on bidders is equally
    relevant here. Advance's final bid withdrawal payment is not only
    unusually high in comparison with previous bid withdrawal payments
    but also unique in that it is the only bid withdrawal payment ever
    assessed that both exceeds \$4 million and represents more than 200
    percent of the ultimate winning bid for the permit or license. If we
    were to enforce it, Advance's final bid withdrawal payment would
    also be the highest bid withdrawal payment, as an absolute number,
    ever imposed in the history of the auctions program.[^40]

10. Bid withdrawal payments over \$4 million have been rare; only two
    have previously been imposed.[^41] These bid withdrawal payments
    were not excessive, however, because in both cases they represented
    less than 5 percent of the ultimate winning bids for the licenses
    and therefore were in keeping with the value of the licenses as
    reflected by the prices paid for them.[^42] In contrast, Advance's
    final bid withdrawal payment exceeds 200 percent of the sale price
    of the Yarnell construction permit.[^43] In reviewing these facts,
    we find that where license values are high a bid withdrawal payment
    of over \$4 million is not necessarily excessive or out of line with
    the Commission's goals in imposing bid withdrawal payments.
    Similarly, we find that a bid withdrawal payment that is over 200
    percent of the ultimate winning bid for a license is not *per se*
    excessive; there may be many cases in which license values are
    relatively low and a bid withdrawal payment of more than 200 percent
    of the sale price is not unreasonable. We do find, however, that
    where a bid withdrawal payment exceeds both \$4 million and 200
    percent of the ultimate winning bid for the license, as is the case
    here, it is unnecessarily high to achieve the purpose of Section
    1.2104(g)(1).

11. We make no findings regarding Advance's argument that it had no
    reason to believe that its original engineering analysis for the
    Yarnell allotment was incorrect, and we do not base our decision on
    Advance's claim that it relied on faulty third-party software. The
    nature of the error Advance alleges is not as clear-cut as the
    typographical errors the Commission considered in the early years of
    the auctions program. We also agree with the Commission's
    observation in *Atlantic Trunking Associates* that "it may be
    extremely difficult for the Commission to distinguish between
    'innocent' erroneous bids and 'strategic' erroneous bids."[^44] In
    addition, all participants in Commission auctions are responsible
    for performing adequate due diligence in deciding whether and how
    much to bid for any particular construction permit or license. We
    therefore emphasize that we do not consider Advance's allegations of
    third-party mistake to be a justification for a waiver of the bid
    withdrawal payment rule. At the same time, however, Advance has
    asserted under penalty of perjury that it did not bid insincerely
    for the Yarnell permit, and we find no evidence of its having done
    so. If there were such evidence, we would not grant a waiver in this
    case.

12. We also do not accept Advance's argument that its bid withdrawal
    payment is inequitable because it is higher than forfeitures imposed
    for violations of the Commission's rules. The statutory and
    regulatory provisions that govern such forfeitures have different
    purposes than the Commission's bid withdrawal payment rule.
    Moreover, the factors involved in any particular forfeiture case
    will be different from the factors involved in the assessment of a
    bid withdrawal payment under Section 1.2104(g)(1). Any comparison of
    forfeitures and bid withdrawal payments is therefore irrelevant to a
    consideration of the equitableness of the latter.

13. In addition, we do not base our decision in this case on Advance's
    argument that it is unable to pay the final bid withdrawal payment
    it has been assessed. Rather, we base our decision solely on the
    fact that the bid withdrawal payment at issue here is exceptionally
    high---i.e., over both \$4 million and 200 percent of the ultimate
    winning bid for the permit---and therefore higher than necessary to
    serve the purpose of the rule. All auction participants must be
    prepared to pay their bids and should not incur debt obligations
    they are financially unable to meet. Therefore, inability to pay
    does not by itself justify a waiver of the Commission's bid
    withdrawal payment rule.[^45]

14. We also reject Advance's assertion that its bid withdrawal payment
    is inequitable because it is a subsidiary of a non-profit religious
    broadcaster, Starboard Media Foundation, Inc. Advance is a
    self-described for-profit business created to acquire property
    "unrelated to Starboard's non-profit operations."[^46] Furthermore,
    the Commission does not apply its rules differently to for-profit
    and non-profit businesses, nor would it be appropriate for the
    Commission to treat religious organizations differently from
    non-religious entities.

