[Federal Register Volume 64, Number 76 (Wednesday, April 21, 1999)]
[Notices]
[Pages 19530-19540]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9765]


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FEDERAL COMMUNICATIONS COMMISSION

[DA 99-474; Report No. AUC-99-24-B (Auction No. 24)]


Phase II 220 MHz Service Spectrum Auction; Notice and Filing 
Requirements for Auction of Phase II 220 MHz Service Spectrum Scheduled 
for June 8, 1999; Minimum Opening Bids and Other Procedural Issues

AGENCY: Federal Communications Commission.

ACTION: Notice.

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[[Page 19531]]

SUMMARY: This is a summary of a Public Notice (DA 99-474) released on 
March 8, 1999, establishing minimum opening bids and procedures for the 
upcoming auction of Phase II 220 MHz Service Spectrum (Auction No. 24), 
in accordance with the Balanced Budget Act of 1997.

DATES: Auction No. 24 is scheduled to begin on June 8, 1999.

ADDRESSES: See the text of the Public Notice and attachments for 
information regarding important addresses.

FOR FURTHER INFORMATION CONTACT:
    Media Contact: Meribeth McCarrick, (202) 418-0654.
    Auctions Division: Ruby Hough, Operations; Bob Reagle, Auctions 
Analysis; or Anne Napoli, Legal, (202) 418-0660.
    Commercial Wireless Division: Scott Mackoul, (202) 418-0620.

SUPPLEMENTARY INFORMATION: The complete text of this Public Notice, 
including nine attachments that do not appear in this summary, is 
available for inspection and copying Monday through Thursday from 9 
a.m. to 4 p.m., and Friday from 9 a.m. to 2 p.m., in the Wireless 
Telecommunications Bureau's Public Reference Room (Room 5608), 2025 M 
Street, N.W., Washington, D.C. 20554, and on the Commission's World 
Wide Web page, located at: http://www.fcc.gov/wtb/auctions/auc24/
auc24.html. Please note that the Wireless Telecommunications Bureau's 
Public Reference Room will cease operations at the M Street location on 
Monday, April 26, 1999, and will reopen on Monday, May 3, 1999 at the 
Commission's new headquarters, located at 445 Twelfth Street, S.W., 
Room CY-A257, Washington, D.C. 20554. Copies also may be purchased from 
the Commission's copy contractor, International Transcription Services, 
Inc. (ITS), 1231 20th Street, N.W., Washington, D.C. 20036, (202) 857-
3800. The nine attachments that do not appear in this summary, but are 
available as described above, are: Attachment A (Summary of Licenses to 
be Auctioned, Upfront Payments, Minimum Opening Bids); Attachment B 
(List of Cases Pending Before the Commission Involving Non-Nationwide 
Phase I 220 MHz Licensees); Attachment C (Guidelines for Completing FCC 
Forms 175 and 159 and Exhibits); Attachment D (Auction-Specific 
Instructions for FCC Remittance Advice (FCC Form 159)); Attachment E 
(Electronic Filing and Review of FCC Form 175); Attachment F (Accessing 
the FCC Network Using Windows 95/98); Attachment G (FCC Remote Bidding 
Software Order Form); Attachment H (Summary Listing of Documents from 
the Commission and the Wireless Telecommunications Bureau Addressing 
Application of the Anti-Collusion Rules); and Attachment I (Auction 
Seminar Registration Form).

Synopsis

I. Introduction

    1. The Federal Communications Commission (``FCC'' or 
``Commission'') will hold an auction of 225 licenses to operate in the 
220-222 MHz band. This auction offers 216 100-kHz licenses in 87 
Economic Areas (EAs), and nine 150-kHz licenses in four Economic Area 
Groups (EAGs) designated for the Phase II 220 MHz auction. The number 
of 100-kHz licenses available in each EA varies from one to five, while 
the number of 150-kHz licenses available in each EAG varies from two to 
three. No nationwide licenses are available in this auction. A list of 
each license that will be available in Auction No. 24, along with its 
upfront payment and minimum opening bid, is included in the full text 
of this Public Notice as Attachment A (see ``Supplementary 
Information,'' supra, for further details).
    2. Auction Date: The auction will commence on June 8, 1999. The 
initial schedule for bidding will be announced by Public Notice at 
least one week before the start of the auction. Unless otherwise 
announced, bidding will be conducted on each business day until bidding 
has stopped on all licenses.
    3. Bidding Methodology: Simultaneous multiple round bidding. 
Bidding will be permitted only from remote locations, either 
electronically (by computer) or telephonically. Pre-Auction Dates and 
Deadlines:
     Auction Seminar: April 21, 1999.
     Short Form Application (FCC Form 175): May 10, 1999; 5:30 
p.m. ET.
     Upfront Payments (via wire transfer): May 24, 1999; 6:00 
p.m. ET.
     Orders for Remote Bidding Software: May 25, 1999.
     Mock Auction June 4, 1999.
    Telephone Contacts:
     FCC National Call Center: (888) CALL-FCC ((888) 225-5322) 
or (717) 338-2888 (direct dial). For general auction information and 
seminar registration, press option #2 at the prompt. Hours: 8 a.m.-5:30 
p.m. ET, Monday through Friday.
     FCC Technical Support Hotline: (202) 414-1250 (voice), 
(202) 414-1255 (text telephone (TTY)). Hours of service: 8 a.m.-6 p.m. 
ET, Monday through Friday.

A. Background

    4. In the 220 MHz Third Report and Order (62 FR 15978, April 3, 
1997), the Commission restructured the licensing framework that governs 
the 220 MHz Service. Site-specific licensing, used in the Phase I 220 
MHz Service, was replaced with a geographic-based system in the Phase 
II 220 MHz Service, which is the subject of the upcoming auction. This 
geographic-based licensing methodology is similar to that used in other 
commercial mobile radio services (``CMRS''). The Commission developed 
three types of geographic area licenses for the Phase II 220 MHz 
Service. The first type of license was based upon Economic Areas (EAs), 
developed by the Bureau of Economic Analysis of the U.S. Department of 
Commerce (60 FR 13114, March 10, 1995). In addition, the Commission 
created three EA-type license areas to cover the following United 
States territories: American Samoa; the U.S. Virgin Islands and Puerto 
Rico; and Guam and the Northern Mariana Islands. The second type of 
license, known as Economic Area Groupings (EAGs), included 6 groups of 
EAs, which collectively encompassed all of the EA and EA-type licenses. 
Finally, the Commission designed three nationwide licenses, each of 
which encompassed all six EAGs. Service and operational requirements 
for the Phase II 220 MHz Service are contained in Part 90 of the 
Commission's Rules, 47 CFR Part 90.
    Pursuant to the rules adopted in the 220 MHz Third Report and Order 
(62 FR 15978, April 3, 1997) and the 220 MHz Memorandum Opinion and 
Order on Reconsideration (63 FR 306611, June 12, 1998), the Commission 
commenced the auction of 908 Phase II 220 MHz licenses on September 15, 
1998. This auction closed on October 22, 1998. Forty-four winning 
bidders won a total of 693 licenses. On November 24, 1998, the Bureau 
released a Public Notice (DA 98-2386) (63 FR 67685, December 12, 1998) 
(``Phase II 220 MHz Service Public Notice''), announcing that 225 
licenses now available for auction will be included in Auction No. 24.

