[Federal Register Volume 64, Number 141 (Friday, July 23, 1999)]
[Notices]
[Pages 39995-40004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18834]


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FEDERAL COMMUNICATIONS COMMISSION

[DA 99-1346; Report No. AUC-99-25-A (Auction No. 25)]


Auction of AM, FM, TV, LPTV, and FM and TV Translator 
Construction Permits Scheduled for September 28, 1999; Minimum Opening 
Bids and Other Procedural Issues

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: On July 9, 1999, the Mass Media Bureau (``MMB'') and the 
Wireless Telecommunications Bureau (``WTB'') (collectively, 
``Bureaus'') released a Public Notice announcing the minimum opening 
bids and other auction procedures for the Closed Broadcast Auction of 
AM, FM, TV, LPTV, and FM and TV Translator Construction Permits.

DATES: The auction will begin on September 28, 1999.

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

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau: 
Auctions and Industry Analysis Division: Bob Allen, Legal Branch at 
(202) 418-0660; Jeff Garrettson, Auctions Operations Branch at (202) 
418-0660 or Bob Reagle, Auctions Operations Branch at (717) 338-2807.
    Mass Media Bureau: Shaun Maher, Video Services Division at (202) 
418-2324; Lisa Scanlan, Audio Services Division at (202) 418-2700.
    Media Contact: Meribeth McCarrick at (202) 418-0654.

SUPPLEMENTARY INFORMATION: This is a summary of a Public Notice that 
was released on July 9, 1999. The complete text of this Public Notice 
is available in its entirety, including all Attachments, for inspection 
and copying during normal business hours in the Reference Information 
Center, Room CY A-257, 445 12th Street, S.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. It is also 
available on the Commission's website at http://www.fcc.gov.

Synopsis of the Public Notice

A. Introduction

    1. This Public Notice announces the procedures and minimum opening 
bids for the upcoming Closed Broadcast Auction. On May 17, 1999 the 
Bureaus released a Public Notice (See ``Closed Broadcast Auctions 
Scheduled for September 28, 1999; Comment Sought on Minimum Opening 
Bids and Other Auction Procedures,'' Public Notice, DA 99-940 (rel. May 
17, 1999) (``Closed Broadcast Auction Public Notice''), 64 FR 29312 
(June 1, 1999), seeking comment on the establishment of reserve prices 
or minimum opening bids for the auction of AM, FM, TV, LPTV, and FM and 
TV Translator Construction Permits (Auction No. 25), in accordance with 
the Balanced Budget Act of 1997. In addition, the Bureaus sought 
comment on a number of procedures to be used in Auction No. 25. The 
Bureaus received 39 comments and 7 reply comments in response to the 
Closed Broadcast Auction Public Notice.
    2. Pursuant to the Broadcast First Report and Order, 63 FR 48615 
(September 11, 1998), (See Implementation of Section 309(j) of the 
Communications Act--Competitive Bidding for Commercial Broadcast and 
Instructional Television Fixed Service Licenses, First Report and 
Order, MM Docket No. 97-234, GC Docket No. 92-52 and GEN Docket No. 90-
264, (``Broadcast First Report and Order'') and Memorandum Opinion and 
Order, 64 FR 24523 (May 7, 1999), (``Memorandum Opinion and Order on 
Reconsideration''), participation in this auction is limited to those 
applicants identified in the Closed Broadcast Auction Public Notice.
    3. Auction Date: The auction will begin on September 28, 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 each business day and will 
continue until bidding has stopped on all licenses.
    4. Auction Title: Auction No. 25 (Closed Broadcast Auction).
    5. Bidding Methodology: Simultaneous multiple round bidding. 
Bidding will be permitted only from remote locations, either 
electronically (by computer) or telephonically.
    6. Pre-Auction Deadlines:
     Auction Seminar--August 3, 1999.
     Short Form Application (FCC Form 175)--August 20, 1999; 
5:30 p.m. ET.
     Orders for Remote Bidding Software--August 20, 1999.
     Upfront Payments (via wire transfer)--September 13, 1999; 
6:00 p.m. ET.
     Mock Auction--September 24, 1999.
    7. Telephone Contacts:
     Auctions Hotline--(888) CALL-FCC ((888) 225-5322), press 
Option #2 or (717) 338-2888 (direct dial). (For General Auction 
Information, and Seminar Registration. Hours of service: 8 a.m.-5:30 
p.m. ET. Monday-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-Friday).
    8. List of Attachments:
     Attachment A--Summary of Construction Permits to be 
Auctioned, Upfront Payments, Minimum Opening Bids.
     Attachment B--Guidelines for Completion of FCC Forms 175 
and Exhibits.
     Attachment C--Auction-Specific Instructions for FCC 
Remittance Advice FCC Form 159.
     Attachment D--Electronic Filing and Review of FCC Form 
175.
     Attachment E--Accessing the FCC Network Using Windows 95/
98.
     Attachment F--FCC Remote Bidding Software Order Form.
     Attachment G--Summary Listing of Documents from the 
Commission and the Wireless Telecommunications Bureau Addressing the 
Application of the Anti-Collusion Rules.
     Attachment H--Auction Seminar Registration Form.
    9. Background: All spectrum to be auctioned is the subject of 
pending,

