75702 Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices

application. This notice must be

published at least twice a week for two

consecutive weeks in a three-week

period. A copy of this notice must be

placed in the public inspection file

along with the application.

Additionally, an applicant for

assignment of license must broadcast

the same notice over the station at least

once daily on four days in the second

week immediately following the

tendering for filing of the application.

On April 4, 2000, the Commission

adopted a Report and Order in MM

Docket No. 95–31 in the Matter of

Reexamination of the Comparative

Standards for Noncommercial

Educational Applicants. This Report

and Order adopted new procedures to

select among competing applicants for

noncommercial educational (NCE)

broadcast channels. The new procedure

will use points to compare objective

characteristics whenever there are

competing applications for full-service

radio or television channels reserved for

NCE use. The new procedure

established a four-year holding period of

on-air operations for licenses approved

as a result of evaluation in a point

system. The FCC 314 has been revised

to reflect the new policy and to require

stations authorized under the point

system who have not operated for a

four-year period to submit with their

applications an exhibit demonstrating

compliance with Section 73.7005.

The data is used by FCC staff to

determine whether the applicants meet

basic statutory requirements to become

a Commission licensee/permittee and to

assure that the public interest would be

served by grant of the application.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

[FR Doc. 00–30802 Filed 12–01–00; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS

COMMISSION

[Report No. AUC–00–35–E (Auction No. 35);

DA 00–2259]

Notice and Filing Requirements for 422

Licenses in the C and F Block

Broadband PCS Spectrum Auction

Minimum Opening Bids, Upfront

Payments and Other Procedural Issues

For Final Auction Inventory

AGENCY: Federal Communications

Commission.

ACTION: Notice.

SUMMARY: This document announces the

procedures and minimum opening bids

for the upcoming auction of broadband

Personal Communications Services

(PCS) spectrum and also provides the

final inventory of licenses to be made

available for this auction; we will not

add to this inventory for the December

12, 2000, auction.

DATES: Auction No. 35 is scheduled for

December 12, 2000.

FOR FURTHER INFORMATION CONTACT:

Auctions and Industry Analysis

Division: Audrey Bashkin, Legal

Branch, or Craig Bomberger, Auctions

Operations Branch, at (202) 418–0660;

Lisa Stover, Auctions Operations

Branch, at (717) 338–2888. Commercial

Wireless Division: Gary Oshinsky,

Policy and Rules Branch, at (202) 418–

7167 or JoAnn Epps, Licensing and

Technical Analysis Branch, at (202)

418–0620. Media Contact: Meribeth

McCarrick at (202) 418–0654.

SUPPLEMENTARY INFORMATON: This is a

summary of a Public Notice released

October 5, 2000. The complete text of

the public notice, including

Attachments A through I, is available for

inspection and copying during normal

business hours in the FCC Reference

Center (Room CY–A257), 445 12th

Street, SW, Washington, DC. It may also

be purchased from the Commission’s

copy contractor, International

Transcription Services, Inc. (ITS, Inc.)

1231 20th Street, NW, Washington, D.C.

20036, (202) 857–3800. It is also

available on the Commission’s web site

at http://www.fcc.gov.

List of Attachments available at the

FCC:

Attachment A.......... Upfront Payments

and Minimum Opening Bids for

Auction No. 35

Attachment B.......... FCC Auction

Seminar Registration Form Auction

No. 35

Attachment C.......... Electronic Filing

and Review of the FCC Form 175

Attachment D.......... Guidelines for

Completion of FCC Form 175 and

Exhibits

Attachment E.......... Auction-Specific

Instructions for FCC Remittance

Advice (FCC Form 159-July 1997

edititon)

Attachment F.......... FCC Bidding

Preference/Remote Software Order

Form Auction No. 35

Attachment G.......... Bid Increments and

Exponential Smoothing

Attachment H.......... Accessing the FCC

Network to File FCC Form 175

Attachment I.......... Summary Listing of

Documents from the Commission

and the Wireless

Telecommunications Bureau

Addressing Application of the AntiCollusion Rules

I. General Information

A. Introduction

1. By this public notice, the Wireless

Telecommunications Bureau (‘‘Bureau’’)

announces the procedures and

minimum opening bids for the

upcoming auction of broadband

Personal Communications Services

(PCS) spectrum in the C and F blocks

(Auction No. 35) scheduled for

December 12, 2000. The public notice

also provides the final inventory of

licenses to be made available for this

auction; we will not add to this

inventory for the December 12, 2000,

auction.

2. On March 3, 2000, in accordance

with the Balanced Budget Act of 1997,

the Bureau released the Auction No. 35

Public Notice seeking comment on

reserve prices or minimum opening bids

and the procedures to be used in

Auction No. 35. After the August 29,

2000 release of the C/F Block Sixth

Report and Order, 65 FR 53624

(September 5, 2000), the Bureau

released the Auction No. 35 Comment

Public Notice, 65 FR 55243 (September

13, 2000) on September 6, 2000, revising

the list of licenses available and again

seeking comment on reserve prices or

minimum opening bids and the

procedures to be used in Auction No.

35. The Bureau received seven

comments and two reply comments in

response to the Auction No. 35 Public

Notice, and three comments and two

reply comments in response to the

Auction No. 35 Comment Public Notice.

i. Background of Proceeding

3. Auction No. 35 will be the fourth

auction of C block spectrum and the

third auction of F block spectrum. In the

past, these spectrum blocks were

designated by the Commission as

‘‘entrepreneurs’ blocks,’’ meaning that

participation in auctions of C and F

block licenses was limited to entities

qualifying under the Commission’s rules

as entrepreneurs. The initial C block

licenses were awarded through two

auctions, Auction No. 5, which ended

on May 6, 1996, and Auction No. 10,

which concluded on July 16, 1996.

Auction No. 11, the initial F block

auction, ended on January 14, 1997, and

also included D and E block licenses.

Auction No. 22, which concluded on

April 15, 1999, made available C, E, and

F block licenses that had been returned

to, or reclaimed by, the Commission.

4. On August 29, 2000, the

Commission released the C/F Block

Sixth Report and Order, revising the

service and auction rules for auction of

C and F block PCS licenses. The

Commission decided to reconfigure

Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices 75703

each 30 MHz C block license available

in Auction No. 35 and other future

broadband PCS auctions into three 10

MHz C block licenses. The Commission

also divided Basic Trading Areas

(‘‘BTAs’’) into two tiers according to the

population size, with Tier 1 comprising

markets with population at or above 2.5

million, based on 1990 census figures,

and Tier 2 comprising the remaining

markets. The Commission decided that

some licenses would be available to all

bidders in ‘‘open’’ bidding, while other

licenses would be available only to

entrepreneurs in ‘‘closed’’ bidding. The

Commission established open bidding

for all C and F block licenses available

but unsold in Auction No. 22 or any

subsequent auction. The Commission

also established open bidding for the

following licenses: two of the three

reconfigured 10 MHz C block licenses in

Tier 1, one of the three reconfigured 10

MHz C block licenses in Tier 2, the 15

MHz C block licenses in Tier 1, and all

F block licenses (Tier 1 and Tier 2). The

Commission established small and very

small business bidding credits of 15

percent and 25 percent, respectively, for

licenses won in open bidding and

eliminated bidding credits for licenses

won in closed bidding. Additionally,

the Commission removed from its rules

the § 24.710 license cap, which had

prohibited an applicant from winning

more than 98 of the licenses available in

the C and F blocks. Finally, the

Commission decided that the

Commercial Mobile Radio Services

spectrum cap would continue to apply

to C and F block licenses, including

those won in Auction No. 35.

ii. Licenses to Be Auctioned

5. The 422 licenses available in

Auction No. 35 cover 195 various BTAs

and consist of 312 C block 10 MHz

licenses, 43 C block 15 MHz licenses,

and 67 F block 10 MHz licenses. As

stated, the BTAs are divided into two

tiers according to the population size,

with Tier 1 comprising markets with

population at or above 2.5 million, and

Tier 2 comprising the remaining

markets. There will be 252 licenses

open to all bidders in ‘‘open’’ bidding,

while 170 licenses will only be available

to entrepreneurs in ‘‘closed’’ bidding.

6. The following table contains the

Block/Eligibility Status/Frequency

Cross-Reference List for Auction No. 35:

Channel block

Eligibility status Bandwidth

(MHz) Frequencies

Tier 1 Tier 2

C1 ...................... [Open] .............................. Closed .............................. 15 1902.5–1910, 1982.5–1990

C2 ...................... [Open] .............................. Closed* ............................. 15 1895–1902.5, 1975–1982.5

C3 ...................... Closed* ............................. Closed* ............................. 10 1895–1900, 1975–1980

C4 ...................... Open ................................ Closed* ............................. 10 1900–1905, 1980–1985

C5 ...................... Open ................................ Open ................................ 10 1905–1910, 1985–1990

F ........................ Open ................................ Open ................................ 10 1890–1895, 1970–1975

Note: Brackets indicate that no licenses of the particular tier/channel block combination will be available in Auction No. 35.

*The entrepreneur eligibility restriction does not apply to licenses that were available but unsold in Auction No. 22. Tier 2 C2 licenses are classified as closed, but all of the C2 licenses available in Auction No. 35 were available but unsold in Auction No. 22 and are therefore open to all

bidders. Certain C block licenses were also available but unsold in Auction No. 22 (as 30 MHz licenses), and the corresponding C3 and C4 licenses are therefore open to all bidders.

7. A complete list of licenses available

for Auction No. 35 is included as

Attachment A of the Public Notice. The

attachment specifies the eligibility

status of each license.

8. AT&T proposes switching the

eligibility status of the C3 and C5

blocks, thereby making all of the C3

licenses open to all bidders. AT&T

argues that the C3 block should be open

rather than the C5 block, because that

would afford AT&T and other bidders

the opportunity to obtain 20 MHz of

contiguous spectrum. We note that

granting AT&T’s request would be

contrary to the Commission’s recently

adopted rules on the location of open

and closed blocks of C block spectrum.

As the Commission indicated in the C/

F Block Sixth Report and Order, it

placed the closed band(s) next to the F

block spectrum in order that

entrepreneurs aggregating newly

acquired closed 10 MHz C block

licenses with F block licenses might

enjoy reduced base station facilities

costs and simplified maintenance

requirements. Accordingly, we will not

make the change requested by AT&T.

