DA 02-659

March 19, 2002

AUCTION OF LICENSES IN THE 747-762 AND 777-792 MHz BANDS SCHEDULED FOR
JUNE 19, 2002

FURTHER MODIFICATION OF PACKAGE BIDDING PROCEDURES AND OTHER PROCEDURES
FOR AUCTION NO. 31

Report No. AUC-02-31-B (Auction No. 31)

I. General Information [1](#general-information)

A. Introduction [1](#introduction)

1\. Background of Proceeding [2](#background-of-proceeding)

2\. Licenses to Be Auctioned [3](#licenses-to-be-auctioned)

B. Rules and Disclaimers [7](#rules-and-disclaimers)

1\. Relevant Authority [7](#relevant-authority)

2\. Prohibition of Collusion [8](#prohibition-of-collusion)

3\. Interference Protection of Television Services
[9](#interference-protection-of-television-services)

4\. Due Diligence [11](#due-diligence)

5\. Bidder Alerts [13](#bidder-alerts)

6\. National Environmental Policy Act ("NEPA") Requirements
[14](#national-environmental-policy-act-nepa-requirements)

C. Auction Specifics [14](#auction-specifics)

1\. Auction Date [14](#auction-date)

2\. Auction Title [14](#auction-title)

3\. Bidding Methodology [14](#bidding-methodology)

4\. Pre-Auction Dates and Deadlines
[15](#pre-auction-dates-and-deadlines)

5\. Requirements For Participation [15](#requirements-for-participation)

6\. General Contact Information [15](#general-contact-information)

II\. SHORT-FORM (FCC FORM 175) APPLICATION REQUIREMENTS
[16](#short-form-fcc-form-175-application-requirements)

A. Ownership Disclosure Requirements (FCC Form 175 Exhibit A)
[16](#ownership-disclosure-requirements-fcc-form-175-exhibit-a)

B. Consortia And Joint Bidding Arrangements (FCC Form 175 Exhibit B)
[16](#consortia-and-joint-bidding-arrangements-fcc-form-175-exhibit-b)

C. Eligibility [17](#eligibility)

1\. Bidding Credit Eligibility (FCC Form 175 Exhibit C)
[17](#bidding-credit-eligibility-fcc-form-175-exhibit-c)

2\. Tribal Land Bidding Credit [18](#tribal-land-bidding-credit)

3\. Applicability of Part 1 Attribution Rules
[18](#applicability-of-part-1-attribution-rules)

4\. Supporting Documentation [19](#supporting-documentation)

D. Provisions Regarding Defaulters and Former Defaulters (FCC Form 175
Exhibit D)
[20](#provisions-regarding-defaulters-and-former-defaulters-fcc-form-175-exhibit-d)

E. Installment Payments [20](#installment-payments)

F. Other Information (FCC Form 175 Exhibits E and F)
[20](#other-information-fcc-form-175-exhibits-e-and-f)

G. Minor Modifications to Short-Form Applications (FCC Form 175)
[20](#minor-modifications-to-short-form-applications-fcc-form-175)

H. Maintaining Current Information in Short-Form Applications (FCC Form
175)
[21](#maintaining-current-information-in-short-form-applications-fcc-form-175)

III\. PRE-AUCTION PROCEDURES [21](#pre-auction-procedures)

A. Auction Seminar [21](#auction-seminar)

B. Short-Form Application (FCC Form 175) --- Due May 8, 2002
[21](#short-form-application-fcc-form-175-due-may-8-2002)

1\. Electronic Filing [21](#electronic-filing)

2\. Completion of the FCC Form 175 [22](#completion-of-the-fcc-form-175)

3\. Electronic Review of FCC Form 175
[22](#electronic-review-of-fcc-form-175)

C. Application Processing and Minor Corrections
[22](#application-processing-and-minor-corrections)

D. Upfront Payments --- Due May 28, 2002
[23](#upfront-payments-due-may-28-2002)

1\. Making Auction Payments by Wire Transfer
[23](#making-auction-payments-by-wire-transfer)

2\. FCC Form 159 [24](#fcc-form-159)

3\. Amount of Upfront Payment [24](#amount-of-upfront-payment)

4\. Applicant's Wire Transfer Information for Purposes of Refunds of
Upfront Payments
[25](#applicants-wire-transfer-information-for-purposes-of-refunds-of-upfront-payments)

E. Auction Registration [26](#auction-registration)

F. Electronic Bidding [26](#electronic-bidding)

G. Mock Auction [26](#mock-auction)

IV\. AUCTION EVENT [27](#auction-event)

A. Auction Structure [27](#auction-structure)

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

2\. Maximum Eligibility [27](#maximum-eligibility)

3\. Activity and Eligibility Rules [28](#activity-and-eligibility-rules)

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

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

6\. Auction Stopping Rules [31](#auction-stopping-rules)

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

B. Bidding Procedures [32](#bidding-procedures)

1\. Round Structure [32](#round-structure)

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

3\. Minimum Acceptable Bids and Bid Increments
[36](#minimum-acceptable-bids-and-bid-increments)

4\. Renewed Bids [39](#renewed-bids)

5\. Last and Best Bids [39](#last-and-best-bids)

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

7\. Packages [41](#packages)

8\. Bidding [41](#bidding)

9\. Bid Removal and Bid Withdrawal [43](#bid-removal-and-bid-withdrawal)

10\. Round Results [43](#round-results)

11\. Auction Announcements [44](#auction-announcements)

12\. Default [44](#default)

V. POST-AUCTION PROCEDURES [47](#post-auction-procedures)

A. Down Payments [47](#down-payments)

B. Auction Discount Voucher [47](#auction-discount-voucher)

C. Long-Form Application [47](#long-form-application)

D. Tribal Land Bidding Credit [47](#tribal-land-bidding-credit-1)

E. Default and Disqualification [48](#default-and-disqualification)

F. Refund of Remaining Upfront Payment Balance
[48](#refund-of-remaining-upfront-payment-balance)

VI\. Attachment A

VII\. Attachment B

VIII\. Attachment C

IX\. Attachment D

X. Attachment E

XI\. Attachment F

XII\. Attachment G

XIII\. Attachment H

XIV\. Attachment I

# General Information 

## Introduction

By this public notice, the Wireless Telecommunications Bureau ("Bureau")
announces the procedures, minimum opening bids, and aggregate reserve
price for the upcoming auction of licenses in the 747-762 and 777-792
MHz ("Upper 700 MHz") bands scheduled for June 19, 2002 ("Auction No.
31"). In a series of prior public notices, the Bureau sought comment on
and announced various Auction No. 31 procedures.[^1] Most recently, in
the *Auction No. 31 Further Modifications Comment Public Notice*, the
Bureau sought comment on the potential establishment of an aggregate
reserve price, inclusion of 24 additional licenses in Auction No. 31 and
potential modifications to previously-announced procedures for Auction
No. 31.[^2] The Bureau received five comments and seven reply comments
in response.[^3] In the present public notice, the Bureau sets forth a
single set of procedures, minimum opening bids, and an aggregate reserve
price consolidating prior Auction No. 31 procedures public notices, and
resolves matters raised in the *Auction No. 31 Further Modifications
Comment Public Notice*.

### Background of Proceeding

Historically, the 746-806 MHz band has been used exclusively by
television stations (Channels 60-69). In the Balanced Budget Act of
1997, Congress directed the Commission to reallocate this spectrum for
public safety and commercial use by December 31, 1997,[^4] and to
commence competitive bidding for commercial licenses on the reallocated
spectrum after January 1, 2001.[^5] Incumbent analog television
broadcasters, however, may continue operations until December 31, 2006,
and, under certain circumstances, may be able to extend their operations
beyond that date.[^6]

In the *Upper 700 MHz First Report and Order,* the Commission adopted
service rules for the commercial use of the Upper 700 MHz bands that
enable the broadest possible use of this spectrum, consistent with sound
spectrum management.[^7] In its service rules, the Commission divided
the Upper 700 MHz bands into one 20-megahertz block (consisting of
paired 10 megahertz blocks) and one 10-megahertz block (consisting of
paired 5 megahertz blocks). The Commission will license the blocks in
the Upper 700 MHz bands over six 700 MHz band Economic Area Groupings
("EAGs"). All operations in the Upper 700 MHz bands will be generally
regulated under the framework of Part 27's technical, licensing, and
operating rules.

In subsequent proceedings, the Commission provided guidance on its
review of applications for approval of voluntary agreements accelerating
the transition of incumbent analog television licensees and opening
these bands for new 700 MHz licensee use, and several potential
mechanisms to advance the spectrum clearing process.[^8] In connection
with three-way spectrum clearing agreements (which would provide for TV
incumbents on television Channels 59-69 to agree with new 700 MHz
wireless licensees to relocate to lower band TV channels that, in turn,
would be voluntarily cleared by the lower band TV incumbents), the
Commission also provided guidance on interference issues that may arise
from a proposal to relocate a broadcast operation to a channel below
Channel 59, and adopted various procedural changes in order to
streamline the process of reviewing regulatory requests needed to
effectuate private band-clearing agreements.[^9]

### Licenses to Be Auctioned 

As discussed fully below, twelve licenses in the Upper 700 MHz bands
will be available in Auction No. 31. These licenses consist of one 20
megahertz license (consisting of paired 10 megahertz blocks) and one 10
megahertz license (consisting of paired 5 megahertz blocks) in each of
six 700 MHz band EAGs. These licenses are listed in this public notice
on Attachment A and are shown in the table below.

  -------- ----------------------- ------------- ------------- ------------- ------------- -------------
           [Upper 700 MHz Band                                                             
           Licenses]{.underline}                                                           

           Pacific                 Central /     Great Lakes   Southeast     Mid- Atlantic Northeast
                                   Mountain                                                

  10 MHz   WX-EAG706-C             WX-EAG705-C   WX-EAG704-C   WX-EAG703-C   WX-EAG702-C   WX-EAG701-C

  20 MHz   WX-EAG706-D             WX-EAG705-D   WX-EAG704-D   WX-EAG703-D   WX-EAG702-D   WX-EAG701-D
  -------- ----------------------- ------------- ------------- ------------- ------------- -------------

Bidders may bid on individual licenses. In addition, bidders will be
permitted to create and bid on up to twelve different packages of their
own choosing during the course of the auction. Bidders will not be
required to identify or create their packages before the start of the
auction, but may create their packages as the auction progresses.[^10]

In the *Further Modifications Comment Public Notice*, the Bureau sought
comment regarding the potential inclusion in Auction No. 31 of 24
additional licenses from the 698-746 MHz band (the "Lower 700 MHz"
band).[^11] The licenses available for auction in the Lower 700 MHz band
consist of 24 licenses to use spectrum in the 700 MHz band EAGs (four in
each of the six EAGs) and 734 licenses to use spectrum in Metropolitan
Statistical Areas/Rural Statistical Areas ("MSA/RSAs").[^12] The Bureau
sought comment on any potential advantages or disadvantages of enabling
bidders in Auction No. 31 to create and bid on packages containing 700
MHz band EAG licenses from both the Upper and Lower 700 MHz bands.[^13]
As noted in the *Further Modifications Comment Public Notice*, the
Bureau also sought comment on this issue in a public notice regarding
the auction of licenses from the Lower 700 MHz band ("Auction No.
44").[^14]

Commenters were divided on whether to include the 24 Lower 700 MHz band
EAG licenses in Auction No. 31. Commenters favoring the inclusion of the
Lower 700 MHz band EAG licenses in Auction No. 31 tended to focus on
separating the Lower 700 MHz band EAG licenses from the 734 Lower 700
MHz band MSA/RSA licenses rather than on combining the 24 Lower 700 MHz
band EAG licenses with the 12 Upper 700 MHz band EAG licenses.
Commenters opposing inclusion tended to focus on the possibility that
continuing rule making proceedings in the Lower 700 MHz band might delay
auction of those licenses and any other licenses grouped with them,
including the Upper 700 MHz band licenses.

#### Comments Favoring Including the 24 Lower 700 MHz Band EAG Licenses in Auction No. 31

RTG and the Rural 700 MHz Group request that the Commission combine in a
single auction the 24 EAG licenses in the Lower 700 MHz band with the 12
EAG licenses in the Upper 700 MHz band.[^15] According to the Rural 700
MHz Group, it would be administratively simple for bidders interested in
the EAG licenses to participate in a single auction, rather than two
simultaneous auctions.[^16] The Rural 700 MHz Group also contends that
separating the EAG licenses from the MSA/RSA licenses might attract new
small business entrants to Auction No. 44.[^17] RTG believes that
grouping the MSA/RSA licenses with the EAG licenses in the Lower 700 MHz
band may discourage many smaller carriers from participating in Auction
No. 44.[^18] RTG also asserts that grouping the Lower 700 MHz
EAG-licenses with the Upper 700 MHz EAG-licenses will avoid confusion
and improve the efficiency of both Auction Nos. 31 and 44.[^19] TCA also
supports limiting Auction No. 44 to MSA/RSA licenses, believing that it
will limit the amount of overall bidding eligibility and increase the
number of licenses in the control of many different entities, including
rural telephone companies.[^20] TCA supports auctioning the MSA/RSA
licenses separately from the EAG licenses in the Lower 700 MHz band, to
further the opportunities for small and rural carriers.[^21] McBride
also does not want the larger EAG licenses to be grouped with MSA/RSA
licenses that are likely to be of interest to smaller carriers.[^22]
Finally, NTCA agrees with RTG, the Rural 700 MHz Group and TCA that
auctioning the MSA/RSA licenses separately may increase rural carrier
and other small business participation.[^23]

Leap believes that grouping the EAG licenses in the Upper and the Lower
700 MHz bands in the same auction is the most efficient way to conduct
the auction, because bidders will perceive EAG licenses in the two bands
as relatively substitutable and will implicitly place values on these
licenses with reference to the price and availability of all
others.[^24] Leap also contends that combining Auction Nos. 31 and 44
would produce an unmanageable situation in a package bidding environment
and thus, recommends that the MSA/RSA licenses be auctioned separately,
without package bidding features.[^25]

#### Comments Opposing Including the 24 Lower 700 MHz Band EAG Licenses in Auction No. 31

In its comments, Paxson opposes grouping the 24 EAG licenses in Auction
No. 44 with the 12 EAG licenses in Auction No. 31.[^26] Paxson asserts
that there is no chance of clearing the Lower 700 MHz band for many
years to come, and thus, it recommends that the EAG licenses in Auction
No. 31 be kept separate from the EAG licenses in Auction No. 44 to
assure that a delay in conducting Auction No. 44 does not result in a
delay in the start of Auction No. 31.[^27] Paxson also argues there are
no real administrative efficiencies to be achieved by linking Auction
Nos. 31 and 44, because all of the prospective bidders have been
planning their software and tracking tools based on current auction
inventory.[^28] Spectrum Exchange/Allen agrees that all 758 Lower 700
MHz band licenses should be sold together, adding that the Bureau should
use package bidding provisions similar to those employed for Auction No.
31.[^29] The Spectrum Clearing Alliance also supports Paxson's position
that the Bureau should not risk delaying the Upper 700 MHz auction by
linking it with the Lower 700 MHz auction in any regard.[^30] Finally,
Entravision agrees with Paxson that the Bureau's proposal to group the
EAG licenses from both the Upper 700 MHz and Lower 700 MHz auctions
would delay the Upper 700 MHz auction because postponement of the Lower
700 MHz auction is likely due to the heavily encumbered status of the
Lower 700 MHz spectrum.[^31]

#### Comments Advocating Including All Lower and Upper 700 MHz Band Licenses in a Single Auction

One commenter, US Cellular, recommends that the Bureau include in a
single auction all 12 licenses in the Upper 700 MHz band and 758
licenses in the Lower 700 MHz band.[^32] According to US Cellular, a
consolidation of the auction of the 700 MHz spectrum will help avoid the
"effects of the head-start advantage" of licensing EAGs before licensing
MSAs/RSAs in the 700 MHz band.[^33]

#### Discussion

After careful review of the comments, the Bureau concludes that it will
not include the 24 Lower 700 MHz EAG licenses in Auction No. 31 with the
Upper 700 MHz EAG licenses. The Bureau is not persuaded that grouping
the MSA/RSA licenses in an auction with the Lower 700 MHz EAG licenses
will create a disadvantage to small businesses and rural telephone
companies. We do not agree with those commenters that believe that
separating the 734 MSAs/RSAs from the 24 EAGs would provide greater
opportunities for small businesses and rural telephone companies.[^34]
Larger entities that do not qualify for bidding credits would continue
to be eligible to participate in an auction of the 734 MSA/RSA licenses.
In the *Lower 700 MHz Report and Order*, the Commission adopted
MSAs/RSAs as the licensing area for a portion of the Lower 700 MHz band
to promote opportunities for a wide variety of applicants, including
small and rural wireless providers, to obtain spectrum.[^35] However,
the Commission did not decide to restrict eligibility for these licenses
to small and rural service providers.[^36] Because the Commission
adopted licensing rules for the Lower 700 MHz band that provide for open
eligibility, the Bureau declines to consider license groupings for the
purpose of discouraging participation in the auction by any particular
class of bidders. We disagree with those commenters who suggest that
grouping the MSA/RSA licenses with the EAG licenses in the Lower 700 MHz
band may discourage many smaller carriers from participating in Auction
No. 44. The Commission has sought to provide small businesses with an
opportunity to successfully compete against larger, well-financed
bidders by defining three tiers of small-businesses that are eligible
for bidding credits. As the Commission noted in the *Lower 700 MHz
Report & Order*, the use of a third small entity definition may result
in the dissemination of licenses among an even wider range of small
business entities, consistent with its obligations under Section
309(j)(3)(B) of the Act.[^37]

## Rules and Disclaimers

### Relevant Authority

Prospective bidders must familiarize themselves thoroughly with the
Commission's rules relating to the Upper 700 MHz bands contained in
Title 47, Part 27 of the Code of Federal Regulations, and those relating
to application and auction procedures, contained in Title 47, Part 1 of
the Code of Federal Regulations.

Prospective bidders also must be thoroughly familiar with the
procedures, terms and conditions (collectively, \"Terms\") contained in
the Commission's rulemakings regarding the Upper 700 MHz bands,
including the *Reallocation and Reconsideration*;[^38] *Upper 700 MHz
First Report and Order*; the *Upper 700 MHz Memorandum Opinion and Order
and Further Notice of Proposed Rulemaking*; the *Upper 700 MHz Third
Report and Order*; and the *Upper 700 MHz Third Report and Order
Reconsideration*;[^39] as well as the Commission's rulemakings regarding
competitive bidding, such as the *Part 1 Fifth Report and Order*.[^40]

The terms contained in the Commission's rules, relevant orders, and
public notices are not negotiable. The Commission may amend or
supplement the information contained in our public notices at any time,
and will issue public notices to convey any new or supplemental
information to bidders. It is the responsibility of all prospective
bidders to remain current with all Commission rules and with all public
notices pertaining to this auction. Copies of most Commission documents,
including public notices, can be retrieved from the FCC Auctions
Internet site at [http://wireless.fcc.gov/auctions]{.underline}.
Additionally, documents are available for public inspection and copying
during regular business hours at the FCC Reference Information Center,
Portals II, 445 12th Street, SW, Room CY-A257, Washington, DC, 20554 or
may be purchased from the Commission's duplicating contractor, Qualex
International, Portals II, 445 12th Street, SW, Room CY-B402,
Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898, or
via e-mail qualexint@aol.com. When ordering documents from Qualex,
please provide the appropriate FCC number (for example, FCC 00-5 for the
*700 MHz First Report & Order*).

### Prohibition of Collusion

To ensure the competitiveness of the auction process, the Commission's
rules prohibit applicants for the same geographic license area from
communicating with each other during the auction about bids, bidding
strategies, or settlements.[^41] This prohibition begins at the
short-form application filing deadline and ends at the down payment
deadline after the auction. Bidders competing for licenses in the same
geographic license areas are encouraged not to use the same individual
as an authorized bidder. A violation of the anti‑collusion rule could
occur if an individual acts as the authorized bidder for two or more
competing applicants, and conveys information concerning the substance
of bids or bidding strategies between the bidders he or she is
authorized to represent in the auction. A violation could similarly
occur if the authorized bidders are different individuals employed by
the same organization (*e.g.*, law firm or consulting firm). In such a
case, at a minimum, applicants should certify on their applications that
precautionary steps have been taken to prevent communication between
authorized bidders and that applicants and their bidding agents will
comply with the anti‑collusion rule.[^42]

However, the Bureau cautions that merely filing a certifying statement
as part of an application will not outweigh specific evidence that
collusive behavior has occurred, nor will it preclude the initiation of
an investigation when warranted.[^43] In Auction No. 31, for example,
the rule would apply to any applicants bidding for the same 700 MHz Band
EAG. Therefore, applicants that apply to bid for "all markets" are
precluded from communicating with all other applicants until after the
down payment deadline. However, applicants may enter into bidding
agreements *before* filing their FCC Form 175, as long as they disclose
the existence of the agreement(s) in their Form 175.[^44] If parties
agree in principle on all material terms prior to the short-form filing
deadline, those parties must be identified on the short-form application
pursuant to Section 1.2105(c), even if the agreement has not been
reduced to writing. If the parties have not agreed in principle by the
filing deadline, an applicant would not include the names of those
parties on its application, and may not continue negotiations with other
applicants for licenses covering the same geographic areas.[^45] By
signing their FCC Form 175 short-form applications, applicants are
certifying their compliance with Section 1.2105(c).

In addition, Section 1.65 of the Commission's rules requires an
applicant to *maintain* the accuracy and completeness of information
furnished in its pending application and to notify the Commission within
30 days of any substantial change that may be of decisional significance
to that application.[^46] Thus, Sections 1.65 and 1.2105 require an
auction applicant to notify the Commission of any violation of the
anti-collusion rules upon learning of such violation. Bidders therefore
are required to make such notification to the Commission immediately
upon discovery.[^47]

A summary listing of documents from the Commission and the Bureau
addressing the application of the anti-collusion rules may be found in
Attachment I.

### Interference Protection of Television Services

Licensees operating on the spectrum associated with Channels 60, 61, 62,
65, 66, and 67 must comply with the co-channel and adjacent channel
provisions of Section 27.60 of our Rules.[^48] For example, a licensee
operating on any portion of the 10 megahertz block (i.e., between 752
MHz and 762 MHz) that coincides with Channel 61 will have to provide
co-channel protection to television stations operating on Channel 61 and
adjacent channel protection to television stations operating on Channels
60 and 62 (including digital television ("DTV") stations); and any
licensee operating on any portion of the 10 megahertz block that
coincides with Channel 62 will have to provide co-channel protection to
television stations operating on Channel 62 and adjacent channel
protection to television stations operating on Channels 61 and 63.
Licensees operating on spectrum between 747 MHz and 752 MHz (Channel
60), in addition to providing co-channel protection to Channel 60
television stations, will have to provide adjacent channel protection to
television stations operating on both Channel 61 and 59.[^49] New Upper
700 MHz licensees will also have to comply with any additional technical
requirements or interference protection requirements that may be adopted
in the future as a result of pending and future rulemaking
proceedings.[^50] These interference obligations will remain in force
until the end of the DTV transition period, at which time analog TV and
DTV broadcasters will be required to vacate both the Upper and Lower 700
MHz bands.

#### Negotiations with Incumbent Broadcast Licensees 

The Commission has established a policy of facilitating voluntary
clearing of the 700 MHz bands to allow for the introduction of new
wireless services and to promote the transition of incumbent analog
television licensees to DTV service. The Commission established its
policies on voluntary clearing for the Upper 700 MHz Band in a series of
orders. The Commission initially stated that it would "consider specific
regulatory requests needed to implement voluntary agreements" between
incumbent broadcasters and new licensees to clear the Upper 700 MHz Band
early, if consistent with public interest.[^51] Subsequently, the
Commission established a rebuttable presumption favoring the grant of
requests that would both result in certain specific benefits and avoid
specific detriments.[^52] These policies were later extended to
"three-way" band clearing arrangements, in which non-Channel 59-69
broadcasters were also potential parties.[^53] Subsequently, the
Commission provided certain additional flexibility to facilitate
voluntary agreements for early clearing and granted a request for relief
from two specific DTV-related requirements.[^54] In considering such
requests, the Commission will consider whether grant of the request
would result in public interest benefits, such as making new or expanded
public safety or other wireless services available to consumers or
deploying wireless service to rural or other underserved
communities.[^55] The Commission intends to weigh these benefits against
any likely public interest costs, such as the loss of any of the four
stations in the designated market area with the largest audience share,
the loss of the sole service licensed to the local community, the loss
of a community's sole service on a channel reserved for noncommercial
educational broadcast service, or a negative effect on the pace of the
DTV transition in the market.[^56] For example, the Commission would
consider the availability of the licensee's former analog programming
within the service area, through simulcast of the programming on the
licensee's DTV channel or distribution of the programming on cable or
DBS, or the availability of similar broadcast services within the
service area (e.g., whether the lost service is the only network
service, the only source for local service, or the only source for
otherwise unique broadcast service).

