[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: 94-13258]
[[Page Unknown]]
[Federal Register: May 31, 1994]
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FEDERAL COMMUNICATIONS COMMISSION
[Report No. ABC-94-02, Auction No. 2]
Private Radio Bureau Information; Notice and Filing Requirements
for the First Auction of Interactive Video Data Service Licenses
May 23, 1994.
The Federal Communications Commission (``FCC'') plans to hold a
series of oral and sealed bid auctions for approximately 1400
Interactive Video Data Service (IVDS) licenses. The first auction,
which will be an oral auction, will be for 297 IVDS markets. The
auction will begin promptly at 9 a.m. each day on July 28-29, 1994, and
will be held in the Regency Ballroom at the Omni Shoreham Hotel at 2500
Calvert Street, NW., in Washington, DC. As explained in more detail
below, those wishing to participate in the first auction must submit an
application in accordance with the Commission's rules and the
instructions in this Public Notice on or before Monday, June 27, 1994,
and must bring to the auction a cashier's check payable to ``FCC'' or
``Federal Communications Commission'' in the amount of $2500 for each
five licenses that they expect to win in order to be eligible to bid.
Summary of Licenses To Be Auctioned
The first auction will cover 297 IVDS markets: markets 5 and 11-
306.\1\ Two licenses are available in each market, license A and
license B.\2\ Bidders may only hold one IVDS license in each market.
The Commission will not auction the licenses strictly by largest to
smallest IVDS market. Rather, the licenses will first be grouped to
conform as closely as possible with Areas of Dominant Influence
(ADIs)\3\. The IVDS license group associated with the largest ADIs will
be auctioned first. Within ADIs, the largest IVDS markets will be
auctioned first, with smaller markets following. The exact order in
which the markets are to be auctioned is listed as an Appendix to this
Public Notice.\4\
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\1\Licenses for IVDS markets 1-10 except for market 5 (Detroit)
were awarded pursuant to a lottery held last year. Licenses for IVDS
markets 307-734 will be conducted later by sealed bid.
\2\License A is at 218-218.5 MHz; License B is at 218.5-219 MHz.
\3\ADIs are geographic areas that are designed to reflect the
coverage of a broadcast television station. This standard market
definition, developed by the Arbitron Ratings Company, places each
county in the continental U.S. within one of 210 ADIs. Usually, an
ADI is composed of several IVDS markets (Metropolitan Statistical
Areas or MSAs). A list which reflects the exact order in which the
Commission intends to auction the MSAs can be found in the far left
hand column of the attached Appendix under the heading ``Auction
No.'' and will also be included in the Bidder's Package discussed
below.
\4\The following IVDS areas being auctioned are located along
the US/Canadian or US/Mexican borders: 5, 16, 18, 20, 25, 34, 48,
53, 77, 81, 128, 130, 136, 141, 162, 248, 270, 281, 285 and 306 and
are also identified as ``Border'' in the right hand column of the
list of IVDS markets attached as an Appendix to this Public Notice.
Applicants should be aware that there may be licensing delays and/or
additional restrictions on operation in these areas because of the
need to coordinate with foreign governments. IVDS markets 1-4 and 6-
10 were awarded by lottery. The IVDS licenses associated with the
ADIs for IVDS markets 1-4 and 6-10 but which were not lotteried will
be auctioned last in the oral auction.
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During the auction, both license A and license B will be auctioned
at the same time, with the two highest bidders generally\5\ awarded a
license. The highest bidder will receive first choice between the two
licenses at its bid price and the next highest bidder will receive the
other license at its bid price.
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\5\The only exception will be when the two high bidders are
designated entities using bidding credits. In that event the highest
bidder will be offered the license of its choice and the second
highest bidder will be given the option of accepting the license
without the credit or declining the remaining license. In the latter
event, the second license will be reauctioned without the use of
bidding credits.
