[Federal Register Volume 87, Number 71 (Wednesday, April 13, 2022)]
[Rules and Regulations]
[Pages 21755-21783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-07602]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 27

[AU Docket No. 20-429; FCC 22-24; FR ID 81075]


Auction of Flexible-Use Licenses in the 2.5 GHz Band for Next-
Generation Wireless Services; Notice and Filing Requirements, Minimum 
Opening Bids, Upfront Payments, and Other Procedures for Auction 108; 
Bidding Scheduled To Begin July 29, 2022

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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SUMMARY: This document summarizes the procedures, deadlines, and 
upfront payment and minimum opening bid amounts for the upcoming 
auction of approximately 8,000 new flexible-use geographic overlay 
licenses in the 2.5 GHz band (Auction 108). The Auction 108 Procedures 
Public Notice summarized here provides details regarding the 
procedures, terms, conditions, dates, and deadlines governing 
participation in Auction 108 bidding, as well as overview of the post-
auction application and payment process. The Auction 108 Procedures 
Public Notice released on March 21, 2022, was corrected by an erratum 
released on April 1, 2022. The changes made by the erratum are included 
in this document.

DATES: Applications to participate in Auction 108 must be submitted 
before 6 p.m. Eastern Time (ET) on May 10, 2022. Upfront payments for 
Auction 108 must be received by 6 p.m. ET on June 23, 2022. Bidding in 
Auction 108 is scheduled to start on July 29, 2022.

FOR FURTHER INFORMATION CONTACT: 
    General Auction 108 Information: FCC Auctions Hotline at 888-225-
5322, option two; or 717-338-2868.
    Auction 108 Legal Information: Lyndsey Grunewald, Daniel Habif or 
Scott Mackoul at (202) 418-0660.
    2.5 GHz Band Licensing Information: Madelaine Maior or Nadja Sodos-
Wallace at (202) 418-2487.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's

[[Page 21756]]

document, Auction 108 Procedures Public Notice, in AU Docket No. 20-
429, FCC 22-24, released on March 21, 2022. The complete text of this 
document, including attachments and any related document, is available 
on the Commission's website at http://www.fcc.gov/auction/108 or by 
using the search function for on the Commission's Electronic Comment 
Filing System (ECFS) web page at www.fcc.gov/ecfs. Alternative formats 
are available to persons with disabilities by sending an email to 
<a href="/cdn-cgi/l/email-protection#87c1c4c4b2b7b3c7e1e4e4a9e0e8f1"><span class="__cf_email__" data-cfemail="efa9acacdadfdbaf898c8cc1888099">[email protected]</span></a> or by calling the Consumer & Governmental Affairs Bureau 
at (202) 418-0530 (voice), (202) 418-0432 (TTY).

I. General Information

A. Introduction

    1. By the Auction 108 Procedures Public Notice, the Commission 
establishes the procedures to be used for Auction 108, the auction of 
approximately 8,000 new flexible-use geographic overlay licenses in the 
2.5 GHz band. Auction 108 will offer the single largest contiguous 
portion of available mid-band spectrum below 3 GHz, and the licenses 
made available in this auction will help extend 5G service beyond the 
most populated areas.
    2. Bidding in Auction 108 is scheduled to commence on July 29, 
2022. Auction 108 will be conducted using an ascending clock auction 
with a supply of one in each category of frequency-specific channel 
blocks, referred to as the clock-1 auction format. The Auction 108 
Procedures Public Notice provides details regarding the procedures, 
terms, conditions, dates, and deadlines governing participation in 
Auction 108 bidding, as well as an overview of the post-auction 
application and payment processes.

B. Background and Relevant Authority

    3. In the 2.5 GHz Report and Order, 84 FR 57343, July 11, 2019, the 
Commission made available 117.5 megahertz of spectrum in the 2.5 GHz 
band for new licensed use. In that Order, the Commission established a 
Rural Tribal Priority Window to enable federally-recognized Tribal 
Nations an opportunity to obtain 2.5 GHz licenses to provide service 
using unassigned spectrum in the former Educational Broadband Service 
(EBS) band on rural Tribal lands before the remaining unassigned 
spectrum is made generally available through competitive bidding. Among 
other things, the Commission authorized both fixed and mobile 
operations in the 2.5 GHz band using geographic area licensing, 
replaced the regulatory regime of the EBS with new flexible-use 
licensing and operating rules, and decided to use its competitive 
bidding rules to assign remaining overlay licenses following the close 
of the Rural Tribal Priority Window.
    4. On January 13, 2021, in accordance with section 309(j)(3) of the 
Communications Act of 1934, as amended (Communications Act), the 
Commission released the Auction 108 Comment Public Notice, 86 FR 12146, 
March 2, 2021, seeking comment on certain competitive bidding 
procedures and various other procedures to be used in Auction 108. 
Interested parties filed 16 comments and 26 reply comments in response 
to the Auction 108 Comment Public Notice. On February 9, 2022, the 
Commission's Office of Economics and Analytics (OEA) and Wireless 
Telecommunications Bureau (WTB) released the Auction 108 Further 
Comment Public Notice, 87 FR 8764, February 16, 2022, seeking further 
comment on multiple-round auction procedures for Auction 108. 
Specifically, OEA and WTB sought comment on whether a clock auction 
would address commenters' concerns and suggestions regarding the 
simultaneous multiple-round (SMR) and single-round, sealed bid auction 
formats proposed in the Auction 108 Comment Public Notice. Interested 
parties filed 13 comments in response to the Auction 108 Further 
Comment Public Notice. On February 18, 2022, OEA and WTB released the 
Auction 108 Inventory Comment Public Notice, 87 FR 11379, March 1, 
2022, that announced an updated auction inventory and sought comment 
whether any procedures need to be adjusted for all the licenses 
available in Auction 108 in light of additions to the initial license 
inventory. Interested parties filed eight comments in response to the 
Auction 108 Inventory Comment Public Notice. In the Auction 108 
Procedures Public Notice, the Commission resolves all open issues 
raised in the Auction 108 Comment Public Notice, the Auction 108 
Further Comment Public Notice, and the Auction 108 Inventory Comment 
Public Notice and address the comments received.
    5. Other Commission rules and decisions provide the underlying 
authority for the procedures the Commission adopts for Auction 108. 
Among other things, prospective applicants should familiarize 
themselves with the Commission's general competitive bidding rules, 
including amendments and clarifications thereto, as well as Commission 
decisions regarding competitive bidding procedures, application 
requirements, and obligations of Commission licensees. Prospective 
applicants also should familiarize themselves with the Commission's 
rules regarding the 2.5 GHz band, as well as the licensing and 
operating rules that are applicable to all Part 27 services. In 
addition, applicants must be thoroughly familiar with the procedures, 
terms, and conditions contained in the Auction 108 Procedures Public 
Notice and any future public notices that may be released in this 
proceeding.
    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 its public notices at any time 
and will issue public notices to convey any new or supplemental 
generally applicable information to applicants. Pursuant to the 
Commission's rules, OEA and WTB also retain the authority to implement 
further procedures during the course of Auction 108. It is the 
responsibility of all applicants to remain current with all Commission 
rules and with all public notices pertaining to Auction 108.

C. Description of Licenses To Be Offered in Auction 108

    7. Consistent with the Commission's determination, any remaining 
unassigned EBS spectrum will be made available in Auction 108. Auction 
108 will offer geographic overlay licenses for unassigned spectrum in 
the 2.5 GHz (2496-2690 MHz) band. The Commission will offer up to three 
blocks of spectrum--49.5 megahertz, 50.5 megahertz, and 17.5 megahertz 
blocks, respectively--licensed on a county basis. Specifically, the 
first channel block will include channels A1-A3, B1-B3, C1-C3 (49.5 
megahertz); the second channel block will include channels D1-D3, the J 
channels, and channels A4, B4, C4, D4, and G4 (50.5 megahertz); and the 
third channel block will include channels G1-G3 and the relevant K 
channels (16.5 megahertz of contiguous spectrum and 1 megahertz of the 
K channels associated with the G channel group, for a total of 17.5 
megahertz). New overlay licenses in the EBS portion of the 2.5 GHz band 
will be issued for 10-year, renewable license terms. A licensee in this 
band may provide any services permitted under terrestrial fixed or 
mobile allocations, as set forth in the non-Federal Government column 
of the Table of Frequency Allocations in 47 CFR 2.106.
    8. Concurrent with the release of the Auction 108 Comment Public 
Notice, OEA and WTB made available a file listing all county and 
channel block

[[Page 21757]]

combinations potentially available for Auction 108. Several commenters, 
including some incumbent licensees, noted potential discrepancies 
between the Commission's initial list of potentially available licenses 
and commenters' own analyses of available white space in the band. 
These commenters and others urged the Commission to audit the 
preliminary list of licenses available in Auction 108 to ensure that 
the final list of available licenses is complete and accurate. In light 
of these comments, WTB staff performed additional geographic 
information systems (GIS) analysis of existing 2.5 GHz licenses and 
prepared a new list of potentially available licenses based on license 
service area data extracted from the Universal Licensing System (ULS) 
on February 2, 2022. The revised list also took into account licenses 
issued pursuant to Rural Tribal Priority Window applications and 
information provided by commenters. OEA and WTB released that updated 
list of potentially available licenses, which added 189 licenses to the 
list and removed 370, on February 18, 2022, and requested comment on 
whether any of the procedures proposed in the Auction 108 Comment 
Public Notice or the Auction 108 Further Comment Public Notice needed 
to be adjusted in light of licenses added to the initial license 
inventory.
    9. Many of the issues raised by commenters in response to the 
Auction 108 Comment Public Notice were addressed in the revised 
inventory released with the Auction 108 Inventory Comment Public 
Notice. The revised list of licenses also excluded county/channel block 
combinations where the only areas with unassigned spectrum were over 
large bodies of water such as the Atlantic Ocean or the Great Lakes. 
Since a licensee may only place base stations within their geographic 
service area (GSA) and limit the power flux density of their signal 
within their GSA, there would be no prospect for a licensee to deploy 
service to land-based populations in that scenario.
    10. The revised license inventory released in conjunction with the 
Auction 108 Procedures Public Notice incorporates WTB's comprehensive 
review of the inventory in response to additional GIS analyses and 
feedback from interested parties including incumbent licensees and 
lessees. The Commission declines a request by certain parties to 
implement a more formal process by which interested parties may submit 
data to challenge the revised license inventory. Interested parties had 
multiple opportunities to provide input on the development of the 
license inventory, as WTB has continued to refine and revise the 
inventory in response to feedback from interested parties. Most 
recently, several parties submitted additional information in response 
to the Auction 108 Inventory Comment Public Notice, and WTB has taken 
that information into account in developing the most recent inventory 
listing reflected in the updated Attachment A that is being released in 
conjunction with the Auction 108 Procedures Public Notice. Second, a 
new, formal process at this time would significantly delay the auction 
of critical mid-band spectrum.
    11. On March 15, 2022, WTB granted seven additional Rural Tribal 
Priority Window applications in Alaska. As a result of those grants, 
all 2.5 GHz spectrum in Bristol Bay and Lake and Peninsula Boroughs in 
Alaska was assigned on all three channel blocks. Accordingly, the three 
licenses for those boroughs have been removed from the list of 
available licenses.
    12. In light of comments, the Commission has also excluded from its 
analysis of active licensees' geographic service areas the potential 
effect of licenses that expired before January 10, 2005, and were not 
reinstated prior to March 10, 2008. As a result, the Commission removed 
80 licenses in 57 counties from the auction inventory.
    13. Concurrent with the release of the Auction 108 Procedures 
Public Notice, the Commission makes available an updated file listing 
all county and channel block combinations potentially available for 
Auction 108. This file is listed as an Attachment A file on the Auction 
108 website at www.fcc.gov/auction/108. This inventory of overlay 
licenses available in Auction 108 released concurrently with the 
Auction 108 Procedures Public Notice removes 87 licenses from the 
revised inventory released on February 18, 2022, based on OEA and WTB 
review of comments and the results of the Rural Tribal Priority Window. 
If additional licenses are removed from inventory because of future 
Rural Tribal Priority Window grants, those actions will be announced by 
subsequent public notice(s).
    14. The Commission has also made available resources to assist 
applicants in conducting due diligence research regarding potential 
encumbrances in the band. These resources include a new mapping tool to 
help identify and view existing licenses and Rural Tribal Priority 
Window applications. The new mapping tool is being made available to 
all potential bidders in Auction 108, and the public generally, 
concurrently with the release of the Auction 108 Procedures Public 
Notice. It can be found under the Education tab on the Auction 108 
website at www.fcc.gov/auction/108. Potential applicants are reminded, 
however, that this mapping tool is merely a graphical aid for potential 
applicants and does not represent official licensing information; all 
information should be confirmed in the Universal Licensing System (ULS) 
for any specific license or area.
    15. The Commission will not adopt an expansion of existing 
requirements on incumbent licensees and lessors in this band that would 
mandate disclosure of additional details of spectrum lease agreements 
to potential bidders. The Commission finds that adoption of proponents' 
expanded disclosure requirement is beyond the bounds of the existing 
spectrum leasing rules and the Commission's prior determinations 
supporting those disclosure requirements. The Commission's spectrum 
leasing rules already provide that each licensee that enters into a 
leasing agreement must disclose to the Commission a significant amount 
of information pertaining to the agreement, including the identity of 
the lessee, the term, and the spectrum and geographic area covered, and 
that such information is publicly available through ULS. Given the 
spectrum lease information already available, the Commission finds that 
proponents of disclosure have not supported their assertion that 
additional information is necessary in making decisions about whether 
or how to participate in this auction. Finally, even if additional 
information may be helpful or material to one or more bidders--and the 
Commission makes no such finding--the Commission is not convinced that 
the benefits to potential bidders of obtaining such information would 
outweigh the potential competitive harm to the leaseholders from 
disclosure.
    16. Each potential bidder is solely responsible for investigating 
and evaluating all technical and marketplace factors that may have a 
bearing on the potential uses of a license that it may seek in Auction 
108, including the availability of unassigned white space in any 
particular license area. In addition to the typical due diligence 
considerations encouraged of bidders in all auctions, the Commission 
calls particular attention in Auction 108 to potential encumbrances due 
to existing licenses and pending applications. In particular there will 
be a substantial number of licenses in the inventory where the amount 
of unassigned area or unassigned spectrum is very small. For example, 
there could be licenses in Channel Block 2 where as little as .333 
megahertz of spectrum is unassigned.

[[Page 21758]]

There are also a substantial number of licenses where the area with 
unassigned spectrum is smaller than one square mile. Each applicant 
should carefully consider these issues and the technical and economic 
implications for commercial use of the 2.5 GHz band.

D. Auctions Specifics

1. Auction Title and Start Date
    17. The auction of licenses in the 2.5 GHz band will be referred to 
as Auction 108. Bidding in Auction 108 will begin on Friday, July 29, 
2022. Pre-bidding dates and deadlines are listed below. The initial 
schedule for bidding rounds in Auction 108 will be announced by public 
notice at least one week before bidding begins.
    18. Unless otherwise announced, bidding on all licenses will be 
conducted on each business day until bidding has stopped on all 
licenses.
2. Auction Dates and Deadlines
    19. The following dates and deadlines apply to Auction 108:

Auction Application Tutorial Available   No later than April 5, 2022.
 (via internet).
Short-Form Application (FCC Form 175)    April 27, 2022, 12 p.m. Eastern
 Filing Window Opens.                     Time (ET).
Short-Form Application (FCC Form 175)    May 10, 2022, 6 p.m. ET.
 Filing Window Deadline.
Upfront Payments (via wire transfer)...  June 23, 2022, 6 p.m. ET.
Bidding Tutorial Available (via          No later than July 13, 2022.
 internet).
Mock Auction...........................  July 26-27, 2022.
Bidding Begins in Auction 108..........  July 29, 2022.
 

3. Requirements for Participation
    20. Those wishing to participate in Auction 108 must:
    <bullet> Submit a short-form application (FCC Form 175) 
electronically prior to 6 p.m. ET on May 10, 2022, following the 
electronic filing procedures and other instructions set forth in the 
Auction 108 Procedures Public Notice and in the FCC Form 175 
Instructions.
    <bullet> Submit a sufficient upfront payment and an FCC Remittance 
Advice Form (FCC Form 159) by 6 p.m. ET on June 23, 2022, following the 
procedures and instructions set forth in the Auction 108 Procedures 
Public Notice.
    <bullet> Comply with all provisions outlined in the Auction 108 
Procedures Public Notice and applicable Commission rules.

II. Applying To Participate in Auction 108

A. Certification of Notice of Auction 108 Requirements and Procedures

    21. For the reasons set forth in the Auction 108 Comment Public 
Notice, the Commission adopts the proposal to require any applicant 
seeking to participate in Auction 108 to certify in its short-form 
application, under penalty of perjury, that it has read the Auction 108 
Procedures Public Notice adopting procedures for Auction 108 and that 
it has familiarized itself with these procedures and with the 
requirements for obtaining a license and operating facilities in the 
2.5 GHz band. No commenter opposed the proposed certification, and one 
commenter, T-Mobile, supports it.
    22. This certification is designed to bolster applicants' efforts 
to educate themselves about the procedures for auction participation 
and to ensure that, prior to submitting their short-form applications, 
applicants understand their obligation to stay abreast of relevant, 
forthcoming information. Familiarity with the Commission's rules and 
procedures governing Auction 108 may also help bidders avoid the 
consequences to them associated with defaults, which also cause harm to 
other applicants and the public by reducing the efficiency of the 
auction process and reducing the likelihood that the license will be 
assigned to the bidder that values it the most. This certification, 
along with the other certifications required pursuant to 47 CFR 
1.2105(a), will promote submission of applications that meet the 
Commission's requirements, thereby leading to a more efficient 
application process.
    23. A substantively similar requirement was recently instituted for 
Auction 110, a Commission auction of flexible-use licenses in the 3.45-
3.55 GHz band. That requirement furthered a long-standing policy under 
which the Commission expressly places a burden upon each applicant to 
be thoroughly familiar with the procedures, terms, and conditions 
contained in the relevant Procedures Public Notice and any future 
public notices that may be released in the auction proceeding. While 
the certification the Commission adds refers to information regarding 
auction procedures and licensing that is available at the time of 
certification, potential auction applicants are on notice that their 
educational efforts must continue even after their short-form 
applications are filed. Commission staff routinely makes available 
detailed educational materials, such as interactive, online tutorials 
and technical guides, to enhance interested parties' comprehension of 
the pre-bidding and bidding processes and to help minimize the need for 
applicants to engage outside engineers, legal counsel, or other auction 
experts.
    24. For these reasons, the Commission will require each Auction 108 
applicant to certify as follows in its short-form application: That the 
applicant has read the public notice adopting procedures for the 
auction and that it has familiarized itself both with the auction 
procedures and with the requirements for obtaining a license and 
operating facilities in the 2.5 GHz band.
    25. An applicant must provide this certification under penalty of 
perjury, consistent with 47 CFR 1.2105(a). This certification is in 
addition to the certifications already required under 47 CFR 1.2105. 
Consistent with the other certifications required in the short-form 
application, an applicant's failure to make this certification in its 
FCC Form 175 by the May 10, 2022 filing deadline will render its 
application unacceptable for filing, and its application will be 
dismissed with prejudice.

