**PUBLIC NOTICE**![](media/image1.png){width="0.7243055555555555in"
height="0.7347222222222223in"}

**Federal Communications Commission**

**445 12^th^ Street, SW**

**Washington, DC 20554**

#######  {#section .unnumbered}

####### DA 04-1639 {#da-04-1639 .unnumbered}

**June 18, 2004**

###### BROADBAND PCS SPECTRUM AUCTION {#broadband-pcs-spectrum-auction .unnumbered}

##### SCHEDULED FOR JANUARY 12, 2005 {#scheduled-for-january-12-2005 .unnumbered}

**COMMENT SOUGHT**

**ON RESERVE PRICES OR MINIMUM OPENING BIDS AND**

###### OTHER AUCTION PROCEDURES {#other-auction-procedures .unnumbered}

**Report No. AUC-03‑58-A (Auction No. 58)**

By this Public Notice, the Wireless Telecommunications Bureau ("Bureau")
announces the auction of 234 broadband Personal Communications Service
("PCS") licenses scheduled to commence on January 12, 2005 (Auction No.
58). The spectrum to be auctioned has been offered previously in other
auctions[^1] but was returned to the Commission as a result of license
cancellation or termination.[^2] A complete list of licenses available
for Auction No. 58 is included as Attachment A of this Public Notice.

The following table contains the block/eligibility status/frequency
cross-reference list for Auction No. 58:

+---------+-----+-----+--------------+-------------------------------+
| **Fr    | *   |     | **Bandwidth  | **Frequency (MHz) (Unless     |
| equency | *El |     | (MHz)**      | otherwise noted in Attachment |
| Block** | igi |     |              | A)**                          |
|         | bil |     | **(Unless    |                               |
|         | ity |     | otherwise    |                               |
|         | St  |     | noted in     |                               |
|         | atu |     | Attachment   |                               |
|         | s** |     | A)**         |                               |
+---------+-----+-----+--------------+-------------------------------+
|         | **T | **T |              |                               |
|         | ier | ier |              |                               |
|         | 1** | 2** |              |                               |
+---------+-----+-----+--------------+-------------------------------+
| A       | n/a | n/a | 30           | 1850-1865, 1930-1945          |
+---------+-----+-----+--------------+-------------------------------+
| C1      | O   | Clo | 15           | 1902.5-1910, 1982.5-1990      |
|         | pen | sed |              |                               |
+---------+-----+-----+--------------+-------------------------------+
| C2      | O   | Clo | 15           | 1895-1902.5, 1975-1982.5      |
|         | pen | sed |              |                               |
+---------+-----+-----+--------------+-------------------------------+
| C3      | Clo | Clo | 10           | 1895-1900, 1975-1980          |
|         | sed | sed |              |                               |
+---------+-----+-----+--------------+-------------------------------+
| C4      | O   | Clo | 10           | 1900-1905, 1980-1985          |
|         | pen | sed |              |                               |
+---------+-----+-----+--------------+-------------------------------+
| C5      | O   | O   | 10           | 1905-1910, 1985-1990          |
|         | pen | pen |              |                               |
+---------+-----+-----+--------------+-------------------------------+
| D       | n/a | n/a | 10           | 1865-1870, 1945-1950          |
+---------+-----+-----+--------------+-------------------------------+
| E       | n/a | n/a | 10           | 1885-1890, 1965-1970          |
+---------+-----+-----+--------------+-------------------------------+
| F       | O   | O   | 10           | 1890-1895, 1970-1975          |
|         | pen | pen |              |                               |
+---------+-----+-----+--------------+-------------------------------+

In some cases, licenses are available for only part of a market or may
not include all of the spectrum associated with a particular frequency
block in Auction No. 58. Dark gray boxes indicate that no license of the
particular tier/frequency block combination will be available in Auction
No. 58. See Attachment A to determine which licenses will be offered.

For the C and F block licenses, Basic Trading Areas ("BTAs") are divided
into two tiers according to the population size, with Tier 1 comprising
markets with population at or above 2.5 million, based on 2000 census
figures, and Tier 2 comprising the remaining markets.[^3] Some licenses
are available to all bidders in "open" bidding, while other licenses are
available only to entrepreneurs in "closed" bidding.[^4] In order to
qualify as an "entrepreneur," an applicant, including attributable
investors and affiliates, must have had gross revenues of less than
\$125 million in each of the last two years and must have less than
\$500 million in total assets.[^5] All of the licenses available in
"closed" bidding are C block licenses. The A, B, E, and F block
licenses, as well as certain C block licenses, are available in "open"
bidding. Size-based bidding credits are not available for C block
licenses won in "closed" bidding or for licenses in the A, D, or E
blocks. [^6]

