[Federal Register Volume 75, Number 37 (Thursday, February 25, 2010)]
[Notices]
[Pages 8703-8718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-3875]


-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 09-205; DA 10-18]


Auction of Lower and Upper Paging Bands Licenses Scheduled for 
May 25, 2010; Notice and Filing Requirements, Minimum Opening Bids, 
Upfront Payments, and Other Procedures for Auction 87

AGENCY: Federal Communications Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This document announces the procedures and minimum opening 
bids for the upcoming auction of Lower and Upper Bands Licenses 
(Auction 87). This document is intended to familiarize prospective 
bidders with the procedures and minimum opening bids for the auction.

DATES: Applications to participate in Auction 87 must be filed prior to 
6 p.m. Eastern Time (ET) on March 16, 2010.

[[Page 8704]]

Bidding for licenses in Auction 87 is scheduled to begin on May 25, 
2010.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: For legal questions: Scott 
Mackoul at (202) 418-0660. For general auction questions: Roy Knowles 
or Barbara Sibert at (717) 338-2868. Mobility Division: For licensing 
information and service rule questions: Michael Connelly (legal) or 
Melvin Spann (technical) at 202-418-0620. To request materials in 
accessible formats (Braille, large print, electronic files or audio 
format) for people with disabilities, send an e-mail to <a href="/cdn-cgi/l/email-protection#f1979292c4c1c5b1979292df969e87"><span class="__cf_email__" data-cfemail="93f5f0f0a6a3a7d3f5f0f0bdf4fce5">[email protected]</span></a> 
or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 
or (202) 418-0432 (TTY).

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 87 
Procedures Public Notice, which was released on January 22, 2010. The 
complete text of the Auction 87 Procedures Public Notice, including 
attachments, as well as related Commission documents, are available for 
public inspection and copying from 8 a.m. to 4:30 p.m. ET Monday 
through Thursday and from 8 a.m. to 11:30 a.m. ET on Fridays in the FCC 
Reference Information Center, 445 12th Street, SW., Room CY--A257, 
Washington, DC 20554. The Auction 87 Procedures Public Notice and 
related Commission documents may also be purchased from the 
Commission's duplicating contractor, Best Copy and Printing, Inc. 
(BCPI), Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 
20554, telephone 202-488-5300, facsimile 202-488-5563, or Web site: 
http://www.BCPIWEB.com, using document number DA 10-18 for the Auction 
87 Procedures Public Notice. The Auction 87 Procedures Public Notice 
and related documents are also available on the Internet at the 
Commission's Web site: http://wireless.fcc.gov/auctions/87/. Due to the 
large number of licenses in Auction 87, the complete list of licenses 
available for this auction has been provided in electronic format only, 
available as separate ``Attachment A'' files at http://wireless.fcc.gov/auctions/87/. A paper copy of the complete list of 
licenses and any other documents relating to Auction 87 may also be 
purchased from the Commission's duplicating contractor, BCPI.

I. General Information

A. Introduction

    1. The Wireless Telecommunications Bureau (Bureau) announces the 
procedures and minimum opening bid amounts for the upcoming auction of 
9,603 licenses for lower and upper paging bands spectrum. This auction, 
which is designated as Auction 87, is scheduled to commence on May 25, 
2010. On November 30, 2009, the Bureau released a public notice seeking 
comment on competitive bidding procedures to be used in Auction 87. 
Interested parties submitted 1 comment and 1 reply comment in response 
to the Auction 87 Comment Public Notice, 74 FR 67221, December 18, 
2009.
i. Licenses to be Offered in Auction 87
    2. Auction 87 will offer 9,603 paging licenses consisting of 7,752 
licenses in the lower paging bands (35 MHz, 43 MHz, 152 and 158 MHz, 
454 and 459 MHz) and 1,851 licenses in the upper paging bands (929 MHz 
and 931 MHz). Auction 87 will include licenses that remained unsold 
from a previous auction, licenses on which a winning bidder in a 
previous auction defaulted, and licenses for spectrum previously 
associated with licenses that cancelled or terminated. In a few cases, 
the available license does not cover the entire geographic area due to 
an excluded area or previous partitioning.
    3. Attachment A of the Auction 87 Procedures Public Notice provides 
a summary of the licenses available in Auction 87. Due to the large 
number of licenses in Auction 87, the complete list of licenses 
available for this auction will be provided in electronic format only, 
available as separate Attachment A files at http://wireless.fcc.gov/auctions/87/. Tables containing the block/frequency cross-reference 
list for the paging bands are included in Attachment B of the Auction 
87 Procedures Public Notice.

B. Rules and Disclaimers

i. Relevant Authority
    4. Prospective applicants must familiarize themselves thoroughly 
with the Commission's general competitive bidding rules set forth in 
Title 47, Part 1, Subpart Q of the Code of Federal Regulations, 
including all amendments and clarifications; rules relating to the 
lower and upper paging bands and emerging technologies contained in 
Title 47, Part 22 and Part 90 of the Code of Federal Regulations; and 
rules relating to applications, environment, practice and procedure 
contained in Title 47, Part 1, Subpart I of the Code of Federal 
Regulations. Prospective applicants must also be thoroughly familiar 
with the procedures, terms and conditions (collectively, terms) 
contained in this Public Notice and in the Commission's decisions in 
proceedings regarding competitive bidding procedures, application 
requirements, and obligations of Commission licensees.
    5. 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 its public notices at any time, 
and will issue public notices to convey any new or supplemental 
information to applicants. It is the responsibility of all applicants 
to remain current with all Commission rules and with all public notices 
pertaining to this auction.
ii. Prohibited Communications and Compliance With Antitrust Laws
    6. To ensure the competitiveness of the auction process, 47 CFR 
1.2105(c) prohibits auction applicants for licenses in any of the same 
geographic license areas from communicating with each other about bids, 
bidding strategies, or settlements unless such applicants have 
identified each other on their short-form applications (FCC Form 175) 
as parties with whom they have entered into agreements pursuant to 47 
CFR 1.2105(a)(2)(viii).
a. Entities Subject to Section 1.2105
    7. The prohibited communication provisions of 47 CFR 1.2105(c) will 
apply to any applicants that submit short-form applications seeking to 
participate in a Commission auction and select licenses in the same or 
overlapping markets. In Auction 87, the rule would prohibit any 
applicants that have selected any of the same licenses or licenses with 
overlapping markets in their short form applications from communicating 
absent a disclosed agreement.
    8. Under the terms of the rule, applicants that have applied for 
licenses covering the same or overlapping markets--unless they have 
identified each other on their short form applications as parties with 
whom they have entered into agreements under 47 CFR 
1.2105(a)(2)(viii)--must affirmatively avoid all communications with or 
disclosures to each other that affect or have the potential to affect 
bids or bidding strategy, which may include communications regarding 
the post-auction market structure. This prohibition applies to all 
applicants regardless of whether such applicants become qualified 
bidders or actually bid.
    9. For purposes of this prohibition, 47 CFR 1.2105(c)(7)(i) defines 
applicant as including all officers and directors of the entity 
submitting a short-form application to participate in the auction, all 
controlling interests of that entity, as well as all holders of 
partnership and

[[Page 8705]]

other ownership interests and any stock interest amounting to 10 
percent or more of the entity, or outstanding stock, or outstanding 
voting stock of the entity submitting a short-form application.
    10. Information concerning applicants' license selections will not 
be available to the public. Therefore, the Commission will inform each 
applicant by letter of the identity of each of the other applicants 
that has applied for licenses covering any of the same or overlapping 
geographic areas as the licenses that it has selected in its short-form 
application.
    11. Entities and parties subject to 47 CFR 1.2105(c)'s prohibition 
on certain communications should take special care in circumstances 
where their employees may receive information directly or indirectly 
from a competing applicant relating to any competing applicant's bids 
or bidding strategies. In situations where 47 CFR 1.2105(c)(7)(i) views 
the same person as the applicant with respect to two different entities 
filing competing applications, under Bureau precedent the bids and 
bidding strategies of one applicant are necessarily conveyed to the 
other and, absent a disclosed bidding agreement, an apparent violation 
of the rule occurs. The Bureau has not addressed situations where 
employees who do not qualify as the applicant (e.g., are not officers 
or directors) receive information regarding a competing applicant's 
bids or bidding strategies and thus has not ruled on whether that 
information might be deemed to be necessarily conveyed to the 
applicant. The Bureau notes that the exception to 47 CFR 1.2105(c) 
providing that non-controlling interest holders may have interests in 
more than one competing bidder without violating the rule, provided 
specified conditions are met (including a certification that no 
prohibited communications have occurred or will occur), does not extend 
to controlling interest holders.
b. Prohibition Applies Until Down Payment Deadline
    12. 47 CFR 1.2105(c)'s prohibition on certain communications take 
effect at the short-form application filing deadline and continue until 
the down payment deadline after the auction.
c. Prohibited Communications
    13. Applicants for the upcoming Auction 87 and other parties that 
may be engaged in discussion with such applicants are cautioned on the 
need to comply with 47 CFR 1.2105(c). The rule prohibits not only a 
communication about an applicant's own bids or bidding strategy, but 
also a communication of another applicant's bids or bidding strategy. 
While 47 CFR 1.2105(c) does not prohibit business negotiations among 
auction applicants, applicants must remain vigilant so as not to 
communicate directly or indirectly information that affects, or could 
affect, bids or bidding strategy, or the negotiation of settlement 
agreements.
    14. The Commission remains vigilant about communications taking 
place in other situations. For example, the Commission has warned that 
prohibited communications concerning bids and bidding strategies may 
include communications regarding capital calls or requests for 
additional funds in support of bids or bidding strategies to the extent 
such communications convey information concerning the bids and bidding 
strategies directly or indirectly.
    15. Applicants are hereby placed on notice that disclosure of 
information relating to bidder interests and bidder identities that has 
not yet been made public by the Commission at the time of disclosure 
may violate the provisions of 47 CFR 1.2105(c) that prohibit certain 
communications. This is so even though similar types of information 
were revealed prior to and during other Commission auctions subject to 
different information procedures. Bidders should use caution in their 
dealings with other parties, such as members of the press, financial 
analysts, or others who might become a conduit for the communication of 
prohibited bidding information. For example, where limited information 
disclosure procedures are in place, as for Auction 87, a qualified 
bidder's statement to the press that it has lost bidding eligibility 
and stopped bidding in the auction could give rise to a finding of a 
violation of 47 CFR 1.2105(c). Similarly, an applicant's public 
statement of intent not to participate in Auction 87 bidding could also 
violate the rule.
    16. Applicants selecting licenses for any of the same or 
overlapping geographic license areas must not communicate directly or 
indirectly about bids or bidding strategy. Accordingly, such applicants 
are encouraged not to use the same individual as an authorized bidder. 
A violation of 47 CFR 1.2105(c) 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 such applicants. Also, if the authorized bidders are different 
individuals employed by the same organization (e.g., law firm or 
engineering firm or consulting firm), a violation similarly could 
occur. 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 47 CFR 1.2105(c) prohibition on 
certain communications.
    17. A violation of 47 CFR 1.2105(c) could occur in other contexts, 
such as an individual serving as an officer for two or more applicants. 
Moreover, the Commission has found a violation of the rule where a 
bidder used the Commission's bidding system to disclose its bidding 
strategy in a manner that explicitly invited other auction participants 
to cooperate and collaborate in specific markets, and has placed 
auction participants on notice that the use of its bidding system to 
disclose market information to competitors will not be tolerated and 
will subject bidders to sanctions.
    18. In addition, when completing short-form applications, 
applicants should avoid any statements or disclosures that may violate 
47 CFR 1.2105(c), particularly in light of the limited information 
procedures in effect for Auction 87. Specifically, applicants should 
avoid including any information in their short-form applications that 
might convey information regarding their license selection, such as 
using applicant names that refer to licenses being offered, referring 
to certain licenses or markets in describing bidding agreements, or 
including any information in attachments that may otherwise disclose 
applicants' license selections.
d. Disclosure of Bidding Agreements and Arrangements
    19. The Commission's rules do not prohibit applicants from entering 
into otherwise lawful bidding agreements before filing their short-form 
applications, as long as they disclose the existence of the 
agreement(s) in their short-form applications. If parties agree in 
principle on all material terms prior to the short-form application 
filing deadline, each party to the agreement must identify the other 
party or parties to the agreement on its short-form application, even 
if the agreement has not been reduced to writing. If the parties have 
not agreed in principle by the short-form application filing deadline, 
they should not include the names of parties to discussions on their 
applications, and they may not continue negotiations, discussions, or 
communications with any other applicants for licenses covering any of 
the same or overlapping geographic

