[Federal Register Volume 65, Number 135 (Thursday, July 13, 2000)]
[Notices]
[Pages 43349-43361]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17672]


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

FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-00-36-B (Auction No. 36); DA 00-1388]


Auction of Licenses for 800 MHz Specialized Mobile Radio (SMR) 
Service Frequencies in the Lower 80 Channels

AGENCY: Federal Communications Commission.

ACTION: Notice.

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

SUMMARY: This document announces the procedures and minimum opening 
bids for the upcoming auction of licenses for the 800 MHz Specialized 
Mobile Radio Service Lower 80 Channels (``Auction No. 36''). It also 
announces that the beginning date of Auction No. 36 will be rescheduled 
to November 1, 2000. It was initially scheduled for September 13, 2000.

DATES: Auction No. 36 will begin November 1, 2000.

FOR FURTHER INFORMATION CONTACT: Auctions and Industry Analysis 
Division: M. Nicole Oden, Legal Branch

[[Page 43350]]

at (202) 418-0660, Kathy Garland or Bob Reagle, Auctions Operations 
Branch at (717) 338-2888; Commercial Wireless Division: JoAnn Epps, 
Licensing and Technical Analysis Branch at (202) 418-1342; Media 
Contact: Meribeth McCarrick at (202) 418-0654.

SUPPLEMENTARY INFORMATION: This is a summary of a public notice 
released June 23, 2000. The complete text of the public notice, 
including attachments, is available for inspection and copying during 
normal business hours in the FCC Reference Center (Room CY-A257), 445 
12th Street, SW, Washington, D.C. 20554. It may also be purchased from 
the Commission's copy contractor, International Transcription Services, 
Inc. (ITS, Inc.) 1231 20th Street, NW, Washington, D.C. 20036, (202) 
857-3800. It is also available on the Commission's web site at http://www.fcc.gov.

List of Attachments Available at the FCC

Attachment A--Licenses to be Auctioned
Attachment B--Auction Seminar Registration Form
Attachment C--Electronic Filing and Review of the FCC Form 175
Attachment D--Completing the FCC Form 175
Attachment E--Completing the FCC Form 159
Attachment F--Remote Bidding Software Order Form
Attachment G--Exponential Smoothing Formula and Calculation
Attachment H--Accessing the FCC Network
Attachment I--Summary of Documents Addressing the Anti-Collusin 
Rules

I. General Information

A. Introduction

    1. This public notice announces the procedures and minimum opening 
bids for the upcoming auction of licenses for the 800 MHz Specialized 
Mobile Radio Service Lower 80 Channels (``Auction No. 36''). On March 
23, 2000, in accordance with the Balanced Budget Act, Public Law 105-
33, 111 Stat. 251 (1997) (``Balanced Budget Act'') the Wireless 
Telecommunications Bureau (``Bureau'') released a public notice seeking 
comment on the establishment of reserve prices or minimum opening bids 
and the procedures to be used in Auction No. 36. See Auction of 
Licenses for 800 MHz Specialized Mobile Radio (SMR) Frequencies in the 
Lower 80 Channels Scheduled for September 13, 2000, (Auction No. 36 
Comment Public Notice) 65 FR 17272 (March 31, 2000). The Bureau 
received four comments and three reply comments in response to the 
Auction No. 36 Comment Public Notice.
    2. The Auction No. 36 Comment Public Notice announced that Auction 
No. 36 would begin on September 13, 2000. In this public notice, the 
Bureau announces that the beginning date of Auction No. 36 will be 
rescheduled to November 1, 2000.
i. Background of Proceeding
    3. On December 15, 1995, the Federal Communications Commission (FCC 
or Commission) released Amendment of Part 90 of the Commission's Rules 
to Facilitate Future Development of SMR Systems in the 800 MHz 
Frequency Band, First Report and Order, Eighth Report and Order, and 
Second Further Notice of Proposed Rule Making (800 MHz First Report and 
Order), 61 FR 6212 (February 16, 1996). This document established 
geographic area licensing, auction and service rules for the ``upper 
200'' 800 MHz SMR channels and set forth proposals for new licensing 
rules and auction procedures for the ``lower 230'' 800 MHz SMR 
channels. On July 10, 1997, the Commission released a Second Report and 
Order in the same proceeding (800 MHz Second Report and Order), 62 FR 
41190 (July 31, 1997), that resolved pending issues and established 
technical and operational rules for the ``lower 230'' 800 MHz SMR 
channels. On October 8, 1999, the Commission released a Memorandum 
Opinion and Order on Reconsideration (800 MHz Order on 
Reconsideration), 64 FR 71042 (December 20, 1999) that completed the 
implementation of a new licensing framework for the 800 MHz SMR 
service.
ii. Licenses To Be Auctioned
    4. The licenses available in this auction consist of sixteen non-
contiguous 5 channel blocks (0.25 MHz) in each of 172 Economic Areas 
(EAs) and 3 EA-like areas, covering the United States, possessions or 
territories in the Northern Mariana Islands and Guam, American Samoa, 
the United States Virgin Islands and Puerto Rico. These licenses are 
listed in this public notice under Attachment A. The following table 
contains the Block/Frequency Band Limits Cross-Reference List for the 
800 SMR Lower 80 Channels:

