4816 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 

disclosure requirements simply conform 

VA requirements to the 2013 TILA 

servicing rule and the procedures 

currently followed in the conventional 

mortgage lending market. 

Accordingly, the Secretary certifies 

that the adoption of this proposed rule 

would not have a significant economic 

impact on a substantial number of small 

entities as they are defined in the 

Regulatory Flexibility Act, 5 U.S.C. 601– 

612. Therefore, under 5 U.S.C. 605(b), 

this rulemaking is exempt from the 

initial and final regulatory flexibility 

analysis requirements of sections 603 

and 604. 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance number and title for the 

program affected by this document are 

64.114, Veterans Housing—Guaranteed 

and Insured Loans. 

Signing Authority 

The Secretary of Veterans Affairs, or 

designee, approved this document and 

authorized the undersigned to sign and 

submit the document to the Office of the 

Federal Register for publication 

electronically as an official document of 

the Department of Veterans Affairs. Jose 

D. Riojas, Chief of Staff, Department of 

Veterans Affairs, approved this 

document on January 23, 2015, for 

publication 

List of Subjects in 38 CFR Part 36 

Condominiums, Flood insurance, 

Housing, Indians, Individuals with 

disabilities, Loan programs-housing and 

community development, Loan 

programs—Indians, Loan programs— 

veterans, Manufactured homes, 

Mortgage insurance, Reporting and 

recordkeeping requirements, Veterans. 

Dated: January 26, 2015. 

William F. Russo, 

Acting Director, Office of Regulation Policy 

& Management, Office of the General Counsel, 

U.S. Department of Veterans Affairs. 

For the reasons set out in the 

preamble, VA proposes to amend 38 

CFR part 36 as follows: 

PART 36—LOAN GUARANTY 

■ 1. The authority citation for part 36 

continues to read as follows: 

Authority: 38 U.S.C. 501 and as otherwise 

noted. 

■ 2. Revise § 36.4312(d)(2) and (d)(6) to 

read as follows: 

§ 36.4312 Interest rates. 

* * * * * 

(d) * * * 

(2) Frequency of interest rate changes. 

Interest rate adjustments must occur on 

an annual basis, except that the first 

adjustment may occur no sooner than 36 

months from the date of the borrower’s 

first mortgage payment. The adjusted 

rate will become effective the first day 

of the month following the adjustment 

date; the first monthly payment at the 

new rate will be due on the first day of 

the following month. To set the new 

interest rate, the lender will determine 

the change between the initial (i.e., base) 

index figure and the current index 

figure. The initial index figure shall be 

the most recent figure available before 

the date of the note. For loans where the 

date of the note is before January 10, 

2015, the current index figure shall be 

the most recent index figure available 30 

days before the date of each interest rate 

adjustment. For loans where the date of 

the note is on or after January 10, 2015, 

the current index figure shall be the 

most recent index figure available 45 

days before the date of each interest rate 

adjustment. 

* * * * * 

(6) Disclosures. The lender must 

provide the borrower with disclosures 

in accordance with the timing, content, 

and format required by the regulations 

implementing the Truth in Lending Act 

(15 U.S.C. 1601 et seq.) at 12 CFR 

1026.20(c) and (d). A copy of these 

disclosures will be made a part of the 

lender’s permanent record on the loan. 

* * * * * 

(The Office of Management and Budget has 

approved the information collection 

requirements in this section under control 

number 3170–0015.) 

[FR Doc. 2015–01681 Filed 1–28–15; 8:45 am] 

BILLING CODE 8320–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Parts 1, 27 and 73 

[AU Docket No. 14–252; GN Docket No. 12– 

268; FCC 14–191; DA 15–24; DA 15–60] 

Comment Sought on Competitive 

Bidding Procedures for Broadcast 

Incentive Auction 1000, Including 1001 

and 1002 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule; proposed auction 

procedures. 

SUMMARY: The Auction 1000 Request for 

Comment initiates the pre-auction 

process by which the Federal 

Communications Commission will 

develop detailed procedures for the 

broadcast television spectrum incentive 

auction, taking into account public 

comment received in response to its 

proposals. The Auction 1000 Request for 

Comment includes specific proposals, 

including on determination of the initial 

broadcast television spectrum clearing 

target, opening bid prices, benchmarks 

for the final stage rule, and the final 

television channel assignment process, 

and seeks comment on those proposed 

procedures. 

DATES: Comments are due on or before 

February 13, 2015, and reply comments 

are due on or before March 13, 2015. 

Written comments on the Paperwork 

Reduction Act proposed information 

collection requirements must be 

submitted by the public, Office of 

Management and Budget (OMB), and 

other interested parties on or before 

March 30, 2015. 

ADDRESSES: All filings in response to 

this notice must refer to AU Docket No. 

14–252 and GN Docket No. 12–268. The 

Federal Communications Commission 

strongly encourages interested parties to 

file comments electronically, and 

requests that an additional copy of all 

comments and reply comments be 

submitted electronically to the 

following address: auction1000@fcc.gov. 

Comments may be submitted by any of 

the following methods: 

D Federal eRulemaking Portal: 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

D Federal Communications 

Commission’s Web site: http://

fjallfoss.fcc.gov/ecfs2/. Follow the 

instructions for submitting comments. 

D Paper Filers: Parties who choose to 

file by paper must file an original and 

one copy of each filing. Filings can be 

sent by hand or messenger delivery, by 

commercial overnight courier, or by 

first-class or overnight U.S. Postal 

Service mail. All filings must be 

addressed to the Commission’s 

Secretary, Attn: WTB/ASAD, Office of 

the Secretary, Federal Communications 

Commission. All hand-delivered or 

messenger-delivered paper filings for 

the Commission’s Secretary must be 

delivered to FCC Headquarters at 445 

12th Street SW., Room TW–A325, 

Washington, DC 20554. All hand 

deliveries must be held together with 

rubber bands or fasteners. Any 

envelopes must be disposed of before 

entering the building. Commercial 

overnight mail (other than U.S. Postal 

Service Express Mail and Priority Mail) 

must be sent to 9300 East Hampton 

Drive, Capitol Heights, MD 20743. U.S. 

Postal Service first-class, Express, and 

Priority mail must be addressed to 445 

12th Street SW., Washington, DC 20554. 

People with Disabilities: Contact the 

FCC to request reasonable 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 4817 

accommodations (accessible format 

documents, sign language interpreters, 

CART, etc.) by email: FCC504@fcc.gov 

or phone: 202–418–0530 or TTY: 202– 

418–0432. 

PRA Comments: In addition to filing 

comments with the Secretary, a copy of 

any comments on the Paperwork 

Reduction Act information collection 

requirements contained herein should 

be submitted to the Federal 

Communications Commission via email 

to PRA@fcc.gov and to Nicholas A. 

Fraser, Office of Management and 

Budget, via email to Nicholas_A._

Fraser@omb.eop.gov or via fax at 202– 

395–5167. 

FOR FURTHER INFORMATION CONTACT: 

Wireless Telecommunications Bureau, 

Auctions and Spectrum Access Division: 

For auction legal questions: Erin Griffith 

at (202) 418–0660 and for general 

auction questions: Linda Sanderson at 

(717) 338–2868; Spectrum and 

Competition Policy Division: For mobile 

spectrum holding questions: Amy Brett 

at (202) 418–1310; and Broadband 

Division: For 600 MHz Band service rule 

questions: Madelaine Maior at (202) 

418–1466. Media Bureau, Video 

Division: For broadcast questions: 

Dorann Bunkin at (202) 418–1636. 

Office of Engineering and Technology: 

For repacking and inter-service 

interference questions: Aspasia 

Paroutsas (legal) at (202) 418–7285 or 

Martin Doczkat (technical) (202) 418– 

2435. For additional information 

concerning the Paperwork Reduction 

Act information collection requirements 

contained in this document, send an 

email to PRA@fcc.gov or contact Cathy 

Williams on (202) 418–2918. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Auction 1000 Request 

for Comment adopted on December 11, 

2014 and released on December 17, 

2014, as well as the Order adopted and 

released on January 7, 2015, extending 

the dates for responding to the Auction 

1000 Request for Comment and the 

Supplemental Auction 1000 Request for 

Comment adopted and released on 

January 15, 2015. The Auction 1000 

Request for Comment includes as 

attachments the following appendices: 

Appendix A, Incentive Auction General 

Flow; Appendix B, ISIX Constraints; 

Appendix C, Clearing Target 

Optimization; Appendix D, Reverse 

Auction Pricing and Bid Processing 

Algorithm; Appendix E, Final Channel 

Assignment Optimization; Appendix F, 

Bidding Units, Upfront Payments, and 

Minimum Opening Bids; Appendix G, 

Forward Auction Clock Phase; and 

Appendix H, Forward Auction 

Assignment Phase. The complete text of 

the Auction 1000 Request for Comment, 

including all attachments and related 

Commission documents, is available for 

public inspection and copying from 8:00 

a.m. to 4:30 p.m. Eastern Time (ET) 

Monday through Thursday or from 8:00 

a.m. to 11:30 a.m. ET on Fridays in the 

FCC Reference Information Center, 445 

12th Street SW., Room CY–A257, 

Washington, DC 20554. The Auction 

1000 Request for Comment and its 

attachments, as well as related 

Commission documents, also may be 

purchased from the Commission’s 

duplicating contractor, Best Copy and 

Printing, Inc. (BCPI), 445 12th Street 

SW., Room CY–B402, Washington, DC 

20554, telephone 202–488–5300, fax 

202–488–5563, or you may contact BCPI 

at its Web site: http://

www.BCPIWEB.com. When ordering 

documents from BCPI, please provide 

the appropriate FCC document number, 

for example, FCC 14–191. The Auction 

1000 Request for Comment and its 

attachments, as well as related 

documents, also are available on the 

Internet at the Commission’s Web site: 

http://wireless.fcc.gov/auctions/1000/, 

or by using the search function for AU 

Docket No. 14–252, GN Docket 12–268 

on the Commission’s Electronic 

Comment Filing System (ECFS) Web 

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

This document contains proposed 

information collection requirements. 

The Commission, as part of its 

continuing effort to reduce paperwork 

burdens, invites the general public and 

the Office of Management and Budget 

(OMB) to comment on the information 

collection requirements contained in 

this document, as required by the 

Paperwork Reduction Act of 1995, 

Public Law 104–13. 

Comments should address: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

burden estimates; (c) ways to enhance 

the quality, utility, and clarity of the 

information collected; (d) ways to 

minimize the burden of the collection of 

information on the respondents, 

including the use of automated 

collection techniques or other forms of 

information technology; and (e) way to 

further reduce the information 

collection burden on small business 

concerns with fewer than 25 employees. 

In addition, pursuant to the Small 

Business Paperwork Relief Act of 2002, 

Public Law 107–198, see 44 U.S.C. 

3506(c)(4), we seek specific comment on 

how we might further reduce the 

information collection burden for small 

business concerns with fewer than 25 

employees. 

OMB Control Number: None. 

Title: Application by a Broadcast 

Licensee to Participate in a Broadcast 

Spectrum Incentive Auction (BSIA), 

FCC Form 177; and 47 CFR 1.22002. 

Form No.: FCC Form 177. 

Type of Review: New collection. 

Respondents: Business or other for 

profit entities; not-for-profit institutions; 

State, local or Tribal government. 

Number of Respondents and 

Responses: 2,254 respondents; 2,254 

responses. 

Estimated Time per Response: 3 

hours. 

Frequency of Response: One time 

reporting requirement. 

Obligation to Respond: Required to 

obtain benefits. The statutory authority 

for this information collection is 

contained in sections 154(i) and 309 of 

the Communications Act of 1934, as 

amended. 

Total Annual Burden: 6,762 hours. 

Total Annual Costs: N/A. 

Privacy Act Impact Assessment: N/A. 

Nature and Extent of Confidentiality: 

Pursuant to statute, pending the 

effective date of related license 

reassignments and spectrum 

reallocations, the Commission will take 

all reasonable steps necessary to protect 

the confidentiality of Commission-held 

data of a broadcast licensee 

participating in the broadcast spectrum 

incentive auction, pursuant to 47 CFR 

1.22006. 

Needs and Uses: Any broadcast 

licensee choosing to participate in the 

broadcast spectrum incentive auction 

must provide information to 

demonstrate that it is legally, 

technically, and financially qualified to 

participate, pursuant to 47 CFR 1.22000 

and 1.22004. Information collection on 

the form will include information 

regarding the relevant broadcast license, 

information regarding parties with an 

ownership interest in the license, and if 

applicable, information regarding any 

agreement that the applicant may have 

to share a broadcast channel in the 

event that it relinquishes some of its 

spectrum usage rights through the 

auction. 

Statutory Authority: The statutory 

authority for this information collection 

is contained in sections 154(i) and 309 

of the Communications Act of 1934, as 

amended. 

OMB Control Number: 3060–0600. 

Title: Application to Participate in a 

FCC Auction; FCC Form 175; 47 CFR 

1.2105, 1.2110 and 1.2112. 

Form No.: FCC Form 175. 

Type of Review: Revision of currently 

approved collection. 


tkelley on DSK3SPTVN1PROD with PROPOSALS
4818 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 

Respondents: Business or other forprofit; Not-for-profit institutions; State, 

local or Tribal governments. 

Number of Respondents and 

Responses: 500 respondents; 500 

responses. 

Estimated Time per Response: 90 

minutes. 

Frequency of Response: On occasion 

reporting requirement. 

Obligation to Respond: Required to 

obtain or retain benefits. 

Total Annual Burden: 750 hours. 

Total Annual Costs: N/A. 

Privacy Act Impact Assessment: N/A. 

Nature and Extent of Confidentiality: 

There is no need for confidentiality with 

this collection of information. 

Applicants may request confidential 

treatment of information collected in 

FCC Form 175 pursuant to 47 CFR 

0.459. 

Needs and Uses: The Commission 

will revise the FCC Form 175 to require 

a party to certify compliance with 

requirements applicable to the incentive 

auction prior to submitting the Form. 

Statutory Authority: The statutory 

authority for this information collection 

is contained in sections 154(i) and 309 

of the Communications Act of 1934, as 

amended. 

I. Introduction 

1. With the Auction 1000 Request for 

Comment, the Commission takes 

another important step toward 

conducting the broadcast television 

spectrum incentive auction, a new tool 

to help meet the Nation’s accelerating 

spectrum needs. The Commission 

established the rules and policies for the 

incentive auction in the Report and 

Order, ‘‘Expanding the Economic and 

Innovation Opportunities of Spectrum 

Through Incentive Auction,’’ 79 FR 

48441, August 15, 2014 (Incentive 

Auction R&O). The Auction 1000 

Request for Comment initiates the preauction process by which the 

Commission will develop, based on 

additional public input, the detailed 

procedures necessary to carry out the 

auction. It includes specific proposals 

on crucial auction design issues such as 

determination of the initial broadcast 

television spectrum clearing target, 

opening bid prices, benchmarks for the 

final stage rule, and the final television 

channel assignment process. The legal 

authority for the Commission’s 

proposals is set forth in the rules the 

Commission adopted in the Incentive 

Auction R&O. 

2. The incentive auction will include 

a ‘‘reverse auction’’ in which 

broadcasters will offer to voluntarily 

relinquish some or all of their spectrum 

usage rights, and a ‘‘forward auction’’ of 

new, flexible-use licenses suitable for 

providing mobile broadband services. 

Forward auction proceeds will be used 

to pay broadcasters that relinquish 

rights in the reverse auction. As part of 

the reverse auction, the Commission 

will reorganize or ‘‘repack’’ the 

broadcast TV spectrum so that the 

television stations that remain on the air 

after the incentive auction occupy a 

smaller portion of the UHF band. For 

the incentive auction to succeed, the 

reverse and forward auctions and the 

repacking process must work 

seamlessly. 

3. To encourage voluntary broadcaster 

participation, the Commission is 

striving to make the reverse auction 

design simple and transparent from the 

perspective of the broadcaster bidder. 

Broadcasters will be able to participate 

online through an easy-to-use computer 

interface and will be able to react to 

prices provided by the auction system 

rather than having to formulate their 

own bids. They will have multiple 

options to relinquish their spectrum 

usage rights in exchange for a share of 

auction proceeds—including to cease 

broadcasting, to continue broadcasting 

in a different band, or to share a channel 

with another station. Broadcasters can 

decide whether to participate after 

opening prices are announced, and may 

drop out of the bidding in any 

subsequent round if they decide the 

prices are too low. Stations will be 

treated the same in the repacking 

process whether or not they participate 

in the reverse auction. Except for 

broadcasters that receive auction 

proceeds in exchange for relinquishing 

spectrum usage rights, the identities of 

broadcasters that participate in the 

auction will remain confidential for a 

period of two years after the incentive 

auction. 

4. Because the reverse auction and the 

repacking process are interdependent, 

the Auction 1000 Request for Comment 

includes proposals that may affect 

broadcasters that do not choose to 

participate in the reverse auction, such 

as objectives for optimizing final 

channel assignments in the remaining 

television bands. In making such 

proposals, the Commission is mindful of 

Congress’s directive to make all 

reasonable efforts to preserve the 

coverage area and population served of 

eligible broadcasters that remain on the 

air following the auction, and the 

Commission seeks to avoid unnecessary 

disruption to free, over-the-air television 

service. 

5. The proposals in the Auction 1000 

Request for Comment are organized into 

three major sections. First, the 

integration section addresses how the 

reverse and forward auctions will be 

integrated. Among other things, the 

integration section addresses the 

determination of an initial spectrum 

clearing target, how much market 

variation to accommodate, and the 

process of moving to subsequent stages 

of the auction if necessary. The issues 

and proposals discussed in the 

integration section may be of interest to 

potential participants in both the 

reverse and the forward auctions, as 

well as to broadcasters that do not 

choose to participate in the reverse 

auction. The second and third sections 

of the Auction 1000 Request for 

Comment focus on the reverse and 

forward auctions, respectively. They 

address opening prices, details of the 

application process, and bidding 

procedures for each auction, as well as 

issues unique to each auction, such as 

how the repacking process will work in 

the context of the reverse auction and 

the final frequency assignment process 

for licenses won in the forward auction. 

6. The Auction 1000 Request for 

Comment also includes a number of 

technical appendices, which detail the 

mechanics of the proposed auction 

design, such as use of data from the 

inter-service interference (ISIX) 

methodology in order to identify 

potential ‘‘impairments’’ to 600 MHz 

Band spectrum blocks, optimization 

procedures for determining the 

spectrum clearing target and final TV 

channel assignments, and algorithms for 

the reverse and forward auctions. The 

information in the appendices 

supplements the description of these 

elements in the Auction 1000 Request 

for Comment, but the Auction 1000 

Request for Comment contains the 

information necessary for an interested 

party to evaluate participation in the 

reverse or forward auction. 

7. The major steps of the incentive 

auction process, based on the proposals 

in the Auction 1000 Request for 

Comment, together with the decisions in 

the Incentive Auction R&O, are 

illustrated in Appendix A of the 

Auction 1000 Request for Comment. 

From the perspective of potential 

bidders, the major steps will be as 

follows. (1) Procedures PN: After 

considering the record produced in 

response to the Auction 1000 Request 

for Comment, the Commission will 

adopt final auction procedures and 

provide detailed explanations and 

instructions for potential auction 

participants in a future public notice 

(Procedures PN). (2) Auction 

application: Any party wishing to 

participate in the bidding in either the 

reverse auction or the forward auction 

must submit an auction application by 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 4819 

a date to be specified in the Procedures 

PN. Opening prices in the auction will 

be made available at least 60 days in 

advance of the deadline for applications 

to participate in either the reverse or the 

forward auction. An auction applicant 

must disclose to the Commission on the 

application, among other things, 

specified information about the 

applicant’s identity, certifications, and, 

for reverse and forward auction 

applications, respectively, selections 

regarding bid options or licenses it may 

wish to bid on. Each applicant will be 

informed whether its application is 

complete or deficient in particular 

respects after Commission staff reviews 

it for completeness and consistency 

with the relevant auction rules. Any 

applicant whose application is 

incomplete will have a specified period 

of time within which to resubmit its 

application to correct deficiencies. (3) 

Reverse auction initial bid commitment: 

In order to qualify to bid in the reverse 

auction, each reverse auction applicant 

that successfully completes an 

application must identify one of the bid 

options it selected on its application as 

its preferred option, thereby indicating 

its commitment to relinquish the 

spectrum usage rights associated with 

that option at the opening price for that 

option. (4) Clearing target 

determination: Based on the 

commitments of broadcasters in 

response to the opening prices, the 

auction system will determine the 

broadcast TV spectrum clearing target 

for the initial stage of the auction, which 

will have an associated 600 MHz Band 

plan. (5) Forward auction upfront 

payment: After the clearing target along 

with the associated band plan is 

determined, forward auction bidders 

must submit upfront payments to 

qualify to bid. Each applicant’s upfront 

payment will establish its bidding 

eligibility in terms of bidding units. (6) 

Reverse auction bidding clock phase: 

Reverse auction bidding will begin. 

Each qualified bidder will have an 

opportunity to bid by responding in 

successive clock bidding rounds to price 

offers, which may be reduced as bidding 

progresses. If at any time the price 

offered is lower than a bidder wants to 

accept, the bidder can drop out of the 

bidding. (7) Forward auction bidding 

clock phase: Forward auction bidding 

will begin on two different categories of 

licenses. The license categories will 

reflect the extent of potential 

impairments from television stations to 

a given license. Each qualified bidder 

will have an opportunity to bid by 

indicating in successive clock bidding 

rounds its demands for categories of 

generic license blocks in specific 

geographic areas. The auction system 

will check after each round of clock 

bidding to determine whether the final 

stage rule has been satisfied. If bidding 

stops in ‘‘high-demand’’ markets before 

the final stage rule is satisfied, the 

auction system will initiate an extended 

round of bidding for licenses in those 

markets aimed at satisfying the final 

stage rule. If the final stage rule is met 

after any forward auction round (clock 

or extended), the auction system will 

implement the market-based spectrum 

reserve. Bidding rounds will continue in 

all markets after the final stage rule is 

met, ending when demand does not 

exceed supply. (8) Subsequent auction 

stage if necessary: If the final stage rule 

is not satisfied in the forward auction 

portion of the initial stage, the auction 

system will move to the next stage of the 

auction. (9) Final TV channel 

assignment optimization: After the final 

stage rule is satisfied, the auction 

system will determine final television 

channel assignments for all television 

stations that will remain on the air 

following the incentive auction. (10) 

Forward auction assignment phase: 

After bidding stops in the clock phase 

of the forward auction, the forward 

auction assignment rounds will be 

conducted to assign frequency-specific 

600 MHz Band licenses consistent with 

the demands of specific bidders in 

specific geographic areas. 

8. The Commission intends to begin 

accepting applications to participate in 

the broadcast television spectrum 

incentive auction in the fall of 2015, and 

to start the bidding process in early 

2016. The Commission will finalize 

specific deadlines in the Procedures PN, 

but recognizes the need to give parties 

adequate notice prior to the application 

filing date. The Commission will 

endeavor to give several months’ notice 

prior to the application filing deadline. 

Parties who may be interested in 

participating in the reverse or forward 

auction should regularly monitor the 

LEARN Web site. The broadcast 

spectrum incentive auction, which is 

designated as Auction 1000, will begin 

with bidding in the reverse auction, 

designated as Auction 1001, followed by 

bidding in the forward auction, 

designated as Auction 1002. Since 

adopting the Incentive Auction R&O in 

May, the Commission has made 

progress on a number of auction-related 

issues, including how to predict 

potential inter-service interference in 

certain areas and the auction’s potential 

impact on low-power television 

stations, wireless microphones, and 

unlicensed white space devices. The 

staff also has released additional 

information regarding the reverse 

auction and the repacking process. Well 

in advance of the auction, the 

Procedures PN will establish final 

auction procedures and provide detailed 

explanations and instructions for 

potential auction participants. The 

Commission will resolve outstanding 

issues outside the scope of the preauction process in advance of the 

Procedures PN. 

II. Background 

A. Incentive Auction Order 

i. 600 MHz Band Plan 

9. Pursuant to the Incentive Auction 

R&O, in the forward auction the 

Commission will offer licenses for the 

UHF band spectrum that is repurposed 

through the incentive auction on a 

geographic area basis. The service areas 

for these licenses will be Partial 

Economic Areas (PEAs). The 600 MHz 

Band will be licensed in 5+5 megahertz 

paired uplink and downlink blocks, 

which will be authorized for fixed and 

mobile Frequency Division Duplex 

(FDD) operations. 

10. The 600 MHz Band Plan the 

Commission adopted in the Incentive 

Auction R&O consists of an uplink band 

that will begin at channel 51 (698 MHz), 

followed by a duplex gap, and then a 

downlink band. Because the incentive 

auction may be conducted in several 

stages, each for a different ‘‘spectrum 

clearing target,’’ the Commission 

adopted a set of band plan scenarios 

based on the number of television 

channels cleared. 