B. Rules and Disclaimers

i. Relevant Authority

9. Prospective bidders must

familiarize themselves thoroughly with

the Commission’s rules relating to

Broadband PCS, contained in title 47,

part 24, of the Code of Federal

Regulations, and those relating to

application and auction procedures,

contained in title 47, part 1, of the Code

of Federal Regulations.

10. Prospective bidders must also be

thoroughly familiar with the

procedures, terms and conditions

(collectively, ‘‘Terms’’) contained in this

public notice; the Auction No. 35

Comment Public Notice; the C/F Block

Sixth Report and Order; the Part 1 Fifth

Report and Order, 65 FR 52323 (August

29, 2000); the C Block Second Report

and Order, 62 FR 55348 (October 24,

1997); the C Block Reconsideration

Order, 63 FR 17111 (April 8, 1998); the

C Block Fourth Report and Order, 63 FR

50791 (September 23, 1998); part 24,

subparts A, B, C, E, H, and I, of the

Commission’s Rules concerning

broadband PCS; and part 1, subpart Q,

of the Commission’s Rules concerning

competitive bidding proceedings.

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 our public notices at any time, and

will issue public notices to convey any

new or supplemental information to

bidders. It is the responsibility of all

prospective bidders to remain current

with all Commission rules and with all,

public notices and pronouncements,

including orders on delegated authority

or by the Commission relevant to one or

more of the licenses or otherwise

pertaining to this auction. Copies of

most Commission documents, including

public notices, can be retrieved from the

FCC Internet node via anonymous ftp at

ftp://fcc.gov or the FCC Auctions World

Wide Web site at http://www.fcc.gov/

wtb/auctions. Additionally, documents

may be obtained for a fee, by calling the

Commission’s copy contractor,

International Transcription Service, Inc.

(‘‘ITS’’), at (202) 314–3070. When

ordering documents from ITS, please

provide the appropriate FCC number

(for example, FCC 00–313 for the C/F

Block Sixth Report and Order). See also

Due Diligence section.

75704 Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices

ii. Prohibition of Collusion

12. To ensure the competitiveness of

the auction process, the Commission’s

rules prohibit applicants for the same

geographic license area from

communicating with each other during

the auction about bids, bidding

strategies, or settlements. This

prohibition begins at the short-form

application filing deadline and ends at

the down payment deadline after the

auction. Bidders competing for licenses

in the same geographic license areas 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 the

bidders he or she is authorized to

represent in the auction. Also, if the

authorized bidders are different

individuals employed by the same

organization (e.g., law firm or consulting

firm), a violation could similarly 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.

13. 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. In

Auction No. 35, for example, the rule

would apply to any applicants bidding

for the same BTA. Therefore, applicants

that apply to bid for any license in a

BTA would be precluded from

communicating after filing the FCC

Form 175 short-form application with

any other applicant for a license in the

same BTA. However, applicants may

enter into bidding agreements before

filing their FCC Form 175, as long as

they disclose the existence of the

agreement(s) in their FCC Form 175. If

parties agree in principle on all material

terms prior to the short-form filing

deadline, those parties must be

identified on the 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 filing deadline, an applicant would

not include the names of those parties

on its application, and may not continue

negotiations with other applicants for

the same geographic license areas. By

signing their FCC Form 175 short-form

applications, applicants are certifying

their compliance with § 1.2105(c). In

addition, § 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 violation of the anticollusion rules immediately upon

learning of such violation.

14. A summary listing of documents

from the Commission and the Bureau

addressing the application of the anticollusion rules may be found in

Attachment I of the Public Notice.

iii. Due Diligence

15. Potential bidders are reminded

that private and common carrier fixed

microwave services (‘‘FMS’’) operating

in the 1850–1990 MHz band (and other

bands) are being relocated to available

frequencies in higher bands or to other

media. Bidders should become familiar

with the status of FMS operation and

relocation, and applicable Commission

rules and orders, in order to make a

reasoned, appropriate decision about

their participation in Auction No. 35

and their bidding strategy.

16. Potential bidders and interested

parties should be aware that various

proceedings that may relate to the

licenses available in Auction No. 35

may be pending or subject to further

administrative review before the

Commission, including, for example,

waiver requests, petitions for

reconsideration, and applications for

review. In addition, certain judicial

proceedings that may relate to the

licenses available in Auction No. 35 are

pending or may be subject to further

review. Resolution of these matters

could have an effect on the availability

of spectrum included in Auction No. 35,

and the auction is subject to such

matters. Some of these matters (whether

before the Commission or the courts)

may not be resolved by the time of the

auction. The Commission will continue

to act on matters before it, but it makes

no representations as to the resolution

of judicial proceedings. Potential

bidders are solely responsible for

identifying associated risks, and

investigating and evaluating the degree

to which such matters may affect their

ability to bid on or otherwise acquire

licenses in Auction No. 35.

17. Potential bidders may obtain

information about licenses available in

Auction No. 35 through the Bureau’s

licensing databases on the World Wide

Web at http://www.fcc.gov/wtb/uls.

Potential bidders should direct

questions regarding the search

capabilities to the FCC Technical

Support hotline at (202) 414–1250

(voice) or (202) 414–1255 (TTY), or via

e-mail at ulscomm@fcc.gov. The hotline

is available to assist with questions

Monday through Friday, from 7:00 AM

to 10:00 PM ET, Saturday, 8:00 AM to

7:00 PM ET, and Sunday, 12:00 noon to

6:00 PM ET. In order to provide better

service to the public, all calls to the

hotline are recorded. 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.

18. Further, potential bidders are

strongly encouraged to physically

inspect any sites located in, or near, the

geographic area for which they plan to

bid.

19. Finally, potential bidders are

strongly encouraged to make periodic,

and continuing, inquiries to the Office

of the Secretary and other available

sources regarding any proceedings that

are, or may be, pending with respect to

the licenses available in Auction No. 35.

iv. Clarification of Payment Issue

Relating to Licenses Subject to Pending

Proceedings

20. As noted, potential bidders should

be aware that certain of the licenses

included in Auction No. 35 are or may

become the subject of Commission or

judicial proceedings initiated by parties

claiming to have continuing interests in

the licenses, despite their failure to meet

payment obligations. This public notice

clarifies that the Commission will return

the payments made by winning bidders

of licenses in Auction No. 35 in the

event that such bidders are

subsequently required to surrender

licenses won to prior applicants or

license holders as a result of final

determinations reached in pending

proceedings. The Commission, however,

will not pay interest on the returned

payments, as it lacks legal authority to

do so.

21. Including contested licenses in the

auction helps to fulfill the

Commission’s statutory mandate to

hasten the development and

deployment of new technologies and

services and to promote competition for

the benefit of the public. Returning

payments to winning bidders if licenses

won are later determined to be

unavailable due to subsequent

resolution of other proceedings furthers

these vital public interest goals by

reducing uncertainty in the licensing

process and encouraging auction

Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices 75705

participants to bid on licenses

regardless of whether they are subject to

pending proceedings. Retaining

payments under the circumstances

could have a chilling effect on

participation in Auction No. 35 and

would therefore undermine our efforts

to encourage more efficient use of the

spectrum. We note that winning bidders

of licenses subject to pending

proceedings are still required to meet

the normal payment and construction

schedules established by the

Commission.

v. Bidder Alerts

22. All applicants must certify on

their FCC Form 175 applications under

penalty of perjury that they are legally,

technically, financially, and otherwise

qualified to hold a license, and not in

default on any payment for Commission

licenses (including down payments) or

delinquent on any non-tax debt owed to

any Federal agency. Prospective bidders

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.

23. The FCC makes no representations

or warranties about the use of this

spectrum for particular services.

Applicants should be aware that a FCC

auction represents an opportunity to

become an FCC licensee in this service,

subject to certain conditions and

regulations. A FCC auction does not

constitute an endorsement by the FCC of

any particular services, technologies or

products, nor does a FCC license

constitute a guarantee of business

success. Applicants and interested

parties should perform their own due

diligence before proceeding, as they

would with any new business venture.

24. As is the case with many business

investment opportunities, some

unscrupulous entrepreneurs may

attempt to use Auction No. 35 to

deceive and defraud unsuspecting

investors. Common warning signals of

fraud include the following:

• The first contact is a ‘‘cold call’’

from a telemarketer, or is made in

response to an inquiry prompted by a

radio or television infomercial.

• The offering materials used to

invest in the venture appear to be

targeted at IRA funds, for example, by

including all documents and papers

needed for the transfer of funds

maintained in IRA accounts.

• The amount of investment is less

than $25,000.

• The sales representative makes

verbal representations that: (a) the

Internal Revenue Service (‘‘IRS’’),

Federal Trade Commission (‘‘FTC’’),

Securities and Exchange Commission

(‘‘SEC’’), FCC, or other government

agency has approved the investment; (b)

the investment is not subject to state or

federal securities laws; or (c) the

investment will yield unrealistically

high short-term profits. In addition, the

offering materials often include copies

of actual FCC releases, or quotes from

FCC personnel, giving the appearance of

FCC knowledge or approval of the

solicitation.

25. Information about deceptive

telemarketing investment schemes is

available from the FTC at (202) 326–

2222 and from the SEC at (202) 942–

7040. Complaints about specific

deceptive telemarketing investment

schemes should be directed to the FTC,

the SEC, or the National Fraud

Information Center at (800) 876–7060.

Consumers who have concerns about

specific proposals regarding Auction

No. 35 may also call the FCC Consumer

Center at (888) CALL-FCC ((888) 225–

5322).

vi. National Environmental Policy Act

(‘‘NEPA’’) Requirements

26. Licensees must comply with the

Commission’s rules regarding the

National Environmental Policy Act

(NEPA). The construction of a wireless

antenna facility is a federal action and

the licensee must comply with the

Commission’s NEPA rules for each such

facility. The Commission’s NEPA rules

require, among other things, that the

licensee consult with expert agencies

having NEPA responsibilities, including

the U.S. Fish and Wildlife Service, the

State Historic Preservation Office, the

Army Corp of Engineers and the Federal

Emergency Management Agency

(through the local authority with

jurisdiction over floodplains). 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 must also 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

27. The auction will begin on

Tuesday, December 12, 2000. The initial

schedule for bidding will be announced

by public notice at least one week before

the start of the auction. Unless

otherwise announced, bidding on all

licenses will be conducted on each

business day until bidding has stopped

on all licenses.