#### Canadian and Mexican Border Regions

There are currently separate agreements with Canada and Mexico covering
TV broadcast use of the UHF 470-806 MHz band. Such agreements do not
reflect the additional use or services adopted in the *700 MHz First
Report & Order* for 746-764 and 776-794 MHz bands.[^57] While the
Commission staff has been involved in discussions with both countries
regarding coordination of interference criteria for the use of these
bands in the border areas for the additional services, agreements have
yet to be reached.[^58] Therefore, until such agreements have been
finalized, the Commission found it necessary to adopt certain interim
requirements for licenses in these bands along the Canada and Mexico
borders.[^59] Accordingly, licenses issued for these bands within 120 km
of the borders were made subject to whatever future agreements the
United States developed with those two countries. Because the existing
agreements for the protection of TV stations in those countries are
still in effect and must be recognized until they are replaced or
modified to reflect the new uses, the Commission decided that licenses
in the border areas will be granted on the condition that harmful
interference may not be caused to, but must accept interference from,
UHF TV transmitters in Canada and Mexico.[^60] Furthermore, the
Commission pointed out that modifications may be necessary to comply
with whatever provisions are ultimately specified in future agreements
with Canada and Mexico regarding the use of these bands.[^61]

### Due Diligence

Potential bidders are reminded that there are a number of incumbent
broadcast television licensees already licensed and operating in the
746-764 and 776-794 MHz bands (television Channels 60-62 and 65-67) that
will be subject to the upcoming auction. As discussed above in greater
detail, the Commission made clear that geographic area licensees
operating on the spectrum associated with Channels 60, 61, 62, 65, 66,
and 67 must comply with the co-channel and adjacent channel provision of
Section 27.60 of the Commission's rules.[^62] In addition, geographic
area licensees operating fixed stations in the 746-764 MHz band must
comply with the relevant provisions for "base stations" in Sections
27.60 and 90.309 of the Commission's rules; and licensees operating
fixed stations in the 776-794 MHz band must comply with the relevant
provisions for "control stations" in those sections of the rules.[^63]

These limitations may restrict the ability of such geographic licensees
to use certain portions of the electromagnetic spectrum or provide
service to certain regions in their geographic license areas. To aid
potential bidders, the Bureau will shortly issue a Due Diligence
Announcement listing incumbent licensees operating in these bands. The
Commission makes no representations or guarantees that the matters
listed in this Due Diligence Announcement are the only pending matters
that could affect spectrum availability in these services.

Potential bidders are solely responsible for identifying associated
risks and for investigating and evaluating the degree to which such
matters may affect their ability to bid on, otherwise acquire, or make
use of licenses available in Auction No. 31.

Potential bidders also should be aware that certain applications
(including those for modification), petitions for rulemaking, requests
for special temporary authority (\"STA\"), waiver requests, petitions to
deny, petitions for reconsideration, and applications for review may be
pending before the Commission and relate to particular applicants or
incumbent licensees. In addition, certain decisions reached in this
proceeding may be subject to judicial appeal and may be the subject of
additional reconsideration or appeal. We note that resolution of these
matters could have an impact on the availability of spectrum in Auction
No. 31. In addition, although the Commission will continue to act on
pending applications, requests and petitions, some of these matters may
not be resolved by the time of the auction. To aid potential bidders,
the Bureau will issue shortly a Due Diligence Announcement listing
matters pending before the Commission that relate to licenses or
applications in these services. The Commission makes no representations
or guarantees that the listed matters are the only pending matters that
could affect spectrum availability in these services.

In addition, potential bidders may research the licensing database for
the Mass Media Bureau on the Internet in order to determine which
frequencies are already licensed to incumbent licensees. The Commission
makes no representations or guarantees regarding the accuracy or
completeness of information in its databases or any third party
databases, including, for example, court docketing systems. Furthermore,
the Commission makes no representations or guarantees regarding the
accuracy or completeness of information that has been provided by
incumbent licensees and incorporated into the database. **Potential
bidders are strongly encouraged to physically inspect any sites located
in, or near, the EAG, MSA, or RSA for which they plan to bid.**

Licensing records for the Mass Media Bureau are contained in the Mass
Media Bureau's Consolidated Data Base System (CDBS) and may be
researched on the Internet at
[http://wireless.fcc.gov/](http://www.fcc.gov/wtb/uls)[mmb]{.underline}.
Potential bidders may query the database online and download a copy of
their search results if desired. Detailed instructions on using Search
for Station Information, Search for Ownership Report Information and
Search for Application Information and downloading query results are
available online by selecting the CDBS Public Access (main) button at
the bottom of the Electronic Filing and Public Access list section. The
database searches return either station or application data. The
application search provides an application link that displays the
complete electronically filed application in application format. An
AL/TC search under the application search link permits searching for
Assignment of License/Transfer of Control groups using the AL/TC group
lead application. For further details, click on the
[Help](../help_pa.htm) file.

Potential bidders should direct questions regarding the search
capabilities of CDBS to the Mass Media Bureau help line at (202)
418-2662, or via e-mail at <mmbinfo@fcc.gov>.

### Bidder Alerts 

All applicants must certify on their FCC Form 175 applications under
penalty of perjury that they are legally, technically, financially and
otherwise qualified to hold a license, and not in default on any payment
for Commission licenses (including down payments) or delinquent on any
non-tax debt owed to any Federal agency.[^64] Prospective bidders are
reminded that submission of a false certification to the Commission is a
serious matter that may result in severe penalties, including monetary
forfeitures, license revocations, exclusion from participation in future
auctions, and/or criminal prosecution.

The FCC makes no representations or warranties about the use of this
spectrum for particular services. Applicants should be aware that an FCC
auction represents an opportunity to become an FCC licensee in this
service, subject to certain conditions and regulations. An FCC auction
does not constitute an endorsement by the FCC of any particular
services, technologies or products, nor does an FCC license constitute a
guarantee of business success. Applicants and interested parties should
perform their own due diligence before proceeding, as they would with
any new business venture.

As is the case with many business investment opportunities, some
unscrupulous entrepreneurs may attempt to use Auction No. 31 to deceive
and defraud unsuspecting investors. Common warning signals of fraud
include the following:

-   The first contact is a "cold call" from a telemarketer, or is made
    in response to an inquiry prompted by a radio or television
    infomercial.

-   The offering materials used to invest in the venture appear to be
    targeted at IRA funds, for example, by including all documents and
    papers needed for the transfer of funds maintained in IRA accounts.

-   The amount of investment is less than \$25,000.

-   The sales representative makes verbal representations that: (a) the
    Internal Revenue Service ("IRS"), Federal Trade Commission ("FTC"),
    Securities and Exchange Commission ("SEC"), FCC, or other government
    agency has approved the investment; (b) the investment is not
    subject to state or federal securities laws; or (c) the investment
    will yield unrealistically high short-term profits. In addition, the
    offering materials often include copies of actual FCC releases, or
    quotes from FCC personnel, giving the appearance of FCC knowledge or
    approval of the solicitation.

Information about deceptive telemarketing investment schemes is
available from the FTC at (202) 326-2222 and from the SEC at (202)
942-7040. Complaints about specific deceptive telemarketing investment
schemes should be directed to the FTC, the SEC, or the National Fraud
Information Center at (800) 876-7060. Consumers who have concerns about
specific proposals regarding Auction No. 31 may also call the FCC
Consumer Center at (888) CALL-FCC ((888) 225-5322).

### National Environmental Policy Act ("NEPA") Requirements

Licensees must comply with the Commission's rules regarding the National
Environmental Policy Act (NEPA).[^65] The construction of a wireless
antenna facility is a federal action and the licensee must comply with
the Commission's NEPA rules for each such facility.[^66] The
Commission's NEPA rules require, among other things, that the licensee
consult with expert agencies having NEPA responsibilities, including the
U.S. Fish and Wildlife Service, the State Historic Preservation Office,
the Army Corp of Engineers and the Federal Emergency Management Agency
(through the local authority with jurisdiction over floodplains). The
licensee must prepare environmental assessments for facilities that may
have a significant impact in or on wilderness areas, wildlife preserves,
threatened or endangered species or designated critical habitats,
historical or archaeological sites, Indian religious sites, floodplains,
and surface features. The licensee must also prepare environmental
assessments for facilities that include high intensity white lights in
residential neighborhoods or excessive radio frequency emission.

## Auction Specifics

### Auction Date

The auction will begin on Wednesday, June 19, 2002.[^67] The initial
schedule for bidding will be announced by public notice at least one
week before the start of the auction. Unless otherwise announced,
bidding on all licenses and packages will be conducted on each business
day until bidding has stopped on all licenses and packages.

### Auction Title

Auction No. 31 -- Upper 700 MHz Band

### Bidding Methodology

The bidding methodology for Auction No. 31 will be simultaneous multiple
round with package bidding (SMR-PB).[^68] The Commission will conduct
this auction over the Internet. Telephonic bidding will also be
available. As a contingency, the FCC Wide Area Network, which requires
access to a 900 number telephone service, will be available as well for
a fee of \$2.30 per minute. Qualified bidders are permitted to bid
telephonically or electronically.

### Pre-Auction Dates and Deadlines

Auction Seminar April 30, 2002

Short-Form Application (FCC FORM 175) May 8, 2002; 6:00 p.m. ET

Upfront Payments (via wire transfer) May 28, 2002; 6:00 p.m. ET

Mock Auction June 13-14, 2002

Auction Begins June 19, 2002

### Requirements For Participation

Those wishing to participate in the auction must:

-   Submit a short-form application (FCC Form 175) electronically by
    6:00 p.m. ET, May 8, 2002.

-   Submit a sufficient upfront payment and an FCC Remittance Advice
    Form (FCC Form 159) by 6:00 p.m. ET, May 28, 2002.

-   Comply with all provisions outlined in this public notice.

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

### General Contact Information

+-----------------------------------+----------------------------------+
| GENERAL AUCTION INFORMATION       | FCC Auctions Hotline             |
+-----------------------------------+----------------------------------+
| General Auction Questions         | \(888\) 225-5322, Press Option   |
|                                   | #2                               |
+-----------------------------------+----------------------------------+
| Seminar Registration              | or direct (717) 338-2888         |
+-----------------------------------+----------------------------------+
|                                   | Hours of service: 8 a.m. -- 5:30 |
|                                   | p.m. ET                          |
+-----------------------------------+----------------------------------+
| AUCTION LEGAL INFORMATION         | Auctions and Industry Analysis   |
|                                   | Division                         |
+-----------------------------------+----------------------------------+
| Auction Rules, Policies,          | Legal Branch (202) 418-0660      |
| Regulations                       |                                  |
+-----------------------------------+----------------------------------+
| LICENSING INFORMATION             | Commercial Wireless Division     |
+-----------------------------------+----------------------------------+
| Rules, Policies, Regulations      | \(202\) 418-0620                 |
|                                   |                                  |
| Licensing Issues                  |                                  |
|                                   |                                  |
| Due Diligence                     |                                  |
|                                   |                                  |
| Incumbency Issues                 |                                  |
+-----------------------------------+----------------------------------+
| TECHNICAL SUPPORT                 | FCC Auctions Technical Support   |
|                                   | Hotline                          |
+-----------------------------------+----------------------------------+
| Electronic Filing                 | \(202\) 414-1250 (Voice),        |
+-----------------------------------+----------------------------------+
| Automated Auction System          | \(202\) 414-1255 (TTY)           |
|                                   |                                  |
|                                   | Hours of service: Monday through |
|                                   | Friday 7 a.m. to 10:00 p.m. ET,  |
|                                   | Saturday, 8:00 a.m. to 7:00      |
|                                   | p.m., Sunday, 12:00 noon to 6:00 |
|                                   | p.m.                             |
+-----------------------------------+----------------------------------+
| PAYMENT INFORMATION               | FCC Auctions Accounting Branch   |
+-----------------------------------+----------------------------------+
| Wire Transfers                    | \(202\) 418-1995                 |
+-----------------------------------+----------------------------------+
| Refunds                           | \(202\) 418-2843 (Fax)           |
+-----------------------------------+----------------------------------+
| TELEPHONIC BIDDING                | Will be furnished only to        |
|                                   | qualified bidders                |
+-----------------------------------+----------------------------------+
| FCC COPY CONTRACTOR               | Qualex International             |
+-----------------------------------+----------------------------------+
| Additional Copies of              | Portals II, 445 12^th^ Street,   |
|                                   | SW, Room CY-B402                 |
+-----------------------------------+----------------------------------+
| Commission Documents              | Washington, DC 20554             |
|                                   |                                  |
|                                   | \(202\) 863-2893                 |
|                                   |                                  |
|                                   | \(202\) 863-2898 (Fax)           |
|                                   |                                  |
|                                   | qualexint@aol.com (E-mail)       |
+-----------------------------------+----------------------------------+
| PRESS INFORMATION                 | Meribeth McCarrick (202)         |
|                                   | 418-0654                         |
+-----------------------------------+----------------------------------+
| FCC FORMS                         | \(800\) 418-3676 (outside        |
|                                   | Washington, DC)                  |
|                                   |                                  |
|                                   | \(202\) 418-3676 (in the         |
|                                   | Washington Area)                 |
|                                   |                                  |
|                                   | <h                               |
|                                   | ttp://www.fcc.gov/formpage>.html |
+-----------------------------------+----------------------------------+
| FCC INTERNET SITES                | [http://w                        |
|                                   | ww.fcc.gov](http://www.fcc.gov/) |
|                                   |                                  |
|                                   | [ht                              |
|                                   | tp://wireless.fcc.gov/auctions]( |
|                                   | http://www.fcc.gov/wtb/auctions) |
|                                   |                                  |
|                                   | http://wireless.fcc.gov/uls      |
+-----------------------------------+----------------------------------+

# SHORT-FORM (FCC FORM 175) APPLICATION REQUIREMENTS

Guidelines for completion of the short-form (FCC Form 175) are set forth
in Attachment E to this public notice. The short-form application seeks
the applicant's name and address, legal classification, status, small or
very small business bidding credit eligibility, identification of the
license(s) sought, the authorized bidders and contact persons. All
applicants must certify on their FCC Form 175 applications under penalty
of perjury that they are legally, technically, financially and otherwise
qualified to hold a license and, as discussed below in Section II.D
(Provisions Regarding Defaulters and Former Defaulters), that they are
not in default on any payment for Commission licenses (including down
payments) or delinquent on any non-tax debt owed to any Federal agency.

## Ownership Disclosure Requirements (FCC Form 175 Exhibit A)

All applicants must comply with the uniform Part 1 ownership disclosure
standards and provide information required by Sections 1.2105 and 1.2112
of the Commission's rules. Specifically, in completing FCC Form 175,
applicants will be required to file an "Exhibit A" providing a full and
complete statement of the ownership of the bidding entity. The ownership
disclosure standards for the short-form are set forth in Section 1.2112
of the Commission's rules.[^69]

## Consortia And Joint Bidding Arrangements (FCC Form 175 Exhibit B)

Applicants will be required to identify on their short-form applications
any parties with whom they have entered into any consortium
arrangements, joint ventures, partnerships or other agreements or
understandings which relate in any way to the licenses being auctioned,
including any agreements relating to post-auction market structure.[^70]
Applicants will also be required to certify on their short-form
applications that they have not entered into any explicit or implicit
agreements, arrangements or understandings of any kind with any parties,
other than those identified, regarding the amount of their bids, bidding
strategies, or the particular licenses on which they will or will not
bid.[^71] As discussed above, if an applicant has had discussions, but
has not reached a joint bidding agreement by the short-form deadline, it
would not include the names of parties to the discussions on its
applications and may not continue discussions with applicants for the
same geographic license area(s) after the deadline.[^72] Where
applicants have entered into consortia or joint bidding arrangements,
applicants must submit an "Exhibit B" to the FCC Form 175.

A party holding a non-controlling, attributable interest in one
applicant will be permitted to acquire an ownership interest in, form a
consortium with, or enter into a joint bidding arrangement with other
applicants for licenses in the same geographic license area provided
that (i) the attributable interest holder certifies that it has not and
will not communicate with any party concerning the bids or bidding
strategies of more than one of the applicants in which it holds an
attributable interest, or with which it has formed a consortium or
entered into a joint bidding arrangement; and (ii) the arrangements do
not result in a change in control of any of the applicants.[^73] While
the anti-collusion rules do not prohibit non-auction related business
negotiations among auction applicants, bidders are reminded that certain
discussions or exchanges could touch upon impermissible subject matters
because they may convey pricing information and bidding strategies.

## Eligibility

### Bidding Credit Eligibility (FCC Form 175 Exhibit C)

Bidding credits are available to small and very small businesses, or
consortia, thereof, as defined in 47 C.F.R. § 27.502. A bidding credit
represents the amount by which a bidder's winning bids are
discounted.[^74] The size of a 700 MHz band bidding credit depends on
the average of the aggregated annual gross revenues for each of the
preceding three years of the bidder, its affiliates, its controlling
interests, and the affiliates of its controlling interests:

-   A bidder with attributed average annual gross revenues of not more
    than \$40 million for the preceding three years receives a 15
    percent discount on its winning bids for 700 MHz band licenses
    ("small business");[^75]

-   A bidder with attributed average annual gross revenues of not more
    than \$15 million for the preceding three years receives a 25
    percent discount on its winning bids for 700 MHz band licenses
    ("very small business").[^76]

Bidding credits are not cumulative; qualifying applicants receive either
the 15 percent or the 25 percent bidding credit, but not both.

### Tribal Land Bidding Credit

To encourage the growth of wireless services in federally recognized
tribal lands the Commission has implemented a tribal land bidding
credit. *See* Section V.D. of this Public Notice.

### Applicability of Part 1 Attribution Rules

***Controlling interest standard.*** On August 14, 2000, the Commission
released the *Part 1 Fifth Report and Order*, in which the Commission,
*inter alia*, adopted a "controlling interest" standard for attributing
to auction applicants the gross revenues of their investors and
affiliates in determining small business eligibility for future
auctions.[^77] The Commission observed that the rule modifications
adopted in the various Part 1 orders would result in discrepancies
and/or redundancies between certain of the new Part 1 rules and existing
service-specific rules, and the Commission delegated to the Bureau the
authority to make conforming edits to the Code of Federal Regulations
(CFR) consistent with the rules adopted in the Part 1 proceeding.[^78]
Part 1 rules that superseded inconsistent service-specific rules will
control in Auction No. 31.[^79] *Accordingly, the "controlling interest"
standard as set forth in the Part 1 rules will be in effect for Auction
No. 31, even if conforming edits to the CFR are not made prior to the
auction.*

***Control.*** The term "control" includes both *de facto* and *de jure*
control of the applicant. Typically, *ownership of at least 50.1 percent
of an entity's voting stock evidences de jure control*. *De facto*
control is determined on a case-by-case basis.[^80] The following are
some common indicia of *de facto* control:

-   the entity constitutes or appoints more than 50 percent of the board
    of directors or management committee;

-   the entity has authority to appoint, promote, demote, and fire
    senior executives that control the day-to-day activities of the
    licensee; or

-   the entity plays an integral role in management decisions.

***Attribution for small and very small business eligibility.*** In
determining which entities qualify as small or very small businesses,
the Commission will consider the gross revenues of the applicant, its
affiliates, its controlling interests, and the affiliates of its
controlling interests. The Commission does not impose specific equity
requirements on controlling interest holders. Once the principals or
entities with a controlling interest are determined, only the revenues
of those principals or entities, the affiliates of those principals or
entities, the applicant and its affiliates, will be counted in
determining small business eligibility.

A consortium of small or very small businesses is a "conglomerate
organization formed as a joint venture between or among mutually
independent business firms," each of which *individually* must satisfy
the definition of small or very small business in Sections 1.2110(f),
27.502. Thus, each consortium member must disclose its gross revenues
along with those of its affiliates, its controlling interests, and the
affiliates of its controlling interests. We note that although the gross
revenues of the consortium members will not be aggregated for purposes
of determining eligibility for small or very small business credits,
this information must be provided to ensure that each individual
consortium member qualifies for any bidding credit awarded to the
consortium.

### Supporting Documentation

Applicants should note that they will be required to file supporting
documentation to their FCC Form 175 short-form applications to establish
that they satisfy the eligibility requirements to qualify as small or
very small businesses (or consortia of small or very small businesses)
for this auction.[^81]

Applicants should further note that submission of an FCC Form 175
application constitutes a representation by the certifying official that
he or she is an authorized representative of the applicant, has read the
form's instructions and certifications, and that the contents of the
application and its attachments are true and correct. Submission of a
false certification to the Commission may result in penalties, including
monetary forfeitures, license forfeitures, ineligibility to participate
in future auctions, and/or criminal prosecution.

***Small or very small business eligibility (Exhibit C).*** Entities
applying to bid as small or very small businesses (or consortia of small
or very small businesses) will be required to disclose on Exhibit C to
their FCC Form 175 short-form applications, *separately and in the
aggregate*, the gross revenues for the preceding three years of each of
the following: (1) the applicant, (2) its affiliates, (3) its
controlling interests, and (4) the affiliates of its controlling
interests. **Certification that the average annual gross revenues for
the preceding three years do not exceed the applicable limit is not
sufficient. A statement of the total gross revenues for the preceding
three years is also insufficient. The applicant must provide separately
for itself, its affiliates, its controlling interests, and the
affiliates of its controlling interests, a schedule of gross revenues
for *each* of the preceding three years, as well as a statement of total
average gross revenues for the three-year period.** If the applicant is
applying as a consortium of small or very small businesses, this
information must be provided for each consortium member.

## Provisions Regarding Defaulters and Former Defaulters (FCC Form 175 Exhibit D)

Each applicant must certify on its FCC Form 175 application that it is
not in default on any Commission licenses and that it is not delinquent
on any non-tax debt owed to any Federal agency.[^82] In addition, each
applicant must attach to its FCC Form 175 application a statement made
under penalty of perjury indicating whether or not the applicant, its
affiliates, its controlling interests, or the affiliates of its
controlling interest have ever been in default on any Commission
licenses or have ever been delinquent on any non-tax debt owed to any
Federal agency. The applicant must provide such information for itself,
its affiliates, its controlling interests, and the affiliates of its
controlling interests, as defined by Section 1.2110 of the Commission's
rules (as amended in the *Part 1 Fifth Report and Order*).[^83]
**Applicants must include this statement as Exhibit D of the FCC Form
175.** Prospective bidders are reminded that the statement must be made
under penalty of perjury and, further, submission of a false
certification to the Commission is a serious matter that may result in
severe penalties, including monetary forfeitures, license revocations,
exclusion from participation in future auctions, and/or criminal
prosecution.

"Former defaulters" --- *i.e.*, applicants, including their attributable
interest holders, that in the past have defaulted on any Commission
licenses or been delinquent on any non-tax debt owed to any Federal
agency, but that have since remedied all such defaults and cured all of
their outstanding non-tax delinquencies --- are eligible to bid in
Auction No. 31, provided that they are otherwise qualified. However, as
discussed *infra* in Section III.D.3, former defaulters are required to
pay upfront payments that are fifty percent more than the normal upfront
payment amounts.[^84]

## Installment Payments

Installment payment plans will not be available in Auction No. 31.

## Other Information (FCC Form 175 Exhibits E and F)

Applicants owned by minorities or women, as defined in 47 C.F.R. §
1.2110(c)(2), may attach an exhibit (Exhibit E) regarding this status.
This applicant status information is collected for statistical purposes
only and assists the Commission in monitoring the participation of
"designated entities" in its auctions. Applicants wishing to submit
additional information may do so on Exhibit F (Miscellaneous
Information) to the FCC Form 175.

## Minor Modifications to Short-Form Applications (FCC Form 175)

After the short-form filing deadline (May 8, 2002), applicants may make
only minor changes to their FCC Form 175 applications. Applicants will
not be permitted to make major modifications to their applications
(*e.g*., change their license selections or proposed service areas,
change the certifying official or change control of the applicant or
change bidding credits). *See* 47 C.F.R. § 1.2105. Permissible minor
changes include, for example, deletion and addition of authorized
bidders (to a maximum of three) and revision of exhibits. Applicants
should make these modifications to their FCC Form 175 electronically and
submit a letter, briefly summarizing the changes, by electronic mail to
the attention of Margaret Wiener, Chief, Auctions and Industry Analysis
Division, at the following address: auction31@fcc.gov. The electronic
mail summarizing the changes must include a subject or caption referring
to Auction No. 31. The Bureau requests that parties format any
attachments to electronic mail as Adobe® Acrobat® (pdf) or Microsoft®
Word documents.

**A separate copy of the letter should be faxed to the attention of
Kathryn Garland at (717) 338-2850.** Questions about other changes
should be directed to Howard Davenport of the Auctions and Industry
Analysis Division at (202) 418-0660.

## Maintaining Current Information in Short-Form Applications (FCC Form 175)

Applicants have an obligation under 47 C.F.R. §1.65, to maintain the
completeness and accuracy of information in their short-form
applications. Amendments reporting substantial changes of possible
decisional significance in information contained in FCC Form 175
applications, as defined by 47 C.F.R. § 1.2105(b)(2), will not be
accepted and may in some instances result in the dismissal of the FCC
Form 175 application.

# PRE-AUCTION PROCEDURES

## Auction Seminar

On Tuesday, April 30, 2002, the FCC will sponsor a free seminar for
Auction No. 31 at the Federal Communications Commission, located at 445
12^th^ Street, SW, Washington, DC. The seminar will provide attendees
with information about pre-auction procedures, conduct of the auction,
the FCC Automated Auction System, and the 700 MHz band service and
auction rules. The seminar will also provide an opportunity for
prospective bidders to ask questions of FCC staff.

To register, complete the registration form attached hereto as
Attachment C and submit it by Friday, April, 26, 2002. Registrations are
accepted on a first-come, first-served basis.

## Short-Form Application (FCC Form 175) --- Due May 8, 2002

In order to be eligible to bid in this auction, applicants must first
submit an FCC Form 175 application. This application must be submitted
electronically and received at the Commission no later than 6:00 p.m. ET
on May 8, 2002. Late applications will not be accepted.

There is no application fee required when filing an FCC Form 175.
However, to be eligible to bid, an applicant must submit an upfront
payment. *See* Part III.D, *below*.

### Electronic Filing

Applicants must file their FCC Form 175 applications
electronically.[^85] Applications may generally be filed at any time
beginning at noon ET on April 30, 2002, until 6:00 p.m. ET on May 8,
2002. Applicants are strongly encouraged to file early and are
responsible for allowing adequate time for filing their applications.
Applicants may update or amend their electronic applications multiple
times until the filing deadline on May 8, 2002.