[[Page 39996]]

mutually exclusive applications for construction permits for the AM, 
FM, TV, LPTV, and FM and television translator services, for which the 
Commission has not approved a settlement agreement that obviates the 
need for an auction. This includes mutually exclusive applications for 
full service FM, AM and television stations that were subject to the 
comparative freeze, instituted after the decision of the U.S. Court of 
Appeals for the District of Columbia in Bechtel v. FCC. The auction 
will also include pending mutually exclusive applications for LPTV, FM 
translator and television translator, as well as certain mutually 
exclusive LPTV and television translator DTV displacement relief 
applications. Pursuant to the Broadcast First Report and Order, 
participation in the auction will be limited to those applicants 
identified in this Public Notice and applicants will be potentially 
eligible to bid on only those construction permits for which they filed 
an appropriate long-form application and the Bureaus will dismiss the 
previously-filed long-form application of any pending applicant failing 
to timely file a short-form application to participate in the Closed 
Broadcast Auction.
    10. Due Diligence: Potential bidders are solely responsible for 
investigating and evaluating all technical and marketplace factors that 
may have a bearing on the value of the facilities on which they intend 
to bid.
    11. The FCC makes no representation or warranties about the use of 
this spectrum for particular services. Applicants should be aware that 
an FCC auction represents an opportunity to become a FCC permittee in 
these services, 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 construction permit 
or license constitute a guarantee of business success.
    12. Participation: Those wishing to participate in the auction 
must:
     Submit a short form application (FCC Form 175) by 5:30 
p.m. Eastern Time, August 20, 1999.
     Submit a sufficient upfront payment and an FCC Remittance 
Advice Form (FCC Form 159) by 6:00 p.m. Eastern Time, September 13, 
1999.
     Comply with all provisions outlined in this Public Notice 
and applicable rules of the Commission.
    13. Prohibition of Collusion: To ensure the competitiveness of the 
auction process, the Commission's Rules prohibit mutually exclusive 
applicants within a group from communicating with each other during the 
auction about bids, bidding strategies, or settlements. This 
prohibition becomes effective at the short form filing deadline and 
ends on the down payment due date. Bidders competing for the same 
construction permit(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 engineering 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 Bureaus, however, caution 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. 
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 electronically submitting their FCC Form 175 short 
form applications, applicants are certifying their compliance with 
Sections 1.2105(c) and 73.5002. 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.
    14. Bidder Information Package: Given the closed nature of Auction 
No. 25 and the fact that the pool of potential bidders is limited to 
those that had previously filed long-form applications, no Bidder 
Information Package will be provided. All information necessary to 
participate in the Closed Broadcast Auction is contained in this Public 
Notice, the Closed Broadcast Auction Public Notice, the Broadcast First 
Report and Order, the Memorandum Opinion and Order on Reconsideration 
and the Commission's rules. Applicants may access updated information 
about Auction No. 25 at the following address on WTB's web site:

http://www.fcc.gov/wtb/auctions/auc25/auc25.html

    15. Future Releases: Further information regarding sequencing and 
length of bidding rounds and other procedural issues will be released 
in a future public notice.
    16. Relevant Authority: Prospective bidders must familiarize 
themselves thoroughly with the Commission's Rules relating to broadcast 
auctions, contained in Title 47, Part 73 of the Code of Federal 
Regulations.
    17. Prospective bidders must also be thoroughly familiar with the 
procedures, terms and conditions contained in this Public Notice, the 
Closed Broadcast Auction Public Notice, the Broadcast First Report and 
Order; the Memorandum Opinion and Order on Reconsideration and Part 1, 
Subpart Q of the Commission's Rules concerning Competitive Bidding 
Proceedings.
    18. 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 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) 
314-3070. When ordering documents from ITS, please provide the 
appropriate FCC number (e.g., FCC 98-194 for the Broadcast First Report 
and Order, 63 FR 48615 (September 11, 1998) and FCC 99-234 for the 
Memorandum Opinion and Order for Reconsideration 64 FR 24523 (May 7, 
1999).
    19. Bidder Alerts: All applicants must certify on their FCC Form 
175 applications under penalty of perjury that they are legally, 
technically,

[[Page 39997]]

financially and otherwise qualified to hold a license, and not in 
default on any payment for Commission construction permits or licenses 
(including down payments) or delinquent on any non-tax debt owed to any 
Federal agency. Applicants should be aware that by filing their FCC 
Form 175 applications, they are certifying that they have long-form 
applications on file and that there has been no change of control of 
their long-form applications that would render them ineligible to 
participate in the auction under 47 U.S.C. 309(1) or any applicable 
Commission rule. Prospective bidders are reminded that submission of a 
false certification to the Commission is a serious matter that may 
result in severe penalties, including monetary forfeitures, license 
revocations, exclusion from participation in future auctions, and/or 
criminal prosecution.
    20. Although applicants have had an extensive opportunity to 
conduct due diligence due to the length of time ensuing since the 
filing of their long-form applications, the following reminder is 
provided: As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use the broadcast 
spectrum 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.
    21. 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 may also call the FCC National Call Center at (888) 
CALL-FCC ((888) 225-5322).
    22. National Environmental Policy Act (NEPA) Requirements: 
Licensees must comply with the Commission's rules regarding the 
National Environmental Policy Act (NEPA). The construction of a 
broadcast antenna facility is a federal action and licensees must 
comply with the Commission's NEPA rules for each such facility. See 47 
CFR 1.1305-1.1319.

