[Federal Register Volume 87, Number 34 (Friday, February 18, 2022)]
[Rules and Regulations]
[Pages 9250-9270]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-03348]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 73

[AU Docket No. 21-449; DA 22-125; FR ID 71977]


Auction of Construction Permits for Full Power Television 
Stations; Notice and Filing Requirements, Minimum Opening Bids, Upfront 
Payments, and Other Procedures for Auction 112

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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SUMMARY: This document summarizes the procedures, deadlines, and 
upfront payment and minimum opening bid amounts for the upcoming 
auction of construction permits for full power television (TV) 
stations. The Auction 112 Procedures Public Notice summarized here is 
intended to familiarize potential applicants with details of the 
procedures, terms, and conditions governing participation in Auction 
112, as well as an overview of the post-auction application and payment 
processes.

DATES: Applications to participate in Auction 112 must be submitted 
before 6:00 p.m. Eastern Time (ET) on March 30, 2022. Upfront payments 
for Auction 112 must be received by 6:00 p.m. ET on May 6, 2022. 
Bidding in Auction 112 is scheduled to start on June 7, 2022.

FOR FURTHER INFORMATION CONTACT: 
    General Auction 112 Information: FCC Auctions Hotline at 888-225-
5322, option two; or 717-338-2868.
    Auction 112 Legal Information: Mary Lovejoy or Andrew McArdell at 
(202) 418-0660.
    Licensing Information: Shaun Maher at (202) 418-2324 or Kevin 
Harding at (202) 418-7077.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communication Commission's (Commission or FCC) document, Auction 112 
Procedures Public Notice, in AU Docket No. 21-449; DA 21-125, released 
on February 10, 2022. The complete text of this document, including 
attachments and any related documents, is available on the Commission's 
website at http://www.fcc.gov/auction/112 or by using the search 
function for on the Commission's Electronic Comment Filing System 
(ECFS) web page at www.fcc.gov/ecfs. Alternative formats are available 
to persons with disabilities by sending an email to <a href="/cdn-cgi/l/email-protection#e3a5a0a0d6d3d7a3858080cd848c95"><span class="__cf_email__" data-cfemail="c1878282f4f1f581a7a2a2efa6aeb7">[email protected]</span></a> or 
by calling the Consumer & Governmental Affairs Bureau at (202) 418-0530 
(voice), (202) 418-0432 (TTY).

I. General Information

A. Introduction

    1. By the Auction 112 Procedures Public Notice, the Office of 
Economics and Analytics (OEA) and the Media Bureau (MB) establish the 
procedures and minimum opening bid amounts to be used for Auction 112, 
an auction of construction permits for full power television (TV) 
stations. Bidding in this auction is scheduled to start on June 7, 
2022. The Auction 112 Procedures Public Notice provides details 
regarding the procedures, terms, conditions, dates, and deadlines 
governing participation in Auction 112 bidding, as well as an overview 
of the post-auction application and payment processes.

B. Background and Relevant Authority

    2. On November 19, 2021, OEA and MB released a public notice 
seeking comment on competitive bidding procedures to be used in Auction 
112. One party filed comments in response to the Auction 112 Comment 
Public Notice, 86 FR 68203, December 1, 2021, and one party filed a 
reply. In the Auction 112 Procedures Public Notice, OEA and MB resolve 
all open issues raised in the Auction 112 Comment Public Notice. 
Auction 112 will proceed pursuant to the procedures described in the 
Auction 112 Procedures Public Notice, which have been adopted in 
accordance with 47 U.S.C. 309(j)(3).
    3. Other Commission rules and decisions provide the underlying 
authority for the procedures OEA and MB adopt for Auction 112. Auction 
112 applicants must familiarize themselves thoroughly with the 
Commission's general competitive bidding rules, including Commission 
decisions in proceedings regarding competitive bidding procedures, 
application requirements, and obligations of Commission licensees. 
Prospective applicants should also familiarize themselves with the 
Commission's television broadcast service and

[[Page 9251]]

competitive bidding requirements contained in part 73 of the 
Commission's rules, as well as Commission orders concerning competitive 
bidding for broadcast construction permits. Applicants must also be 
thoroughly familiar with the procedures, terms and conditions contained 
in the Auction 112 Procedures Public Notice and any future public 
notices that may be released in this proceeding.
    4. The terms contained in the Commission's rules, relevant orders, 
and public notices are not negotiable. The Commission may amend or 
supplement the information contained in its public notices at any time 
and will issue public notices to convey any new or supplemental 
information to applicants. Pursuant to the Commission's rules, OEA and 
MB also retain the authority to implement further procedures during the 
course of this auction. It is the responsibility of all applicants to 
remain current with all Commission rules and with all public notices 
pertaining to Auction 112.

C. Construction Permits To Be Offered in Auction 112

    5. Auction 112 will offer 27 construction permits for TV stations. 
The construction permits that will be available in Auction 112 are 
listed in Attachment A to the Auction 112 Procedures Public Notice.
    6. The construction permits that will be available in Auction 112 
are for channel allotments contained in the Table of Television 
Allotments (TV Table) and assigned at the indicated communities for 
which there currently is not a licensee. Each construction permit 
awarded will be for one of the allotted-but-unlicensed channels 
currently contained in the TV Table.

D. Auction Specifics

1. Auction Title and Start Date
    7. This auction of construction permits for TV stations will be 
referred to as ``Auction 112.'' Bidding in Auction 112 is scheduled to 
begin on Tuesday, June 7, 2022. Pre-auction dates and deadlines are 
listed below.
    8. The initial schedule for bidding rounds will be announced by 
public notice at least one week before the bidding starts in Auction 
112. Unless otherwise announced, bidding on all construction permits 
will be conducted on each business day until bidding has stopped on all 
construction permits.
2. Auction Dates and Deadlines
    9. The following dates and deadlines apply to Auction 112:

Auction Tutorial Available (via internet).........  No later than February 25, 2022.
Short-Form Application (FCC Form 175) Filing        March 17, 2022, 12:00 p.m. ET.
 Window Opens.
Short-Form Application (FCC Form 175) Filing        March 30, 2022, 6:00 p.m. ET.
 Window Deadline.
Upfront Payments (via wire transfer)..............  May 6, 2022, 6:00 p.m. ET.
Mock Auction......................................  June 3, 2022.
Bidding Begins in Auction 112.....................  June 7, 2022.
 

3. Requirements for Participation
    10. Those wishing to participate in Auction 112 must:
    <bullet> Submit a short-form application (FCC Form 175) 
electronically prior to 6:00 p.m. ET on March 30, 2022, following the 
electronic filing procedures set forth in the FCC Form 175 
Instructions.
    <bullet> Submit a sufficient upfront payment and an FCC Remittance 
Advice Form (FCC Form 159) by 6:00 p.m. ET on May 6, 2022, following 
the procedures and instructions set forth in Attachment B to the 
Auction 112 Procedures Public Notice.
    <bullet> Comply with all provisions outlined in the Auction 112 
Procedures Public Notice and applicable Commission rules.

II. Applying To Participate in Auction 112

A. General Information Regarding Short-Form Applications

    11. A short-form application, or FCC Form 175, provides information 
that the Commission uses to determine whether the applicant has the 
legal, technical, and/or financial qualifications to participate in a 
Commission auction for licenses or permits. The short-form application 
is the first part of the Commission's two-phased auction application 
process. In the first phase, a party seeking to participate in Auction 
112 must file a short-form application in which it certifies, under 
penalty of perjury, that it is qualified to participate. Eligibility to 
participate in Auction 112 is determined based on an applicant's short-
form application and certifications and on the applicant's upfront 
payment. After bidding closes, in the second phase of the process, each 
winning bidder in Auction 112 must file a more comprehensive post-
auction, long-form application FCC Form 2100, Schedule A, in the Media 
Bureau's Licensing and Management System (LMS) for the construction 
permits it wins in the auction.
    12. A party seeking to participate in Auction 112 must file an FCC 
Form 175 electronically via the Auction Application System prior to 
6:00 p.m. ET on March 30, 2022, following the procedures prescribed in 
the FCC Form 175 Instructions. If an applicant claims eligibility for a 
bidding credit, then the information provided in its FCC Form 175 will 
be used to determine whether the applicant is eligible for the claimed 
bidding credit. Below OEA and MB describe more fully the information 
disclosures and certifications required in the short-form application. 
Each Auction 112 applicant will be subject to the Commission's rule 
prohibiting certain communications. An applicant is subject to the 
prohibition beginning at the deadline for filing short-form 
applications--6:00 p.m. ET on March 30, 2022.
    13. An Auction 112 applicant bears full responsibility for 
submitting an accurate, complete, and timely short-form application. 
Pursuant to the Commission's competitive bidding rules, an applicant 
must make a series of certifications under penalty of perjury on its 
FCC Form 175 related to the information provided in its application and 
its participation in the auction, and an applicant must confirm that it 
is legally, technically, financially, and otherwise qualified to hold a 
permit. Additionally, each participant in Auction 112 must certify that 
it has read the Auction 112 Procedures Public Notice and familiarized 
itself both with the auction procedures and with the requirements for 
obtaining a construction permit for a television broadcast station. If 
an Auction 112 applicant fails to make the required certifications in 
its FCC Form 175 by the filing deadline, then its application will be 
deemed unacceptable for filing and cannot be corrected after the filing 
deadline.
    14. An applicant should note that submitting an FCC Form 175 (and 
any amendments thereto) constitutes a representation by the certifying 
official that he or she is an authorized representative of the 
applicant with authority to bind the applicant, that he or she has read 
the form's instructions

[[Page 9252]]

and certifications, and that the contents of the application, its 
certifications, and any attachments are true and correct. Submitting a 
false certification to the Commission may result in penalties, 
including monetary forfeitures, license forfeitures, ineligibility to 
participate in future auctions, and/or criminal prosecution.
    15. Applicants are cautioned that, because the required information 
submitted in FCC Form 175 bears on each applicant's qualifications, 
requests for confidential treatment will not be routinely granted. The 
Commission generally has held that it may publicly release confidential 
business information where the party has put that information at issue 
in a Commission proceeding or where the Commission has identified a 
compelling public interest in disclosing the information. In this 
regard, the Commission specifically has held that information submitted 
in support of receiving bidding credits in auction proceedings should 
be made available to the public.
    16. No individual or entity may file more than one short-form 
application. If a party submits multiple short-form applications for an 
auction, then only one application may form the basis for that party to 
become qualified to bid in that auction.
    17. Similarly, and consistent with the Commission's general 
prohibition on joint bidding agreements, a party generally is permitted 
to participate in a Commission auction only through a single bidding 
entity. Accordingly, the filing of applications in Auction 112 by 
multiple entities controlled by the same individual or set of 
individuals generally will not be permitted. Consistent with this 
requirement, a broadcaster interested in bidding on more than one 
construction permit cannot use two or more subsidiary entities to bid 
separately on construction permits in separate markets, regardless of 
whether each subsidiary were to select different construction permits 
on its short-form application. Likewise, if an entity, individual, or 
set of individuals hold controlling interests in multiple entities that 
are interested in participating in Auction 112, regardless of whether 
those entities have other, non-shared controlling or non-controlling 
interests, those entities must participate in the auction through a 
single bidding entity and only that bidding entity may file an auction 
application. In that regard, the bidding entity must disclose in its 
short-form application any joint ventures or other agreements or 
arrangements with any commonly controlled, non-applicant entities 
related to bidding in Auction 112. As noted by the Commission in 
adopting the prohibition on applications by commonly controlled 
entities, this rule, in conjunction with the prohibition against joint 
bidding agreements, protects the competitiveness of the Commission's 
auctions.
    18. OEA and MB discuss below additional details regarding certain 
information required to be submitted in the FCC Form 175. An applicant 
should consult the Commission's rules to ensure that, in addition to 
the materials described below, all required information is included in 
its short-form application. To the extent the information in the 
Auction 112 Procedures Public Notice does not address an applicant's 
specific operating structure, or if the applicant needs additional 
information or guidance concerning the described disclosure 
requirements, the applicant should review the educational materials for 
Auction 112 (see the Education section of the Auction 112 website at 
www.fcc.gov/auction/112) and use the contact information provided in 
the Auction 112 Procedures Public Notice to consult with Commission 
staff to better understand the information that it must submit in its 
short-form application.

B. Certification That Applicant Has Read the Procedures Public Notice 
and Familiarized Itself With Requirements

    19. In the Auction 112 Comment Public Notice, OEA and MB sought 
comment on a proposal to require each participant in Auction 112 to 
certify in its short-form application, under penalty of perjury, that 
it has read the public notice adopting procedures for the auction and 
that it has familiarized itself both with the auction procedures and 
with the requirements for obtaining a construction permit for a TV 
station. As with other certifications required to be made in an auction 
application, a failure to make the certification would render the 
application unacceptable for filing, and the applicant will not be 
found qualified to bid. OEA and MB proposed this requirement to help 
ensure that each applicant has reviewed the procedures to become a 
qualified bidder and participate in the auction process and that it has 
investigated and assessed technical and business factors that may be 
relevant to its use of the licenses being offered. OEA and MB expressed 
the belief that this requirement would promote an applicant's 
successful participation and minimize its risk of defaulting on its 
auction obligations. No parties filed comments addressing this 
proposal, and OEA and MB adopt it in the Auction 112 Procedures Public 
Notice.
    20. This certification is designed to bolster applicants' efforts 
to educate themselves about the procedures for auction participation 
and to ensure that, prior to submitting their short-form applications, 
applicants understand their obligation to stay abreast of relevant, 
forthcoming information. Familiarity with the Commission's rules and 
procedures governing Auction 112 may also help bidders avoid the 
consequences to them associated with defaults, which also cause harm to 
other applicants and the public by reducing the efficiency of the 
auction process and reducing the likelihood that the license will be 
assigned to the bidder that values it the most. This certification, 
along with the other certifications required pursuant to 47 CFR 
1.2105(a), will promote submission of applications that meet the 
Commission's requirements, thereby leading to a more efficient 
application process.
    21. A substantively similar requirement was recently instituted for 
Auction 110, a Commission auction of flexible-use licenses in the 3.45-
3.55 GHz band. That requirement furthered a long-standing policy under 
which the Commission expressly places a burden upon each applicant to 
be thoroughly familiar with the procedures, terms, and conditions 
contained in the relevant Procedures Public Notice and any future 
public notices that may be released in the auction proceeding. While 
the certification OEA and MB add refers to information regarding 
auction procedures and licensing that is available at the time of 
certification, potential auction applicants are on notice that their 
educational efforts must continue even after their short-form 
applications are filed. Commission staff routinely makes available 
detailed educational materials, such as interactive, online tutorials 
and technical guides, to enhance interested parties' comprehension of 
the pre-bidding and bidding processes and to help minimize the need for 
applicants to engage outside engineers, legal counsel, or other auction 
experts.
    22. For these reasons, OEA and MB will require each Auction 112 
applicant to certify as follows in its short-form application: That the 
applicant has read the public notice adopting procedures for the 
auction and that it has familiarized itself both with the auction 
procedures and with the requirements for obtaining a construction 
permit for a television broadcast station.
    23. An applicant must provide this certification under penalty of 
perjury, consistent with 47 CFR 1.2105(a).

[[Page 9253]]

C. Authorized Bidders

    24. An applicant must designate at least one authorized bidder, and 
no more than three, in its FCC Form 175. The Commission's rules 
prohibit an individual from serving as an authorized bidder for more 
than one auction applicant or being listed as an authorized bidder in 
more than one FCC Form 175 application.

