[Federal Register Volume 64, Number 172 (Tuesday, September 7, 1999)]
[Notices]
[Pages 48623-48636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23123]


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FEDERAL COMMUNICATIONS COMMISSION

[DA 99-1591]


Auction of 929 and 931 MHz Paging Service Spectrum; Report No. 
AUC-99-26-B (Auction No. 26)

AGENCY: Federal Communications Commission.

ACTION: Public Notice.

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SUMMARY: This Public Notice announces the procedures and minimum 
opening bids for the upcoming Paging 929 and 931 MHz Upper Bands 
Auction (``Upper Bands Auction''). This document gives auction notice 
and filing requirements for 2,499 paging upper band licenses scheduled 
for February 24, 2000 and announces minimum opening bids and other 
procedural issues. On June 7, 1999, the Wireless Telecommunications 
Bureau (``Bureau'') released a Public Notice seeking comment on the 
establishment of reserve prices or minimum opening bids for the Upper 
Bands auction. In addition, the Bureau sought comment on a number of 
procedures to be used in the Upper Bands auction. The Bureau received 
four comments and no replies in response to the Paging Upper Bands 
Public Notice.

DATES: This auction is scheduled for February 24, 2000.

FOR FURTHER INFORMATION CONTACT: 
    Auctions and Industry Analysis Division: Lisa Hartigan, Operations 
or Arthur Lechtman, Legal Branch at (202) 418-0660; Bob Reagle, 
Auctions Analysis at (717) 338-2807.
    Commercial Wireless Division: Cynthia Thomas, Policy and Rules 
Branch (202) 418-7240; Charlene Lagerwerff, Licensing and Technical 
Analysis Branch (202) 418-1385.
    Media Contact: Meribeth McCarrick at (202) 418-0654.

SUPPLEMENTARY INFORMATION: This is a summary of a Public Notice 
released August 12, 1999. The text of the public notice, including all 
attachments, is available for inspection and copying during normal 
business hours in the FCC Reference Center (Room CY-A257), 445 12th 
Street, SW., Washington, DC and also may be purchased from the 
Commission's copy contractor, International Transcription Services, 
Inc. (ITS, Inc.), 1231 20th Street, NW., Washington, DC 20036, (202) 
857-3800. It is also available on the Commission's website at http://
www.fcc.gov.
    1. The Upper Band Licenses to Be Auctioned: The licenses available 
in this auction consist of 12 channels in the 929 MHz band and 37 
channels in the 931 MHz band. The following tables contain the Block/
Frequency Cross-Reference List for the 929 MHz and 931 MHz bands:

                         929 MHz Paging Channels
------------------------------------------------------------------------
                            Block                              Frequency
------------------------------------------------------------------------
License Suffix:
A...........................................................    929.0125
B...........................................................    929.1125
C...........................................................    929.2375
D...........................................................    929.3125
E...........................................................    929.3875
F...........................................................    929.4375
G...........................................................    929.4625
H...........................................................    929.6375
I...........................................................    929.6875
J...........................................................    929.7875
K...........................................................    929.9125
L...........................................................    929.9625
------------------------------------------------------------------------


                         931 MHz Paging Channels
------------------------------------------------------------------------
                            Block                              Frequency
------------------------------------------------------------------------
License Suffix:
AA..........................................................    931.0125
AB..........................................................    931.0375
AC..........................................................    931.0625
AD..........................................................    931.0875
AE..........................................................    931.1125
AF..........................................................    931.1375
AG..........................................................    931.1625
AH..........................................................    931.1875
AI..........................................................    931.2125
AJ..........................................................    931.2375
AK..........................................................    931.2625

[[Page 48624]]

 
AL..........................................................    931.2875
AM..........................................................    931.3125
AN..........................................................    931.3375
AO..........................................................    931.3625
AP..........................................................    931.3875
AQ..........................................................    931.4125
AR..........................................................    931.4375
AS..........................................................    931.4625
AT..........................................................    931.4875
AU..........................................................    931.5125
AV..........................................................    931.5375
AW..........................................................    931.5625
AX..........................................................    931.5875
AY..........................................................    931.6125
AZ..........................................................    931.6375
BA..........................................................    931.6625
BB..........................................................    931.6875
BC..........................................................    931.7125
BD..........................................................    931.7375
BE..........................................................    931.7625
BF..........................................................    931.7875
BG..........................................................    931.8125
BH..........................................................    931.8375
BI..........................................................    931.8625
BJ..........................................................    931.9625
BK..........................................................    931.9875
------------------------------------------------------------------------

    One license will be awarded for each of these spectrum blocks in 
each of the 51 geographic areas known as Major Economic Areas 
(``MEAs''), resulting in a total of 2,499 Upper Bands paging licenses. 
These licenses are listed in Attachment A to this Public Notice. The 
licenses designated for the Upper Band auction comprise various 
portions of the following areas: (a) the continental United States, (b) 
the Northern Mariana Islands, (c) Guam, (d) American Samoa, (e) the 
United States Virgin Islands, and (f) Puerto Rico.
    Auction Date: The auction will begin on Thursday, February 24, 
2000. 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 on all licenses will be conducted on each 
business day until bidding has stopped on all licenses.
    Auction Title: The 929 and 931 MHz Upper Bands Paging Auction--
Auction No. 26.
    Bidding Methodology: Simultaneous multiple round bidding. Bidding 
will be permitted only from remote locations, either electronically (by 
computer) or telephonically.
    Pre-Auction Deadlines:
Auction Seminar--January 7, 2000
Short Form Application (FCC Form 175)--January 20, 2000; 5:30 p.m. ET
Upfront Payments (via wire transfer)-- February 7, 2000; 6:00 p.m. ET
Orders for Remote Bidding Software--February 11, 2000; 5:30 p.m. ET
Mock Auction--February 22, 2000

    Telephone Contacts:
Auctions Hotline--(888) CALL-FCC (888) 225-5322, press Option #2 or 
(717) 338-2888 (direct dial)
    (For Bidder Information Packages, General Auction Information, and 
Seminar Registration. Hours of service: 8 a.m.-5:30 p.m. ET.)
FCC Technical Support Hotline (202) 414-1250 (voice), (202) 414-1255 
(TTY)
    (For technical assistance with installing or using FCC software. 
Hours of service: 8 a.m.-6 p.m. ET, Monday-Friday)

    List of Attachments available at the FCC:

Attachment A--Summary of Paging 929 and 931 MHz Licenses to be 
Auctioned, Upfront Payments, Minimum Opening Bids
Attachment B--Existing 929 MHz Licensees and 931 MHz Licensees
Attachment C--Guidelines for Completion of FCC Forms 175 and 159, and 
Exhibits
Attachment D--Electronic Filing and Review of FCC Form 175
Attachment E--How to Monitor FCC Auctions Online
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
Attachment I--Auction Seminar Registration Form
Attachment J--Exponential Smoothing Formula and Example

