[Federal Register Volume 75, Number 184 (Thursday, September 23, 2010)]
[Notices]
[Pages 57947-57952]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-23825]


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FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 10-147; DA 10-1351]


Auction of VHF Commercial Television Station Construction Permits 
Scheduled for February 15, 2011; Comment Sought on Competitive Bidding 
Procedures for Auction 90

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the auction of certain VHF 
construction permits scheduled to commence on February 15, 2011 
(Auction 90). This document also seeks comment on competitive bidding 
procedures for Auction 90.

DATES: Comments are due on or before September 30, 2010, and reply 
comments are due on or before October 15, 2010.

ADDRESSES: You may submit comments, identified by AU Docket No. 10-147, 
by any of the following methods:

[[Page 57948]]

    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Federal Communications Commission's Web Site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
    <bullet> Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. Filings can be sent by 
hand or messenger delivery, by commercial overnight courier, or by 
first-class or overnight U.S. Postal Service mail. All filings must be 
addressed to the Commission's Secretary, Attn: WTB/ASAD, Office of the 
Secretary, Federal Communications Commission.
    <bullet> All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St., SW., Room TW-A325, Washington, DC 20554. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building.
    <bullet> Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    <bullet> People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: <a href="/cdn-cgi/l/email-protection#5a1c19196f6a6e1a3c3939743d352c"><span class="__cf_email__" data-cfemail="90d6d3d3a5a0a4d0f6f3f3bef7ffe6">[email protected]</span></a> or telephone: 202-
418-0530 or TTY: 202-418-0432.
    <bullet> The Wireless Telecommunications Bureau requests that a 
copy of all comments and reply comments be submitted electronically to 
the following address: <a href="/cdn-cgi/l/email-protection#2d4c584e59444243141d6d4b4e4e034a425b"><span class="__cf_email__" data-cfemail="dabbafb9aeb3b5b4e3ea9abcb9b9f4bdb5ac">[email protected]</span></a>.
    <bullet> People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: <a href="/cdn-cgi/l/email-protection#d1979292e4e1e591b7b2b2ffb6bea7"><span class="__cf_email__" data-cfemail="3d7b7e7e080d097d5b5e5e135a524b">[email protected]</span></a> or phone: 202-418-
0530 or TTY: 202-418-0432.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: For auction legal questions: 
Howard Davenport at (202) 418-0660; for general auction questions: Jeff 
Crooks at (202) 418-2074 or Barbara Sibert at (717) 338-2868. Media 
Bureau, Video Division: for service rules questions: Shaun Maher or 
Adrienne Denysyk at (202) 418-1600.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 90 Comment 
Public Notice released on September 8, 2010. The complete text of the 
Auction 90 Comment Public Notice, including an attachment and related 
Commission documents, is available for public inspection and copying 
from 8 a.m. to 4:30 p.m. ET Monday through Thursday or 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 90 
Comment Public Notice and related Commission documents also may be 
purchased from the Commission's duplicating contractor, Best Copy and 
Printing, Inc. (BCPI), 445 12th Street SW., Room CY-B402, Washington, 
DC 20554, telephone 202-488-5300, fax 202-488-5563, or you may contact 
BCPI at its Web site: http://www.BCPIWEB.com. When ordering documents 
from BCPI, please provide the appropriate FCC document number, for 
example, DA 10-1351. The Auction 90 Comment Public Notice and related 
documents also are available on the Internet at the Commission's Web 
site: http://wireless.fcc.gov/auctions/90/, or by using the search 
function for AU Docket No.10-147 on the ECFS Web page at http://www.fcc.gov/cgb/ecfs/.

I. Introduction

    1. The Wireless Telecommunications and the Media Bureaus (the 
Bureaus) announce an auction of two digital very high frequency (VHF) 
commercial television station construction permits. This auction, which 
is designated Auction 90, is scheduled to commence on February 15, 
2011.

