[Federal Register Volume 70, Number 194 (Friday, October 7, 2005)]
[Notices]
[Pages 58700-58706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-20355]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-05-64-A (Auction No. 64); DA 05-2423]


Television Station Construction Permits

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the auction of 11 full power 
television station construction permits scheduled to commence on March 
15, 2006 (Auction No. 64). This document also seeks comments on reserve 
prices or minimum opening bids and other procedures for Auction No. 64.

DATES: Comments are due on or before October 14, 2005, and reply 
comments are due on or before October 21, 2005.

ADDRESSES: Comments and reply comments must be sent by electronic mail 
to the following address: <a href="/cdn-cgi/l/email-protection#75140016011c1a1b4341351316165b121a03"><span class="__cf_email__" data-cfemail="06677365726f696830324660656528616970">[email protected]</span></a>. Parties who file also by 
paper must file an original and four copies of each filing. U.S. Postal 
Service first class, express or priority mail must be addressed to the 
Office of the Secretary, 445 12th Street, SW., Washington, DC 20054.

FOR FURTHER INFORMATION CONTACT: For legal questions: Lynne Milne at 
(202) 418-0660. For general auction questions: Debbie Smith or Lisa 
Stover at (717) 338-2888. For service rule questions: Shaun Maher at 
(202) 418-2324 or Shaleim Henry at (202) 418-1600.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 64 
Comment Public Notice released on September 23, 2005. The complete text 
of the Auction No. 64 Comment Public Notice, including attachments and 
any related Commission documents, is available for public inspection 
and copying from 8 a.m. to 4:30 p.m. Monday through Thursday or from 8 
a.m. to 11:30 a.m. on Friday at the FCC Reference Information Center, 
Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. 
The Auction No. 64 Comment Public Notice and related Commission 
documents may also be purchased from the Commission's duplicating 
contractor, Best Copy and Printing, Inc. (BCPI), Portals II, 445 12th 
Street, SW., Room CY-B402, Washington, DC, 20554, telephone 202-488-
5300, facsimile 202-488-5563, or BCPI Web site: http://www.BCPIWEB.com. 
When ordering documents from BCPI, please provide the appropriate FCC 
document number, for example, DA 05-2423 for the Auction No. 64 Comment 
Public Notice. The Auction No. 64 Comment Public Notice and related 
documents are also available on the Internet at the Commission's Web 
site: http://wireless.fcc.gov/auctions/64/.

I. Television Construction Permits in Auction No. 64

A. Open Construction Permits

    1. By the Auction No. 64 Comment Public Notice, the Wireless 
Telecommunications Bureau and the Media Bureau (collectively referred 
to as the Bureaus) announce that the ten construction permits listed in 
Attachment A of the Auction No. 64 Comment Public Notice as open are 
available to any interested party. Long-form applications (FCC Forms 
301) were filed previously for some of these stations. The pending 
applications for these stations are listed in Attachment A of the 
Auction No. 64 Comment Public Notice. Any party filing for a station 
with a pending application should understand that it is likely that its 
application will be mutually exclusive with the previously-filed 
application. Even if there is no pending long-form application for a 
station listed in Attachment A of the Auction No. 64 Comment Public 
Notice, applicants specifying the same construction permit will be 
considered mutually exclusive for auction purposes. Once mutual 
exclusivity exists for auction purposes, even if only one applicant for 
the same construction permit in Auction No. 64 submits an upfront 
payment, that applicant is required to submit a bid in order to obtain 
the construction permit. Any applicant that submits a short-form 
application that is accepted for filing but fails to timely submit an 
upfront payment will retain its status as an applicant in Auction No. 
64 and will remain subject to the Commission's anti-collusion rule, 47 
CFR 1.2105(c), but, having purchased no bidding eligibility, will not 
be eligible to bid.
    2. The Commission's competitive bidding rules will be used to 
select among mutually exclusive applicants for these 10 construction 
permits in Auction No. 64. Those wishing to participate in the auction, 
including those entities listed in Attachment A of the Auction No. 64 
Comment Public

[[Page 58701]]

Notice with a pending long-form application, will be required to file a 
short-form application (FCC Form 175) prior to the short-form deadline 
which will be announced in a subsequent public notice.