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Procedures, Terms, and Conditions
The auction will be conducted by Tradewinds International, Inc. and
Larry Latham Auctioneers, Inc. Prospective bidders are urged to
thoroughly familiarize themselves with the Procedures, Terms and
Conditions in the Bidder's Package (collectively, ``Terms''), the
Second Report and Order in FCC Docket No. 93-253, FCC 94-61, released
April 20, 1994, and the Fourth Report and Order in Docket No. 93-253,
FCC 94-99, 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. The Terms and the auction documents in the Bidder's
Information Package (``Bidder's Package'') discussed below are not
negotiable. Prospective bidders are urged to read, review and analyze
the auction documents prior to bidding at the auction, to make certain
that they completely understand the provisions therein, and are willing
to be bound by all of the Terms before making any bid.
1. Bidder's Information Package
The Bidder's Package (as amended and supplemented from time to
time) may be obtained by a prospective bidder by contacting the
Commission's contractor, Tradewinds International, Inc. at General
Aviation Terminal, suite 200, No. 7 Thomas Avenue, Washington National
Airport, Washington, DC 20001, telephone (202) 637-FCC1 (3221) and
(202) 637-FCC2 (3222).
The Bidder's Package will contain the following information:
(1) List of licenses to be offered in the sequence they will be
offered;
(2) Procedures, Terms and Conditions of the auction;
(3) Application form to participate in an FCC auction (``FCC Form
175'' (and 175-S)\6\ or ``Short Form'') including instructions on
filling out the form and a sample form 175 correctly filled out;
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\6\Form 175-S is a continuation of Form 175 for those who wish
to bid on more markets than there is space for on Form 175.
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(4) High Bid Acknowledgment Form\7\;
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\7\The High Bid Acknowledgment Form is a form that the high
bidders must sign at the conclusion of each round of bidding
confirming the amount of their bid and the license they have won.
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(5) Wire transfer instructions for winning bidders wishing to use
wire transfer of funds;
(6) Application form for an IVDS license (``FCC Form 574'' or
``Long Form'') to be submitted by winning bidders only;
(7) Copies of the FCC decision on auction rules for IVDS (the
Fourth Report and Order) and of the general auction rules established
in the Second Report and Order; and
(8) Other general auction information.
2. Short Form (FCC Form 175) License Application
Bidding at the oral IVDS auction is open only to bidders who submit
an application on FCC Form 175 to participate in an FCC auction that
complies with FCC rules that is received by Tradewinds no later 5:30
p.m. EDT Monday, June 27, 1994. If you have not submitted a Form 175 by
that time, you cannot bid. Instructions for filling out the Form 175
are on the back of that form; please read them before completing the
Form. We call special attention to several items on the Form 175.
1. In item 6 of Form 175, Auction No., applicants should enter
``2''.
2. Item 7 requires you to make up a ten digit FCC Account Number, a
personal identification number that we will use to identify and track
your application. You have two options to create this FCC Account
Number. Option 1--you may use your taxpayer identification number (TIN)
with a prefix of ``O'', i.e., 0123456789. Option 2--you may use your
ten digit telephone number (i.e. 5552345678). You should use this same
number when submitting additional information/material regarding this
application, including any required fees submitted to the Commission on
FCC 159, FCC Remittance Advice, (i.e. use the same number for the Form
175 and the FCC Account Number of FCC 159). Please use this number
whenever you write, call, or otherwise inquire about your application.
You will need that number to register for the auction on auction day.
3. Items 9 and 10 ask whether the applicant is claiming a
preference in the bidding process. As discussed more fully below,
certain preferential measures are available to entities listed in item
9. Please ensure that you qualify for a preference before checking
``yes'' in item 10; the Commission has specific rules defining a
``minority'' and ``small business.''
