[Federal Register Volume 59, Number 103 (Tuesday, May 31, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13257]


[[Page Unknown]]

[Federal Register: May 31, 1994]


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FEDERAL COMMUNICATIONS COMMISSION
[Report No. AUC-94-01, Auction No. 1]

 

Common Carrier Public Mobile Services Information Auction Notice 
and Filing Requirements for Ten Nationwide Licenses for Personal 
Communications Services in the 900 MHz Band

May 23, 1994.
    The Federal Communications Commission (``FCC'') plans to hold a 
simultaneous multiple round auction for ten nationwide Personal 
Communications Service (PCS) licenses in the 900 MHz band (``narrowband 
PCS''). The auction will begin at 10 a.m. on Monday, July 25, 1994. 
Bidding will begin at 9 a.m. and end at 6 p.m. each day thereafter 
until bidding has closed on all licenses. The auction will be held in 
the Blue Room at the Omni Shoreham Hotel at 2500 Calvert Street NW., 
Washington DC, Telephone number (202) 234-0700. Those wishing to 
participate in the auction must submit an FCC Form 175 in accordance 
with the Commission's rules and the instructions in this Public Notice. 
The FCC Form 175 must be received on or before 5:30 p.m. EDT, Friday, 
July 1, 1994. Applicants are also required to submit an upfront payment 
of $350,000 per license (in U.S. dollars) for the maximum number of 
licenses on which they expect to bid in any single round. The upfront 
payment must be by wire transfer or cashier's check payable to the 
Federal Communications Commission or ``FCC'' and must be received on or 
before 3 p.m. EDT on Monday, July 11, 1994. Limited space will be 
available at the auction for members of the public to observe the 
auction.

1. Summary of Licenses To Be Auctioned

    The following lists by market number and frequency block number the 
10 nationwide narrowband PCS licenses grouped by category of license. 
All ten licenses will be auctioned simultaneously:
    (1) Five 50 kHz channels, each paired with another 50 kHz channel:

Market No. N-1, Frequency Block No. 1: 940.00-940.05 and 901.00-901.05 
MHz;
Market No. N-2, Frequency Block No. 2: 940.05-940.10 and 901.05-901.10 
MHz;
Market No. N-3, Frequency Block No. 3: 940.10-940.15 and 901.10-901.15 
MHz;
Market No. N-4, Frequency Block No. 4: 940.15-940.20 and 901.15-901.20 
MHz; and,
Market No. N-5, Frequency Block No. 5: 940.20-940.25 and 901.20-901.25 
MHz; **

    (2) Three 50 kHz channels, each paired with another 12.5 kHz 
channel:

Market No. N-6, Frequency Block No. 6: 930.40-930.45 and 901.7500-
901.7625 MHz;
Market No. N-7, Frequency Block No. 7: 930.45-930.50 and 901.7625-
901.7750 MHz; and,
Market No. N-8, Frequency Block No. 8: 930.50-930.55 and 901.7750-
901.7875 MHz;**

    (3) Two 50 kHz unpaired channels:

Market No. N-10, Frequency Block No. 10: 940.80-940.85 MHz.
Market No. N-11, Frequency Block No. 11: 940.85-940.90 MHz,**

    Please note that Market No. N-9, Frequency Block No. 9: 940.75-
940.80 MHz will not be offered at the auction. The market numbers and 
frequency block numbers outlined above should be used in filling out 
FCC Form 175, discussed more fully below. Businesses owned by women 
and/or minorities will be eligible for a 25 percent bidding credit on 
all license designated by an (**) above. See Third Report and Order at 
72-80.

