[Federal Register Volume 62, Number 182 (Friday, September 19, 1997)]
[Notices]
[Page 49241]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24931]


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FEDERAL COMMUNICATIONS COMMISSION

[DA 97-1933]


Comment Sought on Balanced Budget Provisions Calling for Reserve 
Prices or Minimum Opening Bids in FCC Auctions

Released September 5, 1997.

Report No. AUC-16-E (Auction No. 16)

    When FCC licenses are subject to auction (i.e, because they are 
mutually exclusive) the recently enacted Balanced Budget Act of 1997 
calls upon the Commission to prescribe methods by which a reasonable 
reserve price is required or minimum opening bid established, unless it 
determines that such an assessment is not in the public interest. The 
Wireless Telecommunications Bureau recently announced the auction of 
525 licenses in the upper 10 MHz of the 800 MHz Specialized Mobile 
Service (SMR), which is to begin October 28, 1997. In anticipation of 
that auction, and in light of the recently adopted legislation, it is 
proposed that a reserve price or minimum opening bid be established.
    Specifically, it is proposed that in no event should any of the 
licenses in the 800 MHz auction be sold for less than the value of the 
upfront payment amounts specified for the licenses in the Public Notice 
released August 6, 1997 for that auction. The upfront payments for the 
800 MHz SMR auction are based on a $0.02 per MHz-POP formula, as was 
used in the 900 MHz SMR auction. The $0.02 MHz-POP has been discounted 
for each Economic Area by 75 percent, with a floor of $2,500, to 
account for the degree of incumbency for this service. Under this 
formulation, the minimum amount is $2,500 and the maximum amount is 
$717,571. Comment is sought on this proposal.
    Parties should also comment on whether the upfront payment should 
be considered a reserve price or a minimum opening bid for this 
auction. Normally, a reserve price is an absolute minimum price below 
which an item will not be sold in a given auction. Reserve prices can 
be either published or unpublished. A minimum opening bid, on the other 
hand, is the minimum bid price set at the beginning of the auction 
below which no bids are accepted. In a minimum opening bid scenario, 
the auctioneer often has the discretion to lower it later in the 
auction.
    Furthermore, commenters should also address whether the amount of 
the reserve price or minimum opening bid should be capped to ensure 
that bidding is not deterred on high valuation markets, in particular. 
For example, a cap of $250,000 could be applied.
    Finally, if commenters believe that a reserve price or minimum 
opening bid equal to the upfront payment will result in substantial 
unsold licenses, or is not a reasonable amount, they should explain why 
this is so, and comment on the desirability of a reserve price or 
minimum opening bid greater or less than the upfront payment.
    Comments are due on or before September 12, 1997. To file formally, 
parties must file an original and four copies. Parties may send 
comments to the Chief, Auctions and Industry Analysis Division, 
Wireless Telecommunications Bureau, Federal Communications Commission, 
Room 5202, 2025 M Street, NW., Washington, DC 20554. Comments will be 
available for public inspection during regular business hours in the 
FCC Reference Center of the Federal Communications Commission, Room 
239, 1919 M Street, NW., Washington, DC 20554.
    For further information concerning this proceeding, contact Alice 
Elder at the Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau at (202) 418-0660.

Federal Communications Commission.
Shirley S. Suggs,
Chief, Publications Branch.
[FR Doc. 97-24931 Filed 9-18-97; 8:45 am]
BILLING CODE 6712-01-P