B. Due Diligence

    5. Potential bidders are reminded that there are a number of 
incumbent Phase I 220 MHz licensees already licensed and operating on 
frequencies that will be subject to the upcoming auction. Such 
incumbents must be protected from harmful interference by Phase II 220 
MHz licensees in accordance with the Commission's Rules. See 47 CFR 
90.763. These limitations may restrict the ability of such geographic 
area licensees to use certain portions of the electromagnetic spectrum 
or provide

[[Page 19532]]

service to certain areas in their geographic license areas.
    6. In addition, potential bidders seeking licenses for geographic 
areas that are near the Canadian border should be aware that the use of 
some or all of the channels they acquire in the auction could be 
restricted as a result of a future agreement with Canada on the use of 
220-222 MHz spectrum in the border area.
    7. Potential bidders should also be aware that certain applications 
(including those for modification), waiver requests, petitions for 
reconsideration and applications for review are pending before the 
Commission that relate to particular incumbent non-nationwide 220 MHz 
licensees. In addition, the decisions reached in the 220 MHz proceeding 
are the subject of a judicial appeal and may be the subject of 
additional reconsideration or appeal. See, e.g., PLMRS Narrowband 
Corp., et al. v. Federal Communications Commission, No. 92-1432, (D.C. 
Cir., filed September 18, 1992). We note that resolution of these 
matters could have an impact on the availability of spectrum for EA and 
EAG licensees. In addition, while the Commission will continue to act 
on pending applications, requests and petitions, some of these matters 
may not be resolved by the time of the auction.
    8. Potential bidders are solely responsible for investigating and 
evaluating the degree to which such pending matters may affect spectrum 
availability in areas where they seek EA or EAG licenses.
    9. To aid potential bidders, Attachment B to this Public Notice 
lists matters pending before the Commission that relate to licenses or 
applications for the 220 MHz service. The Commission makes no 
representations or guarantees that the listed matters are the only 
pending matters that could affect spectrum availability in the 220-222 
MHz band.
    10. Parties may submit additions or corrections to the list, 
provided such additions or corrections are filed with the Commission 
within ten (10) business days from release of this Public Notice. Such 
submissions should be limited to identifying pleadings or papers 
previously filed with the Commission. No new pleadings or arguments on 
the merits will be accepted as explicitly provided by Commission Rules.
    11. Corrections and additions must be filed with the Office of the 
Secretary, Federal Communications Commission, 445 12th St., S.W., 
Washington, D.C. 20554. One copy of each submission should also be sent 
to International Transcription Service, Inc., 1231 20th Street, N.W., 
Washington, D.C. 20036, while an additional courtesy copy should be 
sent to Scott A. Mackoul, Policy and Rules Branch, Commercial Wireless 
Division, Wireless Telecommunications Bureau, Federal Communications 
Commission, 445 12th Street, S.W., Room 4-A230, Washington, D.C. 20554. 
Parties filing additions or corrections should include the internal 
reference number of this Public Notice (DA 99-474) on their 
submissions. Parties are also reminded that some of the proceedings are 
restricted proceedings governed by the Commission's ex parte rules. 
Accordingly, any submission filed pursuant to this Public Notice that 
is directed to the merits or outcome of any restricted proceeding must 
be served on all parties to that restricted proceeding. See generally 
47 CFR 1.1200-1.1216.
    12. Additional information regarding matters identified in 
Attachment B is available to the public. Licensing information is 
contained in the Commission's licensing database, which is available 
for inspection in the Wireless Telecommunications Bureau's Public 
Reference Rooms, located at 2025 M Street, N.W., Room 5608, Washington, 
D.C. 20554, and 1270 Fairfield Road, Gettysburg, PA 17325. In a future 
Public Notice, the Bureau will provide the new location of the 
Commission's licensing database in the Portals building. In addition, 
copies of the pleadings are available for public inspection only in the 
Gettysburg Public Reference Room.
    13. In addition, potential bidders may search for information (but 
not the pleadings) regarding incumbent 220 MHz licensees on the World 
Wide Web at http://www.fcc.gov/wtb. In particular, information can be 
accessed by downloading databases by selecting ``WTB Database Files'' 
(http://www.fcc.gov/wtb/databases.html), or searching on-line by 
selecting ``Search WTB Databases'' (http://gullfoss.fcc.gov:8080/cgi-
bin/ws.exe/beta/genmen/index.hts). Any telephone inquires regarding 
these matters should be directed to the Technical Support Hotline at 
(202) 414-1250 (V) or (202) 414-1255 (text telephone (TTY)).
    14. The Commission makes no representations or guarantees regarding 
the accuracy or completeness of information that has been provided by 
incumbent licensees and incorporated into the database. Potential 
bidders are strongly encouraged to physically inspect any sites located 
in or near the geographic area for which they plan to bid.

C. Participation

    15. Those wishing to participate in the auction must:

     Electronically submit a short form application (FCC Form 
175) by May 10, 1999.
     Submit a sufficient upfront payment and an FCC Remittance 
Advice Form (FCC Form 159) by May 24, 1999.
     Comply with all provisions outlined in the Bidder 
Information Package.

D. Prohibition of Collusion

    16. To ensure the competitiveness and integrity of the auction 
process, the Commission's Rules prohibit applicants for the same 
geographic license area from communicating with each other during the 
auction about bids, bidding strategies, or settlements. This 
prohibition begins with the filing of short-form applications, and ends 
on the down payment due date. Bidders competing for the same license(s) 
are encouraged not to use the same individual as an authorized bidder. 
A violation of the anti-collusion rule could occur if an individual 
acts as the authorized bidder for two or more competing applicants, and 
conveys information concerning the substance of bids or bidding 
strategies between the bidders he/she is authorized to represent in the 
auction. Also, if the authorized bidders are different individuals 
employed by the same organization (e.g., law firm or consulting firm), 
a violation could similarly occur. At a minimum, in such a case, 
applicants should certify that precautionary steps have been taken to 
prevent communication between authorized bidders and that applicants 
and their bidding agents will comply with the anti-collusion rule. The 
Bureau, however, cautions that merely filing a certifying statement as 
part of an application will not outweigh specific evidence that 
collusive behavior has occurred nor will it preclude the initiation of 
an investigation when warranted. In Auction No. 24, for example, the 
rule would apply to any applicants bidding for the same EA or EAG. 
Therefore, applicants that apply to bid for ``all markets'' would be 
precluded from communicating with all other applicants after filing the 
FCC Form 175. However, applicants may enter into bidding agreements 
before filing their FCC Form 175 short-form applications, as long as 
they disclose the existence of the agreement(s) in their Form 175 
short-form applications. By signing their FCC Form 175 short-form 
applications, applicants are certifying their compliance with Section 
1.2105(c).

[[Page 19533]]

In addition, Section 1.65 of the Commission's Rules requires an 
applicant to maintain the accuracy and completeness of information 
furnished in its pending application and to notify the Commission 
within 30 days of any substantial change that may be of decisional 
significance to that application. Thus, Section 1.65 requires an 
auction applicant to notify the Commission of any violation of the 
anti-collusion rules upon learning of such violation. Bidders are 
therefore required to make such notification to the Commission 
immediately upon discovery.

E. Bidder Information Package

    17. No Bidder Information Package will be provided for Auction No. 
24. The Commission provided a Bidder Information Package for Auction 
No. 18, the initial auction of Phase II 220 MHz Service spectrum. 
Although the majority of the specific software and technical 
information contained therein is no longer applicable (e.g., Tabs A 
through D), other information, including the auction rules and some 
(but not all) of the relevant rulemakings, can be found in Tab E of the 
Auction No. 18 Bidder Information Package. Upon request, the Commission 
will provide one free copy of that Bidder Information Package to each 
Auction No. 24 applicant. Additional copies may be ordered at a cost of 
$16.00 each, including postage, payable by Visa or Master Card, or by 
check payable to ``Federal Communications Commission'' or ``FCC.'' To 
place an order, contact the FCC National Call Center at (888) CALL-FCC 
((888) 225-5322, press option #2 at the prompt). Prospective bidders 
that have already contacted the FCC at this number expressing an 
interest in Auction No. 24 will receive a Bidder Information Package in 
approximately four weeks, and need not call again unless they wish to 
order additional copies. In addition, applicants may access updated 
information about Auction No. 24 at the following address on the 
Bureau's web site:

http://www.fcc.gov/wtb/auctions/auc24/auc24.html

Applicants are strongly encouraged to check this site regularly for 
complete information regarding Auction No. 24.

