Federal Register / Vol. 72, No. 59 / Wednesday, March 28, 2007 / Notices 14555 

cgb/ecfs/ or the Federal eRulemaking 

Portal: http://www.regulations.gov. 

Filers should follow the instructions 

provided on the Web site for submitting 

comments. 

• For ECFS filers, if multiple docket 

or rulemaking numbers appear in the 

caption of this proceeding, filers must 

transmit one electronic copy of the 

comments for each docket or 

rulemaking number referenced in the 

caption. In completing the transmittal 

screen, filers should include their full 

name, U.S. Postal Service mailing 

address, and the applicable docket or 

rulemaking number. Parties may also 

submit an electronic comment by 

Internet e-mail. To get filing 

instructions, filers should send an email to ecfs@fcc.gov, and include the 

following words in the body of the 

message, ‘‘get form.’’ A sample form and 

directions will be sent in response. 

• Mail: Parties who choose to file by 

paper must file an original and four 

copies of each filing. If more than one 

docket or rulemaking number appears in 

the caption of this proceeding, filers 

must submit two additional copies for 

each additional docket or rulemaking 

number. Filings can be sent by hand or 

messenger delivery, by commercial 

overnight courier, or by first-class or 

overnight U.S. Postal Service mail 

(although we continue to experience 

delays in receiving U.S. Postal Service 

mail). All filings must be addressed to 

the Commission’s Secretary, Office of 

the Secretary, Federal Communications 

Commission. 

• The Commission’s contractor will 

receive hand-delivered or messengerdelivered paper filings for the 

Commission’s Secretary at 236 

Massachusetts Avenue, NE., Suite 110, 

Washington, DC 20002. The filing hours 

at this location are 8 a.m. to 7 p.m. All 

hand deliveries must be held together 

with rubber bands or fasteners. Any 

envelopes must be disposed of before 

entering the building. 

• 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. 

• U.S. Postal Service first-class, 

Express, and Priority mail should be 

addressed to 445 12th Street, SW., 

Washington, DC 20554. 

• People with Disabilities: Contact the 

FCC to request reasonable 

accommodations (accessible format 

documents, sign language interpreters, 

CART, etc.) by e-mail: FCC504@fcc.gov 

or phone: 202–418–0530 or TTY: 202–

418–0432. To request materials in 

accessible formats for people with 

disabilities (braille, large print, 

electronic files, audio format), send an 

e-mail to fcc504@fcc.gov or call the 

Consumer and Governmental Affairs 

Bureau at (202) 418–0530 (voice), (202) 

418–0432 (tty). 

For detailed instructions for 

submitting comments and additional 

information on the rulemaking process, 

see the SUPPLEMENTARY INFORMATION

section of this document. 

FOR FURTHER INFORMATION CONTACT: 

Janice Myles of the Competition Policy 

Division, Wireline Competition Bureau 

at (202) 418–1577 or e-mail 

Janice.Myles@fcc.gov. 

SUPPLEMENTARY INFORMATION: In 

February 2002, the Commission issued 

a Notice of Inquiry, 67 FR 10919, March 

11, 2002, to examine whether there was 

a continued need for the equal access 

and nondiscrimination obligations 

contained in antitrust decrees and 

carried forward by section 251(g) of the 

Communications Act of 1934, as 

amended (Act), or contained in the 

Commission’s rules. Since the 

Commission’s Notice of Inquiry was 

released in 2002, there have been a 

number of intervening developments 

that may have rendered the record 

developed in this proceeding stale. In 

particular, the market appears to be 

shifting from competition between 

stand-alone long distance services to 

competition between service bundles 

including both local exchange and long 

distance services. The industry structure 

has also changed with the mergers of 

local and long distance providers. For 

these reasons, the Wireline Competition 

Bureau requests that parties update the 

record with any new information or 

arguments they believe to be relevant to 

issues raised in the Notice of Inquiry. 

This will enable the Commission to 

undertake appropriate and expedited 

review of the equal access and 

nondiscrimination requirements. 

All filings must be addressed to the 

Commission’s Secretary, Marlene H. 

Dortch, Office of the Secretary, Federal 

Communications Commission, 445 12th 

Street, SW., Room TW–A325, 

Washington, DC 20554. Parties should 

also send a copy of their filings to Janice 

Myles, Competition Policy Division, 

Wireline Competition Bureau, Federal 

Communications Commission, Room 5–

C140, 445 12th Street, SW., Washington, 

DC 20554, or by e-mail to 

Janice.Myles@fcc.gov. Parties shall also 

serve one copy with the Commission’s 

copy contractor, Best Copy and Printing, 

Inc. (BCPI), Portals II, 445 12th Street, 

SW., Room CY–B402, Washington, DC 

20554, (202) 488–5300, or via e-mail to 

fcc@bcpiweb.com. 

Documents in CC Docket No. 02–39 

are available for public inspection and 

copying during business hours at the 

FCC Reference Information Center, 

Portals II, 445 12th Street, SW., Room 

CY–A257, Washington, DC 20554. The 

documents may also be purchased from 

BCPI, telephone (202) 488–5300, 

facsimile (202) 488–5563, TTY (202) 

488–5562, e-mail fcc@bcpiweb.com. 

These documents may also be viewed 

on the Commission’s Web site at 

http://www.fcc.gov/cgb/ecfs. 

Federal Communications Commission. 

Thomas J. Navin, 

Chief, Wireline Competition Bureau. 

[FR Doc. E7–5561 Filed 3–27–07; 8:45 am] 

BILLING CODE 6712–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

[AU Docket No. 06–214; Report No. AUC–

07–72–B (Auction No. 72); DA 07–514] 

Auction of Phase II 220 MHz Service 

Spectrum Scheduled for June 20, 2007; 

Notice and Filing Requirements, 

Minimum Opening Bids, Upfront 

Payments and Other Procedures for 

Auction No. 72 

AGENCY: Federal Communications 

Commission. 

ACTION: Notice. 

SUMMARY: This document announces the 

procedures and minimum opening bids 

for the upcoming auction of certain 

Phase II 220 MHz Service Spectrum 

(Auction No. 72). This document is 

intended to familiarize prospective 

bidders with the procedures and 

minimum opening bids for this auction. 

DATES: Applications to participate in 

Phase II 220 MHz Service Spectrum 

Auction No. 72 must be filed before 6 

p.m. ET on April 20, 2007. Bidding for 

Auction No. 72 is scheduled to begin on 

June 20, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Wireless Telecommunications Bureau, 

Auctions Spectrum and Access 

Division: For legal questions: Howard 

Davenport at (202) 418–0660. For 

general auction questions: Debbie Smith 

or Barbara Sibert at (717) 338–2868. 

Mobility Division: For service rule 

questions: Allen Barna (legal) or Gary 

Devlin (technical) at (202) 418–0620. To 

request materials in accessible formats 

(Braille, large print, electronic files, 

audio format) for people with 

disabilities, send an e-mail to 

fcc504@fcc.gov or call the Consumer 

and Governmental Affairs Bureau at 

(202) 418–0530 or (202) 418–0432 

(TTY). 


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SUPPLEMENTARY INFORMATION: This is a 

summary of the Auction No. 72 

Procedures Public Notice released on 

February 26, 2007. The complete text of 

the Auction No. 72 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. Eastern 

Time (ET) Monday through Thursday or 

from 8 a.m. to 11:30 a.m. on Friday at 

the FCC Reference Information Center, 

Portals II, 445 12th Street, SW., Room 

CY–A257, Washington, DC 20554. The 

Auction No. 72 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. When 

ordering documents from BCPI, please 

provide the appropriate FCC document 

number, for example, DA 07–30 for the 

Auction No. 72 Procedures Public 

Notice. The Auction No. 72 Procedures 

Public Notice and related documents are 

also available on the Internet at the 

Commission’s Web site: http:// 

wireless.fcc.gov/auctions/72/. 

I. General Information 

A. Introduction 

1. The Commission announces the 

procedures and minimum opening bid 

amounts for the upcoming auction of 

Phase II 220 MHz Service licenses in the 

paired 220–222 MHz band scheduled to 

begin on June 20, 2007 (Auction No. 72). 

On December 12, 2006, in accordance 

with Section 309(j)(3) of the 

Communications Act of 1934, as 

amended, the Wireless 

Telecommunications Bureau (Bureau) 

released a public notice seeking 

comment on reserve prices or minimum 

opening bid amounts and the 

procedures to be used in Auction No. 

72. The Bureau received one comment 

and no reply comments in response to 

the Auction No. 72 Comment Public 

Notice, 71 FR 76332, December 20, 

2006. 

2. In the Auction No. 72 Comment 

Public Notice, the Bureau proposed to 

include all 94 Phase II 220 MHz Service 

licenses in a single auction using the 

Commission’s standard simultaneous 

multiple-round (SMR) auction format. 

The Bureau sought comment on the 

feasibility and desirability of allocating 

the Phase II 220 MHz Service licenses 

using the Commission’s package 

bidding format (SMR–PB). Based on the 

record and the particular circumstances 

of the auction of Phase II 220 MHz 

Service licenses, the Bureau will 

include all 94 Phase II 220 MHz Service 

licenses in a single auction using the 

Commission’s standard SMR format, as 

proposed. Package bidding will not be 

used in Auction No. 72. 

3. The Bureau also sought comment in 

the Auction No. 72 Comment Public 

Notice on whether to implement 

procedures that would limit the 

disclosure of certain information on 

bidder interests, and identities prior to 

the close of bidding. The Bureau asked 

commenters to indicate what factors 

weigh for or against limiting disclosure 

of bidder interests and identities, and 

whether the Commission should 

condition the use of any disclosure 

limits on a measure of competition in 

the auction. 

4. For Auction No. 72, the Bureau will 

determine the information procedures 

based primarily on the eligibility ratio, 

a measure of likely competition in the 

auction. The eligibility ratio is defined 

as the total number of bidding units of 

eligibility purchased by bidders through 

their upfront payments, divided by the 

total number of bidding units for the 

licenses in the auction. Specifically, if 

the eligibility ratio equals or exceeds 

three, the Bureau will not use the 

limited information procedures, since 

with sufficient likely competition, the 

anti-competitive behavior that limited 

information procedures aim to deter is 

unlikely to be successful. If the 

eligibility ratio is less than three, in 

general the Bureau will withhold certain 

information on bidder interests and 

bidder identities. However, if the 

eligibility ratio is less than three, the 

Commission reserves the discretion not 

to limit information on bidder interests 

and identities if circumstances indicate 

that limited information procedures 

would not be an effective tool for 

deterring anti-competitive behavior. 

Such circumstances would occur, for 

example, if only two applicants became 

qualified to participate in the bidding, 

since limited information procedures 

would be ineffective in preventing 

bidders from knowing the identity of the 

competing bidder. 

5. In the event that the conditions 

described above result in the use of 

procedures under which certain 

information is withheld, the Bureau will 

release: (1) Each bidder’s eligibility and 

upfront payment made prior to the start 

of the auction; and (2) the amounts of 

all gross bids including the losing bids 

for each license after each round, but 

not the identities of the bidders placing 

the bids. The Bureau believes this 

provides bidders with information 

regarding license valuations without 

compromising the goal of reducing the 

potential for anti-competitive outcomes. 

6. Pursuant to these procedures, 

information on the license selections of 

auction applicants will be withheld at 

least until the upfront payment deadline 

has passed and the Commission 

determines the information procedures 

that will be used for the auction. 

