[Federal Register Volume 65, Number 77 (Thursday, April 20, 2000)]
[Notices]
[Pages 21182-21196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-9905]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-00-33-B (Auction No. 33); DA 00-781]


Auction of Licenses for the 700 MHz Guard Bands Scheduled for 
June 14, 2000; Auction Notice and Filing Requirements for 104 Licenses 
in the 700 MHz Guard Band Auction Scheduled for June 14, 2000 Minimum 
Opening Bids and Other Procedural Issues

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This public notice announces the procedures and minimum 
opening bids for the upcoming auction of licenses for fixed and mobile 
services in the 746-747/776-777 and 762-764/792-794 MHz bands 
(``Auction No. 33'') scheduled to commence on June 14, 2000.

DATES: Auction No. 33 is scheduled for June 14, 2000.

FOR FURTHER INFORMATION CONTACT: Auctions and Industry Analysis 
Division: Howard Davenport, Attorney, Auctions Legal Branch at (202) 
418-0660; Kathy Garland, Project Manager, Auctions Operations Branch at 
(717) 338-2888, or Craig Bomberger, Analyst, Auctions Operations Branch 
at (202) 418-0660. Media Contact: Meribeth McCarrick at (202) 418-0654. 
Commercial Wireless Division: Roger Noel, Chief, Licensing and 
Technical Analysis Branch, at (202) 418-0620.

SUPPLEMENTARY INFORMATION: This is a summary of a Public Notice 
released April 10, 2000. The complete text of the public notice, 
including Attachments A through H, is available for inspection and 
copying during normal business hours in the FCC Reference Center (Room 
CY-A257), 445 12th Street, SW, Washington, DC. Attachments C, D, and H 
where corrected in DA 00-850, released April 13, 2000 and is also 
available in the FCC Reference Center. It may also be purchased from 
the Commission's copy contractor, International Transcription Services, 
Inc. (ITS, Inc.) 1231 20th Street, NW, Washington, D.C. 20036, (202) 
857-3800. It is also available on the Commission's web site at http://www.fcc.gov.

List of Attachments available at the FCC:

Attachment A--Auction No. 33 Licenses to be Auctioned Revised Upfront 
Payments and Minimum Opening Bids
Attachment B--FCC Auction Seminar Registration Form Auction No. 33
Attachment C--Electronic Filing and Review of the FCC Form 175 
(Corrected in DA 00-850 released April 13, 2000)
Attachhment D--Guidelines for Completion of FCC Form 175 and Exhibits 
(Corrected in DA 00-850 released April 13, 2000)
Attachment E--Auction-Specific Instructions for FCC Remittance Advice 
(FCC Form 159)
Attachment F--FCC Bidding Preference/Remote Software Order Form Auction 
No. 33
Attachment G--Bid Increments and Exponential Smoothing
Attachment H--Accessing the FCC Network Using Windows 95/98

[[Page 21183]]

(Corrected in DA 00-850 released April 13, 2000)
Attachment I--Summary Listing of Documents from the Commission and the 
Wireless Telecommunications Bureau Addressing Application of the Anti-
Collusion Rules
Attachment J--Incumbent Television Licenses on Channels 59 through 68

I. General Information

A. Introduction

    1. This public notice announces the procedures and minimum opening 
bids for the upcoming auction of licenses for fixed and mobile services 
in the 746-747/776-777 and 762-764/792-794 MHz bands (``Auction No. 
33''). On March 10, 2000, the Wireless Telecommunications Bureau 
(``Bureau'') released a public notice, seeking comment on the 
establishment of reserve prices or minimum opening bids for Auction No. 
33, in accordance with the Balanced Budget Act of 1997. See DA 00-559, 
Auction of Licenses for the 700 MHz Guard Bands Scheduled for June 14, 
2000 (Auction No. 33 Comment Public Notice) 65 FR 14561 (March 17, 
2000). In addition, the Bureau sought comment on a number of procedures 
to be used in Auction No. 33. The Bureau received four comments and 
five reply comments in response to the Auction No. 33 Comment Public 
Notice.
(i) Background of Proceeding
    2. The 746-806 MHz band has historically been used exclusively by 
television stations (Channels 60-69). Incumbent analog television 
broadcasters are permitted by statute to continue operations in this 
band until their markets are converted to digital television (``DTV''). 
See Advanced Television Systems and Their Impact Upon Existing 
Television Broadcast Service (Fifth Report and Order) 63 FR 15774 
(April 1, 1998). The Budget Act directed the Commission to reallocate 
this spectrum for public safety and commercial use by December 31, 
1997, and to commence competitive bidding for the commercial licenses 
on the reallocated spectrum after January 1, 2001. In November 1999, 
Congress enacted a consolidated appropriations statute that revised the 
latter instruction. This legislation accelerated the schedule for 
auction of the commercial spectrum bands, and requires that the 
proceeds from the auction of these bands be deposited in the U.S. 
Treasury by September 30, 2000.
(ii) Licenses To Be Auctioned
    3. The licenses available in this auction consist of one 4 
megahertz license (a pair of 2 megahertz blocks) and one 2 megahertz 
license (a pair of 1 megahertz blocks) in each of 52 Major Economic 
Areas (MEAs). These licenses are listed in this public notice on 
Attachment A. The following table contains the Block/Frequency Band 
cross-references for Auction No. 33:

                            Frequencies (MHz)
------------------------------------------------------------------------
             License suffix                        Frequencies
------------------------------------------------------------------------
A......................................  746-747, 776-777
B......................................  762-764, 792-794
------------------------------------------------------------------------

B. Rules and Disclaimers

(i) Relevant Authority

    4. Prospective bidders must familiarize themselves thoroughly with 
the Commission's rules relating to the 700 MHz band, contained in title 
47, part 27 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.
    5. Prospective bidders must also be thoroughly familiar with the 
procedures, terms and conditions (collectively, ``Terms'') contained in 
this public notice; the Auction No. 33 Comment Public Notice; Service 
Rules for the 746-764 and 776-794 MHz Bands, and Revisions to Part 27 
of the Commission's Rules) (700 MHz Second Report & Order), FCC 00-90, 
65 FR 17594 (April 4, 2000), and First Report and Order, FCC 00-5 (700 
MHz First Report & Order), 65 FR 3139 (January 20, 2000) recon pending; 
Reallocation of Television Channels 60-69, the 746-806 MHz Band, ET 
Docket No. 97-157, (Report and Order), 63 FR 6669 (February 10, 1998), 
recon., 63 FR 63798 (November 17, 1998) (Reallocation Reconsideration).
    6. The terms contained in the Commission's rules, relevant orders 
and public notices are not negotiable. The Commission may amend or 
supplement the information contained in our public notices 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 <a href="/cdn-cgi/l/email-protection#f89e8c88b89e8c88d69e9b9bd69f978e"><span class="__cf_email__" data-cfemail="8ceaf8fccceaf8fca2eaefefa2ebe3fa">[email protected]</span></a> or the FCC Auctions 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. (ITS), at (202) 
314-3070. When ordering documents from ITS, please provide the 
appropriate FCC number (for example, FCC 00-5 for the 700 MHz First 
Report & Order).

(ii) Prohibition of Collusion

    7. 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 after the auction. Bidders competing for licenses in the same 
geographic license areas are encouraged not to use the same individual 
as an authorized bidder. A violation of the anti-collusion rule could 
occur if an individual acts as the authorized bidder for two or more 
competing applicants, and conveys information concerning the substance 
of bids or bidding strategies between the bidders he/she is authorized 
to represent in the auction. Also, if the authorized bidders are 
different individuals employed by the same organization (e.g., law firm 
or consulting firm), a violation could similarly occur. At a minimum, 
in such a case, applicants should certify on their applications that 
precautionary steps have been taken to prevent communication between 
authorized bidders and that applicants and their bidding agents will 
comply with the anti-collusion rule.
    8. The Bureau, however, cautions that merely filing a certifying 
statement as part of an application will not outweigh specific evidence 
that collusive behavior has occurred nor will it preclude the 
initiation of an investigation when warranted. In Auction No. 33, for 
example, the rule would apply to any applicants bidding for the same 
MEA. Therefore, applicants that apply to bid for ``all markets'' would 
be precluded from communicating with all other applicants after filing 
the FCC Form 175. However, applicants may enter into bidding agreements 
before filing their FCC Form 175 short-form applications, as long as 
they disclose the existence of the agreement(s) in their Form 175 
short-form applications. If parties agree in principle on all material 
terms prior to the short-form filing deadline, those parties must be 
identified on the short-form application under Sec. 1.2105(c), even if 
the agreement has not been reduced