1. Synopsis

    2. Background: In 1997 and 1998, the Commission adopted rules 
governing geographic licensing of Common Carrier Paging (``CCP'') and 
exclusive 929 MHz Private Carrier Paging (``PCP''), and established 
procedures for auctioning mutually exclusive applications for these 
licenses. See, Second Report and Order and Further Notice of Proposed 
Rulemaking, (``Paging Second Report and Order'') 62 FR 11616 (March 12, 
1997) and 62 FR 11638 (March 12, 1997); Memorandum Opinion and Order on 
Reconsideration and Third Report and Order, (``Paging Reconsideration 
Order'' and ``Third Report and Order'') 64 FR 33762 (June 24, 1999). In 
order to facilitate the geographic licensing program, the Commission 
dismissed pending mutually exclusive applications and applications 
filed after July 31, 1996. The Commission provided for a transition to 
geographic area licensing for exclusive, non-nationwide channels in the 
bands allocated for paging and developing a standard methodology for 
providing protection to incumbent licensees from co-channel 
interference for the 929-930 MHz and 931-932 MHz paging bands. The 
Commission proposed the first in a series of auctions of Paging service 
licenses to commence December 7, 1999, First Paging Service Spectrum 
Auction Scheduled for December 7, 1999; Comment Sought on Reserve 
Prices or Minimum Opening Bids and Other Auction Procedures, Public 
Notice, DA 99-1103 (released June 7, 1999), (``Upper Bands Public 
Notice'') 64 FR 36009 (July 2, 1999).
    Scheduling: Due to concerns raised about the timing of the Auction 
No. 26, the Wireless Telecommunications Bureau (``Bureau'') has 
rescheduled the auction to commence on February 24, 2000. Parties 
responding to the Upper Bands Public Notice raised several reasons for 
delaying the auction, including anticipated computer software problems 
associated with the roll-over into the Year 2000 (``Y2K''). The Bureau 
recognizes that preparing their existing businesses for the Y2K roll-
over while preparing for an auction could present formidable problems 
for potential bidders. Accordingly, the Bureau is providing information 
now about the auction, and allowing for the submission of Short-Form 
Applications (FCC Form 175) twenty days after the onset of Y2K. The 
Bureau believes that this new schedule provides sufficient time for 
potential bidders to prepare their computer systems for the auction and 
correct any problems that might have been caused by Y2K.
    Incumbent Licensees: Incumbent (nongeographic) paging licensees 
operating under their existing authorizations are entitled to full 
protection from co-channel interference. See Paging Second Report and 
Order and Paging Reconsideration Order. Geographic area licensees are 
likewise afforded co-channel interference protection from incumbent 
licensees. See Paging Reconsideration Order. Adjacent geographic area 
licensees are obligated to resolve possible interference concerns of 
adjacent geographic area licensees by negotiating a mutually acceptable 
agreement with the neighboring geographic licensee. Incumbency issues 
are further discussed.
    Due Diligence: Potential bidders are reminded that there are a 
number of incumbent licensees already licensed and operating on 
frequencies that will be subject to the upcoming auction.

[[Page 48625]]

Geographic area licensees in accordance with the Commission's Rules 
must protect such incumbents from harmful interference. See 47 CFR 
22.503(i). These limitations may restrict the ability of such 
geographic area licensees to use certain portions of the 
electromagnetic spectrum or provide service to certain areas in their 
geographic license areas.
    3. In addition, potential bidders seeking licenses for geographic 
areas adjacent to the Canadian and Mexican 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 agreements with Canada or Mexico on 
the use of 929 and 931 MHz spectrum in the border area.
    4. Potential bidders should also be aware that certain applications 
(including those for modification), waiver requests, petitions to deny, 
petitions for reconsideration, and applications for review are pending 
before the Commission that relate to particular applicants or incumbent 
licensees. In addition, certain decisions reached in the paging 
proceeding are subject to judicial appeal and may be the subject of 
additional reconsideration or appeal. The Bureau notes that resolution 
of these matters could have an impact on the availability of spectrum 
for MEA licensees in the 929 and 931 MHz bands. 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.
    5. 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 MEA licenses.
    6. To aid potential bidders, Attachment B to this Public Notice 
lists matters pending before the Commission that relate to licenses or 
applications for the 929 MHz and 931 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 929 or 
931 MHz bands.
    7. 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. 
See 47 CFR 1.45(c).
    8. Corrections and additions must be filed with the Office of the 
Secretary, Federal Communications Commission, 445 Twelfth St., SW, 
Washington, DC 20554. One copy of each submission should also be 
delivered to the Commission's duplicating contractor, International 
Transcription Service, Inc., (``ITS''), 445 Twelfth Street, SW, CY-
B402, Washington, DC 20554, while an additional courtesy copy should be 
sent to Cyndi Thomas, Policy and Rules Branch, Commercial Wireless 
Division, Wireless Telecommunications Bureau, Federal Communications 
Commission, 445 Twelfth St., SW, Room 4-A164, Washington, DC 20554. 
Parties filing additions or corrections should include the internal 
reference number of this Public Notice (DA 99-1591) on their 
submissions. Parties are also reminded that some of the proceedings are 
restricted and 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.
    9. Copies of the pleadings relating to the 931 MHz band identified 
in Attachment B are available for public inspection and copying during 
normal reference room hours at: Office of Public Affairs (OPA), 
Reference Operations Division, 445 Twelfth Street, SW, Room CY-C314, 
Washington, DC 20554. Copies of the pleadings relating to the 929 MHz 
band identified in Attachment B are available for public inspection and 
copying during normal reference room hours at: Wireless 
Telecommunications Bureau (Gettysburg), Public Reference Room, 1270 
Fairfield Road, Gettysburg, PA 17325.
    10. In addition, potential bidders may research the Bureau's 
licensing databases on the World Wide Web in order to determine which 
frequencies are already licensed to incumbent licensees. Because some 
of the incumbent paging licensing records have not yet been converted 
to the Bureau's new Universal Licensing System (ULS), potential bidders 
may have to select other databases to perform research for the 
frequency(s) of interest. The research options will allow potential 
bidders to download licensing data, as well as to perform queries 
online.
    11. 929 MHz band Incumbent Licenses: Licensing records for the 929 
MHz band are contained in the Bureau's Land Mobile database (not ULS) 
and may be researched on the internet at http://www.fcc.gov/wtb by 
selecting the ``Databases'' link at the top of the page. Potential 
bidders may download a copy of the licensing database by selecting 
``Download the Wireless Databases'' and choosing the appropriate files 
under ``Land Mobile Database Files--47 CFR parts 74, 90, and 95.'' 
Alternatively, potential bidders may query the Bureau's licensing 
records online by selecting ``Search the Wireless Database Online.''
    12. 931 MHz band Incumbent Licenses: Licensing records for the 931 
MHz band are contained in the Bureau's ULS and may be researched on the 
internet at http://www.fcc.gov/wtb/uls by selecting the ``License 
Search'' button in the left frame. Potential bidders may query the 
database online and download a copy of their search results if desired. 
The Bureau recommends that potential bidders select the ``Frequency'' 
option under License Search, specify the desired frequency, and use the 
``GeoSearch'' button at the bottom of the screen to limit their 
searches to a particular geographic area. Detailed instructions on 
using License Search (including frequency searches and the GeoSearch 
capability) and downloading query results are available online by 
selecting the ``?'' button at the bottom right-hand corner of the 
License Search screen.
    13. Potential bidders should direct questions regarding the search 
capabilities to the FCC Technical Support Hotline at (202) 414-1250 
(voice) or (202) 414-1255 (TTY), or via email at [email protected]. The 
hotline is available Monday through Friday, from 8:00 AM to 6:00 PM 
Eastern Time. In order to provide better service to the public, all 
calls to the hotline are recorded.
    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.
    Participation: Those wishing to participate in the auction must: 
Submit a short form application (FCC Form 175) electronically by 
January 20, 2000. Submit a sufficient upfront payment and a FCC 
Remittance Advice Form (FCC Form 159) by February 7, 2000.
    Comply with all provisions outlined in this Public Notice.
    Prohibition of Collusion: To ensure the competitiveness 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. See Paging

