10374 Federal Register / Vol. 66, No. 32 / Thursday, February 15, 2001 / Rules and Regulations

Community Involvement

Public participation activities for

Release Blocks D and H have been

satisfied as required in CERCLA section

113(k), 42 U.S.C. 9613(k), and Section

117, 42 U.S.C. 9617. As part of the

Mound 2000 Process, DOE routinely

solicited public comment on the Core

Team’s recommended response at each

Potential Release Site (PRS) and on the

residual risk assessments. The final

remedy decisions for Release Blocks D

and H were each preceded by the

issuance of a proposed plan, a notice in

the local newspapers commencing a 30-

day public comment period, and a

public meeting where citizens could ask

questions and make comments. All

documents DOE relied upon in making

its remedy decisions were available for

public inspection at the The CERCLA

Public Reading Room, Miamisburg

Senior Adult Center, 305 Central

Avenue, Miamisburg, OH 45342. When

it issued its remedy decisions, DOE

included a written response to all

significant comments.

Current Status

DOE has implemented the RODs for

Release Blocks D and H by placing

restrictions in the deeds for each

property. DOE conveyed Release Block

D to the Miamisburg Mound

Community Improvement Corporation

on March 18, 1999. DOE conveyed

Release Block H to the Miamisburg

Mound Community Improvement

Corporation on August 5, 1999. Because

the remedies for Release Blocks D and

H do not allow unlimited use of and

unrestricted exposure to each property,

DOE, in consultation with EPA, OEPA,

and the Ohio Department of Health, will

review the remedial actions each year to

assure that human health and the

environment are being protected by the

remedial actions being implemented.

While EPA does not believe that any

future response actions for Release

Blocks D and/or H will be needed, if

future conditions warrant such action,

these areas of the Mound Site would be

eligible for future Fund-financed

response actions. This partial deletion

does not alter the status of the

remainder of the Mound Site, which is

not proposed for deletion and remains

on the NPL.

V. Action

EPA, with concurrence from the State

of Ohio, has determined that all

appropriate CERCLA response actions

have been completed at Release Blocks

D and H, and that protection of human

health and the environment has been

achieved in these areas. Therefore, EPA

is deleting Release Blocks D and H of

the Mound Superfund Site from the

NPL.

This action will be effective April 16,

2001. However, if EPA receives

dissenting comments by March 19,

2001, EPA will publish a document that

withdraws this action.

List of Subjects in 40 CFR Part 300

Air pollution control, Chemicals,

Hazardous substances, Hazardous

waste, Intergovernmental relations,

Penalties; Reporting and recordkeeping

requirements, Superfund, Water

pollution control, Water supply.

Dated: January 19, 2001.

David A. Ullrich,

Acting Regional Administrator, U.S. EPA,

Region 5.

Part 300, title 40 of chapter 1 of the

Code of Federal Regulations is amended

as follow:

PART 300—[AMENDED]

1. The authority citation for Part 300

continues to read as follows:

Authority: 33 U.S.C. 1321(c)(2); 42 U.S.C.

9601–9657; E.O. 12777, 56 FR 54757, 3 CFR,

1991 Comp.; p.351; E.O. 12580, 52 FR 2923,

3 CFR, 1987 Comp.; p. 193.

Appendix B—[Amended]

2. Table 2 of appendix B to Part 300

is amended by revising the entry for

‘‘Mound Plant (USDOE)’’ Miamisburg,

Ohio to read as follows:

Appendix B to Part 300—National Priorities List

TABLE 2.—FEDERAL FACILITIES SECTION

State Sitename City/County (Notes) 1

*******

OH .............................................................. Mound Plant (USDOE) ............................. Miamisburg ............................................... P

*****

1P=Sites with partial deletion(s).

