[Federal Register Volume 73, Number 178 (Friday, September 12, 2008)]
[Notices]
[Pages 53020-53025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-21350]



[[Page 53020]]

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FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 08-22; Report No. AUC-08-85-F (Auction 85); DA 08-1944]


Auction of LPTV and TV Translator Digital Companion Channels 
Scheduled for November 5, 2008; Notice and Filing Requirements, Minimum 
Opening Bids, Upfront Payments and Other Procedures for Auction 85

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the procedures and minimum opening 
bids for the upcoming auction of LPTV and TV Translator Digital 
Companion Channels (Auction 85). This document is intended to 
familiarize prospective bidders with the procedures and minimum opening 
bids for the auction.

DATES: Auction 85 is scheduled to begin on November 5, 2008.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions Spectrum and Access Division: For legal questions: Lynne Milne 
at (202) 418-0660. For general auction questions: Roy Knowles or Linda 
Sanderson at (717) 338-2868. Media Bureau, Video Division: For 
licensing information and service rule questions: Shaun Maher (legal) 
or Hossein Hashemzadeh (engineering) at (202) 418-1600. To request 
materials in accessible formats (Braille, large print, electronic files 
or audio format) for people with disabilities, send an e-mail to 
<a href="/cdn-cgi/l/email-protection#d8bebbbbede8ec98bebbbbf6bfb7ae"><span class="__cf_email__" data-cfemail="9ff9fcfcaaafabdff9fcfcb1f8f0e9">[email protected]</span></a> or call the Consumer and Governmental Affairs Bureau at 
(202) 418-0530 or (202) 418-0432 (TTY).

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 85 
Procedures Public Notice, which was released on September 2, 2008. The 
complete texts of the Auction 85 Procedures Public Notice including 
attachments, as well as related Commission documents, are available for 
public inspection and copying from 8 a.m. to 4:30 p.m. ET Monday 
through Thursday and from 8 a.m. to 11:30 a.m. ET on Fridays in the FCC 
Reference Information Center, 445 12th Street, SW., Room CY-A257, 
Washington, DC 20554. The Auction 85 Procedures Public Notice and 
related Commission documents may also be purchased from the 
Commission's duplicating contractor, Best Copy and Printing, Inc. 
(BCPI), Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 
20554, telephone 202-488-5300, facsimile 202-488-5563, or Web site: 
http://www.BCPIWEB.com. The Auction 85 Procedures Public Notice and 
related documents are also available on the Internet at the 
Commission's Web site: http://wireless.fcc.gov/auctions/85/.

I. General Information

A. Introduction

    1. The Wireless Telecommunications Bureau and the Media Bureau 
(collectively, the Bureaus) announce the procedures and minimum opening 
bid amounts for the upcoming auction of construction permits for Low 
Power Television (LPTV), including Class A Television (TV), and TV 
Translator digital companion channels. This auction, which is 
designated Auction 85, is scheduled to commence on November 5, 2008. On 
July 17, 2008, in accordance with Section 309(j)(3) of the 
Communications Act of 1934, as amended, the Bureaus released a public 
notice seeking comment on minimum opening bid amounts and the 
procedures to be used in Auction 85. In addition, the Bureaus proposed 
an additional settlement period for applicants to use engineering 
solutions, dismissal requests or settlements to resolve conflicts among 
their digital companion channel engineering proposals. No comments were 
submitted in response to the Auction 85 Comment Public Notice, 73 FR 
43230, July 24, 2008.
i. Construction Permits To Be Offered in Auction 85
    2. Auction 85 will offer 44 construction permits for specified 
LPTV, including Class A TV, and TV Translator digital companion 
channels. Participation in this auction will be limited to those 
applicants for construction permits identified in Attachment A of the 
Auction 85 Procedures Public Notice.
    3. Attachment A specifies the MX Groups accompanied by their 
respective minimum opening bids and upfront payments. Attachment A also 
lists the names of the applicants for construction permits in each MX 
Group. For each MX Group identified in Attachment A, competing 
applications were filed during the relevant filing period. All 
applications within an identified MX Group are directly mutually 
exclusive with one another, and therefore, a single construction permit 
will be auctioned for each MX Group identified in Attachment A.

