[Federal Register Volume 63, Number 12 (Tuesday, January 20, 1998)]
[Notices]
[Pages 2976-2980]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1282]



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FEDERAL COMMUNICATIONS COMMISSION

[DA 98-48; Report No. AUC-97-18-A (Auction No. 18)]


Comment Sought on Reserve Prices or Minimum Opening Bids and 
Other Auction Procedural Issues for the Phase II 220 MHz Service

AGENCY: Federal Communications Commission.

ACTION: Notice; seeking comment.

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SUMMARY: The Commission is seeking comment on a proposed formula for 
calculating minimum opening bids as well as other procedural issues in 
the auction of licenses for the Phase II 220 MHz Service, Auction No. 
18.

DATES: Comments are due on or before January 29, 1998. Reply comments 
are due on or before February 5, 1998.

ADDRESSES: To file formally, parties must submit an original and four 
copies to the Office of the Secretary, Federal Communications 
Commission, Room 222, 1919 M Street N.W., Washington, D.C. 20554. In 
addition, parties must submit one copy to Kathleen O'Brien Ham, Chief, 
Auctions and Industry Analysis Division, Wireless Telecommunications 
Bureau, Federal Communications Commission, Room 5202, 2025 M Street 
N.W., Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Lisa Hartigan, Bob Reagle or Frank 
Stilwell, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau, at (202) 418-0660.

SUPPLEMENTARY INFORMATION: This public notice was released on January 
13, 1998 and is available in its entirety, including attachments; for 
inspection and copying during normal business hours in the FCC 
Reference Center (Room 239), 1919 M Street, N.W., Washington, D.C., and 
also may be purchased from the Commission's copy contractor, 
International Transcription Services, (202) 857-3800, fax (202) 857-
3805, 1231 20th Street, N.W., Washington, D.C. 20036.