15. Finally, we find that the circumstances of this case do not justify
    a waiver of the interim bid withdrawal payment that Advance has been
    assessed. Although Advance's final bid withdrawal payment is
    exceptionally high, this fact alone does not warrant a decision to
    impose no bid withdrawal payment at all in this case. The
    Commission's bid withdrawal payment rule has been in place since the
    inception of the auctions program, and the *Auction No. 37
    Procedures Public Notice* clearly explained its application to
    bidders in Auction No. 37. Advance recognizes that "there should be
    some consequence as a result of its bid withdrawal,"[^47] and we
    find that it is important to the Commission's goal of deterring
    insincere bidding to impose a bid withdrawal payment here. We
    therefore do not waive the interim bid withdrawal payment of
    \$205,500 that Advance has been assessed and that has been deducted
    from its upfront payment for Auction No. 37.

# CONCLUSION

16. We conclude that special circumstances warrant a deviation from the
    normal application of Section 1.2104(g)(1) in this case. If we were
    to enforce the final bid withdrawal payment assessed against Advance
    under the rule for its withdrawal of its high bid on the Yarnell,
    Arizona, construction permit, it would be the highest bid withdrawal
    payment ever imposed in the history of the auctions program.[^48]
    More important, it would be the only bid withdrawal payment ever
    imposed that both exceeds \$4 million and represents more than 200
    percent of the sale price of the permit or license. Given the
    exceptionally high level of this bid withdrawal payment, we conclude
    that it is higher than necessary to serve the bid withdrawal payment
    rule's purpose of deterring insincere bidding in Commission
    auctions. We therefore waive that part of Section 1.2104(g)(1) that
    prescribes the final bid withdrawal payment and apply to Advance in
    this case only that part of the rule that prescribes the interim bid
    withdrawal payment. Because Advance's interim payment of \$205,500
    has already been deducted from the upfront payment it deposited with
    the Commission to participate in Auction No. 37, it owes no further
    payment to the Commission.

# ORDERING CLAUSES

17. Accordingly, IT IS ORDERED pursuant to Sections 4(i), 303(r), and
    309(j) of the Communications Act of 1934, as amended, 47 U.S.C. §§
    154(i), 303(r), and 309(j), and Sections 1.3 and 1.1204(g)(1) of the
    Commission\'s rules, 47 C.F.R. §§ 1.3 and 1.1204(g)(1), that the
    Request for Waiver filed by Advance Acquisitions, Inc., on November
    20, 2006, IS GRANTED, and the Amended Request for Waiver filed by
    Advance Acquisitions, Inc., on May 22, 2007, IS GRANTED IN PART.

18. IT IS FURTHER ORDERED pursuant to Sections 4(i), 303(r), and 309(j)
    of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i),
    303(r), 309(j), and Section 1.1204(g)(1) of the Commission\'s rules,
    47 C.F.R. § 1.1204(g)(1), that the interim bid withdrawal payment of
    \$205,500 Advance Acquisitions, Inc., has paid for the withdrawal of
    its provisionally winning bid on the Yarnell, Arizona, construction
    permit in Round 52 of Auction No. 37 shall be retained by the
    Commission.

19. This action is taken under delegated authority pursuant to Section
    0.331 of the Commission's rules, 47 C.F.R. § 0.331.

> FEDERAL COMMUNICATIONS COMMISSION

Fred B. Campbell, Jr.

Chief, Wireless Telecommunications Bureau

[^1]: Letter to Margaret W. Wiener, Chief, Auctions and Spectrum Access
    Division, Wireless Telecommunications Bureau, Federal Communications
    Commission, from Denise B. Moline, Counsel to Advance Acquisition,
    Inc., dated November 20, 2006 ("Request for Waiver"); Advance
    Acquisition, Inc., Amended Request for Waiver of 47 C.F.R. §
    1.2104(g)(1), dated May 22, 2007 ("Amended Request for Waiver").
    *See also* 47 C.F.R. § 1.2104(g).

[^2]: The Yarnell, Arizona, allotment is FM024.

[^3]: 47 C.F.R. § 1.2104(g)(1).