4. For item 11, Market No., the Market No. for each IVDS license to
be auctioned is listed in the second column of the Appendix to this
Public Notice under the heading ``MSA''; please list the markets you
are interested in bidding on in the first column under item 11 labeled
``Market No.'' If you want to bid on more than five markets, you must
continue on Form 175-S. For the Frequency Block No. in item 11,
applicants should check Block No. 1 if they wish to bid on license A
(218-218.5-MHz) Block No. 2 if they wish to bid on license B (218.5-
219MHz). Applicants who wish to hold either license in a particular
market should check both Block No. 1 and Block No. 2. Leave the other
Frequency Block Nos. blank.
5. In item 12, applicants should list the name(s) of a person(s)
they want to represent them at the auction. Only one of the
individual(s) listed in item 12 will be permitted to display the
bidding card.
6. Please read the ``Certifications'' carefully before signing.
These certifications help to ensure a fair and open auction and
require, among other things, the disclosure to the Commission of
certain information on applicant ownership and agreements or
arrangements concerning the licenses. Submission of a false
certification to the Commission is a serious matter that may result in
severe penalties, including monetary forfeitures, license
revocation(s), being barred from future auctions, and/or criminal
prosecution.
A sample Form 175, properly completed, will be provided as part of
the Bidder's Package.
No microfiche copies of the Form 175 or 175-S are required.
Where To Send the Form 175
Each individual application (Form 175 and attachments, including
Form 175-S, if needed), whether mailed or hand delivered, must be in an
individual sealed envelope and properly addressed. Multiple
applications, properly packaged, may be delivered in one larger,
properly addressed container.
In order to be eligible to bid, Tradewinds must receive your Form
175 application by 5:30 p.m. EDT on Monday, June 27, 1994. Late
applications will not be accepted.
Whether mailed, hand delivered, or sent by private courier, they
must be addressed only to: Tradewinds International, Inc., General
Aviation Terminal, suite 200, No. 7 Thomas Avenue, Washington National
Airport, Washington, DC 20001, Attention: IVDS Auction, (202) 637-3221
in an envelope addressed as above and marked ``IVDS Auction'' on the
outside. The business hours of Tradewinds International are between 9
a.m. and 6 p.m. Applications taken or sent to any other location will
not be accepted.
We strongly recommended that you use certified mail, return receipt
requested or a delivery service that obtains a receipt showing when,
where, and to whom the application was delivered. Tradewinds
International will time stamp file copies of applications upon request.
When To Submit Form 175
The completed Form 175, application to participate in an FCC
auction, can be submitted only to the address above anytime after
release of this Public Notice but must be received by 5:30 p.m. EDT on
Monday, June 27, 1994. The Form 175 requires the bidder to supply
certain information which is explained more fully in the instructions
accompanying that application. Please read the instructions thoroughly
before attempting to complete the form. Certain information necessary
to complete Form 175, such as the Auction No., and IVDS Market Nos.,
can be found either at the top of or in the Appendix to this Public
Notice.\8\
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\8\Applicants interested in bidding on licenses for more than
five IVDS licenses must use FCC Form 175-S to list the additional
markets on which they wish to bid. Applicants may bid only on
licenses for which they applied, and may only be awarded one of the
two IVDS licenses in each market.
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Application Fee
No application fee or fee form need accompany the Form 175 for the
IVDS auction, but you must bring an upfront payment with you to the
auction as described below in order to be able to bid. As discussed
further below, winning bidders will have to submit an application on
FCC Form 574 to be an IVDS licensee.
Upfront Payment
You must have at least one cashier's check in the amount of two
thousand five hundred dollars ($2,500.00) U.S. at the auction in order
to bid. One cashier's check in the amount of $2,500 entitles you to be
the successful high bidder on up to five licensees. If you intend to
win more than five licenses, you must bring additional $2,500.00
cashier's checks, each of which will cover up to five additional
licenses. For example, if you wish to win seven IVDS licenses, bring
two $2,500.00 cashier's checks. If you wish to win twelve IVDS
licenses, bring three $2,500.00 cashier's checks. If you wish to win
thirty two IVDS licenses, bring seven $2,500.00 cashier's checks.
