[Federal Register Volume 86, Number 118 (Wednesday, June 23, 2021)]
[Rules and Regulations]
[Pages 32775-32804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12617]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 27

[AU Docket No. 21-62; DA 21-655; FR ID 32766]


Auction of Flexible-Use Service Licenses in the 3.45-3.55 GHz 
Band for Next-Generation Wireless Services; Notice and Filing 
Requirements, Minimum Opening Bids, Upfront Payments, and Other 
Procedures for Auction 110; Bidding in Auction 110 Scheduled To Begin 
October 5, 2021

AGENCY: Federal Communications Commission.

ACTION: Final action; requirements and procedures.

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SUMMARY: This document establishes the procedures to be used for 
Auction 110, the Auction of new flexible-use licenses in the 3.45-3.55 
GHz band (the 3.45 GHz Service).

DATES: Applications to participate in Auction 110 must be submitted 
before 6 p.m. Eastern Time (ET) on July 21, 2021. Upfront payments for 
Auction 110 must be received by 6 p.m. ET on September 9, 2021. Bidding 
in Auction 110 is scheduled to start on October 5, 2021.

FOR FURTHER INFORMATION CONTACT: 
    General Auction 110 Information: FCC Auctions Hotline at 888-225-
5322, option two; or 717-338-2868.
    Auction 110 Legal Information: Mary Lovejoy or Andrew McArdell at 
202-418-0660.
    3.45 GHz Service Information: Joyce Jones at 202-418-1327.
    3.45 GHz Service Technical Information: Ira Keltz, (202) 418-0616.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 110 
Procedures Public Notice, released on June 9, 2021. The complete text 
of the Auction 110 Procedures Public Notice, including attachments and 
any related document, are available on the Commission's website at 
www.fcc.gov/auction/110 or by using the search function for AU Docket 
No. 21-62, DA 21-655, 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#3b7d78780e0b0f7b5d5858155c544d"><span class="__cf_email__" data-cfemail="a0e6e3e3959094e0c6c3c38ec7cfd6">[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 110 Procedures Public Notice, the Office of 
Economics and Analytics (OEA), jointly with the Wireless 
Telecommunications Bureau (WTB), establishes the procedures to be used 
for Auction 110, the auction of new flexible-use licenses in the 3.45-
3.55 GHz band (the 3.45 GHz Service). Auction 110 is the Commission's 
third scheduled auction of mid-band spectrum, which is intended to 
further the deployment of fifth-generation (5G) wireless, the Internet 
of Things (IoT), and other advanced spectrum-based services across the 
country. The Auction 110 Procedures Public Notice continues to 
implement section 905 of the Consolidated Appropriations Act, 2021, 
which required the Commission to start an auction to grant new initial 
licenses subject to flexible use in the 3450-3550 MHz (3.45 GHz) band 
by December 31, 2021.
    2. The bidding for new licenses in Auction 110 is scheduled to 
commence on October 5, 2021. The Auction 110 Procedures Public Notice 
provides details regarding the procedures, terms, conditions, dates, 
and deadlines governing participation in Auction 110 bidding, as well 
as an overview of the post-auction application and payment processes.

B. Background and Relevant Authority

    3. In the 3.45 GHz Second Report and Order, 86 FR 17920, April 7, 
2021, the Commission made available 100 megahertz of spectrum in the 
3.45-3.55 GHz band for licensed use within the contiguous United 
States. In that Order, the Commission allocated the 3.45-3.55 GHz band 
for new non-federal fixed and mobile (except aeronautical mobile) 
operations in the contiguous United States. Among other things, the 
Commission authorized both fixed and mobile operations in the 3.45-3.55 
GHz band using geographic area licensing, established licensing and 
operating rules for the new 3.45 GHz Service, and decided to use its 
competitive bidding rules to assign 3.45 GHz Service licenses.
    4. On March 18, 2021, in accordance with section 309(j)(3) of the 
Communications Act of 1934, as amended (Communications Act), the 
Commission released a public notice seeking comment on certain 
competitive bidding procedures and various other procedures to be used 
in Auction 110. The Commission received comments from eight parties in 
response to the Auction 110 Comment Public Notice, 86 FR 18000, April 
07, 2021, and eight reply comments. In the Auction 110 Procedures 
Public Notice, OEA and WTB resolve all open issues raised in the 
Auction 110 Comment Public Notice and address the comments received.
    5. Other Commission rules and decisions provide the underlying 
authority for the procedures OEA and WTB adopt today for Auction 110. 
Among other things, prospective applicants should familiarize 
themselves with the Commission's general competitive bidding rules, 
including recent 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 3.45 GHz Service, 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 110 
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 this auction. It is the 
responsibility of all applicants to remain current with all Commission 
rules and with all public notices pertaining to Auction 110.

C. Description of Licenses To Be Offered in Auction 110

    7. Auction 110 will offer 4,060 new flexible-use licenses for 
spectrum in the 3.45-3.55 GHz band throughout the contiguous United 
States. The 100 megahertz of spectrum in this band will be licensed on 
an unpaired basis and divided into ten 10-megahertz blocks in

[[Page 32776]]

partial economic area (PEA)-based geographic areas located in the 
contiguous 48 states and the District of Columbia (PEAs 1-41, 43-211, 
213-263, 265-297, 299-359, and 361-411). These 10-megahertz blocks are 
designated as A through J.
    8. All 3.45 GHz Service licenses will be issued for 15-year, 
renewable license terms, and certain licenses are subject to 
cooperative sharing requirements, as described in the 3.45 GHz Second 
Report and Order and below, as well as any other conditions that may be 
established in related proceedings. Interested parties will be able to 
find additional information about the cooperative sharing requirements, 
including information about the encumbrances in specific PEAs, on the 
National Telecommunications and Information Administration's (NTIA) 
3450-3550 MHz web page at https://www.ntia.doc.gov/category/3450-3550-mhz. Interested parties can also find additional guidance and 
information on federal/non-federal coordination procedures in the 
public notice issued jointly by NTIA and the Commission. OEA and WTB 
understand that the Department of Defense (DoD) will hold one or more 
workshops to provide further information on transition and coordination 
plans, as well as guidance on anticipated received power levels from 
the DoD's high-powered operations, methods and means for sharing 
proprietary and classified information (e.g., through ``Trusted 
Agents''), and descriptions of potential national emergency scenarios.
    9. Licensees may hold up to four 10-megahertz blocks (out of a 
total of ten) in the 3.45-3.55 GHz band within any PEA at any given 
time for the first four years after the close of the auction. A 
licensee in the 3.45-3.55 GHz band may provide any services permitted 
under terrestrial fixed or mobile, except aeronautical mobile, 
allocations (as set forth in the non-Federal Government column of the 
Table of Frequency Allocations in section 2.106 of the Commission's 
rules, as modified by the 3.45 GHz Second Report and Order), so long as 
it complies with the relevant licensing, operating, and technical 
rules.

D. Auction Specifics

1. Auction Title and Start Date
    10. The auction of licenses in the 3.45-3.55 GHz band will be 
referred to as ``Auction 110.'' Bidding in Auction 110 will begin on 
Tuesday, October 5, 2021. Pre-bidding dates and deadlines are listed 
below. The initial schedule for bidding rounds in Auction 110 will be 
announced by public notice at least one week before bidding begins.
    11. 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
    12. The following dates and deadlines apply to Auction 110:

Auction Application Tutorial Available (via internet): No later than 
June 22, 2021
Short-Form Application (FCC Form 175)
Filing Window Opens July 8, 2021, 12 p.m. Eastern Time (ET)
Short-Form Application: (FCC Form 175)
Filing Window Deadline: July 21, 2021, 6 p.m. ET
Upfront Payments (via wire transfer): September 2, 2021, 6 p.m. ET
Bidding Tutorial Available (via internet): No later than September 16, 
2021
Mock Auction: September 30, 2021
Bidding Begins in Auction 110: October 5, 2021
3. Requirements for Participation
    13. Those wishing to participate in Auction 110 must:
    <bullet> Submit a short-form application (FCC Form 175) 
electronically prior to 6 p.m. ET on July 21, 2021, following the 
electronic filing procedures set forth in the FCC Form 175 
Instructions. OEA will prepare and make publicly available detailed 
instructions for submitting an FCC Form 175 for Auction 110 (FCC Form 
175 Instructions) in the Education section of the Auction 110 website 
at www.fcc.gov/auction/110.
    <bullet> Submit a sufficient upfront payment and an FCC Remittance 
Advice Form (FCC Form 159) by 6 p.m. ET on September 2, 2021, following 
the procedures and instructions set forth in the FCC Form 159 
Instructions.
    <bullet> Comply with all provisions outlined in the Auction 110 
Procedures Public Notice and applicable Commission rules.

II. Applying To Participate in Auction 110

A. General Information Regarding Short-Form Applications

    14. An application to participate in Auction 110, 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 financial qualifications to participate in a Commission 
auction for spectrum licenses. 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 110 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 110 is based on an applicant's short-form application and 
certifications and on the applicant's submission of a sufficient 
upfront payment for the auction. After bidding closes, in the second 
phase of the process, each winning bidder must file a more 
comprehensive post-auction, long-form application (FCC Form 601) for 
the licenses it wins in the auction, and it must have a complete and 
accurate ownership disclosure information report (FCC Form 602) on file 
with the Commission. OEA and WTB remind applicants that being deemed 
qualified to bid in Auction 110 does not constitute a determination 
that a party is qualified to hold a Commission license or is eligible 
for a designated entity bidding credit.
    15. A party seeking to participate in Auction 110 must file an FCC 
Form 175 electronically via the Auction Application System prior to 6 
p.m. ET on July 21, 2021, 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 as of 
the filing date will be used to determine whether the applicant may 
request the claimed bidding credit. Below OEA and WTB describe more 
fully the information disclosures and certifications required in the 
short-form application. An applicant that files an FCC Form 175 for 
Auction 110 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 July 21, 2021. The prohibition will end for applicants on the post-
auction down payment deadline for Auction 110.
    16. An applicant bears full responsibility for submitting an 
accurate, complete, and timely short-form application. Pursuant to the 
Commission's competitive bidding rules, each 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 it must confirm that it is legally, 
technically, financially, and otherwise qualified to hold a license. 
Additionally, each participant in Auction 110 must certify that it has 
read the Auction 110 Procedures Public Notice and has familiarized 
itself both with the auction

[[Page 32777]]

procedures and with the requirements for obtaining a license and 
operating facilities in the 3.45-3.55 GHz band). If an Auction 110 
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.
    17. 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.
    18. 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.
    19. 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.
    20. 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.
    21. 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 110 by 
multiple entities controlled by the same individual or set of 
individuals generally will not be permitted. This restriction applies 
across all applications, without regard to the geographic areas 
selected. The Commission adopted a limited exception to the general 
prohibition on the filing of multiple applications by commonly 
controlled entities for qualified rural wireless partnerships and 
individual members of such partnerships. 47 CFR 1.2105(a)(3). Under 
this limited exception, each qualifying rural wireless partnership and 
its individual members will be permitted to participate separately in 
an auction. 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.
    22. After the initial short-form application filing deadline, 
Commission staff will review all timely submitted applications for 
Auction 110 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.
    23. The Auction 110 Procedures Public Notice outlines 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 110 
Procedures Public Notice does not address a potential 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 110 (see the Education section of the Auction 110 website at 
www.fcc.gov/auction/110) and/or use the contact information provided in 
the Auction 110 Procedures Public Notice to consult with Commission 
staff to better understand the information it must submit in its short-
form application.

B. License Area Selection

    24. An applicant must select all of the license areas on which it 
may want to bid from the list of available PEAs on its FCC Form 175. An 
applicant must carefully review and verify its PEA selections before 
the 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 any or all of the license areas selected, 
but the FCC Auction Bidding System (bidding system) will not accept 
bids for blocks located in PEAs that the applicant did not select in 
its FCC Form 175. The auction application system, however, will provide 
an applicant the option to select all 406 available PEAs at one time 
using an ``all PEAs'' feature.

C. Disclosure of Agreements and Bidding Arrangements

    25. 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 
controls) is a party. As discussed below, an applicant may continue 
negotiating, discussing, or communicating with respect to a new 
agreement after the FCC Form 175 filing deadline, provided that the 
communications involved do not relate both to the licenses being 
auctioned and to bids or bidding strategies or post-auction market 
structure. If, after the FCC Form 175

[[Page 32778]]

filing deadline, an auction applicant enters into any agreement 
relating to the licenses being auctioned, then it is subject to these 
same disclosure obligations. Each applicant must maintain the accuracy 
and completeness of the information in its pending auction application.
    26. 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.
    27. 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 at 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.
    28. 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, the Commission considers AT&T, T-Mobile, and Verizon to be 
``nationwide providers'' for the purpose of implementing the 
competitive bidding rules in Auction 110.
    29. 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 (DE) 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. While two or more non-
nationwide providers may participate in an auction through a joint 
venture, a nationwide and a non-nationwide provider may not do so. 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 section 1.2105(a)(2)(ix)(A)-(C) of 
the Commission's rules.
    30. 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.
    31. 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.
    32. Applicants should bear in mind that a winning bidder will be 
required to disclose in its FCC Form 601 post-auction 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.