The Balanced Budget Act of 1997 requires the Commission to "ensure that,
in the scheduling of any competitive bidding under this subsection, an
adequate period is allowed . . . before issuance of bidding rules, to
permit notice and comment on proposed auction procedures. . . ."[^7]
Consistent with the provisions of the Balanced Budget Act and to ensure
that potential bidders have adequate time to familiarize themselves with
the specific rules that will govern the day-to-day conduct of an
auction, the Commission directed the Bureau, under its existing
delegated authority,[^8] to seek comment on a variety of
auction-specific procedures prior to the start of each auction.[^9] We
therefore seek comment on the following issues relating to Auction No.
58.

# Auction Structure

##  Simultaneous Multiple-Round Auction Design 

We propose to award all licenses included in Auction No. 58 in a
simultaneous multiple-round auction. As described further below, this
methodology offers every license for bid at the same time with
successive bidding rounds in which bidders may place bids. We seek
comment on this proposal.

## Upfront Payments and Bidding Eligibility 

The Bureau has delegated authority and discretion to determine an
appropriate upfront payment for each license being auctioned, taking
into account such factors as the population in each geographic license
area and the value of similar spectrum.[^10] As described further below,
the upfront payment is a refundable deposit made by each bidder to
establish eligibility to bid on licenses. Upfront payments protect
against frivolous or insincere bidding and provide the Commission with a
source of funds from which to collect payments owed at the close of the
auction.[^11] With these guidelines in mind for Auction No. 58, we
propose to calculate upfront payments on a license-by-license basis
using a formula based on bandwidth and license area population:[^12]

> \$0.05 \* MHz \* License Area Population

The specific proposed upfront payment for each license available in
Auction No. 58 is set forth in Attachment A.[^13] We seek comment on
this proposal.

We further propose that the amount of the upfront payment submitted by a
bidder will determine the maximum number of bidding units on which a
bidder may place bids. This limit is a bidder's initial eligibility.
Each license is assigned a specific number of bidding units equal to the
upfront payment listed in Attachment A, on a bidding unit per dollar
basis. This number does not change as prices rise during the auction. A
bidder's upfront payment is not attributed to specific licenses. Rather,
a bidder may place bids on any combination of licenses as long as the
total number of bidding units associated with those licenses does not
exceed its current eligibility. Eligibility cannot be increased during
the auction. Thus, in calculating its upfront payment amount, an
applicant must determine the **maximum** number of bidding units it may
wish to bid on (or hold high bids on) in any single round, and submit an
upfront payment covering that number of bidding units. We seek comment
on this proposal.

## Activity Rules 

In order to ensure that our auctions close within a reasonable period of
time, an activity rule requires bidders to bid actively on a percentage
of their current bidding eligibility during each round of the auction
rather than waiting until the end to participate. A bidder that does not
satisfy the activity rule will either lose bidding eligibility in the
next round or must use an activity rule waiver (if any remain).

We propose to divide the auction into two stages, each characterized by
an increased activity requirement. The auction will start in Stage One.
We propose that the auction generally will advance from Stage One to
Stage Two when the auction activity level, as measured by the percentage
of bidding units receiving new high bids, is approximately twenty
percent or below for three consecutive rounds of bidding. However, we
further propose that the Bureau retain the discretion to change stages
unilaterally by announcement during the auction. In exercising this
discretion, the Bureau will consider a variety of measures of bidder
activity, including, but not limited to, the auction activity level, the
percentage of licenses (as measured in bidding units) on which there are
new bids,[^14] the number of new bids, and the percentage increase in
revenue. We seek comment on these proposals.

For Auction No. 58, we propose the following activity requirements:

**Stage One:** In each round of the first stage of the auction, a bidder
desiring to maintain its current eligibility is required to be active on
licenses representing at least 80 percent of its current bidding
eligibility. Failure to maintain the requisite activity level will
result in a reduction in the bidder's bidding eligibility in the next
round of bidding (unless an activity rule waiver is used). During Stage
One, reduced eligibility for the next round will be calculated by
multiplying the current round activity by five-fourths (5/4).

**Stage Two:** In each round of the second stage, a bidder desiring to
maintain its current eligibility is required to be active on 95 percent
of its current bidding eligibility. In this final stage, reduced
eligibility for the next round will be calculated by multiplying the
current round activity by twenty/nineteenths (20/19).