[[Page 8706]]

areas after the short-form application filing deadline.
e. Section 1.2105(c) Certification
    20. By electronically submitting a short-form application following 
the electronic filing procedures set forth in Attachment C of the 
Auction 87 Procedures Public Notice, each applicant certifies its 
compliance with 47 CFR 1.2105(c). However, the Bureau cautions that 
merely filing a certifying statement as part of an application will not 
outweigh specific evidence that prohibited behavior has occurred, nor 
will it preclude the initiation of an investigation when warranted. The 
Commission has stated that it intends to scrutinize carefully any 
instances in which bidding patterns suggest that collusion may be 
occurring. Any applicant found to have violated 47 CFR 1.2105(c) may be 
subject to sanctions.
f. Antitrust Laws
    21. Applicants are also reminded that, regardless of compliance 
with the Commission's rules, they remain subject to the antitrust laws, 
which are designed to prevent anticompetitive behavior in the 
marketplace. Compliance with the disclosure requirements of 47 CFR 
1.2105(c) will not insulate a party from enforcement of the antitrust 
laws. For instance, a violation of the antitrust laws could arise out 
of actions taking place well before any party submits a short-form 
application.
    22. To the extent the Commission becomes aware of specific 
allegations that suggest that violations of the federal antitrust laws 
may have occurred, the Commission may refer such allegations to the 
United States Department of Justice for investigation. If an applicant 
is found to have violated the antitrust laws or the Commission's rules 
in connection with its participation in the competitive bidding 
process, it may be subject to forfeiture of its upfront payment, down 
payment, or full bid amount and may be prohibited from participating in 
future auctions, among other sanctions.
g. Duty To Report Prohibited Communications; Reporting Procedure
    23. 47 CFR 1.2105(c)(6) provides that any applicant that makes or 
receives a communication that appears to violate 47 CFR 1.2105(c) must 
report such communication in writing to the Commission immediately, and 
in no case later than five business days after the communication 
occurs. The Commission has clarified that each applicant's obligation 
to report any such communication continues beyond the five-day period 
after the communication is made, even if the report is not made within 
the five day period.
    24. In addition, 47 CFR 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 of 
any substantial change that may be of decisional significance to that 
application. Thus, 47 CFR 1.65 requires an auction applicant to notify 
the Commission of any substantial change to the information or 
certifications included in its pending short-form application. 
Applicants are therefore required by 47 CFR 1.65 to report to the 
Commission any communications of bids or bidding strategies that result 
in a bidding arrangement, agreement, or understanding after the short-
form filing application deadline.
    25. The Commission recently amended 47 CFR 1.65(a) and 1.2105(c) to 
require applicants in competitive bidding proceedings to furnish 
additional or corrected information within five days of a significant 
occurrence, or to amend their short-form applications no more than five 
days after the applicant becomes aware of the need for amendment. The 
Commission made this change to facilitate the auction process, by 
making the information available promptly to all participants and 
enabling the Bureau to act expeditiously on those changes when such 
action is necessary.
    26. Parties reporting communications pursuant to 47 CFR 1.65 or 
1.2105(c)(6) must take care to ensure that any such reports of 
prohibited communications do not themselves give rise to a violation of 
47 CFR 1.2105(c). For example, a party's report of a prohibited 
communication could violate the rule by communicating prohibited 
information to other applicants through the use of Commission filing 
procedures that would allow such materials to be made available for 
public inspection.
    27. The Commission recently amended 47 CFR 1.2105(c) to minimize 
the risk of inadvertent dissemination by requiring parties to file only 
a single report and to file that report with Commission personnel 
expressly charged with administering the Commission's auctions. 
Pursuant to the amended rule, any reports required by 47 CFR 1.2105(c) 
must be filed consistent with the instructions set forth in the Auction 
87 Procedures Public Notice. For Auction 87, such reports should be 
filed with the Chief of the Auctions and Spectrum Access Division, 
Wireless Telecommunications Bureau, by the most expeditious means 
available. Specifically, any such reports should be submitted by e-mail 
at the following address: <a href="/cdn-cgi/l/email-protection#26475345524f49481e116640454508414950"><span class="__cf_email__" data-cfemail="5c3d293f28353332646b1c3a3f3f723b332a">[email protected]</span></a>, or delivered to the 
following address: Margaret W. Wiener, Chief, Auctions and Spectrum 
Access Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, 445 12th Street, SW., Room 6423, Washington, 
DC 20554. Parties submitting such a report should include a cover sheet 
to avoid the inadvertent dissemination of information contained in the 
report.
    28. A party seeking to report such prohibited communications should 
consider submitting its report with a request that the report or 
portions of the submission be withheld from public inspection. Such 
parties are also encouraged to consult with the Auctions and Spectrum 
Access Division staff if they have any questions about the procedures 
for submitting such reports. Applicants must be aware that failure to 
comply with the Commission's rules can result in enforcement action.
h. Winning Bidders Must Disclose Terms of Agreements
    29. Applicants that are winning bidders will be required to 
disclose in their long-form applications the specific terms, 
conditions, and parties involved in any bidding consortia, joint 
ventures, partnerships, and other arrangements entered into relating to 
the competitive bidding process.
i. Additional Information Concerning Rule Prohibiting Certain 
Communications
    30. A summary listing of documents issued by the Commission and the 
Bureau addressing the application of 47 CFR 1.2105(c) may be found in 
Attachment E of the Auction 87 Procedures Public Notice.
iii. Incumbency Issues
    31. There are pre-existing paging incumbent licenses, including 
public safety entities licensed under either 47 U.S.C. 337 or 47 CFR 
1.925. Incumbent (non-geographic) paging licensees operating under 
their existing authorizations are entitled to full protection from co-
channel interference. Geographic area licensees are likewise afforded 
co-channel interference protection from incumbent licensees. Adjacent 
geographic area licensees are obligated to resolve possible 
interference concerns of adjacent geographic area licensees by 
negotiating a mutually acceptable agreement with the neighboring 
geographic licensee.
a. International Coordination
    32. Potential bidders seeking licenses for geographic areas 
adjacent to the

[[Page 8707]]

