[Federal Register Volume 66, Number 117 (Monday, June 18, 2001)]
[Notices]
[Pages 32810-32815]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15325]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-01-41-A (Auction No. 41); DA 01-1400]


Narrowband PCS Spectrum Auction Scheduled for October 3, 2001; 
Comment Sought on Reserve Prices or Minimum Opening Bids and Other 
Auction Procedural Issues

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the auction of 365 Personal

[[Page 32811]]

Communications Service (PCS) licenses in the 900 MHz band (``narrowband 
PCS'') set to begin on October 3, 2001 (Auction No. 41) and seeks 
comment on reserve prices or minimum opening bids and other auction 
procedural issues.

DATES: Comments are due on or before June 25, 2001 and reply comments 
are due on or before July 2, 2001.

ADDRESSES: An original and four copies of all pleadings must be filed 
with the Commission's Secretary, Magalie Roman Salas, Office of the 
Secretary, Federal Communications Commission, Room TW-A325, 445 Twelfth 
Street, SW., Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Howard Davenport, Auctions Attorney, 
or Lyle Ishida, Auctions Analyst, at (202) 418-0660; or Lisa Stover, 
Project Manager, at (717) 338-2888.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 41 
Procedures Public Notice released June 12, 2001. The complete text of 
the Auction No. 41 Procedures Public Notice, including the attachment, 
is available for inspection and copying during normal business hours in 
the FCC Reference Center (Room CY-A257), 445 12th Street, SW., 
Washington, DC 20554. The Auction No. 41 Procedures Public Notice may 
also be purchased from the Commission's copy contractor, International 
Transcription Services, Inc. (ITS, Inc.) 1231 20th Street, NW., 
Washington, DC 20036, (202) 857-3800. The Auction No. 41 Procedures 
Public Notice is also available on the Commission's web site at http://www.fcc.gov..
    1. By this Public Notice, the Wireless Telecommunications Bureau 
(``Bureau'') announces the auction of 365 Personal Communications 
Service (PCS) licenses in the 900 MHz band (``narrowband PCS'') set to 
begin on October 3, 2001 (Auction No. 41). In Auction No. 41, eight (8) 
licenses will be offered on a nationwide basis and seven (7) licenses 
will be offered in each of 51 Major Trading Areas (MTAs), for a total 
of 357 MTA licenses. The following table describes the licenses that 
will be auctioned:

----------------------------------------------------------------------------------------------------------------
           Channel Number                Channel Description         Frequency Bands          Bandwidth (kHz)
----------------------------------------------------------------------------------------------------------------
                                               Nationwide Licenses
----------------------------------------------------------------------------------------------------------------
18..................................  One 100 kHz unpaired      940.65--940.75 MHz......  100 kHz
                                       channel.
19..................................  One 50 kHz/50 kHz paired  901.3--901.35, 930.5--    100 kHz
                                       channel.                  930.55 MHz.
20..................................  One 50 kHz/50 kHz paired  901.9--901.95, 930.75--   100 kHz
                                       channel.                  930.8 MHz.
21..................................  One 50 kHz/150 kHz        901.5--901.55, 930--      200 kHz
                                       paired channel.           930.15 MHz.
22..................................  One 50 kHz/150 kHz        901.6--901.65, 930.15--   200 kHz
                                       paired channel.           930.3 MHz.
23..................................  One 50 kHz/100 kHz        901.45--901.5, 940.55--   150 kHz
                                       paired channel.           940.65 MHz.
24..................................  One 50 kHz/100 kHz        901.55--901.6, 940.3--    150 kHz
                                       paired channel.           940.4 MHz.
25..................................  One 50 kHz/100 kHz        901.85--901.9, 940.45--   150 kHz
                                       paired channel.           940.55 MHz.
 