B. Eligibility For New Entrant Bidding Credit

    23. For the Closed Broadcast Auction the Commission adopted the New 
Entrant Bidding Credit to promote and facilitate the diversification of 
ownership in the mass media. The bidder's attributable interests shall 
be determined as of the short form (FCC Form 175) filing deadline--
August 20, 1999. Bidders intending to divest a media interest or make 
any other ownership changes, such as resignation of positional 
interests, in order to avoid attribution for purposes of qualifying for 
the New Entrant Bidding credit must have consummated such divestment 
transactions or have completed such ownership changes by no later than 
the short-form filing deadline--August 20, 1999.
    24. Determination of Eligibility for Bidding Credit. The interests 
of the bidder, and of any individuals or entities with an attributable 
interest in the bidder in other media of mass communications shall be 
considered when determining a bidder's eligibility for the New Entrant 
bidding credit.
    25. For purposes of determining which entities qualify for a New 
Entrant Bidding Credit, the following information should be considered: 
the interests of the bidder, and of individuals or entities with an 
attributable interest in the bidder, in other media of mass 
communications at the time of the short-form application filing 
deadline. These interests should be considered to the extent that they 
are considered attributable under the broadcast multiple ownership 
rules. Further, any bidder asserting new entrant status must have de 
facto as well as de jure control of the entity claiming the bidding 
credit.
    26. Under traditional broadcast attribution rules, those entities 
or individuals with an attributable interest in a bidder include: all 
officers and directors of a corporate bidder; any owner of 5% or more 
of the voting stock of a corporate bidder; all partners and limited 
partners of a partnership bidder, unless the limited partners are 
sufficiently insulated from exercising management and control of the 
partnership; and all members of a limited liability company, unless 
sufficiently insulated. In cases where a bidder is an individual and 
his or her spouse or other close family member holds interests in other 
media, such interests are not automatically attributable to the bidder, 
rather the Commission decides attribution issues in this context based 
on certain factors that it has traditionally considered to be relevant. 
Bidders are also reminded that, in the Memorandum Opinion and Order on 
Reconsideration, the Commission determined to consider, in a future 
order, whether to attribute the mass media interests of any individual 
or entity who holds a significant equity and/or debt interest in a 
broadcast auction bidder claiming New Entrant status, even if such an 
interest is nonvoting. Specifically, the Memorandum Opinion and Order 
on Reconsideration stated that this further order would consider the 
appropriateness of attributing the mass media interests held by 
substantial investors in a bidder claiming a credit as a New Entrant 
and the threshold at which a nonvoting equity and/or debit interest in 
a New Entrant should be attributable. While the Commission has not yet 
released its further order resolving these issues, it stated in the 
Memorandum Opinion and Order on Reconsideration that the further order 
would be released ``expeditiously'' and its release would not delay the 
commencement of broadcast service auctions. Therefore, bidders should 
be aware of these outstanding issues when considering their 
qualifications for the New Entrant bidding credit. The eligibility 
standards will be governed by the rule in effect on the short-form 
filing for the New Entrant bidding credit.
    27. Consortia and Joint Bidding Arrangements. A party holding a 
non-controlling, attributable interest in one applicant will be 
permitted to acquire an ownership interest, form a consortium with, or 
enter into a joint bidding arrangement with other applicants for 
construction permits in the same MX Group provided that: (1) the 
attributable interest holder certify that it has not and will not 
communicate with any party concerning the bids or bidding strategies of 
more than one of the applicants in which it holds an attributable 
interest, has

[[Page 39998]]