B. General Information Regarding Short-Form Applications

    26. An application to participate in Auction 108, referred to as a 
short-form application or FCC Form 175, provides information that the 
Commission uses to determine whether the applicant has the legal, 
technical, and/or financial qualifications to participate in a 
Commission auction for spectrum licenses or permits. The short-form 
application is the first part of the Commission's two-phased auction 
application process. In the first phase, a party seeking to participate 
in Auction 108 must file a short-form application in which it 
certifies, under penalty of perjury, that it is qualified to 
participate. Eligibility to participate in Auction 108 is determined 
based on an applicant's short-form application and certifications and 
on the applicant's upfront payment. After bidding closes, in the second 
phase of the process, each winning bidder in Auction 108 must file a 
more comprehensive post-auction long-form application (FCC Form 601) 
for the licenses it wins in the auction,

[[Page 21759]]

and it must have a complete and accurate ownership disclosure 
information report (FCC Form 602) on file with the Commission.
    27. A party seeking to participate in Auction 108 must file an FCC 
Form 175 electronically via the Auction Application System prior to 6 
p.m. ET on May 10, 2022, following the procedures prescribed in the FCC 
Form 175 Instructions. If an applicant claims eligibility for a bidding 
credit, then the information provided in its FCC Form 175 will be used 
to determine whether the applicant appears to be eligible for the 
claimed bidding credit, with the final determination of bidding credit 
eligibility to occur based on a winning bidder's post-auction long-form 
application. Below the Commission describes more fully the information 
disclosures and certifications required in the short-form application. 
Each Auction 108 applicant will be subject to the Commission's rule 
prohibiting certain communications. An applicant is subject to the 
prohibition beginning at the deadline for filing short-form 
applications--6 p.m. ET on May 10, 2022.
    28. An Auction 108 applicant bears full responsibility for 
submitting an accurate, complete, and timely short-form application. 
Pursuant to the Commission's competitive bidding rules, an applicant 
must make a series of certifications under penalty of perjury on its 
FCC Form 175 related to the information provided in its application and 
its participation in the auction, and an applicant must confirm that it 
is legally, technically, financially, and otherwise qualified to hold a 
license. As noted above, each participant in Auction 108 must also 
certify that it has read the Auction 108 Procedures Public Notice and 
familiarized itself both with the auction procedures and with the 
requirements for obtaining a license and operating facilities in the 
2.5 GHz band. If an Auction 108 applicant fails to make the required 
certifications in its FCC Form 175 by the filing deadline, then its 
application will be deemed unacceptable for filing and cannot be 
corrected after the filing deadline.
    29. An applicant should note that submitting an FCC Form 175 (and 
any amendments thereto) constitutes a representation by the certifying 
official that he or she is an authorized representative of the 
applicant with authority to bind the applicant, that he or she has read 
the form's instructions and certifications, and that the contents of 
the application, its certifications, and any attachments are true and 
correct. Submitting a false certification to the Commission may result 
in penalties, including monetary forfeitures, license forfeitures, 
ineligibility to participate in future auctions, and/or criminal 
prosecution.
    30. Applicants are cautioned that, because the required information 
submitted in FCC Form 175 bears on each applicant's qualifications, 
requests for confidential treatment will not be routinely granted. The 
Commission generally has held that it may publicly release confidential 
business information where the party has put that information at issue 
in a Commission proceeding or where the Commission has identified a 
compelling public interest in disclosing the information. In this 
regard, the Commission specifically has held that information submitted 
in support of receiving bidding credits in auction proceedings should 
be made available to the public.
    31. An applicant must designate between one and three individuals 
as authorized bidders in its FCC Form 175. The Commission's rules 
prohibit an individual from serving as an authorized bidder for more 
than one auction applicant.
    32. In order to access the auction bidding system, each authorized 
bidder will be required to have a unique email address associated with 
an FCC Username Account that is linked to the applicant's FCC 
Registration Number (FRN) in the Commission Registration System 
(CORES). This added security measure is newly implemented for bidding 
in Commission auctions. If an authorized bidder does not provide an FCC 
Username Account linked to the applicant's FRN in the applicant's FCC 
Form 175, that bidder will be unable to place or submit bids. For 
further details, applicants should refer to the FCC Form 175 
Instructions for Auction 108.
    33. No individual or entity may file more than one short-form 
application or have a controlling interest in more than one short-form 
application. If a party submits multiple short-form applications for an 
auction, then only one application may form the basis for that party to 
become qualified to bid in that auction.
    34. Similarly, and consistent with the Commission's general 
prohibition on joint bidding agreements, a party generally is permitted 
to participate in a Commission auction only through a single bidding 
entity. Accordingly, the filing of applications in Auction 108 by 
multiple entities controlled by the same individual or set of 
individuals generally will not be permitted. As noted by the Commission 
in adopting the prohibition on applications by commonly controlled 
entities, this rule, in conjunction with the prohibition against joint 
bidding agreements, protects the competitiveness of the Commission's 
auctions.
    35. After the initial short-form application filing deadline, 
Commission staff will review all timely submitted applications for 
Auction 108 to determine whether each application complies with the 
application requirements and whether the applicant has provided all 
required information concerning its qualifications for bidding. After 
this review is completed, a public notice will be released announcing 
the status of applications and identifying the applications that are 
complete and those that are incomplete because of minor defects that 
may be corrected. That public notice also will establish an application 
resubmission filing window, during which an applicant may make 
permissible minor modifications to its application to address 
identified deficiencies. The public notice will include the deadline 
for resubmitting modified applications. To become a qualified bidder, 
an applicant must have a complete application (i.e., have timely filed 
an application that is deemed complete after the deadline for 
correcting any identified deficiencies), and must make a timely and 
sufficient upfront payment. Qualified bidders will be identified by 
public notice at least 10 days prior to the mock auction.
    36. The Commission discusses below additional details regarding 
certain information required to be submitted in the FCC Form 175. An 
applicant should consult the Commission's rules to ensure that, in 
addition to the materials described below, all required information is 
included in its short-form application. To the extent the information 
in the Auction 108 Procedures Public Notice does not address an 
applicant's specific operating structure, or if the applicant needs 
additional information or guidance concerning the described disclosure 
requirements, the applicant should review the educational materials for 
Auction 108 (see the Education section of the Auction 108 website at 
www.fcc.gov/auction/108) and use the contact information provided in 
the Auction 108 Procedures Public Notice to consult with Commission 
staff to better understand the information that it must submit in its 
short-form application.

C. License Area Selection

    37. An applicant must select all of the license areas on which it 
may want to bid from the list of available counties on its FCC Form 
175. An applicant must carefully review and verify its license area 
(i.e., county) selections before the

[[Page 21760]]

FCC Form 175 filing deadline because those selections cannot be changed 
after the auction application filing deadline. An applicant is not 
required to place bids on licenses in any or all of the license areas 
selected, but the FCC Auction Bidding System (bidding system) will not 
accept bids for licenses in license areas (i.e., counties) that the 
applicant did not select in its FCC Form 175.
    38. When two or more short-form applications (FCC Form 175) are 
submitted selecting the same licenses in Auction 108, mutual 
exclusivity exists for auction purposes as to those licenses, and the 
licenses must be awarded by competitive bidding procedures. Once mutual 
exclusivity exists for auction purposes, even if only one applicant is 
qualified to bid for a particular license, that applicant is required 
to submit a bid in order to obtain the license. An applicant may select 
licenses on its Form 175 by using the select all licenses checkbox or 
by selecting any particular county. Selection of a county will allow 
the applicant to bid on any available license within that county, 
provided that it otherwise becomes a qualified bidder and has 
sufficient bidding eligibility.

D. Disclosure of Agreements and Bidding Arrangements

    39. An applicant must provide in its FCC Form 175 a brief 
description of, and identify each party to, any partnerships, joint 
ventures, consortia or agreements, arrangements, or understandings of 
any kind relating to the licenses being auctioned, including any 
agreements that address or communicate directly or indirectly bids 
(including specific prices), bidding strategies (including the specific 
licenses on which to bid or not to bid), or the post-auction market 
structure, to which the applicant, or any party that controls or is 
controlled by the applicant, is a party. In connection with the 
agreement disclosure requirement, the applicant must certify under 
penalty of perjury in its FCC Form 175 that it has described, and 
identified each party to any such agreements, arrangements, or 
understandings to which it (or any party that controls it or that it 
controls) is a party. Moreover, since each applicant must maintain the 
accuracy and completeness of the information in its pending auction 
application, if it enters into any agreement relating to the licenses 
being auctioned after the FCC Form 175 filing deadline, then that 
agreement is subject to these same disclosure requirements.
    40. For purposes of making the required agreement disclosures on 
the FCC Form 175, if parties agree in principle on all material terms 
prior to the application filing deadline, then each party to the 
agreement that is submitting an auction application must provide a 
brief description of, and identify the other party or parties to, the 
agreement on its respective FCC Form 175, even if the agreement has not 
been reduced to writing. Parties that have not agreed in principle by 
the FCC Form 175 filing deadline should not describe, or include the 
names of parties to, the discussions on their applications.
    41. The Commission's rules generally prohibit joint bidding and 
other arrangements involving auction applicants (including any party 
that controls or is controlled by such applicants). For purposes of the 
prohibition, a joint bidding arrangement includes any arrangement 
relating to the licenses being auctioned that addresses or 
communicates, directly or indirectly, bidding in the auction, bidding 
strategies, including arrangements regarding price or the specific 
licenses on which to bid, and any such arrangement relating to the 
post-auction market structure.
    42. This prohibition applies to joint bidding arrangements 
involving two or more nationwide providers, as well as joint bidding 
arrangements involving a nationwide provider and one or more non-
nationwide providers, where at least one party to the arrangement is an 
applicant for the auction. In the Updating Part 1 Report and Order, 80 
FR 56763, Sep. 18, 2015, the Commission stated that entities that 
qualify as nationwide providers generally would be identified in 
procedures public notices released before each auction. To that end, 
and consistent with the Commission's decisions in recent spectrum 
auctions and in the 2020 Communications Marketplace Report, the 
Commission considers AT&T, T-Mobile, and Verizon to be nationwide 
providers for the purpose of implementing the competitive bidding rules 
in Auction 108.
    43. Under certain circumstances, a non-nationwide provider may 
enter into an agreement to form a consortium or a joint venture (as 
applicable) that results in a single party applying to participate in 
an auction. Specifically, a designated entity can participate in one 
consortium or joint venture in an auction, and non-nationwide providers 
that are not designated entities may participate in an auction through 
only one joint venture. A non-nationwide provider may enter into only 
one agreement to form a consortium or joint venture (as applicable), 
and such consortium or joint venture shall be the exclusive bidding 
vehicle for its members in the auction. The general prohibition on 
joint bidding arrangements excludes certain agreements, including those 
that are solely operational in nature, as defined in 47 CFR 
1.2105(a)(2)(ix)(A)-(C).
    44. To implement the prohibition on joint bidding arrangements, the 
Commission's rules require each applicant to certify in its short-form 
application that it has disclosed any arrangements or understandings of 
any kind relating to the licenses being auctioned to which it (or any 
party that controls or is controlled by it) is a party. The applicant 
must also certify that it (or any party that controls or is controlled 
by it) has not entered and will not enter into any arrangement or 
understanding of any kind relating directly or indirectly to bidding at 
auction with, among others, any other applicant or a nationwide 
provider.
    45. Although the Commission's rules do not prohibit auction 
applicants from communicating about matters that are within the scope 
of an excepted agreement that has been disclosed in an FCC Form 175, 
the Commission reminds applicants that certain discussions or exchanges 
could nonetheless touch upon impermissible subject matters, and that 
compliance with the Commission's rules will not insulate a party from 
enforcement of the antitrust laws.
    46. Applicants should bear in mind that a winning bidder will be 
required to disclose, in its post-auction long-form application, the 
specific terms, conditions, and parties involved in any agreement 
relating to the licenses being auctioned into which it had entered 
prior to the time bidding was completed. This applies to any bidding 
consortium, joint venture, partnership, or other agreement, 
arrangement, or understanding of any kind entered into relating to the 
competitive bidding process, including any agreements relating to the 
licenses being auctioned that address or communicate directly or 
indirectly bids (including specific prices), bidding strategies 
(including the specific licenses on which to bid or not to bid), or the 
post-auction market structure, to which the applicant, or any party 
that controls or is controlled by the applicant, is a party.

E. Ownership Disclosure Requirements

    47. Each applicant must comply with the applicable part 1 ownership 
disclosure requirements and provide information required by 47 CFR 
1.2105 and 1.2112, and, where applicable, 47 CFR 1.2110. Specifically, 
in completing FCC Form 175, an applicant must fully

[[Page 21761]]

disclose information regarding the real party- or parties-in-interest 
in the applicant or application and the ownership structure of the 
applicant, including both direct and indirect ownership interests of 
10% or more, as prescribed in 47 CFR 1.2105 and 1.2112 and, where 
applicable, 47 CFR 1.2110. Each applicant is responsible for ensuring 
that information submitted in its short-form application is complete 
and accurate.
    48. In certain circumstances, an applicant may have previously 
filed an FCC Form 602 ownership disclosure information report or filed 
an auction application for a previous auction in which ownership 
information was disclosed. If the applicant used the same FCC 
Registration Number (FRN) the applicant is using to submit its FCC Form 
175, the most current ownership information contained in any such 
filing will automatically be pre-filled into certain ownership sections 
on the applicant's FCC Form 175, if such information is in an 
electronic format compatible with FCC Form 175. Each applicant must 
carefully review any ownership information automatically entered into 
its FCC Form 175, including any ownership attachments, to confirm that 
all information supplied on FCC Form 175 is complete and accurate as of 
the application filing deadline. Any information that needs to be 
corrected or updated must be changed directly in FCC Form 175.

F. Foreign Ownership Disclosure Requirements

    49. Section 310 of the Communications Act requires the Commission 
to review foreign investment in radio station licenses and imposes 
specific restrictions on who may hold certain types of radio licenses. 
Section 310 applies to applications for initial radio licenses, 
applications for assignments and transfers of control of radio 
licenses, and spectrum leasing arrangements under the Commission's 
secondary market rules. In completing FCC Form 175, an applicant is 
required to disclose information concerning foreign ownership of the 
applicant. If an applicant has foreign ownership interests in excess of 
the applicable limit or benchmark set forth in 47 U.S.C. 310(b), then 
it may seek to participate in Auction 108 as long as it has filed a 
petition for declaratory ruling with the Commission prior to the FCC 
Form 175 filing deadline. An applicant must certify in its FCC Form 175 
that, as of the deadline for filing its application to participate in 
the auction, the applicant either is in compliance with the foreign 
ownership provisions of 47 U.S.C. 310 or has filed a petition for 
declaratory ruling requesting Commission approval to exceed the 
applicable foreign ownership limit or benchmark in 47 U.S.C. 310(b) 
that is pending before, or has been granted by, the Commission.

G. Information Procedures During the Auction Process

    50. Consistent with past practice in many prior spectrum license 
auctions, the Commission adopts the proposal to limit information 
available in Auction 108 in order to prevent the identification of 
bidders placing particular bids until after the bidding has closed. 
Specifically, the Commission will not make public until after bidding 
has closed: (1) The license areas that an applicant selects for bidding 
in its short-form application, (2) the amount of any upfront payment 
made by or on behalf of an applicant for Auction 108, (3) any 
applicant's bidding eligibility, and (4) any other bidding-related 
information that might reveal the identity of the bidder placing a bid.
    51. Once bidding begins in Auction 108, under the limited 
information procedures (sometimes also referred to as anonymous 
bidding), information to be made public after each round of bidding 
will include, for each license, the aggregate demand, the posted price 
of the completed round, and the clock price for the next round. The 
identities of bidders placing specific bids will not be disclosed until 
after the close of bidding.
    52. Throughout the auction, bidders will have access to additional 
information related to their own bidding and bidding eligibility 
through the Commission's bidding system. Specifically, after the bids 
of a round have been processed, the bidding system will inform each 
bidder of its processed demand, whether the bidder has a proxy 
instruction in place for each license, and its eligibility for the next 
round.
    53. After the close of bidding, bidders' license area selections, 
upfront payment amounts, bidding eligibility, bids, and other bidding-
related actions will be made publicly available. Bids placed according 
to a bidder's proxy instructions will be available, but a bidder's 
proxy instructions will not be disclosed.
    54. The Commission warns applicants that direct or indirect 
communication to other applicants or the public disclosure of non-
public information (e.g., reductions in eligibility, identities of 
bidders) could violate the Commission's rule prohibiting certain 
communications. Therefore, to the extent an applicant believes that 
such a disclosure is required by law or regulation, including 
regulations issued by the U.S. Securities and Exchange Commission 
(SEC), the Commission strongly urges that the applicant consult with 
Commission staff in the Auctions Division before making such 
disclosure.

H. Prohibited Communications and Compliance With Antitrust Laws

    55. The rules prohibiting certain communications set forth in 47 
CFR1.2105(c) apply to each applicant in Auction 108. Section 
1.2105(c)(1) provides that, subject to specified exceptions, after the 
short-form application filing deadline, all applicants are prohibited 
from cooperating or collaborating with respect to, communicating with 
or disclosing, to each other or any nationwide provider of 
communications services that is not an applicant, or, if the applicant 
is a nationwide provider, any non-nationwide provider that is not an 
applicant, in any manner the substance of their own, or each other's, 
or any other applicants' bids or bidding strategies (including post-
auction market structure), or discussing or negotiating settlement 
agreements, until after the down payment deadline.
1. Entities Subject to Section 1.2105(c)
    56. An applicant for purposes of this rule includes all controlling 
interests in the entity submitting the FCC Form 175 auction 
application, as well as all holders of interests amounting to 10% or 
more of the entity (including institutional investors and asset 
management companies), and all officers and directors of that entity. 
Under 47 CFR 1.2105(c), a party that submits an application becomes an 
applicant under the rule, which goes into effect at the application 
deadline, and that status does not change based on later developments.
    57. As proposed in the Auction 108 Comment Public Notice, the 
Commission considers AT&T, T-Mobile, and Verizon to be nationwide 
providers for the purposes of the prohibited communications rule for 
Auction 108.
2. Prohibition Applies Until Down Payment Deadline
    58. The prohibition in 47 CFR 1.2105(c) on certain communications 
begins at an auction's short-form application filing deadline and ends 
at the auction's down payment deadline after the auction closes, which 
will be announced in a future public notice.

[[Page 21762]]

3. Scope of Prohibition on Certain Communications; Prohibition on Joint 
Bidding Agreements
    59. Section 1.2105(c) prohibits certain communications between 
applicants for an auction, regardless of whether the applicants seek 
permits or licenses in the same geographic area or market. The rule 
also applies to communications by applicants with non-applicant 
nationwide providers of communications services and by nationwide 
applicants with non-applicant, non-nationwide providers. The rule 
further prohibits joint bidding arrangements, including arrangements 
relating to the permits or licenses being auctioned that address or 
communicate, directly or indirectly, bidding at the auction, bidding 
strategies, including arrangements regarding price or the specific 
permits or licenses on which to bid, and any such arrangements relating 
to the post-auction market structure. The rule allows for limited 
exceptions for communications within the scope of any arrangement 
consistent with the exclusion from the Commission's rule prohibiting 
joint bidding, provided such arrangement is disclosed on the 
applicant's auction application. Applicants may communicate pursuant to 
any pre-existing agreements, arrangements, or understandings relating 
to the licenses being auctioned that are solely operational or that 
provide for the transfer or assignment of licenses, provided that such 
agreements, arrangements, or understandings are disclosed on their 
applications and do not both relate to the licenses at auction and 
address or communicate bids (including amounts), bidding strategies, or 
the particular permits or licenses on which to bid or the post-auction 
market structure.
    60. In addition to express statements of bids and bidding 
strategies, the prohibition against communicating in any manner 
includes public disclosures as well as private communications and 
indirect or implicit communications. Consequently, an applicant must 
take care to determine whether its auction-related communications may 
reach another applicant.
    61. Parties subject to 47 CFR 1.2105(c) should take special care in 
circumstances where their officers, directors, and employees may 
receive information directly or indirectly relating to any applicant's 
bids or bidding strategies. Such information may be deemed to have been 
received by the applicant under certain circumstances. For example, 
Commission staff have found that, where an individual serves as an 
officer and director for two or more applicants, the bids and bidding 
strategies of one applicant are presumed to be conveyed to the other 
applicant through the shared officer, which creates an apparent 
violation of the rule.
    62. Subject to the limited exceptions for communications within the 
scope of any arrangement consistent with the exclusion from the 
Commission's rule prohibiting joint bidding, 47 CFR 1.2105(c)(1) 
prohibits applicants from communicating with specified other parties 
only with respect to their own, or each other's, or any other 
applicant's bids or bidding strategies. The Prohibited Communications 
Guidance Public Notice, 80 FR 63215, October 19, 2015, released in 
advance of the broadcast incentive auction (Auction 1000) reviewed the 
scope of the prohibition generally, as well as in that specific 
auction's forward auction of spectrum licenses and reverse auction to 
relinquish broadcast licenses. As the Commission explained therein, a 
communication conveying bids or bidding strategies (including post-
auction market structure) must also relate to the licenses being 
auctioned in order to be covered by the prohibition. Thus, the 
prohibition is limited in scope and does not apply to all 
communications between or among the specified parties. The Commission 
consistently has made clear that application of the rule prohibiting 
communications has never required total suspension of essential ongoing 
business. Entities subject to the prohibition may negotiate agreements 
during the prohibition period, provided that the communications 
involved do not relate to both: (1) The licenses being auctioned and 
(2) bids or bidding strategies or post-auction market structure.
    63. Accordingly, business discussions and negotiations that do not 
convey information about the bids or bidding strategies, including the 
post-auction market structure, of an applicant are not prohibited by 
the rule. Moreover, not all auction-related information is covered by 
the prohibition. For example, communicating merely whether a party has 
or has not applied to participate in Auction 108 will not violate the 
rule. In contrast, communicating, among other things, how a party will 
participate, including specific geographic areas selected, specific bid 
amounts, and/or whether or not the party is placing bids, would convey 
bids or bidding strategies and would be prohibited.
    64. While 47 CFR 1.2105(c) does not prohibit business discussions 
and negotiations among auction applicants that are unrelated to the 
auction, each applicant must remain vigilant not to communicate, 
directly or indirectly, information that affects, or could affect, bids 
or bidding strategies. Certain discussions might touch upon subject 
matters that could convey price or geographic information related to 
bidding strategies. Such subject areas include, but are not limited to, 
management, sales, local marketing agreements, and other transactional 
agreements.
    65. The Commission cautions applicants that bids or bidding 
strategies may be communicated outside of situations that involve one 
party subject to the prohibition communicating privately and directly 
with another such party. For example, the Commission has warned that 
prohibited communications concerning bids and bidding strategies may 
include communications regarding capital calls or requests for 
additional funds in support of bids or bidding strategies to the extent 
such communications convey information concerning the bids and bidding 
strategies directly or indirectly. Moreover, the Commission found a 
violation of the rule against prohibited communications when an 
applicant used the Commission's bidding system to disclose its bidding 
strategy in a manner that explicitly invited other auction participants 
to cooperate and collaborate in specific markets, and it has placed 
auction participants on notice that the use of its bidding system to 
disclose market information to competitors will not be tolerated and 
will subject bidders to sanctions.
    66. Likewise, when completing a short-form application, each 
applicant should avoid any statements or disclosures that may violate 
47 CFR 1.2105(c), particularly in light of the limited information 
procedures in effect for Auction 108. Specifically, an applicant should 
avoid including any information in its short-form application that 
might convey information regarding its license area selections, such as 
referring to counties or other geographic areas in describing 
agreements, including any information in application attachments that 
will be publicly available that may otherwise disclose the applicant's 
license area selections, or using applicant names that refer to 
licenses being offered.
    67. Applicants also should be mindful that communicating non-public 
application or bidding information publicly or privately to another 
applicant may violate 47 CFR 1.2105(c) even though that information 
subsequently may be made public during later periods of the application 
or bidding processes.