Applicants must press the "SUBMIT Application" button on the
"Submission" page of the electronic form to successfully submit their
FCC Form 175s. Any form that is not submitted will not be reviewed by
the FCC. Information about accessing the FCC Form 175 is included in
Attachment D. Technical support is available at (202) 414-1250 (voice)
or (202) 414-1255 (text telephone (TTY)); the hours of service Monday
through Friday, from 7:00 AM to 10:00 PM ET, Saturday, 8:00 AM to 7:00
PM ET, and Sunday, 12:00 noon to 6:00 PM ET. In order to provide better
service to the public, *all calls to the hotline are recorded.*

Applicants can also contact Technical Support via e-mail at
betacomm@fcc.gov.

### Completion of the FCC Form 175

Applicants should carefully review 47 C.F.R. § 1.2105, and must complete
all items on the FCC Form 175. Instructions for completing the FCC Form
175 are in Attachment E of this public notice. Applicants are encouraged
to begin preparing the required attachments for FCC Form 175 prior to
submitting the form. Attachments D and E to this public notice provide
information on the required attachments and appropriate formats.

### Electronic Review of FCC Form 175

The FCC Form 175 electronic review system may be used to locate and
print applicants' FCC Form 175 information. Applicants may also view
other applicants' completed FCC Form 175s after the filing deadline has
passed and the FCC has issued a public notice explaining the status of
the applications. For this reason, it is important that applicants do
not include their Taxpayer Identification Numbers (TINs) on any exhibits
to their FCC Form 175 applications. There is no fee for accessing this
system. *See* Attachment D for details on accessing the review system.

## Application Processing and Minor Corrections

After the deadline for filing the FCC Form 175 applications has passed,
the FCC will process all timely submitted applications to determine
which are acceptable for filing, and subsequently will issue a public
notice identifying: (1) those applications accepted for filing; (2)
those applications rejected; and (3) those applications which have minor
defects that may be corrected, and the deadline for filing such
corrected applications.

As described more fully in the Commission's rules, after the May 8,
2002, short-form filing deadline, applicants may make only minor
corrections to their FCC Form 175 applications. Applicants will not be
permitted to make major modifications to their applications (*e.g.*,
change their license selections, change the certifying official, change
control of the applicant, or change bidding credit eligibility).[^86]

## Upfront Payments --- Due May 28, 2002

In order to be eligible to bid in the auction, applicants must submit an
upfront payment accompanied by an FCC Remittance Advice Form (FCC Form
159). After completing the FCC Form 175, filers will have access to an
electronic version of the FCC Form 159 that can be printed and faxed to
Mellon Bank in Pittsburgh, PA. All upfront payments must be received at
Mellon Bank by 6:00 p.m. ET on May 28, 2002.

Please note that:

-   All payments must be made in U.S. dollars.

-   All payments must be made by wire transfer.

-   Upfront payments for Auction No. 31 go to a lockbox number different
    from the lockboxes used in previous FCC auctions, and different from
    the lockbox number to be used for post-auction payments.

-   Failure to deliver the upfront payment by the May 28, 2002, deadline
    will result in dismissal of the application and disqualification
    from participation in the auction.

### Making Auction Payments by Wire Transfer

**Wire transfer payments must be received by 6:00 p.m. ET on May 28,
2002.** To avoid untimely payments, applicants should discuss
arrangements (including bank closing schedules) with their banker
several days before they plan to make the wire transfer, and allow
sufficient time for the transfer to be initiated and completed before
the deadline. Applicants will need the following information:

> ABA Routing Number: 043000261

> Receiving Bank: Mellon Pittsburgh
>
> BENEFICIARY: FCC/Account \# 910-0171
>
> OBI Field: (Skip one space between each information item)

> "AUCTIONPAY"

> FCC REGISTRATION NUMBER (FRN): (same as FCC Form 159, block 11 and/or
> 21)
>
> PAYMENT TYPE CODE (same as FCC Form 159, block 24A: A31U)
>
> FCC CODE 1 (same as FCC Form 159, block 28A: "31")
>
> PAYER NAME (same as FCC Form 159, block 2)
>
> LOCKBOX NO. \# 358430

**NOTE:** The BNF and Lockbox number are specific to the upfront
payments for this auction; do not use BNF or Lockbox numbers from
previous auctions.

Applicants must fax a completed FCC Form 159 (Revised 2/00) to Mellon
Bank at (412) 209-6045 **at least one hour before** placing the order
for the wire transfer (but on the same business day). On the cover sheet
of the fax, write "Wire Transfer --- Auction Payment for Auction Event
No. 31." **Bidders should confirm receipt of their upfront payment at
Mellon Bank by contacting their sending financial institution.**

### FCC Form 159

A completed FCC Remittance Advice Form (FCC Form 159, Revised 2/00) must
be faxed to Mellon Bank in order to accompany each upfront payment.
Proper completion of FCC Form 159 (Revised 2/00) is critical to ensuring
correct credit of upfront payments. Detailed instructions for completion
of FCC Form 159 are included in Attachment F to this public notice. An
electronic version of the FCC Form 159 is available after filing the FCC
Form 175. The FCC Form 159 can be completed electronically, but must be
filed with Mellon Bank via facsimile.

### Amount of Upfront Payment

In the *Part 1 Order, Memorandum Opinion and Order, and Notice of
Proposed Rule Making,* the Commission delegated to the Bureau the
authority and discretion to determine appropriate upfront payment(s) for
each auction.[^87] In addition, in the *Part 1 Fifth Report and Order*,
the Commission ordered that "former defaulters," *i.e.*, applicants that
have ever been in default on any Commission license or have ever been
delinquent on any non-tax debt owed to any Federal agency, be required
to pay upfront payments fifty percent greater than non-"former
defaulters."[^88] For purposes of this calculation, the "applicant"
includes the applicant itself, its affiliates, its controlling
interests, and the affiliates of its controlling interests, as defined
by Section 1.2110 of the Commission's rules (as amended in the *Part 1
Fifth Report and Order*).[^89]

The amount of the upfront payment will determine the number of bidding
units on which a bidder can bid, where each license is associated with a
fixed number of bidding units. A bidder's maximum eligibility will be
established by translating its upfront payment to bidding units (one
dollar equals one bidding unit). In order to bid on a license, otherwise
qualified bidders who applied for that license on Form 175 must have an
eligibility level that meets or exceeds the number of bidding units
assigned to that license. At a minimum, therefore, an applicant's total
upfront payment must be enough to establish eligibility to bid on at
least one of the licenses applied for on Form 175, or else the applicant
will not be eligible to participate in the auction. An applicant does
not have to make an upfront payment to cover all licenses for which the
applicant has applied on Form 175. An applicant may, on its FCC Form
175, apply for every applicable license being offered, but its actual
bidding in any round will be limited by (1) its *initial eligibility*,
the bidding units reflected in its upfront payment; and (2) its *current
eligibility*, the bidding units reflected in its upfront payment less
the number of bidding units by which its eligibility has been reduced.
As an upper bound on the upfront payment, an applicant could add
together the upfront payments for all licenses on which it seeks to bid
(either individually or in a package) in any given round. **Bidders
should check their calculations carefully, as there is no provision for
increasing a bidder's maximum eligibility after the upfront payment
deadline.**

The specific upfront payments and bidding units for each license are set
forth in Attachment A of this Public Notice.

Former defaulters should calculate their upfront payment for all
licenses by multiplying the number of bidding units they wish to
purchase by 1.5. In order to calculate the number of bidding units to
assign to former defaulters, the Commission will divide the upfront
payment received by 1.5 and round the result up to the nearest bidding
unit.

  -------------------- --------------------------------- ------------ -------------- --------------
  **Example: Upper 700                                                               
  MHz Bands Upfront                                                                  
  Payments and Bidding                                                               
  Flexibility**                                                                      

                       **License or Package**            **Bidding    **Upfront      
                                                         Units**      Payment**      

                       Package A (WX‑EAG701‑C and        42,000,000   \$42,000,000   
                       WX‑EAG701‑D)                                                  

                       WX‑EAG702‑C                       14,000,000   \$14,000,000   

  If a bidder wishes                                                                 
  to bid on both                                                                     
  Package A and                                                                      
  license WX-EAG702-C                                                                
  in a round, it must                                                                
  have selected                                                                      
  WX-EAG701-C,                                                                       
  WX-EAG701-D, and                                                                   
  WX-EAG702-C on its                                                                 
  FCC Form 175 and                                                                   
  purchased at least                                                                 
  56,000,000 bidding                                                                 
  units (14,000,000 +                                                                
  28,000,000 +                                                                       
  14,000,000). If a                                                                  
  bidder only wishes                                                                 
  to bid on either                                                                   
  Package A or license                                                               
  WX-EAG702-C, but not                                                               
  both, purchasing                                                                   
  42,000,000 bidding                                                                 
  units would meet the                                                               
  requirement for                                                                    
  either Package A or                                                                
  license WX-EAG702-C.                                                               
  The bidder would be                                                                
  able to bid on                                                                     
  either Package A or                                                                
  license WX-EAG702-C,                                                               
  [but not both at the                                                               
  same                                                                               
  time]{.underline}.                                                                 
  If the bidder                                                                      
  purchased only                                                                     
  14,000,000 bidding                                                                 
  units, it would have                                                               
  enough eligibility                                                                 
  for license                                                                        
  WXEAG702-C or                                                                      
  license WX-EAG701-C                                                                
  but not for Package                                                                
  A or license                                                                       
  WX-EAG701-D.                                                                       
  -------------------- --------------------------------- ------------ -------------- --------------

### Applicant's Wire Transfer Information for Purposes of Refunds of Upfront Payments

The Commission will use wire transfers for all Auction No. 31 refunds.
To ensure that refunds of upfront payments are processed in an
expeditious manner, the Commission is requesting that all pertinent
information as listed below be supplied to the FCC. Applicants can
provide the information electronically during the initial short-form
filing window after the form has been submitted. Wire Transfer
Instructions can also be manually faxed to the FCC, Financial Operations
Center, Auctions Accounting Group, ATTN: Tim Dates or Gail Glasser, at
(202) 418-2843 by May 28, 2002. All refunds will be returned to the
payer of record as identified on the FCC Form 159 unless the payer
submits written authorization instructing otherwise. For additional
information, please call (202) 418-1995.

Name of Bank

> ABA Number
>
> Contact and Phone Number
>
> Account Number to Credit
>
> Name of Account Holder
>
> FCC Registration Number (FRN)
>
> Taxpayer Identification Number (see below)
>
> Correspondent Bank (if applicable)
>
> ABA Number
>
> Account Number

(Applicants should also note that implementation of the Debt Collection
Improvement Act of 1996 requires the FCC to obtain a Taxpayer
Identification Number (TIN) before it can disburse refunds.) Eligibility
for refunds is discussed in Section V.F., *below*.

## Auction Registration

Approximately ten days before the auction, the FCC will issue a public
notice announcing all qualified bidders for the auction. Qualified
bidders are those applicants whose FCC Form 175 applications have been
accepted for filing and have timely submitted upfront payments
sufficient to make them eligible to bid on at least one of the licenses
for which they applied.

All qualified bidders are automatically registered for the auction.
Registration materials will be distributed prior to the auction by two
separate overnight mailings, one containing the confidential bidder
identification number (BIN) required to place bids and the other
containing the SecurID cards. These mailings will be sent only to the
contact person at the contact address listed in the FCC Form 175.

Applicants that do not receive both registration mailings will not be
able to submit bids. Therefore, any qualified applicant that has not
received both mailings by noon on Wednesday, June 12, 2002, should
contact the Auctions Hotline at (717) 338-2888. Receipt of both
registration mailings is critical to participating in the auction and
each applicant is responsible for ensuring it has received all of the
registration material.

Qualified bidders should note that lost bidder identification numbers or
SecurID cards can be replaced only by appearing [in person]{.underline}
at the FCC Auction Headquarters located at 445 12^th^ St., SW,
Washington, DC 20554. Only an authorized representative or certifying
official, as designated on an applicant's FCC Form 175, may appear in
person with two forms of identification (one of which must be a photo
identification) in order to receive replacements. Qualified bidders
requiring replacements must call technical support prior to arriving at
the FCC.

## Electronic Bidding 

The Commission will conduct this auction over the Internet. Telephonic
bidding will also be available. As a contingency, the FCC Wide Area
Network, which requires access to a 900 number telephone service, will
be available as well. Qualified bidders are permitted to bid
telephonically or electronically, *i.e.*, over the Internet or the FCC's
Wide Area Network at \$2.30 per minute. In either case, **each
authorized bidder** must have its own Remote Security Access SecurID
card, which the FCC will provide at no charge. Any applicant with only
one authorized bidder will be issued two SecurID cards, while applicants
with two or three authorized bidders will be issued three cards. For
security purposes, the SecurID cards and the FCC Automated Auction
System User Manual are only mailed to the contact person at the contact
address listed on the FCC Form 175. Please note that each SecurID card
is tailored to a specific auction, therefore, SecurID cards issued for
other auctions or obtained from a source other than the FCC will not
work for Auction No. 31. The telephonic bidding phone number will be
supplied in the first overnight mailing, which also includes the
confidential bidder identification number. Each applicant should
indicate its bidding preference---electronic or telephonic--- on the FCC
Form 175.

Please note that the SecurID cards can be recycled, and we encourage
bidders to return the cards to the FCC. We will provide pre-addressed
envelopes that bidders may use to return the cards once the auction is
over.

## Mock Auction

All qualified bidders will be eligible to participate in a mock auction
on Thursday, June 13, 2002, and Friday, June 14, 2002. The mock auction
will enable applicants to become familiar with the FCC Automated Auction
System prior to the auction. Participation by all bidders is strongly
recommended. Details will be announced by public notice.

# AUCTION EVENT

The first round of bidding for Auction No. 31 will begin on Wednesday,
June 19, 2002. The initial bidding schedule will be announced in a
public notice listing the qualified bidders, which is released
approximately 10 days before the start of the auction.

## Auction Structure

### Simultaneous Multiple Round Auction with Package Bidding

We will auction the twelve Upper 700 MHz band licenses in a single,
simultaneous multiple-round auction with package bidding.[^90] Unless
otherwise announced, bids will be accepted on all licenses and packages
in each round of the auction.[^91] This approach, we believe, will allow
bidders in this auction to take advantage of any synergies that exist
among licenses and will lead to the most efficient outcome consistent
with our objectives under Section 309(j) of the Communications Act of
1934.[^92]

The simultaneous multiple round auction with package bidding auction
format (SMR-PB) differs in several important ways from our traditional
simultaneous multiple round auction (SMR).[^93] Briefly and generally,
the most important structural changes follow. Bids are allowed on groups
of licenses as well as on individual licenses. All bids in the auction,
not just those from the current round, are considered when determining
the provisionally winning set of bids in each round. However, the bids
of a bidder in one round are considered mutually exclusive of its bids
from any other round -- that is, all bids from a single bidder in the
provisionally winning set must be from the same round. A major
implication of these changes is that bids which are not part of the
provisionally winning set in a given round can become part of the
provisionally winning set in later rounds.

As a consequence of these basic structural changes, the SMR-PB rules on
activity and eligibility, minimum acceptable bids, bid withdrawals, and
many other auctions specifics are very different from the rules under
the traditional SMR format. In addition to the complete descriptions in
this Public Notice, Attachments G and H summarize the SMR-PB
requirements.

### Maximum Eligibility 

The amount of the upfront payment submitted by a bidder will determine
the initial maximum eligibility (as measured in bidding units) for each
bidder.[^94] Note again that 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. The bidding units associated with a
package are defined as the sum of the bidding units associated with the
individual licenses comprising the package.[^95] The total upfront
payment defines the maximum number of bidding units on which the
applicant will be permitted to be active during any given round. As
there is no provision for increasing a bidder's maximum eligibility
during the course of an auction, prospective bidders are cautioned to
calculate their upfront payments carefully. The total upfront payment
does not affect the dollar amount a bidder may bid on licenses.

### Activity and Eligibility Rules

In order to ensure that the auction closes within a reasonable period of
time, an activity rule is in place that requires bidder participation
throughout the auction. The activity rule requires each bidder to have
active bids in each round that account for a specified fraction of the
bidder's current eligibility, as measured in bidding units. Failure to
adhere to the rule results in the use of an activity rule waiver or the
reduction of current eligibility (*see* Section IV.A.4, "Activity Rule
Waivers and Reducing Eligibility").

In earlier SMR auctions, a bidder's activity in a round was determined
by summing the bidding units associated with licenses on which the
bidder was active. A bidder was considered active on a license in the
current round if it was either the high bidder at the end of the
previous bidding round (and did not withdraw the high bid in the current
round), or if it submitted an acceptable bid in the current round (and
did not subsequently remove the bid). In a package-bidding auction,
calculating activity levels in a round is not as straightforward because
a bidder can submit bids on different packages that contain one or more
of the same licenses.

*Bidding activity* is one measure that is used to determine a bidder's
activity in a round for a package-bidding auction. We define a bidder's
bidding activity in a round to be the maximum number of bidding units
the bidder can win considering new bids placed and provisionally winning
bids renewed in that round. Thus, when a bidder submits bids in a round
the system will determine the set of bids, among the bidder's new bids
and renewed provisionally winning bids, that contains the most bidding
units and has no overlap among the licenses. To illustrate this, suppose
a bidder submits the following bids in round *t*:

+----------------------------------------------+-----------------------+
| **Bids Placed in Round *t***                 |                       |
+----------------------------------------------+-----------------------+
| **License/Package**                          | **Bidding Units**     |
+----------------------------------------------+-----------------------+
| Package A:                                   | 56,000,000 bu         |
|                                              |                       |
| WX-EAG701-C (14,000,000 bu)                  |                       |
|                                              |                       |
| WX-EAG702-C (14,000,000 bu)                  |                       |
|                                              |                       |
| WX-EAG703-C (14,000,000 bu)                  |                       |
|                                              |                       |
| WX-EAG704-C (14,000,000 bu)                  |                       |
+----------------------------------------------+-----------------------+
| Package B:                                   | 42,000,000 bu         |
|                                              |                       |
| WX‑EAG701‑C (14,000,000 bu)                  |                       |
|                                              |                       |
| WX‑EAG701‑D (28,000,000 bu)                  |                       |
+----------------------------------------------+-----------------------+

This set of bids contains five distinct licenses. The sum of the bidding
units associated with these five licenses is 84,000,000. However, since
both packages contain license WX-EAG701-C, this bidder can not win both
packages at the same time. The maximum number of bidding units that the
bidder can win would be the 56,000,000 associated with Package A, so the
bidder's bidding activity is 56,000,000 bidding units.

A bidder is also considered to be active if the bidder has provisionally
winning bids from the previous round. Auction rules state that a
bidder's bids made in different rounds will be considered mutually
exclusive, so the bidding units associated with provisionally winning
bids must be viewed independently from the bidding units associated with
current round bids. We define a bidder's *eligibility activity* in a
round to be the greater of (i) its bidding activity in the round and
(ii) the bidding units associated with the bidder's provisionally
winning bids from the prior round. To illustrate how eligibility
activity will be calculated in a round we continue with our example.
Suppose this bidder has the following provisionally winning bids from
round *t-1*:

+----------------------------------------------+-----------------------+
| **Provisionally Winning Bids from Round      |                       |
| *t-1***                                      |                       |
+----------------------------------------------+-----------------------+
| **License/Package**                          | **Bidding Units**     |
+----------------------------------------------+-----------------------+
| License:                                     | 14,000,000 bu         |
|                                              |                       |
| WX-EAG701-C (14,000,000 bu)                  |                       |
+----------------------------------------------+-----------------------+
| License:                                     | 28,000,000 bu         |
|                                              |                       |
| WX‑EAG701‑D (28,000,000 bu)                  |                       |
+----------------------------------------------+-----------------------+

The number of bidding units associated with this bidder's provisionally
winning bids is 42,000,000. Recall that the bidder's bidding activity
for the round is 56,000,000 bidding units. The eligibility activity for
this bidder in round *t* is therefore 56,000,000, the greater of its
bidding activity (56,000,000 bidding units) and the bidding units
associated with its bids in the provisionally winning set (42,000,000
bidding units).

We have established an eligibility activity requirement of
one-half.[^96] Accordingly, in each round of the auction, a bidder
desiring to maintain its current eligibility and not use an activity
rule waiver is required to have eligibility activity equal to at least
half of its current eligibility. A bidder that fails to meet this
eligibility activity requirement in a given round and also has no
remaining activity rule waivers will have its current eligibility
reduced for the next round to a level consistent with the eligibility
activity requirement. The bidder's new current eligibility will be its
eligibility activity in the current round multiplied by the reciprocal
of the eligibility activity requirement (1/eligibility activity
requirement) --- in this case, two (1/(1/2)). Thus, a bidder's
eligibility in the current round will be the lesser of: (i) its
eligibility in the previous round or (ii) the product of its eligibility
activity in the previous round and the reciprocal of the eligibility
activity requirement.

The Bureau has reserved the right, however, to increase to two-thirds
the proportion of current eligibility on which bidders must be active to
retain their current eligibility.[^97] The two-thirds limit will ensure
that bidders retain the flexibility to switch from bidding on a 20 MHz
license or package to a 30 MHz package with the equivalent population.
Any such change will be announced to bidders prior to the beginning of
the round in which the change takes effect. In the event that the Bureau
exercises its ability to change the eligibility activity requirement to
two-thirds, the new current eligibility for a bidder not meeting the
requirement and having no remaining activity rule waivers will be its
eligibility activity in the current round multiplied by 3/2 (the
reciprocal of the eligibility activity requirement).

In the example above, the bidder has eligibility activity in the current
round of 56,000,000 bidding units. If this bidder's current eligibility
is 168,000,000 bidding units and the eligibility activity requirement is
one-half, the bidder's required activity level is 84,000,000 bidding
units (168,000,000 \* ½ = 84,000,000). Since the bidder's eligibility
activity is less than the required activity level, and if the bidder has
no remaining activity rule waivers, its current eligibility will be
reduced so that the bidder will be in compliance with the activity
requirement. Therefore, the bidder's current eligibility for the next
round will be 112,000,000 bidding units (56,000,000 \* (1/½) =
112,000,000).

Because a bidder's bids from all prior rounds are considered in
determining provisionally winning bids, it is possible for a bidder to
become a provisional winner for a license or package even though it does
not have sufficient eligibility to place a new bid on that license or
package. In such a case, the bidder will be awarded the license or
package at the end of the auction if it has made the winning bid, but it
will not be permitted to place any new bids on the license or package
during the auction.

### Activity Rule Waivers and Reducing Eligibility

Each bidder in the auction will be provided five activity rule waivers
that may be used in any round during the course of the auction.[^98] Use
of an activity rule waiver preserves the bidder's current bidding
eligibility despite the bidder's eligibility 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.[^99] We are satisfied that our practice of providing five
waivers over the course of the auction provides a sufficient number of
waivers and flexibility to the bidders, while safeguarding the integrity
of the auction.

In contrast to our traditional SMR auction format, bidders will not have
the ability to apply waivers proactively.[^100] In our SMR auction
format, proactive waivers are a means by which bidders can keep the
auction open without bidding. For Auction No. 31, we have adopted a
two-round simultaneous stopping rule. Thus, after one round with no new
bids, the auction will not close. For more information, *see* Section
IV.A.6. "Stopping Rules," *infra*.

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

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

### Auction Stages and Stage Transitions

Our SMR auctions generally are conducted in two or three stages, in
which the activity requirement is increased between stages. In this
SMR-PB auction, we have adopted a single stage with a one-half activity
requirement, although we retain the discretion during the auction to
increase to two-thirds the proportion of bidding units on which bidders
must be active to retain their current eligibility.[^101] Any such
change will be announced to bidders prior to the beginning of the round
in which the change takes effect.[^102]

### Auction Stopping Rules

For Auction No. 31, we have adopted a two-round simultaneous stopping
rule.[^103] A two-round simultaneous stopping rule means that all
licenses remain open until two consecutive rounds have occurred in which
no new bids are accepted. After a round with no new bids, bidders will
receive a message warning that if no new bids are placed in the next
round the auction will close. After the second consecutive round with no
new bids, bidding closes simultaneously on all licenses and packages.
Thus, unless circumstances dictate otherwise, bidding will remain open
on all licenses until bidding stops on every license and package.

For purposes of the stopping rule, renewed bids are not considered new
bids; in other words, a round in which the only bids that are placed are
renewed bids is considered a round with no new bids for purposes of the
stopping rule.[^104]

The computer software used to determine the provisionally winning set of
bids is run at the end of every round of the auction but the last round
(*i.e.*, the second consecutive round with no new bids). Because ties
are broken randomly, this means that if there were ties for the
provisionally winning set in the previous round, running the software at
the conclusion of the next round may well result in a different
provisionally winning set, even if there was no bidding activity in the
round. Consequently, a provisionally winning bid on a license or package
may not be a provisionally winning bid one round later, even if there
are no bids in the intervening round. Bidders have the option of using
the last and best bidding procedure in order to avoid being in a tied
set (*see* Section IV.B.5, "Last and Best Bids").

As in previous auctions, the Bureau has retained the discretion to keep
an auction open even if no new bids are submitted. The activity rule
would apply as usual, and a bidder with insufficient eligibility
activity will either lose bidding eligibility or use a remaining
activity rule waiver. The Bureau has reserved the right to declare that
the auction will end after a specified number of additional rounds
("special stopping rule"). The Bureau would exercise this option only in
certain circumstances, such as, for example, where the auction is
proceeding very slowly, there is minimal overall bidding activity, or it
appears likely that the auction will not close within a reasonable
period of time. Before exercising this option, the Bureau is likely to
attempt to increase the pace of the auction, for example, by increasing
the number of bidding rounds per day, and/or by increasing the amount of
the minimum acceptable bids for the limited number of licenses where
there is still a high level of bidding activity. Any such change will be
announced to bidders before it takes effect.[^105]

### Auction Delay, Suspension, or Cancellation

By public notice or by announcement during the auction, the Bureau may
delay, suspend, or cancel the auction in the event of natural disaster,
technical obstacle, evidence of an auction security breach, unlawful
bidding activity, administrative or weather necessity, or for any other
reason that affects the fair and competitive conduct of competitive
bidding. In such cases, the Bureau, in its sole discretion, may elect to
resume the auction starting from the beginning of the current round,
resume the auction starting from some previous round, or cancel the
auction in its entirety. Network interruption may cause the Bureau to
delay or suspend the auction. We emphasize that exercise of this
authority is solely within the discretion of the Bureau, and its use is
not intended to be a substitute for situations in which bidders may wish
to apply their activity rule waivers.