F. Relevant Authority

    18. Prospective bidders must familiarize themselves thoroughly with 
the Commission's Rules relating to the Phase II 220 MHz Service, 
contained in Title 47, Part 90 of the Code of Federal Regulations. 
Prospective bidders must also be thoroughly familiar with the 
procedures, terms and conditions contained in the 220 MHz Third Report 
and Order (62 FR 15978, April 3, 1997); 220 MHz Memorandum Opinion and 
Order on Reconsideration (63 FR 306611, June 12, 1998); 220 MHz Fourth 
Report and Order (62 FR 46211, September 2, 1997); and 220 MHz Fifth 
Report and Order (63 FR 49291, September 15, 1998). Potential bidders 
must also familiarize themselves with Part 1, Subpart Q of the 
Commission's Rules concerning Competitive Bidding Proceedings.
    19. The terms contained in the Commission's Rules, relevant orders, 
Public Notices and bidder information package are not negotiable. The 
Commission may amend or supplement the information contained in our 
Public Notices or the bidder information package at any time, and will 
issue Public Notices to convey any new or supplemental information to 
bidders. It is the responsibility of all prospective bidders to remain 
current with all Commission Rules and with all Public Notices 
pertaining to this auction. Copies of most Commission documents, 
including Public Notices, can be retrieved from the FCC Internet node 
via anonymous ftp @ftp.fcc.gov or the FCC World Wide Web site at http:/
/www.fcc.gov/wtb/auctions. Additionally, documents may be obtained for 
a fee by calling the Commission's copy contractor, International 
Transcription Service, Inc. (ITS), at (202) 857-3800. When ordering 
documents from ITS, please provide the appropriate FCC number (e.g., 
FCC 98-93 for the Memorandum Opinion and Order on Reconsideration and 
FCC 97-57 for the 220 MHz Second Report and Order).
    20. Bidder Alerts: The FCC makes no representations or warranties 
about the use of this spectrum for particular services. Applicants 
should be aware that an FCC auction represents an opportunity to become 
an FCC licensee in this service, subject to certain conditions and 
regulations. An FCC auction does not constitute an endorsement by the 
FCC of any particular services, technologies or products, nor does an 
FCC license constitute a guarantee of business success. Applicants 
should perform their individual due diligence before proceeding, as 
they would with any new business venture.
    21. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 22 to 
deceive and defraud unsuspecting investors. Common warning signals of 
fraud include the following:
     The first contact is a ``cold call'' from a telemarketer, 
or is made in response to an inquiry prompted by a radio or television 
infomercial.
     The offering materials used to invest in the venture 
appear to be targeted at IRA funds, for example by including all 
documents and papers needed for the transfer of funds maintained in IRA 
accounts.
     The amount of the minimum investment is less than $25,000.
     The sales representative makes verbal representations 
that: (a) the Internal Revenue Service (``IRS''), Federal Trade 
Commission (``FTC''), Securities and Exchange Commission (``SEC''), 
FCC, or other government agency has approved the investment; (b) the 
investment is not subject to state or federal securities laws; or (c) 
the investment will yield unrealistically high short-term profits. In 
addition, the offering materials often include copies of actual FCC 
releases, or quotes from FCC personnel, giving the appearance of FCC 
knowledge or approval of the solicitation.
    22. Information about deceptive telemarketing investment schemes is 
available from the FTC at (202) 326-2222 and from the SEC at (202) 942-
7040. Complaints about specific deceptive telemarketing investment 
schemes should be directed to the FTC, the SEC, or the National Fraud 
Information Center at (800) 876-7060. Consumers who have concerns about 
specific proposals regarding Auction No. 22 may also call the FCC 
National Call Center at (888) CALL-FCC ((888) 225-5322).

G. National Environmental Policy Act (NEPA) Requirements

    23. Licensees must comply with the Commission's rules regarding the 
National Environmental Policy Act (NEPA). The construction of a 
wireless antenna facility is a federal action and licensees must comply 
with the Commission's NEPA rules for each wireless facility. See 47 CFR 
1.1305-1.1319. These rules require that, among other things, licensees 
consult with expert agencies having NEPA responsibilities including the 
U.S. Fish and Wildlife Service, the State Historic Preservation Office, 
the Army Corp of Engineers and the Federal Emergency Management Agency 
(through the local authority with jurisdiction over floodplains). 
Licensees must prepare environmental assessments for wireless 
facilities that may have a significant impact in or on wilderness 
areas, wildlife preserves, threatened or

[[Page 19534]]

endangered species or designated critical habitats, historical or 
archaeologic sites, Indian religious sites, floodplains, and surface 
features. Licensees must also prepare environmental assessments for 
wireless facilities that include high intensity white lights in 
residential neighborhoods or excessive radiofrequency emission.

II. Eligibility

A. General Eligibility Criteria

    24. For the Phase II 220 MHz Service, the Commission adopted small 
business provisions to promote and facilitate the participation of 
small businesses in the auction, and in the provision of this and other 
commercial mobile radio services.
(1) Determination of Revenues
    25. For purposes of determining which entities qualify as very 
small businesses or small businesses, the Commission will consider the 
gross revenues of the applicant, its controlling principals, and the 
affiliates of the applicant and its controlling principals. Therefore, 
the gross revenues of all of the above entities must be disclosed 
separately and in the aggregate as Exhibit C to an applicant's FCC Form 
175. The Commission does not impose specific equity requirements on 
controlling principals. The term ``controlling principal'' includes 
both de facto and de jure control of the applicant. Typically, de jure 
control is evidenced by ownership of at least 50.1 percent of an 
entity's voting stock. De facto control is determined on a case-by-case 
basis. The following are some common indicia of control:
     The person/entity constitutes or appoints more than 50 
percent of the board of directors or management committee;
     The person/entity has authority to appoint, promote, 
demote, and fire senior executives that control the day-to-day 
activities of the licensee; or
     The person/entity plays an integral role in management 
decisions.
(2) Very Small or Small Business Consortia
    26. A consortium of small businesses or very small businesses is a 
conglomerate organization formed as a joint venture between or among 
mutually independent business firms, each of which individually 
satisfies the definition of small or very small business in Section 
90.1021(b) (1) or (2). Thus, each consortium member must disclose its 
gross revenues along with those of its affiliates, controlling 
principals, and controlling principals' affiliates. We note that 
although the gross revenues of the consortium members will not be 
aggregated for purposes of determining eligibility for very small or 
small business credits, this information must be provided to ensure 
that each individual consortium member qualifies for any bidding credit 
awarded to the consortium.
(3) Application Showing
    27. Applicants should note that they will be required to file 
supporting documentation as Exhibit C to their FCC Form 175 short form 
applications to establish that they satisfy the eligibility 
requirements to qualify as a very small business or small business (or 
consortia of very small or small businesses) for this auction. 
Specifically, for the Phase II 220 MHz Service auction, applicants 
applying to bid as very small or small businesses (or consortia of very 
small or small businesses) will be required to file all information 
required under Sections 1.2105(a) and 1.2112(a) of the Commission's 
Rules. See 47 CFR 90.1009. In addition, these applicants must disclose, 
separately and in the aggregate, the gross revenues for the preceding 
three years of each of the following: (1) the applicant; (2) the 
applicant's affiliates; (3) the applicant's controlling principals; and 
(4) the affiliates of the applicant's controlling principals. 
Certification that the average gross revenues for the preceding three 
years do not exceed the applicable limit is not sufficient. A statement 
of the total gross revenues for the preceding three years is also 
insufficient. The applicant must provide separately for itself, its 
affiliates, and its controlling principals, a schedule of gross 
revenues for each of the preceding three years, as well as a statement 
of total average gross revenues for the three-year period. If the 
applicant is applying to bid as a consortium of very small or small 
businesses, this information must be provided for each consortium 
member.