28. In response to comments received,

the Commission announces that bidding

for Auction No. 35 will be temporarily

suspended during the holidays.

Beginning Friday, December 22, 2000

through Wednesday, January 3, 2001, no

bidding will be conducted. Bidding will

resume on Thursday, January 4, 2001.

ii. Auction Title

29. Auction No. 35—C and F Block

Broadband PCS

iii. Bidding Methodology

30. The bidding methodology for

Auction No. 35 will be simultaneous

multiple round bidding. Bidding will be

permitted only from remote locations,

either electronically (by computer) or

telephonically.

iv. Pre-Auction Dates and Deadlines

31. The following are important

events and deadlines related to Auction

No. 35:

Auction Seminar: October 20, 2000.

Short-Form Application (FCC FORM

175): November 6, 2000; 6:00 p.m. ET.

Upfront Payments (via wire transfer):

November 27, 2000; 6:00 p.m. ET.

Orders for Remote Bidding Software:

November 28, 2000; 6:00 p.m. ET.

Mock Auction: December 8, 2000.

Auction Begins: December 12, 2000.

v. Requirements For Participation

32. Those wishing to participate in

the auction must:

• Submit a short-form application

(FCC Form 175) electronically by 6:00

p.m. ET, November 6, 2000.

• Submit a sufficient upfront

payment and a FCC Remittance Advice

Form (FCC Form 159) by 6:00 p.m. ET,

November 27, 2000.

• Comply with all provisions

outlined in this public notice.

vi. General Contact Information

33. The following is a list of general

contact information relating to Auction

No. 35:

General Auction Information

General Auction Questions

Seminar Registration

Orders for Remote Bidding Software

FCC Auctions Hotline, (888) 225–

5322, Press Option #2, or direct

(717) 338–2888, Hours of service: 8

a.m.—5:30 p.m. ET.

Auction Legal Information

Auction Rules, Policies, Regulations

75706 Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices

Auctions and Industry Analysis

Division, Legal Branch (202) 418–

0660.

Licensing Information

Rules, Policies, Regulations

Licensing Issues

Due Diligence

Incumbency Issues

Commercial Wireless Division, (202)

418–0620.

Technical Support

Electronic Filing Assistance

Software Downloading

FCC Auctions Technical Support

Hotline, (202) 414–1250 (Voice),

(202) 414–1255 (TTY).

Hours of service: Monday through

Friday 7 a.m. to 10:00 p.m. ET,

Saturday, 8:00 a.m. to 7:00 p.m.,

Sunday, 12:00 noon to 6:00 p.m.

Payment Information

Wire Transfers

Refunds

FCC Auctions Accounting Branch,

(202) 418–1995, (202) 418–2843

(Fax).

Telephonic Bidding

Will be furnished only to qualified

bidders.

FCC Copy Contractor

Additional Copies of Commission

Documents

International Transcription Services,

Inc., 445 12th Street, SW Room CY–

B400, Washington, DC 20554, (202)

314–3070.

Press Information

Meribeth McCarrick (202) 418–0654.

FCC Forms

(800) 418–3676 (outside Washington,

DC), (202) 418–3676 (in the

Washington Area) http://

www.fcc.gov/formpage.

FCC Internet Sites

http://www.fcc.gov; http://ftp.fcc.gov;

http://www.fcc.gov/wtb/auctions.

II. Short-Form (FCC Form 175)

Application Requirements

34. Guidelines for completion of the

short-form (FCC Form 175) are set forth

in Attachment D of the Public Notice.

The short-form application seeks the

applicant’s name and address, legal

classification, status, small and very

small business bidding credit eligibility,

identification of the license(s) sought,

the authorized bidders and contact

persons. All applicants must certify on

their FCC Form 175 applications under

penalty of perjury that they are legally,

technically, financially and otherwise

qualified to hold a license and, as

discussed in section II.E (Provisions

Regarding Defaulters and Former

Defaulters), that they are not in default

on any payment for Commission

licenses (including down payments) or

delinquent on any non-tax debt owed to

any Federal agency.

A. Ownership Disclosure Requirements

(FCC Form 175 Exhibit A)

35. 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 FCC Form 175, applicants

will be required to file an ‘‘Exhibit A’’

providing a full and complete statement

of the ownership of the bidding entity.

The ownership disclosure standards for

the short-form are set forth in § 1.2112

of the Commission’s rules.

B. Consortia And Joint Bidding

Arrangements (FCC Form 175 Exhibit B)

36. Applicants will be required to

identify on their short-form applications

any parties with whom they have

entered into any consortium

arrangements, joint ventures,

partnerships, or other agreements or

understandings which relate in any way

to the licenses being auctioned,

including any agreements relating to

post-auction market structure. See 47

CFR 1.2105(a)(2)(viii) and 1.2105(c)(1).

Applicants will also be required to

certify on their short-form applications

that they have not entered into any

explicit or implicit agreements,

arrangements or understandings of any

kind with any parties, other than those

identified, regarding the amount of their

bids, bidding strategies, or the particular

construction permits on which they will

or will not bid. See 47 CFR

1.2105(a)(2)(ix). As discussed, if an

applicant has had discussions, but has

not reached a joint bidding agreement

by the short-form deadline, it would not

include the names of parties to the

discussions on its applications and may

not continue discussions with

applicants for the same geographic

license area(s) after the deadline. Where

applicants have entered into consortia

or joint bidding arrangements,

applicants must submit an ‘‘Exhibit B’’

to the FCC Form 175.

37. A party holding a non-controlling,

attributable interest in one applicant

will be permitted to acquire an

ownership interest in, form a

consortium with, or enter into a joint

bidding arrangement with other

applicants for licenses in the same

geographic license area 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 formed a consortium or

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, bidders are

reminded that certain discussions or

exchanges could touch upon

impermissible subject matters because

they may convey pricing information

and bidding strategies.

C. Eligibility

i. Eligibility for Closed Bidding (FCC

Form 175 Exhibit C)

38. General rule. In order to be

eligible to bid for one or more closed

licenses, an applicant must show on

Exhibit C that, as of the FCC Form 175

filing deadline, the applicant, its

affiliates, persons or entities that hold

interests in the applicant, and their

affiliates, have combined total assets of

less than $500 million and have had

combined gross revenues of less that

$125 million in each of the last two

years. Applicants that can make this

showing qualify as ‘‘entrepreneurs’’ for

purposes of C and F block auctions. See

§ 24.709 of the Commission’s Rules.

39. Grandfather exception. Qualified

applicants that were eligible for and

participated in Auction No. 5 or 10 may

bid on closed C block licenses in any

auction that begins on or before March

23, 2001, even if their total assets and

gross revenues exceed the financial caps

for auction participation as an

entrepreneur. This exception does not

extend to F block licenses.

ii. Small Business Bidding Credit

Eligibility (FCC Form 175 Exhibit D)

40. Bidding credits are available to

small and very small businesses, or

consortia thereof, (as defined in 47 CFR

24.720(b)) that win licenses in open

bidding. A bidding credit represents the

amount by which a bidder’s winning

bids are discounted. The size of the

bidding credit depends on the average

annual gross revenues for the preceding

three years of the bidder, together with

its affiliates and controlling interests of

the bidder and its affiliates:

• A bidder with average annual gross

revenues of not more than $40 million

for the preceding three years (‘‘small

business’’) receives a 15 percent

discount on its winning bids for C and

F block licenses;

Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices 75707

• A bidder with average annual gross

revenues of not more than $15 million

for the preceding three years (‘‘very

small business’’) receives a 25 percent

discount on its winning bids for C and

F block licenses.

41. Bidding credits are not

cumulative; qualifying applicants

receive either the 15 percent or the 25

percent bidding credit, but not both. No

small and very small business bidding

credits are provided for licenses subject

to closed bidding.

iii. Tribal Land Bidding Credit

42. To encourage the growth of

wireless services in federally recognized

tribal lands the Commission has

implemented a tribal land bidding

credit. See Part V.C.

iv. Applicability of Part 1 Attribution

Rules

43. Controlling interest standard. On

August 14, 2000, the Commission

released the Part 1 Fifth Report and

Order, in which the Commission, inter

alia, adopted a ‘‘controlling interest’’

standard for attributing to auction

applicants the total assets and/or gross

revenues of their investors and affiliates

in determining entrepreneur and small

business eligibility for future C and F

block auctions. The Commission

observed that the rule modifications

adopted in the various part 1 orders

would result in discrepancies and/or

redundancies between certain of the

new part 1 rules and existing servicespecific rules, and the Commission

delegated to the Bureau the authority to

make conforming edits to the Code of

Federal Regulations (CFR) consistent

with the rules adopted in the part 1

proceeding. Time may not permit

conforming edits to the part 24 C and F

block rules to be made in advance of

Auction No. 35; however, the part 1

rules that superseded inconsistent

service-specific rules will control in

Auction No. 35. Accordingly, the

‘‘controlling interest’’ standard as set

forth will be in effect for Auction No. 35,

even if conforming edits to the CFR are

not made prior to the auction.

44. Control. The term ‘‘control’’

includes both de facto and 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 control:

• The entity constitutes or appoints

more than 50 percent of the board of

directors or management committee;

• The entity has authority to appoint,

promote, demote, and fire senior

executives that control the day-to-day

activities of the licensee; or

• The entity plays an integral role in

management decisions.

45. Attribution for entrepreneur

eligibility. For purposes of determining

which entities qualify as entrepreneurs

for closed bidding, the Commission will

consider the total assets and gross

revenues of the applicant, its controlling

interest holders, the affiliates of the

applicant, and their controlling interest

holders. The Commission does not

impose specific equity requirements on

parties with controlling interests. Once

principals or entities with a controlling

interest are determined, only the assets

and revenues of those principals or

entities, the applicant, and their

affiliates will be counted in determining

entrepreneur eligibility. Applicants for

closed bidding in Auction No. 35

should not include existing C and F

block licenses in their calculations of

total assets; however, all other

Commission licenses must be included

in such calculations.