    Nationwide subtotal.............  ........................  ........................  1,150 kHz
----------------------------------------------------------------------------------------------------------------
                                                  MTA Licenses
----------------------------------------------------------------------------------------------------------------
26..................................  One 50 kHz unpaired       901.35--901.4 MHz.......  50 kHz
                                       channel.
27..................................  One 50 kHz unpaired       901.4--901.45 MHz.......  50 kHz
                                       channel.
28..................................  One 50 kHz unpaired       940.4--940.45 MHz.......  50 kHz
                                       channel.
29 \1\..............................  One 50 kHz/50 kHz paired  901.95--902.0, 930.8--    100 kHz
                                       channel.                  930.85 MHz.
30..................................  One 50 kHz/100 kHz        901.65--901.7, 930.3--    150 kHz
                                       paired channel.           930.4 MHz.
31 \1\..............................  One 50 kHz/150 kHz        901.7--901.75, 930.85--   200 kHz
                                       paired channel.           931 MHz.
32 \1\..............................  One 12.5 kHz/100 kHz      901.8375--901.85, 940.9-- 112.5 kHz
                                       paired channel.           941 MHz.
                                                                                         -----------------------
    MTA Subtotal....................  ........................  ........................  712.5 kHz
                                                                                         -----------------------
    Grand Total.....................  ........................  ........................  1,862.5 kHz
----------------------------------------------------------------------------------------------------------------
\1\ NBPCS channels 29, 31, and 32 in MTA002 (Los Angeles-San Diego) will be available subject to protection of
  incumbent licenses held by Paging Systems, Inc. under call signs WPOI469, WPOI470, WPOI471, and WPOI472. See
  In the Matter of License Communications Services, Inc. et al., Memorandum Opinion and Order, 62 FR 55375
  (October 24, 1997).

    2. The Balanced Budget Act of 1997 requires the Commission to 
``ensure that, in the scheduling of any competitive bidding under this 
subsection, an adequate period is allowed * * * before issuance of 
bidding rules, to permit notice and comment on proposed auction 
procedures * * *.'' Consistent with the provisions of the Balanced 
Budget Act and to ensure that potential bidders have adequate time to 
familiarize themselves with the specific rules that will govern the 
day-to-day conduct of an auction, the Commission directed the Bureau, 
under its existing delegated authority, to seek comment on a variety of 
auction-specific procedures prior to the start of each auction. We 
therefore seek comment on the following issues relating to Auction No. 
41.

I. Auction Structure

A. Simultaneous Multiple Round Auction Design

    3. We propose to award the licenses in a single, simultaneous 
multiple-round auction. As described further, this methodology offers 
every license for bid at the same time with successive bidding rounds 
in which bidders may place bids. We seek comment on this proposal.

B. Upfront Payments and Initial Maximum Eligibility

    4. The Bureau has been delegated authority and discretion to 
determine an appropriate upfront payment for each license being 
auctioned, taking into account such factors as the population

[[Page 32812]]

in each geographic license area, and the value of similar spectrum. As 
described further, the upfront payment is a refundable deposit made by 
each bidder to establish eligibility to bid on licenses. Upfront 
payments related to the specific spectrum subject to auction protect 
against frivolous or insincere bidding and provide the Commission with 
a source of funds from which to collect payments owed at the close of 
the auction. With these guidelines in mind for Auction No. 41, we 
propose to calculate upfront payments on a license-by-license basis 
using the following formula:

$.00002 * kHz * License Area Population with a minimum of $1,000 per 
license.
    5. Accordingly, we list all licenses, including the related license 
area population and proposed upfront payment for each, in Attachment A 
of the Auction No. 41 Procedures Public Notice. We seek comment on this 
proposal.
    6. We further propose that the amount of the upfront payment 
submitted by a bidder will determine the number of bidding units on 
which a bidder may place bids--this limit is a bidder's ``maximum 
initial eligibility.'' Each license is assigned a specific number of 
bidding units equal to the upfront payment listed in Attachment A, on a 
bidding unit per dollar basis. This number does not change as prices 
rise during the auction. A bidder's upfront payment is not attributed 
to specific licenses. Rather, a bidder may place bids on any 
combination of licenses as long as the total number of bidding units 
associated with those licenses does not exceed its maximum initial 
eligibility. Eligibility cannot be increased during the auction. Thus, 
in calculating its upfront payment amount, an applicant must determine 
the maximum number of bidding units it may wish to bid on (or hold high 
bids on) in any single round, and submit an upfront payment covering 
that number of bidding units. We seek comment on this proposal.