B. Bidding Credits

    28. Applicants that qualify under the definitions of very small 
business and small business (or consortia of very small or small 
businesses), as set forth in 47 CFR 90.1021(b), are eligible for a 
bidding credit that represents the amount by which a bidder's winning 
bids are discounted. The size of a Phase II 220 MHz Service bidding 
credit depends on the average gross revenues for the preceding three 
years of the bidder, its controlling principals, and the affiliates of 
both the bidder and its controlling principals:
     A bidder with average gross revenues of not more than $15 
million for the preceding three years receives a 25 percent discount on 
its winning bids for Phase II 220 MHz Service licenses; and,
     A bidder with average gross revenues of not more than $3 
million for the preceding three years receives a 35 percent discount on 
its winning bids for Phase II 220 MHz Service licenses.
    29. Bidding credits are not cumulative: qualifying applicants 
receive either the 25 percent or the 35 percent bidding credit, but not 
both. Guidance on calculating gross revenues is contained in 47 CFR 
90.1021(c).
    30. Phase II 220 MHz Service bidders should note that unjust 
enrichment provisions apply to winning bidders that use bidding credits 
and subsequently assign or transfer control of their licenses to an 
entity not qualifying for the same level of bidding credit. Finally, 
Phase II 220 MHz Service bidders should also note that there are no 
installment payment plans in the Phase II 220 MHz Service auction.

III. Pre-Auction Procedures

A. Short-Form Application (FCC Form 175)--Due May 10, 1999, 5:30 p.m. 
ET

    31. In order to be eligible to bid in this auction, applicants must 
first submit an FCC Form 175 application. This application must be 
received at the Commission by 5:30 p.m. ET on May 10, 1999. Late 
applications will not be accepted. There is no application fee required 
when filing an FCC Form 175. However, to be eligible to bid, an 
applicant must submit an upfront payment. See Part III.C., infra.
(1) Electronic Filing
    32. As of January 1, 1999, applications to participate in FCC 
auctions must be filed electronically, unless it is not operationally 
feasible. Applicants will be permitted to file their FCC Form 175 
applications in hard copy form only in the event the FCC experiences 
technical difficulties with its electronic systems. In such an event, 
the FCC will announce the procedure for submitting manual applications.
    33. For Auction No. 24, applicants may file applications 
electronically beginning April 16, 1999. The system will generally be 
open for filing on a 24-hour basis. The filing window will remain open 
until 5:30 p.m. ET on May 10, 1999. Applicants are strongly encouraged 
to file early, and applicants are responsible for allowing adequate 
time for filing their applications. Applicants may update or amend 
their electronic applications multiple times until the filing deadline 
of May 10, 1999. Information about installing and

[[Page 19535]]

running the FCC Form 175 application software will be included in a 
future Public Notice. Technical support is available at (202) 414-1250 
(voice) or (202) 414-1255 (text telephone (TTY)); the hours of service 
are 8 a.m.-6 p.m. ET, Monday-Friday.
(2) Completion of the FCC Form 175
    34. Applicants should carefully review 47 CFR 1.2105, and must 
complete all items on the FCC Form 175. Instructions for completing the 
FCC Form 175 are in Attachment B of this Public Notice. Applicants 
should not consider their form submitted to the FCC until they press 
the ``Submit Form 175'' button on the ``Submit'' page and receive 
confirmation from the filing system that the form has been received by 
the Commission.
(3) Electronic Review of FCC Form 175
    35. The FCC Form 175 review software may be used to review and 
print applicants' FCC Form 175 applications. Applicants may also view 
other applicants' completed FCC Form 175s after the filing deadline has 
passed and the FCC has issued a Public Notice explaining the status of 
the applications. For this reason, it is important that applicants do 
not include their Taxpayer Identification Numbers (TINs) on any 
Exhibits to their FCC Form 175 applications. There is a fee of $2.30 
per minute for accessing this system. For details, see Attachment E of 
the full text of the Public Notice (see SUPPLEMENTARY INFORMATION 
above).

B. Application Processing and Minor Corrections

    36. After the deadline for filing the FCC Form 175 applications has 
passed, the FCC will process all timely submitted applications to 
determine which are acceptable for filing, and subsequently will issue 
a Public Notice identifying: (1) those applications accepted for filing 
(including FCC account numbers and the licenses for which they 
applied); (2) those applications rejected; and (3) those applications 
that have minor defects that may be corrected, and the deadline for 
filing such corrected applications.
    37. As described more fully in the Commission's Rules, after the 
May 10, 1999, short form filing deadline, applicants may make only 
minor corrections to their FCC Form 175 applications. Applicants will 
not be permitted to make major modifications to their applications 
(e.g., change their license selections, change the certifying official 
or change control of the applicant). See 47 CFR 1.2105.

C. Upfront Payments--Due May 24, 1999

    In order to be eligible to bid in the auction, applicants must 
submit an upfront payment accompanied by an FCC Remittance Advice Form 
(FCC Form 159). Applicants will have access to an electronic version of 
the FCC Form 159 (July 1997 version) after completing the electronic 
FCC Form 175. Earlier versions of this form will not be accepted. All 
upfront payments must be received at Mellon Bank in Pittsburgh, PA, by 
6 p.m. ET on May 24, 1999.
    Please note that:
     All payments must be made in U.S. dollars.
     All payments must be made by wire transfer.
     Upfront payments for Auction No. 24 go to a lockbox number 
different from the ones used in previous FCC auctions, and different 
from the lockbox number to be used for post-auction payments.
     Failure to deliver the upfront payment by the May 24, 1999 
deadline will result in dismissal of the application and 
disqualification from participation in the auction.
(1) Making Auction Payments by Wire Transfer
    39. Wire transfer payments must be received by 6:00 p.m. ET on May 
24, 1999. To avoid untimely payments, applicants should discuss 
arrangements (including bank closing schedules) with their banker 
several days before they plan to make the wire transfer, and allow 
sufficient time for the transfer to be initiated and completed before 
the deadline. Applicants will need the following information:

ABA Routing Number: 043000261
Receiving Bank: Mellon Pittsburgh
BNF: FCC/AC 9100180
OBI Field: (Skip one space between each information item).
``AUCTIONPAY''
Taxpayer Identification No.: (same as FCC Form 159, block 26)
Payment Type Code: (enter ``A24U'')
FCC Code: 1 (same as FCC Form 159, block 23A: ``24'')
Payer Name: (same as FCC Form 159, block 2)
Lockbox No.: # 358420.

    Note: The BNF and Lockbox number are specific to the upfront 
payments for this auction; do not use BNF or Lockbox numbers from 
previous auctions.