## Bidding Procedures

### Round Structure

The Commission will use an automated auction system to conduct the
simultaneous multiple round with package bidding auction format. The
initial bidding schedule will be announced in the public notice listing
the qualified bidders, which is released approximately 10 days before
the start of the auction. The round structure for each bidding round
contains a single bidding round followed by the release of the round
results. Multiple bidding rounds may be conducted in a given day.

The Bureau will release an additional public notice by April 30, 2002,
explaining the round results process and providing sufficient
information on our solving and tie-breaking procedures such that
participants and interested observers will be able to replicate the
FCC's official round results.

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.

### Reserve Price and Minimum Opening Bid

Congress mandated that the Commission's objectives when designing
competitive bidding methodologies include \"recovery for the public of a
portion of the value of the public spectrum resource.\"[^106] Section
309(j) of the Communications Act, as amended, calls upon the Commission
to prescribe methods by which a reasonable reserve price will be
required and/or a minimum opening bid established for licenses subject
to auction, unless the Commission determines that a reserve price or
minimum opening bid is not in the public interest.[^107] Consistent with
this mandate, the Commission 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.[^108] Among other factors, the Bureau must consider the
amount of spectrum being auctioned, levels of incumbency, the
availability of technology to provide service, the size of the
geographic service areas, the extent of interference with other spectrum
bands, and any other relevant factors that could have an impact on the
spectrum being auctioned.[^109] The Commission concluded that the Bureau
should have the discretion to employ either or both of these mechanisms
for future auctions.[^110]

The Bureau has adopted minimum opening bids for each license in Auction
No. 31, and the Bureau further established that the minimum opening bids
for packages will be the sum of the minimum opening bids for the
licenses comprising the package.[^111]

In the *Auction No. 31 Further Modifications Comment Public Notice*, the
Bureau sought comment on increasing the minimum opening bids or
establishing an aggregate reserve price that exceeds the sum of the
minimum opening bids.[^112] The Bureau did so in light of the unique
statutory process governing the clearance of incumbent broadcasters from
the spectrum in Auction No. 31 and the incentives created by the
Commission to accelerate that process.[^113]

Given the complexities resulting from the presence of incumbents and the
clearance process, the Bureau specifically sought comment on an
aggregate reserve in Auction No. 31 equal to \$2.6 billion in gross
bids.[^114] As the Bureau noted in the *Auction No. 31 Further
Modifications Comment Public Notice,* Congress previously estimated that
the Upper 700 MHz band licenses, which consist of the previously
auctioned 700 MHz guard bands licenses and the licenses in Auction No.
31, will generate \$2.6 billion in net revenue.[^115] The prior 700 MHz
guard bands auctions generated nearly \$541 million in net
revenue.[^116] To assure that net revenues in Auction No. 31 together
with prior net revenues will be commensurate with Congress's
expectations, the Bureau suggested establishing an aggregate reserve
price for Auction No. 31 of \$2.6 billion in gross bids. The Bureau
notes that there are unavoidable uncertainties in estimating the gross
bids required to assure particular net revenues.

Only three comments or reply comments address the reserve price
question. In a footnote, Paxson simply states that it has "no objection"
to the proposal concerning establishing an aggregate reserve
price.[^117] Spectrum Exchange/Allen addresses the aggregate reserve
price at greater length in its comment. Spectrum Exchange/Allen
advocates establishing an aggregate reserve of \$720 million, equal to
the sum of the previously establish minimum opening bids, and reducing
the minimum opening bids on individual licenses.[^118] It opposes any
aggregate reserve price greater than \$720 million. More generally,
Spectrum Exchange/Allen asserts that establishing reserves based on
expected auction revenues conflicts with the Commission's statutory
mandate of ensuring efficient and intensive use of the spectrum.[^119]
In addition, Spectrum Exchange/Allen argues that any aggregate reserve
price should be made public prior to the auction.[^120] Finally, Harstad
addresses the issue of an aggregate reserve price in a reply comment.
Harstad argues for the use of both aggregate and individual license
reserve prices, ideally set at or marginally below market values.[^121]
In the absence of other valuation data, Harstad endorses the
Commission's use of Congressional auction revenue projections to
establish an aggregate reserve price. No other parties submitted any
comments or replies addressing the possibility of establishing an
aggregate reserve price for Auction No. 31.

The Bureau adopts the suggested public aggregate reserve price equal to
\$2.6 billion in gross bids. The unique complexities of the spectrum
clearance process make establishing an aggregate reserve price for
Auction No. 31 appropriate.

The comments of Spectrum Exchange/Allen regarding the level of the
aggregate reserve price overlook the fact that Congress statutorily
mandated that the Commission seek "recovery for the public of a portion
of the value of the public spectrum resource . . . and avoidance of
unjust enrichment."[^122] Establishing a reserve price based on expected
revenues can serve this statutory objective without interfering with the
Commission's other statutory objective of ensuring efficient and
intensive use of the spectrum.[^123] Furthermore, Spectrum
Exchange/Allen's proposal to establish a reserve price at levels
comparable to minimum opening bids in prior auctions does not serve the
statutory purpose of seeking adequate recovery. Minimum opening bids
serve merely as starting points for the auction and so appropriately may
be very low relative to expected values. In contrast, reserve prices
employed to protect recovery should be set near the level of anticipated
recovery or they will not accomplish their purpose.

Spectrum Exchange/Allen bases its argument for a substantially lower
aggregate reserve on "adverse developments in capital markets that have
likely constrained the financial wherewithal of potential
bidders."[^124] In reply, Harstad notes that "\[s\]tock prices fluctuate
for many reasons. Some of these reasons have nothing to do with the
long-term value of the licenses," and further asserts that "to the
extent that the data on the fall of the stock prices of wireless
companies represent temporary business conditions or result in temporary
difficulties for wireless companies in obtaining financing, they are an
argument FOR aggressive reserve prices, not against them." [^125]

The Bureau concludes that there is no basis for departing from the use
of the Congressional estimate set forth in the *Auction No. 31 Further
Modifications Comment Public Notice*. Spectrum Exchange/Allen offers no
evidence, and the Bureau is aware of none, that either Congress or the
Administration has departed substantially from the prior Congressional
estimate based on recent market developments. Finally, Spectrum
Exchange/Allen does not dispute the Congressional estimate with its own
valuations but simply argues in favor of a downward departure from a
figure based on the prior Congressional estimate.[^126]

In addition to the aggregate reserve price of \$2.6 billion, we will
maintain the previously-established minimum opening bids on licenses and
packages. No license or package will be sold if it has not received a
bid at the minimum opening bid amount. Furthermore, at the end of
Auction No. 31, if the total gross revenue of the provisionally winning
set does not equal or exceed \$2.6 billion, there will be no winning
bids and no licenses will be sold.

However, the aggregate reserve will be considered satisfied and licenses
will be awarded to the winning bidders if total gross revenue exceeds
\$2.6 billion, even if some individual licenses remain unsold. The FCC
will retain any unsold licenses. For the purposes of calculating the
total gross revenue of the winning set, any FCC-held licenses will be
treated as having received a bid at a small amount below the minimum
opening bid amount.[^127] Therefore, in the event that there are unsold
licenses while the aggregate reserve is met, actual gross payments to
the Treasury from winning bidders will be less than total gross
revenues, since the latter figure includes FCC "bid" amounts for the
unsold licenses. During the course of the auction, the Bureau will not
entertain any requests to reduce the aggregate reserve price.

The specific minimum opening bids for each license are set forth in
Attachment A of this Public Notice. Potential bidders should note that
some of the population figures included in Attachment A to the *Package
Bidder Procedures Public Notice* were incorrect. The corrected figures
are included in Attachment A to this Public Notice. The discrepancies
were relatively minor and do not affect the upfront payments or minimum
opening bids.

The minimum opening bids that we have adopted are reducible at the
discretion of the Bureau. We emphasize, however, that such discretion
will be exercised, if at all, sparingly and early in the auction,
*i.e.*, before bidders lose all waivers and begin to lose substantial
eligibility. During the course of the auction, the Bureau will not
entertain any requests to reduce the minimum opening bid on specific
licenses.

### Minimum Acceptable Bids and Bid Increments 

In the *Auction No. 31 Further Modifications Comment Public Notice*, the
Bureau sought comment on two potential changes, Options 1 and 2, to the
previously-adopted procedures for calculating minimum acceptable
bids.[^128] In the previously-adopted procedures, the minimum acceptable
bid for any particular license or package would be the greatest of: (i)
the applicable minimum opening bid; (ii) the bidder\'s previous high bid
on that license/package plus x%, where the Bureau would specify the
value of x in each round; and (iii) the bidder\'s previous high bid on
that particular license/package plus an amount based on the increase in
the bidder's previous high bid needed to create a tie with the
provisional winners.[^129] If the bidder has not bid on a license or an
already constructed package, the bidder's previous high bid for purposes
of calculating part (iii) would be the applicable minimum opening bid.
As Option 1, the Bureau proposed completely replacing part (iii) of the
minimum acceptable bid calculation with a formula based on "current
price estimates."[^130] In addition, as a second part of Option 1, the
Bureau proposed considering all bids submitted during the auction both
when calculating current price estimates and when determining the
provisionally winning set of bids.[^131] The Bureau proposed a much more
modest change to part (iii) as Option 2. The Bureau proposed changing
the mathematical formula applicable only when determining minimum
acceptable bids on packages created and bid on in the same round.[^132]

The "current price estimate" is a measure, developed by the Bureau,
which utilizes information from all current and past bids on a license
and packages containing that license, to approximate a "price" for each
license in every round of the auction. The precise methodology used to
calculate price estimates is described in Attachment B, *Using the
Smoothed Anchoring Method to Obtain Current Price Estimates*. Until a
bid is placed on a license *or* on a package containing that license, by
any bidder in any round, the current price estimate is the FCC bid
amount, which is slightly below the minimum opening bid.[^133] If a bid
on a single license is part of the provisionally winning set of bids in
a round, then the current price estimate for that license in that round
will be equal to the provisionally winning bid. Generally, however, if a
license is part of a package bid in the provisionally winning set, the
current price estimate for an individual license is calculated using all
of the bids placed that involve that license, since those bids together
yield information on how bidders value that license. The set of current
price estimates, one for each license, is then used as the basis for
determining minimum acceptable bids for the next round, under part (iii)
of the minimum acceptable bid rule. Specifically, for individual
licenses, the part (iii) minimum acceptable bid amount is the current
price estimate of the license plus z%. For packages, it is the sum of
the current price estimates for the licenses comprising that package,
plus z% of the sum. Initially, the Bureau will set z at five, but
retains the discretion to adjust the amount during the course of the
auction, including setting z at less than zero, in order to control the
pace of the auction.

Several commenters address Option 1. Paxson expresses no objection to
the proposal.[^134] In comments, Spectrum Exchange/Allen claim that
Option 1 is too complex, and warn that the use of actual bids in
approximating minimum acceptable bids may lead to unstable and
unpredictable amounts.[^135] They expand on this argument in reply
comments, stating that Option 1 could lead to inefficient auction
results.[^136] In their comments, Harstad [^137]claim that the Bureau
does not justify its use of current price estimates on theoretical
grounds, and assert that basing minimum acceptable bid amounts for
packages on the sum of current price estimates for licenses does not
take into account that licenses may have greater value as part of a
package than as an individual license. In reply comments, Harstad
challenge Spectrum Exchange/Allen's comments that Option 1 is too
complex, pointing out that it is actually computationally simpler than
the alternative proposal. They state that Option 2, favored by Spectrum
Exchange/Allen, is also an untested method, and in an appendix,
demonstrate that Option 2 can produce unstable estimates.[^138]

We disagree with the assertions of Spectrum Exchange/Allen that the use
of current price estimates adds complexity to Auction 31. While the
calculations are complex, we feel that current price estimates actually
are simpler , both computationally, as Harstad assert, and conceptually.
We disagree with Harstad, however, that current price estimates do not
take into account the complementarities within packages. The
determination of current price estimates is based on the well-recognized
economic theory of "shadow prices," and these prices are determined
using the information contained in all bids over all rounds. They
therefore reflect what it would cost for any license (and therefore any
package containing that license) to be competitive.

Consequently, we adopt Option 1. Thus, the minimum acceptable bid for
any license or package will be the greatest of: (i) the minimum opening
bid; (ii) the bidder's own previous high bid on a license or package
plus x%, where the Bureau will specify the value of x in each round; and
(iii) the current price estimate of the license plus z%, or for a
package, the sum of the current price estimates for the licenses in the
package plus z%, where the Bureau will specify the value of z in each
round. Initially, the Bureau will set x at ten, but retains the
discretion to adjust the amount during the course of the auction.

The Bureau retains an exception to part (iii) for calculating the
minimum acceptable bid for a "global" package --- a package consisting
of all of the licenses available in the auction. After the first round
of the auction, the minimum acceptable bid for a global package will
always be the revenue generated by the provisionally winning bid set in
the previous round plus w%. The Bureau makes this distinction in order
to retain the ability to ensure that bids for the global package will
continue to increase even if we employ a percentage z that does not
guarantee that outcome. Initially, the Bureau will set w at five, but
retains the discretion to adjust the amount during the course of the
auction.

Under our normal SMR auction design, we define a bid increment for a
license as the difference between the minimum acceptable bid and the
standing high bid. Under these package bidding procedures, we do not
have standing high bids. Therefore, bid increments cannot be defined and
used in the same manner. Minimum acceptable bids will be calculated as
set forth above. To maintain consistency with our simultaneous multiple
round auction design, we will still sometimes refer to the minimum
acceptable bid as being a bid of one bid increment.

For bids higher than the minimum acceptable bid --- *i.e.*,
multi-increment bids --- we are defining the amount of the additional
bid increments as v% of the minimum acceptable bid, where the minimum
accepted bid is determined as discussed above. Initially, the Bureau
will set v at ten, but retains the discretion to adjust the amount
during the course of the auction.[^139] Thus, when v equals ten, bidders
will be able to place multi-increment bids of the minimum acceptable bid
plus approximately 10%, 20%, etc., with the maximum bid being
approximately equal to the minimum acceptable bid plus 80%.[^140]

We retain the discretion to change the minimum acceptable bid, and to do
so on a license-by-license and package-by-package basis, if
circumstances so dictate. We will notify bidders of any such change
before it takes effect.[^141]

As described in the *Auction No. 31 Further Modifications Comment Public
Notice*, the adoption of Option 1 also involves a change in the number
of rounds of bids being considered when determining the provisionally
winning set. [^142] In contrast to the prior procedures in which two
rounds of bids were considered, we now will consider every bid made in
every round of the auction (except for bids that are placed and
subsequently removed during the same round). Additionally, a set of
"FCC" bids on each license in the auction at some small dollar amount
less than the respective minimum opening bid will also be considered.

### Renewed Bids

For each bidder, we will treat the bids it makes in different rounds as
mutually exclusive. If a bidder does not want a bid from the previous
round (including a provisionally winning bid) to be considered mutually
exclusive with bids made in the current round, it can renew the bid in
the current round.

Without regard to the minimum acceptable bid requirement, a bidder may
"renew" in the current round the highest previous bid it made on any
license or package; that is, it may resubmit the bid without increasing
the amount bid. Renewed bids will be treated as being made in the
current round.[^143]

Renewed provisionally winning bids confer bidding activity, while
non-renewed provisional winners count toward eligibility activity. No
eligibility or bidding activity will be conferred for renewing a
non-provisionally winning bid. All bidding, including renewals of
non-provisionally winning bids, is limited by initial eligibility,
however.

### Last and Best Bids

Bidders that wish to drop out of the auction or that believe they are
about to lose their bidding eligibility will have the opportunity before
they drop out to make "last and best" bids on any licenses or packages
for which they remain eligible. This is a limited exception to the
minimum acceptable bid rule and to click box bidding. If a bidder
chooses this option, it will not be permitted to make any further bids
during the auction.[^144]

A bidder may make up to two sets of last and best bids. The two sets of
last and best bids must be submitted in a single round, but will be
treated as mutually exclusive, as are bids placed in separate
rounds.[^145] Once last and best bids are placed, the bidder will not be
permitted to place new bids or renew previous bids in any subsequent
round. If a bidder chooses to submit last and best bids, then, for the
remainder of the auction, those bids will be considered, as will all of
the bidder's previous rounds of bidding.

The last and best bid amount for any license or package is any amount,
in thousand dollar increments, greater than or equal to the bidder's
previous high bid on the license or package and the eighth increment
above the minimum acceptable for that license or package in the current
round. Also, if the bidder has never placed a bid on a package or
license, the lower bound on the last and best bid amount is equal to the
minimum opening bid for that package or license.

Each set of last and best bids may consist of bids on any or all of the
licenses selected on the Form 175 and any or all of the packages created
by the bidder, consistent with the activity and eligibility rules and
the twelve package limitation. Bidding activity for *each* of the sets
of last and best bids must not exceed current eligibility, as determined
at the beginning of the round in which these bids are placed. In other
words, eligibility for the second set of last and best bids will not be
recalculated based on eligibility activity associated with the first set
of bids. Last and best bids are considered to be new bids in the round
in which they are placed. However, a last and best bid equal to the
bidder's previous high bid will be considered as a renewed bid.

### Winning and Provisionally Winning Bids

The *winning bids* are the set of "consistent" bids (bids that (i) do
not overlap and (ii) are made or renewed by an individual bidder in the
same round) that maximizes total revenue when the auction closes,
provided that the aggregate reserve has been met. The *provisionally
winning bids* are the set of consistent bids that maximizes total
revenue in a particular round.[^146] When determining winning and
provisionally winning bids, all bids made in every round throughout the
course of the auction (except for bids that are placed and subsequently
removed during the same round) will be considered. In addition, each
license is treated as having a bid placed by the FCC at some small
amount less than the minimum opening bid.[^147] This procedure will
ensure that a bid on a license or package at the minimum opening bid
always beats the FCC bid.[^148]

Since there can be more than one set of consistent bids that produces
the maximum revenue, a procedure for randomly selecting among these tied
sets is used when determining the provisionally winning bids. This tie
breaking procedure involves two steps: the assignment of a *selection
number* to each bid, and the determination of, among all tied bid sets,
the set that produces the *maximum sum of* *selection numbers*.

A bid's *selection number* is the sum of *n* pseudo-random numbers where
*n* is the number of licenses comprising the bid's package. Each
pseudo-random number is generated by invoking a well-documented and
well-tested routine developed by Pierre L'Ecuyer.[^149] A bid's
selection number as well as the beginning seed numbers used to produce
it will be released at the close of each round.

Once the selection numbers have been generated for each bid, the second
step of the tie breaking procedure will decide the provisionally winning
bids. Computer software is used to determine, among all tied bid sets,
the set that produces the maximum sum of selection numbers. [^150] Thus,
the set of provisionally winning bids is the set of consistent bids that
maximizes revenue and maximizes the sum of selection numbers. Each bid
will be assigned a new selection number in every round. The solver will
not be run after the last round of the auction. *See* Section IV.A.6,
"Auction Stopping Rules," for more information on the close of the
auction.

The procedure we are adopting for last and best bids, described in
Section IV.B.5, above, allows bidders to reduce the likelihood that
their *final* bid on a license or package will be part of a randomly
broken tied set. Generally, in the case of a tie, the bidder(s) whose
bid is not chosen has the opportunity in the next round to continue
bidding. However, if the bidder believes that the minimum acceptable bid
is too high and so would ordinarily cease bidding on that license or
package, it may use the last and best bid(s) procedure to make final
bids on licenses and packages, which may be as little as \$1,000 more
than the bidder's highest previous bid on each license or package.[^151]

### Packages

In addition to bidding on individual licenses, bidders will be permitted
to create and bid on up to twelve different packages of their own
choosing during the course of the auction. Bidders will not be required
to identify or create their packages before the start of the auction,
but may create their packages as the auction progresses.[^152] A bidder
may modify or delete a package it has created up until the point where
it has bid on the package and the round has closed. If the bidder
submits a bid on a package and subsequently removes the bid during the
same round, the bidder has the option of also deleting or modifying the
package. However, once a bidder bids on a package and the round closes,
the package may not be modified or deleted and counts as one of the
bidder's twelve allowable packages. A bid on an individual license does
not count as a bid on a package; packages consist of two or more
licenses.

### Bidding

During a bidding round, a bidder may submit new bids or renewed bids for
as many licenses and packages as it wishes, subject to its eligibility,
its FCC Form 175 license selection, and the twelve package limitation;
remove bids placed in the current bidding round; or permanently reduce
eligibility. Bidders also have the option of making multiple submissions
in each bidding round. If a bidder submits multiple bids for a single
license or package in the same round, the system overwrites any previous
bid with the last bid entered as that bidder's bid for the round.
Bidders should note that the bidding units associated with licenses for
which the bidder has removed its bid do not count towards the bidder's
bidding activity at the close of the round.

Bidding is constrained by the eligibility and activity rules, which
determine both minimum and maximum permissible levels of bidding, as
measured in bidding units. As previously discussed, minimum bidding, as
measured in bidding units, is constrained by the activity rules. In each
round, a bidder desiring to maintain its current eligibility and not use
an activity rule waiver must be active, based on eligibility activity,
on licenses associated with enough bidding units to meet the activity
requirement for the current round. For more details, please refer to
Section IV.A.3. "Activity and Eligibility Rules."

Maximum bidding, as measured in bidding units, is constrained by the
eligibility rules. *Bidding activity* for a round, defined as the
maximum number of bidding units a bidder can win considering new bids
and renewed provisionally winning bids placed in that round, cannot
exceed current eligibility. That is, when a bidder submits a set of bids
in a round, the system will not accept the set of bids if it determines
that the bidding activity generated by those bids exceeds the bidder's
current eligibility. Bidding in a round is further limited by the
requirement that a bidder's *bidding exposure* in a round must be less
than or equal to its initial eligibility. Bidding exposure is the
maximum number of bidding units a bidder can win considering all the
bids (new, renewed provisionally winning or non-provisionally winning)
placed in the round. Similarly, when a bidder submits a set of bids in a
round, the system will not accept the set of bids if it determines that
the bidding exposure generated by those bids exceeds the bidder's
initial eligibility. In either case, if a set of bids is rejected, the
system will notify the bidder that its bids have not been accepted and
report which rule is in violation.

Bidders are permitted only to bid on the specific licenses they selected
on their FCC Form 175. Any packages they create must be comprised
entirely of licenses selected on their Form 175. The bid submission
screens are customized using the bidder's Form 175 information, and will
not permit bidding on non-selected licenses (or packages of those
licenses).

Please note that all bidding will take place remotely either through the
FCC Automated Auction System or by telephonic bidding. (Telephonic bid
assistants are required to use a script when entering bids placed by
telephone. Telephonic bidders are therefore reminded to allow sufficient
time to bid by placing their calls well in advance of the close of a
round.) There will be no on-site bidding during Auction No. 31.

The Automated Auction System requires each bidder to be logged in during
the bidding round using the bidder identification number provided in the
registration materials, and the generated SecurID code. Bidders are
strongly encouraged to print bid confirmations [after]{.underline} they
submit their bids.

In each round, eligible bidders will be able to place new bids on a
given license or package[^153] in any of nine different amounts.[^154]
Bidders must use the drop-down box to select bids from among the nine
acceptable new bid amounts; to renew any bids (if applicable); or to
remove any bids made within that same round.

Finally, bidders are cautioned in selecting their bid amounts because,
as explained in the following section, bidders are not permitted to
withdraw bids from prior rounds, even if mistakenly or erroneously made.
As explained previously, when determining winning and provisionally
winning bids, we consider all bids made throughout the course of the
auction.[^155]

### Bid Removal and Bid Withdrawal

Bid "removal" is the voiding of a bid made in the current round. For the
reasons set forth below, we permit only the removal of bids placed in
the current round. The withdrawal or cancellation of bids made in
previous rounds is *prohibited*.[^156]

At any time before the close of a bidding round, a bidder has the option
of removing any bids placed in that round. By using the remove bid
function in the bidding system, a bidder may effectively "unsubmit" any
bid placed within the current round. This is not the same as withdrawing
a bid, which, in our SMR system, can occur in rounds subsequent to the
round in which the high bid was placed. A bidder removing a bid placed
in the same round is not subject to withdrawal payments. Once a round
closes, a bidder may no longer remove a bid.

At the close of the auction, if a bid is declared the winner and the
bidder does not pay the amount due, it is liable for a default payment
as set forth in the Commission's Rules.[^157]

We stated the following in the *Auction No. 31 Package Bidding
Procedures Public Notice*, and it still holds true.

> We believe that by making bids placed in different rounds mutually
> exclusive, we have limited a bidder's exposure risk when changing
> strategies. Moreover, the bid withdrawal procedure was designed to
> allow bidders to back out of failed aggregations --- to avoid winning
> some licenses that are worth less to them than the amount bid without
> the other licenses they need to implement their business plan.
> Therefore, since bidders may make package bids on all combinations of
> licenses with significant complementarities, the use of withdrawals to
> mitigate such risk is no longer necessary. Moreover, while there is no
> offsetting benefit from allowing bid withdrawals, there would still be
> potential harm. Withdrawals may be used strategically to provide
> incorrect price signals during the auction and lead other bidders to
> place inefficient bids. Also, when withdrawals are permitted, one
> cannot ensure that the auction will proceed at an acceptable pace.
> Moreover, the harm associated with withdrawals is likely to be more
> severe in auctions with package bidding since a single withdrawal of a
> bid (on either an individual license or a package) can affect the
> entire provisionally winning set. Accordingly, we will *not* permit
> bidders to withdraw their provisionally winning bids.[^158]

### Round Results 

Bids placed during a round will not be published until the conclusion of
that bidding period. After a round closes, the Bureau will compile
reports of all bids made in that round, the set of bids considered when
determining the current provisionally winning bids, current price
estimates, new minimum acceptable bids for all bidders, current
provisionally winning bids, and bidder eligibility status (bidding
eligibility and activity rule waivers), and post the reports for public
access. Reports reflecting bidders' identities and bidder identification
numbers for Auction No. 31 will be available before and during the
auction. Thus, bidders will know in advance of this auction the
identities of the bidders against which they are bidding.