We seek comment on these proposals. Commenters that believe these
activity rules should be modified should explain their reasoning and
comment on the desirability of an alternative approach. Commenters are
advised to support their claims with analyses and suggested alternative
activity rules.

## Activity Rule Waivers and Reducing Eligibility

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. Activity rule
waivers can be either proactive or automatic and are principally a
mechanism for auction participants to avoid the loss of auction
eligibility in the event that exigent circumstances prevent them from
placing a bid in a particular round. **Note: Once a proactive waiver is
submitted, that waiver cannot be unsubmitted, even if the round has not
yet closed.**

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 (known as an "automatic waiver") at the end
of any bidding period 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. **Note: If a bidder has no waivers remaining and does not
satisfy the required activity level, its current eligibility will be
permanently reduced, possibly eliminating the bidder from the auction.**

A bidder with insufficient activity may wish to reduce its bidding
eligibility rather than use an activity rule waiver. If so, the bidder
must affirmatively override the automatic waiver mechanism during the
bidding period by using the "reduce eligibility" function in the bidding
system. In this case, the bidder's eligibility is permanently reduced to
bring the bidder into compliance with the activity rules as described
above. Once eligibility has been reduced, a bidder will not be permitted
to regain its lost bidding eligibility.

A bidder may proactively use an activity rule waiver as a means to keep
the auction open without placing a bid. If a bidder submits a proactive
waiver (using the proactive waiver function in the bidding system)
during a bidding period in which no bids or withdrawals are submitted,
the auction will remain open and the bidder's eligibility will be
preserved. An automatic waiver invoked in a round in which there are no
new valid bids or withdrawals will not keep the auction open.

We propose that each bidder in Auction No. 58 be provided with three
activity rule waivers that may be used at the bidder's discretion during
the course of the auction as set forth above. We seek comment on this
proposal.

## Information Relating to Auction Delay, Suspension, or Cancellation

For Auction No. 58, we propose that, 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, or administrative or
weather necessity, or for any other reason that affects the fair and
efficient conduct of competitive bidding.[^15] 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. We seek comment on this proposal.

# Bidding Procedures

## A. Round Structure {#a.-round-structure .unnumbered}

The Commission will conduct Auction No. 58 over the Internet. Telephonic
bidding will also be available. As a contingency plan, the FCC Wide Area
Network will be available as well. The telephone number through which
the backup FCC Wide Area Network may be accessed will be announced in a
later public notice. Full information regarding how to establish such a
connection will be provided in the public notice announcing details of
auction procedures.

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 simultaneous multiple-round
format will consist of sequential bidding rounds, each followed by the
release of round results. 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. We seek comment on
this proposal.

## B. Reserve Price or Minimum Opening Bid {#b.-reserve-price-or-minimum-opening-bid .unnumbered}

The Balanced Budget Act calls upon the Commission to prescribe methods
for establishing a reasonable reserve price or a minimum opening bid
when FCC licenses are subject to auction, unless the Commission
determines that a reserve price or minimum opening bid is not in the
public interest.[^16] Consistent with this mandate, the Commission has
directed the Bureau to seek comment on the use of a minimum opening bid
and/or reserve price prior to the start of each auction.[^17]

Normally, a reserve price is an absolute minimum price below which an
item will not be sold in a given auction. Reserve prices can be either
published or unpublished. A minimum opening bid, on the other hand, is
the minimum bid price set at the beginning of the auction below which no
bids are accepted. It is generally used to accelerate the competitive
bidding process. Also, the auctioneer often has the discretion to lower
the minimum opening bid amount later in the auction. It is also possible
for the minimum opening bid and the reserve price to be the same amount.

In light of the Balanced Budget Act's requirements, the Bureau proposes
to establish minimum opening bids for Auction No. 58 based on factors
that could have an impact on the value of the spectrum.[^18] The Bureau
believes a minimum opening bid, which has been used in other auctions,
is an effective bidding tool.[^19] With these guidelines in mind for
Auction No. 58, we propose to calculate minimum opening bids on a
license-by-license basis using formulas based on bandwidth and license
area population.[^20] Furthermore, we propose to differentiate these
formulas based on the population of each license area.[^21]

> Population ≥ 2,000,000: \$0.50 \* MHz \* License Area Population
>
> Population ≥ 500,000: \$0.25 \* MHz \* License Area Population
>
> Population \< 500,000: \$0.15 \* MHz \* License Area Population

The specific minimum opening bid for each license available in Auction
No. 58 is set forth in Attachment A of this Public Notice.[^22] We seek
comment on this proposal.

