[Federal Register Volume 65, Number 50 (Tuesday, March 14, 2000)]
[Notices]
[Pages 13749-13761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-6323]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-99-28-B (Auction No. 28); DA 99-2958]


Notice and Filing Requirements for Auction of Certain AM, FM, 
LPTV, and TV Broadcast Construction Permits Scheduled for March 21, 
2000; Minimum Opening Bids and Other Procedural Issues

AGENCY: Federal Communications Commission.

ACTION: Notice.

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

SUMMARY: This document announces the auction, procedures, reserve 
prices and minimum opening bids for the upcoming supplemental Closed 
Broadcast Auction (Auction No. 28) scheduled to commence on March 21, 
2000.

DATES: Auction No. 28 is scheduled for March 21, 2000.

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

SUPPLEMENTARY INFORMATION: This is a summary of a Public Notice 
released December 23, 1999. The complete text of the public notice, 
including Attachments A through H, 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

[[Page 13750]]

also 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 web site at http://www.fcc.gov.

A. Introduction

    1. This Public Notice announces the procedures, reserve prices and 
minimum opening bids for the upcoming supplemental Closed Broadcast 
Auction (Auction No. 28). On November 19, 1999, the Mass Media Bureau 
(``MMB'') and the Wireless Telecommunications Bureau (``WTB'') 
(collectively, the ``Bureaus'') released a Public Notice (Comment 
Public Notice) 64 FR 67569 (December 2, 1999). This Comment Public 
Notice sought comment on the establishment of reserve prices and 
minimum opening bids for the auction of AM, FM, LPTV, and TV Broadcast 
Construction Permits, in accordance with the Balanced Budget Act of 
1997. In addition, the Bureaus sought comment on a number of procedures 
to be used in Auction No. 28. In response to the Comment Public Notice, 
the Bureaus received comments from two applicants and no replies to 
these comments.

(i) Background

    2. All spectrum to be auctioned in Auction No. 28 is the subject of 
pending, mutually exclusive applications for referenced broadcast 
services for which the Federal Communications Commission (``FCC'') has 
not approved settlement agreements. In Auctions No. 25 and No. 27, 
recently completed, the Commission auctioned similar groups of 
construction permits. This Auction No. 28 shall dispose of broadcast 
applications not included in those earlier Auctions. Auction No. 28 
shall include mutually exclusive applications for full service FM, AM 
and television construction permits that were subject to the 
comparative hearing freeze pending resolution of the issues raised by 
Bechtel II (Bechtel v. FCC 10 F 3d 875 (D.C. Cir. 1993)). In addition, 
included in Auction No. 28 are certain mutually exclusive LPTV and TV 
translator displacement relief applications. Pursuant to the Broadcast 
First Report and Order 63 FR 48615 (September 11, 1998), participation 
in the auction will be limited to those applicants identified on 
Attachment A of this Public Notice. Applicants will be eligible to bid 
only on those construction permits for which they previously filed 
long-form applications (FCC Forms 301 or 349). Also pursuant to the 
Broadcast First Report and Order, the Bureaus will dismiss the 
previously-filed long-form application of any pending applicant failing 
to timely file a short-form application to participate in Auction No. 
28.

(ii) Construction Permits Auctioned

    3. A list of each of the groups of mutually exclusive applications 
(``MX Groups'') in Auction No. 28, along with its reserve price or 
minimum opening bid and the upfront payment is included on Attachment 
A. Pursuant to the Broadcast First Report and Order, in those specific 
situations where both non-commercial and commercial applicants for full 
power stations filed mutually exclusive long-form applications for non-
reserved band channels, auctions shall not be conducted at this time 
and these applications are not included on Attachment A.
    4. In response to the Comment Public Notice, Valley Public 
Television, Inc. (``Valley''), an applicant for a secondary television 
facility in MX Group SST10, raises arguments similar to those raised 
prior to the Closed Broadcast Auction (Auction No. 25) concerning 
whether so-called ``noncommercial educational'' secondary television 
applicants should be included in this auction. Valley maintains that 
(i) under section 309(j)(2)(C) of the Communications Act of 1934, as 
amended, 47 U.S.C. 309(j)(2)(C), noncommercial applicants are exempt 
from auction; (ii) non-profit organizations like itself cannot afford 
to participate in the auction; and (iii) the Commission should use a 
lottery to choose between the applicants in MX Group SST10. As we 
stated in the Public Notice, DA 99-1346, released July 9, 1999 (``July 
9 Public Notice''), in Auction No. 25, only those broadcast stations 
that are ``eligible to be licensed by the Commission as a noncommercial 
educational radio or television broadcast station'' are exempt from 
auction under sections 309(j)(2)(C) and 397(6) of the Communications 
Act. See July 9 Public Notice at 36 through 39. Because applicants for 
the secondary television services are not ``eligible to be licensed . . 
. as a noncommercial educational * * * television broadcast station'' 
they are not exempt from the auction. See Inquiry Into the Future Role 
of Low Power Television Broadcasting and Television Translators in the 
National Telecommunications System, Report and Order, FCC 82-107, 47 FR 
21468 (May 18, 1982), where the Commission stated that it would not 
license low power television and television translator stations on a 
noncommercial basis. Therefore, under the mandate of section 309(j)(1) 
of the Communications Act, the Commission has no discretion, as Valley 
suggests, to exempt these applications from auction or to use an 
alternative method to choose between mutually exclusive applicants in 
the secondary television services. See 47 U.S.C. 309(j)(1).

(iii) Daisy Chain MX Groups

    5. In some, but not all, of the MX Groups listed on Attachment A, a 
``daisy chain'' of mutual exclusivity exists whereby applications are 
directly mutually exclusive with certain applications in the MX Group 
but not others. A ``daisy chain'' occurs when two or more non-table, 
site-based applications propose service areas that do not directly 
overlap, but are linked together into a chain by the overlapping 
proposal(s) of other applicants. In such cases, the potential exists to 
grant more than one application and issue more than one construction 
permit per MX Group and remain consistent with the Commission's 
separation requirements relating to site-based services. The 
identification of ``daisy chains'' on Attachment A is provisional in 
nature, since the final configuration of groups cannot be ascertained 
until after the acceptance for filing of short-form (FCC Form 175) 
applications, at which point mutual exclusivity for auction purposes is 
determined. Further identification and enumeration of ``Daisy Chain MX 
Groups'' will be provided prior to the auction in the public notices 
announcing the status of the applications and listing qualified 
bidders. It is possible that some MX Groups provisionally identified 
here as constituting a daisy chain may, after the short-form filing 
deadline, become directly mutually exclusive. In such cases(s), the 
procedures set forth in this notice pertaining to ``Direct'' MX Groups 
become applicable.