11. The first stage of the forward 

auction will offer licenses 

corresponding to one of these band plan 

scenarios, and subsequent stages, if 

necessary, will offer licenses for 

scenarios corresponding to lower 

clearing targets. The 600 MHz Band 

Plan can accommodate variation in the 

amount of spectrum recovered in 

different geographic areas in order to 

prevent the most restricted market from 

limiting the quantity of spectrum the 

Commission can offer generally across 

the nation. If not all PEAs can be 

cleared, the 600 MHz Band Plan will 

accommodate market variation either by 

including some spectrum blocks subject 

to inter-service interference, or 

alternatively, fewer spectrum blocks 

than in most PEAs across the country. 

ii. Repacking Process 

12. Repacking involves reorganizing 

television stations in the broadcast 

television bands so that the stations that 

remain on the air after the incentive 

auction will occupy a smaller portion of 


tkelley on DSK3SPTVN1PROD with PROPOSALS
4820 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 

the UHF band, thereby freeing up a 

portion of that band for new wireless 

uses. Prior to the commencement of the 

reverse auction, the staff will determine 

the coverage area and population served 

of every television station whose 

coverage area and population served the 

Commission will make ‘‘all reasonable 

efforts’’ to preserve in the repacking 

process, using the methodology 

described in the Office of Engineering 

and Technology Bulletin No. 69. Based 

on this data, the staff will develop 

‘‘constraint files’’ for each station that 

will be used to check the feasibility of 

assigning permissible channels to 

stations that will remain on the air. 

13. Before bidding in the reverse 

auction begins, the initial ‘‘clearing 

target’’ for how much broadcast TV 

spectrum will be repurposed through 

the reverse auction and the repacking 

process will be determined based on 

broadcasters’ collective willingness to 

relinquish spectrum usage rights at the 

opening prices announced by the 

Commission. The clearing target will 

dictate the total number of remaining 

television channels available for the 

repacking process. 

14. At the start of the reverse auction 

bidding process, television stations will 

fall into two general categories: Nonparticipating stations that will remain 

on the air after the incentive auction, 

and participating stations that may or 

may not remain on the air, depending 

on the reverse auction outcome. The 

auction system will use a ‘‘repacking 

feasibility checker’’ to ensure that every 

non-participating station is assigned a 

television channel in its pre-auction 

band consistent with the Commission’s 

statutory obligation to make reasonable 

efforts to preserve its population and 

coverage area. Each time a participating 

station drops out of the auction, it will 

be assigned a channel in its pre-auction 

band consistent with this obligation, 

and the repacking feasibility checker 

will determine whether a channel that 

meets these requirements is available for 

each individual station that continues to 

participate in the bidding. 

15. Television station channel 

assignments in the remaining television 

bands will be provisional throughout 

the bidding stages of the auction. Final 

channel assignments will be made after 

the final stage rule is satisfied and 

bidding ends in the reverse and forward 

auctions. At that point, the assignments 

for each television station that will be 

assigned a channel in the remaining TV 

bands will be optimized to ensure 

efficient final channel assignments that 

preserve the coverage area and 

population served of each station and 

account for the additional goals that the 

Commission has adopted or will adopt 

in this pre-auction process. 

iii. Auction Process 

16. The incentive auction will consist 

of reverse and forward auctions. The 

reverse auction will collect information 

about the prices at which broadcast 

television licensees would be willing to 

voluntarily relinquish some or all of 

their spectrum usage rights. The forward 

auction will consist of a clock phase and 

an assignment phase. The clock phase 

will identify the prices that potential 

users of repurposed broadcast television 

spectrum will pay for generic spectrum 

blocks. In the assignment phase, 

winners of blocks in the clock phase 

will bid for specific licenses to use the 

spectrum. The results of both auctions 

will be used to determine whether the 

overall reserve price, or final stage rule, 

has been satisfied. Once the reserve 

price requirements of the final stage rule 

are met and bidding meets the 

conditions of a stopping rule, the overall 

results of the bidding in both auctions 

will determine those broadcasters 

selected to relinquish spectrum usage 

rights and the amounts of their 

incentive payments from the reverse 

auction, as well as the winning bidders 

for flexible-use 600 MHz Band licenses 

and the prices they will pay for those 

licenses from the forward auction. After 

the final stage rule is satisfied and there 

is no excess demand for licenses, 

broadcasters that will remain on the air 

will receive final channel assignments 

and winners of generic licenses will 

have the opportunity to bid for specific 

frequencies. Then the incentive auction 

will close. 

17. The reverse and forward auctions 

will be integrated in one or more stages. 

Each stage will consist of a reverse 

auction and a forward auction bidding 

process; multiple stages will be run only 

if necessary. The forward auction 

bidding process will follow the reverse 

auction bidding process. If bidding in 

the forward auction does not satisfy the 

final stage rule, additional stages will be 

run with progressively lower spectrum 

clearing targets in the reverse auction 

and fewer licenses available in the 

forward auction, until the final stage 

rule is satisfied. 

18. In the Incentive Auction R&O, the 

Commission adopted a descending 

clock format for the reverse auction in 

which, in each bidding round, stations 

will be offered prices for one or more 

bid options and indicate their choices at 

those prices. The prices offered to each 

station for options will be adjusted 

downward as the rounds progress in a 

way that accounts for the availability of 

television channels in different bands in 

the repacking process. A station will 

continue to be offered prices for bid 

options until its voluntary 

relinquishment of rights becomes 

needed to meet the current spectrum 

clearing target. When all remaining 

bidders’ relinquishments are needed in 

this way, the reverse auction for the 

stage will end. If the final stage rule is 

satisfied in that stage, then those 

bidders will be winning bidders, and 

the price paid to each will be at least as 

high as the last price it agreed to accept. 

19. For the clock phase of the forward 

auction, the Commission adopted an 

ascending clock auction format in 

which bidders will be able to bid for 

generic spectrum blocks in one or more 

license categories, to be followed by an 

assignment mechanism for frequencyspecific licenses. Consistent with the 

Mobile Spectrum Holdings R&O, 79 FR 

39977, July 11, 2014, the forward 

auction will incorporate a market-based 

spectrum reserve of blocks for certain 

eligible bidders. There will be a separate 

clock price for each license category in 

each PEA, and bidders will indicate the 

number of blocks that they demand at 

the current prices. The prices generally 

will rise from round to round, as long 

as the demand for blocks exceeds 

availability. Bidders still demanding 

blocks when the clock prices stop rising 

in every license category in every PEA 

will become winners provided the final 

stage rule is satisfied. If the rule is not 

satisfied, bidders will have an 

opportunity to make additional bids to 

meet the rule in an extended bidding 

round. Once the final stage rule is 

satisfied, winners may indicate their 

preferences for frequency-specific 

licenses in the assignment phase of the 

forward auction. Final license prices 

will reflect the winning bid amounts 

from the clock bidding rounds as well 

as any adjustments from the extended 

bidding and assignment rounds. 

B. Inter-Service Interference (ISIX) 

Order and Further Notice 

20. The Commission recently issued 

an order establishing a methodology for 

use during the incentive auction to 

predict inter-service interference in 

areas where broadcast and wireless 

services operate on the same or adjacent 

channels as a result of market variation. 

In such areas, television channels may 

not be available in the remaining 

television bands for all of the stations 

that will remain on the air, and one or 

more stations may have to be assigned 

channels in the 600 MHz Band, that is, 

in the portion of the UHF spectrum that 

generally will be repurposed. Assigning 

channels to television stations in the 

600 MHz Band creates a potential for 


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harmful interference to both broadcast 

and wireless operations. In addition, 

some areas may be subject to interservice interference resulting from 

existing television stations along the 

borders in Canada and Mexico. The ISIX 

Order established a methodology (the 

ISIX methodology) for predicting such 

interference. 

21. The ISIX methodology varies 

depending on the applicable 

interference scenario or case. Cases 1 

and 2 relate to interference from 

television to wireless operations (base 

stations and user equipment, 

respectively). Cases 3 and 4 relate to 

interference from wireless operations 

(base stations and user equipment, 

respectively) to digital TV receivers. The 

applicable interference case depends on 

where television stations are placed in 

the 600 MHz Band. 

22. In the Incentive Auction R&O, the 

Commission defined an ‘‘impaired’’ 

PEA as one in which a 600 MHz Band 

licensee is restricted to some extent 

from operating within the geographic 

boundary of the PEA in order prevent 

harmful interference to television 

operations in the 600 MHz Band; and 

conversely, one in which a 600 MHz 

Band licensee may receive harmful 

interference from television operations 

in the 600 MHz Band. In the ISIX Order, 

the Commission further clarified that 

impairments may result in ‘‘restricted’’ 

and ‘‘infringed’’ areas within a 600 MHz 

Band service area. A ‘‘restricted’’ area is 

one in which the wireless operator 

could cause harmful interference to a 

television station. An ‘‘infringed’’ area is 

one in which the wireless operator may 

receive harmful interference from a 

television station. The Commission 

proposed in the ISIX Further Notice, 79 

FR 76282, December 22, 2014, to allow 

wireless carriers to operate in areas 

where they may receive interference 

from TV stations, but not in areas where 

they may cause any harmful 

interference to television operations in 

the 600 MHz Band. The Commission 

further proposed that a 600 MHz Band 

licensee with an ‘‘impaired’’ license 

would hold the license for the entire 

PEA but would be limited to operations 

within the boundaries permitted under 

the inter-service interference rules. The 

ISIX Further Notice also proposed a 

methodology for use after the auction to 

prevent inter-service interference based 

on actual deployment of wireless 

networks, including a zero-percent 

threshold for interference to TV stations 

from wireless services. 

C. Mobile Spectrum Holdings Order 

23. The Commission established the 

maximum amount of licensed spectrum 

that will be reserved in each PEA for 

eligible entities (reserve-eligible entities) 

in the forward auction for different 

initial stage spectrum clearing targets. A 

spectrum clearing target will include 

licensed spectrum and guard bands; 

however only licensed spectrum is 

relevant to determination of the reserve. 

If the auction does not close in the 

initial stage, the maximum amount of 

reserved licensed spectrum in each PEA 

in subsequent stages will be the smaller 

of (1) the maximum amount in the 

previous stage, or (2) the amount that 

the reserve-eligible bidders demanded at 

the end of the previous stage. The 

maximum amount of reserved spectrum 

is 30 megahertz for initial clearing 

targets with more than 100 megahertz of 

licensed spectrum. The Mobile 

Spectrum Holdings R&O inadvertently 

omitted the 80 megahertz clearing 

scenario established by the Commission 

(as set forth in the technical appendix 

to the Incentive Auction R&O) from an 

accompanying chart. Consistent with 

the Commission’s finding that a 

maximum spectrum reserve of 30 

megahertz is appropriate for most levels 

of total available spectrum licenses 

except for levels less than 70 megahertz, 

the maximum amount of reserved 

spectrum for an 80 megahertz clearing 

scenario is 30 megahertz. The actual 

amount of reserved spectrum will 

depend on the demand by reserveeligible bidders when the auction 

reaches a ‘‘spectrum reserve trigger.’’ 

The auction system will set the 

spectrum reserve trigger at the point 

when the final stage rule is satisfied. 

III. Proposed Procedures for Overall 

Incentive Auction Structure, Including 

Integration of Reverse and Forward 

Auctions 

24. The Commission seeks comment 

on integrating the reverse and forward 

auction bidding processes consistent 

with the staged structure it established 

in the Incentive Auction R&O. In 

particular, the Commission seeks 

comment on procedures for setting the 

broadcast television spectrum clearing 

target and for determining whether the 

final stage rule is satisfied, as well as on 

the steps triggered by the determination 

that the final stage rule is satisfied. 

A. Setting an Initial Spectrum Clearing 

Target and Determining Impairments 

25. The Commission proposes 

procedures for setting the initial 

clearing target for the auction. The 

approach the Commission proposes will 

establish the highest clearing target 

possible from among the available 

options given broadcaster participation 

in the reverse auction. Alternatively, the 

Commission seeks comment on whether 

it should omit any initial clearing 

targets, such as the 108 MHz clearing 

target. The auction system will use 

mathematical optimization techniques 

to identify provisional TV channel 

assignments that protect the coverage 

area and population served of nonparticipating television stations as 

required by the Spectrum Act. Where 

necessary, non-participating stations 

will be assigned to channels in the 600 

MHz Band. Any stations assigned to 

channels in the 600 MHz Band will be 

entitled to the same protection in the 

repacking process as other TV stations, 

and will be protected from inter-service 

interference under the standards the 

Commission adopted in the ISIX 

proceeding, in which it has proposed 

strict standards to protect TV stations 

from such interference. In making such 

assignments, the Commission proposes 

that the auction system will minimize 

potential inter-service interference to 

600 MHz Band licenses. To limit the 

extent of market variation in the 

provisional TV channel assignment 

plan, the Commission proposes to limit 

impairments on a nationwide aggregated 

basis to less than 20 percent of the total 

U.S. population (measured on a 

weighted basis). If a provisional channel 

plan does not exceed this limit, the 

auction system may apply any 

secondary objectives for TV channel 

assignments that the Commission 

establishes. If a provisional channel 

plan exceeds the less than 20 percent 

limit, however, the process will start 

again with the next lower clearing 

target. 

26. The Commission first addresses its 

proposed approach to measuring the 

extent of potential inter-service 

interference to 600 MHz Band PEAs in 

order to set the clearing target. Second, 

the Commission addresses objectives for 

determining the location of any TV 

stations that must be assigned to the 600 

MHz Band to accommodate market 

variation. Third, the Commission 

explains its proposal to use ‘‘weightedpops’’ to calculate the market variation 

associated with a clearing target and 

propose a standard for limiting market 

variation. Fourth, the Commission 

addresses the use of optimization 

techniques under its proposed approach 

to setting a clearing target. 

i. Measuring the Extent of Potential 

Impairments 

27. In order to determine a clearing 

target, the auction system must be able 

to evaluate the extent of any potential 

impairments to licenses in the 600 MHz 

Band as a result of market variation. In 

the ISIX R&O, the Commission adopted 


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the ISIX methodology to predict 

potential inter-service interference 

between TV and wireless services. 

Appendix B of the Auction 1000 

Request for Comment details how the 

Commission proposes to use the data 

produced using this methodology to 

generate mathematical constraints that 

enable the auction system to measure 

the extent of potential impairments to 

600 MHz Band licenses in order to set 

a clearing target. Under the proposed 

procedure, the raw data the ISIX 

methodology produced at the two-bytwo kilometer cell level would be 

aggregated into uplink and downlink, 

county-level data sets (a table crossreferencing counties to PEAs is available 

on the Commission’s Web site at 

http://transition.fcc.gov/oet/info/maps/

areas/) and mapped to specific 600 MHz 

Band licenses in advance of the 

incentive auction. The percentage of the 

population of each county subject to 

inter-service interference then would be 

calculated for every TV station eligible 

for protection in the repacking process 

on every possible channel in the 600 

MHz Band. Consistent with the ISIX 

methodology, which defines each cell as 

‘‘impaired’’ or ‘‘unimpaired’’ depending 

on whether it is subject to any interservice interference, the procedure 

would apply a threshold to determine 

whether a county is ‘‘impaired’’ for each 

possible TV station and channel 

combination. 

28. The Commission invites comment 

on a threshold for determining whether 

a county is ‘‘impaired’’ for purposes of 

determining impairments for a given 

clearing target. In particular, the 

Commission invites comment on setting 

a threshold within the range of 10-to-20 

percent. Under the Commission’s 

proposed methodology, a county with 

predicted impairment above the 

threshold for a specific station-channel 

assignment would be considered wholly 

impaired, i.e., 100 percent of the county 

population, for purposes of measuring 

the extent of impairment in the PEA 

when setting the clearing target. In 

considering the impaired population to 

which the Commission will apply the 

threshold, it also proposes to 

distinguish between uplink and 

downlink impairments. In this regard, a 

TV station in the uplink portion of the 

600 MHz Band might allow unimpaired 

use of the downlink portion of a paired 

5+5 megahertz license. Accordingly, the 

Commission proposes that rather than 

consider uplink impairments above the 

threshold to be wholly impaired as it 

does with downlink impairments, it 

consider a county with uplink 

impairments above the threshold to be 

50 percent impaired. Commenters that 

advocate a different threshold or 

approach should explain why they 

believe their approach would better 

inform the setting of a clearing target. 

29. The Commission proposes to 

aggregate the data in order to reduce the 

volume of data inputs to a quantity that 

reasonably can be utilized in setting a 

clearing target. The data would be 

aggregated to this level only for use in 

the optimization procedure to set a 

clearing target; the Commission 

proposes that the auction system would 

provide more detailed data on the 

location and extent of impairment to 

600 MHz Band licenses during the 

forward auction. 

30. Under the Commission’s proposed 

procedure for setting an initial clearing 

target, the mathematical constraints for 

measuring impairments that are the 

inputs to the optimization procedure 

would be generated before the auction, 

so that during the auction the 

optimization can dynamically calculate 

the percentage of impaired population 

within each license for any possible 

combination of TV stations and channel 

assignments in the 600 MHz Band by 

adding the total population of the 

‘‘impaired’’ counties within the PEA 

and dividing that sum by the total 

population of all of the counties within 

the PEA. The Commission proposes that 

if a 600 MHz Band license is more than 

50 percent impaired by the assignment, 

the optimization procedure will 

consider all of the associated weightedpops to be impaired, consistent with its 

proposal not to offer such licenses in the 

forward auction. 

ii. Assigning TV Stations to the 600 

MHz Band as Necessary To 

Accommodate Market Variation 

31. The Commission seeks comment 

on certain details for assigning 

television stations to the 600 MHz Band 

as necessary to accommodate market 

variation. Under the Commission’s 

proposed approach, the auction system 

will use mathematical optimization 

techniques to identify a provisional TV 

channel assignment plan for stations 

that elect not to participate in the 

auction that best meets certain primary 

objectives. While these techniques will 

identify channels in the remaining TV 

bands for as many of these stations as 

possible, the auction system may not be 

able to assign channels in the remaining 

bands to all of the stations that must be 

assigned channels in areas that are 

constrained due to factors such as lack 

of broadcaster participation in the 

reverse auction or international borderrelated issues. Under such 

circumstances, the auction system will 

assign television stations to channels in 

the 600 MHz Band. Any television 

stations assigned to channels in the 600 

MHz Band will be entitled to the same 

protection in the repacking process as 

other TV stations, and will be protected 

from inter-service interference under the 

standards the Commission adopts in the 

ISIX proceeding, in which it has 

proposed not to allow any harmful 

interference to TV stations from wireless 

services. 

32. Importantly, although TV channel 

assignments in the broadcasting portion 

of the band will be provisional until the 

final channel assignment process, which 

occurs after bidding ends in the final 

stage of the auction, under the 

Commission’s proposed approach any 

assignments of television stations to 

channels in the 600 MHz Band will be 

fixed prior to the start of the forward 

auction for that stage, and those 

assignments will be final if no 

subsequent stages of the auction are 

necessary. Thus, a television station’s 

assignment to a channel in the 600 MHz 

Band for purposes of setting a clearing 

target may determine both its postauction channel assignment and the 

specific impairments to 600 MHz Band 

blocks that will be offered in the 

forward auction, depending on whether 

the final stage rule is satisfied in that 

stage. If subsequent stages are necessary, 

the auction system will generate a new 

band plan that may involve different 

provisional TV station and channel 

assignments in the 600 MHz Band. In 

contrast to any TV channel assignments 

in the 600 MHz Band, the vast majority 

of assignments to channels in the 

remaining television bands will change 

constantly during the repacking process. 

33. Because of differences in wireless 

uplink and downlink transmission 

technologies, location of a television 

station in the downlink or uplink 

portion of the 600 MHz Band is likely 

to affect the extent of impairments to 

affected PEAs and, therefore, 600 MHz 

Band license prices. In particular, 

uplink impairments are likely to affect 

larger geographic areas than downlink 

impairments, although whether that 

interference to a larger area translates 

into a significantly larger impact on 

value to the forward auction licenses 

depends on the population density 

within a PEA. Uplink impairments also 

may affect fewer spectrum blocks than 

downlink impairments, however, 

because they would allow for 

unimpaired use of the downlink portion 

of a 600 MHz Band license by carriers 

with below-1 GHz uplink spectrum. On 

the other hand, assigning stations to the 

downlink band would limit the 

geographic reach of impairments and 


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promote greater contiguity with 

television stations in the remaining TV 

bands. Assigning stations to the 

downlink band, and/or only to the 

licensed portion of the uplink band, 

would also result in more consistently 

usable nationwide spectrum for wireless 

microphones and unlicensed devices 

that will operate in the duplex gap, i.e., 

the guard band between 600 MHz Band 

uplink and downlink services. In cases 

where a television station must be 

assigned to a channel in the 600 MHz 

Band in order to meet a given clearing 

target, the Commission proposes to 

assign these stations based on its goal of 

minimizing the loss of value due to 

impairments, i.e., minimizing the total 

impaired weighted-pops nationwide. 

Under this proposal, the optimization 

procedure could assign TV stations to 

any frequency in the 600 MHz Band. 

This could lead to assignments in the 

uplink portion of the 600 MHz Band in 

some markets, and in the downlink 

portion in others. The Commission 

proposes to include this objective in the 

optimization procedure consistent with 

its goals of limiting the potential for 

inter-service interference and 

maintaining a generally consistent band 

plan. In addition, the proposed objective 

will increase the likelihood of meeting 

the incentive auction reserve price 

conditions at the initial clearing target. 

On the other hand, the Commission 

recognizes that this approach may result 

in assigning television stations to the 

duplex gap or other guard bands in 

some markets, and limit the contiguity 

of TV stations if they are not assigned 

to the downlink portion of the 600 MHz 

Band. 

34. Alternatively, the Commission 

seeks comment on whether it should 

assign stations to the downlink portion 

of the 600 MHz Band whenever feasible 

to do so, in the interest of greater 

contiguity and ensuring more 

consistently usable nationwide 

unlicensed spectrum. The Commission 

notes that by limiting the choice of 

assignments, a downlink-only approach 

may make it more difficult to identify an 

assignment of TV stations that meets the 

less than 20 percent standard than 

would its more flexible proposed 

approach and, therefore, could result in 

setting a lower clearing target. The 

Commission invites commenters to 

address the costs and benefits of its 

proposal and the alternative, including 

the potential impact on broadcast and 

wireless licensees, as well as on 

wireless microphones and unlicensed 

devices, and to discuss how the 

Commission should prioritize objectives 

where multiple outcomes are possible. 

In the Part 15 NPRM, 79 FR 69709, 

November 21, 2014, the Commission 

proposed technical criteria for wireless 

microphones and unlicensed devices for 

each possible guard band size (7, 9, or 

11 megahertz). 

iii. Standard for Limiting Market 

Variation 

35. In the Incentive Auction R&O, the 

Commission established that the 600 

MHz Band Plan will allow for market 

variation, while recognizing that it is 

important to limit the potential for interservice interference and maintain a 

generally consistent band plan 

nationwide by applying a ‘‘nearnationwide’’ standard. The Commission 

therefore proposes to limit the amount 

of market variation associated with the 

initial spectrum clearing target by 

limiting impairments on a nationwide 

aggregated basis to less than 20 percent 

of ‘‘weighted-pops.’’ The Commission 

believes that its proposed approach will 

promote the central goal of a successful 

auction that allows market forces to 

determine the highest and best use of 

spectrum. By accommodating market 

variation, it will ensure that 

broadcasters have the opportunity to 

participate in the reverse auction in 

markets where interest is high, and 

avoid the need to restrict the licenses 

offered in the forward auction to the 

number available in the most 

constrained market. At the same time, 

by strictly limiting the total amount of 

market variation associated with a 

clearing target, it will limit the potential 

for inter-service interference and help 

600 MHz Band licensees achieve 

economies of scale when deploying 

their new networks. The Commission’s 

proposed approach also takes into 

account the relative costs and benefits of 

impairing licenses in different PEAs. 

