[Federal Register Volume 65, Number 37 (Thursday, February 24, 2000)]
[Notices]
[Pages 9310-9319]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4349]



[[Page 9309]]

-----------------------------------------------------------------------

Part II





Federal Communications Commission





-----------------------------------------------------------------------



Auction of Licenses For Fixed Point-to-Point Microwave Services in the 
38.6 to 40.0 GHz (39 GHz) Band; Auction Notice and Filing Requirements 
for 2,450 Licenses in the 39 GHz Band; Auction Scheduled for April 12, 
2000; Minimum Opening Bids and Other Procedural Issues; Notice

  Federal Register / Vol. 65, No. 37 / Thursday, February, 24, 2000 / 
Notices  

[[Page 9310]]


-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-99-30-B (Auction No. 30); DA 00-112]


Auction of Licenses for fixed Point-to-Point Microwave Services 
in the 38.6 to 40.0 GHz (39 GHz) Band; Auction Notice and Filing 
Requirements for 2,450 Licenses in the 39 GHz Band; Auction Scheduled 
for April 12, 2000; Minimum Opening Bids and Other Procedural Issues

AGENCY: Federal Communications Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This document announces the auction and procedures governing 
the auction of licenses for fixed point-to-point microwave services in 
the 38.6 to 40.0 GHz band (``Auction No. 30''), scheduled to commence 
on April 12, 2000. As discussed in greater detail herein, Auction No. 
30 will be composed of 2,450 licenses in the 38.6-40.0 GHz bands (``39 
GHz band''). Fourteen 100 megahertz licenses (paired 50 megahertz 
channel blocks) will be offered in each of 172 Economic Areas (EAs) and 
3 EA-like areas, covering the United States, the Northern Mariana 
Islands, Guam, American Samoa, the United States Virgin Islands and 
Puerto Rico.

DATES: Auction No. 30 is Scheduled for April 12, 2000.

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

SUPPLEMENTARY INFORMATION: This is a summary of a Public Notice 
released January 21, 2000 (``Auction Public Notice''). The complete 
text, including all attachments, of the Auction Public Notice is 
available for inspection and copying during normal business hours in 
the FCC Reference Center (Room CY-A257), 445 12th Street, SW, 
Washington, DC. It may also be purchased from the Commission's copy 
contractor, International Transcription Services, Inc., (ITS, Inc.) 
1231 20th Street, NW, Washington, DC 20035, (202) 857-3800. It is also 
available on the Commission's website at http://www.fcc.gov/wtb/auctions.

I. General Information

A. Introduction

    1. The Auction Public Notice announces the procedures and minimum 
opening bids for the upcoming auction of licenses for fixed point-to-
point microwave services in the 38.6 to 40.0 GHz band (``Auction No. 
30''). On November 23, 1999, the Wireless Telecommunications Bureau 
(``Bureau'') released a Public Notice, seeking comment on the 
establishment of reserve prices or minimum opening bids for Auction No. 
30, in accordance with the Balanced Budget Act of 1997. See ``Auction 
of Licenses for Fixed Point-to-Point Microwave Services in the 38.6 to 
40.0 GHz (``39 GHz) Band Scheduled for April 11, 2000; Comment Sought 
on Reserve Prices or Minimum Opening Bids and Other Auction 
Procedures,'' Public Notice, 64 FR 70708 (December 17, 1999) (``39 GHz 
Comment Public Notice''). See also Section 3002(a), Balanced Budget Act 
of 1997, Public Law 105-33, 111 Stat. 251 (1997) (``Budget Act''); 47 
U.S.C. 309(j)(4)(F). In addition, the Bureau sought comment on a number 
of procedures to be used in Auction No. 30. See 39 GHz Comment Public 
Notice at 2-3. The Bureau received seven comments and four reply 
comments in response to the 39 GHz Comment Public Notice. 
i. Background of Proceeding
    2. In March 1997, the Federal Communications Commission 
(``Commission'') released a Memorandum Opinion and Order that modified 
the interim rules for fixed point-to-point microwave services in the 39 
GHz band. See Amendment of the Commission's Rules Regarding the 37.0-
38.6 GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-183, Memorandum 
Opinion and Order, 62 FR 14015 (March 25, 1997) (``Memorandum Opinion 
and Order''). On November 3, 1997, the Commission released a Report and 
Order and Second Notice of Proposed Rule Making that revised the 
licensing and technical rules for the fixed point-to-point microwave 
service in the 39 GHz band, and dismissed certain 39 GHz applications 
and amendments thereto that had been held in abeyance. See Amendment of 
the Commission's Rules Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz 
Bands, ET Docket No. 95-183, Report and Order and Second Notice of 
Proposed Rule Making, 63 FR 6079 (February 6, 1998) (``Report and Order 
and Second NPRM''). On July 29, 1999, the Commission released a Second 
Memorandum Opinion and Order that addressed pleadings filed concerning 
these two Commission orders. See Amendment of the Commission's Rules 
Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz Bands, ET Docket No. 95-
183, Memorandum Opinion and Order, 64 FR 59663 (November 3, 1999) 
(``Second Memorandum Opinion and Order''). In the Second Memorandum 
Opinion and Order, the Commission revisits the 39 GHz band service 
areas, channelization plan, performance requirements, licensing rules 
and disposition of pending applications, and affirms application of the 
standard method for calculating unjust enrichment payments on a pro 
rata basis.
ii. Scheduling
    3. Parties responding to the 39 GHz Comment Public Notice raise 
several reasons for delaying the auction. Commenters contend that 
Auction No. 30 is scheduled to begin too close in time to the 
anticipated start date of the auction in the 746-764 MHz and 776-794 
MHz bands (``700 MHz bands''). They argue that companies interested in 
acquiring both 39 GHz and 700 MHz band spectrum will be forced to 
prepare for two auctions simultaneously, effectively prohibiting small 
and rural telecommunications companies from participating in one of the 
auctions. Commenters therefore contend that Auction No. 30 should be 
postponed. We disagree. We believe that the proposed schedule provides 
sufficient time for potential bidders interested in acquiring both 39 
GHz and 700 MHz band spectrum to analyze availability and due diligence 
issues. We therefore adopt, with a slight modification, our proposed 
auction schedule. Specifically, we will move the auction start date 
from April 11, 2000 to April 12, 2000.
iii. Licenses To Be Auctioned
    4. The licenses available in this auction consist of fourteen 100 
megahertz licenses (paired 50 megahertz channel blocks) in each of 172 
Economic Areas (EAs) and 3 EA-like areas, covering the United States, 
the Northern Mariana Islands, Guam, American Samoa, the United States 
Virgin Islands and Puerto Rico.