II. Construction Permits in Auction 90

    2. Auction 90 will offer construction permits for two VHF 
commercial television stations as follows:

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MM-DTV012-4..........................  Atlantic City, NJ.......    DTV 4
MM-DTV013-5..........................  Seaford, DE.............    DTV 5
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III. Due Diligence

    3. Potential bidders 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 construction permits for 
broadcast facilities they are seeking in this auction. Bidders are 
responsible for assuring themselves that, if they win a construction 
permit, they will be able to build and operate facilities in accordance 
with the Commission's rules.
    4. Applicants should perform their due diligence research and 
analysis before proceeding, as they would with any new business 
venture. In particular, potential bidders are strongly encouraged to 
review all underlying Commission orders. The Bureaus note that both of 
the permits being offered in this auction are available pursuant to 
allocations made pursuant to Section 331(a) of the Communications Act. 
Therefore, each station must remain on a VHF channel as long as the 
station is the only commercial VHF station in its State. Additionally, 
potential bidders should perform technical analyses and/or refresh any 
previous analyses to assure themselves that, should they be a winning 
bidder for any Auction 90 construction permit, they will be able to 
build and operate facilities that will fully comply with the 
Commission's current technical and legal requirements.
    5. Applicants are strongly encouraged to conduct their own research 
prior to Auction 90 in order to determine the existence of pending 
administrative or judicial proceedings, including pending allocations 
rulemaking proceedings that might affect their decisions regarding 
participation in the auction.
    6. Participants in Auction 90 are strongly encouraged to continue 
such research throughout the auction. The due diligence considerations 
mentioned in the Auction 90 Comment Public Notice does not comprise an 
exhaustive list of steps that should be undertaken prior to 
participating in this auction. As always, the burden is on the 
potential bidder to determine how much research to undertake, depending 
upon specific facts and circumstances.

IV. Bureaus Seek Comment on Auction Procedures

A. Auction Structure

i. Simultaneous Multiple-Round Auction Design
    7. The Bureaus propose to auction the two construction permits 
included in Auction 90 using the Commission's standard simultaneous 
multiple-round 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. Typically, bidding remains open on all 
construction permits until bidding stops on every construction permit. 
The Bureaus seek comment on this proposal.
ii. Bidding Rounds
    8. Auction 90 will consist of sequential bidding rounds, each 
followed by the release of round results. The initial bidding schedule 
will be announced in a public notice to be released at least one week 
before the start of the auction. Details on viewing round results, 
including the location and format of downloadable round

[[Page 57949]]

results files, will be included in the same public notice.
    9. The Commission will conduct Auction 90 over the Internet, and 
telephonic bidding will be available as well. The toll-free telephone 
number for the Auction Bidder Line will be provided to qualified 
bidders.
    10. The Bureaus propose to retain the discretion to change the 
bidding schedule in order to foster an auction pace that reasonably 
balances speed with the bidders' need to study round results and adjust 
their bidding strategies. Under this proposal, the Bureaus may change 
the amount of time for the bidding rounds, the amount of time between 
rounds, or the number of rounds per day, depending upon bidding 
activity and other factors. The Bureaus seek comment on this proposal. 
Commenters may wish to address the role of the bidding schedule in 
managing the pace of the auction and the tradeoffs in managing auction 
pace by bidding schedule changes, by changing the activity requirements 
or bid amount parameters, or by using other means.
iii. Stopping Rule
    11. For Auction 90, the Bureaus propose to employ a simultaneous 
stopping rule approach. A simultaneous stopping rule means that all 
construction permits remain available for bidding until bidding closes 
simultaneously on all construction permits. More specifically, bidding 
will close simultaneously on all construction permits after the first 
round in which no bidder submits any new bids, applies a proactive 
waiver, or withdraws any provisionally winning bids (if bid withdrawals 
are permitted in this auction). Thus, unless the Bureaus announce 
alternative procedures, bidding will remain open on all construction 
permits until bidding stops on every construction permit. Consequently, 
it is not possible to determine in advance how long the auction will 
last.
    12. Further, the Bureaus propose to retain the discretion to 
exercise any of the following options during Auction 90: (1) Use a 
modified version of the simultaneous stopping rule. The modified 
stopping rule would close the auction for all construction permits 
after the first round in which no bidder applies a waiver, withdraws a 
provisionally winning bid (if withdrawals are permitted in this 
auction), or places any new bids on any construction permit for which 
it is not the provisionally winning bidder. Thus, absent any other 
bidding activity, a bidder placing a new bid on a construction permit 
for which it is the provisionally winning bidder would not keep the 
auction open under this modified stopping rule; (2) Declare that the 
auction will end after a specified number of additional rounds. If the 
Bureaus invoke this special stopping rule, they will accept bids in the 
specified final round(s), after which the auction will close; and (3) 
Keep the auction open even if no bidder places any new bids, applies a 
waiver, or withdraws any provisionally winning bids (if withdrawals are 
permitted in this auction). In this event, the effect will be the same 
as if a bidder had applied a waiver. The activity rule will apply as 
usual, and a bidder with insufficient activity will either lose bidding 
eligibility or use a waiver.
    13. The Bureaus propose to exercise these options only in certain 
circumstances, for example, where the auction is proceeding unusually 
slowly or quickly, there is minimal overall bidding activity, or it 
appears likely that the auction will not close within a reasonable 
period of time or will close prematurely. Before exercising these 
options, the Bureaus are likely to attempt to change the pace of the 
auction by, for example, changing the number of bidding rounds per day 
and/or changing minimum acceptable bids. The Bureaus propose to retain 
the discretion to exercise any of these options with or without prior 
announcement during the auction. The Bureaus seek comment on these 
proposals.
iv. Information Relating to Auction Delay, Suspension, or Cancellation
    14. For Auction 90, the Bureaus propose that, by public notice or 
by announcement during the auction, the Bureaus may delay, suspend, or 
cancel the auction in the event of natural disaster, technical 
obstacle, 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. The Bureaus emphasize that exercise of this 
authority is solely within the discretion of the Bureaus, and its use 
is not intended to be a substitute for situations in which bidders may 
wish to apply their activity rule waivers. The Bureaus seek comment on 
this proposal.