[[Page 21184]]

to writing. If the parties have not agreed in principle by the filing 
deadline, an applicant would not include the names of those parties on 
its application, and may not continue negotiations with other 
applicants for the same geographic license areas. By signing their FCC 
Form 175 short-form applications, applicants are certifying their 
compliance with Sec. 1.2105(c). In addition, Sec. 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, Sec. 1.65 
requires an auction applicant 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.
(iii) Protection of Public Safety Operations
    9. Section 337(d)(4) of the Budget Act requires that the Commission 
establish rules insuring that public safety services licensees using 
spectrum reallocated pursuant to subsection (a)(1) shall not be subject 
to harmful interference from television broadcast licensees. The 
Conference Report pertaining to that section states that the Commission 
should ensure that public safety service licensees in the 746-806 MHz 
band ``continue to operate free of interference from any new commercial 
licensees.'' To achieve this end, the Commission established ``Guard 
Bands'' in the 746-747 MHz, 762-764 MHz, 776-777 MHz, and 792-794 MHz 
bands. The Commission required that entities operating in the Guard 
Bands adhere to the same out-of-band emission (``OOBE'') criteria that 
was adopted for 700 MHz public safety users. In addition, these 
entities must coordinate their frequency use with public safety 
frequency coordinators and also comply with the adjacent channel 
coupled power out-of-band emission limits. In addition, operations in 
the Guard Bands are restricted to entities that do not use a cellular 
system architecture.
(iv) Protection of Television Services
    10. Licensees operating on the spectrum associated with Channels 
60, 62, 65, and 67 must comply with the co-channel and adjacent channel 
provisions of Sec. 27.60 of our rules. For example, an entity operating 
on any portion of the 746-747 MHz Guard Band, which is contained in 
Channel 60, must provide co-channel protection to Channel 60, and 
adjacent channel protection to Channels 59 and 61.
a. Negotiations With Incumbent Broadcast Licensees
    11. As the Commission noted in the 700 MHz First Report & Order: 
``The Congressional plan set forth in sections 336 and 337 of the 
[Communications] Act and in the 1997 Budget Act is to transition this 
spectrum from its current use for broadcast services to commercial use 
and public safety services.'' Congress also has directed the Commission 
to auction 36 MHz of spectrum, six of which are the subject of this 
auction, allocated for commercial use at least six years before the 
relocation deadline for incumbent broadcasters in this spectrum, while 
adopting interference limits and other technical restrictions necessary 
to protect full-service analog and digital television service during 
the transition to DTV. In these circumstances, the Commission will 
consider specific regulatory requests needed to implement voluntary 
agreements reached between incumbent licensees and new licensees in 
these bands. In considering whether the public interest would be served 
by approving specific requests, the Commission would, for example, 
consider the benefits to consumers of the provision of new wireless 
services, such as next generation mobile services or Internet fixed 
access services. The Commission would also consider whether such 
agreements would help clear spectrum for public safety use in these 
bands and could result in the provision of new wireless service in 
rural and other relatively underserved communities. On the other hand, 
the Commission would also consider loss of service to the broadcast 
community of the licensee. For example, the Commission would consider 
the availability of the licensee's former analog programming within the 
service area, through simulcast of that programming on the licensee's 
DTV channel or distribution of the programming on cable or DBS, or the 
availability of similar broadcast services within the service area 
(e.g., whether the lost service is the only network service, the only 
source for local service, or the only source for otherwise unique 
broadcast service).
b. Canadian and Mexican Border Regions
    12. There are currently separate agreements with Canada and Mexico 
covering TV broadcast use of the UHF 470-806 MHz band. Such agreements 
do not reflect the additional use or services adopted in the 700 MHz 
First Report & Order and the 700 MHz Second Report & Order for 746-764 
and 776-794 MHz bands. While the Commission staff has been involved in 
discussions with both countries regarding coordination of interference 
criteria for the use of these bands in the border areas for the 
additional services, agreements have yet to be reached. Therefore, 
until such agreements have been finalized, the Commission found it 
necessary to adopt certain interim requirements for licenses in these 
bands along the Canada and Mexico borders. Accordingly, licenses issued 
for these bands within 120 km of the borders will be made subject to 
whatever future agreements the United States develops with those two 
countries. In that the existing agreements for the protection of TV 
stations in those countries are still in effect and must be recognized 
until they are replaced or modified to reflect the new uses, the 
Commission decided that licenses in the border areas will be granted on 
the condition that harmful interference may not be caused to, but must 
accept interference from, UHF TV transmitters in Canada and Mexico. 
Furthermore, the Commission pointed out that modifications may be 
necessary to comply with whatever provisions are ultimately specified 
in future agreements with Canada and Mexico regarding the use of these 
bands. Pending further negotiations, the Commission has adopted the 
protection criteria found in Sec. 90.545 of the Commission's Rules, 47 
CFR 90.545, as an interim criteria for protecting Canadian and Mexican 
TV and DTV stations. Potential bidders should be aware that a petition 
for reconsideration of the TV protection criteria has been filed. Based 
on future Commission action on this petition, the protection criteria 
and license conditions, as described, could be modified.
(v) Due Diligence
    13. 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.
    14. Potential bidders are reminded that there are a number of 
incumbent broadcast television licensees already

[[Page 21185]]

licensed and operating in the 746-764 and 776-794 MHz bands (television 
Channels 60-62 and 65-67), six megahertz of which will be subject to 
the upcoming auction. The Commission made clear that geographic area 
licensees operating on the spectrum associated with Channels 60, 62, 
65, and 67 must comply with the co-channel and adjacent channel 
provision of Sec. 90.545 of the Commission's rules. In addition, 
geographic area licensees operating fixed stations in the 746-764 MHz 
band must comply with the relevant provisions for ``base stations'' in 
Secs. 90.309 and 90.545 of the Commissions rules; and licensees 
operating fixed stations in the 776-794 MHz band must comply with the 
relevant provisions for ``control stations'' in those sections of the 
rules.
    15. These limitations may restrict the ability of such geographic 
licensees to use certain portions of the electromagnetic spectrum or 
provide service to certain regions in their geographic license areas. 
Listed in Attachment J are the facilities of incumbent television 
permittees and licensees on television Channels 59-68. However, 
prospective bidders should not rely solely on this list, but should 
carefully review the Commission's databases and records before 
formulating bidding strategies. Records relating to these stations are 
available for public inspection during regular business hours in the 
Reference Information Center at the Federal Communications Commission, 
445 Twelfth Street, SW, CY-A257, Washington, DC 20554. The Commission 
makes no representation or guarantees regarding the accuracy or 
completeness of the information in Attachment J. In addition, 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 databases. Potential 
bidders are strongly encouraged to physically inspect any sites located 
in or near the geographic area for which they plan to bid.
    Potential bidders should also be aware of the following filings:

    <bullet> QUALCOMM Incorporated, Petition for Declaratory Ruling 
Giving Effect to the Mandate of the District of Columbia Circuit 
Court of Appeals, Service Rules for the 746-764 and 776-794 MHz 
Bands and Revisions to Part 27 of the Commission's Rules, Petition 
for Declaratory Ruling (filed January 28, 2000).
    <bullet> ``Wireless Telecommunications Bureau Seeks Comment On 
QUALCOMM Incorporated's Petition for Declaratory Ruling Seeking 700 
MHz Band License Pursuant to Ruling of U.S. Circuit Court of 
Appeals,'' Public Notice, DA 00-219 (rel. February 4, 2000); 
Extension of Filing Deadline for Comments to QUALCOMM Incorporated's 
Petition for Declaratory Ruling, Public Notice, DA 00-273 (rel. 
February 11, 2000). 65 FR 9266 (February 24, 2000)

    Potential bidders should also be aware that certain applications 
(including those for modification), petitions for rulemaking, waiver 
requests, requests for special temporary authority (``STA''), petitions 
to deny, petitions for reconsideration, and applications for review may 
be pending before the Commission that relate to the facilities in 
Attachment J. We note that resolution of these pending matters could 
have an impact on the availability of spectrum for licensees in the 
746-764 and 776-794 MHz bands. While the Commission will continue to 
act on pending matters, some of these matters may not be resolved by 
the time of auction. Potential bidders are strongly encouraged to 
conduct their own research prior to Auction No. 33 in order to 
determine the existence of pending proceedings that might affect their 
decisions regarding participation in the auction. Participants in 
Auction No. 33 are strongly encouraged to continue such research during 
the auction.
(vi) Bidder Alerts
    16. 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.
    17. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 33 to 
deceive and defraud unsuspecting investors. Common warning signals of 
fraud include the following:
    <bullet> 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.
    <bullet> 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.
    <bullet> The amount of the minimum investment is less than $25,000.
    <bullet> 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.
    18. 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 700 MHz proposals may also call the FCC Consumer Center at 
(888) CALL-FCC ((888) 225-5322).
    (vii) National Environmental Policy Act (NEPA) Requirements
    19. The licensee must comply with the Commission's rules regarding 
the National Environmental Policy Act (NEPA). The construction of a 700 
MHz facility is a federal action and the permitee must comply with the 
Commission's NEPA rules for each such facility. See 47 CFR 1.1305-
1.1319. The Commission's NEPA rules require that, among other things, 
the permitee consult with expert agencies having NEPA responsibilities, 
including the U.S. Fish and Wildlife Service, the State Historic 
Preservation Office, the Army Corp of Engineers and the Federal 
Emergency Management Agency (through the local authority with 
jurisdiction over floodplains). The permitee must prepare environmental 
assessments for facilities that may have a significant impact in or on 
wilderness areas, wildlife preserves, threatened or endangered species 
or designated critical habitats, historical or archaeological sites, 
Indian religious sites, floodplains, and surface features. The permitee 
must also prepare environmental assessments for facilities that include 
high intensity white lights in residential neighborhoods or excessive 
radio frequency emission.