The cashier's check(s) must be drawn on a bank insured by the
Federal Deposit Insurance Corporation (FDIC) and be made payable to
``FCC'' or ``Federal Communications Commission''. No cash will be
accepted.
Please calculate carefully the number of IVDS licenses you expect
to bid on before the auction, as you will not be permitted to bid on
additional licenses if you do not have sufficient cashier's checks.
Also, if you plan to bid on more than five licenses, please do not
bring a single cashier's check in an amount that is a multiple of
$2,500. Bring several cashier's checks, each in the amount of
$2,500.00. The Commission cannot process upfront payments in amounts
other than $2,500.00 and you may not be able to bid on more than five
licenses without checks of $2,500.000. Furthermore, the Commission will
not refund any monies if you bring cashier's checks in amounts larger
than $2,500.00. Your upfront payment(s) will be credited towards the
balance due on the license(s) you win, but FCC cannot make refunds on
auction day if the amount of your check(s) exceeds the value of the
license(s).
You will be required to show your cashier's check(s) on auction day
in order to receive the bidding card enabling you to bid. If you are
the successful high bidder on a license, the auctioneer will take your
check from you although you will still be able to win up to four more
licenses without having to submit another cashier's check. The amount
of your cashier's check(s) will be credited towards the balance due the
Commission on the license(s) you have won.
3. What Happens After the Form 175 Applications Are Filed?
After the period for filing applications has closed on Monday, June
27, 1994 at 5:30 p.m. EDT, the Commission will process the received
applications and issue a Public Notice listing all accepted and
rejected applications and also listing those which have minor defects
that can be corrected. The Public Notice will also announce the time
and manner for correcting these defects. As described more fully in the
Commission's general auction rules, you may only make minor changes to
your application such as the correction of typographical errors. You
may not make major modifications such as changes in ownership to your
application. Failure to sign the Form 175 cannot be corrected and will
cause the application to be dismissed and the applicant ineligible to
participate in the auction. See Sec. 1.2105 of the Commission's general
auction rules.
Later, the Commission will release another Public Notice announcing
the names of all applicants, including applicants who have corrected
their defective applications, whose applications have been accepted for
filing and who are therefore eligible to participate in the auction.\9\
Bidder numbers and cards will be assigned at registration. Further
information, such as directions to the auction location and auction
registration procedures, will be provided in the Bidder's Package. All
bidders will be required to bring two forms of identification (one form
of photo identification, e.g. a valid driver's license or passport, and
one additional form of identification.)
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\9\If the Commission receives only one application for an
available IVDS license or licenses in a particular market, it will
not auction that license and will invite the applicant or applicants
for those licenses to file an application on FCC Form 574 to acquire
those licenses without having to participate in an auction.
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4. Auction Day and Post-Auction Procedures
Registration
You must register at the auction site in order to bid either the
night before the first day of the auction or on the morning of both
auction days before 9 a.m. Details of registration will be in the
Bidder's Package. You may bid on both license A and license B in a
single IVDS market, but you may only win one license. The FCC will
verify and inspect the number and validity of your cashier's check(s)
at registration.
Collection of High Bid Acknowledgment Form and Upfront Payments
At the end of each round of bidding, the two high bidders will be
required to sign a High Bid Acknowledgment Form. The upfront payment
($2,500 cashier's check) will be collected from the successful bidder
immediately after the first license is won in each group of five
licenses. No interest will be paid on any funds deposited with the
Commission.
Payment of Down Payment and Remaining Balance Due
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 within five (5)
business days after the auction. This down payment must be deposited at
the Commission's lockbox bank. Winning bidders that are qualified small
businesses, however, need only submit an amount sufficient to bring
their monies on deposit with the government up to 10% of their winning
bid within five (5) business days after close of bidding, with the
remaining 10% due within five (5) business days after grant of the
license. Further details are in the Commission's general auction rules
and its IVDS specific auction rules and will be supplied in the
Bidder's Package. Except for winners entitled to installment financing,
payment of the 80% remaining balance will be due after the Commission
processes the winning bidder's Form 574 (see below) and grants its
license. No interest will be paid on any funds deposited with the
Commission.
