[Federal Register Volume 75, Number 193 (Wednesday, October 6, 2010)]
[Notices]
[Pages 61752-61756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-25195]


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FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 10-183; DA 10-1711]


Auction of FM Broadcast Construction Permits Scheduled for March 
29, 2011; Comment Sought on Competitive Bidding Procedures for Auction 
91

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the auction of certain FM construction 
permits scheduled to commence on March 29, 2011 (Auction 91). This 
document also seeks comment on competitive bidding procedures for 
Auction 91.

DATES: Comments are due on or before October 13, 2010, and reply 
comments are due on or before October 27, 2010.

ADDRESSES: You may submit comments, identified by AU Docket No. 10-183, 
by any of the following methods:
    <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#9bddd8d8aeabafdbfdf8f8b5fcf4ed"><span class="__cf_email__" data-cfemail="34727777010400745257571a535b42">[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#8eeffbedfae7e1e0b7bfcee8ededa0e9e1f8"><span class="__cf_email__" data-cfemail="d1b0a4b2a5b8bebfe8e091b7b2b2ffb6bea7">[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#a8eeebeb9d989ce8cecbcb86cfc7de"><span class="__cf_email__" data-cfemail="480e0b0b7d787c082e2b2b662f273e">[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: 
Lynne Milne or Howard Davenport at (202) 418-0660; for general auction 
questions: Roy Knowles or Linda Sanderson at (717) 338-2868. Media 
Bureau, Video Division: for service rules questions: Lisa Scanlan or 
Tom Nessinger at (202) 418-2700.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 91 Comment 
Public Notice released on September 21, 2010. The complete text of the 
Auction 91 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 8:00 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 
91 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 10-1711. The Auction 91 Comment Public Notice and related 
documents also are available on the Internet at the Commission's Web 
site: http://wireless.fcc.gov/auctions/91/, or by using the search 
function for AU Docket No.10-183 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 certain FM Broadcast construction 
permits. This auction, which is designated Auction 91, is scheduled to 
commence on March 29, 2011.

II. Construction Permits In Auction 91

    2. Auction 91 will offer 147 construction permits in the FM 
broadcast service. The construction permits to be auctioned are for 147 
new FM allotments, including 37 construction permits that were offered 
but not sold in Auction 79. Specifically, the vacant FM allotments for 
which construction permits are being offered are listed in Attachment A 
of the Auction 91 Comment Public Notice along with the reference 
coordinates for each vacant FM allotment. If two or more short-form 
applications specify the same FM allotment, they will be considered 
mutually exclusive, and the construction permit for that FM allotment 
will be awarded by competitive bidding procedures.

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. The FCC makes no representations or 
warranties about the use of this spectrum for particular services.
    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. Additionally, potential 
bidders should perform

[[Page 61753]]

technical analyses and/or refresh any previous analyses to assure 
themselves that, should they be a winning bidder for any Auction 91 
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 91 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 91 are strongly encouraged to continue 
such research throughout the auction. The due diligence considerations 
mentioned in the Auction 91 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 all construction permits included 
in Auction 91 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 91 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 results files, 
will be included in the same public notice.
    9. The Commission will conduct Auction 91 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 91 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 91: (a) Use a 
modified version of the simultaneous stopping rule that 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; (b) Use a modified version of the simultaneous stopping rule that 
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 that is not FCC held. Thus, 
absent any other bidding activity, a bidder placing a new bid on a 
construction permit that does not already have a provisionally winning 
bid (an FCC-held construction permit) would not keep the auction open 
under this modified stopping rule; (c) Use a modified version of the 
simultaneous stopping rule that combines (a) and (b); (d) Declare that 
the auction will end after a specified number of additional rounds 
(special stopping rule). 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 (e) 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 91, 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

[[Page 61754]]