[[Page 21763]]

4. Communicating With Third Parties
    68. Section 1.2105(c) does not prohibit an applicant from 
communicating bids or bidding strategies to a third party, such as a 
consultant or consulting firm, counsel, or lender. An applicant should 
take appropriate steps, however, to ensure that any third party it 
employs for advice pertaining to its bids or bidding strategies does 
not become a conduit for prohibited communications to other specified 
parties, as that would violate the rule. For example, an applicant 
might require a third party, such as a lender, to sign a non-disclosure 
agreement before the applicant communicates any information regarding 
bids or bidding strategy to the third party. Within third-party firms, 
separate individual employees, such as attorneys or auction 
consultants, may advise individual applicants on bids or bidding 
strategies, as long as such firms implement firewalls and other 
compliance procedures that prevent such individuals from communicating 
the bids or bidding strategies of one applicant to other individuals 
representing separate applicants. Although firewalls and/or other 
procedures should be used, their existence is not an absolute defense 
to liability if a violation of the rule has occurred.
    69. As the Commission has noted in other spectrum auctions, in the 
case of an individual, the objective precautionary measure of a 
firewall is not available. As a result, an individual that is privy to 
bids or bidding information of more than one applicant presents a 
greater risk of becoming a conduit for a prohibited communication. The 
Commission will take the same approach to interpreting the prohibited 
communications rule in Auction 108. The Commission emphasizes that 
whether a prohibited communication has taken place in a given case will 
depend on all the facts pertaining to the case, including who possessed 
what information, what information was conveyed to whom, and the course 
of bidding in the auction.
    70. The Commission reminds potential applicants that they may 
discuss the short-form application or bids for specific licenses or 
license areas with the counsel, consultant, or expert of their choice 
before the short-form application deadline. Furthermore, the same 
third-party individual could continue to give advice after the short-
form deadline regarding the application, provided that no information 
pertaining to bids or bidding strategies, including license areas, or 
counties, selected on the short-form application, is conveyed to that 
individual.
    71. Applicants also should use caution in their dealings with other 
parties, such as members of the press, financial analysts, or others 
who might become conduits for the communication of prohibited bidding 
information. For example, even though communicating that it has applied 
to participate in the auction will not violate the rule, an applicant's 
statement to the press that it intends to stop bidding in an auction 
could give rise to a finding of a 47 CFR 1.2105 violation. Similarly, 
an applicant's public statement of intent not to place bids during 
bidding in Auction 108 could also violate the rule.
5. Section 1.2105(c) Certifications
    72. By electronically submitting its FCC Form 175, each applicant 
for Auction 108 certifies its compliance with 47 CFR 1.2105(c). The 
mere filing of a certifying statement as part of an application, 
however, will not outweigh specific evidence that a prohibited 
communication has occurred, nor will it preclude the initiation of an 
investigation when warranted. Any applicant found to have violated 
these communication prohibitions may be subject to sanctions.
6. Duty To Report Prohibited Communications
    73. 47 CFR 1.2105(c)(4) requires that any applicant that makes or 
receives a communication that appears to violate 47 CFR 1.2105(c) must 
report such communication in writing to the Commission immediately, and 
in no case later than five business days after the communication 
occurs. Each applicant's obligation to report any such communication 
continues beyond the five-day period after the communication is made, 
even if the report is not made within the five-day period.
7. Procedures for Reporting Prohibited Communications
    74. A party reporting any information or communication pursuant to 
47 CFR 1.65(a), 1.2105(a)(2), or 1.2105(c)(4) must take care to ensure 
that any report of a prohibited communication does not itself give rise 
to a violation of 47 CFR 1.2105(c). For example, a party's report of a 
prohibited communication could violate the rule by communicating 
prohibited information to other parties specified under the rule 
through the use of Commission filing procedures that allow such 
materials to be made available for public inspection.
    75. An applicant must file only a single report concerning a 
prohibited communication and must file that report with the Commission 
personnel expressly charged with administering the Commission's 
auctions. This rule is designed to minimize the risk of inadvertent 
dissemination of information in such reports. Any reports required by 
47 CFR 1.2105(c) must be filed consistent with the instructions set 
forth in the Auction 108 Procedures Public Notice. For Auction 108, 
such reports must be filed with the Chief of the Auctions Division, 
Office of Economics and Analytics, by the most expeditious means 
available. Any such report should be submitted by email to the Auctions 
Division Chief and sent to <a href="/cdn-cgi/l/email-protection#1071657364797f7e212028507673733e777f66"><span class="__cf_email__" data-cfemail="22435741564b4d4c13121a624441410c454d54">[email protected]</span></a>. If you choose instead to 
submit a report in hard copy, contact Auctions Division staff at 
<a href="/cdn-cgi/l/email-protection#86e7f3e5f2efe9e8b7b6bec6e0e5e5a8e1e9f0"><span class="__cf_email__" data-cfemail="bcddc9dfc8d5d3d28d8c84fcdadfdf92dbd3ca">[email protected]</span></a> or (202) 418-0660 for guidance.
    76. Given the potential competitive sensitivity of public 
disclosure of information in such a report, a party seeking to report 
such a prohibited communication should consider submitting its report 
with a request that the report or portions of the submission be 
withheld from public inspection by following the procedures specified 
in 47 CFR 0.459. The Commission encourages such parties to coordinate 
with the Auctions Division staff about the procedures for submitting 
such reports.
8. Winning Bidders Must Disclose Terms of Agreements
    77. Each applicant that is a winning bidder will be required to 
provide as part of its long-form application any agreement or 
arrangement it has entered into and a summary of the specific terms, 
conditions, and parties involved in any agreement it has entered into. 
This applies to any bidding consortia, joint venture, partnership, or 
agreement, understanding, or other arrangement entered into relating to 
the competitive bidding process, including any agreement relating to 
the post-auction market structure. Failure to comply with the 
Commission's rules can result in enforcement action.
9. Additional Information Concerning Prohibition on Certain 
Communications in Commission Auctions
    78. A summary listing of documents issued by the Commission and 
OEA/WTB addressing the application of 47 CFR 1.2105(c) is available on 
the Commission's auction web page at www.fcc.gov/summary-listing-documents-addressing-application-rule-prohibiting-certain-communications.
10. Antitrust Laws
    79. Regardless of compliance with the Commission's rules, 
applicants remain

[[Page 21764]]

subject to the antitrust laws, which are designed to prevent 
anticompetitive behavior in the marketplace. Compliance with the 
disclosure requirements of 47 CFR 1.2105(c)(4) will not insulate a 
party from enforcement of the antitrust laws. For instance, a violation 
of the antitrust laws could arise out of actions taking place well 
before any party submits a short-form application. The Commission has 
cited a number of examples of potentially anticompetitive actions that 
would be prohibited under antitrust laws: for example, actual or 
potential competitors may not agree to divide territories in order to 
minimize competition, regardless of whether they split a market in 
which they both do business, or whether they merely reserve one market 
for one and another market for the other.
    80. To the extent the Commission becomes aware of specific 
allegations that suggest that violations of the federal antitrust laws 
may have occurred, they may refer such allegations to the United States 
Department of Justice for investigation. If an applicant is found to 
have violated the antitrust laws or the Commission's rules in 
connection with its participation in the competitive bidding process, 
then it may be subject to a forfeiture and may be prohibited from 
participating further in Auction 108 and in future auctions, among 
other sanctions.

I. Provisions for Small Businesses and Rural Service Providers

    81. A bidding credit represents an amount by which a bidder's 
overall payment across all of the licenses won will be discounted, 
subject to the caps discussed below. As set forth in 47 CFR 1.2110, and 
as described below, the designated entity rules include, but are not 
limited to: (1) A two-pronged standard for evaluating eligibility for 
small business benefits, (2) an attribution rule for certain 
disclosable interest holders of applicants claiming designated entity 
benefits, (3) updated gross revenue amounts defining eligibility for 
small business benefits, (4) a bidding credit for eligible rural 
service providers, and (5) caps on the total amount of designated 
entity benefits any eligible winning bidder may receive.
    82. In Auction 108, designated entity bidding credits will be 
available to applicants demonstrating eligibility for a small business 
or a rural service provider bidding credit and subsequently winning 
license(s). These bidding credits will not be cumulative--an applicant 
is permitted to claim either a small business bidding credit or a rural 
service provider bidding credit, but not both. Each applicant must also 
certify that it is eligible for the claimed bidding credit in its FCC 
Form 175. In addition to the information provided below, each applicant 
should review carefully the Commission's decisions regarding the 
designated entity provisions as well as the part 1 rules.
    83. In particular, the Commission reminds applicants applying for 
designated entity bidding credits that they should take due account of 
the requirements of the Commission's rules and implementing orders 
regarding de jure and de facto control of such applicants. These rules 
include a prohibition, which applies to all applicants (whether they 
seek bidding credits or not), against changes in ownership of the 
applicant that would constitute an assignment or transfer of control 
after the initial filing deadline for FCC Form 175. Applicants should 
not expect to receive any opportunities to revise their ownership 
structure after the filing of their short- and long-form applications, 
including making revisions to their agreements or other arrangements 
with interest holders, lenders, or others in order to address potential 
concerns relating to compliance with the designated entity bidding 
credit requirements. This policy will help to ensure compliance with 
the Commission's rules applicable to the award of bidding credits prior 
to the conduct of the auction, which will involve competing bids from 
those that do and do not seek bidding credits, and thus preserves the 
integrity of the auction process. The Commission also believes that 
this will meet the Commission's objectives in awarding licenses through 
the competitive bidding process.
1. Small Business Bidding Credit
    84. For Auction 108, bidding credits will be available to eligible 
small businesses and consortia thereof, subject to the caps discussed 
below. Under the service rules applicable to the 2.5 GHz band licenses 
to be offered in Auction 108, the level of bidding credit available is 
determined as follows:
    <bullet> A bidder that qualifies as a small business--i.e., one 
with attributed average annual gross revenues that do not exceed $55 
million for the preceding five years--is eligible to receive a 15% 
discount on its overall payment.
    <bullet> A bidder that qualifies as a very small business--i.e., 
one with attributed average annual gross revenues that do not exceed 
$20 million for the preceding five years--is eligible to receive a 25% 
discount on its overall payment.
    85. In adopting this two-tiered approach in the 2.5 GHz Report and 
Order, the Commission observed that this approach would provide 
consistency and predictability for small businesses.
    86. Small business bidding credits are not cumulative; an eligible 
applicant may receive either the 15% or the 25% bidding credit on its 
overall payment, but not both. The Commission's unjust enrichment 
provisions also apply to a winning bidder that uses a bidding credit 
and subsequently seeks to assign or transfer control of its license 
within a certain period to an entity not qualifying for at least the 
same level of small business bidding credit.
    87. Each applicant claiming a small business bidding credit must 
disclose the gross revenues for the preceding five years for each of 
the following: (1) The applicant, (2) its affiliates, (3) its 
controlling interests, and (4) the affiliates of its controlling 
interests. The applicant must also submit an attachment that lists all 
parties with which the applicant has entered into any spectrum use 
agreements or arrangements for any licenses that may be won by the 
applicant in Auction 108. In addition, to the extent that an applicant 
has an agreement with any disclosable interest holder for the use of 
more than 25% of the spectrum capacity of any license that may be won 
in Auction 108, the applicant must disclose the identity and the 
attributable gross revenues of any such disclosable interest holder. 
This attribution rule will be applied on a license-by-license basis. As 
a result, an applicant may be eligible for a bidding credit on some, 
but not all, of the licenses for which it is bidding in Auction 108. If 
an applicant is applying as a consortium of small businesses, then the 
disclosures described in this paragraph must be provided for each 
consortium member.
2. Rural Service Provider Bidding Credit
    88. An eligible applicant may request a 15% discount on its overall 
payment using a rural service provider bidding credit, subject to the 
cap discussed below. To be eligible for a rural service provider 
bidding credit, an applicant must: (1) Be a service provider that is in 
the business of providing commercial communications services and, 
together with its controlling interests, affiliates, and the affiliates 
of its controlling interests, has fewer than 250,000 combined wireless, 
wireline, broadband, and cable subscribers; and (2) serve predominantly 
rural areas. Rural areas are defined as counties with a population 
density of 100 or fewer persons per square mile. An applicant seeking a 
rural service provider bidding credit must provide the number of 
subscribers served as of the short-form

[[Page 21765]]

application deadline. An applicant may count any subscriber as a single 
subscriber even if that subscriber receives more than one service.
    89. Each applicant seeking a rural service provider bidding credit 
must disclose the number of its subscribers, along with the number of 
subscribers of its affiliates, controlling interests, and the 
affiliates of its controlling interests. The applicant must also submit 
an attachment that lists all parties with which the applicant has 
entered into any spectrum use agreements or arrangements for any 
licenses that may be won by the applicant in Auction 108. In addition, 
to the extent that an applicant has an agreement with any disclosable 
interest holder for the use of more than 25% of the spectrum capacity 
of any license that may be won in Auction 108, the identity and the 
attributable subscribers of any such disclosable interest holder must 
be disclosed. Like applicants seeking eligibility for small business 
bidding credits, eligible rural service providers may also form a 
consortium. If an applicant is applying as a consortium of rural 
service providers, then the disclosures described in this paragraph, 
including the certification, must be provided for each consortium 
member.
3. Caps on Bidding Credits
    90. Eligible applicants claiming either a small business or rural 
service provider bidding credit will be subject to specified caps on 
the total bidding credit discount that they may receive. The Commission 
adopts the bidding credit caps for Auction 108 at the amounts proposed 
for the reasons discussed by the Commission in the Auction 108 Comment 
Public Notice. Specifically, the Commission adopts a $25 million cap on 
the total bidding credit discount that may be awarded to an eligible 
small business, and a $10 million cap on the total bidding credit 
discount that may be awarded to an eligible rural service provider. 
Additionally, to create parity among eligible small businesses and 
rural service providers competing against each other in smaller 
markets, no winning designated entity bidder may receive more than $10 
million in bidding credit discounts in total for licenses won in 
counties located within any partial economic area (PEA) with a 
population of 500,000 or less.
4. Attributable Interests
a. Controlling Interests and Affiliates
    91. Pursuant to 47 CFR 1.2110, an applicant's eligibility for 
designated entity benefits is determined by attributing the gross 
revenues (for those seeking small business benefits) or subscribers 
(for those seeking rural service provider benefits) of the applicant, 
its affiliates, its controlling interests, and the affiliates of its 
controlling interests. Controlling interests of an applicant include 
individuals and entities with either de facto or de jure control of the 
applicant. Typically, ownership of greater than 50% of an entity's 
voting stock evidences de jure control. De facto control is determined 
on a case-by-case basis based on the totality of the circumstances. The 
following are some common indicia of de facto control:
    <bullet> The entity constitutes or appoints more than 50% 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; and
    <bullet> the entity plays an integral role in management decisions.
    92. Additionally, for attribution purposes, officers and directors 
of an applicant seeking a bidding credit are considered to have a 
controlling interest in the applicant. Applicants should refer to 47 
CFR 1.2110(c)(2) and the FCC Form 175 Instructions to understand how 
certain interests are calculated in determining control for purposes of 
attributing gross revenues.
    93. Affiliates of an applicant or controlling interest include an 
individual or entity that: (1) Directly or indirectly controls or has 
the power to control the applicant, (2) is directly or indirectly 
controlled by the applicant, (3) is directly or indirectly controlled 
by a third party that also controls or has the power to control the 
applicant, or (4) has an identity of interest with the applicant. The 
Commission's definition of an affiliate of the applicant encompasses 
both controlling interests of the applicant and affiliates of 
controlling interests of the applicant. For more information on the 
application requirements regarding controlling interests and 
affiliates, applicants should refer to 47 CFR 1.2110(c)(2) and (5) 
respectively, as well as the FCC Form 175 Instructions.
    94. An applicant seeking a small business bidding credit must 
demonstrate its eligibility for the bidding credit by: (1) Meeting the 
applicable small business size standard, based on the controlling 
interest and affiliation rules discussed above; and (2) retaining 
control, on a license-by-license basis, over the spectrum associated 
with the licenses for which it seeks small business benefits. For 
purposes of the first prong of the standard, applicants should note 
that control and affiliation may arise through, among other things, 
ownership interests, voting interests, management and other operating 
agreements, or the terms of any other types of agreements--including 
spectrum lease agreements--that independently or together create a 
controlling, or potentially controlling, interest in the applicant's or 
licensee's business as a whole. In addition, once an applicant 
demonstrates eligibility as a small business under the first prong, it 
must also be eligible for benefits on a license-by-license basis under 
the second prong. As part of making the FCC Form 175 certification that 
it is qualified as a designated entity under 47 CFR 1.2110, an 
applicant is certifying that it does not have any spectrum use or other 
agreements that would confer either de jure or de facto control of any 
license it seeks to acquire with bidding credits.
    95. Applicants should note that, under this standard for evaluating 
eligibility for small business bidding credits, if an applicant 
executes a spectrum use agreement that does not comply with the 
Commission's relevant standard of de facto control, then it will be 
subject to unjust enrichment obligations for the benefits associated 
with that particular license, as well as the penalties associated with 
any violation of 47 U.S.C. 310(d) and related regulations, which 
require Commission approval of transfers of control. If that spectrum 
use agreement (either alone or in combination with the designated 
entity controlling interest and attribution rules described above) goes 
so far as to confer control of the applicant's overall business, then 
the gross revenues of the additional interest holders will be 
attributed to the applicant, which could render the applicant 
ineligible for all current and future small business benefits on all 
licenses.
b. Limitation on Spectrum Use
    96. Under 47 CFR 1.2110(c)(2)(ii)(J), the gross revenues (or the 
subscribers, in the case of a rural service provider) of an applicant's 
disclosable interest holder are attributable to the applicant, on a 
license-by-license basis, if the disclosable interest holder has an 
agreement with the applicant to use, in any manner, more than 25% of 
the spectrum capacity of any license won by the applicant and acquired 
with a bidding credit during the five-year unjust enrichment period for 
the applicable license. For purposes of this requirement, a disclosable 
interest holder of an applicant seeking designated entity benefits is 
defined as