Canadian and Mexican border should be aware that the use of some or all 
of the channels they acquire in the auction could be restricted as a 
result of current or future agreements with Canada or Mexico. Licensees 
on the lower paging channels must submit an FCC Form 601 to obtain 
authorization to operate stations north of Line A or east of Line C 
because these channels are subject to the Above 30 Megacycles per 
Second Agreement with Industry Canada. Although the upper paging 
channels do not require coordination with Canada, the U.S.-Canada 
Interim Coordination Considerations for the Band 929-932 MHz, as 
amended, assigns specific 929 MHz and 931 MHz frequencies to the United 
States for licensing along certain longitudes above Line A, and assigns 
other specific 929 MHz and 931 MHz frequencies to Canada for licensing 
along certain longitudes along the U.S.-Canada border. In addition, the 
929 MHz and 931 MHz frequencies assigned to Canada are unavailable for 
use by U.S. licensees above Line A as set out in the agreement.
b. Quiet Zones
    33. Paging licensees must individually apply for and receive a 
separate license for each transmitter if the proposed operation would 
affect the radio quiet zones set forth in the Commission's rules.
iv. Due Diligence
    34. Potential bidders are reminded that there are a number of 
incumbent licensees already licensed and operating on frequencies that 
will be subject to the upcoming auction. Geographic area licensees in 
accordance with the Commission's rules must protect such incumbents 
from harmful interference. These limitations may restrict the ability 
of such geographic area licensees to use certain portions of the 
electromagnetic spectrum or provide service to certain areas in their 
geographic license areas.
    35. The Bureau cautions potential applicants formulating their 
bidding strategies to investigate and consider the extent to which 
these frequencies are occupied. For example, there are incumbent 
operations already licensed and operating in the bands that must be 
protected. These limitations may restrict the ability of paging 
licensees to use certain portions of the electromagnetic spectrum or 
provide service to certain areas in their geographic license areas. 
Bidders should become familiar with the status of these operations and 
applicable Commission rules, orders and any pending proceedings related 
to the service, in order to make reasoned, appropriate decisions about 
their participation in this auction and their bidding strategy.
    36. Potential bidders are reminded that they are solely responsible 
for investigating and evaluating all technical and marketplace factors 
that may have a bearing on the value of the licenses being offered in 
this auction. The Commission makes no representations or warranties 
about the use of this spectrum for particular services. Applicants 
should be aware that a Commission auction represents an opportunity to 
become a licensee subject to certain conditions and regulations. The 
auction does not constitute an endorsement by the Commission of any 
particular service, technology, or product, nor does a Commission 
license constitute a guarantee of business success. Applicants should 
perform their individual due diligence before proceeding as they would 
with any new business venture.
    37. Potential bidders are strongly encouraged to conduct their own 
research prior to the beginning of bidding in Auction 87 in order to 
determine the existence of any pending legislative, administrative, or 
judicial proceedings that might affect their decision regarding 
participation in the auction. Participants in Auction 87 are strongly 
encouraged to continue such research throughout the auction. In 
addition, potential bidders should perform technical analyses 
sufficient to assure themselves that, should they prevail in 
competitive bidding for a specific license, they will be able to build 
and operate facilities that will fully comply with the Commission's 
technical and legal requirements as well as other applicable Federal, 
state, and local laws.
    38. Applicants should also be aware that certain pending and future 
proceedings, including rulemaking proceedings or petitions for 
rulemaking, applications (including those for modification), requests 
for special temporary authority, waiver requests, petitions to deny, 
petitions for reconsideration, informal oppositions, and applications 
for review, before the Commission may relate to particular applicants 
or incumbent licensees or the licenses available in Auction 87. Pending 
and future judicial proceedings may also relate to particular 
applicants or incumbent licensees, or to the licenses available in 
Auction 87. Prospective bidders are responsible for assessing the 
likelihood of the various possible outcomes, and considering their 
potential impact on spectrum licenses available in this auction.
    39. Applicants should perform due diligence to identify and 
consider all proceedings that may affect the spectrum licenses being 
auctioned and that could have an impact on the availability of spectrum 
for Auction 87. In addition, although the Commission may continue to 
act on various pending applications, informal objections, petitions, 
and other requests for Commission relief, some of these matters may not 
be resolved by the beginning of bidding in the auction.
    40. Applicants 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 being offered.
    41. Potential bidders may research the Bureau's licensing database 
on the Internet in order to determine which frequencies are already 
licensed to incumbent licensees. Applicants may obtain information 
about licenses available in Auction 87 through the Bureau's online 
licensing databases at http://wireless.fcc.gov/uls. Applicants may 
query the database online and download a copy of their search results 
if desired.
    42. 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. 
To the extent the Commission's databases may not include all 
information deemed necessary or desirable by an applicant, applicants 
may obtain or verify such information from independent sources or 
assume the risk of any incompleteness or inaccuracy in said databases. 
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 its databases.
    43. Potential applicants are strongly encouraged to physically 
inspect any prospective sites located in, or near, the geographic area 
for which they plan to bid, and also to familiarize themselves with the 
environmental review obligations described in the Auction 87 Procedures 
Public Notice.
v. Use of Integrated Spectrum Auction System
    44. The Commission will make available a browser-based bidding 
system to allow bidders to participate in Auction 87 over the Internet 
using the Commission's Integrated Spectrum Auction System (ISAS or FCC 
Auction System). The Commission makes no warranty whatsoever with 
respect to the

[[Page 8708]]

FCC Auction System. In no event shall the Commission, or any of its 
officers, employees or agents, be liable for any damages whatsoever 
(including, but not limited to, loss of business profits, business 
interruption, loss of business information, or any other loss) arising 
out of or relating to the existence, furnishing, functioning or use of 
the FCC Auction System that is accessible to qualified bidders in 
connection with this auction. Moreover, no obligation or liability will 
arise out of the Commission's technical, programming or other advice or 
service provided in connection with the FCC Auction System.
vi. Environmental Review Requirements
    45. Licensees must comply with the Commission's rules regarding 
implementation of the National Environmental Policy Act and other 
federal environmental statutes. The construction of a wireless antenna 
facility is a federal action, and the licensee must comply with the 
Commission's environmental rules for each such facility.

C. Auction Specifics

i. Auction Start Date
    46. Bidding in Auction 87 will begin on Tuesday, May 25, 2010, as 
announced in the Auction 87 Comment Public Notice. 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 will be conducted on each business day until bidding has 
stopped on all licenses.
ii. Bidding Methodology
    47. The bidding methodology for Auction 87 will be simultaneous 
multiple round (SMR) bidding. The Commission will conduct this auction 
over the Internet using the FCC Auction System, and telephonic bidding 
will be available as well. Qualified bidders are permitted to bid 
electronically via the Internet or by telephone. All telephone calls 
are recorded.
iii. Pre-Auction Dates and Deadlines
    48. The following dates and deadlines apply:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Auction Tutorial Available (via Internet).  March 4, 2010.
Short-Form Application (FCC Form 175)       March 4, 2010; 12 noon ET.
 Filing Window Opens.
 Short-Form Application (FCC Form 175)      March 16, 2010; prior to 6
 Filing Window Deadline.                     p.m. ET.
Upfront Payments (via wire transfer)......  April 23, 2010; 6 p.m. ET.
Mock Auction..............................  May 21, 2010.
Auction Begins............................  May 25, 2010.
------------------------------------------------------------------------

iv. Requirements for Participation
    49. Those wishing to participate in this auction must: (1) Submit a 
short-form application (FCC Form 175) electronically prior to 6 p.m. 
ET, March 16, 2010, following the electronic filing procedures set 
forth in Attachment C of the Auction 87 Procedures Public Notice; (2) 
submit a sufficient upfront payment and an FCC Remittance Advice Form 
(FCC Form 159) by 6 p.m. ET, April 23, 2010, following the procedures 
and instructions set forth in Attachment D of the Auction 87 Procedures 
Public Notice; and (3) comply with all provisions outlined in the 
Auction 87 Procedures Public Notice and applicable Commission rules.

II. Short-Form Application (FCC Form 175) Requirements

A. General Information Regarding Short-Form Applications

    50. An application to participate in an FCC auction, referred to as 
a short-form application or FCC Form 175, provides information used in 
determining whether the applicant is legally, technically, and 
financially qualified to participate in Commission auctions for 
licenses or permits. The short-form application is the first part of 
the Commission's two-phased auction application process. In the first 
phase of this process, parties desiring to participate in the auction 
must file streamlined, short-form applications in which they certify 
under penalty of perjury as to their qualifications. Eligibility to 
participate in bidding is based on the applicants' short-form 
applications and certifications as well as their upfront payments. In 
the second phase of the process, winning bidders must file a more 
comprehensive long-form application (FCC Form 601) and have a complete 
and accurate ownership disclosure information report (FCC Form 602) on 
file with the Commission.
    51. Entities seeking licenses available in Auction 87 must file 
short-form applications electronically via the FCC Auction System prior 
to 6 p.m. ET on March 16, 2010, following the procedures prescribed in 
Attachment C of the Auction 87 Procedures Public Notice. Applicants 
filing short-form applications are subject to the Commission's rule 
prohibiting certain communications beginning on the deadline for 
filing. The information provided in its short-form application will be 
used in determining, among other things, if the applicant is eligible 
for a bidding credit.
    52. Applicants bear full responsibility for submitting accurate, 
complete and timely short-form applications. All applicants must 
certify on their short-form applications under penalty of perjury that 
they are legally, technically, financially and otherwise qualified to 
hold a license. Applicants should read the instructions set forth in 
Attachment C carefully and should consult the Commission's rules to 
ensure that, in addition to the materials all the information that is 
required under the Commission's rules is included with their short-form 
applications.
    53. An entity may not submit more than one short-form application 
for a single auction. If a party submits multiple short-form 
applications, only one application may become qualified to bid.
    54. Applicants also should note that submission of a short-form 
application (and any amendments thereto) constitutes a representation 
by the certifying official that he or she is an authorized 
representative of the applicant, that he or she has read the form's 
instructions and certifications, and that the contents of the 
application, its certifications, and any attachments are true and 
correct. An applicant cannot change the certifying official to its 
application. 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.

B. License Selection

    55. An applicant must select the licenses on which it wants to bid 
from the Eligible Licenses list on its short-form application. To 
assist applicants in identifying licenses of interest that will be 
available in Auction 87, the FCC Auction System includes a filtering 
mechanism that allows an applicant to filter the Eligible Licenses 
list.
    56. Applicants will not be able to change their license selections 
after the short-form application filing deadline. Applicants interested 
in participating in this auction must have selected license(s) 
available in Auction 87 by the short-form application deadline. 
Applicants must confirm their license selections before the deadline 
for submitting short-form applications. The FCC Auction System will not 
accept bids from an applicant on licenses that the applicant has not 
selected on its short-form application.

[[Page 8709]]

C. Disclosure of Bidding Arrangements

    57. Applicants will be required to identify in their short-form 
applications all parties with whom they have entered into any 
agreements, arrangements, or understandings of any kind relating to the 
licenses being auctioned, including any agreements relating to post-
auction market structure.
    58. Applicants will also be required to certify under penalty of 
perjury in their short-form applications that they have not entered and 
will not enter into any explicit or implicit agreements, arrangements, 
or understandings of any kind with any parties, other than those 
identified in the application, regarding the amount of their bids, 
bidding strategies, or the particular licenses on which they will or 
will not bid. If an applicant has had discussions, but has not reached 
an agreement by the short-form application filing deadline, it should 
not include the names of parties to the discussions on its application 
and it may not continue such discussions with any applicants after the 
deadline.
    59. While 47 CFR 1.2105(c) of the rules does not prohibit non-
auction-related business negotiations among auction applicants, 
applicants are reminded that certain discussions or exchanges could 
touch upon impermissible subject matters because they may convey 
pricing information and bidding strategies. Further, as discussed 
above, compliance with the disclosure requirements of 47 CFR 1.2105(c) 
will not insulate a party from enforcement of the antitrust laws.

D. Ownership Disclosure Requirements

    60. All applicants must comply with the uniform ownership 
disclosure standards set forth in Title 47, Part 1 of the Code of 
Federal Regulations, and provide information required by 47 CFR 1.2105 
and 1.2112. Specifically, in completing the short-form application, 
applicants will be required to fully disclose information on the real 
party or parties-in-interest and ownership structure of the applicant. 
The ownership disclosure standards for the short-form application are 
prescribed in 47 CFR 1.2105 and 1.2112. Each applicant is responsible 
for information submitted in its short-form application being complete 
and accurate.
    61. An applicant's most current ownership information on file with 
the Commission, if in an electronic format compatible with the short-
form application (FCC Form 175) (such as information submitted with an 
ownership disclosure information report (FCC Form 602) or in a short-
form application (FCC Form 175) filed for a previous auction using 
ISAS) will automatically be entered into the applicant's short-form 
application. An applicant is responsible for ensuring that the 
information submitted in its short-form application for Auction 87 is 
complete and accurate. Accordingly, applicants should carefully review 
any information automatically entered to confirm that it is complete 
and accurate as of the Auction 87 deadline for filing the short-form 
application. If any information that was entered automatically needs to 
be changed, applicants must do so directly in the short-form 
application.