If commenters believe that these minimum opening bids will result in
substantial numbers of "unwon" licenses, or are not reasonable amounts,
or should instead operate as reserve prices, they should explain why
this is so, and comment on the desirability of an alternative approach.
Commenters are advised to support their claims with valuation analyses
and suggested reserve prices or minimum opening bid levels or formulas.
In establishing the minimum opening bids, we particularly seek comment
on such factors as the amount of spectrum being auctioned, levels of
incumbency, the availability of technology to provide service, the size
of the geographic service areas, issues of interference with other
spectrum bands and any other relevant factors that could reasonably have
an impact on valuation of these PCS licenses. We also seek comment on
whether, consistent with the Balanced Budget Act, the public interest
would be served by having no minimum opening bid or reserve price.

## C. Minimum Acceptable Bids and Bid Increments  {#c.-minimum-acceptable-bids-and-bid-increments .unnumbered}

In each round, eligible bidders will be able to place bids on a given
license in any of nine different amounts.[^23] The FCC Automated Auction
System interface will list the nine acceptable bid amounts for each
license. Until a bid has been placed on a license, the minimum
acceptable bid for that license will be equal to its minimum opening
bid. In the rounds after a bid is placed on a license, the minimum
acceptable bid for that license will be equal to the standing high bid
plus the defined increment.

Once there is a standing high bid on a license, the FCC Automated
Auction System will calculate a minimum acceptable bid for that license
for the following round, as described below. The difference between the
minimum acceptable bid and the standing high bid for each license will
define the **bid increment**. The nine acceptable bid amounts for each
license consist of the minimum acceptable bid (the standing high bid
plus one bid increment) and additional amounts calculated using multiple
bid increments (*i.e.*, the second bid amount equals the standing high
bid plus two times the bid increment, the third bid amount equals the
standing high bid plus three times the bid increment, etc.).

Until a bid has been placed on a license, the minimum acceptable bid for
that license will be equal to its minimum opening bid. The additional
bid amounts for licenses that have not yet received a bid will be
calculated differently, as explained below.

For Auction No. 58, we propose to calculate minimum acceptable bids by
using a smoothing methodology, as we have done in several other
auctions. The smoothing formula calculates minimum acceptable bids by
first calculating a **percentage increment**, not to be confused with
the **bid increment**. The percentage increment for each license is
based on bidding activity on that license in all prior rounds;
therefore, a license that has received many bids throughout the auction
will have a higher percentage increment than a license that has received
few bids.

The calculation of the percentage increment used to determine the
minimum acceptable bids for each license for the next round is made at
the end of each round. The computation is based on an activity index,
which is a weighted average of the number of bids in that round and the
activity index from the prior round.[^24] The current activity index is
equal to a weighting factor times the number of new bids received on the
license in the most recent bidding round plus one minus the weighting
factor times the activity index from the prior round. The activity index
is then used to calculate a percentage increment by multiplying a
minimum percentage increment by one plus the activity index with that
result being subject to a maximum percentage increment. The Commission
will initially set the weighting factor at 0.5, the minimum percentage
increment at 0.1 (10%), and the maximum percentage increment at 0.3
(30%). Hence, at these initial settings, the percentage increment will
fluctuate between 10% and 30% depending upon the number of bids for the
license.

######## Equations {#equations .unnumbered}

A~i~ = (C \* B~i~) + ( (1-C) \* A~i-1~)

I~i+1~ = smaller of ( (1 + A~i~) \* N) and M

X ~i+1~ = I~i+1~ \* Y~i~

where,

A~i~ = activity index for the current round (round i)

C = activity weight factor

B~i~ = number of bids in the current round (round i)

A~i-1~ = activity index from previous round (round i-1), A~0~ is 0

I~i+1~ = percentage increment for the next round (round i+1)

N = minimum percentage increment or percentage increment floor

M = maximum percentage increment or percentage increment ceiling

X ~i+1~ = dollar amount associated with the percentage increment

Y~i~ = high bid from the current round

Under the smoothing methodology, once a bid has been received on a
license, the minimum acceptable bid for that license in the following
round will be the high bid from the current round plus the dollar amount
associated with the percentage increment, with the result rounded to the
nearest thousand if it is over ten thousand or to the nearest hundred if
it is under ten thousand.