B. Closed Construction Permit

    3. The construction permit listed in Attachment B of the Auction 
No. 64 Comment Public Notice, identified as station TV-NTSC011-51, is 
the subject of pending, mutually exclusive applications for a new full 
power analog television station that were filed prior to July 1, 1997. 
The Commission's competitive bidding rules will be used in Auction No. 
64 to select among mutually exclusive applicants for construction 
permit TV-NTSC011-51. Pursuant to the Congressional directive of 47 
U.S.C. Section 309(l)(3) and procedures set forth in the Broadcast 
Auctions First Report and Order, 63 FR 48615 (September 11, 1998), 
participation in competitive bidding for a construction permit for 
station TV-NTSC011-51 will be limited to those nine applicants 
identified in Attachment B of the Auction No. 64 Comment Public Notice: 
Edward I. St. Pe, Fant Broadcasting Development, LLC, George S. Flinn, 
Jr., KB Communications Corp., KM Communications, Inc., Marri 
Broadcasting, LP, Natchez Trace Broadcasting Company, United 
Television, Inc., and Winstar Broadcasting Corp.

C. FRN Submission Requirement

    4. The nine applicants identified in Attachment B of the Auction 
No. 64 Comment Public Notice that wish to participate in the auction 
are required to file a short-form application (FCC Form 175) and select 
TV-NTSC011-51 prior to the short-form deadline which will be announced 
in a subsequent public notice. In addition, each applicant identified 
in Attachment B of the Auction No. 64 Comment Public Notice that wishes 
to remain eligible for competitive bidding for station TV-NTSC011-51 
must provide its FCC Registration Number (FRN) prior to 5 p.m. Eastern 
Time (ET) on November 16, 2005. An FRN for an applicant identified in 
Attachment B is necessary in order for the FCC Auction System to 
display TV-NTSC011-51 in the construction permit selection list on its 
electronic short-form application. If an applicant fails to provide 
this information in the prescribed manner and before the deadline 
specified, the applicant will not be able to select a construction 
permit for station TV-NTSC011-51 in its electronic short-form 
application, its long-form application will be dismissed, and it will 
no longer be eligible for competitive bidding for a construction permit 
for station TV-NTSC011-51.
    5. To submit an FRN for association with construction permit TV-
NTSC011-51, each applicant listed in Attachment B of the Auction No. 64 
Comment Public Notice must provide, prior to 5 p.m. ET on November 16, 
2005, its precise applicant name and FRN in an e-mail to 
<a href="/cdn-cgi/l/email-protection#f4958197809d9b9ac2c0b4929797da939b82"><span class="__cf_email__" data-cfemail="12736771667b7d7c2426527471713c757d64">[email protected]</span></a> or by facsimile to Kathryn Garland at (717) 338-2850. 
Applicants that do not have an FRN must obtain one by registering using 
the FCC's Commission Registration system (CORES). To access CORES, 
click on the CORES link under Related Sites on the FCC Auctions page at 
http://wireless.fcc.gov/auctions/. Next, follow the directions provided 
to register and receive an FRN. Each applicant should retain this 
number and password and keep such information strictly confidential.
    6. Interested parties should note that some of the stations listed 
in Attachment A of the Auction No. 64 Comment Public Notice are single 
channel, digital-only television stations. Those stations are 
identified in Attachment A of the Auction No. 64 Comment Public Notice 
as DTV. These stations must be operated in digital television mode. 
Those stations indicated in Attachments A and B of the Auction No. 64 
Comment Public Notice as NTSC are single-channel stations that must be 
operated as either NTSC analog stations or, if they meet the 
Commission's interference requirements, may be operated as DTV 
stations.
    7. To allow an adequate period of time before issuance of bidding 
rules, to permit notice and comment on proposed auction procedures, and 
to ensure that potential bidders have adequate time to familiarize 
themselves with the specific rules that will govern the day-to-day 
conduct of an auction, the Bureaus seek comment on a variety of 
auction-specific procedures prior to the start of Auction No. 64.

II. Auction Structure

A. Simultaneous Multiple-Round Auction Design

    8. Auction No. 64 will use the FCC's Integrated Spectrum Auction 
System (ISAS or FCC Auction System), a redesign of the previous auction 
application and bidding systems. The Bureaus propose to award all 
construction permits included in Auction No. 64 in a simultaneous 
multiple-round auction. As described further below, this methodology 
offers every construction permit for bid at the same time with 
successive bidding rounds in which eligible bidders may place bids. 
That is, bidding will remain open on all construction permits until 
bidding stops on every construction permit. The Bureaus seek comment on 
this proposal.

