[Federal Register Volume 75, Number 35 (Tuesday, February 23, 2010)]
[Notices]
[Pages 8070-8076]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-3583]


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FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 10-31; DA 10-125]


Closed Auction of Broadcast Construction Permits Scheduled for 
July 20, 2010; Auction 88 Applicants Must Provide Supplemental 
Information by March 12, 2010; Comment Sought on Competitive Bidding 
Procedures for Auction 88

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the auction of certain broadcast FM, 
AM, and FM Translator construction permits scheduled to commence on 
July 20, 2010 (Auction 88). This document also seeks comments on 
competitive bidding procedures for Auction 88.

DATES: Comments are due on or before February 25, 2010, and reply 
comments are due on or before March 11, 2010. Auction 88 applicants 
must provide supplemental information by March 12, 2010.

ADDRESSES: You may submit comments, identified by AU Docket No. 10-31, 
by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Federal Communications Commission's Web Site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
    <bullet> Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. Filings can be sent by 
hand or messenger delivery, by commercial overnight courier, or by 
first-class or overnight U.S. Postal Service mail. All filings must be 
addressed to the Commission's Secretary, Attn: WTB/ASAD, Office of the 
Secretary, Federal Communications Commission.
    <bullet> All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St., SW., Room TW-A325, Washington, DC 20554. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building.
    <bullet> Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    <bullet> People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: <a href="/cdn-cgi/l/email-protection#f2b4b1b1c7c2c6b2949191dc959d84"><span class="__cf_email__" data-cfemail="b1f7f2f2848185f1d7d2d29fd6dec7">[email protected]</span></a> or telephone: 202-
418-0530 or TTY: 202-418-0432.
    <bullet> The Wireless Telecommunications Bureau requests that a 
copy of all comments and reply comments be submitted electronically to 
the following address: <a href="/cdn-cgi/l/email-protection#16776375627f79782e2e56707575387179"><span class="__cf_email__" data-cfemail="bfdecadccbd6d0d18787ffd9dcdc91d8d0">[email protected]</span></a>v.
    <bullet> People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: <a href="/cdn-cgi/l/email-protection#561015156366621630353578313920"><span class="__cf_email__" data-cfemail="7e383d3d4b4e4a3e181d1d50191108">[email protected]</span></a> or phone: 202-418-
0530 or TTY: 202-418-0432.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: For auction legal questions: 
Lynne Milne and Howard Davenport at (202) 418-0660. For general auction 
questions: Jeff Crooks at (202) 418-0660 or Linda Sanderson at (717) 
338-2868. Media Bureau, Audio Division: For

[[Page 8071]]

service rule questions: Lisa Scanlan or Tom Nessinger at (202) 418-
2700.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 88 Comment 
Public Notice released on February 4, 2010. The complete text of the 
Auction 88 Comment Public Notice, including Attachments A and B, and 
related Commission documents, are available for public inspection and 
copying from 8 a.m. to 4:30 p.m. ET Monday through Thursday or 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 88 Comment Public Notice and related Commission documents also 
may be purchased from the Commission's duplicating contractor, Best 
Copy and Printing, Inc. (BCPI), 445 12th Street SW., Room CY-B402, 
Washington, DC 20554, telephone 202-488-5300, fax 202-488-5563, or you 
may contact BCPI at its Web site: http://www.BCPIWEB.com. When ordering 
documents from BCPI, please provide the appropriate FCC document 
number, for example, DA10-125. The Auction 88 Comment Public Notice and 
related documents also are available on the Internet at the 
Commission's Web site: http://wireless.fcc.gov/auctions/88/ auctions/88/, or by 
using the search function for AU Docket No. 10-31 on the ECFS Web page 
at http://www.fcc.gov/cgb/ecfs/.

I. Introduction

    1. The Wireless Telecommunications and the Media Bureaus (the 
Bureaus) announced an auction of certain broadcast FM, AM, and FM 
Translator construction permits and sought comment on the procedures to 
be used for this auction. The Auction 88 Comment Public Notice also 
establishes a deadline for the submission to the Commission of an FCC 
Registration Number (FRN) by each applicant to permit access to the 
Commission's electronic short-form application filing and auction 
bidding systems, and provides for dismissal of those application(s) 
where the applicant fails to provide its FRN by March 12, 2010. This 
auction, which is designated Auction 88, is scheduled to commence on 
July 20, 2010. Auction 88 will be a closed auction; only those entities 
listed in Attachment A to the Auction 88 Comment Public Notice will be 
eligible to participate in this auction.