[[Page 48626]]

Reconsideration Order, 47 CFR 1.2105(c). 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 on their applications 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.
    15. 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 the Upper Band 
auction, for example, the rule would apply to any applicants bidding 
for the same MEA. 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. See 47 CFR 
1.2105(c). By signing their FCC 175 short form applications, applicants 
are certifying their compliance with Sec. 1.2105(c). In addition, 
Sec. 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. See 47 CFR 1.65. Thus, Sec. 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.
    Relevant Authority: Prospective bidders must familiarize themselves 
thoroughly with the Commission's Rules relating to Upper Band, 
contained in title 47, part 22 and part 90 of the Code of Federal 
Regulations, and those relating to application and auction procedures, 
contained in title 47, part 1 of the Code of Federal Regulations.
    16. Prospective bidders must also be thoroughly familiar with the 
procedures, terms and conditions (collectively, ``Terms'') contained in 
the Second Report and Order in PP Docket No. 93-253, 59 FR 22980 (April 
1994); the Second Memorandum Opinion and Order in PP Docket No. 93-253, 
59 FR 44272 (August 1994); the Erratum to the Second Memorandum Opinion 
and Order in PP Docket No. 93-253 (released October 19, 1994); Revision 
of Part 22 and Part 90 of the Commission's Rules to Facilitate Future 
Development of Paging Systems, WT Docket No. 96-18 Notice of Proposed 
Rulemaking, 61 FR 6199 (February 16, 1996) (``Paging Notice''); 
Revision of part 22 and part 90 of the Commission's Rules to Facilitate 
Future Development of Paging Systems, WT Docket No. 96-18, First Report 
and Order, 61 FR 21380 (May 10, 1996) (``Paging First Report and 
Order''); Revision of part 22 and part 90 of the Commission's Rules to 
Facilitate Future Development of Paging Systems, WT Docket No. 96-18, 
Order on Reconsideration of First Report and Order, 61 FR 34375 (July 
2, 1996) (``First Paging Reconsideration''); Revision of part 22 and 
part 90 of the Commission's Rules to Facilitate Future Development of 
Paging Systems, Second Report and Order and Further Notice of Proposed 
Rulemaking, (``Paging Second Report and Order''); Revision of part 22 
and part 90 of the Commission's Rules to Facilitate Future Development 
of Paging Systems, Memorandum Opinion and Order on Reconsideration and 
Third Report and Order, FCC 99-98 (released May 24, 1999) (``Paging 
Reconsideration Order'' and ``Paging Third Report and Order'').
    17. 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 its 
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 [email protected] 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 99-98 for the Paging Third Report and Order).
    Bidder Alerts: All applicants must certify on their FCC Form 175 
applications under penalty of perjury that they are legally, 
technically, financially and otherwise qualified to hold a license, and 
not in default on any payment for Commission licenses (including down 
payments) or delinquent on any non-tax debt owed to any Federal agency. 
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.
    18. 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.
    19. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use the Upper Bands 
Auction 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)

[[Page 48627]]

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.
    20. Information about deceptive telemarketing investment schemes is 
available from the FTC at (202) 362-2222 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 Upper Band proposals may also call the FCC National Call 
Center at (888) CALL-FCC (888) 225-5322).

2. Bidder Eligibility and Small Business Provisions

A. General Eligibility Criteria

    21. This auction offers 2,499 licensees in the 929 and 931 MHz 
bands. In the Paging Second Report and Order and Paging Reconsideration 
Order, the Commission adopted small business provisions to promote and 
facilitate the participation of small business in the Upper Bands 
Auction and in the provision of this and other commercial mobile radio 
services. General eligibility to provide Upper Bands service, subject 
to any restrictions outlined in the Commission's rules, is afforded to 
entities that are not precluded under 47 CFR 22.217 and 22.223.
(i) Determination of Revenues
    22. 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 interests, and the 
affiliates of the applicant and its controlling interests. Therefore, 
the gross revenues of all of the 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 
interests. Once principals or entities with a controlling interest are 
determined, only the revenues of those principals or entities will be 
counted in determining small business eligibility. The term ``control'' 
includes both de facto and de jure control of the applicant. Typically, 
ownership of at least 50.1 percent of an entity's voting stock 
evidences de jure control. De facto control is determined on a case-by-
case basis. See 47 CFR 1.211(b)(4). The following are some common 
indicia of control:
     The entity constitutes or appoints more than 50 percent of 
the board of directors or management committee;
     The entity has authority to appoint, promote, demote, and 
fire senior executive that control the day-to-day activities of the 
licensee; or
     The entity plays an integral role in management decisions.
(ii) Small or Very Small Business Consortia
    23. 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 
Sec. 22.223. Thus, each consortium member must disclose its gross 
revenues along with those of its affiliates, controlling interests, and 
controlling interests' affiliates. The Bureau notes that although the 
gross revenues of the consortium members will not be aggregated for 
purposes of determining eligibility for small or very small business 
credits, this information must be provided to ensure that each 
individual consortium member qualifies for any bidding credit awarded 
to the consortium.
(iii) Application Showing
    24. 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 small business or very small business (or 
consortiums of small or very small businesses) for this auction. See 47 
CFR 22.217 and 1.2105. Specifically, for the Upper Bands Auction, 
applicants applying to bid as small or very small businesses (or 
consortiums of very small businesses) will be required to file as 
Exhibit C to their FCC Form, 175 short form applications, all 
information required under Secs. 1.2105(a) and 1.2112(a). In addition, 
these applicants must disclose, separately and in the aggregate, the 
gross revenues for the preceding three years of each of the following: 
(a) the applicant; (b) the applicant's affiliates; (c) the applicant's 
controlling interests; and (d) the affiliates of the applicant's 
controlling interests. 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 interests, 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 as a consortium of very small or small 
businesses, this information must be provided for each consortium 
member.