    Applicants must fax a completed FCC Form 159 to Mellon Bank at 
(412) 236-5702 at least one hour before placing the order for the wire 
transfer (but on the same business day). On the cover sheet of the fax, 
write ``Wire Transfer--Auction Payment for Auction Event No. 24.'' 
Bidders may confirm receipt of their upfront payment at Mellon Bank by 
contacting their sending financial institution.
(2) FCC Form 159
    41. Each upfront payment must be accompanied by a completed FCC 
Remittance Advice Form (FCC Form 159). Proper completion of FCC Form 
159 is critical to ensuring correct credit of upfront payments. 
Detailed instructions for completion of FCC Form 159 will be included 
in a future Public Notice.
(3) Amount of Upfront Payment
    42. As proposed in the Phase II 220 MHz Service Public Notice, the 
following upfront payments will apply in Auction No. 24:

(1) EAG Licenses: $0.01 * 0.15 MHz * License Population (the result 
rounded up to the next dollar).
(2) EA Licenses: $500 per license.

The upfront payment amount for each license has been calculated and is 
listed in Attachment A. Please note that upfront payments are not 
attributed to specific licenses, but instead will be translated to 
bidding units to define a bidder's maximum bidding eligibility. For 
Auction No. 24, the amount of the upfront payment will be translated 
into bidding units on a one-to-one basis, e.g., a $25,000 upfront 
payment provides the bidder with 25,000 bidding units. The total 
upfront payment defines the maximum amount of bidding units on which 
the applicant will be permitted to bid (including standing high bids) 
in any single round of bidding. Thus, an applicant does not have to 
make an upfront payment to cover all licenses for which the applicant 
has selected on FCC Form 175, but rather to cover the maximum number of 
bidding units associated with licenses on which the bidder wishes to 
place bids and hold high bids on at any given time.
    43. To be able to place a bid on a license, in addition to having 
specified that license on the FCC Form 175, a bidder must have an 
eligibility level that meets or exceeds the number of bidding units 
assigned to that license. At a minimum, an applicant's total upfront 
payment must be enough to establish eligibility to bid on at least one 
of the licenses applied for on the FCC Form 175, or else the applicant 
will not be eligible to participate in the auction.
    44. In calculating the upfront payment amount, an applicant should 
determine the maximum number of bidding units it may wish to bid on in 
any single

[[Page 19536]]

round, and submit an upfront payment covering that number of bidding 
units. Bidders should check their calculations carefully as there is no 
provision for increasing a bidder's maximum eligibility after the 
upfront payment deadline.
    45. Note: An applicant may, on its FCC Form 175, apply for every 
license being offered, but its actual bidding in any round will be 
limited by the bidding units reflected in its upfront payment.
(4) Applicant's Wire Transfer Information for Purposes of Refunds
    46. Because experience with prior auctions has shown that in most 
cases wire transfers provide quicker and more efficient refunds than 
paper checks, the Commission will use wire transfers for all Auction 
No. 24 refunds. To avoid delays in processing refunds, applicants 
should include wire transfer instructions with any refund request they 
file; they may also provide this information in advance by faxing it to 
the FCC Billings and Collections Branch, ATTN: Linwood Jenkins or 
Geoffrey Idika, at (202) 418-2843. Please include the following 
information:

Name of Bank
ABA Number
Account Number to Credit
Correspondent Bank (if applicable)
ABA Number
Account Number
Contact and Phone Number

(Applicants should also note that implementation of the Debt Collection 
Improvement Act of 1996 requires the FCC to obtain an applicant's 
Taxpayer Identification Number (TIN) before it can disburse refunds.) 
Eligibility for refunds is discussed in Part V.D., infra.

D. Auction Registration

    47. Approximately ten days before the auction, the FCC will issue a 
Public Notice announcing all qualified bidders for Auction No. 24. 
Qualified bidders are those applicants whose FCC Form 175 applications 
have been accepted for filing and that have timely submitted upfront 
payments sufficient to make them eligible to bid on at least one of the 
licenses for which they applied.
    48. All qualified bidders are automatically registered for the 
auction. Registration materials will be distributed prior to the 
auction by two separate overnight mailings, each containing part of the 
confidential identification codes required to place bids. These 
mailings will be sent only to the contact person at the applicant 
address listed in the FCC Form 175.
    49. Applicants that do not receive both registration mailings will 
not be able to submit bids. Therefore, any qualified applicant that has 
not received both mailings by noon on June 3, 1999 should contact the 
FCC National Call Center at (888) CALL-FCC ((888) 225-5322, press 
option #2 at the prompt). Receipt of both registration mailings is 
critical to participating in the auction and each applicant is 
responsible for ensuring it has received all of the registration 
material.
    50. Qualified bidders should note that lost login codes, passwords 
or bidder identification numbers can be replaced only by appearing in 
person at the FCC Auction Headquarters located at 2 Massachusetts 
Avenue, N.E., Washington, D.C. 20002. Only an authorized representative 
or certifying official, as designated on an applicant's FCC Form 175, 
may appear in person with two forms of identification (one of which 
must be a photo identification) in order to receive replacement codes.

E. Remote Electronic Bidding Software

    51. Qualified bidders must purchase remote electronic bidding 
software for $175.00 by May 25, 1999. (Auction software is tailored to 
a specific auction, so software from prior auctions will not work for 
Auction No. 24.) A software order form is included in this Public 
Notice.

F. Auction Seminar

    52. On April 21, 1999, the FCC will sponsor a seminar for the Phase 
II 220 MHz Service auction at the Park Hyatt Washington, 1201 24th 
Street, N.W., Washington, D.C. 20037. The seminar will provide 
attendees with information about pre-auction procedures, conduct of the 
auction, FCC remote bidding software, and the Phase II 220 MHz Service 
service and auction rules.
    53. To register, complete the registration form included as 
Attachment I to this Public Notice. The registration form includes 
details about the time and location of the seminar. Registrations are 
accepted on a first-come, first-served basis.

G. Mock Auction

    54. All applicants whose FCC Form 175 and 175-S have been accepted 
for filing will be eligible to participate in a mock auction on June 4, 
1999. The mock auction will enable applicants to become familiar with 
the electronic software prior to the auction. Free demonstration 
software will be available for use in the mock auction. Participation 
by all bidders is strongly recommended. Details will be announced by 
Public Notice.

IV. Auction Event

    55. The first round of the auction will begin on June 8, 1999. The 
initial round schedule will be announced in a Public Notice listing the 
qualified bidders, to be released approximately 10 days before the 
start of the auction.

A. Auction Structure

(1) Simultaneous Multiple Round Auction
    56. As proposed in the Phase II 220 MHz Service Public Notice, the 
225 Phase II 220 MHz Service licenses will be awarded through a single, 
simultaneous multiple round auction. Unless otherwise announced, bids 
will be accepted on all licenses in each round of the auction. This 
approach, we believe, allows bidders to take advantage of any synergies 
that exist among licenses and is most administratively efficient.
(2) Maximum Eligibility and Activity Rules
    57. For Auction No. 24, the amount of the upfront payment submitted 
by a bidder will determine the initial maximum eligibility (as measured 
in bidding units) for each bidder. Upfront payments are not attributed 
to specific licenses, but instead will be translated into bidding units 
to define a bidder's initial maximum eligibility. The total upfront 
payment defines the maximum number of bidding units on which the 
applicant will initially be permitted to bid. There is no provision for 
increasing a bidder's maximum eligibility during the course of an 
auction, as discussed under ``Auction Stages'' in Part IV.A.(2), infra.
    58. To ensure that the auction closes within a reasonable period of 
time, an activity rule requires bidders to bid actively throughout the 
auction, rather than wait until the end before participating. Bidders 
are required to be active on a specific percentage of their maximum 
eligibility during each round of the auction.
    59. A bidder is considered active on a license in the current round 
if it is either the high bidder at the end of the previous bidding 
round and does not withdraw the high bid in the current round, or if it 
submits an acceptable bid in the current round (see ``Minimum Accepted 
Bids'' in Part IV.B.(3), infra). A bidder's activity level in a round 
is the sum of the bidding units associated with licenses on which the 
bidder is active. The minimum required activity level is expressed as a 
percentage of the bidder's maximum bidding eligibility, and increases 
as the auction progresses. These procedures have proven