II. Background

    2. Auction 88 will resolve pending closed groups of mutually 
exclusive applications for full-power FM and FM translator construction 
permits that have been the subject of various Commission and judicial 
decisions. Included in these groups are twelve applications that were 
recently amended to specify operation as commercial broadcast stations. 
Auction 88 will also resolve mutual exclusivity between applications 
for new AM stations on 640 kHz and 1230 kHz in the Terre Haute, 
Indiana, area. The 13 FM application groups and the two FM Translator 
application groups (all of which are former Mixed Groups), and the 
three closed AM application groups identified in Attachment A of the 
Auction 88 Comment Public Notice will now proceed to auction.

III. Construction Permits in Auction 88

    3. Auction 88 will offer construction permits for 13 commercial FM 
stations, two commercial FM translator stations, and three commercial 
AM stations as listed in Attachment A. Attachment A of the Auction 88 
Comment Public Notice also sets forth proposed minimum opening bids and 
upfront payments for permits being offered in this auction.
    4. An applicant listed in Attachment A of the Auction 88 Comment 
Public Notice may become qualified to bid only if it submits an FRN 
pursuant to the instructions set forth in the Auction 88 Comment Public 
Notice and meets the additional filing, qualification and payment 
requirements, as will be further described in future public notices. 
Each qualified bidder will be eligible to bid on only those 
construction permits specified for that qualified bidder in Attachment 
A of the Auction 88 Comment Public Notice. All applicants within these 
groups of mutually exclusive applications (MX groups) are directly 
mutually exclusive with one another, therefore no more than one 
construction permit will be awarded for each MX group.

IV. Due Diligence

    5. 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 construction permits for 
broadcast facilities they are seeking in this auction. Bidders are 
responsible for assuring themselves that, if they win a construction 
permit, they will be able to build and operate facilities in accordance 
with the Commission's rules. The FCC makes no representations or 
warranties about the use of this spectrum for particular services. 
Applicants should be aware that an FCC auction represents an 
opportunity to become an FCC construction permittee in a broadcast 
service, subject to certain conditions and regulations. An FCC auction 
does not constitute an endorsement by the FCC of any particular 
service, technology, or product, nor does an FCC construction permit or 
license constitute a guarantee of business success.

V. FCC Registration Number Information Required

    6. Each applicant is required to submit its FCC Registration Number 
(FRN) by no later than 5 p.m. Eastern Time (ET) on Friday, March 12, 
2010, in order to be able and eligible to participate in Auction 88. 
Failure to submit an FRN pursuant to the instructions in the Auction 88 
Comment Public Notice will result in dismissal of the applicant's 
application(s) and will result in disqualification of the applicant 
from Auction 88.
    7. The Commission's rules require all persons and entities doing 
business with the Commission to obtain a unique identifying number 
called the FRN and to provide the FRN with all applications or feeable 
filings, as well as with other transactions with the Commission 
involving payment of money. Accordingly, use of an FRN is mandatory for 
all applicants for Auction 88. Submission of an FRN is necessary to 
permit each applicant to log in to the FCC's Integrated Spectrum 
Auction System (ISAS or FCC Auction System) and continue to participate 
in the auction process.
    8. Applicants that do not have an FRN must obtain one by 
registering using the FCC's Commission Registration System (CORES). To 
access CORES, point your web browser to the FCC Auctions page at http://wireless.fcc.gov/auctions/ and click the CORES link under Related 
Sites. Next, follow the directions provided to register and receive 
your FRN. Be sure to retain this number and password and keep such 
information strictly confidential.
    9. To submit an FRN, each applicant listed in Attachment A must 
provide its applicant name and FRN in an e-mail to <a href="/cdn-cgi/l/email-protection#93f2e6f0e7fafcfdababd3f5f0f0bdf4fc"><span class="__cf_email__" data-cfemail="5c3d293f2835333264641c3a3f3f723b33">[email protected]</span></a>v or 
fax this information to Kathryn Hostetter at (717) 338-2850. Each 
applicant's FRN submission also must describe the submitter's 
relationship to the applicant or must describe the basis for the 
submitter's authorization to submit an FRN on behalf of the applicant. 
The Bureaus note that, in some cases, an individual or entity may have 
obtained multiple FRNs during the time that the applications in 
Attachment A have been pending. For those applicants listed in 
Attachment A with a short-form application (FCC Form 175) on file 
(i.e., the closed AM application groups MM-AM039-640, MM-AM040-1230 and