D. Ownership Disclosure Requirements

    33. Each applicant must comply with the applicable part 1 ownership 
disclosure requirements and provide information required by sections 
1.2105 and 1.2112, and, where applicable, section 1.2110, of the 
Commission's rules. Specifically, in completing FCC Form 175, an 
applicant must fully 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 sections 1.2105 
and 1.2112 and, where applicable, section 1.2110 of the Commission's 
rules. Each applicant is responsible for ensuring that information 
submitted in its short-form application is complete and accurate.
    34. 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. The most current ownership information 
contained in any FCC Form 602 or previous auction application on file 
with the Commission that used the same FCC Registration Number (FRN) 
the applicant is using to submit its FCC Form 175 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. Applicants are encouraged to submit an FCC Form 602 ownership 
report or update any ownership information on file with the Commission 
in an FCC Form 602 ownership report prior to starting a short-form 
application for Auction 110 to ensure that their most recent ownership 
information is pre-filled into their short-form application. 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.

E. Foreign Ownership Disclosure Requirements

    35. Section 310 of the Communications Act requires the

[[Page 32779]]

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 
section 310(b), then it may seek to participate in Auction 110 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 section 310 or has filed a petition 
for declaratory ruling requesting Commission approval to exceed the 
applicable foreign ownership limit or benchmark in section 310(b) that 
is pending before, or has been granted by, the Commission. Additional 
information concerning foreign ownership disclosure requirements is 
provided in the FCC Form 175 Instructions.

F. Information Procedures During the Auction Process

    36. Consistent with past practice in many prior spectrum license 
auctions, OEA and WTB adopt the Commission's proposal to limit 
information available in Auction 110 in order to prevent the 
identification of bidders placing particular bids until after the 
bidding has closed. More specifically, OEA will not make public until 
after bidding has closed: (1) The PEAs 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 110, (3) any 
applicant's bidding eligibility, and (4) any other bidding-related 
information that might reveal the identity of the bidder placing a bid.
    37. The limited information procedures used in past auctions have 
helped safeguard against potential anticompetitive behavior such as 
retaliatory bidding and collusion. No commenters objected to this 
proposal, and OEA and WTB find nothing in the record to suggest 
departure from the Commission's now-established practice of 
implementing these procedures in wireless spectrum auctions. OEA and 
WTB find that the competitive benefits associated with limiting 
information disclosure support adoption of such procedures and outweigh 
the potential benefits of full disclosure.
    38. Once the bidding begins in Auction 110, 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 licenses in each geographic area, the supply, the 
aggregate demand, the price at the end of the last completed round, and 
the price for the next round. The identities of bidders placing 
specific bids and the net bid amounts (reflecting bidding credits) will 
not be disclosed until after the close of bidding.
    39. Throughout the auction, bidders will have access to additional 
information related to their own bidding and bidding eligibility 
through the Commission's bidding system. For example, bidders will be 
able to view their own level of eligibility, both before and during the 
auction.
    40. After the close of bidding, bidders' PEA selections, upfront 
payment amounts, bidding eligibility, bids, and other bidding-related 
actions will be made publicly available.
    41. OEA and WTB warn 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), OEA and WTB strongly urge that the applicant consult with the 
Commission staff in the Auctions Division before making such 
disclosure.

G. Prohibited Communications and Compliance With Antitrust Laws

    42. The rules prohibiting certain communications set forth in 
section 1.2105(c) apply to each applicant that files a short-form 
application (FCC Form 175) in Auction 110. Section 1.2105(c)(1) of the 
Commission's rules provides that, subject to specified exceptions, 
``[a]fter 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)
    43. 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 section 1.2105(c), a party that submits an application becomes an 
``applicant'' under the rule at the application deadline, and that 
status does not change based on later developments. Thus, an auction 
applicant that does not correct deficiencies in its application, fails 
to submit a timely and sufficient upfront payment, or does not 
otherwise become qualified, remains an ``applicant'' for purposes of 
the rule and remains subject to the prohibition on certain 
communications until the Auction 110 down payment deadline.
    44. As the Commission proposed in the Auction 110 Comment Public 
Notice, OEA and WTB consider AT&T, T-Mobile, and Verizon to be 
``nationwide providers'' for the purposes of the prohibited 
communications rule for Auction 110.
2. Prohibition Applies Until Down Payment Deadline
    45. The prohibition in section 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.
3. Scope of Prohibition on Certain Communications; Prohibition on Joint 
Bidding Agreements
    46. Section 1.2105(c) of the Commission's rules 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

[[Page 32780]]

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.
    47. 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. OEA and WTB remind applicants that they must 
determine whether their communications with other parties are 
permissible under the rule once the prohibition begins at the deadline 
for submitting applications, even before the public notice identifying 
applicants is released.
    48. Parties subject to section 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.
    49. 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, section 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, Oct. 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.
    50. Accordingly, business discussions and negotiations that are 
unrelated to bidding in Auction 110 and 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 110 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.
    51. While section 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.
    52. OEA and WTB caution 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.
    53. Likewise, when completing a short-form application, each 
applicant should avoid any statements or disclosures that may violate 
section 1.2105(c), particularly in light of the limited information 
procedures in effect for Auction 110. Specifically, an applicant should 
avoid including any information in its short-form application that 
might convey information regarding its PEA selections, such as 
referring to certain markets in describing agreements, including any 
information in application attachments that will be publicly available 
that may otherwise disclose the applicant's PEA selections, or using 
applicant names that refer to licenses being offered.
    54. Applicants also should be mindful that communicating non-public 
application or bidding information publicly or privately to another 
applicant may violate section 1.2105(c) even though that information 
subsequently may be made public during later periods of the application 
or bidding processes.
4. Communicating With Third Parties
    55. 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. The applicant should 
take appropriate steps, however, to ensure

[[Page 32781]]

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.
    56. 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. OEA 
and WTB will take the same approach to interpreting the prohibited 
communications rule in Auction 110. OEA and WTB emphasize 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.
    57. OEA and WTB remind 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 PEAs selected on the short-form 
application, is conveyed to that individual.
    58. 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 section 1.2105 violation. Similarly, 
an applicant's public statement of intent not to place bids during 
bidding in Auction 110 could also violate the rule.
5. Section 1.2105(c) Certifications
    59. By electronically submitting its FCC Form 175 auction 
application, each applicant for Auction 110 certifies its compliance 
with section 1.2105(c) of the rules. 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
    60. Section 1.2105(c)(4) requires that any applicant that makes or 
receives a communication that appears to violate section 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
    61. A party reporting any information or communication pursuant to 
sections 1.65, 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 section 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.
    62. Parties 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 
process differs from filing procedures used in connection with other 
Commission rules and processes, which may call for submission of 
filings to the Commission's Office of the Secretary or ECFS. Filing 
through the Office of Secretary or ECFS could allow the report to 
become publicly available and might result in the communication of 
prohibited information to other auction applicants. This rule is 
designed to minimize the risk of inadvertent dissemination of 
information in such reports. Any reports required by section 1.2105(c) 
must be filed consistent with the instructions set forth in the Auction 
110 Procedures Public Notice. For Auction 110, 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#6a0b1f091e0305045b5b5a2a0c0909440d051c"><span class="__cf_email__" data-cfemail="a8c9ddcbdcc1c7c6999998e8cecbcb86cfc7de">[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#1170647265787e7f202021517772723f767e67"><span class="__cf_email__" data-cfemail="d7b6a2b4a3beb8b9e6e6e797b1b4b4f9b0b8a1">[email protected]</span></a> or (202) 
418-0660 for guidance.
    63. 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 section 0.459 of the Commission's rules. OEA and WTB encourage such 
parties to coordinate with the Auctions Division staff about the 
procedures for submitting such reports.
8. Winning Bidders Must Disclose Terms of Agreements
    64. 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
    65. A summary listing of documents issued by the Commission, OEA, 
and WTB addressing the application of section 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.

[[Page 32782]]

10. Antitrust Laws
    66. Regardless of compliance with the Commission's rules, 
applicants remain subject to the antitrust laws, which are designed to 
prevent anticompetitive behavior in the marketplace. Compliance with 
the disclosure requirements of section 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.
    67. To the extent that Commission staff become 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 110 and in future auctions, among 
other sanctions.

H. Provisions for Small Businesses and Rural Service Providers

    68. A bidding credit represents an amount by which a bidder's 
overall payment across all the licenses won will be discounted, subject 
to the caps discussed below. As set forth in section 1.2110 of the 
Commission's rules, and as described below, these rule revisions 
include, but are not limited to: (1) Adopting a two-pronged standard 
for evaluating eligibility for small business benefits, (2) 
establishing a new attribution rule for certain disclosable interest 
holders of applicants claiming designated entity benefits, (3) updating 
the gross revenue amounts defining eligibility for small business 
benefits, (4) creating a separate bidding credit for eligible rural 
service providers, and (5) establishing caps on the total amount of 
designated entity benefits any eligible winning bidder may receive.
    69. In Auction 110, 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.
    70. 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. 
This may, in some circumstances, include changes in officers or 
directors. 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. OEA 
and WTB also believe that this will meet the Commission's objectives in 
awarding licenses through the competitive bidding process.
1. Small Business Bidding Credit
    71. For Auction 110, 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 3.45 GHz Service 
licenses to be offered in Auction 110, 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.
    72. In adopting this two-tiered approach in the 3.45 GHz Second 
Report and Order, the Commission observed that this approach would 
provide consistency and predictability for small businesses.
    73. 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.
    74. 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 110. 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 110, 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 110. 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
    75. 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

[[Page 32783]]

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 application deadline. An applicant may 
count any subscriber as a single subscriber even if that subscriber 
receives more than one service.
    76. 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 110. 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 110, 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
    77. Eligible applicants claiming either a small business or rural 
service provider bidding credit will be subject to specified caps on 
the total amount of bidding credit discounts that they may receive. OEA 
and WTB adopt the bidding credit caps for Auction 110 at the amounts 
proposed by the Commission in the Auction 110 Comment Public Notice. 
Specifically, OEA and WTB adopt a $25 million cap on the total amount 
of bidding credit discounts that may be awarded to an eligible small 
business, and a $10 million cap on the total amount of bidding credit 
discounts 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 PEAs 
with populations of 500,000 or less.
4. Attributable Interests
a. Controlling Interests and Affiliates
    78. Pursuant to section 1.2110 of the Commission's rules, 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.
    79. 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 
section 1.2110(c)(2) of the Commission's rules and the FCC Form 175 
Instructions to understand how certain interests are calculated in 
determining control for purposes of attributing gross revenues.
    80. 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 sections 1.2110(c)(2) and (c)(5) 
respectively, as well as the FCC Form 175 Instructions.
    81. 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 in the Auction 110 Procedures 
Public Notice; 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 section 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.
    82. 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 section 310(d) of the Communications Act 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
    83. Under section 1.2110(c)(2)(ii)(J) of the Commission's rules, 
the gross revenues (or the subscribers, in the case of a rural service 
provider) of an applicant's disclosable interest holder

[[Page 32784]]

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 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 110 will be subject to this attribution rule 
and must make the requisite disclosures.
    84. 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 use agreement is 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 110.
c. Exceptions From Attribution Rules for Small Businesses and Rural 
Service Providers
    85. 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.
    86. 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 section 1.2110(b)(4)(iii) of the Commission's rules 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 section 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.
    87. 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.
    88. 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.

I. Provisions Regarding Former and Current Defaulters

    89. 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 110, 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 it is 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 section 
1.2105(a)(4)(i) of the Commission rules.
    90. 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 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 section 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 default or delinquency was the 
subject of a legal or arbitration proceeding and

[[Page 32785]]

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.
    91. In addition to the Auction 110 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.
    92. 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 sections 1.2105 and 
1.2106, with regard to current and former defaults or delinquencies.
    93. OEA and WTB remind 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 section 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 110 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. OEA and WTB 
encourage 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.

J. Optional Applicant Status Identification

    94. Applicants owned by members of minority groups and/or women, as 
defined in section 1.2110(c)(3), and rural telephone companies, as 
defined in section 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.

