Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices 35213

As part of its EMS, Lucent has

established facility-specific Local

Environmental Advisory Groups

(LEAGs) for all of its facilities globally.

Each LEAG is composed of local

stakeholders including environmental

organizations, community groups,

employees, and other interested

citizens. The LEAGs provide input on

the XL project and the EMS. The LEAGs

unanimously approved the draft

umbrella FPA.

DATES: The period for submission of

comments ends on July 29, 1998.

ADDRESSES: All comments on the draft

Final Project Agreement should be sent

to: Rich Kampf, U.S. EPA, Region III,

841 Chestnut Street (3WP00),

Philadelphia, PA 19107, or L. Nancy

Birnbaum, U.S. EPA, 401 M Street, SW,

Room 1025WT (1802), Washington, DC

20460. Comments may also be faxed to

Mr. Kampf at (215) 566–2301 or Ms.

Birnbaum at (202) 401–2474. Comments

will also be received via electronic mail

sent to: kampf.rich@epamail.epa.gov or

birnbaum.nancy@epamail.epa.gov.

FOR FURTHER INFORMATION CONTACT: To

obtain a copy of the proposed Final

Project Agreement or Fact Sheet,

contact: Rich Kampf, U.S. EPA, Region

III, 841 Chestnut Street (3WP00),

Philadelphia, PA 19107, or L. Nancy

Birnbaum, U.S. EPA, 401 M Street, SW,

Room 1025WT (1802), Washington, DC

20460. The documents are also available

via the Internet at the following

location: ‘‘http://www.epa.gov/

ProjectXL’’. In addition, public files on

the Project are located at EPA Region III

in Philadelphia. Questions to EPA

regarding the documents can be directed

to Rich Kampf at (215) 566–2105 or L.

Nancy Birnbaum at (202) 260–2601. To

be included on the Lucent Project XL

mailing list to receive information about

future public meetings, XL progress

reports and other mailings from Lucent

on the XL Project, contact: Debra

Hennelly, Lucent Technologies, Inc.,

219 Mount Airy Road, Room 2F236,

P.O. Box 612, Basking Ridge, NJ 07920–

0612. Ms. Hennelly can also be reached

by telephone at (908) 953–4960. For

information on all other aspects of the

XL Program contact Christopher Knopes

at the following address: Office of

Reinvention, United States

Environmental Protection Agency,

Room 1029, 401 M Street, SW (1802),

Washington, DC 20460. Additional

information on Project XL, including

documents referenced in this notice,

other EPA policy documents related to

Project XL, regional XL contacts,

application information, and

descriptions of existing XL projects and

proposals, is available via the Internet at

‘‘http://www.epa.gov/ProjectXL’’ and

via an automated fax-on-demand menu

at (202) 260–8590.

Dated: June 23, 1998.

Lisa Lund,

Deputy Associate Administrator for

Reinvention Programs, Office of Reinvention.

[FR Doc. 98–17263 Filed 6–26–98; 8:45 am]

BILLING CODE 6560–50–U

FEDERAL COMMUNICATIONS

COMMISSION

[DA 98–1010; Report No. AUC–98–18–B

(Auction No. 18)]

Auction of the Phase II 220 MHz

Service Licenses; Scheduled for

September 15, 1998—Minimum

Opening Bids and Other Procedural

Issues

AGENCY: Federal Communications

Commission.

ACTION: Notice.

SUMMARY: This Public Notice announces

the procedures and minimum opening

bids for the upcoming Phase II 220 MHz

Service (‘‘220 MHz Service’’) auction.

On January 13, 1998, the Commission

released a Public Notice, (‘‘220 MHz

Public Notice’’), seeking comment on

the establishment of reserve prices or

minimum opening bids for the 220 MHz

Service auction. In addition, the

Commission also sought comment on a

number of procedures to be used in the

220 MHz Service auction.

EFFECTIVE DATES: June 29, 1998.

FOR FURTHER INFORMATION CONTACT: Lisa

Hartigan, Bob Reagle, or Frank Stilwell,

Auctions and Industry Analysis

Division, Wireless Telecommunications

Bureau at (202) 418–0660, Scott A.

Mackoul, Commercial Wireless Division

at (202 418–7240, or Marty Liebman,

Policy Division, Wireless

Telecommunications Bureau at (202

418–1310.

SUPPLEMENTARY INFORMATION: This is the

summary of a Public Notice released

May 29, 1998. The text of the public

notice in its entirety, including

attachments, is available for inspection

and copying during normal business

hours in the FCC Reference Center

(Room 239), 1919 M Street, NW,

Washington, DC and also may be

purchased from the Commission’s copy

contractor, International Transcription

Services, Inc. (ITS), 1231 20th Street,

NW, Washington, DC 20036, (202) 857–

3800. In addition, the text of the public

notice in its entirety, including

attachments, is available on the World

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

auctions/220/220.html#PN.

1. Introduction

1. The Federal Communications

Commission (‘‘FCC’’ or ‘‘Commission’’)

will hold an auction for 908 licenses to

operate in the 220–222 MHz band.

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 172 geographic

areas known as Economic Areas (EAs)

and three EA-like areas; (2) five licenses

in six Economic Area Groupings (EAGs);

and (3) three Nationwide licenses which

encompass the same territory as all of

the EAGs combined (see Attachment A

for a complete listing of licenses). The

licenses include the following channels:

Channels

(1) EA Block:

A: Channel Groups 2, 13 .......... 10

B: Channel Groups 3, 16 .......... 10

C: Channel Groups 5, 18 .......... 10

D: Channel Groups 8, 19 .......... 10

E: Channel 171–180 ................. 10

(2) EAG Block:

F: Channel Groups 1, 6, 11 ...... 15

G: Channel Groups 4, 9, 14 ..... 15

H: Channel Groups 7, 12, 17 .... 15

I: Channel Groups 10, 15, 20 ... 15

J: Channel 186–200 .................. 15

(3) Nationwide Block:

K: Channels 51–60 ................... 10

L: Channels 81–90 .................... 10

M: Channels 141–150 ............... 10

Auction Date: The auction will

commence on September 15, 1998. The

initial schedule for bidding will be

announced by public notice at least one

week before the start of the auction.

Unless otherwise announced, bidding

will be conducted on each business day

until bidding has stopped on all

licenses.

Auction Title: The Phase II 220 MHz

Service—Auction No. 18.

Bidding Methodology: Simultaneous

multiple round bidding. Bidding will be

permitted only from remote locations,

either electronically (by computer) or

telephonically.

Pre-Auction Deadline

• Auction Seminar ......................................................................................................................... August 6, 1998.

• Short Form Application (FCC Form 175) ................................................................................. August 17, 1998; 5:30 p.m. ET.
35214 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices

• Upfront Payments (via wire transfer) ........................................................................................ August 31, 1998; 6:00 p.m. ET.

• Orders for Remote Bidding Software ........................................................................................ September 1, 1998; 5:30 p.m. ET.

• Mock Auction ............................................................................................................................. September 11, 1998 (time TBA).

Telephone Contacts

• FCC National Call Center ........................................................................................................... (888) CALL–FCC ((888) 225–5322) (For Bidder Information Packages, General Auction,

Information, and Seminar Registration,

press option #2 at the prompt). Hours of

service: 8 a.m.–5:30 p.m. ET.

• FCC Technical Support Hotline ................................................................................................ (202) 414–1250 (V), (202) 414–1255 (TTY).

Hours of service: 8 a.m.–6 p.m. ET, Monday–Friday; 9 a.m.–5 p.m. ET, weekend of

August 15–16, 1998.

List of Attachments

• Attachment A

Summary of Phase II 220 Mhz

Licenses to be Auctioned

• Attachment B

List of Cases Pending before the

Commission Involving NonNationwide Phase I 220 MHz

Licensees

• Attachment C

Guidelines for Completion of FCC

Forms 175 and 159, and Exhibits

• Attachment D

Electronic Filing and Review of FCC

Form 175

• Attachment E

Summary Listing of Documents from

the Commission and the Wireless

Telecommunications Bureau

Addressing Application of the AntiCollusion Rules

• Attachment F

List of Commenters

I. Background

2. In March 1997, the Commission

restructured the licensing framework

that governs the 220 MHz Service. Sitespecific licensing, used in the Phase I

220 MHz Service, is to be replaced with

a geographic-based system in the Phase

II 220 MHz Service which is the subject

of the upcoming auction. This

geographic-based licensing methodology

is similar to that used in other

commercial mobile radio services

(‘‘CMRS’’). The geographic areas for the

licenses were created based upon

Economic Areas (EAs), developed by the

Bureau of Economic Analysis of the U.S.