E. Designated Entity Provisions

    62. Eligible applicants in Auction 87 may claim small business 
bidding credits. Applicants should review carefully the Commission's 
decisions regarding the designated entity provisions.
i. Bidding Credits for Small Businesses
    63. A bidding credit represents an amount by which a bidder's 
winning bid will be discounted. For Auction 87, bidding credits will be 
available to small businesses and consortia thereof.
a. Bidding Credit Eligibility Criteria
    64. The level of bidding credit is determined as follows: (1) A 
bidder with attributed average annual gross revenues that do not exceed 
$15 million for the preceding three years will receive a 25 percent 
discount on its winning bid; and (2) a bidder with attributed average 
annual gross revenues that do not exceed $3 million for the preceding 
three years will receive a 35 percent discount on its winning bid. 
Bidding credits are not cumulative. A qualifying applicant may claim 
either a 25 percent or 35 percent bidding credit on its winning bid.
b. Revenue Disclosure on Short-Form Application
    65. An entity applying as a small business must provide gross 
revenues for the preceding three years of each of the following: (1) 
The applicant, (2) its affiliates, (3) its controlling interests, (4) 
the affiliates of its controlling interests, and (5) the entities with 
which it has an attributable material relationship. Certification that 
the average annual gross revenues of such entities and individuals for 
the preceding three years do not exceed the applicable limit is not 
sufficient. Additionally, if an applicant is applying as a consortium 
of small businesses, this information must be provided for each 
consortium member.
ii. Attributable Interests
a. Controlling Interests
    66. Controlling interests of an applicant include individuals and 
entities with either de facto or de jure control of the applicant. 
Typically, ownership of greater than 50 percent of an entity's voting 
stock evidences de jure control. De facto control is determined on a 
case-by-case basis.
    67. Applicants should refer to 47 CFR 1.2110(c)(2) and Attachment C 
of the Auction 87 Procedures Public Notice to understand how certain 
interests are calculated in determining control. For example, pursuant 
to 47 CFR 1.2110(c)(2)(ii)(F), officers and directors of an applicant 
are considered to have controlling interest in the applicant.
b. Affiliates
    68. Affiliates of an applicant or controlling interest include an 
individual or entity that: (1) Directly or indirectly controls or has 
the power to control the applicant; (2) is directly or indirectly 
controlled by the applicant; (3) is directly or indirectly controlled 
by a third party that also controls or has the power to control the 
applicant; or (4) has an identity of interest with the applicant. The 
Commission's definition of an affiliate of the applicant encompasses 
both controlling interests of the applicant and affiliates of 
controlling interests of the applicant. For more information regarding 
affiliates, applicants should refer to 47 CFR 1.2110(c)(5) and 
Attachment C of the Auction 87 Procedures Public Notice.
c. Material Relationships
    69. The Commission requires the consideration of certain leasing 
and resale (including wholesale) relationships--referred to as material 
relationships--in determining designated entity eligibility for bidding 
credits. Material relationships fall into two categories: Impermissible 
and attributable.
    70. An applicant or licensee has an impermissible material 
relationship when it has agreements with one or more other entities for 
the lease or resale (including under a wholesale agreement) of, on a 
cumulative basis, more than 50 percent of the spectrum capacity of any 
of its licenses. If an applicant or a licensee has an impermissible 
material relationship, it is, as a result, (i) ineligible for the award 
of designated entity benefits, and (ii) subject to liability for unjust 
enrichment on a license-by-license basis.
    71. An applicant or licensee has an attributable material 
relationship when

[[Page 8710]]

it has one or more agreements with any individual entity for the lease 
or resale (including under a wholesale agreement) of, on a cumulative 
basis, more than 25 percent of the spectrum capacity of any individual 
license held by the applicant or licensee. The attributable material 
relationship will cause the gross revenues of that entity and its 
attributable interest holders to be attributed to the applicant or 
licensee for the purposes of determining the applicant's or licensee's 
(i) eligibility for designated entity benefits and (ii) liability for 
unjust enrichment on a license-by-license basis.
    72. The Commission grandfathered material relationships in 
existence before the release of the Designated Entity Second Report and 
Order, 71 FR 26245, May 5, 2006, meaning that those preexisting 
relationships alone would not cause the Commission to examine a 
designated entity's ongoing eligibility for benefits or its liability 
for unjust enrichment. The Commission did not, however, grandfather 
preexisting material relationships for determinations of an applicant's 
or licensee's designated entity eligibility for future auctions or in 
the context of future assignments, transfers of control, spectrum 
leases, or other reportable eligibility events. Rather, the occurrence 
of any of those eligibility events after the release date of the 
Designated Entity Second Report and Order triggers a reexamination of 
the applicant's or licensee's designated entity eligibility, taking 
into account all existing material relationships, including those 
previously grandfathered.
d. Gross Revenue Exceptions
    73. The Commission has also made other modifications to its rules 
governing the attribution of gross revenues for purposes of determining 
designated entity eligibility. For example, the Commission has 
clarified that, in calculating an applicant's gross revenues under the 
controlling interest standard, it will not attribute the personal net 
worth, including personal income, of its officers and directors to the 
applicant.
    74. The Commission has also exempted from attribution to the 
applicant the gross revenues of the affiliates of a rural telephone 
cooperative's officers and directors, if certain conditions specified 
in 47 CFR 1.2110(b)(3)(iii) are met. An applicant claiming this 
exemption must provide, in an attachment, an affirmative statement that 
the applicant, affiliate and/or controlling interest is an eligible 
rural telephone cooperative within the meaning of 47 CFR 
1.2110(b)(3)(iii), and the applicant must supply any additional 
information as may be required to demonstrate eligibility for the 
exemption from the attribution rule. Applicants seeking to claim this 
exemption must meet all of the conditions.
e. Bidding Consortia
    75. A consortium of small businesses is a conglomerate organization 
composed of two or more entities, each of which individually satisfies 
the definition of a small business. Thus, each member of a consortium 
of small businesses that applies to participate in Auction 87 must 
individually meet the criteria for small businesses. Each consortium 
member must disclose its gross revenues along with those of its 
affiliates, its controlling interests, the affiliates of its 
controlling interests, and any entities having an attributable material 
relationship with the member. Although the gross revenues of the 
consortium members will not be aggregated for purposes of determining 
the consortium's eligibility as a small business, this information must 
be provided to ensure that each individual consortium member qualifies 
for any bidding credit awarded to the consortium.

F. Tribal Lands Bidding Credit

    76. To encourage the growth of wireless services in federally 
recognized tribal lands, the Commission has implemented a tribal lands 
bidding credit. Applicants do not provide information regarding tribal 
lands bidding credits on their short-form applications. Instead, 
winning bidders may apply for the tribal lands bidding credit after the 
auction when they file their more detailed, long-form applications.

G. Provisions Regarding Former and Current Defaulters

    77. Current defaulters are not eligible to participate in Auction 
87, but former defaulters can participate so long as they are otherwise 
qualified and, make upfront payments that are fifty percent more than 
the normal upfront payment amounts. An applicant is considered a 
current defaulter when it, its affiliates, its controlling interests, 
or the affiliates of its controlling interests, are in default on any 
payment for any Commission license (including down payments) or are 
delinquent on any non-tax debt owed to any Federal agency as of the 
filing deadline for short-form applications. An applicant is considered 
a former defaulter when it, its affiliates, its controlling interests, 
or the affiliates of its controlling interests, have defaulted on any 
Commission license or been delinquent on any non-tax debt owed to any 
Federal agency, but have since remedied all such defaults and cured all 
of the outstanding non-tax delinquencies.
    78. On the short-form application, an applicant must certify under 
penalty of perjury that it, its affiliates, its controlling interests, 
and the affiliates of its controlling interests, as defined by 47 CFR 
1.2110, are not in default on any payments for Commission licenses 
(including down payments) and that they are not delinquent on any non-
tax debt owed to any Federal agency. Each applicant must also state 
under penalty of perjury whether or not it, its affiliates, its 
controlling interests, and the affiliates of its controlling interests, 
have ever been in default on any Commission licenses or have ever been 
delinquent on any non-tax debt owed to any Federal agency. Prospective 
applicants 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. These 
statements and certifications are prerequisites to submitting an 
application to participate in an FCC auction.
    79. Applicants are encouraged to review the Bureau's previous 
guidance on default and delinquency disclosure requirements in the 
context of the short-form application process. For example, it has been 
determined that to the extent that Commission rules permit late payment 
of regulatory or application fees accompanied by late fees, such debts 
will become delinquent for purposes of 47 CFR 1.2105(a) and 1.2106(a) 
only after the expiration of a final payment deadline. Therefore, with 
respect to regulatory or application fees, the provisions of 47 CFR 
1.2105(a) and 1.2106(a) regarding default and delinquency in connection 
with competitive bidding are limited to circumstances in which the 
relevant party has not complied with a final Commission payment 
deadline. Parties are also encouraged to coordinate with the 
Commission's Office of Managing Director or the Bureau's Auctions and 
Spectrum Access Division staff if they have any questions about default 
and delinquency disclosure requirements.
    80. The Commission considers outstanding debts owed to the United 
States Government, in any amount, to be a serious matter. The 
Commission has adopted rules, including a provision referred to as the 
red light rule, that implement the Commission's

[[Page 8711]]

obligations under the Debt Collection Improvement Act of 1996, which 
governs the collection of claims owed to the United States. Under the 
red light rule, the Commission will not process applications and other 
requests for benefits filed by parties that have outstanding debts owed 
to the Commission. In the same rulemaking order, the Commission 
explicitly declared, however, that the Commission's competitive bidding 
rules are not affected by the red light rule. As a consequence, the 
Commission's adoption of the red light rule does not alter the 
applicability of any of the Commission's competitive bidding rules, 
including the provisions and certifications of 47 CFR 1.2105 and 
1.2106, with regard to current and former defaults or delinquencies.
    81. Applicants are reminded, however, that the Commission's Red 
Light Display System, which provides information regarding debts owed 
to the Commission, may not be determinative of an auction applicant's 
ability to comply with the default and delinquency disclosure 
requirements of 47 CFR 1.2105. Thus, while the red light rule 
ultimately may prevent the processing of long-form applications by 
auction winners, an auction applicant's red light status is not 
necessarily determinative of its eligibility to participate in an 
auction or of its upfront payment obligation.