[[Page 8072]]

MM-AM041-750), the applicant must submit the FRN associated with the 
Taxpayer Identification Number (TIN) that it used in connection with 
the submission of its initially filed short-form application.
    10. For further information, contact the FCC ULS Customer Support 
Hotline at (877) 480-3201 option 2, (717) 338-2888, or (717) 338-2824 
(TTY). The hotline is available to assist with questions Monday through 
Friday 8 a.m. to 6 p.m. ET. In order to provide better service to the 
public, all calls to the hotline are recorded.

VI. Submission of Auction Short-Form Applications

    11. The Bureaus will specify procedures for Auction 88 applicants 
to electronically file short-forms applications (FCC Form 175) in ISAS 
in a future public notice. Those procedures will include instructions 
for reporting changes pursuant to 47 CFR 1.65. Applicants are reminded 
that certain changes may be considered a major modification of an 
application and could result in dismissal of the application and 
disqualification of an applicant from participation in Auction 88.

VII. Bureaus Seek Comment on Auction Procedures

A. Auction Structure

i. Simultaneous Multiple-Round Auction Design
    12. The Bureaus proposed to auction all construction permits 
included in Auction 88 using the Commission's standard simultaneous 
multiple-round (SMR) auction format. This type of auction offers every 
construction permit for bid at the same time and consists of successive 
bidding rounds in which eligible bidders may place bids on individual 
construction permits. Typically, bidding remains open on all 
construction permits until bidding stops on every construction permit. 
The Bureaus seek comment on this proposal.
ii. Round Structure
    13. The Commission will conduct Auction 88 over the Internet, and 
telephonic bidding will be available as well. The toll-free telephone 
number for the Auction Bidder Line will be provided to qualified 
bidders. The initial bidding schedule will be announced in a public 
notice to be released at least one week before the start of the 
auction.
    14. The auction will consist of sequential bidding rounds, each 
followed by the release of round results. Details on viewing round 
results, including the location and format of downloadable round 
results files, will be included in the same public notice.
    15. The Bureaus proposed to retain the 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. Under this proposal, the Bureaus may change 
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. The Bureaus seek comment on this proposal. 
Commenters may wish to address the role of the bidding schedule in 
managing the pace of the auction and the tradeoffs in managing auction 
pace by bidding schedule changes, by changing the activity requirements 
or bid amount parameters, or by using other means.
iii. Stopping Rule
    16. The Bureaus have discretion to establish stopping rules before 
or during multiple round auctions in order to terminate the auction 
within a reasonable time. For Auction 88, the Bureaus proposed to 
employ a simultaneous stopping rule approach. A simultaneous stopping 
rule means that all construction permits remain available for bidding 
until bidding closes simultaneously on all construction permits. More 
specifically, bidding will close simultaneously on all construction 
permits after the first round in which no bidder submits any new bids, 
applies a proactive waiver, or withdraws any provisionally winning bids 
(if bid withdrawals are permitted in this auction). Thus, unless the 
Bureaus announce alternative procedures, bidding will remain open on 
all construction permits until bidding stops on every construction 
permit. Consequently, it is not possible to determine in advance how 
long the auction will last.
    17. Further, the Bureaus proposed to retain the discretion to 
exercise any of the following options during Auction 88: (1) Use a 
modified version of the simultaneous stopping rule. The modified 
stopping rule would close the auction for all construction permits 
after the first round in which no bidder applies a waiver, withdraws a 
provisionally winning bid (if withdrawals are permitted in this 
auction), or places any new bids on any construction permit for which 
it is not the provisionally winning bidder. Thus, absent any other 
bidding activity, a bidder placing a new bid on a construction permit 
for which it is the provisionally winning bidder would not keep the 
auction open under this modified stopping rule; (2) Declare that the 
auction will end after a specified number of additional rounds (special 
stopping rule). If the Bureaus invoke this special stopping rule, they 
will accept bids in the specified final round(s), after which the 
auction will close; and (3) Keep the auction open even if no bidder 
places any new bids, applies a waiver, or withdraws any provisionally 
winning bids (if withdrawals are permitted in this auction). In this 
event, the effect will be the same as if a bidder had applied a waiver. 
The activity rule will apply as usual, and a bidder with insufficient 
activity will either lose bidding eligibility or use a waiver.
    18. The Bureaus proposed to exercise these options only in certain 
circumstances, for example, where the auction is proceeding unusually 
slowly or quickly, there is minimal overall bidding activity, or it 
appears likely that the auction will not close within a reasonable 
period of time or will close prematurely. Before exercising these 
options, the Bureaus are likely to attempt to change the pace of the 
auction by, for example, changing the number of bidding rounds per day 
and/or changing minimum acceptable bids. The Bureaus proposed to retain 
the discretion to exercise any of these options with or without prior 
announcement during the auction. The Bureaus seek comment on these 
proposals.
iv. Information Relating to Auction Delay, Suspension, or Cancellation
    19. For Auction 88, the Bureaus proposed that, by public notice or 
by announcement during the auction, the Bureaus 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. In 
such cases, the Bureaus, in their sole discretion, may elect to resume 
the auction starting from the beginning of the current round, resume 
the auction starting from some previous round, or cancel the auction in 
its entirety. Network interruption may cause the Bureaus to delay or 
suspend the auction. The Bureaus emphasize that exercise of this 
authority is solely within the discretion of the Bureaus, and its use 
is not intended to be a substitute for situations in which bidders may 
wish to apply their activity