Department of Commerce. The

Economic Area Groupings (EAGs),

developed by the Commission, include

groupings of EAs and encompass the

sum total of all EAs. Three Nationwide

licenses, including all of the EAGs, are

also to be offered in the Phase II 220

MHz Service auction. Service and

operational requirements for the Phase

II 220 MHz Service are contained in Part

90 of the Commission’s Rules, 47 CFR

Part 90.

3. On May 21, 1998, the Commission

released a Memorandum Opinion and

Order on Reconsideration in PR Docket

No. 89–552, 63 FR 32579; June 12, 1998.

Among other things the Commission

removed the spectrum efficiency

standard that applied to equipment

operating in the 220–222 MHz band,

eliminated installment payments for

small business and very small

businesses, and increased bidding

credits for such entities.

II. Due Diligence

4. Potential bidders are reminded that

there are a number of incumbent Phase

I 220 MHz licensees already licensed

and operating on frequencies that will

be subject to the upcoming auction.

Such incumbents must be protected

from harmful interference by Phase II

220 MHz licensees in accordance with

the Commission’s Rules. See 47 CFR

90.763. These limitations may restrict

the ability of such geographic area

licensees to use certain portions of the

electromagnetic spectrum or provide

service to certain areas in their

geographic license areas.

5. In addition, potential bidders

seeking licenses for geographic areas

that are near the Canadian border

should be aware that the use of some or

all of the channels they acquire in the

auction could be restricted as a result of

a future agreement with Canada on the

use of 220–222 MHz spectrum in the

border area.

6. Potential bidders should also be

aware that certain applications

(including those for modification),

waiver requests, petitions for

reconsideration and applications for

review are pending before the

Commission that relate to particular

incumbent non-nationwide 220 MHz

licensees. The Commission notes that

resolution of these matters could have

an impact on the availability of

spectrum for EA and EAG licensees. In

addition, while the Commission will

continue to act on pending applications,

requests and petitions, some of these

matters may not be resolved by the time

of the auction.

III. Potential Bidders Are Solely

Responsible for Investigating and

Evaluating the Degree to Which Such

Pending Matters May Affect Spectrum

Availability in Areas Where They Seek

EA or EAG Licenses

7. To aid potential bidders,

Attachment B to this Public Notice lists

pending matters of which the

Commission is aware that relate to

licenses or applications for the 220 MHz

service. The Commission makes no

representations or guarantees that the

listed matters are the only pending

matters that could affect spectrum

availability in the 220–222 MHz band.

Parties may submit additions or

corrections to the list, provided such

additions or corrections are filed with

the Commission within ten (10)

business days from release of this Public

Notice. Such submissions should be

limited to identifying pleadings or

papers previously filed with the

Commission. No new pleadings or

arguments on the merits will be

accepted as explicitly provided by

Commission Rules.

8. Corrections and additions must be

filed with the Office of the Secretary,

Federal Communications Commission,

1919 M Street, NW., Washington, DC

20554. One copy of each submission

should also be sent to International

Transcription Service, Inc., 1231 20th

Street, NW., Washington, DC 20036,

while an additional courtesy copy may

be sent to Scott A. Mackoul, Policy and

Rules Branch, Commercial Wireless

Division, Wireless Telecommunications

Bureau, Federal Communications

Commission, 2100 M Street, NW., 7th

Floor, Washington, DC 20554. Parties

filing additions or corrections should

include the internal reference number

(DA 98–1010) on their submissions.

Parties also are reminded that some of

the proceedings are restricted

proceedings governed by the

Commission’s ex parte rules.

Accordingly, any submission filed

pursuant to this Public Notice that is

directed to the merits or outcome of any

restricted proceeding must be served on
Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices 35215

all parties to that restricted proceeding.

See generally 47 CFR 1.1200–1.1216.

9. Additional information regarding

matters identified in Attachment B is

available to the public. Licensing

information is contained in the

Commission’s licensing database, which

is available for inspection in the

Wireless Telecommunications Bureau’s

Pubic Reference Rooms, located at 2025

M Street, NW., Room 5608, Washington,

DC 20554, and 1270 Fairfield Road,

Gettysburg, PA 17325. In addition,

copies of the pleadings are available for

public inspection only in the Gettysburg

Public Reference Room.

10. In addition, potential bidders may

search for information (but not the

pleadings) regarding incumbent 220

MHz licensees on the World Wide Web

at http://www.fcc.gov/wtb. In

particular, information can be accessed

by downloading databases by selecting

‘‘WTB Database Files’’ (http://

www.fcc.gov/wbt/databases.html), or

searching on-line by selecting ‘‘Search

WTB Databases’’ (http://

gullfoss.fcc.gov:8080/cgi-bin/ws.exe/

beta/genmen/index.hts). Any telephone

inquiries regarding these matters should

be directed to the Technical Support

Hotline at (202) 414–1250 (V) or (202)

414–1255 (TTY).

IV. The Commission Makes no

Representations or Guarantees

Regarding the Accuracy or

Completeness of Information That Has

Been Provided by Incumbent Licensees

and Incorporated Into the Database.

Potential Bidders Are Strongly

Encouraged to Physically Inspect any

Sites Located in or Near the Geographic

Area for Which They Plan to Bid

11. Participation: Those wishing to

participate in the auction must:

• Submit a short form application

(FCC Form 175) by the above-listed

deadline.

• Submit a sufficient upfront

payment and an FCC Remittance Advice

Form (FCC For 159) by the above-listed

deadline.

• Comply with all provisions

outlined in this Public Notice.

12. Prohibition of Collusion: To

ensure the competitiveness of the

auction process, the Commission’s

Rules prohibit applicants for the same

geographic license area from

communicating with each other during

the auction about bids, bidding

strategies, or settlements. This

prohibition begins with the filing of

short-form applications, and ends on the

down payment due date. In the 220

MHz Service auction, for example, the

rule would apply to an applicant

bidding for an EAG and an applicant

bidding for an EA within that EAG.

Applicants that apply to bid for ‘‘all

markets’’ or a nationwide license would

be precluded from communicating with

all other applicants. An exception is

where applicants enter into a bidding

agreement before filing their short-form

applications, and disclose the existence

of the agreement in their short-form

applications. See 47 CFR 1.2105(c). The

Commission notes that Section 1.65 of

the Commission’s Rules requires an

applicant to maintain the accuracy and

completeness of information furnished

in its pending application and to notify

the Commission within 30 days of any

substantial change that may be of

decisional significance to that

application. Thus, Section 1.65 requires

an auction applicant to bring to the

Commission’s attention any

communication not permissible under

the applicant’s certification of

compliance with § 1.2105(c). Finally,

bidders are reminded that they have a

duty to notify the Commission of any

violation of the anti-collusion rules

upon learning of such violation. Bidders

are therefore required to make such

notification to the Commission

immediately upon discovery.

13. Bidder Information Package: More

complete details about this auction are

contained in a Bidder Information

Package. The Commission will provide

one copy to each company free of

charge. Additional copies may be

ordered at a cost of $16.00 each,

including postage, payable by Visa or

Master Card, or by check payable to

‘‘Federal Communications Commission’’

or ‘‘FCC.’’ To place an order, contact the

FCC National Call Center at (888)

CALL–FCC (888) 225–5322, press

option #2 at the prompt). Prospective

bidders that have already contacted the

FCC at this number expressing an

interest in this auction will receive a

Bidder Information Package in

approximately three weeks, and need

not call again unless they wish to order

additional copies.

14. Relevant Authority: Prospective

bidders must familiarize themselves

thoroughly with the Commission’s

Rules relating to the Phase II 220 MHz

Service, contained in Title 47, Part 90 of

the Code of Federal Regulations, and

those relating to application and auction

procedures, contained in Title 47, Part

1, of the Code of Federal Regulations.

15. Prospective bidders must also be

thoroughly familiar with the

procedures, terms and conditions

(collectively, ‘‘Terms’’) contained in

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, 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 (1997), 62 FR 15978 (April 3,

1997) (‘‘220 MHz Third Report and

Order’’). The Commission resolved

petitions for reconsideration of the 220

MHz Third Report and Order in

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, GN Docket No. 93–252, PP Docket

No. 93–253, FCC 98–93, Memorandum

Opinion and Order on Reconsideration

(rel. May 21, 1998), 63 FR 32580 (June

12, 1998) (‘‘220 MHz MO&O’’).