########  {#section-1 .unnumbered}

######## Examples {#examples .unnumbered}

########  {#section-2 .unnumbered}

License 1

C=0.5, N = 0.1, M = 0.3

[Round 1 (2 new bids, high bid = \$1,000,000)]{.underline}

1\. Calculation of percentage increment for round 2 using the smoothing
formula:

A~1~ = (0.5 \* 2) + (0.5 \* 0) = 1

I~2~ = The smaller of ( (1 + 1) \* 0.1) = 0.2 or 0.3 (the maximum
percentage increment)

2\. Calculation of dollar amount associated with the percentage
increment for round 2 (using I~2~ from above):

X~2~ = 0.2 \* \$1,000,000 = \$200,000

3\. Minimum acceptable bid for round 2 = \$1,200,000

[Round 2 (3 new bids, high bid = \$2,000,000)]{.underline}

1\. Calculation of percentage increment for round 3 using the smoothing
formula:

A~2~ = (0.5 \* 3) + (0.5 \* 1) = 2

I~3~ = The smaller of ( (1 + 2) \* 0.1) = 0.3 or 0.3 (the maximum
percentage increment)

2\. Calculation of dollar amount associated with the percentage
increment for round 3 (using I~3~ from above):

X~3~ = 0.3 \* \$2,000,000 = \$600,000

3\. Minimum acceptable bid for round 3 = \$2,600,000

[Round 3 (1 new bid, high bid = \$2,600,000)]{.underline}

1\. Calculation of percentage increment for round 4 using the smoothing
formula:

A~3~ = (0.5 \* 1) + (0.5 \* 2) = 1.5

I~4~ = The smaller of ( (1 + 1.5) \* 0.1) = 0.25 or 0.3 (the maximum
percentage increment)

2\. Calculation of dollar amount associated with the percentage
increment for round 4 (using I~4~ from above):

X~4~ = 0.25 \* \$2,600,000 = \$650,000

3\. Minimum acceptable bid for round 4 = \$3,250,000

As stated above, until a bid has been placed on a license, the minimum
acceptable bid for that license will be equal to its minimum opening
bid. The additional bid amounts are calculated using the difference
between the minimum opening bid times one plus the minimum percentage
increment, rounded as described above, and the minimum opening bid. That
is, I = (minimum opening bid)(1 + N){rounded}- (minimum opening bid).
Therefore, when N equals 0.1, the first additional bid amount will be
approximately ten percent higher than the minimum opening bid; the
second, twenty percent; the third, thirty percent; etc.

In the case of a license for which the standing high bid has been
withdrawn,[^25] the minimum acceptable bid will equal the second highest
bid received for the license. The additional bid amounts are calculated
using the difference between the second highest bid times one plus the
minimum percentage increment, rounded, and the second highest bid.

The Bureau retains the discretion to change the minimum acceptable bids
and bid increments if it determines that circumstances so dictate. The
Bureau will do so by announcement in the FCC Automated Auction System.
We seek comment on these proposals.

## High Bids

At the end of a bidding round, a high bid for each license will be
determined based on the highest gross bid amount received for the
license. In the event of identical high bids on a license in a given
round (*i.e*., tied bids), we propose to use a random number generator
to select a single high bid from among the tied bids. If the auction
were to end with no higher bids being placed for that license, the
winning bidder would be the one that placed the selected high bid.
However, the remaining bidders, as well as the high bidder, can submit
higher bids in subsequent rounds. If any bids are received on the
license in a subsequent round, the high bid again will be determined by
the highest gross bid amount received for the license. We seek comment
on this proposal.

A high bid will remain the high bid until there is a higher bid on the
same license at the close of a subsequent round. A high bid from a
previous round is sometimes referred to as a "standing high bid."
Bidders are reminded that standing high bids count towards bidding
activity.[^26]

## Information Regarding Bid Withdrawal and Bid Removal

For Auction No. 58, we propose the following bid removal and bid
withdrawal procedures. Before the close of a bidding period, a bidder
has the option of removing any bid placed in that round. By removing
selected bids in the bidding system, a bidder may effectively "unsubmit"
any bid placed within that round. A bidder removing a bid placed in the
same round is not subject to a withdrawal payment. Once a round closes,
a bidder may no longer remove a bid.

A high bidder may withdraw its standing high bids from previous rounds
using the withdraw function in the bidding system. A high bidder that
withdraws its standing high bid from a previous round is subject to the
bid withdrawal payment provisions of the Commission rules.[^27] We seek
comment on these bid removal and bid withdrawal procedures.