C. Activity Rules

    7. In order to ensure that the auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively on a 
percentage of their maximum bidding eligibility during each round of 
the auction rather than waiting until the end to participate. A bidder 
that does not satisfy the activity rule will either lose bidding 
eligibility in the next round or must use an activity rule waiver (if 
any remain).
    8. We propose to divide the auction into three stages, each 
characterized by an increased activity requirement. The auction will 
start in Stage One. We propose that the auction generally will 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 approximately 
ten percent or below for three consecutive rounds of bidding. However, 
we further propose that the Bureau retain the discretion to change 
stages unilaterally by announcement during the auction. In exercising 
this discretion, the Bureau will consider a variety of measures of 
bidder activity, including, but not limited to, the auction activity 
level, the percentage of licenses (as measured in bidding units) on 
which there are new bids, the number of new bids, and the percentage 
increase in revenue. We seek comment on these proposals.
    9. For Auction No. 41, we propose the following activity 
requirements:
    Stage One: In each round of the first stage of the auction, a 
bidder desiring to maintain its current eligibility is required to be 
active on licenses representing at least 80 percent of its current 
bidding eligibility. Failure to maintain the requisite activity level 
will result in a reduction in the bidder's bidding eligibility in the 
next round of bidding (unless an activity rule waiver is used). During 
Stage One, reduced eligibility for the next round will be calculated by 
multiplying the current round activity by five-fourths (5/4).
    Stage Two: In each round of the second stage, a bidder desiring to 
maintain its current eligibility is required to be active on 90 percent 
of its current bidding eligibility. During Stage Two, reduced 
eligibility for the next round will be calculated by multiplying the 
current round activity by ten-ninths (10/9).
    Stage Three: In each round of the third stage, a bidder desiring to 
maintain its current eligibility is required to be active on 98 percent 
of its current bidding eligibility. In this final stage, reduced 
eligibility for the next round will be calculated by multiplying the 
current round activity by fifty/forty-ninths (50/49).
    10. We seek comment on these proposals. If commenters believe that 
these activity rules should be changed, they should explain their 
reasoning and comment on the desirability of an alternative approach. 
Commenters are advised to support their claims with analyses and 
suggested alternative activity rules.

D. Activity Rule Waivers and Reducing Eligibility

    11. Use of an activity rule waiver preserves the bidder's current 
bidding eligibility despite the bidder's activity in the current round 
being below the required minimum level. An activity rule waiver applies 
to an entire round of bidding and not to a particular license. Activity 
waivers are principally a mechanism for auction participants to avoid 
the loss of auction eligibility in the event that exigent circumstances 
prevent them from placing a bid in a particular round.
    12. The FCC auction system assumes that bidders with insufficient 
activity would prefer to use an activity rule waiver (if available) 
rather than lose bidding eligibility. Therefore, the system will 
automatically apply a waiver (known as an ``automatic waiver'') at the 
end of any bidding period where a bidder's activity level is below the 
minimum required unless: (1) There are no activity rule waivers 
available; or (2) the bidder overrides the automatic application of a 
waiver by reducing eligibility, thereby meeting the minimum 
requirements.
    13. A bidder with insufficient activity may wish to reduce its 
bidding eligibility rather than use an activity rule waiver. If so, the 
bidder must affirmatively override the automatic waiver mechanism 
during the bidding period by using the reduce eligibility function in 
the bidding system. In this case, the bidder's eligibility is 
permanently reduced to bring the bidder into compliance with the 
activity rules as described. Once eligibility has been reduced, a 
bidder will not be permitted to regain its lost bidding eligibility.
    14. 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 
system) during a bidding period in which no bids or withdrawals 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.
    15. We propose that each bidder in Auction No. 41 be provided with 
five activity rule waivers that may be used at the bidder's discretion 
during the course of the auction as set forth. We seek comment on this 
proposal.