16. For general background on the

Phase I 220 MHz Service, see, among

other materials: 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

Services, PR Docket No. 89–552, Report

and Order, 6 FCC Rcd 2356 (1991), 56

FR 19598 (April 29, 1991); 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

Services, PR Docket No. 80–552,

Memorandum Opinion and Order, 7

FCC Rcd 4484 (1992), 57 FR 32448 (July

22, 1992).

17. For further information about the

220 MHz Service, see 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, PR Docket No. 89–552, GN

Docket No. 93–252, Second Report and

Order, 11 FCC Rcd 3668 (1996), 61 FR

3841 (Feb. 2, 1996) (‘‘220 MHz Second

Report and Order’’); 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, PR Docket No. 89–552, Fourth

Report and Order, 12 FCC Rcd 13453

(1997), 62 FR 46211 (Sept. 2, 1997).

18. The Terms contained in the

Commission’s Rules, relevant orders,

public notices and bidder information

package are not negotiable. Potential

bidders are reminded that the 220 MHz

MO&O, released May 21, 1998, which

resolved petitions for reconsideration

filed in response to the 220 MHz Second

Report and Order and the 220 MHz

Third Report and Order altered some of

the decisions and rules adopted in those

orders. In addition, the decisions

reached in the 220 MHz proceeding are
35216 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices

the subject of a judicial appeal and may

be the subject of additional

reconsideration or appeal. See, e.g.,

PLMRS Narrowband Corp., et al. v.

Federal Communications Commission,

No. 92–1432, et al. (D.C. Cir., filed

September 18, 1992).

19. The Commission may amend or

supplement the information contained

in its public notices or the bidder

information package at any time, and

will issue public notices to convey any

new or supplemental information to

bidders. It is the responsibility of all

prospective bidders to remain current

with all Commission Rules and with all

public notices pertaining to this auction.

Copies of most Commission documents,

including public notices, can be

retrieved from the FCC Internet node via

anonymous ftp@ftp.fcc.gov or the FCC

World Wide Web site at http://

www.fcc.gov/wtb/auctions.

Additionally, documents may be

obtained for a fee by calling the

Commission’s copy contractor,

International Transcription Service,

Inc., at (202) 857–3800.

20. Bidder Alerts: All applicants must

certify on their FCC Form 175

applications under penalty of perjury

that they are legally, technically,

financially and otherwise qualified to

hold a license, and not in default on any

payment for Commission licenses

(including down payments) or

delinquent on any non-tax debt owed to

any Federal agency. Prospective bidders

are reminded that submission of a false

certification to the Commission is a

serious matter that may result in severe

penalties, including monetary

forfeitures, license revocations,

exclusion from participation in future

auctions, and/or criminal prosecution.

V. The FCC Makes no Representations

or Warranties About the Use of This

Spectrum for Particular Services.

Applicants Should be Aware That an

FCC Auction Represents an

Opportunity to Become an FCC

Licensee in This Service, Subject to

Certain Conditions and Regulations. An

FCC Auction Does Not Constitute an

Endorsement by the FCC of Any

Particular Services, Technologies or

Products, nor Does an FCC License

Constitute a Guarantee of Business

Success. Applicants Should Perform

Their Individual Due Diligence Before

Proceeding as They Would With Any

New Business Venture

21. As is the case with many business

investment opportunities, some

unscrupulous entrepreneurs may

attempt to use the Phase II 220 MHz

Service auction to deceive and defraud

unsuspecting investors. Common

warning signals of fraud include the

following:

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

from a telemarketer, or is made in

response to an inquiry prompted by a

radio or television infomercial.

• The offering materials used to

invest in the venture appear to be

targeted at IRA funds, for example by

including all documents and papers

needed for the transfer of funds

maintained in IRA accounts.

• The amount of the minimum

investment is less than $25,000.

• The sales representative makes

verbal representations that: (a) the

Internal Revenue Service (‘‘IRS’’),

Federal Trade Commission (‘‘FTC’’),

Securities and Exchange Commission

(‘‘SEC’’), FCC, or other government

agency has approved the investment; (b)

the investment is not subject to state or

federal securities laws; or (c) the

investment will yield unrealistically

high short-term profits. In addition, the

offering materials often include copies

of actual FCC releases, or quotes from

FCC personnel, giving the appearance of

FCC knowledge or approval of the

solicitation.

22. Information about deceptive

telemarketing investment schemes is

available from the FTC at (202) 326–

2222 and from the SEC at (202) 942–

7040. Complaints about specific

deceptive telemarketing investment

schemes should be directed to the FTC,

the SEC, or the National Fraud

Information Center at (800) 876–7060.

Consumers who have concerns about

specific Phase II 220 MHz Service

proposals may also call the FCC

National Call Center at (888) CALL–FCC

((888) 225–5322).

2. Bidder Eligibility and Small Business

Provisions

A. General Eligibility Criteria

23. As described above, this auction

offers: (1) Five licenses in each of 172

geographic areas known as Economic

Areas (EAs) and three EA-like areas; (2)

five licenses in six Economic Area

Groupings (EAGs); and (3) three

Nationwide licenses which encompass

the same territory as all of the EAGs

combined (see Attachment A for a

complete listing of licenses).

(1) Determination of Revenues

24. For purposes of determining

which entities qualify as very small

businesses or small businesses, the

Commission will attribute to the

applicant the gross revenues of all of its

controlling principals and affiliates. For

purposes of this auction, the

Commission will not impose specific

equity requirements on controlling

principals. However, in order to qualify

as a very small business or small

business, an applicant’s qualifying

principals must maintain control of the

applicant. The term ‘‘control’’ includes

both de facto and de jure control of the

applicant. Typically, de jure control is

evidenced by ownership of at least 50.1

percent of an entity’s voting stock. De

facto control is determined on a case-bycase basis. The following are some

common indicia of control:

• The entity constitutes or appoints

more than 50 percent of the board of

directors or management committee;

• The entity has authority to appoint,

promote, demote, and fire senior

executives that control the day-to-day

activities of the licensee; or

• The entity plays an integral role in

management decisions.

(2) Application Showing

25. Applicants should note that they

will be required to file supporting

documentation to establish that they

satisfy the eligibility requirements to

qualify as a very small business or small

business for this auction. See 47 CFR

90.1009 and 1.2105.

B. Bidding Credits

26. Qualifying Phase II 220 MHz

applicants are eligible for bidding

credits. The size of a Phase II 220 MHz

bidding credit depends on the annual

gross revenues of the bidder and its

controlling principals and affiliates, as

averaged over the preceding three years:

• A bidder with gross annual

revenues of not more than $15 million

receives a 25 percent discount on its

winning bids for Phase II 220 MHz

Service licenses; and,

• A bidder with gross annual

revenues of not more than $3 million

receives a 35 percent discount on its

winning bids for Phase II 220 MHz

Service licenses.

27. Bidding credits are not

cumulative: applicants that qualify

receive either the 25 percent or the 35

percent bidding credit, but not both.

The definitions of very small business

and small business (including

calculation of gross annual revenue) are

set forth in 47 CFR 90.1021(b).

28. Phase II 220 MHz Service bidders

should note that unjust enrichment

provisions apply to winning bidders

that use bidding credits and

subsequently assign or transfer control

of their licenses to an entity not

qualifying for the same levels of bidding

credits. See 47 CFR 90.1017(b). Finally,

Phase II 220 MHz Service bidders

should also note that there are no
Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices 35217

installment payment plans in the 220

MHz Service auction.

3. Pre-Auction Procedures

A Short-form Application (FCC Form

175)—Due August 17, 1998

29. In order to be eligible to bid in this

auction, applicants must first submit an

FCC Form 175 application. This

application must be received at the

Commission by 5:30 p.m. ET on August

17, 1998. Late applications will not be

accepted.

30. There is no application fee

required when filing an FCC Form 175.

However, to be eligible to bid, an

applicant must submit an upfront

payment. See 3.C. infra.