46. Attribution for small and very

small business eligibility. Similarly, in

determining which entities qualify as

small or very small businesses, the

Commission will consider the gross

revenues of the applicant, its controlling

interest holders, the affiliates of the

applicant, and their controlling interest

holders. As stated, the Commission does

not impose specific equity requirements

on controlling interest holders. Once

principals or entities with a controlling

interest are determined, only the

revenues of those principals or entities,

the applicant and their affiliates will be

counted in determining small business

eligibility.

47. A consortium of small or very

small businesses is a ‘‘conglomerate

organization formed as a joint venture

between or among mutually

independent business firms,’’ each of

which individually must satisfy the

definition of small or very small

business in § 24.720(b). Thus, each

consortium member must disclose its

gross revenues along with those of its

affiliates, controlling interests, and

controlling interests’ affiliates. We note

that although the gross revenues of the

consortium members will not be

aggregated for purposes of determining

eligibility for small or very small

business credits, this information must

be provided to ensure that each

individual consortium member qualifies

for any bidding credit awarded to the

consortium.

v. Application Showing

48. Applicants should note that they

will be required to file supporting

documentation to their FCC Form 175

short-form applications to establish that

they satisfy the eligibility requirements

to qualify as entrepreneurs and/or small

or very small businesses (or consortia of

small or very small businesses) for this

auction.

49. Applicants should further note

that submission of an FCC Form 175

application constitutes a representation

by the certifying official that he or she

is an authorized representative of the

applicant, has read the form’s

instructions and certifications, and that

the contents of the application and its

attachments are true and correct.

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.

50. Entrepreneur eligibility (Exhibit

C). Entities applying to bid on closed

licenses will be required to disclose on

Exhibit C to their FCC Form 175 shortform applications, separately and in the

aggregate, the gross revenues for the

preceding two years and the total assets

of each of the following: (i) the

applicant, (ii) the applicant’s affiliates,

(iii) the applicant’s controlling interest

holders, and (iv) the affiliates of the

applicant’s controlling interest holders.

Certification that the gross revenues for

each of the preceding two years or the

total assets do not exceed the applicable

limit is not sufficient. The applicant

must provide separately for itself, its

affiliates, its controlling interest holders,

and their affiliates a schedule of gross

revenues for each of the preceding two

years. As stated, entities applying for

closed bidding under the grandfather

exception (47 CFR 24.709(b)(i)) need not

meet the total assets and gross revenues

limits of § 24.709(a) of the Commission’s

rules. Applicants claiming auction

eligibility under the grandfather

exception should note the Commission’s

clarification of this exception in the C/

F Block Sixth Report and Order.

51. Small and very small business

eligibility (Exhibit D). Entities applying

to bid as small or very small businesses

(or consortia of small or very small

businesses) will be required to disclose

on Exhibit D to their FCC Form 175

short-form applications, separately and

in the aggregate, the gross revenues for

the preceding three years of each of the

following: (i) the applicant, (ii) the

applicant’s affiliates, (iii) the applicant’s

controlling interest holders, and (iv) the

affiliates of the applicant’s controlling

interest holders. Certification that the

average annual gross revenues for the

preceding three years do not exceed the

applicable limit is not sufficient. A

75708 Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices

statement of the total gross revenues for

the preceding three years is also

insufficient. The applicant must provide

separately for itself, its affiliates, its

controlling interest holders, and their

affiliates a schedule of gross revenues

for each of the preceding three years, as

well as a statement of total average gross

revenues for the three-year period. If the

applicant is applying as a consortium of

very small or small businesses, this

information must be provided for each

consortium member.

D. Special C Block Eligibility Restriction

Regarding Surrendered C Block Licenses

52. C block licensees that surrendered

C block licenses pursuant to the

disaggregation, prepayment, and/or

amnesty/prepayment election options

the Commission made available in the C

Block Second Report and Order, as

modified by the C Block

Reconsideration Order, are ineligible to

reacquire the spectrum represented by

their surrendered licenses through

auction participation, or by any other

means, until March 23, 2001. This

prohibition extends to qualifying

members of the licensee’s control group,

and their affiliates. Licensees that

surrendered licenses pursuant to the

‘‘pure amnesty’’ election option remain

eligible to reacquire the spectrum

represented by those surrendered

licenses through auction participation

or a secondary market transaction.

Applicants that are prohibited from

bidding on licenses representing

previously surrendered spectrum,

should not select ‘‘all markets’’ on their

FCC Form 175 application if any of their

surrendered spectrum is available in

Auction No. 35.

E. Provisions Regarding Defaulters and

Former Defaulters (FCC Form 175

Exhibit E)

53. Each applicant must certify on its

FCC Form 175 application that it is not

in default on any Commission licenses

and that it is not delinquent on any nontax debt owed to any Federal agency. In

addition, each applicant must attach to

its FCC Form 175 application a

statement made under penalty of

perjury indicating whether or not the

applicant has ever been in default on

any Commission licenses or has ever

been delinquent on any non-tax debt

owed to any federal agency. Applicants

must include this statement as Exhibit

E of the FCC Form 175. If any of an

applicant’s controlling interests holders

or their affiliates, as defined by § 1.2110

of the Commission’s rules (as recently

amended in the Part 1 Fifth Report and

Order) have ever been in default on any

Commission license or have ever been

delinquent on any non-tax debt owed to

any Federal agency, the applicant must

include such information as part of the

same attached statement. Prospective

bidders are reminded that the statement

must be made under penalty of perjury

and, further, 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.

54. ‘‘Former defaulters’’—i.e.,

applicants, including their attributable

interest holders, that in the past have

defaulted on any Commission licenses

or been delinquent on any non-tax debt

owed to any Federal agency, but that

have since remedied all such defaults

and cured all of their outstanding nontax delinquencies—are eligible to bid in

Auction No. 35, provided that they are

otherwise qualified. However, as

discussed infra in section III.D.3, former

defaulters are required to pay upfront

payments that are fifty percent more

than the normal upfront payment

amounts.

F. Transfer and Assignment Restrictions

on Licenses Won in Closed Bidding

55. C or F block licenses won in

closed bidding generally may be

transferred or assigned only to an entity

that meets the entrepreneur financial

caps or that holds another C or F block

license that it acquired while meeting

the entrepreneur financial caps. This

restriction ends five years after the date

of the initial license grant or upon

notification by the licensee that it has

satisfied its five-year construction

requirement under 47 CFR 24.203(c),

whichever comes first. Licenses won in

open bidding are not subject to this

restriction and may be transferred or

assigned any time after grant to any

qualified entity.

G. Unjust Enrichment Payments

56. C or F block licensees that use a

small or very small business bidding

credit, and during the first five years of

their license term seek to assign or

transfer control of a license to an entity

that does not meet the eligibility criteria

for a small or very small business

bidding credit, or that is eligible for a

lower bidding credit, will have to

reimburse the U.S. Government for a

percentage of the amount of the bidding

credit, plus interest.

57. In the C/F Block Sixth Report and

Order, the Commission decided that

licensees are not subject to bidding

credit unjust enrichment payments for

early transfer or assignment of licenses

won in Auction No. 5 or No. 10. We

clarify that transfer or assignment of a

license won in Auctions No. 11, 22, 35,

or any other auction using a small or

very small business bidding credit, will

still be subject to any applicable bidding

credit unjust enrichment payment under

the Commission’s rules.

H. Installment Payments

58. Installment payment plans will

not be available in Auction No. 35.

I. Other Information (FCC Form 175

Exhibits F and G)

59. Applicants owned by minorities

or women, as defined in 47 CFR

1.2110(c)(2), may attach an exhibit

(Exhibit F) 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. Applicants wishing to

submit additional information may do

so on Exhibit G (Miscellaneous

Information) to the FCC Form 175.

J. Minor Modifications to Short-Form

Applications (FCC Form 175)

60. After the short-form filing

deadline (November 6, 2000), applicants

may make only minor changes to their

FCC Form 175 applications. Applicants

will not be permitted to make major

modifications to their applications (e.g.,

change their license selections or

proposed service areas, change the

certifying official, or change control of

the applicant or change bidding credits).

See 47 CFR 1.2105. Permissible minor

changes include, for example, deletion

and addition of authorized bidders (to a

maximum of three) and revision of

exhibits. Applicants should make these

changes on-line, and submit a letter to

Louis Sigalos, Deputy Chief, Auctions

and Industry Analysis Division,

Wireless Telecommunications Bureau,

Federal Communications Commission,

445 12th Street, SW, Suite 4–A668

Washington, DC 20554, briefly

summarizing the changes. Questions

about other changes should be directed

to Audrey Bashkin of the Auctions and

Industry Analysis Division at (202) 418–

0660.

K. Maintaining Current Information in

Short-Form Applications (FCC Form

175)

61. Applicants have an obligation

under 47 CFR 1.65, to maintain the

completeness and accuracy of

information in their short-form

applications. Amendments reporting

substantial changes of possible

decisional significance in information

contained in FCC Form 175

applications, as defined by 47 CFR

Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices 75709

1.2105(b)(2), will not be accepted and

may in some instances result in the

dismissal of the FCC Form 175

application.

III. Pre-auction Procedures

A. Auction Seminar

62. On Friday, October 20, 2000, the

FCC will sponsor a free seminar for

Auction No. 35 at the Federal

Communications Commission, located

at 445 12th Street, SW, Washington, DC.

The seminar will provide attendees with

information about pre-auction

procedures, conduct of the auction, FCC

remote bidding software, and the C and

F block broadband PCS spectrum and

auction rules. The seminar will also

provide an opportunity for prospective

bidders to ask questions of FCC staff.

B. Short-Form Application (FCC Form

175)—Due November 6, 2000

63. In order to be eligible to bid in this

auction, applicants must first submit a

FCC Form 175 application. This

application must be submitted

electronically and received at the

Commission no later than 6:00 p.m. ET

on November 6, 2000. Late applications

will not be accepted.

64. There is no application fee

required when filing a FCC Form 175.