B. Upfront Payments and Bidding Eligibility

    9. The Bureaus have delegated authority and discretion to determine 
an appropriate upfront payment for each construction permit being 
auctioned, taking into account such factors as the efficiency of the 
auction process and the potential value of similar spectrum. As 
described further below, the upfront payment is a refundable deposit 
made by each bidder to establish eligibility to bid on construction 
permits. Upfront payments related to the specific spectrum subject to 
auction protect against frivolous or insincere bidding and provide the 
Commission with a source of funds from which to collect payments owed 
at the close of the auction. With these guidelines in mind, the Bureaus 
propose the schedule of upfront payments for each construction permit 
as set forth in Attachments A and B of the Auction No. 64 Comment 
Public Notice. The Bureaus seek comment on this proposal.
    10. The Bureaus further propose that the amount of the upfront 
payment submitted by a bidder will determine the maximum number of 
bidding units on which a bidder may place bids. This limit is a 
bidder's initial bidding eligibility. Each construction permit is 
assigned a specific number of bidding units equal to the upfront 
payment listed in Attachments A and B of the Auction No. 64 Comment 
Public Notice, on a bidding unit per dollar basis. Bidding units for a 
given construction permit do not change as prices rise during the 
auction. A bidder's upfront payment is not attributed to specific 
construction permits. Rather, a bidder may place bids on any 
combination of construction permits as long as the total number of 
bidding units associated with those construction permits does not 
exceed the bidder's current eligibility. In order to bid on a 
construction permit, qualified bidders must have an eligibility level 
that meets the number of bidding units assigned to that construction 
permit. Eligibility cannot be increased during the auction; it can only 
remain the same or decrease. Thus, in calculating its upfront payment 
amount, an applicant must determine the maximum number of bidding units 
on which it may wish to bid (or hold

[[Page 58702]]

provisionally winning bids) in any single round, and submit an upfront 
payment amount covering that total number of bidding units. 
Provisionally winning bids are bids that would become final winning 
bids if the auction were to close in that given round. The Bureaus seek 
comment on this proposal.

C. Activity Rules

    11. In order to ensure that the auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively 
throughout the auction, rather than wait until late in the auction 
before participating. A bidder's activity will be the sum of the 
bidding units associated with the construction permits upon which it 
places a bid during the current round and the bidding units associated 
with the construction permits upon which it holds provisionally winning 
bids. Bidders are required to be active on a specific percentage of 
their current bidding eligibility during each round of the auction. 
Failure to maintain the requisite activity level will result in the use 
of an activity rule waiver, if any remain, or a reduction in the 
bidder's eligibility, possibly curtailing the bidder's ability to bid 
on some construction permits or eliminating the bidder from further 
bidding in the auction.
    12. The Bureaus propose to divide the auction into two stages, each 
characterized by a different activity requirement. The auction will 
start in Stage One. The Bureaus propose that the auction generally will 
advance from Stage One to Stage Two when the auction activity level, as 
measured by the percentage of bidding units receiving new provisionally 
winning bids, is approximately twenty percent or below for three 
consecutive rounds of bidding. However, the Bureaus further propose 
that the Bureaus retain the discretion to change stages unilaterally by 
announcement during the auction. In exercising this discretion, the 
Bureaus will consider a variety of measures of bidder activity, 
including, but not limited to, the auction activity level, the 
percentage of construction permits (as measured in bidding units) on 
which there are new bids, the number of new bids, and the percentage 
increase in revenue. For example, when monitoring activity for 
determining when to change stages, we may consider the percentage of 
bidding units of the construction permits receiving new provisionally 
winning bids, excluding any FCC-held construction permits. The Bureaus 
seek comment on these proposals.
    13. For Auction No. 64, the Bureaus propose the following activity 
requirements:
    Stage One: In each round of the first stage of the auction, a 
bidder desiring to maintain its current bidding eligibility is required 
to be active on construction permits representing at least 75 percent 
of its current bidding eligibility. Failure to maintain the requisite 
activity level will result in a reduction in the bidder's bidding 
eligibility in the next round of bidding (unless an activity rule 
waiver is used). During Stage One, a bidder's reduced eligibility for 
the next round will be calculated by multiplying the bidder's current 
round activity by four-thirds (4/3).
    Stage Two: In each round of the second stage, a bidder desiring to 
maintain its current bidding eligibility is required to be active on 95 
percent of its current bidding eligibility. Failure to maintain the 
requisite activity level will result in a reduction in the bidder's 
bidding eligibility in the next round of bidding (unless an activity 
rule waiver is used). During Stage Two, a bidder's reduced eligibility 
for the next round will be calculated by multiplying the bidder's 
current round activity by twenty-nineteenths (20/19).
    14. The Bureaus seek comment on these proposals. Commenters that 
believe these activity rules should be modified should explain their 
reasoning and comment on the desirability of an alternative approach. 
Commenters are advised to support their claims with analyses and 
suggested alternative activity rules.