B. Rules and Disclaimers

(i) Relevant Authority

    6. Prospective bidders must familiarize themselves thoroughly with 
the Commission's rules relating to broadcast auctions, contained in 
title 47, part 73 of the Code of Federal Regulations. Prospective 
bidders must also be thoroughly familiar with the procedures, terms and 
conditions contained in this Public Notice. See also the Comment Public 
Notice, the Broadcast First Report and Order, the Broadcast 
Reconsideration Order 64 FR 24523 (May 7, 1999), and the New Entrant 
Bidding Credit Reconsideration Order 64 FR 44856 (August 18, 1999). 
Potential bidders must also familiarize

[[Page 13751]]

themselves with part 1, subpart Q of the Commission's Rules concerning 
Competitive Bidding Proceedings.
    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 its public notices at any time, 
and will issue public notices to convey any new or supplemental 
information to bidders. It is the responsibility of all prospective 
bidders to remain current with all Commission rules and with all public 
notices pertaining to this auction. Copies of most Commission 
documents, including public notices, can be retrieved from the FCC 
Internet node via anonymous ftp @ftp.fcc.gov or the FCC World Wide Web 
site at http://www.fcc.gov/wtb/auctions. Additionally, documents may be 
obtained for a fee by calling the Commission's copy contractor, 
International Transcription Service, Inc. (ITS), at (202) 314-3070. 
When ordering documents from ITS, please provide the appropriate FCC 
number (e.g., FCC 98-194 for the Broadcast First Report and Order and 
FCC 99-74 for the Broadcast Reconsideration Order).

(ii) Prohibition of Collusion

    8. To ensure the competitiveness and integrity of the auction 
process, the Commission's rules prohibit applicants from communicating 
with each other during the auction about bids, bidding strategies, or 
settlements. In Auction No. 28, for example, the rule applies to all 
applicants within a MX Group. This prohibition becomes effective at the 
short-form application deadline (February 18, 2000) and ends on the 
post-auction down payment due date (to be determined). Bidders 
competing for the same construction permit(s) are encouraged not to use 
the same individual as an authorized bidder. A violation of the anti-
collusion rule could occur if an individual acts as the authorized 
bidder for two or more competing applicants, and conveys information 
concerning the substance of bids or bidding strategies between the 
bidders he or 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 technical consulting firm), a violation 
could similarly occur. At a minimum, in such a case, applicants should 
certify that precautionary steps have been taken to prevent 
communication between authorized bidders and that applicants and their 
bidding agents will comply with the anti-collusion rule. See Public 
Notice 63 FR 3572 (January 23, 1998). The Bureaus, however, caution 
that merely filing a certifying statement as part of an application 
will not outweigh specific evidence that collusive behavior has 
occurred nor will it preclude the initiation of an investigation when 
warranted. 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 FCC Form 175 short-form 
applications. By electronically submitting their FCC Form 175 short-
form applications, applicants are certifying their compliance with 
Secs. 1.2105(c) and 73.5002. 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, as promptly as possible and in any event within 30 days, of 
any substantial change that may be of decisional significance to that 
application. 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.

(iii) Due Diligence

    9. Potential bidders are solely responsible for investigating and 
evaluating all technical and marketplace factors that may have a 
bearing on the value of the facilities on which they intend to bid. The 
FCC makes no representations or warranties about the use of this 
spectrum for particular services. Applicants should be aware that a FCC 
auction represents an opportunity to become a FCC permittee in these 
services, subject to certain conditions and regulations. A FCC auction 
does not constitute an endorsement by the FCC of any particular 
services, technologies or products, nor does a FCC construction permit 
or license constitute a guarantee of business success. Applicants 
should perform their individual due diligence before proceeding as they 
would with any new business venture.
    10. Although applicants have had an extensive opportunity to 
conduct due diligence due to the length of time since the filing of 
their long-form applications, please remember that, as is the case with 
many business investment opportunities, some unscrupulous entrepreneurs 
may attempt to use the broadcast spectrum to deceive and defraud 
unsuspecting investors. Common warning signals of fraud include the 
following:
    The first contact is a ``cold call'' from a telemarketer, or is 
made in response to an inquiry prompted by a radio or television 
infomercial.
    The offering materials used to invest in the venture appear to be 
targeted at IRA funds, for example by including all documents and 
papers needed for the transfer of funds maintained in IRA accounts.
    The amount of the minimum investment is less than $25,000.
    The sales representative makes verbal representations that: (a) The 
Internal Revenue Service, Federal Trade Commission (``FTC''), 
Securities and Exchange Commission (``SEC''), FCC, or other government 
agency has approved the investment; (b) the investment is not subject 
to state or federal securities laws; or (c) the investment will yield 
unrealistically high short-term profits.
    In addition, the offering materials often include copies of actual 
FCC releases, or quotes from FCC personnel, giving the appearance of 
FCC knowledge or approval of the solicitation.
    11. Information about deceptive telemarketing investment schemes is 
available from the FTC at (202) 326-2222 and from the SEC at (202) 942-
7040. Complaints about specific deceptive telemarketing investment 
schemes should be directed to the FTC, the SEC, or the National Fraud 
Information Center at (800) 876-7060. Consumers who have concerns about 
specific proposals may also call the FCC Consumer Call Center at (888) 
CALL-FCC ((888) 225-5322).

(iv) Bidder Certification

    12. All applicants must certify on their short-form 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 construction 
permits or licenses (including down payments) or delinquent on any non-
tax debt owed to any Federal agency.
    Applicants should be aware that by filing their FCC Form 175 
applications, they are certifying that they have long-form applications 
on file and that there has been no change of control of their long-form 
applications that would render them ineligible to participate in the 
auction under 47 U.S.C. 309(l) or any other applicable Commission rule.
    13. Prospective bidders are reminded that submission of a false 
certification to the Commission is a serious matter that

[[Page 13752]]

may result in severe penalties, including monetary forfeitures, 
construction permit or license revocations, exclusion from 
participation in future auctions, and/or criminal prosecution.

(v) National Environmental Policy Act (NEPA) Requirements

    14. The permitee must comply with the Commission's rules regarding 
the National Environmental Policy Act (NEPA). The construction of a 
broadcast antenna facility is a federal action and the permitee must 
comply with the Commission's NEPA rules for each such facility. See 47 
CFR 1.1305 through 1.1319. The Commission's NEPA rules require that, 
among other things, the permitee 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 permitee must prepare 
environmental assessments for broadcast 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 permitee must also prepare 
environmental assessments for broadcast facilities that include high 
intensity white lights in residential neighborhoods or excessive radio 
frequency emission.

C. Auction Specifics

(i) Auction Date

    15. The auction will begin on March 21, 2000. The initial schedule 
for bidding will be announced by public notice at least one week before 
the start of the auction.

(ii) Auction Title

    16. Auction No. 28 (supplemental Closed Broadcast Auction).

(iii) Bidder Information

    17. Information necessary to participate in Auction No. 28 is 
contained in this Public Notice, the Comment Public Notice, the 
Broadcast First Report and Order, the Broadcast Reconsideration Order, 
the New Entrant Bidding Credit Reconsideration Order and the 
Commission's rules. Since the notice and comment rulemaking proceeding 
looking toward implementation of this auction was initiated nearly two 
years ago and since all eligible applicants have had their long-form 
applications on file for an extensive period of time, no separate 
Bidder Information Package will be provided. Applicants may access 
updated information about Auction No. 28 at the following address on 
WTB's web site: http://www.fcc.gov/wtb/auctions/auc28/auc28.html 
Applicants are strongly encouraged to check this site regularly for 
updated information regarding Auction No. 28.