* * * * *

[FR Doc. 01–3612 Filed 2–14–01; 8:45 am]

BILLING CODE 6560–50–U

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 27

[WT Docket No. 99–168; FCC 00–330]

Service Rules for the 746–764 and 776–

794 MHz Bands

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: By this document, the

Commission dismisses a petition for

reconsideration as moot and adopts a

special rule on default payments for

auctions of licenses in the 746–764 and

776–794 MHz Bands using a package

bidding design.

DATES: February 15, 2001.

FOR FURTHER INFORMATION CONTACT:

Howard Davenport, Attorney, Auctions

Legal Branch at (202) 418–0660.

SUPPLEMENTARY INFORMATION: This is a

summary of a Second Memorandum

Opinion and Order (Second MO&O) in

the Amendment of the Commission’s

Rules Regarding Service Rules for the

746–764 and 776–794 MHz Bands. The

complete text of the Second MO&O is

available for inspection and copying

during normal business hours in the

FCC Reference Center (Room CY–A257),

445 12th Street, SW., Washington, DC.

It may also be purchased from the

Commission’s copy contractor,

International Transcription Services,

Inc. (ITS, Inc.), 1231 20th Street, NW.,

Washington, DC 20036, (202) 857–3800.

It is also available on the Commission’s

web site at http://www.fcc.gov/wtb/

auctions.

Synopsis of the Second Memorandum

Opinion and Order

I. Introduction

1. In this Second Memorandum

Opinion and Order (Second MO&O), we

address a petition for reconsideration

Federal Register / Vol. 66, No. 32 / Thursday, February 15, 2001 / Rules and Regulations 10375

asking that in the auction of licenses in

the 747–762 and 777–792 MHz bands

(‘‘Auction No. 31’’), we apply to bidders

that seek a 20 MHz nationwide

aggregation any limits on bid

withdrawal payments made available to

bidders that seek a nationwide 30 MHz

aggregation. We also address the

question whether the competitive

bidding rules, particularly the default

payment rule, need to be modified for

Auction No. 31 in light of the decision

of the Wireless Telecommunications

Bureau (‘‘the Bureau’’) to offer

combinatorial (package) bidding for this

auction.

2. In an earlier ruling in this docket,

we found that in designing the

procedures for Auction No. 31, we

should not use a combinatorial

(package) bidding design because of the

time required to further develop such an

auction design. See 700 MHz First

Report and Order, 65 FR 3139 (January

20, 2000). Instead, we directed the

Bureau to adopt, if operationally

feasible, a special nationwide bid

withdrawal procedure to limit the

exposure of bidders seeking a 30

megahertz nationwide aggregation. In

response to this ruling, one party filed

a petition for reconsideration. In the 700

MHz MO&O, 65 FR 42879 (July 12,

2000), we deferred ruling on the petition

and stated that the Bureau may

implement a combinatorial bidding

design for Auction No. 31, if

appropriate. In that regard, the Bureau

issued a Auction No. 31 Package

Bidding Comment Public Notice, 65 FR

35636 (June 5, 2000), that sought

comment on procedures for

implementing combinatorial (package)

bidding for Auction No. 31. The Auction

No. 31 Package Bidding Comment

Public Notice also sought comment on

application to a package bidding auction

of the general competitive bidding rules

regarding default. After careful review

of the comments, the Bureau issued a

Auction No. 31 Package Bidding

Procedures Public Notice, 65 FR 43361

(July 13, 2000), that set forth specific

procedures for conducting a

simultaneous multiple round auction

with combinatorial or package bids. For

the reasons set forth, we dismiss the

petition as moot and adopt a special

default payment rule for Auction No.

31.

