[Federal Register Volume 82, Number 164 (Friday, August 25, 2017)]
[Proposed Rules]
[Pages 40520-40537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-18041]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[AU Docket No. 17-182; WC Docket No. 10-90; FCC 17-101]


Comment Sought on Competitive Bidding Procedures and Certain 
Program Requirements for the Connect America Fund Phase II Auction 
(Auction 903)

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) initiates the pre-auction process for the Connect America 
Fund Phase II auction (Phase II auction, auction, or Auction 903). The 
Commission proposes and seeks comment on the procedures to be used in 
the Phase II auction. The Phase II auction will award up to $1.98 
billion over 10 years to service providers that commit to offer voice 
and broadband services to fixed locations in unserved high-cost areas. 
The auction is scheduled to begin in 2018. A guide that provides 
further technical and mathematical detail regarding the bidding, 
assignment, and support amount determination procedures proposed in 
this document, as well as examples for potential bidders, is available 
at: http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0804/DA-17-733A1.pdf.

DATES: Comments are due on or before September 18, 2017 and reply 
comments are due on or before October 18, 2017. If you anticipate that 
you will be submitting comments, but find it difficult to do so within 
the period of time allowed by this document, you should advise the 
contact listed below as soon as possible.

ADDRESSES: Comments may be filed using the Commission's Electronic 
Comment Filing System (ECFS). See Electronic Filing of Documents in 
Rulemaking Proceedings, 63 FR 24121 (1998).
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://apps.fcc.gov/ecfs/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy of each filing. If more than one docket or 
rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. 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, Office of the Secretary, Federal Communications Commission.
    [ssquf] 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. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building.
    [ssquf] 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.
    [ssquf] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street SW., Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Heidi Lankau or Katie King, 
Telecommunications Commission, Wireline Competition Bureau, (202) 418-
7400 or TTY: (202) 418-0484; Mark Montano or Angela Kung, Auctions and 
Spectrum Access Division, Wireless Telecommunications Bureau, (202) 
418-0660.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
document in AU Docket No. 17-182; WC Docket No. 10-90; FCC 17-101, 
released on August 4, 2017. The full text of this document is available 
for public inspection during regular business hours in the FCC 
Reference Center, Room CY-A257, 445 12th St. SW., Washington, DC 20554 
or at the following Internet address: http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0807/FCC-17-101A1.pdf.
    Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47 
CFR 1.415, 1.419, interested parties may file comments and reply 
comments on or before the dates indicated above in AU Docket No. 17-182 
and WC Docket No. 10-90.

I. Introduction

    1. By this document, the Commission initiates the pre-auction 
process for the Connect America Fund Phase II auction (Phase II 
auction, auction, or Auction 903). The Phase II auction will award up 
to $198 million annually for 10 years to service providers that commit 
to offer voice and broadband services to fixed locations in unserved 
high-cost areas. The auction is scheduled to begin in 2018.
    2. Auction 903 will be the first auction to award ongoing high-cost 
universal service support through competitive bidding in a multiple-
round, reverse auction. Through this auction, the Commission intends to 
maximize the value the American people receive for the universal 
service dollars it spends, balancing higher-quality services with cost 
efficiencies. Therefore, the auction is designed to select bids from 
providers that would deploy high-speed broadband and voice services in 
unserved communities for lower relative levels of support.

[[Page 40521]]

    3. While many of the pre-auction and bidding procedures and 
processes proposed for this auction are similar to those used in the 
Commission's Mobility Fund Phase I auction and in its spectrum 
auctions, the Commission proposes some new pre-auction and bidding 
procedures and processes for this auction. As is typical prior to a 
Commission auction, it proposes and seeks comment in this Public Notice 
on the procedures to be used in this auction, including (i) how an 
applicant can become qualified to participate in the auction, (ii) how 
bidders will submit bids, and (iii) how bids will be processed to 
determine winners and assign support amounts. The Commission also 
proposes procedures for, among other things, aggregating eligible areas 
into larger geographic units for bidding, setting reserve prices, and 
making auction information available to bidders and the public. The 
Commission asks that commenters advocating a particular procedure 
provide specific details regarding the costs and benefits of that 
procedure.
    4. The Commission will announce final procedures and other 
important information concerning Auction 903 after considering comments 
provided in response to this document, pursuant to governing statutes 
and the Commission's rules. Because the Commission expects that the 
Phase II auction will attract parties that have never participated in a 
Commission auction, the Commission anticipates providing detailed 
educational materials and hands-on practice opportunities in advance of 
the auction to help such potential bidders understand the procedures 
ultimately adopted to govern the auction after consideration of 
comments in response to this Public Notice.

II. Minimum Geographic Area for Bidding

    5. As an initial matter, and in the interest of providing bidders 
with as much flexibility as feasible, the Commission proposes to use 
census block groups containing one or more eligible census blocks as 
the minimum geographic area for bidding in the auction. Although the 
Commission previously decided that support will be available for 
specified eligible census blocks, it proposes to aggregate eligible 
census blocks by census block groups for purposes of bidding. The 
Commission seeks comment on this approach. In August 2016, as directed 
by the Commission, the Wireline Competition Bureau (WCB) released a 
preliminary list of eligible census blocks based on June 30, 2015, FCC 
Form 477 data. This list included approximately 300,000 eligible census 
blocks, which are located in 36,000 census block groups and 20,000 
census tracts.
    6. In the Phase II Auction Order, 81 FR 44414, July 7, 2016, the 
Commission indicated that it expected to use census block groups that 
contain one or more eligible census blocks as the minimum geographic 
unit for bidding, rather than a larger geographic area, such as census 
tracts or counties. While the Commission reserved the right to require 
that bids be submitted for census tracts so as to limit the number of 
discrete biddable units, the Commission thinks that it is unnecessary 
to do so here. The number of eligible census block groups would not 
materially increase the complexity of the Phase II auction. At the same 
time, using census block groups will provide bidders with more 
flexibility to develop a bidding strategy that aligns with their 
intended network expansion or construction. Bidding at the census tract 
level could be particularly problematic for small providers that may 
seek to construct smaller networks or expand existing networks because 
a larger minimal geographic area, like a census tract or county, may 
extend beyond a bidder's service territory, franchise area, or license 
area. The Commission invites comment on using census block groups as 
the minimum geographic unit for bids.
    7. In addition, the Commission directed WCB to determine the census 
blocks that will be eligible for the Phase II auction and to publish 
the final list of eligible census blocks no later than three months 
prior to the deadline for submission of short-form applications. The 
Preliminary Phase II Auction Areas document provides a summary of the 
Commission's decisions regarding the categories of blocks that will be 
included in the auction. As directed, WCB will update the list of 
eligible census blocks, based on the most recent publicly available 
Form 477 data at that time by identifying blocks that are not served by 
terrestrial, fixed voice and broadband services at speeds of 10/1 Mbps 
or higher, whether offered by the incumbent price cap carrier or an 
unsubsidized competitor. Separately, WCB has released additional 
information and is seeking comment on certain census blocks that may be 
incorporated into the final list of eligible census blocks, consistent 
with the Commission's previous decisions.

III. Proposed Application Requirements

    8. In this section, the Commission describes and seeks comment on 
certain information it proposes to require each applicant to provide in 
its short-form application. This information should help promote an 
effective, efficient, and fair auction and facilitate Commission 
staff's evaluation of whether a potential bidder is qualified to 
participate in Auction 903. The Phase II Auction Order adopted a two-
stage application filing process for the Phase II competitive bidding 
process. The two stages consist of a pre-auction short-form application 
and a post-auction long-form application. In its short-form 
application, a potential bidder will seek to establish its eligibility 
to participate in the Phase II auction. After the auction, upon receipt 
of a winning bidder's long-form application, Commission staff will 
conduct a more extensive review of the winning bidder's qualifications 
to receive support.
    9. The Commission's rules require each applicant seeking to 
participate in the Phase II auction to provide in its short-form 
application, among other things, basic ownership information, 
certifications regarding its qualifications to receive support, and 
information regarding its operational and financial capabilities. The 
Commission's Phase II short-form application rules also provide for the 
collection of such additional information as the Commission may require 
to evaluate an applicant's qualifications to participate in the Phase 
II auction. The information provided in a short-form application helps 
confirm that an applicant meets certain basic qualifications for 
participation in the bidding and enables Commission staff to ensure 
compliance with certain rules and bidding restrictions that help 
protect the integrity of the auction.
    10. After the deadline for filing short-form applications, 
Commission staff will review all timely submitted applications to 
determine whether each applicant has complied with the application 
requirements and provided all information concerning its qualifications 
for bidding. After this review, WCB and the Wireless Telecommunications 
Bureau (WTB) (collectively, the Bureaus) will issue a public notice 
identifying the applications that are complete and those that are 
incomplete because of minor defects that may be corrected. For those 
applications found to be incomplete, the public notice will set a 
deadline for the resubmission of corrected applications. After 
reviewing the resubmitted applications, and well in advance of the 
start of bidding in Auction 903, the Bureaus will issue a public notice 
announcing all qualified bidders for the auction. Qualified bidders are 
those

[[Page 40522]]

applicants that submitted short-form applications deemed timely-filed 
and complete. To be clear, however, the finding from Commission staff 
that a short-form application is complete and that an applicant is 
qualified to bid only qualifies the applicant to participate in the 
bidding; it does not authorize a winning bidder to receive Phase II 
support.
    11. After Auction 903 concludes, each winning bidder must submit a 
long-form application that Commission staff will review to determine 
whether the winning bidder meets the eligibility requirements for 
receiving Phase II support and has the financial and technical 
qualifications to meet the obligations associated with such support. In 
its long-form application, each winning bidder must submit information 
about its qualifications, funding, and the network it intends to use to 
meet its obligations. In addition, prior to being authorized to receive 
Phase II support, each winning bidder must demonstrate that it has been 
designated as an ETC in the area(s) where it was awarded support and 
must obtain a letter of credit from a bank meeting the Commission's 
eligibility requirements. The Commission addresses below the types of 
further information that may be required in the long-form application. 
If a winning bidder is not authorized to receive Phase II support 
(e.g., the bidder fails to file or prosecute its long-form application 
or its long-form application is dismissed or denied), the winning 
bidder is in default.
    12. Consistent with the Commission's practice in the Mobility Fund 
I auction (Auction 901) and its spectrum auctions, the Commission 
proposes to require each applicant to identify in its short-form 
application the state(s) in which it intends to bid for support in the 
Phase II auction. An applicant will be able to place bids for eligible 
areas only in the states identified in its application. This 
restriction is designed to improve the administrative efficiency of the 
auction for both bidders and the Commission and to safeguard against 
coordinated bidding while preserving bidders' flexibility to decide 
whether to bid for specific census block groups in a state until the 
start of the auction.
    13. To discourage coordinated bidding that may disadvantage other 
bidders, the Commission proposes to prohibit separate applicants that 
are commonly-controlled or parties to a joint bidding arrangement from 
bidding in any of the same states. Absent such a restriction, there is 
a risk that separate bidders could coordinate their bidding through a 
joint bidding arrangement identified on their respective applications 
and engage in communications during the competitive bidding process 
under the exception to the Commission's rule prohibiting certain 
communications during the competitive bidding process. Knowing the 
specific state(s) for which each applicant intends to bid, in 
combination with the ownership and bidding agreement information 
collected on the short-form application, will enable the Commission to 
ensure applicants' compliance. Accordingly, the Commission intends to 
resolve any state overlaps and determine the specific state(s) in which 
an applicant is eligible to bid prior to the commencement of the 
bidding.
    14. To implement the restriction described above, the Commission 
proposes to use definitions adopted for similar purposes in its 
spectrum auctions and rely to the extent appropriate on past precedent 
and guidance regarding the Commission's rules on prohibited 
communications. Specifically, to identify commonly-controlled entities, 
the Commission proposes to define a ``controlling interest'' for 
purposes of the Phase II auction as an individual or entity with 
positive or negative de jure or de facto control of the applicant. In 
addition, the Commission proposes to adapt the definition of ``joint 
bidding arrangements'' that it uses in its spectrum auctions to those 
that (i) relate to any eligible area in the Phase II auction, and (ii) 
address or communicate bids or bidding strategies, including 
arrangements regarding Phase II support levels (i.e., bidding 
percentages) and specific areas on which to bid, as well as any 
arrangements relating to the post-auction market structure in an 
eligible area. As a result, if two or more applicants are parties to an 
agreement that falls within this definition, they would be prohibited 
from bidding in the same state in the Phase II auction. Furthermore, 
the prohibited communications rule applicable to the Phase II auction, 
section 1.21002(b), is analogous to rules that were applicable in past 
auctions. In past auctions, the Commission explained that the rule does 
not prohibit an applicant covered by the rule from communicating bids 
or bidding strategies to a third-party consultant or consulting firm, 
provided that such an applicant takes appropriate steps to ensure that 
any third party it employs for advice pertaining to its bids or bidding 
strategies does not become a conduit for prohibited communications to 
other covered entities, which in the Phase II auction would include 
another applicant, unless both applicants are parties to a joint 
bidding agreement disclosed on their respective applications. The 
Commission notes that WTB has expressed particular concerns about 
employing the same individual for bidding advice. The Commission seeks 
comment on whether there are alternative procedures that it could adopt 
that would be equally effective in preventing the competitive harm from 
coordinated bidding that the Commission seeks to avoid through section 
1.21002(b) and the procedures proposed herein.
    15. Entities that are commonly-controlled or parties to a joint 
bidding arrangement have several options for submitting short-form 
applications to avoid the Commission's proposed restriction on state 
overlaps. It is important that entities carefully consider these 
options prior to the short-form application filing deadline. At the 
deadline, the prohibited communications rule takes effect, and only 
minor amendments or modifications to applications will be permitted.
    16. First, such entities may submit a single short-form application 
and qualify to bid as one applicant in a state. The Commission's Phase 
II auction rules do not restrict service providers from determining 
which of their related entities will apply to participate in bidding. 
For example, a holding or parent company may choose to submit a single 
short-form application on behalf of all its affiliated operating 
companies in one or more states. So that Commission staff can readily 
identify such applications, it proposes requiring each applicant to 
indicate whether it is submitting the application on behalf of one or 
more existing operating companies and if so, to identify such 
companies. Similarly, parties to a joint bidding arrangement may form a 
consortium or a joint venture and submit a single short-form 
application that identifies each party to the consortium or joint 
venture. At least one related entity, affiliate, or member of the 
holding or parent company, consortium, or joint venture must 
demonstrate that it meets the operational and financial requirements of 
section 54.315(a)(7).
    17. Consistent with the Commission's practice for consortium and 
joint venture applicants that are winning bidders in spectrum auctions, 
the Commission proposes that if a holding/parent company or a 
consortium/joint venture is announced as a winning bidder in Auction 
903, the entity may, during the long-form application review process, 
designate at least one operating