formed a consortium, or has entered into a joint bidding arrangement; 
and (2) the arrangements do not result in a change in control of any of 
the applicants. While the anti-collusion rule does not prohibit non-
auction related business negotiations among auction applicants, bidders 
are reminded that certain discussion or exchanges could broach on 
impermissible subject matters because they may convey pricing 
information and bidding strategies. Such subject areas include, but are 
not limited to, issues such as management, sales, local marketing 
agreements, rebroadcast agreements and other transactional 
arrangements.
    28. Application Showing. Applicants should note that they will be 
required to file supporting documentation as Exhibits A and C to their 
FCC Form 175 short form applications to establish that they satisfy the 
eligibility requirements to qualify for a New Entrant Bidding Credit. 
Ownership information must also be provided in the Closed Broadcast 
Auction in order for us to verify eligibility to participate in the 
auction. Specifically, for the Closed Broadcast Auction, applicants 
will be required to file (in Exhibit A to their FCC Form 175 short form 
applications) a full and complete statement of the ownership of the 
bidding entity, to include all attributable interest holders. If the 
information reflects that here has been a change of control, the 
related long-form application will be dismissed and the applicant will 
be ineligible to participate in the auction. The applicant must provide 
the ownership information for itself and its attributable interest-
holders, as defined by Section 73.3555 and Note 2 of that section, 
including: all officers and directors of a corporate bidder; any owner 
of 5% or more of the voting stock of a corporate bidder; all partners 
and limited partners of a partnership bidder, unless the limited 
partners are sufficiently insulated from the management or operation of 
the partnership; and all members of a limited liability company, except 
those sufficiently insulated from its management or operation. Bidders 
must certify (in Exhibit A) compliance with the Commission's policies 
relating to media interests of immediate family members. In addition, 
in those cases where a New Entrant Bidding credit is being sought, a 
certification under penalty of perjury must be set forth in Exhibit C 
attesting to the eligibility of the bidder for the level of credit 
claimed. If the applicant is applying to bid as a consortium of 
applicants eligible for the New Entrant bidding credit, this 
information must be provided for each consortium member. In cases where 
a joint biding arrangement is contemplated, an Exhibit B must be filed. 
Applicants owned by minorities or women, as defined in 47 CFR 
1.2110(b)(2), may attach an exhibit (Exhibit D) regarding this status.
    29. Bidding Credits. Applicants that qualify for the New Entrant 
Bidding Credit, as set forth in 47 CFR 73.5007, are eligible for a 
bidding credit that represents the amount by which a bidder's winning 
bids are discounted. The size of a New Entrant Bidding Credit depends 
on the number of ownership interests in other media of mass 
communications that are attributable to the bidder-entity and its 
attributable interest-holders:
     A 35 percent bidding credit will be given to a winning 
bidder if it, and/or any individual or entity with an attributable 
interest in the winning bidder, has no attributable interest in any 
other media of mass communications, as defined in 47 CFR 73.5008 and
     A 25 percent bidding credit will be given to a winning 
bidder if it, and/or any individual or entity with an attributable 
interest in the winning bidder, has no attributable interest in no more 
than three media of mass communications, as defined in 47 CFR 73.5008; 
and
     No bidding credit will be given if any of the commonly 
owned mass media facilities would serve the same area as the proposed 
broadcast or secondary broadcast station, as defined in 47 CFR 73.5007, 
or if the winning bidder, and/or any individual or entity with an 
attributable interest in the winning bidder, have attributable 
interests in more than three mass media facilities.
    30. Attributable interests held by a winning bidder in existing low 
power television, television translator or FM translator facilities 
will not be counted among the bidders' other mass media facilities. 
Bidding credits are not cumulative: qualifying applicants receive 
either the 25 percent or the 35 percent bidding credit, but not both.
    31. Closed Broadcast Auction 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, 
Closed Broadcast Auction bidders should also note that there are no 
installment payment plans in the Closed Broadcast Auction.

C. Pre-Auction Procedures

    32. Short-Form Application (FCC Form 175)--Due August 20, 1999, 
5:30 p.m. ET. In order to be eligible to bid in this auction, 
applicants must first electronically submit an FCC Form 175 
application. This application must be received at the Commission by 
5:30 p.m. ET on August 20, 1999. Late applications will not be 
accepted.
    33. There is no application fee required when filing an FCC Form 
175. However, to purchase bidding eligibility, an applicant must submit 
an upfront payment. See Paragraph 40 below.
    34. Electronic Filing. As of January 1, 1999, applications to 
participate in FCC auctions must be filed electronically, unless it is 
not operationally feasible. See 47 CFR 1.2105(a). Applicants will be 
permitted to file their FCC Form 175 applications in paper 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 paper applications.
    35. For Auction No. 25, applicants may file applications 
electronically beginning August 3, 1999. The system will generally be 
open for filing on a 24-hour basis. The Form 175 filing window will 
remain open until 5:30 p.m. ET on August 20, 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 on August 20, 1999. Information about the electronic 
filing of the FCC Form 175 application is included in Attachment D. 
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.
    36. Completion of the FCC Form 175. Applicants should carefully 
review 47 CFR 1.2105 and 73.5002 and must complete all items on the FCC 
Form 175. Instructions for completing the FCC Form 175 are in 
Attachment B to the 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.
    37. Electronic Review of FCC Form 175. 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 175

[[Page 39999]]