B. Bidding Credits

    25. Applicants that qualify under the definitions of small 
business, and very small business (or consortia of very small, or small 
businesses as are set forth in 47 CFR 22.223, are eligible for a 
bidding credit that represents the amount by which a bidder's winning 
bids are discounted. The size of an Upper Bands bidding credit depends 
on the average gross revenues for the preceding three years of the 
bidder and its controlling interests and affiliates:
     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 Upper Bands licenses (``small business''); See 47 
CFR 22.223(b)(1)(ii).
     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 Upper Bands licenses (``very small business'') See 
47 CFR 22.223(b)(1)(i).
    26. Bidding credits are not cumulative: qualifying applicants 
receive either the 25 percent or the 35 percent bidding credit, but not 
both.
    27. Upper Bands 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, bidders 
should also note that there are no installment payment plans in the 
Upper Bands Auction.

3. Pre-Auction Procedures

A. Short-Form Application (FCC Form 175)--Due January 20, 2000

    28. In order to be eligible to bid in this auction, applicants must 
first submit an FCC Form 175 application. This application must be 
submitted electronically and received at the Commission by 5:30 p.m. ET 
on January 20, 2000. Late applications will not be accepted.
    29. 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 II.C, infra.

[[Page 48628]]

(i) Electronic Filing
    30. Applicants must file their FCC Form 175 applications 
electronically. See 47 CFR 1.2105(a). Applications may generally be 
filed at any time from January 7, 2000 until 5:30 p.m. ET on January 
20, 2000. 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 January 20, 
2000.
    31. Applicants must press the ``Submit Form 175'' button on the 
``Submit'' page of the electronic form to successfully submit their FCC 
Forms 175. Information about accessing the FCC Form 175 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.
(ii) Completion of the FCC Form 175
    32. Applicants should carefully review 47 CFR 1.105, and must 
complete all items on the FCC Form 175. Instructions for completing the 
FCC Form 175 are in Attachment C. Applicants are encouraged to begin 
preparing the required attachments for FCC Form 175 prior to submitting 
the form. Attachments C and D provide information on the required 
attachments and appropriate formats.
(iii) Electronic Review of FCC Form 175
    33. The FCC Form 175 review software may be used to review and 
print applicants' FCC Form 175 information. 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 no fee for 
accessing this system. See Attachment D for details.

B. Application Processing and Minor Corrections

    34. 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: (a) those applications accepted for filing 
(including FCC account numbers and the licenses for which they 
applied); (b) those applications rejected; and (c) those applications 
which have minor defects that may be corrected, and the deadline for 
filing such corrected applications.
    35. As described more fully in the Commission's Rules, after the 
January 20, 2000, 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, 
change control of the applicant, or change bidding credit eligibility).

C. Upfront Payments--Due February 7, 2000

    36. 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). After completing the FCC Form 175, filers will have 
access to an electronic version of the FCC Form 159. All upfront 
payments must be received at Mellon Bank in Pittsburgh, PA, by 6:00 
p.m. ET on February 7, 2000.
    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. 26 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 February 7, 2000 
deadline will result in dismissal of the application and 
disqualification from participation on the auction.
(i) Making Auction Payments by Wire Transfer
    37. Wire transfer payments must be received by 6:00 p.m. ET on 
February 7, 2000. 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 911-6878
OBI Field: (Skip one space between each information item)
``AUCTIONPAY''
TAXPAYER IDENTIFICATION NO. (Same as FCC Form 159, block 26)
PAYMENT TYPE CODE (enter ``A26U'')
FCC CODE 1 (same as FCC Form 159, block 23A: ``26'')
PAYER NAME (same as FCC Form 159, block 2)
LOCKBOX NO. #358400

    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.

    38. 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. 26.'' 
bidders may confirm receipt of their upfront payment at Mellon Bank by 
contacting their sending financial institution.
(ii) FCC Form 159
    39. A completed FCC Remittance Advice Form (FCC Form 159) must 
accompany each upfront payment. 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.
(iii) Amount of Upfront Payment
    40. In the Part 1 Order, Memorandum Opinion and Order, and Notice 
of Proposed Rule Making, the Commission delegated to the Bureau the 
authority and discretion to determine an appropriate upfront payment 
for each license being auctioned. In the Upper Bands Public Notice, the 
Bureau proposed upfront payments for the Upper Bands Auction. 
Specifically, the Bureau proposed calculating the upfront payment on a 
license-by-license basis, using the following formula:

$.0008* Pops (the result rounded to the nearest hundred for levels 
below $10,000 and to the nearest thousand for levels above $10,000) 
with a minimum of no less than $2,500 per license.

    41. Commenters request the adoption of a different upfront payment 
formula. They claim that upfront payments failing to adequately account 
for levels of incumbency are not a rational method of ensuring the bona 
fides of bidders, but rather, a penalty against prospective bidders. 
Commenters conclude that upfront payments for each license should 
reflect incumbency levels. Accordingly the commenters ask that the 
Commission adopt a formula similar to the 900 MHz SMR Auction, whereby 
incumbency levels are subtracted from the pops prior to formulating the 
payment.
    42. Although the Commission rejects the commenters' request to 
include incumbency levels on a license-by-license basis in the upfront 
payment formula, it recognizes that the proposed

[[Page 48629]]

formula should be adjusted to reflect generally high levels of 
incumbency in the service. Upon re-examination of the proposed formula, 
the Commission will modify it as follows:

$.0004* Pops (the result rounded to the nearest hundred for levels 
below $10,000 and to the nearest thousand for levels about $10,000) 
with a minimum of no less than $2,500 per license.

    43. The revised formula cuts in half the initial proposal for 
upfront payments but retains the $2,500 minimum level. The upfront 
payment is a refundable deposit meant to help ensure sincere bidding 
and to establish initial eligibility levels for use with the activity 
rules discussed in section 4.A.ii. Incorporating incumbency 
calculations for each of the 2,499 licenses in the auction would be an 
overly complex and burdensome process that would not further the 
purpose of an upfront payment, and as such, a general reduction in the 
formula is a more appropriate action.
    44. 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. 26, 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 that are 
associated with licenses on which the bidder wishes to place bids and 
hold high bids at any given time.
    45. In order 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.
    46. In calculating its 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. In order to make this calculation, an applicant should 
add together the upfront payments for all licenses on which it seeks to 
bid in any given round. Bidders should check their calculations 
carefully as there is no provision for increasing a bidder's maximum 
eligibility after the upfront payment deadline.