[[Page 40523]]

company for each state that will be authorized to receive Phase II 
support for the winning bids. While the Commission would permit more 
than one operating company to be designated in each state, in order to 
deter strategic conduct, it proposes that a winning bidder would not be 
allowed to apportion a winning bid for a package of eligible census 
block groups among multiple operating companies. Because the Commission 
recognizes that the holding company or the consortium may wish to form 
a new operating company to serve the area associated with its winning 
bid(s), the holding company or consortium would be permitted to file a 
long-form application in its own name and during the long-form 
application review process, identify the operating company for which it 
seeks authorization to receive support for each winning bid. The 
operating company that should be identified as the entity authorized to 
receive support must be the entity that is designated as the ETC by the 
relevant state(s) in the areas covered by the winning bid(s) and is 
named in the letter of credit that each winning bidder must obtain. The 
entity authorized to receive support is the entity that will be 
required to meet the associated Phase II public interest obligations.
    18. Second, commonly-controlled entities or parties to a joint 
bidding arrangement may bid in the Phase II auction independently and 
submit separate short-form applications, provided that they do not 
submit bids in the same state. The Commission expects that such 
applicants would exercise due diligence to confirm that no other 
commonly-controlled entity or party to a joint bidding arrangement, or 
an entity that controls any party to such an arrangement, has indicated 
its intent to bid in any of the same states the applicant has selected. 
To provide further assurance, the Commission proposes requiring each 
applicant to certify that it acknowledges that it cannot place any bids 
in the same state as (i) another commonly-controlled entity; (ii) 
another party to a joint bidding arrangement related to Phase II 
auction support that it is a party to; or (iii) any entity that 
controls a party to such an arrangement. The Commission's rules require 
each applicant to disclose in its short-form application information 
concerning its real parties in interest and its ownership, and identify 
all real parties in interest to any agreements relating to the 
participation of the applicant in the competitive bidding. The 
Commission proposes requiring an applicant to also provide in its 
short-form application a brief description of any such agreements, 
including any joint bidding arrangements. Commission staff would use 
such information to identify and resolve any impermissible state 
overlaps prior to the auction.
    19. The Commission further proposes to require every applicant to 
certify in its short-form application that it has not entered into any 
explicit or implicit agreements, arrangements, or understandings of any 
kind related to the support to be sought through the Phase II auction, 
other than those disclosed in the short-form application. The 
Commission further proposes requiring each winning bidder to submit in 
its long-form application any updated information regarding the 
agreements, arrangements, or understandings related to its Phase II 
auction support disclosed in its short-form application. A winning 
bidder may also be required to disclose in its long-form application 
the specific terms, conditions, and parties involved in any agreement 
into which it has entered and the agreement itself.
    20. If during short-form application review Commission staff 
identifies applicants that are commonly-controlled and/or parties to a 
joint bidding arrangement where any controlling interests have selected 
the same states in their respective applications, the Commission 
proposes that all such applications would be deemed to be incomplete on 
initial review. The Bureaus would inform each affected applicant of the 
identity of each of the other applicants with which it has an 
impermissible state overlap and the specific state(s) associated with 
such overlap. To the extent that an affected applicant has disclosed a 
joint bidding arrangement with one or more of the other affected 
applicants, these applicants must decide amongst themselves which 
applicant will bid in each overlapping state and then revise their 
short-form applications during the application resubmission period, as 
appropriate, in order to become qualified to bid. However, any affected 
applicant that has not disclosed a joint bidding arrangement with the 
other affected applicants will be barred by the Commission's prohibited 
communications rule from discussing the overlap with any of the other 
affected applicants. As a result, any affected applicant that cannot 
discuss and resolve the overlap(s) due to the failure to disclose a 
joint bidding arrangement will be prohibited from bidding in any states 
where there is an overlap. Due to the prohibition on certain 
communications that takes effect as of the short-form application 
filing deadline, all commonly-controlled entities must have entered 
into any joint bidding arrangements prior to the short-form filing 
deadline and disclosed them in their applications to be able to take 
advantage of the exception afforded by the Commission's rules. By 
taking these steps, commonly-controlled entities could discuss and 
jointly resolve any state overlaps identified by Commission staff. 
After the application resubmission period has ended, the Bureaus would 
inform each applicant about how it can find out the states in which it 
is eligible to bid, and the bidding system would permit an applicant to 
place bids only in those states.
    21. The Commission seeks comment on this process and whether its 
proposals efficiently and effectively promote straightforward bidding 
and safeguard the integrity of the auction.
    22. The Commission proposes to have its staff determine, at the 
short-form application stage and in advance of the start of bidding in 
the auction, each applicant's eligibility to bid for the performance 
tier and latency combinations it has selected in its application. The 
Commission also proposes a standard and a process Commission staff will 
use in making this determination. Moreover, the Commission proposes 
requiring each applicant to submit additional high-level operational 
information in its short-form application to aid Commission staff in 
making this determination, and for each winning bidder to submit 
updated and supportive information in its long-form application.
    23. In the Phase II Auction Order, the Commission concluded that it 
would accept bids for four performance tiers with varying speed and 
usage allowances and with respect to each tier would provide for bids 
at either high or low latency. All bids will be considered 
simultaneously so that bidders that propose to meet one set of 
performance standards will compete directly against bidders that 
propose to meet other performance standards, taking into account the 
weights adopted by the Commission for each performance tier and latency 
level. Pursuant to the Commission's rules, each applicant for the Phase 
II auction must indicate in its short-form application the performance 
tier and latency combinations for which it intends to bid and the 
technologies it intends to deploy to meet the relevant public interest 
obligations. Additionally, each Phase II auction applicant must 
indicate whether it has at least two years' experience providing a 
voice, broadband, and/or electric distribution or transmission service 
and must submit certain financial

[[Page 40524]]

information. The Commission's rules also require each applicant to 
submit any additional information that the Commission may require to 
establish its eligibility for the weights associated with the 
applicant's selected performance tier and latency combinations.
    24. Requiring a potential bidder to submit evidence in its short-
form application that it can meet the service requirements associated 
with the performance tier and latency combinations for which it intends 
to bid will help safeguard consumers from situations where bidders that 
are unable to meet the specified service requirements divert support 
from bidders that can meet the service requirements. Accordingly, the 
Commission seeks to collect sufficient operational information in the 
short-form application regarding an applicant's experience providing 
voice, broadband, and/or electric distribution or transmission service 
and its plans for provisioning service if awarded support to assess a 
bidder's technical qualifications to bid for specific performance tier 
and latency combinations. At the same time, the Commission wants to 
minimize the burden on applicants and Commission staff.
    25. The Commission intends to use the short-form application to 
assess the likelihood that an applicant will default if selected as a 
winning bidder. If the applicant becomes qualified to bid in the Phase 
II auction and subsequently becomes a winning bidder, Commission staff 
will evaluate the information submitted in the long-form application 
and will rely on the applicant's letter of credit to determine whether 
an applicant is capable of meeting its Phase II auction obligations in 
the specific areas where it has been selected as a winning bidder. 
Accordingly, a determination at the short-form stage that an applicant 
is eligible to bid for a performance tier and latency combination would 
not preclude a determination at the long-form application stage that an 
applicant does not meet the technical qualifications for the 
performance tier and latency combination and thus will not be 
authorized to receive Phase II support. In addition, the Commission's 
adoption of certain non-compliance measures in the event of default--
both before a winning bidder is authorized for support and if a winning 
bidder does not fulfill its Phase II obligations after it has been 
authorized--should encourage each applicant to select performance tier 
and latency combinations with public interest obligations that it can 
reasonably expect to meet. With these considerations in mind, the 
Commission describes its proposals: (1) For what information and 
showing each applicant must submit to establish its qualifications for 
the performance tier and latency combinations it has selected on its 
application, (2) for the process Commission staff would use to 
determine whether an applicant is eligible to bid on those 
combination(s), and (3) not to adopt any additional non-compliance 
measures for this process beyond those adopted in the Phase II Auction 
Order.
    26. The Commission proposes to collect high-level operational 
information from each applicant to complete its operational showing and 
enable Commission staff to determine whether the applicant is expected 
to be reasonably capable of meeting the public interest obligations 
(e.g., speed, usage, latency, and build-out milestones) for each 
performance tier and latency combination that it selected in its 
application. As noted above, each applicant seeking to participate in 
the Phase II auction is required to make certain certifications in its 
short-form application, including a certification that it is 
technically qualified to meet the public interest obligations in each 
tier and in each area for which it seeks support, and a certification 
regarding its experience in providing voice, broadband, and/or electric 
distribution or transmission service. The Commission's rules also 
require an applicant to submit certain information in its short-form 
application in connection with those certifications.
    27. The Commission proposes making such determinations on a state-
by-state basis. Accordingly, for each selected performance tier and 
latency combination, an applicant will be required to demonstrate how 
it intends to provision service if awarded support and that it is 
reasonably capable of meeting the relevant public interest obligations 
for each state it selects. Some parties have suggested in the Phase II 
proceeding that the Commission should only require additional 
information from, and conduct an eligibility review for, applicants 
that select certain performance tier and latency combinations. Instead, 
to reduce the risk of defaults, the Commission proposes to evaluate all 
combinations selected by each applicant to determine its eligibility to 
bid for any such combination.
    28. Specifically, the Commission proposes to require each applicant 
to answer the questions listed in the following Proposed Auction 903 
Short-Form Application Operational Questions for each state it selects 
in its application. The questions are intended to elicit short, 
narrative responses from each applicant regarding its experience in 
providing voice, broadband, and/or electric distribution or 
transmission service, and the network(s) it intends to use to meet its 
Phase II public interest obligations. The questions are designed to 
confirm that each applicant has developed a preliminary design or 
business case for meeting the public interest obligations for its 
selected performance tier and latency combinations. They ask the 
applicant to identify the information it could make available to 
support the assertions in its application. Because the Commission 
expects that applicants will have already started planning to be ready 
to deploy the required voice and broadband services upon authorization 
of Phase II support, the Commission does not anticipate that it will be 
unduly burdensome to respond to these questions. The Commission seeks 
comment on the specific questions it proposes and ask whether there are 
other questions the Commission should include.
    29. The Commission also seeks comment on the assumptions an 
applicant will need to make about network usage and subscription rates 
when determining whether it can meet the public interest obligations 
for its selected performance tier and latency combination(s). For 
example, the Commission's rules require that each winning bidder 
provide in its long-form application a certification by a professional 
engineer that the applicant's proposed network can deliver the required 
service to at least 95 percent of the required number of locations. The 
Commission seeks comment on the suggestion by some parties that an 
applicant be required to demonstrate that its network could be 
engineered to deliver the required service to every location in the 
relevant census blocks. The Commission also seeks comment on whether it 
should require each service provider to assume a subscription rate of 
at least 70 percent for voice services, broadband services, or both 
when determining whether it can meet the public interest obligations 
for its selected performance tiers and latency combinations. This 
subscription rate is consistent with the assumptions made in the 
Connect America Cost Model (CAM) when calculating the amount of support 
made available. Some parties in the Phase II proceeding have suggested 
that the Commission should not expect that all end users