[[Page 21186]]

C. Auction Specifics

(i) Auction Date
    20. The auction will begin on Wednesday, June 14, 2000. 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 on all licenses will be conducted on each business day until 
bidding has stopped on all licenses.
(ii) Auction Title
    21. Auction No. 33--700 MHz Guard Band
(iii) Bidding Methodology
    22. The bidding methodology for Auction No. 33 will be simultaneous 
multiple round bidding. Bidding will be permitted only from remote 
locations, either electronically (by computer) or telephonically.
(iv) Pre-Auction Dates and Deadlines
    23. The following are important events and deadlines related to 
Auction No. 33:

April 27, 2000
    Auction Seminar
May 9, 2000; 6 p.m. ET
    Short-Form Application (FCC FORM 175)
May 26, 2000; 6 p.m. ET
    Upfront Payments (via wire transfer)
May 30, 2000; 6 p.m. ET
    Orders for Remote Bidding Software
June 12, 2000
    Mock Auction
June 14, 2000
    Auction Begins
(v) Requirements for Participation
    24. Those wishing to participate in the auction must:
    <bullet> Submit a short form application (FCC Form 175) 
electronically by 6 p.m. ET, May 9, 2000.
    <bullet> Submit a sufficient upfront payment and an FCC Remittance 
Advice Form (FCC Form 159) by 6 p.m. ET May 26, 2000.
    <bullet> Comply with all provisions outlined in this public notice.
(vi) General Contact Information
    25. The following is a list of general contact information relating 
to Auction No. 33:

General Auction Information

    General Auction Questions
Seminar Registration
Orders for Remote Bidding Software
FCC Auctions Hotline, (888) 225-5322, Press Option #2, or direct (717) 
338-2888. Hours of service: 8 a.m.-6:00 p.m. ET

Auction Legal Information

Auction Rules, Policies, Regulations
Auctions and Industry Analysis Division, Legal Branch (202) 418-0660

Licensing Information

Rules, Policies, Regulations
Licensing Issues
Incumbency/Protection Issues
Commercial Wireless Division, (202) 418-0620

Technical Support

Electronic Filing Assistance
Software Downloading
FCC Auctions Technical Support Hotline, (202) 414-1250 (Voice), (202) 
414-1255 (TTY). Hours of service: 8 a.m.-6 p.m. ET

Payment Information

Wire Transfers
Refunds
FCC Auctions Accounting Branch, (202) 418-1995, (202) 418-2843 (Fax)

Telephonic Bidding

FCC Copy Contractor

Will be furnished only to qualified bidders
Additional Copies of Commission Documents
International Transcription Services, Inc., 445 12th Street, SW Room 
CY-B400, Washington, DC 20554, (202) 314-3070

Press Information

Meribeth McCarrick, (202) 418-0654

FCC Forms

(800) 418-3676 (outside Washington, DC),
(202) 418-3676 (in the Washington Area)
    http://www.fcc.gov/formpage

FCC Internet Sites

    http://www.fcc.gov/wtb/auctions
    http://www.fcc.gov
    ftp://ftp.fcc.gov

II. Short-Form (FCC Form 175) Application Requirements

    26. Guidelines for completion of the short-form (FCC Form 175) are 
set forth in Attachment D to this public notice. The short-form 
application seeks the applicant's name and address, legal 
classification, status, bidding credit eligibility, identification of 
the authorization(s) sought, the authorized bidders and contact 
persons, and specific ownership information.

A. Ownership Disclosure Requirements (Form 175 Exhibit A)

    27. All applicants must comply with the uniform part 1 ownership 
disclosure standards and provide information required by Secs. 1.2105 
and 1.2112 of the Commission's rules. Specifically, in completing Form 
175, applicants will be required to file an Exhibit A providing a full 
and complete statement of the ownership of the bidding entity. The 
ownership disclosure standards for the short-form are set forth in 
Sec. 1.2112 of the Commission's rules.

B. Consortia and Joint Bidding Arrangements (Form 175 Exhibit B)

    28. Applicants will be required to identify on their short-form 
applications any parties with whom they have entered into any 
consortium arrangements, joint ventures, partnerships or other 
agreements or understandings which relate in any way to the licenses 
being auctioned, including any agreements relating to post-auction 
market structure. See 47 CFR 1.2105(a)(2)(viii), 1.2105(c)(1). 
Applicants will also be required to certify on their short-form 
applications that they have not entered into any explicit or implicit 
agreements, arrangements or understandings of any kind with any 
parties, other than those identified, regarding the amount of their 
bids, bidding strategies, or the particular construction permits on 
which they will or will not bid. See 47 CFR 1.2105(a)(2)(ix). As 
discussed, if an applicant has had discussions, but has not reached a 
joint bidding agreement by the short-form deadline, it would not 
include the names of parties to the discussions on its application and 
may not continue discussions with applicants for the same geographic 
license area(s) after the deadline. In cases where applicants have 
entered into consortia or joint bidding arrangements, applicants must 
submit an Exhibit B to the FCC Form 175.
    29. A party holding a non-controlling, attributable interest in one 
applicant will be permitted to acquire an ownership interest in, form a 
consortium with, or enter into a joint bidding arrangement with other 
applicants for construction permits in the same geographic license area 
provided that (i) the attributable interest holder(s) certify that it 
has not and will not communicate with any party concerning the bids or 
bidding strategies of more than one of the applicants in which it holds 
an attributable interest, or with which it has formed a consortium or 
entered into a joint bidding arrangement; and (ii) the arrangements do 
not result in a change in control of any of the applicants. While the 
anti-collusion rules do not prohibit non-auction related business 
negotiations among auction applicants,

[[Page 21187]]

bidders are reminded that certain discussions or exchanges could broach 
on impermissible subject matters because they may convey pricing 
information and bidding strategies.

C. Small Business Bidding Credits (Form 175 Exhibit C)

    30. In the 700 MHz Second Report & Order, the Commission adopted 
small business provisions to promote and facilitate the participation 
of small businesses in competitive bidding for Guard Band licenses in 
the 700 MHz band.
(i) Eligibility
    31. Bidding credits are available to small businesses and very 
small businesses as defined in 47 CFR 27.502(a). For purposes of 
determining which entities qualify as very small businesses or small 
businesses, the Commission will consider the gross revenues of the 
applicant, its controlling interests, and affiliates of the applicant 
and its controlling interests. The Commission does not impose specific 
equity requirements on controlling interests. Once principals or 
entities with a controlling interest are determined, only the revenues 
of those principals or entities, the applicant and its affiliates will 
be counted in determining small business eligibility. The term 
``control'' includes both de facto and de jure control of the 
applicant. Typically, ownership of at least 50.1 percent of an entity's 
voting stock evidences de jure control. De facto control is determined 
on a case-by-case basis. The following are some common indicia of 
control:
    <bullet> The entity constitutes or appoints more than 50 percent of 
the board of directors or management committee;
    <bullet> The entity has authority to appoint, promote, demote, and 
fire senior executives that control the day-to-day activities of the 
licensee; or
    <bullet> The entity plays an integral role in management decisions.
    32. A consortium of small businesses, or very small businesses is a 
conglomerate organization formed as a joint venture between or among 
mutually independent business firms, each of which individually 
satisfies the definition of small or very small business in 
Sec. 27.502. Thus, each consortium member must disclose its gross 
revenues along with those of its affiliates, controlling interests, and 
controlling interests' affiliates. We note that although the gross 
revenues of the consortium members will not be aggregated for purposes 
of determining eligibility for small or very small business credits, 
this information must be provided to ensure that each individual 
consortium member qualifies for any bidding credit awarded to the 
consortium.
(ii) Application Showing
    33. Applicants must file supporting documentation as Exhibit C to 
their FCC Form 175 short form applications to establish that they 
satisfy the eligibility requirements to qualify as a small business or 
very small business (or consortia of small or very small businesses) 
for this auction. Specifically, for Auction No. 33, applicants applying 
to bid as small or very small businesses (or consortia of small or very 
small businesses) will be required to disclose on Exhibit C to their 
FCC Form 175 short-form applications, separately and in the aggregate, 
the gross revenues for the preceding three years of each of the 
following: (a) the applicant; (b) the applicant's affiliates; (c) the 
applicant's controlling interests; and (d) the affiliates of the 
applicant's controlling interests. Certification that the average gross 
revenues for the preceding three years do not exceed the applicable 
limit is not sufficient. A statement of the total gross revenues for 
the preceding three years is also insufficient. The applicant must 
provide separately for itself, its affiliates, and its controlling 
interests, a schedule of gross revenues for each of the preceding three 
years, as well as a statement of total average gross revenues for the 
three-year period. If the applicant is applying as a consortium of very 
small or small businesses, this information must be provided for each 
consortium member.
(iii) Bidding Credits
    34. Applicants that qualify under the definitions of small business 
and very small business (or consortia of small or very small 
businesses) as are set forth in 47 CFR 27.502, are eligible for a 
bidding credit that represents the amount by which a bidder's winning 
bids are discounted. The size of a bidding credit in the 700 MHz guard 
band auction depends on the average gross revenues for the preceding 
three years of the bidder and its controlling interests and affiliates:
    <bullet> A bidder with average gross revenues of not more than $40 
million for the preceding three years receives a 15 percent discount on 
its winning bids for 700 MHz Guard Band manager licenses (``small 
business'');
    <bullet> A bidder with average gross revenues of not more than $15 
million for the preceding three years receives a 25 percent discount on 
its winning bids for 700 MHz Guard Band manager licenses (``very small 
business'').
    35. Bidding credits are not cumulative: qualifying applicants 
receive either the 15 percent or the 25 percent bidding credit, but not 
both.
    36. Bidders in Auction No. 33 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 level of bidding credit. Finally, bidders 
should also note that there are no installment payment plans in Auction 
No. 33.