In the *Part 1 Third Report and Order*, the Commission explained that
allowing bid withdrawals facilitates efficient aggregation of licenses
and the pursuit of efficient backup strategies as information becomes
available during the course of an auction. The Commission noted,
however, that, in some instances, bidders may seek to withdraw bids for
improper reasons. The Bureau, therefore, has discretion, in managing the
auction, to limit the number of withdrawals to prevent any bidding
abuses. The Commission stated that the Bureau should assertively
exercise its discretion, consider limiting the number of rounds in which
bidders may withdraw bids, and prevent bidders from bidding on a
particular market if the Bureau finds that a bidder is abusing the
Commission's bid withdrawal procedures.[^28]

Applying this reasoning, we propose to limit each bidder in Auction No.
58 to withdrawing standing high bids in no more than two rounds during
the course of the auction. To permit a bidder to withdraw bids in more
than two rounds would likely encourage insincere bidding or the use of
withdrawals for anti-competitive purposes. The two rounds in which
withdrawals are utilized will be at the bidder's discretion; withdrawals
otherwise must be in accordance with the Commission's rules. There is no
limit on the number of standing high bids that may be withdrawn in
either of the rounds in which withdrawals are utilized. Withdrawals will
remain subject to the bid withdrawal payment provisions specified in the
Commission's rules. We seek comment on this proposal.

## Stopping Rule

The Bureau has discretion "to establish stopping rules before or during
multiple round auctions in order to terminate the auction within a
reasonable time."[^29] For Auction No. 58, the Bureau proposes to employ
a simultaneous stopping rule approach. A simultaneous stopping rule
means that all licenses remain available for bidding until bidding
closes simultaneously on all licenses.

Bidding will close simultaneously on all licenses after the first round
in which no new bids, proactive waivers, or withdrawals are received.
Thus, unless circumstances dictate otherwise, bidding will remain open
on all licenses until bidding stops on every license.

However, the Bureau proposes to retain the discretion to exercise any of
the following options during Auction No. 58:

1\. Utilize a modified version of the simultaneous stopping rule. The
modified stopping rule would close the auction for all licenses after
the first round in which no bidder submits a proactive waiver,
withdrawal, or a new bid on any license on which it is not the standing
high bidder. Thus, absent any other bidding activity, a bidder placing a
new bid on a license for which it is the standing high bidder would not
keep the auction open under this modified stopping rule. The Bureau
further seeks comment on whether this modified stopping rule should be
used at any time or only in stage two of the auction.

2\. Keep the auction open even if no new bids or proactive waivers are
submitted and no previous high bids are withdrawn. In this event, the
effect will be the same as if a bidder had submitted a proactive waiver.
The activity rule, therefore, will apply as usual and a bidder with
insufficient activity will either lose bidding eligibility or use a
remaining activity rule waiver.

3\. Declare that the auction will end after a specified number of
additional rounds ("special stopping rule"). If the Bureau invokes this
special stopping rule, it will accept bids in the specified final
round(s) only for licenses on which the high bid increased in at least
one of a specified preceding number of rounds.

The Bureau proposes to exercise these options only in certain
circumstances, 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 these options, the Bureau is likely to attempt to increase
the pace of the auction by, for example, increasing the number of
bidding rounds per day, and/or 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 seek comment on these proposals.

# Conclusion

Comments are due on or before July 8, 2004, and reply comments are due
on or before July 15, 2004. Because of the disruption of regular mail
and other deliveries in Washington, DC, the Bureau requires that all
comments and reply comments be filed electronically. Comments and reply
comments must be sent by electronic mail to the following address:
[auction58@fcc.gov]{.underline}.[^30] The electronic mail containing the
comments or reply comments must include a subject or caption referring
to Auction No. 58 Comments and the name of the commenting party. The
Bureau requests that parties format any attachments to electronic mail
as Adobe^®^ Acrobat^®^ (pdf) or Microsoft^®^ Word documents. Copies of
comments and reply comments will be available for public inspection
during regular business hours in the FCC Reference Information Center,
Room CY-A257, 445 12th Street, SW, Washington, DC 20554.

**In addition, the Bureau requests that commenters fax a courtesy copy
of their comments and reply comments to the attention of Kathryn Garland
at (717) 338-2850.**

This proceeding has been designated as a "permit‑but‑disclose"
proceeding in accordance with the Commission's *ex parte* rules.[^31]
Persons making oral *ex parte* presentations are reminded that memoranda
summarizing the presentations must contain summaries of the substance of
the presentations and not merely a listing of the subjects discussed.
More than a one or two sentence description of the views and arguments
presented is generally required.[^32] Other rules pertaining to oral and
written *ex parte* presentations in permit-but-disclose proceedings are
set forth in Section 1.1206(b) of the Commission's rules.[^33]

For further information concerning this proceeding, contact the Auctions
and Spectrum Access Division, Wireless Telecommunications Bureau, as
listed below:

For legal questions: Audrey Bashkin (202) 418-0660

For general auction questions: Jeff Crooks (202) 418-0660

Lisa Stover (717) 338-2888

For service rule questions, contact the Mobility Division, Wireless
Telecommunications Bureau, as follows: Erin McGrath, (202) 418-0620;
JoAnn Epps, (202) 418-1342; or Dwain Livingston, (202) 418‑1338.