SYNOPSIS OF THE PUBLIC NOTICE

Background

I. Reserve Price or Minimum Opening Bid

    The Balanced Budget Act of 1997 calls upon the Commission to 
prescribe methods by which a reasonable reserve price will be required 
or a minimum opening bid established when FCC licenses are subject to 
auction (i.e., because they are mutually exclusive), unless the 
Commission determines that a reserve price or minimum bid is not in the 
public interest. Section 3002(a), Balanced Budget Act of 1997, Public 
Law 105-33, 111 Stat. 251 (1997) (``Budget Act''); 47 U.S.C. 
309(j)(4)(F). The Commission's authority to establish a reserve price 
or minimum opening bid is set forth in 47 CFR 1.2104(c) and (d). 
Consistent with this mandate, the Commission has directed the Wireless 
Telecommunications Bureau (``Bureau'') to seek comment on the use of a 
minimum opening bid and/or reserve price prior to the start of each 
auction. See In the Matter of Amendment of Part 1 of the Commission's 
Rules--Competitive Bidding Procedures, Allocation of Spectrum Below 5 
GHz Transferred from Federal Government Use, 4660-4685 MHz, WT Docket 
No. 97-82, ET Docket No. 94-32, FCC 97-413, Third Report and Order and 
Second Further Notice of Proposed Rule Making (rel. December 31, 1997) 
at para. 141 (``Part 1 Third Report and Order''). The Bureau was 
directed to seek comment on the methodology to be employed in 
establishing each of these mechanisms. Among other factors the Bureau 
should consider is the amount of spectrum being auctioned, levels of 
incumbency, the availability of technology to provide service, the size 
of the geographic service areas, the extent of interference with other 
spectrum bands, and any other relevant factors that could reasonably 
have an impact on valuation of the spectrum being auctioned. The 
Commission concluded that the Bureau should have the discretion to 
employ either or both of these mechanisms for future auctions. Id.
    Normally, a reserve price is an absolute minimum price below which 
an item will not be sold in a given auction. Reserve prices can be 
either published or unpublished. A minimum opening bid, on the other 
hand, is the minimum bid price set at the beginning of the auction 
below which no bids are accepted. It is generally used to accelerate 
the competitive bidding process. Also, in a minimum opening bid 
scenario, the auctioneer generally has the discretion to lower the 
amount later in the auction.
    The Bureau recently announced the auction of 908 licenses for the 
Phase II 220 MHz Service which is scheduled to begin May 19, 1998. See 
Public Notice, ``FCC Announces Spectrum Auction Schedule for 1998,'' DA 
97-2497 (rel. November 25, 1997), 62 FR 64833, 64833-64834 (December 9, 
1997). These licenses encompass the United States, the Northern Mariana 
Islands, Guam, American Samoa, the United States Virgin Islands and 
Puerto Rico. Specifically, the licenses include: (1) Five licenses in 
each of 175 geographic areas known as Economic Areas (EAs); (2) five 
licenses in each of six Regional Economic Area Groupings (REAGs), which 
we will refer to as ``Economic Area Groupings'' (EAGs); and (3) three 
nationwide licenses which encompass the same territory as all of the 
EAGs, combined. We note that the geographic area encompassed within a 
220 MHz REAG differs from the geographic area encompassed within REAGs 
in prior auctions. In order to avoid confusion, therefore, we will use 
EAGs in the 220 MHz auction. See 47 CFR 90.717(a) (nationwide channel 
assignments); 47 CFR 90.721(b) and 90.761 (Phase II EA and REAG channel 
assignments).
    In anticipation of this auction and in light of the Balanced Budget 
Act, the Bureau proposes to establish minimum opening bids for the 220 
MHz auction, and retain discretion to lower the minimum opening bids.
    The Bureau believes a minimum opening bid, which has been utilized 
in other auctions, is an effective bidding tool, and we propose to use 
this approach in the 220 MHz Service auction. See In the Matter of 
Auction of 800 MHz SMR Upper 10 MHz Band, Minimum Opening Bids or 
Reserve Prices, DA 97-2147, Order (rel. October 6, 1997), 62 FR 55251 
(October 23, 1997); In the Matter of Revision of Rules and Policies for 
the Direct Broadcast Satellite Service, IB Docket No. 95-168, PP Docket 
No. 93-253, Report and Order, 11 FCC Rcd 9712, 9787-9788, para. 186 
(1995), 60 FR 65587, 65591 (December 20, 1995). A minimum opening bid 
will help to regulate the pace of the auction and provides flexibility.
    Specifically, the Commission proposes the following formula for 
calculating minimum opening bids in Auction No. 18:

1. Nationwide Licenses: $0.02 MHz/POP
2. EAG Licenses: $0.015 MHz/POP
3. EA Licenses: $0.0175 MHz/POP

with a minimum of no less than $2500.00 per license.
    Comment is sought on this proposal. We note that we have received a 
proposal from SEA, Inc. to establish a minimum opening bid for the 220 
MHz auction. This document has been made a part of the record in this 
proceeding. If commenters believe that the formula proposed above for 
minimum opening bids will result in substantial numbers of unsold 
licenses, or is not a reasonable amount, or should instead operate as a 
reserve price, they should explain why this is so, and comment on the 
desirability of an alternative approach.

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Commenters are advised to support their claims with valuation analyses 
and suggested reserve prices or minimum opening bid levels or formulas. 
In establishing the formula for minimum opening bids, we particularly 
seek comment on such factors as, among other things, the amount of 
spectrum being auctioned, levels of incumbency, the availability of 
technology to provide service, the size of the geographic service 
areas, issues of interference with other spectrum bands and any other 
relevant factors that could reasonably have an impact on valuation of 
the Phase II 220 MHz spectrum. Alternatively, comment is sought on 
whether, consistent with the Balanced Budget Act, the public interest 
would be served by having no minimum opening bid or reserve price.