B. Rules and Disclaimers

 i. Relevant Authority
    4. Prospective applicants must familiarize themselves thoroughly 
with the Commission's general competitive bidding rules, including 
recent amendments and clarifications, as well as Commission decisions 
in proceedings regarding competitive bidding procedures, application 
requirements, and obligations of Commission licensees. Broadcasters 
should also familiarize themselves with the Commission's rules relating 
to the television broadcast service contained in 47 CFR 73.601-73.699 
and 73.1001-73.4280. Prospective applicants must also be familiar with 
the rules relating to competitive bidding proceedings contained in 47 
CFR 1.2001-1.2112 and broadcast auctions contained in 47 CFR 73.3555, 
73.5000-73.5009. Prospective bidders must also be thoroughly familiar 
with the procedures, terms and conditions (collectively, terms) 
contained in the Auction 85 Procedures Public Notice and the 
Commission's decisions in proceedings regarding competitive bidding 
procedures, application requirements, and obligations of Commission 
licensees.
ii. Prohibition of Collusion
    5. Applicants for Auction 85 are reminded that they remain subject 
to the Commission's anti-collusion rule until the down payment deadline 
after the auction, which will be announced in a future public notice. 
This prohibition applies to all applicants listed in Attachment A 
regardless of whether such applicants become qualified bidders or 
actually bid. Applicants are also reminded that, for purposes of this 
prohibition, 47 CFR 1.2105(c)(7)(i) defines applicant as including all 
officers and directors of the entity submitting a short-form 
application to participate in the auction, all controlling interests of 
that entity, as well as all holders of partnership and other ownership 
interests and any stock interest amounting to 10 percent or more of the 
entity, or outstanding stock, or outstanding voting stock of the entity 
submitting a short-form application.
    6. Parties subject to the anti-collusion rule are prohibited from 
communicating with each other about bids, bidding strategies, or 
settlements unless such applicants have identified each other on their 
short-form applications (FCC Form 175) as parties with whom they have 
entered into agreements pursuant to 47 CFR 1.2105(a)(2)(viii). Thus, 
competing applicants must affirmatively avoid all communications with 
each other that affect or, in their reasonable assessment,

[[Page 53021]]