H. Minor Modifications to Short-Form Applications

    82. Applicants are not permitted to make major modifications to 
their short-form applications (e.g., change their license selections, 
change control of the applicant, change the certifying official, or 
change their size to claim eligibility for a higher bidding credit) 
after the short-form application deadline. Thus, any change in control 
of an applicant, resulting from a merger, for example, will be 
considered a major modification to the applicant's short-form 
application, which will consequently be dismissed.
    83. Applicants are, however, permitted to make minor changes to 
their short-form applications after the filing deadline. Permissible 
minor changes include, for example, deletion and addition of authorized 
bidders (to a maximum of three) and revision of addresses and telephone 
numbers of the applicants and their contact persons.

I. Maintaining Current Information in Short-Form Applications

    84. 47 CFR 1.65 requires an applicant to maintain the accuracy and 
completeness of information furnished in its pending application and to 
notify the Commission of any substantial change that may be of 
decisional significance to that application. The Commission recently 
amended 47 CFR 1.65(a) to require applicants in competitive bidding 
proceedings to furnish additional or corrected information within five 
days of a significant occurrence, or to amend their short-form 
applications no more than five days after the applicant becomes aware 
of the need for amendment. Changes that cause a loss of or reduction in 
eligibility for a bidding credit should be reported immediately. If an 
amendment reporting substantial changes is a major amendment, as 
defined by 47 CFR 1.2105, the major amendment will not be accepted and 
may result in the dismissal of the short-form application.
    85. After the short-form filing deadline, applicants may make only 
minor changes to their short-form applications.

III. Pre-Auction Procedures

A. Online Auction Tutorial--Available March 4, 2010

    86. On Thursday, March 4, 2010, the Commission will post an 
educational auction tutorial on the Auction 87 web page for prospective 
bidders to familiarize themselves with the auction process. This online 
tutorial will provide information about pre-auction procedures, 
completing short-form applications, auction conduct, the FCC Auction 
Bidding System, auction rules, and paging rules. The tutorial will also 
provide an avenue to ask questions of FCC staff concerning the auction, 
auction procedures, filing requirements, and other matters related to 
this auction.
    87. The Auction 87 online tutorial replaces the live bidder 
seminars that have been offered for most previous auctions. The Bureau 
believes parties interested in participating in Auction 87 will find 
this interactive, online tutorial a more efficient and effective way to 
further their understanding of the auction process.
    88. The auction tutorial will be accessible from the FCC's Auction 
87 web page at http://wireless.fcc.gov/auctions/87/ through an Auction 
Tutorial link. Once posted, this tutorial will remain available for 
reference in connection with the procedures outlined in the Auction 87 
Procedures Public Notice and accessible anytime.

B. Short-Form Applications--Due Prior to 6 p.m. ET on March 16, 2010

    89. In order to be eligible to bid in this auction, applicants must 
first follow the procedures set forth in Attachment C of the Auction 87 
Procedures Public Notice to submit a short-form application (FCC Form 
175) electronically via the FCC Auction System. This application must 
be received at the Commission prior to 6 p.m. ET on March 16, 2010. 
Late applications will not be accepted.

C. Application Processing and Minor Corrections

    90. After the deadline for filing short-form applications, the 
Commission will process all timely submitted applications to determine 
which are complete, and subsequently will issue a public notice 
identifying (1) those applications that are complete, (2) those 
applications that are rejected, and (3) those applications that are 
incomplete because of minor defects that may be corrected. The public 
notice will include the deadline for resubmitting corrected 
applications.
    91. After the March 16, 2010, short-form filing deadline, 
applicants may make only minor corrections to their applications. 
Applicants will not be permitted to make major modifications to their 
applications (e.g., change their license selections, change control of 
the applicant, change certifying official, or change their size to 
claim eligibility for a higher bidding credit).
    92. Applicants should be aware the Commission staff will 
communicate only with an applicant's contact person or certifying 
official, as designated on the applicant's short-form application, 
unless the applicant's certifying official or contact person notifies 
the Commission in writing that applicant's counsel or other 
representative is authorized to speak on its behalf. Authorizations may 
be submitted by e-mail at the following address: <a href="/cdn-cgi/l/email-protection#47263224332e28297f700721242469202831"><span class="__cf_email__" data-cfemail="f190849285989e9fc9c6b1979292df969e87">[email protected]</span></a>.

D. Upfront Payments--Due April 23, 2010

    93. In order to be eligible to bid in this auction, applicants must 
submit an upfront payment accompanied by an FCC Remittance Advice Form 
(FCC Form 159). After completing its short-form application, an 
applicant will have access to an electronic version of the FCC Form 159 
that can be printed and sent by fax to U.S. Bank in St. Louis, 
Missouri. All upfront payments must be made as instructed in this 
Public Notice and must be received in the proper account at U.S. Bank 
before 6 p.m. ET on April 23, 2010.
i. Making Upfront Payments by Wire Transfer
    94. Wire transfer payments must be received by 6 p.m. ET on April 
23, 2010.

[[Page 8712]]

No other payment method is acceptable. 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.
    95. At least one hour before placing the order for the wire 
transfer (but on the same business day), applicants must fax a 
completed FCC Form 159 (Revised 2/03) to U.S. Bank at (314) 418-4232. 
On the fax cover sheet, applicants should write Wire Transfer--Auction 
Payment for Auction 87. In order to meet the Commission's upfront 
payment deadline, an applicant's payment must be credited to the 
Commission's account before the deadline. The applicant is responsible 
for obtaining confirmation from its financial institution that U.S. 
Bank has timely received its upfront payment and deposited it in the 
proper account.
    96. Please note the following information regarding upfront 
payments: (1) All payments must be made in U.S. dollars; (2) all 
payments must be made by wire transfer; (3) upfront payments for 
Auction 87 go to a lockbox number different from the lockboxes used in 
previous FCC auctions; and (4) failure to deliver a sufficient upfront 
payment as instructed by the April 23, 2010, deadline will result in 
dismissal of the short-form application and disqualification from 
participation in the auction.
ii. FCC Form 159
    97. A completed FCC Remittance Advice Form (FCC Form 159, Revised 
2/03) must be faxed to U.S. Bank to accompany each upfront payment. 
Proper completion of FCC Form 159 is critical to ensuring correct 
crediting of upfront payments. Detailed instructions for completion of 
FCC Form 159 are included in Attachment D of the Auction 87 Procedures 
Public Notice. An electronic pre-filled version of the FCC Form 159 is 
available after submitting the short-form application. Payors using the 
pre-filled FCC Form 159 are responsible for ensuring that all of the 
information on the form, including payment amounts, is accurate. The 
FCC Form 159 can be completed electronically, but must be filed with 
U.S. Bank by fax.
iii. Upfront Payments and Bidding Eligibility
    98. The Commission has delegated to the Bureau the authority and 
discretion to determine appropriate upfront payments for each auction. 
Upfront payments help deter frivolous or insincere bidding, and provide 
the Commission with a source of funds in the event that the bidder 
incurs liability during the auction.
    99. Applicants that are former defaulters must pay upfront payments 
50 percent greater than non-former defaulters. For purposes of this 
calculation, the applicant includes the applicant itself, its 
affiliates, its controlling interests, and affiliates of its 
controlling interests, as defined by 47 CFR 1.2110.
    100. Applicants must make upfront payments sufficient to obtain 
bidding eligibility on the licenses on which they will bid. The Bureau 
proposed, in the Auction 87 Comment Public Notice, that the amount of 
the upfront payment would determine a bidder's initial bidding 
eligibility, the maximum number of bidding units on which a bidder may 
place bids. Under the Bureau's proposal, in order to bid on a 
particular license, a qualified bidder must have selected the license 
on its short-form application and must have a current 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 at least 500 bidding units of eligibility, 
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 the applicant selected on its short-form application, but 
only enough to cover the maximum number of bidding units that are 
associated with licenses on which the bidder wishes to place bids and 
hold provisionally winning bids at any given time.
    101. In the Auction 87 Comment Public Notice, the Bureau proposed 
to make the upfront payments equal to the minimum opening bids. The 
Bureau further proposed that each license be assigned a specific number 
of bidding units equal to the upfront payment listed for the license, 
on a bidding unit for dollar basis. The bidding unit level for each 
license will remain constant throughout the auction. The Bureau 
received no comments on this issue. The Bureau adopts its proposed 
upfront payments. The upfront payment and bidding units for each 
license will be $500 and 500 bidding units.
    102. In the Auction 87 Comment Public Notice, the Bureau noted the 
presence of pre-existing site-based incumbent licenses within some of 
the geographic areas available in Auction 87. The Bureau did not 
specifically address incumbency in its discussion of upfront payments. 
However, in its discussion of the proposed minimum opening bid amounts, 
the Bureau noted it had not attempted to adjust minimum opening bid 
amounts for licenses based on precise levels of incumbency within 
particular geographic areas, and has instead proposed a formula 
intended to reflect overall incumbency levels within the paging service 
areas being offered.
    103. In calculating its upfront payment amount, an applicant should 
determine the maximum number of bidding units on which it may wish to 
be active (bid on or hold provisionally winning bids on) in any single 
round, and submit an upfront payment amount covering that number of 
bidding units. In order to make this calculation, an applicant should 
add together the upfront payments for all licenses on which it seeks to 
be active in any given round. Applicants should check their calculation 
carefully, as there is no provision for increasing a bidder's 
eligibility after the upfront payment deadline.
    104. Applicants that are former defaulters must calculate their 
upfront payment for all licenses by multiplying the number of bidding 
units on which they wish to be active 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.
iv. Applicant's Wire Transfer Information for Purposes of Refunds of 
Upfront Payments
    105. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that all pertinent 
information listed below be supplied. Applicants can provide the 
information electronically during the initial short-form application 
filing window after the form has been submitted.