(iv) Bidding Methodology

    18. The Commission will use two separate auction designs to award 
broadcast construction permits. For the Daisy Chain MX Groups, an 
electronic single round auction will be utilized. For the Direct MX 
Groups, an electronic simultaneous multiple round auction will be 
implemented. Bidding will be permitted only from remote locations, 
either electronically (by computer) or telephonically.

(v) Participation

    19. Those wishing to participate in the auction must: Submit a 
short-form application (FCC Form 175) by 5:30 p.m. ET, February 18, 
2000. Submit a sufficient upfront payment and a FCC Remittance Advice 
Form (FCC Form 159) by 6 p.m. ET, March 6, 2000.
    Comply with all provisions outlined in this Public Notice and 
applicable Commission rules.

(vi) Future Releases

    20. Further information regarding sequencing and length of bidding 
rounds and other procedural issues will be released in a future public 
notice.

(vii) Pre-Auction Dates and Deadlines

    21. The following are important events and deadlines related to 
Auction No. 28:
    Auction Seminar (free)--February 3, 2000.
    Short-Form Application (FCC Form 175)--February 18, 2000; 5:30 p.m. 
ET.
    Upfront Payments (via wire transfer)--March 6, 2000; 6:00 p.m. ET.
    Orders for Remote Bidding Software--March 7, 2000.
    Mock Auction--March 17, 2000.
    Auction Commencement--March 21, 2000.

(viii) List of Attachments to This Public Notice

    22. The following is a list of attachments available at the FCC:

Attachment A: Summary of Construction Permits to be auctioned, 
Reserve Prices, or Minimum Opening Bids, and Upfront Payments
Attachment B: Guidelines for Completion of FCC Form 175 and Exhibits
Attachment C: Auction-Specific Instructions for FCC Remittance 
Advice (FCC Form 159)
Attachment D: Electronic Filing and Review of FCC Form 175
Attachment E: Accessing the FCC Network Using Windows 95/98
Attachment F: FCC Remote Bidding Software Order Form
Attachment G: Summary Listing of Documents from the Commission and 
the Wireless Telecommunications Bureau Addressing the Application of 
the Anti-Collusion Rules
Attachment H: Auction Seminar Registration Form

(ix) Contact Information

    23. The following is general contact information relating to 
Auction No. 28:
    General Auction Information. General auction questions seminar 
registration, orders for remote bidding software.FCC Auctions Hotline: 
(888) CALL-FCC (888-225-5322) or direct (717) 338-2888. Hours of 
service: 8 a.m.--5:30 p.m. ET.
    Legal Auction Information. rules, policies, regulations. FCC 
Auctions Legal Branch: (202) 418-0660.
    Licensing Information. Rules, policies, regulations, licensing 
issues, due diligence, incumbency issues. FCC Mass Media Bureau: Audio 
licenses: (202) 418-2700; video licenses: (202) 418-1600.
    Technical Support. Electronic filing assistance, software 
downloading. FCC Auctions Technical Support Hotline: (202) 414-1250 
(Voice); (202) 414-1255 (TTY). Hours of service: 8 a.m.--6:00 p.m. ET.
    Payment Information. Wire transfers, refunds. FCC Auctions 
Accounting Branch: (202) 418-1995, (202) 418-2843 (Fax).
    Telephonic Bidding. Will be furnished only to qualified bidders.
    FCC Copy Contractor. Additional Copies of Commission Documents: 
International Transcription Services, Inc., 445 12th Street, SW Room 
CY-B400, Washington, DC 20554 (202) 314-3070.
    Press Information. Meribeth McCarrick (202) 418-0654.
    FCC Forms. (800) 418-3676 (outside Washington, DC) (202) 418-3676 
(in the Washington Area) http://www.fcc.gov/formpage
    FCC Internet Sites. http://www.fcc.gov; ftp://ftp.fcc.gov; http://
www.fcc.gov/wtb/auctions.

D. Short-Form (FCC FORM 175) Application Requirements

    24. Guidelines for completion of the short-form (FCC Form 175) are 
set forth on Attachment B to this Public Notice. The short-form 
application seeks the applicant's name and address, legal 
classification, status, bidding credit eligibility, identification of 
the

[[Page 13753]]

construction permit sought, the authorized bidders and contact persons.

(i) Ownership Disclosure Requirements (Form 175 Exhibit A)

    25. All applicants must comply with the uniform Part 1, ownership 
disclosure standards and provide information required by 
Sec. Sec. 1.2105 and 1.2112 of the Commission's rules. 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 Sec. 1.2112 of the Commission's rules. Bidders should note 
that, under Sec. 1.2112 (a)(4), the short-form must list, inter alia, 
the names, addresses and citizenship of any party holding options 
permitting the acquisition of a ten percent or greater equity interest 
in the applicant, as well as the amount and percentage held.

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

    26. 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 particular construction 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.
    27. A party holding a non-controlling, attributable interest in one 
applicant will be permitted to acquire an ownership interest in, form a 
consortium with, or enter into a joint bidding arrangement with other 
applicants for construction permits in the same MX Group 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. 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. Such subject areas include, but are not limited to, issues 
such as management, sales, local marketing agreements, rebroadcast 
agreements and other transactional arrangements.
(iii) New Entrant Bidding Credit (Form 175 Exhibit C)
    28. To fulfill its obligations under section 309(j) and further its 
long-standing commitment to the diversification of broadcast facility 
ownership, the Commission adopted a tiered New Entrant Bidding Credit 
for broadcast auction applicants with no, or very few, other media 
interests.
(a) Eligibility
    29. The interests of the bidder, and of any individuals or entities 
with an attributable interest in the bidder, in other media of mass 
communications shall be considered when determining a bidder's 
eligibility for the New Entrant Bidding Credit. The bidder's 
attributable interests shall be determined as of the short-form (FCC 
Form 175) filing deadline--February 18, 2000. Bidders intending to 
divest a media interest or make any other ownership changes, such as 
resignation of positional interests, in order to avoid attribution for 
purposes of qualifying for the New Entrant Bidding Credit must have 
consummated such divestment transactions or have completed such 
ownership changes by no later than the short-form filing deadline
    30. Under traditional broadcast attribution rules, those entities 
or individuals with an attributable interest in a bidder include:
     All officers and directors of a corporate bidder;
     Any owner of 5% or more of the voting stock of a corporate 
bidder;
     All partners and limited partners of a partnership bidder, 
unless the limited partners are sufficiently insulated; and
     All members of a limited liability company, unless 
insulated.
Bidders should note that the mass media attribution rules were recently 
revised. See Report and Order 64 FR 50622 (September 17, 1999).
    31. In cases where a bidder's spouse or close family member holds 
other media interests, such interests are not automatically 
attributable to the bidder. The Commission decides attribution issues 
in this context based on certain factors traditionally considered 
relevant. See Clarification of Commission Policies Regarding Spousal 
Attribution 57 FR 8845 (March 13, 1992)
    32. Bidders are also reminded that, by the New Entrant Bidding 
Credit Reconsideration Order, the Commission further refined the 
eligibility standards for the New Entrant Bidding Credit, judging it 
appropriate to attribute the media interests held by very substantial 
investors in, or creditors of, a bidder claiming new entrant status. 
Specifically, the attributable mass media interests held by an 
individual or entity with an equity and/or debt interest in a bidder 
shall be attributed to that bidder for purposes of determining its 
eligibility for the New Entrant Bidding Credit, if the equity and debt 
interests, in the aggregate, exceed 33% of the total asset value of the 
bidder, even if such an interest is non-voting.
    33. Generally, media interests will be attributable for purposes of 
the New Entrant Bidding Credit to the same extent that such other media 
interests are considered attributable for purposes of the broadcast 
multiple ownership rules. However, attributable interests held by a 
winning bidder in existing low power television, television translator 
or FM translator facilities will not be counted among the bidders' 
other mass media interests in determining its eligibility for a New 
Entrant Bidding Credit. A medium of mass communications is defined in 
47 CFR 73.5008 (b).
(b) Application Requirements
    34. In addition to the ownership information required on Exhibit A, 
applicants are required to file supporting documentation on Exhibit C 
to their FCC Form 175 short-form applications to establish that they 
satisfy the eligibility requirements to qualify for a New Entrant 
Bidding Credit. In addition, in those cases where a New Entrant Bidding 
Credit is being sought, a certification under penalty of perjury must 
be set forth in Exhibit C. An applicant claiming that it qualifies for 
a 35 percent new entrant bidding credit must certify under penalty of 
perjury that neither it nor any of its attributable interest holders 
have any attributable interests in any other media of mass 
communications. An applicant claiming that it qualifies for a 25 
percent new entrant bidding credit must certify under penalty of 
perjury that neither it nor any of its attributable interest holders 
have any attributable interests in more that three media of mass