D. Permit Selection

    25. An applicant must select on its FCC Form 175 all of the 
construction permits on which it may want to bid. An applicant must 
carefully review and verify its construction permit selections before 
the FCC Form 175 filing deadline because permit selections cannot be 
changed after the initial auction application filing deadline. The FCC 
Auction Bidding System (bidding system) will not accept bids on 
construction permits that were not selected on the bidder's FCC Form 
175.

E. Disclosure of Agreements and Bidding Arrangements

    26. An applicant must provide in its FCC Form 175 a brief 
description of, and identify each party to, any partnerships, joint 
ventures, consortia or agreements, arrangements, or understandings of 
any kind relating to the TV construction permits being auctioned, 
including any agreements that address or communicate directly or 
indirectly bids (including specific prices), bidding strategies 
(including the specific licenses on which to bid or not to bid), or the 
post-auction market structure, to which the applicant, or any party 
that controls or is controlled by the applicant, is a party. In 
connection with the agreement disclosure requirement, the applicant 
must certify under penalty of perjury in its FCC Form 175 that it has 
described, and identified each party to, any such agreements, 
arrangements, or understandings to which it (or any party that controls 
it or that it controls) is a party. If, after the FCC Form 175 filing 
deadline, an auction applicant enters into any agreement relating to 
the licenses being auctioned, then it is subject to these same 
disclosure obligations. Each applicant must maintain the accuracy and 
completeness of the information in its pending auction application.
    27. For purposes of making the required agreement disclosures on 
the FCC Form 175, if parties agree in principle on all material terms 
prior to the application filing deadline, then each party to the 
agreement that is submitting an auction application must provide a 
brief description of, and identify the other party or parties to, the 
agreement on its respective FCC Form 175, even if the agreement has not 
been reduced to writing. Parties that have not agreed in principle by 
the FCC Form 175 filing deadline should not describe, or include the 
names of parties to, the discussions on their applications.
    28. The Commission's rules generally prohibit joint bidding and 
other arrangements involving auction applicants (including any party 
that controls or is controlled by such applicants). For purposes of the 
prohibition, a joint bidding arrangement includes any arrangement 
relating to the construction permits being auctioned that addresses or 
communicates, directly or indirectly, bidding at the auction, bidding 
strategies, including arrangements regarding price or the specific 
construction permits on which to bid, and any such arrangement relating 
to the post-auction market structure.
    29. To implement the prohibition on joint bidding arrangements, the 
Commission's rules require each applicant to certify in its short-form 
application that it has disclosed any arrangements or understandings of 
any kind relating to the permits or licenses being auctioned to which 
it (or any party that controls or is controlled by it) is a party. The 
applicant must also certify that it (or any party that controls or is 
controlled by it) has not entered and will not enter into any 
arrangement or understanding of any kind relating directly or 
indirectly to bidding at auction with, among others, any other 
applicant.
    30. Although the Commission's rules do not prohibit auction 
applicants from communicating about matters that are within the scope 
of an excepted agreement that has been disclosed in an FCC Form 175, 
the Commission reminds applicants that certain discussions or exchanges 
could nonetheless touch upon impermissible subject matters, and that 
compliance with the Commission's rules will not insulate a party from 
enforcement of the antitrust laws.
    31. Applicants should bear in mind that a winning bidder will be 
required to disclose in its FCC Form 2100 post-auction application the 
specific terms, conditions, and parties involved in any agreement 
relating to the construction permits being auctioned into which it had 
entered prior to the time bidding was completed. This applies to any 
settlement agreement, joint venture, partnership, or other agreement, 
arrangement, or understanding of any kind entered into relating to the 
competitive bidding process, including any agreements relating to the 
construction permits being auctioned that address or communicate 
directly or indirectly bids (including specific prices), bidding 
strategies (including the specific construction permits on which to bid 
or not to bid), or the post-auction market structure, to which the 
applicant, or any party that controls or is controlled by the 
applicant, is a party.

F. Ownership Disclosure Requirements

    32. Each applicant must comply with the ownership disclosure 
requirements and provide information required by 47 CFR 1.2105 and 
1.2112. Specifically, in completing FCC Form 175, an applicant must 
fully disclose information regarding the real party or parties-in-
interest in the applicant or application and the ownership structure of 
the applicant, including both direct and indirect ownership interests 
of 10% or more, as prescribed in 47 CFR 1.2105 and 1.2112. These 
interest holders may differ from the types of attributable interest 
holders that are required to be reported by broadcast applicants under 
part 73 of the rules in conjunction with licensing and assignment and 
transfer of facilities or reporting of ownership information, such as 
insulated interest holders and holders of non-voting stock/equity in 
the applicant. Each applicant is responsible for ensuring that 
information submitted in its short-form application is complete and 
accurate.
    33. In certain circumstances, an applicant may have previously 
filed an FCC Form 602 ownership disclosure information report or filed 
an auction application for a previous auction in which ownership 
information was disclosed. The most current ownership information 
contained in any FCC Form 602 or previous auction application on file 
with the Commission that used the same FCC Registration Number (FRN) 
the applicant is using to submit its FCC Form 175 will automatically be 
pre-filled into certain ownership sections on the applicant's FCC Form 
175, if such information is in an electronic format compatible with FCC 
Form 175. Each applicant must carefully review any ownership 
information automatically entered into its FCC Form 175, including any 
ownership attachments, to confirm that all information supplied on FCC 
Form 175 is complete and accurate as of the application filing 
deadline. Any information that needs to be corrected or updated must be 
changed directly in FCC Form 175.

G. Foreign Ownership Disclosure Requirements

    34. The provisions in 47 U.S.C. 310 require the Commission to 
review

[[Page 9254]]

foreign investment in radio station licenses and imposes specific 
restrictions on who may hold certain types of radio licenses. In 
completing FCC Form 175, an applicant is required to disclose 
information concerning foreign ownership of the applicant. If an 
applicant has foreign ownership interests in excess of the applicable 
limit or benchmark set forth in 47 U.S.C. 310(b), then it may seek to 
participate in Auction 112 only if it has filed a petition for 
declaratory ruling with the Media Bureau prior to the FCC Form 175 
filing deadline. An applicant must certify in its FCC Form 175 that, as 
of the deadline for filing its application to participate in the 
auction, the applicant either is in compliance with the foreign 
ownership provisions of 47 U.S.C. 310 or has filed a petition for 
declaratory ruling requesting Commission approval to exceed the 
applicable foreign ownership limit or benchmark in 47 U.S.C. 310(b) 
that is pending before, or has been granted by, the Commission.

H. Information Procedures During the Auction Process

    35. Consistent with past practice in most recent Commission 
spectrum auctions, OEA and MB adopt the proposal to limit information 
available in Auction 112 in order to discourage unproductive and 
anticompetitive strategic behavior. Accordingly, OEA and MB will not 
identify bidders placing particular bids until after the bidding has 
closed. While OEA and MB generally make available to the public 
information provided in each applicant's FCC Form 175 following an 
initial review by Commission staff, they will not make public until 
after bidding has closed: (1) The construction permits that an 
applicant selects for bidding in its short-form application, (2) the 
amount of any upfront payment made by or on behalf of an applicant, (3) 
any applicant's bidding eligibility, and (4) any other bidding-related 
information that might reveal the identity of the bidder placing a bid.
    36. The limited information procedures used in past auctions have 
helped safeguard against potential anticompetitive behavior such as 
retaliatory bidding and collusion. No commenters objected to this 
proposal, and OEA and MB find nothing in the record to suggest that 
they should not use those procedures for Auction 112. The competitive 
benefits associated with limiting information disclosure support 
adoption of such procedures and outweigh the potential benefits of full 
disclosure.
    37. After the close of each round of bidding in Auction 112, under 
the limited information procedures (sometimes also referred to as 
anonymous bidding), for each permit OEA and MB will make public its 
current provisionally winning bid amount, the minimum acceptable bid 
amount for the following round, and the amounts of all bids placed on 
the permit during the round. These reports will be publicly accessible.
    38. Throughout the auction, OEA and MB will provide bidders with 
secure access to certain non-public bidding information while bidding 
is ongoing. For example, bidders will be able to view their own level 
of eligibility, both before and during the auction.
    39. After the close of bidding, bidders' permit selections, upfront 
payment amounts, bidding eligibility, bids, and other bidding-related 
information will be made publicly available.
    40. OEA and MB warn applicants that direct or indirect 
communication to other applicants or the public disclosure of non-
public information (e.g., reductions in eligibility, identities of 
bidders) could violate the Commission's rule prohibiting certain 
communications. Therefore, to the extent an applicant believes that 
such a disclosure is required by law or regulation, including 
regulations issued by the U.S. Securities and Exchange Commission 
(SEC), OEA and MB strongly urge that the applicant consult with 
Commission staff in the Auctions Division before making such 
disclosure.

I. Prohibited Communications and Compliance With Antitrust Laws

    41. The rules prohibiting certain communications set forth in 47 
CFR 1.2105(c) and 73.5002(d) and (e) apply to each ``applicant'' in 
Auction 112. The provisions in 47 CFR 1.2105(c)(1) provide that, 
subject to specified exceptions, after the deadline for filing a short-
form application, all applicants are prohibited from cooperating or 
collaborating with respect to, communicating with or disclosing, to 
each other in any manner the substance of their own, or each other's, 
or any other applicant's bids or bidding strategies (including post-
auction market structure), or discussing or negotiating settlement 
agreements, until after the down payment deadline.
1. Entities Subject to Section 1.2105(c)
    42. An ``applicant'' for purposes of this rule includes the 
officers and directors of the applicant, all ``controlling interests'' 
in the entity submitting the FCC Form 175, as well as all holders of 
interests amounting to 10% or more of that entity. A party that submits 
an application becomes an ``applicant'' under the rule at the short-
form application filing deadline, and that status does not change based 
on later developments, including failure to become a qualified bidder. 
Thus, an auction applicant that does not correct deficiencies in its 
application, fails to submit a timely and sufficient upfront payment, 
or does not otherwise become qualified, remains an ``applicant'' for 
purposes of the rule and remains subject to the prohibition on certain 
communications until the applicable down payment deadline.
2. Prohibition Applies Until Down Payment Deadline
    43. The prohibition in 47 CFR 1.2105(c) on certain communications 
begins at an auction's short-form application filing deadline and ends 
at the auction's down payment deadline after the auction closes, which 
will be announced in a future public notice.
3. Scope of Prohibition on Certain Communications; Prohibition on Joint 
Bidding Agreements
    44. The provisions in 47 CFR 1.2105(c) prohibit certain 
communications between auction applicants, regardless of whether the 
applicants seek permits in the same geographic area or market. The rule 
also prohibits any ``joint bidding arrangement,'' including 
arrangements relating to the permits being auctioned that address or 
communicate, directly or indirectly, bidding at the auction, bidding 
strategies, including arrangements regarding price or the specific 
permits on which to bid, and any such arrangements relating to the 
post-auction market structure. The rule allows for limited exceptions 
for communications within the scope of any arrangement consistent with 
the exclusion from the Commission's rule prohibiting joint bidding, 
provided such arrangement is disclosed on the applicant's short-form 
application. An applicant may communicate pursuant to any pre-existing 
agreements, arrangements, or understandings relating to the licenses 
being auctioned that are solely operational or that provide for the 
transfer or assignment of licenses, provided that such agreements, 
arrangements, or understandings are disclosed on its application and do 
not both relate to the permits at auction and address or communicate 
bids (including amounts), bidding strategies, or the particular permits 
or licenses on which to bid or the post-auction market structure.
    45. In addition to express statements of bids and bidding 
strategies, the prohibition against communicating ``in

[[Page 9255]]

any manner'' includes public disclosures as well as private 
communications and indirect or implicit communications. Consequently, 
an applicant must take care to determine whether its auction-related 
communications may reach another applicant. Applicants are reminded 
that the prohibition on communications between applicants begins at the 
deadline for submitting short-form applications and before the public 
notice identifying applicants is released. Special care should be taken 
with regard to any public disclosures or private communications 
regarding bids or bidding strategies during the period following the 
short-form application deadline when the identity of other applicants 
is not known.
    46. Parties subject to 47 CFR 1.2105(c) should take special care in 
circumstances where their officers, directors, and employees may 
receive information directly or indirectly relating to any applicant's 
bids or bidding strategies. Such information may be deemed to have been 
received by the applicant under certain circumstances. For example, 
Commission staff have determined that, where an individual serves as an 
officer or director for two or more applicants, the bids and bidding 
strategies of one applicant are presumed to be conveyed to the other 
applicant through the shared officer or director, which creates an 
apparent violation of the rule
    47. Subject to the limited exceptions for communications within the 
scope of any arrangement consistent with the exclusion from the 
Commission's rule prohibiting joint bidding, 47 CFR 1.2105(c)(1) 
prohibits applicants from communicating with specified other parties 
only with respect to ``their own, or each other's, or any other 
applicant's bids or bidding strategies . . . .'' The Prohibited 
Communications Guidance Public Notice, 80 FR 63215, October 19, 2015, 
released in advance of the broadcast incentive auction (Auction 1000) 
reviewed the scope of the prohibition generally, as well as specific 
variations on the prohibition that were unique to Auction 1000. As the 
Commission explained therein, a communication conveying ``bids or 
bidding strategies (including post-auction market structure)'' must 
also relate to the ``licenses being auctioned'' in order to be covered 
by the prohibition. Thus, the prohibition is limited in scope and does 
not apply to all communications between or among the specified parties. 
The Commission consistently has made clear that application of the rule 
prohibiting communications has never required total suspension of 
essential ongoing business. Entities subject to the prohibition may 
negotiate agreements during the prohibition period, provided that the 
communications involved do not relate to both: (1) The licenses or 
permits being auctioned and (2) bids or bidding strategies or post-
auction market structure.
    48. Accordingly, business discussions and negotiations that are 
unrelated to bidding in Auction 112 and that do not convey information 
about the bids or bidding strategies of an applicant, including the 
post-auction market structure, are not prohibited by the rule. 
Moreover, not all auction-related information is covered by the 
prohibition. For example, communicating merely whether a party has or 
has not applied to participate in Auction 112 will not violate the 
rule. In contrast, communicating, among other things, how a party will 
participate, including whether or not a party plans to submit an 
upfront payment and the upfront payment amount, specific bid amounts, 
and/or whether or not the party is placing or intends to place bids, 
would convey bids or bidding strategies and would be prohibited.
    49. While 47 CFR 1.2105(c) does not prohibit business discussions 
and negotiations among auction applicants that are unrelated to the 
auction, each applicant must remain vigilant not to communicate, 
directly or indirectly, information that affects, or could affect, bids 
or bidding strategies. Certain discussions might touch upon subject 
matters that could convey price or geographic information related to 
bidding strategies. Such subject areas include, but are not limited to, 
management, sales, local marketing agreements, and other transactional 
agreements.
    50. OEA and MB caution applicants that bids or bidding strategies 
may be communicated outside of situations that involve one party 
subject to the prohibition communicating privately and directly with 
another such party. For example, the Commission has warned that 
prohibited communications concerning bids and bidding strategies may 
include communications regarding capital calls or requests for 
additional funds in support of bids or bidding strategies to the extent 
such communications convey information concerning the bids and bidding 
strategies directly or indirectly. Moreover, the Commission found a 
violation of the rule against prohibited communications when an 
applicant used the Commission's bidding system to disclose its bidding 
strategy in a manner that explicitly invited other auction participants 
to cooperate and collaborate . . . in specific markets, and it has 
placed auction participants on notice that the use of its bidding 
system to disclose market information to competitors will not be 
tolerated and will subject bidders to sanctions.
    51. Likewise, when completing a short-form application, each 
applicant should avoid any statements or disclosures that may violate 
47 CFR 1.2105(c), particularly in light of the limited information 
procedures in effect for Auction 112. Specifically, an applicant should 
avoid including any information in its short-form application that 
might convey information regarding its permit selections, such as 
referring to certain markets in describing agreements, including any 
information in application attachments that will be publicly available 
that may otherwise disclose the applicant's permit selections, or using 
applicant names that refer to permits being offered.
    52. Applicants also should be mindful that communicating non-public 
application or bidding information publicly or privately to another 
applicant may violate 47 CFR 1.2105(c) even though that information 
subsequently may be made public during later periods of the application 
or bidding processes.
4. Communicating With Third Parties
    53. The provisions in 47 CFR 1.2105(c) do not prohibit an applicant 
from communicating bids or bidding strategies to a third party, such as 
a consultant or consulting firm, counsel, or lender. The applicant 
should take appropriate steps, however, to ensure that any third party 
it employs for advice pertaining to its bids or bidding strategies does 
not become a conduit for prohibited communications to other specified 
parties, as that would violate the rule. For example, an applicant 
might require a third party, such as a lender, to sign a non-disclosure 
agreement before the applicant communicates any information regarding 
bids or bidding strategy to the third party. Within third-party firms, 
separate individual employees, such as attorneys or auction 
consultants, may advise individual applicants on bids or bidding 
strategies, as long as such firms implement firewalls and other 
compliance procedures that prevent such individuals from communicating 
the bids or bidding strategies of one applicant to other individuals 
representing separate applicants. Although firewalls and/or other 
procedures should be used, their existence is not an absolute defense 
to