B. Auction Procedures

i. Upfront Payments and Bidding Eligibility
    15. For Auction 90, the Bureau proposes to make the upfront 
payments equal to the minimum opening bids. The specific upfront 
payments for each license are listed in Attachment A of the Auction 90 
Comment Public Notice. The Bureau seeks comment on this proposal.
    16. The Bureaus further propose that the amount of the upfront 
payment submitted by a bidder will determine the bidder's initial 
bidding eligibility in bidding units. The Bureaus propose that each 
construction permit be assigned a specific number of bidding units 
equal to the upfront payment listed in Attachment A of the Auction 90 
Comment Public Notice, on a bidding unit per dollar basis. The number 
of bidding units for a given construction permit is fixed and does not 
change during the auction as prices change. A bidder may place bids on 
multiple construction permits, provided that the total number of 
bidding units associated with those construction permits does not 
exceed the bidder's current eligibility.
    17. Eligibility cannot be increased during the auction; it can only 
remain the same or decrease. Thus, in calculating its upfront payment 
amount and hence its initial bidding eligibility, an applicant must 
determine the maximum number of bidding units on which it may wish to 
bid (or hold provisionally winning bids) in any single round, and 
submit an upfront payment amount covering that total number of bidding 
units. Provisionally winning bids are bids that would become final 
winning bids if the auction were to close in that given round. The 
Bureaus request comment on these proposals.
ii. Activity Rule
    18. In order to ensure that the auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively 
throughout the auction, rather than wait until late in the auction 
before participating. A bidder's activity in a round will be the sum of 
the bidding units associated with any construction permits upon which 
it places bids during the current round and the bidding units 
associated with any construction permits for which it holds 
provisionally winning bids. Failure to maintain the requisite activity 
level will result in the use of an activity rule waiver, if any remain, 
or a

[[Page 57950]]