E. Auction Registration

    106. Approximately ten days before the auction, the Bureau will 
issue a public notice announcing all qualified bidders for the auction. 
Qualified bidders are those applicants with submitted short-form 
applications that are deemed complete and upfront payments that are 
sufficient to make them eligible to bid.
    107. All qualified bidders are automatically registered for the 
auction. Registration materials will be distributed prior to the 
auction by overnight mail. The mailing will be sent only to the contact 
person at the contact address listed in the short-form application and 
will include the SecurID[supreg] tokens that will be required to

[[Page 8713]]

place bids, the Integrated Spectrum Auction System (ISAS) Bidder's 
Guide, and the Auction Bidder Line phone number.
    108. Qualified bidders that do not receive this registration 
mailing will not be able to submit bids. Therefore, any qualified 
bidder that has not received this mailing by noon on Wednesday, May 19, 
2010, should call (717) 338-2868. Receipt of this registration mailing 
is critical to participating in the auction, and each applicant is 
responsible for ensuring it has received all of the registration 
material.
    109. Only a person who has been designated as an authorized bidder, 
the contact person, or the certifying official on the applicant's 
short-form application may request replacements for lost or damaged 
SecurID[supreg] tokens.

F. Remote Electronic Bidding

    110. The Commission will conduct this auction over the Internet, 
and telephonic bidding will be available as well. Only qualified 
bidders are permitted to bid. Each applicant should indicate its 
bidding preference--electronic or telephonic--on its short-form 
application. In either case, each authorized bidder must have its own 
SecurID[supreg] token, which the Commission will provide at no charge. 
Each applicant with one authorized bidder will be issued two 
SecurID[supreg] tokens, while applicants with two or three authorized 
bidders will be issued three tokens. For security purposes, the 
SecurID[supreg] tokens, the telephonic bidding telephone number, and 
the Integrated Spectrum Auction System (ISAS) Bidder's Guide are only 
mailed to the contact person at the contact address listed on the 
short-form application. Each SecurID[supreg] token is tailored to a 
specific auction. SecurID[supreg] tokens issued for other auctions or 
obtained from a source other than the FCC will not work for Auction 87.

G. Mock Auction--May 21, 2010

    111. All qualified bidders will be eligible to participate in a 
mock auction on Friday, May 21, 2010. The mock auction will enable 
applicants to become familiar with the FCC Auction System prior to the 
auction. Participation by all bidders is strongly recommended. Details 
will be announced by public notice.

IV. Auction Event

    112. The first round of bidding for Auction 87 will begin on 
Tuesday, May 25, 2010. The initial bidding schedule will be announced 
in a public notice listing the qualified bidders, which is to be 
released approximately 10 days before the start of the auction.

A. Auction Structure

i. Simultaneous Multiple Round Auction
    113. The Bureau will auction all licenses in Auction 87 in a single 
auction using the Commission's standard simultaneous multiple-round 
auction format. This type of auction offers every license for bid at 
the same time and consists of successive bidding rounds in which 
eligible bidders may place bids on individual licenses. A bidder may 
bid on, and potentially win, any number of licenses. Typically, bidding 
remains open on all licenses until bidding stops on every license.
ii. Information Available to Bidders Before and During the Auction
    114. In the Auction 87 Comment Public Notice, the Bureau proposed 
to withhold, until after the close of bidding, public release of (1) 
bidders' license selections on their short-form applications (FCC Form 
175), (2) the amounts of bidders' upfront payments and bidding 
eligibility, and (3) information that may reveal the identities of 
bidders placing bids and taking other bidding-related actions. The 
Bureau sought comment on the proposal to implement anonymous bidding 
and on any alternatives, particularly in light of the large number of 
licenses available in Auction 87.
    115. The Bureau received one comment on its proposal to use 
anonymous bidding procedures for Auction 87. Because the Bureau finds 
that the competitive benefits associated with anonymous bidding support 
adoption of such procedures, the Bureau adopts the limited information 
procedures proposed in the Auction 87 Comment Public Notice. Thus, 
after the conclusion of each round, the Bureau will disclose all 
relevant information about the bids placed and/or withdrawn except the 
identities of the bidders performing the actions and the net amounts of 
the bids placed or withdrawn. As in past auctions conducted with 
limited information procedures, the Bureau will indicate, for each 
license, the minimum acceptable bid amount for the next round and 
whether the license has a provisionally winning bid. After each round, 
the Bureau will also release, for each license, the number of bidders 
that placed a bid on the license. Furthermore, the Bureau will indicate 
whether any proactive waivers were submitted in each round, and the 
Bureau will release the stage transition percentage--the percentages of 
licenses (as measured in bidding units) on which there were new bids--
for the round. In addition, bidders can log in to the FCC Auction 
System to see, after each round, whether their own bids are 
provisionally winning. The Bureau will provide descriptions and/or 
samples of publicly available and bidder-specific (non-public) results 
files prior to the start of the auction.
    116. The Bureau, however, retains the discretion not to use limited 
information procedures if the Bureau, after examining the level of 
potential competition as expressed in the license selection on the 
short-form applications filed for Auction 87, determines that the 
circumstances indicate that limited information procedures would not be 
an effective tool for deterring anti-competitive behavior. For example, 
if only two applicants become qualified to participate in the bidding, 
limited information procedures would be ineffective in preventing 
bidders from knowing the identity of the competing bidder and, 
therefore, limited information procedures would not serve to deter 
attempts at signaling and retaliatory bidding behavior.
    117. Other Issues. Information disclosure procedures established 
for this auction will not interfere with the administration of or 
compliance with the Commission's prohibition of certain communications. 
47 CFR 1.2105(c)(1) provides that, after the short-form application 
filing deadline, all applicants for licenses in any of the same or 
overlapping geographic license areas are prohibited from disclosing to 
each other in any manner the substance of bids or bidding strategies 
until after the down payment deadline, subject to specified exceptions.
    118. In Auction 87, the Commission will not disclose information 
regarding license selection or the amounts of bidders' upfront payments 
and bidding eligibility. As in the past, the Commission will disclose 
the other portions of applicants' short-form applications through its 
online database, and certain application-based information through 
public notices.
    119. To assist applicants in identifying other parties subject to 
47 CFR 1.2105(c), the Bureau will notify separately each applicant in 
Auction 87 whether applicants with short-form applications to 
participate in pending auctions, including but not limited to Auction 
87, have applied for licenses in any of the same or overlapping 
geographic areas as that applicant. Specifically, after the Bureau 
conducts its initial review of applications to participate in Auction 
87, it will send to

[[Page 8714]]

each applicant in Auction 87 a letter that lists the other applicants 
that have pending short-form applications for licenses in any of the 
same or overlapping geographic areas. The list will identify the other 
applicants by name but will not list their license selections. As in 
past auctions, additional information regarding other applicants that 
is needed to comply with 47 CFR 1.2105(c)--such as the identities of 
other applicants' controlling interests and entities with a greater 
than ten percent ownership interest--will be available through the 
publicly accessible online short-form application database.
    120. When completing short-form applications, applicants should 
avoid any statements or disclosures that may violate the Commission's 
prohibition of certain communications, pursuant to 47 CFR 1.2105(c), 
particularly in light of the Commission's procedures regarding the 
availability of certain information in Auction 87. While applicants' 
license selections will not be disclosed until after Auction 87 closes, 
the Commission will disclose other portions of short-form applications 
through its online database and public notices. Accordingly, applicants 
should avoid including any information in their short-form applications 
that might convey information regarding license selections. For 
example, applicants should avoid using applicant names that refer to 
licenses being offered, referring to certain licenses or markets in 
describing bidding agreements, or including any information in 
attachments that may otherwise disclose applicants' license selections.
    121. If an applicant is found to have violated the Commission's 
rules or antitrust laws in connection with its participation in the 
competitive bidding process, the applicant may be subject to various 
sanctions, including forfeiture of its upfront payment, down payment, 
or full bid amount and prohibition from participating in future 
auctions.
    122. The Bureau hereby warns applicants that the direct or indirect 
communication to other applicants or the public disclosure of non-
public information (e.g., bid withdrawals, proactive waivers submitted, 
reductions in eligibility) could violate the Commission's anonymous 
bidding procedures and 47 CFR 1.2105(c). To the extent an applicant 
believes that such a disclosure is required by law or regulation, 
including regulations issued by the Securities and Exchange Commission, 
the Bureau strongly urges that the applicant consult with the 
Commission staff in the Auctions and Spectrum Access Division before 
making such disclosure.
iii. Eligibility and Activity Rules
    123. The Bureau will use upfront payments to determine initial 
(maximum) eligibility (as measured in bidding units) for Auction 87. 
The amount of the upfront payment submitted by a bidder determines 
initial bidding eligibility, the maximum number of bidding units on 
which a bidder may be active. As noted earlier, each license is 
assigned a specific number of bidding units set forth in the complete 
list of licenses available for Auction 87, available as separate 
Attachment A files at http://wireless.fcc.gov/auctions/87/. Bidding 
units for a given license do not change as prices rise during the 
auction. A bidder's upfront payment is not attributed to specific 
licenses. Rather, a bidder may place bids on any of the licenses 
selected on its short-form application as long as the total number of 
bidding units associated with those licenses does not exceed its 
current eligibility. Eligibility cannot be increased during the 
auction; it can only remain the same or decrease. Thus, in calculating 
its upfront payment amount, an applicant must determine the maximum 
number of bidding units it may wish to bid on or hold provisionally 
winning bids on in any single round, and submit an upfront payment 
amount covering that total number of bidding units. At a minimum, an 
applicant's upfront payment must cover the bidding units for at least 
one of the licenses it selected on its short-form application. The 
total upfront payment does not affect the total dollar amount a bidder 
may bid on any given license.
    124. In order to ensure that an auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively 
throughout the auction, rather than wait until late in the auction 
before participating. Bidders are required to be active on a specific 
minimum percentage of their current bidding eligibility during each 
round of the auction.
    125. A bidder's activity level in a round is the sum of the bidding 
units associated with any licenses covered by new and provisionally 
winning bids. A bidder is considered active on a license in the current 
round if it is either the provisionally winning bidder at the end of 
the previous bidding round and does not withdraw the provisionally 
winning bid in the current round, or if it submits a bid in the current 
round.
    126. The minimum required activity is expressed as a percentage of 
the bidder's current eligibility, and increases by stage as the auction 
progresses. Because these procedures have proven successful in 
maintaining the pace of previous auctions, the Commission adopts them 
for Auction 87. Failure to maintain the requisite activity level will 
result in the use of an activity rule waiver, if any remain, or a 
reduction in the bidder's eligibility, possibly curtailing or 
eliminating the bidder's ability to place additional bids in the 
auction.
iv. Auction Stages
    127. In the Auction 87 Comment Public Notice, the Bureau proposed 
to conduct the auction in two stages and employ an activity rule. Under 
the Bureau's proposal a bidder desiring to maintain its current bidding 
eligibility would be required to be active on licenses representing at 
least 80 percent of its current bidding eligibility, during each round 
of Stage One, and at least 95 percent of its current bidding 
eligibility in Stage Two. The Commission received no comments on this 
proposal.
    128. The Bureau has the discretion to further alter the activity 
requirements before and/or during the auction as circumstances warrant, 
and also has other mechanisms by which it may influence the speed of an 
auction. The Bureau finds that two stages for an activity requirement 
adequately balances the desire to conclude the auction quickly with 
giving sufficient time for bidders to consider the status of the 
bidding and to place bids. Therefore, the Bureau adopts the two stages 
for Auction 87.
v. Stage Transitions
    129. In the Auction 87 Comment Public Notice, the Bureau proposed 
that it would advance the auction to the next stage (i.e., from Stage 
One to Stage Two) after considering a variety of measures of auction 
activity. The Bureau received no comments on this issue therefore the 
Bureau adopts its proposal for stage transitions. Thus, the auction 
will start in Stage One. The Bureau will regulate the pace of the 
auction by announcement. The Bureau retains the discretion to 
transition the auction to Stage Two, to add an additional stage with a 
higher activity requirement, not to transition to Stage Two, and to 
transition to Stage Two with an activity requirement that is higher or 
lower than 95 percent. This determination will be based on a variety of 
measures of auction activity, including, but not limited to, the number 
of new bids and the percentages of licenses (as measured in bidding 
units) on which there are new bids.

