[Federal Register Volume 86, Number 135 (Monday, July 19, 2021)]
[Proposed Rules]
[Pages 37972-37981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-15146]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 73

[AU Docket No. 21-284; DA 21-801; FR ID 37717]


Auction of Construction Permits for Low Power Television and TV 
Translator Stations; Comment Sought on Competitive Bidding Procedures 
for Auction 111

AGENCY: Federal Communications Commission.

ACTION: Proposed rule; proposed auction procedures.

-----------------------------------------------------------------------

SUMMARY: The Office of Economics and Analytics and the Media Bureau 
announce a closed auction of construction permits for new or modified 
low power television (LPTV) stations and TV translator stations 
(collectively, LPTV/translator stations). This document seeks comment 
on the procedures to be used for this auction, which is designated as 
Auction 111.

DATES: Comments are due on or before August 3, 2021, and reply comments 
are due on or before August 13, 2021. Bidding in this auction is 
expected to commence in February 2022.

ADDRESSES: Interested parties may file comments or reply comments in AU 
Docket No. 21-284. Comments may be filed using the Commission's 
Electronic Comment Filing System (ECFS). All filings in response to the 
Auction 111 Comment Public Notice must refer to AU Docket No. 21-284.
    <bullet> Electronic Filers: Comments may be filed electronically 
using the internet by accessing the ECFS at https://www.fcc.gov/ecfs/.
    <bullet> Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing.
    <bullet> Filings in response to the Public Notice can be sent by 
commercial courier or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission
    <bullet> Commercial deliveries (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Dr., 
Annapolis Junction, MD 20701.
    <bullet> U.S. Postal Service first-class, Express, or Priority mail 
must be addressed to 45 L Street NE, Washington, DC 20554.
    <bullet> Until further notice, the Commission no longer accepts any 
hand or messenger delivered filings. This is a temporary measure taken 
to help protect the health and safety of individuals, and

[[Page 37973]]

to mitigate the transmission of COVID-19.
    <bullet> Email: Commenters are asked to also submit a copy of their 
comments and reply comments electronically to the following address: 
<a href="/cdn-cgi/l/email-protection#a4c5d1c7d0cdcbca959595e4c2c7c78ac3cbd2"><span class="__cf_email__" data-cfemail="28495d4b5c414746191919684e4b4b064f475e">[email protected]</span></a>.
    <bullet> People with Disabilities: To request materials in 
accessible formats (braille, large print, electronic files, audio 
format) for people with disabilities, send an email to <a href="/cdn-cgi/l/email-protection#32545151070206725451511c555d44"><span class="__cf_email__" data-cfemail="3b5d58580e0b0f7b5d5858155c544d">[email protected]</span></a> 
or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 
(voice), (202) 418-0432 (TTY).

FOR FURTHER INFORMATION CONTACT: 
    Auction legal questions: Lyndsey Grunewald, (202) 418-0660, 
<a href="/cdn-cgi/l/email-protection#5e1227303a2d3b2770192c2b303b293f323a1e383d3d70393128"><span class="__cf_email__" data-cfemail="84c8fdeae0f7e1fdaac3f6f1eae1f3e5e8e0c4e2e7e7aae3ebf2">[email protected]</span></a>, or Scott Mackoul, (202) 418-0660, 
<a href="/cdn-cgi/l/email-protection#df8cbcb0ababf192bebcb4b0aab39fb9bcbcf1b8b0a9"><span class="__cf_email__" data-cfemail="287b4b475c5c0665494b43475d44684e4b4b064f475e">[email protected]</span></a>.
    General auction questions: Auction Hotline at (717) 338-2868.
    LPTV/translator station service questions: Shaun Maher (legal), 
(202) 418-2324, <a href="/cdn-cgi/l/email-protection#8edde6effbe0a0c3efe6ebfccee8ededa0e9e1f8"><span class="__cf_email__" data-cfemail="c794afa6b2a9e98aa6afa2b587a1a4a4e9a0a8b1">[email protected]</span></a>, or Mark Colombo (technical 
questions), (202) 418-7611, <a href="/cdn-cgi/l/email-protection#2f624e5d44016c404340424d406f494c4c01484059"><span class="__cf_email__" data-cfemail="eca18d9e87c2af838083818e83ac8a8f8fc28b839a">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Public Notice 
(Auction 111 Comment Public Notice), AU Docket No. 21-284, DA 21-801, 
adopted on July 9, 2021, and released on July 9, 2021. The Auction 111 
Comment Public Notice includes the following attachments: Attachment A, 
Construction Permits in Auction 111. The complete text of the Auction 
111 Comment Public Notice, including its attachments, is available on 
the Commission's website at http://www.fcc.gov/auction/111 or by using 
the search function for AU Docket No. 21-284 on the Commission's ECFS 
web page at www.fcc.gov/ecfs. Alternative formats are available to 
persons with disabilities by sending an email to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="b7f1f4f4828783f7d1d4d499d0d8c1">[email protected]</a> or by 
calling the Consumer & Governmental Affairs Bureau at (202) 418-0530 
(voice), (202) 418-0432 (TTY).

I. Introduction

    1. By the Auction 111 Comment Public Notice, the Office of 
Economics and Analytics (OEA) and the Media Bureau (MB), announce a 
closed auction of construction permits for new or modified low power 
television (LPTV) stations and TV translator stations (collectively 
referred to as LPTV/translator stations) and seek comment on the 
procedures to be used for this auction. The bidding for the auction, 
which is designated as Auction 111, is expected to commence in February 
2022.
    2. OEA and MB has sent a copy of the Auction 111 Comment Public 
Notice by email and overnight delivery to the contact address listed on 
each LPTV/translator station application listed in Attachment A of the 
Auction 111 Comment Public Notice. Future public notices in this 
proceeding may be provided directly to each applicant listed in 
Attachment A at this contact address as well. Each applicant is 
reminded that pursuant to Sec.  1.65 of the Commission's rules, it is 
obligated to maintain the accuracy of this information. 47 CFR 1.65. 
OEA and MB ask each party that is eligible to file a short-form 
application in Auction 111 to make sure that the contact address 
provided in its LPTV/translator station application is accurate and is 
a location capable of accepting packages. After the deadline for filing 
short-form applications (FCC Form 175) to participate in Auction 111, 
Auction 111-related materials will be sent to auction applicants at the 
contact addresses in their short-form applications.