E. Information Relating to Auction Delay, Suspension, or 
Cancellation

    16. For Auction No. 41, we propose that, by public notice or by

[[Page 32813]]

announcement during the auction, the Bureau may delay, suspend, or 
cancel the auction in the event of natural disaster, technical 
obstacle, evidence of an auction security breach, unlawful bidding 
activity, administrative or weather necessity, or for any other reason 
that affects the fair and competitive conduct of competitive bidding. 
In such cases, the Bureau, in its sole discretion, may elect to resume 
the auction starting from the beginning of the current round, resume 
the auction starting from some previous round, or cancel the auction in 
its entirety. Network interruption may cause the Bureau to delay or 
suspend the auction. We emphasize that exercise of this authority is 
solely within the discretion of the Bureau, and its use is not intended 
to be a substitute for situations in which bidders may wish to apply 
their activity rule waivers. We seek comment on this proposal.

II. Bidding Procedures

A. Round Structure

    17. The Commission will use its Automated Auction System to conduct 
the electronic simultaneous multiple round auction format for Auction 
No. 41. In contrast to prior auctions, Auction No. 41 will be conducted 
over the Internet. However, the Bureau's wide area network will be 
available at the standard charge, as in prior auctions. Prospective 
bidders concerned about their access to the Internet may want to 
establish a connection to the Bureau's wide area network as a backup. 
Full information regarding how to establish such a connection, and 
related charges, will be provided in the public notice announcing 
details of auction procedures. In past auctions, we have used the 
timing of bids to select a high bidder when multiple bidders submit 
identical high bids on a license in a given round. Given that bidders 
will access the Internet at differing speeds, we will not use this 
procedure in Auction No. 41. For Auction No. 41, we propose to use a 
random number generator to select a high bidder from among such 
bidders. As with prior auctions, remaining bidders will be able to 
submit higher bids in subsequent rounds. The initial bidding schedule 
will be announced in a public notice to be released at least one week 
before the start of the auction, and will be included in the 
registration mailings. The simultaneous multiple round format will 
consist of sequential bidding rounds, each followed by the release of 
round results. Details regarding the location and format of round 
results will be included in the same public notice.
    18. The Bureau 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 Bureau 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. We seek 
comment on this proposal.

B. Reserve Price or Minimum Opening Bid

    19. The Balanced Budget Act calls upon the Commission to prescribe 
methods for establishing a reasonable reserve price or a minimum 
opening bid when FCC licenses are subject to auction unless the 
Commission determines that a reserve price or minimum bid is not in the 
public interest. Consistent with this mandate, the Commission has 
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.
    20. Normally, a reserve price is an absolute minimum price below, 
which an item will not be sold in a given auction. Reserve prices can 
be either published or unpublished. A minimum opening bid, on the other 
hand, is the minimum bid price set at the beginning of the auction 
below which no bids are accepted. It is generally used to accelerate 
the competitive bidding process. Also, the auctioneer often has the 
discretion to lower the minimum opening bid amount later in the 
auction. It is also possible for the minimum opening bid and the 
reserve price to be the same amount.
    21. In light of the Balanced Budget Act's requirements, the Bureau 
proposes to establish minimum opening bids for Auction No. 41. The 
Bureau believes a minimum opening bid, which has been utilized in other 
auctions, is an effective bidding tool.
    22. Specifically, for Auction No. 41, the Commission proposes the 
following license-by-license formula for calculating minimum opening 
bids:

$.00004 * kHz * License Area Population with a minimum of $1,000 per 
license.

    23. The specific minimum opening bid for each license available in 
Auction No. 41 is set forth in Attachment A of the Auction No. 41 
Procedures Public Notice. Comment is sought on this proposal. If 
commenters believe that these minimum opening bids will result in 
substantial numbers of unsold licenses, or are not reasonable amounts, 
or should instead operate as reserve prices, they should explain why 
this is so, and comment on the desirability of an alternative approach. 
Commenters are advised to support their claims with valuation analyses 
and suggested reserve prices or minimum opening bid levels or formulas. 
In establishing the minimum opening bids, we particularly seek comment 
on such factors as the amount of spectrum being auctioned, levels of 
incumbency, the availability of technology to provide service, the size 
of the geographic service areas, issues of interference with other 
spectrum bands and any other relevant factors that could reasonably 
have an impact on valuation of the narrowband PCS spectrum. 
Alternatively, comment is sought on whether, consistent with the 
Balanced Budget Act, the public interest would be served by having no 
minimum opening bid or reserve price.