The Bureau will release an additional public notice by April 30, 2002,
detailing round results reports formats, explaining the round results
process and providing sufficient information on our solving and
tie-breaking procedures such that participants and interested observers
will be able to replicate the FCC's official round results.

In the *Auction No. 31 Package Bidding Procedures Public Notice*, the
Bureau stated in a footnote that we would "make available a bidder aid
for bidders to be able to determine for themselves what bid amount would
have been necessary to beat the other bids and become a provisional
winner in the prior round." This bidder's aid tool was intended to
calculate the "shortfall and deficit" amounts which have been superceded
by current price estimates in part (iii) of the minimum acceptable bid
rule.[^159] The Bureau will **not** provide such a bidder aid, nor will
it provide the FCC Auction Tracking Tool software.

### Auction Announcements

The FCC will use auction announcements to announce items such as
schedule changes. All FCC auction announcements will be available by
clicking on a link in the Automated Auction System.

### Default

The Commission adopted a special rule for calculating default payments
in connection with package bidding in the Upper 700 MHz band.[^160] 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 25% payment.[^161] The special default rule is modeled on
the default rule used in other auctions. However, there are substantial
differences, perhaps most significantly in the amount of the additional
payment. The default rule used in other auctions sets the additional
payment at three percent (3%) of the lesser of the subsequent winning
bid and the defaulted bid.[^162] In contrast, the default rule for use
with package bidding in the Upper 700 MHz bands sets the additional
payment at twenty-five percent (25%) of the lesser of the subsequent
winning bid and the defaulted bid.

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 held winning bids on individual licenses (*i.e.*, not
as part of a package), and in a subsequent auction the licenses are also
won individually, the deficiency portion will be calculated by
subtracting the subsequent winning bid from the defaulted bid. The
deficiency portion for such bids will be calculated on a
license-by-license basis (*i.e.*, in the event of defaults on multiple
bids, the differences between the amounts originally bid and the amounts
subsequently bid will not be aggregated to determine a net amount
owed).[^163]

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. [^164] 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. [^165] Thus, in this situation, the deficiency portion will
not be calculated on a bid-by-bid basis.

If, in a situation requiring that bids be aggregated in order to
determine the deficiency portion of the default payments for the bids,
there are multiple defaulting bidders, the default payment (both the
deficiency portion and the additional 25% payment portion) will be
allocated to the defaulting bidders in proportion to their share of the
aggregated default bids.[^166]

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. 31 bid(s) minus the gross subsequent winning bid(s) and (ii)
the sum of the net defaulted Auction No. 31 bid(s) minus the net
subsequent winning bid(s). The Bureau will impose the lesser of (i) and
(ii) as the deficiency portion.[^167]

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).[^168] 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).

# POST-AUCTION PROCEDURES

## Down Payments 

After bidding has ended, the Commission will issue a public notice
declaring the auction closed, identifying winning bidders and down
payments due.

Within ten business days after release of the auction closing notice,
each winning bidder must submit sufficient funds (in addition to its
upfront payment) to bring its total amount of money on deposit with the
Government to 20 percent of its net winning bids (actual bids less any
applicable small and very small business bidding credits). *See* 47
C.F.R. § 1.2107(b).

## Auction Discount Voucher

On June 8, 2000, the Commission awarded Qualcomm, Inc. a transferable
Auction Discount Voucher ("ADV") in the amount of
\$125,273,878.00.[^169] This ADV may be used by Qualcomm or its
transferee, in whole or in part, to adjust a winning bid in any spectrum
auction prior to June 8, 2003, subject to terms and conditions set forth
in the Commission's Order. Qualcomm transferred \$10,848,000.00 of the
ADV to a winning bidder in FCC Auction No. 35 and the transferee used
its portion of the ADV to adjust one of its winning bids in Auction No.
35.[^170] The remaining portion of Qualcomm's ADV could be used to
adjust winning bids in another FCC auction, including Auction No. 31.

## Long-Form Application

Within ten business days after release of the auction closing notice,
winning bidders must electronically submit a properly completed
long-form application (FCC Form 601) and required exhibits for each
license won through Auction No. 31. Winning bidders that are small or
very small businesses must include an exhibit demonstrating their
eligibility for small and very small business bidding credits. *See* 47
C.F.R. §§ 1.2112(b). Further filing instructions will be provided to
auction winners at the close of the auction.

## Tribal Land Bidding Credit

A winning bidder that intends to use its license(s) to deploy facilities
and provide services to federally-recognized tribal lands that are
unserved by any telecommunications carrier or that have a telephone
service penetration rate equal to or below 70 percent is eligible to
receive a tribal land bidding credit as set forth in 47 C.F.R. §§ 1.2107
and 1.2110(f). A tribal land bidding credit is in addition to, and
separate from, any other bidding credit for which a winning bidder may
qualify.

Unlike other bidding credits that are requested prior to the auction, a
winning bidder applies for the tribal land bidding credit *after*
winning the auction when it files its long-form application (FCC Form
601). When filing the long-form application, the winning bidder will be
required to advise the Commission whether it intends to seek a tribal
land bidding credit, for each market won in the auction, by checking the
designated box(es). After stating its intent to seek a tribal land
bidding credit, the applicant will have 90 days from the close of the
long-form filing window to amend its application to select the specific
tribal lands to be served and provide the required tribal government
certifications. Licensees receiving a tribal land bidding credit are
subject to performance criteria as set forth in 47 C.F.R. § 1.2110(f).

For additional information on the tribal land bidding credit, including
how the amount of the credit is calculated, applicants should review the
Commission's rule making proceeding regarding tribal land bidding
credits and related public notices.[^171] Relevant documents can be
viewed on the Commission's auctions web site at
[http://wireless.fcc.gov/auctions](http://www.fcc.gov/wtb/auctions) by
clicking on the *Tribal Land Credits* link.

## Default and Disqualification

Any high bidder that defaults or is disqualified after the close of the
auction (*i.e.*, fails to remit the required down payment within the
prescribed period of time, fails to submit a timely long-form
application, fails to make full payment, or is otherwise disqualified)
will be subject to the payments described in 47 C.F.R. § 27.501(b). In
addition, if a default or disqualification involves gross misconduct,
misrepresentation, or bad faith by an applicant, the Commission may
declare the applicant and its principals ineligible to bid in future
auctions, and may take any other action that it deems necessary,
including institution of proceedings to revoke any existing licenses
held by the applicant.[^172]

See Section IV.B.12 for more detail on the default rule for this
auction.

## Refund of Remaining Upfront Payment Balance

All applicants that submitted upfront payments but were not winning
bidders for a license in Auction No. 31 may be entitled to a refund of
their remaining upfront payment balance after the conclusion of the
auction. All refunds will be returned to the payer of record, as
identified on the FCC Form 159, unless the payer submits written
authorization instructing otherwise.

At the end of the auction, those bidders who are eligible for a refund
must submit a written refund request. If you have completed the refund
instructions electronically, then only a written request for the refund
is necessary. If not, the request must also include wire transfer
instructions, Taxpayer Identification Number (TIN), and FCC Registration
Number (FRN). Send refund request to:

Federal Communications Commission

Financial Operations Center

Auctions Accounting Group

Gail Glasser or Tim Dates

445 12th Street, SW, Room 1-C863

Washington, DC 20554

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

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

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

**Auctions and Industry Analysis Division:** For legal questions, Howard
Davenport, Legal Branch, at (202) 418-0660; for general auction
questions, Martha Stancill or Craig Bomberger, Auctions Operations
Branch, at (202) 418-0660, or Lisa Stover, Auctions Operations Branch,
at (717) 338-2888

**Commercial Wireless Division:** Gary Oshinsky**,** Policy and Rules
Branch, or Melvin Spann, Licensing and Technical Analysis Branch, at
(202) 418-0620

-- FCC --

# Attachment A

PLACE HOLDER

# Attachment B

**Using the Smoothed Anchoring Method to Obtain Current Price
Estimates**

This appendix describes the method by which bid information on packages
and licenses is used to approximate a "price" associated with each
license at the close of every round. These "current price estimates," as
they are called, are then used in the next round when calculating part
(iii) of the minimum acceptable bid formula[^173]. Specifically, for a
license, this value is the current price estimate of the license plus
z%. For a package, the value is the sum of the current price estimates
of the licenses that make up the package plus z% of the sum.

The current price estimates of the licenses are based on the concept
that every linear optimization problem has a dual problem that provides
pricing information. We begin by discussing a simplified representation
of the FCC winner determination problem and then discuss its linear
programming relaxation before explaining the dual problem of interest.
The winner determination problem is shown in (P1):

(P1): ![](media/image2.wmf)

where *B^t^* is the set of considered bids in round *t,*

*b~j~* is the bid amount of bid *j,*

*L* is the set of licenses being auctioned,

$a_{\text{ij}} = \begin{Bmatrix}
\ 1\ ,\ \text{if}\ \text{license}\ i\ \text{is}\ \text{in}\ \text{bid}\ j\  \\
0\ ,\ \text{otherwise}\ 
\end{Bmatrix}$ and,

$x_{j} = \begin{Bmatrix}
1\ ,\ \text{if}\ \text{bid}j\ \text{is}\ \text{in}\ \text{the}\ \text{winning}\ \text{set} \\
0\ ,\ \text{otherwise}\ 
\end{Bmatrix}$

In this formulation, *x~j~* is an indicator variable that equals one if
bid *j* is in the provisionally winning set and zero otherwise. Thus,
the sum of the bid amounts of all provisionally winning bids produces
the maximum obtainable revenue for round *t*. Constraints (1) ensure
that each license is awarded exactly once. The constraints that ensure
that a bidder's bids between rounds are mutually exclusive are not
represented in (P1) since they will be ignored in the linear
representation of the problem.[^174]

The linear program of (P1) relaxes the restriction on the variables
*x~j~*, for all *j∈B^t^*, allowing these variables to take on any value
between zero and one. The linear programming representation of (P1) is
shown in (P2):

(P2): ![](media/image3.wmf)

The dual formulation of (P2) can be used to identify a price, *π~i~*,
for each license *i*, and is shown in the following linear program (P3):

(P3): ![](media/image4.wmf)

where *F⊂* *B^t^* is the set of FCC bids on each license[^175] and,

$a_{\text{ji}} = \begin{Bmatrix}
1\ ,\ \text{if}\ \text{bid}\ j\ \text{contains}\ \text{license}\ i \\
0\ ,\ \text{otherwise}\ 
\end{Bmatrix}$.

The optimal value of each variable, *π~i~*, in (P3) corresponds to a
dual price[^176] -- often called a "shadow price" -- for each
constraint, i.e., each license, in (P2). The dual price of each license
measures the monetary cost of not awarding the license to whom it has
been provisionally assigned under the solution to (P2). Thus, this
monetary cost has a clear and natural use in estimating the current
price of a license given the bids considered in the current round.

Constraints (2) in (P3) ensure that the dual price of a license must be
at least as large as the greatest bid made on that license. For a
package, these constraints ensure that the sum of the dual prices of the
licenses that make up a particular package must be at least as large as
the greatest bid made on that package. Constraints (3) in (P3) ensure
that if a license has not been bid on, the dual price of that license is
at least as large as the FCC bid amount.

Ideally, the solution to (P2) is identical to the solution of (P1). When
this occurs, the sum of the dual prices of the licenses comprising any
provisionally winning bid equals the winning bid amount. However, (P2)
is only an approximation to the integer problem[^177] and often
*overestimates* the maximum revenue of (P1). When this occurs, the sum
of the dual prices of the licenses in at least one provisionally winning
bid will be greater than the respective bid amount. Thus, using the dual
prices of (P3) can result in minimum acceptable bid amounts that are too
high.

We propose to resolve this issue by using *pseudo-dual prices,*[^178]
rather than the dual prices of (P3)*.* These pseudo-dual prices are
obtained by forcing the sum of the dual prices of the licenses
comprising a provisionally winning bid to equal its respective bid
amount. For example, suppose there are two bids in the provisionally
winning set in round *t*: a bid on license A for \$10 and a bid on
package BC for \$25. The pseudo-dual price of A would exactly equal \$10
and the sum of the pseudo-dual prices of B and C would exactly equal
\$25. These restrictions ensure that the sum of the pseudo-dual prices
equals the maximum revenue for the round (e.g. \$35) and that minimum
acceptable bid amounts reflect the bid amounts of bids in the
provisionally winning set.

Pseudo-dual prices for each license *i*, denoted *π~i~*, satisfy the
following constraints:

![](media/image5.wmf)

where *W^t^⊂ B^t^* is the provisionally winning bid set in round *t*
and*,*

*δ~j~* is a slack variable that represents the difference between the
bid amount of

non-winning bid *j* and the sum of pseudo-dual prices of the licenses
contained

in non-winning bid *j*

Constraints (5) ensure that for each provisionally winning bid, the sum
of the dual prices of the licenses comprising that bid equal its
respective bid amount. This new restriction requires that we ease
restriction (2) in (P3) for non-winning bids in order to ensure that a
feasible solution exists. Constraints (4) provide this needed slack.
Constraints (6) are equivalent to constraints (3) in (P3) and
constraints (7) force the slack variables to be non-negative.

Satisfying constraints (5) implies that the sum of the pseudo-dual
prices always yields the maximum revenue for the round. There are likely
to be many sets of pseudo-dual prices that satisfy this constraint set.
For instance, in the example provided earlier, the pseudo-dual prices of
B and C might be any two numbers that together sum to \$25.

By keeping constraints (4)-(7), we have the flexibility to choose an
objective function that will help in selecting among multiple solutions
while still ensuring that the sum of the pseudo-dual prices yields the
maximum revenue of the round. We would like an objective function that
minimizes the values of the slack variables *δ~j~,* for all *j∈ B^t^ \\
(W^t^ ∪ F)* in order to obtain pseudo-dual prices that are close to the
dual prices of (P3). We have tested a number of alternative objective
functions:

1.  Minimization of the maximum *δ~j~* for all *j∈B^t^ \\ (W^t^ ∪ F)*
    followed by maximization of the minimum *π~i~* for all *i* in
    license set *L*, in an iterative manner. (DeMartini, Kwasnica,
    Ledyard and Porter, 1999)

2.  Minimization of the sum of the squares of *δ~j~* for all *j∈B^t^ \\
    (W^t^ ∪ F)*. (also DeMartini, Kwasnica, Ledyard and Porter, 1999)

3.  Minimization of the sum of the *δ~j~* for all *j∈B^t^ \\ (W^t^ ∪ F)*
    using a "centering" algorithm[^179] to solve, essentially finding an
    average among all sets of optimal pseudo-dual prices.

In testing the above alternatives, we frequently observed instances
where the pseudo-dual price of a license significantly changed from
round to round. We acknowledge that prices of licenses should be allowed
to reflect real changes, both increases and decreases, in the way
bidders value the licenses over time. However, we believe that large
oscillations in minimum acceptable bid amounts for the same bid that are
due to irrelevant factors such as multiple optimal solutions, can be
confusing to bidders. We have therefore chosen a method that attempts to
balance minimizing the slack variables and reducing the fluctuations in
pseudo-dual prices from round to round. This method requires solving two
optimization problems, the first of which is alternative 3 above, which
we present as (P4):

(P4):![](media/image6.wmf)

Since multiple optimal solutions can exist to (P4) we solve a second
optimization problem that chooses a solution in a way that reduces the
magnitude of price fluctuations between rounds. Specifically, we use an
objective function that applies the concepts of exponential
smoothing[^180] to choose among alternative pseudo-dual prices with the
additional constraint on the problem that the sum of the slack variables
equals Ω^\*^ (the optimal value of (P4)). This objective function
minimizes the sum of the squared deviations of the resulting pseudo-dual
prices in round *t,* from their respective smoothed prices in round
*t-1.*[^181] At the start of the auction, we use the minimum opening bid
prices as the prior smoothed prices. Since these opening prices are
based on bandwidth and population, the pricing algorithm begins with *a
priori* information about the differences among licenses.

Let $\pi_{i}^{t}$ be the pseudo-dual price of license *i* in round *t.*
The smoothed price for license *i* in round *t* is calculated using the
following exponential smoothing formula:

$$p_{i}^{t} = \text{απ}_{i}^{t} + (1 - \alpha)p_{i}^{t - 1}$$

where $p_{i}^{t - 1}$is the smoothed price in round *t*-1,

0 ≤ α ≤ 1, and

$p_{i}^{0}$ = the minimum opening bid amount for license *i.*

Consistent with prior practice of the Commission, a weighting factor of
$\alpha = 0\text{.}5$ has been chosen but can change, as the Commission
requires*.*

The following quadratic program (QP) will find the pseudo-dual price,
$\pi_{i}^{t}$, for each license *i* in round *t* that minimizes the sum
of the squared deviations from the respective smoothed prices in round
*t-1* while ensuring that the pseudo-dual prices sum up to the
provisionally winning bid amounts and that the sum of the slack
variables is minimized.

(QP):![](media/image7.wmf)

where ![](media/image8.wmf) is known and treated as a constant within
the optimization.[^182]

Among alternative prices that satisfy all constraints, the objective
function of this optimization problem chooses one that forces the
pseudo-dual prices to be as close as possible to the previous round's
smoothed price. Thus, we call this the *Smoothed Anchoring Method* since
we "anchor" on the smoothed prices when solving for the pseudo-dual
prices. We define the "current price estimate" for license *i* in round
*t* as the pseudo-dual price, $\pi_{i}^{t}$, obtained by solving (QP).

The minimum acceptable bid amount for a license in round *t+1* under
part (iii) will be the current price estimate of the license, as
calculated above, plus z%. For a package, the value will be the sum of
the current price estimates of the licenses that make up the package
plus z% of the sum. This part (iii) amount is then compared to the
amounts of parts (i) and (ii), and the greatest is the minimum
acceptable bid for the next round.

# Attachment C

FCC AUCTION SEMINAR REGISTRATION FORM

Auction No. 31

The FCC will sponsor a one-day seminar for Auction No. 31 applicants.
The seminar is free of charge and will provide information about
pre-auction procedures, service and auction rules, conduct of the
auction, and the Automated Auction System.

A maximum of two representatives from each company may attend on a
reservation basis, first-come first-served until room capacity is
filled. Additional seating may be available on a stand-by basis the day
of the seminar. The seminar will be held:

Tuesday, April 30, 2002

Federal Communications Commission

445 12th Street SW

Washington, DC 20554

Registration 9:30 a.m. -- 10:00 a.m.

Seminar 10:00 a.m. - 4 p.m.

If hotel accommodations are needed

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

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

To register, complete the form below and

return no later than

Friday, April 26, 2002, by mail or fax to:

FCC Auction 31

Auctions Operations Branch

1270 Fairfield Road

Gettysburg, PA 17325-7245

FAX: 717-338-2850

Phone: 717-338-2888

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

I/We will attend the Auction No. 31 Seminar, scheduled for Tuesday,
April 30, 2002.

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

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

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

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

# Attachment D

ELECTRONIC FILING AND REVIEW

OF THE FCC FORM 175

Applicants must submit their FCC Form 175 applications electronically.
The FCC recommends submitting your Form 175 via the Internet. As a
contingency, you can submit via the FCC Wide-Area Network. FCC Form 175
applications must be submitted and confirmed by **6:00 p.m. ET on
Wednesday, May 8, 2002.** Late applications or unconfirmed submissions
of electronic data will not be accepted.

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

## Software Requirements

Applicants will need to meet the following minimum software
requirements:

-   Web Browser, either of the following:

```{=html}
<!-- -->
```
-   Microsoft® Internet Explorer 4.0 or higher (recommended). Your
    browser must have either Microsoft VM or Java Plug-In Version 1.3.1
    installed.

-   Netscape® Communicator™ 4.0 or higher, with Java Plug-In Version
    1.3.1.

> Java Plug-In Version 1.3.1 is available for downloading at
> [***http://java.sun.com/getjava/download.html***](http://java.sun.com/products/plugin/).

-   PDF Viewer: Adobe Acrobat Reader 4.0 or higher (available at
    ***http://www.adobe.com***)

-   If you wish to use the download feature on the Search Results page,
    you will need a .tar file extraction utility, e.g., Winzip
    (available at ***http://www.winzip.com***) or Pkzip for Windows
    (available at ***http://www.pkware.com/shareware***).

## Submitting FCC Form 175 Applications

You can submit FCC Form 175 applications electronically via the
Internet. Start your web browser and point it to either
***https://auctions.fcc.gov/*** (primary location) or
***https://auctions2.fcc.gov/*** (secondary location). On the FCC
Auctions page, click **Form 175 Application & Search** to obtain the
Form 175 Homepage.

**Note:** As a contingency, you may submit FCC Form 175 applications via
the FCC Wide Area Network, using Dial-Up Networking. To access the Wide
Area Network, configure your dial-up network to dial ***800-378-7435***.
(Alternatively, you can configure your dial-up network to dial
***877-844-2788***.)

### Logging On

The Form 175 Homepage has a Form 175 Logon area at the top right. This
area provides fields that let you identify yourself to the system before
submitting a Form 175 application.

**Important:** On December 3, 2001, the FCC Registration Number (FRN)
became mandatory for all parties conducting business with the FCC. An
FRN is mandatory for all filers logging onto the 175 Application System.

Once you have logged on with your FRN, you can click the **New Form**
link to obtain the *Profile* page for the auction.

### Uploading Attachments

When uploading attachments from the Form 175 *Attachments* page,
applicants may use a variety of file formats\--including Word 2000 or
earlier, WordPerfect 6.*x* or earlier, Adobe PDF, and ASCII text \-- and
should verify that the files contain all exhibit information. Also note
the following about files to be uploaded:

-   Graphics files (e.g., .*bmp, .tiff, .jpg*) and spreadsheets (e.g.,
    Excel, Lotus) are not supported,

-   Word processing files that are uploaded may not contain graphic
    images.

-   Do not include punctuation marks (e.g., ? . -- ,) in the name of a
    file to be uploaded. The FCC system will not be able to convert that
    file.

-   Do not upload a password-protected file. The FCC system will not be
    able to open it or convert it.

The system converts each uploaded attachment to PDF format. (The
conversion process generally completes within 30 minutes.) Until the
system has converted your file to PDF format, the description field
shows *Not converted*.

Repeat this procedure for each additional attachment you want to add.
When you have finished adding attachments, click the **Continue to
CERTIFICATION** button to obtain the *Certification* page.

#### Unreadable Attachment Files

If you are unable to read an attachment file after it has been
converted, please do the following:

1\. Re-upload the attachment.

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

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

After you have successfully re-uploaded an attachment, please delete the
old, unreadable attachment files using their **Delete** links.

### Completing the Submission Procedure

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

## Reviewing FCC Form 175 Applications

Once the FCC has completed the 175 Review process, you can view FCC Form
175 applications electronically by searching for them in the FCC
database. Start your web browser and point it to either
***https://auctions.fcc.gov/*** (primary location) or
***https://auctions2.fcc.gov/*** (secondary location). Click the **Form
175 Application & Search** link, then click the **SEARCH** link at the
top of the page. When the *Form 175 Search* page appears, select the
search criteria you want and then click the **Submit** button.

## Help

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

You can also contact Technical Support via e-mail. To obtain the
address, click the **Support** tab on the Form 175 Homepage.

# Attachment E

GUIDELINES FOR COMPLETION OF FCC FORM 175 AND EXHIBITS

## FCC Form 175

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

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

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

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

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

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

**Authorized Bidders:** Applicants must list the name(s) of the
person(s) (no more than three) authorized to represent them at the
auction. Only those individuals listed on the FCC Form 175 will be
authorized to place or withdraw bids for the applicant during the
auction.

**Bidding Credit Eligibility:** Applicants that qualify for a small or
very small business bidding credit must select the applicable bidding
credit (15 percent or 25 percent) in the bidding credit eligibility item
on the Form 175. Applicants are advised that this is the sole
opportunity applicants have to elect small business status and bidding
credit level (if applicable). There is no opportunity to change the
election once the short-form filing deadline passes on May 8, 2002.

**Telephonic or Electronic Bidding Options:** Bidders may participate in
the auction either electronically or telephonically, and must specify
their preference. To participate in the auction, every authorized bidder
must have a SecurID card, which the FCC will provide free of charge.

**License Selection:** Applicants should select all licenses on which
they want to be eligible to bid in the auction. Be advised that there is
no opportunity to change this list once the short-form filing deadline
passes on May 8, 2002. It is critically important that you confirm the
licenses that you have selected because the Automated Auction System
will not allow you to create packages with or place bids on licenses for
which an applicant has not applied on its FCC Form 175.