II. Construction Permits Offered and Application Processing

A. Construction Permits To Be Offered in Auction 111

    3. Auction 111 will resolve groups of pending mutually exclusive 
(MX) engineering proposals for up to 17 new or modified LPTV/translator 
station construction permits. Auction 111 is a closed auction; only 
those individuals or entities listed in Attachment A to the Auction 111 
Comment Public Notice are eligible to participate in this auction with 
respect to the construction permit(s) for which each is listed.
    4. The MX groups and engineering proposals listed in Attachment A 
to the Auction 111 Comment Public Notice consist of applications for 
new LPTV/translator stations, or major changes to existing stations, 
that were accepted on a first-come, first-served basis (i.e., rolling 
one-day windows), pursuant to Sec.  74.787(a)(3) of the Commission's 
rules and displacement relief applications filed pursuant to a special 
filing window for eligible LPTV/translator stations displaced by the 
broadcast television spectrum incentive auction (Auction 1000). Any 
LPTV/translator station applications for new facilities, major changes 
to existing facilities, or displacement relief that are mutually 
exclusive with one another must be resolved via the Commission's part 1 
and part 73 competitive bidding rules. In 2009, MB began accepting 
applications for new rural digital LPTV/translator stations on a 
limited basis and then later froze those filings. All but one of the MX 
groups listed in Attachment A to the Auction 111 Comment Public Notice 
consist of applications for new or modified rural digital LPTV/
translator stations that were submitted on the first day that MB began 
accepting such applications. With regard to the remaining MX group, 
Auction 1000, which repurposed 84 megahertz of the 600 MHz band 
spectrum, resulted in the channel reassignments of certain full power 
and Class A television stations, and in turn displaced certain LPTV/
translator stations. In 2018, the Incentive Auction Task Force and MB 
opened a special displacement application filing window for eligible 
licensees and permittees of LPTV/translator stations displaced by 
Auction 1000 to apply for new channels. The remaining MX group listed 
in Attachment A to the Auction 111 Comment Public Notice consists of 
two displacement relief applications filed pursuant to this special 
displacement application filing window.
    5. In order to facilitate resolution of pending mutually exclusive 
LPTV/translator station applications before initiating competitive 
bidding procedures, and given the passage of time since the 
applications were filed, MB announced that it would withhold action on 
certain MX applications for new or modified LPTV/translator stations, 
including each application listed in Attachment A to the Auction 111 
Comment Public Notice, from June 1, 2020 to July 31, 2020, in order to 
provide applicants with an opportunity to resolve mutual exclusivity 
through settlement or technical modification of their engineering 
proposals. MB advised each applicant that, absent resolution of its 
mutual exclusivity, its application would be subject to the 
Commission's competitive bidding procedures.
    6. The 17 MX groups listed in Attachment A to the Auction 111 
Comment Public Notice are the groups of 24 applicants that filed 40 
applications that remain MX after the filing window closed, and OEA and 
MB will now proceed to resolve these mutually exclusive LPTV/translator 
station proposals by competitive bidding in Auction 111. Attachment A 
to the Auction 111 Comment Public Notice also lists, for each proposal 
in each MX group, the applicant name, FCC Registration Number (FRN), 
file number, facility identification number, community of license, and 
the channel requested in the relevant construction permit application.

B. Application Processing and Limited Auction Settlement Period

    7. Attachment A to the Auction 111 Comment Public Notice lists the 
pending LPTV/translator station

[[Page 37974]]

applications that will be resolved through Auction 111 unless the 
applicants resolve their mutual exclusivity by entering into settlement 
agreements or making minor amendments to their pending applications 
before the deadline for filing short-form applications (FCC Form 175) 
to participate in Auction 111, which will be announced in a future 
public notice. Specifically, if a member of an MX group withdraws its 
application on its own initiative or files a unilateral engineering 
amendment, or if members of the MX group enter into and submit a 
settlement agreement and supporting documentation that the Commission 
staff determines to be fully in accordance with the Communications Act 
of 1934, as amended (Act) and the Commission's rules, and such actions 
completely resolve the mutual exclusivity prior to the short-form 
application deadline, that MX group will be removed from Auction 111 
and the remaining engineering proposal(s) will be processed under 
standard licensing procedures.
    8. Conversely, if an MX group listed in Attachment A to the Auction 
111 Comment Public Notice remains mutually exclusive as of the short-
form application filing deadline, each applicant in that MX group must 
timely file a short-form application in order to avoid dismissal of its 
pending LPTV/translator station application. Specifically, if any 
member of an MX group that remains mutually exclusive as of the short-
form application filing deadline fails to submit a timely short-form 
application, that party will have its pending application for a new or 
modified LPTV/translator station dismissed for failure to prosecute. 
Likewise, if only one member of an MX group that remains mutually 
exclusive as of the short-form application filing deadline submits a 
short-form application, the MX group will be removed from the auction 
and the engineering proposal of the party that submitted a short-form 
application will be treated as a singleton application and processed 
under standard licensing procedures. If an applicant forgoes filing a 
short-form application pursuant to an agreement with mutually exclusive 
applicants, such settlement agreement must be submitted to MB for 
approval in accordance with Sec.  73.3525 of the Commission's rules.
    9. After the short-form application filing deadline, OEA and MB 
will release a public notice identifying the mutually exclusive 
applications for Auction 111. As provided in section 73.5002(d) of the 
Commission's rules, these mutually exclusive applicants will then be 
given a limited opportunity to resolve mutual exclusivity of the 
Commission's rules by the filing of technical amendments, dismissal 
requests, and requests for approval of universal settlements. The 
specific dates of the settlement period will be announced in the public 
notice identifying the MX applications, but will only last, at most, 
two weeks. Due to the Commission's competitive bidding rule prohibiting 
certain communications, 47 CFR 1.2105(c), applicants in Auction 111 
will not be able to communicate after the short-form application 
deadline with each other for the purpose of resolving conflicts outside 
of this limited settlement period.
    10. An applicant listed in Attachment A to the Auction 111 Comment 
Public Notice may become qualified to bid in Auction 111 only if it 
complies with the auction filing, qualification, and payment 
requirements, and otherwise complies with applicable rules, policies, 
and procedures. Each listed applicant may become a qualified bidder 
only for those construction permits specified for that applicant in 
Attachment A to the Auction 111 Comment Public Notice. Each of the 
engineering proposals within each MX group are directly mutually 
exclusive with one another; therefore, no more than one construction 
permit will be awarded through Auction 111 for each MX group identified 
in Attachment A to the Auction 111 Comment Public Notice. Under the 
Commission's established precedent, once two or more short-form 
applications are accepted for an MX group, mutual exclusivity exists 
for the relevant construction permit for auction purposes. Unless the 
mutual exclusivity is resolved during the limited settlement 
opportunity mentioned above, an applicant in Auction 111 cannot obtain 
a construction permit without placing a bid, even if no other applicant 
for that particular construction permit becomes qualified to bid or in 
fact places a bid.

III. Implementation of Part 1 and Part 73 Competitive Bidding Rules and 
Requirements

    11. Consistent with the provisions of section 309(j)(3)(E)(i) of 
the Act, and to ensure that potential bidders have adequate time to 
familiarize themselves with the specific rules that will govern the 
day-to-day conduct of an auction, OEA and MB seek comment on a variety 
of auction-specific procedures relating to the conduct of Auction 111.
    12. The Commission's part 1 and part 73 competitive bidding rules 
require each applicant seeking to bid to acquire a construction permit 
in a broadcast auction to provide certain information in a short-form 
application (FCC Form 175), including ownership details and numerous 
certifications. The competitive bidding rules in part 1, subpart Q, and 
part 73 also contain a framework for the implementation of a 
competitive bidding design, application and certification procedures, 
reporting requirements, and the prohibition of certain communications.