C. Minimum Acceptable Bids and Bid Increments

    24. In each round, eligible bidders will be able to place bids on a 
given license in any of nine different amounts. The Automated Auction 
System interface will list the nine acceptable bid amounts for each 
license. Once there is a standing high bid on a license, the Automated 
Auction System will calculate a minimum acceptable bid for that license 
for the following round, as described. The difference between the 
minimum acceptable bid and the standing high bid for each license will 
define the bid increment. The nine acceptable bid amounts for each 
license consist of the minimum acceptable bid (the standing high bid 
plus one bid increment) and additional amounts calculated using 
multiple bid increments (i.e., the second bid amount equals the 
standing high bid plus two times the bid increment, the third bid 
amount equals the standing high bid plus three times the bid increment, 
etc.).
    25. Until a bid has been placed on a license, the minimum 
acceptable bid for that license will be equal to its minimum opening 
bid. The additional bid amounts for licenses that have not yet received 
a bid will be calculated differently, as explained.
    26. For Auction No. 41, we propose to calculate minimum acceptable 
bids by using a smoothing methodology, as we have done in several other 
auctions. The smoothing formula calculates minimum acceptable bids by 
first calculating a percentage increment, not to be confused with the 
bid increment, for each license based on a weighted average of the 
activity received on each license in all previous rounds. This 
methodology tailors the percentage increment for each license based on

[[Page 32814]]

activity, rather than setting a global increment for all licenses.
    27. In a given round, the calculation of the percentage increment 
for each license is made at the end of the previous round. The 
computation is based on an activity index, which is calculated as the 
weighted average of the activity in that round and the activity index 
from the prior round. The activity index at the start of the auction 
(round 0) will be set at 0. The current activity index is equal to a 
weighting factor times the number of new bids received on the license 
in the most recent bidding round plus one minus the weighting factor 
times the activity index from the prior round. The activity index is 
then used to calculate a percentage increment by multiplying a minimum 
percentage increment by one plus the activity index with that result 
being subject to a maximum percentage increment. The Commission will 
initially set the weighting factor at 0.5, the minimum percentage 
increment at 0.1 (10%), and the maximum percentage increment at 0.2 
(20%).
Equations
A<INF>i</INF> = (C * B<INF>i</INF>) + ((1-C) * A<INF>i-1</INF>)
I<INF>i+1</INF> = smaller of ((1 + A<INF>i</INF>) * N) and M
X<INF>i+1</INF> = I<INF>i+1</INF> * Y<INF>i</INF>

 where,

A<INF>i</INF> = activity index for the current round (round i)
C = activity weight factor
B<INF>i</INF> = number of bids in the current round (round i)
A<INF>i-1</INF> = activity index from previous round (round i-1), 
A<INF>0</INF> is 0
I<INF>i+1</INF> = percentage increment for the next round (round i+1)
N = minimum percentage increment or percentage increment floor
M = maximum percentage increment or percentage increment ceiling
X<INF>i+1</INF> = dollar amount associated with the percentage 
increment
Y<INF>i</INF> = high bid from the current round

    Under the smoothing methodology, once a bid has been received on a 
license, the minimum acceptable bid for that license in the following 
round will be the high bid from the current round plus the dollar 
amount associated with the percentage increment, with the result 
rounded to the nearest thousand if it is over ten thousand or to the 
nearest hundred if it is under ten thousand.
Examples
License 1
C = 0.5, N = 0.1, M = 0.2

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

    i. Calculation of percentage increment for round 2 using the 
smoothing formula:

A<INF>1</INF> = (0.5 * 2) + (0.5 * 0) = 1
I<INF>2</INF> = The smaller of ((1 + 1) * 0.1) = 0.2 or 0.2 (the 
maximum percentage increment)

    ii. Calculation of dollar amount associated with the percentage 
increment for round 2 (using I<INF>2</INF> from above):

X<INF>2</INF> = 0.2 * $1,000,000 = $200,000

    iii. Minimum acceptable bid for round 2 = $1,200,000

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

    i. Calculation of percentage increment for round 3 using the 
smoothing formula:

A<INF>2</INF> = (0.5 * 3) + (0.5 * 1) = 2
I<INF>3</INF> = The smaller of ((1 + 2) * 0.1) = 0.3 or 0.2 (the 
maximum percentage increment)

    ii. Calculation of dollar amount associated with the percentage 
increment for round 3 (using I<INF>3</INF> from above):

X<INF>3</INF> = 0.2 * $2,000,000 = $400,000

    iii. Minimum acceptable bid for round 3 = $2,400,000

Round 3 (1 new bid, high bid = $2,400,000)

    i. Calculation of percentage increment for round 4 using the 
smoothing formula:

A<INF>3</INF> = (0.5 * 1) + (0.5 * 2) = 1.5
I<INF>4</INF> = The smaller of ((1 + 1.5) * 0.1) = 0.25 or 0.2 (the 
maximum percentage increment)

    ii. Calculation of dollar amount associated with the percentage 
increment for round 4 (using I<INF>4</INF> from above):

X<INF>4</INF> = 0.2 * $2,400,000 = $480,000

    iii. Minimum acceptable bid for round 4 = $2,880,000
    28. As stated, until a bid has been placed on a license, the 
minimum acceptable bid for that license will be equal to its minimum 
opening bid. The additional bid amounts are calculated using the 
difference between the minimum opening bid times one plus the minimum 
percentage increment, rounded as described, and the minimum opening 
bid. That is, I = (minimum opening bid)(1 + N){rounded}-(minimum 
opening bid). Therefore, when N equals 0.1, the first additional bid 
amount will be approximately ten percent higher than the minimum 
opening bid; the second, twenty percent; the third, thirty percent; 
etc.
    29. In the case of a license for which the standing high bid has 
been withdrawn, the minimum acceptable bid will equal the second 
highest bid received for the license. The additional bid amounts are 
calculated using the difference between the second highest bid times 
one plus the minimum percentage increment, rounded, and the second 
highest bid.
    30. The Bureau retains the discretion to change the minimum 
acceptable bids and bid increments if it determines that circumstances 
so dictate. The Bureau will do so by announcement in the Automated 
Auction System. We seek comment on these proposals.

D. Information Regarding Bid Withdrawal and Bid Removal

    31. For Auction No. 41, we propose the following bid removal and 
bid withdrawal procedures. Before the close of a bidding period, a 
bidder has the option of removing any bid placed in that round. By 
using the remove selected bids function in the bidding system, 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 a withdrawal 
payment.
    32. Once a round closes, a bidder may no longer remove a bid. 
However, in any subsequent round, a high bidder may withdraw its 
standing high bids from previous rounds using the withdraw function in 
the bidding system. A high bidder that withdraws its standing high bid 
from a previous round is subject to the bid withdrawal payment 
provisions of the Commission rules. We seek comment on these bid 
removal and bid withdrawal procedures.
    33. In the Part 1 Third Report and Order, 63 FR 2315 (January 15, 
1998) the Commission explained that allowing bid withdrawals 
facilitates efficient aggregation of licenses and the pursuit of 
efficient backup strategies as information becomes available during the 
course of an auction. The Commission noted, however, that, in some 
instances, bidders may seek to withdraw bids for improper reasons. The 
Bureau, therefore, has discretion, in managing the auction, to limit 
the number of withdrawals to prevent any bidding abuses. The Commission 
stated that the Bureau should assertively exercise its discretion, 
consider limiting the number of rounds in which bidders may withdraw 
bids, and prevent bidders from bidding on a particular market if the 
Bureau finds that a bidder is abusing the Commission's bid withdrawal 
procedures.
    34. Applying this reasoning, we propose to limit each bidder in 
Auction

[[Page 32815]]

No. 41 to withdrawing standing high bids in no more than two rounds 
during the course of the auction. To permit a bidder to withdraw bids 
in more than two rounds would likely encourage insincere bidding or the 
use of withdrawals for anti-competitive purposes. The two rounds in 
which withdrawals are utilized will be at the bidder's discretion; 
withdrawals otherwise must be in accordance with the Commission's 
rules. There is no limit on the number of standing high bids that may 
be withdrawn in either of the rounds in which withdrawals are utilized. 
Withdrawals will remain subject to the bid withdrawal payment 
provisions specified in the Commission's rules. We seek comment on this 
proposal.