[[Page 21766]]

any individual or entity holding a 10% or greater interest of any kind 
in the applicant, including but not limited to, a 10% or greater 
interest in any class of stock, warrants, options, or debt securities 
in the applicant or licensee. Any applicant seeking a bidding credit 
for licenses won in Auction 108 will be subject to this attribution 
rule and must make the requisite disclosures.
    97. Certain disclosable interest holders may be excluded from this 
attribution rule. Specifically, an applicant claiming the rural service 
provider bidding credit may have spectrum license use agreements with a 
disclosable interest holder, without having to attribute the 
disclosable interest holder's subscribers, so long as the disclosable 
interest holder is independently eligible for a rural service provider 
credit and the disclosable interest holder's spectrum use and any 
spectrum use agreements are otherwise permissible under the 
Commission's existing rules. If applicable, the applicant must attach 
to its FCC Form 175 any additional information as may be required to 
indicate any license (or license area) that may be subject to this 
attribution rule or to demonstrate its eligibility for the exception 
from this attribution rule. Consistent with the Commission's limited 
information procedures, the Commission intends to withhold from public 
disclosure all information contained in any such attachments until 
after the close of Auction 108.
c. Exceptions From Attribution Rules for Small Businesses and Rural 
Service Providers
    98. Applicants claiming designated entity benefits may be eligible 
for certain exceptions from the Commission's attribution rules. For 
example, in calculating an applicant's gross revenues under the 
controlling interest standard, the Commission will not attribute to the 
applicant the personal net worth, including personal income, of its 
officers and directors. However, to the extent that the officers and 
directors of the applicant are controlling interest holders of other 
entities, the gross revenues of those entities will be attributed to 
the applicant. Moreover, if an officer or director operates a separate 
business, then the gross revenues derived from that business would be 
attributed to the applicant.
    99. The Commission has also exempted from attribution to the 
applicant the gross revenues of the affiliates of a rural telephone 
cooperative's officers and directors, if certain conditions specified 
in 47 CFR 1.2110(b)(4)(iii) are met. An applicant claiming this 
exemption must provide, in an attachment, an affirmative statement that 
the applicant, affiliate and/or controlling interest is an eligible 
rural telephone cooperative within the meaning of 47 CFR 
1.2110(b)(4)(iii), and the applicant must supply any additional 
information as may be required to demonstrate eligibility for the 
exemption from the attribution rule.
    100. An applicant claiming a rural service provider bidding credit 
may be eligible for an exception from the Commission's attribution 
rules as an existing rural partnership. To qualify for this exception, 
an applicant must be a rural partnership providing service as of July 
16, 2015, and each member of the rural partnership must individually 
have fewer than 250,000 combined wireless, wireline, broadband, and 
cable subscribers. Because each member of the rural partnership must 
individually qualify for the bidding credit, by definition, a 
partnership that includes a nationwide provider as a member will not be 
eligible for the benefit.
    101. Finally, a consortium of small businesses or rural service 
providers may seek an exception from the Commission's attribution 
rules. Under the Commission's rules, a consortium of small businesses 
or rural service providers is a conglomerate organization composed of 
two or more entities, each of which individually satisfies the 
definition of small business or rural service provider. A consortium 
must provide additional information for each member demonstrating each 
member's eligibility for the claimed bidding credit in order to show 
that the applicant satisfies the eligibility criteria for the bidding 
credit. The gross revenue or subscriber information of each consortium 
member will not be aggregated for purposes of determining the 
consortium's eligibility for the claimed bidding credit. This 
information must be provided, however, to ensure that each consortium 
member qualifies for the bidding credit sought by the consortium.

J. Tribal Lands Bidding Credit

    102. A winning bidder that intends to use its license(s) to deploy 
facilities and provide services to qualifying Tribal lands that have a 
wireline penetration rate equal to or below 85% is eligible to receive 
a Tribal lands bidding credit. A tribal lands bidding credit is in 
addition to, and separate from, any other bidding credit for which a 
winning bidder may qualify. Unlike other bidding credits that are 
requested prior to an auction, a winning bidder applies for a Tribal 
lands bidding credit after the auction when it files its FCC Form 601 
post-auction application.

K. Provisions Regarding Former and Current Defaulters

    103. Pursuant to the rules governing competitive bidding, each 
applicant must make certifications regarding whether it is a current or 
former defaulter or delinquent. A current defaulter or delinquent is 
not eligible to participate in Auction 108, but a former defaulter or 
delinquent may participate so long as it is otherwise qualified and 
makes an upfront payment that is 50% more than would otherwise be 
necessary. Accordingly, each applicant must certify under penalty of 
perjury on its FCC Form 175 that it, its affiliates, its controlling 
interests, and the affiliates of its controlling interests are not in 
default on any payment for a Commission construction permit or license 
(including down payments) and that they are not delinquent on any non-
tax debt owed to any Federal agency. Additionally, an applicant must 
certify under penalty of perjury whether it (along with its controlling 
interests) has ever been in default on any payment for a Commission 
construction permit or license (including down payments) or has ever 
been delinquent on any non-tax debt owed to any Federal agency, subject 
to the exclusions described below. For purposes of making these 
certifications, the term controlling interest is defined in 47 CFR 
1.2105(a)(4)(i).
    104. Under the Commission's rule regarding applications by former 
defaulters, an applicant is considered a former defaulter or a former 
delinquent when, as of the FCC Form 175 filing deadline, the applicant 
or any of its controlling interests has defaulted on any Commission 
construction permit or license or has been delinquent on any non-tax 
debt owed to any Federal agency, but has since remedied all such 
defaults and cured all of the outstanding non-tax delinquencies. For 
purposes of the certification under 47 CFR 1.2105(a)(2)(xii), the 
applicant may exclude from consideration any cured default on a 
Commission construction permit or license or cured delinquency on a 
non-tax debt owed to a Federal agency for which any of the following 
criteria are met: (1) The notice of the final payment deadline or 
delinquency was received more than seven years before the FCC Form 175 
filing deadline, (2) the default or delinquency amounted to less than 
$100,000, (3) the default or delinquency was paid within two quarters 
(i.e., six months) after receiving the notice of the final payment 
deadline or delinquency, or (4) the

[[Page 21767]]

default or delinquency was the subject of a legal or arbitration 
proceeding and was cured upon resolution of the proceeding. With 
respect to the first exclusion, notice to a debtor may include notice 
of a final payment deadline or notice of delinquency and may be express 
or implied depending on the origin of any Federal non-tax debt giving 
rise to a default or delinquency. Additionally, for the third 
exclusion, the date of receipt of the notice of a final default 
deadline or delinquency by the intended party or debtor will be used 
for purposes of verifying receipt of notice.
    105. In addition to the Auction 108 Procedures Public Notice, 
applicants are encouraged to review previous guidance on default and 
delinquency disclosure requirements in the context of the auction 
short-form application process. Parties are also encouraged to consult 
with Auctions Division staff if they have any questions about default 
and delinquency disclosure requirements.
    106. The Commission considers outstanding debts owed to the United 
States Government, in any amount, to be a serious matter. The 
Commission has previously adopted rules, including a provision referred 
to as the red light rule, that implement its obligations under the Debt 
Collection Improvement Act of 1996, which governs the collection of 
debts owed to the United States. Under the red light rule, applications 
and other requests for benefits filed by parties that have outstanding 
debts owed to the Commission will not be processed. When adopting that 
rule, the Commission explicitly declared, however, that its competitive 
bidding rules are not affected by the red light rule. As a consequence, 
the Commission's adoption of the red light rule does not alter the 
applicability of any of its competitive bidding rules, including the 
provisions and certifications of 47 CFR 1.2105 and 1.2106, with regard 
to current and former defaults or delinquencies.
    107. The Commission reminds each applicant, however, that any 
indication in the Commission's Red Light Display System, which provides 
information regarding debts currently owed to the Commission, may not 
be determinative of an auction applicant's ability to comply with the 
default and delinquency disclosure requirements of 47 CFR 1.2105. Thus, 
while the red light rule ultimately may prevent the processing of long-
form applications by auction winners, an auction applicant's lack of 
current red light status is not necessarily determinative of its 
eligibility to participate in an auction (or whether it may be subject 
to an increased upfront payment obligation). Moreover, a prospective 
applicant in Auction 108 should note that any long-form applications 
filed after the close of bidding will be reviewed for compliance with 
the Commission's red light rule, and such review may result in the 
dismissal of a winning bidder's long-form application. The Commission 
encourages each applicant to carefully review all records and other 
available Federal agency databases and information sources to determine 
whether the applicant, or any of its affiliates, or any of its 
controlling interests, or any of the affiliates of its controlling 
interests, owes or was ever delinquent in the payment of non-tax debt 
owed to any Federal agency.

L. Optional Applicant Status Identification

    108. Applicants owned by members of minority groups and/or women, 
as defined in 47 CFR 1.2110(c)(3), and rural telephone companies, as 
defined in 47 CFR 1.2110(c)(4), may identify themselves regarding this 
status in filling out their FCC Form 175 applications. This applicant 
status information is collected for statistical purposes only and 
assists the Commission in monitoring the participation of various 
groups in its auctions.

M. Modifications to FCC Form 175

1. Only Minor Modifications Allowed
    109. After the initial FCC Form 175 filing deadline, an Auction 108 
applicant will be permitted to make only minor amendments to its 
application consistent with the Commission's rules. Examples of minor 
changes include the deletion or addition of authorized bidders (to a 
maximum of three) and the revision of addresses and telephone numbers 
of the applicant, its responsible party, and its contact person. Major 
amendments to an FCC Form 175 (e.g., change of license area selection, 
certain changes in ownership that would constitute an assignment or 
transfer of control of the applicant, change in the required 
certifications, change in applicant's legal classification that results 
in a change in control, or change in claimed eligibility for a higher 
percentage of bidding credit) will not be permitted after the initial 
FCC Form 175 filing deadline. If an amendment reporting changes is a 
major amendment, as described in 47 CFR 1.2105(b)(2), the major 
amendment will not be accepted and may result in the dismissal of the 
application.
2. Duty To Maintain Accuracy and Completeness of FCC Form 175
    110. Pursuant to 47 CFR 1.65, each applicant has a continuing 
obligation to maintain the accuracy and completeness of information 
furnished in a pending application, including a pending application to 
participate in Auction 108. Consistent with the requirements for prior 
spectrum auctions, an applicant for Auction 108 must furnish additional 
or corrected information to the Commission within five business days 
after a significant occurrence, or amend its FCC Form 175 no more than 
five business days after the applicant becomes aware of the need for 
the amendment. An applicant is obligated to amend its pending 
application even if a reported change may result in the dismissal of 
the application because it is subsequently determined to be a major 
modification.
3. Modifying and FCC Form 175
    111. As noted above, a party seeking to participate in Auction 108 
must file an FCC Form 175 electronically via the FCC's Auction 
Application System. During the initial filing window, an applicant will 
be able to make any necessary modifications to its FCC Form 175 in the 
Auction Application System. An applicant that has certified and 
submitted its FCC Form 175 before the close of the initial filing 
window may continue to make modifications as often as necessary until 
the close of that window; however, the applicant must re-certify and 
re-submit its FCC Form 175 before the close of the initial filing 
window to confirm and effect its latest application changes. After each 
submission, a confirmation page will be displayed stating the 
submission time and submission date.
    112. An applicant will also be allowed to modify its FCC Form 175 
in the Auction Application System, except for certain fields, during 
the resubmission filing window and after the release of the public 
notice announcing the qualified bidders for an auction. During these 
times, if an applicant needs to make permissible minor changes to its 
FCC Form 175 or must make changes in order to maintain the accuracy and 
completeness of its application pursuant to 47 CFR 1.65 and 
1.2105(b)(4), then it must make the change(s) in the Auction 
Application System and re-certify and re-submit its application to 
confirm and effect the change(s).
    113. An applicant's ability to modify its FCC Form 175 in the 
Auction Application System will be limited between the closing of the 
initial filing

[[Page 21768]]

window and the opening of the application resubmission filing window, 
and between the closing of the resubmission filing window and the 
release of the public notice announcing the qualified bidders for an 
auction. During these periods, an applicant will be able to view its 
submitted application, but will be permitted to modify only the 
applicant's address, responsible party address, and contact information 
(e.g., name, address, telephone number) in the Auction Application 
System. An applicant will not be able to modify any other pages of the 
FCC Form 175 in the Auction Application System during these periods. 
If, during these periods, an applicant needs to make other permissible 
minor changes to its FCC Form 175, or changes to maintain the accuracy 
and completeness of its application pursuant to 47 CFR 1.65 and 
1.2105(b)(4), then the applicant must submit a letter briefly 
summarizing the changes to its FCC Form 175 via email to 
<a href="/cdn-cgi/l/email-protection#90f1e5f3e4f9fffea1a0a8d0f6f3f3bef7ffe6"><span class="__cf_email__" data-cfemail="dcbda9bfa8b5b3b2edece49cbabfbff2bbb3aa">[email protected]</span></a>. The email summarizing the changes must include a 
subject line referring to Auction 108 and the name of the applicant, 
for example, Re: Changes to Auction 108 Auction Application of XYZ 
Corp. Any attachments to the email must be formatted as Adobe[supreg] 
Acrobat[supreg] (PDF) or Microsoft[supreg] Word documents. An applicant 
that submits its changes in this manner must subsequently modify, 
certify, and submit its FCC Form 175 application(s) electronically in 
the Auction Application System once it is again open and available to 
applicants.
    114. Applicants should also note that even at times when the 
Auction Application System is open and available to applicants, the 
system will not allow an applicant to make certain other permissible 
changes itself (e.g., correcting a misstatement of the applicant's 
legal classification). If an applicant needs to make a permissible 
minor change of this nature, then it must submit a written request by 
email to the Auctions Division Chief, via <a href="/cdn-cgi/l/email-protection#98f9edfbecf1f7f6a9a8a0d8fefbfbb6fff7ee"><span class="__cf_email__" data-cfemail="dbbaaeb8afb2b4b5eaebe39bbdb8b8f5bcb4ad">[email protected]</span></a> requesting 
that the Commission manually make the change on the applicant's behalf. 
Once Commission staff has informed the applicant that the change has 
been made in the Auction Application System, the applicant must then 
re-certify and re-submit its FCC Form 175 in the Auction Application 
System to confirm and effect the change(s).
    115. As with filing the FCC Form 175, any amendment(s) to the 
application and related statements of fact must be certified by an 
authorized representative of the applicant with authority to bind the 
applicant. Applicants should note that submission of any such amendment 
or related statement of fact constitutes a representation by the person 
certifying that he or she is an authorized representative with such 
authority and that the contents of the amendment or statement of fact 
are true and correct.
    116. Applicants must not submit application-specific material 
through the Commission's Electronic Comment Filing System. Further, as 
discussed above, parties submitting information related to their 
applications should use caution to ensure that their submissions do not 
contain confidential information or communicate information that would 
violate 47 CFR 1.2105(c) or the limited information procedures adopted 
for Auction 108. An applicant seeking to submit, outside of the Auction 
Application System, information that might reflect non-public 
information, such as an applicant's county selection(s), upfront 
payment amount, or bidding eligibility, should consider including in 
its email a request that the filing or portions of the filing be 
withheld from public inspection until the end of the prohibition on 
certain communications pursuant to 47 CFR 1.2105(c).
    117. Questions about FCC Form 175 amendments should be directed to 
the Auctions Division at (202) 418-0660.

III. Preparing for Bidding in Auction 108

A. Due Diligence

    118. The Commission reminds each potential bidder that it is solely 
responsible for investigating and evaluating all technical and 
marketplace factors that may have a bearing on the value of the 
licenses that it is seeking in Auction 108 and that it is required to 
certify, under penalty of perjury, that it has read the Auction 108 
Procedures Public Notice and has familiarized itself with the auction 
procedures and the service rules for the 2.5 GHz band. The Commission 
makes no representations or warranties about the use of this spectrum 
or these licenses for particular services. Each applicant should be 
aware that a Commission auction represents an opportunity to become a 
Commission licensee, subject to certain conditions and regulations. 
This includes the established authority of the Commission to alter the 
terms of existing licenses by rulemaking, which is equally applicable 
to licenses awarded by auction. A Commission auction does not 
constitute an endorsement by the Commission of any particular service, 
technology, or product, nor does a Commission license constitute a 
guarantee of business success.
    119. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
In particular, the Commission encourages each potential bidder to 
perform technical analyses and/or refresh its previous analyses to 
assure itself that, should it become a winning bidder for any Auction 
108 license, it will be able to build and operate facilities that will 
fully comply with all applicable technical and legal requirements. The 
Commission urges each applicant to inspect any prospective sites for 
communications facilities located in, or near, the geographic area for 
which it plans to bid, confirm the availability of such sites, and to 
familiarize itself with the Commission's rules regarding the National 
Environmental Policy Act (NEPA), the National Historic Preservation Act 
(NHPA), and any other environmental statutes that may apply.
    120. As noted above, applicants must carefully consider potential 
encumbrances on existing licenses. The Commission notes in particular 
that there will be a substantial number of licenses in inventory where 
the amount of unassigned area or unassigned spectrum is very small. For 
example, there could be licenses in Channel Block 2 where as little as 
.333 megahertz of spectrum is unassigned. There are also a substantial 
number of licenses where the area with unassigned spectrum is smaller 
than one square mile. Each applicant should carefully research the 
existence of incumbent licenses and the technical and economic 
implications for commercial use of the 2.5 GHz band.
    121. The Commission also encourages each applicant in Auction 108 
to continue to conduct its own research throughout the auction in order 
to determine the existence of pending or future administrative or 
judicial proceedings that might affect its decision on continued 
participation in the auction. Each applicant is responsible for 
assessing the likelihood of the various possible outcomes and for 
considering the potential impact on licenses available in an auction. 
The due diligence considerations mentioned in the Auction 108 
Procedures Public Notice do not constitute an exhaustive list of steps 
that should be undertaken prior to participating in Auction 108. As 
always, the burden is on the potential bidder to determine how much 
research to undertake, depending upon the specific facts and 
circumstances related to its interests. For example, applicants should 
pay particular attention to the

[[Page 21769]]

results applications filed in the Rural Tribal Priority Window, which 
will determine the final inventory of licenses available for bidding in 
Auction 108. The Commission emphasizes again that licenses granted 
through applications received during the Rural Tribal Priority Window 
have incumbent status vis-[agrave]-vis licenses awarded in Auction 108. 
In other words, any winning bidder awarded a license in Auction 108 
will not be allowed to operate within the license area of a successful 
Rural Tribal Priority Window applicant, even if that application 
remains pending today or at the time of issuance of the overlay 
license. In addition, the Commission reminds applicants that the tools 
made available to assess the available licenses in Auction 108, 
including the mapping tool described above, may not represent official 
licensing information and all information should be confirmed in ULS 
for any specific license or area.
    122. Applicants are solely responsible for identifying associated 
risks and for investigating and evaluating the degree to which such 
matters may affect their ability to bid on, otherwise acquire, or make 
use of the licenses available in Auction 108. Each potential bidder is 
responsible for undertaking research to ensure that any licenses won in 
the auction will be suitable for its business plans and needs. Each 
potential bidder must undertake its own assessment of the relevance and 
importance of information gathered as part of its due diligence 
efforts.
    123. The Commission makes no representations or guarantees 
regarding the accuracy or completeness of information in its databases 
or any third-party databases, including, for example, court docketing 
systems. To the extent the Commission's databases may not include all 
information deemed necessary or desirable by an applicant, it must 
obtain or verify such information from independent sources or assume 
the risk of any incompleteness or inaccuracy in said databases. 
Furthermore, the Commission makes no representations or guarantees 
regarding the accuracy or completeness of information that has been 
provided by incumbent licensees and incorporated into its databases.