Therefore, to enable applicants to 

comply with the Commission’s anticollusion rules, once the Bureau has 

conducted its initial review of 

applications to participate in Auction 

No. 72, each applicant will receive a 

letter that lists the other applicants in 

Auction No. 72 that have applied for 

licenses in any of the same geographic 

areas as the applicant. 

i. Background of Proceeding 

7. Licenses in the Phase II 220 MHz 

spectrum to be auctioned in Auction 

No. 72 have been offered previously in 

other auctions but were returned to the 

Commission as a result of license 

cancellation or termination. In March 

1997, the Commission restructured the 

licensing framework that governs the 

220 MHz Service. Site-specific 

licensing, used in the Phase I 220 MHz 

Service, was replaced with a 

geographic-based system in the Phase II 

220 MHz Service. This geographic-based 

licensing methodology is similar to that 

used in other commercial mobile radio 

services (CMRS). The Commission 

developed three types of geographic 

area licenses for the Phase II 220 MHz 

Service. The first type of license was 

based upon Economic Areas (EAs), 

developed by the Bureau of Economic 

Analysis of the U.S. Department of 

Commerce. In addition, the Commission 

created three EA-type license areas to 

cover the following United States 

territories: American Samoa; the U.S. 

Virgin Islands and Puerto Rico; and 

Guam and the Northern Mariana 

Islands. The second type of license, 

known as Economic Area Groupings 

(EAGs), included 6 groups of EAs, 

which collectively encompassed all of 

the EA and EA-type licenses. Finally, 

the Commission designed three 

nationwide licenses, each of which 

encompassed all six EAGs. Service and 

operational requirements for the Phase 

II 220 MHz Service are contained 

primarily in part 90 of the Commission’s 

Rules, 47 CFR part 90. 

ii. Licenses To Be Auctioned 

8. Auction No. 72 will offer 94 

licenses: 93 Economic Area (EA) 

licenses and one Economic Area 

Grouping (EAG) license. 

9. Certain licenses for Phase II 220 

MHz Service in Auction No. 72 are 


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available for only part of a market. In 

addition, one license available for only 

part of a market also covers less 

bandwidth. The licenses available in 

this auction are listed in Attachment A 

of the Auction No. 72 Procedures Public 

Notice. The Phase II 220 MHz spectrum 

covered by this auction is only available 

to non-Government applicants. 

B. Rules and Disclaimers 

i. Relevant Authority 

10. Prospective applicants must 

familiarize themselves thoroughly with 

the Commission’s general competitive 

bidding rules set forth in Title 47 CFR 

including recent amendments and 

clarifications; rules relating to the Phase 

II 220 MHz Service contained in Title 

47, part 90 and rules relating to 

applications, practice and procedure 

contained in Title 47, part 1. 

Prospective applicants must also be 

thoroughly familiar with the 

procedures, terms and conditions 

(collectively, terms) contained in the 

Auction No. 72 Procedures Public 

Notice and the Commission’s decisions 

in proceedings regarding competitive 

bidding procedures, application 

requirements, and obligations of 

Commission licensees. 

11. 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. Prohibition of Collusion; Compliance 

With Antitrust Laws 

12. To ensure the competitiveness of 

the auction process § 1.2105(c) of the 

Commission’s rules prohibit applicants 

competing 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 Forms 175) as parties 

with whom they have entered into 

agreements pursuant to 

§ 1.2105(a)(2)(viii). In Auction No. 72, 

the rule would apply to any applicants 

for licenses in the same EA or EAG. The 

rule would also apply to applicants for 

licenses in overlapping EAs and the 

EAG. For example, assume that one 

applicant applies for an EAG license 

and a second applicant applies for an 

EA license covering any area within that 

EAG. The two entities will have applied 

for licenses covering the same 

geographic areas and would be 

precluded from communicating with 

each other under the rule. In addition, 

the rule would preclude applicants that 

apply to bid for all licenses from 

communicating with all other 

applicants. Thus, applicants that have 

applied for licenses covering the same 

markets (unless they have identified 

each other on their FCC Form 175 

applications as parties with whom they 

have entered into agreements under 

§ 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 postauction market structure. This 

prohibition begins at the short-form 

application filing deadline and ends at 

the downpayment deadline after the 

auction. This prohibition applies to all 

applicants regardless of whether such 

applicants become qualified bidders or 

actually bid. Information concerning 

applicants’ license selections will not be 

made public at least until the upfront 

payment deadline has passed and the 

Commission determines the information 

procedures that will be used for the 

auction. 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 geographic areas as the 

licenses that it has selected in its shortform application. 

13. For purposes of this prohibition 

§ 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 

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. 

14. Applicants for licenses for any of 

the same 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 the anti-collusion rule could 

occur if an individual acts as the 

authorized bidder for two or more 

competing applicants, and conveys 

information concerning the substance of 

bids or bidding strategies between 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 

anti-collusion rule. A violation of the 

anti-collusion rule 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 anti-collusion 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. Bidders are cautioned that 

the Commission remains vigilant about 

prohibited 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. 

Applicants are hereby placed on notice 

that public disclosure of information 

relating to bidder interests and bidder 

identities that—although revealed prior 

to and during other Commission 

auctions—is confidential in this auction 

at the time of disclosure may violate the 

anti-collusion rule. 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. 

15. 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 application. If parties agree 

in principle on all material terms prior 

to the short-form filing deadline, each 

party to the agreement must identify the 

other party or parties to the agreement 

on its short-form application under 

§ 1.2105(c), even if the agreement has 

not been reduced to writing. If the 

parties have not agreed in principle by 

the short-form filing deadline, they 

should not include the names of parties 


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to discussions on their applications, and 

they may not continue negotiations, 

discussions or communications with 

any other applicants after the short-form 

filing deadline. 

16. By electronically submitting its 

short-form application following the 

electronic filing procedures set forth in 

Attachment C to the Auction No. 72 

Procedures Public Notice, each 

applicant certifies its compliance with 

§ 1.2105(c). However, the Bureau 

cautions that merely filing a certifying 

statement as part of an application will 

not outweigh specific evidence that 

collusive behavior has occurred, nor 

will it preclude the initiation of an 

investigation when warranted. 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 the 

anti-collusion rule may be subject to 

sanctions. 

17. 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 the 

Commission’s anti-collusion rule 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. The Commission has cited 

a number of examples of potentially 

anticompetitive actions that would be 

prohibited under antitrust laws: for 

example, actual or potential competitors 

may not agree to divide territories 

horizontally in order to minimize 

competition, regardless of whether they 

split a market in which they both do 

business, or whether they merely 

reserve one market for one and another 

for the other. Similarly, the Bureau has 

long reminded potential applicants and 

others that even where the applicant 

discloses parties with whom it has 

reached an agreement on the short-form 

application, thereby permitting 

discussions with those parties, the 

applicant is nevertheless subject to 

existing antitrust laws. To the extent the 

Commission becomes aware of specific 

allegations that may give rise to 

violations of the federal antitrust laws, 

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. 

18. Section 1.65 of the Commission’s 

rules requires an applicant to maintain 

the accuracy and completeness of 

information furnished in its pending 

application and to notify the 

Commission within 30 days of any 

substantial change that may be of 

decisional significance to that 

application. Thus § 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 § 1.65 to report to the 

Commission any communications they 

have made to or received from another 

applicant after the short-form filing 

deadline that affect or have the potential 

to affect bids or bidding strategy unless 

such communications are made to or 

received from parties to agreements 

identified under § 1.2105(a)(2)(viii). In 

addition § 1.2105(c)(6) provides that any 

applicant that makes or receives a 

communication prohibited by 

§ 1.2105(c) must report such 

communication to the Commission in 

writing immediately, and in no case 

later than five business days after the 

communication occurs. 

19. 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. 

20. A summary listing of documents 

issued by the Commission and the 

Bureau addressing the application of the 

anti-collusion rule may be found in 

Attachment F of the Auction No. 72 

Procedures Public Notice. 

iii. Protection of Incumbent Operations 

21. Potential applicants are advised 

that there are a number of incumbent 

Phase I 220 MHz Service licensees 

already licensed and operating on 

frequencies between 220 and 222 MHz. 

Such Phase I incumbents must be 

protected from harmful interference by 

Phase II 220 MHz Service licensees in 

accordance with the Commission’s 

rules. These limitations may restrict the 

ability of Phase II geographic area 

licensees to use certain portions of the 

electromagnetic spectrum or provide 

service to certain areas in their 

geographic license areas. 

a. International Coordination 

22. Potential bidders seeking licenses 

for geographic areas that are near the 

Canadian or Mexican borders should be 

aware that the use of some or all of the 

channels they acquire in the auction 

could be restricted by agreements with 

Canada or Mexico on the use of 220–222 

MHz spectrum in the border area. 

b. Quiet Zones 

23. Phase II 220 MHz Service 

licensees must protect the radio quiet 

zones set forth in the Commission’s 

rules. Licensees are cautioned that they 

must receive the appropriate approvals 

directly from the relevant quiet zone 

entity prior to operating within the areas 

described in the Commission’s rules. 

iv. Due Diligence 

24. The Bureau cautions potential 

applicants formulating their bidding 

strategies to investigate and consider the 

extent to which Phase II 220 MHz 

frequencies are occupied. Applicants 

and their investors should also 

understand that Commission rules and 

requirements place limitations on the 

ability of Phase II 220 MHz Service 

licensees to use this spectrum. 

Incumbent Phase I 220 MHz Service 

operations in the 220–222 MHz band 

must be protected. These limitations 

may restrict the ability of Phase II 220 

MHz Service geographic area 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, applicable Commission 

rules, orders and any pending 

proceedings related to the service, in 

order to make reasoned, appropriate 

decisions about their participation in 

Auction No. 72 and their bidding 

strategy. 

25. 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 

Phase II 220 MHz Service licenses in 

this auction. The FCC makes no 

representations or warranties about the 

use of this spectrum for particular 

services. Applicants should be aware 

that an FCC auction represents an 

opportunity to become an FCC licensee 

in the Phase II 220 MHz 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 license 

constitute a guarantee of business 

success. Applicants should perform 


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their individual due diligence before 

proceeding as they would with any new 

business venture. 

26. Potential bidders are strongly 

encouraged to conduct their own 

research prior to the beginning of 

bidding in Auction No. 72 in order to 

determine the existence of any pending 

administrative or judicial proceedings 

that might affect their decision 

regarding participation in the auction. 

Participants in Auction No. 72 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. 

27. Applicants should also be aware 

that certain pending and future 

proceedings, including applications, 

including those for modification, 

petitions for rulemaking, 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 No. 72. In 

addition, pending and future judicial 

proceedings may relate to particular 

applicants or incumbent licensees, or 

the licenses available in Auction No. 72. 

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. 

28. 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 No. 

72. 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. 

29. 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 available in 

Auction No. 72. 

30. Applicants may use the Bureau’s 

licensing databases at http:// 

wireless.fcc.gov/uls to obtain 

information about incumbent licenses 

that may affect the availability of the 

spectrum for which licenses are offered 

in Auction No. 72. 

31. 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. 