[[Page 9256]]

liability if a violation of the rule has occurred.
    54. As the Commission has noted in other broadcast auctions, in the 
case of an individual, the objective precautionary measure of a 
firewall is not available. As a result, an individual that is privy to 
bids or bidding information of more than one applicant presents a 
greater risk of becoming a conduit for a prohibited communication. OEA 
and MB emphasize that whether a prohibited communication has taken 
place in a given case will depend on all the facts pertaining to the 
case, including who possessed what information, what information was 
conveyed to whom, and the course of bidding in the auction.
    55. OEA and MB remind potential applicants that they may discuss 
the short-form application or bids for specific permits with the 
counsel, consultant, or expert of their choice before the short-form 
application deadline. Furthermore, the same third-party individual 
could continue to give advice to multiple applicants regarding their 
applications after the short-form application deadline, provided that 
no information pertaining to bids or bidding strategies is conveyed to 
that individual from any of the applicants the individual advises. OEA 
and MB remind potential applicants, however, that no person may serve 
as an authorized bidder for more than one applicant in Auction 112.
    56. Applicants also should use caution in their dealings with other 
parties, such as members of the press, financial analysts, or others 
who might become conduits for the communication of prohibited bidding 
information. For example, even though communicating that it has applied 
to participate in this auction will not violate the rule, an 
applicant's statement to the press or a statement on social media that 
it intends to stop bidding or does not intend to bid at all in an 
auction could give rise to a finding of a 47 CFR 1.2105 violation. 
Similarly, an FCC Form 175 applicant's public statement of intent not 
to place bids during bidding in Auction 112 could also violate the 
rule.
5. Section 1.2105(c) Certifications
    57. By electronically submitting its FCC Form 175, each applicant 
in Auction 112 certifies its compliance with 47 CFR 1.2105(c) and 
73.5002(d) of the rules. If an applicant has a non-controlling interest 
with respect to more than one application, then the applicant must 
certify that it has established internal control procedures to preclude 
any person acting on behalf of the applicant from possessing 
information about the bids or bidding strategies of more than one 
applicant or communicating such information with respect to either 
applicant to another person acting on behalf of and possessing such 
information regarding another applicant. The mere filing of a 
certifying statement as part of an application, however, will not 
outweigh specific evidence that a prohibited communication has 
occurred, nor will it preclude the initiation of an investigation when 
warranted. Any applicant found to have violated these communication 
prohibitions may be subject to sanctions.
6. Duty To Report Prohibited Communications
    58. The provision in 47 CFR 1.2105(c)(4) requires that any 
applicant that makes or receives a communication that appears to 
violate 47 CFR 1.2105(c) must report such communication in writing to 
the Commission immediately, and in no case later than five business 
days after the communication occurs. Each applicant's obligation to 
report any such communication continues beyond the five-day period 
after the communication is made, even if the report is not made within 
the five-day period.
7. Procedures for Reporting Prohibited Communications
    59. A party reporting any information or communication pursuant to 
47 CFR 1.65 or 1.2105(a)(2) or (c)(4) must take care to ensure that any 
report of a prohibited communication does not itself give rise to a 
violation of 47 CFR 1.2105(c). For example, reporting a prohibited 
communication through ECFS or another Commission filing system that 
allows public access to filed materials could violate the rule by 
communicating prohibited information to other parties covered by the 
rule.
    60. An applicant must file only a single report concerning a 
prohibited communication and must file that report with the Commission 
personnel expressly charged with administering the Commission's 
auctions. This rule is designed to minimize the risk of inadvertent 
dissemination of information in such reports. Any reports required by 
47 CFR 1.2105(c) must be filed consistent with the instructions set 
forth in the Auction 112 Procedures Public Notice. For Auction 112, 
such reports must be filed with the Chief of the Auctions Division, 
OEA, by the most expeditious means available. Any such report should be 
submitted by email to the Auctions Division Chief at the following 
email address: <a href="/cdn-cgi/l/email-protection#2140544255484e4f101013614742420f464e57"><span class="__cf_email__" data-cfemail="d4b5a1b7a0bdbbbae5e5e694b2b7b7fab3bba2">[email protected]</span></a>. If you choose instead to submit a 
report in hard copy, contact Auctions Division staff at 
<a href="/cdn-cgi/l/email-protection#42233721362b2d2c737370022421216c252d34"><span class="__cf_email__" data-cfemail="81e0f4e2f5e8eeefb0b0b3c1e7e2e2afe6eef7">[email protected]</span></a> or (202) 418-0660 for guidance prior to making any 
filing.
    61. Given the potential competitive sensitivity of information in 
such a report, a party seeking to report a prohibited communication 
should consider submitting its report with a request that the report or 
portions of the submission be withheld from public inspection by 
following the procedures specified in 47 CFR 0.459. OEA and MB 
encourage such parties to coordinate with the Auctions Division staff 
about the procedures for submitting reports of prohibited 
communications.
8. Winning Bidders Must Disclose Terms of Agreements
    62. Each applicant that is a winning bidder will be required to 
provide, as part of its long-form application, any agreement or 
arrangement relating to the competitive bidding process that it has 
entered into and a summary of the specific terms, conditions, and 
parties involved in that agreement. This applies to any settlement 
agreement, bidding consortia, joint venture, partnership, or agreement, 
understanding, or other arrangement entered into relating to the 
competitive bidding process, including any agreement relating to the 
post-auction market structure. Failure to comply with the Commission's 
rules can result in enforcement action.
9. Additional Information Concerning Rule Prohibiting Certain 
Communications in Commission Auctions
    63. A summary listing of documents issued by the Commission and OEA 
addressing the application of 47 CFR 1.2105(c) is available on the 
Commission's auction web page at www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications.
10. Antitrust Laws
    64. Regardless of compliance with the Commission's rules, 
applicants remain subject to the antitrust laws, which are designed to 
prevent anticompetitive behavior in the marketplace. Compliance with 
the disclosure requirements of 47 CFR 1.2105(c)(4) will not insulate a 
party from enforcement of the antitrust laws. For instance, a violation 
of the antitrust laws could arise out of actions taking place well 
before any party submits a short-form application. The Commission has 
cited a number of examples of potentially anticompetitive actions that 
would be prohibited under antitrust laws: for example, actual or 
potential competitors

[[Page 9257]]

may not agree to divide territories in order to minimize competition, 
regardless of whether they split a market in which they both do 
business, or whether they merely reserve one market for one and another 
market for the other.
    65. To the extent the Commission becomes aware of specific 
allegations that suggest that violations of the federal antitrust laws 
may have occurred, the Commission may refer such allegations to the 
United States Department of Justice for investigation. If an applicant 
is found to have violated the antitrust laws or the Commission's rules 
in connection with its participation in the competitive bidding 
process, then it may be subject to a forfeiture and may be prohibited 
from participating further in Auction 112 and in future auctions, among 
other sanctions.

J. New Entrant Bidding Credit

    66. To promote the objectives of 47 U.S.C. 309(j) and further its 
long-standing commitment to the diversification of broadcast facility 
ownership, the Commission provides a tiered new entrant bidding credit 
for broadcast auction applicants with no, or very few, other media 
interests.
    67. Applicants that qualify for the new entrant bidding credit are 
eligible for a bidding credit in this auction that represents the 
amount by which a bidder's winning bid is discounted. Eligibility for 
the new entrant bidding credit must be specified in an applicant's 
short-form application, which establishes that applicant's maximum 
bidding credit eligibility for Auction 112. The size of a new entrant 
bidding credit depends on the number of ownership interests in other 
media of mass communications that are attributable to the bidder-entity 
and its attributable interest-holders:
    <bullet> A 35% bidding credit will be given to a winning bidder if 
it, and/or any individual or entity with an attributable interest in 
the winning bidder, has no attributable interest in any other media of 
mass communications, as defined in 47 CFR 73.5008;
    <bullet> A 25% bidding credit will be given to a winning bidder if 
it, and/or any individual or entity with an attributable interest in 
the winning bidder, has an attributable interest in no more than three 
mass media facilities, as defined in 47 CFR 73.5008;
    <bullet> No bidding credit will be given if any of the commonly 
owned mass media facilities serve the ``same area'' as the broadcast 
permit proposed in the auction, as defined in 47 CFR 73.5007(b), or if 
the winning bidder, and/or any individual or entity with an 
attributable interest in the winning bidder, has attributable interests 
in more than three mass media facilities.
    68. Bidding credits are not cumulative; qualifying applicants 
receive either the 25% or the 35% bidding credit, but not both.
    69. The interests of the applicant, and of any individuals or 
entities with an attributable interest in the applicant, in other media 
of mass communications are considered when determining an applicant's 
eligibility for the new entrant bidding credit. Attributable interests 
are defined in 47 CFR 73.3555 and note 2 of that section. In Auction 
112, the bidder's attributable interests, and thus, its maximum new 
entrant bidding credit eligibility, are determined as of the short-form 
application filing deadline. An applicant intending to divest a media 
interest or make any other ownership change, such as resignation of 
positional interests (officer or director) in order to avoid 
attribution for purposes of qualifying for the new entrant bidding 
credit, must have consummated such divestment transactions, or have 
completed such ownership changes, by no later than the FCC Form 175 
filing deadline. Each prospective bidder is reminded, however, that 
events occurring after the short-form application filing deadline, such 
as the acquisition of attributable interests in media of mass 
communications, may cause diminishment or loss of the bidding credit 
and, must be reported immediately. OEA and MB remind each applicant of 
its duty to continuously maintain the accuracy of information submitted 
in its auction application.
    70. Under broadcast attribution rules, those entities or 
individuals with an attributable interest in a bidder include:
    <bullet> All officers and directors of a corporate bidder;
    <bullet> any owner of 5% or more of the voting stock of a corporate 
bidder;
    <bullet> all general partners and limited partners of a partnership 
bidder, unless the limited partners are sufficiently insulated; and
    <bullet> all members of a limited liability company, unless 
sufficiently insulated.
    71. In cases where an applicant's spouse or close family member 
holds other media interests, such interests are not automatically 
attributable to the bidder. The Commission decides attribution issues 
in this context based on certain factors traditionally considered 
relevant.
    72. In the New Entrant Bidding Credit Reconsideration Order, 64 FR 
44856, August 18, 1999, the Commission further refined the eligibility 
standards for the new entrant bidding credit, judging it appropriate to 
attribute the media interests held by very substantial investors in, or 
creditors of, an applicant claiming new entrant status. Specifically, 
the attributable mass media interests held by an individual or entity 
with an equity and/or debt interest in an applicant shall be attributed 
to that bidder for purposes of determining its eligibility for the new 
entrant bidding credit, if the equity and debt interests, in the 
aggregate, exceed 33% of the total asset value of the applicant, even 
if such an interest is non-voting.
    73. In the Diversity Order, 76 FR 7719, February 11, 2011, the 
Commission relaxed the equity/debt plus attribution standard, to allow 
for higher investment opportunities in entities meeting the definition 
of ``eligible entities.'' An ``eligible entity'' is defined in Note 
2(i) of 47 CFR 73.3555. Pursuant to the Diversity Order, the Commission 
will allow the holder of an equity or debt interest in the applicant to 
exceed the above-noted 33% threshold without triggering attribution 
provided (1) the combined equity and debt in the ``eligible entity'' is 
less than 50%; or (2) the total debt in the ``eligible entity'' does 
not exceed 80% of the asset value, and the interest holder does not 
hold any equity interest, option, or promise to acquire an equity 
interest in the ``eligible entity'' or any related entity.
    74. Generally, media interests will be attributable for purposes of 
the new entrant bidding credit to the same extent that such other media 
interests are considered attributable for purposes of the broadcast 
multiple ownership rules. Attributable interests held by a winning 
bidder in existing low power television, television translator, or FM 
translator facilities, however, will not be counted among the 
applicant's other mass media interests in determining its eligibility 
for a new entrant bidding credit. A medium of mass communications is 
defined in 47 CFR 73.5008(b). Full service noncommercial educational 
stations, on both reserved and non-reserved channels, are included 
among ``media of mass communications'' as defined in 47 CFR 73.5008(b).
1. Application Requirements
    75. In addition to the ownership information required pursuant to 
47 CFR 1.2105 and 1.2112, applicants seeking a new entrant bidding 
credit are required to establish on their short-form applications that 
they satisfy the eligibility requirements to qualify for the bidding 
credit. In those cases, a certification under penalty of perjury must 
be provided in completing the short-form application. An applicant 
claiming that it qualifies for a 35% new entrant bidding credit must 
certify that

[[Page 9258]]

neither it nor any of its attributable interest holders has any 
attributable interests in any other media of mass communications. An 
applicant claiming that it qualifies for a 25% new entrant bidding 
credit must certify that neither it nor any of its attributable 
interest holders has any attributable interests in more than three 
media of mass communications, and must identify and describe such media 
of mass communications.
2. Unjust Enrichment
    76. Applicants should note that unjust enrichment provisions apply 
to a winning bidder that utilizes a bidding credit and subsequently 
seeks to assign or transfer control of its license or construction 
permit to an entity not qualifying for the same level of bidding 
credit.