B. Rules and Disclaimers

i. Relevant Authority
    5. Prospective bidders must familiarize themselves thoroughly with 
the Commission's Rules relating to the 39 GHz band, contained in Title 
47, part 101 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.
    6. Prospective bidders must also be thoroughly familiar with the 
procedures, terms and conditions (collectively, ``Terms'') contained in 
the Memorandum Opinion and Order in ET Docket No. 95-183, 62 FR 14015 
(March 25, 1997); the Report and Order and Second Notice of Proposed 
Rule Making

[[Page 9311]]

in ET Docket No. 95-183, 63 FR 6079 (February 6, 1998); the Memorandum 
Opinion and Order in ET Docket No. 95-183, 64 FR 59663 (November 3, 
1999).
    7. The terms contained in the Commission's Rules, relevant orders 
and public notices are not negotiable. The Commission may amend or 
supplement the information contained in our public notices at any time, 
and will issue public notices to convey any new or supplemental 
information to bidders. It is the responsibility of all prospective 
bidders to remain current with all Commission Rules and with all public 
notices pertaining to this auction. Copies of most Commission 
documents, including public notices, can be retrieved from the FCC 
Internet node via anonymous ftp @ftp.fcc.gov or the FCC Auctions 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.
ii. Prohibition of Collusion
    8. 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. 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.
    9. The Bureau, however, cautions that merely filing a certifying 
statement as part of an application will not outweigh specific evidence 
that collusive behavior has occurred nor will it preclude the 
initiation of an investigation when warranted. In Auction No. 30, for 
example, the rule would apply to any applicants bidding for the same 
EA. Therefore, applicants that apply to bid for ``all markets'' would 
be precluded from communicating with all other applicants after filing 
the FCC Form 175. However, applicants may enter into bidding agreements 
before filing their FCC Form 175 short-form applications, as long as 
they disclose the existence of the agreement(s) in their Form 175 
short-form applications. By signing their FCC Form 175 short form 
applications, applicants are certifying their compliance with 47 CFR 
1.2105(c). In addition, 47 CFR 1.65 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, 47 CFR 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.
iii. Due Diligence
    10. 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 this proceeding are subject to judicial appeal and may be 
the subject of additional reconsideration or appeal. We note that 
resolution of these matters could have an impact on the availability of 
spectrum for EA licensees in the 39 GHz band. 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.
    11. Potential bidders are solely responsible for investigating and 
evaluating the degree to which such pending matters may affect spectrum 
availability in areas where they seek EA licenses. To aid potential 
bidders, Attachment B to the Auction Public Notice lists matters 
pending before the Commission that relate to licenses or applications 
in the 39 GHz band. The Commission makes no representations or 
guarantees that the listed matters are the only pending matters that 
could affect spectrum availability in the 39 GHz band.
    12. Copies of pleadings from pending cases relating to the 39 GHz 
band identified in Attachment B to the Auction Public Notice are 
available for public inspection and copying during normal reference 
room hours at: Office of Media Relations (OMR), Reference Operations 
Division, 445 Twelfth Street, SW, Room CY-C314, Washington, DC 20554.
    13. 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. Licensing 
records for the 39 GHz band are contained in the Bureau's Universal 
Licensing System 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.
    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.
    15. We remind potential bidders that the National 
Telecommunications and Information Administration (NTIA) has reviewed 
the Memorandum Opinion and Order addressing the 39 GHz band and 
provides related comments. See GHz Comment Public Notice, Attachment B.
    16. The Federal Communications Commission and the Department of 
Industry of Canada have signed an interim arrangement (``Arrangement'') 
regarding sharing between broadband wireless systems in the 39 GHz band 
along the U.S. and Canadian border. This Arrangement applies to both 
new facilities and facilities in existence prior to the date of the 
arrangement. The full text of the Arrangement has been placed on file 
at the International Bureau Reference Room CY--A257, located on