D. Other Information (Form 175 Exhibits D and E)

    37. Applicants owned by minorities or women, as defined in 47 CFR 
1.2110(b)(2), may attach an exhibit (Exhibit D) regarding this status. 
This applicant status information is collected for statistical purposes 
only and assists the Commission in monitoring the participation of 
``designated entities'' in its auctions. Applicants wishing to submit 
additional information may do so in Exhibit E, Miscellaneous 
Information to the FCC Form 175.

E. Minor Modifications to Short-Form Applications (FCC Form 175)

    38. After the short-form filing deadline (May 9, 2000), applicants 
may make only minor changes to their 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 or change 
bidding credits). See 47 CFR 1.2105. Permissible minor changes include, 
for example, deletion and addition of authorized bidders (to a maximum 
of three) and revision of exhibits. Applicants 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, 445 12th Street, SW, Suite 4-A760 
Washington, DC 20554, briefly summarizing the changes. Questions about 
other changes should be directed to Howard Davenport of the Auctions 
and Industry Analysis Division at (202) 418-0660.

F. Maintaining Current Information in Short-Form Applications (FCC Form 
175)

    39. Applicants have an obligation under 47 CFR 1.65, to maintain 
the completeness and accuracy of information in their short-form 
applications. Amendments reporting substantial changes of possible 
decisional significance in information

[[Page 21188]]

contained in FCC Form 175 applications, as defined by 47 CFR 
1.2105(b)(2), will not be accepted and may in some instances result in 
the dismissal of the FCC Form 175 application.

III. Pre-Auction Procedures

A. Auction Seminar

    40. On Thursday, April 27, 2000, the FCC will sponsor a free 
seminar for Auction No. 33 at the Federal Communications Commission, 
located at 445 12th Street, S.W., Washington, D.C. The seminar will 
provide attendees with information about pre-auction procedures, 
conduct of the auction, FCC remote bidding software, and the 700 MHz 
Guard Band service and auction rules. The seminar will also provide an 
opportunity for prospective bidders to ask questions of FCC staff.
    41. To register, complete the registration form that is included as 
Attachment B of this public notice and submit it by Tuesday, April 25, 
2000. Registrations are accepted on a first-come, first-served basis.

B. Short-Form Application (FCC Form 175)--Due May 9, 2000

    42. In order to be eligible to bid in this auction, applicants must 
first submit a FCC Form 175 application. This application must be 
submitted electronically and received at the Commission by 6 p.m. ET on 
May 9, 2000. Late applications will not be accepted.
    43. There is no application fee required when filing a FCC Form 
175. However, to be eligible to bid, an applicant must submit an 
upfront payment. See part III.D.
(i) Electronic Filing
    44. Applicants must file their FCC Form 175 applications 
electronically. Applications may generally be filed at any time from 
April 27, 2000 until 6 p.m. ET on May 9, 2000. Applicants are strongly 
encouraged to file early, and applicants are responsible for allowing 
adequate time for filing their applications. Applicants may update or 
amend their electronic applications multiple times until the filing 
deadline on May 9, 2000.
    45. Information about accessing the FCC Form 175 is included in 
Attachment C. Technical support is available at (202) 414-1250 (voice) 
or (202) 414-1255 (text telephone (TTY)); the hours of service are 8 
a.m. to 6 p.m. ET, Monday through Friday.
(ii) Completion of the FCC Form 175
    46. Applicants must carefully review 47 CFR 1.2105, and must 
complete all items on the FCC Form 175. Instructions for completing the 
FCC Form 175 are in Attachment D of this public notice. Applicants are 
encouraged to begin preparing the required attachments for FCC Form 175 
prior to submitting the form. Attachments C and D to this public notice 
provide information on the required attachments and appropriate 
formats.
(iii) Electronic Review of FCC Form 175
    47. The FCC Form 175 electronic review system may be used to review 
and print applicants' FCC Form 175 information. Applicants may also 
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. For this reason, it is important that 
applicants do not include their Taxpayer Identification Numbers (TINs) 
on any Exhibits to their FCC Form 175 applications. See Attachment C 
for details on accessing the review system.

C. Application Processing and Minor Corrections

    48. After the deadline for filing the FCC Form 175 applications has 
passed, the FCC will process all timely submitted applications to 
determine which are acceptable for filing, and subsequently will issue 
a public notice identifying: (a) those applications accepted for filing 
(including FCC account numbers and the licenses for which they 
applied); (b) those applications rejected; and (c) those applications 
that have minor defects that may be corrected, and the deadline for 
filing such corrected applications.
    49. As described more fully in the Commission's rules, after the 
May 9, 2000, short form filing deadline, applicants may make only minor 
corrections to their 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, change 
control of the applicant, or change bidding credit eligibility).

D. Upfront Payments--Due May 26, 2000

    50. In order to be eligible to bid in the auction, applicants must 
submit an upfront payment accompanied by a FCC Remittance Advice Form 
(FCC Form 159). After completing the FCC Form 175, filers will have 
access to an electronic version of the FCC Form 159 that can be printed 
and faxed to Mellon Bank in Pittsburgh, PA. All upfront payments must 
be received at Mellon Bank by 6 p.m. ET on May 26, 2000.
    Please note that:

    <bullet> All payments must be made in U.S. dollars.
    <bullet> All payments must be made by wire transfer.
    <bullet> Upfront payments for Auction No. 33 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.
    <bullet> Failure to deliver the upfront payment by the May 26, 
2000 deadline will result in dismissal of the application and 
disqualification from participation in the auction.
(i) Auction Payments by Wire Transfer
    51. Wire transfer payments must be received at Mellon Bank by 6 
p.m. ET on May 26, 2000. 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 910-1174, OBI Field: (Skip one space between each 
information item)
``AUCTIONPAY'',
TAXPAYER IDENTIFICATION NO. (same as FCC Form 159, block 26),
PAYMENT TYPE CODE (enter ``A33U''),
FCC CODE 1 (same as FCC Form 159, block 23A: ``33''),
PAYER NAME (same as FCC Form 159, block 2),
LOCKBOX NO. #358405.

    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.