[[Page 19537]]

successful in maintaining the pace of previous auctions, as discussed 
in Parts IV.A.(4) and (5), infra.
(3) Activity Rule Waivers and Reducing Eligibility
    60. Each bidder will be provided five activity rule waivers that 
may be used in any round during the course of the auction. Use of an 
activity rule waiver preserves the bidder's current bidding eligibility 
despite the bidder's activity in the current round being below the 
required minimum level. An activity rule waiver applies to an entire 
round of bidding and not to a particular license.
    61. The FCC auction system assumes that bidders with insufficient 
activity would prefer to use an activity rule waiver (if available) 
rather than lose bidding eligibility. Therefore, the system will 
automatically apply a waiver (known as an ``automatic waiver'') at the 
end of any round where a bidder's activity level is below the minimum 
required unless: (1) There are no activity rule waivers available; or 
(2) the bidder overrides the automatic application of a waiver by 
reducing eligibility, thereby meeting the minimum requirements.
    62. A bidder with insufficient activity that wants to reduce its 
bidding eligibility rather than use an activity rule waiver must 
affirmatively override the automatic waiver mechanism during the round 
by using the reduce eligibility function in the software. In this case, 
the bidder's eligibility is permanently reduced to bring the bidder 
into compliance with the activity rules. Once eligibility has been 
reduced, a bidder will not be permitted to regain its lost bidding 
eligibility.
    63. Finally, a bidder may proactively use an activity rule waiver 
as a means to keep the auction open without placing a bid. If a bidder 
submits a proactive waiver (using the proactive waiver function in the 
bidding software) during a round in which no bids are submitted, the 
auction will remain open and the bidder's eligibility will be 
preserved. An automatic waiver invoked in a round in which there are no 
new valid bids or withdrawals will not keep the auction open.
(4) Auction Stopping Rules
    64. As proposed in the Phase II 220 MHz Service Public Notice, 
barring extraordinary circumstances, bidding will remain open on all 
licenses until bidding stops on every license. Thus, the auction will 
close for all licenses when one round passes during which no bidder 
submits a new acceptable bid on any license, applies a proactive 
waiver, or withdraws a previous high bid. In addition, however, the 
Bureau retains the discretion to close the auction for all licenses 
after the first round in which no bidder submits a proactive waiver, a 
withdrawal, or a new bid on any license on which it is not the standing 
high bidder. Thus, absent any other bidding activity, a bidder placing 
a new bid on a license for which it is the standing high bidder would 
not keep the auction open under this modified stopping rule.
    65. The Bureau retains the discretion, however, to keep an auction 
open even if no new acceptable bids or proactive waivers are submitted, 
and no previous high bids are withdrawn. In this event, the effect will 
be the same as if a bidder had submitted a proactive waiver. Thus, the 
activity rule will apply as usual, and a bidder with insufficient 
activity will either lose bidding eligibility or use an activity rule 
waiver (if it has any left).
    66. Further, in its discretion, the Bureau reserves the right to 
declare that the auction will end after a specified number of 
additional rounds (``special stopping rule''). If the FCC invokes this 
special stopping rule, it will accept bids in the final round(s) only 
for licenses on which the high bid increased in at least one of the 
preceding specified number of rounds. The FCC intends to exercise this 
option only in extreme circumstances, such as where the auction is 
proceeding very slowly, where there is minimal overall bidding 
activity, or where it appears likely that the auction will not close 
within a reasonable period of time. Before exercising this option, the 
FCC is likely to attempt to increase the pace of the auction by, for 
example, moving the auction into the next stage (where bidders would be 
required to maintain a higher level of bidding activity), increasing 
the number of bidding rounds per day, and/or increasing the amount of 
the minimum bid increments for the limited number of licenses where 
there is still a high level of bidding activity.
(5) Auction Delay, Suspension, or Cancellation
    67. As proposed in the Phase II 220 MHz Service Public Notice, by 
Public Notice or by announcement during the auction, the Bureau may 
delay, suspend or cancel the auction in the event of natural disaster, 
technical obstacle, evidence of an auction security breach, unlawful 
bidding activity, administrative or weather necessity, or for any other 
reason that affects the fair and competitive conduct of competitive 
bidding. In such cases, the Bureau, in its sole discretion, may elect 
to: resume the auction starting from the beginning of the current 
round; resume the auction starting from some previous round; or cancel 
the auction in its entirety. Network interruption may cause the Bureau 
to delay or suspend the auction. This approach has proven effective in 
resolving exigent circumstances in previous auctions. We emphasize that 
exercise of this authority is solely within the discretion of the 
Bureau, and its use is not intended to be a substitute for situations 
in which bidders may wish to apply their activity rule waivers.

B. Bidding Procedures

(1) Round Structure
    68. The initial bidding schedule will be announced by Public Notice 
at least one week before the start of the auction, and will be included 
in the registration mailings. The round structure for each bidding 
round contains a single bidding round followed by the release of the 
round results.
    69. The FCC has discretion to change the bidding schedule in order 
to foster an auction pace that reasonably balances speed with the 
bidders' need to study round results and adjust their bidding 
strategies. The FCC may increase or decrease the amount of time for the 
bidding rounds and review periods, or the number of rounds per day, 
depending upon the bidding activity level and other factors.
(2) Reserve Price or Minimum Opening Bid
    70. As proposed in the Phase II 220 MHz Service Public Notice, the 
following formulae will be used for calculating minimum opening bids on 
a license-by-license basis in Auction No. 24:

(1) EAG Licenses: $0.01 * 0.15 MHz * License Population (the result 
rounded up to the next dollar)
(2) EA Licenses: $500 per license.

These amounts are reducible at the discretion of the Bureau. This will 
allow the Bureau flexibility to adjust the minimum opening bids if 
circumstances warrant. Such discretion will be exercised, if at all, 
sparingly and early in the auction, i.e., before bidders lose all 
waivers and begin to lose substantial eligibility. During the course of 
the auction, the Bureau will not entertain any bidder requests to 
reduce the minimum opening bids on specific licenses. Based on our 
experience in prior auctions, the Commission believes that minimum 
opening bids speed the course of the auction and ensure that valuable 
assets are not sold for nominal prices, without unduly interfering with 
the efficient assignment of licenses.

[[Page 19538]]

(3) Minimum Accepted Bids and Bid Increments
    71. As proposed in the Phase II 220 MHz Service Public Notice (63 
FR 67685, December 8, 1998), once there is a standing high bid on a 
license, there will be a bid increment associated with that bid 
indicating the minimum amount by which the bid on that license can be 
raised. For the Phase II 220 MHz auction, we will use a standard 
exponential smoothing methodology to calculate minimum bid increments. 
The Bureau retains the discretion to compute the minimum bid increment 
through other methodologies if it determines that circumstance so 
dictate.
    72. The exponential smoothing formula calculates the bid increment 
for each license based on a weighted average of the activity received 
on each license in all previous rounds. This methodology will tailor 
the bid increment for each license based on activity, rather than 
setting a global increment for all licenses. For every license that 
receives a bid, the bid increment for the next round for that license 
will be established using the exponential smoothing formula.
    73. The calculation of the percentage bid increment for each 
license in a given round is made at the end of the previous round. The 
computation is based on an activity index, which is calculated as the 
weighted average of the activity in that round and the activity index 
from the prior round. The activity index at the start of the auction 
(round 0) will be set at 0. The current activity index is equal to a 
weighting factor times the number of new bids received on the license 
in the most recent bidding round plus one minus the weighting factor 
times the activity index from the prior round. The activity index is 
then used to calculate a percentage increment by multiplying a minimum 
percentage increment by one plus the activity index with that result 
being subject to a maximum percentage increment. The Commission will 
initially set the weighting factor at 0.5, the minimum percentage 
increment at 0.1, and the maximum percentage increment at 0.2.
Equations
Ai = (C * Bi) + ( (1 - C) * Ai-1)
Ii+1 = smaller of ( (1 + Ai) * N) and 
M

where,

Ai = activity index for the current round (round i)
C = activity weight factor
Bi = number of bids in the current round (round i)
Ai-1 = activity index from previous round (round i-1), 
A0 is 0
Ii+1 = percentage bid increment for the next round (round 
i+1)
N = minimum percentage increment or bid increment floor
M = maximum percentage increment or bid increment ceiling