reduction in the bidder's eligibility, possibly curtailing or 
eliminating the bidder's ability to place additional bids in the 
auction. The Bureaus seek comment on this proposal.
iii. Activity Rule Waivers and Reducing Eligibility
    19. Use of an activity rule waiver preserves the bidder's 
eligibility despite the bidder's activity in the current round being 
below the required minimum level. An activity rule waiver applies to an 
entire round of bidding, not to a particular construction permit. 
Activity rule waivers can be either proactive or automatic and are 
principally a mechanism for auction participants to avoid the loss of 
bidding eligibility in the event that exigent circumstances prevent 
them from bidding in a particular round.
    20. The FCC Auction System assumes that a bidder that does not meet 
the activity requirement would prefer to use an activity rule waiver 
(if available) rather than lose bidding eligibility. Therefore, the 
system will automatically apply a waiver at the end of any bidding 
round in which a bidder's activity level is below the minimum required 
unless: (1) The bidder has no activity rule waivers remaining; or (2) 
the bidder overrides the automatic application of a waiver by reducing 
eligibility, thereby meeting the activity requirement. If a bidder has 
no waivers remaining and does not satisfy the required activity level, 
its current eligibility will be permanently reduced, possibly 
curtailing or eliminating the bidder's ability to place additional bids 
in the auction.
    21. A bidder with insufficient activity may wish to reduce its 
bidding eligibility rather than use an activity rule waiver. If so, the 
bidder must affirmatively override the automatic waiver mechanism 
during the bidding round by using the reduce eligibility function in 
the FCC Auction System. In this case, the bidder's eligibility is 
permanently reduced to bring the bidder into compliance with the 
activity rule. Reducing eligibility is an irreversible action; once 
eligibility has been reduced, a bidder will not be permitted to regain 
its lost bidding eligibility, even if the round has not yet closed.
    22. Under the proposed simultaneous stopping rule, a bidder may 
apply an activity rule waiver proactively as a means to keep the 
auction open without placing a bid. If a bidder proactively applies an 
activity rule waiver (using the apply waiver function in the FCC 
Auction System) during a bidding round in which no bids are placed or 
withdrawn (if bid withdrawals are permitted in this auction), the 
auction will remain open and the bidder's eligibility will be 
preserved. An automatic waiver applied by the FCC Auction System in a 
round in which there are no new bids, withdrawals (if bid withdrawals 
are permitted in this auction), or proactive waivers will not keep the 
auction open. A bidder cannot apply a proactive waiver after bidding in 
a round, and applying a proactive waiver will preclude a bidder from 
placing any bids in that round. Applying a waiver is irreversible; once 
a proactive waiver is submitted, that waiver cannot be unsubmitted, 
even if the round has not yet closed.
    23. The Bureaus propose that each bidder in Auction 90 be provided 
with three activity rule waivers that may be used as set forth above at 
the bidder's discretion during the course of the auction. The Bureaus 
seek comment on this proposal.
iv. Reserve Price or Minimum Opening Bids
    24. A reserve price is an absolute minimum price below which an 
item will not be sold in a given auction. Reserve prices can be either 
published or unpublished. A minimum opening bid, on the other hand, is 
the minimum bid price set at the beginning of the auction below which 
no bids are accepted. It is generally used to accelerate the 
competitive bidding process. It is possible for the minimum opening bid 
and the reserve price to be the same amount.
    25. The Bureaus propose to establish minimum opening bid amounts 
for Auction 90. The Bureaus believe a minimum opening bid amount, which 
has been used in other broadcast auctions, is an effective bidding tool 
for accelerating the competitive bidding process. The Bureaus do not 
propose to establish a separate reserve price for the construction 
permits to be offered in Auction 90.
    26. For Auction 90, the Bureaus propose minimum opening bid amounts 
determined by taking into account the type of service and class of 
facility offered, market size, population covered by the proposed 
broadcast facility, and recent broadcast transaction data. The proposed 
minimum opening bid amounts are $200,000 for each construction permit 
available in Auction 90. The Bureaus seek comment on these proposals.
    27. If commenters believe that these minimum opening bid amounts 
will result in unsold construction permits, are not reasonable amounts, 
or should instead operate as reserve prices, they should explain why 
this is so and comment on the desirability of an alternative approach. 
Commenters are advised to support their claims with valuation analyses 
and suggested amounts or formulas for reserve prices or minimum opening 
bids. In establishing the minimum opening bid amounts, the Bureaus 
particularly seek comment on factors that could reasonably have an 
impact on valuation of the broadcast spectrum, including the type of 
service and class of facility offered, market size, population covered 
by the proposed VHF commercial television station and any other 
relevant factors.
v. Bid Amounts
    28. The Bureaus propose that, in each round, eligible bidders be 
able to place a bid on a given construction permit in any of up to nine 
different amounts. Under this proposal, the FCC Auction System 
interface will list the acceptable bid amounts for each construction 
permit.
    29. For Auction 90, the Bureaus propose to use a minimum acceptable 
bid percentage of 10 percent. This means that the minimum acceptable 
bid amount for a construction permit will be approximately 10 percent 
greater than the provisionally winning bid amount for the construction 
permit. To calculate the additional acceptable bid amounts, the Bureaus 
propose to use a bid increment percentage of 5 percent.
    30. The Bureaus retain the discretion to change the minimum 
acceptable bid amounts, the minimum acceptable bid percentage, the bid 
increment percentage, and the number of acceptable bid amounts if the 
Bureaus determine that circumstances so dictate. Further, the Bureaus 
retain the discretion to do so on a construction permit-by-construction 
permit basis. The Bureaus also retain the discretion to limit (a) the 
amount by which a minimum acceptable bid for a construction permit may 
increase compared with the corresponding provisionally winning bid, and 
(b) the amount by which an additional bid amount may increase compared 
with the immediately preceding acceptable bid amount. For example, the 
Bureaus could set a $10,000 limit on increases in minimum acceptable 
bid amounts over provisionally winning bids. Thus, if calculating a 
minimum acceptable bid using the minimum acceptable bid percentage 
results in a minimum acceptable bid amount that is $12,000 higher than 
the provisionally winning bid on a construction permit, the minimum 
acceptable bid amount would instead be capped at $10,000 above the 
provisionally winning bid. The Bureaus