Filing of FCC Form 574
As detailed in the IVDS and general auction rules, winning bidders
must timely submit a properly completed FCC application for an IVDS
license (FCC Form 574) within ten business days after being notified
that they are the winning bidder(s). Send the Form 574 to: Office of
the Secretary, Federal Communications Commission, 1919 M St., NW., room
222, Washington, DC 20554, Attention: Auction Application Processing
Section.
The Commission has decided to waive Sec. 1.1102(7)(a) of its rules
on its own motion so that winning bidders need not submit an
application fee or Form 159.
After submission of the 574, 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. The continuing validity of the
license will be conditioned upon full payment of the remaining balance
of the winning bid within five business days after license grant.
Default Penalties
Certain penalties apply if a bidder withdraws a high bid or
defaults (e.g. is unable to pay the balance due) after winning the
bidding. These penalties are designed to ensure that only serious,
qualified bidders participate in the auction and are explained more
fully in the Commission's Fourth Report and Order and in its general
auction rules.
5. Designated Entities
Benefits for Designated Entities
The Commission has provided three basic benefits, described below,
for IVDS auction participants who are ``minorities'', ``women'' or
``small businesses'' (collectively, the ``Designated Entities'').
Definitions of these entities are listed in subpart Q of part 1 of the
Commission's Rules and in the Bidder's Package.
The first of these benefits is government sponsored installment
financing, which is available only to small businesses. The FCC is
offering to finance up to 80 percent of a small business's winning bid
(high bid minus the monies on deposit with the FCC) over the 5 year
term of their IVDS license. Interest will be charged at a fixed rate
equal to that in effect for 5 year treasury notes on the day the
license is issued. Payments will be interest only for the first two
years, with principal amortized over the remaining three years of the
license term. The FCC will provide coupon payment books.
The second of these benefits is a bidding credit. Businesses owned
by minorities of women are entitled to a 25% bidding credit to win one
of the two IVDS licenses in each market. A bidding credit allows the
winning bidder to pay less than the amount of its bid. For example, if
the winning bid is $1,000, a business owned by a minority or a woman
need actually pay only $750 for the license. A bidding credit is
available for either license A or license B in each IVDS market, but
not both. If the two high bidders for licenses A and B are both
designated entities using bidding credits, the highest bidder will be
offered the license of its choice and the second highest bidder will be
given the option of accepting the license without the credit or
declining the remaining license. In the latter event, the second
license will be reauctioned, this time without the use of bidding
credits.
If a bidder is both a small business and a minority/woman owned
business, it can obtain installment financing and use bidding
credits.\10\ Bidding credits will not be available on the second IVDS
license in a market if the other IVDS license was already won using a
bidding credit, however.
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\10\For those designated entities utilizing both installment
financing and bidding credits, the down payment requirements and
installment financing would apply to amounts due after application
of the bidding credit.
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The third benefit is the availability of tax certificates to
initial investors in minority and women-owned IVDS licensees upon
divestiture of their non-controlling investment interests in an IVDS
license. Tax certificates are also available to IVDS licensees who
transfer or assign their licenses to minority or women-owned businesses
who are also designated entities. Tax certificates enable initial
investors or the IVDS licensee to defer the taxable gain upon sale of
their interest or license. More information on tax credits in the
Fourth Report and Order.
Unjust Enrichment
Certain penalties apply if a designated entity obtains an IVDS
license using the benefits available to designated entities and
subsequently transfers or sells its license prematurely. These
penalties are explained more fully in the Commission's Fourth Report
and Order and in its general auction rules.
For additional information on IVDS auctions, please call Tradewinds
International, Inc. at (202) 637-FCC1 (3221) or FCC2 (3222) between 9
a.m. and 6 p.m. EDT. Messages can be left after business hours.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 94-13258 Filed 5-27-94; 8:45 am]
BILLING CODE 6712-01-M