    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.
(iv) Applicant's Wire Transfer Information for Purposes of Refunds
    47. To ensure that refunds are processed in an expeditious manner, 
the Commission is requesting that all pertinent information be supplied 
to the FCC no later than February 7, 2000. Should the payer fail to 
submit the requested information, the refund will be returned to the 
original payer. The Commission will use wire transfers for all Auction 
No. 26 refunds. Please fax Wire Transfer Instructions to the FCC, 
Financial Operations Center, Auctions Accounting Group. ATTN: Michelle 
Bennett or Gail Glasser, at (202) 418-2843. For additional information 
please call (202) 418-1995.

Name of Bank
ABA Number
Contact and Phone Number
Account Number to Credit
Name of Account Holder
Correspondent Bank (if applicable)
ABA Number
Account 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.) 
Eligibility for refunds is discussed in 5.D., infra.

D. Auction Registration

    48. Approximately ten days before the auction, the FCC will issue a 
public notice announcing all qualified bidders for the auction. 
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 did on at least one of the 
licenses for which they applied.
    49. 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.
    50. 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 Friday, February 18, 2000 should 
contact the Auctions Hotline at 1-(888) 225-5322 (option #2) or (717) 
338-2888. 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.
    51. 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 St., 
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. Qualified 
bidders requiring replacement codes must call technical support prior 
to arriving at the FCC to arrange preparation of new codes.

E. Remote Electronic Bidding Software

    52. Qualified bidders are allowed to bid electronically or 
telephonically. Those choosing to bid electronically must purchase 
remote electronic bidding software for $175.00 by February 11, 2000. 
(Auction software is tailored to a specific auction, so software from 
prior auctions will not work for Auction No. 26.) A software order form 
is included in this public notice. If bidding telephonically, the 
appropriate phone number will be supplied in the second Federal Express 
mailing of confidential login codes.

F. Auction Seminar

    53. On January 7, 2000, the FCC will sponsor a free seminar for the 
Upper Bands Auction at the Federal Communications Commission, located 
at 445 12th Street, S.W., Washington, D.C. The seminar will provide 
attendees with information about pre-auction procedures, conduct of the 
auction, FCC remote bidding software, and the Paging Upper Band service 
and auction rules. The seminar will also provide a unique opportunity 
for prospective bidders to ask questions of FCC staff.
    54. To register, complete the registration form included with this 
Public Notice and submit it by Wednesday, January 5, 2000. 
Registrations are accepted on a first-come, first-served basis.

[[Page 48630]]

G. Mock Auction

    55. All applicants whose FCC form 175 and 175-S have been accepted 
for filing will be eligible to participate in a mock auction on 
February 22, 2000. 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.

4. Auction Event

    56. The first round of the auction will begin on February 24, 2000. 
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

(i) Simultaneous Multiple Round Auction
    57. In the Upper Bands Public Notice, the Commission proposed to 
award the 2,499 licenses in the Upper Bands in a single, simultaneous 
multiple round auction. One commenter requests that the Commission 
conduct auctions for the lower band frequencies before it conducts 
auctions for the 929 MHz and 931 MHz frequencies. This commenter argues 
that this sequence of auctions would reduce the economic hardship on 
small carriers on the lower bands that have been subject to the 
application freeze pending the start of any auctions. The Commission 
notes that the commenter made similar requests in WT Docket No. 96-18 
and PR Docket No. 93-253.
    58. In the Paging Reconsideration Order, the Commission directed 
the Bureau to resolve this issue after receiving comments pursuant to 
the release of the Upper Bands Public Notice. The commenter claim of 
general economic hardship for some licensees fails to reach the level 
of a compelling reason for altering its auction sequence at this 
juncture. Moreover, although the Commission has corrected the paging 
information database for the upper bands, the process of correcting the 
lower bands database remains. Auctioning the lower bands first under 
these circumstances would seriously delay the paging auctions. By 
auctioning the upper bands first, the Commission satisfies its 
statutory obligation to provide fast and efficient communications 
service to the public.
    59. Commenters further request that if the Upper Bands Auction 
occurs first, the Bureau should break the licenses up into smaller 
regional areas prior to auction and provide for five auctions instead 
of one. The Commission concludes that it is operationally feasible and 
appropriate to auction all 2,499 Upper Bands licenses through a single, 
simultaneous multiple round auction. Enhancements to the Commission's 
Automated Auction System software will allow bidders to easily view and 
access the licenses in Auction 26, including license group viewing 
options and search and sort capabilities. The commenter has failed to 
persuade us that the current structure would be burdensome or harmful 
to potential bidders. An auction of this nature provides for an economy 
of scale, whereas having five separate auctions could cause significant 
administrative burdens, to participants in multiple auctions and 
unnecessarily protract the auction process. Unless otherwise announced, 
bids will be accepted on all licenses in each round of the auction. 
This approach, the Commission believes, allows bidders to take 
advantage of any synergies that exist among licenses and is most 
administratively efficient.
(ii) Maximum Eligibility and Activity Rules
    60. In the Upper Bands Public Notice, the Commission 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. The Commission received no comments on this issue.
    61. For the Upper Bands Auction the Bureau will adopt this 
proposal. 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 
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. As there is no provision for increasing 
a bidder's maximum eligibility during the course of an auction (as 
described under ``Auction Stages'' as set forth in part 4.A.(iv)), 
prospective bidders are cautioned to calculate their upfront payments 
carefully.
    62. In order 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.
    63. 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 fund (see ``Minimum Accepted 
Bids'' in Part 4.B.(iii), 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. Because these procedures have proven 
successful in maintaining the pace of previous auctions as set forth 
under ``Auction Stages'' in Part 4.A.(iv) and ``Stage Transitions'' in 
Part 4.A.(v), infra, the Commission adopts them for the Upper Bands 
Auction.
(iii) Activity Rule Waivers and Reducing Eligibility
    64. In the Upper Bands Public Notice, the Commission 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. The 
commenter objects to this proposal and instead requests that the 
Commission allocate activity rule waivers for each stage of the auction 
(e.g., two or three per stage), with the caveat that any unused waivers 
could not be carried over to a subsequent stage. The commenter claims 
that this approach would give applicants sufficient flexibility 
consistent with the Commission's goals but would eliminate the use of 
waivers to keep the auction open for an inordinate period of time.
    65. Based upon its experience in previous auctions, the Commission 
adopts its proposal that each bidder be provide 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. The Commission 
is satisfied that its practice of providing five waivers over the 
course of the auction provides a sufficient number of waivers and 
maximum flexibility to the bidders, while safeguarding the integrity of 
the auction system. The Commission sees no evidence to support 
commenter's claim that the use of waivers under the guidelines could 
delay the closing of the auction rather than stimulate participation.