A. Upfront Payments and Bidding Eligibility

    13. In keeping with the usual practice in spectrum auctions, OEA 
and MB propose that applicants be required to submit upfront payments 
as a prerequisite to becoming qualified to bid. An upfront payment is a 
refundable deposit made by an applicant to establish its eligibility to 
bid on construction permits. Upfront payments that are related to the 
specific construction permits being auctioned protect against frivolous 
or insincere bidding and provide the Commission with a source of funds 
from which to collect payments owed at the close of the bidding. As 
required by 47 CFR 1.2106(a), a former defaulter must submit an upfront 
payment equal to 50% more than the amount that would otherwise be 
required.
    14. OEA and MB seek comment on an appropriate upfront payment for 
each construction permit being auctioned, taking into account such 
factors as the efficiency of the auction process and the potential 
value of similar construction permits. With these considerations in 
mind, OEA and MB propose the upfront payments set forth in Attachment A 
to the Auction 111 Comment Public Notice and seek comment on those 
proposed upfront payment amounts.
    15. OEA and MB further propose that the amount of the upfront 
payment submitted by an applicant will determine its initial bidding 
eligibility in bidding units, which are a measure of bidder eligibility 
and bidding activity. OEA and MB propose to assign each construction 
permit a specific number of bidding units, equal to one bidding unit 
per dollar of the upfront payment listed in Attachment A to the Auction 
111 Comment Public Notice. The number of bidding units for a given 
construction permit is fixed and does not change during the auction as 
prices change. If an applicant is found to be qualified to bid on more 
than one permit being offered in Auction 111, such bidder may place 
bids on multiple construction permits, provided that the total number 
of bidding units associated with those construction permits does not 
exceed that bidder's current

[[Page 37975]]

eligibility. A bidder cannot increase its eligibility during the 
auction; it can only maintain its eligibility or decrease its 
eligibility. In calculating its upfront payment amount and hence its 
initial bidding eligibility, an applicant must determine the maximum 
number of bidding units on which it may wish to bid (or hold 
provisionally winning bids) in any single round and submit an upfront 
payment amount covering that total number of bidding units. OEA and MB 
request comment on these proposals.

B. Reserve Price or Minimum Opening Bids

    16. As part of the pre-bidding process for each auction, OEA and MB 
seek comment on the use of a minimum opening bid amount and/or reserve 
price, as mandated by section 309(j) of the Act. OEA and MB propose to 
establish minimum opening bid amounts for Auction 111. Based on its 
experience in past broadcast auctions, the Commission has found that 
setting a minimum opening bid amount judiciously is an effective 
bidding tool for accelerating the competitive bidding process. In the 
last auction of LPTV construction permits (Auction 104), OEA and MB 
similarly proposed establishing minimum opening bids and not reserve 
prices; no comments opposed that proposal, and it was adopted. Based on 
all of these facts, OEA and MB propose establishing minimum opening 
bids for Auction 111. OEA and MB do not propose to establish separate 
reserve prices for any of the construction permits to be offered in 
Auction 111 nor do they see any reason to propose an aggregate reserve 
price for the auction.
    17. For auctions of broadcast permits, the Commission generally 
proposes minimum opening bid amounts determined by taking into account 
the type of service and class of facility offered, market size, 
population covered by the proposed broadcast facility, and recent 
broadcast transaction data, to the extent such information is 
available. Consideration of such factors for Auction 111 is complicated 
by a dearth of such transaction data, the fact that a permittee may opt 
to switch its intended use of such facility from LPTV to translator 
operation, or vice versa, and the lack of accurate data on the 
population that would be covered by each proposed facility. In Auction 
104, the last auction of LPTV construction permits, OEA and MB proposed 
minimum opening bid amounts based on the limited information available, 
and received no comments suggesting changes to the minimum opening bid 
amounts. OEA and MB followed a similar methodology used in Auction 104 
to set the minimum opening bid amounts proposed in Attachment A to the 
Auction 111 Comment Public Notice for each construction permit 
available in Auction 111. OEA and MB seek comment on the minimum 
opening bid amounts specified in Attachment A to the Auction 111 
Comment Public Notice.
    18. If commenters believe that these minimum opening bid amounts 
will result in unsold construction permits or are not reasonable 
amounts at which to start bidding, they should explain why this is so 
and comment on the desirability of an alternative approach. Commenters 
should support their claims with valuation analyses and suggested 
amounts or formulas. In establishing the minimum opening bid amounts, 
OEA and MB particularly seek comment on factors that could reasonably 
have an impact on bidders' valuation of the broadcast spectrum, 
including the type of service and class of facility offered, market 
size, population covered by the proposed broadcast facility and any 
other relevant factors. Commenters also may wish to address the general 
role of minimum opening bids in managing the pace of the auction. For 
example, commenters could compare using minimum opening bids--e.g., by 
setting higher minimum opening bids to reduce the number of rounds it 
takes for construction permits to reach their final prices--to other 
means of controlling auction pace, such as changes to bidding 
schedules, percentage increments, or activity requirements.

C. Auction Delay, Suspension, or Cancellation

    19. For Auction 111, OEA and MB propose that at any time before or 
during the bidding process they may delay, suspend, or cancel bidding 
in the auction in the event of a natural disaster, technical obstacle, 
network interruption, administrative or weather necessity, evidence of 
an auction security breach or unlawful bidding activity, or for any 
other reason that affects the fair and efficient conduct of competitive 
bidding. Notification of any such delay, suspension, or cancellation 
will be provided by public notice or through the FCC auction bidding 
system's messages function. If bidding is delayed or suspended, the 
auction may resume starting from the beginning of the current round or 
from some previous round, or the auction may be cancelled in its 
entirety. This authority will be exercised solely at the discretion of 
OEA and MB, and not as a substitute for situations in which bidders may 
wish to apply activity rule waivers. OEA and MB seek comment on this 
proposal.

D. Interim Withdrawal Payment Percentage

    20. As discussed below, OEA and MB propose not to allow bid 
withdrawals in Auction 111. In the event bid withdrawals are permitted 
in Auction 111, however, OEA and MB propose the interim bid withdrawal 
payment be 20% of the withdrawn bid. A bidder that withdraws a 
provisionally winning bid during an auction is subject to a withdrawal 
payment equal to the difference between the amount of the withdrawn bid 
and the amount of the winning bid in the same or a subsequent auction. 
47 CFR 1.2104(g)(1). However, if a construction permit for which a bid 
has been withdrawn does not receive a subsequent higher bid or winning 
bid in the same auction, the Commission cannot calculate the final 
withdrawal payment until that construction permit receives a higher bid 
or winning bid in a subsequent auction. In such cases, when that final 
withdrawal payment cannot yet be calculated, the Commission imposes on 
the bidder responsible for the withdrawn bid an interim bid withdrawal 
payment, which will be applied toward any final bid withdrawal payment 
that is ultimately assessed.
    21. The percentage amount of the interim bid withdrawal payment is 
established in advance of bidding in each auction and may range from 3% 
to 20% of the withdrawn bid amount. The Commission has determined that 
the level of interim withdrawal payment in a particular auction will be 
based on the nature of the service and the inventory of the licenses 
being offered. The Commission noted specifically that a higher interim 
withdrawal payment percentage is warranted to deter the anti-
competitive use of withdrawals when, for example, bidders will not need 
to aggregate the licenses being offered in the auction or when there 
are few synergies to be captured by combining licenses. In light of 
these considerations with respect to the construction permits being 
offered in this auction, OEA and MB propose to use the maximum interim 
bid withdrawal payment percentage permitted by Sec.  1.2104(g)(1) in 
the event bid withdrawals are allowed in this auction. OEA and MB 
request comment on using 20% for calculating an interim bid withdrawal 
payment amount in Auction 111 in the event that bidders would be 
permitted to withdraw bids. Commenters advocating the use of bid 
withdrawals should also address the

[[Page 37976]]

percentage of the interim bid withdrawal payment.