[[Page 40525]]

passed by a Phase II support recipient will subscribe to a service 
package at speeds required by the relevant performance tier, or that 
they will subscribe to the provider's service at all. Does the presumed 
subscription rate need to change over time to reflect the number of 
locations that a bidder is able to serve in a given year? For example, 
if a provider will only have facilities in place in year two to serve 
10 percent of the eligible locations in its bid area, should it be 
required to make its assumptions based on this subscription rate in 
that year? The Commission also seeks comment on whether it should 
specify the assumptions an applicant should make concerning per-
subscriber data usage to ensure that its network is sufficient to 
support peak usage busy hour offered load, accounting for the monthly 
data usage allowance associated with the performance tier(s) the 
applicant selects in its short-form application. The Commission seeks 
comment on these issues and on whether it should set any other 
parameters for assumptions about the network that will be used to meet 
Phase II obligations.
    30. The Commission proposes requiring each applicant that intends 
to use radiofrequency spectrum to submit certain types of information 
regarding the sufficiency of the spectrum to which it has access to aid 
Commission staff in determining whether the applicant is expected to be 
reasonably capable of meeting the public interest obligations for each 
performance tier and latency combination that it selected in its 
application.
    31. The Commission's Phase II auction rules require a short-form 
applicant that plans to use radiofrequency spectrum to demonstrate that 
it has (i) the proper spectrum use authorizations, if applicable; (ii) 
access to operate on the spectrum it intends to use; and (iii) 
sufficient spectrum resources to cover peak network usage and meet the 
minimum performance requirements to serve the fixed locations in 
eligible areas. Consistent with the Commission's approach in the 
Mobility Fund Phase I auction, for the described spectrum access to be 
sufficient as of the date of the short-form application, the applicant 
must have obtained any necessary approvals from the Commission for the 
spectrum, if applicable, subject to the earth station license exception 
for satellite providers described below. The Phase II auction short-
form rules also require an applicant to certify that it will retain 
such authorizations for 10 years.
    32. A number of parties sought clarification on how an applicant 
can demonstrate that it has access to sufficient spectrum resources. 
The Commission proposes that an applicant (i) identify the spectrum 
band(s) it will use for last mile, backhaul, and any other parts of the 
network; (ii) describe the total amount of uplink and downlink 
bandwidth (in megahertz) that it has access to in such spectrum band(s) 
for last mile; (iii) describe the authorizations it has obtained to 
operate in the spectrum, if applicable; and (iv) list the call signs 
and/or application file numbers associated with its spectrum 
authorizations. This spectrum information, combined with the 
operational and financial information submitted in the short-form 
application, will allow Commission staff to determine whether an 
applicant has sufficient spectrum resources and is expected to be 
reasonably capable of meeting the public interest obligations required 
by its selected performance tier and latency combination(s).
    33. In the following Proposed Auction 903 Spectrum Chart, the 
Commission identifies the spectrum bands that it anticipates could be 
used for the last mile to meet Phase II obligations and indicates 
whether the spectrum bands are licensed or unlicensed. The Commission 
seeks comment on whether the individual bands--or, in some cases, the 
blocks within them, individually or in combination with each other--
provide sufficient uplink or downlink bandwidth to support the wireless 
technologies that a provider may use to meet the Phase II obligations. 
In addition to the amount of bandwidth, should Commission staff 
consider the differences between licensed and unlicensed spectrum, or 
the differences between upper band and lower band frequencies when 
evaluating whether an applicant has sufficient spectrum resources? Are 
there other spectrum bands that can offer sufficient uplink or downlink 
bandwidth--individually or in combination--to meet the various 
performance tier and latency combination qualifications? If so, what 
last mile technologies and corresponding last mile network architecture 
can be used in those spectrum bands?
    34. The Commission also proposes requiring any applicant that 
intends to provide service using satellite technology to identify in 
its short-form application any space station licenses it intends to use 
in the areas where it intends to bid. The Commission expects that this 
information, coupled with the additional operational information it 
will collect in the short-form application, will be sufficient to 
enable the Commission to assess whether satellite providers have the 
required authorizations and adequate access to spectrum. Some parties 
have suggested in the Phase II proceeding that each satellite provider 
should also be required to demonstrate that it has obtained earth 
station licenses for the terminals it will use to communicate with 
satellites. But satellite providers must bring their earth stations 
into operation within one year of obtaining a license, and may not be 
ready to do so within a year of the short-form application deadline. 
Because the first Phase II auction interim milestone is not until the 
end of the third year of support and the final milestone is not until 
the end of the sixth year of support, a satellite provider could obtain 
an earth station license during the support term and still meet its 
obligations. Nevertheless, the Commission would expect that each 
satellite provider would describe in its short-form application its 
expected timing for applying for earth station licenses.
    35. In addition to information provided in a short-form 
application, the Commission proposes to allow its staff to consider any 
information that a provider has submitted to the Commission in other 
contexts when determining whether a service provider is reasonably 
capable of meeting the public interest obligations for its selected 
performance tier and latency combinations. This other information would 
include information submitted to the Commission in other contexts--
including data reported in FCC Form 477 Local Telephone Competition and 
Broadband Report (FCC Form 477), FCC Form 481 Carrier Annual Reporting 
Data Collection Form (FCC Form 481), FCC Form 499-A Annual 
Telecommunications Reporting Worksheet (FCC Form 499-A)--and any public 
information. For example, Commission staff may consider whether an 
applicant already offers service that meets the public interest 
obligations associated with its selected performance tier and latency 
combinations and the number of subscribers to that service.
    36. To facilitate Commission staff's collection and review of data 
provided to the Commission by applicants outside the Phase II auction 
short-form application process, the Commission proposes to collect 
information in the short-form application about the unique identifiers 
a provider uses to submit other data to the Commission.
    37. Specifically, the Commission proposes to collect in the short-
form application any FCC Registration Numbers (FRNs) that an applicant 
or its parent company--and in the case of a holding company applicant, 
its

[[Page 40526]]

operating companies--have used to submit their FCC Form 477 data for 
the past two years. By collecting the FRNs that an applicant has used 
to submit FCC Form 477, Commission staff will be able to cross-
reference FCC Form 477 data that an applicant has filed for the past 
two years.
    38. Data on where a service provider offers voice and broadband 
service, the number of subscribers to its voice and broadband services, 
and the broadband speeds it offers would provide insight into an 
applicant's experience in providing voice or broadband service. This 
information could help Commission staff determine whether an applicant 
can reasonably be expected to meet the public interest obligations 
associated with the performance tier and latency combinations it has 
selected in its application. The Commission expects that it would 
generally be sufficient to review FCC Form 477 data from only the past 
two years because those data would reflect the services that the 
applicant is currently offering or recently offered, and would 
illustrate the extent to which an applicant was able to scale its 
network in the recent past.
    39. The Commission proposes to collect in the short-form 
application any study area codes (SAC) associated with an applicant (or 
its parent company) that indicates it is an existing ETC. In the case 
of a holding company applicant, the Commission proposes collecting the 
SACs of its operating companies. An applicant is required by the 
Commission's Phase II short-form application rules to disclose its 
status as an ETC if applicable. By identifying its SACs, an applicant 
will be disclosing its status as an existing ETC. As noted above, an 
applicant need not have obtained an ETC designation in the areas where 
it seeks Phase II support until after it is named as the winning bidder 
in those areas. The Commission proposes to collect these SACs even if 
the relevant entity is not an ETC in the areas where the applicant 
intends to bid. ETCs also file their annual reports on their FCC Form 
481 for each of their SACs. Collecting the SACs associated with every 
applicant (if applicable) will allow Commission staff to easily cross-
reference the Form 481 data filed by the applicant or its parent 
company, or in the case of a holding company applicant, the Form 481 
data filed by its operating companies. An ETC is required to file FCC 
Form 481 data and certifications regarding its compliance with existing 
ETC obligations. Being able to review an ETC's past compliance with its 
ETC obligations will be useful for determining whether an applicant is 
reasonably capable of meeting the relevant Phase II obligations.
    40. Finally, the Commission proposes to collect in the short-form 
application any FCC Form 499 filer identification numbers that the 
applicant or its parent company, and in the case of a holding company, 
its operating companies, have used to file an FCC Form 499-A in the 
past year, if applicable. Subject to some exceptions, the Commission 
requires telecommunications carriers and certain other providers of 
telecommunications (including VoIP providers) to report on an annual 
basis in FCC Form 499-A certain revenues from the prior year for a 
number of purposes, including for purposes of calculating contributions 
to the Universal Service Fund and the Telecommunications Relay Services 
Fund, the administration of the North American Numbering Plan, for 
shared costs of the local number portability administration, and for 
calculating and assessing Interstate Telecommunications Service 
Provider regulatory fees. By collecting the relevant FCC Form 499 filer 
identification numbers, Commission staff would be able to easily cross-
reference the most recent FCC Form 499-A filed by the applicant and 
obtain the revenue data therein, which could be useful in assessing the 
financial qualifications of the applicant.
    41. Because the Commission expects each applicant already keeps 
track of its identifiers to meet various regulatory obligations, the 
Commission does not anticipate that requiring these identifiers to be 
provided in the short-form application would be unduly burdensome for 
Phase II auction applicants. The Commission seeks comment on its 
proposed collection and use of these various identifiers, and on 
whether there are other ways Commission staff can leverage data that 
are already reported to the Commission to assess the qualifications of 
Phase II applicants.
    42. To streamline the review of short-form applications, the 
Commission proposes to preclude an applicant that intends to use 
certain technologies from selecting certain performance tier and 
latency combinations that are inconsistent with those technologies. For 
example, the Commission proposes to prohibit satellite providers from 
selecting low latency in combination with any of the performance tiers. 
As satellite providers have acknowledged, they cannot meet the low 
latency requirement that 95 percent or more of all peak period 
measurements of network round trip latency are at or below 100 
milliseconds due to the limitations of geostationary spacecraft. 
Moreover, based on the record and publicly available Form 477 data, the 
Commission is not convinced that a satellite provider would be able to 
persuade the Commission staff that the provider is reasonably capable 
of offering broadband at speeds of 1 Gbps downstream/500 Mbps upstream 
and 2 TB of monthly data to consumers by the first interim build-out 
milestone. No satellite provider reports offering broadband speeds in 
excess of 25 Mbps downstream in FCC Form 477 data (as of June 30, 
2016), and ViaSat reports that it is the first satellite provider to 
offer a 150 GB monthly data allowance. While ViaSat claims that it is 
deploying networks that will be capable of offering speeds of at least 
100 Mbps in the near term, the record lacks specificity on whether or 
when satellite providers would be able to offer 1 Gbps/500 Mbps speeds 
and a minimum monthly 2 TB data usage allowance to U.S. consumers.
    43. While a certain technology may eventually be able to meet the 
public interest obligations required by certain performance tier and 
latency combinations, it may not serve the public interest to award 
Phase II support for such a technology at this time based on possible 
future technological advances. Should applicants be limited to bidding 
on performance tier and latency combinations that they or similar 
providers are currently offering? Specifically, what combination of 
technologies, performance tiers, and latency levels should the 
Commission prohibit?
    44. The Commission seeks comment on the above proposals for 
determining an applicant's eligibility to bid on the performance tier 
and latency combination(s) selected in its short-form application. A 
party submitting alternative proposals should explain how its proposal 
appropriately balances the Commission's objective of assessing an 
applicant's capability to meet the Phase II obligations with its intent 
not to impose undue costs on applicants or the Commission.
    45. The Commission proposes that its staff review the information 
submitted by an applicant in its short-form application and any other 
relevant information available to staff to determine whether the 
applicant has planned how it would provide service if awarded support 
and is therefore expected to be reasonably capable of meeting the 
public interest obligations for its selected performance tier and 
latency combinations in its selected states. The Commission proposes 
that if staff finds that an applicant is reasonably expected to be 
capable of meeting the relevant public interest