                      800 MHz SMR Lower 80 Channels
                           [856-860 MHz Band]
------------------------------------------------------------------------
                                                           Base station
                                                            frequencies
              Channel block                 Channel No.      (channel
                                                             centers)
------------------------------------------------------------------------
G.......................................  201, 241, 281,    856-860.0125
                                                321, 361
H.......................................  202, 242, 282,    856-860.0375
                                                322, 362
I.......................................  203, 243, 283,    856-860.0625
                                                323, 363
J.......................................  204, 244, 284,    856-860.0875
                                                324, 364
K.......................................  205, 245, 285,    856-860.1125
                                                325, 365
L.......................................  206, 246, 286,    856-860.1375
                                                326, 366
M.......................................  207, 247, 287,    856-860.1625
                                                327, 367
N.......................................  208, 248, 288,    856-860.1875
                                                328, 368
O.......................................  221, 261, 301,    856-860.5125
                                                341, 381
P.......................................  222, 262, 302,    856-860.5375
                                                342, 382
Q.......................................  223, 263, 303,    856-860.5625
                                                343, 383
R.......................................  224, 264, 304,    856-860.5875
                                                344, 384
S.......................................  225, 265, 305,    856-860.6125
                                                345, 385
T.......................................  226, 266, 306,    856-860.6375
                                                346, 386
U.......................................  227, 267, 307,    856-860.6625
                                                347, 387
V.......................................  228, 268, 308,    856-860.6875
                                                348, 388
------------------------------------------------------------------------


    Note: The allocation of channels available in spectrum blocks G 
through V are different in the U.S./Mexico and U.S./Canada border 
areas than noted in the prior table. The tables that follow indicate 
the channels assignable in the border areas. Also note that the 
channels listed for the U.S./Mexico border area are offset 12.5 kHz 
lower in frequency than the same channel as specified in Sec. 90.613 
of the Commission's rules.


            United States-Mexico Border Area, SMR Categories.
                  [EA-Based SMR Category (83 Channels)]
------------------------------------------------------------------------
                 Spectrum block                    Offset channel Nos.
------------------------------------------------------------------------
G..............................................              229-272-349
H..............................................              230-273-350
I..............................................              231-274-351
J..............................................              232-278-352
K..............................................              233-279-353
L..............................................              234-280-354
M..............................................              235-309-358
N..............................................              236-310-359
O..............................................              237-311-360
P..............................................              238-312-389
Q..............................................              239-313-390
R..............................................              240-314-391
S..............................................              269-318-392
T..............................................              270-319-393
U..............................................              271-320-394
V..............................................      228-268-308-348-388
------------------------------------------------------------------------


[[Page 43351]]


            United States-Canada Border Area, SMR Categories
              [Region 7 & 8]----SMR Category (172 Channels)
------------------------------------------------------------------------
                 Spectrum block                        Channel Nos.
------------------------------------------------------------------------
G..............................................      155-229-269-309-349
H..............................................      156-230-270-310-350
I..............................................      157-231-271-311-351
J..............................................      158-232-272-312-352
K..............................................      159-233-273-313-353
L..............................................      160-234-274-314-354
M..............................................      195-235-275-315-355
N..............................................      196-236-276-316-356
O..............................................      197-237-277-317-357
P..............................................      198-238-278-318-358
Q..............................................      199-239-279-319-359
R..............................................      200-240-280-320-360
S..............................................      225-265-305-345-385
T..............................................      226-266-306-346-386
U..............................................      227-267-307-347-387
V..............................................      228-268-308-348-388
------------------------------------------------------------------------