[[Page 9312]]

the Court Yard level of 445 12th Street, S.W. Copies are also available 
from the International Transcription Service at (202) 857-3800 and can 
be downloaded from the Commission's International Bureau Internet site 
at http://www.fcc.gov/ib/pnd/agree.
    17. Potential bidders should direct questions regarding the search 
capabilities described above 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.
iv. Incumbent Licensees
    18. Potential bidders are reminded that there are incumbent 
licensees operating on frequencies that are subject to the upcoming 
auction. Incumbent licensees retain the exclusive right to use those 
channels within their self-defined rectangular service areas. The 
holder of an EA authorization thus will be required to implement its 
facilities to protect incumbents from harmful interference. 
Specifically, an EA authorization holder will be required to coordinate 
with the incumbent licensees by using the interference protection 
criteria in 47 CFR 101.103. However, operational agreements are 
encouraged between the parties. Should an incumbent lose its license, 
the incumbent's service area(s) will convey to the relevant EA 
authorization holder and it will be then entitled to operate within the 
forfeited rectangular service area(s) located within its EA, without 
being subject to further competitive bidding.
v. Bidder Alerts
    19. 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.
    20. The FCC makes no representations or warranties about the use of 
this spectrum for particular services. Applicants should be aware that 
an FCC auction represents an opportunity to become an FCC licensee in 
this service, subject to certain conditions and regulations. An FCC 
auction does not constitute an endorsement by the FCC of any particular 
services, technologies or products, nor does an FCC license constitute 
a guarantee of business success. Applicants should perform their 
individual due diligence before proceeding as they would with any new 
business venture.
    21. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 30 to 
deceive and defraud unsuspecting investors. Common warning signals of 
fraud include the following: (1) 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; (2) 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; (3) the amount of the minimum investment is 
less than $25,000; and (4) the sales representative makes verbal 
representations that: (i) the Internal Revenue Service (``IRS''), 
Federal Trade Commission (``FTC''), Securities and Exchange Commission 
(``SEC''), FCC, or other government agency has approved the investment; 
(ii) the investment is not subject to state or federal securities laws; 
or (iii) the investment will yield unrealistically high short-term 
profits. In addition, the offering materials often include copies of 
actual FCC releases, or quotes from FCC personnel, giving the 
appearance of FCC knowledge or approval of the solicitation.
    22. Information about deceptive telemarketing investment schemes is 
available from the FTC at (202) 326-2222 and from the SEC at (202) 942-
7040. Complaints about specific deceptive telemarketing investment 
schemes should be directed to the FTC, the SEC, or the National Fraud 
Information Center at (800) 876-7060. Consumers who have concerns about 
specific 39 GHz proposals may also call the FCC National Call Center at 
(888) CALL-FCC ((888) 225-5322).
vi. National Environmental Policy Act (NEPA) Requirements
    23. The permittee must comply with the Commission's rules regarding 
the National Environmental Policy Act (NEPA). The construction of a 39 
GHz facility is a federal action and the permittee must comply with the 
Commission's NEPA rules for each such facility. See 47 CFR 1.1305-
1.1319. The Commission's NEPA rules require that, among other things, 
the permittee consult with expert agencies having NEPA 
responsibilities, including the U.S. Fish and Wildlife Service, the 
State Historic Preservation Office, the Army Corp of Engineers and the 
Federal Emergency Management Agency (through the local authority with 
jurisdiction over floodplains). The permittee must prepare 
environmental assessments for facilities that may have a significant 
impact in or on wilderness areas, wildlife preserves, threatened or 
endangered species or designated critical habitats, historical or 
archaeological sites, Indian religious sites, floodplains, and surface 
features. The permittee must also prepare environmental assessments for 
facilities that include high intensity white lights in residential 
neighborhoods or excessive radio frequency emission.