have the potential to affect, bids or bidding strategy, which may 
include communications regarding the post-auction market structure. The 
anti-collusion rule prohibits not only a communication about an 
applicant's own bids or bidding strategy, but also a communication of 
another applicant's bids or bidding strategy. While the anti-collusion 
rule provisions do not prohibit business negotiations among auction 
applicants, applicants must remain vigilant so as not to communicate 
directly or indirectly information that affects, or could affect, bids 
or bidding strategy, or the negotiation of settlement agreements.
    7. The Bureaus also remind Auction 85 applicants that they must not 
communicate indirectly to other applicants about bids or bidding 
strategy. Accordingly, Auction 85 applicants are encouraged not to use 
the same individual as an authorized bidder. A violation of the anti-
collusion rule could occur if an individual acts as the authorized 
bidder for two or more competing applicants, and conveys information 
concerning the substance of bids or bidding strategies between such 
applicants. Also, if the authorized bidders are different individuals 
employed by the same organization (e.g., law firm or engineering firm 
or consulting firm), a violation similarly could occur. In such a case, 
at a minimum, applicants should certify on their applications that 
precautionary steps have been taken to prevent communication between 
authorized bidders and that applicants and their bidding agents will 
comply with the anti-collusion rule. Moreover, the Commission has found 
a violation of the anti-collusion rule where 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 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. Applicants are cautioned that the 
Commission remains vigilant about prohibited communications taking 
place in other situations. 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.
    8. Applicants are also reminded that, regardless of compliance with 
the Commission's rules, they remain subject to the antitrust laws, 
which are designed to prevent anticompetitive behavior in the 
marketplace. Compliance with the disclosure requirements of the 
Commission's anti-collusion rule will not insulate a party from 
enforcement of the antitrust laws.
    9. If an applicant makes or receives a communication that appears 
to violate the anti-collusion rule, it must report such communication 
in writing to the Commission immediately and in no case later than five 
business days after the communication occurs. The Commission recently 
clarified that 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.
    10. In addition, 47 CFR 1.65 of the Commission's rules requires an 
applicant to maintain the accuracy and completeness of information 
furnished in its pending application and to notify the Commission 
within 30 days of any substantial change that may be of decisional 
significance to that application. Thus, 47 CFR 1.65 requires an auction 
applicant to notify the Commission of any substantial change to the 
information or certifications included in its pending short-form 
application. Applicants are therefore required by 47 CFR 1.65 to report 
to the Commission any communications they have made to or received from 
another applicant after the short-form application filing deadline that 
affect or have the potential to affect bids or bidding strategy unless 
such communications are made to or received from parties to agreements 
identified under 47 CFR 1.2105(a)(2)(viii).
iii. Due Diligence
    11. Potential applicants are reminded that they are solely 
responsible for investigating and evaluating all technical and 
marketplace factors that may have a bearing on the value of the 
broadcast facilities they are seeking in this auction. Applicants 
should perform their individual due diligence before proceeding as they 
would with any new business venture.
    12. Applicants are strongly encouraged to conduct their own 
research prior to Auction 85 in order to determine the existence of 
pending administrative or judicial proceedings that might affect their 
decisions regarding participation in the auction. Potential bidders for 
any new television facility in this auction are also reminded that full 
service television stations are in the process of converting from 
analog to digital operation and that stations may have pending 
applications to construct and operate digital television facilities, 
construction permits and/or licenses for such digital facilities. All 
LPTV and TV translator stations are secondary to full service stations 
and are subject to displacement by such stations. Bidders should 
investigate the impact such applications, permits and licenses may have 
on their ability to operate facilities based on the construction 
permits offered in this auction.
iv. Use of Integrated Spectrum Auction System
    13. The Commission will make available a browser-based bidding 
system to allow bidders to participate in Auction 85 over the Internet 
using the Commission's Integrated Spectrum Auction System (ISAS or FCC 
Auction System). The Commission makes no warranty whatsoever with 
respect to the FCC Auction System. 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 business information, or any other loss) 
arising out of or relating to the existence, furnishing, functioning or 
use of the FCC Auction System that is accessible to qualified bidders 
in connection with this auction. Moreover, no obligation or liability 
will arise out of the Commission's technical, programming or other 
advice or service provided in connection with the FCC Auction System.
v. Environmental Review Requirements
    14. Permittees or licensees must comply with the Commission's rules 
regarding implementation of the National Environmental Policy Act and 
other Federal environmental statutes.

C. Auction Specifics

i. Auction Date
    15. Bidding in Auction 85 will begin on Wednesday, November 5, 
2008.
    16. The initial schedule for bidding will be announced by public 
notice at least one week before the start of the auction. Unless 
otherwise announced, bidding on construction permits will be conducted 
on each business day until bidding has stopped on all construction 
permits.
ii. Bidding Methodology
    17. The bidding methodology for Auction 85 will be simultaneous 
multiple round bidding. The Commission will conduct this auction over 
the Internet using the FCC Auction

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System, and telephonic bidding will be available as well. All telephone 
calls are recorded.
iii. Pre-Auction Dates and Deadlines
    18. Dates and Deadlines

Auction Seminar.......................  October 1, 2008.
Upfront Payments (via wire transfer)..  October 10, 2008; 6 p.m. ET.
Mock Auction..........................  November 3, 2008.
Auction Begins........................  November 5, 2008.
 

iv. Requirements for Participation
    19. Those wishing to participate in the auction must: (1) Be listed 
on Attachment A; (2) submit a sufficient upfront payment and an FCC 
Remittance Advice Form (FCC Form 159) before 6 p.m. ET, October 10, 
2008, following the procedures and instructions set forth in Attachment 
B to the Auction 85 Procedures Public Notice; and (3) comply with all 
provisions outlined in the Public Notice and applicable Commission 
rules.

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

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

    20. Since the deadline for filing short-form applications (FCC 
Forms 175) passed on June 30, 2006, Auction 85 applicants may now make 
only minor changes to their applications.

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

    21. 47 CFR 1.65 requires an applicant to maintain the accuracy and 
completeness of information furnished in its pending application and to 
notify the Commission within 30 days of any substantial change that may 
be of decisional significance to that application.