B. Scheduling

i. Bifurcation
    5. Some commenters responding to the Auction No. 36 Comment Public 
Notice argued that there should be no overlap between Auctions No. 34 
and 36. The Bureau agrees that it may be burdensome for some bidders to 
participate in coinciding auctions. However, there was no consensus 
among commenters on how to resolve this potential problem. For reasons 
of administrative convenience, the Bureau chooses to maintain the 
bifurcated schedule for Auctions No. 34 and 36.
    6. In addition, for reasons of administrative convenience and 
effective auction management, we will change the date for Auction No. 
36, moving the date back to November 1, 2000. This change will not only 
provide for more efficient management of the auction, it will provide 
additional time between Auctions No. 34 and 36 to permit all interested 
parties, including incumbents and small businesses, sufficient time in 
which to evaluate the outcome of Auction No. 34 and prepare for Auction 
No. 36.
ii. Pacific Wireless' Petition for Reconsideration
    7. Pacific Wireless seeks reconsideration of the Bureau's 
scheduling of Auctions No. 34 and 36 prior to the conclusion of the 
mandatory negotiation period for the relocation of incumbent licensees 
from the upper 200 channels, scheduled to conclude on December 4, 2000. 
SBT and PCIA also support postponement of the auctions, however, they 
advocate delay until the completion of the involuntary relocation phase 
that is scheduled to commence on December 4, 2000. Pacific Wireless 
contends that holding the auctions prior to December 4, 2000, 
contravenes the Commission's prior decisions and is contrary to the 
interests of incumbents. We disagree with this contention and deny 
Pacific Wireless's Petition for Reconsideration. The 800 MHz Second 
Report and Order stated that the licensing of the lower channels would 
not occur until ``incumbents have had the opportunity to relocate to 
the lower channels.'' As Nextel and Southern correctly note, prior to 
Auction No. 36, incumbents on the upper 200 channels will have had 
approximately 18 months to relocate their systems. Although we 
recognize that upper channel incumbents are currently in the second 
phase of the three-phase process the Commission established, we believe 
that 18 months provides a reasonable opportunity for incumbents to 
relocate.
    8. We agree with those commenters who stated that going forward 
with Auctions No. 34 and 36 will facilitate the relocation process by 
providing EA licensees with additional relocation spectrum and 
incumbents with a more certain picture of their relocation options. 
Accordingly, we will not delay the start of Auction No. 36 until the 
close of the mandatory negotiation period for relocation of incumbent 
licensees on the upper 200 channels.

C. Rules and Disclaimers

i. Relevant Authority
    9. Prospective bidders must familiarize themselves thoroughly with 
the Commission's rules relating to the 800 MHz band, contained in title 
47, part 90 of the Code of Federal Regulations, and those relating to 
application and auction procedures, contained in title 47, part 1 of 
the Code of Federal Regulations.
    10. Prospective bidders must also be thoroughly familiar with the 
procedures, terms and conditions (collectively, ``Terms'') contained in 
this public notice; the Auction No. 34 Comment Public Notice, 800 MHz 
First Report and Order, 800 MHz Second Report and Order, and the 800 
MHz Order on Reconsideration.
    11. 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. When ordering documents from ITS, please provide the 
appropriate FCC number (for example, FCC 99-270 for the 800 MHz Order 
on Reconsideration).
ii. Prohibition of Collusion
    12. 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 licenses in the same geographic license 
areas 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 authorized bidders 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. In such a case, at 
a minimum, 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.
    13. However, the Bureau 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. Applicants that apply to 
bid for ``all markets'' would be precluded from communicating with all 
other applicants after filing the FCC Form 175 short-form application. 
However, applicants may enter into bidding agreements before filing 
their FCC Form 175, as long as they disclose the existence of the 
agreement(s) in their Form 175. If parties agree in principle on all 
material terms prior to the short-form filing deadline, those parties 
must be identified on the short-form