[[Page 40527]]

obligations in a state, the applicant would be eligible to bid for its 
selected performance tier and latency combinations in that state.
    46. If Commission staff, in its initial review, is unable to find 
that an applicant can reasonably be expected to meet the relevant 
public interest obligations based on the information submitted in its 
short-form application, the Bureaus would deem the application 
incomplete, and the applicant would have another opportunity during the 
application resubmission period to submit additional information to 
demonstrate that it meets this standard. The Bureaus would notify the 
applicant that additional information is required to assess the 
applicant's eligibility to bid for any or all of the specific states 
and performance tier and latency combinations selected in its short-
form application. During the application resubmission period, an 
applicant would be able to submit additional information to establish 
its eligibility to bid for the relevant performance tier and latency 
combinations. An applicant would also have the option of selecting a 
lesser performance tier and latency combination for which it might be 
more likely to be technically qualified. The Commission would consider 
these to be permissible minor modifications of the short-form 
application. Once the application resubmission period has ended, the 
Bureaus would make their final determination of an applicant's 
eligibility to bid for any or all of the specific states and 
performance tier and latency combinations selected in its application, 
and then notify each applicant in which states and for which 
performance tier and latency combinations it is eligible to bid. The 
bidding system will be configured to permit a bidder to bid only in the 
state(s) and for the performance tier and latency combinations on which 
it is eligible to bid. The Commission seeks comment on this proposed 
process.
    47. The Commission proposes not to adopt any specific measures or 
remedies related to an applicant's representations in its short-form or 
long-form applications of its capabilities with respect to the 
performance tier and latency combination(s) for which it seeks to be 
eligible to bid. First, the Commission expects that its Phase II 
auction default rules and the measures adopted by the Commission 
relating to an authorized recipient that does not meet its obligations 
will impress upon each applicant the importance of both ensuring that 
it can meet the technical qualifications associated with each 
performance tier and latency combination for which it is eligible to 
bid and submitting documentation that accurately reflects its 
capabilities. Second, to the extent documentation may be falsified, the 
Commission has broad discretion to impose additional non-compliance 
measures on a defaulting winning bidder, including disqualifying that 
entity from future universal service competitive bidding. Finally, each 
applicant is required to declare, under the penalty of perjury, that 
the information in its short-form and long-form applications is true 
and correct. The Commission believes these collective measures provide 
adequate incentives for an applicant to submit truthful and accurate 
evidence of its technical qualifications. The Commission seeks comment 
on this analysis. To the extent commenters believe that additional 
measures may be needed to ensure that Commission staff receive accurate 
information, they should explain why the current non-compliance scheme 
is inadequate and describe with specificity the additional non-
compliance measures that they propose.
    48. In addition to the audited financial statements that certain 
applicants are already required to provide at the short-form stage to 
establish their financial qualifications to provide broadband service, 
the Commission proposes to require all applicants to submit financial 
statements. The Commission also proposes to require applicants to 
identify and report certain specific information from their financial 
statements on the short-form application.
    49. In the Phase II Auction Order, the Commission required each 
applicant for the Phase II auction to certify its financial 
capabilities to provide the required services within the specified 
timeframe in the geographic areas for which it seeks support. In 
addition, an applicant certifying that it has provided voice, 
broadband, and/or electric transmission or distribution services for at 
least two years must submit audited financial statements from the prior 
fiscal year, including balance sheets, and statements of net income and 
cash flow, unless it has not obtained an audit of financial statements 
in the ordinary course of business. If the applicant cannot make that 
certification, it must submit (1) audited financial statements for the 
three most recent consecutive fiscal years, including balance sheets, 
and statements of net income, and cash flow, and (2) a letter of 
interest from a qualified bank with terms acceptable to the Commission 
that the bank would provide a letter of credit to the bidder if the 
bidder were selected for support of a certain dollar magnitude. The 
Commission seeks comment on whether it should also require applicants 
submitting audited financial statements to identify and report certain 
specific information from their most recent financial statements on the 
short-form application to facilitate the Commission's review of their 
financial capabilities.
    50. In the Phase II Auction Order, the Commission permitted an 
applicant certifying that it has provided voice, broadband, and/or 
electric transmission or distribution services for at least two years, 
but that is not audited in the ordinary course of business to wait 
until after it is announced as a winning bidder to submit audited 
financial statements. Such an applicant must certify that it will 
submit the prior fiscal year's audited financial statements by the 
deadline during the long-form application process. The Commission seeks 
comment on whether it should require these applicants to submit 
unaudited financial statements with the short-form application and to 
identify and report the same information in the short-form application 
as an applicant that submits audited financial statements.
    51. Based on the Commission's experience with the rural broadband 
experiments, it proposes that Commission staff use criteria similar to 
those used there in evaluating the financial statements of those 
applications, including a five-point scale described below. 
Specifically, the Commission proposes to require an applicant to 
respond to one financial question and submit four financial metrics. An 
applicant could receive one point for each of the five areas, and those 
points would be summed as shown in the table below. The five-point 
scale should help Commission staff evaluate, quickly and efficiently, 
an applicant's financial qualifications, and it would expect an 
applicant with a score of at least three points to be financially 
qualified to bid in the auction. An applicant with a score of less than 
three points or a score of zero for the ratio of current assets to 
current liabilities and total equity divided by total capital would 
warrant a more in-depth review of the full set of financial statements 
submitted with the short-form application, as well as other 
information, to determine whether the applicant is qualified to bid in 
the Phase II auction.
    52. Specifically, the short-form application would ask an applicant 
whether, to the extent that its prior year-end financial statements 
were audited, it had received an unmodified, non-

[[Page 40528]]

qualified opinion from the auditor; an applicant would receive one 
point for a ``yes'' answer. Each applicant would also enter the 
following metrics from its prior year-end financial statements: (1) 
Latest operating margins (i.e., operating revenue less operating 
expenses), where an operating margin greater than zero receives one 
point; (2) time interest earned ratio (TIER), where TIER ((net income 
plus interest expense)/interest expense) greater than or equal to 1.25 
would receive one point; (3) current ratio (i.e., current assets 
divided by current liabilities), where a ratio greater than or equal to 
2 would receive one point; and (4) total equity divided by total 
capital, where a result greater or equal to 0.5 would receive one 
point. This scoring methodology is summarized in the chart below:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
If the applicant has audited        Yes.................              +1
 financial statements, did it
 receive an unmodified (non-
 qualified) opinion?
Operating margin..................  >0..................              +1
Times Interest Earned Ratio (TIER)  >=1.25..............              +1
Ratio current assets/current        >=2.................              +1
 liabilities.
Total equity/total capital (total   >=0.5...............              +1
 equity plus total liabilities).
------------------------------------------------------------------------

    53. The Commission proposes common and simple financial metrics to 
evaluate the financial position of the types of applicants that it 
anticipates will seek to participate in the auction. The question 
regarding an applicant's audit opinion measures both the applicant's 
financial condition and operations. The metric for operating margin 
measures core profitability, and the metrics for current ratio and 
ratio of equity to capital measure the applicant's short- and long-term 
financial condition, respectively. TIER measures the ability to pay the 
interest on outstanding debt. The Commission seeks comment on these 
five evaluative criteria. Are there additional metrics that the 
Commission should consider that are both common and simple and can be 
used to analyze the financial qualifications of auction applicants?
    54. The Commission staff's determination at the short-form stage 
that an applicant is financially qualified to bid would not preclude a 
determination at the long-form application review stage that an 
applicant is not authorized to receive Phase II support. The 
Commission's rules require that during the long-form application stage 
a winning bidder: (1) Certify that it will have available funds for all 
project costs that exceed the amount of Phase II support for the first 
two years, (2) submit a description of how the required construction 
will be funded, and (3) obtain a letter of credit.
    55. The Commission proposes requiring an applicant to certify that 
it has performed due diligence concerning its potential participation 
in the Phase II auction. Specifically, the Commission proposes that 
each applicant make the following certification in its application 
under penalty of perjury:
    The applicant acknowledges that it has sole responsibility for 
investigating and evaluating all technical and marketplace factors that 
may have a bearing on the level of Connect America Fund Phase II 
support it submits as a bid, and that, if the applicant wins support, 
it will be able to build and operate facilities in accordance with the 
Connect America Fund obligations and the Commission's rules generally.
    56. This proposed certification will help ensure that each 
applicant acknowledges and accepts responsibility for its bids and any 
forfeitures imposed in the event of default, and that the applicant 
will not attempt to place responsibility for the consequences of its 
bidding activity on either the Commission or third parties. The 
Commission seeks comment on this proposal.
    57. The Commission proposes to require each winning bidder to 
submit certain information in its long-form application to aid the 
Commission staff in evaluating whether the winning bidder is 
technically and financially qualified to meet the relevant Phase II 
public interest obligations in the areas where it was awarded support. 
As required by the Commission's rules, a winning bidder must also 
provide in its long-form application more in-depth information 
regarding the networks it intends to use to meet its Phase II 
obligations and how it intends to fund such networks. Among other 
things, the Commission proposes to require each applicant to provide in 
its long-form application any updates to its spectrum authorizations or 
spectrum access and to certify in its long-form application that it 
will retain access to the spectrum for at least 10 years from the date 
of the funding authorization. Requiring this information in the long-
form application will provide the Commission with additional assurance 
that a winning bidder intends to retain appropriate access to spectrum, 
particularly if any changes identified in the long-form application 
were not certified to in the short-form application. The Commission 
expects to provide guidance in a future public notice regarding the 
specific types of information that each winning bidder will be required 
to submit in its long-form application to support its operational 
assertions in the short-form application.

IV. Auction Reserve Prices

    58. The Commission proposes that the reserve price for each census 
block group will be the sum of the support amounts calculated for each 
eligible census block in that census block group, subject to the cap on 
extremely high-cost locations. For all census blocks with average costs 
above the funding threshold but below the extremely high-cost threshold 
(i.e., high-cost census blocks), the Commission proposes to set a 
reserve price based on the support per-location calculated by the CAM 
for that census block. This would ensure that no high-cost census block 
will receive more Connect America Fund Phase II support than the CAM 
calculates is necessary for deploying and operating a voice and 
broadband-capable network in that census block.
    59. Under the Commission's rules on competitive bidding for high-
cost universal service support, the Commission has the discretion to 
establish maximum acceptable per-unit bid amounts and reserve amounts, 
separate and apart from any maximum opening bids. In the Phase II 
Auction Order, the Commission decided that bids in excess of a reserve 
price set using the CAM will not be accepted, and that winning bidders 
generally would be those that accept the lowest percentages of the 
reserve price for the areas for which they bid. Assigned support 
amounts would take into account the performance tiers and latencies 
specified in the winning bids. The Commission also decided to cap the 
amount of support per location provided to extremely high-cost census 
blocks.
    60. For census blocks with average costs that exceed the extremely 
high-cost threshold, the Commission proposes imposing a $146.10 per-
location-per-month funding cap so that the reserve price will be equal 
to $146.10 multiplied by the number of

[[Page 40529]]

locations in that census block as determined by the CAM. This cap would 
be calculated by starting with the extremely high-cost benchmark of 
$198.60 and subtracting the funding threshold of $52.50 that WCB 
determined could reasonably be recovered through end-user charges. This 
approach would help ensure that Phase II auction support is not 
unreasonably skewed toward areas that the Commission has deemed the 
most expensive to serve and the most remote. These areas also tend to 
be sparsely populated. If the Commission were to allocate all the 
available Connect America Fund support to areas where few consumers 
live, it would leave many consumers unserved. In circumstances where 
bidders can make a business case to serve these extremely high-cost 
areas with support at or below the capped amount, they would be able to 
bid for support in these areas. To the extent bidders cannot, the 
census blocks would not receive bids, and thus would remain eligible 
for the Remote Areas Fund auction if they continue to be unserved.
    61. Finally, for administrative simplicity, the Commission proposes 
to round the reserve prices for each census block group to the nearest 
dollar. Because auction participants will place bids for annual support 
amounts, the Commission proposes to multiply the monthly reserve price 
for a census block group by 12 and then perform the rounding. As a 
simplified example, if an annual reserve price for a census block group 
is $15,000.49, the reserve price would be rounded down to $15,000; and 
if a reserve price is $15,000.50, the reserve price would be rounded up 
to $15,001. Thus, any census block group that has a reserve price of 
less than $0.50 would be ineligible for the Phase II auction.
    62. When it released the preliminarily eligible census block list 
in August 2016 based on the June 30, 2015 FCC Form 477 data, WCB 
included the annual CAM-calculated support amounts for the high-cost 
census blocks and capped the CAM-calculated support amount at $146.10 
per location-per-month for extremely high-cost census blocks. That list 
is available at https://apps.fcc.gov/edocs_public/attachmatch/DA-16-908A1_Rcd.pdf. Commenters can refer to this list and round the annual 
support amounts to the nearest dollar for each census block group to 
see approximate reserve prices for these areas based on the 
Commission's proposed methodology. To be clear, the list is intended to 
be illustrative for purposes of showing potential reserve prices and 
preliminary eligible areas, and parties should not assume that support 
ultimately will be made available in all the areas listed. For example, 
the census blocks located in New York will be removed from the final 
list because they are no longer eligible for the Phase II auction due 
to the Commission's decision to allocate up to $170.4 million dollars 
in partnership with New York's New NY Broadband program in eligible 
census blocks. In addition, WCB will update the eligible census block 
list to reflect publicly available Form 477 data and may further modify 
the list in light of the public notice that WCB recently released 
seeking comment on certain census blocks. A final list of eligible 
census blocks will be released at least three months prior to the 
short-form application filing deadline.
    63. The Commission seeks comment on these proposals and on any 
other proposed methodology for calculating reserve prices using the 
Connect America Cost Model.