[[Page 13754]]

communications, and must identify and describe such media of mass 
communications.
(c) Bidding Credits
    35. Applicants that qualify for the New Entrant Bidding Credit, as 
set forth in 47 CFR 73.5007, are eligible for a bidding credit that 
represents the amount by which a bidder's winning bids are discounted. 
The size of a New Entrant Bidding Credit depends on the number of 
ownership interests in other media of mass communications that are 
attributable to the bidder-entity and its attributable interest-
holders:
     A 35 percent bidding credit will be given to a winning 
bidder if it, and/or any individual or entity with an attributable 
interest in the winning bidder, has no attributable interest in any 
other media of mass communications, as defined in 47 CFR 73.5008;
     A 25 percent bidding credit will be given to a winning 
bidder if it, and/or any individual or entity with an attributable 
interest in the winning bidder, has an attributable interest in no more 
than three mass media facilities, as defined in 47 CFR 73.5008;
     No bidding credit will be given if any of the commonly 
owned mass media facilities serve the same area as the proposed 
broadcast station, as defined in 47 CFR 73.5007, or if the winning 
bidder, and/or any individual or entity with an attributable interest 
in the winning bidder, has attributable interests in more than three 
mass media facilities.
    36. Bidding credits are not cumulative; qualifying applicants 
receive either the 25 percent or the 35 percent bidding credit, but not 
both. Attributable interests are defined in 47 CFR 73.3555 and note 2 
of that section. Bidders should note that unjust enrichment provisions 
apply to a winning bidder that utilizes a bidding credit and 
subsequently seeks to assign or transfer control of its license or 
construction permit to an entity not qualifying for the same level of 
bidding credit.

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

    37. 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.

F. Minor Modifications to Short-Form FCC Form 175 Applications

    38. After the short-form filing deadline (February 18, 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 Jose Ochoa of the FCC Auctions and Industry Analysis 
Division at (202) 418-0660.

G. Maintaining Current Information in Short-Form (FCC Form 175) 
Applications

    39. 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. Applicants should also be aware that failure to report 
ownership changes rendering them ineligible to participate in the 
auction under section 309(l)(2) and applicable Commission rules, even 
if that failure is inadvertent, could result in serious financial 
penalties if they participate in competitive bidding and win a 
construction permit. These include default payments and revocation of 
construction permit(s) or license(s). Sec. 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.

H. Pre-Auction Procedures

(i) Short-Form Application (FCC Form 175)--Due February 18, 2000, 5:30 
p.m. ET

    40. In order to be eligible to bid in this auction, applicants must 
first electronically submit a FCC Form 175 application. This 
application must be received at the Commission by 5:30 p.m. ET on 
February 18, 2000. Late applications will not be accepted.
    41. There is no application fee required when filing a FCC Form 
175. However, to purchase bidding eligibility, an applicant must submit 
an upfront payment. See section 3.C, infra.
(a) Electronic Filing
    42. As of January 1, 1999, applications to participate in FCC 
auctions must be filed electronically. See Part 1 Third Report and 
Order 63 FR 770 (January 7, 1998). For Auction No. 28, applicants may 
file applications electronically beginning February 3, 2000. The system 
will generally be open for filing on a 24-hour basis. The Form 175 
filing window will remain open until 5:30 p.m. ET on February 18, 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 February 18, 2000. 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. Information about the electronic filing of the FCC Form 175 
application is included as Attachment D to this Public Notice.
(b) Completion of the FCC Form 175
    43. Applicants should carefully review 47 CFR 1.2105 and 73.5002 
and must complete all items on the FCC Form 175. Applicants should not 
consider their form submitted to the FCC until they press the ``Submit 
Form 175'' button on the ``Submit'' page and receive confirmation from 
the filing system that the form has been received by the Commission. 
Instructions for completing the FCC Form 175 are on Attachment B of 
this Public Notice.
(c) Electronic Review of FCC Form 175
    44. The FCC Form 175, review software may be used to review and 
print applicants' FCC Form 175 applications. Applicants may review 
their own completed FCC Form 175. Applicants may also view other 
applicants' completed FCC Form 175s after the filing deadline has 
passed and the FCC has issued a public notice

[[Page 13755]]

explaining the status of the applications. For this reason, it is 
important that applicants do not include their Taxpayer Identification 
Numbers (TINs) on any Exhibits to their FCC Form 175 applications. 
There are no fees for accessing this system or for submitting a FCC 
Form 175. Instructions for reviewing the FCC Form 175 are provided on 
Attachment D to this Public Notice.

(ii) Application Processing and Minor Corrections

    45. After the deadline for filing FCC Form 175 applications has 
passed, the FCC will process all timely submitted short-form 
applications to determine which are acceptable for filing and which are 
mutually exclusive. The Commission will subsequently issue a public 
notice identifying: (i) Those short-form applications that are 
acceptable for filing and are mutually exclusive (including FCC file 
numbers and the construction permits for which they applied); (ii) 
those applications rejected; and (iii) those short-form applications 
that have minor defects that may be corrected, and the deadline for 
filing such corrected applications. In each MX Group, the construction 
permit(s) will be auctioned if two or more short-form applications are 
accepted for filing. In any MX Group for which only one short-form 
application is accepted for filing, the construction permit will be 
removed from the auction and the related long-form application (FCC 
Forms 301 and 349) will be processed, and, if acceptable, will be 
granted.