[[Page 43352]]

application under Sec. 1.2105(c), even if the agreement has not been 
reduced to writing. If the parties have not agreed in principle by the 
filing deadline, an applicant would not include the names of those 
parties on its application, and may not continue negotiations with 
other applicants for the same geographic license areas. By signing 
their FCC Form 175 short form applications, applicants are certifying 
their compliance with Sec. 1.2105(c). In addition, Sec. 1.65 of the 
Commission's rules requires an applicant to maintain the accuracy and 
completeness of information furnished in its pending application and to 
notify the Commission within 30 days of any substantial change that may 
be of decisional significance to that application. Thus, Sec. 1.65 
requires an auction applicant to notify the Commission of any violation 
of the anti-collusion rules immediately upon learning of such 
violation. A summary listing of documents from the Commission and the 
Bureau addressing the application of the anti-collusion rules may be 
found in Attachment I.
iii. Due Diligence
    14. Potential bidders should be aware that certain applications 
(including those for modification), waiver requests, petitions to deny, 
petitions for reconsideration, and applications for review are pending 
before the Commission that relate to particular applicants or incumbent 
licensees. In addition, certain decisions reached in the SMR 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 800 MHz SMR general category and upper bands. 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. 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. Potential 
bidders are strongly encouraged to conduct their own research prior to 
Auction No. 36, and encouraged to continue such research during the 
auction, in order to determine the existence of pending proceedings 
that might affect their decisions regarding participation in the 
auction.
    15. To aid potential bidders, the Commission will release a 
subsequent public notice listing pending matters that relate to 
licenses or applications that affect the 800 MHz SMR general category 
and upper bands. The Commission will make available for public 
inspection the pleadings and related filings in those matters pending 
before the Commission.
    16. In addition, potential bidders may research the Bureau's 
licensing databases on the World Wide Web in order to determine which 
frequencies are already licensed to incumbent licensees. Because some 
of our incumbent 800 MHz licensing records have not yet been converted 
to the Bureau's new Universal Licensing System (ULS), potential bidders 
may have to select other databases to perform research for the 
frequency(s) of interest. The research options will allow potential 
bidders to download licensing data, as well as to perform queries 
online.
    17. 800 MHz band Incumbent Licenses: Licensing records for the 800 
MHz band are contained in the Bureau's Land Mobile database and may be 
researched on the internet at http://www.fcc.gov/wtb by selecting the 
``Databases'' link at the top of the page. Potential bidders may 
download a copy of the licensing database by selecting ``Download the 
Wireless Databases'' and choosing the appropriate files under ``Land 
Mobile Database Files--47 CFR part 90.'' Alternatively, potential 
bidders may query the Bureau's licensing records online by selecting 
``Search the Wireless Databases Online.''
    18. 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 databases. Potential 
bidders are strongly encouraged to physically inspect any sites located 
in or near the geographic area for which they plan to bid.
    19. Potential bidders should direct questions regarding the search 
capabilities described to the FCC Technical Support Hotline at (202) 
414-1250 (voice) or (202) 414-1255 (TTY), or via email at 
[email protected]. The hours of service for the hotline are 7 a.m. to 10 
p.m. EST, Monday through Friday, 8 a.m. to 7 p.m. EST, Saturday, and 12 
p.m. to 6 p.m. EST, Sunday. In order to provide better service to the 
public, all calls to the hotline are recorded.
iv. Incumbent Licensees
    20. 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 service areas. The holder of an EA 
authorization thus will be required to implement its facilities to 
protect incumbents from harmful interference. These limitations may 
restrict the ability of such geographic area licenses to use certain 
portions of the electromagnetic spectrum or provide service to certain 
areas in their geographic license areas. Specifically, an EA 
authorization holder will be required to coordinate with the incumbent 
licensees by using the interference protection criteria referenced in 
Sec. 90.683 and Sec. 90.693 of the Commission's rules. 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 authorized holder of the EA, and the authorized EA 
licensee will be entitled to operate within the forfeited service 
area(s) without being subject to further competitive bidding.
v. Bidder Alerts
    21. 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.
    22. The FCC makes no representations or warranties about the use of 
this spectrum for particular services. Applicants should be aware than 
a FCC auction represents an opportunity to become a FCC licensee in 
this service, 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 license constitute a 
guarantee of business success. Applicants should perform their 
individual due diligence before proceeding, as they would with any new 
business venture.
    23. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 36 to 
deceive and defraud unsuspecting investors. Common warning signals of 
fraud include the following: (a) 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; (b) The offering materials used to 
invest in the venture