[[Page 57951]]

seek comment on the circumstances under which the Bureaus should employ 
such a limit, factors the Bureaus should consider when determining the 
dollar amount of the limit, and the tradeoffs in setting such a limit 
or changing other parameters, such as changing the minimum acceptable 
bid percentage, the bid increment percentage, or the number of 
acceptable bid amounts. If the Bureaus exercise this discretion, they 
will alert bidders by announcement in the FCC Auction System during the 
auction. The Bureaus seek comment on these proposals.
vi. Provisionally Winning Bids
    31. Provisionally winning bids are bids that would become final 
winning bids if the auction were to close in that given round. At the 
end of a bidding round, a provisionally winning bid for each 
construction permit will be determined based on the highest bid amount 
received for the construction permit. In the event of identical high 
bid amounts being submitted on a construction permit in a given round 
(i.e., tied bids), the Bureaus will use a random number generator to 
select a single provisionally winning bid from among the tied bids. 
(Each bid is assigned a random number, and the tied bid with the 
highest random number wins the tiebreaker.) The remaining bidders, as 
well as the provisionally winning bidder, can submit higher bids 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. If any bids are received on the construction 
permit in a subsequent round, the provisionally winning bid again will 
be determined by the highest bid amount received for the construction 
permit.
    32. A provisionally winning bid will remain the provisionally 
winning bid until there is a higher bid on the construction permit at 
the close of a subsequent round, unless the provisionally winning bid 
is withdrawn. Bidders are reminded that provisionally winning bids 
count toward activity for purposes of the activity rule.
vii. Bid Removal and Bid Withdrawal
    33. For Auction 90, the Bureaus propose and seek comment on the 
following bid removal procedures. Before the close of a bidding round, 
a bidder has the option of removing any bid placed in that round. By 
removing selected bids in the FCC Auction System, a bidder may 
effectively undo any bid placed within that round. In contrast to the 
bid withdrawal provisions a bidder removing a bid placed in the same 
round is not subject to a withdrawal payment. Once a round closes, a 
bidder may no longer remove a bid.
    34. The Bureaus also seek comment on whether bid withdrawals should 
be permitted in Auction 90. When permitted in an auction, bid 
withdrawals provide a bidder with the option of withdrawing bids placed 
in prior rounds that have become provisionally winning bids. A bidder 
may withdraw its provisionally winning bids using the withdraw bids 
function in the FCC Auction System. A bidder that withdraws its 
provisionally winning bid(s), if permitted, is subject to the bid 
withdrawal payment provisions of the Commission rules.
    35. For Auction 90 the Bureaus propose to prohibit bidders from 
withdrawing any bids after the round in which bids were placed has 
closed. This proposal is made in recognition that bid withdrawals, 
particularly those made late in this auction, could result in delays in 
licensing of digital broadcast television service to the public in 
these two markets. The Bureaus are also mindful that the two 
construction permits that are the subject of this auction are being 
offered as a means to effectuate section 331(a)'s mandate that the 
Commission allot at least one VHF channel to each State, if technically 
feasible. The Bureaus seek comment on this approach.