[^4]: Auction of FM Broadcast Construction Permits Scheduled for
    November 3, 2004; Notice and Filing Requirements, Minimum Opening
    Bids, Upfront Payments and Other Auction Procedures, *Public
    Notice*, 19 FCC Rcd 10,570 (WTB/MB 2004) ("*Auction No. 37
    Procedures Public Notice*").

[^5]: *Id.* at 10,602-04.

[^6]: *Id.* at 10,603. Section 1.2104(g) provides that "the Commission
    will impose payments on bidders who withdraw high bids during the
    course of an auction, or who default on payments due after an
    auction closes or who are disqualified." 47 C.F.R. § 1.2104(g).
    Section 1.2104(g)(1) prescribes the method of calculating the
    payment that is imposed when a bid is withdrawn prior to the close
    of an auction. 47 C.F.R. § 1.2104(g)(1).

[^7]: As the *Auction No. 37 Procedures Public Notice* explained, the
    interim payment, which is applied toward any final bid withdrawal
    payment that is assessed after the construction permit is sold,
    ensures that the Commission receives a minimal bid withdrawal
    payment pending assessment of any final bid withdrawal payment.
    *Auction No. 37 Procedures Public Notice,* 19 FCC Rcd at 10,604
    (citing Amendment of Part 1 of the Commission\'s Rules --
    Competitive Bidding Procedures, *Order on Reconsideration of the
    Third Report and Order, Fifth Report and Order, and Fourth Further
    Notice of Proposed Rule Making*, 15 FCC Rcd 15,293, 15,302 ¶ 15
    (2000)). Where a bid that is higher than the withdrawn bid is
    submitted in the same auction, no bid withdrawal payment is
    assessed. 47 C.F.R. § 1.2104(g)(1); *Auction No. 37 Procedures
    Public Notice*, 19 FCC Rcd at 10,603.

[^8]: In 2006, the Commission amended Section 1.2104(g)(1) to raise the
    3 percent limit on interim bid withdrawal payments to 20 percent. In
    doing so, the Commission noted that there had been a
    disproportionate number of bid withdrawals late in auctions,
    indicating that some bidders had been placing and then withdrawing
    bids primarily to discourage potential or existing market
    competitors from seeking to acquire licenses, and expressed its
    continuing concern that bid withdrawals weaken the integrity of the
    auctions process and impede the deployment of service to the public.
    Implementation of the Commercial Spectrum Enhancement Act and
    Modernization of the Commission's Competitive Bidding Rules and
    Procedures, *Report and Order*, 21 FCC Rcd 891, 901-04 ¶¶ 24-32
    (2006). The Commission, as part of its determination of competitive
    bidding procedures in advance of each auction, now establishes the
    appropriate level, from 3 percent up to a maximum of 20 percent, at
    which to set interim bid withdrawal payments. *Id.* at 903-04 ¶ 31.

[^9]: Auction of FM Broadcast Construction Permits; 456 Bidders
    Qualified to Participate in Auction No. 37, *Public Notice*, 19 FCC
    Rcd 19,773 (WTB/MB 2004).

[^10]: Amended Request for Waiver at 6-7; *see also* FM Broadcast
    Construction Permits Auction Closes; Auction No. 37 Winning Bidders
    Announced; Payment and Application Deadlines Established, *Public
    Notice*, 20 FCC Rcd 1021, Attachment A (WTB/MB 2004) ("*Auction No.
    37 Closing Public Notice*").

[^11]: *See* *supra* note 10.

[^12]: *Auction No. 37 Closing Public Notice,* Attachment C.

[^13]: Section 1.2104(g)(1) provides: "The withdrawal payment amount is
    deducted from any upfront payments or down payments that the
    withdrawing bidder has deposited with the Commission." 47 C.F.R. §
    1.1204(g)(1).

[^14]: Auction of FM Broadcast Construction Permits Closes; Winning
    Bidders Announced for Auction No. 62, *Public Notice*, 21 FCC Rcd
    1071, Attachment A (WTB/MB 2006) ("*Auction No. 62 Closing Public
    Notice*"). The gross winning bid for the Yarnell permit was
    \$2,234,000. Because the winning bidder qualified for a 35 percent
    bidding credit, the net winning bid it paid to the Commission was
    \$1,452,100.