[[Page 43353]]

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; (c) The amount of the minimum investment is less than 
$25,000. (d) 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. 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 800 MHz proposals may 
also call the FCC Consumer Center at (888) CALL-FCC ((888) 225-5322).
vi. National Environmental Policy Act (NEPA) Requirements
    24. Licensees must comply with the Commission's rules regarding the 
National Environmental Policy Act (NEPA). The construction of an 800 
MHz facility is a federal action and the licensee must comply with the 
Commission's NEPA rules for each such facility. The Commission's NEPA 
rules require, among other things, that the licensee 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 licensee 
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 licensee must also prepare 
environmental assessments for facilities that include high intensity 
white lights in residential neighborhoods or excessive radio frequency 
emission.

D. Auction Specifics

i. Auction Date
    25. The auction will begin on Wednesday, November 1, 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
    26. Auction No. 36--800 MHz SMR Lower 80 Channels
iii. Bidding Methodology
    27. The bidding methodology for Auction No. 36 will be simultaneous 
multiple round bidding. Bidding will be permitted only from remote 
locations, either electronically (by computer) or telephonically.
iv. Pre-Auction Dates and Deadlines
    28. These are important dates relating to Auction No. 36:
Auction Seminar--September 18, 2000
Short-Form Application (FCC FORM 175)--September 29, 2000; 6:00 p.m. 
EST
Upfront Payments (via wire transfer)--October 16, 2000; 6:00 p.m. EST
Orders for Remote Bidding Software--October 17, 2000; 5:30 p.m. EST
Mock Auction--October 30, 2000
Auction Begins--November 1, 2000
v. Requirements For Participation
    29. Those wishing to participate in the auction must:
     Submit a short form application (FCC Form 175) 
electronically by 6:00 p.m. EST, September 29, 2000.
     Submit a sufficient upfront payment and a FCC Remittance 
Advice Form (FCC Form 159) by 6:00 p.m. EST, October 16, 2000.
     Comply with all provisions outlined in this public notice.
vi. General Contact Information
    30. The following is a list of general contact information relating 
to Auction No. 36:
General Auction Information
    General Auction Questions
    Seminar Registration
    Orders for Remote Bidding Software
    FCC Auctions Hotline (888) 225-5322, Press Option #2 or direct 
(717) 338-2888; Hours of service: 8 a.m.-5:30 p.m. EST
Auction Legal Information
    Auction Rules, Policies, Regulations
    Auctions and Industry Analysis Division, Legal Branch, (202) 418-
0660; Commercial Wireless Division, (202) 418-0620
Licensing Information
    Rules, Policies, Regulations
    Licensing Issues
    Due Diligence
    Incumbency Issues
Technical Support
    Electronic Filing Assistance
    Software Downloading
    FCC Auctions Technical Support Hotline, (202) 414-1250 (Voice), 
(202) 414-1255 (TTY), Hours of service: 7 a.m.-10:00 p.m. EST, Monday-
Friday; 8 a.m.-7:00 p.m. EST, Saturday; 12:00 p.m.-6:00 p.m. EST, 
Sunday
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)
FCC Internet 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

    31. Guidelines for completion of the short-form (FCC Form 175) are 
set forth on Attachment D. The short-form application seeks the 
applicant's name and address, legal classification, status, bidding 
credit eligibility, identification of the authorization(s) sought, the 
authorized bidders and contact persons.

A. Ownership Disclosure Requirements (Form 175 Exhibit A)

    32. All applicants must comply with the uniform part 1 ownership 
disclosure standards and provide information required by Secs. 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.

[[Page 43354]]

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

    33. 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) and 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 licenses on which they will 
or will not bid. See 47 CFR 1.2105(a)(2)(ix). Where applicants have 
entered into consortia or joint bidding arrangements, applicants must 
submit an ``Exhibit B'' to the FCC Form 175.
    34. 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 geographic license area 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.