2. Procedures, Terms, and Conditions

    The auction will be conducted by Tradewinds International, Inc. and 
Cantor Fitzgerald Securities, Inc. Prospective bidders must thoroughly 
familiarize themselves with the procedures, terms and conditions 
(collectively, ``Terms''), contained in the Second Report and Offer in 
PP Docket No. 93-253, FCC 94-61, released April 20, 1994, and the Third 
Report and Order in PP Docket No. 93-253, FCC 94-98, released May 10, 
1994. Copies of the Second Report and Order are available for a fee 
from International Transcription Services, Inc. at (202) 857-3800. A 
copy of the Third Report and Order will be included in the Bidder 
Information Package (``Bidder Package'') described below. The Terms 
contained in the Commission Reports and Orders and in the Bidder 
Package are not negotiable. Prospective bidders should review these 
auction documents thoroughly prior to the auction to make certain that 
they understand all of the provisions and are willing to be bound by 
all the Terms before making any bid.

3. Bidder Package

    The Bidder Package (as amended and supplemented from time to time) 
may be obtained by prospective bidders by contacting Tradewinds 
International, Inc. at General Aviation Terminal, No. 7 Thomas Avenue, 
Washington National Airport, Washington, DC, 20001, telephone number 
(202) 637-3221, facsimile number (202) 637-3222. The business hours of 
Tradewinds International Inc., are Monday through Friday 9 a.m. to 6 
p.m., EDT.
    The Bidder Package will contain the following information:
    (1) A list of licenses to be offered simultaneously;
    (2) The procedures, terms and conditions of the auction;
    (3) A copy of the Third Report and Order in PP Docket No. 93-253, 
FCC 94-98;
    (4) An Application Form to participate in an FCC auction (``FCC 
Form 175'' and ``175S'' or ``Short-Form'') including instructions on 
filling out the form and a sample of a completed Form 175;
    (5) An FCC Remittance Advice (FCC Form 159) to be submitted by 
bidders together with their upfront payment, down payment and final 
payment (described below);
    (6) Wire transfer instructions;
    (7) An application for a narrowband PCS license (FCC Form 401 or 
``Long-Form'' application) to be submitted by winning bidders only; and
    (8) Other general auction information.

4. Short Form Application (FCC Form 175)

    In order to be eligible to bid in the auction, bidders must submit 
an application for one or more narrowband PCS licenses on FCC Form 175 
prior to the auction in compliance with applicable FCC Rules and 
Regulations and with the requirements set forth below. Only the person 
or persons identified on FCC Form 175 as qualified to make a bid will 
be permitted to bid at the auction. The FCC Form 175 may be submitted 
anytime after the release of this Public Notice but must be received no 
later than 5:30 p.m. EDT, Friday, July 1, 1994. Certain information 
necessary to complete FCC Form 175, such as market numbers and 
frequency block numbers for nationwide narrowband PCS licenses as well 
as the Auction No., may be found at the top of this Public Notice.

Completion of Form 175

    Applicants are required to complete all the items on the 
application. The applicant must also identify all parties to the 
application, including members of bidding consortia, joint ventures or 
any other agreements, arrangements or understandings relating to the 
auction or post-auction market structure. In completing FCC Form 175, 
bidders should note the following:
    1. In item 6 of FCC Form 175, Auction No., applicants should enter 
``1''.
    2. Item 7 requires applicants to make up a ten digit FCC Account 
Number, a personal identification number that the Commission will use 
to identify and track applications. Applicants have two options to 
create this FCC Account Number. Option 1--an applicant may use its 
taxpayer identification number (TIN) with a prefix of ``0'', i.e., 
0123456789. Option 2--an applicant may use its ten digit telephone 
number (i.e., 5552345678). Each applicant should use this same number 
when submitting additional information/material regarding its 
application, including any required fees submitted to the Commission on 
FCC Remittance Advice, (i.e. use the same number for the Form 175 and 
the FCC Account Number on FCC Form 159). This number must be used 
whenever an applicant writes, calls, or otherwise inquires about its 
application. Applicants will also need this number to register for the 
auction.
    3. Items 9 and 10 will be used to determine whether the applicant 
is claiming a preference in the bidding process. As discussed more 
fully in the Third Report and Order, certain preferential measures are 
available to small businesses and businesses owned by members of 
minority groups and/or women. Applicants claiming a preference should 
refer to Sec. 1.2110 of the Commission's Rules (47 CFR 1.2110) for 
definitions and eligibility requirements applicable to small businesses 
and businesses owned by women and minorities. See also Third Report and 
Order at 66-90.
    4. In Item 11, applicants should identify the market number for 
each narrowband PCS license they want to bid on. The market number for 
each license is listed above. Applicants should list the market number 
for each license they are interested in bidding on in the first column 
labeled ``Market No.'' If applicants want to bid on more than five 
markets, they should list each additional market number on FCC Form 
175-S. For the Frequency Block No. in item 11, applicants should 
indicate the frequency block numbers associated with each license they 
expect to bid on at the auction.
    5. In item 12, applicants should list the name(s) of a person(s) 
authorized to represent them at the auction. Only one bidding number 
per applicant will be assigned.
    6. Applicants should read the ``Certifications'' listed on the FCC 
Form 175 carefully before signing the application. These certifications 
help to ensure a fair and competitive auction and require, among other 
things, disclosure to the Commission of certain information on 
applicant ownership and agreements or arrangements concerning the 
auction. Submission of a false certification to the Commission may 
result in penalties, including monetary forfeitures, license 
revocation(s), being barred from future auctions, and/or criminal 
prosecution.