II. Other Auction Procedural Issues

    The Balanced Budget Act of 1997 requires the Commission to ``ensure 
that, in the scheduling of any competitive bidding under this 
subsection, an adequate period is allowed * * * before issuance of 
bidding rules, to permit notice and comment on proposed auction 
procedures * * *.'' Budget Act, Sec. 3002(a)(E)(i). Consistent with the 
provisions of the Balanced Budget Act and to ensure that potential 
bidders have adequate time to familiarize themselves with the specific 
provisions that will govern the day-to-day conduct of an auction, the 
Commission directed the Bureau, under its existing delegated authority, 
to seek comment on a variety of auction-specific issues prior to the 
start of each auction. Part 1 Third Report and Order at para. 124. The 
Commission directed the Bureau to seek comment on specific mechanisms 
related to day-to-day auction conduct including, for example, the 
structure of bidding rounds and stages, establishment of minimum 
opening bids or reserve prices, minimum accepted bids, initial maximum 
eligibility for each bidder, activity requirements for each stage of 
the auction, activity rule waivers, criteria for determining reductions 
in eligibility, information regarding bid withdrawal and bid removal, 
stopping rules, and information relating to auction delay, suspension 
or cancellation. Id. at 125. We therefore seek comment on the following 
issues.
a. License Groupings
    In the 220 MHz Third Report and Order the Commission concluded that 
it would auction the 908 Phase II 220 MHz licenses in a single, 
simultaneous multiple-round auction. However, the Commission reserved 
the discretion, which it ultimately delegated to the Bureau, to auction 
each of the license types (i.e., nationwide, EAG, EA) separately or in 
different combinations (e.g., nationwide and EAG together). See In the 
Matter of Amendment of Part 90 of the Commission's Rules to Provide for 
the Use of the 220-222 MHz Band by the Private Land Mobile Radio 
Service, Implementation of Sections 3(n) and 332 of the Communications 
Act, Regulatory Treatment of Mobile Services, Implementation of Section 
309(j) of the Communications Act--Competitive Bidding, PR Docket No. 
89-552, RM 8506, GN Docket No. 93-252, PP Docket No. 93-253, Third 
Report and Order and Fifth Notice of Proposed Rulemaking, 12 FCC Rcd 
10943, 11046, para. 221 (1997) (``220 MHz Third Report and Order''), 62 
FR 15978, 15979 (April 3, 1997). For reasons of administrative 
efficiency, we propose to award the 908 licenses in the Phase II 220 
MHz Service in a single, simultaneous multiple-round auction. We seek 
comment on this proposal.
b. Structure of Bidding Rounds, Activity Requirements, and Criteria for 
Determining Reductions in Eligibility
    We propose to divide the auction into three stages: Stage One, 
Stage Two and Stage Three. The auction will start in Stage One. We 
propose that the auction will advance to the next stage (i.e., from 
Stage One to Stage Two, and from Stage Two to Stage Three) when in each 
of three consecutive rounds of bidding, the high bid has increased on 
10 percent or less of the licenses being auctioned (as measured in 
bidding units). However, we further propose that the Bureau retain the 
discretion to accelerate the auction by announcement. This 
determination will be based on a variety of measures of bidder activity 
including, but not limited to, the auction activity level, the 
percentages of licenses (as measured in bidding units) on which there 
are new bids, the number of new bids, and the percentage increase in 
revenue. We seek comment on these proposals.
    In order to ensure that the auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively on a 
percentage of their maximum eligibility during each round of the 
auction rather than waiting until the end to participate. A bidder that 
does not satisfy the activity rule will either lose bidding eligibility 
in the next round or use an activity rule waiver.
    For the Phase II 220 MHz Service auction, we propose that, in each 
round of the first stage of the auction, a bidder desiring to maintain 
its current eligibility is required to be active on licenses 
encompassing at least 80 percent of its current bidding eligibility. 
Failure to maintain the requisite activity level will result in a 
reduction in the bidder's bidding eligibility in the next round of 
bidding (unless an activity rule waiver is used). During Stage One, 
reduced eligibility for the next round will be calculated by 
multiplying the current round activity by five-fourths (\5/4\). In each 
round of the second stage of the auction, a bidder desiring to maintain 
its current eligibility is required to be active on at least 90 percent 
of its current bidding eligibility. During Stage Two, reduced 
eligibility for the next round will be calculated by multiplying the 
current round activity by ten-ninths (\10/9\). In each round of the 
third stage, a bidder desiring to maintain its current eligibility is 
required to be active on 98 percent of its current bidding eligibility. 
In this final stage, reduced eligibility for the next round will be 
calculated by multiplying the current round activity by fifty-
fortyninths (\50/49\). We seek comment on these proposals.
c. Minimum Accepted Bids
    Once there is a standing high bid on a license, a bid increment 
will be applied to that license to establish a minimum acceptable bid 
for the following round. For the Phase II 220 MHz Service auction, we 
propose, as described immediately below, to use an exponential 
smoothing methodology to calculate minimum bid increments. The Bureau 
retains the discretion to change the minimum bid increment if it 
determines that circumstances so dictate. The exponential smoothing 
methodology has been used in previous auctions, including the WCS 
auction and the 800 MHz SMR auction. We seek comment on this proposal.
Exponential Smoothing
    The exponential smoothing formula calculates the bid increment 
based on a weighted average of the activity received on each license in 
the current and all previous rounds. This methodology will tailor the 
bid increment for each license based on activity, rather than setting a 
global increment for all licenses. For every license that receives a 
bid, the bid increment for the next round for that license will be 
established as the greater of $0.25 per bidding unit for each license 
or a percentage increment that is determined using the exponential 
smoothing formula.
    Using exponential smoothing, the calculation of the percentage bid 
increment for each license will be based