**- FCC -**

[^1]: *See* C and F Block Broadband PCS Auction Closes; Winning Bidders
    Announced, *Public Notice*, 16 FCC Rcd 2339 (2001); C, D, E, and F
    Block Broadband PCS License Auction Closes; Winning Bidders of 302
    Licenses Announced, *Public Notice*, 14 FCC Rcd 6688 (1999); D, E,
    and F Block Closes; Winning Bidders in the Auction of 1,479 Licenses
    to Provide Broadband PCS in Basic Trading Areas, *Public Notice*, DA
    97-81 (rel. Jan. 15, 1997); Entrepreneurs' C Block Reauction Closes;
    FCC Announces Winning Bidders in the Reauction of 18 Licenses to
    Provide Broadband PCS in Basic Trading Areas: Auction Event No. 10,
    *Public Notice*, 11 FCC Rcd 8183 (1996); Entrepreneurs' C Block
    Auction Closes; FCC Announces Winning Bidders in the Auction of 493
    Licenses to Provide Broadband PCS in Basic Trading Areas: Auction
    Event No. 5, *Public Notice*, DA 96-716 (rel. May 8, 1996);
    Commercial Mobile Radio Service Information; Announcing the Winning
    Bidders in the FCC Auction of 99 Licenses to Provide Broadband PCS
    in Major Trading Areas; Down Payments Due March 20, 1995, *Public
    Notice*, PNWL 95-028 (rel. Mar. 13, 1995).

[^2]: With respect to licenses formerly held by NextWave Personal
    Communications, Inc. and NextWave Power Partners Inc. (collectively,
    "NextWave") for spectrum to be associated with licenses offered in
    Auction No. 58, the Universal Licensing System database will be
    updated to reflect cancellation of those licenses pursuant to an
    agreement between the Commission and NextWave.

[^3]: 47 C.F.R. § 24.709(a)(3).

[^4]: *Id.* § 24.709(a)(4).

[^5]: *Id.* § 24.709(a)(1). The entrepreneur eligibility restriction
    does not apply to licenses that were available but not won in any
    auction beginning on or after March 23, 1999. *Id.* §
    24.709(a)(4)(ii). C block licenses for BTA215, BTA330, and BTA470
    were available but not won in Auction No. 22. Accordingly, even
    though licenses in the C3 and C4 frequency blocks in Tier 2
    generally are designated as subject to closed bidding, CW-BTA215-C3,
    CW-BTA330-C3, and CW-BTA470-C4 will be offered in open bidding in
    Auction No. 58. CW-BTA215-C3, CW-BTA330-C3, and CW-BTA470-C4 were
    offered in open bidding and won in Auction No. 35; however, because
    the winners defaulted on their payment obligations, the licenses
    were never awarded. *See* TPS Utilicom, Inc., *Order on
    Reconsideration*, 18 FCC Rcd 2516 (2003); Citifone PCS, LLC,
    *Order*, 16 FCC Rcd 13970 (2001). []{.mark}

[^6]: *Id.* §§ 24.712, 24.717.

[^7]: 47 U.S.C. § 309(j) (as amended by Section 3002(a)(E)(i), Balanced
    Budget Act of 1997, Pub. L. 105-33, 111 Stat. 251 (1997) ("Balanced
    Budget Act")).

[^8]: *See* Amendment of Part 1 of the Commission's Rules ---
    Competitive Bidding Proceeding, WT Docket No. 97-82, *Order,
    Memorandum Opinion and Order, and Notice of Proposed Rule Making*,
    12 FCC Rcd 5686, 5697-98, ¶ 16 (1997) ("*Part 1 Order*") ("We also
    clarify that pursuant to Section 0.131 of our rules, the Chief,
    Wireless Telecommunications Bureau, has delegated authority to
    implement all of the Commission's rules pertaining to auctions
    procedures.").