E. Deficiency Payments and Additional Default Payment Percentage

    22. Any winning bidder that defaults or is disqualified after the 
close of an auction (i.e., fails to remit the required down payment by 
the specified deadline, fails to make full and timely final payment, 
fails to submit a timely long-form application, or whose long-form 
application is not granted for any reason, or is otherwise 
disqualified) is liable for a default payment under Sec.  1.2104(g)(2) 
of the rules. This payment consists of a deficiency payment, equal to 
the difference between the amount of the Auction 111 bidder's winning 
bid and the amount of the winning bid the next time a construction 
permit covering the same spectrum is won in an auction, plus an 
additional payment equal to a percentage of the defaulter's bid or of 
the subsequent winning bid, whichever is less.
    23. The Commission's rules provide that, in advance of each 
auction, it will establish a percentage between 3% and 20% of the 
applicable winning bid to be assessed as an additional default payment. 
As the Commission has indicated, the level of this additional payment 
in each auction will be based on the nature of the service and the 
construction permits being offered.
    24. For Auction 111, OEA and MB propose to establish an additional 
default payment of 20%, which is consistent with the percentage in 
prior auctions of broadcast construction permits. As the Commission has 
noted, defaults weaken the integrity of the auction process and may 
impede the deployment of service to the public, and an additional 20% 
default payment will be more effective in deterring defaults than the 
3% used in some earlier auctions. In light of these considerations, OEA 
and MB propose for Auction 111 an additional default payment of 20% of 
the relevant bid. OEA and MB seek comment on this proposal.

IV. Proposed Bidding Procedures

A. Simultaneous Multiple-Round Auction Design

    25. OEA and MB propose to use the Commission's simultaneous 
multiple-round auction format for Auction 111. As described further 
below, this type of auction offers every construction permit for bid at 
the same time and consists of successive bidding rounds in which 
qualified bidders may place bids on individual construction permits. 
Typically, bidding remains open on all construction permits until 
bidding stops on every construction permit. OEA and MB seek comment on 
this proposal.

B. Bidding Rounds

    26. The Commission will conduct Auction 111 over the internet using 
the FCC auction bidding system. A bidder will also have the option of 
placing bids by telephone through a dedicated auction bidder line.
    27. Under this proposal, Auction 111 will consist of sequential 
bidding rounds, each followed by the release of round results. The 
initial bidding schedule will be announced in a public notice to be 
released at least one week before the start of bidding. Details on 
viewing round results, including the location and format of 
downloadable round results files, will be included in the same public 
notice.
    28. OEA and MB propose that the initial bidding schedule may be 
adjusted in order to foster an auction pace that reasonably balances 
speed with the bidders' need to study round results and adjust their 
bidding strategies. Under this proposal, such changes may include the 
amount of time for the bidding rounds, the amount of time between 
rounds, or the number of rounds per day, depending upon bidding 
activity and other factors. OEA and MB seek comment on this proposal. 
Commenters on this issue should address the role of the bidding 
schedule in managing the pace of the auction, specifically discussing 
the tradeoffs in managing auction pace by bidding schedule changes, by 
changing the activity requirement(s) or bid amount parameters, or by 
using other means.

C. Stopping Rule

    29. OEA and MB have discretion to establish stopping rules before 
or during multiple round auctions in order to complete the auction 
within a reasonable time. 47 CFR 1.2104(e). For Auction 111, OEA and MB 
propose to employ a simultaneous stopping rule approach, which means 
all construction permits remain available for bidding until bidding 
stops on every construction permit. Specifically, bidding will close on 
all construction permits after the first round in which no bidder 
submits any new bid, applies a proactive activity rule waiver, or 
withdraws any provisionally winning bid (if bid withdrawals are 
permitted in this auction). Thus, under the proposed simultaneous 
stopping rule, bidding would remain open on all construction permits 
until bidding stops on every construction permit. Consequently, under 
this approach, it is not possible to determine in advance how long the 
bidding in this auction will last.
    30. Further, OEA and MB propose to retain the discretion to 
exercise any of the following stopping options during Auction 111: (1) 
The auction would close for all construction permits after the first 
round in which no bidder applies a waiver, no bidder withdraws a 
provisionally winning bid (if withdrawals are permitted in this 
auction), or no bidder places any new bid on a construction permit for 
which it is not the provisionally winning bidder. Absent any other 
bidding activity, a bidder placing a new bid on a construction permit 
for which it is the provisionally winning bidder would not keep the 
auction open under this modified stopping rule; (2) the auction would 
close for all construction permits after the first round in which no 
bidder applies a waiver, no bidder withdraws a provisionally winning 
bid (if withdrawals are permitted in this auction), or no bidder places 
any new bid on a construction permit that already has a provisionally 
winning bid. Absent any other bidding activity, a bidder placing a new 
bid on an FCC-held construction permit (a construction permit that does 
not already have a provisionally winning bid) would not keep the 
auction open under this modified stopping rule; (3) the auction would 
close using a modified version of the simultaneous stopping rule that 
combines (1) and (2); (4) the auction would close after a specified 
number of additional rounds (special stopping rule) to be announced in 
advance in the FCC auction bidding system. If this special stopping 
rule is invoked, bids will be accepted in the specified final round(s), 
after which the auction will close; and (5) the auction would remain 
open even if no bidder places any new bid, applies a waiver, or 
withdraws any provisionally winning bid (if withdrawals are permitted 
in this auction). In this event, the effect will be the same as if a 
bidder had applied a waiver. The activity rule will apply as usual, and 
a bidder with insufficient activity will either lose bidding 
eligibility or use a waiver.
    31. OEA and MB propose to exercise these options only in certain 
circumstances, for example, where the auction is proceeding unusually 
slowly or quickly, there is minimal overall bidding activity, or it 
appears likely that the auction will not close within a reasonable 
period of time or will close prematurely. Before exercising these 
options, OEA and MB are likely to attempt to change the pace of the 
auction. For example, the pace of bidding may be adjusted by changing

[[Page 37977]]

the number of bidding rounds per day or the minimum acceptable bids. 
OEA and MB propose to retain the discretion to exercise any of these 
options with or without prior announcement during the auction. OEA and 
MB seek comment on these proposals. Commenters should provide specific 
reasons for supporting or objecting to these proposals.

D. Activity Rule

    32. 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 late in the auction before 
participating. For purposes of the activity rule, the FCC auction 
bidding system calculates a bidder's activity in a round as the sum of 
the bidding units associated with any construction permits upon which 
it places bids during the current round and the bidding units 
associated with any construction permits for which it holds 
provisionally winning bids. Bidders are required to be active on a 
specific percentage of their current bidding eligibility during each 
round of the auction. OEA and MB propose a single-stage auction with a 
100% activity requirement. That is, in each bidding round, a bidder 
desiring to maintain its current bidding eligibility will be required 
to be active on 100% of its bidding eligibility. Thus, the activity 
requirement would be satisfied when a bidder has bidding activity on 
construction permits with bidding units that total 100% of its current 
eligibility in the round. If the activity rule is met, then the 
bidder's eligibility does not change in the next round. Failure to 
maintain the requisite activity level will result in the use of an 
activity rule waiver, if any remain, or a reduction in the bidder's 
eligibility for the next round of bidding, possibly curtailing or 
eliminating the bidder's ability to place additional bids in the 
auction. OEA and MB seek comment on these activity requirements. 
Commenters that oppose a 100% activity requirement are encouraged to 
explain their reasons with specificity.