However, to be eligible to bid, an

applicant must submit an upfront

payment. See Part III.D.

i. Electronic Filing

65. Applicants must file their FCC

Form 175 applications electronically.

Applications may generally be filed at

any time beginning at noon on October

20, 2000, until 6:00 p.m. ET on

November 6, 2000. Applicants are

strongly encouraged to file early and are

responsible for allowing adequate time

for filing their applications. Applicants

may update or amend their electronic

applications multiple times until the

filing deadline on November 6, 2000.

66. Applicants must press the

‘‘Submit Form 175’’ button on the

‘‘Submit’’ page of the electronic form to

successfully submit their FCC Forms

175. Any form that is not submitted will

not be reviewed by the FCC. Information

about accessing the FCC Form 175 is

included in Attachment C of the Public

Notice. Technical support is available at

(202) 414–1250 (voice) or (202) 414–

1255 (text telephone (TTY)); the hours

of service Monday through Friday, from

7:00 AM to 10:00 PM ET, Saturday, 8:00

AM to 7:00 PM ET, and Sunday, 12:00

noon to 6:00 PM ET. In order to provide

better service to the public, all calls to

the hotline are recorded.

ii. Completion of the FCC Form 175

67. Applicants should carefully

review 47 CFR 1.2105, and must

complete all items on the FCC Form

175. Instructions for completing the FCC

Form 175 are in Attachment D of the

Public Notice. Applicants are

encouraged to begin preparing the

required attachments for FCC Form 175

prior to submitting the form.

Attachments C and D to this public

notice provide information on the

required attachments and appropriate

formats.

iii. Electronic Review of FCC Form 175

68. The FCC Form 175 electronic

review software may be used to review

and print applicants’ FCC Form 175

information. Applicants may also view

other applicants’ completed FCC Form

175s after the filing deadline has passed

and the FCC has issued a public notice

explaining the status of the applications.

For this reason, it is important that

applicants do not include their

Taxpayer Identification Numbers (TINs)

on any exhibits to their FCC Form 175

applications. There is no fee for

accessing this system. See Attachment C

of the Public Notice for details on

accessing the review system.

C. Application Processing and Minor

Corrections

69. 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 (including FCC

account numbers and the licenses for

which they applied); (2) those

applications rejected; and (3) those

applications which have minor defects

that may be corrected, and the deadline

for filing such corrected applications.

70. As described more fully in the

Commission’s rules, after the November

6, 2000 short-form 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 the certifying

official, change control of the applicant,

or change bidding credit eligibility).

D. Upfront Payments—Due November

27, 2000

71. In order to be eligible to bid in the

auction, applicants must submit an

upfront payment accompanied by a 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 faxed to Mellon

Bank in Pittsburgh, PA. All upfront

payments must be received at Mellon

Bank by 6:00 p.m. ET on November 27,

2000.

Please note that:

• All payments must be made in U.S.

dollars.

• All payments must be made by wire

transfer.

• Upfront payments for Auction No.

35 go to a lockbox number different

from the ones used in previous FCC

auctions, and different from the lockbox

number to be used for post-auction

payments.

• Failure to deliver the upfront

payment by the November 27, 2000,

deadline will result in dismissal of the

application and disqualification from

participation in the auction.

i. Making Auction Payments by Wire

Transfer

72. Wire transfer payments must be

received by 6:00 p.m. ET on November

27, 2000. 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. Applicants will need the

following information:

ABA Routing Number: 043000261

Receiving Bank: Mellon Pittsburgh

BNF: FCC/AC 910–0198

OBI Field: (Skip one space between

each information item)

‘‘AUCTIONPAY’’

TAXPAYER IDENTIFICATION NO.:

(same as FCC Form 159, block 26)

PAYMENT TYPE CODE (enter ‘‘A35U’’)

FCC CODE 1 (same as FCC Form 159,

block 23A: ‘‘35’’)

PAYER NAME (same as FCC Form 159,

block 2)

LOCKBOX NO. #358410

Note: The BNF and Lockbox number are

specific to the upfront payments for this

auction; do not use BNF or Lockbox numbers

from previous auctions.

73. Applicants must fax a completed

FCC Form 159 to Mellon Bank at (412)

209–6045 or (412) 236–5702 at least one

hour before placing the order for the

wire transfer (but on the same business

day). On the cover sheet of the fax, write

‘‘Wire Transfer—Auction Payment for

Auction Event No. 35.’’ Bidders should

confirm receipt of their upfront payment

at Mellon Bank by contacting their

sending financial institution.

ii. FCC Form 159

74. A completed FCC Remittance

Advice Form (FCC Form 159) must be

75710 Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices

faxed to Mellon Bank in order to

accompany each upfront payment.

Proper completion of FCC Form 159 is

critical to ensuring correct credit of

upfront payments. Detailed instructions

for completion of FCC Form 159 are

included in Attachment E of the Public

Notice. An electronic version of the FCC

Form 159 is available after filing the

FCC Form 175. The FCC Form 159 can

be completed electronically, but must be

filed with Mellon Bank via facsimile.

iii. Amount of Upfront Payment

75. In the Part 1 Order, Memorandum

Opinion and Order, and Notice of

Proposed Rule Making, 62 FR 13570

(March 21, 1997), the Commission

delegated to the Bureau the authority

and discretion to determine an

appropriate upfront payment for each

license being auctioned. In addition, as

required by the Part 1 Fifth Report and

Order, the upfront payment amount for

‘‘former defaulters,’’ i.e., applicants that

have ever been in default on any

Commission license or have ever been

delinquent on any non-tax debt owed to

any Federal agency, will be fifty percent

more than the normal amount required

to be paid. In the Auction No. 35

Comment Public Notice, the Bureau

proposed upfront payments for Auction

No. 35. Specifically, the Bureau

proposed upfront payments using the

following formula:

Tier 1

(1) 15 MHz licenses—2.5 % of most

recent net high bid for C block

licenses in same BTA

(2) 10 MHz licenses—1.6 % of most

recent net high bid for C block

licenses in same BTA

Tier 2

(1) 15 MHz licenses—1.25 % of most

recent net high bid for C block

licenses in same BTA

(2) 10 MHz licenses—1.0 % of most

recent net high bid for C block

licenses in same BTA

We adopt the proposed formula for

upfront payments (with

clarification):

Tier 1

(1) 15 MHz licenses—2.5 % of most

recent net high bid for 30 MHz C

block license in same BTA

(2) 10 MHz licenses—1.6 % of most

recent net high bid for 30 MHz C

block license in same BTA

Tier 2

(1) 15 MHz licenses—1.25 % of most

recent net high bid for 30 MHz C

block license in same BTA

(2) 10 MHz licenses—1.0 % of most

recent net high bid for 30 MHz C

block license in same BTA

76. Please note that upfront payments

are not attributed to specific licenses,

but instead will be translated to bidding

units to define a bidder’s maximum

bidding eligibility. For Auction No. 35,

the amount of the upfront payment will

be translated into bidding units on a

one-to-one basis, e.g., a $25,000 upfront

payment provides the bidder with

25,000 bidding units. The total upfront

payment defines the maximum amount

of bidding units on which the applicant

will be permitted to bid (including

standing high bids) in any single round

of bidding. Thus, an applicant does not

have to make an upfront payment to

cover all licenses for which the

applicant has selected on FCC 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

high bids at any given time.

77. In order to be able to place a bid

on a license, in addition to being

qualified for and having specified that

license on the FCC Form 175, a bidder

must have an eligibility level that meets

or exceeds the number of bidding units

assigned to that license. At a minimum,

an applicant’s total upfront payment

must be enough to establish eligibility to

bid on at least one of the licenses

applied for on the FCC Form 175, or else

the applicant will not be eligible to

participate in the auction.

78. In calculating its upfront payment

amount, an applicant should determine

the maximum number of bidding units

it may wish to bid on in any single

round, and submit an upfront payment

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 bid in any given

round. Bidders should check their

calculations carefully, as there is no

provision for increasing a bidder’s

maximum eligibility after the upfront

payment deadline.

79. Former defaulters should calculate

their upfront payment for all licenses by

multiplying the number of bidding units

they wish to purchase 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.

Note: An applicant may, on its FCC Form

175, apply for every applicable license being

offered, but its actual bidding in any round

will be limited by the bidding units reflected

in its upfront payment.

iv. Applicant’s Wire Transfer

Information for Purposes of Refunds for

Upfront Payments

80. The Commission will use wire

transfers for all Auction No. 35 refunds.

To ensure that refunds of upfront

payments are processed in an

expeditious manner, the Commission is

requesting that all pertinent information

as listed be supplied to the FCC.

Applicants can provide the information

electronically during the initial shortform filing window after the form has

been submitted. Wire Transfer

Instructions can also be manually faxed

to the FCC, Financial Operations Center,

Auctions Accounting Group, ATTN:

Tim Dates or Gail Glasser, at (202) 418–

2843 by November 28, 2000. Should the

payer fail to submit the requested

information, the refund will be returned

to the original payer. For additional

information, please call (202) 418–1995.

Name of Bank

ABA Number

Contact and Phone Number

Account Number to Credit

Name of Account Holder

Correspondent Bank (if applicable)

ABA Number

Account Number

(Applicants should also note that

implementation of the Debt Collection

Improvement Act of 1996 requires the

FCC to obtain a Taxpayer Identification

Number (TIN) before it can disburse

refunds.) Eligibility for refunds is

discussed in Part V.F.

A. Auction Registration

81. 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 on at least one of

the licenses for which they applied.

82. All qualified bidders are

automatically registered for the auction.

Registration materials will be

distributed prior to the auction by two

separate overnight mailings, each

containing part of the confidential

identification codes required to place

bids. These mailings will be sent only

to the contact person at the contact

address listed in the FCC Form 175.

83. Applicants that do not receive

both registration mailings will not be

able to submit bids. Therefore, any

qualified applicant that has not received

both mailings by noon on Friday,

December 8, 2000, should contact the

Auctions Hotline at (717) 338–2888.

Receipt of both registration mailings is

Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices 75711

critical to participating in the auction

and each applicant is responsible for

ensuring it has received all of the

registration material.