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

i. Eligibility
    35. Bidding credits are available to small businesses and very 
small businesses as defined in 47 CFR 90.912(b). 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:
     The entity constitutes or appoints more than 50 percent of 
the board of directors or management committee;
     The entity has authority to appoint, promote, demote, and 
fire senior executives that control the day-to-day activities of the 
licensee; or
     The entity plays an integral role in management decisions.
    36. A consortium of small businesses, or very small businesses is a 
conglomerate organization formed as a joint venture between or among 
mutually independent business firms, each of which individually 
satisfies the definition of small or very small business in 
Sec. 90.912. 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.
ii. Application Showing
    37. 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. 
Specifically, for Auction No. 36, 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: (i) 
The applicant; (ii) the applicant's affiliates; (iii) the applicant's 
controlling interests; and (iv) 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. 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
    38. Applicants that qualify under the definitions of small 
business, and very small business (or consortia of small or very small 
businesses) as set forth in 47 CFR 90.912, are eligible for a bidding 
credit that represents the amount by which a bidder's winning bids are 
discounted. The size of an 800 MHz lower 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 $15 
million for the preceding three years receives a 25 percent discount on 
its winning bids for 800 MHz lower band licenses (``small business'');
     A bidder with average gross revenues of not more than $3 
million for the preceding three years receives a 35 percent discount on 
its winning bids for 800 MHz lower band licenses (``very small 
business'').
    39. Bidding credits are not cumulative: qualifying applicants 
receive either the 25 percent or the 35 percent bidding credit, but not 
both.
    40. Bidders in Auction No. 36 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 
90.910(b) Finally, bidders should also note that there are no 
installment payment plans in Auction No. 36.

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

    41. 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)

    42. After the short-form filing deadline (September 29, 2000), 
applicants may make only minor changes to their FCC Form 175

[[Page 43355]]

applications. Applicants will not be permitted to make major 
modifications to their applications (e.g., change their license 
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 summarizing the changes to Amy Zoslov, Chief, Auctions and 
Industry Analysis Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, 445 12th Street, SW, Room 4-A760, 
Washington, DC 20554. A separate copy of the letter should be submitted 
to M. Nicole Oden, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau, Federal Communications commission, 445 12th 
Street, SW, Room 4-A337, Washington, D.C. 20554, briefly summarizing 
the changes. Questions about other changes should be directed to M. 
Nicole Oden at (202) 418-0660.

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

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

III. Pre-Auction Procedures

A. Auction Seminar

    44. On Monday, September 18, 2000, the FCC will sponsor a free 
seminar for Auction No. 36 at the Federal Communications Commission, 
located at 445 12th Street, SW, Washington, D.C. The seminar will 
provide attendees with information about pre-auction procedures, 
conduct of the auction, FCC remote bidding software, and the 800 MHz 
band service and auction rules. The seminar will also provide an 
opportunity for prospective bidders to ask questions of FCC staff.
    45. To register, complete the registration form (Attachment B) and 
submit it by Friday, September 15, 2000. Registrations are accepted on 
a first-come, first-served basis.

B. Short-Form Application (FCC Form 175)--Due September 29, 2000

    46. In order to be eligible to bid in this auction, applicants must 
first submit a FCC Form 175 application. This application must be 
submitted electronically and received at the Commission by 6:00 p.m. 
EST on September 29, 2000. Late applications will not be accepted.
    47. There is no application fee required when filing a FCC Form 
175. However, to be eligible to bid, an applicant must submit an 
upfront payment. See Part III.D.
i. Electronic Filing
    48. Applicants must file their FCC Form 175 applications 
electronically. See 47 CFR 1.2105(a). Applications may generally be 
filed at any time beginning at noon on September 18, 2000 until 6:00 
p.m. EST on September 29, 2000. Applicants are strongly encouraged to 
file early, and 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 September 29, 
2000.
    49. 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 C. Technical support is available at (202) 414-1250 (voice) 
or (202) 414-1255 (text telephone (TTY)); the hours of service are 7 
a.m. to 10 p.m. EST, Monday through Friday, 8 a.m. to 7 p.m. EST, 
Saturday, and 12 p.m. to 6 p.m. EST, Sunday.
ii. Completion of the FCC Form 175
    50. 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 D of this public notice. Applicants are 
encouraged to begin preparing the required attachments for FCC Form 175 
prior to submitting the form. Attachments C and D provide information 
on the required attachments and appropriate formats.
iii. Electronic Review of FCC Form 175
    51. The FCC Form 175 electronic review software may be used to 
review and print applicants' FCC Form 175 information. Applicants may 
also view other applicants' completed FCC Form 175s after the filing 
deadline has passed and the FCC has issued a public notice explaining 
the status of the applications. For this reason, it is important that 
applicants do not include their Taxpayer Identification Numbers (TINs) 
on any Exhibits to their FCC Form 175 applications. There is no fee for 
accessing this system. See Attachment C for details on accessing the 
review system.