## Exhibits and Attachments 

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

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

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

*2) Re‑upload the attachment.*

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

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

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

### General Information

  -----------------------------------------------------------------------
  ***Applicant Status*** ***Required Information***
  ---------------------- ------------------------------------------------
  General Partnership    Name, citizenship, and address of all partners,
                         and the share or interest participation of each
                         partner

  Limited Partnership    Name, citizenship, and address of each limited
                         partner whose interest in the applicant is equal
                         to or greater than 10 percent (as calculated
                         according to the percentage of equity paid in
                         and the percentage of distribution of profits
                         and losses)

  Corporation            Corporate name and address; name, title, and
                         citizenship of a responsible officer or director

  Limited Liability      Corporate name and address; name, address, and
  Corporation            citizenship of all members whose interest in the
                         applicant is equal to or greater than 10 percent
                         (as calculated according to the percentage of
                         equity paid in and the percentage of
                         distribution of profits and losses)

  Trust                  Name, citizenship, and address of trustee

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

### Ownership Information

+----------------------+-----------------------------------------------+
| ***Applicant         | ***Required Information***                    |
| Status***            |                                               |
+======================+===============================================+
| All applicants       | Name, citizenship, and address of all         |
|                      | controlling interests of the applicant as     |
|                      | discussed in Part II.C.3 of this public       |
|                      | notice.                                       |
+----------------------+-----------------------------------------------+
| All applicants       | Name, citizenship, and address of all parties |
|                      | holding 10 percent or more of each class of   |
|                      | stock, warrants, options or debt securities   |
|                      | and the amount and percentage held.           |
+----------------------+-----------------------------------------------+
| All applicants       | Name of all parties holding a 10 percent or   |
|                      | greater interest in the applicant and the     |
|                      | specific amount held.                         |
+----------------------+-----------------------------------------------+
| All applicants       | List of all parties holding indirect          |
|                      | ownership interests in the applicant that     |
|                      | equals 10 percent or more, as determined by   |
|                      | successive multiplication of the ownership    |
|                      | percentages in each link of the vertical      |
|                      | ownership chain, except that if the ownership |
|                      | percentage for any link in the chain exceeds  |
|                      | 50 percent or represents actual control, it   |
|                      | shall be reported as if it were a 100 percent |
|                      | interest.                                     |
+----------------------+-----------------------------------------------+
|                      | *Example.* Company A owns 10% of Company B,   |
|                      | which owns 60% of Company C, which owns 25%   |
|                      | of the applicant. Company B's interest in the |
|                      | applicant would be 25% (the same as Company   |
|                      | C's interest since Company B's interest in    |
|                      | Company C exceeds 50%), and Company A's       |
|                      | interest in the applicant would be 2.5% (0.1  |
|                      | \* 0.25). Under the 10% attribution           |
|                      | benchmark, Company B's interest in the        |
|                      | applicant must be reported on the applicant's |
|                      | FCC Form 175 Exhibit A, while Company A's     |
|                      | interest in the applicant need not be         |
|                      | reported. However, if Company A owned 40% of  |
|                      | Company B in the above example, then Company  |
|                      | A's interest in the applicant would be 10%    |
|                      | (0.4 \* 0.25), and the applicant would need   |
|                      | to report it on the applicant's FCC Form 175  |
|                      | Exhibit A                                     |
+----------------------+-----------------------------------------------+
| All applicants       | List of any FCC-regulated entity or applicant |
|                      | for an FCC license, in which                  |
+----------------------+-----------------------------------------------+
|                      | > a\. the applicant;                          |
+----------------------+-----------------------------------------------+
|                      | > b\. any party with a 10 percent or greater  |
|                      | > interest in the applicant; or               |
+----------------------+-----------------------------------------------+
|                      | > c\. a controlling interest (as discussed in |
|                      | > Part II.C.3 of this public notice)          |
|                      |                                               |
|                      | owns a 10 percent or greater interest of the  |
|                      | applicant or 10 percent or more of any class  |
|                      | of stock, warrants, options or debt           |
|                      | securities of the applicant. (*See also* 47   |
|                      | C.F.R. § 1.2110) This list must include a     |
|                      | description of each such entities' principal  |
|                      | business and a description of each such       |
|                      | entities' relationship to the applicant.      |
+----------------------+-----------------------------------------------+
|                      | *Example of a.* The applicant owns 10 percent |
|                      | of Company A (an FCC regulated entity or an   |
|                      | applicant for an FCC license). The applicant  |
|                      | must list Company A on its FCC Form 175       |
|                      | Exhibit A and provide the required            |
|                      | information.                                  |
+----------------------+-----------------------------------------------+
|                      | *Example of b.* Company A owns 10 percent of  |
|                      | the applicant and 10 percent of Company B (an |
|                      | FCC regulated entity or an applicant for an   |
|                      | FCC license). The applicant must list both    |
|                      | Company A and Company B on its FCC Form 175   |
|                      | Exhibit A and provide the required            |
|                      | information.                                  |
+----------------------+-----------------------------------------------+
|                      | *Example of c.* Company A owns 55% of the     |
|                      | applicant and owns 10 percent of Company B    |
|                      | (an FCC regulated entity or an Applicant for  |
|                      | an FCC license). The applicant must list both |
|                      | Company A and Company B on its FCC Form 175   |
|                      | Exhibit A and provide the required            |
|                      | information.                                  |
+----------------------+-----------------------------------------------+

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

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

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

+----------------------+--------------------+-------------------------+
| ***Entity***         | ***Required        |                         |
|                      | Information***     |                         |
+======================+====================+=========================+
| Applicant            | Average annual     |                         |
|                      | gross revenues for |                         |
|                      | the preceding      |                         |
|                      | three years set    |                         |
|                      | forth *both        |                         |
|                      | separately*        |                         |
|                      | (*e.g.*, for each  |                         |
|                      | of the preceding   |                         |
|                      | three years        |                         |
|                      | individually) *and |                         |
|                      | in the aggregate*  |                         |
|                      | (for all of the    |                         |
|                      | preceding three    |                         |
|                      | years combined).   |                         |
|                      | Certification that |                         |
|                      | the average of the |                         |
|                      | aggregated annual  |                         |
|                      | gross revenues for |                         |
|                      | the preceding      |                         |
|                      | three years do not |                         |
|                      | exceed the         |                         |
|                      | required limit, or |                         |
|                      | providing average  |                         |
|                      | gross revenues for |                         |
|                      | the 3-year period  |                         |
|                      | without providing  |                         |
|                      | the gross revenues |                         |
|                      | for each of the    |                         |
|                      | preceding three    |                         |
|                      | years, is          |                         |
|                      | insufficient.      |                         |
+----------------------+--------------------+-------------------------+
| Applicant's          | Same information   |                         |
| Affiliates           | required as        |                         |
|                      | discussed above    |                         |
| *See* 47 CFR §§      |                    |                         |
| 1.2110, 1.2112       |                    |                         |
+----------------------+--------------------+-------------------------+
| Applicant's          | Same information   |                         |
| Controlling          | required as        |                         |
| Interests *See* 47   | discussed above    |                         |
| CFR §§ 1.2110,       |                    |                         |
| 1.2112.              |                    |                         |
+----------------------+--------------------+-------------------------+
|                      | *Example.* The     |                         |
|                      | applicant had      |                         |
|                      | gross revenues of  |                         |
|                      | \$500,000 in 1998, |                         |
|                      | \$1,000,000 in     |                         |
|                      | 2000, and          |                         |
|                      | \$3,000,000 in     |                         |
|                      | 2001, with average |                         |
|                      | gross revenues for |                         |
|                      | that time period   |                         |
|                      | of \$1,500,000.    |                         |
|                      | The applicant owns |                         |
|                      | 60% of Company A,  |                         |
|                      | making Company A   |                         |
|                      | an affiliate of    |                         |
|                      | the applicant      |                         |
|                      | under Section      |                         |
|                      | 1                  |                         |
|                      | .2110(c)(5)(i)(B). |                         |
|                      | Company B owns 52% |                         |
|                      | of the applicant,  |                         |
|                      | making Company B a |                         |
|                      | controlling        |                         |
|                      | interest of the    |                         |
|                      | applicant, as      |                         |
|                      | defined in Part    |                         |
|                      | II.C.3 of this     |                         |
|                      | public notice.     |                         |
|                      | Company B owns     |                         |
|                      | 100% of Company C, |                         |
|                      | making Company C   |                         |
|                      | an affiliate of    |                         |
|                      | the applicant's    |                         |
|                      | controlling        |                         |
|                      | interest, under    |                         |
|                      | Section            |                         |
|                      | 1                  |                         |
|                      | .2110(c)(5)(i)(C). |                         |
|                      | The applicant's    |                         |
|                      | Exhibit C would    |                         |
|                      | look like this:    |                         |
+----------------------+--------------------+-------------------------+
|                      | Applicant Name     |                         |
+----------------------+--------------------+-------------------------+
|                      | 1999 gross         | \$ 500,000              |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | 2000 gross         | \$ 1,000,000            |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | 2001 gross         | \$ 3,000,000            |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | Average gross      |                         |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | for the preceding  | \$ 1,500,000            |
|                      | 3 years            |                         |
+----------------------+--------------------+-------------------------+
|                      | Company A (an      |                         |
|                      | affiliate of the   |                         |
|                      | applicant)         |                         |
+----------------------+--------------------+-------------------------+
|                      | 1999 gross         | \$ enter amount         |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | 2000 gross         | \$ enter amount         |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | 2001 gross         | \$ enter amount         |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | Average gross      | \$ enter amount         |
|                      | revenues for the   |                         |
|                      | preceding 3 years  |                         |
+----------------------+--------------------+-------------------------+
|                      | Company B (a       |                         |
|                      | controlling        |                         |
|                      | interest in the    |                         |
|                      | applicant)         |                         |
+----------------------+--------------------+-------------------------+
|                      | 1999 gross         | \$ enter amount         |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | 2000 gross         | \$ enter amount         |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | 2001 gross         | \$ enter amount         |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | Average gross      | \$ enter amount         |
|                      | revenues for the   |                         |
|                      | preceding 3 years  |                         |
+----------------------+--------------------+-------------------------+
|                      | Company C (an      |                         |
|                      | affiliate of the   |                         |
|                      | applicant's        |                         |
|                      | controlling        |                         |
|                      | interest)          |                         |
+----------------------+--------------------+-------------------------+
|                      | 1999 gross         | \$ enter amount         |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | 2000 gross         | \$ enter amount         |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | 2001 gross         | \$ enter amount         |
|                      | revenues           |                         |
+----------------------+--------------------+-------------------------+
|                      | Average gross      | \$ enter amount         |
|                      | revenues for the   |                         |
|                      | preceding 3 years  |                         |
+----------------------+--------------------+-------------------------+

**NOTE:** Each member of an applicant that is applying to bid as a
consortium of small or very small

businesses must provide this information and qualify for the claimed
status.

**Exhibit D -- Information Required of All Applicants Regarding Prior
Defaults and Prior Delinquencies:** Each applicant must include at
Exhibit D a statement made under penalty of perjury indicating whether
or not the applicant, its affiliates, its controlling interests, or the
affiliates of its controlling interest have ever been in default on any
Commission licenses or have ever been delinquent on any non-tax debt
owed to any Federal agency. The applicant must provide such information
for itself, for each of its controlling interests and affiliates, and
for each affiliate of its controlling interests as defined by Section
1.2110 of the Commission's rules (as amended in the *Part 1 Fifth Report
and Order*).

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

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

**Waivers:** Applicants requesting waiver of any rules must submit a
statement of reasons sufficient to justify the waiver sought. *See* 47
C.F.R. §§ 1.3, 1.925.

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

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

**NOTE: Applicants must press the "SUBMIT Application" button on the
"Submission" page to successfully submit their FCC Form 175.**

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

Applicants are reminded that all information required in connection with
applications to participate in spectrum auctions is necessary to
determine the applicants' qualifications, and as such will be available
for public inspection. Required proprietary information may be redacted,
or confidentiality may be requested, following the procedures set forth
in 47 C.F.R. § 0.459. Such requests must be submitted by electronic mail
to the attention of Margaret Wiener, Chief, Auctions and Industry
Analysis Division, at the following address: <auction31@fcc.gov>, in
which case the applicant must indicate in Exhibit F that it has filed a
confidentiality request. Because the required information bears on
applicants' qualifications, the FCC envisions that confidentiality
requests will not be routinely granted.

The electronic mail summarizing the request must include a subject or
caption referring to Auction No. 31. The Bureau requests that parties
format any attachments to electronic mail as Adobe® Acrobat® (pdf) or
Microsoft® Word documents.

A separate copy of the letter should be faxed to the attention of
Kathryn Garland at (717) 338-2850.

# Attachment F

AUCTION-SPECIFIC INSTRUCTIONS FOR

FCC REMITTANCE ADVICE (FCC FORM 159-February 2000 edition)

## Upfront Payments

The following information supplements the standard instructions for FCC
Form 159 (Revised 2/00), and is provided to help ensure correct
completion of FCC Form 159 for upfront payments for Auction No. 31.
Applicants need to complete FCC Form 159 carefully, since:

-   **Mistakes may affect their bidding eligibility; and**

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-   **Lack of consistency between information set forth in FCC Form 159
    (Revised 2/00), FCC Form 175, long-form application, and
    correspondence about an application may cause processing delays.**

Therefore appropriate cross-references between the FCC Form 159
Remittance Advice and the FCC

Form 175 Short Form Application are described below:

Block

Number Required Information

> 1 LOCKBOX \# - Enter "358430"
>
> 2 Payer Name - Enter the name of the person or company making the
> payment.
>
> If the applicant itself is the payer, this entry would be the same as
> FCC Form 175.
>
> 3 Total Amount Paid - Enter the amount of the upfront payment
> associated with the FCC Form 159 (Revised 2/00).

8.  Street Address, City, State, ZIP Code - Enter the street mailing
    address (not Post

> Office box number) where mail should be sent to the payer. If the
> applicant is the
>
> payer, these entries would be the same as FCC Form 175 from the
> Applicant
>
> Information section.
>
> 9 Daytime Telephone Number - Enter the telephone number of a person
> knowledgeable about this upfront payment.
>
> 10 Country Code - For addresses outside the United States, enter the
> appropriate postal country code (available from the Mailing
> Requirements Department of the U.S. Postal Service).

11. Payer FRN -- Enter the payer's ten-digit FCC Registration Number
    (FRN)

> registered in the Commission Registration System (CORES).

12. Payer TIN -- Enter the payer's nine-digit Taxpayer Identification
    Number (TIN).

> 24A Payment Type Code - Enter "A31U"
>
> 25A Quantity - Enter the number "1"
>
> 26A Fee Due - Amount of Upfront Payment
>
> 27A Total Fee - Will be the same amount as 26A.
>
> 28A FCC Code 1 - Enter the number "31" (indicating Auction No. 31).

NOTES:

-   Do not use Remittance Advice (Continuation Sheet), FCC Form 159-C,
    for upfront payments.

-   If applicant is different from the payer, complete blocks 13 through
    22 for the applicant, using the same information shown on FCC
    Form 175. Otherwise leave them blank.

-   Since credit card payments will not be accepted for this auction,
    leave Section E blank.

## Winning Bidder Requirements, Down Payments and Final Payments

Specific information regarding down payments and final payments will be
included in a post-auction public notice announcing the winning bidders.

# Attachment G

**Summary of Package Bidding Rules for 700 MHz Auction**

## Available Packages

-   A bidder may bid only on those licenses selected on its Form 175 and
    on packages created from those licenses.[^183]

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-   Bidders will be permitted to create and bid on up to twelve
    different packages of their own choosing during the course of the
    auction. Bidders will not be required to identify or create their
    packages before the start of the auction, but may create their
    packages as the auction progresses.[^184] A bidder may modify or
    delete a package it has created up until the point where it has bid
    on the package and the round has closed. If the bidder submits a bid
    on a package and subsequently removes the bid during the same round,
    the bidder has the option of also deleting or modifying the package.
    However, once a bidder bids on a package and the round closes, the
    package may not be modified or deleted and counts as one of the
    bidder's twelve allowable packages.

## New Bids

-   *Minimum acceptable bid.* A bidder may make a minimum acceptable bid
    on a license/package.[^185] A minimum acceptable bid is the
    *greatest* of:

i.  The *minimum opening bid*. The Commission sets the minimum opening
    bids for licenses prior to the auction. Minimum opening bids for
    packages are the sum of the minimum opening bids for the licenses
    composing the package.[^186]

ii. A bidder's *previous high bid* on the license/package *plus x%.* The
    Commission sets x and may vary it during the course of the
    auction.[^187] Part (ii) does not apply if a bidder has not bid on a
    license/package.

iii. A current price estimate of the license or package plus z%. A
     current price estimate for each license will be calculated at the
     close of each round using the Smoothed Anchoring Method (see
     Attachment B). The current price estimate for a package will be the
     sum of the current price estimates of the licenses that comprise
     the package.

> After the first round of the auction, part (iii) of the minimum
> acceptable bid rule for a global package will always be the revenue
> generated by the provisionally winning bid set in the previous round
> plus w%.

-   *Multi-Increment bid.* A bidder may make multi-increment bids on a
    license/package. For multi-increment bids, an increment is equal to
    v% of the minimum acceptable bid, where v% is determined by the
    Commission.[^188] Thus, if v equals 10, bidders will be able to
    place multi-increment bids of the minimum acceptable bid plus
    approximately 10%, 20%, etc., with the maximum bid being
    approximately equal to the minimum acceptable bid plus 80%.[^189]

-   *Last and best bids*. A bidder may make up to two sets of last and
    best bids.[^190] The two sets of last and best bids must be
    submitted in a single round but will be treated as mutually
    exclusive.[^191] Once last and best bids are placed the bidder will
    not be permitted to place new bids or renew previous bids in any
    subsequent round.[^192] Each set of last and best bids may consist
    of bids on any or all of the licenses and any or all of the packages
    created by the bidder, consistent with activity rules and the twelve
    package limitation.[^193] The last and best bid amount for any
    license or package may be any amount, in thousand dollar increments,
    greater than or equal to the bidder\'s previous high bid on the
    license or package and less than or equal to the eighth increment
    above the minimum acceptable bid for that license or package.[^194]
    Also, if a bidder has never placed a bid on a package or license the
    lower bound on the last and best bid is equal to the minimum opening
    bid for that package or license.

## Renewed Bids

-   A bidder may renew a bid made previously on a license/package at the
    highest amount it previously bid on that license/package.[^195]
    Thus, a bidder can renew only its own last bid on a license/package,
    and a bidder's bids on a license/package may not decrease.[^196]

-   As discussed below (in the section on activity and eligibility),
    renewed provisionally winning bids count as bidding activity, while
    renewed *non*-provisionally winning bids do not receive any
    activity. Thus a bidder can renew non-provisionally winning bids
    without regard to its current eligibility, provided it has not made
    a last-and-best bid. Renewal of non-provisionally winning bids is
    constrained by initial eligibility, however.

-   Renewed bids are treated as being made in the current round.[^197]

## Determining Winners

-   In determining provisionally winning bids in the current round, we
    *consider:*

i.  All bids (new and renewed) placed in the auction

ii. A set of "FCC bids" on each license in the auction at some small
    dollar amount less than the respective minimum opening bid

-   Bids made by the same bidder in different rounds are treated as
    *mutually exclusive* ("or") bids.[^198] Thus for each bidder, any
    bids in the provisionally winning set must have been made in the
    same round. If a bidder does not want a bid from a previous round
    (including a provisionally winning bid) to be considered mutually
    exclusive with bids made in the current round, it must renew or
    increase the bid in the current round.[^199]

-   Overlapping bids (bids that include the same license) by the same
    bidder in the same round are treated as *mutually exclusive* ("or")
    bids.[^200]

-   The *provisionally winning* bids at the end of each round consist of
    those non-mutually exclusive considered bids that maximize revenue
    while assigning each license only once.

-   The *winning bids* are the provisionally winning bids when the
    auction closes.

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-   *Ties.* Ties will be broken randomly using a two-step process.[^201]
    To begin, each considered bid is assigned a selection number as the
    sum of n pseudo-random numbers where n is the number of licenses
    comprising the bid\'s package (n = 1 for individual license bids).
    Then with knowledge of the maximum revenue for the round, a second
    optimization determines the provisionally winning set by choosing a
    set of non-mutually exclusive considered bids that maximizes the sum
    of selection numbers while still yielding the maximum revenue.

-   A bid at the minimum opening bid beats the "FCC bid". This is
    accomplished by putting in "FCC bids" at some small amount less than
    the minimum opening bid.

## Closing Rules

-   The auction closes after the second round in which no new bids have
    been placed.[^202] Renewed bids (whether provisionally winning or
    non-provisionally winning) are not new bids. Last and best bids are
    considered to be new bids in the round in which they are placed
    except for those last and best bids placed at the bidder's previous
    high bid.[^203]

-   After the first round in which no new bids have been placed, bidders
    will receive a message warning that if no new bids are placed in the
    next round, the auction will close and the current provisionally
    winning bids will become the winning bids.

-   We run the solver after every round *except* the last round.

## Activity and Eligibility

-   *Bidding units.* Prior to the auction, licenses are assigned a
    specific number of bidding units for the purpose of calculating
    bidder compliance with the activity rules. The number of bidding
    units assigned to a license is fixed and does not increase as prices
    rise during the auction.

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-   *Bidding activity.* *Bidding activity* in a round is the maximum
    number of bidding units a bidder can win considering new bids and
    renewed provisionally winning bids placed in that round.[^204] A
    bidder's *bidding activity* in the current round must be *less* than
    or equal to its *current* eligibility.[^205]

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-   *Bidding exposure.* *Bidding exposure* in a round is the maximum
    number of bidding units a bidder can win considering *all* the bids
    (new, renewed provisionally winning, renewed non-provisionally
    winning) placed in that round. A bidder's *bidding exposure* in the
    current round must be *less* than or equal to its *initial*
    eligibility.

-   *Initial eligibility*. A bidder's *initial eligibility* is
    determined by its selection on Form 175 and the upfront payment it
    makes.[^206] Its initial eligibility in bidding units is equal to
    its upfront payment in dollars.

-   *Eligibility activity.* *Eligibility activity* in a round is the
    maximum number of bidding units a bidder can win considering new
    bids and renewed provisionally winning bids placed in that round,
    and the bidder's provisionally winning bids at the end of the
    previous round. Since bids made in different rounds are mutually
    exclusive, *eligibility activity* in a round is the *greater* of (i)
    bidding activity in the round; and (ii) the bidding units associated
    with the bidder's bids that remain in the provisionally winning set.

-   *Current eligibility.* A bidder's *eligibility* in the *current*
    round is the *lesser* of (i) its eligibility in the previous round
    and (ii) the reciprocal of the *activity requirement* (1/activity
    requirement) multiplied by its *eligibility activity* in the
    previous round.[^207] When the auction begins the eligibility
    activity requirement is one-half, so until we change it, the current
    eligibility is the lesser of previous round eligibility, and the
    reciprocal of previous round eligibility activity. Absent activity
    rule waivers, if eligibility activity in the current round falls
    below the eligibility activity requirement (*e.g.*, one-half) times
    current eligibility, eligibility in the next round will be reduced.

-   *Eligibility activity waivers.* If a bidder's eligibility activity
    does not meet the activity requirement, its eligibility is not
    reduced if it has a waiver available.[^208] Each bidder initially
    has five waivers. [^209] If a bidder has used up its five waivers
    and then fails to meet the activity requirement, the bidder's
    eligibility is reduced in the next round to meet the activity
    requirement, just as if it had affirmatively reduced its
    eligibility. A bidder may also affirmatively reduce its eligibility
    if it wishes in order not to use a waiver.[^210]

## Dollar Exposure

-   *Dollar exposure*. *Dollar exposure* in a round is the maximum
    dollar amount a bidder can owe considering *all* bids (new, renewed
    provisionally winning, renewed non-provisionally winning) placed in
    that round. A bidder's *dollar exposure* in the current round does
    not apply any bidding credits the bidder may have.

-   *Overall dollar exposure. Overall dollar exposure* in a round is the
    maximum dollar amount a bidder can owe considering all bids (new,
    renewed provisionally winning, renewed non-provisionally winning)
    placed by that bidder in the auction. A bidder's *overall dollar
    exposure* in the current round does not apply any bidding credits
    the bidder may have.

# Attachment H

**PACKAGE BIDDING ACTIVITY CALCULATIONS**

+---------------+------------------------------+-----------------------+
| **Name**      | **Definition**               | **Rule/Application**  |
+---------------+------------------------------+-----------------------+
| **Bidding     | Maximum number of bidding    | Bidding activity ≤    |
| activity**    | units a bidder can win       | current eligibility   |
|               | considering:                 |                       |
|               |                              | In the current round, |
|               | -   New bids                 | a bidder may not      |
|               |                              | place new bids or     |
|               | -   Renewed provisionally    | renew provisionally   |
|               |     winning bids made or     | winning bids so that  |
|               |     renewed in the current   | it can win more       |
|               |     round                    | bidding units than    |
|               |                              | its *current*         |
|               |                              | eligibility.          |
+---------------+------------------------------+-----------------------+
| **Bidding     | Maximum number of bidding    | Bidding exposure ≤    |
| exposure**    | units a bidder can win       | initial eligibility   |
|               | considering:                 |                       |
|               |                              | In the current round, |
|               | -   New bids                 | a bidder may not      |
|               |                              | place new bids or     |
|               | -   Renewed provisionally    | renew provisionally   |
|               |     winning bids             | winning or            |
|               |                              | non-provisionally     |
|               | -   Renewed                  | winning bids so that  |
|               |     non-provisionally        | it can win more       |
|               |     winning bids made or     | bidding units than    |
|               |     renewed in the current   | its *initial*         |
|               |     round                    | eligibility.          |
+---------------+------------------------------+-----------------------+
| **Eligibility | Maximum number of bidding    | Eligibility(t+1) =    |
| activity**    | units a bidder can win       | min \[eligibility(t), |
|               | considering:                 | 1/eligibility         |
|               |                              | activity requirement  |
|               | -   New bids                 | \* eligibility        |
|               |                              | activity(t)\]         |
|               | -   Renewed provisionally    |                       |
|               |     winning bids made or     | A bidder's            |
|               |     renewed in the current   | eligibility in the    |
|               |     round                    | current round is the  |
|               |                              | *lesser* of: (i) its  |
|               | -   Provisionally winning    | eligibility in the    |
|               |     bids at the end of the   | previous round, or    |
|               |     previous round           | (ii) its eligibility  |
|               |                              | activity in the       |
|               | Eligibility activity = max   | previous round times  |
|               | \[bidding activity, bidding  | the reciprocal of the |
|               | units associated with a      | eligibility activity  |
|               | bidder's provisionally       | requirement, if it    |
|               | winning bids\]               | does not use an       |
|               |                              | activity rule waiver. |
+---------------+------------------------------+-----------------------+

# Attachment I

SUMMARY LISTING OF DOCUMENTS FROM THE COMMISSION

AND THE WIRELESS TELECOMMUNICATIONS BUREAU

ADDRESSING APPLICATION OF THE ANTI-COLLUSION RULES

## Commission Decisions:

*Second Report and Order* in PP Docket No. 93‑253, FCC 94‑61, 9 FCC Rcd.
2348, 2386‑2388 (1994), paragraphs 221‑226.