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 are no fees for accessing this system or for 
submitting an FCC Form 175. See Attachment D of the Public Notice for 
details.
    38. Application Processing and Minor Corrections. After the 
deadline for filing the FCC Form 175 applications has passed, the FCC 
will process all timely submitted short-form applications to determine 
which are acceptable for filing, and will subsequently issue a public 
notice identifying: (1) those short-form applications which are 
mutually exclusive and are acceptable for filing (including FCC file 
numbers and the construction permits for which they applied); (2) those 
applications rejected; and (3) those short-formed applications that 
have minor defects that may be corrected, and the deadline for filing 
such corrected applications.
    39. As described more fully in the Commission's Rules, after the 
August 20, 1999, short form filing deadline, applicants may make only 
minor non-technical corrections to their FCC Form 175 applications. 
Applicants will not be permitted to make major modifications to their 
applications (e.g., change their construction permit selections or 
proposed service areas, change the certifying official, or change 
control of the applicant, or change bidding credits). See 47 CFR 
1.2105.
    40. Upfront Payments--Due September 13, 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 may access an electronic version of the FCC Form 159 (August 
1998 version) after completing the electronic FCC Form 175; however, 
the FCC Remittance Advice Form (FCC Form 159) is to be submitted by 
facsimile transmission to Mellon Bank in accordance with the 
instructions below. Earlier versions of this form will not be accepted. 
All upfront payments must be received at Mellon Bank in Pittsburgh, PA, 
by 6:00 p.m. ET on September 13, 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. 25 go to a lockbox number 
different from the ones used in previous FCC auctions, and are 
different from the lockbox number to be used for post-auction payments.
     Failure to deliver the upfront payment by the September 
13, 1999 deadline will result in no bidding eligibility being accorded 
the applicant.
    41. Making Auction Payments by Wire Transfer. Wire transfer 
payments must be received by 6:00 p.m. ET on September 13, 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/ 910-0171
OBI Field: (Skip one space between each information item) 
``AUCTIONPAY''
TAXPAYER IDENTIFICATION NO. (same as FCC Form 159, block 26)
PAYMENT TYPE CODE (enter ``A25U'')
FCC CODE 1 (same as FCC Form 159, block 23A: ``25'')
PAYER NAME (same as FCC Form 159, block 2)
LOCKBOX NO. #358430

    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.

    42. 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. 25.'' 
Bidders may confirm receipt of their upfront payment at Mellon Bank by 
contacting their sending financial institution.
    43. FCC Form 159. 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 are 
included in Attachment C to the Public Notice.
    44. Amount of Upfront Payment. In the Broadcast First Report and 
Order the Commission delegated to the Bureaus the authority and 
discretion to determine an appropriate upfront payment for each 
construction permit being auctioned. In the Closed Broadcast Auction 
Public Notice, the Bureaus proposed certain upfront payments. We 
received comments from a number of parties, including the National 
Translator Association (``NTA''). NTA states that any organization 
which is exempt from annual regulatory fees should be exempted from the 
requirement of filing upfront payments. However, Section 73.5003 of the 
Commission's rules requires that every bidder in every broadcast 
service shall submit an upfront payment prior to the commencement of 
bidding. Therefore, we shall not adopt NTA's suggestion and all bidders 
will be required to submit an upfront payment.
    45. Applicants potentially eligible to participate in competitive 
bidding in more than one MX Group should 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. 25, 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 construction permits which the 
applicant has selected on FCC Form 175, but rather to cover the maximum 
number of bidding units that are associated with construction permits 
on which the bidder wishes to place bids and hold high bids at any 
given time. Bidders are reminded that failure to submit an upfront 
payment of sufficient size to provide bidding eligibility for every MX 
Group in which an applicant has a pending long-form application will 
limit the bidding eligibility of that applicant.
    46. In order to be able to place a bid on a construction permit, in 
addition to having specified that permit 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 construction permits applied for on the FCC Form 
175, or else the applicant will not be eligible to participate in the 
auction.
    47. 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 round, and submit an upfront payment covering that number of 
bidding units. Bidders should check their calculations carefully as 
there is no provision for

[[Page 40000]]

increasing a bidder's maximum eligibility after the upfront payment 
deadline.
    48. An applicant potentially eligible to bid in more than one MX 
group may, on its FCC Form 175, indicate an intent to bid on every 
construction permit for which an underlying long-form has been filed, 
but its actual bidding in any round will be limited by the bidding 
units reflected in its upfront payment.
    49. Applicant's Wire Transfer Information for Purposes of Refunds. 
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. 25 
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 a Taxpayer 
Identification Number (TIN) before it can disburse refunds.)
    50. Auction Registration. Approximately ten days before the 
auction, the FCC will issue a public notice announcing all qualified 
bidders for Auction No. 25. 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 construction permits for which a long-
form application was previously accepted.
    51. 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.
    52. 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 September 23, 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.
    53. 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 445--12th Street, 
S.W., Washington, D.C. 20554. 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. Bidders 
needing replacement codes must call technical support at 202-414-1250 
prior to arriving at the FCC.
    54. Remote Electronic Bidding Software. Qualified bidders that file 
or amend the FCC Form 175 electronically are strongly encouraged to bid 
electronically. Due to the fact that each of the potential bidders has 
already paid substantial fees to the Commission in connection with the 
filing of their long-form applications, the software packages required 
to participate in remote electronic bidding will be provided on request 
at no charge to the bidders in the Closed Broadcast Auction. These 
software packages must be ordered by August 20, 1999. (Auction software 
is tailored to a specific auction, so software from prior auctions will 
not work for Auction No. 25.) A software order form is included in the 
Public Notice.
    55. Auction Seminar. On August 3, 1999, the FCC will sponsor a 
free, informational seminar for the Closed Broadcast Auction at the 
Main Meeting Room on the first floor of the Headquarters Building of 
the Federal Communications Commission located at 445--12th Street, 
S.W., Washington, DC 20554. The seminar will provide attendees with 
information about pre-auction procedures, conduct of the auction, FCC 
remote bidding software, and the Closed Broadcast Auction service and 
auction rules.
    56. To register, refer to the registration materials form included 
as Attachment H with the Public Notice. Registrations are accepted on a 
first-come, first-served basis.
    57. Mock Auction. All qualified bidders will be eligible to 
participate in a mock auction on September 24, 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.