B. Licensing Considerations

1. Incumbency Issues
    124. Potential applicants in Auction 108 should carefully review 
the new rules applicable to the 2.5 GHz band as well as the results of 
applications filed in the Rural Tribal Priority Window, which will 
determine the final license inventory for Auction 108, when developing 
business plans, assessing market conditions, and evaluating the 
availability of equipment for 2.5 GHz operations. Each applicant should 
closely follow releases from the Commission concerning these issues and 
consider carefully the technical and economic implications for 
commercial use of the 2.5 GHz band.
2. International Coordination
    125. Potential bidders seeking licenses for geographic areas 
adjacent to the Canadian and Mexican borders should be aware that the 
use of the 2.5 GHz frequencies they acquire in Auction 108 are subject 
to current and future agreements with the governments of Canada and 
Mexico.
    126. The Commission routinely works with the United States 
Department of State and Canadian and Mexican government officials to 
ensure the efficient use of the spectrum as well as interference-free 
operations in the border areas near Canada and Mexico. Until such time 
as any adjusted agreements, as needed, between the United States, 
Mexico, and/or Canada can be agreed to, operations in the 2.5 GHz band 
must not cause harmful interference across the border, consistent with 
the terms of the agreements currently in force.
3. Environmental Review Requirements
    127. Licensees must comply with the Commission's rules for 
environmental review under the NEPA, the NHPA, and any other 
environmental statutes that may apply. Licensees and other applicants 
that propose to build certain types of communications facilities for 
licensed service must follow Commission procedures implementing 
obligations under NEPA and NHPA prior to constructing the facilities. 
Under NEPA, a licensee or applicant must assess if certain 
environmentally sensitive conditions specified in the Commission's 
rules are relevant to the proposed facilities, and prepare an 
environmental assessment when applicable. If an environmental 
assessment is required, then facilities may not be constructed until 
environmental processing is completed. Under NHPA, a licensee or 
applicant must follow the procedures in 47 CFR 1.1320, the Nationwide 
Programmatic Agreement for Collocation of Wireless Antennas and the 
Nationwide Programmatic Agreement Regarding the Section 106 National 
Historic Preservation Act Review Process. Compliance with section 106 
of the NHPA requires Tribal consultation, and if construction of the 
communications facilities would have adverse effects on historic or 
Tribally significant properties, an environmental assessment must be 
prepared.
4. Mobile Spectrum Holdings Policies
    128. The Commission reminds bidders of the Commission's mobile 
spectrum holdings policies applicable to the 2.5 GHz band. 
Specifically, the Commission did not impose a pre-auction bright-line 
limit on acquisitions of the 2.5 GHz band. The Commission determined 
that ``EBS white space spectrum should be considered available for 
purposes of the spectrum screen.'' In addition, the Commission 
eliminated the EBS white space discounts and ended the 5% exclusion of 
spectrum from the screen. The Commission also concluded that it would 
perform case-by-case review of secondary market transactions to assess 
the effect of educational use restrictions in existing spectrum leases 
in particular local markets.

C. Bidder Education

    129. Before the opening of the short-form filing window for Auction 
108, detailed educational information will be provided in various 
formats to would-be participants on the Auction 108 web page. 
Specifically, the Commission directs OEA to provide various materials 
on the pre-bidding processes in advance of the opening of the short-
form application window, beginning with the release of step-by-step 
instructions for completing the FCC Form 175, which OEA will make 
available in the Education section of the Auction 108 website at 
www.fcc.gov/auction/108. In addition, OEA will provide an online 
application procedures tutorial for the auction, covering information 
on pre-bidding preparation, completing short-form applications, and the 
application review process.
    130. In advance of the start of the mock auction, OEA will provide 
educational materials on the bidding procedures for Auction 108, 
including a user guide for the bidding system, bidding system file 
formats, and an online bidding procedures tutorial. These materials 
will provide detailed information on bidding features specific to the 
ascending clock auction format, including intra-round bidding and proxy 
bids. The Commission recognizes the importance of these materials to 
applicants' and bidders' comprehension of the bidding procedures 
adopted in the Auction 108 Procedures Public Notice. Accordingly, the 
educational materials shall be released as soon as reasonably possible 
to provide potential applicants and bidders with time to

[[Page 21770]]

understand them and ask questions before bidding begins.
    131. The Commission believes that parties interested in 
participating in Auction 108 will find the interactive, online 
tutorials an efficient and effective way to further their understanding 
of the application and bidding processes. The online tutorials will 
allow viewers to navigate the presentation outline, review written 
notes, and listen to audio of the notes. Additional features of this 
web-based tool include links to auction-specific Commission releases, 
email links for contacting Commission staff, and screen shots of the 
online application and bidding systems. The online tutorials will be 
accessible in the Education section of the Auction 108 website at 
www.fcc.gov/auction/108. Once posted, the tutorials will remain 
continuously accessible.

D. Short-Form Applications: Due Before 6 p.m. ET on May 10, 2022

    132. In order to be eligible to bid in Auction 108, an applicant 
must first follow the procedures to submit a short-form application 
(FCC Form 175) electronically via the Auction Application System, 
following the instructions set forth in the FCC Form 175 Instructions. 
The short-form application will become available with the opening of 
the initial filing window and must be submitted prior to 6 p.m. ET on 
May 10, 2022. Late applications will not be accepted. No application 
fee is required for short-form applications.
    133. Applications may be filed at any time beginning at noon ET on 
April 27, 2022, until the filing window closes at 6 p.m. ET on May 10, 
2022. Applicants are strongly encouraged to file early and are 
responsible for allowing adequate time for filing their applications. 
There are no limits or restrictions on the number of times an 
application can be updated or amended until the initial filing deadline 
on May 10, 2022.
    134. An applicant must always click on the CERTIFY & SUBMIT button 
on the Certify & Submit screen to successfully submit its FCC Form 175 
and any modifications; otherwise the application or changes to the 
application will not be received or reviewed by Commission staff. 
Additional information about accessing, completing, and viewing the FCC 
Form 175 is provided in the FCC Form 175 Instructions. Applicants 
requiring technical assistance should contact FCC Auctions Technical 
Support using the contact information provided in Section VI.D. 
(Contact Information), below. In order to provide better service to the 
public, all calls to Technical Support are recorded.

E. Application Processing and Minor Modifications

1. Public Notice of Applicants' Initial Application Status and 
Opportunity for Minor Modifications
    135. After the deadline for filing auction applications, the 
Commission will process all timely submitted applications to determine 
whether each applicant has complied with the application requirements 
and provided all information concerning its qualifications for bidding. 
OEA will issue a public notice with applicants' initial application 
status, identifying: (1) Those that are complete; and (2) those that 
are incomplete or deficient because of defects that may be corrected. 
The public notice will include the deadline for resubmitting corrected 
applications and an electronic copy will be sent by email to the 
contact address listed in the FCC Form 175 for each applicant. In 
addition, each applicant with an incomplete application will be sent 
information on the nature of the deficiencies in its application, along 
with the name and contact information of a Commission staff member who 
can answer questions specific to the application.
    136. After the initial application filing deadline on May 10 2022, 
applicants can make only minor modifications to their applications. 
Major modifications (e.g., change of license area selection, change in 
ownership that would constitute an assignment or transfer of control of 
the applicant, change in the required certifications, change in 
applicant's legal classification that results in a change in control, 
or change in claimed eligibility for a higher percentage of bidding 
credit) will not be permitted. After the deadline for resubmitting 
corrected applications, an applicant will have no further opportunity 
to cure any deficiencies in its application or provide any additional 
information that may affect Commission staff's ultimate determination 
of whether and to what extent the applicant is qualified to participate 
in Auction 108.
    137. Commission staff will communicate only with an applicant's 
contact person or certifying official, as designated on the applicant's 
FCC Form 175, unless the applicant's certifying official or contact 
person notifies Commission staff in writing that another representative 
is authorized to speak on the applicant's behalf. Authorizations may be 
sent by email to <a href="/cdn-cgi/l/email-protection#cbaabea8bfa2a4a5fafbf38bada8a8e5aca4bd"><span class="__cf_email__" data-cfemail="a3c2d6c0d7cacccd92939be3c5c0c08dc4ccd5">[email protected]</span></a>.
2. Public Notice of Applicants' Final Application Status After Upfront 
Payment Deadline
    138. After Commission staff reviews resubmitted applications and 
upfront payments, OEA will release a public notice identifying 
applicants that have become qualified bidders for the auction. A 
Qualified Bidders Public Notice will be issued before bidding in the 
auction begins. Qualified bidders are those applicants with submitted 
FCC Form 175 applications that are deemed timely filed and complete and 
that have made a sufficient upfront payment.

F. Upfront Payments

    139. In order to be eligible to bid in Auction 108, a sufficient 
upfront payment and a complete and accurate FCC Remittance Advice Form 
(FCC Form 159, Revised 2/03) must be submitted before 6 p.m. ET on June 
23, 2022. After completing its short-form application, an applicant 
will have access to an electronic pre-filled version of the FCC Form 
159. An accurate and complete FCC Form 159 must accompany each payment. 
Proper completion of this form is critical to ensuring correct 
crediting of upfront payments. Payers using the pre-filled FCC Form 159 
are responsible for ensuring that all the information on the form, 
including payment amounts, is accurate. Instructions for completing FCC 
Form 159 for Auction 108 are provided below.
1. Making Upfront Payments by Wire Transfer for Auction 108
    140. Upfront payments for Auction 108 must be wired to, and will be 
deposited in, the U.S. Treasury.
    141. Wire transfer payments for Auction 108 must be received before 
6 p.m. ET on June 23, 2022. No other payment method is acceptable. To 
avoid untimely payments, applicants should discuss arrangements 
(including bank closing schedules and other specific bank wire transfer 
requirements, such as an in-person written request before a specified 
time of day) with their bankers several days before they plan to make 
the wire transfer, and must allow sufficient time for the transfer to 
be initiated and completed before the deadline. The following 
information will be needed:
    ABA Routing Number: 021030004.
    Receiving Bank: TREAS NYC, 33 Liberty Street, New York, NY 10045.
    Beneficiary: FCC, 45 L Street NE, 3rd Floor, Washington, DC 20554.
    Account Number: 827000001002.
    Originating Bank Information (OBI Field): (Skip one space between 
each information item).

[[Page 21771]]

    ``AUCTIONPAY''
    Applicant FCC Registration Number (FRN): (use the same FRN as used 
on the applicant's FCC Form 159, block 21).
    Payment Type Code: (same as FCC Form 159, block 24A: ``U108'').
    Note: The beneficiary account number (BNF Account Number) is 
specific to the upfront payments for Auction 108. Do not use a BNF 
Account Number from a previous auction.
    142. At least one hour before placing the order for the wire 
transfer (but on the same business day), applicants must print and fax 
a completed FCC Form 159 (Revised 2/03) to the FCC at (202) 418-2843. 
Alternatively, the completed form can be scanned and sent as an 
attachment to an email to <a href="/cdn-cgi/l/email-protection#8ad8d8c5cddde3f8efccebf2eff9caece9e9a4ede5fc"><span class="__cf_email__" data-cfemail="5b0909141c0c32293e1d3a233e281b3d3838753c342d">[email protected]</span></a>. On the fax cover sheet 
or in the email subject header, write ``Wire Transfer--Auction Payment 
for Auction 108''. To meet the upfront payment deadline, an applicant's 
payment must be credited to the Commission's account for Auction 108 
before the deadline.
    143. Each applicant is responsible for ensuring timely submission 
of its upfront payment and for timely filing of an accurate and 
complete FCC Form 159. An applicant should coordinate with its 
financial institution well ahead of the due date regarding its wire 
transfer and allow sufficient time for the transfer to be initiated and 
completed prior to the deadline. The Commission repeatedly has 
cautioned auction participants about the importance of planning ahead 
to prepare for unforeseen last-minute difficulties in making payments 
by wire transfer. Each applicant also is responsible for obtaining 
confirmation from its financial institution that its wire transfer to 
the U.S. Treasury was successful and from Commission staff that its 
upfront payment was timely received and that it was deposited into the 
proper account. As a regulatory requirement, the U.S. Treasury screens 
all payments from all financial institutions before deposits are made 
available to specified accounts. If wires are suspended, the U.S. 
Treasury may direct questions regarding any transfer to the financial 
institution initiating the wire. Each applicant must take care to 
assure that any questions directed to its financial institution(s) are 
addressed promptly. To receive confirmation from Commission staff, 
contact Scott Radcliffe of the Office of Managing Director's Revenue & 
Receivables Operations Group/Auctions at (202) 418-7518 or Theresa 
Meeks at (202) 418-2945.
    144. Please note the following information regarding upfront 
payments:
    <bullet> All payments must be made in U.S. dollars.
    <bullet> All payments must be made by wire transfer.
    <bullet> Upfront payments for Auction 108 go to an account number 
different from the accounts used in previous FCC auctions.
    145. Failure to deliver a sufficient upfront payment as instructed 
in the Auction 108 Procedures Public Notice by the upfront payment 
deadline will result in dismissal of the short-form application and 
disqualification from participation in the auction.
2. Completing and Submitting FCC Form 159
    146. The following information supplements the standard 
instructions for FCC Form 159 (Revised 2/03) and is provided to help 
ensure correct completion of FCC Form 159 for upfront payments for 
Auction 108. Applicants need to complete FCC Form 159 carefully, 
because:
    <bullet> Mistakes may affect bidding eligibility; and
    <bullet> Lack of consistency between information provided in FCC 
Form 159 (Revised 2/03), FCC Form 175, long-form application (FCC Form 
601), and correspondence about an application may cause processing 
delays.
    147. Therefore, appropriate cross-references between the FCC Form 
159 Remittance Advice and the short-form application (FCC Form 175) are 
described below.

------------------------------------------------------------------------
        Block No.                       Required information
------------------------------------------------------------------------
1........................  LOCKBOX #--Leave Blank.
2........................  Payer Name--Enter the name of the person or
                            company making the payment. If the applicant
                            itself is the payer, this entry would be the
                            same name as in FCC Form 175.
3........................  Total Amount Paid--Enter the amount of the
                            upfront payment associated with the FCC Form
                            159 (Revised 2/03).
4-8......................  Street Address, City, State, ZIP Code--Enter
                            the street mailing address (not post office
                            box number) where mail should be sent to the
                            payer. If the applicant is the payer, these
                            entries would be the same as FCC Form 175
                            from the Applicant Information section.
9........................  Daytime Telephone Number--Enter the telephone
                            number of a person knowledgeable about this
                            upfront payment.
10.......................  Country Code--For addresses outside the
                            United States, enter the appropriate postal
                            country code (available from the Mailing
                            Requirements Department of the U.S. Postal
                            Service).
11.......................  Payer FRN--Enter the payer's 10-digit FCC
                            Registration Number (FRN) registered in the
                            Commission Registration System (CORES).
21.......................  Applicant FRN (Complete only if applicant is
                            different than payer)--Enter the applicant's
                            10-digit FRN registered in CORES.
24A......................  Payment Type Code--Enter ``U108''.
25A......................  Quantity--Enter the number ``1''.
26A......................  Fee Due--Amount of Upfront Payment
27A......................  Total Fee--Will be the same amount as 26A.
28A......................  FCC Code 1--Enter the number ``108''
                            (indicating Auction 108).
------------------------------------------------------------------------
Notes:
<bullet> Do not use Remittance Advice (Continuation Sheet), FCC Form 159-
  C, for upfront payments.
<bullet> If applicant is different from the payer, complete blocks 13
  through 21 for the applicant, using the same information shown on FCC
  Form 175. Otherwise leave them blank.
<bullet> No signature is required on FCC Form 159 for auction payments
<bullet> Since credit card payments will not be accepted for upfront
  payments for an auction, leave Section E blank.

3. Upfront Payments and Bidding Eligibility
    148. The Commission has authority to determine appropriate upfront 
payments for each license being auctioned, taking into account such 
factors as the efficiency of the auction process and the potential 
value of similar licenses. An upfront payment is a refundable deposit 
made by each applicant seeking to participate in bidding to establish 
its eligibility to bid on licenses. Upfront payments that are related 
to the inventory of licenses being auctioned protect against frivolous 
or

[[Page 21772]]

insincere bidding and provide the Commission with a source of funds 
from which to collect payments owed at the close of bidding.
    149. Applicants that are former defaulters must pay upfront 
payments 50% greater than non-former defaulters. For purposes of 
classification as a former defaulter or a former delinquent, defaults 
and delinquencies of the applicant itself and its controlling interests 
are included.
    150. An applicant must make an upfront payment sufficient to obtain 
bidding eligibility on the licenses on which it will bid. The 
Commission adopts the proposals to set upfront payments based on the 
total potential MHz-pops of each license offered in the auction and to 
determine an applicant's initial bidding eligibility, the maximum 
number of bidding units on which a bidder may place bids in any single 
round, based on the amount of the upfront payment. In order to bid for 
a license, qualified bidders must have a current eligibility level that 
meets or exceeds the number of bidding units assigned to that license. 
At a minimum, therefore, an applicant's total upfront payment must be 
enough to establish eligibility to bid on at least one license in one 
of the license areas selected on its FCC Form 175 for Auction 108, or 
else the applicant will not become qualified to participate in the 
auction. The total upfront payment does not affect the total dollar 
amount the bidder may bid.
    151. In the Auction 108 Comment Public Notice, the Commission 
proposed to require applicants to submit upfront payments based on 
$0.003 per MHz-pop with a minimum of $500 per license. Because upfront 
payments 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 bidding, the Commission adopts the proposal. For the 
49.5-megahertz and 50.5-megahertz channel blocks, the calculation will 
be based on 50 megahertz, which is beneficial for the purpose of 
allowing switch bids because it will result in the same number of 
bidding units, as described below, for each of those channel blocks 
within a county. For the 17.5-megahertz channel block, the calculation 
will be based on the 16.5 megahertz of contiguous spectrum not 
including the 1-megahertz guard band. The Commission uses the 16.5 
megahertz of contiguous spectrum and excludes the 1-megahertz guard 
band for comparability with the larger blocks that consist of 
contiguous spectrum only. The upfront payment amount per license 
potentially available in Auction 108 is set forth in the Attachment A 
file on the Auction 108 website at www.fcc.gov/auction/108.
    152. For the reasons set forth in the Auction 108 Comment Public 
Notice, the Commission also adopts the proposal to assign each license 
a specific number of bidding units, equal to one bidding unit per $100 
of the upfront payment, which is necessary for implementing the 
activity requirement described in Section IV.F. (Activity Rule) below, 
and facilitates the efficient conduct of the auction. The number of 
bidding units for a given license is fixed and does not change during 
the auction as prices change. Thus, in calculating its upfront payment 
amount, an applicant should determine the maximum number of bidding 
units on which it may wish to bid in any single round, and submit an 
upfront payment amount covering that number of bidding units. In order 
to make this calculation, an applicant should add together the bidding 
units for the licenses on which it seeks to be active in any given 
round. Applicants should check their calculations carefully, as there 
is no provision for increasing a bidder's eligibility after the upfront 
payment deadline.

                                Example: Upfront Payments and Bidding Eligibility
----------------------------------------------------------------------------------------------------------------
                                                                     Bandwidth                        Upfront
             County                   State        Channel block       (MHz)      Bidding  units      payment
----------------------------------------------------------------------------------------------------------------
Lake...........................  IN                            2            50.5             700         $70,000
Porter.........................  IN                            2            50.5             200          20,000
----------------------------------------------------------------------------------------------------------------
Under the clock-1 format, if a bidder wishes to bid on the 50.5-megahertz license in both of the above counties
  in a round, it must have selected both counties on its FCC Form 175 and purchased at least 900 bidding units
  (700 + 200) of bidding eligibility. If a bidder only wishes to bid on one, but not both, purchasing 700
  bidding units would meet the eligibility requirement for the 50.5-megahertz license in either county. The
  bidder would be able to bid on the license in either county, but not both at the same time. If the bidder
  purchased only 200 bidding units, the bidder would have enough eligibility to bid for the license in Porter
  County but not for the one in Lake County.

    153. If an applicant is a former defaulter, it must calculate its 
upfront payment for the maximum number of licenses on which it plans to 
bid by multiplying the number of bidding units on which it wishes to be 
active by 1.5. In order to calculate the number of bidding units to 
assign to former defaulters, the Commission will calculate the number 
of bidding units a non-former defaulter would get for the upfront 
payment received, divide that number by 1.5, and round the result up to 
the nearest bidding unit.

G. Auction Registration

    154. All qualified bidders for Auction 108 are automatically 
registered for the auction. Registration materials will be distributed 
prior to the auction by overnight delivery. The mailing will be sent 
only to the contact person at the contact address listed in the FCC 
Form 175 and will include the SecurID[supreg] tokens that will be 
required to place bids.
    155. Qualified bidders that do not receive this registration 
mailing will not be able to submit bids. Therefore, any qualified 
bidder for Auction 108 that has not received this mailing by noon on 
July 20, 2022, should call the Auctions Hotline at (717) 338-2868. 
Receipt of this registration mailing is critical to participating in 
the auction, and each applicant is responsible for ensuring it has 
received all the registration materials.
    156. In the event that a SecurID[supreg] token is lost or damaged, 
only a person who has been designated as an authorized bidder, the 
contact person, or the certifying official on the applicant's short-
form application may request a replacement. To request a replacement, 
call the Auction Bidder Line at the telephone number provided in the 
registration materials or the Auction Hotline at (717) 338-2868.