K. Modifications to FCC Form 175

1. Only Minor Modifications Allowed
    95. After the initial FCC Form 175 filing deadline, an Auction 110 
applicant will be permitted to make only minor changes 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 
modification to an FCC Form 175 (e.g., change of PEA 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 section 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
    96. Pursuant to section 1.65 of the Commission's rules, 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 110. 
Consistent with the requirements for spectrum auctions, an applicant 
for Auction 110 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 an FCC Form 175
    97. As noted above, a party seeking to participate in Auction 110 
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.
    98. 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 sections 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).
    99. 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 32786]]

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, etc.) 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 
sections 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#82e3f7e1f6ebedecb3b3b2c2e4e1e1ace5edf4"><span class="__cf_email__" data-cfemail="74150117001d1b1a454544341217175a131b02">[email protected]</span></a>. The email summarizing the changes must include a 
subject line referring to Auction 110 and the name of the applicant, 
for example, ``Re: Changes to Auction 110 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.
    100. 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, name, or certifying official). 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#2140544255484e4f101011614742420f464e57"><span class="__cf_email__" data-cfemail="3a5b4f594e5355540b0b0a7a5c5959145d554c">[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).
    101. 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.
    102. 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 section 1.2105(c) or the limited information procedures adopted 
for Auction 110. An applicant seeking to submit, outside of the Auction 
Application System, information that might reflect non-public 
information, such as an applicant's PEA 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 section 1.2105(c).
    103. Questions about FCC Form 175 amendments should be directed to 
the Auctions Division at (202) 418-0660.

III. Preparing for Bidding in Auction 110

A. Due Diligence

    104. OEA and WTB remind 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 110 and that it is required to 
certify, under penalty of perjury, that it has read the Auction 110 
Procedures Public Notice and has familiarized itself with the auction 
procedures and the service rules for the 3.45-3.55 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.
    105. An applicant should perform its due diligence research and 
analysis before proceeding, as it would with any new business venture. 
In particular, OEA and WTB encourage 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 110 
license, it will be able to build and operate facilities that will 
fully comply with all applicable technical and legal requirements. OEA 
and WTB urge 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 other environmental statutes.
    106. OEA and WTB also encourage each applicant in Auction 110 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. Lockheed Martin Corporation has filed a request for 
waiver of certain Commission rules that is currently pending before the 
Commission. Additionally, three Petitions for Reconsideration of the 
3.45 GHz Second Report and Order are currently pending before the 
Commission. If the Commission acts on any of these pending matters 
prior to the auction, we will provide updated information for potential 
bidders as necessary. 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 110 Procedures Public Notice do 
not constitute an exhaustive list of steps that should be undertaken 
prior to participating in Auction 110. 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 framework 
adopted in the 3.45 GHz Second Report and Order that requires new 
flexible-use licensees to reimburse secondary, non-federal 
radiolocation operators for the relocation costs associated with their 
transitions into the 2.9-3.0 GHz band and cooperative

[[Page 32787]]

sharing requirements for certain licenses.
    107. Applicants in Auction 110 should carefully consider the impact 
of the aggregation limit in the 3.45 GHz Service, discussed further in 
Section III.B.4, below. In particular, applicants should consider 
whether any of their own attributable interest holders have permissible 
overlapping interests in another applicant that could further limit the 
number of licenses that each applicant may hold in a given PEA. For 
example, a single individual or entity may be permitted to hold a non-
controlling interest of 10% or more in multiple applicants, but the 
combined holdings of those applicants in any PEA may not exceed the 
four-license aggregation limit.
    108. 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 110. 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.
    109. 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. Transition of Incumbent Operations
    110. Potential applicants in Auction 110 should consider carefully 
the process for transitioning incumbent Federal and non-Federal 
radiolocation and amateur operations out of the 3.45-3.55 GHz band and 
to the cooperative sharing requirements within the band when developing 
business plans, assessing market conditions, and evaluating the 
availability of equipment for 3.45 GHz Service operations. Each 
applicant should follow closely releases from the Commission concerning 
these issues and consider carefully the technical and economic 
implications for commercial use of the 3.45-3.55 GHz band.
a. Cooperative Sharing in the 3.45-3.55 GHz Band
    111. The 3.45-3.55 GHz band will operate using a cooperative 
sharing framework under which existing federal users are prohibited 
from causing harmful interference to non-federal operations, except in 
limited circumstances and in locations where current incumbent federal 
systems will remain indefinitely in the band. Under the following 
circumstances, non-federal systems are not entitled to protection 
against harmful interference from federal operations (and limited 
restrictions may be placed on non-federal operations); (1) in 
``Cooperative Planning Areas'' identified by the DoD in which it 
anticipates that federal operations will continue after the assignment 
of flexible use licenses in the band; and (2) in ``Periodic Use Areas'' 
that overlap with certain Cooperative Planning Areas, in which the DoD 
will need episodic access to all or a portion of the band in specific, 
limited geographic areas. Cooperative Planning Areas and Periodic Use 
Areas are coordination areas, rather than exclusion areas, meaning that 
commercial operations within their boundaries are not precluded. Under 
this framework, incumbent federal operations and new flexible use 
operations must coordinate with each other to facilitate shared use of 
the band in these specified areas and during specified time periods as 
described in the 3.45 GHz Second Report and Order.
b. AIA's Petition for Reconsideration and Lockheed Martin Corporation's 
Waiver Request
    112. We note that one of the pending petitions for reconsideration, 
filed by the Aerospace Industries Association, seeks adoption of a 
coordination framework for certain existing federal contractor 
facilities and that Lockheed Martin Corporation has filed a request for 
waiver of certain Commission rules across the lower 75 megahertz of the 
3.45-3.55 GHz Band related to its Experimental Radio Service licenses 
and operations between midnight and 8:00 a.m. ET. Potential bidders 
should be aware that if relief substantially similar to that sought by 
Lockheed were granted, it would affect coordination requirements and 
spectrum use in blocks A through H in PEAs 41, 44, and 227 for the 
duration of time of any such grant.
c. Relocation of Secondary Non-Federal Radiolocation Operations
    113. In addition to the federal users operating in the 3.45-3.55 
GHz band, the 3.3-3.55 GHz band is currently used by secondary non-
federal radiolocation licensees that will be relocated to the 2.9-3.0 
GHz band no later than 180 days after the flexible-use licenses won in 
Auction 110 are granted. In order to facilitate the expeditious 
clearing of the 3.3-3.55 GHz band, in the 3.45 GHz Second Report and 
Order, the Commission adopted a requirement that licensees in the new 
3.45 GHz Service reimburse the current 3.3-3.55 licensees for their 
reasonable costs related to the relocation of their operations to the 
2.9-3.0 GHz band. Auction 110 winning bidders will be required to pay 
these reimbursement costs in addition to their winning bid amounts. For 
additional information about cost-sharing and reimbursement procedures 
related to the licenses offered in Auction 110, potential bidders 
should review carefully the 3.45 GHz Second Report and Order.
d. Commercial Spectrum Enhancement Act/Spectrum Act Requirements and 
Aggregate Reserve Price
    114. The spectrum in the 3.45-3.55 GHz band is covered by a 
Congressional mandate that requires auction proceeds to be used to fund 
the estimated relocation or sharing costs of incumbent federal 
entities. In 2004, the Commercial Spectrum Enhancement Act (CSEA) 
established a Spectrum Relocation Fund (SRF) to reimburse eligible 
federal agencies operating on certain frequencies that have been 
reallocated from federal to non-federal use for the cost of relocating 
their operations. The CSEA, as amended by the Spectrum Act, requires 
that the total cash proceeds from any auction of eligible frequencies 
must equal at least 110% of the estimated relocation or sharing costs 
provided to the Commission by NTIA, and it prohibits the Commission 
from concluding any auction of eligible frequencies that falls short of 
this amount. The Commission's rules therefore require that the 
establishment of a reserve price in order to meet the CSEA's 
requirement that Auction 110's total cash proceeds amount to at least 
110% of the NTIA's estimate of the relevant relocation or sharing 
costs.
    115. NTIA provides the Commission with an estimate of eligible 
federal entities' relocation or sharing costs and the timelines for 
such relocation or sharing pursuant to the requirements of

[[Page 32788]]

the CSEA. On January 14, 2021, NTIA provided to the Commission an 
estimate of $13,432,140,300 for the relocation or sharing costs of the 
incumbent Federal entities currently operating in the 3.45-3.55 GHz 
band. Accordingly, for Auction 110, OEA and WTB establish a single 
aggregate reserve price to ensure that total cash proceeds from the 
auction equal at least $14,775,354,330, or 110% of NTIA's estimate.
    116. OEA and WTB adopt procedures that have been used in past 
Commission auctions to determine whether the reserve price is met in 
Auction 110. Although total cash proceeds from Auction 110 will not be 
known precisely before the conclusion of the auction, these procedures 
will provide a careful, conservative estimate of whether total cash 
proceeds meet the reserve price after each bidding round in the clock 
phase.
    117. As in many services, the Commission has established for this 
auction bidding credits for small business and rural service providers. 
Winning bidders claiming such credits may pay less than the amount of 
their winning bids for any licenses won. In the CSEA/Part 1 Declaratory 
Ruling, the Commission determined that ``total cash proceeds'' for 
purposes of meeting the CSEA's requirement means winning bids net of 
any applicable bidding credit discounts at the end of bidding. Thus, 
whether the CSEA's total cash proceeds requirement has been met depends 
on whether winning bids, net of any applicable bidding credit 
discounts, equal, in aggregate, at least 110% of estimated relocation 
costs.
    118. As in prior Commission auctions, OEA will assess whether the 
reserve price is met--whether the auction will generate sufficient 
total cash proceeds--based on bids in the clock phase of the auction 
and not the assignment phase. Total cash proceeds from assignment phase 
payments are expected to be small relative to those from the clock 
phase and therefore less likely to contribute significantly to meeting 
the reserve price. Given that assignment phase payments will be 
determined using a second-price rule, an individual bidder will have 
little ability to boost net winning bids in the assignment phase in 
order to meet the reserve price. OEA and WTB do not wish to require 
bidders or Commission staff to invest the additional time in the 
assignment phase if ultimately no licenses will be assigned.
    119. Whether winning bidders in the clock phase claim any bidding 
credits that may reduce total cash proceeds to less than gross winning 
bids only can be determined with certainty at the close of the clock 
phase of bidding. However, OEA will estimate whether the reserve is met 
during the clock phase by assuming conservatively that for a category 
in a PEA with excess demand, blocks will be won by the bidders with the 
highest bidding credit percentages, to the extent that such bidders 
still demand blocks in that category in that PEA. In order to make 
bidders aware of whether the reserve is likely to be met while they are 
still bidding in the clock phase, OEA and will indicate on the Public 
Reporting System (PRS) whether estimated total cash proceeds based on 
the bids in the most recently completed round would satisfy the 
reserve. If the reserve has not yet been met, OEA will make available 
only to bidders information on the shortfall between the reserve and 
the estimated total cash proceeds, rounded up to the nearest million.
    These procedures are designed to avoid a potential situation where 
the reserve price is assumed to be met, but, when bidding credits are 
considered, final net winning bids later prove insufficient. For a 
category in a PEA without excess demand, the requirement will be 
evaluated based on a true calculation of net revenue after bid 
processing, rather than on the estimate, since information on how to 
apply bidding credits precisely will be available in that case.
    120. These procedures are designed to avoid a potential situation 
where the reserve price is assumed to be met, but, when bidding credits 
are considered, final net winning bids later prove insufficient. For a 
category in a PEA without excess demand, the requirement will be 
evaluated based on a true calculation of net revenue after bid 
processing, rather than on the estimate, since information on how to 
apply bidding credits precisely will be available in that case.
2. International Coordination
    121. Potential bidders seeking licenses for geographic areas 
adjacent to the Canadian and Mexican borders should be aware that the 
use of the 3.45 GHz Service frequencies they acquire in Auction 110 are 
subject to current and future agreements with the governments of Canada 
and Mexico.
    122. 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 3.45-3.55 GHz 
band must not cause harmful interference across the border, consistent 
with the terms of the agreements currently in force.
3. Environmental Review Requirements
    123. Licensees must comply with the Commission's rules for 
environmental review under the NEPA, the NHPA, and other environmental 
statutes. 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 section 1.1320 of 
the Commission's rules, 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. Spectrum Aggregation Limit
    124. In the 3.45 GHz Second Report and Order, the Commission 
adopted a spectrum aggregation limit for flexible-use licenses in the 
3.45 GHz Service that allows any entity to hold a maximum of 40 
megahertz (i.e., four blocks out of ten) in any PEA at any point in 
time for four years post-auction. For purposes of spectrum attribution 
to a particular entity, all controlling interests and non-controlling 
interests of 10% or more, including institutional investors and asset 
management companies, are attributable. In addition, interests of less 
than 10% are attributable if the interest confers de facto control, 
including but not limited to partnership and other ownership interests 
and any stock interest in a licensee.
    125. Consistent with this limit on the number of blocks that a 
single entity can hold in any single PEA, the bidding system will limit 
to four the number of blocks that a bidder can demand in any given PEA 
at any point in the auction.

