[Federal Register Volume 62, Number 207 (Monday, October 27, 1997)]
[Notices]
[Pages 55642-55643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28361]


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FEDERAL COMMUNICATIONS COMMISSION

[CC Docket No. 92-297; DA 97-2224]


Comment Sought on Reserve Prices or Minimum Opening Bids for LMDS 
Auction: LMDS Auction Formula Proposed [Report No. AUC-17-B (Auction 
No. 17)]

AGENCY: Federal Communications Commission.

ACTION: Public notice seeking comment.

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SUMMARY: The Commission is proposing a formula for calculating minimum 
opening bids in the auction of licenses for the Local Multipoint 
Distribution Service, Auction No. 17, and invites public comment on its 
proposal.

DATES: Comments are due November 5, 1997. Reply comments are due 
November 10, 1997.

FOR FURTHER INFORMATION CONTACT: Brett Tarnutzer, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, at (202) 418-
0660.

SUPPLEMENTARY INFORMATION: This public notice was released on October 
17, 1997, and is available for inspection and copying during normal 
business hours in the FCC Reference Center (Room 239), 1919 M Street, 
N.W., Washington, D.C., and also may be purchased from the Commission's 
copy contractor, International Transcription Services, (202) 857-3800, 
Fax (202) 857-3805, 1231 20th Street, N.W., Washington, D.C. 20036.

Synopsis of the Public Notice

Background

    1. When FCC licenses are subject to auction (i.e., because they are 
mutually exclusive) the recently enacted Balanced Budget Act of 1997 
calls upon the Commission to prescribe methods by which a reasonable 
reserve price will be required or a minimum opening bid established, 
unless the Commission determines that a reserve price or minimum bid is 
not in the public interest. Section 3002(a), Balanced Budget Act of 
1997, Public Law 105-33, 111 Stat. 251 (1997); 47 U.S.C. 309(j)(4)(F). 
The Commission's authority to establish a reserve price or minimum 
opening bid is set forth in 47 CFR 1.2104(c) and (d). Normally, a 
reserve price is an absolute minimum price below which an item will not 
be sold in a given auction. Reserve prices can be either published or 
unpublished. A minimum opening bid, on the other hand, is the minimum 
bid price set at the beginning of the auction below which no bids are 
accepted. In a minimum opening bid scenario, the auctioneer generally 
has the discretion to lower it later in the auction.
    2. The Wireless Telecommunications Bureau recently announced the 
auction of 986 licenses for the Local Multipoint Distribution Service 
(``LMDS''), which is to begin December 10, 1997. See Public Notice, 
``Auction of Local Multipoint Distribution Service: Auction Notice and 
Filing Requirements for 986 Basic Trading Area (``BTA'') Licenses in 
the 28 GHz and 31 GHz Bands, Scheduled for December 10, 1997,'' DA 97-
2081 (62 FR 53629, October 15, 1997).

Discussion

    3. The Commission believes a minimum opening bid is more 
appropriate for the LMDS auction than a reserve price because firm 
reserve prices would not give the Commission flexibility to adjust to 
information learned during the auction and react to changing market 
conditions. Minimum bids, on the other hand, can serve the same revenue 
raising objective that reserve prices would serve, and in addition 
preserve for the Commission freedom to reduce the selected levels as 
the bidding unfolds. Further, a minimum opening bid will help to 
regulate the pace of the auction.
    4. Specifically, the Commission proposes the following formula for 
calculating minimum opening bids in Auction No. 17:

------------------------------------------------------------------------
                                  A block min.                          
  Population of license area     opening bid (in   B block min. opening 
                                    dollars)                bid         
------------------------------------------------------------------------
Less than 100,000.............  0.75 x            10% of A Block.       
                                 population.                            
100,000-1,000,000.............  1.50 x            10% of A Block.       
                                 population.                            
More than 1,000,000...........  2.25 x            10% of A Block.       
                                 population.                            
------------------------------------------------------------------------


[[Page 55643]]

    5. If, however, commenters believe that the formula proposed above 
for minimum opening bids will result in substantial numbers of unsold 
licenses, or is not a reasonable amount, or should instead operate as a 
reserve price, they should explain why this is so, and comment on the 
desirability of an alternative approach. Commenters are advised to 
support their claims with valuation analyses and suggested reserve 
prices or minimum opening bid levels or formulas. Alternatively, 
comment is sought on whether, consistent with the Balanced Budget Act, 
the public interest dictates having no minimum opening bid or reserve 
price.
    6. Comments are due on or before November 5, 1997, and reply 
comments are due on or before November 10, 1997. To file formally, 
parties must submit an original and four copies to the Chief, Auctions 
and Industry Analysis Division, Wireless Telecommunications Bureau, 
Federal Communications Commission, Room 5202, 2025 M Street, N.W., 
Washington, D.C. 20554. Comments and reply comments will be available 
for public inspection during regular business hours in the FCC Public 
Reference Room, Room 239, 1919 M Street, N.W., Washington, D.C. 20554.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-28361 Filed 10-24-97; 8:45 am]
BILLING CODE 6712-01-P