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on an activity index, which is calculated as the weighted average of 
the current activity and the activity index from the previous round. 
The activity index at the start of the auction (round 0) will be set at 
0. The current activity index is equal to a weighting factor times the 
number of new bids received on the license in the current bidding 
period plus one minus the weighting factor times the activity index 
from the previous round. The activity index is then used to calculate a 
percentage increment by multiplying a minimum percentage increment by 
one plus the activity index with that result being subject to a maximum 
percentage increment. The Commission will initially set the weighting 
factor at 0.5, the minimum percentage increment at 0.05, and the 
maximum percentage increment at 0.15.
Equations
A<INF>i</INF> = (C * B<INF>i</INF>) + ( (1-C) * A<INF>i-1</INF>)
I<INF>i</INF> = smaller of ( (1 + A<INF>i</INF>) * N) and M

Where,

A<INF>i</INF> = activity index for the current round (round i)
C = activity weight factor
B<INF>i</INF> = number of bids in the current round (round i)
A<INF>i-1</INF>=activity index from previous round (round i-1), 
A<INF>0</INF> is 0
I<INF>i</INF>=percentage bid increment for the current round (round i)
N=minimum percentage increment
M=maximum percentage increment

    Under the exponential smoothing methodology, once a bid has been 
received on a license, the minimum acceptable bid for that license in 
the following round will be the new high bid plus the greater of either 
the dollar amount associated with the percentage increment (variable 
I<INF>i</INF> from above times the high bid) or the absolute increment 
(a fixed dollar amount per bidding unit for each license, e.g., $0.25 
per bidding unit).
Example
License 1 (800,000 bidding units)
C=0.5, N=0.05, M=0.15, Absolute bid increment=$0.25 per bidding unit

Round 1 (2 new bids, high bid=$1,000,000)