36. For purposes of applying the nearnationwide standard, the Commission 

proposes to measure the impact of 

potential impairments in terms of 

‘‘weighted-pops,’’ weighting the affected 

population in a license area by an index 

of area-specific prices from prior 

auctions. The same weighted-pops 

amount will be applied for each 

spectrum block in a PEA. This index is 

the same index used for calculating 

bidding units before applying the 

proposed decile approach. Both indices 

are provided in Appendix F of the 

Auction 1000 Request for Comment. The 

Commission proposes to incorporate the 

final results of the auction of AWS–3 

licenses (Auction 97) when calculating 

the indices. The Commission seeks 

comment on whether it should group 

the index by deciles for purposes of 

applying the near-nationwide standard 

as it proposes for calculating bidding 

units. Under this approach, for a given 

clearing target and assignment of TV 

stations to channels, the Commission 

calculates the percentage of the 

population impaired in every PEA for 

each license using the county level data 

generated using the measurement 

approach. The Commission multiplies 

that percentage by the weighted-pops 

associated with the PEA to determine 

the ‘‘impaired weighted-pops’’ for the 

license. To calculate a nationwide total 

of impaired weighted-pops, the 

impaired weighted-pops for all licenses 

associated with a clearing target will be 

added together. This total will then be 

divided by the nationwide total number 

of weighted-pops for all licenses 

associated with that clearing target to 

determine whether the maximum 

aggregate nationwide impairment 

standard or threshold is satisfied. The 

Commission believes that its proposed 

approach to applying a threshold 

provides for flexibility in balancing the 

population that will be affected by 

potential inter-service interference with 

the number of markets that will be 

affected, and accounts for the relative 

value of the market to wireless 

providers based on past auction prices. 

Alternatively, the Commission seeks 

comment on whether it should use a 

metric that does not weight population 

by the amount of bandwidth and/or by 

a price index. For example, an 

alternative metric could require that 80 

percent of the U.S. population (or priceweighted population) must be in areas 

not considered impaired, regardless of 

the quantity of impaired spectrum in 

any one area. 

37. The Commission proposes to set 

the near-nationwide standard at less 

than 20 percent. Under this standard, a 

clearing target could be chosen only if 

80 percent or more of the weighted-pops 

in the targeted amount of spectrum 

nationwide is considered unimpaired 

according to its methodology. If the 

provisional TV channel assignment plan 

associated with a clearing target results 

in potential impairments to 20 percent 

or more of the total number of weightedpops nationwide, the auction system 

would consider a lower clearing target. 

The Commission believes that a less 

than 20 percent limit is appropriate to 

avoid reducing the amount of spectrum 

that will be available in most areas 

nationwide while ensuring that, for any 

given clearing target, 600 MHz Band 

Plan licenses generally will not be 

affected by inter-service interference. 

The Commission’s proposal to use 

weighted-pops also will help to ensure 

that most of the spectrum in the most 


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heavily-weighted PEAs remains 

unimpaired. 

38. The Commission seeks comment 

on these proposals. The Commission 

also invites comment on alternatives to 

its proposed near-nationwide standard. 

For example, should the Commission 

set a lower standard? Should the 

Commission require that certain PEAs, 

or a specific number of PEAs (e.g., 40 of 

the top 50 PEAs as measured by total 

population), not have any Category 2 

licenses in order to choose a clearing 

target? The Commission encourages 

commenters to address the trade-offs 

involved in any alternative approach 

that they advocate. 

iv. Clearing Target Optimization 

Procedure 

39. Consistent with the Incentive 

Auction R&O, the process the 

Commission will use to set the initial 

clearing target will incorporate 

mathematical optimization techniques. 

The proposed optimization procedure is 

set forth in detail in Appendix C of the 

Auction 1000 Request for Comment. 

This process will also provisionally 

assign television stations to channels 

under an assignment plan that best 

meets the rules and objectives the 

Commission proposes. Once a clearing 

target is set, the resulting provisional 

assignment plan of television stations to 

channels in the television bands will be 

used by the reverse auction system as 

the initial tentative assignment, and 

information about license impairments 

due to stations assigned in the 600 MHz 

Band will be used in the forward 

auction portion of the stage. 

40. The proposed procedure will 

apply a number of rules or constraints 

that any provisional assignment plan 

must satisfy. It will ensure that any 

assignment plan includes a permissible 

channel in its pre-auction band for 

every television station that is not 

participating in the reverse auction. The 

procedure will apply the technical 

repacking constraints established in the 

Incentive Auction R&O, taking into 

account any fixed constraints specific to 

an area or a channel that would prevent 

an assignment of a station to a channel, 

as well as all other stations that cannot 

be located on a co- or adjacent channel. 

The procedure also will determine an 

initial assignment of participating 

stations to relinquishment options 

consistent with the station’s initial 

commitments made during the 

application process and will attempt to 

assign as many stations as possible to 

their preferred option. 

41. The Commission proposes that the 

primary objective of the proposed 

clearing target optimization procedure 

will be to minimize the total impaired 

weighted-pops nationwide. The 

optimization procedure will measure 

the percentage of population impaired 

in a PEA for a given television station 

and channel assignment using the 

measurement approach and described in 

more detail in Appendix C of the 

Auction 1000 Request for Comment. 

Thus, the optimization procedure will 

determine a feasible assignment of 

television stations to channels in the 

remaining TV bands where possible 

and, as necessary, assign stations to 

channels in the 600 MHz Band so as to 

minimize potential impairments to 600 

MHz Band licenses. 

42. In addition to these primary rules 

and objectives, the procedure could 

consider additional criteria in setting a 

clearing target. For example, should the 

procedure apply criteria to account for 

operation of the proposed dynamic 

reserve price process? Should it apply 

criteria to increase the likelihood of 

satisfying the final stage rule? The 

Commission seeks comment on whether 

to apply additional criteria in setting a 

clearing target. The Commission asks 

commenters to keep in mind that the 

tradeoff from stricter requirements may 

be to move to a lower clearing target, 

where fewer licenses will be available 

and fewer stations will be needed to 

relinquish spectrum usage rights. 

43. Any channel assignment plan that 

satisfies the primary rules and 

objectives also may be modified for 

secondary objectives, provided that it 

does not violate the Commission’s less 

than 20 percent standard for 

impairments. Should the Commission 

incorporate a secondary objective that 

would favor an initial channel 

assignment with at least a minimum 

level of vacancy in the broadcasting 

portion of the band, so as to give the 

auction system more flexibility to find 

feasible assignments during the bidding 

rounds, potentially avoiding the need to 

move to a lower clearing target because 

it failed to meet the final stage rule? In 

this context, should the Commission 

consider requiring that the 20 percent 

nationwide standard include sufficient 

vacancy to accommodate additional 

impairments created during any reverse 

auction dynamic reserve pricing 

procedures? The Commission seeks 

comment on possible secondary 

objectives to be applied in the 

optimization procedure. Because the 

optimization procedure may identify 

more than one possible assignment plan 

that satisfies the primary rules and 

objectives, the Commission particularly 

seeks comment on how the procedure 

should choose between plans to best 

meet the goals of the incentive auction. 

For example, the Commission asks 

commenters to consider whether the 

procedure should favor an assignment 

in which the number of 600 MHz Band 

blocks, or the number of Category 1 

blocks (a Category 1 license is any 

license with potential impairments that 

do not exceed 15 percent of the 

population) is most nearly the same in 

the largest number of PEAs, in order to 

promote the geographic contiguity of the 

band plan. Alternatively, the 

Commission invites comment on 

whether the optimization procedure 

should try to minimize the number of 

PEAs—or the number of particular 

PEAs—in which Category 2 blocks 

outnumber Category 1 blocks, to avoid 

having PEAs with significantly fewer 

Category 1 blocks than are available in 

most areas nationwide. 

B. Final Stage Rule 

44. The final stage rule the 

Commission adopted in the Incentive 

Auction R&O incorporates an aggregate 

reserve price based on the bids in the 

forward auction. Satisfaction of the rule 

conditions will cause the current stage 

to become the final stage for the 

auction’s clock bidding rounds. The rule 

has two components, both of which 

must be satisfied. The first and second 

components are complementary and not 

cumulative. The auction must satisfy 

both components, but it need not raise 

sufficient proceeds to satisfy the first in 

addition to the second. Rather, the same 

bids and proceeds can be considered 

when satisfying each component. The 

Commission seeks comment on 

determining the price and spectrum 

clearing benchmarks for the first 

component of the rule, as well as on 

other rule implementation issues. 

i. First Component: Average/Aggregate 

Prices in Forward Auction 

45. The Commission proposes an 

average price per MHz-pop (the term 

MHz-pop is defined as the product 

derived from multiplying the number of 

megahertz associated with a license by 

the population of the license’s service 

area, i.e., PEA, for the 600 MHz band, 

specifically) benchmark of $1.25 for 

spectrum offered in the largest 40 PEAs 

by population in the forward auction 

and a forward auction spectrum 

benchmark of 70 megahertz, 

corresponding to a broadcast spectrum 

clearing target of 84 megahertz. The 

Commission also seeks comment on its 

proposal to consider a subset of those 

licenses in applying the first component 

of the final stage rule. 

46. The first component ensures that 

winning bids for the licenses in the 

forward auction reflect competitive 


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prices. The Commission explained in 

the Incentive Auction R&O that the first 

component of the reserve price will be 

satisfied if, for a given stage of the 

auction: (1) The average price per MHzpop for licenses in the forward auction 

meets a price benchmark that will be set 

by the Commission in the pre-auction 

process; or (2) the total proceeds 

associated with licenses in the forward 

auction exceed the product of the price 

benchmark, the forward auction 

spectrum benchmark, and the total 

number of pops for those licenses. The 

determination of the average price and 

spectrum clearing benchmarks is 

therefore essential to the 

implementation of the first component 

of the final stage rule. 

47. Setting an average unit price 

benchmark of $1.25 per MHz-pop in the 

largest 40 PEAs by population will 

accomplish the Commission’s goal of 

‘‘assuring that prices for licenses in the 

forward auction reflect competitive 

values without reducing the amount of 

spectrum repurposed for new, flexibleuse licenses.’’ The closest comparable 

spectrum auction—Auction 73— 

generated an auction-wide average price 

per MHz-pop of $1.28 and an average 

price among paired spectrum blocks of 

$1.36. Since that auction closed in early 

2008, spectrum prices generally appear 

to have increased, although the growth 

rate cannot be validated based on 

comparable data due to the absence of 

final results for a large-scale auction in 

that period. Moreover, because the 

prices of 600 MHz Band licenses will be 

determined by the forward auction 

bidding, the Commission believes that 

any aggregate reserve price it sets 

should reflect a ‘‘floor’’ and not a 

‘‘ceiling’’ of the ‘‘competitive values’’ of 

these licenses, in order to provide 

sufficient margin to account for the 

inherent price uncertainty present in 

any auction. 

48. The Commission proposes to set 

the forward auction spectrum 

benchmark to correspond with the 

spectrum recovery scenario in which 

the Commission clears 84 megahertz of 

broadcast TV spectrum and offer 

licenses for 70 megahertz of spectrum in 

the forward auction. The spectrum 

benchmark will be used as part of the 

alternative formulation of the final stage 

rule’s first component, which 

‘‘recognizes that if the incentive auction 

repurposes a relatively large amount of 

spectrum for flexible uses, per-unit 

market prices may be expected to 

decline consistent with the increase in 

available supply.’’ An 84 megahertz 

broadcast TV spectrum clearing target, 

which would repurpose all of the 

spectrum between TV channel 37 and 

the 700 MHz Band and provide 70 

megahertz of spectrum in the forward 

auction, would promote the 

Commission’s competitive goals by 

enabling multiple bidders to obtain lowband spectrum. Therefore, the 

Commission believes that this threshold 

is appropriate for the forward auction 

spectrum benchmark. 

49. The Commission proposes to 

determine whether the first component 

of the final stage rule is satisfied based 

on the average prices for a subset of 

PEAs likely to be subject to the greatest 

level of demand. The Commission 

proposes to include in the subset the 40 

largest PEAs by population because they 

cover geographic areas that have usually 

generated the highest average prices per 

MHz-pop in prior spectrum license 

auctions. In previous auctions, prices 

for licenses in these ‘‘high-demand’’ 

areas have accounted for a substantial 

fraction of total auction revenues, and 

further, licenses in ‘‘high-demand’’ 

areas tend to reach their final prices 

well before bidding stops on all 

licenses, making these markets a good 

leading indicator of final auction 

revenues. Further, using this subset of 

PEAs will promote a speedy auction by 

enabling the auction system to 

determine quickly when the final stage 

rule will not be met necessitating a new 

stage with a lower clearing target. The 

Commission seeks comment on this use 

of ‘‘high-demand’’ PEAs and the 

proposed definition of this ‘‘highdemand’’ subset. 

50. The Commission further proposes, 

in considering whether average prices 

meet the benchmark, to consider only 

bids for spectrum blocks in Category 1. 

The Commission proposes to offer 

spectrum blocks in two categories of 

generic licenses for bidding in the 

forward auction. Specifically, the 

Commission defines a Category 1 

license as any license with potential 

impairments that affect zero to 15 

percent of the population of a specific 

PEA, and as Category 2, any license 

with potential impairments that affect 

greater than 15 percent but less than or 

equal to 50 percent of the population. 

Limiting the Commission’s 

consideration of blocks in this manner 

is consistent with its proposed use of 

data from other auctions in determining 

the relevant average price, as the 

licenses in those prior auctions were not 

impaired in a manner comparable to the 

proposed licenses in Category 2. 

51. Applying the Commission’s 

proposals to the first component of the 

final stage rule, as explained in more 

detail in Appendix G of the Auction 

1000 Request for Comment, the first 

component will be satisfied if the 

average price per MHz-pop for Category 

1 licenses in ‘‘high-demand’’ PEAs in 

the forward auction equals or exceeds 

$1.25 per MHz-pop at clearing targets at 

or below the benchmark clearing target. 

For clearing targets above the 

benchmark clearing target, the 

Commission proposes to consider 

current auction proceeds for all licenses 

when comparing to the proceeds that 

would be generated by the benchmark 

price for ‘‘high demand’’ PEAs and the 

benchmark clearing target. This 

simplifies the evaluation of the 

formulation since the Commission will 

compare a number publicly announced 

at the end of every round (the total 

forward auction proceeds) to a fixed 

number known in advance (the product 

of the price and spectrum benchmarks 

that it adopts, and the total number of 

pops covered by licenses in ‘‘highdemand’’ PEAs). Under this formula, the 

first component of the final stage rule 

may be satisfied even if the overall 

average price per MHz-pop in the ‘‘highdemand’’ PEAs fails to meet the 

proposed $1.25 price benchmark. 

52. In evaluating whether the first 

component of the final stage rule is 

satisfied, the Commission also proposes 

not to take into account any adjustments 

to final clock prices. Thus, the 

Commission proposes to rely on gross 

bids, rather than bids net of individual 

bidders’ bidding credits or any 

adjustments for impairments. The first 

component is intended to assess 

whether the bids reflect competitive 

prices for the licenses. The Commission 

tentatively concludes that the clock 

prices will adequately measure 

competitive prices for the licenses in the 

proposed Category 1, even though the 

full amount of the clock price may not 

be collected from every winning bidder. 

Moreover, since winning bidders will 

not yet be determined at the time the 

final stage rule is met, it will not be 

clear which licenses will be subject to 

bidding credits. The clock price reflects 

a common metric for pricing the 

licenses and is appropriate to use in 

assessing whether the first component 

of the final stage rule has been satisfied. 

ii. Second Component: Covering Costs 

53. The second component of the final 

stage rule requires that the proceeds of 

the forward auction be sufficient to meet 

mandatory costs and expenses set forth 

in the Spectrum Act and any Public 

Safety Trust Fund amounts needed in 

connection with FirstNet. Given the 

purpose of assuring sufficient proceeds 

for specified purposes, the Commission 

proposes a conservative approach to 

estimating the proceeds resulting from 


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4826 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 

forward auction bids for evaluating 

whether the second component is met. 

54. The Spectrum Act requires that 

the forward auction generate proceeds 

sufficient to pay three types of expenses: 

payments to winning bidders in the 

reverse auction; the Commission’s 

relevant administrative costs of the 

auction; and an estimate of broadcaster 

relocation costs eligible for 

reimbursement. In addition, the 

Commission concluded that the forward 

auction proceeds also must cover a 

fourth expense: any Public Safety Trust 

Fund amounts still needed to provide 

funding for FirstNet as contemplated in 

the Spectrum Act. 

55. The reverse auction itself will 

determine the amount of the first 

expense. With regard to the second 

expense, the Commission cannot yet 

provide a reliable estimate of the 

amount of its expenses in conducting 

the incentive auction because there is 

still much work to do before it can 

conduct the auction. The Commission 

therefore proposes here to provide an 

estimate in the Procedures PN and a 

maximum percentage by which the final 

amount might vary from that estimate. 

The final amount for purposes of the 

final stage rule would be provided no 

later than the commencement of 

bidding. The flexibility in this approach 

will enable the Commission to discharge 

its statutory obligation to recover the 

relevant expenses from auction 

proceeds while providing adequate 

information to potential and actual 

auction participants to make informed 

decisions about participating and 

bidding. 

56. With regard to the third expense 

that must be covered, the actual amount 

that will be needed to reimburse 

broadcasters from the TV Broadcaster 

Relocation Fund (Reimbursement Fund) 

will not be known until sometime after 

the auction. In any event, the Spectrum 

Act provides that the forward auction 

must generate proceeds sufficient to 

meet the Commission’s estimate of the 

total expenses, as opposed to the actual 

amount. The Commission proposes to 

estimate this amount at $1.75 billion, 

the maximum amount that the Spectrum 

Act permits it to deposit in the 

Reimbursement Fund. The Commission 

considers setting this expense at the 

maximum amount to be prudent in light 

of the difficulty of estimating the 

amount in advance and the substantially 

conflicting range of estimates suggested 

in the record to date. 

57. With regard to the fourth expense, 

the Commission proposes to announce 

in the Procedures PN any amount 

needed in the Public Safety Trust Fund 

to provide funding for FirstNet. The 

maximum amount of the Public Safety 

Trust Fund deposits to be made 

available to FirstNet for build out under 

the Spectrum Act is $7 billion. The 

amount that the incentive auction must 

provide will depend on the proceeds 

generated for FirstNet by the auction of 

AWS–3 licenses (Auction 97) and 

whether, once Auction 97 has been 

concluded, there are any Public Safety 

Trust Fund amounts still needed to 

provide funding for FirstNet as 

contemplated in the Spectrum Act. The 

Commission is optimistic that upon the 

conclusion of Auction 97, it will be 

clear that deposits to the Public Safety 

Trust Fund will be sufficient to fully 

fund requisite amounts for FirstNet. 

58. The Commission proposes to take 

into account discounts that may affect 

actual amounts paid by winning bidders 

when evaluating whether the second 

component of the final stage rule is 

satisfied. Given the second component’s 

purpose of assuring sufficient proceeds 

for specified purposes, the Commission 

believes a more conservative approach 

to estimating the ultimate proceeds 

resulting from forward auction bids is 

appropriate than for the first component 

of the final stage rule. Accordingly, in 

determining whether the second 

component has been satisfied, the 

Commission proposes to take into 

account any discounts based on 

impairments, as well as discounts based 

on small business bidding credits 

applicable to particular bidders. 

59. A final license price may be 

adjusted to take into account the extent 

of any impairments that exist in the 

license. Accordingly, the Commission 

proposes here that it use the available 

information regarding the extent of the 

impairments when evaluating the final 

stage rule to discount the current clock 

price by the impairments. Doing so 

effectively will apply the same 

percentage discount that will be applied 

to the final price for the license, 

presuming the final stage rule is 

satisfied. The estimate used will be the 

lowest amount possible for the final 

price, which ultimately may be larger 

based on bidding in clock rounds and 

any additional bidding on the license in 

the assignment phase. 

60. It is more difficult to estimate the 

final effect of small business bidding 

credits on auction proceeds prior to the 

conclusion of the auction. In order to do 

so, the Commission proposes that the 

auction system will presume that the 

bidder with the largest bidding credit 

will win the blocks it is bidding on and 

then proceed to the bidder with the next 

largest bidding credit and so on, until 

there are no more blocks left. Moreover, 

the Commission proposes to presume 

that the bidders with the largest bidding 

credits will win the blocks that are least 

impaired and thus, subject to the least 

adjustment based on the extent of 

impairment. The Commission believes 

that this approach is appropriate in light 

of the purpose of the second 

component. The Commission notes that 

a more conservative approach would be 

to discount all bids by the largest 

bidding credit claimed by any bidder in 

the auction, thereby assuring that the 

final winning bids could not be any 

lower than the estimate. However, the 

Commission does not propose to take 

this more conservative approach 

because it likely would overestimate 

substantially the discounts on final 

winning bids. 

61. Unlike other bidding credits, 

winning bidders initially apply for 

Tribal lands bidding credits after the 

close of bidding, and so the amount of 

any Tribal lands bidding credits will not 

be known until after the auction, 

making it very difficult to assess their 

effect on auction proceeds. In past 

auctions, the Commission addressed 

this difficulty with a rule (47 CFR 

1.2110(f)(3)(v)) that limits any amounts 

disbursed as Tribal lands bidding 

credits based on the available funds that 

exceed the relevant reserve price. The 

rule thus allows the award of Tribal 

lands bidding credits so long as the 

awards do not reduce the amount of 

funds otherwise required by a reserve 

price. The second component of the 

final stage rule specifically functions to 

assure that auction proceeds will equal 

or exceed the total of the four expenses 

that the second component reflects. 

Accordingly, the Commission proposes 

to apply 47 CFR 1.2110(f)(3)(v) with 

respect to the amount of the second 

component to preclude the possibility 

that the post-auction award of Tribal 

lands bidding credits could reduce 

auction proceeds below the total of the 

four expenses. Under this proposal, so 

long as there are sufficient proceeds to 

fund both the four expenses and any 

Tribal lands bidding credits, the credits 

will be awarded in full. If the proceeds 

are not sufficient to cover both the four 

expenses and any such Tribal lands 

bidding credits, the credits will be 

reduced proportionally as provided in 

47 CFR 1.2110(f)(3)(v) so that the four 

expenses will be covered in full and any 

credits awarded will use only proceeds 

in excess of the total of the four 

expenses. Commenters objecting to this 

proposal should specify an alternative 

approach to prevent total auction 

proceeds from falling below the amount 

of the final stage rule’s second 

component. 


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Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 4827 

C. Stage Structure 

62. In the Incentive Auction R&O, the 

Commission decided that the incentive 

auction will begin with reverse auction 

bidding followed by forward auction 

bidding in the initial stage and that, if 

necessary, bidding will continue over 

multiple stages, each including reverse 

and forward auctions, for successively 

lower clearing targets, until the final 

stage rule is met. Here the Commission 

seeks comment on remaining issues 

related to the stage structure. In 

particular, the Commission proposes 

procedures to determine whether the 

auction is in its final stage. The 

Commission also proposes procedures 

for moving to an extended round if 

certain conditions are met, as well as 

steps for transitioning to a new stage if 

necessary. 

i. Sequence of Reverse and Forward 

Auctions 

63. Consistent with the Commission’s 

decision in the Incentive Auction R&O 

regarding the first stage, the 

Commission intends that in any stage, 

the reverse auction will occur first, to be 

followed by the forward auction. Under 

this proposal, the reverse auction will 

run until the reverse auction stopping 

rules are met. The forward auction will 

commence once the reverse auction has 

stopped. 

64. The Commission seeks to provide 

the minimum necessary time between 

the reverse and forward auctions in any 

stage. The Commission therefore 

proposes to start forward auction 

bidding in the initial stage on the 

second business day after the close of 

bidding in the stage’s reverse auction. 

With respect to any subsequent stages, 

the Commission proposes to start 

forward auction bidding on the next 

business day after the close of reverse 

auction bidding. Before forward auction 

bidding commences in any stage of the 

auction, forward auction bidders will be 

informed of the number of blocks to be 

offered in each PEA and the degree to 

which any of those blocks are impaired. 

The Commission seeks comment on this 

proposal. If commenters suggest a longer 

interval, the Commission asks that they 

provide details on why a longer period 

is desirable. 

ii. Final Stage Determination and 

Implementation of Extended Round 

65. The Commission proposes to 

evaluate whether the final stage rule is 

met throughout forward auction bidding 

in order to determine as quickly as 

possible whether the auction is in its 

final stage. This approach will allow the 

auction system to implement 

procedures triggered by satisfaction of 

the rule as early as possible and 

promote the speedy conclusion of the 

overall auction process. Specifically, the 

auction system will evaluate whether 

forward auction proceeds are sufficient 

to satisfy the final stage rule as part of 

the bid processing that occurs after each 

round of forward auction bidding. As 

prices and associated auction proceeds 

increase during the forward auction, the 

auction system will have the needed 

information to evaluate whether all 

required conditions of the final stage 

rule have been met. 