[[Page 8073]]

rule waivers. The Bureaus seek comment on this proposal.

B. Auction Procedures

i. Upfront Payments and Bidding Eligibility
    20. The Bureaus have delegated authority and discretion to 
determine an appropriate upfront payment for each construction permit 
being auctioned, taking into account such factors as the efficiency of 
the auction process and the potential value of similar spectrum. The 
upfront payment is a refundable deposit made by each bidder to 
establish eligibility to bid on construction permits. Upfront payments 
related to the specific spectrum subject to auction protect against 
frivolous or insincere bidding and provide the Commission with a source 
of funds from which to collect payments owed at the close of the 
auction. With these considerations in mind, the Bureaus proposed the 
upfront payments set forth in Attachment A of the Auction 88 Comment 
Public Notice. The Bureaus seek comment on this proposal.
    21. The Bureaus further proposed that the amount of the upfront 
payment submitted by a bidder will determine the bidder's initial 
bidding eligibility in bidding units. The Bureaus proposed that each 
construction permit be assigned a specific number of bidding units 
equal to the upfront payment listed in Attachment A of the Auction 88 
Comment Public Notice, on a bidding unit per dollar basis. The number 
of bidding units for a given construction permit is fixed and does not 
change during the auction as prices change. A bidder may place bids on 
multiple construction permits, provided that (1) each such construction 
permit is designated for that bidder in Attachment A of the Auction 88 
Comment Public Notice, and (2) the total number of bidding units 
associated with those construction permits does not exceed the bidder's 
current eligibility. Eligibility cannot be increased during the 
auction; it can only remain the same or decrease. Thus, in calculating 
its upfront payment amount and hence its initial bidding eligibility, 
an applicant must determine the maximum number of bidding units on 
which it may wish to bid (or hold provisionally winning bids) in any 
single round, and submit an upfront payment amount covering that total 
number of bidding units. Provisionally winning bids are bids that would 
become final winning bids if the auction were to close in that given 
round.
ii. Activity Rule
    22. In order to ensure that the 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.
    23. The Bureaus proposed a single stage auction with the following 
activity requirement: In each round of the auction, a bidder desiring 
to maintain its current bidding eligibility is required to be active on 
one hundred (100) percent of its bidding eligibility. A bidder's 
activity in a round will be the sum of the bidding units associated 
with any construction permits upon which it places bids during the 
current round and the bidding units associated with any construction 
permits for which it holds provisionally winning bids. 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. The Bureaus seek comment on this 
proposal.
iii. Activity Rule Waivers and Reducing Eligibility
    24. Use of an activity rule waiver preserves the bidder's 
eligibility despite the bidder's activity in the current round being 
below the required minimum level. An activity rule waiver applies to an 
entire round of bidding, not to a particular construction permit. 
Activity rule waivers can be either proactive or automatic and are 