E. Activity Rule Waivers and Reducing Eligibility

    33. For the proposed simultaneous multiple-round auction format, 
OEA and MB propose that when a bidder's activity in the current round 
is below the required minimum level, it may preserve its current level 
of eligibility through an activity rule waiver, if the bidder has any 
available. Consistent with prior Commission auctions of broadcast 
construction permits, OEA and MB propose that each bidder in Auction 
111 be provided with three activity rule waivers that may be used as 
set forth below at the bidder's discretion during the course of the 
auction.
    34. An activity rule waiver applies to an entire round of bidding, 
not to a particular construction permit. Activity rule waivers can be 
either proactive or automatic. Activity rule waivers are primarily a 
mechanism for a bidder to avoid the loss of bidding eligibility in the 
event that exigent circumstances prevent it from bidding in a 
particular round.
    35. The FCC auction bidding system will assume that a bidder that 
does not meet the activity requirement would prefer to use an activity 
rule waiver (if available) rather than lose bidding eligibility. 
Therefore, the system will automatically apply a waiver at the end of 
any bidding round in which a bidder's activity level is below the 
minimum required unless: (1) The bidder has no activity rule waiver 
remaining; or (2) the bidder overrides the automatic application of a 
waiver by reducing eligibility, thereby meeting the activity 
requirement. If a bidder has no waivers remaining and does not satisfy 
the required activity level, the bidder's current eligibility will be 
permanently reduced, possibly curtailing or eliminating the ability to 
place additional bids in the auction.
    36. A bidder with insufficient activity may wish to reduce its 
bidding eligibility rather than use an activity rule waiver. If so, the 
bidder must affirmatively override the automatic waiver mechanism 
during the bidding round by using the reduce eligibility function in 
the FCC auction bidding system. In this case, the bidder's eligibility 
would be permanently reduced to bring it into compliance with the 
activity rule described above. Reducing eligibility is an irreversible 
action; once eligibility has been reduced, a bidder cannot regain its 
lost bidding eligibility.
    37. Under the proposed simultaneous stopping rule, a bidder would 
be permitted to apply an activity rule waiver proactively as a means to 
keep the auction open without placing a bid. If a bidder proactively 
applies an activity rule waiver (using the proactive waiver function in 
the FCC auction bidding system) during a bidding round in which no bid 
is placed or withdrawn (if bid withdrawals are permitted in this 
auction), the auction will remain open and the bidder's eligibility 
will be preserved. An automatic waiver applied by the FCC auction 
bidding system in a round in which there is no new bid, no bid 
withdrawal (if bid withdrawals are permitted in this auction), or no 
proactive waiver would not keep the auction open. OEA and MB seek 
comment on these proposals.

F. Bid Amount

    38. OEA and MB propose that, in each round, a qualified bidder will 
be able to place a bid on a given construction permit in any of up to 
nine different amounts: The minimum acceptable bid amount or one of the 
additional bid amounts. Bidders must have sufficient eligibility to 
place a bid on the particular construction permit.
    39. Minimum Acceptable Bid Amounts. The first of the acceptable bid 
amounts is called the minimum acceptable bid amount. The minimum 
acceptable bid amount for a construction permit will be equal to its 
minimum opening bid amount until there is a provisionally winning bid 
for the construction permit. Once there is a provisionally winning bid 
for a construction permit, the minimum acceptable bid amount for that 
construction permit will be equal to the amount of the provisionally 
winning bid plus a specified percentage of that bid amount. The 
percentage used for this calculation, the minimum acceptable bid 
increment percentage, is multiplied by the provisionally winning bid 
amount, and the resulting amount is added to the provisionally winning 
bid amount. If, for example, the minimum acceptable bid increment 
percentage is 10%, then the provisionally winning bid amount is 
multiplied by 10%. The result of that calculation is added to the 
provisionally winning bid amount, and that sum is rounded using the 
Commission's standard rounding procedure for auctions as described in 
the Auction 111 Comment Public Notice. If bid withdrawals are permitted 
in this auction, in the case of a construction permit for which the 
provisionally winning bid has been withdrawn, the minimum acceptable 
bid amount will equal the second highest bid received for the 
construction permit.
    40. Additional Bid Amounts. Under this proposal, the Commission 
will calculate the eight additional bid amounts using the minimum 
acceptable bid amount and an additional bid increment percentage. The 
minimum acceptable bid amount is multiplied by the additional bid 
increment percentage, and that result (rounded) is the additional 
increment amount. The first additional acceptable bid amount equals the 
minimum acceptable bid amount plus the additional increment amount. The 
second additional acceptable bid amount equals the minimum acceptable

[[Page 37978]]

bid amount plus two times the additional increment amount; the third 
additional acceptable bid amount is the minimum acceptable bid amount 
plus three times the additional increment amount; etc. If, for example, 
the additional bid increment percentage is 5%, then the calculation of 
the additional increment amount would be (minimum acceptable bid 
amount) * (0.05), rounded. The first additional acceptable bid amount 
equals (minimum acceptable bid amount) + (additional increment amount); 
the second additional acceptable bid amount equals (minimum acceptable 
bid amount) + (2*(additional increment amount)); the third additional 
acceptable bid amount equals (minimum acceptable bid amount) + 
(3*(additional increment amount)); etc.
    41. For Auction 111, OEA and MB propose to use a minimum acceptable 
bid increment percentage of 10%. This means that the minimum acceptable 
bid amount for a construction permit will be approximately 10% greater 
than the provisionally winning bid amount for the construction permit. 
To calculate the additional acceptable bid amounts, OEA and MB propose 
to use a bid increment percentage of 5%. OEA and MB seek comment on 
these proposals.
    42. Bid Amount Changes. OEA and MB propose to retain the discretion 
to change the minimum acceptable bid amounts, the minimum acceptable 
bid percentage, the additional bid increment percentage, and the number 
of acceptable bid amounts if, consistent with past practice, 
circumstances so dictate. OEA and MB propose to retain the discretion 
to do so on a construction permit-by-construction permit basis. OEA and 
MB also propose to retain the discretion to limit (a) the amount by 
which a minimum acceptable bid for a construction permit may increase 
compared with the corresponding provisionally winning bid, and (b) the 
amount by which an additional bid amount may increase compared with the 
immediately preceding acceptable bid amount. For example, a $1,000 
limit could be set on increases in minimum acceptable bid amounts over 
provisionally winning bids. In this example, if calculating a minimum 
acceptable bid using the minimum acceptable bid increment percentage 
results in a minimum acceptable bid amount that is $1,200 higher than 
the provisionally winning bid on a construction permit, the minimum 
acceptable bid amount would instead be capped at $1,000 above the 
provisionally winning bid. OEA and MB seek comment on the circumstances 
that would call for employing such a limit, factors to consider when 
determining the dollar amount of the limit, and the tradeoffs in 
setting such a limit or changing other parameters, such as changing the 
minimum acceptable bid percentage, the bid increment percentage, or the 
number of acceptable bid amounts. If OEA and MB exercise this 
discretion, bidders would be notified by announcement in the FCC 
auction bidding system during the auction.
    43. OEA and MB seek comment on these proposals. If commenters 
disagree with the proposal to begin the auction with nine acceptable 
bid amounts per construction permit, they should suggest an alternative 
number of acceptable bid amounts to use. Commenters may wish to address 
the role of the minimum acceptable bids and the number of acceptable 
bid amounts in managing the pace of the auction and the tradeoffs in 
managing auction pace by changing the bidding schedule, activity 
requirement, bid amounts, or by using other means.