[[Page 32789]]

Therefore, in each bidding round, a bidder will have the opportunity to 
bid for a total of up to four blocks of spectrum per PEA. This spectrum 
aggregation limit will apply across both categories in PEAs that 
contain Cat1 and Cat2 blocks. As a result, no single entity will be 
permitted to bid on, for example, two Cat1 blocks and three Cat2 blocks 
within a single PEA. An aggregation limit of four blocks furthers the 
Commission's interest in promoting greater diversity in participation 
in the 3.45 GHz Service by ensuring that, if licenses for all blocks in 
a PEA are awarded, there will be at least three winning bidders in the 
PEA.
    126. The bidding system will not, however, prevent an entity from 
bidding on more licenses than it may otherwise be permitted to hold 
under the relevant attribution rules. Applicants should therefore 
encouraged to conduct the necessary due diligence prior to the short-
form application deadline to determine whether any of its attributable 
interest holders have attributable interests in other potential auction 
participants, which may limit each applicant's ability to hold up to 
four licenses in a single PEA. Bidders are reminded, however, that 
section 1.2105(c) of the competitive bidding rules, 47 CFR 1.2105(c), 
prohibits certain communications between auction participants beginning 
at the short-form application deadline and continuing until the 
deadline for winning bidders to make down payments.

C. Bidder Education

    127. Before the opening of the short-form filing window for Auction 
110, detailed educational information will be provided in various 
formats to would-be participants on the Auction 110 web page. 
Specifically, OEA will 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 110 website at www.fcc.gov/auction/110. 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.
    128. In advance of the start of the mock auction, OEA will provide 
educational materials on the bidding procedures for Auction 110, 
beginning with the release of a user guide for the bidding system and 
bidding system file formats, followed by an online bidding procedures 
tutorial. OEA and WTB recognize the importance of these materials to 
applicants' and bidders' comprehension of the bidding procedures 
adopted herein. Accordingly, the educational materials shall be 
released as soon as reasonably possible to provide potential applicants 
and bidders with time to understand them and ask questions before 
bidding begins.
    129. OEA and WTB believe that parties interested in participating 
in Auction 110 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 110 website at www.fcc.gov/auction/110. Once posted, the tutorials will remain continuously accessible.

D. Short-Form Applications: Due Before 6 p.m. ET on July 21, 2021

    130. In order to be eligible to bid in Auction 110, 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 
July 21, 2021. Late applications will not be accepted. No application 
fee is required for short-form applications.
    131. Applications may be filed at any time beginning at noon ET on 
July 8, 2021, until the filing window closes at 6 p.m. ET on July 21, 
2021. 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 July 21, 2021.
    132. 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 at (877) 480-3201, option nine; (202) 414-1250; or (202) 414-
1255 (text telephone (TTY)); hours of service are Monday through 
Friday, from 8 a.m. to 6 p.m. ET. 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
    133. 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 of the public notice 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.
    134. After the initial application filing deadline on July 21, 
2021, applicants can make only minor modifications to their 
applications. Major modifications (e.g., change of PEA 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 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 110.

[[Page 32790]]

    135. 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#bbdaced8cfd2d4d58a8a8bfbddd8d895dcd4cd"><span class="__cf_email__" data-cfemail="ee8f9b8d9a878180dfdfdeae888d8dc0898198">[email protected]</span></a>.
2. Public Notice of Applicants' Final Application Status After Upfront 
Payment Deadline
    136. 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

    137. In order to be eligible to bid in Auction 110, 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 
September 2, 2021. 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 110 are provided below.
1. Making Upfront Payments by Wire Transfer for Auction 110
    138. Upfront payments for Auction 110 must be wired to, and will be 
deposited in, the U.S. Treasury.
    139. Wire transfer payments for Auction 110 must be received before 
6 p.m. ET on September 22, 2021. An applicant must initiate the wire 
transfer through its bank, authorizing the bank to wire funds from the 
applicants account to the proper account in the U.S. Treasury. No other 
payment method is acceptable. The Commission will not accept checks, 
credit cards, or automated clearing house (ACH) payments. 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: 827000001001.
    Originating Bank Information (OBI Field): (Skip one space between 
each information item).
    ``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: ``U110'').

    Note: The beneficiary account number (BNF Account Number) is 
specific to the upfront payments for Auction 110. Do not use a BNF 
Account Number from a previous auction.

    140. 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#dd8f8f929a8ab4afb89bbca5b8ae9dbbbebef3bab2ab"><span class="__cf_email__" data-cfemail="5604041911013f243310372e33251630353578313920">[email protected]</span></a>. On the fax cover sheet 
or in the email subject header, write ``Wire Transfer--Auction Payment 
for Auction 110''. To meet the upfront payment deadline, an applicant's 
payment must be credited to the Commission's account for Auction 110 
before the deadline.
    141. 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. Among other things, OEA and WTB 
caution each applicant to plan ahead regarding any potential delays in 
its or its financial institution's ability to complete wire transfers 
due to the COVID-19 pandemic. 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.
    142. 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 110 go to an account number 
different from the accounts used in previous FCC auctions.
    143. Failure to deliver a sufficient upfront payment as instructed 
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
    144. 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 110. 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.
    145. Therefore, appropriate cross-references between the FCC Form 
159 Remittance Advice and the short-form application (FCC Form 175) are 
described below.

[[Page 32791]]



------------------------------------------------------------------------
         Block number                     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 ``U110''.
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 ``110''
                                (indicating Auction 110).
------------------------------------------------------------------------


    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
    146. The Commission has delegated authority to OEA and WTB 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 insincere bidding and provide 
the Commission with a source of funds from which to collect payments 
owed at the close of bidding.
    147. 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. For this purpose, the term ``controlling interest'' is 
defined in 47 CFR 1.2105(a)(4)(i).
    148. An applicant must make an upfront payment sufficient to obtain 
bidding eligibility on the generic blocks on which it will bid. OEA and 
WTB adopt the Commission's proposal to set upfront payments based on 
MHz-pops, and that the amount of the upfront payment submitted by an 
applicant will determine its initial bidding eligibility, the maximum 
number of bidding units on which a bidder may place bids in any single 
round. In order to bid for a block, qualified bidders must have a 
current eligibility level that meets or exceeds the number of bidding 
units assigned to that generic block in a PEA. At a minimum, therefore, 
an applicant's total upfront payment must be enough to establish 
eligibility to bid on at least one block in one of the PEAs selected on 
its FCC Form 175 for Auction 110, 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.
    149. In the Auction 110 Comment Public Notice, the Commission 
proposed to require applicants to submit upfront payments based on 
$0.03 per MHz-pop for PEAs 1-50 and $0.01 per MHz-pop for all other 
PEAs, subject to a minimum of $500. In response to concerns raised by 
commenters that calculating upfront payments and bidding units with a 
significant structural break between the top 50 markets and markets 
just outside of the top 50 has the potential to create distortions in 
bidding behavior, OEA and WTB will forgo the discrete break in 
calculation amounts for large and small markets for upfront payment and 
bidding unit amounts.
    150. Accordingly, OEA and WTB adopt upfront payments for a generic 
block in a PEA based on $0.01 per MHz-pop for all PEAs. The results of 
these calculations will be rounded using the Commission's standard 
rounding procedures for auctions: 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. The upfront payment amount per block in each PEA is set 
forth in the ``Attachment A'' file on the Auction 110 website at 
www.fcc.gov/auction/110.
    151. OEA and WTB also adopt the Commission's proposal to assign 
each generic block in a PEA a specific number of bidding units, equal 
to one bidding unit per $100 of the upfront payment. The number of 
bidding units per block in each PEA is set forth in the ``Attachment 
A'' file that lists the upfront payment amounts. The number of bidding 
units for one block in a given PEA is fixed, since it is based on the 
MHz-pops in the block, and it does not change during the auction as 
prices change. Thus, in calculating its upfront payment amount, an 
applicant must determine the maximum number of bidding units on which 
it may wish to bid in any single round and submit an upfront payment 
amount for the auction covering that number of bidding units. In some 
cases, a qualified bidder's maximum eligibility may be less than the 
amount of its upfront payment because the qualified bidder has either 
previously been in default on a Commission construction permit or 
license or delinquent on non-tax debt owed to a Federal agency, or has 
submitted an upfront payment that exceeds the total amount of bidding 
units associated with the license areas it selected on its FCC Form 
175. In order to make this calculation, an applicant should add 
together the bidding units for the number of blocks in PEAs 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.

[[Page 32792]]



 Table 1--Upfront Payments, Bidding Eligibility, and Bidding Flexibility
                                 Example
------------------------------------------------------------------------
                                                              Upfront
                   PEA                     Bidding units      payment
------------------------------------------------------------------------
PEA058--Bloomington, IN.................           1,070        $107,000
PEA064--South Bend, IN..................             950          95,000
------------------------------------------------------------------------
If a bidder wishes to bid on one block in both of the above PEAs in a
  round, it must have selected both PEAs on its FCC Form 175 and
  purchased at least 2,020 bidding units (1,070 + 950) of bidding
  eligibility. If a bidder only wishes to bid on a block in one of these
  PEAs, but not both, purchasing 1,070 bidding units would meet the
  eligibility requirement for a block in either PEA. The bidder would be
  able to bid on a block in either PEA, but not both at the same time.
  If the bidder purchased only 950 bidding units, the bidder would have
  enough eligibility to bid for a block in PEA064 but not for one in
  PEA058.

    152. If an applicant is a former defaulter, it must calculate its 
upfront payment for the maximum amount of generic blocks in each PEA 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. If a former defaulter fails 
to submit a sufficient upfront payment to establish eligibility to bid 
on at least one generic block in a PEA, the applicant will not be 
eligible to participate in Auction 110. The applicant, however, will 
retain its status as an applicant in Auction 110 and will remain 
subject to 47 CFR 1.2105(c).

G. Auction Registration

    153. All qualified bidders for Auction 110 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.
    154. Qualified bidders that do not receive this registration 
mailing will not be able to submit bids. Therefore, any qualified 
bidder for Auction 110 that has not received this mailing by noon on 
September 8, 2021, 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.
    155. 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

    156. Bidders will be able to participate in Auction 110 over the 
internet using the FCC Auction Bidding System (bidding system). During 
the assignment phase only, bidders will have the option of placing bids 
by telephone through a dedicated auction bidder line. Please note that 
telephonic bid assistants are required to use a script when entering 
bids placed by telephone. Telephonic bidders are therefore reminded to 
allow sufficient time to bid by placing their calls well in advance of 
the close of a round. The length of a call to place a telephonic bid 
may vary; please allow a minimum of 10 minutes. The toll-free telephone 
number for the auction bidder line will be provided to qualified 
bidders prior to the start of bidding in the auction.
    157. Only qualified bidders are permitted to bid. 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. 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. Bidders are 
strongly encouraged to print a bid summary for each round after they 
have completed all their activity for that round. 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 110. 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.
    158. 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.
    159. 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

    160. All qualified bidders will be eligible to participate in a 
mock auction for the clock phase. Only those bidders that are qualified 
to participate in Auction 110 will be eligible to participate in the 
mock auction. The mock auction, which will begin on

[[Page 32793]]

September 30, 2021, will enable qualified bidders to become familiar 
with the bidding system and to practice submitting bids prior to the 
auction. OEA and WTB recommend 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 110.
    161. After the clock phase of the auction concludes, a separate 
mock auction for the assignment phase will be held for those qualified 
bidders that won generic blocks in the clock phase.

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 
110 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 OEA and WTB find no reason to 
depart from it here. 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. OEA and WTB emphasize 
that they will exercise this authority at their discretion.

K. Fraud Alert

    163. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction 110 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 
www.consumer.ftc.gov/articles/0238-investment-risks.
    <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 Fraud 
Information Center at (202) 835-0618.