(1) Filing Options

31. Auction applicants are strongly

encouraged to file their applications

electronically in order to take full

advantage of the greater efficiencies and

convenience of electronic filing, bidding

and access to bidding data. For example,

electronic filing enables the applicant

to: (a) receive interactive feedback while

completing the application; and (b)

receive immediate acknowledgement

that the FCC Form 175 has been

submitted for filing. In addition, only

those applicants that file electronically

will have the option of bidding

electronically. However, manual filing

(via hard copy) is also permitted. Please

note that manual filers will not be

permitted to bid electronically and must

bid telephonically, unless the FCC Form

175 is amended electronically prior to

the resubmission date for incomplete or

deficient applications. Applicants that

file electronically may make

amendments to their applications until

the filing deadline. The following is a

brief description of each filing method.

(a) Electronic Filing

32. Applicants wishing to file

electronically may generally do so on a

24-hour basis beginning July 20, 1998.

The window for filing the FCC Form

175 electronically will remain open

until 5:30 p.m. ET on August 17, 1998.

Information about installing and

running the FCC Form 175 application

software is included in Attachment D to

this Public Notice. Technical support is

available at (202) 414–1250 (V) or (202)

414–1255 (TTY); the hours of service are

8 a.m.–6 p.m. ET, Monday–Friday, and

9 a.m.–5 p.m. ET, the weekend of

August 15–16.

(b) Manual Filing

33. Auction applicants will be

permitted to file their FCC Form 175

applications in hard copy. When any

manually filed FCC Form 175 and 175–

S exceeds five pages in length, the FCC

additionally requires that all

attachments be submitted on a 3.5-inch

diskette, or the entire application be

filed in a microfiche version. Manual

filers must use the May 1998 version of

FCC Form 175 and the October 1995

edition of the 175–S (if applicable).

Earlier versions of the FCC Form 175

will not be accepted for filing. Copies of

FCC Forms 175 and 175–S can be

obtained by calling (202) 418–FORM.

34. Manual applications may be

submitted by hand delivery (including

private ‘‘overnight’’ courier) or by U.S.

mail (certified mail with return receipt

recommended), addressed to: FCC Form

175 Filing, Auction No. 18, Federal

Communications Commission, Wireless

Telecommunications Bureau, Auctions

& Industry Analysis Division, 1270

Fairfield Road, Gettysburg, PA 17325–

7245.

Note: Manual applications delivered to any

other location will not be accepted.

(2) Completion of the FCC Form 175

35. Applicants should carefully

review 47 CFR 90.1009 and 1.2105, and

must complete all items on the FCC

Form 175 (and Form 175–S, if

applicable). Instructions for completing

the FCC Form 175 are in Attachment C

of this Public Notice.

36. Failure to sign a manually filed

FCC Form 175 (for both electronic and

manual filers) will result in dismissal of

the application and loss of the ability to

participate in the auction. Only original

signatures will be accepted for manually

filed applications.

(3) Electronic Review of FCC Form 175

37. The FCC Form 175 review

software may be used to review and

print applicants’ FCC Form 175

applications. In other words, applicants

that file electronically may review their

own completed FCC Form 175.

Applicants also have access to view

other applicants’ completed FCC Form

175s, after the filing deadline has passed

and the FCC has issued a public notice

explaining the status of the applications.

There is a fee of $2.30 per minute for

accessing the system. See Attachment D

for details.

B. Application Processing and Minor

Corrections

38. After the deadline for filing the

FCC Form 175 applications has passed,

the FCC will process all timely

applications to determine which are

acceptable for filing, and subsequently

will issue a public notice identifying: (1)

those applications accepted for filing

(including FCC account numbers and

the licenses for which they applied); (2)

those applications rejected; and (3)

those applications which have minor

defects that may be corrected, and the

deadline for filing such corrected

applications.

39. As described more fully in the

Commission’s Rules, after the August

17, 1998, short form filing deadline,

applicants may make only minor

corrections to the FCC Form 175

applications. Applicants will not be

permitted to make major modifications

to their applications (e.g., change their

license selections, change the certifying

official or change control of the

applicant). See 47 CFR 90.1009 and

1.2105.

C. Upfront Payments—Due August 31,

1998

40. In order to be eligible to bid in the

auction, applicants must submit an

upfront payment accompanied by an

FCC Remittance Advice Form (FCC

Form 159). Manual filers must use the

July 1997 version of FCC Form 159.

Earlier versions of this form will not be

accepted. All upfront payments must be

received at Mellon Bank in Pittsburgh,

PA, by 6:00 p.m. ET on August 31, 1998.

Please note that:

• All payments must be made in U.S.

dollars.

• All payments must be made by wire

transfer.

• Upfront payments for Auction No.

18 go to a lockbox number different

from the ones used in previous FCC

auctions, and different from the lockbox

number to be used for post-auction

payments.

• Failure to deliver the upfront

payment by the August 31, 1998

deadline will result in dismissal of the

application and disqualification from

participation in the auction.

(1) Making Auction Payments by Wire

Transfers

41. Wire transfer payments must be

received by 6:00 p.m. ET on August 31,

1998. To avoid untimely payments,

applicants should discuss arrangements

(including bank closing schedules) with

their banker several days before they

plan to make the wire transfer, and

allow sufficient time for the transfer to

be initiated and completed before the

deadline. Applicants will need the

following information:

ABA Routing Number: 043000261.

Receiving Bank: Mellon Pittsburgh.

BNF: FCC/AC 910–0171.

OBI Field: (Skip one space between

each information item)

‘‘Auctionpay’’.

Taxpayer Identification No.: (Same as

FCC Form 159, block 26).

Payment Type Code: (Enter ‘‘A22U’’).
35218 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices

FCC Code: 1 (Same as FCC Form 159,

block 23A: ‘‘18’’).

Payer Name: (Same as FCC Form 159,

block 2).

Lockbox No.: 358430.

Note: The BNF and Lockbox number are

specific to the upfront payments for this

auction; do not use BNF or Lockbox numbers

from previous auctions.

42. Applicants must fax a completed

FCC Form 159 to Mellon Bank at (412)

236–5702 at least one hour before

placing the order for the wire transfer

(but on the same business day). On the

cover sheet of the fax, write ‘‘Wire

Transfer—Auction Payment for Auction

Event No. 18.’’ Bidders may confirm

receipt of their upfront payment at

Mellon Bank by contacting their sending

financial institution.

(2) FCC Form 159

43. Each upfront payment must be

accompanied by a completed FCC

Remittance Advice Form (FCC Form

159). Proper completion of FCC Form

159 is critical to ensuring correct credit

of upfront payments. Detailed

instructions for completion of FCC Form

159 are included in Attachment C to

this Public Notice and will also be

included in the Bidder Information

Package.

(3) Amount of Upfront Payment

44. 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. 62 FR at 15981. In the 220

MHz Public Notice, (63 FR 2976,

January 20, 1998) the Commission

proposed for the Phase II 220 MHz

Service auction an upfront payment of

one cent per MHz/POP with no amount

less than $2,500. 63 FR at 2978.

45. For the Phase II 220 MHz Service

auction the Commission will adopt its

proposal of one cent per MHz/POP with

no amount less than $2,500. This

upfront payment amount, based upon

the data in Attachment A, will be the

amount required to bid on a particular

license(s) in Auction No. 18. The

Commission believes that this is the

appropriate upfront payment formula,

considering such factors as the

population in each geographic license

area, and the value of spectrum similar

to that being offered in the 220 MHz

Service. The Commission notes that this

upfront payment amount is lower than

that used in many previous auctions—

e.g., the PCS spectrum auctions—but

believes a reduction is appropriate, for

the reasons expressed by a commenter,

namely, the size of the likely

participants in the 220 MHz Service

auction.

46. The upfront payments are not

attributed to specific licenses, but

instead will be translated to bidding

units to define the bidder’s maximum

bidding eligibility. For Auction No. 18,

the total number of bidding units

assigned to each bidder is equal to the

amount of the upfront payment, e.g., a

$25,000 upfront payment provides the

bidder with 25,000 bidding units. The

total upfront payment defines the

maximum amount of bidding units on

which the applicant will be permitted to

bid (including standing high bids) in

any single round of bidding. Thus, an

applicant does not have to make an

upfront payment to cover all licenses for

which the applicant has applied, but

rather to cover the maximum number of

bidding units associated with licenses

the bidder wishes to place bids on and

hold high bids on at any given time. In

order to be able to place a bid on a

license, in addition to having specified

that license on FCC Form 175, a bidder

must have an eligibility level that meets

or exceeds the number of bidding units

assigned to that license. At a minimum,

an applicant’s total upfront payment

must be enough to establish eligibility to

bid on at least one of the licenses

applied for on FCC Form 175, or else the

applicant will not be eligible to

participate in the auction.