32. Potential applicants are strongly 

encouraged to physically inspect any 

prospective sites located in, or near, the 

service area for which they plan to bid, 

and also to familiarize themselves with 

the environmental review obligations. 

v. Use of Integrated Spectrum Auction 

System 

33. The Commission will make 

available a browser-based bidding 

system to allow bidders to participate in 

Auction No. 72 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 

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. Bidder Alerts 

34. As is the case with many business 

investment opportunities, some 

unscrupulous entrepreneurs may 

attempt to use Auction No. 72 to 

deceive and defraud unsuspecting 

investors. Information about deceptive 

telemarketing investment schemes is 

available from the Commission as well 

as the FTC and SEC. Complaints about 

specific deceptive telemarketing 

investment schemes should be directed 

to the FTC, the SEC, or the National 

Fraud Information Center. 

vii. Environmental Review 

Requirements 

35. 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. The Commission’s 

environmental rules require, among 

other things, that the licensee consult 

with expert agencies having 

environmental responsibilities, 

including the U.S. Fish and Wildlife 

Service, the State Historic Preservation 

Office, the Army Corps of Engineers and 

the Federal Emergency Management 

Agency (through the local authority 

with jurisdiction over floodplains). In 

assessing the effect of facilities 

construction on historic properties, the 

licensee must follow the provisions of 

the Nationwide Programmatic 

Agreement Regarding the Section 106 

National Historic Preservation Act 

Review Process. The licensee must 

prepare environmental assessments for 

facilities that may have a significant 

impact in or on wilderness areas, 

wildlife preserves, threatened or 

endangered species or designated 

critical habitats, historical or 

archaeological sites, Indian religious 

sites, floodplains, and surface features. 

The licensee also must prepare 

environmental assessments for facilities 

that include high intensity white lights 

in residential neighborhoods or 

excessive radio frequency emission. 

C. Auction Specifics 

i. Auction Date 

36. Bidding in Auction No. 72 will 

begin on Wednesday, June 20, 2007, as 

announced in the Auction No. 72 

Comment Public Notice. 

37. In response to the Auction No. 72 

Comment Public Notice, a commenter 

seeks a delay of several months in the 

start of Auction No. 72. The Bureau 

does not believe that it would be in the 

public interest to do so. The commenter 

argues for a delay to enable the 

Commission to complete the processing 

of applications for the assignment of 

certain 220 MHz licenses to an affiliate 

of the commenter. Generally, the 

Commission has held that the existence 

of related pending proceedings is not a 

sufficient reason to delay an auction. 

Similarly, the Commission has observed 

that Section 309(j)(3)(E)(ii)’s statutory 


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requirement to provide prospective 

bidders with time to develop business 

plans and evaluate the availability of 

equipment does not require the 

Commission to postpone an auction 

until every external factor that might 

influence a bidder’s business plan is 

resolved with absolute certainty. 

Further, the Bureau notes that the 

application identified by the commenter 

has been acted upon. The commenter 

provides no legal or policy reason, other 

than its concern about the processing of 

the identified assignment application, in 

support of its request for postponement. 

In furtherance of the statutory objectives 

underlying the Commission’s auctions 

process, including promoting the rapid 

deployment of new technologies and 

services to the public, and enhancing 

economic opportunity and competition, 

the Bureau determined that the public 

interest would be served by proceeding 

with the auction as scheduled. The 

initial schedule for bidding will be 

announced by public notice at least one 

week before the start of the auction. 

38. Unless otherwise announced, 

bidding on all licenses will be 

conducted on each business day until 

bidding has stopped on all licenses. 

ii. Auction Title 

39. Auction No. 72—Phase II 220 

MHz. 

iii. Bidding Methodology 

40. The bidding methodology for 

Auction No. 72 will be simultaneous 

multiple round 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. 

iv. Pre-Auction Dates and Deadlines 

41. Dates and Deadlines 

Auction Seminar: April 11, 2007. 

Short-Form Application (FCC Form 175) 

Filing Window Opens: April 11, 2007; 12 

noon ET. 

Short-Form Application (FCC Form 175) 

Filing Window Deadline: April 20, 2007; 

prior to 6 p.m. ET. 

Upfront Payments (via wire transfer): May 21, 

2007; 6 p.m. ET. 

Mock Auction: June 18, 2007. 

Auction Begins: June 20, 2007. 

v. Requirements for Participation 

42. Those wishing to participate in 

the auction must: (1) Submit a shortform application (FCC Form 175) 

electronically prior to 6 p.m. Eastern 

Time (ET), April 20, 2007, following the 

electronic filing procedures set forth in 

Attachment C to the Auction No. 72 

Procedures Public Notice; (2) submit a 

sufficient upfront payment and an FCC 

Remittance Advice Form (FCC Form 

159) by 6 p.m. ET, May 21, 2007, 

following the procedures and 

instructions set forth in Attachment D to 

the Auction No. 72 Procedures Public 

Notice; and (3) comply with all 

provisions outlined in the Auction No. 

72 Procedures Public Notice and 

applicable Commission rules. For 

example, the Phase II 220 MHz 

spectrum covered by this auction is only 

available to non-Government applicants 

under § 90.721(b) of those rules, 47 CFR 

90.721(b). 

II. Short-Form Application (FCC Form 

175) Requirements 

43. Entities seeking licenses available 

in Auction No. 72 must file a short-form 

application electronically via the FCC 

Auction System prior to 6 p.m. ET on 

April 20, 2007, following the procedures 

prescribed in Attachment C to the 

Auction No. 72 Procedures Public 

Notice. If an applicant claims eligibility 

for a bidding credit, the information 

provided in its FCC Form 175 will be 

used in determining whether the 

applicant is eligible for the claimed 

bidding credit. 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 to the Auction No. 72 

Procedures Public Notice 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. 

44. An entity may not submit more 

than one short-form application for a 

single auction. In the event that a party 

submits multiple short-form 

applications, only one application will 

be accepted for filing. 

45. 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. 

Applicants are not permitted to make 

major modifications to their 

applications; such impermissible 

changes include a change of the 

certifying official to the 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. 

A. Preferences for Small Businesses and 

Others 

i. Size Standards for Bidding Credits 

46. A bidding credit represents the 

amount by which a bidder’s winning 

bid will be discounted. For Auction No. 

72, bidding credits will be available to 

small businesses and very small 

businesses, and consortia thereof, as 

follows: (1) A bidder with attributed 

average annual gross revenues that 

exceed $3 million and do not exceed 

$15 million for the preceding three 

years (small business) 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 (very small business) will 

receive a 35 percent discount on its 

winning bid. 

47. Bidding credits are not 

cumulative; a qualifying applicant 

receives either the 25 percent or 35 

percent bidding credit on its winning 

bid, but not both. 

48. Every applicant that claims 

eligibility for a bidding credit as either 

a small business or a very small 

business, or a consortium of small 

businesses or very small businesses, 

will be required to provide information 

regarding revenues attributable to the 

applicant, its affiliates, its controlling 

interests, and the affiliates of its 

controlling interests on its FCC Form 

175 short-form application to establish 

that it satisfies the applicable eligibility 

requirement. Applicants claiming 

eligibility as a designated entity in 

Auction No. 72 should review carefully 

the CSEA/Part 1 Designated Entity 

FNPRM, 71 FR 6992, February 10, 2006, 

and the Designated Entity Second 

Report and Order, 71 FR 26245, May 5, 

2006. In that connection, the 

Commission adopted rules governing 

eligibility for designated entity benefits 

in the Designated Entity Second Report 

and Order. The Commission’s new rules 

regarding applicants seeking eligibility 

for designated entity benefits requires 

the disclosure of a list of all parties with 

which the applicant has entered into 

arrangements for the lease or resale 

including wholesale agreements of any 

of the capacity of any of the applicant’s 

spectrum; and a list, separately and in 

the aggregate, of the gross revenues of 

entities with which the applicant has an 


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attributable material relationship, as 

defined in § 1.2110(b)(3)(iv)(B). 

49. The Commission has adopted a 

narrow exemption from the attribution 

rule for the officers and directors of a 

rural telephone cooperative pursuant to 

which the gross revenues of the 

affiliates of the cooperative’s officers 

and directors are not attributed to the 

applicant. An applicant (or controlling 

interest) seeking to claim this exemption 

must include in its short-form 

application a certification that it is 

validly organized under the most 

closely applicable organizing statute for 

a cooperative, and that such 

organization is reflected in its articles of 

incorporation, by-laws, and/or other 

relevant organic documents. Applicants 

seeking to claim this exemption must 

meet all of the conditions specified in 

§ 1.2110(b)(3)(iii) of the Commission’s 

rules. Additional guidance on 

completing the FCC Form 175 to claim 

this exemption may be found in 

Attachment C to the Auctions No. 72 

Procedures Public Notice. 

ii. Tribal Lands Bidding Credit 

50. To encourage the growth of 

wireless services in federally recognized 

tribal lands, the Commission has 

implemented a tribal lands bidding 

credit. 

iii. Installment Payments 

51. Installment payment plans will 

not be available in Auction No. 72. 

B. License Selection 

52. In Auction No. 72, applicants 

must select the licenses on which they 

want to bid from the Eligible Licenses 

list. In Auction No. 72, FCC Form 175 

will include a filtering mechanism that 

allows an applicant to filter the 

available licenses. The applicant will 

make selections for one or more of the 

filter criteria and the system will 

produce a list of licenses satisfying the 

specified criteria. The applicant may 

select all the licenses in the customized 

list or select individual licenses from 

the list. Applicants also will be able to 

select licenses from one customized list 

and then create additional customized 

lists to select additional licenses. There 

will be no opportunity to change license 

selection after the short-form filing 

deadline. It is critically important that 

an applicant confirm its license 

selections before submitting its shortform application because the FCC 

Auction System will not accept bids on 

licenses that an applicant has not 

selected on its FCC Form 175. 

C. Disclosure of Bidding Arrangements 

53. 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. Applicants also will 

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 a joint 

bidding agreement by the short-form 

application filing deadline, it would not 

include the names of parties to the 

discussions on its application and may 

not continue such discussions with any 

applicants after the deadline. 

54. After the filing of short-form 

applications, the Commission’s rules do 

not prohibit a party holding a noncontrolling, attributable interest in one 

applicant from acquiring an ownership 

interest in or entering into a joint 

bidding arrangement with other 

applicants provided that (i) the 

attributable interest holder certifies that 

it has not and will not communicate 

with any party concerning the bids or 

bidding strategies of more than one of 

the applicants in which it holds an 

attributable interest, or with which it 

has entered into a joint bidding 

arrangement; and (ii) the arrangements 

do not result in a change in control of 

any of the applicants. While the anticollusion rules do not prohibit nonauction-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 the 

Commission’s anti-collusion rule will 

not insulate a party from enforcement of 

the antitrust laws. 

D. Ownership Disclosure Requirements 

55. All applicants must comply with 

the uniform part 1 ownership disclosure 

standards and provide information 

required by §§ 1.2105 and 1.2112 of the 

Commission’s rules. 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 are prescribed in §§ 1.2105 

and 1.2112 of the Commission’s rules. 

Each applicant is responsible for 

information submitted in its short-form 

application being complete and 

accurate. 

56. 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 in an on-line 

FCC Form 602 or in an FCC Form 175 

filed for a previous auction using ISAS) 

will automatically be entered into the 

applicant’s short-form application. 

Applicants are responsible for ensuring 

that the information submitted in their 

FCC Form 175 for Auction No. 72 is 

complete and accurate. Accordingly, 

applicants should carefully review any 

information automatically entered to 

confirm that it is complete and accurate 

as of the deadline for filing the shortform application. Applicants can update 

any information that was entered 

automatically and needs to be changed 

directly in the short-form application. 

E. Bidding Credit Revenue Disclosures 

57. To determine which applicants 

qualify for bidding credits as small 

businesses or very small businesses, the 

Commission considers the gross 

revenues of the applicant, its affiliates, 

its controlling interests, and the 

affiliates of its controlling interests. 