H. Remote Electronic Bidding via the FCC Auction Bidding System

    157. Bidders will be able to participate in Auction 108 over the 
internet using the FCC Auction Bidding System (bidding system). Only 
qualified bidders are permitted to bid.
    158. Each authorized bidder must have his or her own 
SecurID[supreg] token, which the Commission will provide at no charge. 
Each applicant will be issued three SecurID[supreg] tokens. A bidder 
cannot bid without his or her SecurID[supreg] token.

[[Page 21773]]

In order to access the bidding function of the bidding system, bidders 
must be logged in during the bidding round using the passcode generated 
by the SecurID[supreg] token and a personal identification number (PIN) 
created by the bidder. For security purposes, the SecurID[supreg] 
tokens and a telephone number for bidding questions are only mailed to 
the contact person at the contact address listed on the FCC Form 175. 
Each SecurID[supreg] token is tailored to a specific auction. 
SecurID[supreg] tokens issued for other auctions or obtained from a 
source other than the FCC will not work for Auction 108. Please note 
that the SecurID[supreg] tokens can be recycled, and the Commission 
requests that bidders return the tokens to the FCC. Pre-addressed 
envelopes will be provided to return the tokens once the auction has 
ended.
    159. The Commission makes no warranties whatsoever, and shall not 
be deemed to have made any warranties, with respect to the bidding 
system, including any implied warranties of merchantability or fitness 
for a particular purpose. In no event shall the Commission, or any of 
its officers, employees, or agents, be liable for any damages 
whatsoever (including, but not limited to, loss of business profits, 
business interruption, loss of use, revenue, or business information, 
or any other direct, indirect, or consequential damages) arising out of 
or relating to the existence, furnishing, functioning, or use of the 
bidding system. Moreover, no obligation or liability will arise out of 
the Commission's technical, programming, or other advice or service 
provided in connection with the bidding system.
    160. To the extent an issue arises with the bidding system itself, 
the Commission will take all appropriate measures to resolve such 
issues quickly and equitably. Should an issue arise that is outside the 
bidding system or attributable to a bidder, including, but not limited 
to, a bidder's hardware, software, or internet access problem that 
prevents the bidder from submitting a bid prior to the end of a round, 
the Commission shall have no obligation to resolve or remediate such an 
issue on behalf of the bidder. Similarly, if an issue arises due to 
bidder error using the bidding system, the Commission shall have no 
obligation to resolve or remediate such an issue on behalf of the 
bidder. Accordingly, after the close of a bidding round, the results of 
bid processing will not be altered absent evidence of any failure in 
the bidding system.

I. Mock Auction

    161. All qualified bidders will be eligible to participate in a 
mock auction. The mock auction, which will begin on July 26, 2022, will 
enable qualified bidders to become familiar with the bidding system and 
to practice submitting bids prior to the auction. The Commission 
recommends that all qualified bidders, including all their authorized 
bidders, participate to assure that they can log in to the bidding 
system and gain experience with the bidding procedures. Participating 
in the mock auction may reduce the likelihood of a bidder making a 
mistake during the auction. Details regarding the mock auction will be 
announced in the Qualified Bidders Public Notice for Auction 108.

J. Auction Delay, Suspension, or Cancellation

    162. At any time before or during the bidding process, OEA, in 
conjunction with WTB, may delay, suspend, or cancel bidding in Auction 
108 in the event of a natural disaster, technical obstacle, network 
interruption, administrative or weather necessity, evidence of an 
auction security breach or unlawful bidding activity, or for any other 
reason that affects the fair and efficient conduct of competitive 
bidding. This approach has proven effective in resolving exigent 
circumstances in previous auctions, and the Commission finds no reason 
to depart from it for Auction 108. OEA will notify participants of any 
such delay, suspension, or cancellation by public notice and/or through 
the bidding system's announcement function. If the bidding is delayed 
or suspended, then OEA may, in its sole discretion, elect to resume the 
auction starting from the beginning of the current round or from some 
previous round, or cancel the auction in its entirety. The Commission 
emphasizes that OEA will exercise this authority at its discretion.

K. Fraud Alert

    163. As is the case with many business investment opportunities, 
some unscrupulous parties may attempt to use Auction 108 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 investment is less than $25,000.
    <bullet> The sales representative makes verbal representations 
that: (a) The Internal Revenue Service, 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.
    164. Information about deceptive telemarketing investment schemes 
is available from the FCC, as well as the FTC and SEC. Additional 
sources of information for potential bidders and investors may be 
obtained from the following sources:
    <bullet> The FCC's Consumer Call Center at (888) 225-5322 or by 
visiting www.fcc.gov/general/frauds-scams-and-alerts-guides.
    <bullet> The FTC at (877) FTC-HELP ((877) 382-4357) or by visiting 
consumer.ftc.gov.
    <bullet> The SEC at (202) 942-7040 or by visiting www.sec.gov/investor.
    165. Complaints about specific deceptive telemarketing investment 
schemes should be directed to the FTC, the SEC, or the National 
Consumer League's Fraud Center at fraud.org or (202) 835-3323, Ext. 
815.

IV. Bidding Procedures

    166. The Auction 108 Comment Public Notice and the Auction 108 
Further Comment Public Notice sought comment on three different auction 
formats for Auction 108: A single-round auction format with user-
defined package bidding, a simultaneous multiple-round (SMR) auction 
format, and an ascending clock auction format. The Auction 108 
Inventory Comment Public Notice also sought comment on the previously-
detailed auction procedures in light of additions to the initial 
license inventory. As discussed below, there are arguments for and 
against each auction format. After consideration of the record, the 
Commission finds on balance the record supports using an ascending 
clock auction format for Auction 108 by which bidding will be conducted 
simultaneously for all licenses available in the auction and bidders 
will be able to bid for specific licenses. Accordingly, the Commission 
selects the clock-1 auction format for Auction 108. This

[[Page 21774]]

format will be similar to the clock phase of past Commission ascending 
clock auctions, but rather than offering multiple generic spectrum 
blocks in a category in a geographic area, it will offer only a single 
frequency-specific license in a category in a county. Thus, by using a 
supply of 1 in each category, a clock-1 auction format allows bidders 
to bid on frequency-specific licenses and negates the need for an 
assignment phase, which have been typical of past Commission ascending 
clock auctions.
    167. In response to the Auction 108 Comment Public Notice, 
interested parties filed numerous comments that were split fairly 
evenly between parties that favored the single-round auction format and 
those that favored an SMR auction. OEA and WTB subsequently released 
the Auction 108 Further Comment Public Notice, suggesting an 
alternative clock auction format that would address two frequently-
cited commenter concerns. Specifically, the clock-1 format would be 
familiar to bidders that have participated in FCC auctions previously 
(addressing concerns about the unfamiliarity of the single-round 
format) and would incorporate elements to help mitigate a drawback of 
an SMR auction--its likely long duration--by both potentially 
shortening the length of the auction and making it easier for bidders 
to participate in a longer auction. In response to the Auction 108 
Further Comment Public Notice, interested parties filed comments in 
favor of the single-round auction format and others in favor of the 
multiple-round clock-1 auction. Many commenters that originally 
supported an SMR auction format in response to the Auction 108 Comment 
Public Notice support use of the clock-1 format as proposed in the 
Auction 108 Further Comment Public Notice. Recognizing that there are 
advantages and disadvantages to each auction format for each individual 
bidder, on the whole, the Commission finds that for Auction 108 the 
clock-1 format balances these competing interests.
    168. The Commission directs OEA, in conjunction with WTB, to 
prepare and release, concurrently with this Public Notice, an updated 
technical guide (Auction 108 Technical Guide) that provides the 
mathematical details of the adopted auction design and algorithms for 
the clock phase of Auction 108. The information in the Auction 108 
Technical Guide, which is available in the Education section of the 
Auction 108 website (www.fcc.gov/auction/108), supplements the 
decisions in the Auction 108 Procedures Public Notice.

A. Clock-1 Auction Design

    169. Under the clock-1 format that the Commission adopts, each 
bidder will be able to bid for licenses in the license areas selected 
on its short-form application, where a specific license will be 
identified by a category and a county. The auction will proceed in a 
series of rounds, with bidding conducted simultaneously for all 
licenses available in the auction. Consistent with prior FCC clock 
auctions, for each bidding round, the bidding system will announce a 
clock price for each license, and a bidder will indicate its demand for 
licenses at the prices associated with the current round. The prices 
associated with the round are prices between the start-of-round price 
and the clock price, inclusive.
    170. The clock price for a license will increase from round to 
round if more than one bidder indicates demand for that license. The 
bidding rounds will continue until, for all licenses--that is, all 
categories in all counties--the number of bidders demanding each 
license does not exceed one. Once bidding rounds stop, the bidder with 
demand for a license becomes the winning bidder.

B. Single Licenses in Three Bidding Categories

    171. Auction 108 will offer geographic overlay licenses for 
unassigned spectrum in the 2.5 GHz (2496-2690 MHz) band offered in up 
to three channel blocks of spectrum--49.5 megahertz, 50.5 megahertz, 
and 17.5 megahertz blocks--licensed on a county basis. For bidding in 
this clock auction, in the counties where available, the Commission 
adopts bidding categories as follows: The 49.5 megahertz channel block 
is bidding category 1 (C1); the 50.5 megahertz channel block is bidding 
category 2 (C2); and the 17.5 megahertz channel block is bidding 
category 3 (C3). Therefore, the combination of a bidding category and a 
county would define a single specific license, and bidding for a 
category and a county under the clock-1 auction format would constitute 
license-by-license bidding.

C. Bidding Rounds

    172. Auction 108 will consist of sequential bidding rounds, each 
followed by the release of round results. The Commission will conduct 
bidding simultaneously for all licenses--all categories in all counties 
available in the auction. In the first bidding round of Auction 108, a 
bidder will indicate, for each category and county, whether it demands 
the license at the minimum opening bid price. Before each subsequent 
bidding round, the bidding system will announce a start-of-round price 
and a clock price for each license, and during the round, qualified 
bidders will indicate the licenses for which they wish to bid at the 
prices associated with the current round. Bidding rounds will be open 
for predetermined periods of time. Bidders will be subject to activity 
and eligibility rules that govern the pace at which they participate in 
the auction.
    173. For each category and county--that is, each license--the clock 
price will increase from round to round if more than one bidder 
indicates demand for that license. The bidding rounds will continue 
until, for every license, demand does not exceed one. At that point, 
the bidder still indicating demand for a license will be the winning 
bidder.
    174. The initial bidding schedule will be announced in a public 
notice to be released at least one week before the start of bidding. 
Details on viewing round results, including the location and format of 
downloadable results files for each round, will be released concurrent 
with or prior to that public notice.
    175. The Commission will conduct Auction 108 over the internet. A 
bidder will be able to submit its bids using the bidding system's 
upload function, which allows bid files in a comma-separated values 
(CSV) text format to be uploaded.
    176. The bidding system will allow a bidder to submit bids only for 
licenses in license areas (i.e., counties) the bidder selected on its 
FCC Form 175 and for which the bidder has sufficient bidding 
eligibility.
    177. During each round of the bidding, a bidder will be able to 
modify its bids placed in the current bidding round. It can do so by 
uploading a new file of all its bids, including the modifications, 
which would replace bids previously submitted in the round. The system 
will take the last bid file submission as that bidder's bids for the 
round. The Commission urges bidders to verify their bids in each round. 
Information on how to do so will be made available in educational 
materials that OEA will provide, including a bidding system user guide 
and an online bidding procedures tutorial.
    178. The Commission adopts the proposal that OEA retain the 
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. This will allow OEA 
to change the amount of time for bidding rounds, the amount of time

[[Page 21775]]

between rounds, or the number of rounds per day, depending upon bidding 
activity and other factors.

D. Stopping Rule

    179. For Auction 108, the Commission will employ a simultaneous 
stopping rule approach, which means all licenses remain available for 
bidding until bidding stops on every license. Specifically, bidding 
will close for all licenses after the first round in which demand does 
not exceed one for any license. Consequently, under this approach, it 
is not possible to determine in advance how long Auction 108 will last.

E. Availability of Bidding Information

    180. The Commission adopts the proposal to make public after each 
clock phase bidding round, for each license, the aggregate demand, the 
posted price of the last completed round, and the clock price for the 
next round. The identities of bidders making specific bids will not be 
disclosed until after the close of bidding in the auction.
    181. Each bidder will have access to additional information related 
to its own bidding and bid eligibility. Specifically, after the bids of 
a round have been processed, the bidding system will inform each bidder 
of the licenses it currently demands (its processed demand), whether it 
has proxy instructions for those licenses, and its eligibility for the 
next round.

F. Activity Rule

    182. Activity Requirement. For the reasons set forth in the Auction 
108 Comment Public Notice, the Commission adopts the proposal to employ 
an activity rule that requires bidders to bid actively throughout the 
auction, rather than wait until late in the auction before 
participating. For this clock auction, a bidder's activity in a round 
for purposes of the activity rule will be the sum of the bidding units 
associated with the bidder's demands as applied by the auction system 
during bid processing. Bidders are required to be active on a specific 
percentage (the activity requirement percentage) of their current 
bidding eligibility during each round of the auction. Failure to 
maintain the requisite activity level will result in a reduction in the 
bidder's eligibility, possibly curtailing or eliminating the bidder's 
ability to place bids in subsequent rounds of the auction.
    183. The Commission adopts the proposal to require that bidders 
maintain a fixed, high level of activity in each round of Auction 108 
in order to maintain bidding eligibility. The clock auction requires a 
high level of certainty about bidder demand in order to set accurate 
prices and provide reliable information to bidders. Consistent with 
past practice, bidders must be active on between 90% and 100% of their 
bidding eligibility in all clock rounds, with the specific percentage 
within this range to be set for each round by OEA. Thus, the activity 
rule will be satisfied when a bidder has bidding activity on blocks 
with bidding units that total 90% to 100% of its current eligibility in 
the round. OEA The Commission will set the activity requirement 
percentage initially at 95%. If the activity rule is met, then the 
bidder's eligibility will not change for the next round. If the 
activity rule is not met in a round, then the bidder's eligibility will 
be reduced to an amount that brings the bidder into compliance with the 
rule. Bidding activity will be based on the bids that are applied by 
the FCC auction bidding system. That is, if a bidder bids to reduce its 
demand for a license, but the FCC auction bidding system cannot apply 
the request because demand for that license would fall below one, then 
the bidder's activity would reflect its unreduced demand.
    184. OEA retains the discretion to change the activity requirement 
percentage during the auction. The bidding system will announce any 
such changes in advance of the round in which they would take effect, 
giving bidders adequate notice to adjust their bidding strategies.
    185. Contingent Bidding Limit. Because a bidder's eligibility for 
the next round is calculated based on the bidder's demands as applied 
by the auction system during bid processing, a bidder's eligibility may 
be reduced even if the bidder submitted bids with activity that exceeds 
the required activity for the round. To help a bidder avoid potentially 
having its eligibility reduced as a result of submitted bids that could 
not be applied during bid processing, the Commission adopts procedures 
to allow a bidder to submit bids with associated bidding activity 
greater than its current bidding eligibility. However, the Commission 
emphasizes that even under these additional procedures, the bidder's 
activity as applied by the auction system during bid processing will 
not exceed the bidder's current bidding eligibility. That is, even if a 
bidder submits bids with associated bidding units exceeding 100% of its 
current bidding eligibility, its processed activity cannot exceed its 
eligibility.
    186. Under these procedures, after Round 1, a bidder may submit 
bids with bidding units totaling up to a contingent bidding limit 
greater than or equal to the bidder's current bidding eligibility for 
the round times a contingent bidding percentage equal to or greater 
than 100%. The Commission adopts an initial contingent bidding 
percentage of 120%, which will apply starting in Round 2. The 
Commission finds that 120% provides a useful amount of flexibility to a 
bidder trying to guard against loss of eligibility when requesting a 
reduction in its demand. This limit will be subject to change in 
subsequent rounds within a range of 100% to 140%. If it appears that 
the contingent bidding limit is being misused, OEA may use its 
discretion to change the contingent bidding limit percentage. In any 
bidding round, the auction bidding system will advise the bidder of its 
current bidding eligibility, its required bidding activity, and its 
contingent bidding limit. The Auction 108 Technical Guide provides 
examples of use of the contingent bidding limit, and bidders are 
encouraged to review them.
    187. As with the activity requirement percentage, OEA will retain 
the discretion to change the contingent bidding percentage during the 
auction and will announce any such changes in advance of the round in 
which they would take effect.
    188. For Auction 108, the Commission will not provide for activity 
rule waivers to preserve a bidder's eligibility. The Commission notes 
that the contingent bidding limit, which permits a bidder to submit 
bids with bidding activity greater than its eligibility, within the 
precise limits set forth above, and allowing bidders to submit proxy 
instructions will address some of the circumstances under which a 
bidder risks losing bidding eligibility and otherwise could wish to use 
a bidding activity waiver, while minimizing any potential adverse 
impacts on bidder incentives to bid sincerely and on the price setting 
mechanism of the clock auction. This approach not to allow waivers is 
consistent with the ascending clock auction procedures used in other 
FCC clock auctions. The clock auction relies on precisely identifying 
the point at which demand decreases to equal supply to determine 
winning bidders and final prices. Allowing waivers would create 
uncertainty with respect to the exact level of bidder demand and would 
interfere with the basic clock price-setting and winner determination 
mechanism. Moreover, uncertainty about the level of demand would affect 
the way bidders' requests to reduce demand are processed by the bidding 
system, as addressed below.