47. In calculating the upfront payment

amount, an applicant should determine

the maximum number of bidding units

it may wish to bid on in any single

round, and submit an upfront payment

covering that number of bidding units.

Note: An applicant may, on its FCC Form

175, apply for every license being offered, but

its actual bidding in any round will be

limited by the bidding units reflected in its

upfront payment.

(4) Applicant’s Wire Transfer

Information for Purposes of Refunds

48. Because experience with prior

auctions has shown that in most cases

wire transfers provide quicker and more

efficient refunds than paper checks, the

Commission will use wire transfers for

all Auction No. 18 refunds. To avoid

delays in processing refunds, applicants

should include wire transfer

instructions with any refund request

they file; they may also provide this

information in advance by faxing it to

the FCC Billings and Collections

Branch, ATTN: Linwood Jenkins or

Geoffrey Idika, at (202) 418–2843. Please

include the following information:

Name of Bank

ABA Number

Account Number to Credit

Correspondent Bank (if applicable)

ABA Number

Account Number

Contact and Phone Number

(Applicants should also note that

implementation of the Debt Collection

Improvement Act of 1996 requires the

FCC to obtain a Taxpayer Identification

Number (TIN) before it can disburse

refunds.) Eligibility for refunds is

discussed in 5.D., infra.

D. Auction Registration

49. Approximately ten days before the

auction, the FCC will issue a public

notice announcing all qualified bidders

for the auction. Qualified bidders are

those applicants whose FCC Form 175

applications have been accepted for

filing and that have timely submitted

upfront payments sufficient to make

them eligible to bid on at least one of

the licenses for which they applied.

50. All qualified bidders are

automatically registered for the auction.

Registration materials will be

distributed prior to the auction by two

separate mailings, each containing part

of the confidential identification codes

required to place bids. These mailings

will be sent only to the contact person

at the applicant address listed in the

FCC Form 175.

51. Applicants that do not receive

both registration mailings will not be

able to submit bids. Therefore, any

qualified applicant that has not received

both mailings by noon on Thursday,

September 10, 1998 should contact the

FCC National Call Center at (888)

CALL–FCC ((888) 225–5322, press

option #2 at the prompt). Receipt of both

registration mailings is critical to

participating in the auction and each

applicant is responsible for ensuring it

has received all of the registration

material.

Qualified bidders should note that

lost login codes, passwords or bidder

identification numbers can be replaced

only by appearing in person at the FCC

Auction Headquarters located at 2

Massachusetts Avenue, NE.,

Washington, DC 20002. Only an

authorized representative or certifying

official, as designated on an applicant’s

FCC Form 175, may appear in person

with two forms of identification (one of

which must be a photo identification) in

order to receive replacement codes.

E. Remote Electronic Bidding Software

52. Qualified bidders that file or

amend the FCC Form 175 electronically

are allowed to bid electronically, but

must purchase remote electronic

bidding software for $175.00 by

September 1, 1998. (Auction software is

tailored to a specific auction, so

software from prior auctions will not
Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices 35219

work for Auction No. 18.) A software

order form is included in the Bidder

Information Package.

F. Auction Seminar

53. On August 6, 1998, the FCC will

sponsor a seminar for the Phase II 220

MHz Service auction in Washington,

DC. The seminar will provide attendees

with information about pre-auction

procedures, conduct of the auction, FCC

remote bidding software, and the 220

MHz Service and auction rules.

54. To register, complete the

registration form to be included in the

upcoming Phase II 220 MHz Service

auction Bidder Information Package.

The registration form will include

details about the time and location of

the seminar. Registrations are accepted

on a first-come, first-served basis.

G. Mock Auction

55. All applicants whose FCC Form

175 and 175–S have been accepted for

filing will be eligible to participate in a

mock auction beginning September 11,

1998. The mock auction will enable

applicants to become familiar with the

electronic software prior to the auction.

Free demonstration software will be

available for use in the mock auction.

Due to different bidding procedures in

the Phase II 220 MHz Service auction

from previous Commission auctions,

participation by all bidders is strongly

recommended. Details will be

announced by public notice.

4. Auction Event

56. The first round of the auction will

begin on September 15, 1998. The initial

round schedule will be announced in a

Public Notice listing the qualified

bidders, to be released approximately 10

days before the start of the auction.

A. Auction Structure

(1) Simultaneous Multiple Round

Auction

57. The Commission adopts its

proposal, in the 220 MHz Public Notice,

to award the 908 licenses in the Phase

II 220 MHz Service in a single,

simultaneous multiple round auction.

63 FR at 2977. Unless otherwise

announced, bids will be accepted on all

licenses in each round of the auction.

This approach, the Commission

believes, is most administratively

efficient. In addition, the Commission

believes that the Phase II 220 MHz

licenses are interdependent and bidders

may prefer to substitute different types

of licenses during the same auction.

(2) Maximum Eligibility and Activity

Rules

58. In the 220 MHz Public Notice, the

Commission proposed that the amount

of the upfront payment submitted by a

bidder would determine the initial

maximum eligibility (as measured in

bidding units) for each bidder. For the

Phase II 220 MHz Service auction the

Commission will adopt this proposal.

The amount of the upfront payment

submitted by a bidder determines the

initial maximum eligibility (in bidding

units) for each bidder. Upfront

payments are not attributed to specific

licenses, but instead will be translated

into bidding units to define a bidder’s

initial maximum eligibility. The total

upfront payment defines the maximum

number of bidding units on which the

applicant will initially be permitted to

bid. The Commission notes that there is

no provision for increasing a bidder’s

maximum eligibility during the course

of an auction.

59. In order to ensure that the auction

closes within a reasonable period of

time, an activity rule requires bidders to

bid actively throughout the auction,

rather than wait until the end before

participating. Bidders are required to be

active on a specific percentage of their

maximum eligibility during each round

of the auction.

60. A bidder is considered active on

a license in the current round if it is

either the high bidder at the end of the

previous bidding round and does not

withdraw the high bid in the current

round, or if it submits an acceptable bid

in the current round (see ‘‘Minimum

Accepted Bids’’ in Part 4.B.(3), infra). A

bidder’s activity level in a round is the

sum of the bidding units associated with

licenses on which the bidder is active.

The minimum required activity level is

expressed as a percentage of the bidder’s

maximum bidding eligibility, and

increases as the auction progresses.

Because these procedures have proven

successful in maintaining the pace of

previous auctions as set forth under

‘‘Auction Stages’’ in Part 4.A.(4) and

‘‘Stage Transitions’’ in Part 4.A.(5),

infra, the Commission adopts them for

the 220 MHz Service auction.

(3) Activity Rule Waivers and Reducing

Eligibility

61. In the 220 MHz Public Notice, the

Commission proposed that each bidder

in the auction would be provided five

activity rule waivers that may be used

in any round during the course of the

auction.

62. Based upon the Commission’s

experience in previous auctions, the

Commission concludes that each bidder

will be provided five activity rule

waivers that may be used in any round

during the course of the auction. Use of

an activity rule waiver preserves the

bidder’s current bidding eligibility

despite the bidder’s activity in the

current round being below the required

minimum level. An activity rule waiver

applies to an entire round of bidding

and not to a particular license.

63. 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 round where

a bidder’s activity level is below the

minimum required unless: (1) there are

no activity rule waivers available; or (2)

the bidder overrides the automatic

application of a waiver by reducing

eligibility, thereby meeting the

minimum requirements.

64. A bidder with insufficient activity

that wants to reduce its bidding

eligibility rather than use an activity

rule waiver must affirmatively override

the automatic waiver mechanism during

the round by using the reduce eligibility

function in the software. In this case,

the bidder’s eligibility is permanently

reduced to bring the bidder into

compliance with the activity rules as

described in ‘‘Auction States,’’ Part

4.A.(4). Once eligibility has been

reduced, a bidder will not be permitted

to regain its lost bidding eligibility.

65. Finally, a bidder may proactively

use an activity rule waiver as a means

to keep the auction open without

placing a bid. If a bidder submits a

proactive waiver (using the proactive

waiver function in the bidding software)

during a round in which no bids are

submitted, the auction will remain open

and the bidder’s eligibility will be

preserved. An automatic waiver invoked

in a round in which there are no new

valid bids or withdrawals will not keep

the auction open.