    52. 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. 33.''
    Applicants are strongly encouraged to confirm timely transmission 
and receipt of their upfront payment at Mellon Bank and can do so by 
contacting their sending financial institution.
(ii) FCC Form 159
    53. A completed FCC Remittance Advice Form (FCC Form 159) must be 
faxed to Mellon Bank to accompany each upfront payment wire transfer. 
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 E to this public

[[Page 21189]]

notice. An electronic version of the FCC form 159 is available after 
submitting the FCC Form 175. The FCC Form 159 can be completed 
electronically, but must be filed with Mellon Bank via facsimile.
(iii) Amount of Upfront Payment
    54. In the Part 1 Order, Memorandum Opinion and Order, and Notice 
of Proposed Rule Making (Part 1 Order), the Commission delegated to the 
Bureau the authority and discretion to determine an appropriate upfront 
payment for each license being auctioned. See 62 FR 13540 (March 21, 
1997). In the Auction No. 33 Comment Public Notice, the Bureau proposed 
upfront payments for Auction No. 33. Several comments were submitted 
regarding the amount of upfront payments proposed for this auction, and 
a revised list of upfront payments appears as Attachment A.
    55. Comments concerning the proposed upfront payment were submitted 
by AMTA, and Motorola. According to Motorola, the proposed amounts for 
upfront payments are extremely high given the level of incumbency and 
restrictions required of licensees in this band. Furthermore, Motorola 
argues that a Guard Band Manager, where TV incumbency is an issue, may 
not realize any return on its license investment until December of 2006 
and Guard Band Managers are unlikely to be in a position to assess the 
nature of adjacent commercial operations prior to bidding. Moreover, 
Motorola claims that the proposed upfront payments preclude 
participation by small business and private land mobile coordinators. 
To address these concerns, Motorola urges that the Bureau use the same 
formula employed in the 1999 220 MHz auction (``Auction No. 24'') to 
set minimum opening bids and upfront payments. According to Motorola, 
applying the formula in this proceeding would result in upfront 
payments that total $2,108,178 for Block A and $4,209,287 for Block B 
licenses. AMTA raises similar concerns in recommending that the 
Commission reduce the upfront payments to one-third or one-quarter of 
their current valuations. AMTA also notes that this spectrum is 
affected by the existence of co-channel or adjacent channel television 
broadcast stations in virtually every market of significant size around 
the nation and that these licensees are not required to vacate the 
spectrum until 2006 and that some licensees may be eligible for an 
extension of that deadline. AMTA cites several other factors, including 
anticipated interference from Commercial Mobile Radio Service 
(``CMRS'') operating in the neighboring 30 MHz and the technical 
requirement that must be adopted to ensure interference protection for 
public safety systems.
    56. In its reply comments, AMTA points out that all parties who 
addressed this issue took the position that the proposed upfront 
payments are too high. AMTA cites several factors in support of its 
position. AMTA urges that the Commission use the upfront payments 
proposed by Motorola as absolute upper limits, with further reductions 
in markets that are encumbered. In its reply comments, ITA strongly 
supports Motorola's alternative formula for use in calculating upfront 
payments. Similarly, Mobex, in its reply comments, stated that adoption 
of such a standard will provide better assurance that the Guard Band 
licenses will be sold, in keeping with the Commission's goals to 
provide spectrum to the public at a reasonable price in an expeditious 
manner. MRFAC emphasizes on reply that if the Commission hopes to 
ensure true competitive bidding between and among a variety of 
qualified bidders, it should significantly reduce the amounts proposed 
for upfront payments. On reply, PCIA questions the amount of the 
proposed upfront payment in light of the incumbency on the channels, 
the fact that most of the spectrum to be auctioned will be unusable for 
six years, the fact that the licensing format is new and untested, the 
cost associated with being a Band Manager, and the level of 
interference protection that must be provided to adjacent channel 
public safety systems.
    57. Upon careful consideration of the comments and reply comments, 
the Bureau has decided to exercise its discretion to adjust the upfront 
payments and has set them forth in Attachment A. The revised figures 
are approximately one-third of the original proposal. In making this 
reduction, we recognize the concerns expressed regarding incumbency and 
interference issues and uncertainty in when the spectrum may become 
unencumbered. We also respond to concerns raised concerning the 
opportunity for small businesses to participate in this auction.
    58. Please note that upfront payments are not attributed to 
specific licenses, but instead will be translated to bidding units to 
define a bidder's maximum bidding eligibility. For Auction No. 33, the 
amount of the upfront payment will be translated into bidding units on 
a one-to-one basis, e.g., a $1,000,000 upfront payment provides the 
bidder with 1,000,000 bidding units. The total upfront payment defines 
the maximum number 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 that an applicant has selected on FCC Form 175, but 
rather to cover the maximum number of bidding units that are associated 
with licenses on which the bidder wishes to place bids and hold high 
bids at any given time.
    59. In order to be able to place a bid on a license, in addition to 
having specified that license on the 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 the FCC Form 175, or else the applicant 
will not be eligible to participate in the auction.
    60. In calculating its 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. In order to make this calculation, an applicant should 
add together the upfront payments for all licenses on which it seeks to 
bid in any given round. Bidders should check their calculations 
carefully as there is no provision for increasing a bidder's maximum 
eligibility after the upfront payment deadline.

    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.

(iv) Applicant's Wire Transfer Information for Purposes of Refunds
    61. The Commission will use wire transfers for all Auction No. 33 
refunds. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that all pertinent 
information as listed be supplied to the FCC. Applicants may either 
submit the information electronically after filing their short-form 
application or fax the wire transfer instructions by May 26, 2000, to 
the FCC, Financial Operations Center, Auctions Accounting Group, ATTN: 
Michelle Bennett or Gail Glasser, at (202) 418-2843. Should the payer 
fail to submit the requested information, the refund will be returned 
to the original payer. For additional information, please call (202) 
418-1995.

Name of Bank, ABA Number, Contact and Phone Number, Account Number to 
Credit, Name of Account Holder,

[[Page 21190]]

Correspondent Bank (if applicable), ABA Number, Account 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 part V.D.

E. Auction Registration

    62. 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 have timely submitted upfront 
payments sufficient to make them eligible to bid on at least one of the 
licenses for which they applied.
    63. All qualified bidders are automatically registered for the 
auction. Registration materials will be distributed prior to the 
auction by two separate overnight mailings, each containing a portion 
of the confidential identification codes required to place bids. These 
mailings will be sent only to the contact person at the contact address 
listed in the FCC Form 175.
    64. 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 Friday, June 9, 2000, must 
contact the Auctions Hotline at 717-338-2888. 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.
    65. 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 445 12th St., SW, 
Washington, DC 20554. Only an authorized representative or certifying 
official, as designated on the 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. Qualified 
bidders requiring replacement codes must call technical support prior 
to arriving at the FCC to arrange preparation of new codes.

F. Remote Electronic Bidding Software

    66. Qualified bidders are allowed to bid electronically or by 
telephone. If choosing to bid electronically, each bidder must purchase 
their own copy of the remote electronic bidding software. Electronic 
bids will only be accepted from those applicants purchasing the 
software. However, the software may be copied by the applicant for use 
by its authorized bidders at different locations. The price of the 
FCC's remote bidding software is $175.00 and must be ordered by 
Tuesday, May 30, 2000. For security purposes, the software is only 
mailed to the contact person at the contact address listed on the FCC 
Form 175. Please note that auction software is tailored to a specific 
auction, so software from prior auctions will not work for Auction No. 
33. If bidding telephonically, the telephonic bidding phone number will 
be supplied in the second Federal Express mailing of confidential login 
codes. Qualified bidders that do not purchase the software may only bid 
telephonically. To indicate your bidding preference, an FCC Bidding 
Preference/Remote Software Order Form can be accessed when submitting 
the FCC Form 175 and completed electronically. A copy of this form is 
included as Attachment F in this public notice.

G. Mock Auction

    67. All qualified bidders will be eligible to participate in a mock 
auction scheduled for Monday, June 12, 2000. 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. Participation by all bidders is strongly 
recommended. Details will be announced by public notice.

IV. Auction Event

    68. The first round of bidding for Auction No. 33 will begin on 
Wednesday, June 14, 2000. The initial bidding schedule will be 
announced in the public notice listing the qualified bidders which is 
released approximately 10 days before the start of the auction.

A. Auction Structure

(i) Simultaneous Multiple Round Auction
    69. In the Auction No. 33 Comment Public Notice, we proposed to 
award 104 Guard Band Manager licenses in the 700 MHz guard bands in a 
single, simultaneous multiple round auction. We received no comment on 
this issue. We conclude that it is operationally feasible and 
appropriate to auction the 700 MHz Guard Band manager licenses through 
a single, simultaneous multiple round auction. Unless otherwise 
announced, bids will be accepted on all licenses in each round of the 
auction. This approach, we believe, allows bidders to take advantage of 
any synergies that exist among licenses and is most administratively 
efficient. For Auction No. 33, no applicant may be deemed the winning 
bidder of both the Block A and the Block B license in a single 
geographic service area.
(ii) Maximum Eligibility and Activity Rules
    70. In the Auction No. 33 Comment Public Notice, we 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. We received no comments on this issue.
    71. For Auction No. 33 we 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. Note again that 
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. As there is no provision for increasing a bidder's 
maximum eligibility during the course of an auction (as described under 
``Auction Stages'' as set forth in part IV.A.(iv), prospective bidders 
are cautioned to calculate their upfront payments carefully. The total 
upfront payment does not define the total dollars a bidder may bid on 
any given license.
    72. 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.
    73. A bidder's activity level in a round is the sum of the bidding 
units associated with licenses on which the bidder is active. 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 IV.B.(iii)). The minimum required activity level is expressed as a 
percentage of the bidder's maximum bidding eligibility, and increases 
by stage 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 IV.A.(iv) and ``Stage 
Transitions'' in part