    The Commission has established a Help Line to assist applicants in 
filling FCC Form 175. That number is (202) 637-3221. Applicants may 
call the Help Line for assistance Monday through Friday from 9 a.m. to 
6 p.m. EDT.
    Microfiche copies of the FCC Form 175 or 175-S are not required.
    Failure to sign the FCC Form 175 will result in dismissal of the 
application and inability to participate in the auction.

Where to Send the FCC Form 175

    In order to be eligible to bid, an FCC Form 175 application must be 
received by 5:30 p.m., EDT on Friday, July 1, 1994. Late applications 
will not be accepted. Applications should be submitted either by hand 
delivery, certified U.S. mail (return receipt requested) or sent by 
private courier. Whether mailed, hand delivered or sent by private 
courier, applications must be addressed to: Tradewinds International, 
Inc., General Aviation Terminal, No. 7 Thomas Avenue, Washington 
National Airport, Washington, DC, 20001, Attention: Narrowband PCS 
Processing.

    Applications will not be accepted if deliver to any other location.

5. Application Fee

    No application fee or FCC Form 159 need accompany the FCC Form 175 
for the auction.

6. Procedures After FCC Form 175 Applications Are Filed

    After the deadline for filing FCC Form 175 applications has passed, 
the Commission will process all applications to determine whether they 
are accepting for filing. The Commission will issue a Public Notice 
listing all applications which are accepted for filing, rejected, and 
those which have minor defects that may be corrected. The Public Notice 
will also announce the deadline for filing corrected applications. As 
described more fully in the Commission's general auction rules, 
applicants may only make minor corrections to their FCC Form 175 
applications. Applicants will not be permitted to make major 
modifications such as changes in ownership to their applications. 
Failure to sign an FCC Form 175 cannot be corrected and will cause the 
application to be dismissed and the applicant to be ineligible to 
participate in the auction. See Sec. 1.2105 of the Commission's Rules. 
47 CFR 1.2105.
    After the deadline for resubmitting corrected applications the 
Commission will release another Public Notice announcing all 
applications that have been accepted for filing, including applicants 
who have corrected defective applications.