V. Proposed Bidding Procedures

    64. The Commission proposes to use a descending clock auction to 
identify the providers that will be eligible to receive Phase II 
support and to establish the amount of support that each bidder will be 
eligible to receive using a ``second-price'' rule, subject to post-
auction application review. In the Phase II Auction FNPRM Order, 82 FR 
14466, March 21, 2017, the Commission decided that bids for different 
areas at specified performance tier and latency levels will be compared 
to each other based on the percentage each bid represents of their 
respective areas' reserve prices. In the sections below, the Commission 
discusses and seeks comment on the details of the proposed auction 
format and procedures. As directed by the Commission, the Bureaus also 
compiled and released a guide that provides further technical and 
mathematical detail regarding the bidding, assignment, and support 
amount determination procedures proposed here, as well as examples for 
potential bidders. In addition, the Commission seeks comment on what 
types of additional information (e.g., fact sheets and user guides) it 
could make available to help educate parties that have never 
participated in a Commission auction. The Commission also seeks comment 
on whether the Bureaus should use the Commission's Office of 
Communications Business Opportunities to engage with small providers 
interested in the auction process.
    65. The Bureaus will conduct the Phase II auction over the 
Internet, and bidders will upload bids in a specified file format for 
processing by the bidding system. The Commission proposes that the 
bidding system announce a base clock percentage before each round. The 
base clock percentage is used to delimit the acceptable prices in each 
round of the auction and as a common unit to compare bids for different 
performance tiers and latencies. The round's base clock percentage 
implies an annual support amount for a given area at the performance 
tier and latency combination specified in a bid using the formula 
determined in the Phase II Auction FNPRM Order.
    66. The base clock percentage begins at a high level, implying a 
support amount that is equal to or close to the full reserve price, and 
which descends from one round to the next. In a round, a bidder can 
submit a bid for a given area at a performance tier and latency 
combination at any percentage that is greater than or equal to the 
round's base clock percentage and less than the previous round's base 
clock percentage. A bid indicates that the bidder is willing to provide 
service to the area that meets the specified performance tier and 
latency requirements in exchange for support that is no less than the 
support amount implied by the bid percentage.
    67. The base clock percentage will continue to descend in a series 
of bidding rounds, implying diminishing support amounts, until the 
aggregate amount of support represented by the bids placed in a round 
at the base clock percentage is no greater than the budget. At that 
point, when the budget ``clears,'' the bidding system will assign 
support to current bidders in areas where there are not competing bids 
from two or more bidders to provide service. Bidding will continue, 
however, for areas where there are competing bids, and the clock will 
continue to descend in subsequent rounds. When there is no longer 
competition for any area, the auction will end. A winning bidder may 
receive support in amounts at least as high, because of the second-
price rule, as the support amounts corresponding to their bid 
percentages.
    68. The Commission proposes that the Phase II descending clock 
auction will consist of sequential bidding rounds according to an 
announced schedule providing the start time and closing time of each 
bidding round. As is typical for Commission auctions, the Commission 
proposes to retain the discretion to change the bidding schedule--with 
advance notice to bidders--in order to foster an auction pace that 
reasonably balances speed with giving bidders sufficient time to study 
round results and adjust their bidding strategies. Under this proposal,

[[Page 40530]]

the Bureaus may modify the amount of time for bidding rounds, the 
amount of time between rounds, or the number of rounds per day, 
depending on bidding activity and other factors. The Commission seeks 
comment on this proposal. Commenters suggesting alternatives to this 
proposal should address any other means the Commission should use to 
manage the auction pace.
    69. The Commission proposes that under its descending clock auction 
format, the base clock will be denominated in terms of a percentage, 
which will be decremented for each round. To determine the annual 
support amount implied at each percentage, the percentage will be 
adjusted for the weights for each performance tier and latency 
combination for which bids will be accepted, and an area-specific 
reserve price, as in the formula set forth below. This proposed 
approach is consistent with previous Commission decisions regarding the 
Phase II auction.
    70. In the Phase II Auction Order, the Commission concluded that it 
would accept bids for four performance tiers with varying speed and 
usage allowances and, for each performance tier, would provide for bids 
at either high or low latency. The Commission further decided to 
consider all bids simultaneously so that bidders proposing varying 
performance standards would be competing directly against each other 
for the limited Phase II budget. In addition, the Commission decided 
that bidders would bid for support expressed as a fraction of an area's 
reserve price and declined to adopt an approach that would conduct 
bidding on a dollar per location basis.
    71. In the Phase II Auction FNPRM Order, the Commission adopted 
weights to compare bids for the performance tiers and latency 
combinations adopted in the Phase II Auction Order. The Commission 
determined that Minimum performance tier bids will have a 65 weight; 
Baseline performance tier bids will have a 45 weight; Above Baseline 
performance tier bids will have a 15 weight; and Gigabit performance 
tier bids will have zero weight. Moreover, high latency bids will have 
a 25 weight and low latency bids will have zero weight added to their 
respective performance tier weight. The lowest possible weight for a 
performance tier and latency combination is 0, and the highest possible 
weight is 90. Each weight uniquely defines a performance tier and 
latency combination, as shown in the table below.

                                                       Weights for Performance Tiers and Latencies
--------------------------------------------------------------------------------------------------------------------------------------------------------
                Minimum                               Baseline                           Above baseline                            Gigabit
--------------------------------------------------------------------------------------------------------------------------------------------------------
   High latency         Low latency        High latency       Low latency        High latency       Low latency        High latency       Low latency
--------------------------------------------------------------------------------------------------------------------------------------------------------
              90                  65                 70                 45                 40                 15                 25                  0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Commission's proposal for a clock auction format with a base 
clock percentage and weights for performance tier and latency 
combinations implements these Commission decisions and provides a 
simple way to compare bids of multiple types. The Commission seeks 
comment on this proposal.
    72. The Commission proposes that the base clock percentage in each 
round will imply a total amount of annual support in dollars for each 
area available for bidding, based on the performance tier and latency 
(``T+L'') combination specified in the bid. The annual support amount 
implied at the base clock percentage will be the smaller of the reserve 
price and the annual support amount obtained by using a formula that 
incorporates the performance tier and latency weights. Specifically:
    Implied Annual Support Amount (at the base clock percentage) =
    [GRAPHIC] [TIFF OMITTED] TP25AU17.001
    
Where:

R denotes the area's reserve price
T denotes the tier weight
L denotes the latency weight
BC denotes the base clock percentage

    73. Because the highest implied support amount can never exceed an 
area's reserve price, when the base clock percentage is greater than 
100, the total implied annual support for lower weighted performance 
tier and latency combinations may remain at an area's reserve price for 
one or more rounds, while the total implied annual support of one or 
more higher weighted performance tier and latency combinations may be 
lower than an area's reserve price. When the base clock percentage is 
decremented below 100, the total implied annual support for all area, 
performance tier and latency combinations will be below the areas' 
respective reserve prices.
    74. The formula above (the ``implied support formula'') can be used 
to determine the implied support at any price point percentage by 
substituting a given percentage for the base clock percentage.
    75. The Commission proposes that, in each round, a bidder may place 
a bid at any price point percentage equal to or greater than the base 
clock percentage and strictly less than the previous round's base clock 
percentage, specified up to two decimal places. This proposal will 
reduce the likelihood of ties and allow bids to correspond to smaller 
increments in annual support amounts. The Commission seeks comment on 
this proposal.
    76. The Commission proposes that bids must imply a support amount 
that is one percent or more of an area's reserve price to be 
acceptable. For a given performance tier and latency combination, when 
the price point percentage equals T+L, the formula implies that the 
annual support amount is zero. When the price point percentage equals 
T+L+1, the formula implies an annual support amount that is one percent 
of the area's reserve price. Hence, a bid must be at least T+L+1 to be 
accepted by the bidding system. The Commission seeks comment on this 
proposal.
    77. The Commission anticipates that the ability to submit bids at 
price points other than the base clock percentage, as proposed, will be 
especially useful to a bidder when the lowest support amount it will 
accept for an area corresponds to a percentage between the base clock 
percentages for two consecutive rounds. In such a case, the proposed 
option will allow the bidder to more precisely indicate the point at 
which it wishes to drop out of bidding for the area. In contrast, a 
bidder still willing to accept a support amount equal to or less than 
that implied by the base clock percentage will simply bid at the base 
clock percentage. In rounds before the budget clears, a bidder may bid 
at an intermediate price point in one round and then bid again for the 
same area in a subsequent round, but its ability to do so is limited. 
In rounds after the budget clears, no area switching is permitted.
    78. The Commission proposes that the minimum geographic area for 
bidding will be a census block group. A bid for

[[Page 40531]]