C. Application Processing and Minor Corrections

    52. 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.
    53. As described more fully in the Commission's rules, after the 
September 29, 2000, short form-filing deadline, applicants may make 
only minor corrections to their FCC Form 175 applications. Applicants 
will not be permitted to make major modifications to their applications 
(e.g., change their license selections, change the certifying official, 
change control of the applicant, or change bidding credit eligibility).

D. Upfront Payments--Due October 16, 2000

    54. 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). After completing the FCC Form 175, filers will have 
access to an electronic version of the FCC Form 159 that can be printed 
and faxed to Mellon Bank in Pittsburgh, PA. All upfront payments must 
be received at Mellon Bank, by 6:00 p.m. EST on October 16, 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. 36 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 October 16, 
2000 deadline will result in dismissal of the application and 
disqualification from participation in the auction.

[[Page 43356]]

i. Making Auction Payments by Wire Transfer
    55. Wire transfer payments must be received by 6:00 p.m. EST on 
October 16, 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 910-1203
OBI Field: (Skip one space between each information item)
``AUCTIONPAY''
TAXPAYER IDENTIFICATION NO.: (same as FCC Form 159, block 26)
PAYMENT TYPE CODE (enter ``A36U'')
FCC CODE 1 (same as FCC Form 159, block 23A: ``36'')
PAYER NAME (same as FCC Form 159, block 2)
LOCKBOX NO.  x 358425


    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.

    56. Applicants must fax a completed FCC Form 159 to Mellon Bank at 
(412) 209-6045 or (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. 36.'' Bidders should confirm receipt of their upfront 
payment at Mellon Bank by contacting their sending financial 
institution.
ii. FCC Form 159
    57. A completed FCC Remittance Advice Form (FCC Form 159) must be 
faxed to Mellon Bank in order to 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. An electronic version of the FCC Form 159 
is available after filing the FCC Form 175. The FCC Form 159 can be 
completed electronically, but must be filed with Mellon Bank via 
facsimile.
iii. Amount of Upfront Payment
    58. In the Amendment of Part 1 of the Commission's Rules, Order, 
Memorandum Opinion and Order, and Notice of Proposed Rule Making, (Part 
1 Order, MO&O and NPRM) 62 FR 13540 (March 21, 1997), the Commission 
delegated to the Bureau the authority and discretion to determine an 
appropriate upfront payment for each license being auctioned. In the 
Auction No. 36 Comment Public Notice, the Bureau proposed upfront 
payments for Auction No. 36. Specifically, the Bureau proposed 
calculating the upfront payment on a license-by-license basis, using 
the following formula:

License population *$0.001 (the result rounded to the nearest hundred 
for levels below $10,000.00 and to the nearest thousand for levels 
above $10,000.00) with a minimum of no less than $1,000.00 per license.

    In this public notice, we adopt this formula.
    59. 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. 36, 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.
    60. 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.
    61. In calculating its upfront payment amount, an applicant should 
determine the maximum number of bidding units it may wish to bid on in 
any single round, and submit an upfront payment covering that number of 
bidding units. In order to make this calculation, an applicant should 
add together the upfront payments for all licenses on which it seeks to 
bid in any given round. Bidders should check their calculations 
carefully, as there is no provision for increasing a bidder's maximum 
eligibility after the upfront payment deadline.