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 91, 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 91 
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 91 
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 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.
    19. The Bureaus propose to divide the auction into at least two 
stages, each characterized by a different activity requirement. The 
auction will start in Stage One. The Bureaus propose to advance the 
auction to the next stage by announcement during the auction. In 
exercising this discretion, the Bureaus will consider a variety of 
measures of auction activity, including but not limited to the 
percentage of licenses (as measured in bidding units) on which there 
are new bids, the number of new bids, and the increase in revenue. The 
Bureaus seek comment on these proposals.
    20. The Bureaus propose the following activity requirements, while 
noting again that the Bureaus retain the discretion to change stages 
unilaterally by announcement during the auction. In each round of the 
first stage of the auction (Stage One), a bidder desiring to maintain 
its current bidding eligibility is required to be active on licenses 
representing at least 75 percent of its current bidding eligibility. 
Failure to maintain the required activity level will result in the use 
of an activity rule waiver or a reduction in the bidder's bidding 
eligibility for the next round of bidding. During Stage One, a bidder's 
reduced eligibility for the next round will be calculated by 
multiplying the bidder's current round activity by four-thirds (\4/3\). 
In each round of the second stage (Stage Two), a bidder desiring to 
maintain its current bidding eligibility is required to be active on 95 
percent of its current bidding eligibility. Failure to maintain the 
required activity level will result in the use of an activity rule 
waiver or a reduction in the bidder's bidding eligibility for the next 
round of bidding. During Stage Two, a bidder's reduced eligibility for 
the next round will be calculated by multiplying the bidder's current 
round activity by twenty-nineteenths (\20/19\).
    21. The Bureaus request comment on these activity requirements. 
Under this proposal, the Bureaus will retain the discretion to change 
the activity requirements during the auction. For example, the Bureaus 
could decide to add an additional stage with a higher activity 
requirement, not to transition to Stage Two if they believe the auction 
is progressing satisfactorily under the Stage One activity requirement, 
or to transition to Stage Two with an activity requirement that is 
higher or lower than the 95 percent proposed herein. If the Bureaus 
exercise this discretion, they will alert bidders by announcement in 
the FCC Auction System.
iii. Activity Rule Waivers and Reducing Eligibility
    22. 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.
    23. 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.
    24. 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.
    25. Under the proposed simultaneous stopping rule, a bidder may 
apply an activity rule waiver proactively as a means to keep the 
auction open without

[[Page 61755]]

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.
    26. The Bureaus propose that each bidder in Auction 91 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
    27. 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.
    28. The Bureaus propose to establish minimum opening bid amounts 
for Auction 91. 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 91.
    29. For Auction 91, 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 amount for each construction permit available in 
Auction 91 is set forth in Attachment A of the Auction 91 Comment 
Public Notice. The Bureaus seek comment on these proposals.
    30. 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 FM broadcast facility and any other relevant factors.
v. Bid Amounts
    31. 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.
    32. For Auction 91, 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.
    33. 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 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
    34. 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.
    35. 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
    36. For Auction 91, the Bureaus propose and seek comment on the 
following bid removal procedures. Before the close of a bidding round, 
a

[[Page 61756]]

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.
    37. 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.
    38. For Auction 91 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 of the site-specific 
nature and wide geographic dispersion of the permits available in this 
auction which suggests that potential applicants for this auction may 
have fewer incentives to aggregate permits through the auction process 
(as compared with bidders in many auctions of wireless licenses). The 
Bureaus are also mindful that bid withdrawals, particularly those made 
late in this auction, could result in delays in licensing new FM 
stations and attendant delays in the offering of new broadcast service 
to the public. The Bureaus seek comment on this approach.

C. Post-Auction Payments

i. Interim Withdrawal Payment Percentage
    39. In the event that the Bureaus allow bid withdrawals in Auction 
91, the Bureaus propose that the interim bid withdrawal payment be 20 
percent of the withdrawn bid. 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. 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.
    40. The amount of the interim bid withdrawal payment may range from 
three percent to 20 percent of the withdrawn bid amount, with the 
percentage generally being higher where there is greater risk of bid 
withdrawals being used for anti-competitive purposes, such as when 
there is little need for bidders to aggregate permits. The Bureaus 
therefore believe that the maximum interim bid withdrawal payment 
percentage allowed by 47 CFR 1.2104(g)(1) is justified, in the event 
bid withdrawals are allowed. Commenters advocating the use of bid 
withdrawals should also address the percentage of the interim bid 
withdrawal payment.
ii. Additional Default Payment Percentage
    41. 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.
    42. 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.
    43. For Auction 91, 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 91, 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

    44. Comments are due on or before October 13, 2010, and reply 
comments are due on or before October 27, 2010. All filings related to 
procedures for Auction 91 must refer to AU Docket No. 10-183. 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.
    45. 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. 2010-25195 Filed 10-5-10; 8:45 am]
BILLING CODE 6712-01-P


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