D. Activity Rule Waivers and Reducing Eligibility

    15. Use of an activity rule waiver preserves the bidder's current 
bidding eligibility despite the bidder's activity in the current round 
being below the required minimum level. An activity rule waiver applies 
to an entire round of bidding and not to a particular construction 
permit. Activity rule waivers can be either proactive or automatic and 
are principally a mechanism for auction participants to avoid the loss 
of bidding eligibility in the event that exigent circumstances prevent 
them from placing a bid in a particular round.
    16. The FCC Auction System assumes that bidders with insufficient 
activity would prefer to apply an activity rule waiver (if available) 
rather than lose bidding eligibility. Therefore, the system will 
automatically apply a waiver at the end of any bidding round where a 
bidder's activity level is below the minimum required unless: (1) the 
bidder has no activity rule waivers available; or (2) the bidder 
overrides the automatic application of a waiver by reducing 
eligibility, thereby meeting the minimum requirement. If a bidder has 
no waivers remaining and does not satisfy the required activity level, 
its eligibility will be permanently reduced, possibly eliminating the 
bidder from further bidding in the auction.
    17. A bidder with insufficient activity may wish to reduce its 
bidding eligibility rather than use an activity rule waiver. If so, the 
bidder must affirmatively override the automatic waiver mechanism 
during the bidding round by using the reduce eligibility function in 
the FCC Auction System. In this case, the bidder's eligibility is 
permanently reduced to bring the bidder into compliance with the 
activity rules as described above. Once eligibility has been reduced, a 
bidder will not be permitted to regain its lost bidding eligibility.
    18. A bidder may apply an activity rule waiver proactively as a 
means to keep the auction open without placing a bid. If a bidder 
proactively applies an activity rule waiver (using the apply waiver 
function in the FCC Auction System) during a bidding round in which no 
bids or withdrawals are submitted, the auction will remain open and the 
bidder's eligibility will be preserved. An automatic waiver applied by 
the FCC Auction System in a round in which there are no new bids or 
withdrawals will not keep the auction open. A bidder cannot submit a 
proactive waiver after submitting a bid in a round, and submitting a 
proactive waiver will preclude a bidder from placing any bids in that 
round. Applying a waiver is irreversible; once a proactive waiver is 
submitted that waiver cannot be unsubmitted, even if the round has not 
yet closed.
    19. The Bureaus propose that each bidder in Auction No. 64 be 
provided with three activity rule waivers that may be used at the 
bidder's discretion during the course of the auction as set forth 
above. The Bureaus seek comment on this proposal.

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

    20. For Auction No. 64, the Bureaus propose that, by public notice 
or by announcement during the auction, the Bureaus may delay, suspend, 
or cancel the auction in the event of natural disaster, technical 
obstacle, evidence of an auction security breach, unlawful bidding 
activity, administrative or weather necessity, or for any other reason 
that affects the fair and efficient conduct of competitive bidding. In 
such cases, the Bureaus, in their sole discretion, may elect to resume 
the auction starting from the beginning of the current round, resume 
the auction

[[Page 58703]]

starting from some previous round, or cancel the auction in its 
entirety. Network interruption may cause the Bureaus to delay or 
suspend the auction. The Bureaus emphasize that exercise of this 
authority is solely within the discretion of the Bureaus, and its use 
is not intended to be a substitute for situations in which bidders may 
wish to apply their activity rule waivers. The Bureaus seek comment on 
this proposal.

III. Bidding Procedures

A. Round Structure

    21. The Commission will conduct Auction No. 64 over the Internet. 
Alternatively, telephonic bidding will also be available. The toll-free 
telephone number for telephonic bidding will be provided to qualified 
bidders.
    22. The initial bidding schedule will be announced in a public 
notice to be released at least one week before the start of the 
auction. The simultaneous multiple-round format will consist of 
sequential bidding rounds, each followed by the release of round 
results. Details on viewing round results, including the location and 
format of downloadable round results files will be included in the same 
public notice.
    23. The Bureaus have 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. The Bureaus may increase or decrease the amount of time for 
the bidding rounds and review periods, or the number of rounds per day, 
depending upon the bidding activity level and other factors. The 
Bureaus seek comment on this proposal.