[[Page 8715]]

vi. Activity Rule Waivers
    130. In the Auction 87 Comment Public Notice, the Bureau proposed 
that each bidder in the auction be provided with three activity rule 
waivers. The Bureau received no comments on this issue and therefore 
adopts its proposal to provide bidders with three activity rule 
waivers. More detail on activity rule waivers can be found in the 
Auction 87 Procedures Public Notice.
vii. Auction Stopping Rules
    131. For Auction 87, the Bureau proposed to employ a simultaneous 
stopping rule approach. A simultaneous stopping rule means that all 
licenses remain available for bidding until bidding closes 
simultaneously on all licenses. More specifically, bidding will close 
simultaneously on all licenses after the first round in which no bidder 
submits any new bids, applies a proactive waiver, or withdraws any 
provisionally winning bids.
    132. The Bureau also sought comment on alternative versions of the 
simultaneous stopping rule for Auction 87. The Bureau received no 
comment on its proposals, and therefore adopts the simultaneous 
stopping rule and its alternatives versions as options.
viii. Auction Delay, Suspension, or Cancellation
    133. In the Auction 87 Comment Public Notice, the Bureau proposed 
that, by public notice or by announcement during the auction, it may 
delay, suspend, or cancel the auction in the event of natural disaster, 
technical obstacle, administrative or weather necessity, evidence of an 
auction security breach or unlawful bidding activity, or for any other 
reason that affects the fair and efficient conduct of competitive 
bidding. The Bureau received no comment on this issue therefore the 
Bureau adopts the proposed rules regarding auction delay, suspension, 
or cancellation.

B. Bidding Procedures

i. Round Structure
    134. The initial schedule of bidding rounds will be announced in 
the public notice listing the qualified bidders, which is released 
approximately 10 days before the start of the auction. Each bidding 
round is followed by the release of round results. Multiple bidding 
rounds may be conducted in a given day. Details regarding round results 
formats and locations will also be included in the qualified bidders 
public notice.
    135. 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, the amount of time between rounds, or the number of 
rounds per day, depending upon bidding activity and other factors.
ii. Reserve Price and Minimum Opening Bids
    136. Section 309(j) of the Communications Act of 1934, as amended, 
calls upon the Commission to prescribe methods by which a reasonable 
reserve price will be required or a minimum opening bid established 
when applications for FCC licenses are subject to auction (i.e., 
because they are mutually exclusive), unless the Commission determines 
that a reserve price or minimum opening bid is not in the public 
interest.
    137. In the Auction 87 Comment Public Notice, the Bureau did not 
propose to establish a separate reserve price for the licenses to be 
offered in Auction 87. The Bureau, however, did propose to establish 
minimum opening bids for each license, reasoning that a minimum opening 
bid, which has been used on other auctions, is an effective bidding 
tool for accelerating the competitive bidding process. Specifically, 
for Auction 87, the Bureau proposed to set the minimum opening bid for 
each license available in Auction 87 at $500. In the Auction 87 Comment 
Public Notice, the Bureau noted the presence of pre-existing site-based 
incumbent licenses within some of the geographic areas available in 
Auction 87. In its discussion of the proposed minimum opening bid 
amounts, the Bureau noted that it had not attempted to adjust minimum 
opening bid amounts for licenses based on precise levels of incumbency 
within particular geographic areas, and have instead proposed a formula 
intended to reflect overall incumbency levels within the paging areas 
being offered.
    138. The Bureau sought comment on its proposal for minimum opening 
bids and, in the alternative, on whether, consistent with Section 
309(j), the public interest would be served by having no minimum 
opening bids. A commenter expressed concern about the minimum opening 
bids for licenses in Auction 87 and appeared to be concerned about 
setting minimum opening bids at the same level that certain paging 
licenses were won in previous auctions (i.e., $500) and that the 
proposed minimum opening bid amounts may make it difficult for bidders 
to maintain the required activity level. In reply, another commenter 
disagreed and suggested that the success of Auctions 40 and 48 confirm 
that the minimum opening bid levels proposed will have the desired 
result of producing a time-efficient auction that places spectrum in 
the hands of those that value it most.
    139. The Bureau finds that the proposed minimum opening bids will 
promote an appropriate auction pace and avoid unnecessarily prolonging 
Auction 87. The Bureau therefore adopts its proposal to set the minimum 
opening bid for each license available in Auction 87 at $500.
iii. Bid Amounts
    140. In the Auction 87 Comment Public Notice, the Bureau proposed 
that in each round, eligible bidders be able to place a bid on a given 
license using one or more pre-defined bid amounts. Under the proposal, 
the FCC Auction System interface will list the acceptable bid amounts 
for each license. The Commission received no comment on this issue. 
Based on the Commission's experience in prior auctions, the Bureau 
adopts this proposal for Auction 87.
a. Minimum Acceptable Bids
    141. Under the Bureau's proposed procedures, the first of the 
acceptable bid amounts is called the minimum acceptable bid amount. The 
minimum acceptable bid amount for a license will be equal to its 
minimum opening bid amount until there is a provisionally winning bid 
on the license. After there is a provisionally winning bid for a 
license, the minimum acceptable bid will be a certain percentage 
higher. That is, the minimum acceptable bid amount will be calculated 
by multiplying the provisionally winning bid amount times one plus the 
minimum acceptable bid percentage. If, for example, the minimum 
acceptable bid percentage is 10 percent, the minimum acceptable bid 
amount will equal (provisionally winning bid amount) * (1.10), rounded. 
In the case of a license for which the provisionally winning bid has 
been withdrawn, the minimum acceptable bid amount will equal the second 
highest bid received for the license.
    142. For Auction 87, the Bureau proposed to use a minimum 
acceptable bid percentage of 10 percent. This means that the minimum 
acceptable bid amount for a license will be approximately 10 percent 
greater than the provisionally winning bid amount for the license.
    143. The Bureau received no comments on this proposal. Therefore, 
the Bureau adopts its proposal to begin

[[Page 8716]]

the auction with a minimum acceptable bid increment percentage of 0.10.
b. Additional Bid Amounts
    144. Any additional bid amounts are calculated using the minimum 
acceptable bid amount and a bid increment percentage, which need not be 
the same as the percentage used to calculate the minimum acceptable bid 
amount. The first additional acceptable bid amount equals the minimum 
acceptable bid amount times one plus the bid increment percentage, 
rounded. If, for example, the bid increment percentage is 5 percent, 
the calculation is (minimum acceptable bid amount) * (1 + 0.05), 
rounded, or (minimum acceptable bid amount) * 1.05, rounded; the second 
additional acceptable bid amount equals the minimum acceptable bid 
amount times one plus two times the bid increment percentage, rounded, 
or (minimum acceptable bid amount) * 1.10, rounded; etc. The Bureau 
will round the results using the Commission's standard rounding 
procedures for auctions.
    145. The Bureau sought comment on whether to start with eight 
additional bid amounts (for a total of nine bid amounts), or with fewer 
or no additional bid amounts, in the event that anonymous bidding is 
implemented for Auction 87. If additional bid amounts are available in 
Auction 87, the Bureau proposed to use a bid increment percentage of 5 
percent.
    146. The Bureau received no comments on this proposal. Therefore, 
the Bureau adopts its proposal to begin the auction with a bid 
increment percentage of 0.05 and have eight additional bid amounts per 
license (for a total of nine bid amounts). The Bureau retains the 
discretion to change the minimum acceptable bid amounts, the additional 
bid amounts, the number of acceptable bid amounts, and the parameters 
of the formulas used to calculate minimum acceptable bid amounts and 
additional bid amounts if it determines that circumstances so dictate. 
Further, the Bureau retains the discretion to do so on a license-by-
license basis.
iv. Provisionally Winning Bids
    147. At the end of each bidding round, a provisionally winning bid 
will be determined based on the highest bid amount received for each 
license. A provisionally winning bid will remain the provisionally 
winning bid until there is a higher bid on the same license at the 
close of a subsequent round. Provisionally winning bids at the end of 
the auction become the winning bids. Bidders are reminded that 
provisionally winning bids count toward activity for purposes of the 
activity rule.
    148. In the Auction 87 Comment Public Notice, the Bureau proposed 
to use a random number generator to select a single provisionally 
winning bid in the event of identical high bid amounts being submitted 
on a license in a given round (i.e., tied bids). No comments were 
received on this proposal. Hence, the Bureau adopts the proposal.
v. Bidding
    149. All bidding will take place remotely either through the FCC 
Auction System or by telephonic bidding. There will be no on-site 
bidding during Auction 87. Please note that 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. The 
length of a call to place a telephonic bid may vary; please allow a 
minimum of ten minutes.
    150. A bidder's ability to bid on specific licenses is determined 
by two factors: (1) The licenses selected on the bidder's short-form 
application and (2) the bidder's eligibility. The bid submission 
screens will allow bidders to submit bids on only those licenses the 
bidder selected on its short-form application.
    151. In order to access the bidding function of the FCC Auction 
System, bidders must be logged in during the bidding round using the 
passcode generated by the SecurID[supreg] token and a personal 
identification number created by the bidder. Bidders are strongly 
encouraged to print a round summary for each round after they have 
completed all of their activity for that round.
    152. In each round, eligible bidders will be able to place bids on 
a given license in one or more pre-defined bid amounts. For each 
license, the FCC Auction System will list the acceptable bid amounts in 
a drop-down box. Bidders use the drop-down box to select from among the 
acceptable bid amounts. The FCC Auction System also includes an upload 
function that allows bidders to upload text files containing bid 
information.
    153. Until a bid has been placed on a license, the minimum 
acceptable bid amount for that license will be equal to its minimum 
opening bid amount. Once there are bids on a license, minimum 
acceptable bids for a license will be determined.
    154. During a round, an eligible bidder may submit bids for as many 
licenses as it wishes (provided that the bidder has enough 
eligibility), remove bids placed in the current bidding round, withdraw 
provisionally winning bids from previous rounds, or permanently reduce 
eligibility. If a bidder submits multiple bids for the exact same 
license in the same round, the system takes 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 or 
withdrawn its bid do not count towards the bidder's current activity.
    155. Finally, bidders are cautioned to select their bid amounts 
carefully because, as explained below, bidders that withdraw a 
provisionally winning bid from a previous round, even if the bid was 
mistakenly or erroneously made, are subject to bid withdrawal payments.
vi. Bid Removal and Bid Withdrawal
    156. In the Auction 87 Comment Public Notice, the Commission 
proposed bid removal and bid withdrawal procedures. The Bureau sought 
comment on permitting a bidder to remove a bid before the close of the 
round in which the bid was placed. With respect to bid withdrawals, the 
Commission proposed limiting each bidder to withdrawals of 
provisionally winning bids on licenses in no more than one round during 
the course of the auction. The round in which withdrawals are used 
would be at each bidder's discretion.
    157. The Bureau received no comments on this issue. Therefore, the 
Bureau adopts its proposal.
    158. Bid Removal. Before the close of a bidding round, a bidder has 
the option of removing any bids placed in that round. By using the 
remove bids function in the FCC Auction System, a bidder may 
effectively unsubmit any bid placed within that round. A bidder 
removing a bid placed in the same round is not subject to withdrawal 
payments. If a bid is placed on a license during a round, it will count 
towards the activity for that round, but when that bid is then removed 
during the same round it was placed, the activity associated with it is 
also removed, i.e., a bid that is removed does not count toward bidding 
activity.
    159. Bid Withdrawal. Once a round closes, a bidder may no longer 
remove a bid. However, in a later round, a bidder may withdraw 
provisionally winning bids from previous rounds for licenses using the 
withdraw bids function in the FCC Auction System. A provisionally 
winning bidder that withdraws its provisionally winning bid from a 
previous round during the