C. Auction Specifics

i. Auction Date
    24. The auction will begin on Wednesday, April 12, 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.
ii. Auction Title and Bidding Methodology
    25. The title of the upcoming auction of licenses for fixed point-
to-point microwave services in the 38.6 to 40.0 GHz band is: Auction 
No. 30. The bidding methodology for Auction No. 30 will be simultaneous 
multiple round bidding. Bidding will be permitted only from remote 
locations, either electronically (by computer) or telephonically.
iii. Pre-Auction Dates and Deadlines
    26. The following are important events and deadlines related to 
Auction No. 30:
     Auction Seminar: March 2, 2000.
     Short-Form Application Deadline: March 13, 2000; 5:30 p.m. 
ET.
     Upfront Payments (via wire transfer): March 27, 2000; 6:00 
p.m. ET.
     Orders for Remote Bidding Software: March 28, 2000; 5:30 
p.m. ET.
     Mock Auction: April 7, 2000.
iv. Auction Public Notice Attachments
    27. The following is the list of attachments contained in the 
Auction Public Notice:

Attachment A  39 GHz Licenses to be Auctioned, Upfront Payments, 
Minimum Opening Bids
Attachment B  Pending Cases in the 39 GHz Proceeding

[[Page 9313]]

Attachment C  Auction Seminar Registration Form
Attachment D  Electronic Filing and Review of FCC Form 175
Attachment E  Guidelines for Completing the FCC 175 and 159
Attachment F  FCC Remote Bidding Software Order Form
Attachment G  Exponential Smoothing Formula and Example
Attachment H  Accessing the FCC Network Using Windows 95/98
Attachment I  How to Monitor FCC Auctions Online
Attachment J  Listing of Documents Addressing Application of the Anti-
Collusion Rules
v. Participation
    28. Those wishing to participate in the auction must:
     Submit a short form application (FCC Form 175) 
electronically by 5:30 pm ET, March 13, 2000.
     Submit a sufficient upfront payment and a FCC Remittance 
Advice Form (FCC Form 159) by 6:00 pm ET, March 27, 2000.
     Comply with all provisions outlined in this Public Notice.
vi. General Contact Information
    29. The following is general contact information relating to 
Auction No. 30:
     Seminar Registration and Orders for Remote Bidding 
Software: (888) CALL-FCC [888-225-5322] or direct (717) 338-2888. Hours 
of service: 8 a.m.--5:30 p.m. ET.
     Auction Legal Information: Auctions and Industry Analysis 
Division, Legal Branch, (202) 418-0660.
     Licensing Information: Public Safety and Private Wireless 
Division, (202) 418-0680.
     Electronic Filing Assistance: FCC Auctions Technical 
Support Hotline: (202) 414-1250 (Voice), Software Downloading (202) 
414-1255 (TTY). Hours of service: 8 a.m.-6:00 p.m. ET.
     Wire transfers and refunds: FCC Auctions Accounting 
Branch: (202) 418-1995, (202) 418-2843 (Fax).
     FCC copy contractor for additional copies of Commission 
documents: International Transcription Services, Inc., 445 12th Street, 
SW Room CY-B400, Washington, DC 20554 (202) 314-3070.
     World Wide Web Sites: http://www.fcc.gov/formpage; http://www.fcc.gov/wtb/auctions; http://www.fcc.gov; ftp://ftp.fcc.gov.

II. Short-Form (FCC Form 175) Application Requirements

    30. Guidelines for completion of the short-form (FCC Form 175) are 
set forth on Attachment E to this Public Notice. The short-form 
application seeks the applicant's name and address, legal 
classification, status, bidding credit eligibility, identification of 
the construction permit sought, the authorized bidders and contact 
persons.

A. Ownership Disclosure Requirements (Form 175 Exhibit A)

    31. All applicants must comply with the uniform Part 1 ownership 
disclosure standards and provide information required by 47 CFR 1.2105 
and 47 CFR 1.2112. Specifically, in completing Form 175, applicants 
will be required to file an Exhibit A providing a full and complete 
statement of the ownership of the bidding entity. The ownership 
disclosure standards for the short-form are set forth in 47 CFR 1.2112.