7. Upfront Payments

    In order to be eligible to bid at the auction, applicants must 
submit an upfront payment together with an FCC Form 159 to the Mellon 
Bank. The upfront payment is $350,000 per license for the maximum 
number of license on which an applicant expects to bid in any single 
round of bidding. Payment must be made in U.S. dollars and must be 
received by 3 p.m. EDT, Monday, July 11, 1994, in accordance with the 
terms and procedures set forth below and the Commission's Rules. The 
upfront payment may be submitted by wire transfer or cashier's check 
payable to the ``Federal Communications Commission'' or ``FCC.'' Wire 
transfer instructions and the delivery address will be provided in the 
Bidder Package. Check(s) must be drawn on a bank whose deposits are 
insured by the Federal Deposit Insurance Corporation (FDIC). An 
applicant intending to bid on more than one nationwide narrowband 
license must submit an upfront payment of $350,000 per license for the 
maximum number of licenses on which it intends to bid in any single 
round of bidding. The upfront payment submitted by each applicant will 
define the maximum number of licenses on which the applicant will be 
permitted to bid in any single round of bidding. Narrowband PCS 
licensees will be permitted to aggregate up to three licenses. An 
applicant may apply for every license on its Form 175, but its actual 
bidding in any round will be limited to the number of licenses covered 
by the amount of its upfront payment. No later than seven (7) business 
days before the auction the Commission will issue a Public Notice 
announcing all qualified bidders for the nationwide narrowband PCS 
auction. Qualified bidders are those whose Form 175 applications have 
been accepted for filing and who have timely submitted their upfront 
payment.

8. Registration

    All qualified bidders or their designated representatives 
identified on Form 175 will be required to register for the auction. 
Registration will be held from 1 p.m. to 9 p.m. on Sunday, July 24, 
1994 and from 8 a.m. to 9:30 a.m. on Monday July 25, 1994 at the Omni 
Shoreham Hotel at 2500 Calvert Street, NW., Washington, DC. A 
confidential bidder number will be assigned to each qualified bidder at 
registration. Further information regarding registration will be 
provided in the Bidder Package. All bidders will be required to bring 
two forms of identification, one form of photo identification (e.g., a 
valid drivers license or passport) and one additional form of 
identification.

9. Method of Competitive Bidding

    The winning bidders for the nationwide narrowband PCS licenses will 
be selected through a simultaneous multiple round auction. Bids will be 
accepted on all licenses in each round of the auction. High bid amounts 
will be posted at the end of each round of bidding. Bidding will remain 
open on all licenses until bidding closes on every license. Thus, 
bidding will stop simultaneously on all licenses.

Bid Submission and Withdrawal Procedures

    All bidders or their representatives are required to be present at 
the auction site in order to place their bids. Each bidder will be 
required to provide its confidential bidder number and FCC account 
number in order to place or withdraw a bid. Bids will be placed with 
bid assistants on site who will input the bids into the auction 
database. All accepted bids for each license and the minimum bid 
increment for the next round will be announced at the conclusion of 
each bidding round. Bidders will have no less than one hour after 
accepted bids are posted to place their bids for the next round. A high 
bidder who wants to withdraw its high bid during the course of the 
auction may do so subject to the bid withdrawal penalty specified in 
the Third Report and Order at 49-59. A high bidder who wants to 
withdraw its high bid should notify a bid assistant as soon as possible 
after its bid is posted as the high bid. If a high bid is withdrawn, 
the license will be offered in the next round at the second high bid 
price.

Bid Increments

    The bid increment is the amount or percentage by which a bid must 
be raised above the previous high bid in order to be accepted as a 
valid bid in the current round. The minimum bid in the first round of 
bidding will be $.02 per pop per MHz (rounded down to the nearest 
$25,000). The bid increment in subsequent rounds will be $.01 per pop 
per MHz (rounded down to the nearest $25,000) or 5% of the previous 
high bid, whichever is greater. The amount of the minimum bid increment 
may be reduced in later rounds as the number of active bidders 
declines. The amount of the minimum bid increment for each license will 
be announced along with the accepted bids from the preceding round. The 
following table shows the amounts of the minimum bid increment for each 
category of license:

------------------------------------------------------------------------
                                                Minimum bid  Minimum bid
                                                   in the     increment 
               Licensecategory                  first round  after first
                                                               round\1\ 
------------------------------------------------------------------------
50/50 kHz paired licenses.....................     $500,000     $250,000
50/12.5 kHz paired licenses...................      300,000      150,000
50 kHz unpaired licenses......................      250,000      125,000
------------------------------------------------------------------------
\1\(or 5% of the previous high bid, whichever is greater)               