[[Page 8717]]

auction is subject to the bid withdrawal payments specified in 47 CFR 
1.2104(g). Once a withdrawal is submitted during a round, that 
withdrawal cannot be unsubmitted even if the round has not yet ended.
    160. If a provisionally winning bid is withdrawn, the minimum 
acceptable bid amount will equal the amount of the second highest bid 
received for the license, which may be less than, or in the case of 
tied bids, equal to, the amount of the withdrawn bid. The Commission 
will serve as a placeholder provisionally winning bidder on the license 
until a new bid is submitted on that license.
    161. Calculation of Bid Withdrawal Payment. Generally, the 
Commission imposes payments on bidders that withdraw provisionally 
winning bids during the course of an auction. If a bidder withdraws its 
bid and there is no higher bid in the same or subsequent auction(s), 
the bidder that withdrew its bid is responsible for the difference 
between its withdrawn bid and the winning bid in the same or subsequent 
auction(s). If there are multiple bid withdrawals on a single license 
and no subsequent higher bid is placed and/or the license is not won in 
the same auction, the payment for each bid withdrawal will be 
calculated based on the sequence of bid withdrawals and the amounts 
withdrawn. No withdrawal payment will be assessed for a withdrawn bid 
if either the subsequent winning bid or any subsequent intervening 
withdrawn bid, in either the same or subsequent auction(s), equals or 
exceeds that withdrawn bid. Thus, a bidder that withdraws a bid will 
not be responsible for any final withdrawal payment if there is a 
subsequent higher bid in the same or subsequent auction(s).
    162. 47 CFR 1.2104(g)(1) sets forth the payment obligations of a 
bidder that withdraws a provisionally winning bid on a license during 
the course of an auction, and provides for the assessment of interim 
bid withdrawal payments. In the Auction 87 Comment Public Notice, the 
Bureau proposed to establish the percentage at ten percent for Auction 
87 and sought comment on the proposal. The Bureau received no comments 
on this issue and adopts its proposal.
vii. Round Results
    163. Limited information about the results of a round will be made 
public after the conclusion of the round. Specifically, after a round 
closes, the Bureau will make available for each license, its current 
provisionally winning bid amount, the minimum acceptable bid amount for 
the following round, the amounts of all bids placed on the license 
during the round, and whether the license is FCC held. The system will 
also provide an entire license history detailing all activity that has 
taken place on a license with the ability to sort by round number. The 
reports will be publicly accessible. Moreover, after the auction, the 
Bureau will make available complete reports of all bids placed during 
each round of the auction, including bidder identities.
viii. Auction Announcements
    164. The Commission will use auction announcements to announce 
items such as schedule changes and stage transitions. All auction 
announcements will be available by clicking a link in the FCC Auction 
System.

V. Post-Auction Procedures

    165. Shortly after bidding has ended, the Commission will issue a 
public notice declaring the auction closed, identifying the winning 
bidders, and establishing the deadlines for submitting down payments, 
long-form applications, final payments, and ownership disclosure 
information reports.

A. Down Payments

    166. Within ten business days after release of the auction closing 
public 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 Commission for Auction 87 to 20 percent of the net 
amount of its winning bids (gross bids less any applicable small 
business bidding credit).

B. Final Payments

    167. Each winning bidder will be required to submit the balance of 
the net amount of its winning bids within 10 business days after the 
applicable deadline for submitting down payments.

C. Long-Form Application (FCC Form 601)

    168. Within ten business days after release of the auction closing 
public notice, winning bidders must electronically submit a properly 
completed long-form application (FCC Form 601) for the license(s) they 
won through Auction 87. Winning bidders claiming eligibility for a 
small business bidding credit must demonstrate their eligibility for 
the bidding credit. Further filing instructions will be provided to 
winning bidders in the auction closing public notice.
    169. Winning bidders organized as bidding consortia must comply 
with the long-form application procedures established in the CSEA/Part 
1 Report and Order 71 FR 6992, February 10, 2006. Specifically, each 
member (or group of members) of a winning consortium seeking separate 
licenses will be required to file a separate long-form application for 
its respective license(s). If the license is to be partitioned or 
disaggregated, the member (or group) filing the long-form application 
must provide the relevant partitioning or disaggregation agreement in 
its long-form application. In addition, if two or more consortium 
members wish to be licensed together, they must first form a legal 
business entity, and any such entity must meet the applicable 
designated entity criteria.

D. Ownership Disclosure Information Report (FCC Form 602)

    170. Within ten business days after release of the auction closing 
public notice, each winning bidder must also comply with the ownership 
reporting requirements in 47 CFR 1.913, 1.919, and 1.2112 by submitting 
an ownership disclosure information report (FCC Form 602) with its 
long-form application.
    171. If an applicant already has a complete and accurate FCC Form 
602 on file in the Commission's Universal Licensing System (ULS), it is 
not necessary to file a new report, but applicants must verify that the 
information on file with the Commission is complete and accurate. If 
the applicant does not have an FCC Form 602 on file, or if it is not 
complete and accurate, the applicant must submit one.
    172. When an applicant submits a short-form application, ULS 
automatically creates an ownership record. This record is not an FCC 
Form 602, but may be used to pre-fill the FCC Form 602 with the 
ownership information submitted on the applicant's short-form 
application. Applicants must review the pre-filled information and 
confirm that it is complete and accurate as of the filing date of the 
long-form application before certifying and submitting the FCC Form 
602. Further instructions will be provided to winning bidders in the 
auction closing public notice.

E. Tribal Lands Bidding Credit

    173. 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 
wireline penetration rate equal to or below 85 percent is eligible to 
receive a tribal lands bidding credit as set forth in 47 CFR 1.2107 and 
1.2110(f). A tribal

[[Page 8718]]

lands bidding credit is in addition to, and separate from, any other 
bidding credit for which a winning bidder may qualify.
    174. Unlike other bidding credits that are requested prior to the 
auction, a winning bidder applies for the tribal lands bidding credit 
after the auction when it files its long-form application (FCC Form 
601). When initially filing the long-form application, the winning 
bidder will be required to advise the Commission whether it intends to 
seek a tribal lands bidding credit, for each license won in the 
auction, by checking the designated box(es). After stating its intent 
to seek a tribal lands bidding credit, the applicant will have 180 days 
from the close of the long-form application 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 lands bidding credit are subject to performance 
criteria as set forth in 47 CFR 1.2110(f)(3)(vii).

F. Default and Disqualification

    175. Any winning 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 CFR 
1.2104(g)(2). The payments include both a deficiency payment, equal to 
the difference between the amount of the bidder's bid and the amount of 
the winning bid the next time a license covering the same spectrum is 
won in an auction, plus an additional payment equal to a percentage of 
the defaulter's bid or of the subsequent winning bid, whichever is 
less.
    176. The percentage of the applicable bid to be assessed as an 
additional payment for defaults in a particular auction is established 
in advance of the auction. Accordingly, in the Auction 87 Comment 
Public Notice, the Bureau proposed to set the additional default 
payment for this auction at 10 percent of the applicable bid. The 
Bureau received no comments on this proposal and therefore adopts the 
proposal.
    177. Finally, in the event of a default, the Commission may re-
auction the license or offer it to the next highest bidder (in 
descending order) at its final bid amount. 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.

G. Refund of Remaining Upfront Payment Balance

    178. After the auction, applicants that are not winning bidders or 
are winning bidders whose upfront payment exceeded the total net amount 
of their winning bids may be entitled to a refund of some or all of 
their upfront payment. 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. Bidders should not request 
a refund of their upfront payments before the Commission releases a 
public notice declaring the auction closed, identifying the winning 
bidders, and establishing the deadlines for submitting down payments, 
long-form applications, and final payments. More detailed information 
on refunds is available in the Auction 87 Procedures Public Notice.

Federal Communications Commission.
William W. Huber,
Associate Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 2010-3875 Filed 2-24-10; 8:45 am]
BILLING CODE 6712-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>