[^15]: *Id.,* Attachment D. Section 1.2104(g)(1) states: "In the event
    that a bidding credit applies to any of the bids, the bid withdrawal
    payment is either the difference between the net withdrawn bid and
    the subsequent net winning bid, or the difference between the gross
    withdrawn bid and the subsequent gross winning bid, whichever is
    less." 47 C.F.R. § 1.1204(g)(1). Pursuant to this provision, the
    gross winning bid of \$2,234,000, rather than the net winning bid of
    \$1,452,100, was used to calculate Advance's bid withdrawal payment.
    *See supra* note 14. Advance did not qualify for a bidding credit in
    Auction No. 37.

[^16]: Letter to Mark Follett, President, Advance Acquisition, Inc.,
    from Rita Cookmeyer, Financial Policy Analyst, Auctions and Spectrum
    Access Division, Wireless Telecommunications Bureau, Federal
    Communications Commission, dated October 31, 2006.

[^17]: *See supra* note 1.

[^18]: Request for Waiver at 4.

[^19]: *Id.* at 5-6.

[^20]: *Id*. at 7.

[^21]: *Id*.

[^22]: *Id.* at 8-10.

[^23]: *Id.* at 10-11.

[^24]: *Id.* at 11-12.

[^25]: *Id.* at 10, 12, 13-14.

[^26]: *Id*. at 13. On February 22, 2007, Advance supplemented its
    Request for Waiver by seeking consideration of debt compromise under
    Section 1.1915 of the Commission's rules, 47 C.F.R. § 1.1915. Letter
    to Margaret W. Wiener, Chief, Auctions and Spectrum Access Division,
    Wireless Telecommunications Bureau, Federal Communications
    Commission, from Denise B. Moline, Counsel to Advance Acquisition,
    Inc., dated February 22, 2007. Advance subsequently withdrew this
    supplement. Letter to Margaret W. Wiener, Chief, Auctions and
    Spectrum Access Division, Wireless Telecommunications Bureau,
    Federal Communications Commission, from Kathleen Abernathy, Counsel
    to Advance Acquisition, Inc., dated May 10, 2007.

[^27]: *See supra* note 1.

[^28]: Amended Request for Waiver at 1-2.

[^29]: *Id.* at 2, 3-8, 18-19.

[^30]: *Id.* at 13-14.

[^31]: *Id.* at 15-17.

[^32]: *Id.* at 17.

[^33]: *Id.* at 18-19.

[^34]: In re Application of Delta Radio, Inc*.*, *Memorandum Opinion and
    Order*, 18 FCC Rcd 16,889, 16,891 ¶ 7 (2003). *See also Northeast
    Cellular Telephone Co. v. FCC*, 897 F.2d 1164, 1166 (D.C. Cir. 1990)
    (citing *WAIT Radio v. FCC*, 418 F.2d 1153, 1157-59 (D.C. Cir.
    1969)); 47 C.F.R. § 1.3 (\"Any provision of the rules may be waived
    . . . on petition if good cause therefor is shown.\").

[^35]: Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding, *Second Report and Order,* 9 FCC Rcd 2348, 2373
    ¶ 147 (1994) *("Competitive Bidding Second Report and Order").*

[^36]: *Id.* at 2374 ¶ 152.

[^37]: *Id.* at 2373 ¶ 148.

[^38]: Atlanta Trunking Associates, Inc. and MAP Wireless L.L.C.,
    *Order*, 11 FCC Rcd 17,189, 17,198 ¶ 19 (1996) (*"Atlanta Trunking
    Associates"*).

[^39]: Following the submission of mistaken bids that contained
    typographical errors in the early years of the auctions program, the
    Commission implemented various system enhancements to reduce the
    possibility of such types of erroneous bids. *See, e.g ,* Atlanta
    Trunking Associates, Inc. and MAP Wireless L.L.C.; Georgia
    Independent PCS Corporation, *Memorandum Opinion and Order*, 12 FCC
    Rcd 6382, 6388 ¶ 11 (1997). Typographical errors have ceased to be a
    problem in Commission auctions.