[[Page 48631]]

    66. 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: (a) there are no activity rule waivers available; or 
(b) bidder overrides the automatic application of a waiver by reducing 
eligibility, thereby meeting the minimum requirements.
    67. 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 as described in ``Auction 
Stages'' (see Part 4.A.(iv)). Once eligibility had been reduced, a 
bidder will not be presented to regain its lost bidding eligibility.
    68. 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.
(iv) Auction Stages
    69. The Commission concludes that the auction will be composed of 
three States, which are each defined by an increasing activity rule. 
The Commission will adopt its proposals for the activity rules. 
Paragraphs 70 through 73 provide activity levels for each stage of the 
auction. The Commission reserves the discretion to further alter the 
activity percentages before and/or during the auction.
    70. Stage One: During the first stage of the auction, a bidder 
desiring to maintain its current eligibility will be required to be 
active on licenses that represent at least 80 percent of its current 
bidding eligibility in each bidding round. Failure to maintain the 
required activity level will result in a reduction in the bidder's 
bidding eligibility in the next round of bidding (unless an activity 
rule waiver is used). During Stage One, reduced eligibility for the 
next round will be calculated by multiplying the sum of bidding units 
of the bidder's standing high bids and valid bids during the current 
round by five-fourths (\5/4\).
    71. Stage Two: During the second stage of the auction, a bidder 
desiring to maintain its current eligibility is required to be active 
on 90 percent of its current bidding eligibility. Failure to maintain 
the required activity level will result in a reduction in the bidder's 
bidding eligibility in the next round of bidding (unless an activity 
rule waiver is used). During Stage Two, reduced eligibility for the 
next round will be calculated by multiplying the sum of bidding units 
of the bidder's standing high bids and valid bids during the current 
round by ten-ninths (\10/9\).
    72. Stage Three: During the third stage of the auction, a bidder 
desiring to maintain its current eligibility is required to be active 
on 98 percent of its current bidding eligibility. Failure to maintain 
the required activity level will result in a reduction in the bidder's 
bidding eligibility in the next round of bidding (unless an activity 
rule waiver is used). In this stage, reduced eligibility for the next 
round will be calculated by multiplying the sum of bidding units of the 
bidder's standing high bids and valid bids during the current round by 
fifty-fortyninths (\50/49\).

    CAUTION: Since activity requirements increase in each auction 
stage, bidders must carefully check their current activity during 
the bidding period of the first round following a stage transition. 
This is especially critical for bidders that have standing high bids 
and do not plan to submit new bids. In past auctions, some bidders 
have inadvertently lost bidding eligibility or used an activity rule 
waiver because they did not re-verify their activity status at stage 
transitions. Bidders may check their activity against the required 
minimum activity level by using the bidding software's bidding 
module.

    73. Because the foregoing procedures have proven successful in 
maintaining proper pace in previous auctions, the Commission adopts 
them for the Upper Bands Auction.
(v) Stage Transitions
    74. In the Upper Bands Public Notice, the Commission proposed that 
the auction would advance to the next stage (i.e., from Stage One to 
Stage Two, and from Stage Two to Stage Three) when the auction activity 
level, as measured by the percentage of bidding units receiving new 
high bids, is below 10 percent for three consecutive rounds of bidding 
in each Stage. However, the Commission further proposed that the Bureau 
would retain the discretion to change stages unilaterally by 
announcement during the auction. This determination, would be based on 
a variety of measures of bidder activity, including, but not limited 
to, the auction activity level, the percentages of licenses (as 
measured in bidding units) on which there are new bids, the number of 
new bids, and the percentage increase in revenue. The Commission 
received no comments on this subject.
    75. The Commission adopts its proposal. Thus, the auction will 
start in Stage One. Under the Commission's general guidelines it will 
advance to the next stage (i.e., from Stage One to Stage Two, and from 
Stage Two to Stage Three) when, in each of three consecutive founds of 
bidding, the high bid has increased on 10 percent or less of the 
licenses being auctioned (as measured in bidding units). However, the 
Bureau will retain the discretion to regulate the pace of the auction 
by announcement. This determination will be based on a variety of 
measures of bidder activity, including, but not limited to, the auction 
activity level, the percentages of licenses (as measured in bidding 
units) on which there are new bids, the number of new bids, and the 
percentage increase in revenue. The Commission believes that these 
stage transition rules, having proven successful in prior auctions, are 
appropriate for use in the Paging Upper Bands Auction.
(vi) Auction Stopping Rules
    76. In the Paging Reconsideration Order, the Commission upheld the 
hybrid simultaneous/license-by-license stopping rule that had been 
adopted for the paging auctions in the Paging Second Report and Order, 
but retained discretion for the Bureau to use another stopping rule 
after seeking further comment on this issue in the pre-auction process. 
For the Upper Bands Auction, the Bureau proposed to employ a 
simultaneous stopping rule. The Bureau concluded that its proposal to 
conduct a series of auctions for the upper and lower bands would 
eliminate the risk of unnecessarily protracted auctions, and likewise, 
the need for a hybrid-stopping rule. The Commission also sought comment 
on a modified version of the simultaneous stopping rule. The modified 
version of the stopping rule would 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. The Bureau 
further

[[Page 48632]]

sought comment on whether this modified stopping rule should be used 
unilaterally or only in stage three of the auction.
    77. The Bureau also proposed retaining 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 addition, the 
Commission proposed that the Bureau reserve the right to declare that 
the auction will end after a specified number of additional rounds 
(``special stopping rule''). If the Bureau 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 Commission proposed to 
exercise this option only in 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.
    78. All four commenters support the use of the hybrid license by 
license stopping rule. Commenters state that the sheer volume of the 
auction, coupled with the number of encumbered areas requires the 
modified approach. They claim that there will be numerous MEAs in which 
the bidding will be light, and even some instances where no bids at all 
are placed in the first round. Other geographic areas are likely to 
inspire intense bidding wars. They also urge the use of the hybrid rule 
because the simultaneous stopping rule would encourage speculators.
    79. The Commission adopts its proposals concerning the stopping 
rule. Adoption of these rules, the Commission believes, is most 
appropriate for the Upper Bands Auction because its experience in prior 
auctions demonstrates that the simultaneous stopping rule balanced the 
interests of administrative efficiency and maximum bidder 
participation. The substitutability between and among licenses in 
different geographic areas and the importance of preserving the ability 
of bidders to pursue backup strategies support the use of a 
simultaneous stopping rule. Further, the Commission also can regulate 
the pace of the auction by conducting more bidding rounds per day, 
employing bid increments that reflect activity levels as specific 
markets and accelerating stage changes.
    80. Thus, bidding will remain open on all licenses until bidding 
stops on every license. 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. After the first such round, bidding closes simultaneously on all 
licenses. In addition, 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 
stopping rule procedure. The Commission will notify bidders in advance 
of implementing any change to its simultaneous stopping rule.
    81. The Bureau also retains the discretion to keep the auction open 
even if no new acceptable bids or proactive waivers are submitted, and 
no previous high bids are withdrawn in a round. 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).
    82. Further, in its discretion, the Bureau reserves the right to 
invoke the ``special stopping rule.'' If the Commission 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. Before exercising this option, 
the Commission 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 adjusting the 
amount of the minimum bid increments for the licenses.
(vii) Auction Delay, Suspension, or Cancellation
    83. In the Paging Upper Bands Public Notice, the Commission 
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.
    84. Because this approach has proven effective in resolving exigent 
circumstances in previous auctions, the Commission 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, 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 Commission emphasizes 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