*Fifth Report and Order in* PP Docket No. 93‑253, FCC 94‑178, 9 FCC Rcd.
5532, 5570‑5571 (1994), paragraphs 91‑92.

*Fourth Memorandum Opinion and Order* in PP Docket No. 93‑253, FCC
94‑264, 9 FCC Rcd. 6858, 6866‑6869 (1994), paragraphs 47‑60.

*Second Memorandum Opinion and Order* in PP Docket No. 93‑253, FCC
94‑215, 9 FCC Rcd. 7245, 7253‑7255 (1994), paragraphs 48‑55.

*Memorandum Opinion and Order* in PP Docket No. 93‑253, FCC 94‑295, 9
FCC Rcd. 7684, 7687‑7689 (1994), paragraphs 8‑12.

In re Commercial Realty St. Pete, *Notice of Apparent Liability for
Forfeiture,* 10 FCC Rcd. 4277 (1995), In re Commercial Realty St. Pete,
*Memorandum Opinion and Order,* 11 FCC Rcd. 15,374 (1996).

In re Applications of Mercury PCS II, LLC, *Notice of Apparent Liability
for Forfeiture,* 12 FCC Rcd. 17,970 (1997) (petition for partial
reconsideration pending).

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,
FCC 97‑413, *Third Report and Order and Second Further Notice of
Proposed Rule Making,* 13 FCC Rcd. 374, 463‑469 (1997), paragraphs
155-­166.

In re Application of US West Communications, Inc., *Notice of Apparent
Liability for Forfeiture,*13 FCC Rcd 8286 (1998); In the Matter of
Notice of Apparent Liability for Forfeiture of US West Communications,
Inc., *Order*, FCC 99-90 (May 7, 1999).

In re Application of Western PCS BTA I Corporation, *Notice of Apparent
Liability for Forfeiture, FCC* 98‑42 (March 16, 1998); In the Matter of
Notice of Apparent Liability for Forfeiture of Western PCS BTA 1
Corporation, *Memorandum Opinion and Orde*r, 14 FCC Rcd 21571, 21577-78,
¶ 20 (rel. Dec. 13, 1999).

In the Matter of Amendment of Part 1 of the Commission's
Rules---Competitive Bidding Procedures, *Seventh Report and Order*, FCC
01-270 (rel. September 27, 2001).

## Wireless Telecommunications Bureau Decisions:

Amendment of Parts 21 and 74 of the Commission's rules with Regard to
Filing Procedures in the Multipoint Distribution Service and in the
Instructional Television Fixed Service, *Order,* 11 FCC Rcd. 9655
(Wireless Tel. Bur. 1995).

In re Applications of GWI PCS, Inc. For Authority to Construct and
Operate Broadband PCS Systems Operating on Frequency Block C,
*Memorandum Opinion and Order,* 12 FCC Rcd. 6441 (Wireless Tel. Bur.
1997).

In re Applications of Mercury PCS II, LLC, For Facilities in the
Broadband Personal Communications Services in the D, E, and F Blocks,
*Memorandum Opinion and Order on Reconsideration,* 12 FCC Rcd. 18,093
(Wireless Tel. Bur. 1997).

In the Matter of Applications of High Plains Wireless, L.P., For
Authority to Construct and Operate Broadband PCS Systems on Frequency
Blocks D, E, and F, *Memorandum Opinion and Order,* 12 FCC Rcd. 19,627
(Wireless Tel. Bur. 1997).

In the Matter of Applications of Mercury PCS II, LLC, For Authority to
Construct and Operate Broadband PCS Systems on Frequency Blocks D, E,
and F, *Memorandum Opinion and Order,* 13 FCC Rcd. 5756 (Wireless Tel.
Bur. 1997).

### Public Notices:

Wireless Telecommunications Bureau Clarifies Spectrum Auction
Anti‑Collusion Rules, *Public Notice,* 11 FCC Rcd. 9645 (1995).

FCC Staff Clarifies Application of Anti‑Collusion Rule to Broadband PCS
'C' Block Reauction, *Public Notice,* 11 FCC Rcd. 7031 (1996).

Wireless Telecommunications Bureau Provides Guidance on the
Anti‑Collusion Rule for D, E and F Block Bidders, *Public* *Notice,* 11
FCC Rcd. 10,134 (1996).

Wireless Telecommunications Bureau Responds to Questions About the Local
Multipoint Distribution Service Auction, *Public Notice*, DA 98-37 (rel.
January 9, 1998).

### Letters from the Office of General Counsel and the Wireless Telecommunications Bureau:

*Letter to Gary M. Epstein and James H. Barker from William E. Kennard,
General Counsel, Federal Communications Commission* (released October
25, 1994).

*Letter to Alan F. Ciamporcero from William E Kennard, General Counsel,
Federal Communications Commission* (released October 25, 1996).

*Letter to R. Michael Senkowski from Rosalind K. Allen, Acting Chief,
Commercial Radio Division, Wireless Telecommunications Bureau* (released
December 1, 1994).

*Letter to Leonard J. Kennedy from Rosalind K. Allen, Acting Chief,
Commercial Radio Division, Wireless Telecommunications Bureau* (released
December 14, 1994).

*Letter to Jonathan D. Blake and Robert J. Rini from Kathleen O'Brien
Ham, Chief, Auctions Division, Wireless Telecommunications Bureau,* DA
95‑2404 (released November 28, 1995).

*Letter to Mark Grady from Kathleen O'Brien Ham, Chief, Auctions
Division, Wireless Telecommunications Bureau,* 11 FCC Rcd. 10,895
(1996).

*Letter to David L. Nace from Kathleen O'Brien Ham, Chief, Auctions
Division, Wireless Telecommunications Bureau,* 11 FCC Rcd. 11,363
(1996).

*Letter to Elliott J. Greenwald from Christopher J. Wright, General
Counsel, Federal Communications Commission* (released April 6, 1998).

*Letter to Robert Pettit, Wiley, Rein & Fielding from Margaret W.
Wiener, Chief, Auctions and Industry Analysis Division, Wireless
Telecommunications Bureau*, DA 00-2905 (released December 26, 2000).

### Civil Actions Initiated by U.S. Department of Justice:

*U.S. v. Omnipoint Corp.,* Proposed Final Judgements and Competitive
Impact Statements, Department of Justice, 63 FR 65,228 (November 25,
1998).

"Justice Department Sues Three Firms Over FCC Auction Practices," *Press
Release, U.S.* Department of Justice (November 10, 1998).

Complaint, *U.S.* *v. Omnipoint Corp.,* No. 1:98CV02750 (D.D.C. November
10, 1998).

Complaint, *U.S. v.* *Mercury PCS II, L.L C.,* No. 1:98CV02751 (D.D.C.
November 10, 1998).

Complaint, *U.S. v. 21st Century Bidding Corp., No.* 1:98CV02752 (D.D.C.
November 10, 1998).

###  {#section .unnumbered}

How to Obtain Copies of the Anti-Collusion Decisions:

Many of the documents listed in this attachment can be retrieved from
the following Commission web site:
[http://wireless.fcc.gov/auctions/anticollusion](http://www.fcc.gov/wtb/auctions/collusio/collusio.html)[.]{.underline}

The documents may be located by using our search engine (select the link
"search"). Documents retrieved from the web site are available in
various formats including Word, WordPerfect, Acrobat Reader, Excel, and
ASCII Text. To review a document in its entirety, including footnotes,
it is necessary to access the document in WordPerfect, MS Word, or
Acrobat Reader.

Additionally, all of these documents can be ordered in hard copy for a
fee from the Commission's contractor, Qualex International at (202)
863-2893.

[^1]: *See* Auction of Licenses in the 747-762 and 777-792 MHz ("700
    MHz") Bands Scheduled for May 10, 2000; Comment Sought on Reserve
    Prices or Minimum Opening Bids and Other Auction Procedural Issues,
    DA 00-43, *Public Notice*, 15 FCC Rcd 670 (2000) *(\"Auction No. 31
    Comment Public Notice*\"); Auction of Licenses in the 747-762 and
    777-792 MHz Bands; Auction Notice and Filing Requirements for 12
    Licenses in the 700 MHz Bands Auction Scheduled for May 10, 2000;
    Minimum Opening Bids and Other Auction Procedural Issues, DA 00-292,
    *Public Notice*, 15 FCC Rcd 2921 (2000) ("*Auction No. 31 Procedures
    Public Notice*"); Auction of Licenses in the 747--762 and 777--792
    MHz Bands Scheduled for September 6, 2000; Comment Sought on
    Modifying the Simultaneous Multiple Round Auction Design to Allow
    Combinatorial (Package) Bidding, DA 00-1075, *Public Notice*, 15 FCC
    Rcd 8809 (2000) ("*Auction No. 31 Package Bidding Comment Public
    Notice*"); Auction of Licenses in the 747-762 and 777-792 MHz Bands
    Scheduled for September 6, 2000, Procedures Implementing Package
    Bidding for Auction No. 31; Bidder Seminar Scheduled for July 24,
    2000, DA 00-1486, *Public Notice*, 15 FCC Rcd 11,526 (2000)
    ("*Auction No. 31 Package Bidding Procedures Public Notice*");
    Auction of Licenses in the 747-762 and 777-792 MHz Bands Scheduled
    for March 6, 2001; Comment Sought on Modifying the Calculation for
    Determining Minimum Accepted Bids and Changing the Provisions
    Concerning "Last and Best" Bids, DA 00-2404, *Public Notice*, 15 FCC
    Rcd 21,424 (2000) ("*Auction No. 31 Package Bidding Modification
    Comment Public Notice*"); Auction of Licenses in the 747-762 and
    777-792 MHz Bands Scheduled for March 6, 2001; Modifications to the
    Calculation for Determining Minimum Acceptable Bids and the
    Provisions Concerning "Last and Best Bids" and Other Procedural
    Issues; Bidder Seminar Scheduled for January 23, 2001, and Test of
    Package Bidding System Set for January 24, 25, and 26, 2001, DA
    01-12, *Public Notice*, 16 FCC Rcd 217 (2001) ("*Auction No. 31
    Package Bidding Procedures Modification Public Notice*"); Auction of
    License in the 747-762 and 777-792 MHz Bands Scheduled for June 19,
    2002; Comment Sought on Adding to Auction Inventory and Further
    Modifying Package Bidding Procedures, DA 02-260, *Public Notice*, 17
    FCC Rcd 2117 (2002) ("*Auction No. 31 Further Modifications Comment
    Public Notice*").

[^2]: *See*, generally, *Auction No. 31 Further Modifications Comment
    Public Notice*.

[^3]: The Bureau received comments from Ronald M. Harstad, Aleksandar
    Pekec, and Michael H. Rothkopf (collectively "Harstad"); the Major
    Cities Chiefs Association ("MCC"); Paxson Communications Corporation
    ("Paxson"); Spectrum Exchange Group, LLC and Allen & Company
    Incorporated ("Spectrum Exchange/Allen"); and United States Cellular
    Corporation ("US Cellular"). The Bureau received reply comments from
    Harstad; Entravision Communications Corporation ("Entravision");
    Paxson; the Rural Telecommunications Group ("RTG"); Members and
    Supporters of the Spectrum Clearing Alliance ("SCA1"); a separate
    group of Members and Supporters of the Spectrum Clearing Alliance
    ("SCA2") and Spectrum Exchange/Allen. As discussed further *infra*,
    the Bureau also sought comment regarding the potential inclusion of
    24 additional licenses in Auction No. 31 from parties interested in
    the auction where those licenses otherwise would be sold, Auction
    No. 44. *See,* Section I(A)(2), "Licenses to Be Auctioned," *infra*.

[^4]: *See* 47 U.S.C. § 337(a).

[^5]: *See* 47 U.S.C. § 337(b)(2)(a)(1999)(subsequently repealed). In
    November 1999, Congress repealed this subsection in a consolidated
    appropriations statute. Consolidated Appropriations Act, 2000 Pub.
    L. No. 106-113, 113 Stat. 2502, Appendix E, § 213; *see* 145 Cong.
    Rec. H12493-94 (Nov. 17, 1999). The Consolidated Appropriations Act
    accelerated the schedule for auction of the commercial spectrum
    bands, and required that the proceeds from the auction of these
    bands be deposited in the U.S. Treasury by September 30, 2000.
    Subsequently, the Commission concluded that the accelerated
    statutory deadline conflicted with statutory requirements governing
    spectrum management and spectrum auctions. Cellular
    Telecommunications Industry Association *et al*.'s Request for Delay
    of the Auction of Licenses in the 747-762 and 777-792 MHz Bands
    Scheduled for September 6, 2000 (Auction No. 31), *Memorandum
    Opinion and Order*, 15 FCC Rcd 17,406 (2000). After reviewing these
    conflicting statutory mandates, the Commission concluded that it
    should schedule Auction No. 31 for a date after September 30, 2000.
    *See* *id.* Following a further postponement, the Bureau
    subsequently established the current June 19, 2002 auction date.
    *See* Auction of Licenses in the 747-762 and 777-792 MHz Bands
    (Auction No. 31) Scheduled for June 19, 2002, DA 01-2394, *Public
    Notice*, 16 FCC Rcd 18,510 (2001).

[^6]: *See* 47 U.S.C. §§ 309(j)(14) and 337(e). *See also* Advanced
    Television Systems and Their Impact Upon Existing Television
    Broadcast Service, MM Docket No. 87-268, *Reconsideration of Fifth
    Report and Order*, 13 FCC Rcd 6860, 6887 (1998).

[^7]: *See* Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, Carriage of the Transmissions of Digital Broadcast Stations,
    CS Docket No. 98-120, Review of the Commission's Rules and Policies
    Affecting the Conversion to Digital Television, MM Docket No. 00-39,
    *First Report and Order*, 15 FCC Rcd 476 (2000) (*Upper 700 MHz
    First Report and Order*).

[^8]: *See* Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, Carriage of the Transmissions of Digital Broadcast Stations,
    CS Docket No. 98-120, Review of the Commission's Rules and Policies
    Affecting the Conversion to Digital Television, MM Docket No. 00-39,
    *Memorandum Opinion and Order and Further Notice of Proposed
    Rulemaking*, 15 FCC Rcd 20845 (2000) (*Upper 700 MHz MO&O and
    FNPRM*).

[^9]: Service Rules for the 746-764 and 776-794 MHz Bands, and Revisions
    to Part 27 of the Commission's Rules, WT Docket No. 99-168, Carriage
    of the Transmissions of Digital Broadcast Stations, CS Docket No.
    98-120, Review of the Commission's Rules and Policies Affecting the
    Conversion to Digital Television, MM Docket No. 00-39, *Third Report
    and Order*, 16 FCC Rcd 2703, 2712-17 ¶¶ 19-23 (2001) (*Upper 700 MHz
    Third Report and Order*).

[^10]: Bidders are limited to bidding on, and hence creating packages
    from, those licenses which they selected on their FCC Form 175 and
    for which they have eligibility. *See generally* Section IV.A.2,
    Maximum Eligibility, and IV.A.3, Activity and Eligibility Rules. For
    more detail on packages, see Section IV.B.7, Packages.

[^11]: *Further Modifications Comment Public Notice* at 1-2.

[^12]: Metropolitan Statistical Areas (MSAs) and Rural Service Areas
    (RSAs) are collectively known as Cellular Market Areas (CMAs).

[^13]: *Auction No. 31 Further Modifications Public Notice* at 2.

[^14]: *Further Modifications Comment Public Notice* at 2 and nn. 5 and
    6; *see* Auction of Licenses in the 698-746 MHz Band Scheduled for
    June 19, 2002; Comment Sought on Reserve Prices or Minimum Opening
    Bids and other Auction Procedural Issues, DA 02-200, *Public
    Notice*, 17 FCC Rcd 1617 (2002) ("*Auction No. 44 Comment Public
    Notice*"). The Bureau received eight comments and thirteen reply
    comments in response to the *Auction No. 44 Comment Public Notice*.
    The Bureau received comments from the following parties: McBride
    Spectrum Partners, LLC ("McBride"); Paxson; the Rural 700 MHz Group
    ("Rural Group"); the Rural Telecommunications Group ("RTG"); Scott
    D. Reiter and Vincent D. McBride (collectively "Reiter"); Spectrum
    Exchange/Allen; Telecom Consulting Associates ("TCA"); and US
    Cellular. The Bureau received reply comments from the following
    parties: Council Tree Communications, LLC ("Council Tree"); Leap
    Wireless International, Inc. ("Leap"); McBride; the National
    Telephone Cooperative Association ("NTCA"); Norwell Television, LLC
    ("Norwell"); Paxson; Rural Group; RTG; Members and Supporters of the
    Spectrum Clearing Alliance ("SCA Supporters"); Spectrum
    Exchange/Allen; TCA; and US Cellular.

[^15]: Comments of Rural 700 MHz Group at 2; Comments of RTG at 2-3.

[^16]: Comments of Rural 700 MHz Group at 2.

[^17]: *Id*. at 2-3.

[^18]: Comments of RTG at 2-3.

[^19]: *Id.* at 2-3.

[^20]: Auction No 44 Comments of TCA at 2.

[^21]: Auction No. 44 Reply Comments of TCA at 2-3.

[^22]: Auction No. 44 Reply Comments of McBride at 1-2. *But see*
    Auction No. 44 Reply Comments of McBride at 3, in which McBride
    supports consolidation of licenses into a single auction.

[^23]: Auction No. 44 Reply Comments of the NTCA at 1-2.

[^24]: Auction No. 44 Reply Comments of Leap at 1-2.

[^25]: *Id.* at 2-5. Leap also requests that the Commission create more
    MSA/RSA licenses from the Lower 700 MHz spectrum. *Id.* The
    Commission decided on a band plan for the Lower 700 MHz band in the
    *Lower 700 MHz Report & Order*. *See* Reallocation and Service Rules
    for the 698-746 Spectrum MHz Band (Television Channels 52-59), GN
    Docket 01-74, *Report and Order*, 17 FCC Rcd 1022 ("*Lower 700 MHz
    Report & Order*") at ¶¶ 7-36. Because this issue has been addressed
    by the Commission and was not an issue on which the Bureau sought
    comment, we will not address it in this public notice.

[^26]: Comments of Paxson at 7-11; *see also* Auction No. 44 Reply
    Comments of Paxson at 3-5.

[^27]: *Id.* at 8-9.

[^28]: Auction No. 44 Reply Comments of Paxson at 3-5

[^29]: Auction No.44 Comments of Spectrum Exchange/Allen at 5-7; see
    also Reply Comments of Spectrum Exchange/Allen at 1-2.

[^30]: Reply Comments of Spectrum Clearing Alliance at 1-2.

[^31]: Reply Comments of Entravision at 1-2.

[^32]: Comments of US Cellular at 2.

[^33]: *Id.*

[^34]: Auction No.44 Comments of TCA at 2; *see also* Comments of RTG at
    2-3, and Auction No. 44 Reply Comments of the NTCA at 1-2.

[^35]: Reallocation and Service Rules for the 698-746 MHz Spectrum Band
    (Television Channels 52-59), GN Docket No. 01-74, *Report and
    Order*, FCC 01-364, (rel. January 18, 2002) ("*Lower 700 MHz Report
    and Order*"), at ¶ 173.

[^36]: *Id.* at ¶ 95.

[^37]: *Lower 700 MHz Report & Order*, at ¶ 174.

[^38]: Reallocation of Television Channels 60-69, the 746-806 MHz Band,
    ET Docket No. 97-157, *Report and Order*, 12 FCC Rcd 22,953 (1998),
    *recon*., 13 FCC Rcd 21,578 (1998) ("*Reallocation and
    Reconsideration"*)

[^39]: Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, Carriage of the Transmissions of Digital Broadcast Stations,
    CS Docket No. 98-120, Review of the Commission's Rules and Policies
    Affecting the Conversion to Digital Television, MM Docket No. 00-39,
    *Order on Reconsideration of Third Report and Order*, 16 FCC Rcd
    21,633 (2001) ("*Upper 700 MHz Third Report and Order
    Reconsideration*").

[^40]: Amendment of Part 1 of the Commission's Rules---Competitive
    Bidding Procedures, WT Docket No. 97-82, *Order on Reconsideration
    of the Third Report and Order*, *Fifth Report and Order*, and
    *Fourth Further Notice of Proposed Rule Making*, 15 FCC Rcd 15293
    (2000) (modified by Erratum, DA 00-2475 (rel. Nov. 3, 2000)) ("*Part
    1 Fifth Report and Order*"). Subsequently, the Commission amended
    Section 1.2105 of the Competitive Bidding Rules. In the Matter of
    Amendment of Part 1 of the Commission's Rules\--Competitive Bidding
    Procedures, *Seventh Report and Order*, 16 FCC Rcd 17546, 17555, ¶
    17 (2001) ("*Part 1* *Seventh Report and Order*"). *See infra* note
    47. On February 8, 2002, the Commission further amended Section
    1.2110 of the Competitive Bidding Rules. Amendment of Part 1 of the
    Commission's Rules -- Competitive Bidding Procedures, *Eighth Report
    and Order*, FCC 02-34 (rel. February 13, 2002). These most recent
    amendments take effect 30 days after publication in the Federal
    Register.

[^41]: *See* *Part 1 Fifth Report and Order*, 15 FCC Rcd at 15297-98, ¶¶
    7-8; *see also* 47 C.F.R. § 1.2105.

[^42]: *See* In re Application of Nevada Wireless for a License to
    Provide 800 MHz Specialized Mobile Radio Service in the Farmington,
    NM-CO Economic Area (EA-155) Frequency Band A, *Memorandum Opinion
    and Order,* 13 FCC Rcd. 11973, 11977 ¶ 11 (1998) ("*Nevada
    Wireless*"*)*.

[^43]: *See id*., at 11978.

[^44]: *See* 47 C.F.R. § 1.2105(c).

[^45]: *See* Wireless Telecommunications Bureau Clarifies Spectrum
    Auction Anti-Collusion Rules, *Public Notice*, 11 FCC Rcd 9645
    (1995).

[^46]: *See* 47 C.F.R. § 1.65.

[^47]: The Commission amended Section 1.2105 to require auction
    applicants to report prohibited communications in writing to the
    Commission immediately, but in no case later than five business days
    after the communication occurs. *Part 1* *Seventh Report and Order*,
    16 FCC Rcd at 17555, ¶ 17.

[^48]: 47 C.F.R. § 27.60.

[^49]: In addition, licensees operating fixed stations in the 747-762
    MHz band must comply with the relevant provisions for "base
    stations" in Sections 27.60 and 90.309 of our Rules; and licensees
    operating fixed stations in the 777-792 MHz band must comply with
    the relevant provisions for "control stations" in Sections 27.60 and
    90.309 of our Rules. *See* 47 C.F.R. §§ 27.60, 90.309.

[^50]: A Due Diligence Announcement that includes a listing of some of
    the pending matters that may relate to the 746- 806 MHz band will be
    released shortly. The Bureau does not represent that this list will
    include all pending matters that may relate to the 746-806 MHz band.

[^51]: *See Upper 700 MHz First Report and Order,* 15 FCC Rcd at 534 *¶*
    145.

[^52]: *See* Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, *Memorandum Opinion and Order and Further Notice of Proposed
    Rulemaking*, 15 FCC Rcd 20845, 20870-71 ¶ 61 (2000) ("*Upper 700 MHz
    MO&O and FNPRM").*

[^53]: *See* Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, Carriage of the Transmissions of Digital Broadcast Stations,
    CS Docket No. 98-120, Review of the Commission's Rules and Policies
    Affecting the Conversion to Digital Television, MM Docket No. 00-39,
    *Third Report and Order*, 16 FCC Rcd 2703, 2718 at ¶ 36 (2001)
    ("*Upper 700 MHz Third Report and Order").*

[^54]: *See* Service Rules for the 746-764 and 776-794 MHz Bands, and
    Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, Carriage of the Transmissions of Digital Broadcast Stations,
    CS Docket No. 98-120, Review of the Commission's Rules and Policies
    Affecting the Conversion to Digital Television, MM Docket No. 00-39,
    *Order on Reconsideration of the* *Third Report and Order*, 16 FCC
    Rcd 21,633 (2001).

[^55]: *See Upper 700 MHz MO&O and FNPRM,* 15 FCC Rcd at 20870 ¶ 61.

[^56]: *Id.*

[^57]: *See Upper 700 MHz First Report and Order*, 15 FCC Rcd at
    534-5*.*

[^58]: *Id.* Furthermore, both Canada and Mexico have been notified that
    the Commission has changed the allocation of these bands, and the
    Commission has discussed with them the possibility of mutually
    compatible spectrum use in all three countries.

[^59]: *See 700 MHz First Report & Order,*15 FCC Rcd at 480-1 n. 17.
    There, the Commission stated that: "many agreements have used the
    geographic distance of 120 km from the border as the coordination or
    affected area. We will apply this criterion until agreements are
    reached."

[^60]: A Letter of Understanding ("LOU") with Canada recognized U.S.
    plans to use this band for other than broadcasting services, and
    notes that Canada is independently considering a reduction of the
    spectrum in this band allocated to television. This LOU also
    specifically provides for non-broadcast allocations and services in
    the 746-806 MHz bands (Channels 60-69) by establishing criteria to
    protect DTV stations and analog TV stations established in
    accordance with the existing TV Agreement (Nov. 3, 1993 -- Jan. 5,
    1994). The FCC and Mexico\'s Secretariat of Communications and
    Transportation have signed a Memorandum of Understanding ("MOU")
    that establishes procedures for implementing digital television
    (DTV) service along the United States/Mexico border and approves all
    five DTV stations in the U.S./Mexico border area slated to begin
    service in November 1998 and May 1999. The MOU, which covers DTV
    operations in the area extending 275 kilometers on either side of
    the U.S./Mexico common border, contains the following provisions: a
    list of mutually acceptable second channel DTV allotments for each
    country; procedures to be used for notifying each administration of
    plans to implement DTV service relative to an allotment; and the
    methods to be used by each administration in evaluating the
    acceptability of proposed DTV facilities.