K. Provisions Regarding Former and Current Defaulters

    77. Pursuant to the rules governing competitive bidding, each 
applicant must make certifications regarding whether it is a current or 
former defaulter or delinquent. A current defaulter or delinquent is 
not eligible to participate in Auction 112, but a former defaulter or 
delinquent may participate so long as it is otherwise qualified and 
makes an upfront payment that is 50% more than would otherwise be 
necessary. Accordingly, each applicant must certify under penalty of 
perjury on its FCC Form 175 that it, its affiliates, its controlling 
interests, and the affiliates of its controlling interests are not in 
default on any payment for a Commission construction permit or license 
(including down payments) and that it is not delinquent on any non-tax 
debt owed to any Federal agency. Additionally, an applicant must 
certify under penalty of perjury whether it (along with its controlling 
interests) has ever been in default on any payment for a Commission 
construction permit or license (including down payments) or has ever 
been delinquent on any non-tax debt owed to any Federal agency, subject 
to the exclusions described below. For purposes of making these 
certifications, the term ``controlling interest'' is defined in 47 CFR 
1.2105(a)(4)(i).
    78. Under the Commission's rule regarding applications by former 
defaulters, an applicant is considered a ``former defaulter'' or a 
``former delinquent'' when, as of the FCC Form 175 deadline, the 
applicant or any of its controlling interests has defaulted on any 
Commission construction permit or license or has been delinquent on any 
non-tax debt owed to any Federal agency, but has since remedied all 
such defaults and cured all of the outstanding non-tax delinquencies. 
For purposes of the certification under 47 CFR 1.2105(a)(2)(xii), the 
applicant may exclude from consideration any cured default on a 
Commission construction permit or license or cured delinquency on a 
non-tax debt owed to a Federal agency for which any of the following 
criteria are met: (1) The notice of the final payment deadline or 
delinquency was received more than seven years before the FCC Form 175 
filing deadline, (2) the default or delinquency amounted to less than 
$100,000, (3) the default or delinquency was paid within two quarters 
(i.e., six months) after receiving the notice of the final payment 
deadline or delinquency, or (4) the default or delinquency was the 
subject of a legal or arbitration proceeding and was cured upon 
resolution of the proceeding. With respect to the first exclusion, 
notice to a debtor may include notice of a final payment deadline or 
notice of delinquency and may be express or implied depending on the 
origin of any Federal non-tax debt giving rise to a default or 
delinquency. Additionally, for the third exclusion, the date of receipt 
of the notice of a final default deadline or delinquency by the 
intended party or debtor will be used for purposes of verifying receipt 
of notice.
    79. In addition to the Auction 112 Procedures Public Notice, OEA 
and MB encourage applicants to review previous guidance on default and 
delinquency disclosure requirements in the context of the auction 
short-form application process. Parties are also encouraged to consult 
with Auctions Division staff if they have any questions about default 
and delinquency disclosure requirements.
    80. The Commission considers outstanding debts owed to the United 
States Government, in any amount, to be a serious matter. The 
Commission adopted rules, including a provision referred to as the 
``red light rule,'' that implement its obligations under the Debt 
Collection Improvement Act of 1996, which governs the collection of 
debts owed to the United States. Under the red-light rule, applications 
and other requests for benefits filed by parties that have outstanding 
debts owed to the Commission will not be processed. When adopting that 
rule, the Commission explicitly declared, however, that its competitive 
bidding rules ``are not affected'' by the red-light rule. As a 
consequence, the Commission's adoption of the red-light rule does not 
alter the applicability of any of its competitive bidding rules, 
including the provisions and certifications of 47 CFR 1.2105 and 
1.2106, with regard to current and former defaults or delinquencies.
    81. OEA and MB remind each applicant, however, that the 
Commission's Red Light Display System, which provides information 
regarding debts currently owed to the Commission, may not be 
determinative of an auction applicant's ability to comply with the 
default and delinquency disclosure requirements of 47 CFR 1.2105. Thus, 
while the red-light rule ultimately may prevent the processing of long-
form applications by auction winners, an auction applicant's lack of 
current ``red light'' status is not necessarily determinative of its 
eligibility to participate in an auction (or whether it may be subject 
to an increased upfront payment obligation). Moreover, a prospective 
applicant in Auction 112 should note that any long-form applications 
filed after the close of bidding will be reviewed for compliance with 
the Commission's red-light rule, and such review may result in the 
dismissal of a winning bidder's long-form application. OEA and MB 
encourage each applicant to carefully review all records and other 
available Federal agency databases and information sources to determine 
whether the applicant, or any of its affiliates, or any of its 
controlling interests, or any of the affiliates of its controlling 
interests, currently owes or was ever delinquent in the payment of non-
tax debt owed to any Federal agency.

L. Optional Applicant Status Identification

    82. An applicant owned by members of minority groups and/or women, 
as defined in 47 CFR 1.2110(c)(3), or that is a rural telephone 
company, as defined in 47 CFR 1.2110(c)(4), may identify itself as such 
in filling out its FCC Form 175. This applicant status information is 
collected for statistical purposes only and assists the Commission in 
monitoring the participation of various groups in its auctions.

M. Noncommercial Educational Status Election

    83. In the NCE Second Report and Order, 68 FR 26220, May 15, 2003, 
the Commission held that applications for noncommercial educational 
(NCE) broadcast stations on non-reserved spectrum, filed during an 
auction filing window, will be returned as unacceptable for filing if 
mutually exclusive with any application for a commercial station. 
Accordingly, if an FCC Form 175 filed during the Auction

[[Page 9259]]

112 filing window identifying the application's proposed station as 
noncommercial educational is mutually exclusive with any application 
filed during that window for a commercial station, the NCE application 
will be returned as unacceptable for filing and the applicant will not 
be provided with any further opportunity to become eligible to bid in 
this auction. For this reason, each prospective applicant in this 
auction should consider carefully whether it wishes to propose NCE 
operation for any television broadcast station acquired in this 
auction. This NCE election cannot be reversed after the initial 
application filing deadline.

N. Modifications to FCC Form 175

1. Only Minor Modifications Allowed
    84. After the initial short-form application filing deadline, an 
Auction 112 applicant will be permitted to make only minor changes to 
its FCC Form 175. Examples of minor changes include the deletion or 
addition of authorized bidders (to a maximum of three) and the revision 
of addresses and telephone numbers of the applicant, its responsible 
party, and its contact person. Major modifications to an FCC Form 175 
(e.g., change of construction permit selection, certain changes in 
ownership that would constitute an assignment or transfer of control of 
the applicant, change in the required certifications, change in 
applicant's legal classification that results in a change in control, 
or change in claimed eligibility for a higher percentage of bidding 
credit) will not be permitted after the FCC Form 175 filing deadline. 
If an amendment reporting changes is a ``major amendment,'' as 
described in 47 CFR 1.2105(b)(2), the major amendment will not be 
accepted and may result in the dismissal of the application. Questions 
about FCC Form 175 amendments should be directed to the Auctions 
Division at (202) 418-0660.
2. Duty to Maintain Accuracy and Completeness of FCC Form 175
    85. Pursuant to 47 CFR 1.65, each applicant has a continuing 
obligation to maintain the accuracy and completeness of information 
furnished in a pending application, including a pending application to 
participate in Auction 112. Consistent with the requirements for 
spectrum auctions, an applicant for Auction 112 must furnish additional 
or corrected information to the Commission within five business days 
after a significant occurrence, or amend its FCC Form 175 no more than 
five business days after the applicant becomes aware of the need for 
the amendment. In accordance with the Commission's rules, an 
applicant's obligation to make modifications to a pending auction 
application in order to provide additional or corrected information 
continues beyond the five-day period, even if the report is not made 
within the five-day period. An applicant is obligated to amend its 
pending application even if a reported change may result in the 
dismissal of the application because it is subsequently determined to 
be a major modification.
3. Modifying an FCC Form 175
    86. As noted above, a party seeking to participate in Auction 112 
must file an FCC Form 175 electronically via the FCC's Auction 
Application System. During the short-form application filing window, an 
applicant will be able to make any necessary modifications to its FCC 
Form 175 in the Auction Application System. An applicant that has 
certified and submitted its FCC Form 175 before the short-form 
application filing deadline may continue to make modifications as often 
as necessary until the filing deadline; however, the applicant must re-
certify and re-submit its FCC Form 175 before the filing deadline in 
order to confirm and effect any application changes. After each 
submission, a confirmation page will be displayed stating the 
submission time and submission date.
    87. An applicant will also be allowed to modify its FCC Form 175 in 
the Auction Application System, except for certain fields, during the 
resubmission filing window and after the release of the public notice 
announcing the qualified bidders for an auction. During these times, if 
an applicant needs to make permissible minor changes to its FCC Form 
175 or must make changes in order to maintain the accuracy and 
completeness of its application pursuant to 47 CFR 1.65 and 
1.2105(b)(4), then it must make the change(s) in the Auction 
Application System and re-certify and re-submit its application to 
confirm and effect the change(s).
    88. An applicant's ability to modify its FCC Form 175 in the 
Auction Application System will be limited between the closing of the 
initial filing window and the opening of the application resubmission 
filing window, and between the closing of the resubmission filing 
window and the release of the public notice announcing the qualified 
bidders for an auction. During these periods, an applicant will be able 
to view its submitted application, but will be permitted to modify only 
the applicant's address, responsible party address, and contact 
information (e.g., name, address, telephone number, etc.) in the 
Auction Application System. An applicant will not be able to modify any 
other pages of the FCC Form 175 in the Auction Application System 
during these periods. If, during these periods, an applicant needs to 
make other permissible minor changes to its FCC Form 175, or changes to 
maintain the accuracy and completeness of its application pursuant to 
47 CFR 1.65 and 1.2105(b)(4), then the applicant must submit a letter 
briefly summarizing the changes to its FCC Form 175 via email to 
<a href="/cdn-cgi/l/email-protection#84e5f1e7f0edebeab5b5b6c4e2e7e7aae3ebf2"><span class="__cf_email__" data-cfemail="32534751465b5d5c030300725451511c555d44">[email protected]</span></a>. The email summarizing the changes must include a 
subject line referring to Auction 112 and the name of the applicant, 
for example, ``Re: Changes to Auction 112 Auction Application of XYZ 
Corp.'' Any attachments to the email must be formatted as Adobe[supreg] 
Acrobat[supreg] (PDF) or Microsoft[supreg] Word documents. An applicant 
that submits its changes in this manner must subsequently modify, 
certify, and submit its FCC Form 175 application(s) electronically in 
the Auction Application System once it is again open and available to 
applicants.
    89. Applicants should also note that even at times when the Auction 
Application System is open and available to applicants, the system will 
not allow an applicant to make certain other permissible changes itself 
(e.g., correcting a misstatement of the applicant's legal 
classification, name, or certifying official). If an applicant needs to 
make a permissible minor change of this nature, then it must submit a 
written request by email to the Auctions Division Chief, via 
<a href="/cdn-cgi/l/email-protection#1e7f6b7d6a7771702f2f2c5e787d7d30797168"><span class="__cf_email__" data-cfemail="f5948096819c9a9bc4c4c7b5939696db929a83">[email protected]</span></a> requesting that the Commission manually make the 
change on the applicant's behalf. Once Commission staff has informed 
the applicant that the change has been made in the Auction Application 
System, the applicant must then re-certify and re-submit its FCC Form 
175 in the Auction Application System to confirm and effect the 
change(s).
    90. As with filing the FCC Form 175, any amendment(s) to the 
application and related statements of fact must be certified by an 
authorized representative of the applicant with authority to bind the 
applicant. Applicants should note that submission of any such amendment 
or related statement of fact constitutes a representation by the person 
certifying that he or she is an authorized representative with such 
authority and that the contents of the amendment or statement of fact 
are true and correct.
    91. Applicants must not submit application-specific material 
through the Commission's Electronic Comment

[[Page 9260]]

Filing System. Further, as discussed above, parties submitting 
information related to their applications should use caution to ensure 
that their submissions do not contain confidential information or 
communicate information that would violate 47 CFR 1.2105(c) or the 
limited information procedures adopted for Auction 112. An applicant 
seeking to submit, outside of the Auction Application System, 
information that might reflect non-public information, such as an 
applicant's upfront payment amount, or bidding eligibility, should 
consider including in its email a request that the filing or portions 
of the filing be withheld from public inspection until the end of the 
prohibition on certain communications pursuant to 47 CFR 1.2105(c).
    92. Questions about FCC Form 175 amendments should be directed to 
the Auctions Division at (202) 418-0660.

III. Preparing for Bidding in Auction 112

A. Due Diligence

    93. OEA and MB remind each potential bidder that it is solely 
responsible for investigating and evaluating all technical and 
marketplace factors that may have a bearing on the value of the 
construction permit(s) it is seeking in Auction 112 and that it is 
required to certify, under penalty of perjury, that it has read the 
Auction 112 Procedures Public Notice and has familiarized itself both 
with the auction procedures and with the requirements for obtaining a 
construction permit for a TV station. The Commission makes no 
representations or warranties about the use of this spectrum or these 
construction permits for particular services. Each applicant should be 
aware that a Commission auction represents an opportunity to become an 
FCC permittee in a broadcast service, subject to certain conditions and 
regulations. This includes the established authority of the Commission 
to alter the terms of existing licenses by rulemaking, which is equally 
applicable to permits or licenses awarded by auction. A Commission 
auction does not constitute an endorsement by the Commission of any 
particular service, technology, or product, nor does a Commission 
construction permit or license constitute a guarantee of business 
success.
    94. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
In particular, OEA and MB encourage each potential bidder to perform 
technical analyses and/or refresh its previous analyses to assure 
itself that, should it become a winning bidder for any Auction 112 
construction permit, it will be able to build and operate facilities 
that will fully comply with all applicable technical and legal 
requirements. OEA and MB also urge each applicant to inspect any 
prospective transmitter sites located in, or near, the service area for 
which it plans to bid, to confirm the availability of such sites, and 
to familiarize itself with the Commission's rules regarding any 
applicable federal, state, and local requirements, including the 
National Environmental Policy Act (NEPA), the National Historic 
Preservation Act (NHPA), and other environmental statutes.
    95. OEA and MB also encourage each applicant in Auction 112 to 
continue to conduct its own research throughout the auction in order to 
determine the existence of pending or future administrative or judicial 
proceedings that might affect its decision to continue participating in 
the auction. Each applicant is responsible for assessing the likelihood 
of the various possible outcomes and for considering the potential 
impact on construction permits available in this auction. The due 
diligence considerations mentioned in the Auction 112 Procedures Public 
Notice do not comprise an exhaustive list of steps that should be 
undertaken prior to participating in Auction 112. As always, the burden 
is on the potential bidder to determine how much research to undertake, 
depending upon specific facts and circumstances related to its 
interests.
    96. Applicants are solely responsible for identifying associated 
risks and for investigating and evaluating the degree to which such 
matters may affect their ability to bid on, otherwise acquire, or make 
use of the construction permits available in Auction 112. Each 
potential bidder is responsible for undertaking research to ensure that 
any permits won in this auction will be suitable for its business plans 
and needs. Each potential bidder must undertake its own assessment of 
the relevance and importance of information gathered as part of its due 
diligence efforts.
    97. The Commission makes no representations or guarantees regarding 
the accuracy or completeness of information in its databases or any 
third-party databases, including, for example, court docketing systems. 
To the extent the Commission's databases may not include all 
information deemed necessary or desirable by an applicant, it must 
obtain or verify such information from independent sources or assume 
the risk of any incompleteness or inaccuracy in said databases. 
Furthermore, the Commission makes no representations or guarantees 
regarding the accuracy or completeness of information that has been 
provided by incumbent licensees and incorporated into its databases.