Therefore, entities applying to bid as 

small businesses or very small 

businesses (or consortia of small 

businesses or very small businesses) 

will be required to disclose on their FCC 

Form 175 short-form applications the 

gross revenues of each of the following 

for the preceding three years: (1) The 

applicant, (2) its affiliates, (3) its 

controlling interests, and (4) the 

affiliates of its controlling interests. 

Certification that the average annual 

gross revenues of such entities and 

individuals for the preceding three years 

do not exceed the applicable limit is not 

sufficient. In order to comply with the 

Commission’s disclosure requirements 

for bidding credit eligibility, an 

applicant must provide separately for 

itself, its affiliates, its controlling 

interests, and the affiliates of its 

controlling interests, the gross revenues 

for each of the preceding three years. If 

the applicant is applying as a 

consortium of small businesses or very 

small businesses, this information must 

be provided for each consortium 

member. 


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58. Controlling interests of an 

applicant include individuals and 

entities with either de facto or de jure 

control of the applicant. Typically, 

ownership of at least 50.1 percent of an 

entity’s voting stock evidences de jure 

control. De facto control is determined 

on a case-by-case basis. The following 

are some common indicia of de facto 

control: (1) The entity constitutes or 

appoints more than 50 percent of the 

board of directors or management 

committee; (2) the entity has authority 

to appoint, promote, demote, and fire 

senior executives that control the dayto-day activities of the licensee and (3) 

the entity plays an integral role in 

management decisions. 

59. Officers and directors of an 

applicant are also considered to have 

controlling interest in the applicant. The 

Commission does not impose specific 

equity requirements on controlling 

interest holders. Once the principals or 

entities with a controlling interest are 

determined, only the revenues of those 

principals or entities, the affiliates of 

those principals or entities, and the 

applicant and its affiliates will be 

counted in determining small business 

eligibility. 

60. In recent years the Commission 

has made modifications to its rules 

governing the attribution of gross 

revenues for purposes of determining 

small business eligibility. These changes 

include exempting the gross revenues of 

the affiliates of a rural telephone 

cooperative’s officers and directors from 

attribution to the applicant if certain 

specified conditions are met. The 

Commission has also 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. 

61. A consortium of small businesses 

or very small businesses is a 

conglomerate organization composed of 

two or more entities, each of which 

individually satisfies the definition of a 

small business or very small business as 

those terms are defined in the servicespecific rules. Thus, each member of a 

consortium of small or very small 

businesses that applies to participate in 

Auction No. 72 must individually meet 

the definition of small business or very 

small business adopted by the 

Commission for the Phase II 220 MHz 

Service. Each consortium member must 

disclose its gross revenues along with 

those of its affiliates, its controlling 

interests, and the affiliates of its 

controlling interests. Although the gross 

revenues of the consortium members 

will not be aggregated for purposes of 

determining the consortium’s eligibility 

as a small business or very small 

business, this information must be 

provided to ensure that each individual 

consortium member qualifies for any 

bidding credit awarded to the 

consortium. 

F. Provisions Regarding Former and 

Current Defaulters 

62. Each applicant must state under 

penalty of perjury on its short-form 

application whether or not the 

applicant, its affiliates, its controlling 

interests, and the affiliates of its 

controlling interests, as defined by 

§ 1.2110, have ever been in default on 

any Commission licenses or have ever 

been delinquent on any non-tax debt 

owed to any Federal agency. In 

addition, each applicant must certify 

under penalty of perjury on its shortform application that as of the shortform filing deadline, the applicant, its 

affiliates, its controlling interests, and 

the affiliates of its controlling interests, 

as defined by § 1.2110, are not in default 

on any payment for Commission 

licenses including down payments and 

that they are not delinquent on any nontax 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. 

63. Former defaulters—i.e., 

applicants, including any of their 

affiliates, any of their controlling 

interests, or any of the affiliates of their 

controlling interests, that in the past 

have defaulted on any Commission 

licenses or been delinquent on any nontax debt owed to any Federal agency, 

but that have since remedied all such 

defaults and cured all of their 

outstanding non-tax delinquencies—are 

eligible to bid in Auction No. 72, 

provided that they are otherwise 

qualified. However, former defaulters 

are required to pay upfront payments 

that are fifty percent more than the 

normal upfront payment amounts. 

64. Current defaulters—i.e., 

applicants, including any of their 

affiliates, any of their controlling 

interests, or any of the affiliates of their 

controlling interests, that are in default 

on any payment for any Commission 

licenses including down payments or 

are delinquent on any non-tax debt 

owed to any Federal agency as of the 

filing deadline for applications to 

participate in this auction—are not 

eligible to bid in Auction No. 72. 

65. Applicants are encouraged to 

review the Bureau’s previous guidance 

on default and delinquency disclosure 

requirements in the context of the shortform 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 §§ 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 §§ 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. 

66. The Commission considers 

outstanding debts owed to the United 

States Government, in any amount, to be 

a serious matter. The Commission 

adopted rules, including a provision 

referred to as the red light rule, that 

implement the Commission’s 

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 §§ 1.2105 and 1.2106, 

with regard to current and former 

defaults or delinquencies. 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 

§ 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 this 

auction or of its upfront payment 

obligation. 

67. Prospective applicants in Auction 

No. 72 should note that any long-form 

applications filed after the close of 

competitive bidding will be reviewed 


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for compliance with the Commission’s 

red light rule, and such review may 

result in the dismissal of a winning 

bidder’s long-form application. 

G. Other Information 

68. Applicants owned by member of 

minority groups and/or women, as 

defined in § 1.2110(c)(3), may identify 

themselves in filling out their shortform applications regarding this status. 

This applicant status information is 

collected for statistical purposes only 

and assists the Commission in 

monitoring the participation of 

designated entities in its auctions. 

H. Minor Modifications to Short-Form 

Applications (FCC Form 175) 

69. As of the deadline for filing shortform applications (FCC Forms 175) prior 

to 6 p.m. ET on April 20, 2007, 

applicants are permitted to make only 

minor changes to their applications. 

Applicants are not permitted to make 

major modifications to their 

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). 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. 

70. An applicant must make 

permissible minor changes to its shortform application, as such changes are 

defined by § 1.2105(b), electronically 

using the FCC Auction System. 

Applicants must click on the SUBMIT 

button in the FCC Auction System for 

the changes to be submitted and 

considered by the Commission. After 

the revised application has been 

submitted, a confirmation page will be 

displayed that states the submission 

time and date, along with a unique file 

number. 

71. In addition, during those periods 

outside of the initial and resubmission 

filing windows (i.e., when you cannot 

electronically update your FCC Form 

175), an applicant should submit a letter 

briefly summarizing the changes and 

subsequently update their short-form 

applications in ISAS as soon as 

possible. Note: After the filing window 

has closed, the auction system will not 

permit applicants to make certain 

changes, such as legal classification and 

bidding credit. Any letter describing 

changes to an applicant’s short-form 

application should be submitted by 

electronic mail to the following address: 

auction72@fcc.gov 

72. Applicants must not submit 

application-specific material through 

the Commission’s Electronic Comment 

Filing System (ECFS). 

I. Maintaining Current Information in 

Short-Form Applications (FCC Form 

175) 

73. Section 1.65 of the Commission’s 

rules requires an applicant to maintain 

the accuracy and completeness of 

information furnished in its pending 

application and to notify the 

Commission within 30 days of any 

substantial change that may be of 

decisional significance to that 

application. Changes that cause a loss of 

or reduction in eligibility for a bidding 

credit must be reported immediately. If 

an amendment reporting substantial 

changes is a major amendment as 

defined by § 1.2105, the major 

amendment will not be accepted and 

may result in the dismissal of the shortform application. 

74. After the short-form filing 

deadline, applicants may make only 

minor changes to their FCC Form 175 

applications, for example, deletion and 

addition of authorized bidders (to a 

maximum of three). Applicants must 

click on the SUBMIT button in the FCC 

Auction System for the changes to be 

submitted and considered by the 

Commission. In addition, applicants 

must submit a letter, briefly 

summarizing the changes, by electronic 

mail at the following address: 

auction72@fcc.gov. 

75. Applicants must not submit 

application-specific material through 

ECFS into the record of the proceeding 

concerning Auction No. 72 procedures. 

III. Pre-Auction Procedures 

A. Auction Seminar—April 11, 2007 

76. On Wednesday, April 11, 2007, 

the FCC will sponsor a free seminar for 

parties interested in participating in 

Auction No. 72 at the FCC headquarters, 

located at 445 12th Street, SW., 

Washington, DC. The seminar will 

provide attendees with information 

about pre-auction procedures, 

completing FCC Form 175, auction 

conduct, the FCC Auction System, 

auction rules, and the Phase II 220 MHz 

Service rules. The seminar will also 

provide an opportunity for prospective 

bidders to ask questions of FCC staff 

concerning the auction, auction 

procedures, filing requirements and 

other matters related to this auction. 

77. To register, please provide the 

information listed on Attachment B of 

the Auction No. 72 Procedures Public 

Notice by fax, e-mail or telephone to the 

FCC by Monday, April 9, 2007. The 

seminar is free of charge and for 

individuals who are unable to attend, an 

Audio/Video webcast of this seminar 

will be available from the FCC’s Auction 

No. 72 web page at http:// 

wireless.fcc.gov/auctions/72/. 

B. Short-Form Application (FCC Form 

175)—Due Prior to 6 p.m. ET on April 

20, 2007 

78. In order to be eligible to bid in this 

auction, applicants must first follow the 

procedures set forth in Attachment C to 

the Auction No. 72 Procedures Public 

Notice to submit an FCC Form 175 

application electronically via the FCC 

Auction System. This application must 

be received at the Commission prior to 

6 p.m. ET on April 20, 2007. Late 

applications will not be accepted. There 

is no application fee required when 

filing an FCC Form 175. However, to be 

eligible to bid, an applicant must submit 

an upfront payment. 

79. Applications may generally be 

filed at any time beginning at noon ET 

on April 11, 2007, and the filing 

window will close prior to 6 p.m. ET on 

April 20, 2007. Applicants are strongly 

encouraged to file early and are 

responsible for allowing adequate time 

for filing their applications. Applicants 

may update or amend their applications 

multiple times until the filing deadline 

on April 20, 2007. 

80. Applicants must always click on 

the SUBMIT button on the Certify & 

Submit screen of the electronic form to 

successfully submit or modify their FCC 

Form 175. Any form that is not 

submitted will not be reviewed by the 

FCC. Additional information about 

accessing, completing, and viewing the 

FCC Form 175 is included in 

Attachment C of the Auction No. 72 

Procedures Public Notice. FCC Auction 

Technical Support is available at (877) 

480–3201, option nine; (202) 414–1250; 

or (202) 414–1255 (text telephone 

(TTY)); hours of service are Monday 

through Friday, from 8 a.m. to 6 p.m. 

E.T. In order to provide better service to 

the public, all calls to Technical 

Support are recorded. 

C. Application Processing and Minor 

Corrections 

81. After the deadline for filing the 

FCC Form 175 applications has passed, 

the FCC will process all timely 

submitted applications to determine 

which are acceptable for filing, and 

subsequently will issue a public notice 

identifying: (1) Those applications 

accepted for filing; (2) those 

applications rejected; and (3) those 

applications which have minor defects 

that may be corrected, and the deadline 

for resubmitting corrected applications. 