(I) Round Structure
    85. 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. Details regarding round results formats and locations 
will be included in the bidder information package.
    86. The Commission 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 Commission 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.
(II) Reserve Price or Minimum Opening Bid
a. Background
    87. The Balanced Budget Act of 1997 calls upon the Commission to 
prescribe methods by which a reasonable reserve price will be required 
or a minimum opening bid established when Commission licenses are 
subject to auction (i.e., because they are mutually exclusive), unless 
the Commission determines that a reserve price or minimum opening bid 
is not in the public interest. Consistent with this mandate, the 
Commission directed the Wireless Telecommunications Bureau (``Bureau'') 
to seek comment on the use of a minimum opening bid and/or reserve 
price prior to the start of each

[[Page 48633]]

auction. Among other factors, the Bureau must consider the amount of 
spectrum being auctioned, levels of incumbency, the availability of 
technology to provide service, the size of the geographic service 
areas, the extent of interference with other spectrum bands, and any 
other relevant factors that could have an impact on valuation of the 
spectrum being auctioned. The Commission concluded that the Bureau 
should have the discretion to employ either or both of these mechanisms 
for future auctions.
    88. In the Upper Bands Public Notice, the Bureau proposed to 
establish minimum opening bids for the Upper Bands Auction and to 
retain discretion to lower the minimum opening bids. Specifically, for 
Auction No. 26, the Commission proposed the following license-by-
license formulas for calculating minimum opening bids, based on the 
population (``pops'') of the BTA:

$.001* Pops (the result to the nearest hundred for levels below $10,000 
and to the nearest thousand for levels above $10,000) with a minimum of 
no less than $2,500 per license.

In the alternative, the Bureau sought comment on whether, consistent 
with the Balanced Budget Act, the public interest would be served by 
having no minimum opening bid or reserve price.
b. Discussion
    89. All of the commenters support minimum bids instead of reserve 
pricing, but request the Commission to take into account incumbency 
levels in its calculation formula. The commenters argue that the 
current formula inflates the market prices of the licenses by ignoring 
the level of incumbency. Moreover, they claim that this minimum bid 
could actually be the only bid issued in many markets.
    90. The Commission will adopt minimum opening bids for the licenses 
in the Upper Bands Auction, which are reducible at the discretion of 
the Bureau. Congress has enacted a presumption that unless the 
Commission determines otherwise, minimum opening bids or reserve prices 
are in the public interest. Based on its experience in using minimum 
opening bids in other 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.
    91. The commenters' arguments regarding the encumbrance of many of 
the paging licenses have convinced the Commission that some proposed 
minimum bid values could be too high, and thus the Commission will 
establish minimum opening bids that are in many cases lower than its 
first proposed. Accordingly, the Commission will use the following 
formula for calculating minimum opening bids:

$.0005* Pops (the result rounded to the nearest hundred for levels 
below $10,000 and to the nearest thousand for levels above $10,000) 
with a minimum of no less than $2,500 per license.

    92. The Commission does not accept the commenters' suggestion 
formula setting minimum opening bids using a license-by-license 
encumbrance adjustment. The Commission finds that such an approach 
would be unnecessarily complex and inappropriate. Because the 
Commission's minimum opening bids serve primarily as a starting point 
for bidding, and do not play the role of traditional reserve prices of 
maximizing revenue raised in the auction, there is no need to base them 
upon complicated formulas involving considerable license-specific 
information. Moreover, simple formulas do not disadvantage any 
prospective bidders, because the Commission does not expect generally 
that winning bids will be equal to the minimum opening values, but 
rather well above those opening values.
    93. In addition, the Commission has not previously established 
minimum opening bid formulas on license-specific information such as 
encumbrance. While the Commission has differentiated among broad groups 
of licenses in setting minimum bid formulas in some past auctions 
(e.g., in the first LMDS auction, where the Commission established 
three ``tiers,'' for the A and B Block licenses), here it finds there 
is no need to establish groups with differing formulas. In particular, 
the Commission is aware of no significant difference in the average 
encumbrance of the 929 and 931 licenses, or other factors that would 
suggest treating the 929 and 931 licenses differently. Finally, the 
Commission notes that license-by-license encumbrance cannot be 
determined with certainty, but must be estimated using assumptions 
about relevant factors such as the height of towers and power levels 
being used by incumbents. Thus, it is not clear that a more complex, 
license-by-license encumbrance would necessarily produce superior 
information upon which to base minimum opening bids.
    94. The Commission concludes that the adopted formula presented 
here best meets the objectives of its authority in establishing 
reasonable minimum opening bids. The Commission has noted in the past 
that the reserve price and minimum opening bid provision is not a 
requirement to minimize auction revenue but rather a protection against 
assigning licenses at unacceptably low prices and that it must balance 
the revenue raising objective against its other public interest 
objectives in setting the minimum bid level. For the sake of auction 
integrity and fairness, minimum opening bids must be set in a manner 
that is consistent across licenses.
    95. As a final safeguard against unduly high pricing, minimum 
opening bids are reducible at the discretion of the Bureau. This will 
allow the Bureau flexibility to adjust the minimum opening bids if 
circumstances warrant. The Commission emphasizes, however, that 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 
bid on specific licenses.
(III) Minimum Accepted Bids
    96. In the Upper Bands Public Notice, the Commission proposed to 
use a smoothing methodology to calculate minimum bid increments. The 
Commission further proposed to retain the discretion to change the 
minimum bid increment if circumstances so dictate. One commenter 
commented on this particular issue. The commenter claims that the 
Bureau's approach will create unnecessarily large minimum bid 
increments because the increase would be based primarily on the number 
of bids. The result, the commenter says, would be that licensees would 
pay significantly more for authorizations without due justification.
    97. The Commission disagrees with the commenter's theory and 
declines to accept it for the Upper Bands Auction. Instead, the 
Commission will adopt its proposal for a smoothing formula. The 
smoothing methodology is designed to vary the increment for a given 
license between a maximum and minimum value based on the bidding 
activity on that license. This methodology allows the increments to be 
tailored to the activity level of a license, decreasing the time it 
takes for active licenses to reach their final value. The formula used 
to calculate this increment is included as Attachment J.