III. Pre-Auction Procedures

 A. Auction Seminar

    22. On Wednesday, October 1, 2008, the FCC will sponsor a seminar 
for Auction 85 at the FCC headquarters, located at 445 12th Street, 
SW., Washington, DC. The seminar will provide attendees with 
information about pre-auction procedures, auction rules and conduct, 
and the FCC Auction System. The seminar will also provide an 
opportunity for prospective bidders to ask questions of FCC staff 
concerning the auction, auction procedures, and other matters related 
to this auction.

B. Minor Corrections to Applications

    23. The Commission will issue a future public notice identifying: 
(1) Those applications which are complete; (2) those applications 
rejected; and (3) those applications which have minor defects that may 
be corrected, and the deadline for resubmitting corrected applications. 
Mutually exclusive commercial applications will proceed to auction.

C. Upfront Payments--Due October 10, 2008

    24. In order to be eligible to bid in the auction, applicants must 
submit an upfront payment accompanied by an FCC Remittance Advice Form 
(FCC Form 159). Applicants in Auction 85 have access to an electronic 
version of the FCC Form 159 that can be printed and sent by facsimile 
to U.S. Bank in St. Louis, Missouri. All upfront payments must be 
received in the proper account at U.S. Bank before 6 p.m. ET on October 
10, 2008.
 i. Making Auction Payments by Wire Transfer
    25. Wire transfer payments must be received before 6 p.m. ET on 
October 10, 2008, consistent with instructions set forth in the Auction 
85 Procedures Public Notice.
 ii. FCC Form 159
    26. A completed FCC Remittance Advice Form (FCC Form 159, Revised 
07/05) must be sent by facsimile to U.S. Bank to accompany each upfront 
payment. Proper completion of FCC Form 159 (Revised 2/03) is critical 
to ensuring correct crediting of upfront payments. Detailed 
instructions for completion of FCC Form 159 are included in Attachment 
B of the Auction 85 Procedures Public Notice. The FCC Form 159 can be 
completed electronically, but must be filed with U.S. Bank via 
facsimile.
 iii. Upfront Payments and Bidding Eligibility
    27. The Commission has delegated to the Bureaus the authority and 
discretion to determine appropriate upfront payment(s) for each 
auction. Upfront payments help deter frivolous or insincere bidding, 
and provide the Commission with a source of funds in the event that the 
bidder incurs liability during the auction.
    28. Applicants that are former defaulters must pay upfront payments 
50 percent greater than non-former defaulters. For purposes of this 
calculation, the applicant includes the applicant itself, its 
affiliates, its controlling interests, and affiliates of its 
controlling interests, as defined by 47 CFR 1.2110.
    29. Applicants must make upfront payments sufficient to obtain 
bidding eligibility on the construction permits on which they will bid. 
The Bureaus proposed, in the Auction 85 Comment Public Notice, that the 
amount of the upfront payment would determine a bidder's initial 
bidding eligibility, the maximum number of bidding units on which a 
bidder may place bids. Under the Bureaus' proposal, in order to bid on 
a particular construction permit, a qualified bidder must have a 
current eligibility level that meets or exceeds the number of bidding 
units assigned to one or more of the construction permits listed in 
Attachment A for which it has submitted an engineering proposal. At a 
minimum, therefore, an applicant's total upfront payment must be enough 
to establish eligibility to bid on at least one of the construction 
permits designated for that applicant in Attachment A or else the 
applicant will not be eligible to participate in the auction. An 
applicant does not have to make an upfront payment to cover all 
construction permits designated for the applicant in Attachment A, but 
only enough to cover the maximum number of bidding units that are 
associated with construction permits on which the bidder wishes to 
place bids and hold provisionally winning bids at any given time.
    30. In calculating its upfront payment amount, an applicant should 
determine the maximum number of bidding units on which it may wish to 
be active (bid on or hold provisionally winning bids on) in any single 
round, and submit an upfront payment amount covering that number of 
bidding units. In order to make this calculation, an applicant should 
add together the upfront payments for all construction permits 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.
    31. If an applicant is a former defaulter, it must calculate its 
upfront payment for all construction permits by multiplying the number 
of bidding units on which they wish to be active by 1.5. In order to 
calculate the number of bidding units to assign to former defaulters, 
the Commission will divide the upfront payment received 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 of the construction permits associated with that 
applicant in Attachment A, the applicant will not be eligible to 
participate in the auction.