(iii) Upfront Payments--Due March 6, 2000

    46. In order to be eligible to bid in the auction, applicants must 
submit an upfront payment accompanied by a FCC Remittance Advice Form 
(FCC Form 159). Applicants will have access to filling out an 
electronic version of the FCC Form 159 (July 1997 version) after 
completing the electronic FCC Form 175; however, the FCC Remittance 
Advice Form (FCC Form 159) must be printed and submitted by facsimile 
transmission to Mellon Bank in accordance with the instructions herein. 
Earlier versions of this form will not be accepted. All upfront 
payments must be received at Mellon Bank in Pittsburgh, Pennsylvania, 
by 6:00 p.m. ET on March 6, 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. 28 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 6, 
2000 deadline will result in no bidding eligibility being accorded the 
applicant.
(a) Making Auction Payments by Wire Transfer
    47. Wire transfer payments must be received by 6 p.m. ET on March 
6, 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. As the Commission is not accountable for the acts of an 
applicant's bank, bidders are urged to confirm before the deadline that 
their wire transfer payments have been properly and timely transmitted 
by their bank to Mellon Bank. Applicants will need the following 
information:

ABA Routing Number: 043000261
Receiving Bank: Mellon Pittsburgh
BNF: FCC/ACC 910-0198
OBI Field: (Skip one space between each information item)
``AUCTION PAY''
TAXPAYER IDENTIFICATION NO. (same as FCC Form 159, block 26)
PAYMENT TYPE CODE (enter ``A28U'')
FCC CODE 1 (same as FCC Form 159, block 23A: ``28'')
PAYER NAME (same as FCC Form 159, block 2)
LOCKBOX NO 358410

    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.

    48. 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. 28.'' 
Bidders are strongly encouraged to confirm receipt of their upfront 
payment at Mellon Bank by contacting their sending financial 
institution.
(b) FCC Form 159
    49. 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 this Public 
Notice as Attachment C.
(c) Amount of Upfront Payment
    50. In the Broadcast First Report and Order, the Commission 
delegated to the Bureaus the authority and discretion to determine an 
appropriate upfront payment for each construction permit being 
auctioned. See Order, Memorandum Opinion and Order and Notice of 
Proposed Rule Making 62 FR 13540 (March 21, 1997). In the Comment 
Public Notice, the Bureaus proposed certain upfront payments as set 
forth on Attachment A. No comments were received concerning such 
upfront payments. We therefore adopt our proposed upfront payment 
amounts for Auction No. 28.
    51. In calculating the upfront payment amount, an applicant should 
determine the maximum number of bidding units it may wish to bid on in 
any single round, and submit an upfront payment covering that number of 
bidding units. Bidders should check their calculations carefully, as 
there is no provision for increasing a bidder's maximum eligibility 
after the upfront payment deadline.

    Note: An applicant potentially eligible to bid in more than one 
MX Group may, on its FCC Form 175, indicate an intent to bid on 
every construction permit for which an underlying long-form has been 
filed, but its actual bidding in any round will be limited by the 
bidding units reflected in its upfront payment.

I. Auction Registration

    52. Approximately ten days before the auction, the FCC will issue a 
public notice announcing all qualified bidders for Auction No. 28. 
Qualified bidders are those applicants whose FCC Form 175 applications 
have been accepted for filing and that have timely submitted upfront 
payments sufficient to make them eligible to bid on at least one of the 
construction permits for which their application was accepted.
    53. 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.
    54. 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 Thursday, March 16, 2000 should 
contact the Auctions Hotline at (888) 225-5322

[[Page 13756]]

(888-CALL-FCC) (press option #2 at the prompt) or dial directly to 
(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.
    55. Qualified bidders should note that lost login codes, passwords 
or bidder identification numbers can be replaced only by appearing in 
person at the FCC Auction Headquarters located at 445--12th Street, SW, 
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. Bidders needing 
replacement codes must call technical support at 202-414-1250 prior to 
arriving at the FCC.

J. Remote Electronic Bidding Software

    56. Qualified bidders are strongly encouraged to bid 
electronically. Due to the fact that potential bidders have already 
paid substantial fees in connection with the filing of their long-form 
applications, the software packages required to participate in remote 
electronic bidding will be provided on request at no charge to the 
bidders in Auction No. 28. These software packages must be ordered by 
March 7, 2000. While bidders are free to copy the software for use by 
authorized bidders at different locations, the FCC auction system will 
accept electronic bids only from bidders who have requested the 
software. (Auction software is tailored to a specific auction, so 
software from prior auctions will not work for Auction No. 28.) A 
software order form is included as Attachment F to this Public Notice.

K. Mock Auction (March 17, 2000)

    57. All qualified bidders will be eligible to participate in a mock 
auction on March 17, 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.

L. Auction Event

    58. The first round of the auction will begin on March 21, 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.

(i) Auction Structure

    59. In the Comment Public Notice, the Commission proposed two 
separate auction designs to award these construction permits, one for 
the Daisy Chain MX Groups and one for the Direct MX Groups. The 
following auction designs will be utilized.
(a) Single Round Auction Design
    60. For Daisy Chain MX Groups, we proposed a single round in which 
each bidder must place a bid that meets or exceeds the established 
reserve price, in whole dollar amounts. No comments were received 
concerning this proposed auction design.
    61. We therefore conclude that utilizing an electronic single round 
auction will award the construction permits in Auction No. 28 that are 
in Daisy Chain MX Groups. The determination of the winning bidder in 
each of the Daisy Chain MX Groups shall be made by finding the set of 
bids on non-overlapping coverage areas that accrue to the greatest 
amount. For example, consider the case of an MX Group consisting of a 
``daisy chain'' of three potential bidders (Bidders 1, 2 and 3) 
interested in three construction permits in the MX Group (respectively 
Construction Permits A, B and C) such that A is MX'ed with B and B is 
MX'ed with C. This means that either A and C can both be assigned or B 
can be assigned, but not A and B, B and C or A, B and C. In order for 
Bidder 2 to win construction permit B, its bid would have to exceed the 
combined bids of Bidders 1 and 3 on construction permits A and C, 
respectively. All bids will be time-stamped and in the case of tie 
bids, the first complete combination of bids placed first in time shall 
be considered the winning bid combination. We have concluded that the 
disposition of the permits for the Daisy Chain MX Groups in this manner 
is most appropriate because of the complexity of their overlapping 
nature.
(b) Simultaneous Multiple Round Auction Design
    62. For Direct MX Groups, we proposed a single stage, simultaneous 
multiple round auction. No comments were received concerning this 
proposed auction design.
    63. We therefore conclude that the construction permits in Auction 
No. 28 for the Direct MX Groups will be awarded through a single, 
simultaneous multiple round auction. Unless otherwise announced, bids 
will be accepted on each of these construction permits in each round of 
this auction. This approach, we believe, allows for a more efficient 
auction process and, in cases where bidders are eligible to participate 
in multiple markets, allows them to take advantage of any synergies 
that exist among construction permits.
(c) Maximum Eligibility and Activity Rules
    64. In the 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. No 
comments were received concerning the eligibility rule.
    65. We adopt the maximum eligibility proposal for Auction No. 28. 
The amount of the upfront payment submitted by a bidder determines the 
initial maximum eligibility (in bidding units) for each bidder. Note 
again that upfront payments are not attributed to specific construction 
permits, but instead will be translated into bidding units to define a 
bidder's initial maximum eligibility. The total upfront payment defines 
the maximum number of bidding units on which the applicant will 
initially be permitted to bid.
    66. For Direct MX Groups, 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 waiting until the end to 
participate. Bidders are required to be active on 100 percent of their 
maximum eligibility during each round of the auction.
    67. A bidder is considered active on a construction permit in the 
current round if it is either the high bidder at the end of the 
previous bidding round and does not withdraw the high bid in the 
current round, or if it submits an acceptable bid in the current round 
(see ``Minimum Accepted Bids'' in section 4.B. (3), infra). A bidder's 
activity level in a round is the sum of the bidding units associated 
with construction permits on which the bidder is active. Required 
minimum activity levels ensure that an auction will proceed 
expeditiously and efficiently. Because such procedures have proven 
successful in maintaining the pace of previous auctions, we adopt them 
for Auction No. 28.
    68. For Daisy Chain MX Groups, because of the single round format, 
activity rules are not applicable.
(d) Activity Rule Waivers, Reducing Eligibility and Stopping Rules
    69. For Direct MX Groups, in the Comment Public Notice, we proposed 
that each bidder in the auction would be provided five activity rule 
waivers that may be used in any round during the