(4) Auction Stages

66. In the 220 MHz Public Notice, the

Commission proposed to conduct the

auction in stages and employ an activity

rule. The Commission concludes that

the auction will be composed of three

stages, which are each defined by an

increasing activity rule. Below are the

proposed activity levels for each stage of

the auction. The FCC reserves the

discretion to alter the activity

percentages before and/or during the

auction.

67. Stage One: In each round of the

first stage of the auction, a bidder

desiring to maintain its current
35220 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices

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).

68. Stage Two: In each round of the

second stage, a bidder desiring to

maintain its current eligibility is

required to be active on 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).

69. Stage Three: 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 fiftyfortyninths (50⁄49).

Caution: Since activity requirements

increase in each auction stage, bidders

must carefully check their current

activity during the bidding round of the

first round following a stage transition.

This is especially critical for bidders

that have standing high bids and do not

plan to submit new bids. In past

auctions, some bidders have

inadvertently lost bidding eligibility or

used an activity rule waiver because

they did not reverify their activity status

at stage transitions. Bidders may check

their activity against the required

minimum activity level by using the

bidding software’s bidding module.

70. Because the foregoing procedures

have proven successful in maintaining

proper tempo in previous auctions, the

Commission will adopt them for the

Phase II 220 MHz Service auction.

(5) Stage Transitions

71. In the 220 MHz Public Notice, the

Commission proposed that the auction

would 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).

72. The Commission concludes that

the auction will start in Stage One.

Under the FCC’s general guidelines it

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

Stage One to Stage Two, and from Stage

Two to Stage Three) when, in each of

three consecutive rounds of bidding, the

high bid has increased on 10 percent or

less of the licenses being auctioned (as

measured in bidding units). However,

the Bureau will retain the discretion to

regulate the pace of the auction by

announcement. This determination will

be based on a variety of measures of

bidder activity, including, but not

limited to, the auction activity level, the

percentages of licenses (as measured in

bidding units) on which there are new

bids, the number of new bids, and the

percentage increase in revenue. The

Commission believes that these stage

transition rules, having proven

successful in prior auctions, are

appropriate for use in the Phase II 220

MHz Service auction.

(6) Auction Stopping Rules

73. In the 220 MHz Public Notice, the

Commission proposed to retain the

discretion to keep the auction open,

even if no new acceptable bids or

proactive waivers are submitted and no

previous high bids are withdrawn. In

addition, the Commission proposed that

the Bureau reserve the right to declare

that the auction will end after a

specified number of additional rounds

(‘‘special stopping rule’’).

74. Barring extraordinary

circumstances, bidding will remain

open on all licenses until bidding stops

on every license. Thus, the auction will

close for all licenses when one round

passes during which no bidder submits

a new acceptable bid on any license,

applies a proactive waiver, or

withdrawns a previous high bid.

75. The Bureau retains the discretion,

however, 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

has submitted a proactive waiver. Thus,

the activity rule will apply as usual, and

a bidder with insufficient activity will

either lose bidding eligibility or use an

activity rule waiver (if it has any left).

76. Further, in its discretion, the

Bureau reserves the right to declare that

the auction will end after a specified

number of additional rounds (‘‘special

stopping rule’’). If the FCC 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 FCC intends to exercise

this option only in extreme

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 FCC 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.

77. Adoption of these rules, the

Commission believes, is most

appropriate for the Phase II 220 MHz

auction because our experience in prior

auctions demonstrates that the

simultaneous stopping rule balanced the

interests of administrative efficiency

and maximum bidder participation. The

substitutability between and among

licenses in different geographic areas

and the importance of preserving the

ability of bidders to pursue backup

strategies support of use of a

simultaneous stopping rule.

(7) Auction Delay, Suspension, or

Cancellation

78. In the 220 MHz Public Notice, the

Commission proposed that, by police

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.

79. Because this approach has proven

effective in resolving exigent

circumstances in previous auctions, the

Commission will adopt our proposed

auction cancellation rules. By public

notice or by announcement during the

action, the Burean 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.

The Commission emphasizes 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.
Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices 35221

B. Bidding Procedures

(1) Round Structure

80. The initial bidding schedule will

be announced by public notice at least

one week before the start of the auction,

and will be included in the registration

mailings. The round structure for each

bidding round contains a single bidding

round followed by the release of the

round results.

81. The FCC has discretion to change

the bidding schedule in order to foster

an auction pace that reasonably

balances speed with the bidders’ need to

study round results and adjust their

bidding strategies. The FCC may

increase or decrease the amount of time

for the bidding rounds and review

periods, or the number of rounds per

day, depending upon the bidding

activity level and other factors.

(2) Reserve Price or Minimum Opening

Bid

82. 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 with FCC

licenses 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 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.

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 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 inference with other spectrum

bands, and any other relevant factors

that could 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.

83. In the 220 MHz Public Notice, the

Bureau proposed to establish minimum

opening bids for the 220 MHz Service

auction and to retain discretion to lower

the minimum opening bids.

Specifically, the Bureau proposed the

following formula for calculating

minimum opening bids for Auction 18:

1. EA Licenses

$0.0175 MHz * POP

2. EAG Licenses

$0.015 MHz * POP

3. Nationwide Licenses

$0.02 MHz * POP

with a minimum of no less than $2,500

per license. In the alternative, the

Bureau sought comment on whether,

consistent with the Balanced Budget

Act, the public interest would be served

by having no minimum opening bid or

reserve price.

84. The Commission adopts minimum

opening bids for each of the licenses in

the Phase II 220 MHz Service auction

that are reducible at the discretion of the

Bureau. The levels will be set as

follows:

1. EA Licenses

$0.015 MHz * POP

2. EAG License

$0.0125 MHz * POP

3. Nationwide Licenses

$0.0175 MHz * POP

with a minimum of no less than $2,500

per license.

85. As was the case in prescribing

minimum opening bids in the auction of

the upper channels in the 800 MHz

SMR service and the LMDS auctions,

Congress has enacted a presumption

that unless the Commission determines

otherwise, minimum opening bids or

reserve prices are in the public interest.

The Bureau is unpersuaded by

commenters’ assertions that minimum

opening bids for the Phase II 220 MHz

Service auction are not in the public

interest. Setting the level of the

minimum opening bids is a difficult

task, especially in the case of the Phase

II 220 MHz Service where the channels

are narrow, encumbered and the

potential uses of the band remain to be

explored. To address this concern, the

minimum opening bids adopted here

are reducible. This will allow the

Bureau flexibility to adjust the

minimum opening bids if circumstances

warrant. The Commission emphasizes,

however, that such discretion will be

exercised sparingly and early in the

auction, ie., before bidders lose all

waivers and begin the lose eligibility.

During the course of the auction, the

Bureau will not entertain any bidder

requests to reduce the minimum

opening bids on specific licenses.

86. The Commission concludes that

the revised formula presented here best

meets the objectives of our auction

authority in establishing a reasonable

minimum opening bid. The Commission

has noted in the past that the reserve

price and minimum opening bid

provision is not a requirement to

maximize auction revenue but rather a

protection against assigning licenses at

unacceptably low prices and that the

Commission must balance the revenue

raising objective against its other public

interest objectives in setting the

minimum bid level. In doing so, the

Commission agree with commenters

that the 220 MHz channels are narrow

and the likely auction participants will

be small business entrepreneurs. In

addition, the Commission recognizes

that the EAG licenses are more

substantially encumbered than are the

other license types. The Commission

has adjusted its minimum opening bids

accordingly. In sum, the Commission’s

experience in using minimum opening

bids in the 800 MHz SMR auction and

the LMDS auction supports the fact that

minimum opening bids promote

efficient allocation of licenses and speed

the course of the auction while ensuring

that valuable assets are not sold for

nominal prices.

(3) Minimum Accepted Bids

87. In the 220 MHz Public Notice, the

Commission proposed to use an

exponential smoothing methodology to

calculate minimum bid increments. The

Commission further proposed to retain

the discretion to change the minimum

bid increment if circumstances so

dictate.

88. Because these techniques have

proven effective in prior auctions, the

Commission adopts its proposal for the

220 MHz Service auction. 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, the

Commission will utilize, as described

immediately below, 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.

Exponential Smoothing

89. The exponential smoothing

formula calculates the bid increment for

each license 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

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 using the

exponential smoothing formula.