66. The Commission also proposes to 

implement an ‘‘extended round’’ in 

which bidders will have the opportunity 

to increase their bids to make up any 

shortfall in the final stage rule under 

specified circumstances. The purpose of 

an extended round is to attempt to 

satisfy the final stage rule without 

moving to a new stage and lower 

clearing target. In the absence of an 

extended round, the current stage of the 

auction would be deemed to have failed 

and the auction would move to a new 

stage with a reduced clearing target. 

iii. Transition to Any Subsequent Stages 

67. After the conclusion of a stage that 

has ended without satisfying the final 

stage rule, and prior to beginning of any 

subsequent stage, the Commission 

proposes that the auction system will 

announce the new bidding schedule, 

including the date and time that bidding 

will start in the reverse auction portion 

of the next stage. If the auction must 

move to a new stage, the Commission 

proposes to set the clearing target for the 

next stage as the next lowest clearing 

target. Alternatively, the Commission 

seeks comment on whether the benefits 

outweigh the costs of skipping some 

clearing targets. For example, should the 

Commission skip the 108 MHz clearing 

target when moving to a lower clearing 

target because under that scenario two 

downlink blocks are separated from the 

remaining downlink blocks by channel 

37? 

D. After the Final Stage Rule Is Satisfied 

68. When forward auction bidding 

satisfies the final stage rule, that stage of 

the auction will be the final stage. 

Meeting the final stage rule will not 

‘‘close’’ the forward auction, however, 

as long as demand exceeds supply in 

any PEA. Rather, bidding will continue 

until demand does not exceed supply 

for all blocks in all PEAs. When this 

clock phase of the auction ends, the 

next step in the forward auction will be 

the assignment phase in which 

successful forward auction bidders will 

bid for frequency-specific licenses equal 

to the number of blocks they won in the 

clock phase. The Commission proposes 

that bidding in the assignment phase of 

the forward auction will start five 

business days after the auction system 

provides more detailed information 

about the assignment phase. The 

Commission recognizes that forward 

auction bidders will need a period of 

time to develop bidding strategies for 

the assignment phase, particularly since 

this is the first time it has conducted a 

frequency assignment phase. However, 

the Commission’s goal is to conclude 

the incentive auction as efficiently as 

possible. Thus, the Commission believes 

the interval it proposes before beginning 

the assignment phase should be 

adequate. 

IV. Proposed Reverse Auction 

Procedures 

A. Relinquishment Options and 

Information Available 

69. The Commission explained in the 

Incentive Auction R&O that the purpose 

of the reverse auction is to identify 

broadcasters willing to relinquish some 

or all of their spectrum usage rights, and 

the corresponding incentive payments 

those broadcasters will require, in order 

to clear a stage-specific spectrum 

clearing target. To this end, the 

Commission adopted a descending 

clock auction format, relinquishment 

options, and a repacking methodology 

that will be incorporated into the 

reverse auction system. Bidding will 

take place in a series of rounds in which 

a bidder will be presented with price 

offers for each of its valid options for 

relinquishing spectrum usage rights. 

The Commission seeks comment on 

procedures to implement the various 

relinquishment options it established. 

The Commission also addresses the 

information that will be made available 

to bidders and to the public during the 

reverse auction bidding process. 

i. Options for Relinquishing Spectrum 

Usage Rights 

70. The Commission proposes to 

implement the relinquishment options 

established in the Incentive Auction 

R&O by giving each bidder the 

opportunity to bid for the various 

options that are open to it given the 

station’s pre-auction band location 

(UHF, High-VHF, or Low-VHF). 

Specifically, a licensee with a UHF 

station can bid to relinquish all 

spectrum usage rights and go off-air, or 

to move to a High-VHF channel or a 

Low-VHF channel. A licensee with a 

High-VHF station can bid to go off-air or 

to move to a Low-VHF channel. A 

licensee with a Low-VHF station can bid 


tkelley on DSK3SPTVN1PROD with PROPOSALS
4828 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 

only to go off-air. To incorporate the 

channel sharing option into the bidding 

process, the Commission proposes that 

a participant that wishes to relinquish 

rights in order to share another 

licensee’s channel will bid to go off-air, 

following the same bidding procedures 

as bidders that wish to go off-air without 

retaining a license. Throughout the 

auction, all bidders will maintain the 

option of declining to accept a price 

offer for an option, indicating that at 

this price or lower, they choose to drop 

out of the bidding. 

71. The Commission proposes to treat 

the various options available to 

broadcasters, from license 

relinquishment to remaining on the air 

in their pre-auction bands, as a 

hierarchy in order of relinquishment 

and value to the auction. With regard to 

a UHF station, bidding to go off-air 

would be at the top, or first, in the 

hierarchy, followed by a move to LowVHF, then to High-VHF, and finally, 

remaining on the air in its pre-auction 

band. Bidding to go off-air would be 

first in the hierarchy for High-VHF and 

Low-VHF stations as well, followed by 

a move to Low-VHF (for High-VHF 

stations only), and then remaining on 

the air in their respective pre-auction 

bands. The Commission will later refer 

to this ordering in addressing several of 

its proposed reverse auction 

implementation procedures. 

72. The Commission proposes that a 

bidder will not be permitted to bid for 

options that would involve greater 

relinquishments than the most recent 

option selected. Under the 

Commission’s proposal, the auction 

system will permit a bidder to move up 

(from greater relinquishment to less), 

but not down. For example, assuming a 

bidder with a UHF station selects all 

three relinquishment options in its 

application and then indicates its 

preferred option is to go off-air, the 

auction system will allow the bidder to 

choose the option of moving to a LowVHF channel (if there is a vacancy in 

the Low-VHF band) later in the bidding, 

but not vice versa. If and when the 

auction system accepts that change in 

the bidder’s preferred option, the bidder 

will not be allowed to request to go offair later because that would represent a 

move down in the hierarchy of options. 

Likewise, selecting the option of moving 

to a High-VHF bid would preclude later 

bidding to go off-air. The Commission 

proposes this approach so that the 

auction system can calculate price offers 

based on consistent indications of 

bidder preferences, which will simplify 

bidding choices and lead to a speedier 

reverse auction. 

73. The Commission proposes to treat 

a channel-sharing bid as the 

Commission does a bid to go off-air 

because, from the perspective of the 

auction system, a channel sharing bid is 

identical to a license relinquishment 

bid. Under this proposal, a bidder that 

seeks to relinquish its rights and share 

a channel with another broadcaster will 

be required to enter into a channel 

sharing agreement before the bidding, 

and will continue to hold a broadcasting 

license following the auction, but will 

not be subject to different bidding 

procedures during the auction than 

other participants that are going off the 

air. A broadcaster that relinquishes 

spectrum usage rights in order to share 

a channel will have its post-auction 

channel determined according to its 

contract with its channel sharer—that is, 

another broadcaster that remains on-air. 

The Commission notes that parties to a 

channel sharing agreement bear the 

consequences of any defects in the 

agreement or the failure of either party 

to perform pursuant to its terms. The 

Commission is not a guarantor or an 

enforcer of channel sharing agreements. 

ii. Reverse Auction Information 

Available During the Auction 

74. The Commission proposes to limit 

the disclosure of information regarding 

bidding during the auction. This 

proposal is separate and apart from the 

Commission’s statutory obligation to 

maintain the confidentiality of 

information regarding the identity of 

participating broadcasters. 

75. Specifically, the Commission 

proposes that the auction system will 

offer each reverse auction bidder only 

the prices for options specific to its 

station(s). Under the Commission’s 

proposed approach bidders will not 

know the prices being offered to other 

bidders. 

76. The Commission proposes that 

while the incentive auction is open, it 

will disclose to the public the current 

stage status, specifically the stage 

number and whether or not bidding is 

still open in the reverse auction for that 

stage. When bidding in the reverse 

auction for a stage is closed, the 

Commission also will disclose to the 

public the total of reverse auction bids 

that the forward auction proceeds must 

satisfy as part of the second component 

of the final stage rule. 

B. Application To Participate and 

Commitment to Initial Relinquishment 

Option 

77. The Commission seeks comment 

on particular aspects of the reverse 

auction application process. 

Specifically, the Commission seeks 

comment on information to be provided 

from potential channel sharers, i.e., 

stations that may or may not participate 

directly in the auction and that have 

agreed to share a channel with an 

auction participant that relinquishes its 

spectrum usage rights in the auction. 

The Commission also seeks comment on 

information to be required from certain 

participants whose eligibility is 

uncertain, and from all participants 

with respect to their exercise of due 

diligence prior to participating. In 

addition, the Commission describes 

how each applicant will identify—and 

commit to—its initial preferred option 

among the available options for 

relinquishing spectrum usage rights. 

i. Information From Channel Sharing 

Participants 

78. The Commission proposes that 

any auction applicant submitting a 

channel sharing agreement with its 

application also be required to submit a 

separate certification by the channel 

sharer that the channel sharing 

agreement submitted is a true, correct, 

and complete copy of the channel 

sharing agreement between the parties. 

This certification must be executed by a 

party with authority to make such 

representations on behalf of the channel 

sharer. The Commission adopted rules 

in the Incentive Auction R&O outlining 

the information required of an applicant 

seeking to participate in the auction in 

order to share a channel after the 

auction. Under these rules, channel 

sharers—stations that agree to share 

their channels after the auction with 

stations that relinquish rights in the 

auction in order to channel share—need 

not apply to participate in the auction. 

However, they must provide any 

‘‘necessary’’ certifications. The 

Commission believes that the proposed 

certification is necessary in order to 

smooth the post-auction transition by 

helping to assure the accuracy of the 

channel sharing agreement submitted 

with the application. 

ii. Agreement to Escrow, if Necessary for 

Participation 

79. The Incentive Auction R&O 

considered the circumstances of 

broadcasters that have licenses that have 

expired or are subject to a revocation 

order (collectively a ‘‘license validity 

proceeding’’), or that have Class A 

stations subject to a downgrade order, 

when the license validity proceeding or 

Class A downgrade order has not 

become final and non-reviewable by a 

date prior to commencement of the 

auction that will be specified in the 

Procedures PN. If the license invalidity 

determination becomes final between 


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the time a broadcaster is found to be 

qualified to participate in the reverse 

auction and commencement of reverse 

auction bidding, the broadcaster will be 

excluded from participating in the 

reverse auction. In those circumstances, 

the Commission established that the 

broadcaster is allowed to participate 

provided that its reverse auction 

proceeds would be placed in escrow 

pending the final outcome of the license 

validity proceeding or order. The 

Commission similarly established that a 

broadcaster with a pending enforcement 

matter or a pending license renewal 

application that raises an enforcement 

issue is allowed to participate in the 

reverse auction, on condition that such 

a broadcaster that no longer would hold 

any broadcast licenses upon acceptance 

of a license relinquishment bid agrees 

that a share of its reverse auction 

proceeds be placed by the Commission 

in escrow to cover potential forfeiture 

costs. The Commission now proposes 

the mechanism for implementing this 

arrangement in those circumstances 

where it is appropriate. Specifically, the 

Commission proposes that broadcasters 

with pending enforcement, license 

renewal, or other potential eligibility 

impediments must agree, as part of their 

application to participate in the auction, 

that auction proceeds which they 

otherwise could receive for 

relinquishing spectrum usage rights will 

be held by the U.S. Treasury. The U.S. 

Treasury would maintain the funds that 

are held back in a manner that accounts 

for each broadcaster’s potential share 

pending the final resolution of specified 

issues, or for two years, as described in 

the Incentive Auction R&O. In addition, 

all such broadcasters that would not 

control any other television stations if 

its bid or bids were accepted must agree 

to remain subject to the Commission’s 

jurisdiction and authority to impose 

enforcement or other FCC liability postauction. The Commission seeks 

comment on this proposal. 

80. This proposal implements the 

Commission’s determination that such 

broadcasters may be qualified to 

participate even though they (a) have 

uncertain eligibility to participate due to 

particular circumstances or (b) have 

certain outstanding potential liabilities 

to the Commission. More specifically, 

the Commission provided that a 

broadcaster that has a license that is 

subject to pending proceedings that, if 

resolved against the broadcaster, would 

make the broadcaster ineligible to 

participate, might become qualified to 

bid if the broadcaster agrees to have the 

full amount of any incentive auction 

proceeds it might win held by the U.S. 

Treasury, pending resolution of the 

outstanding proceedings. 

81. The Commission also concluded 

that a broadcaster might participate in 

the reverse auction even though the 

relinquishment of its broadcast 

spectrum usage rights might otherwise 

limit the Commission’s ability to 

recover potential liabilities to it, 

provided that the broadcaster agrees that 

some of any incentive payment would 

be held by the U.S. Treasury to cover 

potential forfeiture amounts. In the 

second case, when such a broadcaster is 

notified of its eligibility to participate in 

the reverse auction after filing an 

application, the Wireless 

Telecommunications, Media, and 

Enforcement Bureaus will provide that 

broadcaster with information about any 

pending enforcement matter that cannot 

be resolved before the reverse auction. 

In addition, the Bureaus will indicate 

the amount of reverse auction proceeds 

that will be held should the broadcaster 

relinquish its license(s) as a result of the 

auction and therefore otherwise no 

longer be subject to the Commission’s 

jurisdiction. 

82. As to the amount to be held with 

respect to a particular broadcaster, all of 

the relevant auction proceeds would be 

held pending the final resolution of the 

status of the license in the case of a 

broadcaster with a license that may be 

determined post-auction not to have 

been eligible for relinquishment at the 

time of the auction. In the case of a 

broadcaster that has outstanding 

potential liabilities and might cease to 

be subject to Commission jurisdiction 

after relinquishing all of its broadcast 

spectrum usage rights, the amount 

determined prior to the auction by the 

Bureaus would be held. As described in 

the Incentive Auction R&O, amounts 

held will be released to the broadcaster 

or the Commission, as appropriate in 

light of the final resolution of the 

relevant specified issues. 

83. The Commission also invites 

comment on an alternative proposal, 

under which, instead of holding the 

funds in the U.S. Treasury, it would 

deposit the relevant amounts in a third 

party financial institution to serve as a 

private escrow agent. Under this 

alternative, prior to the auction, the 

Commission would designate a private 

escrow agent for each broadcaster 

agreeing to the escrow in its application. 

The Commission will require that any 

escrow agent maintain the 

confidentiality of Commission-held data 

of broadcasters participating in the 

reverse auction. The Commission seeks 

comment on this alternative, including 

the terms of any escrow agreement with 

a third-party agent. 

iii. Certification Regarding Due 

Diligence 

84. The Commission proposes that all 

applicants will be required to certify the 

truth of the following statement as a part 

of their application to participate in the 

reverse auction: ‘‘The applicant 

acknowledges and agrees that any 

information provided by the 

Commission’s outside contractors who 

are advising and assisting it with 

education and outreach in connection 

with the reverse auction is for 

informational purposes only and that 

neither the Commission nor any of its 

outside contractors makes any 

representations or warranties with 

respect to any such information and 

shall have no liability to the applicant 

in connection therewith.’’ The 

Commission’s rules already provide that 

an applicant to participate in the reverse 

auction must certify that it has sole 

responsibility for investigating and 

evaluating all technical and marketplace 

factors that may have a bearing on the 

bids it submits in the reverse auction. 

The Commission’s proposed additional 

certification will likewise help assure 

that each applicant accepts 

responsibility for its bids and will not 

attempt to place responsibility for its 

bids on either the Commission or the 

information provided by third parties as 

part of the Commission’s outreach. 

Requiring this proposed certification is 

also consistent with the Commission’s 

rule providing that an application will 

contain ‘‘such additional information as 

may be required,’’ 47 CFR 1.2204(c)(11). 

iv. Committing to an Initial 

Relinquishment Option 

85. The specific opening prices for 

each bidding option available to each 

station eligible to participate in the 

reverse auction will be provided at least 

60 days in advance of the deadline to 

apply to participate in the reverse 

auction. The Commission proposes that 

each applicant to participate in the 

reverse auction will indicate for each of 

its stations listed in its application all of 

the spectrum relinquishment options 

available to it that it may be willing to 

consider. After Commission staff 

reviews a submitted application and the 

applicant has resolved any issues 

regarding the information provided, the 

applicant will be required to indicate a 

single preferred relinquishment option 

for each of its stations from among those 

that it previously indicated it would be 

willing to consider. An applicant must 

indicate a preferred relinquishment 

option and in certain cases may also 

specify alternative(s) for that preferred 

option. An applicant must specify a 


tkelley on DSK3SPTVN1PROD with PROPOSALS
4830 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 

preferred option (and any alternative(s), 

if it so chooses) for each station listed 

in its application in order to qualify as 

a bidder with respect to those stations 

in the reverse auction. This step will 

constitute a commitment by the 

applicant to fulfilling the terms of its 

preferred option (or alternative(s)) for a 

particular station, i.e., relinquishing the 

relevant spectrum usage rights in 

exchange for the opening price in the 

event the auction system can 

accommodate the preference (or an 

alternative). This first commitment will 

establish the starting point for bidding 

in the clock rounds. 

86. In order for an applicant’s 

commitment for a station to be a valid 

starting point for bidding, it must be 

feasible for the auction system to 

accommodate an option for that station. 

The auction system can always 

accommodate going off-air as a preferred 

option because going off-air does not 

require finding a feasible channel 

assignment. However, the auction 

system may not be able to accommodate 

moving to either the Low-VHF or HighVHF band as a preferred option if there 

are not enough channels available in 

that band (vacancy) at the start of the 

auction to accommodate all stations 

with such a preference. Accordingly, the 

Commission proposes that an applicant 

that selects moving to either Low-VHF 

or High-VHF as its preferred option for 

a station may indicate alternative 

options for that station, which would be 

used in the event that the preferred 

option cannot be accommodated. Under 

the Commission’s proposal, the auction 

system will attempt to accommodate the 

preferred option. If it cannot and the 

applicant indicated one or more 

alternative options for the station, the 

system will attempt to accommodate 

one of the alternative options when 

determining an initial assignment of 

stations to relinquishment options. If 

the system assigns the station to one of 

its alternative options, that option will 

constitute the applicant’s commitment 

and become that station’s assigned 

option at the start of bidding. If the 

auction system cannot accommodate an 

applicant’s preferred option or any of its 

alternative options for a station, that 

station will be assigned a channel in its 

pre-auction band. Thus, an applicant 

that wants to guarantee a station’s 

participation in the bidding should 

indicate going off-air as either its 

preferred option or as an alternative 

option, as a vacancy for every station to 

move to Low-VHF or High-VHF cannot 

be guaranteed. 

87. The Commission proposes that 

once bidding begins in the clock rounds 

a bidder will not be permitted to bid for 

options that would involve greater 

relinquishments than the previous 

option selected. Thus, under the 

Commission’s proposal, an applicant 

considering multiple relinquishment 

options for a station will need to 

consider the restriction on moving one 

way up the hierarchy of options in 

deciding which option to commit to at 

the commitment stage of the application 

process, since its choice may preclude 

later being able to bid for other options 

below it. For example, initially 

committing to moving to Low-VHF 

would preclude later switching options 

to going off-air; initially committing to 

moving to High-VHF would preclude 

later switching options to going off-air 

or moving to Low-VHF; and initially 

committing only to moving to either 

Low-VHF or High-VHF, without 

committing as an alternative to going 

off-air, could result in non-participation 

if there is no vacancy in either of these 

bands at the start of the auction. 

88. Initial Assignment. Once each 

station has made an initial 

commitment(s), the auction system will 

determine an initial assignment of 

stations to relinquishment options using 

optimization techniques. This initial 

assignment will determine the 

relinquishment option for which a 

station will be offered prices at the 

beginning of the reverse auction. Due to 

the limited availability of VHF 

channels, the Commission proposes to 

prioritize rules that will be used to 

determine, in the event that all 

participating stations cannot be assigned 

to their preferred options, how to 

choose an alternative option for some 

stations. If a station cannot be assigned 

to its preferred option or an alternative 

option, it will not participate in the 

reverse auction bidding and will be 

assigned to a channel in its pre-auction 

band. As set forth in detail in Appendix 

C of the Auction 1000 Request for 

Comment, the Commission proposes the 

following rules in order of priority: (1) 

Minimize the number of UHF 

participating stations that must be 

assigned to their pre-auction band; (2) 

minimize the number of VHF 

participating stations that must be 

assigned to their pre-auction band; (3) 

maximize the number of participating 

stations that can be assigned to their 

preferred relinquishment option; (4) 

maximize the number of participating 

stations that can be assigned to go off 

the air as an alternative option; and (5) 

minimize the sum of impaired 

weighted-pops across all licenses (i.e. 

solve for the primary objective of the 

clearing target optimization). The 

Commission proposes to give rules (1) 

and (2) the highest priority to minimize 

the number of stations that are assigned 

to their pre-auction band and, therefore, 

cannot participate in the reverse 

auction. Rule (1) precedes all others to 

minimize the likelihood of creating 

additional impairing stations in the 600 

MHz Band. If not all stations can 

simultaneously be assigned to their 

preferred option pursuant to rule (3), 

rule (4) would ensure that the maximum 

number of stations that must be 

assigned an alternative option are 

assigned the option to go off the air, in 

order to provide the most opportunities 

for bidding in the reverse auction. 

Finally, rule (5) would require the 

optimization to choose among the 

remaining options based on the primary 

objective of minimizing the sum of 

impaired weighted-pops across all 

licenses in the 600 MHz Band. 

C. Descending Clock Bidding Procedures 

89. In adopting a descending clock 

format for the reverse auction, the 

Incentive Auction R&O explained that 

‘‘bidders will be faced with relatively 

simple choices of determining whether 

or not they are still willing to accept the 

current prices for bid options.’’ It 

determined that price offers for bid 

options generally will start high and 

descend between rounds for each 

participating station, and indicated that 

price offers for each station may be 

adjusted based upon factors reflecting 

that particular station’s impact on the 

repacking process. In the Incentive 

Auction R&O, the Commission adopted 

rules allowing for the use of reserve 

pricing in the reverse auction, and noted 

that it may adopt procedures to 

implement a form of dynamic reserve 

pricing (DRP). The Commission also 

explained in general terms the 

descending clock auction procedures for 

selecting winning bids and determining 

prices to be paid to winning bidders. 

90. The Commission proposes 

procedures for determining the prices 

reverse auction bidders will be offered 

during the bidding rounds. The 

Commission then address the bidding 

process in detail, proposing procedures 

for the types of acceptable bidder 

responses to price offers in a round, 

including procedures for bidding for 

multiple relinquishment options. The 

Commission also addresses how the 

auction system will process bidder 

responses to determine which stations 

will have their bids accepted. Finally, 

the Commission proposes procedures to 

implement bidding activity and 

stopping rules. 


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i. Determining Price Offers 

91. The Commission clarifies that a 

‘‘bid’’ in this descending clock auction 

means a response to a price that is 

offered to the bidder. This is consistent 

with the fundamental premise of a clock 

auction, where bidders do not initiate 

bids but rather indicate over a series of 

rounds whether they are willing to 

accept offered prices that increase or 

decrease, depending upon whether it is 

an auction to sell or buy. The clock 

prices stop increasing or decreasing 

when there is no longer competition 

among the bidders to buy or sell an 

item. For example, in a simple 

procurement auction to buy one item, 

the auction stops when only one bidder 

is left that is willing to supply the item 

at the current price offer. In the reverse 

auction, the Commission will aim to 

‘‘procure’’ a targeted amount of cleared 

television spectrum and bidders will 

compete to relinquish spectrum usage 

rights to enable that clearing. Through 

their bids in each round, bidders will 

indicate their continued willingness to 

accept a given offer price for a 

relinquishment option, which will 

constitute a commitment to relinquish 

their spectrum usage rights at that price, 

or they will reject the offer, possibly 

indicating a lowest price they are 

willing to accept. 

a. Opening Price Methodology 

92. Opening prices must be high 

enough to encourage robust 

participation in the reverse auction, but 

not so high that the reverse auction 

requires many hundreds of rounds to 

reach final clearing prices. In designing 

a system of competitive bidding, which 

includes setting opening prices, the 

Commission promotes several statutory 

goals, including ‘‘recovery for the public 

of a portion of the value of the public 

spectrum resource made available for 

commercial use and avoidance of unjust 

enrichment through the methods 

employed to award uses of that 

resource,’’ 47 U.S.C. 309(j)(3)(C). To 

balance these objectives, the 

Commission proposes to calculate an 

opening bid price for each station, using 

a station-specific ‘‘volume’’ factor and 

an underlying base clock price for a 

UHF station going off air. The opening 

bid for the UHF off-air and channel 

sharing options will be the same, as 

both would result in the return of a full 

six megahertz of UHF spectrum for 

reallocation to flexible-use licenses. 

Because the Commission will not know 

the initial clearing target prior to 

accepting bidder applications, and 

therefore will not exclude any stations 

or markets from the auction in advance, 

the Commission intends to provide 

opening prices to every eligible 

broadcaster. If, upon establishing the 

initial clearing target, the auction 

system identifies markets where 

broadcaster participation is not needed, 

it will so inform broadcasters in any 

such market and provisionally assign 

each of them channels in their preauction bands. The opening prices may 

be zero for stations that the auction 

system determines do not constrain the 

Commission from reorganizing the UHF 

band. The opening off-air bid for UHF 

stations would be the product of each 

station’s volume factor and the base 

clock price. Opening bid prices for a 

move from the UHF band to the LowVHF or High-VHF band would be 

calculated by applying a specific 

discount to the off-air bid amount for 

each of these options. 