B. Reserve Price or Minimum Opening Bid

    24. The Bureaus seek comment on the use of minimum opening bid 
amounts and/or reserve prices in Auction No. 64. Normally, a reserve 
price is an absolute minimum price below which an item will not be sold 
in a given auction. Reserve prices can be either published or 
unpublished. A minimum opening bid amount, on the other hand, is the 
minimum bid price set at the beginning of the auction below which no 
bids are accepted. It is generally used to accelerate the competitive 
bidding process. Also, the auctioneer often has the discretion to lower 
the minimum opening bid amount later in the auction. It is also 
possible for the minimum opening bid amount and the reserve price to be 
the same amount.
    25. The Bureaus propose to establish minimum opening bid amounts 
for Auction No. 64. The Bureaus believe a minimum opening bid amount, 
which has been used in other auctions, is an effective bidding tool.
    26. For Auction No. 64, the proposed minimum opening bids were 
determined by taking into account various factors related to the 
efficiency of the auction and the potential value of the spectrum, 
including the type of service, proposed population coverage, market 
size, industry cash flow data and recent broadcast transactions. The 
specific minimum opening bid for each construction permit available in 
Auction No. 64 is set forth in Attachments A and B of the Auction No. 
64 Comment Public Notice. The Bureaus seek comment on this proposal.
    27. If commenters believe that these minimum opening bid amounts 
will result in substantial numbers of unsold construction permits, or 
are not reasonable amounts, or should instead operate as reserve 
prices, they should explain why this is so, and comment on the 
desirability of an alternative approach. Commenters are advised to 
support their claims with valuation analyses and suggested reserve 
prices or minimum opening bid amount levels or formulas. In 
establishing the minimum opening bid amounts, the Bureaus particularly 
seek comment on such factors as the potential value of the spectrum 
being auctioned including the type of service, proposed population 
coverage, market size, and other relevant factors that could reasonably 
have an impact on valuation of the broadcast spectrum. The Bureaus also 
seek comment on whether, consistent with 47 U.S.C. Section 309(j), the 
public interest would be served by having no minimum opening bid amount 
or reserve price.

C. Bid Amounts

    28. In each round, eligible bidders will be able to place bids on a 
particular construction permit in any of nine different amounts, if a 
bidder has sufficient eligibility to place a bid on the particular 
construction permit. The FCC Auction System interface will list the 
nine acceptable bid amounts for each construction permit. The nine 
acceptable bid amounts for each construction permit consist of the 
minimum acceptable bid amount calculated using a smoothing formula and 
additional amounts calculated using a bid increment percentage.
i. Minimum Acceptable Bid Amounts
    29. The minimum acceptable bid amount for a construction permit 
will be equal to its minimum opening bid amount until there is a 
provisionally winning bid for the construction permit. After there is a 
provisionally winning bid for a construction permit, the minimum 
acceptable bid amount for that construction permit will be equal to the 
amount of the provisionally winning bid plus an additional amount 
calculated using a smoothing formula, as described below. The Bureaus 
will round the result using the Bureaus standard rounding procedures, 
in which results above $10,000 are rounded to the nearest $1,000, 
results below $10,000 but above $1,000 are rounded to the nearest $100, 
and results below $1,000 are rounded to the nearest $10.
    30. For Auction No. 64, the Bureaus propose to calculate minimum 
acceptable bid amounts by using a smoothing formula, as was done in 
several other auctions. The smoothing formula calculates minimum 
acceptable bid amounts by first calculating a percentage increment. The 
percentage increment for each construction permit is a function of 
bidding activity on that construction permit in prior rounds; 
therefore, a construction permit that has received many bids will have 
a higher percentage increment than a construction permit that has 
received few bids.
    31. The calculation of the percentage increment used to determine 
the minimum acceptable bid amounts for each construction permit for the 
next round is made at the end of each round. The computation is based 
on an activity index, which is a weighted average of the number of bids 
in that round and the activity index from the prior round, except for 
Round 1 calculations, for which the activity index from the prior round 
is set at 0 because there is no prior round. The current activity index 
is equal to a weighting factor times the number of bidders that submit 
bids on the construction permit in the most recent bidding round plus 
one minus the weighting factor times the activity index from the prior 
round. The activity index is then used to calculate a percentage 
increment by multiplying a minimum percentage increment by one plus the 
activity index with that result being subject to a maximum percentage 
increment. The Commission will initially set the weighting factor at 
0.5, the minimum percentage increment at 0.1 (10%), and the maximum 
percentage increment at 0.2 (20%). Hence, at these initial settings, 
the percentage increment will fluctuate between 10% and 20% depending 
upon the number of bids for the construction permit. Smoothing formula 
equations and examples are shown in Attachment C of the Auction No. 64 
Comment Public Notice.