G. Provisionally Winning Bids

    44. The FCC auction bidding system will determine provisionally 
winning bids consistent with practice in past auctions. At the end of a 
bidding round, the bidding system will determine a provisionally 
winning bid for each construction permit based on the highest bid 
amount received for that permit. The FCC auction bidding system will 
advise bidders of the status of their bids when round results are 
released. A provisionally winning bid will remain the provisionally 
winning bid until there is a higher bid on the same construction permit 
at the close of a subsequent round, unless the provisionally winning 
bid is withdrawn (if bid withdrawals are permitted in this auction). 
Provisionally winning bids at the end of the auction become the winning 
bids. As a reminder, provisionally winning bids count toward activity 
for purposes of the activity rule.
    45. The FCC auction bidding system assigns a pseudo-random number 
generated by an algorithm to each bid when the bid is entered. If 
identical high bid amounts are submitted on a construction permit in 
any given round (i.e., tied bids), the FCC auction bidding system will 
use a pseudo-random number generator to select a single provisionally 
winning bid from among the tied bids. The tied bid with the highest 
pseudo-random number wins the tiebreaker and becomes the provisionally 
winning bid. The remaining bidders, as well as the provisionally 
winning bidder, can submit higher bids in subsequent rounds. However, 
if the auction were to end with no other bids being placed, the winning 
bidder would be the one that placed the provisionally winning bid. If 
the construction permit receives any bids in a subsequent round, the 
provisionally winning bid again will be determined by the highest bid 
amount received for the construction permit.

H. Bid Removal and Bid Withdrawal

    46. Bid Removal. The FCC auction bidding system allows each bidder 
to remove any of the bids it placed in a round before the close of that 
round. By removing a bid placed within a round, a bidder effectively 
unsubmits the bid. In contrast to the bid withdrawal provisions 
described below, a bidder removing a bid placed in the same round is 
not subject to a withdrawal payment. Once a round closes, a bidder may 
no longer remove a bid. Consistent with the design of the bidding 
system, bidders in Auction 111 would be permitted to remove bids placed 
in a round before the close of that round.
    47. Bid Withdrawal. OEA and MB propose not to permit bidders in 
Auction 111 to withdraw bids. When permitted in an auction, bid 
withdrawals provide a bidder with the option of withdrawing bids placed 
in prior rounds that have become provisionally winning bids. A bidder 
would be able to withdraw its provisionally winning bids using the 
withdraw function in the FCC auction bidding system. A bidder that 
withdraws its provisionally winning bid(s), if permitted, is subject to 
the bid withdrawal payment provisions of the Commission's rules. 47 CFR 
1.2104(g), 1.2109.
    48. The Commission has recognized that bid withdrawals may be a 
helpful tool in certain circumstances for bidders seeking to 
efficiently aggregate licenses or implement backup strategies. The 
Commission has also acknowledged that allowing bid withdrawals may 
encourage insincere bidding or increased opportunities for undesirable 
strategic bidding in certain circumstances. The Commission stated that 
this discretion should be exercised assertively, with consideration of 
limiting the number of rounds in which bidders may withdraw bids, and 
preventing bidders from bidding on a particular market if a bidder is 
abusing the Commission's bid withdrawal procedures. In managing the 
auction, therefore, OEA and MB have discretion to limit the number of 
withdrawals to prevent bidding abuses.
    49. Based on this guidance and on experience with past auctions of

[[Page 37979]]

broadcast construction permits, OEA and MB propose to prohibit bidders 
from withdrawing any bid after the close of the round in which that bid 
was placed. OEA and MB make this proposal in light of the site-specific 
nature and wide geographic dispersion of the permits available in this 
auction, which suggests that potential applicants for this auction may 
have fewer incentives to aggregate permits through the auction process 
(as compared with bidders in many auctions of wireless licenses). Thus, 
OEA and MB believe that it is unlikely that bidders will have a need to 
withdraw bids in this auction. Further, bid withdrawals, particularly 
if they were made late in this auction, could result in delays in 
licensing new broadcast stations and attendant delays in the offering 
of new broadcast service to the public. OEA and MB comment on this 
proposal to prohibit bid withdrawals in Auction 111. Commenters 
advocating alternative approaches should support their arguments by 
taking into account the construction permits offered, the impact of 
auction dynamics and the pricing mechanism, and the effects on the 
bidding strategies of other bidders.

V. Tutorial and Additional Information for Applicants

    50. The Commission intends to provide additional information on the 
bidding system and to offer demonstrations and other educational 
opportunities for applicants in Auction 111 to familiarize themselves 
with the FCC auction application system and the auction bidding system. 
For example, OEA and MB intend to release an online tutorial that will 
help applicants understand the procedures to be followed in the filing 
of their auction short-form applications (FCC Form 175) and on the 
bidding procedures for Auction 111.

VI. Procedural Matters

A. Paperwork Reduction Act

    51. The Office of Management and Budget (OMB) has approved the 
information collections in the Application to Participate in an FCC 
Auction, FCC Form 175, OMB Control No. 3060-0600. The Auction 111 
Comment Public Notice does not propose new or modified information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. Therefore, it does not contain any new or 
modified information collection burden for small business concerns with 
fewer than 25 employees pursuant to the Small Business Paperwork Relief 
Act of 2002, Public Law 107-198.

