# Presentation: 670503

## Spectrum Auction Process and FCC’s Auction SystemAuction 85 LPTV and TV Translator Digital Companion Channels

- Roy Knowles, Wireless Telecommunications Analyst,
- Auctions and Spectrum Access Division
- October 1, 2008

## 	Nothing herein is intended to supersede any provision of the Commission's rules or public notices.  These slides should not be used as a substitute for an applicant's review of the Commission's relevant orders, rules, and public notices.  Applicants must familiarize themselves thoroughly and remain current with the Commission's rules relating to low power television, television translator, and Class A television broadcast rules relating to application and auction procedures, and the procedures, terms and conditions contained in the Auction 85 public notices.

**Disclaimer**

## Agenda

- Overview of the FCC’s Simultaneous Multiple Round (SMR) Auction Design and Terminology
- Discuss Auction 85 Rules and Procedures
- Presentation and Hands-on Demonstration of the FCC’s Integrated Spectrum Auction System

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common question slide.

- 	This symbol indicates a
- common question slide.

## Questions?

- 	If you are viewing this presentation over the web, please feel free to e-mail your questions to...

- Auction85@fcc.gov

## Simultaneous Multiple Round (SMR) Auction Design

**Simultaneous** — All construction permits are offered at the same time.
**Multiple Round** — There are multiple discrete bidding rounds during which bidding is confidential.

## How many rounds are conducted, and when does bidding stop?

- The number of rounds varies in each auction.  There is no predetermined number.
- Bidding continues until there is one round in which nothing happens.
- No new bids or proactive waivers.

## Auction Design(continued)

- Web-Based Bidding System
- Option to bid via Auction Bidder Line
- Click-Box Bidding
- When placing a bid, a bidder selects from bid amounts in the bidding system.
- Activity Requirements
- Bidders must generally bid throughout the auction.

## What are Bidding Units?

- A fixed number of units that is assigned to each construction permit in the auction.
- The number of bidding units for each construction permit is listed in Attachment A to the Procedures Public Notice.
- Bidding units are used to measure bidders’ _eligibility_ and _activity_.

## Bidding Units and Eligibility

**Eligibility** — The maximum number of bidding units a bidder can bid on.
- A bidder establishes its eligibility with its upfront payment.
- Eligibility cannot be increased.
- Eligibility is *not* specific to certain construction permits.  A bidder may use its eligibility on any of a number of construction permits it has selected on its 175 application.

## Slide 11

## Bidding Units and Activity

**Activity** — The sum of the bidding units for
- the construction permits on which a bidder places bids in the current round, and
- construction permits on which a bidder has provisionally winning bids from a previous round.

## What is Required Activity?

- The activity requirement is the minimum number of bidding units on which a bidder must be active.  It is determined by a percentage of the bidder’s current eligibility.

## Activity RequirementAuction 85

- Single Stage Auction
- 100% activity requirement
- 	If a bidder has 10,000 bidding units of eligibility, its activity requirement is 10,000 bidding units.

## What if you change your mind?

- You can _remove_ a bid you placed during the current round.  If you place a bid during a round and then remove that bid before the end of the round, it’s as if it never happened.
- In Auction 85, provisionally winning bids cannot be withdrawn.

## What if you do not meet the activity requirement? 

- One of two things will happen:
- You will use an activity rule waiver.
- 				or
- Your eligibility will be reduced.

## Activity Rule Waivers

- Use of an activity rule waiver preserves a bidder’s current eligibility despite the bidder’s activity in the current round being below the required level.
- When a bidder uses an activity rule waiver, the waiver applies to that round of bidding, not to a particular construction permit.

## Activity Rule Waivers

- Bidders are provided with a limited number of activity rule waivers.
- In Auction 85, each bidder is provided three activity rule waivers.

## Automatic Waivers

- 	The system will automatically apply a waiver for a bidder at the end of any round in which the bidder’s activity is below the required level unless:
- The bidder has no more activity rule waivers.
- 				or
- The bidder reduces eligibility.

## Proactive Waivers

- Bidders can apply activity rule waivers proactively.
- The important difference between an automatic waiver and a proactive waiver is that a proactive waiver keeps the auction open.
- Bidding continues until there is one round in which nothing happens.
- No new bids or _proactive waivers_.

## What if a bidder does not meet the activity requirement and does not have any waivers left?

- 	The bidder’s current eligibility will be permanently reduced, possibly eliminating the bidder from further bidding in the auction.

## Eligibility Reduction

- 	Bidders may use the reduce eligibility function of the auction system.
- Reducing eligibility will bring a bidder into compliance with the activity requirement.
- Useful when a bidder is not meeting the activity requirement, does not want to bid on additional construction permits, and does not want to use an activity rule waiver.

## Bid Amounts

- Minimum opening bids are established prior to the auction.
- Minimum acceptable bids are calculated by multiplying the provisionally winning bid amount times one plus the minimum acceptable bid percentage (10%).
- The Bureaus retain the discretion to change the minimum acceptable bid percentage.

## Bid Amounts

- For activity and eligibility, the dollar amount of a bid does not matter.
- How much can you bid?  Any one ofnine pre-defined dollar amounts.
- The upfront payment does not limit the amount you may bid for a construction permit.

## The SecurID® Key Fob

- Multiple key fobs sent to all bidders
- Random number refreshes every 60 seconds
- Countdown indicator
- Please return to the FCC for recycling

## To Ensure a Positive Auction Experience

- Do your homework.
- Read all public notices related to this auction.
- Participate in the mock auction.
- Test backup strategies and activate _all_ SecurID® key fobs.
- Use Auction Bidder Line to ask “what if” questions.
- Check for and read all announcements to stay informed.
- Bidding schedule
- Auction parameter changes
- Bid Early!
- Print round summaries.