principally a mechanism for auction participants to avoid the loss of 
bidding eligibility in the event that exigent circumstances prevent 
them from bidding in a particular round.
    25. The FCC Auction System assumes that a bidder that does not meet 
the activity requirement would prefer to use an activity rule waiver 
(if available) rather than lose bidding eligibility. Therefore, the 
system will automatically apply a waiver at the end of any bidding 
round in which a bidder's activity level is below the minimum required 
unless (1) the bidder has no activity rule waivers remaining; or (2) 
the bidder overrides the automatic application of a waiver by reducing 
eligibility, thereby meeting the activity requirement. If a bidder that 
is eligible to bid on only one construction permit has no waivers 
remaining and does not satisfy the required activity level, its 
eligibility will be permanently reduced, eliminating the bidder from 
the auction. If a bidder that is eligible to bid on more than one 
construction permit has no waivers remaining and does not satisfy the 
required activity level, its current eligibility will be permanently 
reduced, possibly curtailing or eliminating the bidder's ability to 
place additional bids in the auction.
    26. A bidder that is eligible to bid on more than one construction 
permit and has insufficient activity may wish to reduce its bidding 
eligibility rather than use an activity rule waiver. If so, the bidder 
must affirmatively override the automatic waiver mechanism during the 
bidding round by using the reduce eligibility function in the FCC 
Auction System. In this case, the bidder's eligibility is permanently 
reduced to bring the bidder into compliance with the activity rule. 
Reducing eligibility is an irreversible action; once eligibility has 
been reduced, a bidder will not be permitted to regain its lost bidding 
eligibility, even if the round has not yet closed.
    27. Under the proposed simultaneous stopping rule, a bidder may 
apply an activity rule waiver proactively as a means to keep the 
auction open without placing a bid. If a bidder proactively applies an 
activity rule waiver (using the apply waiver function in the FCC 
Auction System) during a bidding round in which no bids are placed or 
withdrawn (if bid withdrawals are permitted in this auction), the 
auction will remain open and the bidder's eligibility will be 
preserved. An automatic waiver applied by the FCC Auction System in a 
round in which there are no new bids, withdrawals (if bid withdrawals 
are permitted in this auction), or proactive waivers will not keep the 
auction open. A bidder cannot apply a proactive waiver after bidding in 
a round, and applying a proactive waiver will preclude a bidder from 
placing any bids in that round. Applying a waiver is irreversible; once 
a proactive waiver is submitted, that waiver cannot be unsubmitted, 
even if the round has not yet closed.
    28. The Bureaus proposed that each bidder in Auction 88 be provided 
with three activity rule waivers that may be used at the bidder's 
discretion during the course of the auction. The Bureaus seek comment 
on this proposal.
iv. Reserve Price or Minimum Opening Bids
    29. The Bureaus proposed to establish minimum opening bid amounts 
for Auction 88. The Bureaus believe a minimum opening bid amount, which 
has been used in other broadcast auctions, is an effective bidding tool 
for accelerating the competitive bidding process. The Bureaus do not 
propose to establish a separate reserve price for the