E. Stopping Rule

    35. For Auction No. 41, the Bureau proposes to employ a 
simultaneous stopping rule approach. The Bureau has discretion ``to 
establish stopping rules before or during multiple round auctions in 
order to terminate the auction within a reasonable time.'' A 
simultaneous stopping rule means that all licenses remain open until 
the first round in which no new acceptable bids, proactive waivers, or 
withdrawals are received. After the first such round, bidding closes 
simultaneously on all licenses. Thus, unless circumstances dictate 
otherwise, bidding would remain open on all licenses until bidding 
stops on every license.
    36. However, the Bureau proposes to retain the discretion to 
exercise any of the following options during Auction No. 41:
    i. Utilize a modified version of the simultaneous stopping rule. 
The modified stopping rule would close the auction for all licenses 
after the first round in which no bidder submits a proactive waiver, 
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 would 
not keep the auction open under this modified stopping rule. The Bureau 
further seeks comment on whether this modified stopping rule should be 
used at any time or only in stage three of the auction.
    ii. Keep the auction open even if no new acceptable bids or 
proactive waivers are submitted and no previous high bids are 
withdrawn. In this event, the effect will be the same as if a bidder 
had submitted a proactive waiver. The activity rule, therefore, will 
apply as usual, and a bidder with insufficient activity will either 
lose bidding eligibility or use a remaining activity rule waiver.
    iii. 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 specified final 
round(s) only for licenses on which the high bid increased in at least 
one of the preceding specified number of rounds.
    37. The Bureau proposes to exercise these options only in certain 
circumstances, such as, for example, where the auction is proceeding 
very slowly, there is minimal overall bidding activity, or it appears 
likely that the auction will not close within a reasonable period of 
time. Before exercising these options, the Bureau is likely to attempt 
to increase the pace of the auction by, for example, increasing the 
number of bidding rounds per day, and/or increasing the amount of the 
minimum bid increments for the limited number of licenses where there 
is still a high level of bidding activity. We seek comment on these 
proposals.

II. Conclusion

    38. Comments are due on or before June 25, 2001, and reply comments 
are due on or before July 2, 2001. An original and four copies of all 
pleadings must be filed with the Commission's Secretary, Magalie Roman 
Salas, Office of the Secretary, Federal Communications Commission, Room 
TW-A325, 445 Twelfth Street, SW., Washington, DC 20554, in accordance 
with Sec. 1.51 of the Commission's rules. In addition, one copy of each 
pleading must be delivered to each of the following locations: (i) The 
Commission's duplicating contractor, International Transcription 
Service, Inc. (ITS), 1231 20th Street, NW., Washington, DC 20036; (ii) 
Office of Media Relations, Public Reference Center, Room CY-A257, 445 
Twelfth Street, SW., Washington, DC 20554; (iii) Rana Shuler, Auctions 
and Industry Analysis Division, Wireless Telecommunications Bureau, 
Room 4-A628, 445 Twelfth Street, SW., Washington, DC 20554. Comments 
and reply comments will be available for public inspection during 
regular business hours in the FCC Public Reference Room, Room CY-A257, 
445 12th Street, SW., Washington, DC 20554.
    39. This proceeding has been designated as a ``permit-but-
disclose'' proceeding in accordance with the Commission's ex parte 
rules. Persons making oral ex parte presentations are reminded that 
memoranda summarizing the presentations must contain summaries of the 
substance of the presentations and not merely a listing of the subjects 
discussed. More than a one or two sentence description of the views and 
arguments presented is generally required. Other rules pertaining to 
oral and written ex parte presentations in permit-but-disclose 
proceedings are set forth in Sec. 1.1206(b) of the Commission's rules.

Federal Communications Commission.
Louis J. Sigalos,
Deputy Chief, Auctions and Industry Analysis Division, WTB.
[FR Doc. 01-15325 Filed 6-15-01; 8:45 am]
BILLING CODE 6712-01-P