[[Page 21191]]

IV.A.(v), we adopt them for Auction No. 33.
(iii) Activity Rule Waivers and Reducing Eligibility
    74. In the Auction No. 33 Comment Public Notice, we 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. We 
received no comment on this issue.
    75. Based upon our experience in previous auctions, we adopt our 
proposal that each bidder 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. We are satisfied that 
our practice of providing five waivers over the course of the auction 
provides a sufficient number of waivers and maximum flexibility to the 
bidders, while safeguarding the integrity of the auction.
    76. The FCC automated 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: (a) There are no activity rule waivers 
available; or (b) the bidder overrides the automatic application of a 
waiver by reducing eligibility, thereby meeting the minimum 
requirements.
    77. 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 
Stages'' (see part IV.A.(iv)). Once eligibility has been reduced, a 
bidder will not be permitted to regain its lost bidding eligibility.
    78. 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.
(iv) Auction Stages
    79. In the Auction No. 33 Comment Public Notice, we proposed to 
conduct the auction in three stages and employ an activity rule. We 
further proposed that, in each round of Stage One, a bidder desiring to 
maintain its current eligibility would be required to be active on 
licenses encompassing at least 80 percent of its current bidding 
eligibility. In each round of Stage Two, a bidder desiring to maintain 
its current eligibility would be required to be active on at least 90 
percent of its current bidding eligibility. Finally, we proposed that a 
bidder in Stage Three, in order to maintain eligibility, would be 
required to be active on 98 percent of its current bidding eligibility. 
We received no comment on these proposals.
    80. We conclude that the auction will be composed of three stages, 
which are each defined by an increasing activity rule. We will adopt 
our proposals for the activity rules. Here are the activity levels for 
each stage of the auction. The FCC reserves the discretion to further 
alter the activity percentages before and/or during the auction.
    Stage One: During the first stage of the auction, a bidder desiring 
to maintain its current eligibility will be required to be active on 
licenses that represent at least 80 percent of its current bidding 
eligibility in each bidding round. Failure to maintain the required 
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 sum of bidding units of the 
bidder's standing high bids and valid bids during the current round by 
five-fourths (5/4).
    Stage Two: During the second stage of the auction, a bidder 
desiring to maintain its current eligibility is required to be active 
on 90 percent of its current bidding eligibility. Failure to maintain 
the required 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 Two, reduced eligibility for the 
next round will be calculated by multiplying the sum of bidding units 
of the bidder's standing high bids and valid bids during the current 
round by ten-ninths (10/9).
    Stage Three: During the third stage of the auction, a bidder 
desiring to maintain its current eligibility is required to be active 
on 98 percent of its current bidding eligibility. Failure to maintain 
the required 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). In this final stage, reduced eligibility for the 
next round will be calculated by multiplying the sum of bidding units 
of the bidder's standing high bids and valid bids during the current 
round by fifty-fortyninths (50/49).
    CAUTION: Since activity requirements increase in each auction 
stage, bidders must carefully check their current activity during the 
bidding period 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 re-verify 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.
    Because the foregoing procedures have proven successful in 
maintaining proper pace in previous auctions, we adopt them for Auction 
No. 33.
(v) Stage Transitions
    81. In the Auction No. 33 Comment Public Notice, we proposed that 
the auction would generally advance to the next stage (i.e., from Stage 
One to Stage Two, and from Stage Two to Stage Three) when the auction 
activity level, as measured by the percentage of bidding units 
receiving new high bids, is below 10 percent for three consecutive 
rounds of bidding in each stage. However, we further proposed that the 
Bureau would retain the discretion to change stages unilaterally by 
announcement during the auction. This determination, we proposed, would 
be based on a variety of measures of bidder activity, including, but 
not limited to, the auction activity level, the percentages of licenses 
(as measured in bidding units) on which there are new bids, the number 
of new bids, and the percentage increase in revenue. We received no 
comments on this subject.
    82. We adopt our proposal. Thus, the auction will start in Stage 
One. Under the FCC's general guidelines the auction will start in Stage 
One and 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,

[[Page 21192]]

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. We believe that these stage 
transition rules, having proven successful in prior auctions, are 
appropriate for use in Auction No. 33.
(vi) Auction Stopping Rules
    83. For Auction No. 33, the Bureau proposed to employ a 
simultaneous stopping rule. Under this rule, bidding will remain open 
on all licenses until bidding stops on every license. 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 withdraws a previous high bid. After the first such round, 
bidding closes simultaneously on all licenses.
    84. The Bureau also proposed a modified version of the simultaneous 
stopping rule. This modified version will close the auction for all 
licenses after the first round in which no bidder submits a proactive 
waiver, a withdrawal, or a new bid on any license on which it is not 
the standing high bidder. Thus, absent any other bidding activity, a 
bidder placing a new bid on a license for which it is the standing high 
bidder will not keep the auction open under this modified stopping 
rule. The Bureau further sought comment on whether this modified 
stopping rule should be used unilaterally or only in stage three of the 
auction.
    85. The Bureau further proposed retaining the discretion to keep an 
auction open even if no new acceptable bids or proactive waivers are 
submitted and no previous high bids are withdrawn in a round. In this 
event, the effect will be the same as if a bidder had 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).
    86. In addition, we proposed that the Bureau reserve the right to 
declare that the auction will end after a specified number of 
additional rounds (``special stopping rule''). If the Bureau invokes 
this special stopping rule, it will accept bids in the final round(s) 
only for licenses on which the high bid increased in at least one of 
the preceding specified number of rounds. We proposed to exercise this 
option only in circumstances such as where the auction is proceeding 
very slowly, where there is minimal overall bidding activity or where 
it appears likely that the auction will not close within a reasonable 
period of time. Before exercising this option, the Bureau is likely to 
attempt to increase the pace of the auction by, for example, moving the 
auction into the next stage where bidders will be required to maintain 
a higher level of bidding activity), increasing the number of bidding 
rounds per day.
    87. No comments were received on any of these issues therefore we 
adopt all of the proposals concerning the auction stopping rules. 
Auction No. 33 will begin under the simultaneous stopping rule, and the 
Bureau will retain the discretion to invoke the other versions of the 
stopping rule. Adoption of these rules, we believe, is most appropriate 
for Auction No. 33 because our experience in prior auctions 
demonstrates that the auction stopping rules balance 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 the use of these stopping rules.
(vii) Auction Delay, Suspension, or Cancellation
    88. In the Auction No. 33 Comment Public Notice, we proposed that, 
by public notice or by announcement during the auction, the Bureau may 
delay, suspend, or cancel the auction in the event of natural disaster, 
technical obstacle, evidence of an auction security breach, unlawful 
bidding activity, administrative or weather necessity, or for any other 
reason that affects the fair and competitive conduct of competitive 
bidding.
    89. Because this approach has proven effective in resolving exigent 
circumstances in previous auctions, we will adopt our proposed auction 
cancellation rules. By public notice or by announcement during the 
auction, the Bureau may delay, suspend or cancel the auction in the 
event of natural disaster, technical obstacle, evidence of an auction 
security breach, unlawful bidding activity, administrative or weather 
necessity, or for any other reason that affects the fair and 
competitive conduct of competitive bidding. In such cases, the Bureau, 
in its sole discretion, may elect to: resume the auction starting from 
the beginning of the current round; resume the auction starting from 
some previous round; or cancel the auction in its entirety. Network 
interruption may cause the Bureau to delay or suspend the auction. We 
emphasize that exercise of this authority is solely within the 
discretion of the Bureau, and its use is not intended to be a 
substitute for situations in which bidders may wish to apply their 
activity rule waivers.