[[Page 53023]]

 iv. Applicant's Wire Transfer Information for Purposes of Refunds of 
Upfront Payments
    32. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that such requests 
include all pertinent information listed in the Auction 85 Procedures 
Public Notice. Applicants can provide the information electronically 
through the FCC Auction System.

D. Auction Registration

    33. Approximately ten days before the auction, the Bureaus will 
issue a public notice announcing all qualified bidders for the auction. 
Qualified bidders are those applicants with timely-submitted short-form 
applications that are deemed complete and timely upfront payments that 
are sufficient to make them eligible to bid.

E. Remote Electronic Bidding

    34. The Commission will conduct this auction over the Internet, and 
telephonic bidding will be available as well. Only qualified bidders 
are permitted to bid. Each applicant should indicate its bidding 
preference--electronic or telephonic--on its short-form application. In 
either case, each authorized bidder must have its own SecurID[supreg] 
token, which the Commission will provide at no charge.

F. Mock Auction--November 3, 2008

    35. All qualified bidders will be eligible to participate in a mock 
auction on Monday, November 3, 2008. The mock auction will enable 
bidders to become familiar with the FCC Auction System prior to the 
auction. Participation by all bidders is strongly recommended. Details 
will be announced by public notice.

IV. Auction Event

    36. The first round of bidding for Auction 85 will begin on 
Wednesday, November 5, 2008. The initial bidding schedule will be 
announced in a public notice listing the qualified bidders, which is to 
be released approximately 10 days before the start of the auction.

A. Auction Structure

 i. Simultaneous Multiple Round Auction
    37. In the Auction 85 Comment Public Notice, the Bureaus proposed 
to auction all construction permits in Auction 85 in a single auction 
using the Commission's standard simultaneous multiple-round (SMR) 
auction format. This type of auction offers every construction permit 
for bid at the same time and consists of successive bidding rounds in 
which eligible bidders may place bids on individual construction 
permits. A bidder may bid on, and potentially win, any number of 
construction permits. Typically, bidding remains open on all 
construction permits until bidding stops on every construction permit. 
The Bureaus received no comment on this issue.
 ii. Eligibility and Activity Rules
    38. The Bureaus will use upfront payments to determine the initial 
(maximum) eligibility (as measured in bidding units) for Auction 85. 
The amount of the upfront payment submitted by a bidder determines 
initial bidding eligibility, the maximum number of bidding units on 
which a bidder may be active. As noted earlier, each construction 
permit is assigned a specific number of bidding units listed in 
Attachment A. Bidding units for a given construction permit do not 
change as prices rise during the auction. A bidder's upfront payment is 
not attributed to specific construction permits. Rather, a bidder may 
place bids on any of the construction permits designated for that 
applicant as long as the total number of bidding units associated with 
those construction permits does not exceed its current eligibility. 
Eligibility cannot be increased during the auction; it can only remain 
the same or decrease. Thus, in calculating its upfront payment amount, 
an applicant must determine the maximum number of bidding units it may 
wish to bid on or hold provisionally winning bids on in any single 
round, and submit an upfront payment amount covering that total number 
of bidding units. At a minimum, an applicant's upfront payment must 
cover the bidding units for at least one of the licenses it selected on 
its short-form application. The total upfront payment does not affect 
the total dollar amount a bidder may bid on any given construction 
permit.
    39. In order to ensure that an 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. Bidders are required to be active on a specific 
percentage of their current bidding eligibility during each round of 
the auction.
    40. A bidder's activity level in a round is the sum of the bidding 
units associated with any construction permits covered by that bidder's 
new and provisionally winning bids. A bidder is considered active on a 
construction permit in the current round if it is either the 
provisionally winning bidder at the end of the previous bidding round 
or if it submits a bid in the current round.
    41. A bidder is required to be active on 100 percent of its current 
eligibility during each round of the auction. That is, a bidder must 
either place a bid and/or be the provisionally winning bidder during 
each round of the auction. Failure to maintain the requisite activity 
level will result in the use of an activity rule waiver, if any remain, 
or a reduction in the bidder's eligibility, possibly curtailing or 
eliminating the bidder's ability to place bids in the auction.
 iii. Activity Rule Waivers
    42. Each bidder in the auction will be provided with three activity 
rule waivers. The Bureaus received no comments on this issue.
 iv. Auction Stopping Rules
    43. For Auction 85, the Bureaus will employ a simultaneous stopping 
rule approach. A simultaneous stopping rule means that all construction 
permits remain available for bidding until bidding closes 
simultaneously on all construction permits. More specifically, bidding 
will close simultaneously on all construction permits after the first 
round in which no bidder submits any new bids or applies a proactive 
waiver.
    44. Auction 85 will begin under the simultaneous stopping rule 
approach, and the Bureaus will retain the discretion to employ the 
other proposed versions of the stopping rule. Moreover, the Bureaus 
will retain the discretion to use the modified stopping rule with or 
without prior announcement during the auction.
 v. Auction Delay, Suspension, or Cancellation
    45. The Bureaus may delay, suspend, or cancel the auction in the 
event of natural disaster, technical obstacle, 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. In such cases, the Bureaus, 
in their sole discretion, may elect to resume the auction starting from 
the beginning of the current round, resume the auction starting from 
some previous round, or cancel the auction in its entirety. Network 
interruption may cause the Bureaus to delay or suspend the auction.