B. Consortia and Joint Bidding Arrangements (Form 175 Exhibit B)

    32. Applicants will be required to identify on their short-form 
applications any parties with whom they have entered into any 
consortium arrangements, joint ventures, partnerships or other 
agreements or understandings which relate in any way to the licenses 
being auctioned, including any agreements relating to post-auction 
market structure. See 47 CFR 1.2105(a)(2)(viii); 1.2105(c)(1). 
Applicants will also be required to certify on their short-form 
applications that they have not entered into any explicit or implicit 
agreements, arrangements or understandings of any kind with any 
parties, other than those identified, regarding the amount of their 
bids, bidding strategies, or the licenses permits on which they will or 
will not bid. See 47 CFR 1.2105(a)(2)(ix). In cases where applicants 
have entered into consortia or joint bidding arrangements, applicants 
must submit an Exhibit B to the FCC Form 175.
    33. A party holding a non-controlling, attributable interest in one 
applicant will be permitted to acquire an ownership interest, form a 
consortium with, or enter into a joint bidding arrangement with other 
applicants for licenses in the same market provided that (i) the 
attributable interest holder certify that it has not and will not 
communicate with any party concerning the bids or bidding strategies of 
more than one of the applicants in which it holds an attributable 
interest, or with which it has formed a consortium or entered into a 
joint bidding arrangement; and (ii) the arrangements do not result in a 
change in control of any of the applicants. See 47 CFR 1.2105(c)(4)(i) 
and (ii). While the anti-collusion rules do not prohibit non-auction 
related business negotiations among auction applicants, bidders are 
reminded that certain discussions or exchanges could broach on 
impermissible subject matters because they may convey pricing 
information and bidding strategies.

C. Small Business Bidding Credits (Form 175 Exhibit C)

i. Eligibility
    34. Bidding credits are available to small businesses and very 
small businesses as defined in 47 CFR 101.1209(b). See also 47 CFR 
101.1208, 101.1209. 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. 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, the applicant and their affiliates 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. The following are some common indicia of control: (1) The 
entity constitutes or appoints more than 50 percent of the board of 
directors or management committee; (2) the entity has authority to 
appoint, promote, demote, and fire senior executives that control the 
day-to-day activities of the licensee; or (3) the entity plays an 
integral role in management decisions. 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 47 CFR 101.1209. Thus, each consortium 
member must disclose its gross revenues along with those of its 
affiliates, controlling interests, and controlling interests' 
affiliates. We note 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.

[[Page 9314]]

ii. Application Showing
    35. 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 
consortia of small or very small businesses) for this auction. See 47 
CFR 101.1209 and 1.2105. Specifically, for Auction No. 30, applicants 
applying to bid as small or very small businesses (or consortia of 
small or very small businesses) will be required to disclose on Exhibit 
C to their FCC Form 175 short-form applications, separately and in the 
aggregate, the gross revenues for the preceding three years of each of 
the following: (1) The applicant; (2) the applicant's affiliates; (3) 
the applicant's controlling interests; and (4) 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.
iii. Bidding Credits
    36. Applicants that qualify under the definitions of small 
business, and very small business (or consortia of small or very small 
businesses) as are set forth in 47 CFR 101.1209, are eligible for a 
bidding credit that represents the amount by which a bidder's winning 
bids are discounted. See 47 CFR 101.1208(a). The size of a 39 GHz band 
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 $40 million for 
the preceding three years receives a 25 percent discount on its winning 
bids for 39 GHz band licenses (``small business''). See 47 CFR 
01.1209(b)(1)(i). A bidder with average gross revenues of not more than 
$15 million for the preceding three years receives a 35 percent 
discount on its winning bids for 39 GHz band licenses (``very small 
business''). See 47 CFR 101.1209(b)(1)(ii). Bidding credits are not 
cumulative: qualifying applicants receive either the 25 percent or the 
35 percent bidding credit, but not both.
    37. 39 GHz band 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. See 47 CFR 
101.1208(b). Finally, bidders should also note that there are no 
installment payment plans in Auction No. 30.

D. Other Information (Form 175 Exhibits D and E)

    38. Applicants owned by minorities or women, as defined in 47 CFR 
1.2110(b)(2), may attach an exhibit (Exhibit D) regarding this status. 
This applicant status information is collected for statistical purposes 
only and assists the Commission in monitoring the participation of 
``designated entities'' in its auctions. Applicants wishing to submit 
additional information may do so in Exhibit E--Miscellaneous 
Information--to the FCC Form 175.

E. Minor Modifications to Short-Form Applications (FCC Form 175)

    39. After the short-form filing deadline (March 13, 2000), 
applicants may make only minor changes to their FCC Form 175 
applications. Applicants will not be permitted to make major 
modifications to their applications (e.g., change their construction 
permit selections or proposed service areas, change the certifying 
official or change control of the applicant or change bidding credits). 
See 47 CFR 1.2105. Permissible minor changes include, for example, 
deletion and addition of authorized bidders (to a maximum of three) and 
revision of exhibits. Applicants should 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, SW, Suite 4-A760 Washington, DC 20554, 
briefly summarizing the changes. Questions about other changes should 
be directed to Kenneth Burnley of the Auctions and Industry Analysis 
Division at (202) 418-0660.

F. Maintaining Current Information in Short-Form Applications

    40. Applicants have an obligation under 47 CFR 1.65, to maintain 
the completeness and accuracy of information in their short-form 
applications. Amendments reporting substantial changes of possible 
decisional significance in information contained in FCC Form175 
applications, as defined by 47 CFR 1.2105(b)(2), will not be accepted 
and may in some instances result in the dismissal of the FCC Form 175 
application. 47 CFR 1.65 amendments to pending long-form applications, 
however, should be filed after the auction and only by the winning 
bidder. The time for the filing of such amendments to the auction 
winners' long form applications will be announced by subsequent Public 
Notice.