B. Bidding Procedures

(i) Round Structure
    90. The initial bidding schedule will be announced in the public 
notice listing the qualified bidders which is released approximately 10 
days before the start of the auction. This public notice will be 
included with the registration mailings. The round structure for each 
bidding round contains a single bidding round followed by the release 
of the round results. Multiple bidding rounds may be conducted in a 
given day. Details regarding round results formats and locations will 
be included in the Qualified Bidder Public Notice.
    91. 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.
(ii) Reserve Price or Minimum Opening Bid
    92. Background. The Balanced Budget Act of 1997 calls upon the 
Commission to prescribe methods by which a reasonable reserve price 
will be required or a minimum opening bid established when FCC licenses 
are subject to auction (i.e., because they are mutually exclusive), 
unless the Commission determines that a reserve price or minimum 
opening bid is not in the public interest. Consistent with this 
mandate, the Commission directed the Bureau to seek comment on the use 
of a minimum opening bid and/or reserve price prior to the start of 
each auction. See FCC 97-413, Amendment of Part 1 of the Commission's 
Rules-Competitive Bidding Procedures (Third Report and Order) 63 FR 770 
(January 7, 1998). Among other factors, the Bureau must 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 interference with other 
spectrum bands, and any other relevant factors that could have an 
impact on valuation of the spectrum

[[Page 21193]]

being auctioned. The Commission concluded that the Bureau should have 
the discretion to employ either or both of these mechanisms for future 
auctions.
    93. In the Auction No. 33 Comment Public Notice, the Bureau 
proposed to establish minimum opening bids for Auction No. 33 and to 
retain discretion to lower the minimum opening bids. Specifically, for 
Auction No. 33, the Commission proposed calculating the minimum opening 
bid based on information available in the form of a Congressional 
estimate of the value of the spectrum. In response to the Auction No. 
33 Comment Public Notice, AMTA, ITA, Mobex and Motorola all filed 
comments concerning the proposed minimum opening bids.
    94. In its comments, AMTA states that it is unlikely that its 
members will elect to participate unless the Commission significantly 
reduces the minimum opening bids proposed for the Guard Band spectrum. 
AMTA cites several factors in support of its position. First AMTA 
points out that the Guard Band spectrum will not become available until 
2006 and that deadline may be further extended. Also AMTA asserts that 
the Guard Band spectrum is susceptible to interference from CMRS 
systems operating in the neighboring 30 MHz and that the economic 
utility of the Guard Band allocation will be affected by the technical 
requirements adopted to ensure interference protection for public 
safety systems. According to AMTA, these factors support a reduction to 
one-third or one-quarter of the proposed valuations in minimum opening 
bids in the Guard Band auction.
    95. ITA claims that the Commission needs to revisit the amount set 
for the minimum opening bids in order to give consideration to the 
interference protection that must be provided public safety users. 
According to ITA, the protection requirements have the potential to 
erode the ability of the Guard Band Manager to fully maximize use of 
the spectrum. Further, according to ITA, the Guard Band Manager must 
also consider potential interference from adjacent band commercial 
users and avoid causing interference to incumbent broadcast operations. 
ITA argues that basing minimum bids upon traditional calculations, when 
there is the possibility that use of the spectrum cannot be fully 
maximized simply makes it that much more difficult to attract a wide 
pool of prospective Guard Band Managers. In view of these factors, ITA 
strongly encourages the Commission to reevaluate the methodology it 
used in setting the opening minimum bids. ITA did not state what 
minimum opening bid would be appropriate.
    96. Mobex claims that the minimum opening bids: (i) Are cost 
prohibitive for most small businesses; (ii) contradict the requirements 
of the 1996 Telecommunications Act, specifically section 309(j); and 
(iii) will have a long term negative impact on the few remaining small 
businesses in the SMR industry, including Mobex. According to Mobex, 
the Commission's excessive minimum opening bids effectively preclude 
countless small businesses from realistically participating in the 
auction proceeding. Mobex cites to section 309(j) of the 
Telecommunications Act, which Mobex says requires the Commission to 
avoid excessive concentration of licenses by disseminating licenses 
among a wide variety of applicants, including small businesses. Mobex 
did not indicate what would be a more acceptable minimum opening bid.
    97. Motorola argues that the proposed minimum opening bid amounts 
fail to account for: (i) The presence of incumbent broadcast stations; 
(ii) the possibility of interference from adjacent commercial 
licensees; and (iii) the barrier to entry these amounts present for 
small businesses and associations likely to be interested in the role 
of Guard Band Manager. Motorola further argues that the Commission did 
not explain the valuation expected for the Guard Band licenses as 
compared to the amount anticipated to be raised by the licenses 
available on the other 30 megahertz of spectrum allocated for 
commercial use in the 700 MHz band. Thus, Motorola says that it has no 
way of knowing what specific value the Bureau placed on the Guard Band 
spectrum. Motorola adds that because of TV incumbency issues, there are 
some markets where a Guard Band Manager may not be able to recognize a 
return on its license until December, 2006. Further, Motorola claims 
that the Guard Band spectrum faces potential interference from users of 
the remaining 30 megahertz of commercial spectrum in the 700 MHz band. 
Moreover, Motorola argues that the current values for upfront payments 
preclude small businesses and private land mobile frequency 
coordinators from participation in the auction. Motorola asserts that 
the bidding credits do not help because the credits are not applied to 
upfront payment amounts and the time constraints to raise the capital 
are extremely short due to the Congressional requirement to deposit the 
proceeds by September 30, 2000. Motorola recommends that the Bureau use 
the same formula that it used in setting the minimum opening bids for 
the 220 MHz spectrum in Auction No. 24 and that the Bureau maintain the 
33% ratio, used in this proceeding, between minimum opening bids and 
upfront payments. Furthermore, Motorola claims that markets which are 
encumbered should be subject to a further reduction in minimum opening 
bids.
    98. Reply comments were submitted by AMTA, ITA, Mobex , MRFAC, and 
PCIA.
    99. On reply, AMTA notes that all of the initial comments filed in 
this proceeding took the position that the proposed minimum opening 
bids were unreasonably high. AMTA says that collectively the factors 
cited by commenters support a reduction in both the upfront payment and 
minimum opening bids in Auction No. 33. AMTA argues that those few 
parties that are able to participate in the auction will have to pass 
on unreasonably high acquisition costs to potential lessees, thus 
negatively impacting, if not eliminating, participation by small 
businesses. AMTA reiterates that the Commission should reduce the 
upfront payments and the minimum opening bids for the Guard Band 
spectrum to one-third or one-quarter of their current valuations to 
bring the valuations in line with the 220 MHz auction figures. AMTA 
concludes by stating that it supports Motorola's proposal to maintain a 
ratio of 33% between minimum opening bids and upfront payments and that 
the Commission should use Motorola's proposal as the absolute upper 
limits, with further reductions in markets that are encumbered.
    100. In its reply comments, ITA also notes that all of those filing 
comments agreed that the Commission should revisit the amount of 
minimum opening bids. According to ITA, because the guard band manager 
must protect public safety users from interference, while avoiding 
interference to incumbent broadcast operations, it is much more 
difficult to attract a wide pool of prospective bidders. ITA states 
that it supports Motorola's proposal to apply the valuations used in 
the 220 MHz auction to set upfront payments and minimum opening bids.
    101. In its reply comments, Mobex notes that all parties who 
submitted initial comments are in agreement that the Commission's 
proposed minimum opening bids would be cost prohibitive for many small 
businesses Mobex states that the Commission should reduce the valuation 
for the Guard Band, citing arguments of potential interference from 
users within the 30 megahertz block, the

[[Page 21194]]

lack of out-of-band limitations on the 30 megahertz block, the 
requirement to protect public safety users, and the existence of co-
channel or adjacent channel television broadcast stations in virtually 
every market of significant size around the nation. Mobex also notes 
that a financial return on the guard band spectrum may be delayed until 
December, 2006 and beyond. In view of the foregoing, Mobex urges the 
Commission to adopt the valuations proposed by Motorola in this 
proceeding.
    102. MRFAC states that the minimum opening bid amounts are too 
high, considering that the spectrum in many of these markets will be 
encumbered until December, 2006, or even beyond. According to MRFAC, no 
rational investor would risk these kind of sums for an encumbered 
asset. MRFAC, therefore, urges that the Commission use minimum opening 
bids that are in line with those for the 220 MHz auction.
    103. As in the case of the amount of upfront payments, the Bureau 
is persuaded by the comments and reply comments that it is appropriate 
to make a downward adjustment in the minimum opening bids. In doing so, 
we recognize concerns expressed with regard to when the spectrum may 
become available, interference and technical issues, and other factors 
cited in response to the Auction No. 33 Comment Public Notice. 
Accordingly, the Bureau has lowered the proposed minimum opening bids 
for the licenses in the Guard Band, establishing minimum opening bids 
that are approximately one-third of the original proposal, as set forth 
in Attachment A.
(iii) Bid Increments and Minimum Accepted Bids
    104. In the Auction No. 33 Comment Public Notice, we proposed to 
use a smoothing methodology to calculate minimum bid increments. We 
further proposed to retain the discretion to change the minimum bid 
increment if circumstances so dictate. We received no comment on this 
issue.
    105. We will adopt our proposal for a smoothing formula. The 
smoothing methodology is designed to vary the increment for a given 
license between a maximum and minimum value based on the bidding 
activity on that license. This methodology allows the increments to be 
tailored to the activity level of a license, decreasing the time it 
takes for active licenses to reach their final value. The formula used 
to calculate this increment is included as Attachment G.
    106. We adopt our proposal of initial values for the maximum of 
0.2, or 20 percent of the license value, and a minimum of 0.1, or 10 
percent of the license value. The Bureau retains the discretion to 
change the minimum bid increment if it determines that circumstances so 
dictate. The Bureau will do so by announcement in the Automated Auction 
System. Under its discretion, the Bureau may also implement an absolute 
dollar floor for the bid increment to further facilitate a timely close 
of the auction. The Bureau may also use its discretion to adjust the 
minimum bid increment without prior notice if circumstances warrant. As 
an alternative approach, the Bureau may, in its discretion, adjust the 
minimum bid increment gradually over a number of rounds as opposed to 
single large changes in the minimum bid increment (e.g., by raising the 
increment floor by one percent every round over the course of ten 
rounds). The Bureau also retains the discretion to use alternate 
methodologies, such as a flat percentage increment for all licenses, 
for Auction No. 33 if circumstances warrant.
(iv) High Bids
    107. Each bid will be date-and time-stamped when it is entered into 
the FCC computer system. In the event of tie bids, the Commission will 
identify the high bidder on the basis of the order in which the 
Commission receives bids. 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 stamp than 
bids submitted later in a round.
(v) Bidding
    108. During a bidding round, a bidder may submit bids for as many 
licenses as it wishes, subject to its eligibility, 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. 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-stamp of that bid reflects the 
latest time the bid was submitted.
    109. Please note that all bidding will take place remotely either 
through the automated bidding software or by telephonic bidding. 
(Telephonic bid assistants are required to use a script when entering 
bids placed by telephone. Telephonic bidders are therefore reminded to 
allow sufficient time to bid by placing their calls well in advance of 
the close of a round. Normally, four to five minutes are necessary to 
complete a bid submission.) There will be no on-site bidding during 
Auction No. 33.
    110. A bidder's ability to bid on specific licenses in the first 
round of the auction is determined by two factors: (a) the licenses 
applied for on FCC Form 175; and (b) 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.
    111. The bidding software requires each bidder to login 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.
    112. The bid entry screen of the automated auction system software 
for Auction No. 33 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. The 
bidding software will display the bid increment for each license.
    113. To place a bid on a license, the bidder must increase the 
standing high bid by one to nine times the bid increment. This is done 
by entering a whole number between 1 and 9 in the bid increment 
multiplier (Bid Mult) field in the software. 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)
    114. 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 ``1'' in the bid increment multiplier column and 
press submit.
    115. 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