Activity Rule

    In order to ensure that the auction closes within a reasonable 
period of time, we will impose an activity rule to prevent bidders from 
waiting until the end of the auction before participating. Because of 
the relatively small number of licenses being offered in this auction 
we will impose a simplified version of the Milgrom-Wilson activity rule 
(discussed in the Third Report and Order at 37-40). During the first 
stage of the auction bidders will be required to be active on at least 
one license in every round of bidding. A bidder will be considered 
active on a license if it either is the high bidder from the previous 
round or submits a bid which exceeds the previous round's high bid by 
at least the amount of the minimum bid increment. Bidders will be 
permitted five automatic waivers from the activity rule during the 
course of the auction. A bidder must notify a bid assistant of its 
intent to exercise one or more of its waivers at the time such bidder 
submits its next bid. Bidders in the first stage of the auction who 
fall below the required activity level and who have used all five of 
the automatic waivers will have their eligibility reduced to 0 and will 
not be eligible to bid in future rounds. See Third Report and Order at 
36-40. To speed up the auction the Commission may declare at any time 
after 15 rounds have passed that the auction will move into a final 
stage, with an increased activity level. If the Commission declares 
such an additional stage, bidders would be required to be active on the 
maximum number of licenses they desire to be awarded. In the final 
stage, bidders would have their eligibility reduced to the number of 
licenses on which they are active, unless they invoke an automatic 
waiver or waivers, in which case they would retain their current 
eligibility.

Stopping Rules

    Bidding will remain open on all licenses until bidding stops on 
every license. The auction will close if one round passes with no new 
acceptable bids on my license. Thus, bidding will stop for all 
nationwide licenses simultaneously. The Commission, however, may 
declare at any time after 20 rounds that the auction will end after one 
additional round (or some other specified number of rounds).

Bid Withdrawal, Default or Disqualification Penalty

    Any high bidder who withdraws a high bid in any round, defaults by 
failing to remit the required 20% down payment within the prescribed 
time or is disqualified after bidding is declared closed will be 
subject to a penalty described in Section 24.304 of the Commission's 
Rules. 47 C.F.R. Sec. 24.304.

Down Payment and Final Payment

    The winning bidder for each license must submit sufficient 
additional funds (a ``down payment'') to bring the amount of money on 
deposit with the government to 20% of their winning bid amount within 
five (5) business days after bidding is declared closed. Winning 
bidders that are qualified small businesses are required to submit only 
a 10% down payment within five (5) business days after bidding is 
closed, with an additional 10% due within five (5) business days after 
grant of the license. No interest will be paid on any funds on deposit 
with the Commission.

10. Long-Form Application (FCC Form 401)

    As detailed in the narrowband PCS and general auction rules, 
winning bidders must timely submit a properly completed FCC application 
for a narrowband PCS license (FCC Form 401) within ten (10) business 
days after being notified that they are the winning bidder. The Form 
401 must be sent to: Office of the Secretary, Federal Communications 
Commission, 1919 M St., NW., room 222, Washington, DC 20554, Attention: 
Auction Application Processing Section.
    After submission of the FCC Form 401, the Commission will determine 
whether there are any reasons why the license should not be granted; if 
there are none, it will grant the license. Winning bidders will be 
required to pay the remainder of the winning bid amount within five (5) 
business days after grant of the license. Qualified small businesses 
will be permitted to pay the remaining 80% of their winning amount in 
installments over the term of the license. See Third Report and Order 
at 86-90. All license grants will be conditioned on timely payment in 
full of the bid price.

11. Delay, Suspension, or Cancellation of the Auction

    The Commission may by Public Notice or announcement during the 
auction, delay, suspend or cancel the auction in the event of natural 
disaster, technical obstacle, evidence of an auction security breach, 
unlawful bidding activity, administrative necessity, or for any other 
reason that affects the fair and competitive conduct of competitive 
bidding. In such cases, the Commission may, in its sole discretion, 
resume the auction starting from the beginning of the current or some 
previous round or may cancel the auction in its entirety.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 94-13257 Filed 5-27-94; 8:45 am]
BILLING CODE 6712-01-M