    Under the exponential smoothing methodology, once a bid has been 
received on a license, the minimum acceptable bid for that license in 
the following round will be the new high bid plus the dollar amount 
associated with the percentage increment (variable Ii+1 from 
above times the high bid). This result will be rounded to the nearest 
thousand if it is over ten thousand or to the nearest hundred if it is 
under ten thousand.

Examples

License 1

C = 0.5, N = 0.1, M = 0.2

Round 1 (2 new bids, high bid = $1,000,000)

    1. Calculation of percentage increment for round 2 using 
exponential smoothing:

A1 = (0.5 * 2) + (0.5 * 0) = 1
The smaller of I2 = (1 + 1) * 0.1 = 0.2 or 0.2 (the maximum 
percentage increment)

    2. Minimum bid increment for round 2 using the percentage increment 
(I2 from above).

0.2 * $1,000,000 = $200,000

    3. Minimum acceptable bid for round 2 = 1,200,000

Round 2 (3 new bids, high bid = 2,000,000)

    1. Calculation of percentage increment for round 3 using 
exponential smoothing:

A2 = (0.5 * 3) + (0.5 * 1) = 2
The smaller of I3 = (1 + 2) * 0.1 = 0.3 or 0.2 (the maximum 
percentage increment)

    2. Minimum bid increment for round 3 using the percentage increment 
(I3 from above)

0.2 * $2,000,000 = $400,000

    3. Minimum acceptable bid for round 3 = 2,400,000

Round 3 (1 new bid, high bid = 2,400,000)

    1. Calculation of percentage increment for round 4 using 
exponential smoothing:

A3 = (0.5 * 1) + (0.5 * 2) = 1.5
The smaller of I4 = (1 + 1.5) * 0.1 = 0.25 or 0.2 (the 
maximum percentage increment)

    2. Minimum bid increment for round 4 using the percentage increment 
(I4 from above)

0.2 * $2,400,000 = $480,000

    3. Minimum acceptable bid for round 4 = 2,880,000
(4) High Bids
    74. Each bid will be date- and time-stamped when it is entered into 
the FCC computer system. In the event of tie bids, the Commission will 
identify the high bidder on the basis of the order in which bids are 
received by the Commission, starting with the earliest bid. The bidding 
software allows bidders to make multiple submissions in a round. As 
each bid is individually date and time-stamped according to when it was 
submitted, bids submitted by a bidder earlier in a round will have an 
earlier date- and time-stamp than bids submitted later in a round.
(5) Bidding
    75. During a bidding round, a bidder may submit bids for as many 
licenses as it wishes (subject to its eligibility), as well as withdraw 
high bids from previous bidding rounds, remove bids placed in the same 
bidding round, or permanently reduce eligibility. Bidders also have the 
option of making multiple submissions and withdrawals in each bidding 
round. If a bidder submits multiple bids for a single license in the 
same round, the system takes the last bid entered as that bidder's bid 
for the round, and the date- and time-stamp of that bid reflects the 
latest time the bid was submitted.
    76. Please note that all bidding will take place either through the 
automated bidding software or by telephonic bidding. (Telephonic bid 
assistants are required to use a script when handling bids placed by 
telephone. Telephonic bidders are therefore reminded to allow 
sufficient time to bid, by placing their calls well in advance of the 
close of a round, because four to five minutes are necessary to 
complete a bid submission.) There will be no on-site bidding during 
Auction No. 24.
    77. A bidder's ability to bid on specific licenses in the first 
round of the auction is determined by two factors: (1) the licenses 
applied for on FCC Form 175; and (2) the upfront payment amount 
deposited. The bid submission screens will be tailored for each bidder 
to include only those licenses for which the bidder applied on its FCC 
Form 175. A bidder also has the option to further tailor its bid 
submission screens to call up specified groups of licenses.
    78. The bidding software requires each bidder to login to the FCC 
auction system during the bidding round using the FCC account number, 
bidder identification number, and the confidential security codes 
provided in the registration materials. Bidders are

[[Page 19539]]

strongly encouraged to download and print bid confirmations after they 
submit their bids.
    79. The bid entry screen of the Automated Auction System software 
for the Phase II 220 MHz Service auction allows bidders to place 
multiple increment bids which will let bidders increase high bids from 
one to nine bid increments. A single bid increment is defined as the 
difference between the standing high bid and the minimum acceptable bid 
for a license.
    80. To place a bid on a license, the bidder must enter a whole 
number between 1 and 9 in the bid increment multiplier (Bid Mult) 
field. This value will determine the amount of the bid (Amount Bid) by 
multiplying the bid increment multiplier by the bid increment and 
adding the result to the high bid amount according to the following 
formula:

    Amount Bid = High Bid + (Bid Mult * Bid Increment)