[[Page 21776]]

G. Acceptable Bids

1. Minimum Opening Bids
    189. As is typical for each auction, the Commission sought comment 
on the use of a minimum opening bid amount and/or reserve price, as 
mandated by 47 U.S.C. 309(j). The Commission will establish minimum 
opening bid amounts for Auction 108. The bidding system will not accept 
bids lower than the minimum opening bids for each license. Based on the 
Commission's experience in past auctions, setting minimum opening bid 
amounts judiciously is an effective tool for accelerating the 
competitive bidding process.
    190. The Commission establishes the minimum bid amounts in Auction 
108 using the total potential MHz-pops of each license offered in the 
auction, rather than on available white space in each block. The 
Commission bases these calculations on $0.006 per MHz-pop, with a 
minimum of $500 per license. Consistent with the calculations for 
upfront payments and bidding units adopted in the Auction 108 
Procedures Public Notice, for the 49.5-megahertz and 50.5-megahertz 
blocks, the Commission bases the calculation on 50 megahertz. For the 
17.5-megahertz channel block, the calculation will be based on the 16.5 
megahertz of contiguous spectrum not including the 1-megahertz guard 
band. Additionally, when calculating minimum bid amounts, the 
Commission rounds the results of calculations as follows: Results below 
$1,000 will be rounded down to the nearest $100; results between $1,000 
and $10,000 will be rounded down to the nearest $1,000; results between 
$10,000 and $100,000 will be rounded down to the nearest $10,000; and 
results above $100,000 will be rounded down to the nearest $100,000. 
The rounding procedures will lessen the differences between minimum bid 
amounts for licenses in counties with similar population instead of 
reflecting relatively small differences in total potential MHz-pops 
that are not necessarily representative of the available white space.
    191. The minimum opening bid amounts for each license offered in 
Auction 108 are set forth in the Attachment A file on the Auction 108 
website at www.fcc.gov/auction/108.
2. Clock Price Increments
    192. The Commission adopts the procedures regarding clock price 
increments described in the Auction 108 Further Comment Public Notice. 
Therefore, after bidding in the first round and before each subsequent 
round, for each license, the FCC auction bidding system will announce 
the start-of-round price and the clock price for the upcoming round--
that is, the lowest price and the highest price at which bidders can 
indicate their demand for the license during the round. As long as 
aggregate demand for the license exceeds one, the start-of-round price 
will be equal to the clock price from the prior round. If aggregate 
demand equaled one at a price in a previous round, then the start-of-
round price for the next round will be equal to the price at which 
aggregate demand equaled one. If aggregate demand was zero in the 
previous round, then the start-of-round price for the next round will 
not increase.
    193. The Commission will set the clock price for a license for a 
round by adding a percentage increment to the start-of-round price. The 
Commission will set the initial increment percentage at 10% and OEA may 
adjust within a range of 5% to 30% inclusive as rounds continue. The 
Commission recognizes that an increment larger than the initial 10% may 
be useful in managing the length of the auction, and OEA may increase 
the percentage increment during the auction, but OEA will take bidding 
activity into account before deciding to do so and will announce any 
change in advance. To ensure that an increase in the percentage 
increment does not result in an unduly large increase for a license, 
the total dollar amount of the increment (the difference between the 
clock price and the start-of-round price) will be capped at a certain 
amount. The Commission will set this cap on the increment initially at 
$10 million and OEA may adjust the cap as rounds continue. The 5% to 
30% increment range and cap will allow us to set a percentage that 
manages the auction pace and takes into account bidders' needs to 
evaluate their bidding strategies while moving the auction along 
quickly.
3. Intra-Round Bids
    194. As described in the Auction 108 Further Comment Public Notice, 
in any round after the first round, the Commission will permit a bidder 
to make intra-round bids by indicating a point between the start-of-
round price and the clock price at which its demand for a license 
changes. In placing an intra-round bid for a license, a bidder will 
indicate a specific price and the changed quantity it demands (either 
zero or one) if the price for the license should increase beyond that 
price. For example, if a bidder has processed demand for a license at 
the start-of-round price of $200, but no longer wants the license if 
the price increases by more than $10, the bidder would indicate a bid 
quantity of zero at a price of $210. Similarly, if the bidder wishes to 
reduce its demand to zero if the price increases at all above $200, the 
bidder would indicate a bid quantity of zero at the start-of-round 
price of $200.
    195. Intra-round bids are optional; a bidder may choose to express 
its demands only at the start-of-round price or the clock price. Using 
intra-round bidding will allow the auction system to use relatively 
large percentage increments, thereby speeding up the auction, without 
running the risk that a jump in the clock price will overshoot the 
market clearing price--the point at which only one bidder demands the 
license--because bidders can specify a price lower than the clock 
price.
    196. Intra-round bid amounts will be limited to multiples of $10 
for prices below $10,000; to multiples of $100 for prices between 
$10,000 and $100,000, inclusive; and to multiples of $1,000 for prices 
above $100,000.
4. Proxy Bids
    197. The Commission adopts the proposal to provide each bidder with 
the option to use proxy bidding under the clock-1 format. Accordingly, 
a bidder will be allowed to submit a proxy instruction to the bidding 
system to reduce its demand for a license to zero at a price higher 
than the current round's clock price. Proxy instructions to increase a 
bidder's demand for a license at a given price will not be permitted.
    198. Under these procedures, if a proxy instruction has been 
submitted, the bidding system will automatically submit a proxy bid to 
maintain the bidder's demand for the license in every subsequent round 
as long as the clock price for the round is less than the proxy 
instruction price. In the first round in which the clock price is 
greater than or equal to the proxy instruction price, the bidding 
system will submit a proxy bid on behalf of the bidder to reduce the 
bidder's demand for that license to zero at the proxy instruction 
price. For example, if a bidder has processed demand for a license with 
a clock price of $1,000, but the bidder is willing to purchase the 
license for a price up to $1,800, the bidder could submit a proxy 
instruction to reduce its demand for the license to 0 at $1,800. In 
that case, the bidding system will submit proxy bids to maintain the 
bidder's demand for the license in each subsequent round as long as the 
clock price is less than $1,800.
    199. In the case that a bid to reduce demand, placed according to 
proxy

[[Page 21777]]

instructions or submitted by the bidder in the round, is not applied 
during bid processing, the bidding system will automatically generate a 
proxy instruction at the bid price and, in the following rounds, submit 
proxy bids on behalf of the bidder according to that proxy instruction. 
For example, suppose that the start-of-round price for a license is 
$10,000, the clock price is $12,000, and a bidder with processed demand 
for the license submits a bid to reduce its demand to 0 at price 
$11,500. If the bid is not applied during bid processing (e.g., because 
there were no other bids for the license in the round), in the 
following round the bidding system will submit a proxy bid on behalf of 
the bidder to reduce demand for the license to 0 at price $11,500. The 
proxy instruction preserves in the bidding system the bidder's interest 
in retaining demand for the license at a price no higher than $11,500, 
which may help avoid having the license sold later in the auction to 
another bidder at a price less than what the initial bidder is willing 
to pay.
    200. In any round, a bidder can remove or modify any existing proxy 
instructions or proxy bids for the round by uploading a new bid file, 
including the modifications, which would replace any bids and proxy 
instructions previously submitted. The system will take the last bid 
file submission as that bidder's bids and proxy instructions.
    201. As is the case for intra-round bid amounts, proxy instruction 
prices will be limited to multiples of $10 for prices below $10,000; to 
multiples of $100 for prices between $10,000 and $100,000, inclusive; 
and to multiples of $1,000 for prices above $100,000. Proxy 
instructions will not be publicly released either during or after the 
auction.
5. Bid Types
    202. Under the clock-1 auction format adopted for Auction 108, as 
in other FCC spectrum clock auctions, a bidder will indicate in each 
round the licenses it demands at the prices associated with the round. 
Bidders will be permitted to make two types of bids: Simple bids and 
switch bids.
    203. A simple bid indicates a desired quantity (in this auction, 
one or zero) at a price. A bidder that is willing to maintain its 
demand for a license at the new clock price would bid for the license 
at the clock price, indicating that it is willing to pay up to that 
price, if need be, for the license. A bidder that wishes to change the 
quantity it demands for a license (relative to its processed demand 
from the previous round) would express the price (either the clock 
price or an intra-round price) at which it wishes to change its demand.
    204. A switch bid allows the bidder to request to move its demand 
for a license from C1 to C2, or vice versa, within the same county at a 
price for the from category (either the clock price or an intra-round 
price). Switch bids are allowed only in counties with both an available 
category 1 license and an available category 2 license.
    205. Bids to maintain demand will always be applied by the auction 
bidding system during bid processing. Simple bids to change demand and 
switch bids will not necessarily be applied during bid processing.
6. Missing Bids
    206. Under the clock-1 auction format, a bidder is required to 
indicate its demands in every round or have a proxy instruction in 
place, even if its demands at the new round's prices are unchanged from 
the previous round. If a bidder does not submit a new bid for a license 
for which it had processed demand from the previous round and does not 
have a proxy instruction in place, the system will consider that a 
missing bid.
    207. Missing bids are treated by the auction bidding system as 
requests to reduce demand to a quantity of zero for the license. If 
these requests are applied, then a bidder's bidding activity, and its 
bidding eligibility for the next round, may be reduced. Unlike in 
previous FCC clock auctions for spectrum licenses, under the clock1 
format for Auction 108, a bidder is permitted to enter proxy 
instructions. Thus, a bidder that is unable to indicate its demands in 
every round can avoid having missing bids by entering appropriate proxy 
instructions.

H. Bid Processing

    208. The Commission adopts bid processing procedures that the 
auction bidding system will use, after each bidding round, to process 
bids to change demand to determine the processed demand of each bidder 
for each license and a posted price for each license that will serve as 
the start-of-round price for the next round.
1. No Excess Supply Rule for Bids To Reduce Demand
    209. Under the clock-1 auction format, the FCC auction bidding 
system will not allow a bidder to reduce its demand for a license if 
the reduction would cause aggregate demand to fall below one. 
Therefore, if a bidder has been bidding for a specific license but 
submits a simple bid to reduce its demand to zero for the license if 
the price should increase above the price in its bid, the FCC auction 
bidding system will treat the bid as a request to reduce demand that 
will be applied only if the no excess supply rule would be satisfied. 
Similarly, if a bidder submits a switch bid to move its demand from the 
C1 license to the C2 license in the same county, the FCC auction 
bidding system will treat the bid as a request that will be applied 
only if the no excess supply rule would be satisfied for C1 in the 
county, and vice versa.
2. Eligibility Rule for Bids To Increase Demand
    210. The bidding system will not allow a bidder to increase its 
demands for licenses if the total number of bidding units associated 
with the bidder's demands exceeds the bidder's bidding eligibility for 
the round. Therefore, if a bidder submits a simple bid to add a license 
for which it did not have processed demand in the previous round, the 
FCC auction bidding system will treat the bid as a request to increase 
demand that will be applied only if that would not cause the bidder's 
processed activity to exceed its eligibility.
3. Processed Demand
    211. The Commission adopts the procedures described in the Auction 
108 Further Comment Public Notice to determine the order in which the 
bidding system will process bids after a round ends. After a round 
ends, the bidding system will first consider and apply all bids to 
maintain demand, and then it will process bids to change demand in 
order of price point, where the price point represents the percentage 
of the bidding interval for the round. The bidding system will process 
bids to change demand in ascending order of price point, first 
considering intra-round bids in order of price point and then bids at 
the clock price. The system will consider bids at the lowest price 
point across all licenses, then look at bids at the next price point 
across all licenses, and so on. As it considers each submitted bid 
during bid processing, the FCC auction bidding system will determine 
whether there is excess demand for a license at that point in the 
processing in order to determine whether a bidder's request to reduce 
demand for that license can be applied. Likewise, the auction bidding 
system will evaluate the activity associated with the bidder's most 
recently determined demands at that point in the processing to 
determine whether a request to increase demand can be applied.
    212. Because in any given round some bidders may request to 
increase demand

[[Page 21778]]

for licenses while others may request reductions, the price point at 
which a bid is considered by the auction bidding system can affect 
whether it is applied. In addition, bids that were not applied because 
demand would fall below one or because the bidder's activity (as 
applied by the auction system) would exceed its eligibility will be 
held in a queue and considered, again in price point order, if there 
should be excess demand or if the bidder's activity (as applied by the 
auction system) is reduced sufficiently later in the processing after 
other bids are processed.
    213. Therefore, once a round closes, the auction system will 
process bids to change demand by first considering the bid submitted at 
the lowest price point and determining whether that bid can be applied 
given bidders' demands as determined at that point in the bid 
processing. If the bid can be applied, the licenses that the bidder 
holds at that point in the processing will be adjusted, and aggregate 
demand for the license will be recalculated accordingly. If the bid 
cannot be applied, the unfulfilled bid will be held in a queue to be 
considered later during bid processing for that round. The FCC auction 
bidding system will then consider the bid submitted at the next lowest 
price point, applying it or not given the most recently determined 
demands of bidders. Any unfulfilled requests will again be held in the 
queue, and aggregate demand will again be recalculated. Every time a 
bid is applied, the unfulfilled bids held in the queue will be 
reconsidered, in the order of the original price points of the bids 
(and by pseudo-random number, in the case of tied price points). The 
auction bidding system will not carry over unfulfilled bid requests to 
the next round, however. The bidding system will advise bidders of the 
status of their bids when round results are released.
4. Price Determination
    214. As described in the Auction 108 Further Comment Public Notice, 
the FCC auction bidding system further will determine, based on 
aggregate demand, the posted price for each license for the round that 
will serve as the start-of-round price for the next round. The price 
for a license will increase from round to round as long as there is 
excess demand for the license but will not increase if only a single 
bidder demands the license.
    215. If, at the end of a round, the aggregate demand for a license 
exceeds the supply of one, the posted price will equal the clock price 
for the round. If a reduction in demand was applied during the round 
and caused demand to fall to one, the posted price will be the price at 
which the reduction was applied. If aggregate demand is zero, or 
aggregate demand is one and no bid to reduce demand was applied for the 
license, then the posted price will equal the start-of-round price for 
the round. The range of acceptable bid amounts for the next round will 
be set by adding the percentage increment to the posted price.
    216. Under the clock-1 auction format, if a bid to reduce demand is 
not applied, it is because there is not excess demand for the license 
and, therefore, the posted price will not increase. Hence, a bidder 
that makes a bid to reduce demand that cannot be applied will not face 
a price for the license that is higher than its bid price.
    217. After the bids of the round have been processed, if the 
stopping rule has not been met, the FCC auction bidding system will 
announce clock prices to indicate a range of acceptable bids for the 
next round. Each bidder will be informed of the licenses for which it 
has processed demand and of the aggregate demand for each license.

I. Winning Bids

    218. Under the clock-1 auction format, a bidder with processed 
demand for a license at the time the stopping rule is met will become 
the winning bidder for the license. The final price for a license will 
be the posted price for the final round.

V. Post-Auction Procedures

    219. The public notice announcing the close of the bidding and 
auction results will be released within several days after bidding has 
ended in Auction 108. The Auction 108 Procedures Public Notice will 
also establish the deadlines for submitting down payments, final 
payments, and the long-form applications (FCC Form 601) for the 
auction.

A. Down Payments

    220. The Commission's rules provide that, unless otherwise 
specified by public notice, within 10 business days after the release 
of the auction closing public notice for Auction 108, each winning 
bidder must submit sufficient funds (in addition to its upfront 
payment) to bring its total amount of money on deposit with the 
Commission to 20% of the net amount of its winning bids (less any 
bidding credits, if applicable).

B. Final Payments

    221. Each winning bidder will be required to submit the balance of 
the net amount for each of its winning bids within 10 business days 
after the deadline for submitting down payments.

C. Long-Form Application (FCC Form 601)

    222. The Commission's rules provide that, within 10 business days 
after release of the auction closing public notice, winning bidders 
must electronically submit a properly completed post-auction 
application (FCC Form 601), including the applicable filing fee, for 
the license(s) they won through the auction.
    223. A winning bidder claiming eligibility for a small business 
bidding credit or a rural service provider bidding credit must 
demonstrate its eligibility for the bidding credit sought in its FCC 
Form 601 post-auction application. Further instructions on these and 
other filing requirements will be provided to winning bidders in the 
auction closing public notice for Auction 108
    224. Winning bidders organized as bidding consortia must comply 
with the FCC Form 601 post-auction application procedures set forth in 
47 CFR 1.2107(g). Specifically, license(s) won by a consortium must be 
applied for as follows: (a) An individual member of the consortium or a 
new legal entity comprising two or more individual consortium members 
must file for licenses covered by the winning bids; (b) each member or 
group of members of a winning consortium seeking separate licenses will 
be required to file a separate FCC Form 601 for its/their respective 
license(s) in their legal business name; (c) in the case of a license 
to be partitioned or disaggregated, the member or group filing the 
applicable FCC Form 601 shall include the parties' partitioning or 
disaggregation agreement with the FCC Form 601; and (d) if a designated 
entity credit is sought (either small business or rural service 
provider), the applicant must meet the applicable eligibility 
requirements in the Commission's rules for the credit.

D. Ownership Disclosure Information Report (FCC Form 602)

    225. Within 10 business days after release of the auction closing 
public notice for Auction 108, each winning bidder must also comply 
with the ownership reporting requirements in 47 CFR 1.913, 1.919, and 
1.2112 by submitting an ownership disclosure information report for 
wireless telecommunications services (FCC Form 602) with its FCC Form 
601 post-auction application.

[[Page 21779]]

    226. If a winning bidder already has a complete and accurate FCC 
Form 602 on file in the FCC's Universal Licensing System (ULS), then it 
is not necessary to file a new report, but the winning bidder must 
certify in its FCC Form 601 application that the information on file 
with the Commission is complete and accurate. If the winning bidder 
does not have an FCC Form 602 on file, or if the form on file is not 
complete and accurate, then the winning bidder must submit a new one.
    227. When a winning bidder submits an FCC Form 175, ULS 
automatically creates an ownership record. This record is not an FCC 
Form 602, but it may be used to pre-fill the FCC Form 602 with the 
ownership information submitted on the winning bidder's FCC Form 175 
application. A winning bidder must review the pre-filled information 
and confirm that it is complete and accurate as of the filing date of 
the FCC Form 601 post-auction application before certifying and 
submitting the FCC Form 602. Further instructions will be provided to 
winning bidders in the auction closing public notice.

E. Tribal Lands Bidding Credit

    228. As noted above, a winning bidder that intends to use its 
license(s) to deploy facilities and provide services to qualifying 
Tribal lands that have a wireline penetration rate equal to or below 85 
percent is eligible to receive a Tribal lands bidding credit as set 
forth in 47 CFR 1.2107 and 1.2110(f). A Tribal lands bidding credit is 
in addition to, and separate from, any other bidding credit for which a 
winning bidder may qualify.
    229. Unlike other bidding credits that are requested prior to an 
auction, a winning bidder applies for a Tribal lands bidding credit 
after the auction when it files its FCC Form 601 post-auction 
application. When initially filing the post-auction application, the 
winning bidder will be required to advise the Commission whether it 
intends to seek a Tribal lands bidding credit, for each license won in 
a particular auction, by checking the designated box(es). After stating 
its intent to seek a Tribal lands bidding credit, the winning bidder 
will have 180 days from the close of the applicable post-auction 
application filing window to amend its application to select the 
specific qualifying Tribal lands to be served and provide the required 
Tribal government certifications. Licensees receiving a Tribal lands 
bidding credit are subject to performance criteria as set forth in 47 
CFR 1.2110(f)(3)(vii). For additional information on the Tribal lands 
bidding credit, including how the amount of the credit is calculated, 
applicants should review the Commission's rulemaking proceeding 
regarding Tribal lands bidding credits and related public notices.

F. Default and Disqualification

    230. Any winning bidder that defaults or is disqualified after the 
close of an auction (i.e., fails to remit the required down payment by 
the specified deadline, fails to submit a timely long-form application, 
fails to make a full and timely final payment, or is otherwise 
disqualified) is liable for default payments as described in 47 CFR 
1.2104(g)(2). A default payment consists of a deficiency payment, equal 
to the difference between the amount of the bidder's winning bid and 
the amount of the winning bid the next time a license covering the same 
spectrum is won in an auction, plus an additional payment equal to a 
percentage of the defaulter's bid or of the subsequent winning bid, 
whichever is less.
    231. The percentage of the applicable bid to be assessed as an 
additional payment for defaults in a particular auction is established 
in advance of the auction. For the reasons set forth in the Auction 108 
Comment Public Notice, the Commission adopts the proposal to set the 
additional default payment for Auction 108 at 15% of the applicable bid 
for winning bids.
    232. Finally, in the event of a default, the Commission has the 
discretion to re-auction the license or offer it to the next highest 
bidder (in descending order) at its final bid amount. In addition, if a 
default or disqualification involves gross misconduct, 
misrepresentation, or bad faith by an applicant, then 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 
authorizations held by the applicant.

G. Refund of Remaining Upfront Payment Balance

    233. If a refund is due, the Bidder must request a refund in 
writing with the information listed below and to the email listed 
below. All refunds of upfront payment balances will be returned to the 
payer of record as identified on the FCC Form 159, or on the wire 
transfer, unless the payer submits written authorization instructing 
otherwise. Bidders are encouraged to use the Refund Information icon 
found on the Auction Application Manager page or the Refund Form link 
available on the Auction Application Submit Confirmation page in the 
FCC Auction Application System to access the form. After the required 
information is completed on the blank form, the form should be printed, 
signed, and submitted to the Commission by mail, fax, or email as 
instructed below.
    234. If you have elected not to access the Refund Form through the 
Auction Application Manager page, the Commission is requesting that all 
information listed below be supplied in writing.

Name, address, contact and phone number of Bank
ABA Number (capable to accept ACH payments)
Account Number to Credit
Name of Account Holder
FCC Registration Number (FRN)

    The refund request must be submitted by fax to the Revenue & 
Receivables Operations Group/Auctions at (202) 418-2843, by email to 
<a href="/cdn-cgi/l/email-protection#a4f6f6ebe3f3cdd6c1e2c5dcc1d7e4c2c7c78ac3cbd2"><span class="__cf_email__" data-cfemail="4b1919040c1c22392e0d2a332e380b2d2828652c243d">[email protected]</span></a>.
    Note: Refund processing generally takes up to two weeks to 
complete. Bidders with questions about refunds should contact Scott 
Radcliffe at (202) 418-7518 or Theresa Meeks at (202) 418-2945.

VI. Procedural Matters

A. Paperwork Reduction Act Analysis

    235. The Office of Management and Budget (OMB) has approved the 
information collections in the Application to Participate in an FCC 
Auction, FCC Form 175. The Auction 108 Procedures Public Notice does 
not contain new or substantively modified information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. Therefore, it does not contain any new or modified 
information collection burden for small business concerns with fewer 
than 25 employees pursuant to the Small Business Paperwork Relief Act 
of 2002, Public Law 107-198. The Commission will be submitting a non-
substantive change request to OMB concerning OMB 3060-0600 related to 
the certification requirement for Auction 108 applicants adopted in the 
Auction 108 Procedures Public Notice, and the Commission will not 
require Auction 108 applicants to make this certification on FCC Form 
175 until OMB has approved the non-substantive change request.