[^9]: Amendment of Part 1 of 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, 447-48, ¶ 124 (1997)
    ("*Part 1 Third Report and Order*"). The Commission directed the
    Bureau to seek comment on specific mechanisms related to day-to-day
    auction conduct including, for example, the structure of bidding
    rounds and stages, establishment of minimum opening bids or reserve
    prices, minimum acceptable bids, initial eligibility for each
    bidder, activity requirements for each stage of the auction,
    activity rule waivers, criteria for determining reductions in
    eligibility, information regarding bid withdrawal and bid removal,
    stopping rules, and information relating to auction delay,
    suspension or cancellation. *Id*. at 448, ¶ 125.

[^10]: *Part 1 Order,* 12 FCC Rcd at 5697-98, ¶ 16. *See also Part 1
    Third Report and Order*, 13 FCC Rcd at 425, ¶ 86; Implementation of
    Section 309(j) of the Communications Act-Competitive Bidding,
    *Second Report and Order*, 9 FCC Rcd 2348, 2378-79, ¶¶ 171-175
    (1994) ("*Second Report and Order*").

[^11]: *Second Report and Order*, 9 FCC Rcd at 2378-79, ¶¶ 171-176.

[^12]: All population figures are from the 2000 U.S. Census, U.S.
    Department of Commerce, Bureau of the Census. *See* Census 2000
    Summary File 1 (SF1) and July 3, 2001, News Releases covering the
    U.S. Virgin Islands, Guam, the Northern Mariana Islands, and
    American Samoa.

[^13]: Results are rounded using our standard rounding procedure:
    results above \$10,000 are rounded to the nearest \$1,000; results
    below \$10,000 but above \$1,000 are rounded to the nearest \$100;
    and results below \$1,000 are rounded to the nearest \$10.

[^14]: For example, when monitoring activity for determining when to
    change stages, we may consider the percentage of bidding units of
    the licenses receiving new high bids, excluding any FCC-held
    licenses.

[^15]: 47 C.F.R. § 1.2104(i).

[^16]: 47 U.S.C. § 309(j) (as amended by Balanced Budget Act, Section
    3002(a)). The Commission's authority to establish a reserve price or
    minimum opening bid is set forth in 47 C.F.R. § 1.2104(c) and (d).

[^17]: *Part 1 Third Report and Order,* 13 FCC Rcd at 454-55, ¶ 141.

[^18]: *[Id]{.underline}.*

[^19]: *See*, *e.g.*, Auction of 800 MHz SMR Upper 10 MHz Band, Minimum
    Opening Bids or Reserve Prices, *Order*, 12 FCC Rcd 16354 (1997);
    Auction of the Phase II 220 MHz Service Licenses, Auction Notice and
    Filing Requirements for 908 Licenses Consisting of Economic Area
    (EA), Economic Area Grouping (EAG), and Nationwide Licenses,
    Scheduled for September 15, 1998, Minimum Opening Bids and Other
    Procedural Issues, *Public Notice*, 13 FCC Rcd 16445 (1998).

[^20]: All population figures are from the 2000 U.S. Census, U.S.
    Department of Commerce, Bureau of the Census. *See* Census 2000
    Summary File 1 (SF1) and July 3, 2001, News Releases covering the
    U.S. Virgin Islands, Guam, the Northern Mariana Islands, and
    American Samoa.

[^21]: For partial markets we will consider the population of the area
    covered. For Auction No. 58, the population covered by each license
    for partial markets falls within Tier 2.

[^22]: Results are rounded using our standard rounding procedure:
    results above \$10,000 are rounded to the nearest \$1,000; results
    below \$10,000 but above \$1,000 are rounded to the nearest \$100;
    and results below \$1,000 are rounded to the nearest \$10.

[^23]: Bidders must have sufficient eligibility to place a bid on the
    particular license. *See* Section I.B. "Upfront Payments and Bidding
    Eligibility", *supra*.

[^24]: For Round 1 calculations, because there is no prior round
    (*i.e.*, no round 0), the activity index from the prior round is set
    at 0.

[^25]: *See* Section II.E. "Information Regarding Bid Withdrawal and Bid
    Removal," *infra*.

[^26]: *See* Section I.C. "Activity Rules," *supra*.

[^27]: 47 C.F.R. §§ 1.2104(g), 1.2109.

[^28]: *Part 1 Third Report and Order*, 13 FCC Rcd at 460, ¶ 150.

[^29]: 47 C.F.R. § 1.2104(e).

[^30]: Comments and reply comments in response to this Public Notice may
    not be filed using the Commission's Electronic Comment Filing
    System, which is used for the Commission's docketed rule making
    proceedings.

[^31]: 47 C.F.R. §§ 1.1200(a), 1.1206.

[^32]: 47 C.F.R. § 1.1206(b).

[^33]: *Id*.