a census block group is a bid for support for the eligible census 
blocks within that census block group.
    79. To simplify the bidding process, ensure manageable bid 
processing, and promote straightforward bidding, the Commission 
proposes for Auction 903 to allow a bidder to place only one bid on a 
given geographic area in a round, whether that area is bid on singly or 
included in a package bid. The Commission proposes to extend this 
restriction on a bidder placing overlapping area bids in a round to 
also apply to multiple bidders that are able to coordinate their 
bidding, which includes commonly-controlled bidders and bidders subject 
to joint bidding arrangements. The Commission anticipates that the 
restriction on overlapping bids by a single bidder will simplify bid 
strategies for bidders and eliminates the need for the auction system 
to use mathematical optimization to consider multiple ways to assign 
winning bids to a bidder, thus simplifying bid processing. The 
restriction on overlapping bids by multiple bidders able to coordinate 
their bidding should promote straightforward bidding by eliminating the 
possibility that separate bidders may coordinate their bids in ways 
that may disadvantage other bidders in the auction.
    80. To implement the restriction on bids by a single bidder, the 
Commission proposes that the bidding system not accept multiple bids by 
a bidder in a round that include the same area. To implement the 
restriction on multiple bidders that are able to coordinate their 
bidding, the Commission proposes to restrict the ability of such 
applicants to select the same state during the pre-auction application 
process, as discussed above. Specifically, the Commission's proposed 
application procedures require that commonly-controlled applicants or 
applicants subject to joint bidding arrangements not select on their 
applications any of the same states but instead resolve any overlapping 
state bidding interests prior to becoming qualified to participate in 
the auction. The Commission seeks comment on this proposal.
    81. A bid is an offer to serve the locations in eligible census 
blocks within the indicated census block group at the indicated 
performance tier and latency combination for a total annual amount of 
support that is not less than the implied annual support at the price 
point percentage specified by the bidder and not more than the reserve 
price. In each round, a bid for a single available census block group 
with reserve price R consists of three pieces: A performance tier 
weight, T, latency weight, L, and a price point that is a percentage 
not less than the current round's base clock percentage and less than 
the previous round's base clock percentage. For a given round, a census 
block group can be included in at most one bid--whether a bid on a 
single census block group or a package bid on multiple census block 
groups--made by a bidder, and a bidder can only bid on census block 
groups that are in states that the bidder selected on its application. 
If a bidder wants to know the annual support amount implied by its bid 
percentage, the bidder can calculate the implied annual support, by 
taking the smaller of the reserve price R and the annual support 
calculated according to the implied support formula.
    82. Before the budget has cleared, a bidder may change the 
performance tier and latency combination in any of its bids from the 
previous round, provided the bidder qualified for the performance tier 
and latency combination for the state at the application stage.
    83. The Commission proposes package bidding procedures that will 
give bidders the option to place bids to serve a bidder-specified list 
of census block groups, with corresponding bid processing procedures 
that may assign fewer than the full list of areas to the bidder as long 
as the funding associated with the assigned areas is at least equal to 
a bidder-specified percentage of the funding requested for the complete 
list of areas. The Commission proposes to allow a bidder to specify a 
package bid by providing a list of census block groups, a performance 
tier and latency combination for each census block group in the list, a 
single price point for the list, and a minimum scale percentage for the 
package. The minimum scale percentage must be no higher than a maximum 
value defined by the Commission, which will be less than 100 percent. 
Thus, a package bid is an offer by the bidder to serve any subset of 
areas in the list at the support amount implied at the bid percentage, 
provided that the ratio of the total implied support of the subset to 
the total implied support of the list meets or exceeds the bidder-
defined minimum scale percentage.
    84. The Commission proposes further procedures defining acceptable 
package bids. The Commission proposes that each census block group in 
the list may have a different performance tier and latency combination. 
Every census block group in a package bid must be in the same state. As 
discussed above, for a given round, a census block group can appear in 
at most one bid--either a single bid or a package bid--made by a given 
bidder. A bidder may change the minimum scale percentage in any package 
bid from round to round. The Commission seeks comment, as well, on 
whether it should set a limit on the total amount of implied support 
that may be included in a single package. Limiting packages to the 
census block groups within a state will impose a de facto limit on the 
total support that may be assigned in a package bid, but the Commission 
asks whether a limit, lower than the maximum possible state-level 
amount of support, should also be implemented.
    85. The Commission also seeks comment on the appropriate upper 
limit of the bidder-specified minimum scale percentage. The Commission 
proposes 80 percent as the Commission-defined maximum of the minimum 
scale percentage. The Commission proposes to use an upper limit less 
than 100 percent so that small overlaps in the areas included in 
package bids do not prevent support from being assigned to a 
potentially much larger number of areas included in the package bids, 
which could occur if packages were assigned on an all-or-nothing basis. 
While an upper limit that is too high will not be effective for this 
purpose, an upper limit that is too low will hinder bidders' ability to 
achieve a minimum amount of funding.
    86. The proposed package bidding format permits a bidder to choose 
between a minimum amount of support or no support, guaranteeing that 
the bidder will not be assigned an amount that does not meet the 
bidder's specified minimum scale requirement. The Commission seeks 
comment on the proposed package bidding format. Will this package 
bidding format facilitate packages that include areas with diverse 
costs, population densities, and other characteristics? Would the 
option to submit package bids be useful to both bidders that have small 
networks and bidders that have large networks?
    87. The Commission seeks comment on the possibility of using proxy 
bidding, which could reduce bidders' need to submit bids manually every 
bidding round and provide bidders with a safeguard against accidentally 
failing to submit a bid. With proxy bidding, a bidder could submit 
instructions for the system to continue to bid automatically for an 
area with a specified performance tier and latency combination in every 
round until either the base clock percentage falls below a bidder-
specified proxy amount, the bidder intervenes to change its bid, or the 
area is assigned, whichever happens first. In the auction format the 
Commission proposes, proxy bidding instructions for

[[Page 40532]]

a single area or a package of areas would contain all the information 
required for these bids, and the specified price point percentage would 
potentially be valid for multiple rounds, as described below. The 
Commission proposes that proxy bidding instructions will not be 
permitted to include instructions for changes to the performance tier 
and latency combination, to the minimum scale percentage of a package 
bid, nor to the specified area or areas.
    88. Under the Commission's proposal for proxy bidding, during a 
round, the bidding system will generate a bid at the base clock 
percentage on behalf of the bidder as long as the percentage specified 
in the proxy instruction is equal to or below the current base clock 
percentage. If the proxy percentage exceeds the current base clock 
percentage but is lower than the prior round's base clock percentage, 
then the bidding system will generate a bid at the price point 
percentage of the proxy. These bids would be treated by the auction 
system in the same way as any other bids placed in the auction. Thus, 
proxy instructions will remain effective through the round in which the 
base clock percentage is equal to or less than the proxy percentage. 
During a bidding round, a bidder may cancel or enter new proxy bidding 
instructions. Since proxy instructions may expire as the base clock 
descends, even with proxy bidding, bidders must monitor the progress of 
the auction to assure that they do not need to cancel or adjust their 
proxy instructions.
    89. The Commission seeks comment on whether to provide for proxy 
bidding in this way. The Commission also seeks comment on whether the 
bidding system should alert bidders regarding the status of their proxy 
instructions (i.e., whether the proxy instructions remain in effect).
    90. Under the Commission's proposal, proxy bidding instructions 
will be treated as confidential information and would not be disclosed 
to the public at any time after the auction concludes, because they may 
reveal private cost information that would not otherwise be made public 
(e.g., if proxy bidding instructions are not fully implemented because 
the base clock percentage does not fall as low as the specified proxy 
percentage). However, the amount of support awarded for any assigned 
bid, regardless of whether it was placed by the bidder or by the 
bidding system according to proxy bidding instructions, will be 
publicly disclosed. The Commission seeks comment on these proposals.
    91. The Commission proposes to measure a bidder's bidding activity 
in a round in terms of implied support dollars and to adopt activity 
rules that prevent a bidder's activity in a round from exceeding its 
activity in the previous round. Activity rules for bidding are used in 
multiple round auctions to encourage bidders to express their bidding 
interests early and sincerely, thus generating reliable information 
about the level of bidding across the various geographic areas in the 
auction. Activity rules promote the orderly collection of bids across 
rounds and limit undesirable strategic bidding behavior such as 
insincerely switching bids across areas, waiting to bid until everyone 
else has bid, or suddenly increasing the number of areas for which bids 
were submitted. Activity rules balance these concerns with allowing 
bidders some freedom to react to competition and price changes.
    92. For this descending clock auction, the Commission proposes that 
a bidder's activity in a round: (1) Be calculated as the sum of the 
implied support amounts (calculated at the bid percentage) for all the 
areas bid for in the round, and (2) not exceed its activity from the 
previous round. The Commission further proposes that a bidder be 
limited in its ability to switch to bidding for support in different 
areas from round to round. Specifically, a bidder's activity in a round 
from areas that the bidder did not bid on at the previous round's base 
clock percentage cannot exceed an amount determined by a percentage 
(the ``switching percentage'') of the bidder's total implied support 
from bids at the previous round's base clock percentage. The Commission 
proposes to set this switching percentage at 10 percent initially and 
to give the Bureaus the discretion to change the switching percentage, 
with adequate notice, before a round begins.
    93. The Commission seeks comment on these proposed activity rules. 
In addition, the Commission asks for comment on the appropriate size of 
the switching percentage, and, if it is to be changed across rounds, 
when and how it should be changed. Will the proposed 10 percent 
switching percentage allow a bidder sufficient flexibility to react to 
other bidders' bids from the prior round?
    94. Since bidding in rounds after the budget has cleared is limited 
to bidding to resolve competition among areas for which more than one 
bidder was willing to accept the base clock percentage in the round 
when the budget cleared, a bidder's permissible bids after clearing 
will necessarily satisfy the activity rules, which therefore are no 
longer constraining. After the budget clears, the Commission proposes 
that a bidder not be allowed to switch to bidding for different areas 
or to change the performance tier and latency combination of a bid.
    95. The Commission proposes that once a bidding round closes, the 
bidding system will consider the submitted bids to determine whether an 
additional round of bidding at a lower base clock percentage is needed 
to bring the amount of requested support down to a level within the 
available budget. If the total requested support at the base clock 
percentage exceeds the budget, another bidding round occurs. In a round 
in which the amount of overall requested support falls to a level 
within the budget, bid processing will take the additional steps of 
assigning support for a given area to the bid at the lowest percentage 
(as measured by the price point percentage of the bid) and determining 
support amounts to be paid according to a second-price rule. If there 
are multiple bids for a given area at the base clock percentage, the 
bidding system will commence another round of bidding to resolve the 
competition, and rounds will continue with bidding for these areas at 
lower base clock percentages until, for each of the contested areas, 
there is a single low bid. The winning bidder will then be assigned 
support at the price point percentage of the second lowest bid. 
Additional details and examples of bid processing are provided in the 
technical guide released by the Bureaus.
    96. As a result of these proposed procedures, the bids that can be 
assigned under the budget in the round when the budget clears and in 
any later rounds will determine the areas that will be provided support 
under Phase II. At most, one bid per area will be assigned support, and 
as set forth above, the winning bid for an area will generally be the 
bid made at the lowest percentage. The specifications of that bid, in 
turn, determine the performance tier and latency combination at which 
service will be provided to the eligible locations in the area.
    97. ViaSat has suggested an alternative approach to assigning 
winning bids. Instead of ranking bids based strictly on the percentage 
of the reserve price, ViaSat proposes that the auction system take the 
number of locations to be covered, as well as performance tier and 
latency, into account when assigning winning bids. As another party has 
observed, however, this suggestion conflicts with the Commission's 
decision not to assign support based on the number of locations covered 
and therefore is beyond the scope of this Public Notice.

[[Page 40533]]

    98. The Commission seeks comment generally on its proposed approach 
to assigning bids and determining support amounts. The Commission asks 
any commenters supporting an alternative approach to consider the goals 
of the Commission in the Connect America Fund Phase II proceeding, the 
decisions made to date on auction design, and how any suggested 
alternatives would integrate with other aspects of the auction design.
    99. The Commission's specific proposals for bid processing 
procedures fall into three categories: Before, during, and after the 
round in which the budget clears. The Commission addresses them in 
order below, after first addressing proposals for the base clock 
percentage.
    100. In each of a series of discrete bidding rounds, a bidder will 
be offered an amount of support for an area at a specified performance 
tier and latency combination that is determined by the base clock 
percentage for the round. By bidding at that base clock percentage, the 
bidder indicates that it is willing to provide the required service 
within the bid area in exchange for a payment at least as large as that 
implied by the base clock percentage. The opening base clock percentage 
will determine the highest support amount that the bidder will be 
offered in the auction for a given area and performance tier and 
latency combination.
    101. The Commission proposes to start the base clock percentage at 
100 percent of an area's reserve price plus an additional percentage 
equal to the largest performance tier and latency combination discount 
that may be submitted by any qualified bidder in the auction. 
Therefore, if any applicant is qualified to bid to provide service at 
the Minimum performance tier and high latency--a performance tier and 
latency combination assigned a weight of 90--the Commission proposes 
that the base clock percentage will start at 190 percent. Starting the 
clock at this level will allow bidders at the lower performance tier 
and latency combinations multiple bidding rounds in which to compete 
for support simultaneously with bidders offering higher performance 
tier and latency combinations.
    102. The Commission seeks comment on this approach to setting the 
initial base clock percentage, and request that commenters, in 
considering the proposal, bear in mind the Commission's previous 
decisions to: (1) Provide an opportunity for bidders offering different 
performance standards to compete against each other, and (2) balance 
this approach with the use of performance scoring weights previously 
determined by the Commission.
    103. The Commission proposes to decrement the base clock percentage 
by 10 percentage points in each round. However, the Commission also 
proposes to provide the Bureaus with the discretion to change that 
amount during the auction if it appears that a lower or higher 
decrement would better manage the pace of the auction. For example, if 
bidding is proceeding particularly slowly, the Commission may increase 
the bid decrement to speed up the auction, recognizing that bidders 
have the option of bidding at an intra-round price point percentage if 
the base clock percentage falls to a percentage corresponding to an 
amount of support that is no longer sufficient. Under this proposal, 
the Commission would begin the auction with a decrement of 10 percent 
and limit any further changes to the decrement to between 5 percent and 
20 percent.
    104. The Commission asks commenters to address proposals to begin 
the auction with a base clock percentage decrement of 10 percent, with 
subsequent decrements between 5 and 20 percent. The Commission also 
seeks comment on circumstances under which it should consider changing 
the decrement during the auction.
    105. Under the Commission's proposed approach to bid processing, 
after each clock round until the budget has cleared, the bidding system 
will calculate an ``aggregate cost,'' an estimate of what it would cost 
to assign support at the base clock percentage to the bids submitted in 
the round, in order to determine whether the budget will clear in that 
round. More precisely, the aggregate cost is the sum of the implied 
support amounts for all the areas receiving bids at the base clock 
percentage for the round, evaluated at the base clock percentage. The 
calculation counts each area only once, even if the area receives bids, 
potentially including package bids, from multiple bidders. If there are 
multiple bids for an area at different performance tier and latency 
combinations, the calculation uses the bid with the highest implied 
support amount. If the aggregate cost for the round exceeds the budget, 
the bidding system will implement another regular clock round with a 
lower base clock percentage.
    106. The first round in which the aggregate cost, as calculated 
above, is less than or equal to the overall support budget is 
considered the ``clearing round.'' In the clearing round, the bidding 
system will further process bids submitted in the round, to determine 
those areas that can be assigned and the support amounts winning 
bidders will receive. Once the clearing round has been identified, the 
system no longer calculates the aggregate cost, even if there are 
subsequent bidding rounds.
    107. In the clearing round, the bidding system will consider bids 
in more detail to determine which can be identified as winning, or 
``assigned,'' bids in that round; the ``second prices'' to be paid for 
winning bids; and which bids will carry over for bidding in an 
additional bidding round or rounds. The Commission addresses its 
proposed procedures for these determinations below.
    108. Until the clearing round, the auction is generally driven by 
cross-area competition for the budget, and until the clearing round, 
implied support amounts for all areas are reduced proportionately. In 
estimating cost, the system does not determine which of multiple bids 
competing for support in the same area will be assigned, although it 
does take into account that only one bid per area may be assigned. 
Processing during the clearing round considers intra-area competition 
as well, assigning support to bids that require the lowest level of 
support for a given area, as long as any assigned package bids meet the 
bidder's minimum scale percentage. Bid processing in the clearing round 
also determines support amounts for assigned bids according to a 
second-price rule, so that bids are supported at a price percentage at 
least as high as the bid percentage.
    109. Once bid processing has determined that the current round is 
the clearing round, the bidding system will begin to assign winning 
bids, awarding support to at most one bid for a given area. The system 
will first assign bids made at the base clock percentage for areas not 
bid on by another bidder at the base clock percentage. Any package bids 
that are assigned must meet the bidder's minimum scale percentage.
    110. Under the proposed bid processing procedures, the system then 
considers all other bids submitted in the round in ascending order of 
price point percentage to see if additional bids can be assigned and, 
considering the bids assigned so far, to determine the highest price 
point percentage at which the total support cost of the assigned bids 
does not exceed the budget (the ``clearing price point''). Bids at 
price point percentages above the clearing price point are not 
assigned.
    111. As it considers bids in ascending price point percentage 
order, the system assigns a bid if no other bid for the same area has 
already been assigned, as long as the area did not receive multiple 
bids at the base clock percentage and the