    1. Calculation of percentage increment using exponential smoothing:

A<INF>1</INF>=(0.5 * 2)+(0.5 * 0)=1
I<INF>1</INF>=(1+1) * 0.05=0.1

    2. Dollar increment using the percentage increment (I<INF>1</INF> 
from above)

0.1 * $1,000,000=$100,000

    3. Dollar increment using the absolute increment

$0.25 * 800,000 bidding units=$200,000

    4. Minimum bid increment: greater of percentage and 
absolute=$200,000

Round 2 (3 new bids, high bid=2,000,000)

    1. Calculation of percentage increment using exponential smoothing:

A<INF>2</INF>=(0.5 * 3)+(0.5 * 1)=2
I<INF>2</INF>=(1+2) * 0.05=0.15

    2. Dollar increment using the percentage increment (I<INF>2</INF> 
from above)

0.15 * $2,000,000=$300,000

    3. Dollar increment using the absolute increment

$0.25 x 800,000 bidding units=$200,000

    4. Minimum bid increment: greater of percentage and 
absolute=$300,000

Round 3 (1 new bid, high bid = 2,300,000)

    1. Calculation of percentage increment using exponential smoothing:

A<INF>3</INF> = (0.5 * 1) + (0.5 * 2) = 1.5
I<INF>3</INF> = (1 + 1.5) * 0.05 = 0.125

    2. Dollar increment using the percentage increment (I<INF>3</INF> 
from above)

0.125 * $2,300,000 = $287,500

    3. Dollar increment using the absolute increment

$0.25 \ 800,000 bidding units = $200,000

    4. Minimum bid increment: greater of percentage and absolute = 
$287,500
d. Initial Maximum Eligibility for Each Bidder
    In the 220 MHz Third Report and Order, the Commission delegated to 
the Bureau the authority and discretion to determine an appropriate 
upfront payment for each license being auctioned, taking into account 
such factors as the population in each geographic license area, and the 
value of similar spectrum. The Commission noted that the Bureau should 
establish an upfront payment amount that would roughly equate with a 
five percent value for the license. 220 MHz Third Report and Order, 12 
FCC Rcd at 11055-11056, para. 255, 62 FR at 15981.
    With these guidelines in mind, we propose, for the Phase II 220 MHz 
Service auction, an upfront payment of one cent per MHz-pop with no 
amount less than $2,500. Our proposal will utilize the data in 
Attachment A to this Public Notice. We seek comment on this proposal.
    For the Phase II 220 MHz Service auction, we further propose that 
the amount of the upfront payment submitted by a bidder will determine 
the initial maximum eligibility (as measured in bidding units) for each 
bidder. Upfront payments are not attributed to specific licenses, but 
instead will be translated into bidding units to define a bidder's 
initial maximum eligibility. The total upfront payment defines the 
maximum amount of bidding units on which the applicant will initially 
be permitted to bid. We seek comment on this proposal.
e. Activity Rule Waivers and Reducing Eligibility
    Use of an activity rule waiver preserves the bidder's current 
bidding eligibility despite the bidder's activity in the current round 
being below the required minimum level. An activity rule waiver applies 
to an entire round of bidding and not to a particular license. Activity 
waivers are principally a mechanism for auction participants to avoid 
the loss of auction eligibility in the event that exigent circumstances 
prevent them from placing a bid in a particular round.
    The FCC auction system assumes that bidders with insufficient 
activity would prefer to use an activity rule waiver (if available) 
rather than lose bidding eligibility. Therefore, the system will 
automatically apply a waiver (known as an ``automatic waiver'') at the 
end of any bidding period where a bidder's activity level is below the 
minimum required unless: (1) There are no activity rule waivers 
available; or (2) the bidder overrides the automatic application of a 
waiver by reducing eligibility thereby meeting the minimum 
requirements.
    A bidder with insufficient activity that wants to reduce its 
bidding eligibility rather than use an activity rule waiver must 
affirmatively override the automatic waiver mechanism during the 
bidding period by using the reduce eligibility function in the 
software. In this case, the bidder's eligibility is permanently reduced 
to bring the bidder into compliance with the activity rules as 
described above. Once eligibility has been reduced, a bidder will not 
be permitted to regain its lost bidding eligibility.
    A bidder may proactively use an activity rule waiver as a means to 
keep the auction open without placing a bid. If a bidder submits a 
proactive waiver (using the proactive waiver function in the bidding 
software) during a bidding period in which no bids are submitted, the 
auction will remain open and the bidder's eligibility will be 
preserved. An automatic waiver invoked in a round in which there are no 
new valid bids will not keep the auction open.
    We propose that each bidder in the Phase II 220 MHz Service auction 
will be provided five activity rule waivers that may be used in any 
round during the course of the auction. We seek comment on this 
proposal.