[[Page 58704]]

    32. In the case of a construction permit for which the 
provisionally winning bid has been withdrawn, the minimum acceptable 
bid amount will equal the second highest bid received for the 
construction permit.
ii. Additional Bid Amounts
    33. The acceptable bid amounts in addition to the minimum 
acceptable bid amount for each construction permit are calculated using 
a bid increment percentage. The first additional acceptable bid amount 
equals the minimum acceptable bid amount times one plus the bid 
increment percentage, rounded--e.g., if the increment percentage is 10 
percent, the calculation is (minimum acceptable bid amount) * (1 + 
0.10), rounded, or (minimum acceptable bid amount) * 1.10, rounded; the 
second additional acceptable bid amount equals the minimum acceptable 
bid amount times one plus two times the bid increment percentage, 
rounded, or (minimum acceptable bid amount) * 1.20, rounded; the third 
additional acceptable bid amount equals the minimum acceptable bid 
amount times one plus three times the bid increment percentage, 
rounded, or (minimum acceptable bid amount) * 1.30, rounded; etc.
    34. The Bureaus retain the discretion to change the minimum 
acceptable bid amounts, the smoothing formula parameters, and the bid 
increment percentage if they determine that circumstances so dictate. 
The Bureaus will do so by announcement in the FCC Auction System during 
the auction. The Bureaus seek comment on these proposals.

D. Provisionally Winning Bids

    35. At the end of a bidding round, a provisionally winning bid 
amount for each construction permit will be determined based on the 
highest bid amount received for the construction permit. In the event 
of identical high bid amounts being submitted on a construction permit 
in a given round (i.e., tied bids), the Bureaus will use a random 
number generator to select a single provisionally winning bid from 
among the tied bids. If the auction were to end with no higher bids 
being placed for that construction permit, the winning bidder would be 
the one that placed the selected provisionally winning bid. However, 
the remaining bidders, as well as the provisionally winning bidder, can 
submit higher bids in subsequent rounds. If any bids are received on 
the construction permit in a subsequent round, the provisionally 
winning bid again will be determined by the highest bid amount received 
for the construction permit.
    36. A provisionally winning bid will remain the provisionally 
winning bid until there is a higher bid on the same construction permit 
at the close of a subsequent round, unless the provisionally winning 
bid is withdrawn. Bidders are reminded that provisionally winning bids 
confer activity.

E. Information Regarding Bid Removal and Bid Withdrawal

    37. For Auction No. 64, the Bureaus propose the following bid 
removal and bid withdrawal procedures. Before the close of a bidding 
round, a bidder has the option of removing any bid placed in that 
round. By removing bids in the FCC Auction System, a bidder may 
effectively unsubmit any bid placed in that round. Once a round closes, 
a bidder may no longer remove a bid. In contrast to the bid withdrawal 
provisions described below, a bidder removing a bid placed in the same 
round is not subject to a withdrawal payment.
    38. For auctions for which bid withdrawals are permitted, a bidder 
may withdraw its provisionally winning bids using the withdraw bids 
function in the FCC Auction System. A bidder that withdraws its 
provisionally winning bid(s) is subject to the bid withdrawal payment 
provisions of 47 CFR 1.2104(g) and 1.2109. The Bureaus seek comment on 
these bid removal and bid withdrawal procedures.
    39. In the Part 1 Third Report and Order, 63 FR 2315 (Jan. 15, 
1998), the Commission explained that allowing bid withdrawals 
facilitates efficient aggregation of licenses and construction permits 
and the pursuit of efficient backup strategies as information becomes 
available during the course of an auction. The Commission noted, 
however, that, in some instances, bidders may seek to withdraw bids for 
improper reasons. The Bureaus, therefore, have discretion in managing 
the auction to limit the number of withdrawals to prevent any bidding 
abuses. The Commission stated that the Bureaus should assertively 
exercise their discretion, consider limiting the number of rounds in 
which bidders may withdraw bids, and prevent bidders from bidding on a 
particular construction permit if the Bureaus find that a bidder is 
abusing the Commission's bid withdrawal procedures.
    40. Applying this reasoning, the Bureaus propose to limit each 
bidder in Auction No. 64 to withdrawing provisionally winning bids in 
no more than one round during the course of the auction. To permit a 
bidder to withdraw bids in more than one round may encourage insincere 
bidding or the use of withdrawals for anti-competitive purposes. The 
one round in which withdrawals may be used will be at the bidder's 
discretion; withdrawals otherwise must be in accordance with the 
Commission's rules. There is no limit on the number of provisionally 
winning bids that may be withdrawn in the one round in which a bidder's 
one withdrawal is used. Withdrawals will remain subject to the bid 
withdrawal payment provisions specified in the Commission's rules. The 
Bureaus seek comment on this proposal. The Bureaus also invite comments 
on whether bid withdrawals should not be permitted in Auction No. 64 in 
light of the site-specific nature of television broadcast 
authorizations, the small number of construction permits available in 
this auction, or other factors.