[[Page 21195]]

increment exists for the licenses, and bidders should enter ``1'' in 
the Bid Mult field. Note that in this case, any whole number between 1 
and 9 entered in the multiplier column will result in a bid value at 
the minimum acceptable bid amount. 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.
(vi) Bid Removal and Bid Withdrawal
    116. In the Auction No. 33 Comment Public Notice, we proposed bid 
removal and bid withdrawal rules. With respect to bid withdrawals, we 
proposed limiting each bidder to withdrawals in no more than two rounds 
during the course of the auction. The two rounds in which withdrawals 
are utilized, we proposed, would be at the bidder's discretion. We 
received no comment on this issue.
    117. In previous auctions, we have detected bidder conduct that, 
arguably, may have constituted strategic bidding through the use of bid 
withdrawals. While we continue 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, we 
conclude that, for Auction No. 33, adoption of a limit on their use to 
two rounds is the most appropriate outcome. By doing so we believe we 
strike a reasonable compromise that will allow bidders to use 
withdrawals. Our decision on this issue is based upon our experience in 
prior auctions, particularly the PCS D, E and F block auctions, and 800 
MHz SMR auction, and is in no way a reflection of our view regarding 
the likelihood of any speculation or ``gaming'' in this auction.
    118. 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 
during the auction will still be subject to the bid withdrawal payments 
specified in 47 CFR 1.2104(g). 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. 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 Commission 
will serve as a ``place holder'' on the license until a new acceptable 
bid is submitted on that license.
    119. Procedures. 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, i.e. a bid that is subsequently removed does not count 
toward the bidder's activity requirement. This procedure, about which 
we received no comments, will enhance bidder flexibility during the 
auction. Therefore, we will adopt these procedures for Auction No. 33.
    120. 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 withdraws its standing high bid from a previous round during the 
auction is subject to the bid withdrawal payments specified in 47 CFR 
1.2104(g). The procedure for withdrawing a bid and receiving a 
withdrawal confirmation is essentially the same as the bidding 
procedure described in ``High Bids,'' part IV.B.(iv).
    121. Calculation. Generally, the Commission imposes payments on 
bidders that withdraw high bids during the course of an auction. 
Specifically, a bidder (``Bidder X'') that withdraws a high bid during 
the course of an auction is subject to a bid withdrawal payment equal 
to the difference between the amount withdrawn and the amount of the 
subsequent winning bid. If a high bid is withdrawn on a license that 
remains unsold at the close of the auction, Bidder X will be required 
to make an interim payment equal to three (3) percent of the net amount 
of the withdrawn bid. This payment amount is deducted from any upfront 
payments or down payments that Bidder X has deposited with the 
Commission. If, in a subsequent auction, that license receives a valid 
bid in an amount equal to or greater than the withdrawn bid amount, 
then no final bid withdrawal payment will be assessed, and Bidder X may 
request a refund of the interim three (3) percent payment. If, in a 
subsequent auction, the selling price for that license is less than 
Bidder X's withdrawn bid amount, then Bidder X will be required to make 
a final bid withdrawal payment, less the three percent interim payment, 
equal to either the difference between Bidder X's net withdrawn bid and 
the subsequent net winning bid, or the difference between Bidder X's 
gross withdrawn bid and the subsequent gross winning bid, whichever is 
less.
(vii) Round Results
    122. Bids placed during a round will not be published until the 
conclusion of that bidding period. After a round closes, the Commission 
will compile reports of all bids placed, bids withdrawn, current high 
bids, new minimum accepted bids, and bidder eligibility status (bidding 
eligibility and activity rule waivers), and post the reports for public 
access. Reports reflecting bidders' identities and bidder 
identification numbers for Auction No. 33 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.
(viii) Auction Announcements
    123. 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 on the Internet.
(ix) Maintaining the Accuracy of FCC Form 175 Information
    124. As noted in part II.E., after the short-form 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 certain 
revisions to exhibits. Filers must make these changes on-line, and 
submit a letter summarizing these changes to: Amy Zoslov, Chief, 
Auctions and Industry Analysis Division, Wireless Telecommunications 
Bureau, Federal Communications Commission, 445 12th Street, S.W., 
Washington, D.C. 20554.
    A separate copy of the letter should be mailed to Howard Davenport, 
Auctions and Industry Analysis Division), briefly summarizing the 
changes. Questions about other changes should be directed to Howard 
Davenport, Auctions and Industry Analysis Division at (202) 418-0660.

[[Page 21196]]

V. Post-Auction Procedures

A. Down Payments and Withdrawn Bid Payments

    125. 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 bid withdrawal payments due.
    126. Within ten business days after release of the auction closing 
public 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 
1.2107(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 IV.B.(vi). (Upfront payments are 
applied first to satisfy any withdrawn bid liability, before being 
applied toward down payments.) In the 700 MHz Second Report and Order, 
in light of the statutory deadline for depositing auction proceeds, the 
Commission delegated to the Bureau authority to suspend payment 
deadlines and require that winning bidders on all licenses in the 700 
MHz bands pay the full balance of their winning bids upon submission of 
their long-form application. (See 700 MHz Second Report and Order at 
para. 105.) The Bureau will announce via Public Notice if it chooses to 
exercise this authority.

B. Long-Form Application

    127. Within ten business days after release of the auction closing 
public notice, winning bidders must file: (1) FCC Form 601 and all 
required exhibits electronically via the Universal Licensing System 
(``ULS''); and (2) FCC Form 602 manually pursuant to Sec. 1.919 of the 
Commission's Rules. Winning bidders may file a single application for 
all markets won at auction. Winning bidders that are small businesses 
or very small businesses must include and exhibit demonstrating their 
eligibility for bidding credits. See 47 CFR 1.2112(b). Further, more 
detailed filing instructions will be provided to auction winners at the 
close of the auction.

C. Default and Disqualification

    128. 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 re-auction the license 
or offer it to the next highest bidder (in descending order) at their 
final bid. 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

    129. All applicants that submitted upfront payments but were not 
winning bidders for a 700 MHz guard band 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.
    130. 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 refund request which includes wire transfer instructions and a 
Taxpayer Identification Number (``TIN''), to: Federal Communications 
Commission, Financial Operations Center, Auctions Accounting Group, 
Shirley Hanberry, 445 12th Street, S.W., Room 1-A824 Washington, DC 
20554.
    131. Bidders are encouraged to file their refund information 
electronically using the Refund Information portion of the FCC Form 
175, but bidders can also fax their request to the Auctions Accounting 
Group at (202) 418-2843. Once the request has been approved, a refund 
will be sent to the party identified in the refund information.

    Note: Refund processing generally takes up to two weeks to 
complete. Bidders with questions about refunds should contact 
Michelle Bennett or Gail Glasser at (202) 418-1995.


Federal Communications Commission.
Louis J. Sigalos,
Deputy Chief, Auctions and Industry Analysis Division.
[FR Doc. 00-9905 Filed 4-19-00; 8:45 am]
BILLING CODE 6712-01-P


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