[[Page 13757]]

course of the auction. We also proposed to employ a simultaneous 
stopping rule, meaning that all construction permits would remain open 
until the first round in which no new acceptable bids, proactive 
waivers or withdrawals were received. We sought comment on a modified 
version of this rule, in which the auction would close for all 
construction permits after the first round in which no bidder submits a 
proactive waiver, a withdrawal, or a new bid on any construction permit 
on which it is not the standing high bidder. We further proposed to 
retain 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. Finally, we proposed to reserve the right to 
declare that the auction will end after a specified number of 
additional rounds (``special stopping rule''), meaning that the Bureaus 
would accept bids in the final round(s) only for construction permits 
on which the high bid increased in at least one of the preceding 
specified number of rounds. We 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. No comments were received on this proposal.
    70. Based upon our experience in previous auctions, we adopt our 
proposals and each bidder will be provided five activity rule waivers 
that may be used in any round during the course of the auction. Use of 
an activity rule waiver preserves the bidder's current bidding 
eligibility despite the bidder's activity in the current round being 
below the required minimum level. An activity rule waiver applies to an 
entire round of bidding and not to a particular construction permit. 
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: (i) There are no activity rule waivers available; or (ii) the 
bidder overrides the automatic application of a waiver by reducing 
eligibility, thereby meeting the minimum requirements.
    71. A bidder with insufficient activity that wants to reduce its 
bidding eligibility rather than use an activity rule waiver must 
affirmatively override the automatic waiver mechanism during the round 
by using the ``reduce eligibility'' function in the software. In this 
case, the bidder's eligibility is permanently reduced to bring the 
bidder into compliance with the activity rules. Once eligibility has 
been reduced, a bidder will not be permitted to regain its lost bidding 
eligibility.
    72. 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.
    73. Barring extraordinary circumstances, bidding will remain open 
on all construction permits until bidding stops on every construction 
permit. Thus, the auction will close for all construction permits when 
one round passes during which no bidder submits a new acceptable bid on 
any construction permit, applies a proactive waiver, or withdraws a 
previous high bid. In addition, however, the Bureaus retain the 
discretion to close the auction for all construction permits after the 
first round in which no bidder submits a proactive waiver, a 
withdrawal, or a new bid on any license on which it is not the standing 
high bidder. Thus, absent any other bidding activity, a bidder placing 
a new bid on a construction permit for which it is the standing high 
bidder would not keep the auction open under this modified stopping 
rule.
    74. The Bureaus retain the discretion however, to keep an auction 
open even if no new acceptable bids or proactive waivers are submitted, 
and no previous high bids are withdrawn. In this event, the effect will 
be the same as if a bidder had submitted a proactive waiver. Thus, the 
activity rule will apply as usual, and a bidder with insufficient 
activity will either lose bidding eligibility or use an activity rule 
waiver (if it has any left).
    75. Further, in their discretion, the Bureaus reserve the right to 
declare that the auction will end after a specified number of 
additional rounds (``special stopping rule''). If the FCC invokes this 
special stopping rule, it will accept bids in the final round(s) only 
for construction permits on which the high bid increased in at least 
one of the preceding specified number of rounds. The FCC intends to 
exercise this option only in extreme circumstances, such as where the 
auction is proceeding very slowly, where there is minimal overall 
bidding activity, or where it appears likely that the auction will not 
close within a reasonable period of time. Before exercising this 
option, the FCC is likely to attempt to increase the pace of the 
auction by, for example, increasing the number of bidding rounds per 
day, and/or increasing the amount of the minimum bid increments for the 
limited number of construction permits where there is still a high 
level of bidding activity.
    76. For Daisy Chain MX Groups, because of the single round format, 
activity rule waivers and reducing eligibility are not applicable. In 
the Comment Public Notice, we proposed to conduct a single round of 
bidding and declare the auction over at the conclusion of the two-hour 
bidding period. No comments were received on this issue.
(e) Auction Delay, Suspension, or Cancellation
    77. In the Comment Public Notice, we proposed that, by public 
notice or by announcement during the auction, the Bureaus 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 received no comments on this proposal.
    78. Because this approach has proven effective in resolving exigent 
circumstances in previous auctions, we will adopt our proposed auction 
cancellation rules. By public notice or by announcement during the 
auction, the Bureaus 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 Bureaus, 
in their 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 Bureaus to delay or suspend the 
auction. We emphasize that exercise of this authority is solely within 
the discretion of the Bureaus, and its use is not intended to be a 
substitute for situations in which bidders may wish to apply their 
activity rule waivers.