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f. Information Regarding Bid Withdrawal and Bid Removal
    For the Phase II 220 MHz Service auction, we propose the following 
bid removal and bid withdrawal procedures. Before the close of a 
bidding period, a bidder has the option of removing any bids placed in 
that round. By using the remove bid function in the software, a bidder 
may effectively ``unsubmit'' any bid placed within that round. A bidder 
removing a bid placed in the same round is not subject to withdrawal 
payments.
    Once a round closes, a bidder may no longer remove a bid. However, 
in the next round, a bidder may withdraw standing high bids from 
previous rounds using the withdraw bid function. A high bidder that 
withdraws its standing high bid from a previous round is subject to the 
bid withdrawal payment provisions. See 47 CFR 90.1007; 1.2104(g); 
1.2109. We seek comment on these bid removal and bid withdrawal 
procedures.
    In the 220 MHz Third Report and Order, the Commission adopted the 
bid withdrawal provisions found in Part 1 of the Commission's Rules for 
the Phase II 220 MHz auction. 220 MHz Third Report and Order, 12 FCC 
Rcd at 11057, para. 263, 62 FR at 15981. In the Part 1 Third Report and 
Order, the Commission recently explained that allowing bid withdrawals 
facilitates efficient aggregation of licenses and pursuit of efficient 
backup strategies as information becomes available during the course of 
an auction. The Commission noted, however, that in some instances 
bidders may seek to withdraw bids for improper reasons, including to 
delay the close of the auction for strategic purposes. The Bureau, 
therefore, has discretion, in managing the auction, to limit the number 
of withdrawals to prevent strategic delay of the close of the auction 
or other abuses. The Commission stated that the Bureau should 
assertively exercise its discretion, consider limiting the number of 
rounds in which bidders may withdraw bids, and prevent bidders from 
bidding on a particular market if the Bureau finds that a bidder is 
abusing the Commission's bid withdrawal procedures. Part 1 Third Report 
and Order at para. 150. We note that the Part 1 Third Report and Order 
for the most part expressly does not apply to the auction of licenses 
for the 220 MHz Service. Id. at para. 7. However, as we previously 
stated, the 220 MHz Third Report and Order invokes the Part 1 
provisions in establishing its withdrawal rules. We therefore follow 
the reasoning of the Commission in the Part 1 Third Report and Order 
with respect to withdrawals in our analysis of this issue.
    Applying this reasoning, we propose to limit each bidder in the 
Phase II 220 MHz Service auction to withdrawals in no more than two 
rounds during the course of the auction. To permit a bidder to withdraw 
bids in more than two rounds would likely encourage insincere bidding 
or the use of withdrawals for anti-competitive strategic purposes. The 
two rounds in which withdrawals are utilized will be at the bidder's 
discretion; withdrawals otherwise must be in accordance with the 
Commission's Rules. There is no limit on the number of bids that may be 
removed in either of the rounds in which withdrawals are utilized. 
Withdrawals will remain subject to the bid withdrawal payment 
provisions specified in the Commission's Rules. We seek comment on this 
proposal.
g. Stopping Rules
    In the 220 MHz Third Report and Order, the Commission adopted a 
simultaneous stopping rule for the Phase II 220 MHz Service auction. 
The Commission noted that experience in prior auctions demonstrated 
that the simultaneous stopping rule balanced the interests of 
administrative efficiency and maximum bidder participation. The 
Commission concluded that the substitutability between and among 
licenses in different geographic areas and the importance of preserving 
bidders' ability to pursue backup strategies support the use of a 
simultaneous stopping rule. See 220 MHz Third Report and Order, 12 FCC 