[[Page 40534]]

areas to be assigned in a package bid meet the bid's minimum scale 
percentage. The bidding system also checks to ensure that sufficient 
budget is available to assign the bid.
    112. To determine whether there is sufficient budget to support a 
bid, the bidding system keeps a running sum of support costs. This cost 
calculation at price point percentages between the current and previous 
base clock percentages extends the concept of the aggregate cost 
calculation (which identifies the clearing round) to take into account, 
at sequential intermediate price points, the cost of bids that have 
been assigned so far and the estimated cost of bids that have not been 
assigned.
    113. The Commission proposes that at each ascending price point 
increment, starting at the base clock percentage, the running cost 
calculation is the sum of support for three types of bids: (1) For 
assigned bids for which there were no other bids for support for their 
respective areas at price points lower than the currently-considered 
price point percentage, the system calculates the cost of providing 
support as the amount of support implied by the currently-considered 
price point, (2) for assigned bids for areas that did receive other 
bids at price points lower than the currently-considered price point, 
support is generally calculated as the amount implied by the next-
higher price point at which the area received a bid (where next-higher 
is relative to the price point of the assigned bid, not the currently-
considered price point), and (3) competing bids at the base clock 
percentage are not assigned and are evaluated as they were in the pre-
clearing aggregate cost calculation: Only one bid per area is included 
in the calculation, and if there are bids for an area at different 
performance tier and latency combinations, the calculation uses the bid 
with the highest implied support amount, all evaluated at the base 
clock percentage.
    114. The auction system continues to assign bids meeting the 
assignment criteria in ascending price point order as long as the cost 
calculation does not exceed the budget. The highest price point at 
which the running total cost will not exceed the budget is identified 
as the clearing price point. This process is addressed in more detail 
in the technical guide that has been released by the Bureaus.
    115. Bids that were assigned for areas that received no other bids 
at less than the clearing price point are supported at an amount 
implied by the clearing price point percentage.
    116. Bids assigned in the clearing round, when there was also a bid 
at a price point higher than the base clock percentage, are generally 
supported at an amount determined by the price point percentage of the 
higher unassigned bid. For example, if there are two bids for an area, 
the lower bid is supported at the bid price point of the higher bid.
    117. The Commission seeks comment on these assignment and pricing 
proposals for the clearing round.
    118. Once the budget clears, further bidding resolves competition 
for areas where more than one bidder is still bidding for support at 
the lowest base clock percentage announced so far, which is the base 
clock percentage in the previous round. Therefore, bidding rounds 
continue after the clearing round at lower base clock percentages, but 
bids are restricted to areas for which the bidder had bid at the 
clearing round's base clock percentage but which could not be assigned 
in the clearing round. Such bids may be for a given unassigned area 
that received multiple single bids, package bids that were not assigned 
because the bidder's minimum scale percentage for the package was not 
met, or remainders of package bids--unassigned areas that formed part 
of package bids that were partially assigned.
    119. The Commission proposes that these bids at the base clock 
percentage for unassigned areas will carry over automatically to the 
next bidding round at the previous round's clock percentage, since the 
bidder had previously accepted that percentage. In the round into which 
the bids carry forward, the bidder may also bid for support for these 
areas at the current round's base clock percentage or at intermediate 
price points. In rounds after the clearing round, a bidder cannot 
switch to bidding for an area for which it did not bid in the previous 
round, nor can a bidder bid at a different performance tier and latency 
combination for an area for which it bid previously.
    120. While bids for unassigned packages will carry over at the 
previous clock percentage, the bidder for such a package may group the 
bids for the areas in the package into smaller packages and bid on 
those smaller packages at current round percentages. However, the 
unassigned remainders of assigned package bids will carry over as 
individual area bids. Any bids the bidder places for the remainder 
areas at the new round percentages must be bids for individual areas--
that is, the bidder cannot create a new package of any of the 
unassigned remainders.
    121. The Commission proposes that proxy instructions, if at a price 
point percentage below the base clock percentage of the previous round, 
continue to apply in rounds after the clearing round under the same 
conditions that apply to other bids. For package bids made by proxy 
that are only partially assigned because there are multiple bids at the 
base clock percentage, the proxy instructions continue to apply to the 
unassigned areas in the package bid. That is, the price point 
percentage specified in the proxy instructions would apply to bids for 
the individual remainder areas.
    122. As in the clearing round, in subsequent rounds the system 
considers bids for assignment and support amount determination in 
ascending price point percentage order. The system first considers bids 
at the new round's base clock percentage, and any bids for areas that 
received no other bids at the base clock percentage are assigned, as 
long as any package bid meets the minimum scale percentage of the bid. 
The system then processes bids in ascending price point order, 
assigning those bids for as yet unassigned areas, as long as any 
package bids meet the minimum scale condition.
    123. If there is only one bid for an area in a round, the assigned 
bid is paid at the base clock percentage for the previous round, 
consistent with the second-price rule. If an assigned bid is for an 
area that received more than one bid in the round, the assigned bid is 
supported at the next higher price point percentage at which there is a 
bid for the area.
    124. If there is more than one bid for an area at the current base 
clock percentage, including a package bid, there will be another 
bidding round at a lower base clock percentage, with the same 
restrictions on bids and following the same assignment and pricing 
procedures. The Commission seeks comment on these proposed procedures 
for assigning bids and determining support amounts in rounds after the 
clearing round.
    125. Under the proposed auction design, the auction will end once 
the overall budget has cleared and there are no longer competing bids 
for any areas.
    126. As in past Commission auctions, the Commission proposes that 
the public will have access to certain auction information, while 
auction participants will have secure access to additional, non-public 
information.
    127. The Commission proposes to limit the disclosure of information 
regarding bidding in the auction. During the auction, the Commission 
proposes to make available to bidders sufficient information about the 
status of their own bids and the eligible areas in the

[[Page 40535]]

states in which they are qualified to bid to allow them to bid 
confidently and effectively. At the same time, the Commission proposes 
to restrict the availability of information that may facilitate 
identification of other bidders and their bids, which could potentially 
lead to undesirable strategic bidding. With that distinction in mind, 
after each round ends, and before the next round begins, the Commission 
proposes to make the following information available to individual 
bidders:
    <bullet> The base clock percentage for the upcoming round.
    <bullet> The aggregate cost, as calculated above, at the previous 
round's base clock percentage up until the budget clears.
    [cir] The aggregate cost at the base clock percentage is not 
disclosed for the clearing round or any later round.
    <bullet> The bidder's activity, based on all bids in the previous 
round, and activity based on bids at the base clock percentage, whether 
submitted directly or by proxy. These will determine, respectively, the 
maximum activity the bidder is allowed in the next round and the 
maximum activity the bidder is allowed in the next round on areas for 
which the bidder did not bid at the prior round's base clock 
percentage.
    [cir] In rounds after the clearing round, the bidder's assigned 
support and the implied support of its carried-forward bids will be 
available.
    <bullet> Summary statistics of the bidder's bidding in the previous 
round, including:
    [cir] The number of areas for which it bid, at the clock percentage 
and at other price points.
    [cir] Breakdowns of activity and number of areas by proxy bids, 
including proxy instructions for future rounds.
    [cir] After the clearing round, areas and support amounts it has 
been assigned and those for which it is still bidding.
    [ssquf] Status of carried-forward bids.
    <bullet> For all eligible areas in all states, including those in 
which the bidder was not qualified to bid or is not bidding, whether 
the number of bids placed at the previous round's base clock percentage 
was 0, 1, or 2 or more.
    [cir] The performance tier and latency combination of the bids is 
not disclosed.
    128. Prior to each round, the Commission also proposes to make 
available to bidders the support amounts, corresponding to the areas 
and performance tier and latency combinations for which they are 
eligible to bid, that are implied by the round's base clock percentage.
    129. Consistent with the Commission's practice in the Mobility Fund 
Phase I auction (Auction 901) and recent spectrum auctions, the 
Commission proposes to adopt procedures for limited information 
disclosure for Auction 903. Specifically, the Commission proposes to 
withhold from the public, as well as other applicants, the following 
information related to the short-form application process:
    <bullet> The state(s) identified by an applicant in which it is 
interested in bidding.
    <bullet> The state(s) for which the applicant has been determined 
to be eligible to bid.
    <bullet> The performance tier and latency combination(s) identified 
by an applicant.
    <bullet> The performance tier and latency combination(s) for which 
the applicant has been determined to be eligible to bid.
    <bullet> Operational information that is intended to demonstrate an 
applicant's ability to meet the public interest obligations for each 
performance tier and latency combination that the applicant has 
identified in its application.
    130. The Commission also proposes to withhold financial information 
submitted by an applicant that also files financial information on FCC 
Form 481 pursuant to a protective order. The Commission proposes to 
identify such applicants via a question on the short-form application. 
All other applicants may request confidential treatment of their 
financial data by submitting a request under Section 0.459 at the same 
time such information is submitted. The Commission cautions that 
requests that it withhold financial data that applicants elsewhere 
disclose to the public will not be granted.
    131. In addition, until the Commission's announcement of auction 
results, it does not intend to publicly release information pertaining 
to the progression of the Phase II auction. This includes information 
such as the round, base clock percentage, aggregate cost (as it relates 
to the budget), or any information that may reveal or suggest the 
identities of bidders placing bids and taking other bidding-related 
actions. While auction participants will have access to some of this 
information to inform their bidding, such information is of little 
value to the general public, particularly when the Commission projects 
the auction to close within a month. At the same time, the public 
release of preliminary auction data would impose non-trivial costs on 
the Commission to devise and set up a mechanism for that release and to 
prepare aggregated preliminary data at the end of each round or other 
appropriate interval. Furthermore, due to the preliminary and complex 
nature of the data, its release may engender confusion among the 
general public.
    132. After the close of bidding and announcement of auction 
results, the Commission proposes to make publicly available all short-
form application information and bidding data, except for an 
applicant's operational information, confidential financial 
information, and proxy bidding instructions. This approach is 
consistent with the Commission's practice in the Mobility Fund Phase I 
auction and its typical spectrum auctions. The Commission recognizes 
that the Phase II auction bidding data it proposes to release would 
presumably encompass bids for eligible areas that do not receive Phase 
II support and therefore may be eligible for Remote Areas Fund (RAF) 
support in a subsequent auction, and that these non-winning Phase II 
bids may be used to inform bids in the RAF auction. However, that 
information is of value to all potential RAF auction participants--not 
just those that participated in the Phase II auction and thus 
potentially would have had access to information about bids in those 
areas. Accordingly, the public release of Phase II bidding data would 
prevent asymmetric information from being disseminated among potential 
RAF auction bidders, which could ultimately distort competition in the 
RAF auction.
    133. The Commission seeks comment on its proposals to limit the 
availability of bidding information during the auction and to adopt 
limited information procedures for the Phase II auction concerning the 
application and bidding data that will be publicly available before, 
during, and after the auction.