84. Qualified bidders should note that

lost login codes, passwords or bidder

identification numbers can be replaced

only by appearing in person at the FCC

Auction Headquarters located at 445

12th St., SW, Washington, DC 20554.

Only an authorized representative or

certifying official, as designated on an

applicant’s FCC Form 175, may appear

in person with two forms of

identification (one of which must be a

photo identification) in order to receive

replacement codes. Qualified bidders

requiring replacement codes must call

technical support prior to arriving at the

FCC to arrange preparation of new

codes.

B. Remote Electronic Bidding Software

85. Qualified bidders are allowed to

bid electronically or telephonically. If

choosing to bid electronically, each

bidder must purchase its own copy of

the remote electronic bidding software.

Electronic bids will only be accepted

from those applicants purchasing the

software. However, the software may be

copied by the applicant for use by its

authorized bidders at different

locations. The price of the FCC’s remote

bidding software is $175.00 and must be

ordered by Tuesday, November 28,

2000. For security purposes, the

software is only mailed to the contact

person at the contact address listed on

the FCC Form 175. Please note that

auction software is tailored to a specific

auction, so software from prior auctions

will not work for Auction No. 35. If

bidding telephonically, the telephonic

bidding phone number will be supplied

in the first Federal Express mailing of

confidential login codes. Qualified

bidders that do not purchase the

software may only bid telephonically.

To indicate your bidding preference, a

FCC Bidding Preference/Remote

Software Order Form can be accessed

when submitting the FCC Form 175.

Bidders should complete this form

electronically, print it out, and fax to

(717) 338–2850. A manual copy of this

form is also included as Attachment F

of the Public Notice.

C. Mock Auction

86. All qualified bidders will be

eligible to participate in a mock auction

on Friday, December 8, 2000. The mock

auction will enable applicants to

become familiar with the electronic

software prior to the auction. Free

demonstration software will be available

for use in the mock auction.

Participation by all bidders is strongly

recommended. Details will be

announced by public notice.

IV. Auction Event

87. The first round of bidding for

Auction No. 35 will begin on Tuesday,

December 12, 2000. The initial bidding

schedule will be announced in a public

notice listing the qualified bidders,

which is released approximately 10

days before the start of the auction.

A. Auction Structure

i. Simultaneous Multiple Round

Auction

88. In the Auction No. 35 Comment

Public Notice, we proposed to award all

licenses in Auction No. 35 in a single,

simultaneous multiple round auction.

We received no comment on this issue.

We conclude that it is operationally

feasible and appropriate to auction the

PCS licenses through a single,

simultaneous multiple round auction.

Unless otherwise announced, bids will

be accepted on all licenses in each

round of the auction. This approach, we

believe, allows bidders to take

advantage of any synergies that exist

among licenses and is most

administratively efficient.

ii. Maximum Eligibility and Activity

Rules

89. In the Auction No. 35 Comment

Public Notice, we 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.

90. For Auction No. 35 we will adopt

this proposal. The amount of the

upfront payment submitted by a bidder

determines the initial maximum

eligibility (in bidding units) for each

bidder. Note again that upfront

payments are not attributed to specific

licenses, but instead will be translated

into bidding units to define a bidder’s

initial maximum eligibility. The total

upfront payment defines the maximum

number of bidding units on which the

applicant will be permitted to bid. As

there is no provision for increasing a

bidder’s maximum eligibility during the

course of an auction (as described under

‘‘Auction Stages’’ as set forth in Part

IV.A.4), prospective bidders are

cautioned to calculate their upfront

payments carefully. The total upfront

payment does not define the total

dollars a bidder may bid on any given

license.

91. In order to ensure that the auction

closes within a reasonable period of

time, an activity rule requires bidders to

bid actively throughout the auction,

rather than wait until the end before

participating. Bidders are required to be

active on a specific percentage of their

maximum eligibility during each round

of the auction.

92. 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

either if it is the high bidder at the end

of the previous bidding round and does

not withdraw the high bid in the current

round, or if it submits an acceptable bid

in the current round (see ‘‘Minimum

Accepted Bids’’ in Part IV.B.(iii)). The

minimum required activity level is

expressed as a percentage of the bidder’s

maximum bidding eligibility, and

increases by stage as the auction

progresses. Because these procedures

have proven successful in maintaining

the pace of previous auctions as set

forth under ‘‘Auction Stages’’ in Part

IV.A.4 and ‘‘Stage Transitions’’ in Part

IV.A.v., we adopt them for Auction No.

35.

iii. Activity Rule Waivers and Reducing

Eligibility

93. In the Auction No. 35 Comment

Public Notice, we proposed that each

bidder in the auction would be provided

five activity rule waivers that may be

used in any round during the course of

the auction.

94. Based upon our experience in

previous auctions, we adopt our

proposal that each bidder be provided

five activity rule waivers that may be

used 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 level. An

activity rule waiver applies to an entire

round of bidding and not to a particular

license. We are satisfied that our

practice of providing five waivers over

the course of the auction provides a

sufficient number of waivers and

maximum flexibility to the bidders,

while safeguarding the integrity of the

auction.

95. The FCC automated auction

system assumes that bidders with

insufficient activity would prefer to use

an activity rule waiver (if available)

rather than lose bidding eligibility.

Therefore, the system will automatically

apply a waiver (known as an ‘‘automatic

waiver’’) at the end of any 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

75712 Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices

eligibility, thereby meeting the

minimum requirements.

96. 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 round by using the reduce eligibility

function in the software. In this case,

the bidder’s eligibility is permanently

reduced to bring the bidder into

compliance with the activity rules as

described in ‘‘Auction Stages’’ (see Part

IV.A.iv.). Once eligibility has been

reduced, a bidder will not be permitted

to regain its lost bidding eligibility.

97. Finally, a bidder may proactively

use an activity rule waiver as a means

to keep the auction open without

placing a bid. If a bidder submits a

proactive waiver (using the proactive

waiver function in the bidding software)

during a round in which no bids are

submitted, the auction will remain open

and the bidder’s eligibility will be

preserved. An automatic waiver invoked

in a round in which there are no new

valid bids or withdrawals will not keep

the auction open.

iv. Auction Stages

98. In the Auction No. 35 Comment

Public Notice, we proposed to conduct

the auction in three stages and employ

an activity rule. We further proposed

that, in each round of Stage One, a

bidder desiring to maintain its current

eligibility would be required to be active

on licenses encompassing at least 80

percent of its current bidding eligibility.

In each round of Stage Two, a bidder

desiring to maintain its current

eligibility would be required to be active

on at least 90 percent of its current

bidding eligibility. Finally, we proposed

that a bidder in Stage Three, in order to

maintain eligibility, would be required

to be active on 98 percent of its current

bidding eligibility.

99. We conclude that the auction will

be composed of three stages, which are

each defined by an increasing activity

rule. We will adopt our proposals for

the activity rules. Listed are the activity

levels for each stage of the auction. The

FCC reserves the discretion to further

alter the activity percentages before and/

or during the auction.

Stage One: During the first stage of the

auction, a bidder desiring to maintain

its current eligibility will be required to

be active on licenses that represent at

least 80 percent of its current bidding

eligibility in each bidding round.

Failure to maintain the required activity

level will result in a reduction in the

bidder’s bidding eligibility in the next

round of bidding (unless an activity rule

waiver is used). During Stage One,

reduced eligibility for the next round

will be calculated by multiplying the

sum of bidding units of the bidder’s

standing high bids and valid bids during

the current round by five-fourths (5/4).

Stage Two: During the second stage of

the auction, a bidder desiring to

maintain its current eligibility is

required to be active on 90 percent of its

current bidding eligibility. Failure to

maintain the required activity level will

result in a reduction in the bidder’s

bidding eligibility in the next round of

bidding (unless an activity rule waiver

is used). During Stage Two, reduced

eligibility for the next round will be

calculated by multiplying the sum of

bidding units of the bidder’s standing

high bids and valid bids during the

current round by ten-ninths (10/9).

Stage Three: During the third stage of

the auction, a bidder desiring to

maintain its current eligibility is

required to be active on 98 percent of its

current bidding eligibility. Failure to

maintain the required activity level will

result in a reduction in the bidder’s

bidding eligibility in the next round of

bidding (unless an activity rule waiver

is used). In this stage, reduced eligibility

for the next round will be calculated by

multiplying the sum of bidding units of

the bidder’s standing high bids and

valid bids during the current round by

fifty-fortyninths (50/49).

Caution: Since activity requirements

increase in each auction stage, bidders must

carefully check their current activity during

the bidding period of the first round

following a stage transition. This is especially

critical for bidders that have standing high

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 minimum activity level

by using the bidding software’s bidding

module.

Because the foregoing procedures have

proven successful in maintaining proper

pace in previous auctions, we adopt

them for Auction No. 35.

v. Stage Transitions

100. In the Auction No. 35 Comment

Public Notice, we proposed that the

auction would generally advance to the

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

Two, and from Stage Two to Stage

Three) when the auction activity level,

as measured by the percentage of

bidding units receiving new high bids,

is below 10 percent for three

consecutive rounds of bidding in each

Stage. However, we further proposed

that the Bureau would retain the

discretion to change stages unilaterally

by announcement during the auction.

This determination, we 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.

101. We adopt our proposal. Thus, the

auction will start in Stage One. Under

the FCC’s general guidelines, the

auction will start in Stage One and it

will advance to the next stage (i.e., from

Stage One to Stage Two, and from Stage

Two to Stage Three) when, in each of

three consecutive rounds of bidding, the

high bid has increased on 10 percent or

less of the licenses being auctioned (as

measured in bidding units). However,

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. We

believe that these stage transition rules,

having proven successful in prior

auctions, are appropriate for use in

Auction No. 35.

vi. Auction Stopping Rules

102. For Auction No. 35, the Bureau

proposed to employ a simultaneous

stopping rule. Under this rule, bidding

will remain open on all licenses until

bidding stops on every license. The

auction will close for all licenses when

one round passes during which no

bidder submits a new acceptable bid on

any license, applies a proactive waiver,

or withdraws a previous high bid. After

the first such round, bidding closes

simultaneously on all licenses.