F. Stopping Rule

    41. The Bureaus have discretion to establish stopping rules before 
or during multiple round auctions in order to terminate the auction 
within a reasonable time. For Auction No. 64, the Bureaus propose to 
employ a simultaneous stopping rule approach. A simultaneous stopping 
rule means that all construction permits remain available for bidding 
until bidding closes simultaneously on all construction permits.
    42. Bidding will close simultaneously on all construction permits 
after the first round in which no bidder submits any new bids, applies 
a proactive waiver, or places any withdrawals. Thus, unless 
circumstances dictate otherwise, bidding will remain open on all 
construction permits until bidding stops on every construction permit.
    43. However, the Bureaus propose to retain the discretion to 
exercise any of the following options during Auction No. 64:
    a. Use a modified version of the simultaneous stopping rule. The 
modified stopping rule would close the auction for all construction 
permits after the first round in which no bidder applies a waiver, 
places a withdrawal or submits any new bids on any construction permit 
for which it is not the provisionally winning bidder. Thus, absent any 
other bidding activity, a bidder placing a new bid on a construction 
permit for which it is the provisionally winning bidder would not keep 
the auction open under this modified stopping rule. The Bureaus further 
seek comment on whether this modified stopping rule should be used

[[Page 58705]]

at any time or only in stage two of the auction.
    b. Keep the auction open even if no bidder submits any new bids, 
applies a waiver or withdraws any provisionally winning bids. In this 
event, the effect will be the same as if a bidder had applied a waiver. 
The activity rule, therefore, will apply as usual and a bidder with 
insufficient activity will either lose bidding eligibility or use a 
remaining activity rule waiver.
    c. Declare that the auction will end after a specified number of 
additional rounds (which is called a special stopping rule). If the 
Bureaus invoke this special stopping rule, it will accept bids in the 
specified final round(s) and the auction will close.
    44. The Bureaus propose to exercise these options only in certain 
circumstances, for example, where the auction is proceeding very 
slowly, there is minimal overall bidding activity, or it appears likely 
that the auction will not close within a reasonable period of time. 
Before exercising these options, the Bureaus are likely to attempt to 
increase the pace of the auction by, for example, increasing the number 
of bidding rounds per day, and/or increasing the minimum acceptable bid 
percentage for the limited number of construction permits on which 
there is still a high level of bidding activity. The Bureaus seek 
comment on these proposals.