B. Congressional Review Act

    236. The Commission has determined, and Administrator of the Office 
of Information and Regulatory Affairs, Office of Management and Budget, 
concurs, that this rule is non-major

[[Page 21780]]

under the Congressional Review Act, 5 U.S.C. 804(2). The Commission 
will send a copy of the Auction 108 Procedures Public Notice to 
Congress and the Government Accountability Office pursuant to 5 U.S.C. 
801(a)(1)(A).

C. Supplemental Final Regulatory Flexibility Analysis

    237. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), a Supplemental Initial Regulatory Flexibility Analysis 
(Supplemental IRFA) was incorporated in the Auction 108 Comment Public 
Notice released in January 2021. In February 2022, a Second 
Supplemental Initial Regulatory Flexibility Analysis (Second 
Supplemental IRFA) was incorporated in the Auction 108 Further Comment 
Public Notice, and a Third Supplemental Initial Regulatory Flexibility 
Analysis (Third Supplemental IRFA) was incorporated in the Auction 108 
Revised Inventory Public Notice. The Commission sought public comment 
on the proposals in all three public notices, including comments on the 
three supplemental IRFAs. No comments were filed addressing the 
Supplemental IRFA, Second Supplemental IRFA, or Third Supplemental 
IRFA. The Auction 108 Procedures Public Notice establishes the 
procedures to be used for Auction 108. The Supplemental Final 
Regulatory Flexibility Analysis (Supplemental FRFA) reflects actions 
taken in the Auction 108 Procedures Public Notice, and supplements the 
Final Regulatory Flexibility Analyses completed by the Commission in 
the 2.5 GHz Report and Order and other Commission orders pursuant to 
which Auction 108 will be conducted. The present FRFA conforms to the 
RFA.
    238. Need for, and Objectives of, the Rules. The Auction 108 
Procedures Public Notice resolves all open issues, and addresses 
comments filed in response to the Auction 108 Comment Public Notice, 
the Auction 108 Further Comment Public Notice, and the Auction 108 
Revised Inventory Public Notice. The Auction 108 Procedures Public 
Notice implements auction procedures for those entities that seek to 
bid in Auction 108 to acquire new flexible-use geographic overlay 
licenses in the 2.5 GHz band. Auction 108 will offer the single largest 
contiguous portion of available mid-band spectrum below 3 GHz, and the 
licenses made available in Auction 108 will help extend 5G service 
beyond the most populated areas. The Auction 108 Procedures Public 
Notice adopts procedural rules and terms and conditions governing 
Auction 108, and the post-auction application and payment processes, as 
well as sets the minimum opening bid amounts for new flexible-use 
overlay licenses in the 2.5 GHz band that will be offered in Auction 
108.
    239. To promote the efficient and fair administration of the 
competitive bidding process for all Auction 108 participants, the 
Commission adopts the following procedures for Auction 108:
    <bullet> A requirement that any applicant seeking to participate in 
Auction 108 certify in its short-form application, under penalty of 
perjury, that it has read the public notice adopting procedures for 
Auction 108 and that it has familiarized itself with those procedures 
and the requirements for a license and operating facilities in the 2.5 
GHz band;
    <bullet> provision of discretionary authority to OEA, in 
conjunction with WTB, to delay, suspend, or cancel bidding in Auction 
108 for any reason that affects the ability of the competitive bidding 
process to be conducted fairly and efficiently;
    <bullet> establishment of bidding credit caps for eligible small 
businesses, very small businesses, and rural service providers in 
Auction 108;
    <bullet> designation of AT&T, T-Mobile, and Verizon Wireless as 
nationwide providers for purposes of the prohibition of certain 
communications;
    <bullet> use of anonymous bidding/limited information procedures 
which will not make public until after bidding has closed: (1) The 
license areas that an applicant selects for bidding in its short-form 
application (FCC Form 175), (2) the amount of any upfront payment made 
by or on behalf of an applicant for Auction 108, (3) any applicant's 
bidding eligibility, and (4) any other bidding-related information that 
might reveal the identity of the bidder placing a bid;
    <bullet> establishment of an additional default payment of 15% 
under 47 CFR 1.2104(g)(2)in the event that a winning bidder defaults or 
is disqualified after the auction;
    <bullet> a specific upfront payment amount for each license 
available in Auction 108;
    <bullet> establishment of a bidder's initial bidding eligibility in 
bidding units based on that bidder's upfront payment through assignment 
of a specific number of bidding units for each license;
    <bullet> establishment of minimum opening bid amounts based on 
$0.006 per MHz-pop, with a minimum of $500 per license;
    <bullet> use of an ascending clock auction format for Auction 108 
under which each qualified bidder will indicate in successive clock 
bidding rounds its demand for the single frequency-specific license in 
each category in each county. Categories are determined based on the 
framework set forth in the 2.5 GHz Report and Order, in which the 49.5 
megahertz block is bidding category 1 (C1); the 50.5 megahertz block is 
bidding category 2 (C2); and the 17.5 megahertz block is bidding 
category 3 (C3);
    <bullet> use of a simultaneous stopping rule for Auction 108, under 
which all licenses remain available for bidding until bidding stops on 
every license;
    <bullet> retention by OEA of discretion to adjust the bidding 
schedule as necessary in order to manage the pace of Auction 108;
    <bullet> permission for bidders to make two types of bids: Simple 
bids and switch bids. A simple bid indicates a desired quantity (one or 
zero) at a price (either the clock price or an intra-round price). A 
switch bid allows the bidder to request to move its demand for a 
license from C1 to C2, or vice versa, within the same county at a price 
for the from category (either the clock price or an intra-round price);
    <bullet> use of information procedures which would make public 
after each round of Auction 108, for each category in each county, the 
aggregate demand, the posted price of the last completed round, and the 
clock price for the next round;
    <bullet> use of an activity rule that would require bidders to be 
active on between 90% and 100% of their bidding eligibility in all 
clock rounds with the activity requirement percentage initially set at 
95%;
    <bullet> use of a contingent bidding limit that would allow a 
bidder to submit bids with associated bidding activity greater than its 
current bidding eligibility, and establishment of an initial contingent 
bidding percentage at 120%, which would be subject to change in 
subsequent rounds within a range of 100% to 140%;
    <bullet> a specific minimum opening bid amount for licenses 
available in Auction 108;
    <bullet> an option to permit a bidder to submit a proxy instruction 
to reduce its demand for a license to zero at a price higher than the 
current round's clock price and a requirement that bidders indicate 
their demands in every round or submit appropriate proxy instructions;
    <bullet> establishment of acceptable bid amounts, including clock 
price increments and intra-round bids, along with a methodology for 
calculating such amounts; and
    <bullet> establishment of a methodology for processing bids and 
requests to reduce and increase demand subject to the no

[[Page 21781]]

excess supply rule for bids to reduce demand and the eligibility rule 
for bids to increase demand.
    240. The procedures for the conduct of Auction 108 constitute the 
more specific implementation of the competitive bidding rules 
contemplated by parts 1 and 27 of the Commission's rules and the 
underlying rulemaking orders, including the 2.5 GHz Report and Order, 
and relevant competitive bidding orders, and are fully consistent 
therewith.
    241. Summary of Significant Issues Raised by Public Comments in 
Response to the IRFA. There were no comments filed that specifically 
address the information in the Supplemental IRFA, Second Supplemental 
IRFA, or Third Supplemental IRFA. One commenter, Mile One styled a 
proposal for the Commission to facilitate ``pairing infrastructure 
providers and small innovators in commercial market trial programs'' as 
a comment to the Auction 108 Comment Public Notice Supplemental IRFA. 
The substance of this proposal, however, does not specifically address 
the information in the Supplemental IRFA or the procedures and policies 
proposed in the Auction 108 Comment Public Notice and is outside of the 
scope of the procedures established in the Auction 108 Further Comment 
Public Notice and the Auction 108 Revised Inventory Public Notice.
    242. Response to Comments by the Chief Counsel for Advocacy of the 
Small Business Administration. Pursuant to the Small Business Jobs Act 
of 2010, which amended the RFA, the Commission is required to respond 
to any comments filed by the Chief Counsel for Advocacy of the SBA and 
to provide a detailed statement of any changes made to the proposed 
procedures as a result of those comments. The Chief Counsel did not 
file any comments in response to the procedures that were proposed in 
the Auction 108 Comment Public Notice, Auction 108 Further Comment 
Public Notice, or Auction 108 Revised Inventory Public Notice.
    243. Description and Estimate of the Number of Small Entities to 
Which the Rules Will Apply. The RFA directs agencies to provide a 
description of, and, where feasible, an estimate of the number of small 
entities that may be affected by the rules and policies adopted in the 
Auction 108 Procedures Public Notice. The RFA generally defines the 
term small entity as having the same meaning as the terms small 
business, small organization, and small governmental jurisdiction. In 
addition, the term small business has the same meaning as the term 
small business concern under the Small Business Act. A small business 
concern is one which: (1) Is independently owned and operated, (2) is 
not dominant in its field of operation, and (3) satisfies any 
additional criteria established by the SBA.
    244. As noted above, a regulatory flexibility analysis was 
incorporated into the 2.5 GHz Report and Order. That order provides the 
underlying authority for the procedures proposed in the Auction 108 
Comment Public Notice, Auction 108 Further Comment Public Notice, and 
Auction 108 Revised Inventory Public Notice, and that are adopted in 
the Auction 108 Procedures Public Notice for Auction 108. In the 2.5 
GHz Report and Order Regulatory Flexibility Analysis, the Commission 
described in detail the small entities that might be significantly 
affected. In the Auction 108 Procedures Public Notice, in the 
Supplemental FRFA, the Commission incorporates by reference the 
descriptions and estimates of the number of small entities from the 
regulatory flexibility analysis in the 2.5 GHz Report and Order.
    245. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The Commission designed the 
auction application process to minimize reporting and compliance 
requirements for small businesses and other applicants. In the first 
part of the Commission's two-phased auction application process, 
parties desiring to participate in an auction file streamlined, short-
form applications in which they certify under penalty of perjury as to 
their qualifications, and to having reviewed the Auction 108 Procedures 
Public Notice. Eligibility to participate in bidding is based on an 
applicant's short-form application and certifications, as well as its 
upfront payment. In the second phase of the process, winning bidders 
file a more comprehensive long-form application. Thus, an applicant 
that fails to become a winning bidder does not need to file a long-form 
application or provide the additional showings and more detailed 
demonstrations required of a winning bidder.
    246. Applicants that wish to participate in Auction 108 are 
required to certify that they have read the Auction 108 Procedures 
Public Notice and the procedures adopted in the Auction 108 Procedures 
Public Notice for Auction 108, and are familiar with the procedures and 
requirements for obtaining a license and operating facilities in the 
2.5 GHz band. The certification requirement allows applicants to 
educate themselves about the procedures for participation in Auction 
108, and their obligation to stay abreast of relevant information 
before bidding in Auction 108 begins, and throughout the entire Auction 
108 process. Adoption of this requirement may help small entities and 
other applicants avoid, among other things, rule violations or 
technical error that could prevent them from becoming a qualified 
bidder or obtaining a license after placing a winning bid. Moreover, 
the requirement will ensure that small entity applicants are aware of 
the detailed educational materials, such as interactive, online 
tutorials and technical guides, made available by the Commission to 
enhance the understanding of the pre-bidding and bidding processes, and 
should minimize the need for small entity applicants to hire outside 
engineers, legal counsel, or other auction experts.
    247. Some of the resources that the Commission makes available to 
small entities and other applicants are discussed above. In light of 
all of the information, resources, and guidance made available to 
potential and actual participants at no cost, the Commission does not 
expect that the processes and procedures adopted in the Auction 108 
Procedures Public Notice will require small entities to hire attorneys, 
engineers, consultants, or other professionals to participate in 
Auction 108 and comply with the procedures they adopt. Although, the 
Commission cannot quantify the cost of compliance with the procedures 
adopted for Auction 108, they do not believe that the cost of 
compliance will unduly burden small entities that choose to participate 
in the auction. The Commission notes that the processes and procedures 
are consistent with existing Commission policies and procedures used in 
prior auctions. Thus, some small entities may already be familiar with 
such procedures and have the processes and procedures in place to 
facilitate compliance resulting in minimal incremental costs to comply. 
For those small entities that may be new to the Commission's auction 
process, the various resources that will be made available, including, 
but not limited to, the mock auction, remote electronic bidding, and 
access to hotlines for both technical and auction assistance, should 
help facilitate participation without the need to hire professionals. 
These resources are in addition to the resources discussed above that 
small entities and other applicants will be able to access. By 
providing these resources as well as the resources

[[Page 21782]]

discussed below, the Commission expects small entities that use the 
available resources to experience lower participation and compliance 
costs.
    248. Steps Taken to Minimize the Significant Economic Impact on 
Small Entities, and Significant Alternatives Considered. The RFA 
requires an agency to describe any significant, specifically small 
business, alternatives that it has considered in reaching its approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance and reporting requirements under the rule for such small 
entities; (3) the use of performance rather than design standards; and 
(4) an exemption from coverage of the rule, or any part thereof, for 
such small entities.
    249. The Commission has taken steps to minimize any economic impact 
of its auction procedures on small entities through, among other 
things, the many free resources the Commission provides to potential 
auction participants. As mentioned above, consistent with the past 
practices in prior auctions, small entities that are potential 
participants will have access to detailed educational information and 
Commission personnel to help guide their participation in Auction 108, 
which should alleviate any need to hire professionals. For example, 
small entities and other would-be participants will also be provided 
with various materials on the pre-bidding process in advance of the 
short-form application filing window, which includes step-by-step 
instructions on how to complete FCC Form 175. The Commission has taken 
steps to ensure that the application system is simple to use, and that 
FCC Form 175 is easy to complete. For example, the application will 
pre-fill ownership information that an applicant has previously 
provided in an FCC Form 175 for prior auctions or in an FCC Form 602 
filing.
    250. In addition, small entities will have access to the web-based, 
interactive online tutorials produced by Commission staff to 
familiarize themselves with auction procedures, filing requirements, 
bidding procedures, and other matters related to an auction. The 
Commission has also made available resources to assist applicants in 
conducting due diligence research regarding potential encumbrances in 
the 2.5 GHz band, including a mapping tool to help identify and view 
existing licenses and Rural Tribal Priority Window applications in the 
Commission's Universal Licensing System (ULS) database.
    251. After the initial application stage, auction participants 
whose applications have been deemed incomplete have the opportunity to 
correct certain errors. An applicant whose application is deemed 
incomplete will receive a letter from the Commission identifying the 
specific errors in their application and providing contact information 
for a specific FCC staff member who has been assigned to provide 
assistance. Additionally, after the application process is complete and 
the Commission has identified the applicants who will be qualified to 
bid in Auction 108, all qualified bidders for Auction 108 will 
automatically be registered for the auction, and registration materials 
will be distributed prior to the auction by overnight delivery. 
Applicants are not required to take any further steps until bidding 
commences.
    252. Prior to the start of bidding, eligible bidders will be given 
an opportunity to become familiar with auction procedures and the 
bidding system by participating in a mock auction. Eligible bidders 
will have access to a user guide for the bidding system, bidding file 
formats, and an online bidding procedures tutorial in advance of the 
mock auction. Further, the Commission will conduct Auction 108 
electronically over the internet using a web-based auction system that 
eliminates the need for small entities and other bidders to be 
physically present in a specific location. These mechanisms are made 
available to facilitate participation in Auction 108 by all eligible 
bidders and may result in significant cost savings for small entities 
that use them. Moreover, the adoption of bidding procedures in advance 
of the auction, consistent with statutory directive, is designed to 
ensure that the auction will be administered predictably and fairly for 
all participants, including small businesses.
    253. Small entities and other auction participants may seek 
clarification of, or guidance on, complying with competitive bidding 
rules and procedures, reporting requirements, and using the bidding 
system at any stage of the auction process. Additionally, an FCC 
Auctions Hotline will provide small entities one-on-one access to 
Commission staff for information about the auction process and 
procedures. Further, the FCC Auctions Technical Support Hotline is 
another resource that provides technical assistance to applicants, 
including small entities, on issues such as access to or navigation 
within the electronic FCC Form 175 and use of the bidding system.
    254. The Commission also makes various databases and other sources 
of information, including the Auctions program websites and copies of 
Commission decisions, available to the public without charge, providing 
a low-cost mechanism for small entities to conduct research prior to 
and throughout the auction. Prior to the start of bidding, and at the 
close of Auction 108, OEA and WTB will post public notices on the 
Auctions website that articulate the procedures and deadlines for the 
auction. The Commission makes this information easily accessible and 
without charge to benefit all Auction 108 applicants, including small 
entities, thereby lowering their administrative costs to comply with 
the Commission's competitive bidding rules.
    255. Another step taken to minimize the economic impact for small 
entities participating in Auction 108 is the Commission's adoption of 
bidding credits for small businesses and rural service providers. In 
accordance with the service rules applicable to the 2.5 GHz band 
licenses to be offered in Auction 108, bidding credit discounts will be 
available to eligible small businesses and small business consortia on 
the following basis: (1) A bidder with attributed average annual gross 
revenues that do not exceed $55 million for the preceding five years is 
eligible to receive a 15% discount on its overall payment; or (2) a 
bidder with attributed average annual gross revenues that do not exceed 
$20 million for the preceding five years is eligible to receive a 25% 
discount on its overall payment. Eligible applicants can receive only 
one of the available small business bidding credits--not both.
    256. An eligible rural service provider may request a 15% discount 
on its overall payment using a rural service provider bidding credit. 
To be eligible for a rural service provider bidding credit, an 
applicant must: (1) Be a service provider that is in the business of 
providing commercial communications services and, together with its 
controlling interests, affiliates, and the affiliates of its 
controlling interests, has fewer than 250,000 combined wireless, 
wireline, broadband, and cable subscribers; and (2) serve predominantly 
rural areas. Rural areas are defined as counties with a population 
density of 100 or fewer persons per square mile. Eligible applicants 
can request either a small business bidding credit or a rural service 
provider bidding credit, but not both.

[[Page 21783]]

    257. The total bidding credit discount that may be awarded to an 
eligible small business is capped at $25 million and there is a $10 
million cap on the total bidding credit discount that may be awarded to 
an eligible rural service provider. In addition, to create parity among 
eligible small businesses and rural service providers competing against 
each other in smaller markets, the Commission adopts a $10 million cap 
on the overall amount of bidding credits that any winning designated 
entity may apply to winning licenses in markets with a population of 
500,000 or less. Based on the technical characteristics of the 2.5 GHz 
band and their analysis of past auction data, the Commission 
anticipates that the caps will allow the majority of small businesses 
to take full advantage of the bidding credit program, thereby lowering 
the relative costs of participation for small businesses. While 
eligible entities will have the opportunity to compete at auction 
without being unduly constrained, the caps are reasonable enough to 
ensure that ineligible entities are not encouraged to undercut the 
Commission's rules, thereby achieving the Commission's dual statutory 
goals of benefitting designated entities and at the same time 
preventing unjust enrichment.
    258. A Tribal lands bidding credit will also be available to 
winning bidders that intend to deploy facilities and provide services 
to qualifying Tribal lands that have a wireline penetration rate equal 
to or below 85 percent. The Tribal lands bidding credit is in addition 
to, and separate from, any other bidding credit winning bidders may 
qualify to claim. Therefore, small entities that are eligible for the 
small or rural bidding credit can also claim the Tribal lands bidding 
credit, provided they meet the requirements of 47 CFR 1.2107 and 
1.2110(f).
    259. These procedures for the conduct of Auction 108 constitute the 
more specific implementation of the competitive bidding rules 
contemplated by parts 1 and 27 of the Commission's rules and the 
underlying rulemaking orders, including the 2.5 GHz Report and Order 
and relevant competitive bidding orders, and are fully consistent 
therewith.
    260. Report to Congress. The Commission will send a copy of the 
Auction 108 Procedures Public Notice, in a report to Congress pursuant 
to the Congressional Review Act. In addition, the Commission will send 
a copy of the Auction 108 Procedures Public Notice, including the 
Supplemental FRFA to the Chief Counsel for Advocacy of the SBA.

Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2022-07602 Filed 4-12-22; 8:45 am]
BILLING CODE 6712-01-P


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