II. US West Petition for Reconsideration

A. Background

3. In the 700 MHz First Report and

Order, we adopted service and auction

rules for the commercial use of the 746–

764 MHz and 776–794 MHz bands.

These bands had been reallocated from

use solely for broadcast service. The

new service rules established 12

licenses (six regional licenses of 10 MHz

each and six regional licenses of 20

MHz each) for the 30 megahertz of

spectrum in the 747–762 MHz and 777–

792 MHz bands. In that ruling, we noted

that there may be bidders that do not

wish to acquire any licenses if they

cannot acquire a nationwide aggregation

of 30 MHz licenses. We further noted

that the bid withdrawal provisions of

our general competitive bidding rules at

part 1, subpart Q, might discourage

bidders from attempting a nationwide

aggregation. To address this concern, we

directed the Bureau to adopt, if

operationally feasible, a nationwide bid

withdrawal procedure to limit the

exposure of bidders that seek a 30 MHz

aggregation. The Bureau adopted such a

procedure. See Auction No. 31

Procedures Public Notice 65 FR 12251

(March 8, 2000). The petition asks that

we apply the same nationwide bid

withdrawal provisions to any bidder

that seeks a 20 MHz nationwide

aggregation, as may be applied to a

bidder seeking a 30 MHz nationwide

aggregation.

B. Discussion

4. In the Auction No. 31 Package

Bidding Procedures Public Notice, the

Bureau determined that bidders may

place bids on individual licenses and

may also place bids on up to twelve

different packages of each bidder’s

choosing. By providing for package

bidding, the Bureau has addressed the

problem that may exist for a bidder that

desires all or none of the licenses in a

particular aggregation. For example, a

bidder that seeks a 20 MHz or a 30 MHz

nationwide aggregation can now bid on

a package that includes these licenses

and thus avoid the risk of winning only

some of the desired licenses. Because,

under package bidding, bidders that

seek a 30 MHz nationwide aggregation

no longer run the risk of being left with

unwanted licenses in a failed

nationwide aggregation, we conclude

that the 30 MHz nationwide bid

withdrawal procedure established by

the Bureau at our direction is no longer

necessary and the Bureau need not

apply the procedure in Auction No. 31.

Because the Bureau stated that, upon

Commission approval, it will not apply

the nationwide bid withdrawal

procedure in Auction No. 31, the

request that we implement a similar bid

withdrawal procedure for 20 MHz

aggregation is moot. Accordingly, we

dismiss the petition.

III. Default

A. Introduction

5. In the 700 MHz MO&O, we stated

that we would adopt any necessary rule

changes after the Bureau had

determined whether to implement

package bidding for Auction No. 31. In

the Auction No. 31 Package Bidding

Comment Public Notice, the Bureau

sought comment on application of the

Commission’s rules regarding bidder

defaults. We received three comments

and one reply comment on this issue.

B. Licenses Subject to Auction After a

Default

6. Under our part 1 auction rules, if

a bidder defaults on a bid (or bids), we

may sell the license(s) for the spectrum

in a new auction. For Auction No. 31,

the Bureau proposed that if a bidder

defaults on a package bid, it would

auction the licenses making up the

package on which the party defaulted,

and only those licenses. The Bureau

would do this even if, under the

package bidding procedures, a different

set of packages would have won had the

defaulting bidder not bid. For example,

if the winning set of bids contains a 20

MHz nationwide package and a 10 MHz

nationwide package, and the 20 MHz

winner then defaults, the Bureau would

auction only the six licenses making up

the nationwide 20 MHz package. The 10

MHz package would be unaffected. The

Bureau proposed to take this approach

even if, had the 20 MHz winner not

submitted its winning bid, the licenses

would have been sold in a different set

of packages (for example, the six 30

MHz regional packages).

7. Two parties file joint comments

objecting to this proposal. They are

concerned that bidders may strategically

default, and argue that we should not

award any licenses after a default unless

the non-defaulting winners clearly

would have won absent the default.

They instead propose that we ‘‘rewind’’

the auction to before the round where it

is clear the defaulting bidder was

attempting to manipulate the outcome.