III. Pre-Auction Procedures

A. Auction Seminar

    41. On March 2, 2000, the FCC will sponsor a free seminar for 
Auction No. 30 at the Federal Communications Commission, located at 445 
12th Street, SW, Washington, DC. The seminar will provide attendees 
with information about pre-auction procedures, conduct of the auction, 
FCC remote bidding software, and the 39 GHz band service and auction 
rules. The seminar will also provide an opportunity for prospective 
bidders to ask questions of FCC staff. To register, complete the 
registration form included in the Auction Public Notice and submit it 
by Tuesday, February 29, 2000. Registrations are accepted on a first-
come, first-served basis.

B. Short-Form Application (FCC Form 175)--Due March 13, 2000

    42. 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 March 13, 2000. Late applications will not be accepted. There is no 
application fee required when filing an FCC Form 175. However, to be 
eligible to bid, an applicant must submit an upfront payment.
i. Electronic Filing
    43. All short-form applications must be filed electronically. See 
47 CFR 1.2105(a). Applications may generally be filed at any time from 
March 2, 2000 until 5:30 p.m. ET on March 13, 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 March 13, 2000.
    44. Applicants must press the ``Submit Form 175'' button on the 
``Submit'' page of the electronic form to successfully submit their FCC 
Forms 175. Any form that is not submitted will not be reviewed by the 
FCC. Information about accessing the FCC Form 175 is included in 
Attachment D. Technical

[[Page 9315]]

support is available at (202) 414-1250 (voice) or (202) 414-1255 (text 
telephone (TTY)); the hours of service are 8 a.m. to 6 p.m. ET, Monday 
through Friday.
ii. Completion of the FCC Form 175
    45. Applicants should carefully review 47 CFR 1.2105, and must 
complete all items on the FCC Form 175. Instructions for completing the 
FCC Form 175 are in Attachment E of the Auction Public Notice. 
Applicants are encouraged to begin preparing the required attachments 
for FCC Form 175 prior to submitting the form. Attachments D and E of 
the Auction Public Notice provide information on the required 
attachments and appropriate formats.
iii. Electronic Review of FCC Form 175
    46. 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.

C. Application Processing and Minor Corrections

    47. 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: (i) Those applications accepted for filing 
(including FCC account numbers and the licenses for which they 
applied); (ii) those applications rejected; and (iii) those 
applications which have minor defects that may be corrected, and the 
deadline for filing such corrected applications.

D. Upfront Payments--Due March 27, 2000

    48. 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 March 27, 2000. Please note that all payments must be made 
in U.S. dollars and all payments must be made by wire transfer. Upfront 
payments for Auction No. 30 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 March 27, 2000 deadline will result in dismissal 
of the application and disqualification from participation in the 
auction.
i. Making Auction Payments by Wire Transfer
    49. Wire transfer payments must be received by 6:00 p.m. ET on 
March 27, 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 910-0180
     OBI Field: (Skip one space between each information item)
     ``AUCTIONPAY''
     TAXPAYER IDENTIFICATION NO.: (same as FCC Form 159, block 
26)
     PAYMENT TYPE CODE (enter ``A30U'')
     FCC CODE 1 (same as FCC Form 159, block 23A: ``30'')
     PAYER NAME (same as FCC Form 159, block 2)
     LOCKBOX NO. #358420


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


    50. 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. 30.'' 
Bidders should confirm receipt of their upfront payment at Mellon Bank 
by contacting their sending financial institution.
ii. FCC Form 159
    51. 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 
E to the Auction Public Notice.
iii. Amount of Upfront Payment
    52. 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. See Amendment of Part 1 of the 
Commission's Rules--Competitive Bidding Proceeding, WT Docket No. 97-
82, Order, Memorandum Opinion and Order and Notice of Proposed Rule 
Making, 63 FR 770 (January 7, 1998). In the Auction Public Notice, the 
Bureau adopted upfront payments for Auction No. 30. Specifically, the 
Bureau revised the proposed calculation of upfront payments on a 
license-by-license basis, using the following formula:
    For licenses with populations less than or equal to 1,000,000 pops 
the upfront calculation is:
    License population * $0.02 (the result rounded to the nearest 
hundred dollars for results of less than $10,000 and rounded to the 
nearest thousand dollars for results greater than $10,000.00) with a 
minimum of no less than $2,500.00 For licenses with populations with 
greater than 1,000,000 pops, the upfront calculation is: $0.02 per pop 
for each of the first million pops and $0.04 per pop for the remaining 
pops (the result rounded to the nearest thousand dollars).
    53. 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. 30, 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.
    54. 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. Additional 
information regarding

[[Page 9316]]

upfront payments can be found in Part III.D of the Auction Public 
Notice.