D. Auction Event

    58. The first round of the auction will begin on September 28, 
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.
    59. Auction Structure--Simultaneous Multiple Round Auction. In the 
Closed Broadcast Auction Public Notice, we proposed to award the 
construction permits in a single, simultaneous multiple round auction. 
On this proposal, Community Broadcasters Association (``CBA'') filed 
comments, stating that auctions for LPTV displacement applications 
should be set up to run seriatim. CBA stresses the importance of the 
auction for displaced LPTV licensees and notes that this category of 
bidder consists of small operators who cannot afford the time or staff 
to stay on-line indefinitely. However, contrary to CBA's expressed 
concerns, bidders in the Closed Broadcast Auction are not compelled by 
our procedures to stay online indefinitely, or for extensive periods of 
time. Only a periodic presence will be required during each round of 
the auction: first to place a bid; then later to check round results.
    60. The Bureau concludes that the construction permits in the 
Closed Broadcast Auction will be awarded through a single, simultaneous 
multiple round auction. Unless otherwise announced, bids will be 
accepted on all construction permits in each round of the auction. This 
approach allows for a more efficient auction process and, in cases 
where bidders are eligible to participate in multiple markets, allows 
them to take advantage of any synergies that exist among construction 
permits.
    61. Maximum Eligibility and Activity Rules. In the Closed Broadcast 
Auction Public Notice, the Bureau proposed that the amount of the 
upfront payment submitted by a bidder would determine the initial 
maximum eligibility (as measured in bidding units) for each bidder. We 
received comments from Fant Broadcasting Company (``Fant''). Fant 
believes that the 100% eligibility rule is too high for a multiple 
market bidder and will force such bidders to either exercise a waiver 
or to bid, producing artificially low bid amounts for markets with 
smaller bidding units. Fant suggests a 50% eligibility requirement in 
stage one of the auction.

[[Page 40001]]

    62. We note that in the Closed Broadcast Auction, only a very small 
percentage of bidders are potentially eligible to bid on more than one 
market. For that reason, even if valid, we do not see the factors 
stated by Fant as having a significant impact on the conduct of the 
Closed Broadcast Auction. Further, no other commenter raises similar 
concerns and none of the reply comments express support for this 
position.
    63. We adopt the maximum eligibility and activity rule proposal for 
the Closed Broadcast Auction. The amount of the upfront payment 
submitted by a bidder determines the initial maximum eligibility (in 
bidding units) for each bidder. Note again that upfront payments are 
not attributed to specific construction permits, 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.
    64. 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 100 percent of their maximum eligibility 
during each round of the auction.
    65. A bidder is considered active on a construction permit 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. 
A bidder's activity level in a round is the sum of the bidding units 
associated with construction permits on which the bidder is active. 
Required minimum activity levels ensure that an auction will proceed 
expeditiously and efficiently. Because such procedures have proven 
successful in maintaining the pace of previous auctions, we adopt them 
for the Closed Broadcast Auction.
    66. Activity Rule Waivers, Reducing Eligibility and Stopping Rules. 
In the Closed Broadcast Auction Public Notice, we proposed that each 
bidder in the auction would be provided five activity rule waivers that 
may be used in any round during the course of the auction. We also 
proposed to employ a simultaneous stopping rule in Auction No. 25, 
meaning that all construction permits would remain open until the first 
round in which no new acceptable bids, proactive waivers or withdrawals 
were received. Finally, we proposed a special stopping rule, meaning 
that the Bureaus would accept bids in the final round(s) only for 
construction permits on which the high bid increased in at least one of 
the preceding specified number of rounds. We received numerous comments 
on our activity rule, eligibility reduction and stopping rule 
proposals.
    67. Based upon our experience in previous auctions, the Bureau 
adopts its proposal and 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 construction permit.
    68. 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.
    69. 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.
    70. 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.
    71. Bidding will remain open on all construction permits until 
bidding stops on every construction permit. Thus, the auction will 
close for all construction permits when one round passes during which 
no bidder submits a new acceptable bid on any construction permit, 
applies a proactive waiver, or withdraws a previous high bid. The 
Bureaus retain the discretion to close the auction for all construction 
permits 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 highest bidder. Thus, absent any other bidding activity, a 
bidder placing a new bid on a construction permit for which it is the 
standing high bidder would not keep the auction open under this 
modified stopping rule.
    72. The Bureaus retain the discretion 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).
    73. The Bureaus reserve 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 construction permits 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, increasing the number 
of bidding rounds per day.
    74. Auction Delay, Suspension, or Cancellation. In the Closed 
Broadcast Auction Public Notice, the Bureau proposed that, 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. The Commission received no comments on this proposal.
    75. Because this approach has proven effective in resolving exigent 
circumstances in previous auctions, the Bureau will adopt its proposed 
auction cancellation rules. 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,