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82. After the April 20, 2007, shortform filing deadline, applicants may 

make only minor corrections to their 

FCC Form 175 applications. Applicants 

will not be permitted to make major 

modifications to their applications (e.g., 

change their license selections, change 

control of the applicant, change 

certifying official, or change their size to 

claim eligibility for a higher bidding 

credit). 

D. Upfront Payments—Due May 21, 

2007 

83. In order to be eligible to bid in the 

auction, applicants must submit an 

upfront payment accompanied by an 

FCC Remittance Advice Form (FCC 

Form 159). After completing the FCC 

Form 175, filers will have access to an 

electronic version of the FCC Form 159 

that can be printed and sent by facsimile 

to Mellon Bank in Pittsburgh, PA. All 

upfront payments must be received in 

the proper account at Mellon Bank by 6 

p.m. ET on May 21, 2007. 

i. Making Auction Payments by Wire 

Transfer 

84. Wire transfer payments must be 

received by 6 p.m. ET on May 21, 2007. 

No other payment method is acceptable 

for this auction. 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. 

85. At least one hour before placing 

the order for the wire transfer (but on 

the same business day), applicants must 

send by facsimile a completed FCC 

Form 159 (Revised 2/03) to Mellon Bank 

at (412) 209–6045. On the cover sheet of 

the facsimile, write Wire Transfer—

Auction Payment for Auction No. 72. 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. Applicants are responsible for 

obtaining confirmation from their 

financial institution that Mellon Bank 

has timely received their upfront 

payment and deposited it in the proper 

account. 

86. Please note that: (1) All payments 

must be made in U.S. dollars; (2) all 

payments must be made by wire 

transfer; (3) upfront payments for 

Auction No. 72 go to a lockbox number 

different from the lockboxes used in 

previous FCC auctions, and different 

from the lockbox number to be used for 

post-auction payments; and (4) failure to 

deliver the upfront payment as 

instructed by the May 21, 2007, 

deadline, will result in dismissal of the 

application and disqualification from 

participation in the auction. 

ii. FCC Form 159 

87. A completed FCC Remittance 

Advice Form (FCC Form 159, Revised 2/ 

03) must be sent by facsimile to Mellon 

Bank to accompany each upfront 

payment. Proper completion of FCC 

Form 159 (Revised 2/03) 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 No. 72 Procedures Public 

Notice. An electronic pre-filled version 

of the FCC Form 159 is available after 

submitting the FCC Form 175. Payors 

using a 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 

Mellon Bank via facsimile. 

iii. Upfront Payments and Bidding 

Eligibility 

88. In the Auction No. 72 Comment 

Public Notice, the Bureau proposed 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. In order to bid 

on a license, otherwise qualified bidders 

that selected that license on Form 175 

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 eligibility to bid on at least one 

of the licenses selected on its Form 175, 

or else the applicant will not be eligible 

to participate in the auction. An 

applicant does not have to make an 

upfront payment to cover all licenses 

the applicant selected on its Form 175, 

but rather 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. 

89. In the Auction No. 72 Comment 

Public Notice, the Bureau proposed to 

calculate upfront payments for Auction 

No. 72 on a license-by-license basis 

using the following formulas: 

EA Licenses: $500 per license. 

EAG License: $0.01 * 0.15 MHz * 

License Area Population. 

The Bureau set forth the specific 

upfront payments and bidding units for 

each license in Attachment A of the 

Auction No. 72 Comment Public Notice 

and sought comment on this proposal. 

The Bureau received no comments in 

response to the proposed upfront 

payments. The specific upfront 

payments and bidding units for each 

license are set forth in Attachment A of 

the Auction No. 72 Procedures Public 

Notice. 

90. Applicants must make upfront 

payments sufficient to obtain bidding 

eligibility on the licenses on which they 

will bid. 

91. 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 

calculations carefully, as there is no 

provision for increasing a bidder’s 

eligibility after the upfront payment 

deadline. 

92. Former defaulters should 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 

93. To ensure that refunds of upfront 

payments are processed in an 

expeditious manner, the Commission is 

requesting that all pertinent information 

be supplied to the FCC. 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. 

E. Auction Registration 

94. Approximately ten days before the 

auction, the FCC will issue a public 

notice announcing all qualified bidders 

for the auction. Qualified bidders are 

those applicants whose FCC Form 175 

applications have been accepted for 

filing and have timely submitted 

upfront payments sufficient to make 

them eligible to bid. 

95. 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 


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address listed in the FCC Form 175 and 

will include the SecurID tokens that 

will be required to place bids, the 

Integrated Spectrum Auction System 

(ISAS) Bidder’s Guide, and the Auction 

Bidder Line phone number. 

96. 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 Thursday, June 

14, 2007, 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. 

97. In the event that SecurID tokens 

are lost or damaged, 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 

replacement registration material. 

F. Remote Electronic Bidding 

98. The Commission will conduct this 

auction over the Internet, and 

telephonic bidding will be available as 

well. Qualified bidders are permitted to 

bid electronically and telephonically. 

Each applicant should indicate its 

bidding preference—electronic or 

telephonic—on the FCC Form 175. In 

either case, each authorized bidder must 

have its own SecurID token, which the 

FCC will provide at no charge. Each 

applicant with one authorized bidder 

will be issued two SecurID tokens, 

while applicants with two or three 

authorized bidders will be issued three 

tokens. For security purposes, the 

SecurID 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 FCC Form 175. 

G. Mock Auction—June 18, 2007 

99. All qualified bidders will be 

eligible to participate in a mock auction 

on Monday, June 18, 2007. 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 

100. The first round of bidding for 

Auction No. 72 will begin on 

Wednesday, June 20, 2007. 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 

101. In the Auction No. 72 Comment 

Public Notice, the Bureau proposed to 

auction all Phase II 220 MHz Service 

licenses in a single auction using the 

Commission’s standard simultaneous 

multiple-round (SMR) 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, unless a modified 

stopping rule is invoked. 

102. The Bureau also sought comment 

on using a simultaneous multiple-round 

with package bidding (SMR–PB) format 

for Auction No. 72. The Bureau does not 

believe that a package bidding format 

would significantly enhance the ability 

of bidders to create efficient 

aggregations of licenses in Auction No. 

72. Therefore, the Bureau will not use 

an SMR–PB format for Auction No. 72. 

103. The Bureau concludes that the 

Bureau’s standard SMR auction format 

will meet the needs of bidders in 

Auction No. 72, and the Bureau adopts 

the proposal to use a simultaneous 

multiple-round auction format without 

package bidding. Unless otherwise 

announced, bids will be accepted on all 

licenses in each round of the auction 

until bidding stops on every license. 

This approach, the Bureau believes, 

allows bidders to take advantage of 

synergies that exist among licenses. 

ii. Information Available to Bidders 

Before and During the Auction 

104. In the Auction No. 72 Comment 

Public Notice, the Bureau sought 

comment on whether to implement 

procedures that prior to and during the 

auction would limit the disclosure of 

information on bidder interests and 

identities. The Bureau received no 

comments on this issue. 

105. For Auction No. 72, the Bureau 

will use limited information procedures 

if it appears likely that the 

competitiveness of the auction will be 

low, and if the Bureau believes that 

limited information procedures will be 

effective in making anti-competitive 

behavior less likely to be successful. 

Alternatively, if the Bureau determines 

that the auction is likely to be 

sufficiently competitive, and therefore, 

that the risk of successful collusion is 

low, the Bureau will not implement 

procedures that would limit the 

disclosure of information on bidder 

interests and identities before the close 

of bidding. 

106. Specifically, the Bureau will 

estimate the likely level of competition 

in the auction by considering the 

eligibility ratio, defined as the total 

number of bidding units of eligibility 

purchased by bidders through their 

upfront payments divided by the total 

number of bidding units for the licenses 

in the auction. If the eligibility ratio 

equals or exceeds three, the Bureau will 

not use limited information procedures. 

If the eligibility ratio is less than three, 

in general the Bureau will withhold 

certain information on bidder interests 

and bidder identities prior to and during 

the auction. 

107. However, if the eligibility ratio is 

less than three, the Bureau reserves the 

discretion not to use limited 

information procedures if 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. The 

Bureau anticipates announcing the 

information disclosure procedures to be 

used at or about the time that the 

Bureau releases a public notice 

announcing the applicants that are 

qualified to participate in the bidding. 

108. If the Commission determines 

that limited information procedures will 

be used, it will make available prior to 

the auction the total eligibility level for 

the auction as well as the eligibility of 

each bidder but will not identify 

bidders’ license selections. After each 

round of bidding, the amounts of each 

bid placed will be made available, but 

not the identities of the bidders. This 

information will give bidders an 

indication of demand for the licenses, so 

that bidders and their investors will be 

able to assess whether their bids are 

likely to be consistent with the 

valuations of other bidders, allowing 

them to bid more confidently. In 

addition, after each round bidders 

logged in to the FCC Auction System 

will be able to see whether their own 

bids are provisionally winning. 

109. Other Issues. The Bureau does 

not believe that the information 

disclosure procedures established for 

this auction will interfere with the 

administration of or compliance with 

the Commission’s anti-collusion rule. 

Section 1.2105(c)(1) of the 


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Commission’s rules provides that after 

the short-form application filing 

deadline, all applicants for licenses in 

any of the same 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. When limited 

information procedures are not in effect 

for a particular auction, each applicant’s 

selection of licenses has been publicly 

available through the Commission’s online short-form application database. In 

Auction No. 72, however, the 

Commission will not disclose 

information regarding license selection 

at least until the upfront payment 

deadline has passed and the 

Commission determines the information 

disclosure procedures to be used for the 

auction. As in the past, the Commission 

will disclose the other portions of 

applicants’ short-form applications, 

through its on-line database and certain 

application-based information through 

public notices. Thus, even without 

information regarding license selection, 

applicants would be able to comply 

with § 1.2105(c) by not disclosing bids 

or bidding strategies to any other 

applicants in the auction. This 

approach, however, could inhibit 

otherwise lawful communications with 

applicants for licenses in other 

geographic license areas, which the 

Commission’s rule permits. 

Consequently, the Bureau will notify 

separately each applicant with shortform applications to participate in a 

pending auction whether applicants in 

Auction No. 72 have applied for 

licenses in any of the same geographic 

areas as that applicant. Specifically, 

after the Bureau conducts its initial 

review of applications to participate in 

Auction No. 72, each applicant with a 

pending short-form application will 

receive a letter that lists the applicants 

in Auction No. 72 that have applied for 

licenses in any of the same geographic 

areas as the applicant. The list will 

identify the Auction No. 72 applicant(s) 

by name but will not list the license 

selections of the Auction No. 72 

applicant(s). As in past auctions, 

additional information regarding 

applicants in Auction No. 72 that is 

needed to comply with § 1.2105(c), e.g., 

the identities of controlling interest in 

the applicant and ownership interests 

greater than ten percent, will be 

available through the publicly 

accessible on-line short-form 

application database. 

iii. Eligibility and Activity Rules 

110. In the Auction No. 72 Comment 

Public Notice, the Bureau proposed that 

the amount of the upfront payment 

submitted by a bidder would determine 

the initial (maximum) eligibility (as 

measured in bidding units) for each 

bidder. The Bureau received no 

comments on this issue. 

111. The Commission will use upfront 

payments to determine initial 

(maximum) eligibility (as measured in 

bidding units) for Auction No. 72. 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 listed in 

Attachment A of the Auction No. 72 

Procedures Public Notice. 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 FCC Form 175 

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. The total 

upfront payment does not affect the 

total dollar amount a bidder may bid on 

any given license. 