[[Page 48634]]

    98. The Commission adopts its proposal of initial values for the 
maximum of 0.2 or 20% of the license value, and a minimum of 0.1 or 10% 
of the license value. The Bureau retains the discretion to change the 
minimum bid increment if it determines that circumstances so dictate, 
such as raising the minimum increment toward the end of the auction to 
enable bids to reach their final values more quickly. The Bureau 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. 
The Bureau may also use its discretion to adjust the minimum bid 
increment without prior notice of circumstances warrant. As an 
alternative approach, the Bureau may, in its discretion, adjust the 
minimum bid increment gradually over a number of rounds as opposed to 
single large changes in the minimum bid increment (e.g., by raising the 
increment floor by one percent every round over the course of ten 
rounds). The Bureau also retains the discretion to use alternate 
methodologies for the Upper Band Auction if circumstances warrant.
(IV) High Bids
    99. 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 the 
Commission receives bids. 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.
(V) Bidding
    100. 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.
    101. Please note that all bidding will take place remotely 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. 26.
    102. 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.
    103. 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 strongly encouraged 
to download and print bid confirmations after they submit their bids.
    104. The bid entry screen of the Automated Auction System software 
for the Upper Band 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.
    105. 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.
    106. 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.
(VI) Bid Removal and Bid Withdrawal
    107. In the Upper Bands Public Notice, the Commission proposed bid 
removal and bid withdrawal rules. With respect to bid withdrawals, the 
Commission proposed limiting each bidder to withdrawals in no more than 
two rounds during the course of the auction. The two rounds in which 
withdrawals are utilized, the Commission proposed, would be at the 
bidder's discretion. The commenter objects to this proposal because the 
volume of licenses being auctioned might require bidders to utilize 
more withdrawals. The Commission rejects the commenter's request.
    108. In previous auctions, the Commission has detected bidder 
conduct that, arguably, may have constituted strategic bidding through 
the use of bid withdrawals. While the Commission continues 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, the Commission concludes that, for the Upper 
Bands Auction, adoption of a limit on their use to two rounds is the 
most appropriate outcome. By doing so the Commission believes it 
strikes a reasonable compromise that will allow bidders to use 
withdrawals. The Commission's decision on this issue is based upon its 
experience in prior auctions, particularly the PCS D, E and F block 
auction, 800 MHz SMR auction, and is in no way a reflection of its view 
regarding the likelihood of any speculation or ``gaming'' in this Upper 
Bands Auction.
    109. The Bureau 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

[[Page 48635]]

Commission's bid withdrawal procedures could result in the denial of 
the ability to bid on a market. 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 Commission 
will serve as a ``place holder'' on the license until a new acceptable 
bid is submitted on that license.
a. Procedures
    110. 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 with 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, about which the Commission received no comments, will 
enhance bidder flexibility during the auction. Therefore, the 
Commission adopts these procedures for the Upper Bands Auction.
    111. 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 4.B.(iv)
b. Calculation
    112. Generally, the Commission imposes payments on bidders that 
withdraw high bids during the course of an auction. Specifically, a 
bidder (``Bidder X'') that withdraws a high bid during the course of an 
auction is subject to bid withdrawal payment equal to the difference 
between the amount withdrawn and the amount of the subsequent winning 
bid. If a high bid is withdrawn on a license that remains unsold at the 
close of the auction, Bidder X will be required to make an interim 
payment equal to three (3) percent of the net amount of the withdrawn 
bid. This payment amount is deducted from any upfront payments or down 
payments that Bidder X has deposited with the Commission. If, in a 
subsequent auction, that license receives a valid bid in an amount 
equal to or greater than the withdrawn bid amount, then no final bid 
withdrawal payment will be assessed, and Bidder X may request a refund 
of the interim three (3) percent payment. If, in a subsequent auction, 
the selling price for that license is less than Bidder X's withdrawn 
bid amount, then Bidder X will be required to make a final bid 
withdrawal payment equal to either the difference between Bidder X's 
net withdrawn bid and the subsequent net winning bid, or the difference 
between Bidder X's gross withdrawn bid and the subsequent gross winning 
bid, whichever is less.
(VII) Round Results
    113. All of the commenters addressing the issue of disclosure 
support the Commission's proposal to disclose bidder identity, bid 
amounts, and withdrawal information during the course of the auction. 
The bids placed during a round will not be 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. Reports reflecting bidders' identities and bidder 
identification numbers for Auction No. 26 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.
(VIII) Auction Announcements
    114. 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.
(IX) Other Matters
    115. As noted in 3.B., 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 must make these changes on-line, and submit a 
letter to Amy Zoslov, Chief, Auctions and Industry Analysis Division, 
Wireless Telecommunications Bureau, Federal Communications Commission, 
445 12th Street, S.W., Washington, D.C. 20554 (and mail a separate copy 
to Arthur Lechtman, Auctions and Industry Analysis Division), briefly 
summarizing the changes. Questions about other changes should be 
directed to Arthur Lechtman of the FCC Auctions and industry Analysis 
Division at (202) 418-0660.

5. Post-Auction Procedures

A. Down Payments and Withdrawn Bid Payments

    116. 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.
    117. 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 4.B.(VI). (Upfront payments are applied first to 
satisfy any withdrawn bid liability, before being applied toward down 
payments.)

B. Long-Form Application

    118. Within ten business days after release of the auction closing 
notice, winning bidders must electronically submit a properly completed 
long-form application and required exhibits for each Upper Band 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

    119. 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 license 
or offer it to the next highest bidders (in descending order) at their 
final bids. See 47 CFR 1.2109(b) and (c). In addition, if a default or

[[Page 48636]]

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

    120. All applicants that submitted upfront payments but were not 
winning bidders for an Upper Bands 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.
    121. 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, Financial Operations Center, Auctions Accounting Group, 
Shirley Hanberry, 445 12th Street, S.W., Room 1-A824, Washington, D.C. 
20554.
    122. Bidders can also fax their request to the Auctions Accounting 
Group 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 
Michelle Bennett or Gail Glasser at (202) 418-1995.

Federal Communications Commission.
Thomas Sugrue,
Chief, Wireless Telecommunications Bureau.
[FR Doc. 99-23123 Filed 9-3-99; 8:45 am]
BILLING CODE 6712-01-M