E. Auction Registration

    55. 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 bid on at least one of the 
licenses for which they applied.
    56. 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 contact address 
listed in the FCC Form 175.
    57. 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, April 7, 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.
    58. 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, DC 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.

F. Remote Electronic Bidding Software

    59. Qualified bidders are allowed to bid electronically or 
telephonically. Each bidder choosing to bid electronically must 
purchase remote electronic bidding software for $175.00 by Tuesday, 
March 28, 2000. Auction software is tailored to a specific auction, so 
software from prior auctions will not work for Auction No. 30. A 
software order form is included in the Auction Public Notice.

G. Mock Auction

    60. All applicants whose FCC Form 175 has been accepted for filing 
will be eligible to participate in a mock auction on April 7, 2000.

IV. Auction Event

    61. The first round of the auction will begin on April 12, 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
    62. In the 39 GHz Comment Public Notice, we proposed to award the 
2,450 licenses in the 39 GHz band in a single, simultaneous multiple 
round auction. We received no comment on this issue. We conclude that 
it is operationally feasible and appropriate to auction all 2,450 of 
the 39 GHz band licenses through a single, simultaneous multiple round 
auction. Unless otherwise announced, bids will be accepted on all 
licenses in each round of the auction.
ii. Maximum Eligibility and Activity Rules
    63. In the 39 GHz Comment Public Notice, we proposed that the 
amount of the upfront payment submitted by a bidder would determine the 
initial maximum eligibility (as measured in bidding units) for each 
bidder. We received no comments on this issue. For Auction No. 30 we 
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.
    64. 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.
    65. A bidder's activity level in a round is the sum of the bidding 
units associated with licenses on which the bidder is active. A bidder 
will be considered active on a license in the current round if it is 
either the high bidder at the end of the previous bidding round and 
does not withdraw the high bid in the current round, or if it submits 
an acceptable bid in the current round. The minimum required activity 
level will be expressed as a percentage of the bidder's maximum bidding 
eligibility, and increases by stage as the auction progresses.
iii. Activity Rule Waivers and Reducing Eligibility
    66. Each bidder will be provided five activity rule waivers that 
may be used in any round during the course of the auction. Use of an 
activity rule waiver preserves the bidder's current bidding eligibility 
despite the bidder's activity in the current round being below the 
required minimum level. An activity rule waiver applies to an entire 
round of bidding and not to a particular license.
    67. The FCC auction system assumes that bidders with insufficient 
activity would prefer to use an activity rule waiver (if available) 
rather than lose bidding eligibility. Therefore, the system will 
automatically apply a waiver (known as an ``automatic waiver'') at the 
end of any round where a bidder's activity level is below the minimum 
required unless: (1) There are no activity rule waivers available; or 
(2) the bidder overrides the automatic application of a waiver by 
reducing eligibility, thereby meeting the minimum requirements.
    68. 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 IV.A.4 of the Auction Public Notice). Once 
eligibility has been reduced, a bidder will not be permitted to regain 
its lost bidding eligibility.
    69. 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
    70. The auction will be composed of three stages, which are each 
defined by an increasing activity rule. The following are the activity 
levels for each stage of the auction. The FCC reserves the discretion 
to further alter the activity percentages before and/or during the 
auction.

[[Page 9317]]

    71. 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).
    72. 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).
    73. 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).
v. Stage Transitions
    74. In Auction No. 30, the auction would generally 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 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.
vi. Auction Stopping Rules
    75. 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. We will notify bidders in advance of 
implementing any change to our simultaneous stopping rule.
    76. 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).
    77. Further, in its discretion, the Bureau reserves the right to 
invoke the ``special stopping rule.'' If the FCC invokes this special 
stopping rule, it will accept bids in the final round(s) only for 
licenses on which the high bid increased in at least one of the 
preceding specified number of rounds. Before exercising this option, 
the FCC is likely to attempt to increase the pace of the auction by, 
for example, moving the auction into the next stage (where bidders 
would be required to maintain a higher level of bidding activity), 
increasing the number of bidding rounds per day, and/or adjusting the 
amount of the minimum bid increments for the licenses.
vi. Auction Delay, Suspension, or Cancellation
    78. For Auction No. 30, via 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. We emphasize that exercise 
of this authority is solely within the discretion of the Bureau, and 
its use is not intended to be a substitute for situations in which 
bidders may wish to apply their activity rule waivers.