112. 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 

percentage of their current bidding 

eligibility during each round of the 

auction. 

113. A bidder’s activity level in a 

round is the sum of the bidding units 

associated with licenses on which the 

bidder is active. 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. 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 No. 72. 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 

bids in the auction. 

iv. Auction Stages 

114. In the Auction No. 72 Comment 

Public Notice, the Bureau proposed to 

conduct the auction in two stages and 

employ an activity rule. The Bureau 

further proposed that, in each round of 

Stage One, 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. Finally, the 

Bureau proposed that in each round of 

Stage Two, a bidder desiring to maintain 

its current bidding eligibility would be 

required to be active on at least 95 

percent of its current bidding eligibility. 

The Bureau received no comments on 

this proposal. 

115. The Commission adopts the 

Bureau’s proposals for the activity rules 

and stages. The Bureau reserves the 

discretion to further alter the activity 

percentages before and/or during the 

auction. 

116. Stage One: During the first stage 

of the auction, a bidder desiring to 

maintain its current bidding eligibility 

will be required to be active on licenses 

representing at least 80 percent of its 

current bidding eligibility in each 

bidding round. Failure to maintain the 

required activity level will result in the 

use of an activity rule waiver or, if the 

bidder has no activity rule waivers 

remaining, a reduction in the bidder’s 

bidding eligibility in the next round. 

During Stage One, reduced eligibility for 

the next round will be calculated by 

multiplying the bidder’s current round 

activity (the sum of bidding units of the 

bidder’s provisionally winning bids and 

bids during the current round) by fivefourths (5⁄4). 

117. Stage Two: During the second 

stage of the auction, a bidder desiring to 

maintain its current bidding eligibility 

is required to be active on 95 percent of 

its current bidding eligibility. Failure to 

maintain the required activity level will 

result in the use of an activity rule 

waiver or, if the bidder has no activity 

rule waivers remaining, a reduction in 

the bidder’s bidding eligibility in the 

next round. During Stage Two, reduced 

eligibility for the next round will be 

calculated by multiplying the bidder’s 

current round activity (the sum of 

bidding units of the bidder’s 

provisionally winning bids and bids 

during the current round) by twentynineteenths (20⁄19). 


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118. CAUTION: Since activity 

requirements increase in Stage Two, 

bidders must carefully check their 

activity during the first round following 

a stage transition to ensure that they are 

meeting the increased activity 

requirement. This is especially critical 

for bidders that have provisionally 

winning bids and do not plan to submit 

new bids. In past auctions, some bidders 

have inadvertently lost bidding 

eligibility or used an activity rule 

waiver because they did not re-verify 

their activity status at stage transitions. 

Bidders may check their activity against 

the required activity level by logging 

into the FCC Auction System. 

119. Because the foregoing procedures 

have proven successful in maintaining 

the proper pace in previous auctions, 

the Bureau adopts them for Auction No. 

72. 

v. Stage Transitions 

120. In the Auction No. 72 Comment 

Public Notice, the Bureau proposed that 

the auction would generally advance to 

the next stage (i.e., from Stage One to 

Stage Two) when the auction activity 

level, as measured by the percentage of 

bidding units receiving new 

provisionally winning bids, is 

approximately 20 percent or lower for 

three consecutive rounds of bidding. 

The Bureau further proposed that the 

Bureau would retain the discretion to 

change stages unilaterally by 

announcement during the auction. This 

determination, the Bureau proposed, 

would be based on a variety of measures 

of bidder activity, including, but not 

limited to, the auction activity level, the 

percentages of licenses (as measured in 

bidding units) on which there are new 

bids, the number of new bids, and the 

percentage increase in revenue. The 

Bureau received no comments on this 

issue. 

121. The Bureau adopts this proposal. 

Thus, the auction will start in Stage One 

and will generally advance to Stage Two 

when, in each of three consecutive 

rounds of bidding, the provisionally 

winning bids have been placed on 20 

percent or less of the licenses being 

auctioned (as measured in bidding 

units). In addition, the Bureau will 

retain the discretion to regulate the pace 

of the auction by announcement. This 

determination will be based on a variety 

of measures of bidder activity, 

including, but not limited to, the 

auction activity level, the percentages of 

licenses (as measured in bidding units) 

on which there are new bids, the 

number of new bids, and the percentage 

increase in revenue. The Bureau 

believes that these stage transition rules, 

having proven successful in prior 

auctions, are appropriate for use in 

Auction No. 72. 

vi. Activity Rule Waivers 

122. In the Auction No. 72 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. Therefore, the Bureau adopts the 

proposal that each bidder be provided 

three activity rule waivers. The Bureau 

is satisfied that providing three waivers 

over the course of the auction will give 

bidders a sufficient number of waivers 

and flexibility, while also safeguarding 

the integrity of the auction. 

123. Bidders may use an activity rule 

waiver in any round during the course 

of the auction. Use of an activity rule 

waiver preserves the bidder’s current 

bidding eligibility despite the bidder’s 

activity in the current round being 

below the required minimum activity 

level. An activity rule waiver applies to 

an entire round of bidding and not to a 

particular license. Activity rule waivers 

can be either applied proactively by the 

bidder (a proactive waiver) or applied 

automatically by the FCC Auction 

System (an automatic waiver) and are 

principally a mechanism for auction 

participants to avoid the loss of bidding 

eligibility in the event that exigent 

circumstances prevent them from 

placing a bid in a particular round. 

124. The FCC Auction System 

assumes that bidders with insufficient 

activity would prefer to apply 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 

where a bidder’s activity level is below 

the minimum required unless: (1) There 

are no activity rule waivers available; or 

(2) the bidder overrides the automatic 

application of a waiver by reducing 

eligibility. If a bidder has no waivers 

remaining and does not satisfy the 

activity requirement, the FCC Auction 

System will permanently reduce the 

bidder’s eligibility, possibly curtailing 

or eliminating the bidder’s ability to 

place additional bids in the auction. 

125. A bidder with insufficient 

activity that wants to reduce its bidding 

eligibility rather than use an activity 

rule waiver 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 rules. 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. 

126. Finally, 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 waiver (using the 

apply waiver function in the FCC 

Auction System) during a bidding round 

in which no bids are placed or 

withdrawn, the auction will remain 

open and the bidder’s eligibility will be 

preserved. However, an automatic 

waiver applied by the FCC Auction 

System in a round in which there are no 

new bids, withdrawals, or proactive 

waivers will not keep the auction open. 

A bidder cannot submit a proactive 

waiver after submitting a bid in a round, 

and submitting a proactive waiver will 

preclude a bidder from placing any bids 

in that round. Note: Applying a waiver 

is irreversible; once a proactive waiver 

is submitted that waiver cannot be 

unsubmitted, even if the round has not 

yet closed. 

vii. Auction Stopping Rules 

127. For Auction No. 72, 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. 

128. The Bureau also sought comment 

on a modified version of the 

simultaneous stopping rule (modified 

stopping rule). The modified stopping 

rule would close the auction for all 

licenses after the first round in which 

no bidder applies a proactive waiver, 

withdraws a provisionally winning bid, 

or places any new bids on any license 

on which it is not the provisionally 

winning bidder. Thus, absent any other 

bidding activity, a bidder placing a new 

bid on a license for which it is the 

provisionally winning bidder would not 

keep the auction open under this 

modified stopping rule. 

129. The Bureau further proposed 

retaining the discretion to keep the 

auction open even if no bidder places 

any new bids, applies a proactive 

waiver, or withdraws any provisionally 

winning bids in a round. In this event, 

the effect will be the same as if a bidder 

had applied a waiver. Thus, the activity 

rule will apply as usual, and a bidder 

with insufficient activity will either use 

an activity rule waiver (if it has any left) 

or lose bidding eligibility. 


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130. In addition, the Bureau proposed 

that the Bureau reserve the right to 

declare that the auction will end after a 

specified number of additional rounds 

(special stopping rule). If the Bureau 

invokes this special stopping rule, it 

will accept bids in the specified final 

round(s) and the auction will close. 

131. The Bureau proposed to exercise 

these options only in circumstances 

such as where the auction is proceeding 

very slowly, where there is minimal 

overall bidding activity or where it 

appears likely that the auction will not 

close within a reasonable period of time. 

The Bureau noted that before exercising 

these options, the Bureau is likely to 

attempt to increase the pace of the 

auction by, for example, increasing the 

number of bidding rounds per day, and/ 

or changing the minimum acceptable 

bids. 

132. The Bureau believes that the 

proposed stopping rules are appropriate 

for Auction No. 72 because our 

experience in prior auctions 

demonstrates that these stopping rules 

balance interests of administrative 

efficiency and maximum bidder 

participation. The Bureau received no 

comments concerning the auction 

stopping rules. Therefore the Bureau 

adopts the proposals made in the 

Auction No. 72 Comment Public Notice. 

Auction No. 72 will begin under the 

simultaneous stopping rule approach, 

and the Bureau will retain the discretion 

to employ the other versions of the 

stopping rule. Moreover, the Bureau 

will retain the discretion to use the 

modified stopping rule with or without 

prior announcement during the auction. 

viii. Auction Delay, Suspension, or 

Cancellation 

133. In the Auction No. 72 Comment 

Public Notice, the Bureau proposed that, 

by public notice or by announcement 

during the auction, the Bureau may 

delay, suspend, or cancel the auction in 

the event of natural disaster, technical 

obstacle, 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. 

134. Because the Bureau’s approach to 

notification of delay during an auction 

has proven effective in resolving exigent 

circumstances in previous auctions, the 

Bureau adopts the Bureau’s proposed 

rules regarding auction delay, 

suspension, or cancellation. By public 

notice or by announcement during the 

auction, the Bureau may delay, suspend, 

or cancel the auction in the event of 

natural disaster, technical obstacle, 

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 Bureau, in its 

sole discretion, may elect to resume the 

auction starting from the beginning of 

the current round, resume the auction 

starting from some previous round, or 

cancel the auction in its entirety. 

Network interruption may cause the 

Bureau to delay or suspend the auction. 

The Bureau emphasizes that exercise of 

this authority is solely within the 

discretion of the Bureau, and its use is 

not intended to be a substitute for 

situations in which bidders may wish to 

apply their activity rule waivers. 

B. Bidding Procedures 

i. Round Structure 

135. 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. 

136. 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 

137. 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. Consistent with this 

mandate, the Commission directed the 

Bureau to seek comment on the use of 

a minimum opening bid and/or reserve 

price prior to the start of each auction. 

Among other factors, the Bureau must 

consider the amount of spectrum being 

auctioned, levels of incumbency, the 

availability of technology to provide 

service, the size of the geographic 

service areas, the extent of interference 

with other spectrum bands, and any 

other relevant factors that could have an 

impact on the spectrum being 

auctioned. The Commission concluded 

that the Bureau should have the 

discretion to employ either or both of 

these mechanisms for future auctions. 

138. The Bureau proposed in the 

Auction No. 72 Comment Public Notice 

to establish minimum opening bids for 

each license, while retaining discretion 

to lower the minimum opening bids. 

Specifically, for Auction No. 72, the 

Bureau proposed the following formulas 

for calculating license-by-license 

minimum opening bids: 

EA Licenses: $500 per license. 

EAG License: $0.01 * 0.15 MHz * 

License Area Population. 