[^40]: Voicestream PCS BTA I License Corporation ("Voicestream"), a
    subsidiary of T-Mobile USA, Inc., was assessed a higher bid
    withdrawal payment---\$4,639,000---after withdrawing a high bid in
    Auction No. 35, an auction of Personal Communications Services
    ("PCS") licenses. However, the license on which Voicestream had
    withdrawn its high bid ultimately could not be sold because a
    license for the same spectrum had been issued to NextWave Personal
    Communications Inc. ("NextWave") and the Supreme Court ruled that
    the Commission was prohibited under bankruptcy law from canceling
    licenses on which NextWave had failed to timely submit installment
    payments. The bid withdrawal payment assessed against Voicestream
    was therefore waived and refunded. Letter to Robert A. Calaff,
    Senior Corporate Counsel, T-Mobile USA, Inc., and James H. Barker,
    Counsel for Leap Wireless International, Inc., from Margaret W.
    Wiener, Chief, Auctions and Industry Analysis Division, Wireless
    Telecommunications Bureau, Federal Communications Commission, dated
    September 5, 2003, 18 FCC Rcd 18,349 (2003). In certain early bid
    withdrawal cases involving typographical errors, bid withdrawal
    payments well over \$4 million might have been imposed. Indeed,
    because the errors involved adding extra zeroes to bids, certain bid
    withdrawal payments might have amounted to tens of millions of
    dollars. As explained above, however, the Commission established
    guidelines for reducing bid withdrawal payments in cases of
    typographical errors. *See supra* para. 8.

[^41]: Wireless Co. paid bid withdrawal payments of \$4,468,990 and
    \$4,036,163 after withdrawing high bids in Auction No. 4, an auction
    of PCS licenses. Commercial Mobile Radio Service Information:
    Announcing the Winning Bidders in the FCC\'s Auction of 99 Licenses
    to Provide Broadband PCS in Major Trading Areas; Down Payments Due
    March 20, 1995, *Public Notice,* PNWL95-28 (WTB March 13, 1995).

[^42]: The license for which Wireless Co. was assessed a bid withdrawal
    payment of \$4,468,990 sold for \$89,786,837; thus, the bid
    withdrawal payment was less than 5 percent of the winning bid. The
    license for which Wireless Co. was assessed a bid withdrawal payment
    of \$4,036,163 sold for \$83,888,837; again, the bid withdrawal
    payment was less than 5 percent of the winning bid. Wireless Co.'s
    withdrawn bids for the two licenses were \$94,255,827 and
    \$87,925,000, respectively.

[^43]: As explained above, Advance's final bid withdrawal payment was
    calculated based on the gross winning bid for the Yarnell permit in
    Auction No. 62, which was \$2,234,000. Advance's final bid
    withdrawal payment is 207 percent of this amount. If Advance's final
    bid withdrawal payment had been calculated based on the amount of
    the net winning bid for the permit, which was \$1,452,100, it would
    have been 318 percent of that amount. *See supra* note 15.

[^44]: *Atlanta Trunking Associates*, 11 FCC Rcd at 17,195 ¶ 14.

[^45]: In considering the payments imposed under 47 C.F.R. §
    1.2104(g)(2) on bidders that default after the close of an auction,
    the Commission has found that "we would contravene Commission policy
    if we were to reduce default payment obligations based on a
    bidder\'s inability to pay, because such a practice would encourage
    bidders to bid without secure financial backing." BDPCS Inc.,
    *Memorandum Opinion and Order*, 15 FCC Rcd 17,590, 17,611 ¶ 37
    (2000).

[^46]: Amended Request for Waiver at 2.

[^47]: Request for Waiver at 10. Advance also states in its Amended
    Request for Waiver: "Advance understood at the time \[of withdrawing
    its bid\] that it might be responsible for remitting a bid
    withdrawal payment to the Commission as a result of its actions if
    the Arizona Allotment ultimately sold for an amount below Advance's
    withdrawn bid." Amended Request for Waiver at 15.

[^48]: As explained above, a higher bid withdrawal payment was assessed
    against Voicestream for a bid withdrawn in Auction No. 35, but that
    bid withdrawal payment was waived for reasons unrelated to the
    amount of the payment. In addition, in certain early bid withdrawal
    cases involving typographical errors, bid withdrawal payments higher
    than that assessed against Advance might have been imposed, but the
    Commission established guidelines for reducing bid withdrawal
    payments in such cases. *See supra* note 40.