[[Page 40002]]

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. The Bureau emphasizes that 
exercise of this authority is solely within the discretion of the 
Bureaus, and its use is not intended to be a substitute for situations 
in which bidders may wish to apply their activity rule waivers.
    76. Bidding Procedures--Round Structure. 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.
    77. 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.
    78. Reserve Price or Minimum Opening Bid. In the Closed Broadcast 
Auction Public Notice, the Bureaus proposed to establish minimum 
opening bids and to retain discretion to lower the minimum opening 
bids. In the alternative, the Bureaus sought comment on whether, 
consistent with the Budget Act, the public interest would be served by 
having no minimum opening bid or reserve price. Numerous comments 
addressed the issue of minimum opening bids and reserve prices.
    79. Except as disclosed below, the Bureaus will adopt the minimum 
opening bids proposed for each of the construction permits in the 
Closed Broadcast Auction and which are reducible at the discretion of 
the Bureaus, if circumstances warrant. This discretion will be 
exercised 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 Bureaus will not entertain any bidder 
requests to reduce the minimum opening bid on specific construction 
permits.
    80. A number of commenters submitted comments requesting that 
certain minimum opening bids be lowered for specific primary service 
television markets, due to disproportionate differences in the sizes of 
the markets, the number of households in the proposed markets and the 
average price of stations in the market. We find merit in these 
commenters suggesting that minimum opening bids be lowered due to 
differences in the size of the markets and the revisions are contained 
in Attachment A of the Public Notice.
    81. Minimum Accepted Bids and Bid Increments. In the Closed 
Broadcast Auction Public Notice, the Bureaus proposed a minimum bid 
increment of 10 percent. Biltmore Forest submitted comments stating 
that 10 percent bidding increments are too high to maintain in the 
later stages of an auction. However, our past experience has shown us 
that a 10 percent bid increment is not excessive and will not 
significantly affect the amounts of prospective bids or the rate at 
which bidding occurs. Furthermore, we do have discretion to lower the 
bid increment during the progress of an auction, if we deem that 
circumstances so dictate.
    82. The Bureaus adopt the proposal contained in the Closed 
Broadcast Auction Public Notice. The Bureau retains the discretion to 
change the minimum bid increment if it determines that circumstances so 
dictate, such as raising the minimum bid increment toward the end of 
the auction to speed the pace at which bids reach their final values. 
The Bureaus will do so by announcement in the Automated Auction System. 
Under its discretion, the Bureau may also implement an absolute dollar 
floor for the bid increment to further facilitate a timely close of the 
auction.
    83. Once there is a standing high bid on a construction permit, 
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 
Closed Broadcast Auction, we will use a flat, across-the-board 
increment of 10 percent to calculate minimum bid increments and retain 
the discretion to compute the minimum bid increment through other 
methodologies if circumstances so dictate.
    84. 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. 25.
    85. A bidder's ability to bid on specific construction permits in 
the first round of the auction is determined by two factors: (1) the 
construction permits 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.
    86. 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.
    87. The bid entry screen of the Automated Auction System software 
for the Closed Broadcast 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 construction permit.
    88. Bid Removal and Bid Withdrawal--Procedures. 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 serve to expedite the course of the auction. Therefore, 
the Bureaus will adopt these procedures for the Closed Broadcast 
Auction.
    89. 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.
    90. In previous auctions, the Bureaus have detected bidder conduct 
that, arguably, may have constituted strategic bidding through the use 
of bid withdrawals. While the Bureaus continues to recognize the 
important

[[Page 40003]]