93. The Commission proposes to 

calculate a station’s volume using this 

formula: Station Volume = 

(Interference)0.5 * (Population)0.5. The 

Commission proposes to set interference 

equal to the number of co- and adjacent 

channel constraints a station would 

impose on repacking on a pairwise 

basis. The interference component 

measures a station’s potential impact on 

repacking. More specifically, for each 

station pairing, the Commission first 

determines the maximum number of 

constraints that can exist between the 

two stations on any channel in bands 

into which both stations can be 

repacked. Thus, between two UHF 

stations, the Commission would 

consider all channels in the UHF, HighVHF or Low-VHF bands (channels 2–51) 

to determine the maximum number of 

constraints that exist between the two 

stations consistent with the hierarchy of 

relinquishment options. Between a UHF 

station and a High-VHF station, the 

Commission would consider only 

channels in the High-VHF band 

(channels 7–13) and Low-VHF band 

(channels 2–6) to determine the 

maximum number of constraints that 

exist between the two stations. Between 

a UHF station and a Low-VHF station, 

the Commission would consider only 

channels in the Low-VHF band 

(channels 2–6) to determine the 

maximum number of constraints that 

exist between the two stations. The 

Commission then sums up these 

maximums for each station to set its 

interference metric. The Commission 

proposes to measure population as the 

number of people residing within the 

station’s interference-free service area. A 

fuller description of this calculation is 

set out in Appendix D of the Auction 

1000 Request for Comment. 

94. To calculate a station’s opening 

bid price, the Commission will multiply 

its volume times a base clock price. The 

base clock price is a constant amount 

per unit of volume. Based on the 

Commission’s work to date on the 

design of the incentive auction, it 

expects that a base predicated on an 

opening bid price of $900 million for 

the station with the highest volume will 

achieve robust participation by stations 

across multiple markets. The 

Commission therefore proposes to set 

the base clock price so as to yield an 

opening bid of $900 million for this 

station. It should be noted that if this 

highest volume station is not in UHF, its 

base clock price would be decreased by 

the discount applied to its pre-auction 

band. This discount is detailed in 

Appendix D to the Auction 1000 

Request for Comment. The Commission 

will calculate volume for all stations 

and then rescale so that the maximum 

station volume is one million. Dividing 

the $900 million opening bid price for 

the highest volume station by one 

million results in a base clock price of 

900. The base clock price will drop in 

each round of the reverse auction, while 

a station’s volume will remain constant. 

The price offered to a bidder to go off 

air in a given round will be the product 

of the base clock price in that round and 

the station’s volume. The markets and 

stations needed in the reverse auction 

will depend on which stations choose to 

participate, and actual compensation to 

stations will be determined by the 

auction. 

95. The Commission tentatively 

concludes that this formula 

appropriately balances the manifold 

goals that Congress has charged it with 

in connection with the incentive 

auction. First, a combined interferencepopulation volume establishes opening 

bid prices that should provide the 

necessary incentive for broadcaster 

participation. Consistent with the 

Commission’s determination in the 

Incentive Auction R&O, its proposed 

approach will yield opening bid prices 

that reasonably approximate underlying 

relative differences in value of stations 

to the auction. The Commission’s 

proposed formula is not based on a 

station’s market or enterprise value. If a 

station has many constraints and blocks 

many other stations from being 

repacked, then under the Commission’s 

proposal, its opening price will reflect 

that contribution to the auction’s ability 

to clear spectrum. The population 

component complements the 

interference metric by enabling the 

Commission to clear more spectrum in 

markets where the forward auction 


tkelley on DSK3SPTVN1PROD with PROPOSALS
4832 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 

value of relinquished spectrum usage 

rights is apt to be higher. Second, the 

opening bid price set using the 

proposed methodology will enable the 

Commission to close the auction in a 

reasonable number of rounds, providing 

ease of participation for broadcasters 

and enhancing the prospects for a 

successful auction. Third, the balanced 

approach the Commission proposes will 

meet its statutory obligation to promote 

the interests of taxpayers in getting a 

portion of the value of the spectrum 

sold at the forward auction. Finally, use 

of a population factor is consistent with 

the fact that the spectrum recovered 

from broadcasters will enable flexible 

use licenses to be offered in the forward 

auction subject to procedures that are 

based, among other things, on the 

population covered by each PEA. 

96. Under the Commission’s proposed 

approach, opening bid prices for moving 

from the UHF band to the Low-VHF or 

to the High-VHF band (the VHF options) 

will be set at a value relative to the 

opening price for going off-air. For 

moving from UHF or High-VHF to LowVHF, the Commission tentatively 

concludes that a station’s opening price 

should be between 67 and 80 percent of 

the station’s price to go off-air. For 

moving from UHF to High-VHF, the 

Commission tentatively concludes that a 

station’s opening bid price should be 

between 33 and 50 percent of the 

station’s off-air price. The Commission 

seeks comment on where in these ranges 

it should set the discounts or whether 

some other discount is appropriate for 

these bid options. The Commission 

emphasizes that these would only be 

opening discounts. Final discounts for 

the VHF options will be determined by 

the demand by bidders for VHF 

channels and the availability of those 

channels. 

97. The Commission proposes to 

calculate the opening prices for the VHF 

options as a discount off the off-air 

opening price because a winning bidder 

electing one of the VHF options will 

retain a full six megahertz channel, and 

thus should not receive the same 

compensation as bidder that 

relinquishes its rights to a six megahertz 

channel. The proposed level of the 

discounts reflects a comparison of the 

technical characteristics of UHF and 

VHF channels and of the characteristics 

of Low-VHF and High-VHF channels. In 

particular, VHF frequencies are more 

susceptible to interference than UHF 

frequencies. Specifically, noise from 

nearby electrical devices can disrupt 

reception on these lower frequencies, 

especially indoor reception. While 

present across the VHF bands, this issue 

is more pronounced on low-VHF 

channels than on High-VHF channels. 

Thus, while the opening price for a VHF 

option should not be the same as for the 

off-air relinquishment option, it should 

be high enough to offset the potential 

loss in value associated with this 

increased interference potential. 

98. The smaller discount for the LowVHF option as compared to High-VHF 

reflects that television receivers are 

subject to greater interference in the 

Low-VHF band. The proposed 

respective discounts for the Low-VHF 

and High-VHF options also reflect the 

relative number of unoccupied channels 

in each band. There are substantially 

more unoccupied Low-VHF channels 

than High-VHF channels. As a result, in 

nearly all markets, a station could move 

to a Low-VHF channel without the need 

to reassign any channels in that band. 

Conversely, there are relatively few 

markets where a station could move to 

High-VHF channels unless other 

stations vacate that band or are repacked 

within the band. In at least some 

scenarios, therefore, the Commission 

may need to pay two stations in 

connection with a UHF-to-High-VHF 

move: A High-VHF station to vacate its 

channel, and UHF licensee to move to 

High-VHF. A smaller discount, i.e., a 

higher opening price, for the Low-VHF 

option would signal the greater value of 

this option to the auction. The 

Commission seeks comment on its 

proposed approach to setting opening 

prices for the VHF options, the 

appropriate discount levels, or whether 

there are additional factors or 

approaches that the Commission should 

consider. 

b. Price Offers in Initial and Subsequent 

Rounds 

99. The Commission proposes that, in 

the first clock round of the reverse 

auction, a bidder whose commitment to 

a preferred or assigned alternative 

option at the opening price is not 

provisionally accepted by the auction 

system will be offered a lower price for 

the assigned option. As long as the 

bidder indicates it is willing to accept 

the offered prices, and if a feasible 

channel assignment exists for the station 

in its pre-auction band, the auction 

system will progressively offer lower 

prices for that option. When the 

Commission refers to checking a feasible 

channel assignment in a station’s preauction band when determining price 

offers, for stations with a pre-auction 

band of UHF, the Commission is 

referring to the remaining television 

portion of the UHF band. A bidder that 

indicates it will consider multiple 

bidding options will be informed of 

current prices for those options and will 

have the opportunity to request to 

switch to bidding for another option. A 

bidder that switches bidding options 

will then be offered progressively lower 

prices for that option, but only so long 

as a feasible channel assignment exists 

for the station in its pre-auction band. 

100. The Commission proposes to 

offer a bidder lower prices for 

relinquishment options as long as the 

bidder is still competing with other 

stations to relinquish rights, consistent 

with the basic clock auction’s 

competitive framework. When a 

station’s relinquishment becomes 

essential to meeting the clearing target 

(because there is no longer room for it 

in its pre-auction band), the auction 

system will stop offering lower prices to 

that station, and will provisionally 

accept the station’s offer to relinquish 

its usage rights. 

101. More specifically, whenever a 

station is provisionally assigned to a 

band, either because it dropped out of 

bidding or because its bid to switch to 

a different relinquishment option was 

applied, the repacking feasibility 

checker will consider for each station 

that remains active whether a channel 

can still be found in its pre-auction 

band, given all other stations that need 

to be assigned channels in that band 

(i.e., non-participants and other stations 

that have previously dropped out of the 

bidding and are assigned to that band). 

When the feasibility checker cannot find 

a way to repack a station into its preauction band because of the other 

stations that must be accommodated, 

the auction system will not reduce the 

station’s price in that auction round. If 

the feasibility checker determines that 

the station cannot be repacked in its 

pre-auction band for the remainder of 

the stage, then the auction system will 

notify the bidder that the station’s prices 

and relinquishment offer are ‘‘frozen’’ 

for the remainder of the stage. An 

exception to the general case may occur 

for VHF stations. For a VHF station, the 

amount of vacancy in its pre-auction 

band may increase as bidding rounds 

progress, so a station that had a 

relinquishment bid frozen because it 

was infeasible to accommodate in its 

pre-auction band can later become 

feasible. For instance, if a UHF station 

is currently assigned to move to upperVHF but subsequently drops out of the 

bidding to remain in UHF, that move 

may create a vacancy in upper-VHF. 

Because of this, unlike UHF stations, 

stations with pre-auction channels in 

the VHF band may unfreeze in later 

rounds of the same stage if it becomes 

possible to accommodate the station in 

its pre-auction VHF band. If the system 

determines that the station can feasibly 


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Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 4833 

be assigned a channel, the station will 

be offered a lower price in the next 

bidding round. 

102. Price reductions in each round, 

explained in detail in Appendix D of the 

Auction 1000 Request for Comment, 

will be based on the base clock price. 

The base clock price is calculated for 

the case of a station whose pre-auction 

band is UHF that is still feasible to 

repack in the UHF band and still 

bidding to go off-air. The Commission 

proposes to reduce this base clock price 

by between three percent and 10 percent 

per round. The Commission also 

proposes that the amount may be 

changed at any point during the reverse 

auction based on bidding activity during 

the auction. Using smaller decrements is 

likely to increase the number of rounds 

necessary to reach final auction prices. 

The Commission seeks comment on the 

possibility of using proxy bidding, 

which could reduce the bidders’ need to 

closely monitor numerous, frequent 

bidding rounds. With proxy bidding, a 

bidder could ask the system to continue 

to bid for its current relinquishment 

option in every round until either its 

price falls below a bidder-specified 

threshold or the bidder intervenes to 

change its bid, whichever happens first. 

In each round, the bidder would be 

informed of the first round in which the 

price of its option could possibly fall 

below its specified threshold. This 

notice would allow the bidder to 

anticipate the timing of when it may 

need to change its bid or update its 

proxy bid. The range of potential 

reductions will enable the auction to 

move at an appropriate pace while also 

providing the flexibility to offer bidders 

appropriate price choices as the auction 

progresses. For instance, if the 

decrement in a round is four percent, 

this means that the price offered per 

volume in this round to a UHF station 

for going off-air is four percent lower 

than what the base clock price was after 

the bid processing of the previous 

round. Appendix D of the Auction 1000 

Request for Comment describes how the 

Commission proposes to compute the 

prices that are offered to VHF stations 

for going off-air and/or for 

relinquishment options that are 

different from going off-air. Appendix D 

alternatively considers adjusting the 

decrement of each station as a function 

of its vacancy in the various bands. The 

Commission seeks comment on this 

alternative proposal. 

c. Dynamic Reserve Prices in Early 

Rounds of the First Stage 

103. The Commission proposes to 

implement dynamic reserve price (DRP) 

procedures in the early rounds of the 

reverse auction in the first stage. The 

DRP procedures the Commission 

proposes implement a limited exception 

to the proposal regarding price 

reductions and enable the auction 

system to reduce the price offered a 

station below the opening or previous 

round’s price even when the station 

cannot feasibly be assigned a channel in 

its pre-auction band, so long as 

assigning the station a channel in the 

600 MHz Band will not result in interservice interference that exceeds the 

nationwide standard for market 

variation. Accordingly, while DRP 

procedures are in effect, a UHF station 

may be offered a lower price for an 

option even if it cannot feasibly be 

assigned a channel in the remaining TV 

portions of the UHF band; if it refuses 

the offer, it may be assigned to a 

channel in the 600 MHz Band. By 

mitigating the risk that a station may be 

awarded its opening price merely 

because there is no channel to offer in 

its pre-auction band—a result that 

would have little or nothing to do with 

what the station would be willing to 

accept in exchange for relinquishing its 

spectrum usage rights—these 

procedures will increase the likelihood 

of a successful auction. This is because 

DRP procedures make it possible to offer 

higher opening prices, thereby attracting 

greater broadcaster participation, than 

would otherwise be the case. Absent 

DRP, lower opening prices would be 

necessary. Because the procedures the 

Commission proposes for discontinuing 

DRP will limit the extent to which 

opening prices can fall, even as reduced 

by DRP, the higher opening prices may 

ultimately provide higher incentive 

payments to broadcasters. In addition, 

by enabling the reduction in broadcaster 

payments where such payments are 

acceptable to broadcasters, the proposed 

DRP procedures will make it easier to 

satisfy the second component of the 

final stage rule. 

104. Under the Commission’s 

proposed approach, the reverse auction 

will begin in the first stage with DRP 

procedures in effect. While DRP 

procedures are in effect, participating 

UHF stations that cannot feasibly be 

assigned a channel in the remaining TV 

portion of the UHF band will be treated 

differently than when DRP procedures 

are not in effect: the prices offered to 

such stations will be reduced. In 

contrast, the prices of such stations will 

not be reduced when DRP procedures 

are not in effect. Regardless of whether 

dynamic reserve pricing procedures are 

in effect, the prices of a participating 

VHF station will not be reduced during 

bid processing if that station cannot be 

feasibly assigned a channel in its preauction band. Should a UHF station 

decline to accept a price offer when DRP 

procedures are in effect, the station may 

provisionally be assigned a channel in 

the 600 MHz Band, creating potential 

impairments to one or more 600 MHz 

Band blocks. 

105. The Commission proposes to 

discontinue DRP procedures when their 

application risks exceeding the less than 

20 percent nationwide standard for 

limiting market variation proposed. 

More specifically, the Commission 

proposes that DRP procedures be 

discontinued when, if the Commission 

were to assign all of the participating 

UHF stations for which the auction 

system cannot find a feasible channel in 

the remaining TV portion of the UHF 

band, the predicted aggregate level of 

impairments to licenses in the 600 MHz 

Band would exceed this standard. 

106. The Commission seeks comment 

on this proposal and on how to 

determine whether the standard would 

be exceeded, as a full channel 

assignment optimization would be too 

time consuming to run during the 

reverse auction clock rounds. One 

approach would be for the auction 

system to use a limited version of the 

channel assignment optimization 

procedures proposed for setting a 

clearing target to determine when the 

aggregate level of potential impairments 

from participating stations dropping out 

of the auction could exceed the 

proposed national standard. Once DRP 

procedures are discontinued, however, 

the Commission proposes that the 

system fully optimize the provisional 

channel assignments to minimize the 

impact of any impairments created 

during DRP. 

107. The Commission also seeks 

comment on alternative approaches for 

determining when DRP would be 

discontinued in order to avoid these 

risks. For instance, DRP procedures 

could be discontinued when there is the 

potential that the next participating 

station for which the auction system 

cannot find a feasible channel in the 

remaining TV portion of its pre-auction 

band, if it chose to drop out of the 

auction, would cause the predicted 

aggregate level of impairments to 

licenses in the 600 MHz Band to exceed 

this threshold. This alternative 

approach would always result in 

aggregate impairment that is just one 

station short of the threshold, while the 

proposed approach could result in a 

lower level of impairment, and possibly 

even no additional impairment, due to 

DRP. The Commission also seeks 

comment on whether, instead of 

determining when to discontinue DRP 


tkelley on DSK3SPTVN1PROD with PROPOSALS
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using predicted aggregate impairments, 

the Commission should use the 

population served by UHF stations that 

cannot be feasibly assigned a channel in 

the TV portion of UHF as a proxy for 

predicted aggregate impairments. 

ii. Bidding and Bid Processing 

108. Some bidders in the reverse 

auction will be interested in only a 

single relinquishment option (singleoption bidder). Other bidders may wish 

to consider price offers for multiple 

relinquishment options (multiple-option 

bidder). The Commission proposes 

detailed procedures for bidder 

responses and bid processing for 

bidders in both categories. 

a. Bidding for a Single Relinquishment 

Option 

109. At the start of the clock rounds, 

the Commission proposes that a singleoption bidder whose commitment to a 

bid option at the opening price is not 

provisionally accepted will be presented 

with a price offer lower than the 

opening price it committed to accept 

and asked if it is willing to accept the 

lower price. The Commission proposes 

that the bidder will have three choices: 

it may accept the offered price (i.e., 

submit a bid at the clock price), submit 

an intra-round bid, or not respond. If the 

bidder accepts the offered price, it will 

be finished bidding for that round and 

can await the results of the round. 

110. If the bidder does not place a bid, 

the auction system will treat the bidder 

as unwilling to relinquish its rights for 

less than it previously accepted. If the 

bidder places an intra-round bid, the 

bidder’s intra-round bid will indicate to 

the auction system that, at prices at least 

as high as the intra-round bid (including 

the opening price), the bidder is willing 

to relinquish its spectrum usage rights, 

but at lower prices the bidder’s station 

must be provisionally assigned a 

channel in its pre-auction band. 

111. During each subsequent bidding 

round, a bidder that continues to 

participate in the bidding—that is, a 

bidder that accepted the clock price 

offered during the previous round—will 

be presented with a new, lower price 

offer, and will have the same response 

choices as during the first round. 

112. Under the Commission’s 

proposed procedures, which are 

described in detail in Appendix D of the 

Auction 1000 Request for Comment, the 

auction system will process the bids 

submitted during a bidding round at the 

close of the round based on bid prices. 

If prices in the round drop below the 

level of an intra-round bid, the single 

option bidder will drop out of further 

bidding in the auction. The auction 

system will then evaluate the feasibility 

of repacking (that is, assigning 

permissible channels to) all other 

stations that continue to participate in 

the bidding in their pre-auction bands. 

If the system determines that a 

participating station cannot feasibly be 

accommodated in its pre-auction band, 

the system will stop reducing the 

station’s price at the point at which the 

station is infeasible to repack. 

Acceptance of a bid will be provisional 

until the final stage rule is satisfied, at 

which point provisionally-accepted bids 

will become winning bids. Appendix D 

describes in detail the process by which 

the Commission proposes to integrate 

the repacking feasibility checking 

methodology into the reverse auction 

process. 

113. As the auction system iteratively 

considers bids and potential channel 

assignments, it may determine that it 

will accept a relinquishment offer at a 

price higher than the lowest price the 

bidder indicated it would accept. 

Hence, a bidder that makes an intraround bid during a round may have its 

bid accepted at a price higher than the 

intra-round bid. 

114. Once the auction system has 

processed all of the bids submitted in a 

round and the results of the round have 

been determined, the auction system 

will indicate to each bidder its status— 

that is, whether its relinquishment bid 

has been provisionally accepted, 

whether it is still bidding for the option, 

or whether it is designated to be 

assigned a channel in its pre-auction 

band because it dropped out of the 

bidding. A bidder that accepted the 

clock price offered during the round 

whose station feasibly can be repacked 

in its pre-auction band will be offered 

a lower price for the next round. 

115. The Commission invites 

comment on whether it should simplify 

the reverse auction bidding process by 

not providing the option to place an 

intra-round bid, and instead simply ask 

each bidder if it is willing to accept the 

new lower price for its relinquishment 

option. If the bidder is unwilling to 

accept the lower offered price, the 

auction system would not ask for an 

intra-round bid. This approach could 

simplify both bidding and bid 

processing, as all bids would be 

processed at the clock prices. This 

would eliminate uncertainty about the 

price a bidder may receive at the start 

of the next round for the different 

relinquishment options. Implementing 

this alternative would require that the 

Commission use generally smaller 

increments for price reductions, and 

could reduce to some degree the 

flexibility afforded to bidders to choose 

specific price points within a round. 

b. Multiple Option Bidding 

116. The Commission has proposed 

that with respect to a particular station 

a bidder’s initial commitment will 

determine which option the bidder will 

be bidding for initially and explained 

that the station’s bid option selections 

on the pre-auction application will 

determine which options it may later 

consider, consistent with the proposed 

hierarchy of options. Accordingly, at the 

start of the first clock round, as for a 

single-option bidder, a multiple-option 

bidder in an area where there are more 

stations willing to accept 

relinquishment options than needed to 

meet the clearing target will be 

presented with a price offer for its 

option that is lower than the opening 

price it committed to accept. The 

multiple-option bidder will also be able 

to see current prices for each of its other 

bid options. 

117. In addition to being able to 

accept the lower price for its preferred 

option or place an intra-round bid, a 

multiple-option bidder will have the 

option, at current prices, to request to 

switch to any other of its eligible 

relinquishment options, consistent with 

the option hierarchy. The auction 

system will implement the switch if the 

feasibility checker determines that it is 

feasible to assign the station to a 

channel in the band associated with the 

new option. The bidder will then be 

offered a lower price for the new 

relinquishment option in the next round 

unless the bidder becomes frozen. 

However, if the system is unable to 

assign the bidder a channel in its newly 

preferred option, the system will still 

consider the bidder to be bidding for its 

previous option at the last price it 

agreed to accept. 

118. In the event that multiple bidders 

request to switch to bid on moving to 

the same band in the same round, the 

auction system may not be able to 

accommodate each request. As a result, 

the Commission proposes that a 

multiple-option bidder requesting to 

switch options must also indicate 

whether it is willing to accept the lower 

clock price for its currently assigned 

option, in case the system cannot 

accommodate its request to switch. A 

bidder unwilling to accept the lower 

price offer for its current option may 

place an intra-round bid to indicate a 

specific price at which it wishes to drop 

out of bidding for its current option. If 

there is not a channel available in the 

option to which a multiple-option 

bidder requests to switch, and the price 

for its assigned option drops below the 


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Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 4835 

intra-round bid amount during bid 

processing for the round, the bidder will 

drop out of the bidding and be 

designated to be assigned a channel in 

its pre-auction band. 

119. At the close of the bidding round 

the auction system will process the bids 

submitted during the round as in the 

single option bidder scenario, by 

considering the bids in decreasing order 

of bid price, consistent with the 

descending clock format. Once the 

auction system has processed all of the 

bids submitted in a round, the auction 

system will indicate to each bidder 

whether its request to switch bidding 

options was accepted, as well as 

whether it had a bid provisionally 

accepted or whether it dropped out of 

the bidding during the round. 

120. Under the alternative ‘‘no intraround bidding,’’ multi-option bidders 

would simply respond to single price 

offers without the opportunity to place 

intra-round bids. Submitted bids would 

be processed by attempting to 

accommodate a station’s requests to 

switch options (if any) and processing 

the station’s election to drop out of the 

bidding (if any). If as a result of another 

station’s bid, a bidder cannot be feasibly 

assigned a channel in its pre-auction 

band, the system would not lower the 

bidder’s prices. 

iii. Stopping Rule 

121. The Commission proposes a 

stopping rule for the reverse auction 

whereby bidding rounds will continue 

until no stations are still bidding—that 

is, each participating station either has 

had a bid to relinquish rights accepted 

or has been assigned to a channel in its 

pre-auction band. Both acceptance of a 

bid and assignment to a channel will be 

provisional until the final stage of the 

auction. 

D. New Stage Procedures 

122. If a stage of the auction fails to 

satisfy the final stage rule, the 

Commission will run a new stage of the 

auction at the next lower clearing target 

as identified in the Technical Appendix 

of the Incentive Auction R&O. The 

Commission proposes that at the start of 

any subsequent stages of the incentive 

auction, the auction system will 

conduct another clearing target 

optimization that will take into account 

the additional channel that will be 

available for broadcasting in the UHF 

band as a result of the reduction in the 

amount of UHF spectrum reallocated for 

flexible-use licenses under the next 

lower clearing target. The optimization 

procedure will ‘‘re-shuffle’’ the 

assignment of stations in the UHF band 

(both the television portion and the 600 

MHz Band) using the ISIX constraints 

and based upon the new clearing target 

with the objective of minimizing the 

number of impaired ‘‘weighted-pops.’’ 