Thus, bidders may place a bid that exceeds the standing high bid by 
between one and nine times the bid increment. For example, to bid the 
minimum acceptable bid, which is equal to one bid increment, a bidder 
will enter ``1'' in the bid increment multiplier column and press 
submit.
    81. For any license on which the FCC is designated as the high 
bidder (i.e., a license that has not yet received a bid in the auction 
or where the high bid was withdrawn and a new bid has not yet been 
placed), bidders will be limited to bidding only the minimum acceptable 
bid. In both of these cases no increment exists for the licenses, and 
bidders should enter ``1'' in the Bid Mult field. Note that in this 
case, any whole number between 1 and 9 entered in the multiplier column 
will result in a bid value at the minimum acceptable bid amount. 
Finally, bidders are cautioned in entering numbers in the Bid Mult 
field because, as explained in the following section, a high bidder 
that withdraws its standing high bid from a previous round, even if 
mistakenly or erroneously made, is subject to bid withdrawal payments.
(6) Bid Removal and Bid Withdrawal
a. Procedure
    82. As proposed in the Phase II 220 MHz Service Public Notice, 
before the close of a bidding round, a bidder has the option of 
removing any bids placed in that round. By using the ``remove bid'' 
function in the software, a bidder may effectively ``unsubmit'' any bid 
placed within that round. A bidder removing a bid placed in the same 
round is not subject to withdrawal payments. Removing a bid will affect 
a bidder's activity for the round in which it is removed. This 
procedure will enhance bidder flexibility and, we believe, may serve to 
expedite the course of the auction.
    83. Once a round closes, a bidder may no longer remove a bid. 
However, in the next round, a bidder may withdraw standing high bids 
from previous rounds using the ``withdraw bid'' function (assuming that 
the bidder has not exhausted its withdrawal allowance). A high bidder 
that withdraws its standing high bid from a previous round is subject 
to the bid withdrawal payments specified in 47 CFR 1.2104(g) and 
1.2109. The procedure for withdrawing a bid and receiving a withdrawal 
confirmation is essentially the same as the bidding procedure described 
in ``High Bids,'' Part IV.B.(4).
    84. In previous auctions, we have detected bidder conduct that, 
arguably, may have constituted strategic bidding through the use of bid 
withdrawals. While we continue to recognize the important role that bid 
withdrawals play in an auction, i.e., reducing risk associated with 
efforts to secure various geographic area licenses in combination, we 
conclude that, for the Phase II 220 MHz Service auction, adoption of a 
limit on their use to two rounds is the most appropriate outcome. These 
rounds will be at the bidder's discretion and there will be no limit on 
the number of bids that may be withdrawn in either of these rounds. Our 
decision on this issue is based upon our experience in prior auctions, 
particularly the PCS D, E and F block auction, 800 MHz SMR auction, and 
LMDS auction, and is in no way a reflection of our view regarding the 
likelihood of any speculation or ``gaming'' in the Phase II 220 MHz 
Service auction. Withdrawals will still be subject to the bid 
withdrawal payments specified in 47 CFR 1.2104(g) and 1.2109. Bidders 
should note that abuse of the Commission's bid withdrawal procedures 
could result in the denial of the ability to bid on a market.
    85. If a high bid is withdrawn, the license will be offered in the 
next round at the second highest bid price, which may be less than, or 
equal to, in the case of tie bids, the amount of the withdrawn bid, 
without any bid increment. The FCC will serve as a ``place holder'' on 
the license until a new acceptable bid is submitted on that license.
b. Calculation
    86. Generally, a bidder that withdraws a standing high bid during 
the course of an auction will be subject to a payment equal to the 
lower of: (1) the difference between the net withdrawn bid and the 
subsequent net winning bid; or (2) the difference between the gross 
withdrawn bid and the subsequent gross winning bid for that license. 
See 47 CFR 1.2104(g) and 1.2109. No withdrawal payment will be assessed 
if the subsequent winning bid exceeds the withdrawn bid.
(7) Round Results
    87. The bids placed during a round are not published until the 
conclusion of that bidding period. After a round closes, the FCC will 
compile reports of all bids placed, bids withdrawn, current high bids, 
new minimum accepted bids, and bidder eligibility status (bidding 
eligibility and activity rule waivers), and post the reports for public 
access.
    88. Reports reflecting bidders' identities and bidder 
identification numbers for Auction No. 24 will be available before and 
during the auction. Thus, bidders will know in advance of this auction 
the identities of the bidders against which they are bidding.
(8) Auction Announcements
    89. The FCC will use auction announcements to announce items such 
as schedule changes and stage transitions. All FCC auction 
announcements will be available on the FCC remote electronic bidding 
system, as well as the Internet and the FCC Bulletin Board System.
(9) Other Matters
a. Inclusion of the Gulf of Mexico in Auction No. 24
    90. The Commission will not designate the Gulf of Mexico as the 
seventh EAG and the 176th EA in the Phase II 220 MHz Service auction. 
This issue cannot be addressed in the context of this Public Notice, 
which, consistent with the Bureau's delegated authority, implements the 
Commission's rules pertaining to auctions procedures. The licensing 
regions for the 220 MHz Service were adopted by the Commission in the 
220 Third Report and Order, 62 FR 15978, April 3, 1997, and 
subsequently codified.
b. Minor Modifications to FCC Form 175 Applications
    91. As noted in Section III.B., supra, after the short-form filing 
deadline, applicants may make only minor changes to their FCC Form 175 
applications. For example, permissible minor changes include deletion 
and addition of authorized bidders (to a maximum of three) and revision 
of exhibits. Filers should make these

[[Page 19540]]

changes on-line, and submit a letter (and a courtesy copy to Anne 
Napoli at the same address) to Amy Zoslov, Chief, Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, 445 12th Street, S.W., Suite 4-A760 
Washington, D.C. 20554, briefly summarizing the changes. Questions 
about other changes should be directed to Anne Napoli of the FCC 
Auctions and Industry Analysis Division at (202) 418-0660.

V. Post-Auction Procedures

A. Down Payments and Withdrawn Bid Payments

    After bidding has ended, the Commission will issue a Public Notice 
declaring the auction closed, identifying the winning bids and bidders 
for each license, and listing withdrawn bid payments due.
    Within ten business days after release of the auction closing 
notice, each winning bidder must submit sufficient funds (in addition 
to its upfront payment) to bring its total amount of money on deposit 
with the Government to 20 percent of its net winning bids (actual bids 
less any applicable bidding credits). See 47 CFR 1.2107(b). In 
addition, by the same deadline all bidders must pay any withdrawn bid 
amounts due under 47 CFR 1.2104(g), as discussed in ``Bid Removal and 
Bid Withdrawal,'' Part IV.B.(6), supra. (Upfront payments are applied 
first to satisfy any withdrawn bid liability, before being applied 
toward down payments.)

B. Long-Form Application

    Within ten business days after release of the auction closing 
notice, winning bidders must submit a properly completed long-form 
application and required exhibits for each Phase II 220 MHz Service 
license won through the auction. Winning bidders that are small 
businesses or very small businesses must include an exhibit 
demonstrating their eligibility for bidding credits. See 47 CFR 
1.2112(b). Further filing instructions will be provided to auction 
winners at the close of the auction.

C. Default and Disqualification

    Any high bidder that defaults or is disqualified after the close of 
the auction (i.e., fails to remit the required down payment within the 
prescribed period of time, fails to submit a timely long-form 
application, fails to make full payment, or is otherwise disqualified) 
will be subject to the payments described in 47 CFR 1.2104(g)(2). In 
such event the Commission may offer the license to the next highest 
bidders (in descending order) at their final bids, or reauction the 
spectrum. See 47 CFR 1.2109(b) and (c). In addition, if a default or 
disqualification involves gross misconduct, misrepresentation, or bad 
faith by an applicant, the Commission may declare the applicant and its 
principals ineligible to bid in future auctions, and may take any other 
action that it deems necessary, including institution of proceedings to 
revoke any existing licenses held by the applicant. See 47 CFR 
1.2109(d).

D. Refund of Remaining Upfront Payment Balance

    All applicants that submitted upfront payments but were not winning 
bidders for a Phase II 220 MHz Service license may be entitled to a 
refund of their remaining upfront payment balance after the conclusion 
of the auction. No refund will be made unless there are excess funds on 
deposit from that applicant after any applicable bid withdrawal 
payments have been paid.
    Bidders that drop out of the auction completely may be eligible for 
a refund of their upfront payments before the close of the auction. 
However, bidders that reduce their eligibility and remain in the 
auction are not eligible for partial refunds of upfront payments until 
the close of the auction. Qualified bidders that have exhausted all of 
their activity rule waivers, have no remaining bidding eligibility, and 
have not withdrawn a high bid during the auction must submit a written 
refund request including wire transfer instructions, a Taxpayer 
Identification Number (``TIN''), and a copy of their bidding 
eligibility screen print, to: Federal Communications Commission, 
Billings and Collections Branch, Attn: Regina Dorsey or Linwood 
Jenkins, 445 12th Street, S.W., Room 1-A824, Washington, D.C. 20554.
    Bidders can also fax their request to the Billings and Collections 
Branch at (202) 418-2843. Once the request has been approved, a refund 
will be sent to the address provided on the FCC Form 159.

    Note: Refund processing generally takes up to two weeks to 
complete. Bidders with questions about refunds should contact 
Linwood Jenkins or Geoffrey Idika at (202) 418-1995.

Federal Communications Commission.
Amy J. Zoslov,
Chief, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau.
[FR Doc. 99-9765 Filed 4-20-99; 8:45 am]
BILLING CODE 6712-01-P