IV. Bidding Procedures

    166. OEA and WTB will conduct Auction 110 using an ascending clock 
auction design with two phases. The first phase of the auction--the 
clock phase--will consist of successive clock bidding rounds in which 
bidders indicate their demands for a number of generic license blocks 
in specific categories and PEAs. In the second phase--the assignment 
phase--winning clock phase bidders will have the opportunity to bid for 
their preferred combinations of frequency-specific license assignments, 
consistent with their clock phase winnings, in a series of sealed-bid 
rounds conducted by PEA or, in some cases, PEA group.
    167. In conjunction with WTB, OEA will release shortly updated 
technical guides that provide the mathematical details of the adopted 
auction design and algorithms for the clock and assignment phases of 
Auction 110. The information in the updated technical guides, which are 
available in the Education section of the Auction 110 website 
(www.fcc.gov/auction/110), supplements the decisions in the Auction 110 
Procedures Public Notice. The Auction 110 Clock Phase Technical Guide 
details the adopted procedures for the clock phase of Auction 110. The 
Auction 110 Assignment Phase Technical Guide details the adopted 
procedures for the assignment phase.

A. Clock Phase

1. Clock Auction Design
    168. Under the bidding procedures that OEA and WTB adopt, during 
the clock phase of Auction 110, bidders will indicate their demands for 
generic license blocks in a bidding category in specific geographic 
areas--in this case, PEAs. There may be one or two bidding categories 
in a given PEA. The clock auction format will proceed in a series of 
rounds, with bidding being conducted simultaneously for all spectrum 
blocks in all PEAs available in the auction. During each bidding round, 
the bidding system will announce a per-block clock price for each 
category in each PEA. Qualified bidders will submit, for each category 
and PEA for which they wish to bid, the number of blocks they seek at 
the clock price 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.
    169. As proposed, for each product--a category in a PEA--the clock 
price for a generic license block will increase from round to round if 
bidders indicate total demand for blocks in that product that exceeds 
the number of blocks available. The bidding rounds will continue until, 
for all products, the total number of blocks that bidders demand does 
not exceed the supply of available blocks.
    170. If the aggregate reserve price to satisfy the CSEA requirement 
has been met at the time that the clock phase bidding stops, those 
bidders indicating demand for a product at the final clock phase price 
will be deemed winning bidders, and the auction will proceed to the 
assignment phase. If the reserve price has not been met at the time 
bidding stops in the clock phase, the auction will end, and no licenses 
will be assigned.
    171. Following the clock phase, if the reserve price has been met, 
the assignment phase will offer clock phase winners the opportunity to 
bid an additional amount for licenses with specific frequencies. All 
winning bidders, regardless of whether they bid in the assignment 
phase, will be

[[Page 32794]]

assigned licenses for contiguous blocks within a category in a PEA. In 
addition, if in a PEA there are one or more bidders with clock phase 
winnings in both categories, one of the bidders will be assigned 
frequency blocks that are contiguous across the two categories.
2. Generic License Blocks in Two Bidding Categories
    172. As established in the 3.45 GHz Second Report and Order, the 
3.45-3.55 GHz band will be licensed in uniform 10-megahertz sub-blocks 
in each of the 406 PEAs in the contiguous United States. In most PEAs, 
new licensees generally will have unrestricted use of all ten frequency 
blocks. In other areas, specifically in PEAs that wholly or in part 
cover Cooperative Planning Areas or Periodic Use Areas, licensees must 
coordinate with incumbent federal operations in the band, as 
established in the 3.45 GHz Second Report and Order. In some of the 
PEAs where coordination is required, all ten blocks will be subject to 
the same restrictions. In others, the restrictions may vary depending 
upon the frequency block--specifically, in some PEAs subject to 
coordination with federal incumbents, the A through D blocks may be 
subject to different restrictions than the E through J blocks. As set 
forth in the 3.45 GHz Second Report and Order, the lower 40 megahertz 
of the band--between 3450-3490 MHz corresponding to the A through D 
blocks--are affected differently than the upper 60 megahertz in certain 
PEAs in the band. In the event Lockheed is granted relief substantially 
similar to that sought in its waiver request, the A through H blocks 
will be subject to different conditions than the I and J blocks in the 
three affected PEAs. See Lockheed Waiver Request.
    173. Categories. The Commission adopts the proposal to establish 
categories for bidding such that all the blocks within a category in a 
PEA are similar in terms of any requirements or restrictions. For the 
reasons proposed by the Commission, OEA and WTB adopt bidding 
categories as follows: In the PEAs where all ten blocks are the same--
i.e., all ten generally are unrestricted or all ten are subject to the 
same restrictions--the ten generic blocks will be considered Category 
1, or ``Cat1,'' blocks. In the PEAs subject to coordination with 
federal incumbents where the restrictions differ according to the 
frequency, the four blocks A through D will be considered Category 1, 
or ``Cat1,'' while the six blocks E through J will be considered 
Category 2, or ``Cat2,'' for bidding. In PEAs with two categories, we 
designate certain blocks as Cat1 and other blocks as Cat2 simply to 
denote that for these licenses the coordination requirements in a PEA 
differ between the two categories. For all licenses, we caution 
potential bidders to investigate carefully the restrictions that may 
apply to a given PEA. In particular, we note that DoD has created a 
workbook that specifically describes the coordination requirements for 
each Cooperative Planning Area and Periodic Use Area. In 334 PEAs, 
there will be ten generic blocks of a single Cat1 product, and in 72 
PEAs, there will be two products. OEA and WTB also note that in the 
three PEAs that encompass the areas subject to Lockheed's pending 
waiver request, the eight blocks A through H would be considered Cat1 
while the two blocks I and J would be considered Cat2 for bidding 
should relief substantially similar to that sought by Lockheed be 
granted.
    174. This approach to determining bidding categories differs 
somewhat from the approach the Commission has taken in prior clock 
auctions, in that the coordination requirements on blocks in a given 
category in a given PEA may differ from the requirements on the same 
category of blocks in a different PEA. For example, the Cat1 blocks in 
one PEA may be unrestricted while the Cat1 blocks in another PEA may 
require some degree of coordination. Similarly, the restrictions on 
Cat2 blocks will likely vary from PEA to PEA. In previous auctions, 
blocks in a given bidding category generally have been subject to the 
same use requirements in all PEAs, but because the restrictions in this 
auction differ so widely from PEA to PEA, that approach is not 
feasible. Importantly, however, for Auction 110, within any given PEA, 
the blocks within a category can be considered generic, and bidding in 
the clock phase will determine a single price that will apply to each 
generic block in a category in a PEA.
    175. This approach for bidding on generic blocks in two categories 
is based on the close similarity of the blocks within each bidding 
category within a PEA. To the extent a bidder has a preference for 
licenses for specific frequencies, the bidder may bid for its preferred 
blocks in the assignment phase. However, a bidder for a generic block 
in a category will not be assured that it will be assigned, or not be 
assigned, any particular frequency block.
    176. Limit on number of blocks per bidder. In the 3.45 GHz Second 
Report and Order, the Commission adopted a spectrum aggregation limit 
for flexible-use licenses in the 3.45 GHz band of a maximum of 40 
megahertz (i.e., four blocks out of ten) in any PEA at any point in 
time for four years post-auction. Consistent with this limit on the 
number of blocks that a single entity can hold in any single PEA, the 
bidding system will limit to four the number of blocks that a bidder 
can demand in any given PEA at any point in the auction. Therefore, in 
each bidding round, a bidder will have the opportunity to bid for a 
total of up to four blocks of spectrum per PEA. This spectrum 
aggregation limit will apply across both categories in PEAs that 
contain Cat1 and Cat2 blocks. As a result, no single entity will be 
permitted to bid on, for example, two Cat1 blocks and three Cat2 blocks 
within a single PEA. More specifically, the bidding system will not 
permit bids to be submitted that, if fully applied, would result in the 
bidder demanding more than four blocks in the PEA. Further, the system 
will not fully apply submitted bids if doing so would result in the 
bidder demanding more than four blocks in the PEA. For example, a 
requested increase in one category may not be applied if a requested 
reduction in the other category cannot be applied because of 
insufficient aggregate demand.
    177. An aggregation limit of four blocks will further the 
Commission's interest in promoting greater diversity in participation 
in the 3.45 GHz band by ensuring that, if licenses for all blocks in a 
PEA are awarded, there will be at least three winning bidders in the 
PEA.
3. Bidding Rounds
    178. As proposed, Auction 110 will consist of sequential bidding 
rounds, each followed by the release of round results. OEA and WTB will 
conduct bidding simultaneously for all spectrum blocks in both bidding 
categories for all PEAs available in the auction. In the first bidding 
round of Auction 110, a bidder will indicate, for each product, the 
number of generic license blocks it demands at the minimum opening bid 
price.
    179. The initial bidding schedule will be announced in a public 
notice to be released at least one week before the start of bidding. 
OEA will retain the discretion to adjust 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. Such adjustments may include changes in the amount of time 
for bidding rounds, the amount of time between rounds, or the number of 
rounds per day, and will depend upon bidding activity and other 
factors.
    180. Auction 110 will be conducted over the internet. A bidder will 
be able

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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. The bidding system will not allow bids to be submitted unless 
the bidder selected the PEAs on its FCC Form 175, the bidder has 
sufficient bidding eligibility, and the bids, if applied, are 
consistent with the aggregation limit of 40 megahertz in a PEA.
    181. During each round of the bidding, a bidder will also be able 
to remove bids placed in the current bidding round. If a bidder 
modifies its bids for blocks in a PEA in a round, the system will take 
the last bid submission as that bidder's bid for the round. No bids may 
be withdrawn after the close of a round. Unlike an auction conducted 
using the Commission's simultaneous multiple-round auction format, 
there are no provisionally winning bids in a clock auction. As a 
result, the concept of bid withdrawals as used in simultaneous 
multiple-round auctions does not apply to a clock auction.
4. Stopping Rule
    182. OEA and WTB adopt a simultaneous stopping rule for Auction 
110, under which all blocks in all PEAs will remain available for 
bidding until the bidding stops in every PEA. Specifically, bidding 
will close for all blocks after the first round in which there is no 
excess demand in any product. Excess demand is calculated as the 
difference between the number of blocks of aggregate demand and supply. 
Under this approach, it is not possible to determine in advance how 
long Auction 110 will last.
5. Availability of Bidding Information
    183. OEA and WTB adopt the proposal to make public after each clock 
phase bidding round, for each category in each PEA: The supply, the 
aggregate demand, the posted price of the last completed round, and the 
clock price for the next round. The posted price of the previous round 
is, generally, the start-of-round price if supply exceeds demand; the 
clock price of the previous round if demand exceeds supply; or the 
price at which a reduction caused demand to equal supply. The 
identities of bidders demanding blocks in a specific category or PEA 
will not be disclosed until after Auction 110 concludes (i.e., after 
the close of bidding).
    184. OEA will also make public after each clock phase bidding round 
whether the reserve price has been met, that is, whether the estimated 
total cash proceeds based on the bids in the most recently completed 
round would satisfy the CSEA requirement. If the reserve has not yet 
been met, each bidder will be informed about the shortfall between the 
reserve and the estimated total cash proceeds, rounded up to the 
nearest million. This shortfall information will not be publicly 
available during the auction.
    185. 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 number of blocks it holds after the round (its processed demand) 
for every product and its eligibility for the next round.
    186. Limiting the availability of bidding information during the 
auction balances the Commission's interest in providing bidders with 
sufficient information about the status of their own bids and the 
general level of bidding in all areas and license categories to allow 
them to bid confidently and effectively, while restricting the 
availability of information that may facilitate identification of 
bidders placing particular bids, which could potentially lead to 
undesirable strategic bidding.
6. Activity Requirement, Contingent Bidding Limit, and Missing Bids
    187. Activity requirement. To ensure that the auction closes within 
a reasonable period of time, an activity rule requires bidders to bid 
actively throughout the auction, rather than wait until late in the 
auction before participating. For 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.
    188. OEA and WTB adopt the proposal to require that bidders 
maintain a fixed, high level of activity in each round of Auction 110 
in order to maintain bidding eligibility. Specifically, 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. 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 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, the bidder's eligibility will 
be reduced. Bidding activity will be based on the bids that are applied 
by the FCC auction bidding system. That is, if a bidder requests a 
reduction in the quantity of blocks it demands in a product, but the 
bidding system cannot apply the request because demand would fall below 
the available supply, then the bidder's activity will reflect its 
unreduced demand. Under the ascending clock auction format, the FCC 
auction bidding system will not allow a bidder to reduce the quantity 
of blocks it demands in an individual product if the reduction would 
result in aggregate demand falling below (or further below) the 
available supply of blocks in the product.
    189. OEA will retain the discretion to change the activity 
requirement percentage during the auction. The bidding system would 
announce any such change in advance of the round in which it would take 
effect, giving bidders adequate notice to adjust their bidding 
strategies.
    190. 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. This may occur, for example, if 
the bidder bids to reduce its demand in PEA X by two blocks (with 10 
bidding units each) and bids to increase its demand by one block (with 
20 bidding units) in PEA Y. If the bidder's demand can only be reduced 
by one block in PEA X (because there is only one block of excess 
demand), the increase in PEA Y cannot be applied, and absent other 
bidding activity the bidder's eligibility would be reduced. To help a 
bidder avoid potentially having its eligibility reduced as a result of 
submitted bids that could not be applied during bid processing, as 
proposed, OEA and WTB adopt procedures to allow a bidder to submit bids 
with associated bidding activity greater than its current bidding 
eligibility. For example, depending upon the bidder's overall bidding 
eligibility and the contingent bidding percentage, a bidder could 
submit an ``additional'' bid or bids that would be considered (in price 
point order with its other bids) and applied as available