IV. Due Diligence

    45. Potential bidders are solely responsible for investigating and 
evaluating all technical and market place factors that may have a 
bearing on the value of the broadcast facilities in this auction. The 
FCC makes no representations or warranties about the use of this 
spectrum for particular services. Applicants should be aware that an 
FCC auction represents an opportunity to become an FCC construction 
permittee in the broadcast service, subject to certain conditions and 
regulations. An FCC auction does not constitute an endorsement by the 
FCC of any particular service, technology, or product, nor does an FCC 
construction permit or license constitute a guarantee of business 
success. Applicants should perform their individual due diligence 
before proceeding as they would with any new business venture. In 
particular, potential bidders are strongly encouraged to review all 
underlying Commission orders, such as the specific Report and Order 
amending the TV or DTV Table of Allotments and allotting the TV 
channel(s) on which they plan to bid. Additionally, potential bidders 
should perform technical analyses sufficient to assure them that, 
should they prevail in competitive bidding for a given construction 
permit, they will be able to build and operate facilities that will 
fully comply with the Commission's technical and legal requirements. 
Applicants are strongly encouraged to inspect any prospective 
transmitter sites located in, or near, the service area for which they 
plan to bid, and also to familiarize themselves with the Commission's 
rules regarding the National Environmental Policy Act contained in 47 
CFR chapter 1, part 1, subpart I.
    46. Potential bidders are strongly encouraged to conduct their own 
research prior to Auction No. 64 in order to determine the existence of 
pending proceedings that might affect their decisions regarding 
participation in the auction. Participants in Auction No. 64 are 
strongly encouraged to continue such research during the auction.
    47. Potential bidders should note that, in November of 1999, 
Congress enacted the Community Broadcasters Protection Act of 1999 
(CBPA) which established a new Class A television service. In response 
to the enactment of the CBPA, the Commission adopted rules to establish 
the new Class A television service, including rules to provide 
interference protection for eligible Class A television stations from 
new full power television stations, in the Class A Report and Order, 65 
FR 29985 (May 10, 2000).
    48. Given the Commission's ruling in the Class A Report and Order, 
a winning bidder in Auction No. 64, upon submission of its long-form 
application (FCC Form 301), will have to provide interference 
protection to qualified Class A television stations. Therefore, 
potential bidders are encouraged to perform engineering studies to 
determine the existence of Class A television stations and their effect 
on the ability to operate any full power television station proposed in 
this auction. Information about the identity and location of Class A 
television stations is available from the Media Bureau's Consolidated 
Database System (CDBS) (public access available at: http://www.fcc.gov/mb) and on the Media Bureau's Class A television Web page: http://www.fcc.gov/mb/video/files/classa.html.
    49. Potential bidders for any new television facility in this 
auction are also reminded that full service television stations are in 
the process of converting from analog to digital operation and that 
stations may have pending applications to construct and operate digital 
television facilities, construction permits and/or licenses for such 
digital facilities. Bidders should investigate the impact such 
applications, permits and licenses may have on their ability to operate 
the facilities proposed in this auction.

V. Conclusion

    50. Comments are due on or before October 14, 2005, and reply 
comments are due on or before October 21, 2005. All filings must be 
addressed to the Commission's Secretary Attn: WTB/ASAD, Office of the 
Secretary, Federal Communications Commission. Parties who file comments 
by paper must file an original and four copies of each filing. U.S. 
Postal Service first-class, Express, and Priority mail should be 
addressed to 445 12th Street, SW., Washington, DC 20554. Filings can be 
sent by hand or messenger delivery, by commercial overnight courier, or 
by first-class or overnight U.S. Postal Service mail. The Commission's 
contractor will receive hand-delivered or messenger-delivered paper 
filings for the Commission's Secretary at 236 Massachusetts Avenue NE., 
Suite 110, Washington, DC 20002. The filing hours at this location are 
8 a.m. to 7 p.m. All hand deliveries must be held together with rubber 
bands or fasteners. Commercial overnight mail (other than U.S. Postal 
Service Express Mail or Priority Mail) must be sent to 9300 East 
Hampton Drive, Capitol Heights, MD 20743.
    51. The Bureaus also require that all comments and reply comments 
be filed electronically to the following address: <a href="/cdn-cgi/l/email-protection#9effebfdeaf7f1f0a8aadef8fdfdb0f9f1e8"><span class="__cf_email__" data-cfemail="4a2b3f293e2325247c7e0a2c2929642d253c">[email protected]</span></a>. 
The electronic mail containing the comments or reply comments must 
include a subject or caption referring to Auction No. 64 Comments and 
the name of the commenting party. The Bureaus request that parties 
format any attachments to electronic mail as Adobe[supreg] 
Acrobat[supreg] (pdf) or Microsoft[supreg] Word documents. Copies of 
comments and reply comments will be available for public inspection 
between 8 a.m. and 4:30 p.m. Monday through Thursday or 8 a.m. to 11:30 
a.m. on Friday in the FCC Reference Information Center, Room CY-A257, 
445 12th Street, SW., Washington, DC 20554, and will also be posted on 
the Web page for Auction No. 64 at http://wireless.fcc.gov/auctions/64.
    52. This proceeding has been designated as a permit-but-disclose 
proceeding in accordance with the Commission's ex parte rules. Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentations must contain summaries of the substance 
of the presentations and not merely a listing of

[[Page 58706]]

the subjects discussed. More than a one or two sentence description of 
the views and arguments presented is generally required. Other rules 
pertaining to oral and written ex parte presentations in permit-but-
disclose proceedings are set forth in 47 CFR 1.1206(b).

Federal Communications Commission.
William W. Huber,
Associate Chief, Auctions Spectrum and Access Division, WTB.
[FR Doc. 05-20355 Filed 10-6-05; 8:45 am]
BILLING CODE 6712-01-P


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