90. Using exponential smooting, the

calculation of the percentage bid

increment for each license will be based
35222 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices

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 weighing factor times the

number of new bids received on the

license in the current bidding round

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

Ai=(C*Bi)+((1–C)*Ai¥1)

Ii=smaller of (1+Ai)*N) and M

Where:

Ai=activity index for the current round

(round i)

C=activity weight factor

Bi=number of bids in the current round

(round i)

Ai¥1=activity index from previous

round (round i¥1), A0 is 0

Ii=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 dollar amount associated

with the percentage increment (variable

Ii from above times the high bid). This

result will be rounded to the nearest

thousand if it is over ten thousand or to

the nearest hundred it it is under ten

thousand.

Examples

License 1

C=0.5, N=0.05, M=0.15

Round 1 (2 new bids, high bid =

$1,000,000)

1. Calculation of percentage

increment using exponential smoothing:

A1=(0.5*2) + (0.5*0) = 1

I1 = (1+1) *0.05=0.1

2. Minimum bid increment using the

percentage increment (I1 from above)

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

3. Minimum acceptable bid for round

2=1,100,000

Round 2 (3 new bids, high

bid=2,000,000)

1. Calculation of percentage

increment using exponential smooting:

A2=(0.5 * 3) + (0.5 * 1) = 2

I2=(1 +2) * 0.05 = 0.15

2. Minimum bid increment using the

percentage increment (I2 from above)

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

3. Minimum acceptable bid for round

3 = 2,300,000

Round 3 (1 new bid, high bid =

2,300,000)

1. Calculation of percentage

increment using exponential smoothing:

A3 = (0.5 * 1) + (0.5 * 2) = 1.5

I3 = (1 + 1.5) * 0.05 + 0.125

2. Minimum bid increment using the

percentage increment (I3 from above)

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

3. Minimum acceptable bid for round

4 = 2,588,000

(4) High Bids

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

computer system. In the event of tie

bids, the Commission will identify the

high bidder on the basis of the order in

which bids are received by the

Commission, starting with the earliest

bid. The bidding software allows

bidders to make multiple submissions

in a round. As each bid is individually

date and time-stamped according to

when it was submitted, bids submitted

by a bidder earlier in a round will have

an earlier date- and time-stamped than

bids submitted later in a round.

(5) Bidding

92. During a bidding round, a bidder

may submit bids for as many licenses

for which it is eligible, as well as

withdraw high bids from previous

bidding rounds, remove bids placed in

the same bidding round, or permanently

reduce eligibility. Bidders also have the

option of making multiple submissions

and withdrawals in each bidding round,

and will not have a separate period to

withdraw bids. If a bidder submits

multiple bids for a single license in the

same round, the system takes the last

bid entered as that bidder’s bid for the

round, and the date- and time-stamped

of that bid reflect the latest time the bid

was submitted.

93. Please note that all bidding will

take place either through the automated

bidding software or by telephonic

bidding (Telephonic bid assistants are

required to use a script when handling

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, because four to five minutes are

necessary to complete a bid

submission.) There will be no on-site

bidding during Auction No. 18.

94. A bidder’s maximum eligibility in

the first round of the auction is

determined by two factors: (1) the

licenses applied for on FCC Form 175;

and (2) the upfront payment amount

deposited. The bid submission screens

will be tailored for each bidder to

include only those licenses for which

the bidder applied on its FCC Form 175.

A bidder also has the option to further

tailor its bid submission screens to call

up specified groups of licenses.

95. The bidding software requires

each bidder to log in to the FCC auction

system during the bidding round using

the FCC account number, bidder

identification number, and the

confidential security codes provided in

the registration materials. Bidders are

strongly encouraged to download and

print bid confirmations after they

submit their bids.

96. The bid entry screen of the

Automated Auction System software for

the Phase II 220 MHz Service auction

allows bidders to place multiple

increment bids which will let bidders

increase high bids from one to nine bid

increments. A single bid increment is

defined as the difference between the

standing high bid and the minimum

acceptable bid for a license.

97. To place a bid on a license, the

bidder must enter a whole number

between 1 and 9 in the bid increment

multiplier (Bid Mult) field. This value

will determine the amount of the bid

(Amount Bid) by multiplying the bid

increment multiplier by the bid

increment and adding the result to the

high bid amount according to the

following formula:

Amount Bid = High Bid + (Bid Mult *

Bid Increment)

Thus, bidders may place a bid that

exceeds the standing high bid by

between one and nine times the bid

increment. For example, to bid the

minimum acceptable bid, which is

equal to one bid increment, a bidder

will enter ‘‘16’’ in the bid increment

multiplier column and press submit.

98. For any license on which the FCC

is designated as the high bidder (i.e., a

license that has not yet received a bid

in the auction or where the high bid was

withdrawn and a new bid has not yet

been placed), bidders will be limited to

bidding only the minimum acceptable

bid. In both of these cases no increment

exists for the licenses, and bidders

should enter ‘‘1’’ in the Bid Mult field.

Note that any whole number between 1

and 9 entered in the multiplier column

will result in a bid value at the

minimum acceptable bid amount.
Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices 35223

Finally, bidders are cautioned in

entering numbers in the Bid Mult field

because, as explained in the following

section, a high bidder that withdraws its

standing high bid from a previous

round, even if mistakenly or

erroneously made, is subject to bid

withdrawal payments.

(6) Bid Removal and Bid Withdrawal

99. In the 20 MHz Public Notice, the

Commission proposed bid removal and

bid withdrawal rules. With respect to

bid withdrawals, the Commission

proposed limiting each bidder to

withdrawals in no more than two

rounds during the course of the auction.

a. Procedures

100. Before the close of a bidding

round, a bidder has the option of

removing any bids placed in that round.

By using the remove bid function in the

software, a bidder may effectively

‘‘unsubmit’’ any bid placed within that

round. A bidder removing a bid placed

in the same round is not subject to

withdrawal payments. Removing a bid

will affect a bidder’s activity for the

round in which it is removed. This

procedure will enhance bidder

flexibility and, may serve to expedite

the course of the action. Therefore, the

Commission will adopt these

procedures for the 220 MHz Service

auction.

101. 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 (assuming that the bidder has

not exhausted its withdrawal

allowance). A high bidder that

withdraw its standing high bid from a

previous round is subject to the bid

withdrawal payments specified in 47

CFR 90.1007, 1.2104(g), and 1.2109. The

procedure for withdrawing a bid and

receiving a withdrawal confirmation is

essentially the same as the bidding

procedure described in ‘‘High Bids,’’

Part 4.B.2.c.(4).

102. In previous auctions, the

Commission has detected bidder

conduct that, arguably, may have

constituted strategic bidding through

the use of bid withdrawals. While the

Commission continues to recognize the

important role that bid withdrawals

play in an auction, i.e. reducing risk

associated with efforts to secure various

geographic area licenses in combination,

the Commission concludes that, for the

220 MHz Service auction, adoption of a

limit on their use to two rounds is the

most appropriate outcome. By doing so

the Commission believes it strikes a

reasonable compromise that will allow

bidders to use withdrawals. The

Commission’s decision on this issue is

based upon its experience in prior

auctions, particularly the PCS D, E and

F block auction, 800 MHz SMR auction,

and LMDS auction, and is in no way a

reflection of its view regarding the

likelihood of any speculation or

‘‘gaming’’ in the 220 MHz Service

auction.

103. The Bureau will therefore limit

the number of rounds in which bidders

may place withdrawals to two rounds.

These rounds will be at the bidder’s

discretion and there will be no limit on

the number of bids that may be

withdrawn in either of these rounds.

Withdrawals will still be subject to the

bid withdrawal payments specified in

47 CFR 90.1007, 1.2104(g), and 1.2109.

Bidders should note that abuse of the

Commission’s bid withdrawal

procedures could result in the denial of

the ability to bid on a market.

104. If a high bid is withdrawn, the

license will be offered in the next round

at the second highest bid price, which

may be less than, or equal to, in the case

of tie bids, the amount of the withdrawn

bid, without any bid increment. The

FCC will serve as a ‘‘place holder’’ on

the license until a new acceptable bid is

submitted on that license.

b. Calculation

105. Generally, a bidder that

withdraws a standing high bid during

the course of an auction will be subject

to a payment equal to the lower of: (1)

the difference between the net

withdrawn bid and the subsequent net

winning bid; or (2) the difference

between the gross withdrawn bid and

the subsequent gross winning bid for

that license. See 47 CFR 90.1007,

1.2104(g), and 1.2109. No withdrawal

payment will be assessed if the

subsequent winning bid exceeds the

withdrawn bid.