[[Page 32796]]

eligibility permits during the bid processing. However, OEA and WTB 
emphasize 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, if a 
bidder submits bids with associated bidding units exceeding 100% of its 
current bidding eligibility, its processed activity cannot exceed its 
eligibility.
    191. Under these procedures, after Round 1 a bidder may submit bids 
with bidding units totaling up to a contingent bidding limit equal to 
the bidder's current bidding eligibility for the round times a 
percentage (the contingent bidding percentage) equal to or greater than 
100%. The Commission has previously referred to the contingent bidding 
limit as the activity upper limit, and similarly, to the contingent 
bidding percentage as the activity limit percentage. OEA and WTB modify 
those terms to remind bidders that bids submitted using the contingent 
bidding limit will be applied only under certain circumstances. For 
Round 1, the contingent bidding limit would be 100% of the bidder's 
initial bidding eligibility. OEA and WTB adopt an initial contingent 
bidding percentage of 120% to apply beginning in Round 2. This limit 
will be subject to change in subsequent rounds within a range of 100% 
to 140%. 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 110 Clock Phase 
Technical Guide provides examples of use of the contingent bidding 
limit, and bidders are encouraged to review them.
    192. 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.
    193. Missing bids. Under the clock auction format, bidders are 
required to indicate their demands in every round, even if their 
demands at the new round's prices are unchanged from the previous 
round. Missing bids--bids that are not reconfirmed--are treated by the 
auction bidding system as requests to reduce to a quantity of zero 
blocks for the product. If these requests are applied, or applied 
partially, then a bidder's bidding activity, and its bidding 
eligibility for the next round, may be reduced. in which they would 
take effect.
    194. For Auction 110, OEA and WTB will not provide for activity 
rule waivers to preserve a bidder's eligibility. OEA and WTB note that 
the procedures to permit a bidder to submit bids with bidding activity 
greater than its eligibility, within the precise limits set forth 
above, 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.
7. Acceptable Bids
a. Minimum Opening Bids
    195. 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 section 309(j) of the Communications Act. OEA and WTB will 
establish minimum opening bid amounts for Auction 110. The bidding 
system will not accept bids lower than the minimum opening bids for 
each product. 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.
    196. For Auction 110, the Commission proposed to calculate minimum 
opening bid amounts based on bandwidth and license area population 
using a tiered approach under which the calculation would vary by 
market population. The Commission proposed minimum opening bid amounts 
for a block in a PEA based on $0.06 per MHz-pop for PEAs 1-50 and $0.02 
per MHz-pop for all other PEAs, subject to a minimum of $1000.
    197. Based on comments in the record, however, OEA and WTB adopt 
revised, lower minimum opening bid amounts for Auction 110. 
Specifically, OEA and WTB adopt minimum opening bid amounts for a block 
in a PEA based on $0.03 per MHz-pop for PEAs 1-50, $0.006 per MHz-pop 
for PEAs 51-100, and $0.003 per MHz-pop for all other PEAs, subject to 
a minimum of $1000. These minimum opening bid amounts are set forth in 
the ``Attachment A'' file on the Auction 110 website at www.fcc.gov/auction/110.
b. Clock Price Increments
    198. OEA and WTB adopt the proposed procedures regarding clock 
price increments for Auction 110. Accordingly, after bidding in the 
first round and before each subsequent round, the bidding system will 
announce the start-of-round price (also referred to as the posted price 
of the previous round) and the clock price for the upcoming round--that 
is, the lowest price and the highest price at which bidders can specify 
the number of blocks they demand during the round. As long as aggregate 
demand for blocks in the product exceeds the supply of blocks, the 
start-of-round price will be equal to the clock price from the prior 
round. If demand equaled supply 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 demand equaled supply. If demand was less than supply in the 
previous round, then the start-of-round price for the next round will 
not increase.
    199. OEA will set the clock price for blocks in a specific product 
for a round by adding a percentage increment to the start-of-round 
price. For example, if the start-of-round price for a block of a given 
product is $10,000, and the percentage increment is 20%, then the clock 
price for the round will be $12,000. The result of the clock price 
calculation will be rounded as follows: results above $10,000 will be 
rounded up to the nearest $1,000, and results below $10,000 will be 
rounded up to the nearest $100. OEA will set the initial increment 
percentage at 10%, and may adjust the increment within a range of 5% to 
20% inclusive, as rounds continue. 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. OEA will set this cap 
on the increment initially at $50 million and may adjust the cap as 
rounds continue. The proposed 5% to 20% increment range and cap will 
allow OEA 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.
c. Intra-Round Bids
    200. As proposed, OEA and WTB will permit a bidder to make intra-
round bids by indicating a point between the

[[Page 32797]]

start-of-round price and the clock price at which its demand for blocks 
changes. In placing an intra-round bid, a bidder will indicate a 
specific price and a (different) quantity of blocks it demands if, 
after bids for the round are processed, the price for blocks should 
increase beyond that intra-round amount.
    201. An intra-round bid gives the bidder the flexibility to 
indicate that it wants to change its demand at a price lower than the 
clock price. However, intra-round bids will be optional; a bidder may 
choose to express its demands only at the clock prices. Permitting 
intra-round bids allows the auction system to use relatively large 
increments, thereby speeding the auction, without running the risk that 
a jump in the clock price will overshoot the market clearing price--the 
point at which demand for blocks equals the available supply.
8. Bids To Change Demand, Bid Types, and Bid Processing
    202. Under the ascending clock auction format the Commission 
proposed for Auction 110, and which OEA and WTB adopt, a bidder will 
indicate in each round the number of blocks in each product that it 
demands at a given price, subject to the in-band limit of four 
discussed above.
    203. A bidder that is willing to maintain the same demand for a 
product (relative to its demands from the previous round as processed 
by the bidding system) at the new clock price would bid for that 
quantity at the clock price, indicating that it is willing to pay up to 
that price, if need be, for the specified quantity. Bids to maintain 
demand will always be applied by the auction bidding system. A bidder 
that wishes to change the quantity it demands would bid at the clock 
price or at an intra-round price, depending upon the point at which its 
demands change.
    204. For example, if a bidder has processed demand for two blocks 
entering a round in which the start-of-round price is $2,000 and the 
clock price is $2,500, but it is only willing to buy one block if the 
price should increase above $2,100, the bidder can submit an intra-
round bid indicating a bid quantity of one at a price of $2,100. Or, if 
the bidder is not willing to pay more than the start-of-round price of 
$2,000 for any blocks, it can submit an intra-round bid requesting a 
quantity of zero at the start-of-round price of $2,000.
    205. To facilitate bidding for multiple blocks in a PEA, bidders 
will be permitted to make two types of bids: Simple bids and switch 
bids. A ``simple'' bid indicates a desired quantity of blocks in a 
product 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 
quantity of blocks from Cat1 to Cat2, or vice versa, within the same 
PEA at a price for the ``from'' category (either the clock price or an 
intra-round price). ``Switch'' bids are allowed only in PEAs with two 
categories.
    206. OEA and WTB will not incorporate any form of package bidding 
procedures into the clock phase of Auction 110. Package bidding would 
add complexity to the bidding process, and OEA and WTB do not see 
significant benefit from such procedures, given the clock auction and 
assignment phase format OEA and WTB adopt. A bidder may bid on multiple 
blocks in a PEA (up to the limit of four) and in multiple PEAs. As set 
forth below, the assignment phase will assign contiguous blocks to 
winners of multiple blocks in a category in a PEA and give bidders an 
opportunity to express their preferences for specific frequency blocks, 
thereby facilitating aggregations of licenses. Also as set forth below, 
if there are one or more bidders that win blocks in both categories, 
the assignment phase bidding system will assign blocks that are 
contiguous across the categories to one such bidder.
    207. OEA and WTB adopt 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 
product and a posted price for each product that will serve as the 
start-of-round price for the next round.
a. No Excess Supply Rule for Bids To Reduce Demand
    208. Under the ascending clock auction format, the FCC auction 
bidding system will not allow a bidder to reduce the quantity of blocks 
it demands in a product if the reduction would result in aggregate 
demand falling below (or further below) the available supply of blocks 
in the product. Therefore, if a bidder submits a simple bid to reduce 
the number of blocks for which it has processed demand as of the 
previous round, the 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 for a quantity of blocks from Cat1 to Cat2 within the 
same PEA, 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 Cat1 in the PEA.
b. Eligibility Rule and Aggregation Limit for Bids To Increase Demand
    209. The bidding system will not allow a bidder to increase the 
quantity of blocks it demands in a product if the total number of 
bidding units associated with the bidder's demand exceeds the bidder's 
bidding eligibility for the round. Therefore, if a bidder submits a 
simple bid to increase the number of blocks for which it has processed 
demand as of the previous round, the bidding system will treat the bid 
as a request to increase demand that will be applied only if it would 
not cause the bidder's activity to exceed its eligibility. The 
eligibility rule for bids to increase demand does not apply to switch 
bids because the bidder's processed activity does not change when a 
switch bid is applied.
    210. In addition, in light of the in-band aggregation limit of 40 
megahertz in a PEA established by the 3.45 GHz Second Report and Order, 
the bidding system will not permit a bidder to increase the number of 
blocks it demands in a PEA if its total demand in the PEA would exceed 
four blocks.
c. Partial Application of Bids
    211. Under the bid processing procedures OEA and WTB adopt, as in 
all previous FCC spectrum auctions using the clock auction format, a 
bid (simple bid or switch bid) that involves a reduction from the 
bidder's previous demands can be applied partially--that is, reduced by 
fewer blocks than requested in the bid--if excess demand is 
insufficient to support the entire reduction. Accordingly, the bidding 
system will apply a bidder's request to reduce demand as much as 
possible consistent with the no excess supply rule. A switch bid may be 
applied partially, but the increase in demand in the ``to'' category 
will always match in quantity the reduction in the ``from'' category. A 
simple bid to increase a bidder's demand may be applied partially if 
the total number of bidding units associated with the bidder's demand 
exceeds the bidder's bidding eligibility for the round, or if fully 
applying the bid would violate the aggregation limit. Therefore, the 
bidding system will accommodate a bidder's request to increase demand 
as much as possible consistent with the aggregation limit and as long 
as the bidder's activity does not exceed its eligibility.
d. Processed Demand
    212. As proposed, OEA and WTB adopt procedures to determine the 
order