8. While we recognize the possibility

that a bidder may attempt to

strategically default, we are not inclined

to adopt the proposal that we ‘‘rewind’’

the auction. We believe that attempting

to ‘‘rewind’’ an auction would be largely

unworkable and unreasonable. First,

bidders may default for other reasons,

and determining when a bidder began

‘‘manipulating’’ the outcome, if indeed

it was attempting to do so, could be

extremely difficult. Second, if the

auction were subject to being

‘‘rewound’’ in the event of a default, the

prevailing bidders would be only

10376 Federal Register / Vol. 66, No. 32 / Thursday, February 15, 2001 / Rules and Regulations

contingent winners until all long form

applications were approved and all

money was paid, possibly some months

after the auction closed. For each

winner, the contingency would not be

under the winner’s control, but rather

would depend on the actions of others.

Moreover, all bidders, both those that

prevailed and those that did not, would

have to be at the ready during this time

to continue the auction from the point

to where it was unwound. We therefore

do not believe that this proposal is

feasible.

9. We also believe that these joint

commenters underestimate the

deterrence value of the current default

rule. We believe that the better course

is to increase the additional default

payment rather than attempt to

‘‘rewind’’ the auction.

10. No other commenter supports the

proposal to rewind the auction, nor does

any other commenter object to this

portion of the proposal. Moreover, these

joint commenters note that any

alternative following a default

(including its own) is problematic.

Accordingly, we adopt the procedure

proposed in the Auction No. 31 Package

Bidding Comment Public Notice to hold

another auction only for the license(s)

on which bidders default.

C. Calculation of Default Payments

11. The Commission’s rules provide

that if a bidder defaults, it is liable for

a default payment that contains a

deficiency portion, equal to the

difference between the amount it bid

and the amount of the winning bid the

next time the Commission offers the

license, plus an additional payment,

equal to three percent of the subsequent

winning bid (or three percent of the

bidder’s bid, whichever is less). Default

payments are calculated on a license-bylicense basis; that is, where a bidder that

defaults has more than one winning bid,

the payments are calculated separately

for each bid. Gains realized from the

subsequent auction of licenses for

which the subsequent winning bid is

higher than the defaulter’s bid are not

used to offset losses incurred on those

licenses for which the winning bid is

lower than the defaulter’s bid.

12. In an auction with package

bidding, a bidder that bids on a package

is not placing separate bids on the

individual licenses making up that

package. Thus, in an auction with

package bidding, it is not possible to

apply the default rules in the same

manner as they are applied in a

simultaneous multiple round auction

without package bidding. The Bureau

therefore proposed to modify the default

rules for Auction No. 31 as follows.

Where a bidder defaults on a package

bid(s), the payment would be calculated

on a bid-by-bid basis, rather than on a

license-by-license basis. The deficiency

portion would be equal to the difference

between the amount bid for the package

and the amount of the subsequent

winning bid for the same package or the

aggregate of the subsequent winning

bids for the licenses that make up the

package. The Bureau also proposed that,

similar to the rule for individual

licenses, if a bidder defaults on two or

more packages, the default payment due

for each defaulted package would be

calculated separately and would not be

not offset against one another. If one

package was subsequently auctioned for

more than the original package bid

amount and the other package

subsequently was auctioned for less, the

excess bid price from the first package

would not be used to reduce the amount

owed on the second package.

13. We will not alter the rule for

calculating default payments when a

bidder has defaulted on more than one

license or package. For the reasons we

expressed in the BDPCS MO&O, 15 FCC

Rcd. 17590 (2000), we believe that the

rule is a correct one. However, the rule

needs to be modified with respect to

how we will calculate default payments

when, after default(s) by one or more

bidders, the affected licenses are won in

different packages or groupings in the

subsequent auction, particularly in light

of the Bureau’s package bidding

procedures which allow bidders in

Auction No. 31 to design their own

packages. Our procedures do not

currently provide a method for

calculating a default payment when

defaulted licenses are subsequently won

in a package(s). While we would prefer

to use our current rule for calculating

default payments and not aggregate

default payments or apportion payments

among defaulting bidders, where

licenses are won in different packages in

a subsequent auction there is no choice

but to do so. Thus, we set forth a rule

for Auction No. 31 that will allow the

calculation of default payments in those

situations where the subsequent auction

results in a completely different set of

winning packages. Where, however, we

are able to apply the current method for

calculating default payments, or apply

an analogous rule, we will do so.