B. Bidder Education

    98. Before the opening of the short-form application filing window 
for Auction 112, detailed educational information will be provided in 
various formats to would-be participants on the Auction 112 web page. 
Specifically, OEA will provide various materials on the pre-bidding 
processes in advance of the opening of the short-form application 
window, beginning with the release of step-by-step instructions for 
completing the FCC Form 175, which OEA will make available in the 
Education section of the Auction 112 website at www.fcc.gov/auction/112. In addition, OEA will provide an online tutorial for the auction, 
covering pre-auction procedures including completing a short-form 
application in the FCC Auction Application System, and bidding 
procedures including how to use the FCC auction bidding system. In 
advance of the start of the mock auction, OEA will release a user guide 
for the bidding system.
    99. OEA and MB believe that parties interested in participating in 
Auction 112 will find the interactive, online tutorial an efficient and 
effective way to further their understanding of the application and 
bidding processes. The online tutorial will allow viewers to navigate 
the presentation outline, review written notes, and listen to audio of 
the notes. Additional features of this web-based tool include links to 
auction-specific Commission releases, email links for contacting 
Commission staff, and screen shots of the online application and 
bidding systems. The online tutorial will be accessible in the 
Education section of the Auction 112 website at www.fcc.gov/auction/112. Once posted, the tutorial will remain continuously accessible.

C. Short-Form Applications: Due Before 6:00 p.m. ET on March 30, 2022

    100. In order to be eligible to bid in Auction 112, an applicant 
must first submit a short-form application (FCC Form 175) 
electronically via the Auction Application System following the 
instructions set forth in the FCC Form 175 Instructions. The short-form 
application will become available with the opening of the initial 
filing window and must be submitted prior to 6:00 p.m. ET on March 30, 
2022. Late applications will not be accepted. No

[[Page 9261]]

filing fee is required to be paid at the time of filing a short-form 
application.
    101. Applications may be filed at any time beginning at noon ET on 
March 17, 2022, until the filing window closes at 6:00 p.m. ET on March 
30, 2022. Applicants are strongly encouraged to file early and are 
responsible for allowing adequate time for filing their applications. 
There are no limits or restrictions on the number of times an 
application can be updated or amended until the initial filing deadline 
on March 30, 2022]
    102. An applicant must always click on the CERTIFY & SUBMIT button 
on the ``Certify & Submit'' screen to successfully submit its FCC Form 
175 and any modifications; otherwise the application or changes to the 
application will not be received or reviewed by Commission staff. 
Additional information about accessing, completing, and viewing the FCC 
Form 175 is provided in the FCC Form 175 Instructions. Applicants 
requiring technical assistance should contact FCC Auctions Technical 
Support at (877) 480-3201, option nine; (202) 414-1250; or (202) 414-
1255 (text telephony (TTY)). Hours of service are Monday through 
Friday, from 8:00 a.m. to 6:00 p.m. ET. In order to provide better 
service to the public, all calls to Technical Support are recorded.

D. Application Processing and Minor Modifications

1. Public Notice of Applicants' Initial Application Status and 
Opportunity for Minor Modifications
    103. Commission staff will review all timely submitted applications 
for Auction 112 to determine whether each applicant has complied with 
the application requirements and whether it has provided all required 
information concerning its qualifications for bidding. After this 
review is completed, OEA and MB will issue a public notice announcing 
applicants' initial application status by identifying: (1) Those that 
are complete; (2) those that are rejected; and (3) those that are 
incomplete or deficient because of defects that may be corrected. This 
public notice also will establish an application resubmission filing 
window, during which an applicant may make permissible minor 
modifications to its application to address identified deficiencies. 
The public notice will include the deadline for resubmitting corrected 
applications and a copy of the public notice will be sent by overnight 
delivery to the contact address listed in the FCC Form 175 for each 
applicant. OEA and MB ask each applicant to make sure that the contact 
address provided in its short-form application is accurate and is a 
location capable of accepting packages that require a signature. In 
addition, each applicant with an incomplete application will be sent 
information on the nature of the deficiencies in its application, along 
with the name and contact information of a Commission staff member who 
can answer questions specific to the application. To become a qualified 
bidder, an applicant must have a complete application (i.e., have 
timely corrected any identified deficiencies) and make a timely and 
sufficient upfront payment. Qualified bidders will be identified by 
public notice at least 10 days prior to the mock auction.
    104. After the initial application filing deadline on March 30, 
2022, applicants can make only minor modifications to their 
applications. Major modifications will not be permitted. After the 
deadline for resubmitting corrected applications, an applicant will 
have no further opportunity to cure any deficiencies in its application 
or provide any additional information that may affect Commission 
staff's ultimate determination of whether and to what extent the 
applicant is qualified to participate in Auction 112.
    105. Commission staff will communicate only with an applicant's 
contact person or certifying official, as designated on the applicant's 
FCC Form 175, unless the applicant's certifying official or contact 
person notifies Commission staff in writing that another representative 
is authorized to speak on the applicant's behalf. Authorizations may be 
sent by email to <a href="/cdn-cgi/l/email-protection#ec8d998f98858382dddddeac8a8f8fc28b839a"><span class="__cf_email__" data-cfemail="bbdaced8cfd2d4d58a8a89fbddd8d895dcd4cd">[email protected]</span></a>.
2. Public Notice of Applicants' Final Application Status After Upfront 
Payment Deadline
    106. After Commission staff review resubmitted applications for 
Auction 112 and evaluate upfront payments, OEA and MB will release a 
public notice identifying applicants that have become qualified 
bidders. A Qualified Bidders Public Notice will be issued before 
bidding in the auction begins. Qualified bidders are those applicants 
with submitted FCC Forms 175 that are deemed timely filed and complete 
and that have made a sufficient upfront payment.

E. Upfront Payments

    107. In order to be eligible to bid in Auction 112, a sufficient 
upfront payment and a complete and accurate FCC Remittance Advice Form 
(FCC Form 159) must be submitted before 6:00 p.m. ET on May 6, 2022. 
After completing its short-form application, an applicant will have 
access to an electronic pre-filled version of the FCC Form 159. An 
accurate and complete FCC Form 159 (February 2003 edition) must 
accompany each payment. Proper completion of this form is critical to 
ensuring correct crediting of upfront payments. Payers using the pre-
filled FCC Form 159 are responsible for ensuring that all the 
information on the form, including payment amounts, is accurate. 
Instructions for completing FCC Form 159 for Auction 112 are provided 
in Attachment B to the Auction 112 Procedures Public Notice.
1. Making Upfront Payments by Wire Transfer for Auction 112
    108. Upfront payments for Auction 112 must be wired to, and will be 
deposited in, the U.S. Treasury.
    109. Wire transfer payments for Auction 112 must be received before 
6:00 p.m. ET on May 6, 2022. No other payment method is acceptable. To 
avoid untimely payments, applicants should discuss arrangements 
(including bank closing schedules and other specific bank wire transfer 
requirements, such as an in-person written request before a specified 
time of day) with their bankers several days before they plan to make 
the wire transfer, and must allow sufficient time for the transfer to 
be initiated and completed before the deadline. The following 
information will be needed:
    ABA Routing Number: 021030004.
    Receiving Bank: TREAS NYC, 33 Liberty Street, New York, NY 10045.
    Beneficiary: FCC, 45 L Street NE, 3rd Floor, Washington, DC 20554.
    Beneficiary Account Number: 827000001002.
    Originating Bank Information (OBI Field): (Skip one space between 
each information item).

    ``Auctionpay''.

    Applicant FCC Registration Number (FRN): (use the same FRN as used 
on the applicant's FCC Form 159, block 21).

    Payment Type Code: (same as FCC Form 159, block 24A: ``U112'').

    Note: The beneficiary account number (BNF Account Number) is 
specific to the upfront payments for Auction 112. Do not use a BNF 
Account Number from a previous auction.

    110. At least one hour before placing the order for the wire 
transfer (but on the same business day), applicants must print and fax 
a completed FCC Form 159 to the FCC at (202) 418-2843. Alternatively, 
the completed form can

[[Page 9262]]

be scanned and sent as an attachment to an email to 
<a href="/cdn-cgi/l/email-protection#b1e3e3fef6e6d8c3d4f7d0c9d4c2f1d7d2d29fd6dec7"><span class="__cf_email__" data-cfemail="cc9e9e838b9ba5bea98aadb4a9bf8caaafafe2aba3ba">[email protected]</span></a>. On the fax cover sheet or in the email subject 
header, write ``Wire Transfer--Auction Payment for Auction 112.'' To 
meet the upfront payment deadline, an applicant's payment must be 
credited to the Commission's account for Auction 112 before the 
deadline.
    111. Each applicant is responsible for ensuring timely submission 
of its upfront payment and for timely filing of an accurate and 
complete FCC Form 159. An applicant should coordinate with its 
financial institution well ahead of the due date regarding its wire 
transfer and allow sufficient time for the transfer to be initiated and 
completed prior to the deadline. The Commission repeatedly has 
cautioned auction participants about the importance of planning ahead 
to prepare for unforeseen last-minute difficulties in making payments 
by wire transfer. Each applicant also is responsible for obtaining 
confirmation from its financial institution that its wire transfer to 
the U.S. Treasury was successful and from Commission staff that its 
upfront payment was timely received and that it was deposited into the 
proper account. As a regulatory requirement, the U.S. Treasury screens 
all payments from all financial institutions before deposits are made 
available to specified accounts. If wires are suspended, the U.S. 
Treasury may direct questions regarding any transfer to the financial 
institution initiating the wire. Each applicant must take care to 
assure that any questions directed to its financial institution(s) are 
addressed promptly. To receive confirmation from Commission staff, 
contact Scott Radcliffe of the Office of Managing Director's Revenue & 
Receivables Operations Group/Auctions at (202) 418-7518 or Theresa 
Meeks at (202) 418-2945.
    112. Please note the following information regarding upfront 
payments:
    <bullet> All payments must be made in U.S. dollars.
    <bullet> All payments must be made by wire transfer.
    <bullet> Upfront payments for Auction 112 go to an account number 
different from the accounts used in previous FCC auctions.
    113. Failure to deliver a sufficient upfront payment as instructed 
herein by the upfront payment deadline will result in dismissal of the 
short-form application and disqualification from participation in the 
auction.
2. Completing and Submitting FCC Form 159
    114. An accurate and complete FCC Form 159 must be sent to the FCC 
to accompany each upfront payment. At least one hour before placing the 
order for the wire transfer (but on the same business day), applicants 
must fax a completed Form 159 to the FCC at (202) 418-2843. 
Alternatively, the completed form can be scanned and sent as an 
attachment to an email to <a href="/cdn-cgi/l/email-protection#0a5858454d5d63786f4c6b726f794a6c6969246d657c"><span class="__cf_email__" data-cfemail="7321213c34241a011635120b1600331510105d141c05">[email protected]</span></a>. On the fax cover sheet 
or in the email subject header, write ``Wire Transfer--Auction Payment 
for Auction 112.''
3. Upfront Payments and Bidding Eligibility
    115. The Commission has delegated authority to OEA and MB to 
determine appropriate upfront payments for each construction permit 
being auctioned, taking into account such factors as the efficiency of 
the auction process and the potential value of similar licenses. An 
upfront payment is a refundable deposit made by each applicant seeking 
to participate in bidding to establish its eligibility to bid on 
construction permits. Upfront payments that are related to the specific 
construction permits being auctioned 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 bidding. In the 
Auction 112 Comment Public Notice, OEA and MB proposed an upfront 
payment amount for each construction permit and sought comment on the 
upfront payment amounts. Although OEA and MB received no comments 
regarding the upfront payment amounts for Auction 112, they adopt 
upfront payment amounts that are 25% lower than those proposed in 
Attachment A of the Auction 112 Comment Public Notice so as to align 
the upfront payment amounts with the reduced minimum opening bids that 
are adopted below.
    116. An applicant must make an upfront payment sufficient to obtain 
bidding eligibility on the construction permits on which it will bid. 
OEA and MB proposed in the Auction 112 Comment Public Notice that the 
amount of the upfront payment submitted by an applicant will determine 
its initial bidding eligibility, the maximum number of bidding units on 
which a bidder may place bids in any single round. Under that proposal, 
in order to bid on a particular construction permit, a qualified bidder 
must have a current eligibility level that meets or exceeds the number 
of bidding units assigned to that construction permit. At a minimum, 
therefore, an applicant's total upfront payment must be enough to 
establish eligibility to bid on at least one of the construction 
permits selected on its FCC Form 175 for Auction 112, or else the 
applicant will not become qualified to participate in the auction. An 
applicant does not have to make an upfront payment to cover all 
construction permits the applicant selected on its FCC Form 175, rather 
only enough to cover the maximum number of bidding units that are 
associated with construction permits on which the applicant wishes to 
place bids and hold provisionally winning bids in any given round. The 
total upfront payment does not affect the total dollar amount the 
bidder may bid on any given construction permit.
    117. OEA and MB received no comments on the proposals that the 
upfront payment amount would determine a bidder's initial eligibility 
and to assign each construction permit a specific number of bidding 
units, equal to one bidding unit per one thousand dollars of the 
upfront payment. Therefore, OEA and MB adopt these proposals. Each 
applicant's upfront payment amount will determine that bidder's initial 
bidding eligibility.
    118. In calculating its upfront payment amount, 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 for the 
auction covering that number of bidding units. In order to make this 
calculation, an applicant should add together the bidding units for all 
construction permits on which it seeks to be active in any given round. 
A qualified bidder's maximum eligibility will not exceed the sum of the 
bidding units associated with the total number of construction permits 
selected on its FCC Form 175. In some cases, a qualified bidder's 
maximum eligibility may be less than the amount of its upfront payment 
because the qualified bidder has either previously been in default on a 
Commission construction permit or license or delinquent on non-tax debt 
owed to a Federal agency, or has submitted an upfront payment that 
exceeds the total amount of bidding units associated with the 
construction permits it selected on its FCC Form 175. Applicants should 
check their calculations carefully, as there is no provision for 
increasing a bidder's eligibility after the upfront payment deadline.
    119. An applicant that is a former defaulter, as described above, 
must pay an upfront payment 50% greater than that required of an 
applicant that is not a former defaulter. For purposes of this

[[Page 9263]]

rule, defaults and delinquencies of the applicant itself and its 
controlling interests are included. If an applicant is a former 
defaulter, it must calculate its upfront payment for all of its 
selected construction permits by multiplying the number of bidding 
units on which it wishes to be active (bid on or hold provisionally 
winning bids on) during a given round by 1.5. In order to calculate the 
number of bidding units to assign to former defaulters, the Commission 
will divide the upfront payment received by 1.5 and round the result up 
to the nearest bidding unit.

F. Auction Registration

    120. All qualified bidders for Auction 112 are automatically 
registered for the auction. Registration materials will be distributed 
prior to the auction by overnight delivery. The mailing will be sent 
only to the contact person at the contact address listed in the FCC 
Form 175 and will include the SecurID[supreg] tokens that will be 
required to place bids, the web address and instructions for accessing 
and logging in to the auction bidding system, FCC assigned username 
(User ID) for each authorized bidder, and the Auction Bidder Line phone 
number.
    121. Qualified bidders that do not receive this registration 
mailing will not be able to submit bids. Therefore, if this mailing is 
not received by the contact person for a qualified bidder by noon on 
May 31, 2022, call the Auctions Hotline at (717) 338-2868. Receipt of 
this registration mailing is critical to participating in the auction, 
and each qualified bidder is responsible for ensuring it has received 
all registration materials.
    122. In the event that a SecurID[supreg] token is lost or damaged, 
only a person who has been designated as an authorized bidder, the 
contact person, or the certifying official on the applicant's short-
form application may request a replacement. To request a replacement, 
call the Auction Bidder Line at the telephone number provided in the 
registration materials or the Auction Hotline at (717) 338-2868.