[[Page 32798]]

in which the bidding system will process bids after a round ends. Bids 
to maintain demand are considered first and always applied. The bidding 
system will then process bids to change demand in order of price point, 
where the price point represents the percentage of the bidding interval 
for the round. For example, if the start-of-round price is $5,000 and 
the clock price is $6,000, a price of $5,100 will correspond to the 10% 
price point, since it is 10% of the bidding interval between $5,000 and 
$6,000. The bidding system will first consider intra-round bids in 
ascending order of price point and then bids at the clock price. The 
system will consider bids at the lowest price point across all PEAs, 
then look at bids at the next price point in all areas, and so on. If 
there are multiple bids at a single price point, the system will 
process those bids in order of a bid-specific pseudo-random number. As 
it considers each submitted bid during bid processing, the bidding 
system will determine the extent to which there is excess demand in 
each PEA at that point in the processing in order to determine whether 
a bidder's request to reduce demand 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.
    213. Because in any given round some bidders may request to 
increase demands for licenses while others may request reductions, the 
price point at which a bid is considered by the bidding system can 
affect whether it is applied. Bids not applied because of insufficient 
aggregate demand or insufficient eligibility will be held in a queue 
and considered, again in order, if there should be excess demand or 
sufficient eligibility later in the processing after other bids are 
processed.
    214. Therefore, once a round closes, the bidding system will 
process bids to change demand by first considering the bid submitted at 
the lowest price point and determining the maximum extent to which that 
bid can be applied given bidders' demands as determined at that point 
in the bid processing. If the bid can be applied (either in full or 
partially), the number of blocks the bidder holds at that point in the 
processing will be adjusted, and aggregate demand will be recalculated 
accordingly. If the bid cannot be applied in full, the unfulfilled bid, 
or portion thereof, will be held in a queue to be considered later 
during bid processing for that round. The bidding system will then 
consider the bid submitted at the next highest price point, applying it 
in full, in part, or not at all, 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 or part of 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.
e. Price Determination
    215. OEA and WTB further adopt bid processing procedures that will 
determine, based on aggregate demand, the posted price for each product 
for the round, which will serve as the start-of-round price for the 
next round. The uniform price for all of the blocks in a product will 
increase from round to round as long as there is excess demand for 
blocks in the product but will not increase if aggregate demand does 
not exceed the available supply of blocks.
    216. Under these procedures, if at the end of a round the aggregate 
demand for blocks in the product exceeds the supply of blocks, the 
posted price will equal the clock price for the round. If a reduction 
in demand was applied during the round and caused demand in the product 
to equal supply, the posted price will be the price at which the 
reduction was applied. If aggregate demand is less than or equal to 
supply and no bid to reduce demand was applied for the product, 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.
    217. When a bid to reduce demand can be applied only partially, the 
uniform price for the product will stop increasing at that point, since 
the partial application of the bid will result in demand falling to 
equal supply. Hence, a bidder that makes a bid to reduce demand that 
cannot be fully applied will not face a price for the remaining demand 
that is higher than its bid price.
    218. 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 its processed demand and 
the extent of excess demand for blocks in each product.
9. Winning Bids in the Clock Phase
    219. Under the clock auction format for Auction 110, if the reserve 
price to meet the CSEA requirement is met in the clock phase, bidders 
with processed demand for a product at the time the stopping rule is 
met will become the winning bidders of licenses corresponding to that 
number of blocks and will be assigned specific frequencies in the 
assignment phase. The final clock phase price for a generic block in a 
product will be the posted price for the final round. This and other 
Auction 110 bid processing details are addressed in the Auction 110 
Clock Phase Technical Guide.

B. Assignment Phase

    220. Following the conclusion of the clock phase, if the reserve 
price to satisfy the CSEA requirement has been met, the assignment 
phase will follow. As proposed, in the assignment phase, in a series of 
bidding rounds, each clock phase winning bidder will have the 
opportunity to indicate its preferences for specific frequency licenses 
corresponding to the generic blocks it won in each category in the 
clock phase. As proposed, a bidder will be assigned contiguous 
frequencies for blocks it wins within each category and PEA regardless 
of whether it chooses to bid in the assignment phase. As set forth 
below, OEA and WTB adopt an additional assignment procedure to address 
commenter concerns that the procedures, as proposed, did not take 
contiguity across categories into account.
1. Sequencing and Grouping of PEAs
    221. As proposed, OEA will sequence assignment rounds to make it 
easier for bidders to incorporate frequency assignments from previously 
assigned areas into their bid preferences for other areas, recognizing 
that bidders winning multiple blocks of licenses generally will prefer 
contiguous blocks across adjacent PEAs. To that end, OEA will conduct 
rounds for the largest markets first to enable bidders to establish a 
``footprint'' from which to work.
    222. Specifically, OEA will conduct a separate assignment round for 
each of the top 20 PEAs and to conduct these assignment rounds 
sequentially, beginning with the largest PEA. Once the top 20 PEAs have 
been assigned, OEA will conduct, for each Regional Economic Area 
Grouping (REAG), a series of assignment rounds for the remaining PEAs 
within that region.

[[Page 32799]]

    223. Further, the bidding system will group into a single market 
for assignment any non-top 20 PEAs within a REAG in which the same 
winning bidders will be assigned the same number of blocks in each 
category, and all are subject to the small markets bidding cap or all 
are not subject to the cap. Grouping in this way may also help maximize 
contiguity across PEAs.
    224. OEA will sequence the assignment rounds within a REAG in 
descending order of population for a PEA group or individual PEA. The 
bidding for the different REAGs will be conducted in parallel in order 
to reduce the total amount of time required to complete the assignment 
phase.
2. Acceptable Bids and Bid Processing
    225. Under the bidding procedures OEA and WTB adopt, in each 
assignment round a bidder will be asked to assign a price to one or 
more possible frequency assignments for which it wishes to express a 
preference, consistent with its winnings for generic blocks in the 
clock phase. The price will represent a maximum payment that the bidder 
is willing to pay, in addition to the price established in the clock 
phase for the generic blocks, for the frequency-specific license or 
licenses in its bid. In PEAs where there are two categories and a 
bidder won generic blocks in both categories, a bidder will submit its 
preferences for blocks won in Cat1 and Cat2 separately, rather than 
submitting bids for preferences that include blocks in both categories. 
That is, if a bidder won one block in Cat1 and two blocks in Cat2, it 
will not be able to submit a single bid amount for an assignment that 
includes both categories. Instead, it will submit its bid or bids for 
assignments in Cat1 separately from its bid or bids for assignments in 
Cat2.
    226. In response to numerous comments requesting that the 
Commission implement procedures that would prioritize contiguous 
assignments across categories, OEA and WTB modify the procedures 
proposed in the Auction 110 Comment Public Notice to ensure that, in 
PEAs with both Cat1 and Cat2 blocks, if one or more bidders win blocks 
in both categories in the clock phase, one of those bidders will be 
assigned licenses that are contiguous across the categories. 
Specifically, in each assignment round, prior to implementing the 
proposed optimization procedures separately for each category in the 
PEA or PEA group, the bidding system will first determine if there are 
one or more bidders with winnings in both categories. If there are, the 
bidding system will assign blocks that are contiguous across the 
categories to one such bidder. To do so, the bidding system will 
consider the sum of each such bidder's bid for its Cat1 option that 
includes the highest-frequency block (D) and its bid for the Cat2 
option that includes the lowest-frequency block (E). The bidder with 
the highest bid total will be assigned licenses that are contiguous 
across the categories (i.e., that include blocks D and E and any other 
blocks contiguous to D and/or E that the bidder won. The bidder's 
assignment payment will be the price of the bidder with the second-
highest total bid for options that include blocks that are contiguous 
across categories.
    227. Once the bidding system has determined whether there is at 
least one bidder with cross-category winnings and if so, has assigned 
licenses to one of those bidders, the system will, as proposed, use an 
optimization approach to determine the winning frequency assignment for 
the remaining blocks in each category in each PEA or PEA group. The 
auction system will select the assignment that maximizes the sum of bid 
amounts among all assignments that satisfy the contiguity requirements 
within categories. Furthermore, if multiple blocks in a category in a 
PEA remain unsold, the unsold licenses will be contiguous.
    228. The additional price a bidder will pay for a specific 
frequency assignment (above the clock phase price) in a given category 
will be calculated consistent with a generalized ``second price'' 
approach--that is, the winner will pay a price that would be just 
sufficient to result in the bidder receiving that same winning 
frequency assignment while ensuring that no group of bidders is willing 
to pay more for an alternative assignment where each bidder is assigned 
contiguous spectrum within that category. This price will be less than 
or equal to the price the bidder indicated it was willing to pay for 
the assignment. OEA will determine prices in this way because it 
facilitates bidding strategy for the bidders, encouraging them to bid 
their full value for the assignment, knowing that if the assignment is 
selected, they will pay no more than would be necessary to ensure that 
the outcome is competitive.
3. Information Available to Bidders During the Assignment Phase
    229. After the clock phase concludes but before bidding begins in 
the assignment phase, the bidding system will provide to each 
assignment phase bidder a menu of bidding options consisting of 
possible configurations of frequency-specific licenses on which it can 
bid. These bidding options will be consistent with the bidder's clock-
phase winnings but will not take into account the winnings of other 
bidders. The bidding system will also announce the order in which 
assignment rounds will take place and indicate which PEAs will be 
grouped together for bidding. The bidding system will provide clock 
phase winning bidders with this information as soon as possible and 
will announce a schedule of assignment phase rounds that will commence 
no sooner than five business days later.
    230. After each assignment round, the bidding system will inform 
each bidder of its own assignment and assignment payment for each 
assignment category for each PEA or PEA group assigned in the round. 
The bidding system will also provide each bidder with its current total 
payment, which is calculated as the sum of the bidder's total clock 
payment across all PEAs and the bidder's assignment payments for the 
PEAs for which an assignment round has already completed. During the 
assignment rounds this information will provide the bidder a running 
estimate of the dollar amount it will owe at the end of the auction. A 
bidder that is claiming a bidding credit will also be informed about 
its current bidding credit discount and whether the discount has been 
capped.

C. Final Auction Payment Calculations

    231. When all assignment rounds have been completed, a bidder's 
final auction payment takes into account the sum of final clock phase 
prices across all licenses that it won, the sum of all of the bidder's 
assignment payments, and any claimed bidding credits. Specifically, if 
a bidder is not claiming a bidding credit, its final payment is 
determined by summing the final clock phase prices across all licenses 
that it won and its assignment payments across all PEAs or PEA groups.
    232. If a bidder claims a bidding credit, a bidding credit discount 
is calculated by applying the bidder's bidding credit percentage to the 
sum of the bidder's clock payments and assignment payments, capping the 
bidding credit discount if it exceeds the applicable caps for small 
businesses, rural service providers, and small markets. The resulting 
bidding credit discount is subtracted from the sum of the bidder's 
clock payments and assignment payments to determine the final payment 
for a bidder with a bidding credit.

[[Page 32800]]

D. Calculating Individual ``Per-License'' Prices

    233. While final auction payments for winning bidders will be 
calculated with bidding credit caps and assignment payments applied on 
an aggregate basis, rather than to individual licenses, the bidding 
system will also calculate a ``per-license'' price for each license. 
Such individual prices may be needed if a licensee later incurs 
license-specific obligations, such as unjust enrichment payments.
    234. After the assignment phase, the auction bidding system will 
determine a net and gross post-auction price for each license that a 
bidder won by apportioning assignment payments and bidding credit 
discounts (only applicable for the net price) across all the bidder's 
licenses. To calculate the gross per-license price, the auction bidding 
system will apportion the assignment payment to licenses in proportion 
to the final clock phase price of the blocks that the bidder is 
assigned in that assignment category and PEA (or PEA group). 
Mathematical details of these procedures, including how the system 
apportions the assignment payment for an assignment that is contiguous 
across the two categories, are given in the Auction 110 Assignment 
Phase Technical Guide. To calculate the net price, the auction bidding 
system will first apportion any applicable bidding credit discounts to 
each PEA or PEA group in proportion to the gross payment for that 
market. Then, for each PEA or PEA group, the auction bidding system 
will apportion the assignment payment and the discount to licenses in 
proportion to the final clock phase price of the blocks that the bidder 
is assigned in that assignment category for that PEA (or PEA group).

E. Auction Results

    235. The bidding system will determine winning bidders as described 
in Section IV.A.9 (Winning Bids in the Clock Phase), above. After 
release of the public notice announcing auction results, the public 
will be able to view and download bidding and results data through the 
FCC Public Reporting System (PRS).

F. Auction Announcements

    236. Commission staff will use auction announcements to report 
necessary information, such as schedule changes, to bidders. All 
auction announcements will be available by clicking a link in the 
bidding system.

V. Post-Auction Procedures

    237. The public notice announcing the close of the bidding and 
auction results will be released shortly after bidding has ended in 
Auction 110. This 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

    238. The Commission's rules provide that, unless otherwise 
specified by public notice, within ten business days after the release 
of the auction closing public notice for Auction 110, 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). Because it is not possible to know 
when bidding in Auction 110 will end, and thus whether post-auction 
payments will be due in late 2021 or early 2022, some commenters 
request that OEA and WTB announce before the bidding begins that down 
payments will be due in early 2022. Commission staff have previously 
recognized that uncertainties regarding the year in which down payments 
will be due could affect potential applicants from a capital planning 
perspective, and that this could in turn affect auction participation. 
Acknowledging that such uncertainties may be presented under the 
current schedule for Auction 110, OEA and WTB exercise their discretion 
under the Commission's rules to set the down payment deadline for 
Auction 110 to be the later of January 7, 2022, or ten business days 
after release of the auction closing public notice.