123. With a reduced clearing target, 

the auction system may be able to find 

a feasible channel assignment for some 

bidders that had been provisional 

winners in the prior stage, that is, 

bidders that were frozen in a 

relinquishment option when the auction 

system determined that they could no 

longer be assigned a channel in their 

pre-auction bands. These bidders will 

resume bidding. Stations that dropped 

out of the bidding in a prior stage to be 

assigned a channel in their pre-auction 

band will retain that status and will not 

resume bidding. The Commission 

proposes to reset the base clock price to 

the highest point at which any newlyfeasible bidder was frozen in a prior 

stage. Then, in each round, as the clock 

price descends to reach the point at 

which a newly-feasible bidder was 

frozen in the previous stage, the bidder 

will again see lower price offers and 

will resume active bidding. 

Consequently, in a new stage, such 

bidders may not see their prices 

decrease for many rounds as the clock 

catches up to the point where each 

station had been previously frozen. 

124. The auction system will calculate 

price offers for bidders that can now be 

assigned a channel in their pre-auction 

bands using the descending clock 

pricing procedures, provided that the 

clock price is at or below the level at 

which these bidders had their 

relinquishment offers provisionally 

accepted in the prior stage. Bidders will 

respond to these prices, and reverse 

auction bidding rounds in the new stage 

will continue, according to the bidding 

procedures. 

125. The Commission seeks comment 

generally on these proposed procedures 

for initiating bidding in a new stage of 

the reverse auction. The Commission 

also seeks comment more specifically 

on whether, in order to reduce the 

number of rounds, especially where 

some bidders may have had their offers 

accepted in significantly earlier rounds 

of the prior stage, the Commission 

should increase the rate at which price 

offers descend for all newly-feasible 

bidders that are again actively bidding. 

E. Determining a Final Television 

Channel Assignment Plan 

126. The Commission invites 

comment on appropriate objectives in 

optimizing the final television channel 

assignment plan and on how to 

prioritize those objectives. Further 

detail on this process can be found in 

Appendix E of the Auction 1000 

Request for Comment. At the end of 

each reverse auction stage, all channel 

assignments in the remaining television 

bands will be provisional. After the final 

stage rule is satisfied, the Commission 

will determine final television channel 

assignments. The reassigned 

broadcasters will have the opportunity, 

after the release of the final channel 

assignment plan, to seek an alternative 

channel. Like the provisional 

assignments made during the clearing 

target optimization and repacking 

processes, final TV channel assignments 

will be subject to the constraints 

adopted in the Incentive Auction R&O 

in order to preserve each eligible 

station’s coverage area and population 

served. Unlike the provisional 

assignments made during the reverse 

auction clock rounds, which will be 

based solely on such constraints, final 

channel assignments will be made 

applying optimization techniques that 

take into account additional objectives. 

The Commission stated in the Incentive 

Auction R&O that it would seek 

comment on the details of the final 

channel assignment optimization in the 

Auction 1000 Request for Comment, and 

expressed its intention to optimize the 

final channel assignment plan to 

minimize relocation costs. In the recent 

ISIX R&O and Further Notice, the 

Commission adopted two additional 

objectives for the final optimization: 

Avoiding channel assignments that 

would result in aggregate new 

interference to any individual station 

over one percent and avoiding 

significant viewer losses due to terrain 

losses. The Commission deferred a 

decision as to how to optimize for the 

latter objective, recognizing that it could 

be accomplished in different ways. 

127. Consistent with the 

Commission’s prior determinations, it 

now proposes to determine the final TV 

channel assignment plan based on the 

following objectives, listed in order of 

priority: (1) Maximizing the number of 

stations assigned to their pre-auction 

channel; (2) minimizing the number of 

stations predicted to receive aggregate 

(that is, from multiple stations) new 

interference above one percent; and (3) 

avoiding reassignments of stations with 

high anticipated relocation costs in 

order to minimize total relocation costs. 

The Commission discusses these 

objectives and how they might work 

together and seeks comment on any 

other possible final TV channel 

assignment plan objectives. 

128. Maximizing Channel ‘‘Stays.’’ In 

order to repurpose a contiguous portion 

of the current UHF television band for 

new, flexible uses, some television 

stations currently operating on higher 


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4836 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 

UHF channels will need to be 

reassigned lower channels in the UHF 

band. While some channel 

reassignments are inevitable in order to 

clear any spectrum, the Commission 

seeks to minimize the disruption that 

channel reassignments will have on 

both broadcasters and their viewers, as 

well as to reduce the overall cost of the 

repacking process. In addition, avoiding 

new channel assignments where 

possible will help to avoid viewer losses 

due to terrain losses that can result 

when a station is reassigned to a 

different channel. The Commission 

therefore proposes to maximize the 

number of stations that stay on their 

pre-auction channel as its first objective 

in the final channel assignment 

optimization. By maximizing the 

number of stations that stay on their 

pre-auction channels, the Commission 

can reduce repacking costs, avoid 

disruption to broadcasters and their 

viewers and avoid losses in viewers and 

coverage area due to terrain that may 

result from channel reassignments. 

129. Minimizing Aggregate New 

Interference Over One Percent. As the 

Commission previously determined, it 

will optimize the final channel 

assignment plan to avoid channel 

assignments that would result in 

aggregate new interference of more than 

one percent to any individual station. 

The Commission invites comment on 

two possible approaches to 

implementing this objective using 

optimization techniques. The first 

approach is to minimize the maximum 

amount of aggregate new interference 

that any one station could receive. The 

second approach is to minimize the 

number of stations predicted to receive 

aggregate new interference above one 

percent. The former approach will 

ensure that the amount of aggregate new 

interference that any one station 

receives is as small as possible but 

could have the drawback of creating 

more stations with aggregate new 

interference above one percent. The 

latter approach ensures that the number 

of stations with aggregate new 

interference above one percent is 

minimal but could have the drawback of 

not explicitly restricting the amount of 

aggregate new interference for any one 

station. As the Commission discussed 

recently in the ISIX Order, however, it 

anticipates that the worst cases will be 

limited in number and will not exceed 

two percent, and stations may remedy 

any such situations by seeking 

alternative channel assignments in the 

post-auction transition process. The 

Commission also invites comment on 

combining the two approaches. The 

Commission seeks comment on these 

and other possible approaches to 

optimizing to reduce aggregate new 

interference. 

130. Minimizing Relocation Expenses. 

The costs associated with reassigning a 

station to a new channel in the 

repacking process vary from station to 

station. For example, some stations 

broadcast from antenna structures that 

may be particularly difficult to modify 

due to height, geography, or weather 

conditions; other stations may need to 

acquire significant new equipment in 

order to broadcast from their reassigned 

channels. In the Incentive Auction R&O, 

the Commission stated its intention to 

disburse funds from the $1.75 billion 

TV Broadcaster Relocation Fund as 

fairly and efficiently as possible. In 

order to carry out this intention, the 

Commission proposes to minimize the 

total relocation costs using the most 

accurate publicly available data to 

measure such costs. Recognizing that 

the Commission may not have perfectly 

accurate data on equipment, facilities, 

and other factors relevant to 

determining anticipated relocation 

costs, the Commission seeks comment 

on this proposal and specifically on 

how to determine these expenses. 

131. Prioritizing Multiple Objectives. 

The Commission further seeks comment 

on prioritizing objectives in the final TV 

channel assignment plan objectives. In 

order to combine the objectives into a 

single process, the Commission 

proposes that the final TV channel 

assignment procedure first solve or 

optimize for a primary objective and use 

that outcome as a constraint on solving 

the secondary objective, which would 

then constrain solving the tertiary 

objective. Given that minimizing 

channel moves will promote multiple 

objectives, the Commission proposes to 

make it the primary objective. Under the 

Commission’s proposed approach, the 

final channel optimization procedure 

first would determine an assignment of 

stations that maximizes the number of 

stations assigned to their pre-auction 

channel. The procedure then would 

apply the Commission’s proposed 

secondary objective by determining 

another assignment that minimizes the 

total number of stations predicted to 

receive new aggregate interference over 

one percent, but would restrict that 

assignment such that the number of 

stations assigned to their pre-auction 

channel is within 95 percent of the 

maximum number in the first step. The 

Commission proposes to set the 

percentage to 95 percent to allow some 

flexibility in the second assignment 

while mostly restricting the assignment 

to maintain the maximum number in 

the first assignment. Finally, the 

procedure would apply these two 

restrictions to the determination of a 

third assignment of stations that 

minimizes anticipated relocation 

expenses. The Commission seeks 

comment on these priorities given that 

the objective with highest priority 

necessarily restricts the objective with 

next priority and so on. 

F. Incentive Payments 

132. As noted in the Incentive 

Auction R&O, the process by which 

auction proceeds will become available 

to pay reverse auction participants their 

shares precludes a specific deadline for 

sharing proceeds. The Commission will 

share auction proceeds with 

broadcasters relinquishing spectrum 

usage rights as soon as practicable 

following the conclusion of the 

incentive auction. The Commission 

notes that circumstances regarding the 

post-auction clearing and relocation of 

broadcasters may make it in the public 

interest to prioritize payments to some 

broadcasters over others in order to 

expedite the entire post-auction 

transition process. For example, the 

Commission determined in the 

Incentive Auction R&O that winning 

bidders in the reverse auction would be 

required to vacate their pre-auction 

channels within three months of 

receiving payment of their share of 

auction proceeds. As the Commission 

explained in the Incentive Auction R&O, 

the ability of stations that are assigned 

to new channels in the repacking 

process may be dependent on other 

stations’ moves. Hence, there may be 

situations in which prioritizing payment 

to a particular winning bidder may 

expedite the transition process for other 

broadcasters. The Commission retains 

discretion to take factors that facilitate 

the transition process into account 

when determining the sequence of 

payments sharing auction proceeds. 

V. Proposed Forward Auction 

Procedures 

A. Information Available During the 

Auction, Inventory, and Implementation 

of the Spectrum Reserve 

133. This section addresses proposals 

regarding the information that will be 

available to forward auction bidders at 

various times during the auction, the 

categories of generic licenses that will 

be available for forward auction 

bidding, and creation of separate 

categories of ‘‘reserved’’ and 

‘‘unreserved’’ spectrum blocks at the 

time the final stage rule is met pursuant 

to the Mobile Spectrum Holdings R&O, 

79 FR 39977, July 11, 2014. 


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Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 4837 

i. Forward Auction Information 

Available During the Auction 

134. As with most recent spectrum 

license auctions, the Commission 

proposes to limit information available 

in the forward auction in order to 

prevent the identification of bidders 

placing particular bids until after the 

auction is over. More specifically, the 

Commission proposes to not make 

public the PEAs that an applicant 

selects for bidding in its application, the 

amount of any upfront payment made 

by or on behalf of the applicant, or any 

other bidding-related information that 

might reveal the identity of the bidder 

placing the bid. Concerns about anticompetitive bidding and other factors 

that the Commission has relied on to 

prevent identification of particular 

bidders during auctions also apply to 

the forward auction portion of the 

incentive auction. The Commission 

invites commenters that disagree with 

its proposal to address why they 

support a different approach. 

135. Notwithstanding the foregoing, 

in order to facilitate compliance with 47 

CFR 1.2105(c) which prohibits parties 

seeking licenses in the same geographic 

area from communicating with one 

another regarding certain biddingrelated information, the Commission 

proposes to notify each forward auction 

applicant of the identities of other 

forward auction applicants that have 

selected geographic areas that overlap 

with the applicant’s own selection and, 

therefore, fall within the scope of the 

rule. As the information the 

Commission will provide relates to the 

bids and bidding strategies of the other 

participants, applicants are prohibited 

from communicating the information 

that they receive to other auction 

participants unless doing so comes 

within one of the exceptions provided 

in the rule. 

136. The Commission also proposes 

that the auction system will provide 

forward auction bidders with the 

following information, at the times 

indicated: (1) Prior to bidding in the 

clock phase of each stage, the clearing 

target for that stage; (2) after the reverse 

auction portion of any stage ends, the 

number of spectrum blocks in each 

license category in each PEA and the 

percentage impairment of each block 

and the location of those impairments, 

as well as the ISIX data for such 

impairments; and (3) after the reverse 

auction portion of each stage ends, the 

total dollar amount of forward auction 

proceeds needed to satisfy the second 

component of the final stage rule. 

137. In connection with the reverse 

auction, the Commission proposes to 

make public the total of reverse auction 

bids when bidding in the reverse 

auction for a stage is closed, as that is 

part of the second component of the 

final stage rule. Similarly, the 

Commission will make public the 

forward auction bid amounts at the end 

of each round, as those are the amounts 

that will be used to determine whether 

the first component of the final stage 

rule has been satisfied. 

ii. Forward Auction Inventory: 

Determining Categories of Generic 

Licenses 

138. In the Incentive Auction R&O, 

the Commission decided it would 

conduct bidding for categories of 

generic licenses in the clock phase of 

the forward auction, recognizing that 

the Commission would need to consider 

‘‘a number of factors, such as proximity 

to television stations or guard bands’’ 

when determining how to group license 

blocks into categories for bidding. Here 

the Commission seeks comment on a 

proposal to offer two categories of 

licenses in the clock phase of the 

forward auction based on relative levels 

of impairment caused by proximity to 

television stations in the 600 MHz Band. 

139. The Commission proposes to 

offer spectrum blocks in two different 

categories of generic licenses for bidding 

in the forward auction (‘‘Category 1’’ 

and ‘‘Category 2’’), based on the extent 

of potential impairments in those 

specific PEA license areas. The 

Commission also proposes thresholds 

for distinguishing between the two 

categories, as well as for determining 

when a license is sufficiently impaired 

that it will not be offered for sale in the 

clock phase of the forward auction. In 

addition, the Commission proposes a 

price adjustment procedure to account 

for varying degrees of impairment in the 

licenses offered. The Commission 

emphasizes that, consistent with its 

determination in the Incentive Auction 

R&O to accommodate market variation 

to a limited extent only, and with its 

proposal to strictly limit the amount of 

market variation in determining an 

initial clearing target, the Commission 

anticipates that most licenses offered in 

the forward auction will fall into 

Category 1, therefore, will have 

potential impairments affecting 15 

percent or less of the population in the 

license area. Nevertheless, the 

Commission must be able to distinguish 

between Category 1 and Category 2 

licenses in order to achieve its auction 

goals. The Incentive Auction R&O 

adopted a strong interoperability rule 

that requires that any user equipment 

certified to operate in any portion of the 

600 MHz Band must be capable of 

operating, using the same technology 

that the licensee has elected to use, 

throughout the entire 600 MHz Band. 

The Commission emphasizes that 

offering multiple categories of licenses 

during the auction will have no effect 

on interoperability because the same 

rules apply to all 600 MHz Band 

licenses regardless of whether the 

license is offered in Category 1 or 

Category 2. 

140. Minimizing the number of 

separate bidding categories to the extent 

possible serves the Commission’s goal of 

speeding up the forward auction 

bidding process. In light of this goal, 

and because the Commission created the 

600 MHz Band guard bands in the 

Incentive Auction R&O to provide 

sufficient protection from harmful 

interference to make 600 MHz Band 

licenses fungible in areas not affected by 

market variation, the Commission does 

not propose to establish separate 

categories of generic licenses based on 

proximity to television stations or guard 

bands in areas that are not affected by 

market variation. 

141. The Commission proposes to 

categorize as Category 1 any license 

with potential impairments that affect 

zero to 15 percent of the population of 

the PEA and as Category 2 any license 

with potential impairments that affect 

greater than 15 percent but less than or 

equal to 50 percent of the population. 

Under this proposal, a license with 

potential impairments that affect more 

than 50 percent of the population will 

not be offered in the forward auction. 

The Commission proposes to calculate 

the extent of impairment on a granular 

basis, using cell-level data. Specifically, 

the Commission proposes to calculate 

the percentage of population impaired 

in each block at a two-by-two kilometer 

cell level by applying the ISIX 

methodology to the assignment plan 

determined by the clearing target 

optimization procedure. With regard to 

the proposed 15 percent threshold for 

Category 1 licenses, wireless operators 

normally can expect some degree of 

interference to service in their license 

areas due to terrain and other factors. A 

15 percent threshold would provide 

flexibility for the auction system to 

assign licenses to Category 1 even if 

they are subject to a limited degree of 

inter-service interference, and winners 

of generic licenses will have the 

opportunity to bid for frequencyspecific licenses within each category 

during the assignment phase of the 

forward auction. Moreover, the 

Commission proposes to apply 

discounts at the end of the assignment 

phase to reflect the extent to which a 

generic license is subject to impairment, 


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i.e., the Commission would discount 

Category 1 licenses based on their 

specific degree of predicted impairment. 

Accordingly, the Commission believes 

that licenses with potential impairments 

that affect between zero and 15 percent 

of the population reasonably may be 

considered fungible. The Commission 

invites comment on this proposal. As an 

alternative, the Commission seeks 

comment on whether to limit the 

proposed Category 1 to licenses that are 

not predicted to be subject to any interservice interference, that is, with 

potential impairments that affect zero 

percent of the PEA population. This 

would enhance fungibility but reduce 

the number of licenses available in 

Category 1. 

142. The Commission proposes a 50 

percent threshold for determining 

whether an impaired license will be 

offered in the clock phase of the forward 

auction for several reasons. The 

Commission believes that even with up 

to 50 percent impairment, particularly 

given the proposed availability of 

discounts based on degree of 

impairment at the end of the assignment 

phase, bidders would find a license 

usable. At the same time, the 

Commission recognizes that there is a 

limit to the extent that impaired licenses 

reasonably can be considered fungible, 

and even assuming that bidders would 

be interested in bidding for highly 

impaired licenses, its goal of simplicity 

militates against creation of an 

additional generic category. Under the 

circumstances, the Commission believes 

that 50 percent represents a reasonable 

threshold. The Commission seeks 

comment on this proposal. If given the 

opportunity, would bidders be 

interested in bidding on licenses that 

are more than 50 percent impaired? If 

the Commission adopts the alternative 

proposal of strictly limiting Category 1, 

should the Commission modify the 

proposed range of Category 2 licenses or 

expand it to between one and 50 

percent? Commenters who advocate 

alternative thresholds or approaches 

should address the potential tradeoffs 

associated with their proposed 

alternatives. 

143. The Commission further 

proposes to incorporate a price 

adjustment into the auction system at 

the end of the assignment phase of the 

forward auction to account for varying 

degrees of predicted impairment to the 

licenses offered for sale, regardless of 

whether such licenses are in Category 1 

or Category 2. Specifically, the 

Commission proposes to discount the 

final clock price by one percent for each 

one percent of predicted impairment. 

For example, under this proposal a 10 

percent discount would be applied to a 

license that is 10 percent impaired 

following the clock phase of the forward 

auction impairment. The Commission 

proposes such price adjustments in 

order to help accommodate a range of 

values among generic licenses within a 

proposed category, while minimizing 

the number of bidding categories in the 

interest of simplicity. The Commission 

also seeks comment on an alternative 

approach, under which the proposed 

discount would be applied only to 

licenses in Category 2 in light of the 

wider range of degrees of impairment in 

that category. 

144. The Commission also invites 

comment on how to treat heavily 

impaired spectrum blocks (i.e., those in 

which more than 50 percent of the 

population is impaired in a PEA) that 

the Commission does not propose to 

offer in the clock round of the forward 

auction. Should the Commission make 

such ‘‘overlay’’ licenses available to 

bidders in the assignment phase in 

conjunction with adjacent licenses 

offered in the same PEA? Under this 

alternative, in the assignment phase, the 

Commission would bundle these 

heavily impaired licenses with the most 

impaired frequency-adjacent licenses. 

The Commission asks commenters to 

address tradeoffs of this alternative 

compared to its main proposal and, 

specifically, to address performance 

requirements in the context of heavilyimpaired overlay licenses. 

iii. Implementation of the Spectrum 

Reserve 

145. Here the Commission seeks 

comment on implementing the marketbased spectrum reserve at the time the 

final stage rule is satisfied, consistent 

with the decisions made in the Mobile 

Spectrum Holdings R&O to reserve a 

portion of the licensed spectrum made 

available in the forward auction for 

reserve-eligible entities and to 

determine the amount of reserved 

spectrum through a market-based 

process during the auction. The 

Commission proposes procedures for 

implementing the market-based 

spectrum reserve in various potential 

contexts, including how the 

Commission will offer Category 2 

licenses and the presence of only one 

reserve-eligible bidder in a PEA. 

a. Determining the Number and 

Category of Reserved Licenses. 

146. The Commission proposes that 

the maximum number of reserved 

licenses, as set forth in the Mobile 

Spectrum Holdings R&O, will be based 

on the total number of Category 1 and 

Category 2 blocks offered in a PEA. For 

example, if there are 60 megahertz of 

Category 1 blocks and 10 megahertz of 

Category 2 blocks made available in a 

PEA, under its proposal the Commission 

will consider the available amount of 

spectrum offered in that PEA to be 70 

megahertz, with a corresponding reserve 

of 30 megahertz. 

147. The Commission proposes that 

only Category 1 blocks will be 

designated for bidding by reserveeligible entities. The Mobile Spectrum 

Holdings R&O determined that the 

actual amount of reserved spectrum will 

be based on the quantity of blocks 

demanded by reserve-eligible bidders. 

Under the Commission’s proposal, the 

actual number of blocks reserved in a 

PEA will be based on demand for 

Category 1 blocks by reserve-eligible 

bidders at the time the auction reaches 

the trigger, i.e., when the final stage rule 

is satisfied. That is, if demand for 

Category 1 blocks in a PEA by reserveeligible bidders is less than the 

maximum reserved spectrum, then 

fewer reserved blocks will be available 

in that PEA. Consistent with this 

proposal, the actual amount of reserved 

spectrum can be no greater than that 

corresponding to the supply of Category 

1 blocks in the PEA. The Commission 

seeks comment on this proposal. 

Alternatively, the Commission seeks 

comment on whether it should include 

Category 2 blocks in the spectrum 

reserve in any PEAs with fewer Category 

1 blocks than in the maximum spectrum 

reserve, assuming sufficient demand for 

Category 2 blocks by reserve-eligible 

bidders at the time the auction reaches 

the final stage rule trigger. Under this 

approach, the total number of Category 

1 and Category 2 blocks in the reserve 

would be no greater than the maximum 

spectrum reserve. 

148. Overall, the Commission’s 

approach seeks to ensure that the need 

to offer fewer Category 1 blocks in 

certain PEAs in order to accommodate 

market variation does not reduce the 

benefits to competition and consumers 

from providing opportunities for 

multiple providers to gain access to lowband spectrum. First, because the 

Commission anticipates that most 

licenses offered for sale in the forward 

auction will fall into Category 1 the 

impact of the proposals should be 

limited to the relatively few markets 

that are affected by market variation. In 

such markets, however, the Commission 

believes its proposal to count both 

categories of licenses toward 

determining the maximum number of 

reserved licenses is consistent with the 

competition goals discussed in the 

Mobile Spectrum Holdings R&O, 


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including facilitating access to below-1– 

GHz spectrum by multiple providers. 

149. The Commission’s competition 

goals will be further accomplished by 

designating only Category 1 blocks for 

reserve-eligible bidders, which are 

likely to be more reliant on 600 MHz 

Band spectrum to expand coverage and 

to compete in the mobile wireless 

marketplace. As discussed in the Mobile 

Spectrum Holdings R&O, the 

Commission is striving ‘‘to promote 

competition by ensuring that in the near 

future, more providers would hold a 

sufficient mix of spectrum to compete 

robustly.’’ The Commission believes this 

proposal is also consistent with its 

statutory obligation to promote access to 

spectrum for a variety of licensees, 

including entities seeking to serve rural 

areas or improve services in rural areas. 

150. It would significantly complicate 

the auction to create an additional 

generic bidding category to implement 

separate reserved categories for both 

Category 1 and Category 2 licenses. 

Doing so would undercut the benefits 

from bidding for categories of generic 

licenses, potentially extending the 

length of the auction, necessitating 

additional procedures for dividing 

bidder demands, and making it harder 

for bidders to switch their demands 

across categories. Therefore, the 

Commission’s proposed approach of 

reserving only Category 1 licenses for 

reserve-eligible bidders promotes good 

auction design and is consistent with its 

established policy to promote access to 

spectrum for a variety of licensees, 

including entities seeking to serve rural 

areas or improve services in rural areas. 