role that bid withdrawals play in an auction, i.e., reducing risk 
associated with efforts to secure various construction permits or 
licenses in combination, the Bureaus concludes that, for the Closed 
Broadcast Auction, adoption of a limit on their use to two rounds is 
the most appropriate outcome. By doing so the Bureaus believe they 
strike a reasonable compromise that will allow bidders to use 
withdrawals. 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 this 
Closed Broadcast Auction.
    91. The Bureaus will therefore limit the number of rounds in which 
bidders may place withdrawals to two rounds. 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. 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.
    92. If a high bid is withdrawn, the construction permit 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 construction permit until a new acceptable bid 
is submitted on that permit.
    93. Calculation. 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 
construction permit. In the case of multiple withdrawals on a 
construction permit, the payment for the final withdrawer will be 
computed as above. The payment for all other withdrawers will be 
computed as the lower of: (1) either the difference between the net 
withdrawn bid and the highest of the subsequent net winning bids or the 
difference between the net withdrawn bid and the subsequent net winning 
bid, whichever is less; or (2) either the difference between the gross 
withdrawn bid and the highest of the subsequent gross withdrawn bids or 
the difference between the gross withdrawn bid and the subsequent gross 
winning bid, whichever is less. No withdrawal payment will be assessed 
for a withdrawn bid if either the subsequent gross or net winning bid 
or if any of the subsequent gross or net withdrawn bids exceed the 
gross or net amount of the withdrawn bid. In the event that a 
construction permit for which there have been withdrawn bids is not won 
in that auction, then those bidders with outstanding withdrawals will 
have 3 percent of their withdrawn bid withheld until such time as the 
construction permit can be reauctioned and a final payment assigned.
    94. Round Results. 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.
    95. Reports reflecting bidders' identities and bidder 
identification numbers for Auction No. 25 will be available before and 
during the auction. Thus, bidders will know in advance the identities 
of the bidders against which they are bidding.
    96. Auction Announcements. The FCC will use auction announcements 
to announce items such as schedule changes and round sequences and 
length. 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.
    97. Other Matters --Deletions and Corrections. Commenters 
Association of American Public Television Stations (APTS) and Rocky 
Mountain Public Broadcasting Network, Inc. (Rocky Mountain) request 
that so-called ``noncommercial educational'' applicants for secondary 
television facilities not be included in the auction. We decline the 
requests of APTS and Rocky Mountain and disagree that they are exempt 
from auction. In this case, applicants in the secondary television 
services are not eligible to be licensed as noncommercial educational, 
a key element in the Communications Act, Section 309(j)(2)(c) statutory 
exemption. Accordingly, the Commission must subject these applications 
to auction.
    98. Pre-auction Procedures for Pending, Applications. Several 
commenters urge the Commission to remove their particular MX Group from 
the September 28, 1999 Closed Broadcast Auction, alleging that their 
only competitor within the group is unacceptable and should be 
dismissed. In the First Report and Order, the Commission decisively 
rejected this argument and unequivocally stated that it would ``not 
consider petitions to deny already filed, or accept additional 
petitions against pending applications, nor consider any questions 
raised in such petitions relating to the tenderability or acceptability 
of the pending long form applications.'' Rather, petitions to deny will 
be entertained only with respect to the auction winning bidder. The 
Commission concluded that the interests of the group of pending 
applicants is best served by this approach and, to do otherwise would 
significantly delay the commencement of competitive bidding and 
ultimate service to the public. Accordingly, we reject commenters' 
requests to examine issue pleadings at this time.
    99. Conflict Removal. One applicant for an MX FM translator 
facility contends that there is no need for an auction because 
alternative frequencies exist and either one of the competing 
applicants could amend to specify a different frequency and remove the 
conflict. The applicant argues that the Commission's failure to open a 
filing window, however, precludes the filing of such amendment and 
forces the parties into an unnecessary auction. The applicant's 
assessment of its settlement options is misguided. As explicitly stated 
in the First Report and Order, pending secondary service applicants may 
still avoid an auction through a settlement agreement that complies 
with all Commission regulations, including the resolution of mutual 
exclusivity through various engineering means.
    100. Minor Modifications to FCC Form 175 Applications. After the 
short-form filing deadline, applicants may make only minor changes to 
their FCC Form 175 applications. Filers should make these changes on-
line, submit a letter to Amy Zoslov, Chief Auctions and Industry 
Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, 445 12th Street, SW, Suite 4-A760 
Washington, DC 20554, briefly summarizing the changes. Questions about 
other changes should be directed to Bob Allen of the FCC Auctions and 
Industry Analysis Division at (202) 418-0660.
    101. Maintaining Currency of Information in FCC Form 175 
Applications. Applicants have an obligation under Section 1.65 of the 
Commission's Rules, 47 CFR 1.65, to maintain the completeness and 
accuracy of information in their short-form applications. Amendments 
reporting substantial changes of possible decisional significance in 
information

[[Page 40004]]

contained in FCC Form 175 applications, as defined by 47 CFR 
1.2105(b)(2), will not be accepted and may in some instances result in 
the dismissal of the FCC Form 175 application.

E. Post-Auction Procedures

    102. 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 construction 
permit and listing withdrawn bid payments due.
    103. 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). (Upfront payments are applied first 
to satisfy any withdrawn bid liability, before being applied toward 
down payments.)
    104. 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 re-auction the 
construction permit to the next highest bidder (in descending order) at 
their final bids. 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 
construction permits or licenses held by the applicant. See 47 CFR 
1.2109(d).
    105. Refund of Remaining Upfront Payment Balance. All applicants 
that submitted upfront payments but were not winning bidders for a 
Closed Broadcast Auction construction permit 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.
    106. 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 which includes 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.
    107. 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. 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.
Mark R. Bollinger,
Deputy Chief, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau.
[FR Doc. 99-18834 Filed 7-22-99; 8:45 am]
BILLING CODE 6712-01-P