139. The Bureau sought comment on 

this proposal and, in the alternative, 

whether, consistent with the Section 

309(j), the public interest would be 

served by having no minimum opening 

bids. A commenter filed comments in 

which it sought a reduction in the 

minimum opening bids by 50 percent. 

The commenter argues that lowering 

minimum opening bids will increase the 

likelihood that these licenses will be 

sold at auction. The commenter notes 

that the auction will make available 

spectrum that licensees will seek to 

aggregate in order to satisfy a particular 

viable market opportunity. The 

commenter also contends that the 

licenses being offered in Auction No. 72 

have low market value, and asserts that 

it does not know of market indications 

of higher values, or developments in the 

near term that would cause higher 

values. 

140. The Bureau continues to believe 

that the minimum opening bid amounts 

proposed in the Auction No. 72 

Comment Public Notice are appropriate. 

The proposed minimum opening bid 

amounts better enable the Commission 

to meet the statutory objective of 

recovering for the public a portion of the 

value of the spectrum resource made 

available for commercial use. Moreover, 

the Bureau observed in the Auction No. 

72 Comment Public Notice that the 

proposed minimum opening bid of $500 

will not impede any party willing and 

able to offer wireless service to the 

public. The commenter offers little 

support for its contention that the 

licenses being offered have low market 

value. 

141. The Bureau believes that the 

minimum opening bids for this auction 

are reasonable. Accordingly, the Bureau 

will adopt the proposed minimum 

opening bid amounts and set the 


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minimum opening bids using the 

proposed formulas. 

142. The Commission did not receive 

any comments addressing its proposal 

that the Bureau retain the discretion to 

reduce minimum opening bid amounts. 

The Bureau adopts this proposal. The 

minimum opening bid amounts the 

Bureau adopts for Auction No. 72 are 

reducible at the discretion of the 

Bureau. The Bureau emphasizes, 

however, that such discretion will be 

exercised, if at all, sparingly and early 

in the auction, i.e., before bidders lose 

all activity waivers. During the course of 

the auction, the Bureau will not 

entertain requests to reduce the 

minimum opening bid amount on 

specific licenses. The Bureau notes that 

effectively the minimum opening bids 

operate as reserve prices. 

143. The specific minimum opening 

bid amounts for each license available 

in Auction No. 72 calculated pursuant 

to the procedure are set forth in 

Attachment A of the Auction No. 72 

Procedures Public Notice. 

iii. Bid Amounts 

144. In the Auction No. 72 Comment 

Public Notice, the Bureau proposed that 

in each round, eligible bidders be able 

to place a bid on a given license in any 

of nine different amounts. Under the 

proposal, the FCC Auction System 

interface will list the acceptable bid 

amounts for each license. The Bureau 

received no comment on this issue. 

Based on the Bureau’s experience in 

prior auctions, the Bureau adopts its 

proposals for Auction No. 72. 

145. 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 for the license. After there 

is a provisionally winning bid for a 

license, the minimum acceptable bid 

amount for that license will be equal to 

the amount of the provisionally winning 

bid plus a percentage of that bid amount 

calculated using the formula. In general, 

the percentage will be higher for a 

license receiving many bids than for a 

license receiving few bids. 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. 

146. The percentage of the 

provisionally winning bid used to 

establish the minimum acceptable bid 

amount (the additional percentage) is 

calculated at the end of each round, 

based on an activity index which is a 

weighted average of the number of bids 

in that round and the activity index 

from the prior round. Specifically, the 

activity index is equal to a weighting 

factor times the number of bids on the 

license in the most recent bidding round 

plus one minus the weighting factor 

times the activity index from the prior 

round. The additional percentage is 

determined as one plus the activity 

index times a minimum percentage 

amount, with the result not to exceed a 

given maximum. The additional 

percentage is then multiplied by the 

provisionally winning bid amount to 

obtain the minimum acceptable bid for 

the next round. The Commission will 

initially set the weighting factor at 0.5, 

the minimum percentage at 0.1 (10%), 

and the maximum percentage at 0.2 

(20%). Hence, at these initial settings, 

the minimum acceptable bid for a 

license will be between 10% and 20% 

higher than the provisionally winning 

bid, depending upon the bidding 

activity for the license. Equations and 

examples are shown in Attachment E of 

the Auction No. 72 Procedures Public 

Notice. 

147. The additional bid amounts are 

calculated using the minimum 

acceptable bid amount and a bid 

increment percentage. 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 ten percent, 

the calculation is (minimum acceptable 

bid amount) * (1 + 0.1), rounded, or 

(minimum acceptable bid amount) * 1.1, 

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) * 1.2, rounded; 

the third additional acceptable bid 

amount equals the minimum acceptable 

bid amount times one plus three times 

the bid increment percentage, rounded, 

or (minimum acceptable bid amount) * 

1.3, rounded; etc. The Bureau will 

round the results of these calculations, 

as well as the calculations to determine 

the minimum acceptable bid amounts, 

using our standard rounding 

procedures. For Auction No. 72, the 

Bureau proposed to use a bid increment 

percentage of ten percent to calculate 

the additional acceptable bid amounts. 

The Bureau received no comment on 

this issue and will begin the auction 

with a bid increment percentage of ten 

percent and eight additional bid 

amounts. 

148. The Bureau did not receive any 

comments on its proposal. The Bureau 

retains the discretion to change the 

minimum acceptable bid amounts, the 

minimum acceptable bid formula 

parameters, the bid increment 

percentage, and the number of 

acceptable bid amounts if it determines 

that circumstances so dictate. The 

Bureau will do so by announcement in 

the FCC Auction System during the 

auction if circumstances warrant. 

iv. Provisionally Winning Bids 

149. 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. 

150. In the Auction No. 72 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. 

Therefore, the Bureau adopts its 

proposal. A pseudo-random number 

generator based on the L’Ecuyer 

algorithms will be used to assign a 

random number to each bid. The tied 

bid with the highest random number 

wins the tiebreaker, and becomes the 

provisionally winning bid. The 

remaining eligible 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 selected provisionally 

winning bid. 

151. During a round, a bidder may 

submit bids for as many licenses as it 

wishes (providing that it is eligible to 

bid), withdraw provisionally winning 

bids from previous rounds, remove bids 

placed in the current bidding round, or 

permanently reduce eligibility. Bidders 

also have the option of submitting and 

removing multiple bids and 

withdrawing multiple provisionally 

winning bids during a round. If a bidder 

submits multiple bids for a single 

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. 

152. All bidding will take place 

remotely either through the FCC 


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Auction System or by telephonic 

bidding. There will be no on-site 

bidding during Auction No. 72. 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. 

153. A bidder’s ability to bid on 

specific licenses is determined by two 

factors: (1) The licenses selected on the 

bidder’s FCC Form 175 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 FCC Form 175. 

154. 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 token and a 

personal identification number (PIN) 

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. 

155. In each round, eligible bidders 

will be able to place bids on a given 

license in any of nine different amounts. 

For each license, the FCC Auction 

System will list the nine 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. 

156. 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. 

157. 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. 

v. Bid Removal and Bid Withdrawal 

158. In the Auction No. 72 Comment 

Public Notice, the Commission 

proposed bid removal and bid 

withdrawal procedures. With respect to 

bid withdrawals, the Commission 

proposed limiting each bidder to 

withdrawals in no more than two 

rounds during the course of the auction. 

The round in which withdrawals are 

used would be at each bidder’s 

discretion. The Bureau received no 

comments on this issue. In previous 

auctions, the Bureau has detected 

bidder conduct that, arguably, may have 

constituted anti-competitive behavior 

through the use of bid withdrawals. 

While the Bureau continues to recognize 

the important role that bid withdrawals 

may play in an auction, i.e., reducing 

risk associated with efforts to secure 

various licenses in combination, the 

Bureau concludes that, for Auction No. 

72, adoption of a limit on the use of 

withdrawals to two rounds per bidder is 

appropriate. By doing so the Bureau 

strikes a reasonable compromise that 

will allow bidders to use withdrawals. 

The Bureau based its decision on its 

experience with bid withdrawals in 

prior auctions, including PCS D, E and 

F block, 800 MHz SMR, and other 

auctions. The Bureau will therefore 

limit the number of rounds in which 

bidders may place withdrawals to two 

rounds, as previously proposed. 

159. Procedures. 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. Removing a bid will affect a 

bidder’s activity for the round in which 

it is removed, i.e., a bid that is removed 

does not count toward bidding activity. 

These procedures will enhance bidder 

flexibility during the auction, and 

therefore the Bureau adopts them for 

Auction No. 72. 

160. Once a round closes, a bidder 

may no longer remove a bid. However, 

in later rounds, a bidder may withdraw 

provisionally winning bids from 

previous rounds using the withdraw 

bids function in the FCC Auction 

System (assuming that the bidder has 

not already withdrawn bids in two 

previous rounds). A provisionally 

winning bidder that withdraws its 

provisionally winning bid from a 

previous round during the auction is 

subject to the bid withdrawal payments 

specified in 47 CFR .2104(g). Note: Once 

a withdrawal is submitted during a 

round, that withdrawal cannot be 

unsubmitted even if the round has not 

yet ended. 

161. The rounds in which a bidder 

may withdraw its bids will be at the 

bidder’s discretion and there will be no 

limit on the number of bids that may be 

withdrawn in either of these rounds. 

Withdrawals during the auction will be 

subject to the bid withdrawal payments 

specified in § 1.2104(g). Bidders should 

note that evidence of abuse of the 

Commission’s bid withdrawal 

procedures could result in the denial of 

the ability to bid on a market. 

162. 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. To set the 

additional bid amounts, the second 

highest bid amount also will be used in 

place of the provisionally winning bid 

in the formula used to calculate 

additional bid amounts. The 

Commission will serve as a place holder 

provisionally winning bidder on the 

license until a new bid is submitted on 

that license. 

163. Calculation of Bid Withdrawal 

Payment. Generally, the Commission 

imposes payments on bidders that 

withdraw high 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 provisionally winning bid in the 

same or subsequent auction(s). In the 

case of multiple bid withdrawals on a 

single license, within the same or 

subsequent auctions(s), 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 

auctions(s), equals or exceeds that 

withdrawn bid. Thus, a bidder that 

withdraws a bid will not be responsible 

for any withdrawal payments if there is 

a subsequent higher bid in the same or 

subsequent auction(s). This policy 

allows bidders most efficiently to 

allocate their resources as well as to 

evaluate their bidding strategies and 

business plans during an auction while, 

at the same time, maintaining the 

integrity of the auction process. The 

Bureau retains the discretion to 

scrutinize multiple bid withdrawals on 

a single license for evidence of anticompetitive strategic behavior and take 

appropriate action when deemed 

necessary. 

164. Section 1.2104(g)(1) of the rules 

sets forth the payment obligations of a 

bidder that withdraws a high bid on a 

license during the course of an auction, 

and provides for the assessment of 

interim bid withdrawal payments. In the 

Auction No. 72 Comment Public Notice, 

the Bureau proposed to establish the 

percentage at ten percent (10%) for the 


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Phase II 220 MHz Service auction and 

sought comment on the proposal. 

165. The Bureau received no 

comments on this issue and adopts its 

proposal. The Commission will assess 

an interim withdrawal payment equal to 

ten percent (10%) of the amount of the 

withdrawn bids. The ten percent (10%) 

interim payment will be applied toward 

any final bid withdrawal payment that 

will be assessed after subsequent 

auction of the license. Assessing an 

interim bid withdrawal payment 

ensures that the Commission receives a 

minimal withdrawal payment pending 

assessment of any final withdrawal 

payment. Section 1.2104(g) provides 

specific examples showing application 

of the bid withdrawal payment rule. 

vi. Round Results 

166. If limited information procedures 

described above are in effect, 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 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. 