151. One Reserve-Eligible Bidder. In 

the Mobile Spectrum Holdings R&O, the 

Commission indicated that it intended, 

after opportunity for comment in the 

Auction 1000 Request for Comment, not 

to allow reserve-eligible bidders to 

acquire more than 20 megahertz of 

reserved spectrum in a PEA unless there 

is another bidder for reserved spectrum 

in that PEA. The Commission does not 

believe the public interest benefits of a 

maximum of 30 megahertz of reserved 

spectrum would be realized without 

more than one reserve-eligible bidder in 

a PEA. In particular, the Commission 

explained in the Mobile Spectrum 

Holdings R&O that a maximum of 30 

megahertz of reserved spectrum could 

permit at least two reserve-eligible 

bidders to acquire paired 5+5 megahertz 

blocks in a PEA for deployment of nextgeneration networks, with one of the 

bidders potentially acquiring two paired 

blocks (20 megahertz). The Commission 

also anticipated that a maximum of 30 

megahertz—three paired 5+5 megahertz 

spectrum blocks—would facilitate 

competition among bidders seeking to 

acquire two paired 5+5 megahertz 

blocks. In contrast, more than 20 

megahertz of reserved spectrum is 

neither necessary for a single reserveeligible bidder to deploy nextgeneration networks nor likely to 

facilitate competitive bidding. 

Accordingly, the Commission proposes 

to limit the maximum amount of 

reserved spectrum in a PEA to 20 

megahertz if there is only one reserveeligible bidder demanding blocks when 

the trigger is reached. 

b. Bidding on Reserved Licenses 

152. The Commission proposes 

specific procedures to govern bidding 

on the reserved licenses after the final 

stage rule is met. The Commission 

proposes to implement separate bidding 

for the reserved licenses in the clock 

bidding round that follows the round in 

which the final stage rule is met, 

regardless of whether the final stage rule 

is met in the course of regular clock 

bidding rounds or an extended round. 

Up to the point at which the auction 

reaches the spectrum reserve trigger, all 

bidders, including reserve-eligible 

bidders, will be bidding on a single 

category of Category 1 blocks in a PEA. 

In order to implement bidding on 

reserved spectrum after the final stage 

rule is met, the Commission proposes to 

split the Category 1 licenses in each 

PEA into two new categories, a reserved 

category, on which only reserve-eligible 

bidders may bid, and an unreserved 

category, on which any bidder may bid. 

Because a uniform clock price will 

apply to all the Category 1 spectrum 

blocks in a PEA at the time of the split, 

the clock price will be the same for both 

the reserved and the unreserved 

Category 1 blocks in the first bidding 

round after the auction reaches the 

spectrum reserve trigger. From that 

point forward, however, the 

Commission proposes to treat the 

reserved and the unreserved Category 1 

blocks as separate bidding categories. 

That is, bids will be processed 

separately following the split for the 

license categories in each PEA of 

reserved Category 1, unreserved 

Category 1, and Category 2, as they were 

for Category 1 and Category 2 prior to 

the split. Prices for generic blocks in 

each category will be based on relative 

supply and demand for each, and thus 

may diverge based on the bidding in 

subsequent rounds. 

153. The Commission proposes to 

allocate the demands for Category 1 

blocks in each PEA among the available 

reserved and unreserved blocks. The 

auction system will have to allocate 

demand for that single category between 

the two new categories (reserved 

Category 1 and unreserved Category 1) 

of blocks as a starting point for bidding 

in the following round. Under the 

Commission’s proposal, the auction 

system first will assign all demand by 

non-reserve-eligible bidders to 

unreserved Category 1, and then will 

assign demand by reserve-eligible 

bidders to the reserved category up to 

the point where demand for reserved 

Category 1 blocks is equal to supply. 

The auction system will apply the 

remaining demand of reserve-eligible 

bidders to unreserved Category 1. 

Accordingly, the auction system will 

first allocate demand for one block to 

the reserved category for each reserveeligible bidder in turn, then a second 

block, and so on until the total demands 

allocated to the reserved category equal 

the supply of reserved blocks. The 

Commission proposes to choose the 

order of reserve-eligible bidders pseudorandomly. In the bidding rounds that 

follow the implementation of the 

spectrum reserve, bidders will be able to 

switch their bids between the separate 

categories of reserved Category 1, 

unreserved Category 1, and Category 2 

blocks, subject to their eligibility for 

reserved blocks and procedures on 

acceptable bids proposed. 

154. Once the Commission applies its 

proposed approach, demand in the 

reserved category will equal supply, and 

any excess demand for the pre-split 

Category 1 blocks will be allocated to 

the unreserved category. The 

Commission proposes to allocate 

demands in this way—as opposed to 

assigning all demand by reserve-eligible 

bidders to the reserved category—to 

avoid the possibility of excess supply 

for unreserved blocks after the split in 

the case that the pre-split Category 1 

does not have excess supply, which 

could result in auction revenue 

declining below the level required by 

the final stage rule at a point at which 

the final stage rule had been declared 

satisfied. 

B. Forward Auction Application Process 

155. The Commission’s general 

competitive bidding rules, as modified 

in the Incentive Auction R&O, apply to 

the forward auction. Those rules require 

that parties apply to participate in the 

forward auction and that applicants 

satisfy certain requirements before 

bidding in the auction. The Commission 

seeks comment on discrete issues 

relating to the upfront payment each 

applicant must make and on how an 

applicant must certify its eligibility to 

bid for reserved licenses if it wishes to 

do so. The Commission will provide 

detailed instructions for the pre-auction 


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4840 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 

application process in the Procedures 

PN. 

i. Bidding Units 

156. Consistent with prior FCC 

spectrum license auctions, the 

Commission proposes to assign to each 

spectrum block that will be available in 

the forward auction a specific number of 

bidding units. The Commission 

proposes to use the bidding units for 

purposes of calculating minimum 

opening bids, upfront payments, and 

bidder eligibility, and for measuring 

bidding activity. Under the 

Commission’s proposed approach, the 

number of bidding units for a given 

license will be fixed and will not change 

during the auction, regardless of price 

changes. 

157. In assigning bidding units to 

licenses, the Commission proposes to 

use a weighted population method 

similar to what the Commission 

proposes for its ‘‘near nationwide’’ 

threshold. The Commission starts with 

the total population in each PEA. 

Because the 600 MHz Band Plan 

consists entirely of paired 5+5 

megahertz blocks, bidding units do not 

need to reflect differences in bandwidth 

across licenses; thus, there is no need to 

use megahertz per population (MHzpops), as the Commission typically does 

for spectrum license auctions. Further, 

the Commission proposes to assign 

Category 1 and Category 2 blocks in a 

PEA the same number of bidding units 

to facilitate bidding across categories. 

Hence, all generic licenses in a PEA 

would be assigned the same number of 

bidding units. 

158. The Commission proposes to 

weight population using an index of 

relative prices for each geographic area 

based on data from previous auctions. 

Consistent with the approach the 

Commission used for Auction 97, the 

auction of Advanced Wireless Services 

(AWS–3) licenses, it will multiply the 

population of each PEA by an index 

value for the PEA. As the Commission 

did for Auction 97, it proposes to group 

the price index by deciles and apply the 

lowest index value in each decile to all 

PEAs in that decile. Appendix F of the 

Auction 1000 Request for Comment sets 

forth the indices and number of bidding 

units that would be assigned to licenses 

in each PEA under its proposed 

approach using currently-available data. 

The Commission further proposes to 

incorporate the final results of Auction 

97 (the AWS–3 auction) in calculating 

the index of relative prices for PEAs that 

will be used to determine bidding units, 

upfront payments, and minimum 

opening bids. 

159. By incorporating past prices, the 

Commission’s proposed approach better 

reflects the relative weight bidders have 

assigned to the different markets in the 

past than would a calculation based 

solely on population. Consequently, 

service areas that have received similar 

winning bid amounts in past auctions 

will be similar to one another with 

respect to the activity rule. To simplify 

the number of units, the Commission 

proposes to divide the result of the 

calculation by 1,000 and round it using 

its standard rounding procedures for 

auctions. Specifically, the Commission 

would round numbers greater than 

10,000 to the nearest thousand; numbers 

less than 10,000 and greater than 1,000 

to the nearest hundred; numbers less 

than 1,000 and more than 10 to the 

nearest ten; and numbers less than 10 to 

the nearest one. All PEAs would have at 

least one bidding unit. Thus, the 

Commission proposes to calculate 

bidding units for most licenses as (pops 

* index)/1000, rounded. Because there 

were no winning bidders for several 

licenses covering US territories and 

protectorates in past auctions, for 

licenses in the PEAs for Puerto Rico, 

Guam-Northern Mariana Islands, US 

Virgin Islands, and American Samoa, 

the Commission proposes to divide the 

results of the weighted population 

calculation by 2,000 and round the 

results. Finally, the Commission 

proposes to assign one bidding unit to 

licenses for the Gulf of Mexico. 

ii. Upfront Payments 

160. In keeping with the 

Commission’s usual practice in 

spectrum license auctions, it proposes 

that applicants be required to submit 

upfront payments as a prerequisite to 

being found qualified to bid. An upfront 

payment is a refundable deposit made 

by each bidder to establish its eligibility 

to bid on licenses. Upfront payments 

protect against frivolous or insincere 

bidding and provide the Commission 

with a source of funds from which to 

collect payments owed at the close of 

the auction. A Commission rule, 47 CFR 

1.2106(a), requires that any auction 

applicant previously in default on a 

Commission license or previously 

delinquent on a non-tax debt to a 

Federal agency must submit upfront 

payments equal to 50 percent more than 

otherwise would be required. 

161. The Commission proposes to 

base the upfront payment for each 

license on the number of bidding units 

associated with that license. 

Specifically, the Commission proposes 

an upfront payment amount of $2,500 

per bidding unit, rounded. These 

bidding unit amounts pertain to a single 

5+5 megahertz generic license for each 

PEA. To the extent that bidders wish to 

bid on multiple generic licenses 

simultaneously, they will need to 

ensure that their upfront payment 

provides enough eligibility to cover 

more than one 5+5 megahertz generic 

license in a given PEA. The number of 

bidding units for a given license will be 

fixed and will not change during the 

auction as prices change. Appendix F of 

the Auction 1000 Request for Comment 

shows the upfront payment amounts 

that would be calculated based on 

current data. The Commission proposes 

to incorporate the final results of 

Auction 97 in the calculation of bidding 

units. 

162. Under the Commission’s 

proposed approach, a bidder’s upfront 

payment will not be attributed to a 

specific license or licenses. Rather, the 

bidder may place bids on any 

combination of the licenses it selects on 

its application to participate in the 

forward auction, provided that the total 

number of bidding units associated with 

those licenses will not exceed its 

eligibility when it places the bid(s). 

Bidders will not be able to increase their 

eligibility during the auction; bidders 

only will be able to maintain or decrease 

their eligibility. Thus, in calculating its 

upfront payment amount and hence its 

initial bidding eligibility, an applicant 

must determine the maximum number 

of bidding units on which it may wish 

to bid in any single round and submit 

an upfront payment amount covering 

that total number of bidding units. The 

Commission seeks comment on these 

proposals. 

163. For the forward auction, the 

Commission proposes to set a deadline 

for the submission of upfront payments 

that will occur after determination of 

the initial clearing target, based on 

commitments of reverse auction 

applicants. This proposed deadline will 

enable a participant to take into account 

the number of licenses in the initial 

clearing target when determining the 

amount of its upfront payment. The 

Commission notes that an applicant will 

be able to consider the amount of its 

upfront payment and prepare 

accordingly well in advance of this date. 

For example, an applicant would be 

able to determine the number of licenses 

it is likely to seek in various PEAs prior 

to knowing the number of licenses that 

will be available. Nevertheless, given 

that the upfront payment will determine 

the participant’s maximum bidding 

eligibility in the forward auction, the 

Commission concludes that it should 

require the submission of the upfront 

payment only after the determination of 

the initial clearing target. 


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iii. Eligibility for Spectrum Reserve 

164. The Commission proposes to 

require an applicant seeking to 

participate in the forward auction as a 

reserve-eligible entity to certify in its 

application that it is a reserve-eligible 

entity with respect to each PEA in 

which it wishes to be able to bid for 

reserved blocks. The Commission 

further proposes that an applicant must 

make this certification in its application 

and that it shall not be able to revise its 

certification thereafter. Under the 

Mobile Spectrum Holdings R&O, 

reserve-eligible entities may bid on 

unreserved spectrum blocks as well as 

reserved spectrum blocks. Nevertheless, 

applicants that otherwise would be 

eligible to bid on reserved spectrum 

blocks may prefer to forego reservedeligible status generally, or with respect 

to licenses in particular areas. In 

particular, reserved spectrum blocks 

will be subject to restrictions on 

subsequent transactions to which 

unreserved spectrum blocks will not be 

subject. The approach the Commission 

proposes will enable potentially reserveeligible applicants to forego reserveeligible status on a PEA-by-PEA basis. In 

addition, by requiring applicants 

intending to bid for reserved spectrum 

blocks to affirmatively declare their 

eligibility to do so the Commission’s 

proposed approach will avoid any 

subsequent ambiguity or uncertainty 

regarding an applicant’s status. 

C. Clock Phase Bidding Procedures 

165. The first phase of the forward 

auction will include the clock bidding 

rounds, and after the clock bidding for 

generic licenses ends in the final stage, 

the assignment phase will commence. 

The Commission proposes specific 

bidding procedures for the clock rounds 

of the forward auction. The Commission 

seeks comment on setting the minimum 

opening prices, setting prices between 

rounds of the auction and between 

stages of the auction. Consistent with a 

clock auction format with categories of 

generic licenses, a uniform minimum 

opening price or clock price applies to 

all the blocks in a category and a PEA. 

The Commission proposes and seeks 

comment on specific types of bids that 

participants will be able to place in the 

forward auction, including how those 

types of bids will be processed by the 

auction system, as well as the activity 

rule that bidders must meet to retain 

their eligibility. The Commission 

proposes a number of changes to the 

procedures it has traditionally used 

when holding forward auctions, such as 

bid withdrawals and proactive waivers. 

The Commission is changing these 

procedures for this auction to reduce 

complexity and uncertainty about 

bidder demand for spectrum. The 

Commission seeks comment on what 

effect these changes could have on 

participation by small business in the 

forward auction. The Commission also 

sets out detailed proposals on 

implementing the extended round and 

seeks comment on those. 

i. Setting Prices in the Clock Rounds 

166. Minimum Opening Bids in the 

First Stage. At the beginning of the clock 

phase of the forward auction in the 

initial stage, a bidder will indicate how 

many blocks in a generic license 

category in a PEA it demands at the 

minimum opening bid price. The 

Commission proposes to establish initial 

clock prices, or minimum opening bids, 

for each license based on the number of 

bidding units associated with the 

license. The Commission’s proposed 

approach is intended to be consistent 

with section 309(j) of the 

Communications Act, as amended, 

which calls for prescribed methods of 

establishing minimum opening bid 

amounts when FCC licenses are subject 

to auction, unless it determines that a 

minimum opening bid amount is not in 

the public interest. 

167. Specifically, the Commission 

proposes a minimum opening bid 

amount of $5,000 per bidding unit. This 

proposal is consistent with the 

precedent of the Commission’s AWS–3 

auction procedures, where it set the 

minimum opening bid amount at twice 

the upfront payment for each license. 

Because the number of bidding units for 

each license incorporates pricing 

information from previous auctions, this 

proposal appropriately adjusts opening 

bids to reflect value differences that 

bidders have placed on different 

geographic areas. Appendix F of the 

Auction 1000 Request for Comment 

shows the minimum opening bid 

amounts that would be calculated based 

on current data. The Commission 

proposes to incorporate the final results 

of Auction 97 in the calculation of 

bidding units. 

168. The Commission’s experience in 

past auctions indicates that minimum 

opening bid amounts calculated in this 

manner will be an effective tool for 

accelerating the competitive bidding 

process, a particularly important goal 

for the incentive auction given the 

interdependency between the reverse 

and forward auctions. One of the 

primary purposes of a minimum 

opening bid is to speed up the course of 

an auction. By incorporating past 

pricing information into the 

Commission’s calculation of minimum 

opening prices, it intends to reduce the 

number of rounds it will take for 

demand to equal supply in markets that 

have historically commanded relatively 

higher prices. 

169. The Commission seeks comment 

on its proposal. If commenters believe 

that this approach will result in unsold 

licenses or unreasonable minimum 

opening bid amounts, they should 

explain why this is so, suggest an 

alternative approach, and explain why 

such an alternative is desirable. The 

Commission also seeks comment on 

whether it should discount minimum 

opening bids for licenses in Category 2. 

170. Clock Price Increments Across 

Rounds. After bidding in the first round 

and before each subsequent round, the 

system will announce a clock price for 

the next round, which is the highest 

price to which bidders can respond 

during the round. The Commission 

proposes to set the clock price for each 

category available in each specific PEA 

for a round by adding a fixed percentage 

increment to the price for the previous 

round. As long as total demand for 

blocks in a category exceeds the supply 

of blocks, the percentage increment will 

be added to the clock price from the 

prior round. If demand equaled supply 

at an intra-round bid price in a previous 

round, then the clock price for the next 

round will be set by adding the 

percentage increment to the intra-round 

bid price. 

171. The Commission proposes to 

apply an increment that is between five 

and 15 percent and generally to apply 

the same increment percentage to all 

categories in all PEAs. The Commission 

proposes to set the initial increment 

within this range, and to adjust the 

increment as stages and rounds 

continue. The proposed five-to-15 

percent increment range will allow the 

auction system to set a percentage that 

manages the auction pace, taking into 

account bidders’ needs to evaluate their 

bidding strategies while moving the 

forward auction along quickly. The 

Commission also proposes that 

increments may be changed during the 

auction on a PEA-by-PEA or categoryby-category basis based on bidding 

activity to assure that the system can 

offer appropriate price choices to 

bidders. 

ii. Acceptable Bids 

a. Types of Bids 

172. Here the Commission proposes 

specific bidding procedures for the 

clock phase of the forward auction, and 

addresses how the auction system will 

process the proposed types of permitted 

bids. The Commission provides 


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complete forward auction clock phase 

bid types and bid processing details in 

Appendix G of the Auction 1000 

Request for Comment. As an initial 

matter, the Commission proposes that 

the auction system not allow a bidder to 

reduce the quantity of blocks it 

demands in a category if the reduction 

will result in aggregate demand falling 

below the available supply of licenses in 

the category. The alternative would risk 

significant reductions in aggregate 

forward auction proceeds from round to 

round, impeding progress toward 

satisfying the final stage rule. It could 

also potentially undermine a prior 

determination that the final stage rule 

had been satisfied. Under the ascending 

clock format adopted for the forward 

auction, a bidder will indicate in each 

round the quantity of blocks in each 

category in each PEA that it demands at 

a given price, indicating that it is 

willing to pay up to that price for its 

current quantity. In addition to making 

bids at the clock price, the adopted 

clock auction format will permit bidders 

to make bids at amounts smaller than 

the clock price (intra-round bids). 

173. Under the Commission’s 

proposal, if a bidder demands fewer 

blocks in a category than it did in the 

previous round, the auction system will 

treat the bid as a request to reduce 

demand which will be implemented 

only if aggregate demand will not fall 

below the available supply of licenses in 

the category. 

174. Once a round ends, the auction 

system will process the bids submitted 

in the round and determine the extent 

to which there is excess demand for 

each category in each PEA in order to 

determine whether a bidder’s requested 

change(s) in demand can be 

implemented. 

175. In order to facilitate bidding for 

multiple licenses in a category, and to 

help bidders manage their bidding given 

the requirement that a request to reduce 

demand may not be accepted, the 

Commission proposes that bidders will 

be permitted to make the following 

three types of bids: simple bids, all-ornothing bids, and switch bids. All three 

types of bids can indicate multiple 

quantities of licenses. Appendix G of 

the Auction 1000 Request for Comment 

provides examples of each of the 

proposed types of bids and discusses 

how the auction system would treat 

them under the Commission’s proposal. 

First, a ‘‘simple’’ bid indicates a desired 

quantity of licenses in a category at a 

price (either the clock price or an intraround price). A simple bid may be 

implemented partially if it involves a 

reduction from the bidder’s previous 

demands, and aggregate excess demand 

is insufficient to support the entire 

reduction. Second, an ‘‘all-or-nothing’’ 

bid also indicates a desired quantity of 

licenses in a category, but allows the 

bidder to indicate that it wants the bid 

to be implemented fully or not at all. 

And, third, a ‘‘switch’’ bid allows the 

bidder to request to move its demand for 

a quantity of licenses from one category 

of generic licenses to another category 

within the same PEA. A switch bid may 

be applied partially, but the increase in 

demand in the ‘‘to’’ category will always 

match in quantity the reduction in the 

‘‘from’’ category. 

176. The Commission emphasizes that 

the proposed bid types will allow 

bidders to express their demand for 

blocks in the next clock round without 

running the risk that they will be forced 

to purchase more spectrum at a higher 

price than they wish. When a bid can be 

applied only partially, the uniform price 

for the category will stop increasing at 

that point, since the partial application 

of the bid results in demand falling to 

equal supply. Hence, a bidder that 

makes a simple bid or a switch bid that 

cannot be fully applied will not face a 

price for the remaining demand that is 

higher than its bid price. On the other 

hand, if a bidder uses an all-or-nothing 

bid to request a reduction that cannot be 

applied because excess demand is 

insufficient to cover the entire requested 

reduction, the price for the category may 

continue to increase if there is any 

excess demand. In such cases, the 

Commission provides for an optional 

‘‘backstop’’ bid to ensure the price for 

the category does not go above the 

amount the bidder specifies in its bid, 

as explained and illustrated with 

examples in Appendix G of the Auction 

1000 Request for Comment. 

177. Because bids to reduce demand 

will not be accepted (or not fully 

accepted) to the extent they would bring 

demand below the available supply, and 

because in any given round some 

bidders may increase demands for 

licenses in a category while others may 

request reductions, the order in which 

the bids are considered can affect which 

bids are accepted. The Commission 

proposes that bids be considered by the 

auction system first in order of 

increasing ‘‘price point’’ (expressed as a 

percentage of the bidding interval for 

the round) and in the case of ties, then 

using a pseudo-random number applied 

to the bid when it is submitted. The 

Commission further proposes that bids 

not accepted because of insufficient 

aggregate demand or insufficient 

eligibility be held in a queue and 

considered, again in order, if there 

should be excess supply or sufficient 

eligibility later in the processing after 

other bids are processed. 

178. More specifically, under the 

Commission’s proposed procedures, 

once a round closes, the auction system 

will process the bids by first considering 

the bid submitted at the lowest price 

point and determine whether it can be 

accepted given aggregate demand as 

determined most recently and given the 

associated bidder’s eligibility. If the bid 

can be accepted, or if it is a simple bid 

or a switch bid that can be only partially 

accepted, the number of licenses the 

bidder demands will be adjusted, and 

aggregate demand will be recalculated 

accordingly. If the bid cannot be 

accepted in part or in full, the 

unfulfilled bid, or portion thereof, will 

be held in a queue to be considered later 

during bid processing for that round. 

The auction system will then consider 

the bid submitted at the next highest 

price point, accepting it in full, in part, 

or not at all, given recalculated 

aggregate demand and given the 

associated bidder’s eligibility. Any 

unfulfilled requests will again be held 

in a queue, and aggregate demand will 

again be recalculated. Every time a bid 

or part of a bid is accepted and aggregate 

demand has been recalculated, the 

unfulfilled bids held in queue will be 

reconsidered, in the order of their 

original price points (and by pseudorandom number, in the case of tied price 

points). The auction system will not 

carry over unfulfilled bid requests to the 

next round, however. The auction 

system will advise bidders of the status 

of their bids when round results are 

released. 

179. After the bids are processed in 

each round, the auction system will 

announce new clock prices to indicate 

a range of acceptable bids for the next 

round. Each bidder will be informed of 

the number of blocks in a category on 

which it holds bids, the extent of excess 

demand for each category, and, if 

demand fell to equal supply during the 

round, the intra-round price point at 

which that occurred. 

b. No Bidding Aggregation 

180. In the Incentive Auction R&O, 

the Commission stated that it did not 

intend to incorporate package bidding 

procedures into the forward auction 

because of the additional complexity 

such procedures would introduce into 

the auction, but that the Commission 

would seek input in the Auction 1000 

Request for Comment on an alternative 

to package bidding under which the 

Commission would create an 

aggregation of the largest PEAs in 

advance of the auction. The 

Commission has significant concerns 


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with a ‘‘major markets’’ aggregation 

approach, however. The Commission 

tentatively concludes that such an 

approach would not be consistent with 

its goal of encouraging entry by 

providers that contemplate offering 

wireless broadband service on a 

localized basis. As the Commission 

discussed when adopting PEAs rather 

than the larger Economic Area (EA) 

service areas, offering single PEA 

licenses in the largest markets will best 

promote entry by the broadest range of 

potential wireless service providers. In 

addition, the Commission is concerned 

an aggregation approach would 

discourage bidders, particularly small or 

regional entities with an interest in only 

a subset of ‘‘major markets,’’ from 

participating in the forward auction. For 

these reasons, the Commission does not 

propose to adopt a ‘‘major markets’’ 

aggregation. The Commission invites 

comment on its tentative conclusion. 