C. Post-Auction Payments

i. Interim Withdrawal Payment Percentage
    36. The Bureaus seek comment on the appropriate percentage of a 
withdrawn bid that should be assessed as an interim withdrawal payment, 
in the event that a final withdrawal payment cannot be determined at 
the close of the auction. In general, the Commission's rules provide 
that a bidder that withdraws a bid during an auction is subject to a 
withdrawal payment equal to the difference between the amount of the 
withdrawn bid and the amount of the winning bid in the same or a 
subsequent auction(s). If a construction permit for which a bid has 
been withdrawn does not receive a subsequent higher bid or winning bid 
in the same auction, the final withdrawal payment cannot be calculated 
until a corresponding construction permit receives a higher bid or 
winning bid in a subsequent auction. When that final payment cannot yet 
be calculated, the bidder responsible for the withdrawn bid is assessed 
an interim bid withdrawal payment, which will be applied toward any 
final bid withdrawal payment that is ultimately assessed.
    37. The Commission's rules provide that, in advance of each 
auction, a percentage shall be established between three percent and 
twenty percent of the withdrawn bid to be assessed as an interim bid 
withdrawal payment. The Commission has indicated that the level of the 
interim withdrawal payment in a particular auction will be based on the 
nature of the service and the inventory of the construction permits 
being offered. The Commission noted that it may impose a higher interim 
withdrawal payment percentage to deter the anti-competitive use of 
withdrawals when, for example, there are few synergies to be captured 
by combining construction permits.
    38. Applying the reasoning that a higher interim withdrawal payment 
percentage is appropriate when aggregation of construction permits is 
not expected, as with the construction permits subject to competitive 
bidding in Auction 90, if the Bureaus allow bid withdrawals in this 
auction, the Bureaus propose the maximum interim withdrawal payment 
allowed under the current rules. Specifically, the Bureaus propose to 
establish an interim bid withdrawal payment of twenty percent of the 
withdrawn bid for this auction. The Bureaus seek comment on this 
proposal.
ii. Additional Default Payment Percentage
    39. Any winning bidder that defaults or is disqualified after the 
close of an 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 payment, or is otherwise 
disqualified) is liable for a default payment under 47 CFR 
1.2104(g)(2). This payment consists of 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.
    40. The Commission's rules provide that, in advance of each 
auction, a percentage shall be established between three percent and 
twenty percent of the applicable bid to be assessed as an additional 
default payment. As the Commission has indicated, the level of this 
payment in each case will be based on the nature of the service and the 
construction permits being offered.

[[Page 57952]]

    41. For Auction 90, the Bureaus propose to establish an additional 
default payment of twenty percent. As previously noted by the 
Commission defaults weaken the integrity of the auction process and may 
impede the deployment of service to the public, and an additional 
default payment of more than the previous three percent will be more 
effective in deterring defaults. In light of these considerations for 
Auction 90, the Bureaus propose an additional default payment of twenty 
percent of the relevant bid. The Bureaus seek comment on this proposal.

V. Deadlines and Filing Procedures

    42. Comments are due on or before September 30, 2010, and reply 
comments are due on or before October 15, 2010. All filings related to 
procedures for Auction 90 must refer to AU Docket No. 10-147. Comments 
may be submitted using the Commission's Electronic Comment Filing 
System or by filing paper copies. The Bureaus strongly encourage 
interested parties to file comments electronically.
    43. This proceeding has been designated as a permit-but-disclose 
proceeding in accordance with the Commission's ex parte rules. Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentations must contain summaries of the substance 
of the presentations and not merely a listing of the subjects 
discussed. More than a one or two sentence description of the views and 
arguments presented is generally required. Other rules pertaining to 
oral and written ex parte presentations in permit-but-disclose 
proceedings are set forth in 47 CFR 1.1206(b).

Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 2010-23825 Filed 9-22-10; 8:45 am]
BILLING CODE 6712-01-P


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