Rcd at 11048, para. 228, 62 FR at 15980. The Bureau has discretion to 
``establish stopping rules before or during an auction in order to 
terminate the auction within a reasonable time.'' See 47 CFR 
90.1005(d). We therefore have the discretion to adopt an alternative 
stopping rule to the simultaneous stopping rule if we deem appropriate. 
Thus, unless circumstances dictate otherwise, bidding would remain open 
on all licenses until bidding stops on every license. The auction would 
close for all licenses when one round passes during which no bidder 
submits a new acceptable bid on any license, applies a proactive 
waiver, or withdraws a previous high bid.
    We propose that the Bureau retain the discretion to keep an auction 
open even if no new acceptable bids or proactive waivers are submitted 
and no previous high bids are withdrawn. In this event, the effect will 
be the same as if a bidder had submitted a proactive waiver. The 
activity rule, therefore, will apply as usual and a bidder with 
insufficient activity will either lose bidding eligibility or use a 
remaining activity rule waiver.
    Finally, we propose that the Bureau reserve the right to declare 
that the auction will end after a specified number of additional rounds 
(``special stopping rule''). If the Bureau invokes this special 
stopping rule, it will accept bids in the final round(s) only for 
licenses on which the high bid increased in at least one of the 
preceding specified number of rounds. The Bureau proposes to exercise 
this option only in circumstances such as where the auction is 
proceeding very slowly, where there is minimal overall bidding 
activity, or where it appears likely that the auction will not close 
within a reasonable period of time. Before exercising this option, the 
Bureau is likely to attempt to increase the pace of the auction by, for 
example, moving the auction into the next stage (where bidders would be 
required to maintain a higher level of bidding activity), increasing 
the number of bidding rounds per day, and/or increasing the amount of 
the minimum bid increments for the limited number of licenses where 
there is still a high level of bidding activity. We seek comment on 
these proposals.
h. Information Relating to Auction Delay, Suspension or Cancellation
    For the Phase II 220 MHz Service auction, we propose that, by 
public notice or by announcement during the auction, the Bureau may 
delay, suspend or cancel the auction in the event of natural disaster, 
technical obstacle, evidence of an auction security breach, unlawful 
bidding activity, administrative or weather necessity, or for any other 
reason that affects the fair and competitive conduct of competitive 
bidding. In such cases, the Bureau, in its sole discretion, may elect 
to: resume the auction starting from the beginning of the current 
round; resume the auction starting from some previous round; or cancel 
the auction in its entirety. Network interruption may cause the Bureau 
to delay or suspend the auction. We emphasize that exercise of this 
authority is solely within the discretion of the Bureau, and its use is 
not intended to be a substitute for situations in which bidders may 
wish to apply their activity rule waivers. We seek comment on this 
proposal.

III. Conclusion

    Comments are due on or before January 29, 1998, and reply comments 
are due on or before February 5, 1998.

[[Page 2980]]

To file formally, parties must submit an original and four copies to 
the Office of the Secretary, Federal Communications Commission, Room 
222, 1919 M Street NW., Washington, DC 20554. In addition, parties must 
submit one copy to Kathleen O'Brien Ham, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, Room 5202, 2025 M Street NW., Washington, DC 
20554. Comments and reply comments will be available for public 
inspection during regular business hours in the FCC Public Reference 
Room, Room 239, 1919 M Street NW., Washington, DC 20554.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-1282 Filed 1-16-98; 8:45 am]
BILLING CODE 6712-01-U