G. Remote Electronic Bidding via the FCC Auction Bidding System

    123. Bidders will be able to participate in Auction 112 over the 
internet using the FCC Auction Bidding System (bidding system) or by 
telephonic bidding. Each applicant should indicate its bidding 
preference--electronic or telephonic--on its FCC Form 175. Please note 
that telephonic bid assistants are required to use a script when 
entering bids placed by telephone. Telephonic bidders are therefore 
reminded to allow sufficient time to bid by placing their calls well in 
advance of the close of a round. The length of a call to place a 
telephonic bid may vary; please allow a minimum of 10 minutes. The 
toll-free telephone number for the auction bidder line will be provided 
to qualified bidders prior to the start of bidding in the auction.
    124. Only authorized bidders bidding on behalf of a qualified 
bidder will be permitted to bid. Each qualified bidder will be issued 
three SecurID[supreg] tokens, which the Commission will provide at no 
charge. Each authorized bidder for a qualified bidder must have an 
individually assigned SecurID[supreg] token in order to access the 
bidding system, either by telephone or over the internet. In order to 
access the bidding function of the bidding system, bidders must be 
logged in during the bidding round using the passcode generated by the 
SecurID[supreg] token and a personal identification number (PIN) 
created by the bidder. Bidders are strongly encouraged to print a bid 
summary for each round after they have completed all of their activity 
for that round. For security purposes, the SecurID[supreg] tokens, 
bidding system web address, FCC-assigned username, and the telephonic 
bidding telephone number are only mailed to the contact person at the 
contact address listed on the FCC Form 175. Each SecurID[supreg] token 
is tailored to a specific auction. SecurID[supreg] tokens issued for 
other auctions or obtained from a source other than the FCC will not 
work for Auction 112. Please note that the SecurID[supreg] tokens can 
be recycled, and the Commission requests that bidders return the tokens 
to the FCC. Pre-addressed envelopes will be provided to return the 
tokens once the auction has ended.
    125. The Commission makes no warranties whatsoever, and shall not 
be deemed to have made any warranties, with respect to the FCC Auction 
Application System and the auction bidding system, including any 
implied warranties of merchantability or fitness for a particular 
purpose. In no event shall the Commission, or any of its officers, 
employees, or agents, be liable for any damages whatsoever (including, 
but not limited to, loss of business profits, business interruption, 
loss of use, loss of revenue, loss of business information, or any 
other direct, indirect, or consequential damages) arising out of or 
relating to the existence, furnishing, functioning, or use of the FCC 
Auction Application System or the FCC auction bidding system. Moreover, 
no obligation or liability will arise out of the Commission's 
technical, programming, or other advice or service provided in 
connection with the FCC auction systems.
    126. To the extent an issue arises with the bidding system itself, 
the Commission will take all appropriate measures to resolve such 
issues quickly and equitably. Should an issue arise that is outside the 
bidding system or attributable to a bidder, including, but not limited 
to, a bidder's hardware, software, or internet access problem that 
prevents the bidder from submitting a bid prior to the end of a round, 
the Commission shall have no obligation to resolve or remedy such an 
issue on behalf of the bidder. Similarly, if an issue arises due to 
bidder error using the bidding system, the Commission shall have no 
obligation to resolve or remedy such an issue on behalf of the bidder. 
Accordingly, after the close of a bidding round, the results of bid 
processing will not be altered absent evidence of any failure in the 
bidding system.

H. Mock Auction

    127. All qualified bidders will be eligible to participate in a 
mock auction on June 3, 2022. The mock auction will enable qualified 
bidders to become familiar with the FCC auction bidding system and to 
practice submitting bids prior to the auction. OEA and MB recommend 
that all qualified bidders, including all their authorized bidders, 
participate to ensure that they can log in to the bidding system and 
gain experience with the bidding procedures. Participating in the mock 
auction may reduce the likelihood of a bidder making a mistake during 
the auction. Details regarding the mock auction will be announced in 
the Qualified Bidders Public Notice for Auction 112

I. Auction Delay, Suspension, or Cancellation

    128. In the Auction 112 Comment Public Notice, OEA and MB proposed 
that, at any time before or during the bidding process, OEA, in 
conjunction with MB, may delay, suspend, or cancel bidding in the 
auction in the event of natural disaster, technical obstacle, network 
interruption, administrative or weather necessity, evidence of an 
auction security breach or unlawful bidding activity, or for any other 
reason that affects the fair and efficient conduct of competitive 
bidding. OEA and MB received no comments on this proposal.
    129. Because this approach has proven effective in resolving 
exigent circumstances in previous auctions, OEA and MB adopt these 
proposals regarding auction delay, suspension, or cancellation. By 
public notice or by announcement through the FCC auction

[[Page 9264]]

bidding system, OEA and MB may delay, suspend, or cancel bidding in the 
auction in the event of natural disaster, technical obstacle, network 
interruption, administrative or weather necessity, evidence of an 
auction security breach or unlawful bidding activity, or for any other 
reason that affects the fair and efficient conduct of competitive 
bidding. In such cases, OEA, in its sole discretion, may elect to 
resume the auction starting from the beginning of the current round or 
from some previous round, or cancel the auction in its entirety. OEA 
and MB emphasize that they will exercise this authority solely at their 
discretion, and not as a substitute for situations in which bidders may 
wish to apply their activity rule waivers.

J. Environmental Review Requirements

    130. Permittees or licensees must comply with the Commission's 
rules for environmental review under the National Environmental Policy 
Act, the National Historic Preservation Act, and other federal 
environmental statutes. The construction of a broadcast facility is a 
federal action, and the permittee or licensee must comply with the 
Commission's environmental rules for each such facility. These 
environmental rules require, among other things, that the permittee or 
licensee consult with expert agencies having environmental 
responsibilities, including the U.S. Fish and Wildlife Service, the 
State Historic Preservation Office, the U.S. Army Corps of Engineers, 
and the Federal Emergency Management Agency (through the local 
authority with jurisdiction over floodplains). In assessing the effect 
of facility construction on historic properties, the permittee or 
licensee must follow the provisions of the FCC's Nationwide 
Programmatic Agreement Regarding the Section 106 National Historic 
Preservation Act Review Process. The permittee or licensee must prepare 
environmental assessments for any facility that may have a significant 
impact in or on wilderness areas, wildlife preserves, threatened or 
endangered species, or designated critical habitats, historical or 
archaeological sites, Indian religious sites, floodplains, and surface 
features. In addition, the permittee or licensee must prepare 
environmental assessments for facilities that include high intensity 
white lights in residential neighborhoods or excessive radio frequency 
emission.

IV. Bidding

    131. The first round of bidding for Auction 112 will begin on June 
7, 2022. The initial bidding schedule will be announced in a public 
notice listing the qualified bidders, which will be released at least 
one week before the start of bidding in the auction.

A. Auction Structure

1. Simultaneous Multiple Round Auction
    132. In the Auction 112 Comment Public Notice, OEA and MB proposed 
to auction all construction permits listed in Attachment A to the 
Auction 112 Procedures Public Notice in a single auction using a 
simultaneous multiple-round auction format. This type of auction offers 
every construction permit for bid at the same time and consists of 
successive bidding rounds in which qualified bidders may place bids on 
individual construction permits. OEA and MB received no comments on 
this proposal, and this proposal is adopted. Unless otherwise 
announced, bids will be accepted on all construction permits in each 
round of the auction until bidding stops on every construction permit.
2. Round Structure
    133. Limited information about the results of a round will be made 
public after the conclusion of the round. Specifically, after a round 
closes, OEA and MB will make available for each construction permit its 
current provisionally winning bid amount, the minimum acceptable bid 
amount for the following round, the amounts of all bids placed on the 
construction permit during the round, and whether the license is FCC-
held. The reports will be publicly accessible. Moreover, after Auction 
112 closes, OEA and MB will make available complete reports of all bids 
placed during each round of the auction, including bidder identities.
    134. As in past Commission spectrum auctions, bidders will have 
secure access to certain non-public bidding information while bidding 
is ongoing. Specifically, after each round ends, and before the next 
round begins, OEA and MB will make the following information available 
to individual bidders:
    <bullet> The bidder's activity, based on all bids in the previous 
round; and
    <bullet> Summary statistics of the bidder's bidding/bid-related 
actions in each round, including the construction permits on which it 
bid and the price it bid for each of those construction permits, the 
result of each of its bids, whether it has any provisionally winning 
bids, and remaining activity rule waivers.
    135. Limiting the availability of bidding information during the 
auction balances the Commission's interest in providing bidders with 
sufficient information about the status of their own bids and bidding 
across all construction permits to allow them to bid confidently and 
effectively, while restricting the availability of information that may 
facilitate identification of bidders placing particular bids, which 
could potentially lead to undesirable strategic bidding.
3. Round Structure
    136. The initial schedule of bidding rounds will be announced in 
the public notice listing the qualified bidders in the auction. Each 
bidding round is followed by the release of round results. Multiple 
bidding rounds may be conducted each day.
    137. In the Auction 112 Comment Public Notice, OEA and MB proposed 
to retain the discretion to adjust the bidding schedule in order to 
foster an auction pace that reasonably balances speed with the bidders' 
need to study round results and adjust their bidding strategies. OEA 
and MB received no comments on the proposal, and they adopt it for 
Auction 112. OEA and MB may change the amount of time for bidding 
rounds, the amount of time between rounds, or the number of rounds per 
day, depending upon bidding activity and other factors.
4. Eligibility and Activity Rules
    138. As discussed above, the amount of the upfront payment 
submitted by a bidder will determine its initial bidding eligibility in 
terms of bidding units. A bidder's bidding eligibility is the maximum 
number of bidding units on which a bidder may be active (bid or hold 
provisionally winning bids) in a given round. As noted earlier, each 
construction permit is assigned a specific number of bidding units, as 
listed in Attachment A to the Auction 112 Procedures Public Notice. The 
bidding unit amounts listed in Attachment A of the Auction 112 
Procedures Public Notice are 25% lower than the bidding unit amounts 
proposed in Attachment A of the Auction 112 Comment Public Notice. OEA 
and MB adopt these adjusted bidding unit amounts to correspond with the 
reduced upfront payments adopted above. Bidding units assigned to each 
construction permit do not change as prices rise during the auction. 
Upfront payments are not attributed to specific construction permits. 
Rather, a bidder may place bids on any of the construction permits 
selected on its FCC Form 175 as long as the total number of bidding 
units associated with those

[[Page 9265]]

construction permits does not exceed the bidder's current eligibility.
    139. Eligibility cannot be increased during the auction; it can 
only remain the same or decrease. Thus, in calculating its upfront 
payment amount, an applicant must determine the maximum number of 
bidding units on which it may wish to bid or hold provisionally winning 
bids in any single round, and submit an upfront payment amount covering 
that total number of bidding units. At a minimum, an applicant's 
upfront payment must cover the bidding units for at least one of the 
construction permits it selected on its short-form application. The 
total upfront payment does not affect the total dollar amount a bidder 
may bid on any given construction permit. OEA and MB received no 
comments on the bidding eligibility proposals, and these proposals are 
adopted.
    140. To ensure that an auction closes within a reasonable period of 
time, an activity rule requires bidders to bid actively throughout the 
auction, rather than wait until late in the auction before 
participating. Bidders are required to be active (bid or hold 
provisionally winning bids) on a specific percentage of their current 
bidding eligibility during each round of the auction. A bidder's 
activity level in a round is the sum of the bidding units associated 
with construction permits covered by the bidder's new bids in the 
current round and provisionally winning bids from the previous round. 
Bidding units associated with construction permits for which the bidder 
has removed bids do not count towards current activity. Provisionally 
winning bids are bids that would become final winning bids if the 
auction were to close after the given round.
    141. OEA and MB received no comments on the eligibility and 
activity rules proposal. Therefore, in order to ensure that the auction 
closes within a reasonable period of time, OEA and MB adopt the 
following activity requirement as proposed: A bidder is required to be 
active on 100% of its current eligibility during each round of the 
auction. That is, a bidder must either place a bid or be a 
provisionally winning bidder during each round of the auction. Failure 
to maintain the requisite activity level will result in the use of an 
activity rule waiver, if any remain, or a reduction in the bidder's 
eligibility, possibly curtailing or eliminating the bidder's ability to 
place bids in subsequent rounds of the auction.
5. Activity Rule Waivers
    142. In the Auction 112 Comment Public Notice, OEA and MB proposed 
that each bidder in the auction be provided with three activity rule 
waivers, which are principally a mechanism for a bidder to avoid the 
loss of bidding eligibility in the event that exigent circumstances 
prevent it from bidding in a particular round. OEA and MB received no 
comments on this issue.
    143. Therefore, OEA and MB adopt this proposal to provide bidders 
with three activity rule waivers. Use of an activity rule waiver 
preserves the bidder's eligibility despite its activity in the current 
round being below the required minimum activity level. An activity rule 
waiver applies to an entire round of bidding and not to a particular 
construction permit. A bidder may use an activity rule waiver in any 
round of the auction as long as the bidder has not used all of its 
waivers.
    144. The FCC auction bidding system will assume that a bidder that 
does not meet the activity requirement would prefer to use an activity 
rule waiver (if available) rather than lose bidding eligibility. 
Therefore, the system will automatically apply a waiver at the end of 
any bidding round in which a bidder's activity level is below the 
minimum required unless (1) the bidder has no activity rule waiver 
remaining, or (2) the bidder overrides the automatic application of a 
waiver by reducing eligibility, therefore meeting the activity 
requirement. If the bidder has no waivers remaining and does not 
satisfy the required activity level, the bidder's current eligibility 
will be permanently reduced, possibly curtailing or eliminating the 
ability to place additional bids in the auction.
    145. A bidder with insufficient activity may wish to reduce its 
bidding eligibility rather than use an activity rule waiver. If so, the 
bidder must affirmatively override the automatic waiver mechanism 
during the bidding round by using the reduce eligibility function in 
the FCC auction bidding system. In this case, the bidder's eligibility 
will be permanently reduced to bring it into compliance with the 
activity rule described above. Reducing eligibility is an irreversible 
action once the round has closed, and a bidder cannot regain its lost 
bidding eligibility.
    146. Finally, a bidder may apply an activity rule waiver 
proactively as a means to keep the auction open without placing a bid. 
If a bidder proactively applies an activity rule waiver (using the 
proactive waiver function in the FCC auction bidding system) during a 
bidding round in which no bids are placed, the auction will remain open 
and the bidder's eligibility will be preserved. An automatic waiver 
applied by the FCC auction bidding system in a round in which there is 
no new bid or a proactive waiver will not keep the auction open.
6. Stopping Rule
    147. For Auction 112, OEA and MB proposed to employ a simultaneous 
stopping rule approach, which means all construction permits remain 
available for bidding until bidding stops on every construction permit. 
Specifically, bidding will close on all construction permits after the 
first round in which no bidder submits a new bid or applies a proactive 
activity rule waiver.
    148. OEA and MB also sought comment on alternative versions of the 
simultaneous stopping rule for Auction 112:
    Option 1. The auction would close for all construction permits 
after the first round in which no bidder applies a proactive waiver or 
places a new bid on any construction permit on which it is not the 
provisionally winning bidder. Thus, absent any other bidding activity, 
a bidder placing a new bid on a construction permit for which it is the 
provisionally winning bidder would not keep the auction open under this 
modified stopping rule.
    Option 2. The auction would close for all construction permits 
after the first round in which no bidder applies a waiver or places any 
new bid on any construction permit that already has a provisionally 
winning bid. Thus, absent any other bidding activity, a bidder placing 
a new bid on an FCC-held construction permit (a construction permit 
that does not have a provisionally winning bid) would not keep the 
auction open under this modified stopping rule.
    Option 3. The auction would close using a modified version of the 
simultaneous stopping rule that combines Option 1 and Option 2 above.
    Option 4. The auction would close after a specified number of 
additional rounds (special stopping rule) to be announced in advance in 
the FCC auction bidding system. If OEA and MB invoke this special 
stopping rule, they will accept bids in the specified final round(s), 
after which the auction will close.
    Option 5. The auction would remain open even if no bidder places a 
new bid or applies a waiver. In this event, the effect will be the same 
as if a bidder had applied a waiver. Thus, the activity rule will apply 
as usual, and a bidder with insufficient activity will either lose 
bidding eligibility or use a waiver.
    149. OEA and MB proposed to exercise these options only in certain 
circumstances, for example, where the

[[Page 9266]]

auction is proceeding unusually slowly or quickly, there is minimal 
overall bidding activity, or it appears likely that the auction will 
not close within a reasonable period of time or will close prematurely. 
Before exercising these options, OEA and MB are likely to attempt to 
change the pace of the auction. For example, OEA and MB may adjust the 
pace of bidding by changing the number of bidding rounds per day and/or 
the minimum acceptable bids. OEA and MB proposed to retain the 
discretion to exercise any of these options with or without prior 
announcement during the auction. OEA and MB received no comments on 
these proposals and adopt them for Auction 112.