103. The Bureau also proposed a

modified version of the simultaneous

stopping rule. This modified version

will close the auction for all licenses

after the first round in which no bidder

submits a proactive waiver, a

withdrawal, or a new bid on any license

on which it is not the standing high

bidder. Thus, absent any other bidding

activity, a bidder placing a new bid on

a license for which it is the standing

high bidder will not keep the auction

open under this modified stopping rule.

104. The Bureau further proposed

retaining the discretion to keep an

auction open even if no new acceptable

bids or proactive waivers are submitted

and no previous high bids are

withdrawn in a round. In this event, the

effect will be the same as if a bidder had

submitted a proactive waiver. Thus, the

Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices 75713

activity rule will apply as usual, and a

bidder with insufficient activity will

either lose bidding eligibility or use an

activity rule waiver (if it has any left).

105. In addition, we 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 final round(s) only for

licenses on which the high bid

increased in at least one of the

preceding specified number of rounds.

We proposed to exercise this option

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. Before

exercising this option, the Bureau is

likely to attempt to increase the pace of

the auction by, for example, moving the

auction into the next stage (where

bidders will be required to maintain a

higher level of bidding activity),

increasing the number of bidding

rounds per day, and/or adjusting the

amount of the minimum bid increments

for the licenses.

106. We adopt all of the proposals

concerning the auction stopping rules.

Auction No. 35 will begin under the

simultaneous stopping rule, and the

Bureau will retain the discretion to

invoke the other versions of the

stopping rule. We believe that these

stopping rules are most appropriate for

Auction No. 35, because our experience

in prior auctions demonstrates that the

auction stopping rules balance the

interests of administrative efficiency

and maximum bidder participation. The

substitutability among licenses in

different geographic areas and the

importance of preserving the ability of

bidders to pursue backup strategies

support the use of these stopping rules.

vii. Auction Delay, Suspension, or

Cancellation

107. In the Auction No. 35 Comment

Public Notice, we 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, evidence of an auction security

breach, unlawful bidding activity,

administrative or weather necessity, or

for any other reason that affects the fair

and competitive conduct of competitive

bidding.

108. Because this approach has

proven effective in resolving exigent

circumstances in previous auctions, we

will adopt our proposed auction

cancellation rules. 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,

evidence of an auction security breach,

unlawful bidding activity,

administrative or weather necessity, or

for any other reason that affects the fair

and competitive 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.

We emphasize 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

109. The initial bidding schedule will

be announced in the public notice

listing the qualified bidders, which is

released approximately 10 days before

the start of the auction. This public

notice will be included in the

registration mailings. The round

structure for each bidding round

contains a single bidding round

followed by the release of the 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

public notice.

110. The FCC 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 FCC may

increase or decrease the amount of time

for the bidding rounds and review

periods, or the number of rounds per

day, depending upon the bidding

activity level and other factors.

ii. Reserve Price or Minimum Opening

Bid

111. Background. The Balanced

Budget Act calls upon the Commission

to prescribe methods by which a

reasonable reserve price will be required

or a minimum opening bid established

when FCC licenses are subject to

auction (i.e., because there are mutually

exclusive applications for those

licenses), 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.

112. In the Auction No. 35 Comment

Public Notice, the Bureau proposed to

establish minimum opening bids for

Auction No. 35 and to retain discretion

to lower the minimum opening bids.

Specifically, for Auction No. 35, the

Commission proposed the following

formula for minimum opening bids:

Tier 1

(1) 15 MHz licenses—5 % of most recent

net high bid for C block licenses in

same BTA

(2) 10 MHz licenses—3.2 % of most

recent net high bid for C block

licenses in same BTA

Tier 2

(1) 15 MHz licenses—2.5 % of most

recent net high bid for C block

licenses in same BTA

(2) 10 MHz licenses—1.6 % of most

recent net high bid for C block

licenses in same BTA

113. In the alternative, the Bureau

sought comment on whether, consistent

with the Balanced Budget Act, the

public interest would be served by

having no minimum opening bid or

reserve price.

114. We will adopt minimum opening

bids for Auction No. 35, which are

reducible at the discretion of the

Bureau. Congress has enacted a

presumption that unless the

Commission determines otherwise,

minimum opening bids, or reserve

prices are in the public interest. We

adopt the proposed formula for

minimum opening bids (with

clarification):

Tier 1

(1) 15 MHz licenses—5 % of most recent

net high bid for 30 MHz C block

license in same BTA

(2) 10 MHz licenses—3.2 % of most

recent net high bid for 30 MHz C

block license in same BTA

75714 Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices

Tier 2

(1) 15 MHz licenses—2.5 % of most

recent net high bid for 30 MHz C

block license in same BTA

(2) 10 MHz licenses—1.6 % of most

recent net high bid for 30 MHz C

block license in same BTA

115. We conclude that the adopted

formula presented here best meets the

objectives of our authority in

establishing reasonable minimum

opening bids. We have noted in the past

that the reserve price and minimum

opening bid provision is not a

requirement to maximize auction

revenue but rather a protection against

assigning licenses at unacceptably low

prices, and that we must balance the

revenue raising objective against our

other public interest objectives in

setting the minimum bid level. For the

sake of auction integrity and fairness,

minimum opening bids must be set in

a manner that is consistent across

licenses.

116. As a final safeguard against

unduly high pricing, minimum opening

bids are reducible at the discretion of

the Bureau. This discretion will allow

the Bureau flexibility to adjust the

minimum opening bids if circumstances

warrant. We emphasize, however, that

such discretion will be exercised, if at

all, sparingly and early in the auction,

i.e., before bidders lose all waivers and

begin to lose substantial eligibility.

During the course of the auction, the

Bureau will not entertain any bidder

requests to reduce the minimum

opening bid on specific licenses.

iii. Bid Increments and Minimum

Accepted Bids

117. In the Auction No. 35 Comment

Public Notice, we proposed to use a

smoothing methodology to calculate

minimum bid increments. We further

proposed to retain the discretion to

change the minimum bid increment if

circumstances so dictate.

118. We will adopt our proposal for

a smoothing formula. The smoothing

methodology is designed to vary the

increment for a given license between a

maximum and minimum value based on

the bidding activity on that license. This

methodology allows the increments to

be tailored to the activity level of a

license, decreasing the time it takes for

active licenses to reach their final value.

The formula used to calculate this

increment is included as Attachment G

of the Public Notice.

119. We adopt our proposal of initial

values for the maximum of 0.2 (20

percent of the license value) and for the

minimum of 0.1 (10 percent of the

license value). The Bureau retains the

discretion to change the minimum bid

increment if it determines that

circumstance so dictate. The Bureau

will do so by announcement in the

Automated Auction System. Under its

discretion, the Bureau may also

implement an absolute dollar floor for

the bid increment to further facilitate a

timely close of the auction. The Bureau

may also use its discretion to adjust the

minimum bid increment without prior

notice if circumstances warrant. As an

alternative approach, the Bureau may,

in its discretion, adjust the minimum

bid increment gradually over a number

of rounds as opposed to single large

changes in the minimum bid increment

(e.g., by raising the increment floor by

one percent every round over the course

of ten rounds). The Bureau also retains

the discretion to use alternate

methodologies, such as a flat percentage

increment for all licenses, for Auction

No. 35 if circumstances warrant.

iv. High Bids

120. Each bid will be date-and timestamped when it is entered into the FCC

computer system. In the event of tied

high bids (identical gross bid amounts)

for a license during a round, the earliest

of the tied bids will be the standing high

bid at the end of the round. The bidding

software allows bidders to make

multiple submissions in a round. As

each bid is individually date-and timestamped according to when it was

submitted, bids submitted by a bidder

earlier in a round will have an earlier

date and time stamp than bids

submitted later in a round.

v. Bidding

121. During a bidding round, a bidder

may submit bids for as many licenses as

it wishes (subject to its eligibility),

withdraw high bids from previous

bidding rounds, remove bids placed in

the same bidding round, or permanently

reduce eligibility. Bidders also have the

option of making multiple submissions

and withdrawals in each bidding 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, and the dateand time-stamp of that bid reflects the

latest time the bid was submitted.

122. Please note that all bidding will

take place remotely either through the

automated bidding software or by

telephonic bidding. (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. Normally, four to

five minutes are necessary to complete

a bid submission.) There will be no onsite bidding during Auction No. 35.

123. A bidder’s ability to bid on

specific licenses in the first round of the

auction is determined by three factors:

(1) the licenses applied for on FCC Form

175, (2) eligibility restrictions on those

licenses, and (3) the upfront payment

amount deposited. The bid submission

screens will be tailored for each bidder

to include only those licenses for which

the bidder applied on its FCC Form 175.

A bidder also has the option to further

tailor its bid submission screens to call

up specified groups of licenses.

124. The bidding software requires

each bidder to log in to the FCC auction

system during the bidding round using

the FCC account number, bidder

identification number, and the

confidential security codes provided in

the registration materials. Bidders are

strongly encouraged to download and

print bid confirmations after they

submit their bids.

125. The bid entry screen of the

Automated Auction System software for

Auction No. 35 allows bidders to place

multiple increment bids. Specifically,

high bids may be increased from one to

nine bid increments. A single bid

increment is defined as the difference

between the standing high bid and the

minimum acceptable bid for a license.

The bidding software will display the

bid increment for each license.

126. To place a bid on a license, the

bidder must increase the standing high

bid by one to nine times the bid

increment. This is done by entering a

whole number between 1 and 9 in the

bid increment multiplier (Bid Mult)

field in the software. This value will

determine the amount of the bid

(Amount Bid) by multiplying the bid

increment multiplier by the bid

increment and adding the result to the

high bid amount according to the

following formula:

Amount Bid = High Bid + (Bid Mult *

Bid Increment)

127. Thus, bidders may place a bid

that exceeds the standing high bid by

between one and nine times the bid

increment. For example, to bid the

minimum acceptable bid, which is

equal to one bid increment, a bidder

will enter ‘‘1’’ in the bid increment

multiplier column and press submit.