B. Final Payments

    239. 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)

    240. 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 necessary filing fee of 
$3,175, for the license(s) they won through the auction. The filing fee 
will be required only if the recently amended section 1.1102 of the 
Commission's rules is in effect by the post-auction application 
deadline.
    241. 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 110.
    242. Winning bidders organized as bidding consortia must comply 
with the FCC Form 601 post-auction application procedures set forth in 
section 1.2107(g) of the Commission's rules. 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 DE 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)

    243. Within 10 business days after release of the auction closing 
public notice for Auction 110, each winning bidder must also comply 
with the ownership reporting requirements in sections 1.913, 1.919, and 
1.2112 of the Commission's rules by submitting an ownership disclosure 
information report for wireless telecommunications services (FCC Form 
602) with its FCC Form 601 post-auction application.
    244. 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.
    245. 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

[[Page 32801]]

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

    246. A winning bidder that intends to use its license(s) to deploy 
facilities and provide services to federally recognized tribal lands 
that have a wireline penetration rate equal to or below 85% is eligible 
to receive a tribal lands bidding credit as set forth in sections 
1.2107(e) and 1.2110(f)(3) of the Commission's rules. A tribal lands 
bidding credit is in addition to, and separate from, any other bidding 
credit for which a winning bidder may qualify.
    247. Unlike other bidding credits that are requested prior to the 
auction, a winning bidder applies for the 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 inform the Commission whether it 
intends to seek a tribal lands bidding credit, for each license won in 
the 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 post-auction application filing 
window to amend its application to select the specific 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 section 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

    248. 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 section 
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.
    249. 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. OEA and WTB adopt the Commission's proposal 
to set the additional default payment for Auction 110 at 15% of the 
applicable bid for winning bids. The bidding system will calculate 
individual per-license prices that are separate from final auction 
payments, which are calculated on an aggregate basis.
    250. 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

    251. All refunds of upfront payment balances will be returned to 
the payer of record as identified on the FCC Form 159 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.
    252. 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" class="__cf_email__" data-cfemail="1143435e56465843545750495442517772723f767e67">[email protected]</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

    253. Supplemental Final Regulatory Flexibility Analysis. As 
required by the Regulatory Flexibility Act of 1980, as amended (RFA), 5 
U.S.C. 603, a Supplemental Initial Regulatory Flexibility Analysis 
(Supplemental IRFA) was incorporated in the Auction 110 Comment Public 
Notice released in March 2021. The Commission sought public comment on 
the proposals in the Auction 110 Comment Public Notice, including 
comments on the Supplemental IRFA. The Rural Wireless Association, Inc. 
(RWA) filed comments specifically addressing the Supplemental IRFA, and 
OEA and WTB address those comments in the Supplemental FRFA in the 
Auction 110 Procedures Public Notice. The Auction 110 Procedures Public 
Notice establishes the procedures to be used for Auction 110 and 
supplements the Initial and Final Regulatory Flexibility Analyses 
completed by the Commission in the 3.1-3.55 GHz Report and Order (R&O) 
and Further Notice of Proposed Rulemaking (FNPRM), 85 FR 64062, October 
2, 2020, and 85 FR 66888, October 21, 2020, 3.45 GHz Second Report and 
Order, 86 FR 17920, April 7, 2021, 3.45 GHz Second Report and Order, 
and other Commission orders pursuant to which Auction 110 will be 
conducted. This present Supplemental Final Regulatory Flexibility 
Analysis (Supplemental FRFA) conforms to the RFA.
    254. Need for, and Objectives of, the Rules. The Auction 110 
Procedures Public Notice implements auction procedures for those 
entities that seek to bid to acquire licenses in Auction 110. Auction 
110 will be the Commission's third auction of mid-band spectrum in 
furtherance of the deployment of fifth-generation (5G) wireless, the 
Internet of Things (IoT), and other advanced spectrum-based services. 
The Auction 110 Procedures Public Notice adopts procedural rules and 
terms and conditions governing Auction 110, and the post-auction 
application and payment processes, as well as sets the minimum opening 
bid amounts for flexible-use licenses in the 3.45-3.55 GHz band (3.45 
GHz Service) that will be offered in Auction 110.
    255. To promote the efficient and fair administration of the 
competitive

[[Page 32802]]

bidding process for all Auction 110 participants, OEA and WTB adopt the 
following procedures proposed in the Auction 110 Comment Public Notice:
    <bullet> Establishment of bidding credit caps for eligible small 
businesses, very small businesses, and rural service providers in 
Auction 110;
    <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 PEAs 
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 110, (3) an 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 section 1.2104(g)(2) of the rules in the event that a winning 
bidder defaults or is disqualified after the auction;
    <bullet> a specific upfront payment amount for products available 
in Auction 110;
    <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 generic block;
    <bullet> establishment of a single aggregate reserve price for the 
auction to ensure that total cash proceeds from the auction equal at 
least $14,775,354,330;
    <bullet> use of a simultaneous stopping rule for Auction 110, under 
which all blocks in both categories in all PEAs would remain available 
for bidding until the bidding stops in every PEA;
    <bullet> use of a clock auction format for Auction 110 under which 
each qualified bidder will indicate in successive clock bidding rounds 
its demands for categories of generic blocks in specific geographic 
areas. Categories are determined based on the framework set forth in 
the 3.45 GHz Second Report and Order, in which the lower frequency 
bands are affected differently than the upper frequency bands in 
certain PEAs in the band;
    <bullet> permission for bidders to make two types of bids: Simple 
bids and switch bids. A ``simple'' bid indicates a desired quantity of 
blocks in a product 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 quantity of blocks from Cat1 to Cat2, or vice versa, 
within the same PEA at a price for the ``from'' category (either the 
clock price or an intra-round price);
    <bullet> use of an activity rule that would require bidders to be 
active on between 90% and 100% of their bidding eligibility in all 
regular clock rounds;
    <bullet> use of an activity rule that does not include a waiver of 
the rule to preserve a bidder's eligibility;
    <bullet> a specific minimum opening bid amount for products 
available in Auction 110;
    <bullet> establishment of acceptable bid amounts, including clock 
price increments and intra-round bids, along with a proposed 
methodology for calculating such amounts;
    <bullet> establishment of a methodology for processing bids and 
requests to reduce and increase demand subject to the no excess supply 
rule for bids to reduce demand and the eligibility rule for bids to 
increase demand; and
    <bullet> establishment of an assignment phase that will determine 
which frequency-specific licenses will be won by the winning bidders of 
generic blocks during the clock phase.
    256. The procedures for the conduct of Auction 110 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 3.45 GHz Second Report and 
Order, and relevant competitive bidding orders, and are fully 
consistent therewith.
    257. Summary of Significant Issues Raised by Public Comments in 
Response to the Supplemental IRFA. RWA filed comments that address 
issues discussed in the Supplemental IRFA. RWA argues that the 
Commission's analysis in the Auction 110 Comment Public Notice's 
Supplemental IRFA underestimates the costs that small and rural 
entities incur when participating in an FCC auction. RWA states that, 
contrary to the Commission's expectations, small and rural providers 
regularly consult attorneys, engineers, and consultants to participate 
in Commission auctions, incurring costs of up to $100,000 on average 
per auction. However, RWA provides no support for this cost figure. Nor 
does RWA clarify what portion of this figure represents costs 
associated with applying to participate in the auction and/or whether 
the figure may be an aggregate amount for all of its trade association 
members. RWA also claims that the educational materials provided by the 
Commission are insufficient, as some materials are not provided until 
after the short-form application deadline.
    258. 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 110 Comment Public Notice.
    259. 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 herein. 
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. 5 U.S.C. 601(3). Pursuant to 5 U.S.C. 
601(3), the statutory definition of a small business applies unless an 
agency, after consultation with the Office of Advocacy of the Small 
Business Administration and after opportunity for public comment, 
establishes one or more definitions of such term which are appropriate 
to the activities of the agency and publishes such definition(s) in the 
Federal Register. 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.
    260. As noted above, Regulatory Flexibility Analyses were 
incorporated into the 3.1-3.55 GHz R&O and FNPRM and the 3.45 GHz 
Second Report and Order. These orders provide the underlying authority 
for the procedures proposed in the Auction 110 Comment Public Notice 
and are adopted herein for Auction 110. In those regulatory flexibility 
analyses, the Commission described in detail the small entities that 
might be significantly affected. In the Auction 110 Procedures Public 
Notice, in the Supplemental FRFA, OEA and WTB incorporate by reference 
the descriptions and estimates of the number of small entities from the 
previous Regulatory Flexibility Analyses in the 3.1-3.55 GHz R&O and 
FNPRM and the 3.45 GHz Second Report and Order.
    261. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The Commission designed the 
auction application process to minimize

[[Page 32803]]

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. 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.
    262. OEA and WTB do not expect that the processes and procedures 
adopted in the Auction 110 Procedures Public Notice will require small 
entities to hire attorneys, engineers, consultants, or other 
professionals to participate in Auction 110 and comply with the 
procedures adopted in the Auction 110 Procedures Public Notice because 
of the information, resources, and guidance the Commission makes 
available to potential and actual participants. OEA and WTB cannot 
quantify the cost of compliance with the procedures, however, they do 
not believe that the cost of compliance will unduly burden small 
entities that choose to participate in the auction. OEA and WTB note 
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. For 
example, OEA intends to release an online tutorial that will help 
applicants understand the procedures for filing the auction short-form 
applications (FCC Form 175). OEA also intends to offer other 
educational opportunities for applicants in Auction 110 to familiarize 
themselves with the FCC Auction Application System and the bidding 
system. By providing these resources as well as the resources discussed 
below, OEA and WTB expect small entities that use the available 
resources to experience lower participation and compliance costs.
    263. RWA does not provide evidence that suggests that outside 
consultants are needed to comply with the auction procedures adopted 
here. Instead, RWA claims that small entity bidders cannot make complex 
decisions on the future impacts of auction bidding, participation, and 
winning bidder compliance requirements without outside counsel. In 
doing so, RWA appears to conflate compliance with auction procedures 
with the development of bidding strategies and compliance with the 
relevant service rules. As discussed below, the Commission makes every 
effort to educate auction participants at every stage of the auction 
process in order to reduce the need for outside consultants.
    264. Moreover, neither the short-form application nor the bidding 
system for Auction 110 require applicants to provide detailed technical 
or financial information that would require the advice of outside 
experts, nor do they require technical or legal expertise to access or 
use. That some entities may elect to hire outside consultants as a 
matter of convenience and/or to develop bidding strategies is not 
relevant to the question of whether they are necessary for small 
entities to comply with auction procedures.
    265. 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.
    266. 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 110, 
which should alleviate any need to hire professionals. For example, 
small entities and other would-be participants will 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. 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.
    267. The Commission has also taken steps to ensure that the 
application system is simple to use and that FCC Form 175 itself is 
easy to complete. For example, the application will pre-fill ownership 
information that an applicant has previously provided in FCC Form 175 
for prior auctions or in an FCC Form 602.
    268. After the initial application stage, auction participants 
whose applications have been deemed incomplete have the opportunity to 
correct their 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 
additional information about the nature of the errors and the 
information needed to correct them. Additionally, after the application 
process is complete and the Commission has identified the applicants 
who will be qualified to bid in Auction 110, all qualified bidders for 
Auction 110 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.
    269. 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, OEA and WTB will conduct Auction 110 
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 110

[[Page 32804]]

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.
    270. 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.
    271. 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 110, OEA 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 110 applicants, including small entities, 
thereby lowering their administrative costs to comply with the 
Commission's competitive bidding rules.
    272. Another step taken to minimize the economic impact for small 
entities participating in Auction 110 is the Commission's adoption of 
bidding credits for small businesses and rural service providers. In 
accordance with the service rules applicable to the 3.45 GHz Service 
licenses to be offered in Auction 110, 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.
    273. 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.
    274. The total amount of bidding credit discounts that may be 
awarded to an eligible small business is capped at $25 million and 
there is a $10 million cap on the total amount of bidding credit 
discounts 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, OEA 
and WTB adopt a $10 million cap on the overall amount of bidding 
credits that any winning designated entity may apply to winning 
licenses in PEAs with a population of 500,000 or less. Based on the 
technical characteristics of the 3.45-3.55 GHz band and OEA and WTB's 
analysis of past auction data, OEA and WTB anticipate that the caps 
adopted in the Auction 110 Procedures Public Notice 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.
    275. These procedures for the conduct of Auction 110 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 3.45 GHz Second Report and 
Order and relevant competitive bidding orders, and are fully consistent 
therewith.
    276. Report to Congress. The Commission will send a copy of the 
Auction 110 Procedures Public Notice, including the Supplemental FRFA, 
in a report to Congress pursuant to the Congressional Review Act. In 
addition, the Commission will send a copy of the Auction 110 Procedures 
Public Notice, including the Supplemental FRFA, to the Chief Counsel 
for Advocacy of the SBA.

Federal Communications Commission.
William Huber,
Associate Chief, Auctions Division, Office of Economics and Analytics.
[FR Doc. 2021-12617 Filed 6-22-21; 8:45 am]
BILLING CODE 6712-01-P


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