[[Page 8074]]

construction permits to be offered in Auction 88.
    30. For Auction 88, the Bureaus proposed minimum opening bid 
amounts determined by taking into account the type of service and class 
of facility offered, market size, population covered by the proposed 
broadcast facility, and recent broadcast transaction data. A proposed 
minimum opening bid amount for each construction permit available in 
Auction 88 is set forth in Attachment A of the Auction 88 Comment 
Public Notice. The Bureaus seek comment on these proposals.
    31. If commenters believe that these minimum opening bid amounts 
will result in unsold construction permits, are not reasonable amounts, 
or should instead operate as reserve prices, they should explain why 
this is so, and comment on the desirability of an alternative approach. 
Commenters are advised to support their claims with valuation analyses 
and suggested amounts or formulas for reserve prices or minimum opening 
bids. In establishing the minimum opening bid amounts, the Bureaus 
particularly seek comment on factors that could reasonably have an 
impact on valuation of the broadcast spectrum, including the type of 
service and class of facility offered, market size, population covered 
by the proposed broadcast FM, AM and FM Translator station and any 
other relevant factors.
v. Bid Amounts
    32. The Bureaus proposed that, in each round, eligible bidders be 
able to place a bid on a given construction permit in any of up to nine 
different amounts. Under this proposal, the FCC Auction System 
interface will list the acceptable bid amounts for each construction 
permit.
    33. The first of the acceptable bid amounts is called the minimum 
acceptable bid amount. The minimum acceptable bid amount for a 
construction permit will be equal to its minimum opening bid amount 
until there is a provisionally winning bid for the construction permit. 
After there is a provisionally winning bid for a construction permit, 
the minimum acceptable bid amount 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. 
If bid withdrawals are permitted in this auction, in the case of a 
construction permit for which the provisionally winning bid has been 
withdrawn, the minimum acceptable bid amount will equal the second 
highest bid received for the construction permit.
    34. The eight 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 Bureaus will round the results using the 
Commission's standard rounding procedures for auctions.
    35. For Auction 88, the Bureaus proposed to use a minimum 
acceptable bid percentage of 10 percent. This means that the minimum 
acceptable bid amount for a construction permit will be approximately 
10 percent greater than the provisionally winning bid amount for the 
construction permit. To calculate the additional acceptable bid 
amounts, the Bureaus proposed to use a bid increment percentage of 5 
percent.
    36. The Bureaus retain the discretion to change the minimum 
acceptable bid amounts, the minimum acceptable bid percentage, the bid 
increment percentage, and the number of acceptable bid amounts if the 
Bureaus determine that circumstances so dictate. Further, the Bureaus 
retain the discretion to do so on a construction permit-by-construction 
permit basis. The Bureaus also retain the discretion to limit (a) the 
amount by which a minimum acceptable bid for a construction permit may 
increase compared with the corresponding provisionally winning bid, and 
(b) the amount by which an additional bid amount may increase compared 
with the immediately preceding acceptable bid amount. For example, the 
Bureaus could set a $10,000 limit on increases in minimum acceptable 
bid amounts over provisionally winning bids. Thus, if calculating a 
minimum acceptable bid using the minimum acceptable bid percentage 
results in a minimum acceptable bid amount that is $12,000 higher than 
the provisionally winning bid on a construction permit, the minimum 
acceptable bid amount would instead be capped at $10,000 above the 
provisionally winning bid. The Bureaus seek comment on the 
circumstances under which the Bureaus should employ such a limit, 
factors the Bureaus should consider when determining the dollar amount 
of the limit, and the tradeoffs in setting such a limit or changing 
other parameters, such as changing the minimum acceptable bid 
percentage, the bid increment percentage, or the number of acceptable 
bid amounts. If the Bureaus exercise this discretion, they will alert 
bidders by announcement in the FCC Auction System during the auction. 
The Bureaus seek comment on these proposals.
vi. Provisionally Winning Bids
    37. Provisionally winning bids are bids that would become final 
winning bids if the auction were to close in that given round. At the 
end of a bidding round, a provisionally winning bid for each 
construction permit will be determined based on the highest bid amount 
received for the construction permit. In the event of identical high 
bid amounts being submitted on a construction permit in a given round 
(i.e., tied bids), the Bureaus will use a random number generator to 
select a single provisionally winning bid from among the tied bids. 
(Each bid is assigned a random number, and the tied bid with the 
highest random number wins the tiebreaker.) The remaining bidders, as 
well as the provisionally winning bidder, can submit higher bids in 
subsequent rounds. However, if the auction were to end with no other 
bids being placed, the winning bidder would be the one that placed the 
provisionally winning bid. If any bids are received on the construction 
permit in a subsequent round, the provisionally winning bid again will 
be determined by the highest bid amount received for the construction 
permit.
    38. A provisionally winning bid will remain the provisionally 
winning bid until there is a higher bid on the construction permit at 
the close of a subsequent round, unless the provisionally winning bid 
is withdrawn (if bid withdrawals are permitted in this auction). 
Bidders are reminded that provisionally winning bids count toward 
activity for purposes of the activity rule.
vii. Bid Removal and Bid Withdrawal
    39. For Auction 88, the Bureaus proposed the following bid removal 
procedures. Before the close of a bidding round, a bidder has the 
option of removing any bid placed in that