[[Page 53024]]

 B. Bidding Procedures

 i. Round Structure
    46. The initial schedule of bidding rounds will be announced in the 
public notice listing the qualified bidders, which is released 
approximately 10 days before the start of the auction. Each bidding 
round is followed by the release of round results. Multiple bidding 
rounds may be conducted in a given day. Details regarding round results 
formats and locations will also be included in the qualified bidders 
public notice.
    47. The Bureaus have the discretion to change the bidding schedule 
in order to foster an auction pace that reasonably balances speed with 
the bidders' need to study round results and adjust their bidding 
strategies. The Bureaus may increase or decrease the amount of time for 
the bidding rounds, the amount of time between rounds, or the number of 
rounds per day, depending upon the bidding activity level and other 
factors.
 ii. Reserve Price and Minimum Opening Bids
    48. The specific minimum opening bid amounts for each construction 
permit available in Auction 85 are set forth in Attachment A.
 iii. Bid Amounts
    49. The Bureaus proposed that in each round, eligible bidders will 
be able to place a bid on a given construction permit in any of up to 
nine different amounts. The FCC Auction System interface will list the 
nine acceptable bid amounts for each construction permit.
 iv. Provisionally Winning Bids
    50. At the end of each bidding round, a provisionally winning bid 
will be determined based on the highest bid amount received for each 
construction permit. A provisionally winning bid will remain the 
provisionally winning bid until there is a higher bid on the same 
construction permit at the close of a subsequent round. Provisionally 
winning bids at the end of the auction become the winning bids. Bidders 
are reminded that provisionally winning bids count toward activity for 
purposes of the activity rule.
    51. The Bureaus will use a random number generator to select a 
single provisionally winning bid in the event of identical high bid 
amounts being submitted on a construction permit in a given round 
(i.e., tied bids).
    52. The tied bid with the highest random number wins the 
tiebreaker, and becomes the provisionally winning bid. Bidders 
regardless of whether they hold a provisionally winning bid, can submit 
higher bides in subsequent rounds. However, if the auction were to end 
with no other bids being placed, the winning bidder would be the one 
that placed the provisionally winning bid.
    53. All bidding will take place remotely either through the FCC 
Auction System or by telephonic bidding. There will be no on-site 
bidding during Auction 85. 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 ten minutes.
    54. A bidder's ability to bid on specific construction permits is 
determined by two factors: (1) The construction permits designated for 
that applicant; and (2) the bidder's eligibility. The bid submission 
screens will allow bidders to submit bids on only those construction 
permits designated for that bidder on Attachment A.
    55. In each round, eligible bidders will be able to place bids on a 
given construction permit in any of nine different bid amounts. For 
each construction permit, the FCC Auction System will list the nine 
acceptable bid amounts in a drop-down box. Bidders use the drop-down 
box to select from among the acceptable bid amounts. The FCC Auction 
System also includes an upload function that allows bidders to upload 
text files containing bid information.
    56. Until a bid has been placed on a construction permit, the 
minimum acceptable bid amount for that construction permit will be 
equal to its minimum opening bid amount. Once there are bids on a 
construction permit, minimum acceptable bids for a construction permit 
for the following round will be determined.
    57. During a round, an eligible bidder may submit bids for as many 
construction permits as it wishes (providing that it is eligible to 
bid), remove bids placed in the current bidding round, or permanently 
reduce eligibility. If a bidder submits multiple bids for the same 
construction permit in the same round--multiple bids on the exact same 
construction permit--the system takes the last bid entered as that 
bidder's bid for the round. Bidders should note that the bidding units 
associated with construction permits for which the bidder has removed 
bids do not count towards the bidder's current activity.
 v. Bid Removal and Bid Withdrawal
    58. Before the close of a bidding round, a bidder has the option of 
removing any bids placed in that round. By removing selected bids in 
the FCC Auction System, a bidder may effectively unsubmit any bid 
placed within that round. A bidder removing a bid placed in the same 
round is not subject to withdrawal payments. Removing a bid will affect 
a bidder's activity for the round in which it is removed, i.e., a bid 
that is removed does not count toward bidding activity. Once a round 
closes, a bidder may no longer remove a bid.
 vi. Round Results
    59. Reports reflecting bidders' identities for Auction 85 will be 
available before and during the auction. Thus, bidders will know in 
advance of this auction the identities of the bidders against which 
they are bidding.
    60. Bids placed during a round will not be made public until the 
conclusion of that round. After a round closes, the Bureaus will 
compile reports of all bids placed, current provisionally winning bids, 
new minimum acceptable bid amounts for the following round, whether the 
construction permit is FCC held, and bidder eligibility status (bidding 
eligibility and activity rule waivers), and post the reports for public 
access.
 vii. Auction Announcements
    61. The Commission will use auction announcements to announce items 
such as schedule changes. All auction announcements will be available 
by clicking a link in the FCC Auction System.