B. Supplemental Initial Regulatory Flexibility Analysis

    52. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), 5 U.S.C. 603, the Commission prepared Initial Regulatory 
Flexibility Analyses (IRFAs) in connection with the Broadcast 
Competitive Bidding Notice of Proposed Rulemaking (NPRM), 62 FR 65392, 
December 12, 1997, and other Commission NPRMs (collectively, 
Competitive Bidding NPRMs) pursuant to which Auction 111 will be 
conducted. Final Regulatory Flexibility Analyses (FRFAs) likewise were 
prepared in the Broadcast Competitive Bidding Order, 63 FR 48615, 
September 11, 1998, and other Commission rulemaking orders 
(collectively, Competitive Bidding Orders) pursuant to which Auction 
111 will be conducted. The Office of Economics and Analytics (OEA), in 
conjunction with the Media Bureau (MB), has prepared a Supplemental 
Initial Regulatory Flexibility Analysis (Supplemental IRFA) of the 
possible significant economic impact on small entities of the policies 
and rules addressed in the Auction 111 Comment Public Notice, to 
supplement the Commission's Initial and Final Regulatory Flexibility 
Analyses completed in the Competitive Bidding NPRMs and the Competitive 
Bidding Orders pursuant to which Auction 111 will be conducted. Written 
public comments are requested on the Supplemental IRFA. Comments must 
be identified as responses to the Supplemental IRFA and must be filed 
by the same filing deadlines for comments specified in the DATES 
section of this document. The Commission will send a copy of the 
Auction 111 Comment Public Notice, including the Supplemental IRFA, to 
the Chief Counsel for Advocacy of the Small Business Administration 
(SBA).
    53. Need for, and Objectives of, the Public Notice. The proposed 
procedures for the conduct of Auction 111 as described in the Auction 
111 Comment Public Notice would constitute the more specific 
implementation of the competitive bidding rules contemplated by parts 1 
and 73 of the Commission's rules, adopted by the Commission in multiple 
notice-and-comment rulemaking proceedings, including the Commission's 
establishing in the underlying rulemaking orders additional procedures 
to be used on delegated authority. More specifically, the Auction 111 
Comment Public Notice seeks comment on proposed procedures, terms and 
conditions governing Auction 111, and the post-auction application and 
payment processes, as well as seeking comment on the minimum opening 
bid amounts for the specified construction permits, and is fully 
consistent with the underlying rulemaking orders, including the 
Broadcast Competitive Bidding Order and other relevant competitive 
bidding orders.
    54. The Auction 111 Comment Public Notice provides notice of 
proposed auction procedures and adequate time for Auction 111 
applicants to comment on those proposed procedures. To promote the 
efficient and fair administration of the competitive bidding process 
for all Auction 111 participants, including small businesses, the 
Auction 111 Comment Public Notice seeks comment on the following 
proposed procedures: Establishment of an interim bid withdrawal 
percentage of 20% of the withdrawn bid in the event bid withdrawals are 
allowed in Auction 111; Establishment of an additional default payment 
of 20% under Sec.  1.2104(g)(2) in the event that a winning bidder 
defaults or is disqualified after the auction; use of a simultaneous 
multiple-round auction format, consisting of sequential bidding rounds 
with a simultaneous stopping rule (with discretion to exercise 
alternative stopping rules under certain circumstances); retention by 
OEA, in conjunction with MB, to exercise its discretion to delay, 
suspend, or cancel bidding in Auction 111 for any reason that affects 
the ability of the competitive bidding process to be conducted fairly 
and efficiently; retention by OEA of discretion to adjust the bidding 
schedule in order to manage the pace of Auction 111; a specific minimum 
opening bid amount for each construction permit available in Auction 
111; a specific number of bidding units for each construction permit; a 
specific upfront payment amount for each construction permit; 
establishment of a bidder's initial bidding eligibility in bidding 
units based on that bidder's upfront payment through assignment of a 
specific number of bidding units for each construction permit; use of 
an activity requirement so that bidders must bid actively during the 
auction rather than waiting until late in the auction before 
participating; a single stage auction in which a bidder is required to 
be active on 100% of its bidding eligibility in each round of the 
auction; provision of three activity waivers for each qualified bidder 
to allow it to preserve eligibility during the course of the auction; 
use of minimum

[[Page 37980]]

acceptable bid amounts and additional bid increments, along with a 
proposed methodology for calculating such amounts, while retaining 
discretion to change their methodology if circumstances dictate; bid 
removal procedures; and proposal to allow for bid removals (before the 
close of a bidding round) but not allow bid withdrawals (after the 
close of a bidding round).
    55. Legal Basis. The Commission's statutory obligations to small 
businesses participating in a spectrum auction under the Act are found 
in sections 309(j)(3)(B) and 309(j)(4)(D). The statutory basis for the 
Commission's competitive bidding rules is found in various provisions 
of the Act, including 47 U.S.C. 154(i), 301, 303(e), 303(f), 303(r), 
304, 307, and 309(j). The Commission has established a framework of 
competitive bidding rules pursuant to which it has conducted auctions 
since the inception of the auction program in 1994 and would conduct 
Auction 111. The Commission has directed that OEA and MB, under 
delegated authority, seek comment on a variety of auction-specific 
procedures prior to the start of bidding in each auction.
    56. Description and Estimate of the Number of Small Entities to 
Which the Proposed Procedures Will Apply. The RFA directs agencies to 
provide a description of and, where feasible, an estimate of the number 
of small entities that may be affected by the proposed procedures, if 
adopted. The RFA generally defines the term small entity as having the 
same meaning as the terms small business, small organization, and small 
government jurisdiction. 5 U.S.C. 601(6). In addition, the term small 
business has the same meaning as the term small business concern under 
the Small Business Act. A small business concern is one which: (1) Is 
independently owned and operated, (2) is not dominant in its field of 
operation, and (3) satisfies any additional criteria established by the 
SBA. 15 U.S.C. 632.
    57. The specific procedures and minimum opening bid amounts on 
which comment is sought in the Auction 111 Comment Public Notice will 
directly affect all applicants participating in Auction 111, in which 
applicant eligibility is closed. Therefore, the specific competitive 
bidding procedures and minimum opening bid amounts described in the 
Auction 111 Comment Public Notice will affect only the 24 individuals 
and entities listed in Attachment A to the Auction 111 Comment Public 
Notice and that are the only parties eligible to complete the remaining 
steps to become qualified to bid in Auction 111. These specific 24 
Auction 111 individuals and entities include firms of all sizes.
    58. The Television Broadcasting Economic Census category comprises 
establishments primarily engaged in broadcasting images together with 
sound. These establishments operate television broadcast studios and 
facilities for the programming and transmission of programs to the 
public. These establishments also produce or transmit visual 
programming to affiliated broadcast television stations, which in turn 
broadcast the programs to the public on a predetermined schedule. 
Programming may originate in their own studio, from an affiliated 
network, or from external sources. The SBA has created the following 
small business size standard for such businesses: Those having $41.5 
million or less in annual receipts. 13 CFR 121.201, NAICS Code 515120. 
The 2012 Economic Census reports that 751 firms in this category 
operated that entire year. Of that number, 656 had annual receipts of 
$25,000,000 or less, and 25 had annual receipts between $25,000,000 and 
$49,999,999. Based on this data OEA and MB therefore estimate that the 
majority of commercial television broadcasters are small entities under 
the applicable SBA size standard.
    59. Additionally, the Commission has estimated the number of 
licensed commercial television stations to be 1,374. Of this total, 
1,269 stations (or about 92.5%) had revenues of $41.5 million or less, 
according to Commission staff review of the BIA Kelsey Inc. Media 
Access Pro Television Database (BIA) in April 20, 2021 and therefore 
these stations qualify as small entities under the SBA definition.
    60. In addition, the Commission has estimated the number of 
licensed noncommercial educational (NCE) television stations to be 384. 
These stations are non-profit, and therefore considered to be small 
entities.
    61. There are also 2,371 LPTV stations, including Class A stations, 
and 3,306 TV translators. Given the nature of these services, OEA and 
MB presume that all of these entities qualify as small entities under 
the SBA small business size standard.
    62. The SBA size standard data, however, does not enable a 
meaningful estimate of the number of small entities that may 
participate in Auction 111.
    63. In assessing whether a business entity qualifies as small under 
the SBA definition, 13 CFR 121.103(a)(1), business control affiliations 
must be included. Business concerns are affiliates of each other when 
one concern controls or has the power to control the other, or a third 
party or parties controls or has the power to control both. This 
estimate therefore likely overstates the number of small entities that 
might be affected by this auction because the revenue figures on which 
this estimate is based does not include or aggregate revenues from 
affiliated companies. Moreover, the definition of small business also 
requires that an entity not be dominant in its field of operation and 
that the entity be independently owned and operated. The estimate of 
small businesses to which Auction 111 competitive bidding rules may 
apply does not exclude any television station from the definition of a 
small business on these bases and is therefore over-inclusive to that 
extent. Furthermore, OEA and MB are unable at this time to define or 
quantify the criteria that would establish whether a specific LPTV 
station or TV translator is dominant in its field of operation.
    64. Further, it is not possible to accurately develop an estimate 
of how many of the 24 entities in this auction are small businesses 
based on the number of small entities that applied to participate in 
prior broadcast auctions, because that information is not collected 
from applicants for broadcast auctions in which bidding credits are not 
based on an applicant's size (as is the case in auctions of licenses 
for wireless services). OEA and MB conclude, however, that the majority 
of Auction 111 eligible bidders would likely meet the SBA's definition 
of a small business concern.
    65. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The Commission designed the 
auction application process itself to minimize reporting and compliance 
requirements for applicants, including small business applicants. To 
participate in this auction parties will file streamlined, short-form 
applications in which they certify under penalty of perjury as to their 
qualifications. Eligibility to participate in bidding is based on an 
applicant's short-form application and certifications, as well as its 
upfront payment. In the second phase of the process, there are 
additional compliance requirements for winning bidders. Thus, a small 
business that fails to become a winning bidder does not need to satisfy 
additional requirements of a winning bidder.
    66. OEA and MB do not expect the processes and procedures proposed 
in the Auction 111 Comment Public Notice will require small entities to 
hire attorneys, engineers, consultants, or other professionals to 
participate in