14. Accordingly, we modify § 27.501

of the Commission’s rules for

calculating the deficiency portion of

default payments in Auction No. 31

when a package bidding design is

employed.

D. Additional Default Payment

15. Because of the widespread

implications of default under package

bidding, two commenters recommend

that we modify our rules to provide a

stronger deterrent against default. One

commenter recommends that we raise

the additional payment portion of the

default payment from three percent to

25 percent to discourage strategic

defaults and avoid potentially

inefficient auction results. The other

recommends that: (i) Bidders be

required to deposit 50 percent of their

winning bids within eight business days

after the close of the auction; (ii) each

defaulter and the real party in interest

be jointly and severally responsible for

the entire revenue shortfall; (iii) each

defaulter and its real party in interest be

jointly and severally responsible for a

default penalty of 25 percent of the total

revenue on all licenses that are placed

in different hands because of the

default; and (iv) to the extent allowable,

all of a bidder’s lines of business and

those of its real party in interest be

subject to suspension during the time a

default penalty remains uncollected.

16. We agree that the effects of a

default in a package bidding auction

require a strong deterrent against

insincere bidding and strategic default.

In an auction without package bidding,

a default on a license mostly affects only

the bidders for that license; if the

defaulting bidder had not bid, the other

licenses in the auction likely still would

have been won by the same bidders. In

an auction with package bidding,

however, a default may reasonably be

expected to affect multiple licenses (and

perhaps every license in the auction); if

the defaulting bidder had not bid, the

licenses may well have been sold in

different packages. We believe,

however, that the protections proposed

by one commenter are too stringent. We

believe that another commenter offers a

more measured approach in

recommending that the additional

default payments of three percent be

raised to 25 percent of the defaulted bid

or the subsequent bid, whichever is

smaller. We agree that a 25 percent

additional default payment will

adequately discourage defaults and

prevent strategic skewing of our auction

and we believe that it is not so high as

to be punitive. We are also concerned

that in this auction a lesser amount

would be inadequate to deter bidders

from insincere bidding or strategically

defaulting. Finally, we believe that

increasing the default payment is an

appropriate response to this risk, as the

very purpose of the default payment

rule, inter alia, is to deter frivolous or

Federal Register / Vol. 66, No. 32 / Thursday, February 15, 2001 / Rules and Regulations 10377

insincere bidding and generally protect

the integrity of the auction process.

Therefore, for Auction No. 31, bidders

that default on their bids will be subject

to an additional payment of 25 percent

of the subsequent winning bid(s) or the

defaulting bids, whichever is less.

IV. Procedural Matters and Ordering

Clauses

17. This action is taken pursuant to

sections 1, 4(i), 301, 303, 308, 309(j),

and 337 of the Communications Act of

1934, as amended, 47 U.S.C. 151, 154(i),

301, 303, 308, 309(j), and 337, and the

Consolidated Appropriations Act, 2000,

Public Law 10–113, 113 Stat. 1501,

section 213.

18. Accordingly, it is ordered that part

27 of the Commission’s rules is

amended to modify the default payment

rule for an auction of licenses in the

747–762 and 777–792 MHz Bands using

a package bidding design, and that, in

accordance with section 213 of the

Consolidate Appropriations Act, 2000,

Public Law 106–113, 113 Stat. 1501

(1999), this rule shall be effective

February 15, 2001.

Federal Communications Commission.

William F. Caton,

Deputy Secretary.

Rule Changes

For the reasons discussed in the

preamble, the Federal Communications

Commission amends 47 CFR part 27 as

follows:

PART 27—WIRELESS

COMMUNICATIONS SERVICE

1. The authority citation for part 27 is

revised to read as follows:

Authority: 47 U.S.C. 154, 301, 302, 303,

307, 309, 332, 336, and 337 unless otherwise

noted.