V. Post-Auction Procedures

    62. Shortly after bidding has ended, the Commission will issue a 
public notice declaring the auction closed, identifying the winning 
bidders, and establishing the deadlines for submitting down payments, 
long-form applications, and final payments, the long-form application 
(FCC Forms 301-CA or 346).

A. Down Payments

    63. Within ten business days after release of the auction closing 
notice, each winning bidder must submit sufficient funds (in addition 
to its upfront payment) to bring its total amount of money on deposit 
with the Commission for Auction 85 to 20 percent of the net amount of 
its winning bids (gross bids less any applicable new entrant bidding 
credits).

[[Page 53025]]

B. Final Payments

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

C. Long-Form Application

    65. Within thirty days after the release of the auction closing 
notice, winning bidders must submit electronically a properly completed 
long-form application (FCC Forms 301-CA or 346), and required exhibits 
for each construction permit won through Auction 85. A winning bidder 
claiming new entrant status must include an exhibit demonstrating its 
eligibility for the bidding credit. Further filing instructions will be 
provided to auction winners at the close of the auction.

D. Default and Disqualification

    66. Any winning bidder that defaults or is disqualified after the 
close of the auction (i.e., fails to remit the required down payment 
within the prescribed period of time, fails to submit a timely long-
form application, fails to make full final payment within the 
prescribed period of time, or is otherwise disqualified) will be 
subject to the payments described in 47 CFR 1.2104(g)(2). The payments 
include both a deficiency payment, equal to the difference between the 
amount of the bidder's bid and the amount of the winning bid the next 
time a construction permit 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.
    67. 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. The Bureaus have set the additional default 
payment for this auction at twenty percent (20%) of the applicable bid.
    68. Finally, in the event of a default, the Commission may re-
auction the construction permit 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, 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.

E. Refund of Remaining Upfront Payment Balance

    69. All applicants that submit upfront payments but after the close 
of the auction are not winning bidders for a construction permit in 
Auction 85 may be entitled to a refund of their remaining upfront 
payment balance after the conclusion of the auction. All refunds will 
be returned to the payor of record, as identified on the FCC Form 159, 
unless the payor submits written authorization instructing otherwise.
    70. Bidders that drop out of the auction completely may be eligible 
for a refund of their upfront payments before the close of the auction. 
Qualified bidders that have exhausted all of their activity rule 
waivers and have no remaining bidding eligibility may also be eligible 
for a refund of their upfront payment before the close of the auction.

Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. E8-21350 Filed 9-11-08; 8:45 am]
BILLING CODE 6712-01-P


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