[[Page 13758]]

(ii) Bidding Procedures

(a) Round Structure
    79. The initial bidding schedule will be announced in the Qualified 
Bidder Public Notice at least one week before the start of the auction, 
and will be included in the registration mailings.
    80. For Daisy Chain MX Groups, a single two-hour bidding round will 
be conducted after which the auction will close.
    81. For Direct MX Groups, the simultaneous multiple round formats 
will consist of sequential bidding rounds, each followed by the release 
of round results. Details regarding the location and format of round 
results will be included in the Qualified Bidder Public Notice.
    82. 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.
(b) Reserve Price or Minimum Opening Bid
    83. 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 FCC licenses or construction 
permits are subject to auction (i.e., because the applications are 
mutually exclusive), unless the Commission determines that a reserve 
price or minimum bid is not in the public interest. Consistent with 
this mandate, the Commission has directed the Bureaus to seek comment 
on the use of minimum opening bids and/or reserve prices prior to the 
start of each broadcast auction. See Part 1 Third Report and Order, 63 
FR 2315 (January 15, 1998). This is consistent with policy applied in 
earlier spectrum auctions, including the recently completed Closed 
Broadcast Auctions. The Commission has concluded that either or both of 
these mechanisms may be employed for auctions and has delegated the 
requisite authority to make determinations regarding the 
appropriateness of employing either or both.
    84. The Bureaus proposed to establish reserve prices for the Daisy 
Chain MX Groups and minimum opening bids for Direct MX Groups. The 
Bureaus also sought comment on whether, consistent with the Budget Act, 
the public interest would be served by having no minimum opening bid or 
reserve price.
    85. A comment was received by Irene Rodriquez Diaz de McComas 
(``McComas'') addressing the minimum opening bid for Channel 247A, Rio 
Grande, Puerto Rico, MX Group FM 1. McComas specifically objects to the 
minimum opening bid amount established for the Rio Grande construction 
permit in light of the potential conflict between the Channel 247A 
allotment at Rio Grande, Puerto Rico and a 100kw station operating on 
channel 247 in the British Virgin Islands, as noted in the 1990 Hearing 
Designation Order setting the mutually exclusive Rio Grande applicants 
for comparative hearing. McComas contends that the uncertainty 
regarding interference forecloses a fair evaluation of the frequency. 
However, as discussed in the December 15, 1999 staff letter addressing 
the issue, the matter has since been resolved, and there remains 
neither a cloud over the Rio Grande allotment, nor a need for further 
Commission pronouncement on the matter.
    86. Therefore, we adopt the reserve prices proposed for the 
construction permits in Daisy Chain MX Groups and reducible minimum 
opening bids proposed for construction permits in the Direct MX Groups 
as listed on Attachment A. Reducible minimum opening bids for the 
Direct MX Groups will allow the Bureaus 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. During the course of the auction, the Bureaus will not 
entertain any bidder requests to reduce the reserve price or minimum 
opening bid on specific construction permits.
(c) Bidding
    87. All bidding will take place either through the automated 
bidding software or by telephonic bidding. (Telephonic bid assistants 
are required to use a script when handling bids placed by telephone. 
Telephonic bidders are therefore reminded to allow sufficient time to 
bid, by placing their calls well in advance of the close of a round, 
because four to five minutes are necessary to complete a bid 
submission.) There will be no on-site bidding during Auction No. 28.
    88. A bidder's ability to bid on specific construction permits in 
the first round of the auction is determined by two factors: (1) the 
construction permits applied for on FCC Form 175; and (2) the upfront 
payment amount deposited. The bid submission screens will be tailored 
for each bidder to include only those construction permits for which 
the bidder applied on its FCC Form 175.
    89. 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.
    90. For both Daisy Chain MX Groups and Direct MX Groups, a bidder 
may submit bids on any licenses for which it is eligible during a 
bidding round. Bidders also have the option of making multiple 
submissions and withdrawals in the 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. For the Direct MX Groups only, a bidder may withdraw high 
bids from previous bidding rounds, remove bids placed in the same 
bidding round, or permanently reduce eligibility.
    91. For Daisy Chain MX Groups, the bid entry screen of the 
Automated Auction System software for the Auction No. 28 allows bidders 
to place a bid that is equal to or greater than the established reserve 
price in a whole dollar amount.
    92. For Direct MX Groups, the bid entry screen of the Automated 
Auction System software for Auction No. 28 allows bidders to place 
multiple increment bids that 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 each construction permit.
    93. To place a bid on a particular construction permit, 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

[[Page 13759]]

will enter ``1'' in the bid increment multiplier column and press 
submit.
    94. For any construction permit on which the FCC is designated as 
the high bidder (i.e., a construction permit 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, and 
bidders should enter ``1'' in the Bid Mult field. Note that, in such 
cases, when the FCC is the designated high bidder 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.
(d) High Bids
    95. For Direct MX Groups, each bid will be date-and time-stamped 
when it is entered into the Auctions Automation System. In the event of 
tie bids, the Commission will identify the high bidder on the basis of 
the order in which the Commission, starting with the earliest bid 
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.
    96. For Daisy Chain MX Groups, the high bid will be determined as 
set forth herein in section 4.A.1 of this Public Notice.
(e) Bid Increments
    97. For Daisy Chain MX Groups, because of the single round auction 
design, bid increments are not applicable.
    98. For Direct MX Groups, in the Comment Public Notice, the Bureaus 
proposed to begin the bid level with established minimum opening bids 
and then apply a minimum bid increment of 10%, rounded to the nearest 
hundred dollars for high bids below $10,000.00 and rounded to the 
nearest thousand dollars for high bids of $10,000.00 or higher. No 
comments were received. We adopt the proposal contained in the Comment 
Public Notice.
    99. The Bureaus retain the discretion to change the minimum bid 
increment if they determine those circumstances so dictate. For 
example, the Bureaus may raise the minimum bid increment towards the 
end of the auction to speed the pace at which bids reach their final 
values. The Bureaus will do so by announcement in the Automated Auction 
System. In addition, the Bureaus retain the discretion to implement a 
dollar floor for the bid increment to further facilitate a timely close 
of the auction.
    100. Once there is a standing high bid on a construction permit, 
there will be a bid increment associated with that bid indicating the 
minimum amount by which the bid on that permit can be raised. For the 
Auction No. 28, we will use a flat, across-the-board increment of 10% 
to calculate minimum bid increments. The Bureaus retain the discretion 
to compute the minimum bid increment through other methodologies if it 
determines circumstances so dictate.
(f) Bid Removal and Bid Withdrawal
    101. For Daisy Chain MX Groups, bidders have the option to remove 
any bids placed before the end of the bidding round. A bidder removing 
a bid is not subject to withdrawal payments. Bid withdrawals (i.e., 
after the close of the single round), however, are not applicable to 
the single round auction.
    (i) Procedures for Direct MX Groups.
    102. Before the close of a bidding round, a bidder has the option 
of removing any bids placed in that round. By using the ``remove bid'' 
function in the software, a bidder may effectively ``unsubmit'' any bid 
placed within that round. A bidder removing a bid placed in the same 
round is not subject to withdrawal payments. Removing a bid will affect 
a bidder's activity for the round in which it is removed. This 
procedure will enhance bidder flexibility and, we believe, may serve to 
expedite the course of the auction.
    103. 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.
    104. In previous auctions, we have detected bidder conduct that, 
arguably, may have constituted strategic bidding through the use of bid 
withdrawals. While we continue to recognize the important role that bid 
withdrawals play in an auction, i.e., reducing risk associated with 
efforts to secure various construction permits in combination, we 
conclude that, for Auction No. 28, adoption of a limit on their use to 
two rounds. By doing so, we believe we strike a reasonable compromise 
that will allow bidders to use withdrawals.
    105. The Bureaus will therefore limit the number of rounds in which 
bidders may place withdrawals to two rounds. These rounds will be at 
the bidder's discretion and there will be no limit on the number of 
bids that may be withdrawn in either of these rounds. Withdrawals will 
still be subject to the bid withdrawal payments specified in 47 CFR 
1.2104(g), and 1.2109. Bidders are reminded that abuse of the 
Commission's bid withdrawal procedures could result in the denial of 
the ability to bid on a construction permit.
    106. If a high bid is withdrawn, the construction permit will be 
offered in the next round at the second highest bid price, which may be 
less than, or equal to (in the case of tie bids), the amount of the 
withdrawn bid, without any bid increment. The FCC will serve as a 
``place holder'' on the construction permit until a new acceptable bid 
is submitted on that permit.
    (ii) Withdrawal Payment Calculations for Direct MX Groups.
    107. Generally, a bidder that withdraws a standing high bid during 
the course of an auction will be subject to a payment equal to the 
lower of: (1) The difference between the net withdrawn bid and the 
subsequent net winning bid; or (2) the difference between the gross 
withdrawn bid and the subsequent gross winning bid for that 
construction permit. In the case of multiple withdrawals on a 
construction permit, the payment for the final withdrawer (i.e., that 
bidder who is the last bidder to withdraw before the license is won in 
an auction) will be computed as described herein. The payment for all 
other withdrawers will be computed as the lower of: (i) Either the 
difference between the net withdrawn bid and the highest of the 
subsequent net withdrawn bids or the difference between the net 
withdrawn bid and the subsequent net winning bid, whichever is less; or 
(ii) either the difference between the gross withdrawn bid and the 
highest of the subsequent gross withdrawn bids or the difference 
between the gross withdrawn bid and the subsequent gross winning bid, 
whichever is less. No withdrawal payment will be assessed for a 
withdrawn bid if either the subsequent gross or net winning bid or if 
any of the subsequent gross or net withdrawn bids exceed the gross or 
net amount of the withdrawn bid. In the event that a