Proposed Auction 903 Short-Form Application Operational Questions

    Has the applicant previously deployed consumer broadband networks 
(Yes/No)? If so, identify the date range for when broadband service was 
offered and in which state(s) service was offered. What specific last 
mile and interconnection (backhaul) technologies were used? How many 
subscribers were served? What services (e.g., voice, video, broadband 
Internet access) were provided?
    Answer for each state the applicant selected in its application:
    1. Which network architectures and technologies will be used in the 
applicant's proposed deployment? How will voice services be provided? 
How will broadband Internet access service be provided?

[[Page 40536]]

    2. What are the relevant industry standards for the last-mile 
technologies in the applicant's proposed deployment? What features of 
this technology and proposed network will enable performance tier, 
latency and voice service requirements to be met?
    3. Can the applicant demonstrate that the technology and the 
engineering design will fully support the proposed performance tier, 
latency and voice service requirements for the requisite number of 
locations during peak periods (Yes/No)? What assumptions about 
subscription rate and peak period data usage is the applicant making in 
this assertion? List the information that can be made available to 
support this assertion.
    4. Can the applicant demonstrate that all the network buildout 
requirements to achieve all service milestones can be met (Yes/No)? 
Describe the information that the applicant can make available in a 
project plan to support this assertion.
    5. For the proposed performance tier, latency and voice service, 
can the applicant demonstrate that potential vendors, integrators and 
other partners are able to provide commercially available and fully 
compatible network equipment, interconnection, last mile technology and 
customer premise equipment (CPE) at cost consistent with applicant's 
buildout budget and in time to meet service milestones (Yes/No)? 
Describe the information and sources of such information that the 
applicant could make available to support this response.
    6. Can the applicant describe how the network will be maintained 
and services provisioned (Yes/No)? Can the applicant demonstrate that 
it can provide internally-developed operations systems for provisioning 
and maintaining the proposed network including equipment and segments, 
interconnections, CPE and customer services at cost consistent with 
applicant's buildout budget and in time to meet service milestones 
(Yes/No)? If not, can the applicant demonstrate that potential vendors, 
integrators, and other partners are able to provide commercially 
available and fully compatible operations systems and tools for 
provisioning and maintaining the proposed network at cost consistent 
with applicant's buildout budget and in time to meet service milestones 
(Yes/No)? Describe the information and sources of such information that 
the applicant could make available to support these responses.
    7. If the applicant is using satellite technologies, describe the 
total satellite capacity available and possible methods the applicant 
will utilize to assign bandwidth and capacity for each spot beam.

                                       Proposed Auction 903 Spectrum Chart
----------------------------------------------------------------------------------------------------------------
                                                Paired licensed             Unpaired licensed       Unlicensed
                                       -------------------------------------------------------------------------
         Spectrum band/service           Uplink freq.   Downlink freq.   Uplink & downlink freq.    Unlicensed
                                             (MHz)           (MHz)                (MHz)                (MHz)
----------------------------------------------------------------------------------------------------------------
600 MHz...............................         663-698         617-652  ........................  ..............
Lower 700 MHz.........................         698-716         728-746  716-728 (Downlink only).  ..............
Upper 700 MHz.........................         776-787         746-757  ........................  ..............
800 MHz SMR...........................   813.5/817-824   858.5/862-869  ........................  ..............
Cellular..............................         824-849         869-894  ........................  ..............
Broadband PCS.........................       1850-1915       1930-1995  ........................  ..............
AWS-1.................................       1710-1755       2110-2155  ........................  ..............
AWS (H Block).........................       1915-1920       1995-2000  ........................  ..............
AWS-3.................................       1755-1780       2155-2180  1695-1710 (Uplink only).  ..............
AWS-4.................................  ..............  ..............  2000-2020...............  ..............
                                                                        2180-2200 (Downlink       ..............
                                                                         only).
BRS/EBS...............................  ..............  ..............  2496-2690...............  ..............
WCS...................................       2305-2315       2350-2360  2315-2320...............  ..............
                                                                        2345-2350...............  ..............
CBRS (3.5 GHz)........................  ..............  ..............  3550-3700...............  ..............
2.4 GHz...............................  ..............  ..............  ........................     2400-2483.5
5 GHz.................................  ..............  ..............  ........................       5150-5250
                                                                                                       5725-5850
24 GHz................................  ..............  ..............  ........................   24,000-24,250
Ku Band (satellite)...................   14,000-14,500   11,700-12,200  ........................  ..............
Ka Band (satellite)...................   27,500-30,000   17,700-20,000  ........................  ..............
UMFUS (terrestrial)...................  ..............  ..............  27,500-28,350...........  ..............
                                                                        38,600-40,000...........  ..............
----------------------------------------------------------------------------------------------------------------

Abbreviations

AWS Advanced Wireless Services
BRS/EBS Broadband Radio Service/Education Broadband Service
CBRS Citizens Broadband Radio Service
PCS Personal Communications Service
SMR Specialized Mobile Radio
UMFUS Upper Microwave Flexible Use Service
WCS Wireless Communications Service

VI. Procedural Matters

    134. This document seeks to implement the information collections 
adopted in the Phase II Auction Order and does not contain any 
additional proposed information collection(s) subject to the Paperwork 
Reduction Act of 1995 (PRA), Public Law 104-13. The Commission is 
currently seeking PRA approval for information collections related to 
the short-form application process and will in the future seek PRA 
approval for information collections related to the long-form 
application process. In addition, therefore, this document does not 
contain any new or modified information collection burden for small 
business concerns with fewer than 25 employees, pursuant to the Small 
Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4).
    135. As required by the Regulatory Flexibility Act of 1980 (RFA), 
the Commission prepared Initial Regulatory Flexibility Analyses (IRFAs) 
in connection with the USF/ICC Transformation Order FNPRM, 76 FR 78384, 
December 16, 2011, the April 2014 Connect America FNPRM, 79 FR 39196, 
July 9, 2014, and the Phase II

[[Page 40537]]

Auction FNPRM, 81 FR 40235, June 21, 2016 (collectively, Phase II 
FNPRMs), and Final Regulatory Flexibility Analyses (FRFAs) in 
connection with the April 2014 Connect America Order, 79 FR 39164, July 
9, 2014, the Phase II Auction Order, and the Phase II Auction FNPRM 
Order (collectively, Phase II Orders). The Commission sought written 
public comment on the proposals in the Phase II FNPRMs, including 
comments on the IRFAs. The Commission did not receive any comments in 
response to those Regulatory Flexibility Analyses.
    136. The IRFAs for the Phase II NPRMs and the FRFAs for the Phase 
II Orders set forth the need for and objectives of the Commission's 
rules for the Phase II auction; the legal basis for those rules; a 
description and estimate of the number of small entities to which the 
rules apply; a description of projected reporting, recordkeeping, and 
other compliance requirements for small entities; steps taken to 
minimize the significant economic impact on small entities and 
significant alternatives considered; and a statement that there are no 
federal rules that may duplicate, overlap, or conflict with the rules. 
The proposals in this Public Notice do not change any of those 
descriptions. However, because this Public Notice proposes specific 
procedures for implementing the rules proposed in the Phase II FNPRMs 
and adopted in the Phase II Orders, the Commission has prepared a 
supplemental IRFA seeking comment on how the proposals in this Public 
Notice could affect those Regulatory Flexibility Analyses.
    137. The proposals in this Public Notice include procedures for 
awarding Phase II support through a multi-round, reverse auction, the 
minimum geographic area for bidding in the auction, aggregating 
eligible areas into larger geographic units for bidding, setting 
reserve prices, capping the amount of support per location provided to 
extremely high-cost census blocks, and the availability of application 
and auction information to bidders and to the public during and after 
the auction. This Public Notice also includes detailed proposed bidding 
procedures for a descending clock auction, including bid collection, 
clock prices, proposed bid format, package bidding format, proxy 
bidding, bidder activity rules, bid processing, and how support amounts 
are determined. The bidding procedures proposed in this Public Notice 
are designed to facilitate the participation of qualified service 
providers of all kinds, including small entities, in the Phase II 
program, and to give all bidders, including small entities, the 
flexibility to place bids that align with their intended network 
construction or expansion, regardless of the size of their current 
network footprints. In addition, the Public Notice specifically seeks 
comment on information the Commission could make available to help 
educate parties that have not previously participated in a Commission 
auction, and on whether the Bureaus should work with the Commission's 
Office of Communications Business Opportunities to engage with small 
providers.
    138. To implement the rules adopted by the Commission in the Phase 
II Orders for the pre-auction process, this Public Notice proposes 
specific procedures and requirements for applying to participate and 
becoming qualified to bid in the Phase II auction, including 
designating the state(s) in which an applicant intends to bid, and 
providing operational and financial information designed to allow the 
Commission to assess the applicant's qualifications to meet the Phase 
II public interest obligations for each area for which it seeks 
support. The Public Notice also makes proposals that address the types 
of further information that may be required in the post-auction long-
form application that a winning bidder must file to become authorized 
to receive support. The application procedures proposed in this Public 
Notice are intended to require applicants to submit enough information 
to permit the Commission to determine their qualifications to 
participate in the Phase II auction, without requiring so much 
information that it is cost-prohibitive for any entity, including small 
entities, to participate.
    139. As noted above, the Commission seeks comment on how the 
proposals in this Public Notice could affect the IRFAs for the Phase II 
FNPRMs or the FRFAs in the Phase II Orders. Such comments must be filed 
in accordance with the same filing deadlines for responses to this 
Public Notice and have a separate and distinct heading designating them 
as responses to the IRFAs and FRFAs.
    140. People with Disabilities: To request materials in accessible 
formats (braille, large print, electronic files, audio format) for 
people with disabilities, send an email to <a href="/cdn-cgi/l/email-protection#02646161373236426461612c656d74"><span class="__cf_email__" data-cfemail="c8aeababfdf8fc88aeababe6afa7be">[email protected]</span></a> or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (TTY).
    141. This proceeding has been designated as a ``permit-but-
disclose'' proceeding in accordance with the Commission's ex parte 
rules. Persons making ex parte presentations must file a copy of any 
written presentation or a memorandum summarizing any oral presentation 
within two business days after the presentation (unless a different 
deadline applicable to the Sunshine period applies). Persons making 
oral ex parte presentations are reminded that memoranda summarizing the 
presentation must (1) list all persons attending or otherwise 
participating in the meeting at which the ex parte presentation was 
made, and (2) summarize all data presented and arguments made during 
the presentation. If the presentation consisted in whole or in part of 
the presentation of data or arguments already reflected in the 
presenter's written comments, memoranda or other filings in the 
proceeding, the presenter may provide citations to such data or 
arguments in his or her prior comments, memoranda, or other filings 
(specifying the relevant page and/or paragraph numbers where such data 
or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with rule 1.1206(b). In proceedings governed by 
rule 1.49(f) or for which the Commission has made available a method of 
electronic filing, written ex parte presentations and memoranda 
summarizing oral ex parte presentations, and all attachments thereto, 
must be filed through the electronic comment filing system available 
for that proceeding, and must be filed in their native format (e.g., 
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding 
should familiarize themselves with the Commission's ex parte rules.

Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer, Office of the Secretary.
[FR Doc. 2017-18041 Filed 8-24-17; 8:45 am]
 BILLING CODE 6712-01-P


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