(7) Round Results

106. The bids placed during a round

are not published until the conclusion

of that bidding period. After a round

closes, the FCC will compile reports of

all bids placed, bids withdrawn, current

high bids, a new minimum accepted

bids, and bidder eligibility status

(bidding eligibility and activity rule

waivers), and post the reports for public

access.

107. Reports reflecting bidders’

identities and bidder identification

numbers for Auction No. 18 will be

available before and during the auction.

Thus, bidders will know in advance of

this auction the identities of the bidders

against which they are bidding.

(8) Auction Announcement

108. The FCC will use auction

announcements to announce items such

as schedule changes and stage

transitions. All FCC auction

announcements will be available on the

FCC remote electronic bidding system,

as well as the Internet and the FCC

Bulletin Board System.

(9) Other Matters

109. As noted in 3.B., after the shortform filing deadline, applicants may

make only minor changes to their FCC

Form 175 applications. For example,

permissible minor changes include

deletion and addition of authorized

bidders (to a maximum of three) and

revision of exhibits. Filers should make

these changes on-line, and submit a

letter to Amy Zoslov, Chief, Auctions

and Industry Analysis Division,

Wireless Telecommunications Bureau,

Federal Communications Commission,

2025 M Street, N.W., Room 5202,

Washington, D.C. 20554 (and mail a

separate copy to Frank Stilwell,

Auctions and Industry Analysis

Division), briefly summarizing the

changes. Questions about other changes

should be directed to Frank Stilwell of

the FCC Auctions and Industry Analysis

Division at (202) 418–0660.

5. Post-Auction Procedures

A. Down Payments and Withdrawn Bid

Payments

110. After bidding has ended, the

Commission will issue a public notice

declaring the auction closed, identifying

the winning bids and bidders for each

license, and listing withdrawn bid

payments due.

111. Within ten business days after

release of the auction closing notice,

each winning bidder must submit

sufficient funds (in addition to its

upfront payment) to bring its total

amount of money on deposit with the

Government to 20 percent of its net

winning bids (actual bids less any

applicable bidding credits). See 47 CFR

90.1011(b). In addition, by the same

deadline all bidders must pay any

withdrawn bid amounts due under 47

CFR 1.2104(g), as discussed in ‘‘Bid

Removal and Bid Withdrawal,’’ Part

4.B.2.c(6). (Upfront payments are

applied first to satisfy any withdrawn

bid liability, before being applied

toward down payments.)

B. Long-Form Application

112. Within ten business days after

release of the auction closing, notice

winning bidders must submit a properly

completed long-form application and

required exhibits for each Phase II 220
35224 Federal Register / Vol. 63, No. 124 / Monday, June 29, 1998 / Notices

MHz Service license won through the

auction. Winning bidders that are small

businesses or very small businesses

must include an exhibit demonstrating

their eligibility for bidding credits. See

47 CFR 90.1013. Further filing

instructions will be provided to auction

winners at the close of the auction.

C. Default and Disqualification

113. Any high bidder that defaults or

is disqualified after the close of the

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

down payment within the prescribed

period of time, fails to submit a timely

long-form application, fails to make full

payment, or is otherwise disqualified)

will be subject to the payments

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

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

highest bidders (in descending order) at

their final bids. See 47 CFR 1.2109(b)

and (c). In addition, if a default or

disqualification involves gross

misconduct, misrepresentation, or bad

faith by an applicant, the Commission

may declare the applicant and its

principals ineligible to bid in future

auctions, and may take any other action

that it deems necessary, including

institution of proceedings to revoke any

existing licenses held by the applicant.

See 47 CFR 1.2109(d).

D. Refund of Remaining Upfront

Payment Balance

114. All applicants that submitted

upfront payments but were not winning

bidders for any Phase II 220 MHz

Service license may be entitled to a

refund of their remaining upfront

payment balance after the conclusion of

the auction. No refund will be made

unless there are excess funds on deposit

from that applicant after any applicable

bid withdrawal payments have been

paid.

115. Bidders that drop out of the

auction completely may be eligible for

a refund of their upfront payments

before the close of the auction.

However, bidders that reduce their

eligibility and remain in the auction are

not eligible for partial refunds of upfront

payments until the close of the auction.

Qualified bidders that have exhausted

all of their activity rule waivers, have no

remaining bidding eligibility, and have

not withdrawn a high bid during the

auction must submit a written refund

request which includes wire transfer

instructions, a Taxpayer Identification

Number (‘‘TIN’’), and a copy of their

bidding eligibility screen print, to:

Federal Communications Commission,

Billings and Collections Branch, Attn:

Regina Dorsey or Linwood Jenkins, 1919

M Street, NW. Room 452, Washington,

DC 20554.

116. Bidders can also fax their request

to the Billings and Collections Branch at

(202) 418–2843. Once the request has

been approved, a refund will be sent to

the address provided on the FCC Form

159.

Note: Refund processing generally takes up

to two weeks to complete. Bidders with

questions about refunds should contact

Linwood Jenkins or Geoffrey Idika at (202)

418–1995.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

Attachment A—Summary of Phase II 220

MHZ Licenses to be Auctioned

Attachment B—List of Cases Pending Before

the Commission Involving Non-Nationwide

Phase I 220 MHZ Licensees

Attachment C—Guidelines for completion of

FCC Forms 175 and 159, and Exhibits

Attachment D—Electronic Filing and Review

of FCC Form 175

Attachment E—Summary Listing of

Documents From the Commission and the

Wireless Telecommunications Bureau

Addressing Application of The AntiCollusion Rules

Attachment F—List of Commenters

Note: Attachments A through F are not

printed in the Federal Register. See the

beginning of the Supplementary Information

section for availability.

[FR Doc. 98–17147 Filed 6–26–98; 8:45 am]

BILLING CODE 6712–01–M

FEDERAL EMERGENCY

MANAGEMENT AGENCY

Agency Information Collection

Activities: Proposed Collection;

Comment Request

ACTION: Notice and request for

comments.

SUMMARY: The Federal Emergency

Management Agency, as part of its

continuing effort to reduce paperwork

and respondent burden, invites the

general public and other Federal

agencies to take this opportunity to

comment on proposed continuing

information collections. In accordance

with the Paperwork Reduction Act of

1995 (44 U.S.C. 3506(c)(2)(A)), this

notice seeks comments concerning

information required from employees of

the Federal Emergency Management

Agency who file a claim with the

Agency under 31 U.S.C. 3721 for the

loss of or damage to personal property

which is incident to their service.

Supplementary Information. 31 U.S.C.

3721 requires claimants to substantiate

their claims as a condition of payment

by the Agency. The Agency’s

substantiation requirements are set forth

in 44 CFR 11.76. There is no set form

required by the Agency for filing a claim

under this statute.

Collection of Information

Title: Claims of Federal Personnel for

Personal Property Loss or Damage.

Type of Information Collection:

Extension of a currently approved

collection.

OMB Number: 3067–0167.

Form Numbers: None.

Abstract: The information is provided

by FEMA personnel to make a claim

against FEMA for personal property

damage incident to service. The

information is used by FEMA to

determine the appropriate disposition

and payment of claims.

Affected Public: Federal Government.

Number of Respondents: 7.

Frequency of Response: On occasion.

Hours Per Response: 1 hour.

Estimated Total Annual Burden

Hours: 7.

Estimated Cost: None.

Comments

Written comments are solicited to: (a)

evaluate whether the proposed data

collection is necessary for the proper

performance of the agency, including

whether the information shall have

practical utility; (b) evaluate the

accuracy of the agency’s estimate of the

burden of the proposed collection of

information, including the validity of

the methodology and assumptions used;

(c) enhance the quality, utility, and

clarity of the information to be

collected; and (d) minimize the burden

of the collection of information on those

who are to respond, including through

the use of appropriate automated,

electronic, mechanical, or other

technological collection techniques or

other forms of information technology,

e.g., permitting electronic submission of

responses. Comments should be

received within 60 days of the date of

this notice.

ADDRESSES: Interested persons should

submit written comments to Muriel B.

Anderson, FEMA Information

Collections Officer, Federal Emergency

Management Agency, 500 C Street, SW,

Room 316, Washington, DC 20472.

Telephone number (202) 646–2625.

FAX number (202) 646–3524.

FOR FURTHER INFORMATION CONTACT:

Contact Mr. Robert S. Brock, Associate

General Counsel for General Law, Office

of General Counsel, Federal Emergency