[[Page 8075]]

round. By removing selected bids in the FCC Auction System, a bidder 
may effectively unsubmit any bid placed within that round. In contrast 
to the bid withdrawal provisions a bidder removing a bid placed in the 
same round is not subject to a withdrawal payment. Once a round closes, 
a bidder may no longer remove a bid. The Bureaus seek comment on this 
bid removal proposal.
    40. The Bureaus also seek comment on whether bid withdrawals should 
be permitted in Auction 88. When permitted in an auction, bid 
withdrawals provide a bidder with the option of withdrawing bids placed 
in prior rounds that have become provisionally winning bids. A bidder 
may withdraw its provisionally winning bids using the withdraw bids 
function in the FCC Auction System. If permitted, a bidder that 
withdraws its provisionally winning bid(s) is subject to the bid 
withdrawal payment provisions of the Commission rules.
    41. In Auction 88, bidders will have limited opportunity to 
aggregate construction permits because of the pre-established closed MX 
Groups. Moreover, bid withdrawals, particularly those made late in 
Auction 88, could result in delays in licensing new broadcast FM, AM 
and FM Translator stations and attendant delays in the offering of new 
broadcast service to the public. The Commission also has noted that in 
some instances bidders may seek to withdraw bids for improper purposes. 
Based on this Commission guidance, on the experience of the Bureaus 
with past broadcast auctions, and on the potential for delays in 
providing broadcast service to the public, for this auction the Bureaus 
proposed to prohibit bidders from withdrawing any bids after the round 
has closed in which bids were placed. The Bureaus seek comment on this 
proposal.

C. Post-Auction Payments

i. Interim Withdrawal Payment Percentage
    42. If withdrawals are allowed in this auction, the Bureaus seek 
comment on the appropriate percentage of a withdrawn bid that should be 
assessed as an interim withdrawal payment, in the event that a final 
withdrawal payment cannot be determined at the close of the auction. In 
general, the Commission's rules provide that a bidder that withdraws a 
bid during an auction is subject to a withdrawal payment equal to the 
difference between the amount of the withdrawn bid and the amount of 
the winning bid in the same or a subsequent auction. However, if a 
construction permit for which a bid has been withdrawn does not receive 
a subsequent higher bid or winning bid in the same auction, the final 
withdrawal payment cannot be calculated until a corresponding 
construction permit receives a higher bid or winning bid in a 
subsequent auction. When that final payment cannot yet be calculated, 
the bidder responsible for the withdrawn bid is assessed an interim bid 
withdrawal payment, which will be applied toward any final bid 
withdrawal payment that is ultimately assessed.
    43. The Commission's rules provide that, in advance of each 
auction, a percentage shall be established between three percent and 
twenty percent of the withdrawn bid to be assessed as an interim bid 
withdrawal payment. The Commission has indicated that the level of the 
interim withdrawal payment in a particular auction will be based on the 
nature of the service and the inventory of the construction permits 
being offered. The Commission noted that it may impose a higher interim 
withdrawal payment percentage to deter the anti-competitive use of 
withdrawals when, for example, there are few synergies to be captured 
by combining construction permits.
    44. Applying the reasoning that a higher interim withdrawal payment 
percentage is appropriate when aggregation of construction permits is 
not expected, as with the construction permits subject to competitive 
bidding in Auction 88, if the Bureaus allow bid withdrawals in this 
auction, the Bureaus proposed the maximum interim withdrawal payment 
allowed under the current rules. Specifically, the Bureaus proposed to 
establish an interim bid withdrawal payment of twenty percent of the 
withdrawn bid for this auction. The Bureaus seek comment on this 
proposal.
ii. Additional Default Payment Percentage
    45. Any winning bidder that defaults or is disqualified after the 
close of an 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) is liable for a default payment under 47 CFR 
1.2104(g)(2). This payment consists of 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 construction permit 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.
    46. The Commission's rules provide that, in advance of each 
auction, a percentage shall be established between three percent and 
twenty percent of the applicable bid to be assessed as an additional 
default payment. The Commission has indicated that the level of the 
additional payment in a particular auction will be based on the nature 
of the service and the inventory of the construction permits being 
offered. As the Commission has indicated, the level of this payment in 
each case will be based on the nature of the service and the inventory 
of the construction permits being offered.
    47. As previously noted by the Commission, defaults weaken the 
integrity of the auction process and may impede the deployment of 
service to the public, and an additional default payment of more than 
the previous three percent will be more effective in deterring 
defaults. In light of these considerations for Auction 88, the Bureaus 
proposed an additional default payment of twenty percent of the 
relevant bid. The Bureaus seek comment on this proposal.
    48. This proceeding has been designated as a permit-but-disclose 
proceeding in accordance with the Commission's ex parte rules. Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentations must contain summaries of the substance 
of the presentations and not merely a listing of the subjects 
discussed. More than a one or two sentence description of the views and 
arguments presented is generally required. Other rules pertaining to 
oral and written ex parte presentations in permit-but-disclose 
proceedings are set forth in 47 CFR 1.1206(b).