2. Section 27.501 is amended by

redesignating the undesignated text as

paragraph (a) and adding new paragraph

(b) to read as follows:

§ 27.501 746–764 MHz and 776–794 MHz

bands subject to competitive bidding.

* * * * *

(b) For auctions of licenses in the

747–762 and 777–792 MHz Bands using

a package bidding design, the payments

imposed on bidders who default on

payments due after an auction closes or

who are disqualified, set forth in

§ 1.2104(g) of this chapter, shall be

calculated as follows. The default

payment consists of a deficiency portion

and an additional payment. The

additional payment shall be 25 percent

of the subsequent winning bid or the

defaulted bid, whichever is less. In the

case that either the subsequent winning

bid or the defaulted bid is subject to

bidding credits, the additional payment

will be calculated in an analogous

manner to that used in § 1.2104(g)(2) of

this chapter. The deficiency portion of

the default payment shall be calculated

as set forth in § 27.501(b)(1) through

(b)(4). In the case that any of the

relevant bids are subject to bidding

credits, the default payment will be

adjusted in an analogous manner to that

used in § 1.2104(g)(1) of this chapter.

(1) Where a defaulting bidder won

licenses individually (i.e., not as part of

a package), and in a subsequent auction

the licenses are also won individually,

we will calculate the deficiency portion

as we do in our simultaneous multiple

round auctions, and on a license-bylicense basis (i.e., the differences

between the amount originally bid and

the amount subsequently bid will not be

aggregated to determine a net amount

owed). Where a license is sold

individually and not as part of a

package, we find no reason to modify

the calculation of the deficiency portion

of the default payment.

(2) Where a defaulting bidder won

licenses in package(s), and in a

subsequent auction the licenses are won

either in the same package(s), or in

smaller packages or as individual

licenses that correlate to the defaulted

package(s), the deficiency portion will

be determined on a package-by-package

basis, and the differences between the

amount originally bid and the amount(s)

subsequently bid will not be aggregated

to determine a net amount owed. Thus,

in this situation, we will calculate the

deficiency portion in a manner

analogous to where the licenses are sold

individually. However, because a bid on

a package does not imply any specific

allocation of the total amount to the

individual licenses making up that

package, where the licenses are

subsequently sold individually or as

part of smaller packages, we believe we

should aggregate the amounts received

in the subsequent auction in order to

determine any deficiency.

(3) Where a defaulting bidder or

bidders won licenses either individually

or as part of packages, and in a

subsequent auction the licenses are won

as larger packages or different packages

(not including the situation described in

§ 27.501(b)(2)), the deficiency portion

will be calculated by subtracting the

aggregate amount originally bid for the

licenses from the aggregate amount bid

in the subsequent auction for the

licenses. As stated in § 27.501(b)(2), a

bid on a package does not imply any

specific allocation of the total amount to

the licenses making up that package. We

believe that in this situation we should

aggregate the amounts bid on the

various packages in order to calculate

the deficiency portion owed.

(4) When in the situation described in

§ 27.501(b)(3), there are multiple

defaulting bidders, the default payment

(both the deficiency portion and the

additional amount portion) will be

allocated to the defaulting bidders in

proportion to the amount they originally

bid. For example, if Bidder 1 defaults on

Package ABC for $200, and Bidder 2

defaults on Package DE for $400, and in

a subsequent auction the licenses are

won in Package AB for $150 and

Package CDE for $350, Bidder 1 would

be liable for 1⁄3 of the default payment

and Bidder 2 would be responsible for

2⁄3. The total default payment would be

equal to the difference between the total

of the original bids ($600) and the total

of the subsequent amounts bid ($500)

plus an additional amount of 25 percent

of the total of the subsequent amounts

bid. The total default payment therefore

would equal $100 ($600–$500) plus 25

percent of $500 ($125), for a total

default payment of $225.

[FR Doc. 01–3786 Filed 2–14–01; 8:45 am]

BILLING CODE 6712–01–U