[[Page 37981]]

Auction 111 and comply with the procedures ultimately adopted because 
of the information, resources, and guidance the Commission makes 
available to potential and actual participants. For example, the 
Commission intends to release an online tutorial that will help 
applicants understand the procedures for filing the auction short-form 
application (FCC Form 175). The Commission also intends to make 
information on the bidding system available and to offer demonstrations 
and other educational opportunities for applicants in Auction 111 to 
familiarize themselves with the FCC auction application system and the 
auction bidding system. By providing these resources as well as the 
resources discussed below, OEA and MB expect small business entities 
who use the available resources to experience lower participation and 
compliance costs. Nevertheless, while OEA and MB cannot quantify the 
cost of compliance with the proposed procedures, they do not believe 
that the costs of compliance will unduly burden small entities that 
choose to participate in the auction because the proposals for Auction 
111 are similar in many respects to the procedures in recent auctions 
conducted by the Commission.
    67. Steps Taken to Minimize the Significant Economic Impact on 
Small Entities, and Significant Alternatives Considered. The RFA 
requires an agency to describe any significant, specifically small 
business, alternatives that it has considered in reaching its proposed 
approach, which may include the following four alternatives (among 
others): (1) The establishment of differing compliance or reporting 
requirements or timetables that take into account the resources 
available to small entities; (2) the clarification, consolidation, or 
simplification of compliance and reporting requirements under the rule 
for such small entities; (3) the use of performance rather than design 
standards; and (4) an exemption from coverage of the rule, or any part 
thereof, for such small entities. 5 U.S.C. 603(c)(1)-(4).
    68. The Commission has taken steps to minimize any economic impact 
of its auction procedures on small businesses through, among other 
things, the many resources it provides potential auction participants. 
Small entities and other auction participants may seek clarification of 
or guidance on complying with competitive bidding rules and procedures, 
reporting requirements, and the FCC's auction bidding system. An FCC 
Auctions Hotline provides access to Commission staff for information 
about the auction process and procedures. The FCC Auctions Technical 
Support Hotline is another resource which provides technical assistance 
to applicants, including small entities, on issues such as access to or 
navigation within the electronic FCC Form 175 and use of the FCC's 
auction bidding system. Small entities may also use the web-based, 
interactive online tutorial produced by Commission staff to familiarize 
themselves with auction procedures, filing requirements, bidding 
procedures, and other matters related to an auction.
    69. The Commission also makes various databases and other sources 
of information, including the Auctions program websites and copies of 
Commission decisions, available to the public without charge, providing 
a low-cost mechanism for small entities to conduct research prior to 
and throughout the auction. Prior to and at the close of Auction 111, 
the Commission will post public notices on the Auctions website, which 
articulate the procedures and deadlines for the auction. The Commission 
makes this information easily accessible and without charge to benefit 
all Auction 111 applicants, including small entities, thereby lowering 
their administrative costs to comply with the Commission's competitive 
bidding rules.
    70. Prior to the start of bidding, eligible bidders will be given 
an opportunity to become familiar with auction procedures and the 
bidding system by participating in a mock auction. Further, the 
Commission intends to conduct Auction 111 electronically over the 
internet using its web-based auction system that eliminates the need 
for bidders to be physically present in a specific location. Qualified 
bidders also have the option to place bids by telephone. These 
mechanisms are made available to facilitate participation in Auction 
111 by all eligible bidders and may result in significant cost savings 
for small business entities that use these alternatives. Moreover, the 
adoption of bidding procedures in advance of the auction, consistent 
with statutory directive, is designed to ensure that the auction will 
be administered predictably and fairly for all participants, including 
small entities.
    71. Federal Rules that May Duplicate, Overlap, or Conflict with the 
Proposed Rules. None.

C. Deadlines and Filing Procedures

    72. Interested parties may file comments or reply comments on or 
before the dates indicated in the DATES section of this summary in AU 
Docket No. 21-248. Comments may be filed using the Commission's 
Electronic Comment Filing System (ECFS).
    73. Ex Parte Requirements. This proceeding has been designated as a 
``permit-but-disclose'' proceeding in accordance with the Commission's 
ex parte rules. 47 CFR 1.1200(a), 1.1206. Persons making ex parte 
presentations must file a copy of any written presentation or a 
memorandum summarizing any oral presentation within two business days 
after the presentation (unless a different deadline applicable to the 
Sunshine period applies). Persons making oral ex parte presentations 
are reminded that memoranda summarizing the presentations must (1) list 
all persons attending or otherwise participating in the meeting at 
which the ex parte presentation was made, and (2) summarize all data 
presented and arguments made during the presentation. If the 
presentation consisted in whole or in part of the presentation of data 
or arguments already reflected in the presenter's written comments, 
memoranda, or other filings in the proceeding, the presenter may 
provide citations to such data or arguments in his or her prior 
comments, memoranda, or other filings (specifying the relevant page 
and/or paragraph numbers where such data or arguments can be found) in 
lieu of summarizing them in the memorandum. Documents shown or given to 
the Commission staff during ex parte meetings are deemed to be written 
ex parte presentations and must be filed consistent with section Sec.  
1.1206(b). In proceedings governed by Sec.  1.49(f) or for which the 
Commission has made available a method of electronic filing, written ex 
parte presentations and memoranda summarizing oral ex parte 
presentations, and all attachments thereto, must be filed through the 
Electronic Comment Filing System available for that proceeding, and 
must be filed in their native format (e.g., .doc, .xml, .ppt, 
searchable .pdf). Participants in this proceeding should familiarize 
themselves with the Commission's ex parte rules.

Federal Communications Commission.
William W. Huber,
Associate Chief, Auctions Division, Office of Economics and Analytics.
[FR Doc. 2021-15146 Filed 7-16-21; 8:45 am]
BILLING CODE 6712-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>