[^61]: *See 700 MHz First Report & Order*, 15 FCC Rcd at 534 ¶ 146.
    Agreements affecting the use of this band between the United States,
    Canada and Mexico may be referenced on the Internet at
    http://www.fcc.gov/ib/pnd/agree/.

[^62]: *See id.* at ¶ 141. *See also* 47 C.F.R. § 27.60; *See also*
    Section I.B.3 of this Public Notice.

[^63]: *See* 47 C.F.R. §§ 27.60, 90.309.

[^64]: *See* 47 C.F.R. § 1.2105.

[^65]: *See* 47 C.F.R. Ch. 1, Subpart I.

[^66]: *See* 47 C.F.R. §§ 1.1305-1.1319.

[^67]: Although the Bureau did not seek comment on the issue, several
    commenters stated their opposition to any delay of Auction No. 31.
    *See, e.g.*, Comments of Paxson, *passim*. US Cellular favored
    postponement of Auction No. 31 to permit development of band
    clearing agreements. *See* Comments of US Cellular at 3-4. In its
    Auction No. 44 filing, Leap Wireless suggests that Auction No. 31
    not be held until the status of Auction No. 35 is resolved. *See*
    Reply Comments of Leap at 6. As noted above, Auction No. 31 is
    scheduled to begin concurrently with Auction No. 44 on June 19,
    2002, as previously announced.

[^68]: *See* below Section IV.A.1, Simultaneous Multiple Round with
    Package Bidding.

[^69]: 47 C.F.R. § 1.2105 requires the disclosure on the short-form of
    the applicant's ownership information as set forth in 47 C.F.R. §
    1.2112. Note that both of these sections were revised in the *Part 1
    Fifth Report and Order*.

[^70]: *See* 47 C.F.R. §§ 1.2105(a)(2)(viii), (c)(1).

[^71]: *See* 47 C.F.R*.* § 1.2105(a)(2)(ix).

[^72]: *See* Section I.B.2 "Prohibition of Collusion," above.

[^73]: *See* 47 C.F.R. § 1.2105(c)(4)(i), (ii).

[^74]: *See* 47 C.F.R. §§ 1.2110(f), 27.502.

[^75]: *Id.*

[^76]: *Id.*

[^77]: The eligibility for small business preferences will be determined
    based on the attribution rules in effect at the short-form
    application deadline. *See* *Part 1 Fifth Report and Order*, 15 FCC
    Rcd at 15327, ¶ 67. *See also* note 12, above.

[^78]: *Part 1 Fifth Report and Order*, 15 FCC Rcd at 15330, ¶ 78.

[^79]: *See* 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, 382, ¶ 5 (1997) ("*Part 1
    Third Report and Order*"); *Part 1 Fifth Report and Order*, 15 FCC
    Rcd at 15330, ¶ 78.

[^80]: For further guidance on the issue of *de facto* control, see the
    Commission's affiliation rule at 47 C.F.R. § 1.2110(b)(5); *see
    also* Ellis Thompson Corp., *Summary Decision of Administrative Law
    Judge Joseph Chachkin*, 10 FCC Rcd. 12554, 12555-56 (1994), in which
    the Commission identified the following factors used to determine
    control of a business: (1) use of facilities and equipment; (2)
    control of day-to-day operations; (3) control of policy decisions;
    (4) personnel responsibilities; (5) control of financial
    obligations; and (6) receipt of monies and profits; Intermountain
    Microwave, 12 FCC 2d. 559 (1963), and Application of Baker Creek
    Communications, L.P., for Authority to Construct and Operate Local
    Multipoint Distribution Services in Multiple Basic Trading Areas,
    *Memorandum Opinion and Order*, 13 FCC Rcd. 18709 (1998).

[^81]: *See* 47 C.F.R. § 1.2105.

[^82]: 47 C.F.R. § 1.2105(a)(2)(x).

[^83]: 47 C.F.R. § 1.2105(a)(2)(xi); *Part 1 Fifth Report and Order*, 15
    FCC Rcd at 15316-17, ¶¶ 40-42.

[^84]: 47 C.F.R. § 1.2106(a).

[^85]: *See* 47 C.F.R. § 1.2105(a).

[^86]: *See* 47 C.F.R. § 1.2105; *see also* Two Way Radio of Carolina,
    Inc., *Memorandum, Opinion and Order*, 14 FCC Rcd. 12035 (1999).

[^87]: 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,
    5697-5698, ¶ 16 (1997) ("*Part 1 Order"*).

[^88]: *Part 1 Fifth Report and Order*, 15 FCC Rcd at 15316-17, ¶¶
    40-42; 47 C.F.R. § 1.2106(a); *see* 47 C.F.R. §§1.2105(a)(2)(xi)

[^89]: 47 C.F.R. § 1.2105(a)(2)(xi); *Part 1 Fifth Report and Order*, 15
    FCC Rcd at 15316-17, ¶¶ 40-42.

[^90]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15 FCC
    rcd at 11534-11536.

[^91]: Bidders are, however, limited by (1) the license selection made
    on their FCC Form 175, (2) activity and eligibility rules, and (3)
    the 12 packages per bidder constraint.

[^92]: 47 U.S.C. § 309(j).

[^93]: Except where otherwise noted, "simultaneous multiple round"
    generally refers to simultaneous multiple round auction format
    **without** package bidding, and "package bidding" generally refers
    to simultaneous multiple round auction format **with** package
    bidding.

[^94]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15 FCC
    Rcd at 11536.

[^95]: *Id*.

[^96]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15 FCC
    Rcd at 11537.

[^97]: *Id*.

[^98]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15 FCC
    Rcd at 11539.

[^99]: *Auction No. 31 Package Bidding Comment Public Notice*, 15 FCC
    Rcd at 8816.

[^100]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15
    FCC Rcd at 11539.

[^101]: If we implement this change in the activity requirement, bidders
    whose eligibility activity is below the requirement and which have
    no remaining activity waivers available will have their current
    eligibility reduced to put them into compliance with the two-thirds
    activity requirement. Consequently, we will reduce the bidder's
    eligibility for the next round to three-halves its eligibility
    activity in the current round.

[^102]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15
    FCC Rcd at 11540-11541.

[^103]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15
    FCC Rcd at 11541.

[^104]: *Id*.

[^105]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15
    FCC Rcd at 11541-11542.

[^106]: 47 U.S.C. § 309(j)(3)(C). In contrast, the Commission's
    consideration of potential recovery of revenues is statutorily
    limited in other contexts. *See* 47 U.S.C. § 309(j)(7)(A).

[^107]: *See* 47 U.S.C. § 309(j)(4)(F).

[^108]: *See* *Part 1 Third Report and Order*, 13 FCC Rcd 375, 455-456 ¶
    141 (1997)*.*

[^109]: *Id*.

[^110]: *Id*.

[^111]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15
    FCC Rcd at 11543.

[^112]: *Auction No. 31 Further Modifications Comment Public Notice* at
    5-7.

[^113]: *See* *Auction No. 31 Further Modifications Comment Public
    Notice* at 6 (citing the *Third Report and Order* *Reconsideration*,
    16 FCC Rcd 21,633 (2001)).

[^114]: *Auction No. 31 Further Modifications Comment Public Notice* at
    6.

[^115]: *Auction No. 31 Further Modifications Comment Public Notice* at
    8.

[^116]: *See* *Auction No. 31 Further Modifications Comment Public
    Notice* at 8 and n.22. The 700 MHz guard bands account for one-sixth
    of the Upper 700 MHz spectrum to be auctioned. Thus, assuming
    roughly comparable values for the spectrum in the 700 MHz guard
    bands and in Auction No. 31, net revenues in Auction No. 31 might
    reach six times the net revenue from the 700 MHz guard bands
    auctions, or approximately \$3.2 billion. Consequently, the
    aggregate reserve price of \$2.6 billion in gross bids should be at
    the lower end of any range of likely values for the spectrum in
    Auction No. 31.

[^117]: Paxson Comment at 8, n.20.

[^118]: Spectrum Exchange/Allen Comment at 2-5.

[^119]: Spectrum Exchange/Allen Comment at 5.

[^120]: Spectrum Exchange/Allen Comment at 5.

[^121]: Harstad Reply at 1-2.

[^122]: 47 U.S.C. § 309(j)(3)(C).

[^123]: 47 U.S.C. § 309(j)(3)(D).

[^124]: Spectrum Exchange/Allen Comment at 3.

[^125]: Harstad Reply at 3.

[^126]: Spectrum Exchange/Allen notes that in prior auctions the
    Commission has established minimum opening bids as a very low
    percentage of expected final auction prices and suggests that
    reserve prices in this auction should be established as a similarly
    low percentage. Spectrum Exchange/Allen Comment at 3. The Bureau
    will retain the previously established minimum opening bids at their
    original levels.

[^127]: In the *Auction No. 31 Further Modifications Comment Public
    Notice*, the Bureau advised that when determining whether the
    provisionally winning set of bids equals or exceeds the aggregate
    reserve price the Bureau would value any licenses held by the
    Commission at the close of the auction at the minimum opening bids
    for those licenses. *See* *Auction No. 31 Further Modifications
    Comment Public Notice*, 17 FCC Rcd at 2123, n. 24 (citing the
    *Auction No. 31 Package Bidding Procedures Public Notice*, 15 FCC
    Rcd at 11,550-51 (in determining provisionally winning bids,
    individual licenses on which no bids are available to be considered
    when determining the provisionally winning set will be treated as
    having a bid at the minimum opening bid)). The Bureau has determined
    that a minor modification to this procedure is necessary. In the
    *Auction No. 31 Package Bidding Procedures Modifications Public
    Notice*, the Bureau stated that, in order to avoid ties between
    bidders and the Commission at the minimum opening bid, the Bureau
    will treat all licenses as having Commission bids at some small
    amount less than the minimum opening bid. *Auction No. 31 Package
    Bidding Procedures Modifications Public Notice*, 16 FCC Rcd at 224,
    232. Licenses should be valued consistently when determining the
    provisionally winning set of bids and whether the provisionally
    winning set of bids equals or exceeds the aggregate reserve price.
    Accordingly, when determining whether the provisionally winning set
    of bids equals or exceeds the aggregate reserve price, the Bureau
    will value any licenses held by the Commission at the close of the
    auction at the Commission bid, *i.e.*, at some small amount less
    than the minimum opening bid.

[^128]: *Auction No. 31 Further Modifications Comment Public Notice*, 17
    FCC Rcd at 2120-22.

[^129]: *See* *Auction No. 31 Package Bidding Procedures Modification
    Public Notice*, 16 FCC Rcd at 219-221.

[^130]: *Auction No. 31 Further Modifications Comment Public Notice*, 17
    FCC Rcd at 2121.

[^131]: *Auction No. 31 Further Modifications Comment Public Notice*, 17
    FCC Rcd at 2121-22.

[^132]: *Auction No. 31 Further Modifications Comment Public Notice*, 17
    FCC Rcd at 2122.

[^133]: See Section IV.B.2, above.

[^134]: Comments of Paxson Communications Commission at 8, February 19,
    2002.

[^135]: Comments of Spectrum Exchange Group, LLC and Allen & Company,
    Inc. at 6-7, February 19, 2002.

[^136]: Reply Comments of Spectrum Exchange Group, LLC and Allen &
    Company, Inc. at 2-3, February 26, 2002.

[^137]: Comments of Ronald M. Harstad, Aleksander Pekec and Michael H.
    Rothkopf at 3-4, February 19, 2002.

[^138]: Reply Comments of Ronald M. Harstad, Aleksander Pekec and
    Michael H. Rothkopf at 3-4, February 26, 2002.

[^139]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15
    FCC Rcd at 11547.

[^140]: The calculation of the amount of the multi-increment bids will
    be performed as follows:

    (MAB)(1+v%) -- MAB = Bi. Then, the new bid amounts shall be (1) MAB;
    (2) MAB + Bi; (3) MAB + 2Bi; ...; (9) MAB + 8Bi.

[^141]: As described further below in Section IV.B.4, Renewed Bids, and
    Section IV.B.5, Last and Best Bids, there are two exceptions to the
    minimum acceptable bid requirement. First, bidders who choose to
    place no further bids in the auction may place "last and best bids"
    at any amount between the bidder's previous high bid --- or, if the
    bidder has not placed a bid on the license or package, the minimum
    opening bid --- and the eighth increment above the minimum
    acceptable bid Second, at any time bidders may "renew" their highest
    previous bid on a license or package without increasing the bid;
    however, a bidder is not conferred activity of any kind for renewing
    a non-provisionally winning bid. Because bids in each round are
    considered mutually exclusive, renewing a provisionally winning bid
    does not double count that bid towards a bidder's total eligibility
    activity credit.

[^142]: *Auction No. 31 Further Modifications Comment Public Notice*, at
    4.

[^143]: Renewed bids, however, do not count as new bids made in the
    current round for the purposes of the stopping rule. See Section
    IV.A.6 above.

[^144]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15
    FCC Rcd at 11548.

[^145]: *Auction No. 31 Package Bidding Procedures Modification Public
    Notice*, at 16 FCC Rcd 222-223.

[^146]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15
    FCC Rcd at 11548.

[^147]: *Auction No. 31 Package Bidding Procedures Modification Public
    Notice*, at 16 FCC Rcd 224.

[^148]: For example, suppose Bidder 1 bids \$110 for License A, there
    are no bids for License B, which has a minimum opening bid of \$100,
    and Bidder 2 bids \$200 for Package AB. In determining the
    provisional winners, we will consider License B to have been bid on
    by the FCC at some small amount less than the minimum opening bid.
    The provisional winning set will therefore consist of Bidder 1
    holding License A and the FCC holding License B because the sum of
    their bids (\$110 + \$99 = \$209) exceeds Bidder 2's bid for Package
    AB (\$200).

[^149]: This routine uses two multiple recursive random number
    generators of order three with period length 2^219^. The description
    of the algorithms can be found in L'Ecuyer, P. (1999) "Good
    parameters and implementations for combined multiple recursive
    random number generators" *Operations Research* **47** (1) pp
    159-164. The code can be downloaded from the author's website:
    [www.iro.umontreal.ca/\~lecuyer/papers.html](http://www.iro.umontreal.ca/~lecuyer/papers.html)[.]{.underline}

[^150]: There is a rare chance that more than one set of bids can
    satisfy these conditions. If such a case exists, all such sets will
    be generated and assigned a random number. The set with the largest
    associated random number will be the set of provisionally winning
    bids.

[^151]: The bidder would ordinarily choose the last and best bid option
    only when it has decided to stop bidding and drop out of the auction
    altogether.

[^152]: Bidders are limited to bidding on, and hence creating packages
    from, those licenses which they selected on their FCC Form 175 and
    for which they have eligibility. *See generally* Section IV.A.2,
    Maximum Eligibility, and IV.A.3, Activity and Eligibility Rules.

[^153]: Bidders must have sufficient eligibility to place a bid on the
    particular license or package. *See* Section III.D.3 "Amount of
    Upfront Payment," *infra*.

[^154]: For more detail on the bid amounts, *see* Section IV.B.8,
    "Bidding," *infra*.

[^155]: *See* Section IV.B.6, *infra*.

[^156]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15
    FCC Rcd at 11555.

[^157]: *See* 47 C.F.R. § 27.501(b).

[^158]: *Auction No. 31 Package Bidding Procedures Public Notice*, 15
    FCC Rcd at 11556.

[^159]: See Section IV.B.3, above.

[^160]: 47 C.F.R. § 27.501. With the exception of calculating default
    payments, the Commission's standard Part 1 rules governing defaults
    will apply in Auction No. 31, *e.g.*, section 1.2109, which gives
    the Commission discretion to either reauction a license or offer it
    to other highest bidders. *See* 47 C.F.R. §27.501(a) (except as
    otherwise provided, Part 1 rules apply to defaults); 47 C.F.R. §
    1.2109(b).

[^161]: 47 C.F.R. § 27.501(b).

[^162]: 47 C.F.R. § 1.2104(g)(2).

[^163]: 47 C.F.R. § 27.501(b)(1). For example, if a bidder defaults on
    two bids, one for License A for \$100 and one for License B for
    \$150, and in a subsequent auction, the licenses are won as License
    A for \$150 and License B for \$120, the default payment would be
    calculated separately for License A (by comparing the original bid
    (\$100) to the amounts subsequently bid (\$150), yielding no
    deficiency but an additional 25% payment)) and License B (by
    comparing the original bid (\$150) to the amount subsequently bid
    for License B (\$120), yielding a deficiency of \$30, plus an
    additional 25% payment)).

[^164]: 47 C.F.R. § 27.501(b)(2). 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)).

[^165]: 47 C.F.R. § 27.501(b)(3). 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).

[^166]: 47 C.F.R. § 27.501(b)(4). For example, if Bidder 1 defaults on
    Package ABC for \$200, and Bidder 2 defaults on Package DE for
    \$400, and in a subsequent auction the licenses are won in Package
    AB for \$150 and Package CDE for \$350, Bidder 1 would be liable for
    1/3 of the default payment and Bidder 2 would be responsible for
    2/3. Where Bidder 1 bid \$200 and Bidder 2 bid \$400, the total bid
    equals \$600 and Bidder 1's proportion equals \$200/\$600 or 1/3 and
    Bidder 2's proportion equals \$400/\$600 or 2/3. The total default
    payment would be equal to the difference between the total of the
    original bids (\$600) and the total of the subsequent amounts bid
    (\$500) plus an additional payment of 25% of the total of the
    subsequent amounts bid. The total default payment therefore would
    equal \$100 (\$600-\$500) plus 25% of \$500 (\$125), for a total
    default payment of \$225.

[^167]: 47 C.F.R. § 27.501(b).

[^168]: 47 C.F.R. § 27.501(b).

[^169]: Qualcomm Incorporated Petition for Declaratory Ruling Giving
    Effect to the Mandate of the District of Columbia Circuit Court of
    Appeals, *Order*, 16 FCC Rcd 4042 (2000).

[^170]: *See* Supplement to Public Notice Released August 22, 2001 By
    Wireless Telecommunications Bureau Announcing It Is Prepared to
    Grant Four C and F Block Broadband Personal Communications Services
    (PCS) Licenses Upon Full and Timely Payment, Auction Event No. 35,
    DA 01-2071, *Public Notice*, 16 FCC Rcd 16,025 (2001). All of the
    terms and conditions applicable to Qualcomm's use of the ADV shall
    apply to its use by a transferee, except that a transferee may not
    transfer the ADV to an entity other than back to Qualcomm. *See* In
    the Matter of Qualcomm Incorporated, *Order*, 16 FCC Rcd 4042
    (2000); *see also* Letter from Thomas J. Sugrue, Chief, Wireless
    Telecommunications Bureau, Federal Communications Commission, to
    Veronica M. Ahern, Attorney for Qualcomm Incorporated (December 22,
    2000).

[^171]: *See* Extending Wireless Telecommunications Services to Tribal
    Lands, WT Docket No. 99-266, *Report and Order and Further Notice of
    Proposed Rule Making*, 15 FCC Rcd 11794 (2000); Wireless
    Telecommunications Bureau Announces Availability of Bidding Credits
    For Providing Wireless Services To Qualifying Tribal Lands, *Public
    Notice*, 15 FCC Rcd 18351 (2000); Wireless Telecommunications Bureau
    Releases Additional Information Regarding the Procedures for
    Obtaining a Tribal Lands Bidding Credit and List of Tribal Lands,
    *Public Notice*, DA 00-2836, (rel. December 14, 2000); Wireless
    Telecommunications Bureau Announces Enhancements to the Universal
    Licensing System to Help Winning Bidders of FCC Auctions File for
    Tribal Land Bidding Credits, *Public Notice*, DA 01-613, (rel. March
    8, 2001).

[^172]: *See* 47 C.F.R. § 1.2109(d).

[^173]: In addition to the part (iii) formula derived here, the minimum
    acceptable bid also considers parts (i) and (ii) amounts, where (i)
    is the minimum opening bid and (ii) is the bidder's own previous
    high bid plus x%, where x is specified by the Bureau. The minimum
    opening bid is the *greatest* of the three amounts.

[^174]: These constraints will be ignored in the linear program
    representation since they are rarely binding in the relaxation of
    the integer-programming problem and because adding such constraints
    to the dual problem creates "degeneracy" in the solution thereby
    causing multiple alternative solutions.

[^175]: The bid amount for a FCC bid is some small amount less than the
    minimum-opening bid for that license. *See* Auction Of Licenses in
    the 747-762 and 777-792 MHz Bands Scheduled for March 6, 2001;
    Modifications to the Calculation for Determining Minimum Acceptable
    Bids and the Provisions Concerning "Last and Best Bids" and Other
    Procedural Issues, DA 01-12, *Public Notice*, 16 FCC Rcd 217
    (2001)(Section III discusses the reasons for this approach).

[^176]: We note that for non-linear problems, these dual prices are also
    known as *Lagrange multipliers.*

[^177]: When the problem is a convex optimization problem, the primal
    and dual problems yield the same objective function values. This is
    called strong-duality. These conditions do not hold for integer
    programming problems, often resulting in a gap between the linear
    programming and integer programming solution values.

[^178]: In our research we found this term first applied to auction
    pricing in the paper by Rassenti, Smith and Bulfin (1982), "A
    combinatorial auction mechanism for airport slot allocation," *Bell
    Journal of Economics*, vol. 13, pp. 402-417.

[^179]: The centering algorithm used in this testing was the barrier
    method available in CPLEX, a commercial optimization package.

[^180]: Exponential smoothing often is used in determining minimum
    acceptable bids in FCC auctions. *See, e.g.*, Auction of Licenses in
    the 747-762 and 777-792 MHz Bands; Auction Notice and Filing
    Requirements for 12 Licenses in the 700 MHz Bands Auction Scheduled
    for May 10, 2000; Minimum Opening Bids and Other Procedural Issues,
    DA 00-292, *Public Notice*, 15 FCC Rcd 2921, Attachment G (2000).

[^181]: This objective function is a convex, quadratic function. This
    quadratic optimization problem is solved using the barrier method.

[^182]: Once the pseudo-dual prices, $\pi_{i}^{t}$, have been
    determined, the smoothed prices, $p_{i}^{t}$, can be calculated and
    used for solving (QP) in round *t+1*.

[^183]: *See* Auction of Licenses in the 747-762 and 777-762 and 777-792
    MHz Bands Scheduled for September 6, 2000, Procedures Implementing
    Package Bidding for Auction No. 31; Bidder Seminar Scheduled for
    July 24, 2000, *Public Notice*, DA 00-1486, 15 FCC Rcd 11526, 11554
    (rel July 3, 2000) ("*Auction No. 31 Package Bidding Procedures
    Public Notice*").

[^184]: Bidders are limited to bidding on, and hence creating packages
    from, those licenses which they selected on their FCC Form 175 and
    for which they have eligibility. *See generally* Section II.A.2,
    Maximum Eligibility, and II.A.3, Activity Rules.

[^185]: *Id.* 15 FCC Rcd. at 11543-11547; *see also* Auction of Licenses
    in the 747-762 and 777-792 MHz Bands Scheduled for March 6, 2001,
    Modifications to the Calculation for Determining Minimum Acceptable
    Bids and Changing the Provisions Concerning Last and Best Bids and
    Other Procedural Issues, Bidder Seminar Scheduled for January 23,
    2001 and Test of Package Bidding System Set For January 24, 25, and
    26, 2001, *Public Notice*, DA 01-12, January 5, 2001, at 2-4.
    ("*Auction No. 31 Package Bidding Further Procedures Public
    Notice*").

[^186]: *Id.* 15 FCC Rcd. at 11543.

[^187]: *Id.* 15 FCC Rcd. at 11545.

[^188]: *Id.*

[^189]: The calculation of the amount of the multi-increment bids will
    be performed as follows:

    (MAB)(1+v%) -- MAB = Bi. Then, the new bid amounts shall be (1) MAB;
    (2) MAB + Bi; (3) MAB + 2Bi; ...; (9) MAB + 8Bi.

[^190]: *See Auction No. 31 Package Bidding Further Procedures Public
    Notice* at 5-6.

[^191]: *Id.*

[^192]: *Id.*

[^193]: *Id.* In applying activity rules, bidding activity for
    [each]{.underline} of the sets of last and best bids must not exceed
    current eligibility, as determined at the beginning of the round in
    which these bids are place. In other words, eligibility for the
    second set of last and best bids will not be recalculated based on
    eligibility activity associated with the first set of bids.

[^194]: *See* 15 FCC Rcd. at 11548-50.

[^195]: *See* 15 FCC Rcd. at 11548.

[^196]: *Id.*

[^197]: Renewed bids, however, do not count as new bids made in the
    current round for the purposes of the stopping rule. See Section
    IV.A.6 above.

[^198]: *See* 15 FCC Rcd. at 11549-51.

[^199]: *Id.*

[^200]: *Id.* at 11554.

[^201]: *Id.* at 11549-50.

[^202]: *See* 15 FCC Rcd at 11541-42. In addition, the Bureau has
    discretion to employ a Special Stopping Rule. *See id.*

[^203]: *Id.* at 11541.

[^204]: *See* 15 FCC Rcd at 11538.

[^205]: *Id.*

[^206]: *See* 15 FCC Rcd at 11536, 11554.

[^207]: *See* 15 FCC Rcd. at 11536-37.

[^208]: *See* 15 FCC Rcd. at 11540.

[^209]: *See* 15 FCC Rcd at 11539.

[^210]: *Id*. at 11539-40.