167. If, however, limited information 

procedures are not used, more 

information will be provided after each 

round in the auction. Bids placed 

during a round, including bidder 

identities, will be made public at the 

conclusion of that round. Specifically, 

after a round closes, the Bureau will 

compile reports of all bids placed and 

which bidders made them, current 

provisionally winning bids, new 

minimum acceptable bid amounts, and 

bidder eligibility status (bidding 

eligibility and activity rule waivers) and 

will post the reports for public access. 

vii. Auction Announcements 

168. 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 

A. Down Payments 

169. After bidding has ended, the 

Commission will issue a public notice 

declaring the auction closed and 

identifying winning bidders, down 

payments and final payments due. 

170. Within ten business days after 

release of the auction closing notice, 

each winning bidder must submit 

sufficient funds (in addition to its 

upfront payment) to bring its total 

amount of money on deposit with the 

Commission for Auction No. 72 to 20 

percent of the net amount of its winning 

bids (gross bids less any applicable 

small business or very small business 

bidding credits). 

B. Final Payments 

171. Each winning bidder will be 

required to submit the balance of the net 

amount of its winning bids within 10 

business days after the deadline for 

submitting down payments. 

C. Long-Form Application (FCC Form 

601) 

172. Within ten business days after 

release of the auction closing notice, 

winning bidders must electronically 

submit a properly completed long-form 

application (FCC Form 601) for each 

license won through Auction No. 72. 

Winning bidders that are small 

businesses or very small businesses 

must demonstrate their eligibility for a 

small business or very small business 

bidding credit. Further filing 

instructions will be provided to auction 

winners at the close of the auction. 

173. The CSEA/Part 1 Report and 

Order modifies the procedure by which 

a consortium that is a winning bidder in 

Auction No. 72 will apply for a license. 

In particular, (a) 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) 

and, in the case of a license to be 

partitioned or disaggregated, the 

member or group filing the applicable 

long-form application shall provide the 

parties’ partitioning or disaggregation 

agreement in its long-form application; 

(b) two or more consortium members 

seeking to be licensed together shall first 

form a legal business entity; and (c) any 

such entity must meet the applicable 

eligibility requirements in our rules for 

small business status. Applicants 

applying as consortia should review the 

CSEA/Part 1 Report and Order in detail 

and monitor any relevant future 

proceedings to understand how the 

members of the consortia will apply for 

a license in the event they are winning 

bidders. 

D. Ownership Disclosure Information 

Report (FCC Form 602) 

174. At the time it submits its longform application (FCC Form 601), each 

winning bidder also must comply with 

the ownership reporting requirements as 

set forth in §§ 1.913, 1.919, and 1.2112 

of the Commission’s rules. Further 

instructions will be provided to winning 

bidders at the close of the auction. 

E. Tribal Lands Bidding Credit 

175. 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 

land bidding credit is in addition to, 

and separate from, any other bidding 

credit for which a winning bidder may 

qualify. 

176. Unlike other bidding credits that 

are requested prior to the auction, a 

winning bidder applies for the tribal 

lands bidding credit after winning 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 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 

§ 1.2110(f)(3)(vi). 

177. For additional information on the 

tribal lands bidding credit, including 

how the amount of the credit is 

calculated, applicants should review the 

Commission’s rule making proceeding 

regarding tribal lands bidding credits 

and related public notices. 

F. Default and Disqualification 

178. 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 § 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 


sroberts on PROD1PC70 with NOTICES
14572 Federal Register / Vol. 72, No. 59 / Wednesday, March 28, 2007 / Notices 

is less. Pursuant to recent modifications 

to the rule governing default payments, 

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 No. 72 

Comment Public Notice, the Bureau 

proposed to set the additional default 

payment for the auction of Phase II 220 

MHz Service licenses at ten percent of 

the applicable bid. The Bureau sought 

comment on its proposal and no 

comments were received on this issue. 

The Bureau therefore adopts its 

proposal and sets the additional default 

payment for the auction of Phase II 220 

MHz spectrum licenses at ten percent of 

the applicable bid. 

179. Finally, the Bureau notes that 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 

180. All applicants that submit 

upfront payments but after the close of 

the auction are not winning bidders for 

a license in Auction No. 72 may be 

entitled to a refund of their remaining 

upfront payment balance after the 

conclusion of the auction. All refunds 

will be returned to the payer of record, 

as identified on the FCC Form 159, 

unless the payer submits written 

authorization instructing otherwise. 

181. Bidders that drop out of the 

auction completely may be eligible for 

a refund of their upfront payments 

before the close of the auction. 

182. Following the close of the 

auction, the Commission may refund 

upfront monies on deposit that exceed 

the required total payments owned by 

the winning bidders. Such refunds will 

be made to the payer of record as 

identified on the FCC Form 159, 

provided the necessary refund request 

and wire transfer instructions have been 

received. 

Federal Communications Commission. 

Gary D. Michaels, 

Deputy Chief, Auctions and Spectrum Access 

Division, WTB. 

[FR Doc. E7–5639 Filed 3–27–07; 8:45 am] 

BILLING CODE 6712–01–P 

FEDERAL MARITIME COMMISSION 

Notice of Agreements Filed 

The Commission hereby gives notice 

of the filing of the following agreements 

under the Shipping Act of 1984. 

Interested parties may submit comments 

on agreements to the Secretary, Federal 

Maritime Commission, Washington, DC 

20573, within ten days of the date this 

notice appears in the Federal Register. 

Copies of agreements are available 

through the Commission’s Office of 

Agreements (202–523–5793 or 

tradeanalysis@fmc.gov). 

Agreement No.: 011324–019. 

Title: Transpacific Space Utilization 

Agreement. 

Parties: American President Lines 

Ltd./APL Co. Pte Ltd.; Evergreen Marine 

Corporation; Hanjin Shipping Co., Ltd.; 

Hapag-Lloyd AG; Hyundai Merchant 

Marine Co., Ltd.; Kawasaki Kisen Kaisha 

Ltd.; Mitsui O.S.K. Lines, Ltd.; Nippon 

Yusen Kaisha; Orient Overseas 

Container Line Limited; Westwood 

Shipping Lines; and Yangming Marine 

Transport Corp. 

Filing Party: Wayne R. Rohde, Esq.; 

Sher & Blackwell; 1850 M Street, NW., 

Suite 900; Washington, DC 20036. 

Synopsis: The amendment would 

delete Evergreen Marine Corporation 

and add Evergreen Line Joint Service 

Agreement, FMC No. 011982, as a party. 

Agreement No.: 011325–038. 

Title: Westbound Transpacific 

Stabilization Agreement. 

Parties: American President Lines, 

Ltd./APL Co. Pte Ltd.; COSCO Container 

Lines Company Limited; COSCO 

Container Lines (Hong Kong) Co., 

Limited; Evergreen Marine Corporation 

(Taiwan), Ltd.; Hanjin Shipping Co., 

Ltd.; Hapag-Lloyd AG; Hyundai 

Merchant Marine Co. Ltd.; Kawasaki 

Kisen Kaisha, Ltd.; Nippon Yusen 

Kaisha Line; Orient Overseas Container 

Line Limited; and Yangming Marine 

Transport Corp. 

Filing Party: Wayne R. Rohde, Esq.; 

Sher & Blackwell, LLP; 1850 M Street, 

NW., Suite 900; Washington, DC 20036. 

Synopsis: The amendment would 

delete Evergreen Marine Corporation 

(Taiwan) Ltd. and add Evergreen Line 

Joint Service Agreement, FMC No. 

011982, as a party. It would also delete 

COSCO Container Lines (Hong Kong) 

Co., Limited and the accompanying note 

and add COSCO Container Lines 

Company Limited. 

Agreement No.: 011353–033. 

Title: The Credit Agreement. 

Parties: APL Co. PTE Ltd.; A.P. 

Moller-Maersk A/S; Caribbean General 

Maritime, Ltd.; Crowley Liner Services, 

Inc.; Dole Ocean Cargo Express; 

Evergreen Marine Corporation (Taiwan) 

Ltd.; King Ocean Services de Venezuela/ 

King Ocean Services Limited; Seaboard 

Marine of Florida, Inc.; and Seaboard 

Marine Ltd. 

Filing Party: Wayne R. Rohde, Esq.; 

Sher & Blackwell; 1850 M Street, NW., 

Suite 900; Washington, DC 20036. 

Synopsis: The amendment updates 

A.P. Moller-Maersk A/S’ trade name. It 

also would delete Evergreen Marine 

Corporation (Taiwan) Ltd. and add 

Evergreen Line Joint Service Agreement, 

FMC Agreement No. 011982, as a party. 

Agreement No.: 011409–015. 

Title: Transpacific Carrier Services 

Inc. Agreement. 

Parties: American President Lines, 

Ltd./APL Co. Pte Ltd.; CMA CGM, S.A.; 

China Shipping Container Lines Co., 

Ltd.; COSCO Container Lines Co., Ltd.; 

Evergreen Marine Corporation; Hanjin 

Shipping Co., Ltd.; Hapag-Lloyd AG; 

Hyundai Merchant Marine Co., Ltd.; 

Kawasaki Kisen Kaisha, Ltd.; Mitsui 

O.S.K. Lines, Ltd.; Nippon Yusen 

Kaisha, Ltd.; Orient Overseas Container 

Line Limited; and Yang Ming Marine 

Transport Corp. 

Filing Party: Wayne R. Rohde, Esq.; 

Sher & Blackwell; 1850 M Street, NW., 

Suite 900; Washington, DC 20036. 

Synopsis: The amendment would 

delete Evergreen Marine Corporation 

and add Evergreen Line Joint Service 

Agreement, FMC No. 011982, as a party. 

It would also delete COSCO Container 

Lines (Hong Kong) Co., Limited and the 

accompanying note. 

Agreement No.: 011679–008. 

Title: ASF/SERC Agreement. 

Parties: American President Lines, 

Ltd./APL Co. Pte Ltd.; ANL Singapore 

Pte Ltd.; China Shipping (Group) 

Company/China Shipping Container 

Lines, Co. Ltd.; COSCO Container Lines 

Company, Ltd.; COSCO Container Lines 

(Hong Kong) Co., Limited; Evergreen 

Marine Corp. (Taiwan) Ltd.; Hanjin 

Shipping Co., Ltd.; Hyundai Merchant 

Marine Co., Ltd.; Kawasaki Kisen 

Kaisha, Ltd.; Mitsui O.S.K. Lines, Ltd.; 

Nippon Yusen Kaisha; Orient Overseas 

Container Line Ltd.; Sinotrans Container 

Lines Co., Ltd.; Wan Hai Lines Ltd.; and 

Yang Ming Marine Transport Corp. 

Filing Party: Wayne R. Rohde, Esq.; 

Sher & Blackwell; 1850 M Street, NW., 

Suite 900; Washington, DC 20036. 

Synopsis: The amendment would 

delete Evergreen Marine Corp. (Taiwan) 

Ltd. and add Evergreen Line Joint 

Service Agreement, FMC Agreement No. 

011982, as a party. It would also delete 

COSCO Container Lines (Hong Kong) 

Co., Limited and the accompanying 

note. 

Agreement No.: 011870–004. 


sroberts on PROD1PC70 with NOTICES