Auction 88 Applicants

Albert Benavides
Amor Radio Group Corp.
Aritaur Communications, Inc.
Arkansas Valley Broadcasting, LLC
BBK Broadcasting
Big Sky Company
Birach Broadcasting Corporation
Boat Of Steam Broadcasting
Bott Broadcasting Company
Central Michigan University
Colorado Alpine Broadcasting Company
Contemporary Media Inc.
Coyote Communications, Inc.
CTS Communications Development Corp.
Darby Radio Enterprises
David Fleisher & Melissa Krantz
Directel Inc.
EB Needles LLC
Educational Media Foundation

[[Page 8076]]

Eric P. Straus
Evandel Ministries Inc.
Evangel Ministries, Incorporated
Fort Bend Broadcasting Company Inc.
Four Corners Broadcasting LLC
George S. Flinn, Jr.
Good News Media Inc.
Grace Communications L.C.
Harry Media
Hawkeye Communications, Inc.
Jem Broadcasting Co., Inc.
KM Communications, Inc.
KRJ Company
La Capra Corporation
Lancer Media
Marist College
Metro Broadcasters-Texas Inc.
Metro North Communications Inc.
Michael R. Walton Jr.
Mid-America Radio Group Inc.
MTD, Inc.
Music Express Broadcasting, Corp.
Music Ministries, Inc.
Oxford Radio Inc.
Peace Broadcasting Network
Penn-Jersey Educational Radio Corp.
Poor Mountain Broadcasting
Positive Alternative Radio, Inc.
Powell Meredith Communications Company
Radio Rosendale
Ramar Communications Inc.
Ramsey Leasing, Inc.
Robert Durango LLC
Robert M. McDaniel
Rocky Mountain Radio Company LLC
Romar Communications, Inc.
Rosen Broadcasting, Inc.
S.I. Broadcasting
Sacred Heart University, Inc.
Salija Bokram/Michael J. St. Cyr
Sarkes Tarzian Inc.
South Shore Broadcasting, inc.
Southern Cultural Foundation
Steven Dinetz
The MacDonald Broadcasting Company
Tri-County Radio, Incorporated
William S. Poorman
Willtronics Broadcasting Co.
Word Power, Inc.
WTCM Radio, Inc.
Yampa Valley Broadcasting Inc.

Federal Communications Commission.
William W. Huber,
Associate Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 2010-3583 Filed 2-22-10; 8:45 am]
BILLING CODE 6712-01-P


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