[[Page 13760]]

construction permit for which there have been withdrawn bids is not won 
in the auction, then those bidders with outstanding withdrawals will 
have 3 percent of their withdrawn bid withheld until such time as the 
construction permit can be subject to competitive bidding in a 
subsequent auction and a final payment assigned. For further guidance, 
please refer to Secs. 1.2104 and 1.2109 of the Commission's rules. We 
adopt the proposed procedures for bid removal and bid withdrawal.
(g) Round Results
    108. Reports reflecting bidders' identities and bidder 
identification numbers for Auction No. 28 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.
    109. For Daisy Chain MX Groups, the auction results will be 
published at the conclusion of the single bidding round. The FCC will 
compile reports, which will include a list of all bids placed and high 
bidders for the designated permits.
    110. For Direct MX Groups, the bids placed during each bidding 
period are not published until the conclusion of that round. 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. Instructions for accessing the Round Results will be included 
in the Qualified Bidder Public Notice.
(h) Auction Announcements
    111. The FCC will use auction announcements to announce items such 
as schedule changes and round sequences and length. All FCC auction 
announcements will be available on the FCC remote electronic bidding 
system, as well as the Internet.

N. Post-Auction Procedures

(i) Down Payments and Withdrawn Bid Payments

    112. After bidding has ended, the Commission will issue a public 
notice declaring the auction closed, identifying the winning bids and 
bidders for each permit, and listing withdrawn bid payments due, if 
any.
    113. Within ten business days after release of the auction closing 
public 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. (6), supra. (Upfront payments 
are applied first to satisfy any withdrawn bid liability, before being 
applied toward down payments.)

(ii) Default and Disqualification

    114. 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 make full payment, or is 
otherwise disqualified) will be subject to the payments described in 47 
CFR 1.2104(g)(2). In such event the Commission may offer the 
construction permit to the next highest bidder (in descending order) at 
their final bid, or offer the spectrum in a later auction. See 47 CFR 
1.2109(b) and (c). In addition, if a default or disqualification 
involves gross misconduct, misrepresentation, or bad faith by an 
applicant, the Commission may declare the applicant and its principals 
ineligible to bid in future auctions, and may take any other action 
that it deems necessary, including institution of proceedings to revoke 
any existing construction permits or licenses held by the applicant. 
See 47 CFR 1.2109(d).

(iii) Applicant's Wire Transfer Information for Purposes of Refunds

    115. To ensure that refunds are processed in an expeditious manner, 
the Commission is requesting that all pertinent information as listed 
herein be supplied to the FCC. Once the request has been approved, a 
refund will be sent to the address provided on the FCC Form 159. Refund 
processing generally takes up to two weeks to complete. Should the 
payor fail to submit the requested information, the refund will be 
returned automatically to the original payor by check after 45 days of 
the closing of the auction. The Commission will use wire transfers for 
all Auction No. 28 refunds, under the condition that we have received 
proper instructions by the designated date. Please fax wire transfer 
instructions to the FCC, Financial Operations Center, Auctions 
Accounting Group, ATTN: Michelle Bennett or Gail Glasser at (202) 418-
2843.
    Please include the following information:

Applicant's Name & TIN #
Name and Address of Bank
ABA Number
Contact and Phone Number
Name of Account Holder
Address of Account Holder
Account Number to Credit
Correspondent Bank (if applicable)
ABA Number
Account Number

(Applicant's name, signature and date are required in order to process 
refund request. Applicants should also note that implementation of the 
Debt Collection Improvement Act of 1996 requires the FCC to obtain an 
applicant's Taxpayer Identification Number (TIN) before it can disburse 
refunds.)

(iv) Partial Refund of Remaining Upfront Payment Balance

    116. All applicants that submitted upfront payments but were not 
winning bidders for a construction permit in Auction No. 28 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.
    117. Direct MX Group 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 and a Taxpayer Identification Number (``TIN'') 
to: Federal Communications Commission, Auctions Accounting Branch, 
Attn: Michelle Bennett and Gail Glasser, 445 12th Street, SW, Room 1-
A824, Washington, DC 20554
    118. Bidders can also fax their request to the Auctions Accounting 
Branch at (202) 418-2843. Once the request has been approved, a refund 
will be sent to the address provided on the FCC Form 159. Refund 
processing generally takes up to two weeks to complete.

O. Contacts

    119. The following is a list of FCC contacts:
    Media Contact: Meribeth McCarrick at (202) 418-0654.
    Wireless Telecommunications Bureau: Auctions and Industry Analysis 
Division: Jose Ochoa, Legal Branch or Ruby Hough, Auctions Operations 
Branch, at (202) 418-0660, or Kathy

[[Page 13761]]

Garland or Bob Reagle, Auctions Operations Branch, at (717) 338-2888.
    Mass Media Bureau: Video Services Division: Shaun Maher at (202) 
418-2324 Audio Services Division: Lisa Scanlan at (202) 418-2700
    Office of Managing Director: Financial Operations: Michelle Bennett 
or Gail Glasser at (202) 418-1995.

Federal Communications Commission.
Louis J. Sigalos,
Deputy Chief, Auctions & Industry Analysis Division.
[FR Doc. 00-6323 Filed 3-13-00; 8:45 am]
BILLING CODE 6712-01-P