B. Bidding Procedures

1. Minimum Opening Bids and Acceptable Bid Amounts
    150. The provision at 47 U.S.C. 309(j) calls upon the Commission to 
prescribe methods by which a reasonable reserve price will be required 
or a minimum opening bid established when applications for FCC licenses 
or construction permits are subject to auction (i.e., because they are 
mutually exclusive), unless the Commission determines that a reserve 
price or minimum opening bid is not in the public interest. Consistent 
with this mandate, the Commission directed the Bureaus to seek comment 
on the use of a minimum opening bid and/or reserve price prior to the 
start of each auction.
    151. In the Auction 112 Comment Public Notice, OEA and MB proposed 
not to establish reserve prices for specific construction permits 
listed in Attachment A that are different from minimum opening bid 
amounts. This is consistent with previous broadcast spectrum auctions. 
OEA and MB received no comments on this proposal and adopt it.
    152. In the Auction 112 Comment Public Notice, OEA and MB sought 
comment on specifically proposed minimum opening amounts for each 
construction permit listed in Attachment A to the Auction 112 
Procedures Public Notice, reasoning that a minimum opening bid, which 
has been used in other broadcast auctions, is an effective tool for 
accelerating the competitive bidding process. Specifically, a minimum 
opening bid was proposed for each construction permit by taking into 
account various factors relating to the efficiency of the auction and 
the potential value of the spectrum, including the type of service and 
class of facility offered, market size, population covered by the 
proposed broadcast facility, and recent broadcast transaction data, to 
the extent such information is available.
    153. Two commenters request that OEA and MB reduce or eliminate the 
minimum opening bids that were proposed in the Auction 112 Comment 
Public Notice, in order to reduce costs for prospective stations in 
remote areas. Brian Lane recommends that OEA and MB cut all proposed 
opening bids in half, arguing that there are considerable equipment and 
engineering costs that could be prohibitive to smaller and diverse 
bidders. Edge Networks, Inc d/b/a Evoca (Evoca) supports Mr. Lane's 
proposal but suggests that it may not go far enough in order to bring 
new, improved, and innovative TV and internet services to small, 
remote, and rural communities. Evoca claims that the markets involved 
in Auction 112 are so small that layering on any costs in addition to 
construction and operation of a TV may all but assure that these 
communities do not get any new service at all, and therefore suggests 
that OEA and MB consider eliminating the minimums altogether for at 
least the smaller communities.
    154. OEA and MB are not persuaded by arguments that reducing the 
minimum opening bids by 50% will significantly affect the viability of 
prospective stations in remote areas. However, in furtherance of their 
goals of promoting competition and encouraging greater participation by 
an array of entities, OEA and MB adopt a more modest reduction in 
minimum opening bids of 25%, which they believe balances these goals 
with the goal of conducting the auction in an efficient manner that 
avoids burdening bidders. Those minimum opening bids are laid out in 
Attachment A to the Auction 112 Procedures Public Notice.
    155. In the Auction 112 Comment Public Notice, OEA and MB proposed 
that, in each round, a qualified bidder will be able to place a bid on 
a given construction permit in any of up to nine different amounts. 
Under the proposal, the FCC auction bidding system interface will list 
the nine acceptable bid amounts for each construction permit. OEA and 
MB received no comments on this proposal, and adopt it as proposed.
    156. In the Auction 112 Comment Public Notice, to calculate the 
first of the acceptable bid amounts, OEA and MB proposed to use a 
minimum acceptable bid increment percentage of 10%. This means that the 
minimum acceptable bid amount for a construction permit will be 
approximately 10% greater than the provisionally winning bid amount for 
the construction permit. To calculate the eight additional acceptable 
bid amounts, OEA and MB proposed in the Auction 112 Comment Public 
Notice to use an additional bid increment percentage of 5% of the 
minimum acceptable bid. OEA and MB did not receive any comments on 
these proposals to use 10% and 5% respectively in our calculation of 
nine acceptable bid amounts for each construction permit. Experience in 
previous broadcast auctions suggests that a minimum acceptable bid 
increment percentage of 10% and an additional bid increment percentage 
of 5% are sufficient to ensure active bidding. Therefore, OEA and MB 
will begin the auction with a minimum acceptable bid increment 
percentage of 10% and an additional bid increment percentage of 5%.
    157. In Auction 112, the minimum acceptable bid amount for a 
construction permit will be equal to its minimum opening bid amount 
until there is a provisionally winning bid for the construction permit. 
After there is a provisionally winning bid for a construction permit, 
the minimum acceptable bid amount will be calculated by multiplying the 
provisionally winning bid amount by one plus the minimum acceptable bid 
percentage--i.e., provisionally winning bid amount * 1.10, rounded. The 
result of this calculation is subject to a minimum of $100. Under the 
Commission's standard rounding procedure for auctions, results above 
$10,000 are rounded to the nearest $1,000; results below $10,000 but 
above $1,000 are rounded to the nearest $100; and results below $1000 
are rounded to the nearest $10.
    158. The FCC auction bidding system will calculate the eight 
additional bid amounts by multiplying the minimum acceptable bid amount 
by the additional bid increment percentage of 5%, and that result 
(rounded) is the additional increment amount. The first additional 
acceptable bid amount equals the minimum acceptable bid amount plus the 
additional increment amount. The second additional acceptable bid 
amount equals the minimum acceptable bid amount plus two times the 
additional increment amount; the third additional acceptable bid amount 
is the minimum acceptable bid amount plus three times the additional 
increment amount; etc. Because the additional bid increment percentage 
is 5%, the calculation of the additional increment amount is (minimum 
acceptable bid amount) * (0.05), rounded. The first additional 
acceptable bid amount equals (minimum acceptable bid amount) +

[[Page 9267]]

(additional increment amount); the second additional acceptable bid 
amount equals (minimum acceptable bid amount) + (2*(additional 
increment amount)); the third additional acceptable bid amount equals 
(minimum acceptable bid amount) + (3*(additional increment amount)); 
etc.
    159. OEA and MB proposed to retain the discretion to change the 
minimum acceptable bid amounts, the minimum acceptable bid increment 
percentage, the additional bid increment percentage, and the number of 
acceptable bid amounts if they determine that circumstances so dictate, 
consistent with past practice. OEA and MB also proposed to retain the 
discretion to do so on a construction permit-by-construction permit 
basis. OEA and MB also proposed to retain the discretion to limit (a) 
the amount by which a minimum acceptable bid for a construction permit 
may increase compared with the corresponding provisionally winning bid, 
and (b) the amount by which an additional bid amount may increase 
compared with the immediately preceding acceptable bid amount. For 
example, OEA and MB could set a $1,000 limit on increases in minimum 
acceptable bid amounts over provisionally winning bids. Thus, if 
calculating a minimum acceptable bid using the minimum acceptable bid 
increment percentage results in a minimum acceptable bid amount that is 
$1,200 higher than the provisionally winning bid on a construction 
permit, the minimum acceptable bid amount would instead be capped at 
$1,000 above the provisionally winning bid.
    160. OEA and MB received no comments on these proposals concerning 
changes of bid amounts, and adopt the discretion to utilize them. OEA 
and MB typically exercise this discretion based on their monitoring of 
ongoing bidding and reserve such discretion here. If OEA and MB 
exercise this discretion, they will alert bidders by announcement in 
the FCC auction bidding system during the auction.
2. Provisionally Winning Bids
    161. Consistent with practice in past auctions, the FCC auction 
bidding system at the end of each bidding round will determine a 
provisionally winning bid for each construction permit based on the 
highest bid amount received for that permit. A provisionally winning 
bid will remain the provisionally winning bid until there is a higher 
bid on the same construction permit at the close of a subsequent round. 
Provisionally winning bids at the end of the auction become the winning 
bids.
    162. In the Auction 112 Comment Public Notice, OEA and MB proposed 
to use a pseudo-random number generator to select a single 
provisionally winning bid if identical high bid amounts are submitted 
on a construction permit in a given round (i.e., tied bids). No 
comments were received on this proposal, and OEA and MB adopt it as 
proposed.
    163. Accordingly, the FCC auction bidding system will assign a 
pseudo-random number to each bid upon submission. The tied bid with the 
highest pseudo-random number wins the tiebreaker and becomes the 
provisionally winning bid. The remaining bidders, as well as the 
provisionally winning bidder, can submit higher bids in subsequent 
rounds. However, if the auction were to close with no other bids being 
placed, the winning bidder would be the one that placed the 
provisionally winning bid. If the construction permit receives any bids 
in a subsequent round, the provisionally winning bid again will be 
determined by the highest bid amount received for the construction 
permit.
    164. As a reminder, provisionally winning bids count toward 
activity for purposes of the activity rule.
3. Bid Removal and Bid Withdrawal
    165. In the Auction 112 Comment Public Notice, OEA and MB explained 
that each qualified bidder has the option of removing any bids placed 
in a round provided that such bids are removed before the close of that 
bidding round. By removing a bid within a round, a bidder effectively 
``unsubmits'' the bid. A bidder removing a bid placed in the same round 
is not subject to withdrawal payments. Removing a bid will affect a 
bidder's activity because a removed bid no longer counts toward bidding 
activity for the round. Once a round closes, a bidder may no longer 
remove a bid.
    166. In the Auction 112 Comment Public Notice, OEA and MB proposed 
to prohibit bidders from withdrawing any bid after close of the round 
in which that bid was placed. This proposal was made in recognition of 
the site-specific nature and wide geographic dispersion of the permits 
available in this auction, as well as OEA and MB's experience with past 
auctions of broadcast construction permits. OEA and MB received no 
comments on this issue. Accordingly, OEA and MB will prohibit bid 
withdrawals in Auction 112. Bidders are cautioned to select bid amounts 
carefully because no bid withdrawals will be allowed, even if a bid was 
mistakenly or erroneously made.
4. Bidding Results
    167. After Auction 112 closes, OEA and MB will provide a means for 
the public to view and download reports of all bids placed during each 
round of the auction and all bid results, including bidder identities.
5. Auction Announcements
    168. Commission staff will use auction announcements to report 
necessary information, such as schedule changes, to bidders. All 
auction announcements will be available by clicking a link in the FCC 
auction bidding system.

V. Post-Auction Procedures

    169. The public notice announcing the close of the bidding and 
auction results will be released shortly after bidding has ended in 
Auction 112. This public notice will also establish the deadlines for 
submitting down payments, final payments, and the long-form 
applications.

A. Down Payments

    170. The Commission's rules provide that, unless otherwise 
specified by public notice, within ten business days after the release 
of the auction closing public notice, each winning bidder must submit 
sufficient funds (in addition to the upfront payment) to bring its 
total amount of money on deposit with the Commission for Auction 112 to 
20% of the net amount of its winning bid(s) (gross bid(s) less any 
applicable new entrant bidding credit).

B. Final Payments

    171. Each winning bidder will be required to submit the balance of 
the net amount for each of its winning bid(s) within 10 business days 
after the applicable deadline for submitting down payments.

C. Long-Form Application (FCC Form 2100--Schedule A)

    172. The Commission's rules currently provide that within thirty 
days following the close of bidding and notification to the winning 
bidders, unless a longer period is specified by public notice, each 
winning bidder must electronically submit a separate, properly 
completed long-form application for each permit won, and required 
exhibits, along with the applicable applicant filing fee. Winning 
bidders for TV construction permits will electronically file FCC Form 
2100, Schedule A, in the Media Bureau's Licensing and Management System 
(LMS). Winning bidders claiming new entrant status must include an 
exhibit demonstrating their eligibility for the

[[Page 9268]]

bidding credit. Further instructions on these and other filing 
requirements will be provided to winning bidders in the auction closing 
public notice.

D. Default and Disqualification

    173. Any winning bidder that defaults or is disqualified after the 
close of an auction (i.e., fails to remit the required down payment by 
the specified deadline, fails to submit a timely long-form application, 
fails to make a full and timely final payment, or is otherwise 
disqualified) is liable for default payments as described in 47 CFR 
1.2104(g)(2). A default payment consists of a deficiency payment, equal 
to the difference between the amount of the Auction 112 bidder's 
winning bid and the amount of the winning bid the next time a 
construction permit covering the same spectrum is won in an auction, 
plus an additional payment equal to a percentage of the defaulter's bid 
or of the subsequent winning bid, whichever is less.
    174. The percentage of the applicable bid to be assessed as an 
additional payment for defaults in a particular auction is established 
in advance of the auction. Accordingly, in the Auction 112 Comment 
Public Notice, OEA and MB proposed to set the additional default 
payment for this auction at 20% of the applicable bid. OEA and MB 
received no comments on this proposal, and it is therefore adopted for 
the reasons described in the Auction 112 Comment Public Notice.
    175. Finally, in the event of a default, the Commission has the 
discretion to re-auction the construction permit or offer it to the 
next highest bidder (in descending order) at its final bid amount. In 
addition, if a default or disqualification involves gross misconduct, 
misrepresentation, or bad faith by an applicant, then the Commission 
may declare the applicant and its principals ineligible to bid in 
future auctions and may take any other action that it deems necessary, 
including institution of proceedings to revoke any existing 
authorizations held by the applicant.

E. Refund of Remaining Upfront Payment Balance

    176. All refunds of upfront payment balances will be returned to 
the payer of record as identified on the FCC Form 159 unless the payer 
submits written authorization instructing otherwise. Bidders are 
encouraged to use the Refund Information icon found on the Auction 
Application Manager page or the Refund Form link available on the 
Auction Application Submit Confirmation page in the FCC Auction 
Application System to access the form. After the required information 
is completed on the blank form, the form must be printed, signed, and 
submitted to the Commission by mail, fax, or email as instructed below.
    177. If you have elected not to access the Refund Form through the 
Auction Application Manager page, then OEA and MB request that all 
information listed below be supplied in writing.