Commenters supporting a ‘‘major 

markets’’ aggregation should explain 

how such an approach would be 

consistent with the Commission’s goals 

of promoting competition in the 

provision of mobile wireless services 

and broad participation in the forward 

auction. 

181. In the event the Commission 

decided to adopt a ‘‘major markets’’ 

aggregation approach, it seeks comment 

on which PEAs should be included in 

the ‘‘major markets’’ aggregation, and on 

how to apply the market-based 

spectrum reserve to the aggregation. 

iii. Activity Rule 

182. To ensure that the auction moves 

as quickly as possible, the Commission 

proposes to require that bidders 

maintain a fixed, high level of activity 

in each round of the auction in order to 

maintain bidding eligibility. 

Specifically, the Commission proposes 

to require that bidders be active on 

between 92 and 97 percent of their 

bidding eligibility in all regular clock 

rounds. The Commission proposes to 

calculate activity using bidding units. 

Thus, the activity rule would be 

satisfied when a bidder has bidding 

activity on blocks with bidding units 

that total 92 to 97 percent of its current 

eligibility in the round. If the activity 

rule is met, then the bidder’s eligibility 

does not change in the next round. The 

Commission further proposes to 

calculate bidding activity based on the 

bids that are accepted by the auction 

system. That is, if a bidder requests a 

reduction in the quantity of blocks it 

demands in a category, but the auction 

system does not accept the request 

because demand for the category would 

fall below the available supply, the 

bidder’s activity will reflect its 

unreduced demand. If the activity rule 

is not met in a round, a bidder’s 

eligibility automatically would be 

reduced. The Commission invites 

comment on this proposal, in particular 

on where to set the activity requirement 

between 92 and 97 percent. Commenters 

may wish to address the relationship 

between the proposed activity rule and 

the ability of bidders to switch their 

demands across PEAs or across 

categories of licenses within a PEA. The 

Commission encourages any 

commenters that oppose an activity rule 

in this range to explain their reasons 

with specificity. 

183. In addition, the Commission 

proposes that if subsequent stages of the 

auction are required, a bidder will begin 

the first round of a new stage with its 

eligibility reset to equal its bidding 

activity when the final round of the 

previous stage concluded. This 

eligibility will be based on bidding in 

the extended round for licenses for 

which there was bidding in the 

extended round, and for other licenses 

on bidding in the last regular clock 

round. 

184. The Commission does not 

propose to provide for activity rule 

waivers to preserve a bidder’s eligibility. 

In previous FCC multiple round 

auctions, when a bidder’s eligibility in 

the current round was below a required 

minimum level, the bidder was able to 

preserve its current level of eligibility 

with a limited number of activity rule 

waivers. The clock auction portion of 

the forward auction, however, relies on 

precisely identifying the point at which 

demand falls to equal supply to 

determine winning bidders and final 

prices. Allowing waivers would create 

uncertainty with respect to the exact 

level of bidder demand, interfering with 

the basic clock price-setting and winner 

determination mechanism. Moreover, 

uncertainty about the level of demand 

would affect the way bidders’ requests 

to reduce demand are processed by the 

auction system. Under the 

Commission’s proposal, bidders would 

be required to reconfirm their bids in 

every round. 

iv. Extended Round 

185. In the Incentive Auction R&O, 

the Commission provided for an 

extended bidding round ‘‘to increase the 

likelihood that the auction will 

conclude at the end of the current stage, 

thereby avoiding the need to move to 

another stage in which less spectrum 

would be available for licensing in the 

forward auction.’’ The Commission 

proposes to implement an extended 

round whenever a round of the forward 

auction ends and (1) the demand for 

licenses in ‘‘high-demand’’ PEAs does 

not exceed the available supply, and (2) 

the final stage rule has not been met. 

The extended round will interrupt the 

clock phase of the forward auction, 

which will resume if bidding in the 

extended round satisfies the final stage 

rule. If the final stage rule is not 

satisfied at the conclusion of the 

extended round, the auction stage will 

end and a new stage will commence 

with a reduced clearing target. 

186. The Commission proposes to 

base the extended round clock price on 

the additional proceeds needed to meet 

the final stage rule, which is consistent 

with the purpose of the extended round 

of attempting to meet the final stage rule 

and avoid the need for a new stage with 

a lower clearing target. Specifically, the 

Commission proposes to increase the 

extended round clock prices for 

Category 1 in the ‘‘high-demand’’ PEAs 

in aggregate by 33 percent more than the 

additional proceeds needed to meet the 

final stage rule. The Commission 

proposes a percentage that is greater 

than the minimum amount required to 

meet the final stage rule to account for 

the possibility that, in some PEAs, 

demand may not be sufficient to 

increase prices to the minimum amount 

required, whereas in others, demand 

may be more than sufficient to meet the 

minimum, in order to increase the 

likelihood of satisfying the final stage 

rule. 

187. The Commission further 

proposes to conduct extended round 

bidding only for Category 1 blocks in 

the ‘‘high-demand’’ PEAs with no 

excess supply. This approach is 

consistent with the Commission’s 

proposal to implement an extended 

round when bidding activity for such 

blocks stops in such areas (that is, when 

demand does not exceed supply). 

Because spectrum auctions typically 

reach near-final auction prices in such 

areas much sooner than in other areas, 

this approach will obviate the need to 

wait for bidding to stop in all areas 

before deciding that a subsequent stage 

is necessary. 

188. The Commission proposes to 

permit bidders in the extended round to 

make a single simple bid for Category 1 

blocks in each ‘‘high-demand’’ PEA, 

indicating a desired quantity of blocks, 

and it proposes to allow for intra-round 

bidding as in the regular clock rounds 

of the forward auction. Under the 

Commission’s proposal, in each ‘‘highdemand’’ PEA, a bidder can either 

maintain its current demand or request 

to reduce its demand by one block at a 

specified intra-round price point. The 

auction system will process requested 


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4844 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 

demand reductions differently 

depending upon whether the final stage 

rule is met, in keeping with its proposed 

rule that bidders will not be allowed to 

reduce their demand if the reduction 

would result in demand falling below 

the available supply. Accordingly, if the 

final stage rule cannot be met in the 

extended round, so that the auction will 

move to a new stage with fewer 

available licenses, the system will 

process a demand reduction of up to 

one block per ‘‘high-demand’’ PEA, 

because there is little likelihood of 

demand being below supply when 

bidding resumes in the next stage. 

However, if the final stage rule is met in 

the extended round, the system will not 

process any requested reductions in 

demand, to avoid reducing demand 

below supply at the current clearing 

target with the current supply of blocks. 

189. Once bids in the extended round 

are placed, the Commission proposes 

that the auction system will consider 

the bids sequentially in ascending order 

of price points for the regular clock 

rounds of the forward auction. The 

auction system will process bids and set 

clock prices for the subsequent bidding 

round—either a regular clock bidding 

round with the spectrum reserve in 

place or the first round of a new stage— 

differently according to whether the 

final stage rule is satisfied. If the final 

stage rule cannot be met in the extended 

round, the auction system will allow for 

a single reduction and otherwise 

process bids as they are processed in 

regular clock rounds. 

190. If the final stage rule can be met 

in the extended round, the auction 

system will process extended round 

bids only up to the lowest price point 

at which the rule is satisfied. Clock 

prices for the next round will be based 

on that price point, unless a reduction 

was requested at a lower price point in 

a PEA, in which case the clock price in 

that PEA will be based on the intraround price at which the reduction was 

requested (but not accepted). Regular 

clock bidding rounds will resume for all 

categories in all PEAs, with the 

spectrum reserve in place. For those 

blocks not subject to extended round 

bidding, that is, non-‘‘high-demand’’ 

PEAs as well as Category 2 blocks of the 

‘‘high-demand’’ PEAs, rounds will 

resume with clock prices for the next 

round based on prices from the round 

preceding the extended round. If the 

final stage rule is not met, clock prices 

for the next round—that is, the first 

round of the new stage—will also be 

based on prices from the round 

preceding the extended round for blocks 

not subject to extended round bidding. 

Under the Commission’s proposed 

procedures, the price for blocks in the 

same category in a PEA will be the same 

for all bidders at the end of an extended 

round, as is also the case for the other 

clock rounds. Accordingly, in a PEA, 

clock prices for reserved spectrum 

blocks going into the next round will be 

the same as for unreserved spectrum 

blocks. 

v. Stopping Rule 

191. Consistent with the 

Commission’s practice of using stopping 

rules in multi-round auctions to ensure 

completion within a reasonable time, it 

proposes to employ a simultaneous 

stopping rule for the clock phase of the 

forward auction in the final stage. Under 

this proposal, all categories of licenses 

in all PEAs would remain available for 

bidding until the bidding stops on every 

category. More specifically, if the final 

stage rule has been met, with or without 

an extended round, the clock phase of 

bidding will end for all categories of 

licenses following the first round in 

which there is no excess demand in any 

category in any PEA. Since bidding will 

remain open on all categories of licenses 

until bidding stops on every category, it 

is not possible to determine in advance 

how long the forward auction will last. 

The Commission seeks comment on 

permitting new bids to be made in one 

additional bidding round following the 

first round in which there is no excess 

demand. 

vi. New Stage Transition 

192. The Commission proposes to 

initiate bidding in any subsequent stage 

of the forward auction based on the 

bidder demands and prices from the end 

of the previous stage. In some cases, 

these demands and prices will have 

been determined in the extended round, 

and in others, from the last regular clock 

round. The price increment in the first 

round of the next stage will be added to 

the last clock price from the previous 

stage, or to the intra-round price at 

which a reduction that brought demand 

down to equal supply was processed. 

193. The Commission proposes that 

for categories of blocks for which all 

bidders indicated that they were willing 

to accept the full extended round price 

increment, bidder demands will carry 

over from the extended round. Because 

the Commission’s proposed procedures 

for processing extended round bids 

when the final stage rule is not met will 

allow at most one request for a 

reduction in demand to be accepted in 

each category, in categories where a 

reduction was accepted, bidder 

demands from the start of the extended 

round will carry over to the new stage 

for all but the bidder whose requested 

reduction was accepted. That bidder’s 

demand will reflect the reduction, 

consistent with extended round bid 

processing. For blocks that were not 

included in bidding in the extended 

round, the Commission proposes that 

bidder demands that were accepted by 

the auction system at the end of the last 

regular clock round of the previous 

stage will carry over to the beginning of 

the next stage. 

194. Under the Commission’s 

proposal, a bidder will begin the first 

round of a new stage with its eligibility 

reset to equal its bidding activity when 

the final round of the previous stage 

concluded. Because the re-optimization 

at the start of a new stage may ‘‘reshuffle’’ the assignment of stations to 

the 600 MHz Band, the extent and 

location of impairments to the blocks 

available may change from stage to stage 

of the forward auction. The auction 

system will advise forward auction 

bidders of any such changes before 

bidding begins. Because the 

Commission recognizes that bidder 

demand for Category 2 blocks in a PEA 

may be reduced if the extent of 

impairments increase, the Commission 

proposes that the auction system will 

accept requests to reduce demand for 

Category 2 blocks in the first round of 

a new stage, even if the reduction will 

result in demand falling below supply 

for that category. 

D. Bidding Procedures in Assignment 

Phase 

195. In the Incentive Auction R&O, 

the Commission adopted a two-step 

forward auction procedure, with a 

separate assignment phase ‘‘in which 

bidders will bid for priority in selecting 

bands or for a preferred frequency 

within a geographic area.’’ Here the 

Commission proposes procedures to 

implement the assignment phase, which 

it also explains in detail in Appendix H 

of the Auction 1000 Request for 

Comment. Under the Commission’s 

proposal, winning bidders from the 

clock phase that have a preference for 

specific frequencies will have an 

opportunity to submit sealed bids for 

particular frequency blocks in a separate 

single assignment round for each 

particular PEA or group of PEAs. The 

Commission proposes that this 

assignment phase be voluntary: 

Winning bidders in the clock phase of 

the forward auction need not participate 

in order to be assigned a number of 

licenses corresponding to the outcome 

of the clock phase. The Commission 

proposes to group bidding for multiple 

PEAs where possible, so as to reduce the 

number of separate assignment rounds 


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Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 4845 

required, and to sequence the bidding 

for the various PEAs. 

196. In determining specific 

frequency assignments during the 

assignment phase of the forward 

auction, the auction system will take 

into account bid amounts as well as 

other efficiency objectives, such as 

maximizing contiguity for winners of 

multiple blocks in an area. Under the 

Commission’s proposed approach, these 

overall efficiency considerations will 

affect the way the auction system 

processes the bids to determine the 

optimal assignment of frequencies. The 

Commission seeks comment on these 

proposed objectives and their relative 

priority in determining the best way to 

structure bidding and bid processing in 

each assignment round. 

i. Grouping of PEAs 

197. The Commission proposes to 

conduct bidding for specific frequencies 

grouped by different geographic areas in 

each assignment round. This will 

reduce the complexity for the bidder 

and the auction system that would be 

inherent in considering simultaneously 

the preferences of multiple bidders for 

various configurations of Category 1 and 

Category 2 license blocks in hundreds of 

PEAs. However, to the extent that the 

set of clock-phase winning bidders and 

their winning bids for Category 1 and 

Category 2 blocks are consistent across 

a group of PEAs, the Commission 

proposes to conduct the single-round 

bidding jointly for multiple areas. Under 

such circumstances, joint bidding 

would not increase the complexity of 

the bidding or the winner determination 

process. Moreover, joint bidding can 

reduce the overall number of 

assignment rounds needed and facilitate 

assigning contiguous blocks to bidders 

that won multiple blocks in a group, 

potentially enhancing the efficiency of 

the assignment. 

198. Specifically, the Commission 

proposes to group together: (1) ‘‘highdemand’’ PEAs with the same number 

of Category 1 and Category 2 blocks, 

where the same frequency blocks are in 

Category 2, and where the same bidders 

won the same quantities of Category 1 

and Category 2 blocks; and (2) all PEAs 

other than the ‘‘high-demand’’ PEAs in 

a Regional Economic Area Grouping 

(‘‘REAG’’) with the same number of 

Category 1 and Category 2 blocks, where 

the same frequency blocks are in 

Category 2, and where the same bidders 

won the same quantities of Category 1 

and Category 2 blocks. The Commission 

further proposes to group PEAs together 

when to do so will not create any 

conflicting interests among bidders. 

This could occur, for example, if the 

bidder mix of generic blocks differs only 

in that there is an unsold license in one 

PEA but not in another. Under the 

Commission’s proposal, bidders would 

bid for their specific preferred 

frequencies across all the PEAs in a 

group, and the auction system will 

determine a frequency assignment that 

will apply to all the licenses in the 

group. 

ii. Sequencing of PEAs 

199. The Commission proposes to 

sequence assignment rounds so as to 

make it easier for bidders to incorporate 

frequency assignments from previouslyassigned areas into their bid preferences 

for other areas, recognizing that bidders 

winning multiple blocks of licenses 

generally will prefer contiguous blocks 

across adjacent PEAs. To that end, the 

Commission proposes to conduct 

rounds for the largest groups of markets 

first to enable bidders to establish a 

‘‘footprint’’ from which to work. 

Specifically, the Commission proposes 

to conduct assignment rounds 

sequentially, generally in order of 

‘‘weighted-pops.’’ Under this proposal, 

the Commission will first conduct an 

assignment round for the largest PEA or 

PEA group, based on total weightedpops, and continue in order of 

weighted-pops until specific frequencies 

have been assigned for all the ‘‘highdemand’’ PEAs (individually or in 

groups). 

200. Once frequencies have been 

assigned for the ‘‘high-demand’’ PEAs, 

the Commission proposes to conduct for 

each REAG a series of assignment 

rounds for non-high-demand PEAs 

within that region, in descending order 

of weighted-pops for a PEA group or 

individual PEAs. The Commission 

further proposes, to the extent practical, 

to conduct the assignment rounds for 

the different REAGs in parallel, to 

reduce the total amount of time 

required. 

iii. Acceptable Bids and Bid Processing 

201. Under the Commission’s 

proposal, described in more detail in 

Appendix H of the Auction 1000 

Request for Comment, bidders will be 

asked to assign a price to their various 

frequency preferences, consistent with 

their winning bids for generic blocks in 

the clock phase. The Commission 

proposes not to differentiate in the 

assignment rounds between licenses 

that were reserved for certain eligible 

bidders pursuant to the Mobile 

Spectrum Holdings R&O and unreserved 

blocks. This proposed approach is 

consistent with the auction design the 

Commission adopted in the Incentive 

Auction R&O: Bidders in the clock 

phase will have competed for generic 

blocks, not specific licenses. The 

Commission also believes this approach 

is consistent with its competitive goals 

in the Mobile Spectrum Holdings R&O, 

as winning bidders will be assured of 

low-band spectrum based on the results 

of the clock phase. Winners of either 

reserved or unreserved Category 1 

blocks will be able to bid for the 

available frequencies in Category 1, and 

the auction system will assign specific 

frequencies without regard to the 

reserve-eligible status of the bidder. 

202. In each assignment round, a 

bidder will be asked to assign a price to 

one or more possible frequency 

assignments for which it wishes to 

express a preference. The price will 

represent a maximum payment that the 

bidder is willing to pay, in addition to 

the base price established in the clock 

phase for the generic blocks, for the 

frequency-specific license or licenses. 

At the end of the assignment phase, the 

clock price will be discounted to the 

extent the licenses included are subject 

to impairments. The Commission 

proposes to apply a discount on the 

clock prices of generic blocks to reflect 

the varying degrees of impairment to the 

blocks within a category. Specifically, 

for a given frequency-specific license, 

the Commission proposes to reduce the 

base price for the assignment round by 

one percent of the final clock price for 

each one percent of impairment to the 

license. Under this proposal and the 

Commission’s proposed assignment 

phase procedures, if a bidder indicates 

it is willing to pay an additional amount 

in the assignment round for a specific 

block that is available in the category, 

and it wins that license, the additional 

payment will be applied to a base price 

that reflects a discount from the final 

clock price for the category. 

203. It may not be possible to assign 

contiguous blocks to all bidders within 

a PEA. Contiguity cannot be guaranteed 

because of the possibility that some 

contiguous blocks are in different 

categories due to the amount of their 

impairment, and in the case of clearing 

targets over 84 megahertz, TV Channel 

37 will separate some blocks. Given 

this, the Commission proposes to use an 

optimization approach to determine the 

winning frequency assignment for each 

assignment round. The Commission 

proposes that the auction system will 

consider a number of objectives aimed 

at assigning contiguous blocks fairly and 

to the extent possible. As set forth in 

Appendix H of the Auction 1000 

Request for Comment, the Commission 

proposes a sequence of optimizations 

using the following objectives: (1) 

Maximizing the number of bidders that 


tkelley on DSK3SPTVN1PROD with PROPOSALS
4846 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Proposed Rules 

won multiple blocks that are assigned at 

least two contiguous blocks; (2) 

minimizing for all bidders that won two 

or more blocks in the clock phase the 

number of blocks that are noncontiguous to any of the bidder’s other 

blocks; and (3) maximizing the number 

of bidders that are assigned only 

contiguous blocks. Under the 

Commission’s proposed procedures, the 

auction system will first solve or 

optimize for the first objective and use 

that outcome as a constraint in solving 

the second objective, which would then 

constrain solving the third objective. 

The winning bids in each assignment 

round will be bids for which the 

assignment satisfies these three 

constraints and for which the bidders in 

that round are willing to pay the most. 

204. As described in Appendix H of 

the Auction 1000 Request for Comment, 

the Commission proposes that the 

additional price a bidder will pay for a 

specific frequency (above the 

discounted final clock price) will be 

calculated consistent with a generalized 

‘‘second price’’ approach—that is, the 

winner will pay a price that would be 

just sufficient to result in the bidder 

receiving that same winning frequency 

assignment. This price will be less than 

or equal to the price the bidder 

indicated it was willing to pay for the 

assignment. The Commission proposes 

to determine prices in this way because 

it facilitates bidding strategy for the 

bidders, giving them an incentive to bid 

their full value for the assignment, 

knowing that if the assignment is 

selected, they will pay no more than 

would have been necessary to ensure 

that the assignment won. 

E. Additional Default Payment 

Percentage 

205. The Commission’s competitive 

bidding rules provide that it shall 

establish the percentage of any 

defaulted bid that will be assessed as a 

payment owed by the defaulter in 

addition to the difference between with 

defaulted bid and a subsequent winning 

bid for the same license. In an auction 

without combinatorial bidding, such as 

the forward auction the Commission 

proposes here, the percentage shall be 

between three and 20 percent. The 

Commission proposes that the 

percentage shall be 20 percent in the 

forward auction. The Commission 

tentatively concludes that the maximum 

amount is in the public interest, given 

the importance of deterring defaults in 

order to minimize the possibility that 

the auction will not generate shortly 

after its conclusion the full amount of 

the proceeds indicated by winning bids. 

VI. Ex Parte 

206. This proceeding has been 

designated as a ‘‘permit-but-disclose’’ 

proceeding in accordance with the 

Commission’s ex parte rules. Persons 

making oral ex parte presentations are 

reminded that memoranda summarizing 

the presentations must contain 

summaries of the substance of the 

presentations and not merely a listing of 

the subjects discussed. More than a one 

or two sentence description of the views 

and arguments presented is generally 

required. Other provisions pertaining to 

oral and written ex parte presentations 

in permit-but-disclose proceedings are 

set forth in 47 CFR 1.1206(b). 

VII. Regulatory Flexibility Act Analysis 

207. As required by the Regulatory 

Flexibility Act of 1980 (RFA), 5 U.S.C. 

603, the Commission prepared an Initial 

Regulatory Flexibility Analysis (IRFA) 

in connection with the Notice of 

Proposed Rulemaking, ‘‘Expanding the 

Economic and Innovation Opportunities 

of Spectrum Through Incentive 

Auction,’’ 77 FR 69933, November 21, 

2012 (Incentive Auction NPRM) and a 

Final Regulatory Flexibility Analysis 

(FRFA) in connection with the Incentive 

Auction R&O. While no commenter 

directly responded to the IRFA, the 

FRFA addressed concerns about the 

impact on small business of various 

auction design issues. The Commission 

seeks comment on how the proposals in 

the Auction 1000 Request for Comment 

could affect either the IRFA or the 

FRFA. Such comments must be filed in 

accordance with the same filing 

deadlines for responses to the Auction 

1000 Request for Comment and have a 

separate and distinct heading 

designating them as responses to the 

IRFA and FRFA. 

208. The IRFA and FRFA set forth the 

need for and objectives of the 

Commission’s rules for the broadcast 

spectrum incentive auction; the legal 

basis for those rules, a description and 

estimate of the number of small entities 

to which the rules apply; a description 

of projected reporting, recordkeeping, 

and other compliance requirements for 

small entities; steps taken to minimize 

the significant economic impact on 

small entities and significant 

alternatives considered; and a statement 

that there are no federal rules that may 

duplicate, overlap, or conflict with the 

rules. The proposals in the Auction 

1000 Request for Comment do not 

change any of those descriptions. 

209. The Auction 1000 Request for 

Comment does, however, detail 

proposed procedures implementing 

those rules. The Commission seeks 

comment on how the proposals in the 

Auction 1000 Request for Comment 

could affect either the IRFA or the 

FRFA. These proposals include 

procedures for setting the initial 

broadcast spectrum clearing target, 

determining whether the final stage rule 

is satisfied and the steps triggered by 

that determination, determining how 

much market variation will be 

accommodated, and a process of moving 

from one stage of the auction to any 

subsequent stage(s), if necessary. The 

Auction 1000 Comment PN also 

addresses detailed proposals for setting 

opening prices, applying to participate 

in the reverse or forward auction, 

establishing bidding procedures for each 

auction, optimizing the final television 

assignment channel plan, providing 

information to forward auction bidders, 

grouping license blocks into categories 

for bidding, implementing the marketbased spectrum reserve, repacking 

broadcasting stations in conjunction 

with the reverse auction, and assigning 

licenses with specific frequencies in the 

forward auction. 

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary. 

[FR Doc. 2015–01607 Filed 1–28–15; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 204 and 237 

RIN 0750–AI29 

Defense Federal Acquisition 

Regulation Supplement: Electronic 

Copies of Contractual Documents 

(DFARS Case 2012–D056) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to 

state the policy that the Electronic 

Document Access (EDA) system is 

DoD’s online repository and distribution 

tool for contract documents and contract 

data, require internal control procedures 

for contract document and data 

verification in EDA, and remove 

outmoded language that is not 

consistent with electronic document 

processes. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 


tkelley on DSK3SPTVN1PROD with PROPOSALS