128. For any license on which the

FCC is designated as the high bidder

(i.e., a license that has not yet received

a bid in the auction or where the high

bid was withdrawn and a new bid has

not yet been placed), bidders will be

limited to bidding only the minimum

acceptable bid. In both of these cases no

increment exists for the licenses, and

Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices 75715

bidders should enter ‘‘1’’ in the Bid

Mult field. Note that in this case, any

whole number between 1 and 9 entered

in the multiplier column will result in

a bid value at the minimum acceptable

bid amount. Finally, bidders are

cautioned in entering numbers in the

Bid Mult field because, as explained in

the following section, a high bidder that

withdraws its standing high bid from a

previous round, even if mistakenly or

erroneously made, is subject to bid

withdrawal payments.

vi. Bid Removal and Bid Withdrawal

129. In the Auction No. 35 Comment

Public Notice, we proposed bid removal

and bid withdrawal rules. With respect

to bid withdrawals, we proposed

limiting each bidder to withdrawals in

no more than two rounds during the

course of the auction. The two rounds

in which withdrawals are utilized, we

proposed, would be at the bidder’s

discretion.

130. In previous auctions, we have

detected bidder conduct that, arguably,

may have constituted strategic bidding

through the use of bid withdrawals.

While we continue to recognize the

important role that bid withdrawals

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

associated with efforts to secure various

geographic area licenses in combination,

we conclude that, for Auction No. 35,

adoption of a limit on their use to two

rounds is the most appropriate outcome.

By doing so we believe we strike a

reasonable compromise that will allow

bidders to use withdrawals. Our

decision on this issue is based upon our

experience in prior auctions,

particularly the PCS D, E and F block

auctions, and 800 MHz SMR auction,

and is in no way a reflection of our view

regarding the likelihood of any

speculation or ‘‘gaming’’ in this auction.

131. The Bureau will therefore limit

the number of rounds in which bidders

may place withdrawals to two rounds.

These rounds 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

still be subject to the bid withdrawal

payments specified in 47 CFR 1.2104(g).

Bidders should note that abuse of the

Commission’s bid withdrawal

procedures could result in the denial of

the ability to bid on a market. If a high

bid is withdrawn, the license will be

offered in the next round at the second

highest bid price, which may be less

than, or equal to, in the case of tie bids,

the amount of the withdrawn bid,

without any bid increment. The

Commission will serve as a ‘‘place

holder’’ on the license until a new

acceptable bid is submitted on that

license.

132. 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 bid’’

function in the software, 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 subsequently

removed does not count toward the

bidder’s activity requirement. This

procedure will enhance bidder

flexibility during the auction. Therefore,

we will adopt these procedures for

Auction No. 35.

133. Once a round closes, a bidder

may no longer remove a bid. However,

in later rounds, a bidder may withdraw

standing high bids from previous

rounds using the ‘‘withdraw bid’’

function (assuming that the bidder has

not exhausted its withdrawal

allowance). A high bidder that

withdraws its standing high bid from a

previous round during the auction is

subject to the bid withdrawal payments

specified in 47 CFR 1.2104(g).

134. Calculation. 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 net

high 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 of the intervening subsequent

withdrawn bids, 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 to

most efficiently 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 anti-competitive strategic

behavior and take appropriate action

when deemed necessary.

135. In the Part 1 Fifth Report and

Order, the Commission modified

§ 1.2104(g)(1) of the rules regarding

assessments of interim bid withdrawal

payments. As amended, § 1.2104(g)(1)

provides that in instances in which bids

have been withdrawn on a license that

is not won in the same auction, the

Commission will assess an interim

withdrawal payment equal to 3 percent

of the amount of the bid withdrawals.

The 3 percent interim payment will be

applied toward any final bid withdrawal

payment that will be assessed at the

close of the 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. The Part 1 Fifth Report and

Order provides specific examples

showing application of the bid

withdrawal payment rule.

vii. Round Results

136. Bids placed during a round will

not be published until the conclusion of

that bidding period. After a round

closes, the Commission will compile

reports of all bids placed, bids

withdrawn, current high bids, new

minimum accepted bids, and bidder

eligibility status (bidding eligibility and

activity rule waivers), and post the

reports for public access. Reports

reflecting bidders’ identities and bidder

identification numbers for Auction No.

35 will be available before and during

the auction. Thus, bidders will know in

advance of this auction the identities of

the bidders against which they are

bidding.

viii. Auction Announcements

137. The FCC will use auction

announcements to announce items such

as schedule changes and stage

transitions. All FCC auction

announcements will be available on the

FCC remote electronic bidding system,

as well as on the Internet.

ix. Maintaining the Accuracy of FCC

Form 175 Information

138. As noted in Part II.J., after the

short-form filing deadline, applicants

may make only minor changes to their

FCC Form 175 applications. For

example, permissible minor changes

include deletion and addition of

authorized bidders (to a maximum of

three) and certain revision of exhibits.

Filers must make these changes on-line,

and submit a letter summarizing the

changes to: Louis Sigalos, Deputy Chief,

Auctions and Industry Analysis

75716 Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices

Division, Wireless Telecommunications

Bureau, Federal Communications

Commission, 445 12th Street, SW, Room

4–A668, Washington, DC 20554.

139. A separate copy of the letter

should be mailed to Audrey Bashkin,

Auctions and Industry Analysis

Division, Wireless Telecommunications

Bureau, Federal Communications

Commission, 445 12th Street, SW, Room

4–A665, Washington, DC 20554.

Questions about other changes should

be directed to Audrey Bashkin at (202)

418–0660.

V. Post-auction Procedures

A. Down Payments and Withdrawn Bid

Payments

140. After bidding has ended, the

Commission will issue a public notice

declaring the auction closed, identifying

the winning bids and bidders for each

license, and listing withdrawn bid

payments due.

141. 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

Government to 20 percent of its net

winning bids (actual bids less any

applicable small and very small

business bidding credits). See 47 CFR

1.2107(b). In addition, by the same

deadline all bidders must pay any

withdrawn bid amounts due under 47

CFR 1.2104(g), as discussed in ‘‘Bid

Removal and Bid Withdrawal,’’ Part

IV.B.6. (Upfront payments are applied

first to satisfy any withdrawn bid

liability, before being applied toward

down payments.)

B. Long-Form Application

142. Within ten business days after

release of the auction closing notice,

winning bidders must electronically

submit a properly completed long-form

application and required exhibits for

each license won through Auction No.

35. Winning bidders that are

entrepreneurs and/or small or very

small businesses must include an

exhibit demonstrating their eligibility

for closed bidding and/or small and

very small business bidding credits as

applicable. See 47 CFR 1.2112(b),

24.709(c)(2)(i). Further filing

instructions will be provided to auction

winners at the close of the auction.

C. Tribal Land Bidding Credit

143. 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 telephone service penetration rate

equal to or below 70 percent is eligible

to receive a tribal land bidding credit as

set forth in 47 CFR 1.2107 and

1.2110(e). A tribal land bidding credit is

in addition to, and separate from, any

other bidding credit for which a

winning bidder may qualify.

144. Unlike other bidding credits that

are requested prior to the auction, a

winning bidder applies for the tribal

land bidding credit after winning the

auction when it files its long-form

application (FCC Form 601). In order for

a winning bidder to be awarded a tribal

land bidding credit, it must provide

specific certifications regarding the

servicing of tribal lands and is subject

to specific performance criteria as set

forth in 47 CFR 1.2110(e).

145. For additional information on the

tribal land bidding credit, including

how to determine the amount of credit

available, see Public Notice DA 00–

2219, released September 28, 2000,

entitled Wireless Telecommunications

Bureau Announces Availability of

Bidding Credits For Providing Wireless

Services To Qualifying Tribal Lands.

D. Auction Discount Voucher

146. On June 8, 2000, the Commission

awarded Qualcomm, Inc. a transferable

Auction Discount Voucher in the

amount of $125,273,878.00. This

Auction Discount Voucher may be used

by Qualcomm or its transferee, in whole

or in part, to adjust a winning bid in any

spectrum auction prior to June 8, 2003,

subject to terms and conditions set forth

in the Commission’s Order.

E. Default and Disqualification

147. Any high bidder that defaults or

is disqualified after the close of the

auction (i.e., fails to remit the required

down payment within the prescribed

period of time, fails to submit a timely

long-form application, fails to make full

payment, or is otherwise disqualified)

will be subject to the payments

described in 47 CFR 1.2104(g)(2). In

such event the Commission may reauction the license or offer it to the next

highest bidder (in descending order) at

its final bid. See 47 CFR 1.2109(b) and

(c). 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.

See 47 CFR 1.2109(d).

F. Refund of Remaining Upfront

Payment Balance

148. All applicants that submitted

upfront payments but were not winning

bidders for a license in Auction No. 35

may be entitled to a refund of their

remaining upfront payment balance

after the conclusion of the auction. No

refund will be made unless there are

excess funds on deposit from that

applicant after any applicable bid

withdrawal payments have been paid.

149. Qualified bidders that have

exhausted all of their activity rule

waivers, have no remaining bidding

eligibility, and have not withdrawn a

high bid during the auction must submit

a written refund request. If you have

completed the refund instructions

electronically, then only a written

request for the refund is necessary. If

not, the request must also include wire

transfer instructions and a Taxpayer

Identification Number (TIN). Send

refund request to: Federal

Communications Commission,

Financial Operations Center, Auctions

Accounting Group, Shirley Hanberry,

445 12th Street, SW, Room 1–A824,

Washington, DC 20554.

150. Bidders are encouraged to file

their refund information electronically

using the refund information portion of

the FCC Form 175, but bidders can also

fax their information to the Auctions

Accounting Group at (202) 418–2843.

Once the information has been

approved, a refund will be sent to the

party identified in the refund

information. NOTE: Refund processing

generally takes up to two weeks to

complete. Bidders with questions about

refunds should contact Tim Dates or

Gail Glasser at (202) 418–1995.

Federal Communications Commission.

Margaret Wiener,

Deputy Chief, Auctions and Industry Analysis

Division, Wireless Telecommunications

Bureau.

[FR Doc. 00–30860 Filed 12–1–00; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL EMERGENCY

MANAGEMENT AGENCY

[FEMA–1347–DR]

Arizona; Amendment No. 3 to Notice of

a Major Disaster Declaration

AGENCY: Federal Emergency

Management Agency (FEMA).

ACTION: Notice.

SUMMARY: This notice amends the notice

of a major disaster for the State of

Arizona, (FEMA–1347–DR), dated