1. Name, address, contact and phone number of Bank
2. ABA Number (capable to accept ACH payments) (please verify this 
number with your Bank)
3. Account Number to Credit
4. Name of Account Holder
5. FCC Registration Number (FRN)

    178. The refund request must be submitted by fax to the Revenue & 
Receivables Operations Group/Auctions at (202) 418-2843, or by email to 
<a href="/cdn-cgi/l/email-protection#5002021f17073922351631283523103633337e373f26"><span class="__cf_email__" data-cfemail="1a4848555d4d73687f5c7b627f695a7c7979347d756c">[email protected]</span></a>.

    Note: Refund processing generally takes up to two weeks to 
complete. Bidders with questions about refunds should contact Scott 
Radcliffe at (202) 418-7518 or Theresa Meeks at (202) 418-2945.

VI. Procedural Matters

A. Paperwork Reduction Act

    179. The Office of Management and Budget (OMB) has approved the 
information collections in the Application to Participate in an FCC 
Auction, FCC Form 175. The Auction 112 Procedures Public Notice does 
not contain new or substantively modified information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. Therefore, it does not contain any new or modified 
information collection burden for small business concerns with fewer 
than 25 employees pursuant to the Small Business Paperwork Relief Act 
of 2002, Public Law 107-198. The Commission will be submitting a non-
substantive change request to OMB concerning OMB 3060-0600 related to 
the certification requirement for Auction 112 applicants adopted 
herein, and the Commission will not require Auction 112 applicants to 
make this certification on FCC Form 175 until OMB has approved the non-
substantive change request.

B. Congressional Review Act

    180. The Commission has determined, and Administrator of the Office 
of Information and Regulatory Affairs, Office of Management and Budget, 
concurs, that these rules are ``non-major'' under the Congressional 
Review Act, 5 U.S.C. 804(2). The Commission will send a copy of the 
Auction 112 Procedures Public Notice in a report to Congress and the 
Government Accountability Office pursuant to the Congressional Review 
Act, 5 U.S.C. 801(a)(1)(A).

C. Supplemental Final Regulatory Flexibility Analysis

    181. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission prepared Initial Regulatory Flexibility 
Analyses (IRFAs) in connection with the Broadcast Competitive Bidding 
Notice of Proposed Rulemaking (NPRM), 62 FR 65392, December 12, 1997, 
and other Commission NPRMs (collectively, Competitive Bidding NPRMs) 
pursuant to which Auction 112 will be conducted. Final Regulatory 
Flexibility Analyses (FRFAs) likewise were prepared in the Broadcast 
Competitive Bidding Order, 63 FR 48615, September 11, 1998, and other 
Commission rulemaking orders (collectively, Competitive Bidding Orders) 
pursuant to which Auction 112 will be conducted. In this proceeding, a 
Supplemental Initial Regulatory Flexibility Analysis (Supplemental 
IRFA) was incorporated in the Auction 112 Comment Public Notice. The 
Commission sought written public comment on the proposals in the 
Auction 112 Comment Public Notice, including comments on the 
Supplemental IRFA. This Supplemental Final Regulatory Flexibility 
Analysis (Supplemental FRFA) supplements the FRFAs in the Competitive 
Bidding Orders to reflect the actions taken in the Auction 112 
Procedures Public Notice and conforms to the RFA.
    182. Need for, and Objectives of, the Public Notice. The procedures 
for the conduct of Auction 112 as described in the Auction 112 
Procedures Public Notice implement the Commission's competitive bidding 
rules, which have been adopted by the Commission in multiple notice-
and-comment rulemaking proceedings. More specifically, the Auction 112 
Procedures Public Notice provides an overview of the procedures, terms, 
and conditions governing Auction 112, and the post-auction application 
and payment processes, as well as setting the minimum opening bid 
amount for each of the TV construction permits that are subject to 
being assigned by competitive bidding.
    183. To promote the efficient and fair administration of the 
competitive bidding process for all Auction 112 participants, including 
small businesses, in the Auction 112 Procedures Public Notice, OEA and 
MB announce the following procedures:

[[Page 9269]]

    <bullet> A requirement that any applicant seeking to participate in 
Auction 112 certify in its short-form application, under penalty of 
perjury, that it has read the public notice adopting procedures for 
Auction 112, and that it has familiarized itself with those procedures 
and the requirements for obtaining a construction permit for a TV 
station;
    <bullet> establishment of an additional default payment of 20% 
under 47 CFR 1.2104(g)(2) in the event that a winning bidder defaults 
or is disqualified after the auction;
    <bullet> use of a simultaneous multiple-round auction format, 
consisting of sequential bidding rounds with a simultaneous stopping 
rule (with discretion to exercise alternative stopping rules under 
certain circumstances);
    <bullet> use of anonymous bidding/limited information procedures 
which will not make public until after bidding has closed: (1) The 
construction permits that an applicant selects for bidding in its 
short-form application, (2) the amount of any upfront payment made by 
or on behalf of an applicant, (3) any applicant's bidding eligibility, 
and (4) any other bidding-related information that might reveal the 
identity of the bidder placing a bid;
    <bullet> retention by OEA, in conjunction with MB, of its 
discretion to delay, suspend, or cancel bidding in Auction 112 for any 
reason that affects the fair and efficient conduct of the competitive 
bidding process;
    <bullet> retention by OEA of its discretion to adjust the bidding 
schedule in order to manage the pace of Auction 112;
    <bullet> a specific minimum opening bid amount for each 
construction permit available in Auction 112;
    <bullet> a specific number of bidding units for each construction 
permit;
    <bullet> a specific upfront payment amount for each construction 
permit;
    <bullet> establishment of a bidder's initial bidding eligibility in 
bidding units based on that bidder's upfront payment through assignment 
of a specific number of bidding units for each construction permit;
    <bullet> use of an activity requirement so that bidders must bid 
actively during the auction rather than waiting until late in the 
auction before participating;
    <bullet> a single stage auction in which a bidder is required to be 
active on 100% of its bidding eligibility in each round of the auction;
    <bullet> provision of three activity waivers for each qualified 
bidder to allow it to preserve eligibility during the course of the 
auction;
    <bullet> use of minimum acceptable bid amounts and additional bid 
increments, along with a proposed methodology for calculating such 
amounts, while retaining discretion to change their methodology if 
circumstances dictate;
    <bullet> bid removal procedures; and
    <bullet> a prohibition on bid withdrawals.
    184. Summary of Significant Issues Raised by Public Comments in 
Response to the IRFA. There were no comments filed that specifically 
addressed the procedures and policies proposed in the Supplemental 
IRFA.
    185. Response to Comments by the Chief Counsel for Advocacy of the 
Small Business Administration. Pursuant to the Small Business Jobs Act 
of 2010, which amended the RFA, the Commission is required to respond 
to any comment filed by the Chief Counsel for Advocacy of the Small 
Business Administration (SBA), and to provide a detailed statement of 
any change made to the proposed procedures as a result of those 
comments. The Chief Counsel did not file any comments in response to 
the procedures that were proposed in the Auction 112 Comment Public 
Notice.
    186. Description and Estimate of the Number of Small Entities to 
Which the Procedures Will Apply. The RFA directs agencies to provide a 
description of and, where feasible, an estimate of the number of small 
entities that may be affected by the rules adopted herein. The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small business concern'' under the 
Small Business Act. A ``small business concern'' is one which: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA.
    187. The specific competitive bidding procedures and minimum 
opening bid amounts described in the Auction 112 Procedures Public 
Notice will affect all applicants participating in Auction 112. OEA and 
MB expect that the pool of applicants who seek to bid in Auction 112 
will include firms of all sizes.
    188. Television Broadcasting. This Economic Census category 
``comprises establishments primarily engaged in broadcasting images 
together with sound.'' These establishments operate television 
broadcast studios and facilities for the programming and transmission 
of programs to the public. These establishments also produce or 
transmit visual programming to affiliated broadcast television 
stations, which in turn broadcast the programs to the public on a 
predetermined schedule. Programming may originate in their own studio, 
from an affiliated network, or from external sources. The SBA has 
created the following small business size standard for such businesses: 
those having $41.5 million or less in annual receipts. The 2012 
Economic Census reports that 751 firms operated that entire year. Of 
that number, 656 had annual receipts of $25,000,000 or less, and 25 had 
annual receipts between $25,000,000 and $49,999,999. Based on this data 
OEA and MB therefore estimate that the majority of commercial 
television broadcasters are small entities under the applicable SBA 
size standard.
    189. Additionally, the Commission has estimated the number of 
licensed commercial television stations to be 1,373. Of this total, 
1,269 stations (or about 92.4%) had revenues of $41.5 million or less, 
according to Commission staff review of the BIA Kelsey Inc. Media 
Access Pro Television Database (BIA), and therefore these stations 
qualify as small entities under the SBA definition.
    190. In addition, the Commission has estimated the number of 
licensed noncommercial educational (NCE) television stations to be 385. 
These stations are non-profit, and therefore considered to be small 
entities.
    191. OEA and MB note, however, that the SBA size standard data does 
not enable them to make a meaningful estimate of the number of small 
entities that may participate in Auction 112.
    192. In assessing whether a business entity qualifies as small 
under the SBA definition, business control affiliations must be 
included. The estimate therefore likely overstates the number of small 
entities that might be affected by this auction because the revenue 
figures on which this estimate is based does not include or aggregate 
revenues from affiliated companies. Moreover, the definition of small 
business also requires that an entity not be dominant in its field of 
operation and that the entity be independently owned and operated. The 
estimate of small businesses to which Auction 112 competitive bidding 
rules may apply does not exclude any television station from the 
definition of a small business on these bases and is therefore over-
inclusive to that extent. Furthermore, OEA and MB are unable at this 
time to define or quantify the criteria that would establish whether a 
specific television station is dominant in its field of operation.
    193. OEA and MB also note that they are unable to accurately 
develop an estimate of how many of the potential Auction 112 applicants 
might prove to

[[Page 9270]]

be small businesses based on the number of small entities that applied 
to participate in prior broadcast auctions because that information is 
not collected from applicants for broadcast auctions in which bidding 
credits are not based on an applicant's size (as is the case in certain 
auctions of licenses for wireless services). OEA and MB conclude, 
however, that the majority of Auction 112 eligible bidders will likely 
meet the SBA's definition of a small business concern.
    194. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. For Auction 112, no new 
reporting, recordkeeping, or other compliance requirements for small 
entities or other auction applicants were proposed. The Commission 
designed the auction application process itself to minimize reporting 
and compliance requirements for applicants, including small business 
applicants. For all spectrum auctions, in the first part of the 
Commission's two-phased auction application process, parties desiring 
to participate in an auction file streamlined, short-form applications 
in which they certify under penalty of perjury as to their 
qualifications. Eligibility to participate in bidding is based on an 
applicant's short-form application and certifications, as well as its 
upfront payment. In the second phase of the auction application 
process, there are additional compliance requirements for winning 
bidders. Thus, a small business that fails to become a winning bidder 
does not need to provide the additional showings and more detailed 
demonstrations required of a winning bidder.
    195. Auction 112 applicants, including small entities, will become 
qualified to bid in Auction 112 only if they comply with the following: 
(1) Submission of a short-form application that is timely and is found 
to be substantially complete, and (2) timely submission of a sufficient 
upfront payment for at least one of the construction permits that the 
applicant selected on its FCC Form 175. In accordance with the terms of 
47 CFR 1.2105(b)(2), an applicant whose application is found to contain 
deficiencies will have a limited opportunity to bring its application 
into compliance with the Commission's competitive bidding rules during 
a resubmission window. In addition, each Auction 112 applicant must 
maintain the accuracy of its previously filed short-form application 
electronically using the FCC Auction Application System.
    196. In the second phase of the process, there are additional 
compliance requirements only applicable to winning bidders. As with 
other winning bidders, any small entity that is a winning bidder will 
be required to comply with the terms of the following rules, among 
others: (1) 47 CFR 1.2107(b), by submitting as a down payment within 10 
business days after release of the auction closing public notice 
sufficient funds (in addition to its upfront payment) to bring its 
total amount of money on deposit with the Commission for Auction 112 to 
20% of the amount of its winning bid or bids; (2) 47 CFR 1.2109(a), by 
submitting within 10 business days after the down payment deadline the 
balance of the amount for each of its winning bids; and (3) 47 CFR 
73.5005(a), by electronically filing a long-form application and 
required exhibits for each construction permit won through Auction 112.
    197. Further, as required by 47 CFR 1.2105(c), reports concerning 
prohibited communications must be filed with the Chief of the Auctions 
Division, as detailed in the Auction 112 Procedures Public Notice.
    198. Steps Taken to Minimize the Significant Economic Impact on 
Small Entities, and Significant Alternatives Considered. The RFA 
requires an agency to describe any significant, specifically small 
business, alternatives that it has considered in reaching its proposed 
approach, which may include the following four alternatives (among 
others): (1) The establishment of differing compliance or reporting 
requirements or timetables that take into account the resources 
available to small entities; (2) the clarification, consolidation, or 
simplification of compliance and reporting requirements under the rule 
for such small entities; (3) the use of performance rather than design 
standards; and (4) an exemption from coverage of the rule, or any part 
thereof, for such small entities.
    199. OEA and MB intend that the procedures adopted in the Auction 
112 Procedures Public Notice to facilitate participation in Auction 112 
will result in both operational and administrative cost savings for 
small entities and other auction participants. In light of the numerous 
resources that will be available from the Commission to small entities 
and other auction participants at no cost, the processes and procedures 
announced in the Auction 112 Procedures Public Notice should minimize 
any economic impact of the auction processes and procedures on small 
entities and should result in both operational and administrative cost 
savings for small entities and other auction participants. For example, 
prior to the beginning of bidding in this auction, the Commission will 
hold a mock auction to allow qualified bidders the opportunity to 
familiarize themselves with both the processes and systems that will be 
used in Auction 112. During the auction, participants will be able to 
access and participate in bidding via the internet using a web-based 
system, or telephonically, providing two cost-effective methods of 
participation and avoiding the cost of travel for in-person 
participation. Further, small entities as well as other auction 
participants will be able to avail themselves of a telephone hotline 
for assistance with auction processes and procedures as well as a 
technical support telephone hotline to assist with issues such as 
access to or navigation within the electronic FCC Form 175 and use of 
the FCC's auction bidding system. In addition, all auction 
participants, including small business entities, will have access to 
various other sources of information and databases through the 
Commission that will aid in both their understanding and participation 
in the process. These mechanisms are made available to facilitate 
participation by all qualified bidders and may result in significant 
cost savings for small business entities that utilize these mechanisms. 
These resources, coupled with the description and communication of the 
bidding procedures before bidding begins in Auction 112, should ensure 
that the auction will be administered predictably, efficiently and 
fairly, thus providing certainty for small entities as well as other 
auction participants. In addition, in consideration of comments 
submitted in this proceeding, the minimum opening bid amounts were 
reduced to amounts 25% lower than those that had been proposed in the 
Auction 112 Comment Public Notice; this change is intended to encourage 
participation in Auction 112 by a greater number of interested parties, 
which may include some small entities.
    200. Notice to SBA. The Commission will send a copy of the Auction 
112 Procedures Public Notice, including this Supplemental FRFA, to the 
Chief Counsel for Advocacy of the SBA.

Federal Communications Commission.
William Huber,
Associate Chief, Auctions Division, Office of Economics and Analytics.
[FR Doc. 2022-03348 Filed 2-17-22; 8:45 am]
BILLING CODE 6712-01-P


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