B. Bidding Procedures

i. Round Structure
    79. 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. Multiple bidding rounds may be run in a given day.
    80. The FCC has discretion to change the bidding schedule in order 
to foster an auction pace that reasonably balances speed with the 
bidders' need to study round results and adjust their bidding 
strategies. The FCC may increase or decrease the amount of time for the 
bidding rounds and review periods, or the number of rounds per day, 
depending upon the bidding activity level and other factors.
ii. Reserve Price or Minimum Opening Bid
    81. We will adopt minimum opening bids for the licenses in Auction 
No. 30, 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.
    82. The commenters' arguments regarding incumbency on the 39 GHz 
band have convinced us that some proposed minimum opening bid values 
may not adequately have taken into account the level of incumbency in 
the 39 GHz band and thus the Bureau has established minimum opening 
bids that more accurately reflect the level of incumbency. Accordingly, 
upon re-examination of the proposed formula, we will modify it as 
follows:
    For licenses with populations less than or equal to 1,000,000 pops 
the minimum opening bid calculation is:
    License population * $0.02 (the result rounded to the nearest 
hundred dollars for results of less than $10,000 and rounded to the 
nearest thousand dollars for results greater than $10,000.00) with a 
minimum of no less than $2,500.00.
    For licenses with populations with greater than 1,000,000 pops, the 
minimum opening calculation is: $0.02 per pop for each of the first 
million pops and $0.04 per pop for the remaining pops (the result 
rounded to the nearest thousand dollars).

[[Page 9318]]

    83. 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. We emphasize, 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. Bid Increments and Minimum Accepted Bids
    84. In Auction No. 30, we will use a smoothing methodology to 
calculate minimum bid increments. We will further retain the discretion 
to change the minimum bid increment if circumstances so dictate. The 
formula used to calculate this increment is included as Attachment G to 
the Auction Public Notice.
    85. We adopt our proposal of initial values for the maximum of 0.2 
or 20 percent of the license value, and a minimum of 0.1 or 10 percent 
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 if 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, such as a flat percentage increment for all licenses, 
for Auction No. 30 if circumstances warrant.
iv. High Bids
    86. 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.
v. Bidding
    87. 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.
    88. 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. 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. More information 
on bidding is included in the Auction Public Notice. See Part IV.B.5 of 
the Auction Public Notice.
vi. Bid Removal and Bid Withdrawal
    89. The Bureau will 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 during the auction 
will still be subject to the bid withdrawal payments specified in 47 
CFR 1.2104(g). Bidders should note that abuse of the Commission's bid 
withdrawal procedures could result in the denial of the ability to bid 
on a market. 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.
    90. Before the close of a bidding round, a bidder has the option of 
removing any bids placed in that round. By using the ``remove bid'' 
function in the software, a bidder may effectively ``unsubmit'' any bid 
placed within that round. A bidder removing a bid placed in the same 
round is not subject to withdrawal payments. For information on 
withdrawal procedures and the calculation of withdrawal payments is 
included in the Auction Public Notice. See Part IV.B.6 of the Auction 
Public Notice.
vii. Round Results
    91. Bids placed during a round will not be published until the 
conclusion of that bidding period. After a round closes, the Commission 
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.
viii. Auction Announcements
    92. 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.
ix. Maintaining the Accuracy of FCC Form 175 Information
    93. After the short-form filing deadline, applicants may make only 
minor changes to their FCC Form 175 applications. 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, SW., 
Washington, DC 20554 (and mail a separate copy to Kenneth Burnley, 
Auctions and Industry Analysis Division), briefly summarizing the 
changes. Questions about other changes should be directed to Kenneth 
Burnley, Auctions and Industry Analysis Division at (202) 418-0660.

V. Post-Auction Procedures

A. Down Payments and Withdrawn Bid Payments

    94. 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.
    95. Within ten business days after release of the auction closing 
notice, each winning bidder must submit sufficient funds (in addition 
to its

[[Page 9319]]

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 Part IV.B.6. of the Auction Public 
Notice. Upfront payments are applied first to satisfy any withdrawn bid 
liability, before being applied toward down payments.

B. Long-Form Application

    96. 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 39 GHz 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

    97. 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 bidder (in descending order) at their 
final bid. See 47 CFR 1.2109(b) and (c). In addition, if a default or 
disqualification involves gross misconduct, misrepresentation, or bad 
faith by an applicant, the Commission may declare the applicant and its 
principals ineligible to bid in future auctions, and may take any other 
action that it deems necessary, including institution of proceedings to 
revoke any existing licenses held by the applicant. See 47 CFR 
1.2109(d).

D. Refund of Remaining Upfront Payment Balance

    98. All applicants that submitted upfront payments but were not 
winning bidders for a 39 GHz 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.
    99. 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, Attention: 
Shirley Hanberry, 445 12th Street, SW, Room 1-A824, Washington, DC 
20554.
    100. Bidders are encouraged to file their refund information as a 
confidential attachment to their short-form application when submitting 
the FCC Form 175. 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.
Louis Sigalos,
Deputy Chief, Auctions and Industry Analysis Division.
[FR Doc. 00-4349 Filed 2-18-00; 3:03 pm]
BILLING CODE 6712-01-U