    Note: An applicant may, on its FCC Form 175, apply for every 
license being offered, but its actual bidding in any round will be 
limited by the bidding units reflected in its upfront payment.

iv. Applicant's Wire Transfer Information for Purposes of Refunds
    62. The Commission will use wire transfers for all Auction No. 36 
refunds. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that all pertinent 
information as listed be supplied to the FCC. Applicants can provide 
the information electronically during the initial short form-filing 
window after the form has been submitted. Wire Transfer Instructions 
can also be manually faxed to the FCC, Financial Operations Center, 
Auctions Accounting Group, ATTN: Michelle Bennett or Gail Glasser, at 
(202) 418-2843 by October 16, 2000. Should the payer fail to submit the 
requested information, the refund will be returned to the original 
payer. For additional information, please call (202) 418-1995

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

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

E. Auction Registration

    63. 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 have timely submitted upfront 
payments sufficient to make them eligible to bid on at least one of the 
licenses for which they applied.
    64. 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.
    65. 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,

[[Page 43357]]

October 27, 2000 should contact the Auctions Hotline at (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.
    66. 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., 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. 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

    67. Qualified bidders are allowed to bid electronically or 
telephonically. If choosing to bid electronically, each bidder must 
purchase their own copy of the remote electronic bidding software. 
Electronic bids will only be accepted from those applicants purchasing 
the software. However, the software may be copied by the applicant for 
use by its authorized bidders at different locations. The price of the 
FCC's remote bidding software is $175.00 and must be ordered by 
Tuesday, October 17, 2000. For security purposes, the software is only 
mailed to the contact person at the contact address listed on the FCC 
Form 175. Please note that auction software is tailored to a specific 
auction, so software from prior auctions will not work for Auction No. 
36. If bidding telephonically, the telephonic bidding phone number will 
be supplied in the first Federal Express mailing of confidential login 
codes. Qualified bidders that do not purchase the software may only bid 
telephonically. To indicate your bidding preference, a FCC Bidding 
Preference/Remote Software Order Form can be accessed when submitting 
the FCC Form 175. Bidders should complete this form electronically, 
print it out, and fax to (717) 338-2850. A manual copy of this form is 
also included as Attachment F in this public notice.

G. Mock Auction

    68. All qualified bidders will be eligible to participate in a mock 
auction on Monday, October 30, 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.

IV. Auction Event

    69. The first round of bidding for Auction No. 36 will begin on 
Wednesday, November 1, 2000. The initial bidding schedule will be 
announced in a public notice listing the qualified bidders, which is 
released approximately 10 days before the start of the auction.

A. Auction Structure

i. Simultaneous Multiple Round Auction
    70. In the Auction No. 36 Comment Public Notice, we proposed to 
award the 2,800 licenses in the 800 MHz lower 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 the 800 MHz lower band licenses through a single, simultaneous 
multiple round auction.
ii. Maximum Eligibility and Activity Rules
    71. In the Auction No. 36 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.
    72. For Auction No. 36 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. The total 
upfront payment does not define the total dollars a bidder may bid on 
any given license.
    73. 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.
    74. 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 
is considered active on a license in the current round if it is either 
the high bidder at the end of the previous bidding round and does not 
withdraw the high bid in the current round, or if it submits an 
acceptable bid in the current round (see ``Minimum Accepted Bids'' in 
Part IV.B.(iii)). The minimum required activity level is 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
    75. 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. We are satisfied that 
our practice of providing five waivers over the course of the auction 
provides a sufficient number of waivers and maximum flexibility to the 
bidders, while safeguarding the integrity of the auction.
    76. The FCC automated 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.
    77. 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.iv discussion). Once eligibility has been 
reduced, a bidder will not be permitted to regain its lost bidding 
eligibility.
    78. 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.

[[Page 43358]]

iv. Auction Stages
    79. We conclude that the Auction No. 36 will be composed of three 
stages, which are each defined by an increasing activity rule. The 
following paragraphs describe 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.
    80. 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\).
    81. 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).
    82. Stage Three: During the third stage of the auction, a bidder 
desiring to maintain its current eligibility is required to be active 
on 98 percent of its current bidding eligibility. Failure to maintain 
the required activity level will result in a reduction in the bidder's 
bidding eligibility in the next round of bidding (unless an activity 
rule waiver is used). In this stage, reduced eligibility for the next 
round will be calculated by multiplying the sum of bidding units of the 
bidder's standing high bids and valid bids during the current round by 
fifty-fortyninths (50/49).
    Caution: Since activity requirements increase in each auction 
stage, bidders must carefully check their current activity during the 
bidding period of the first round following a stage transition. This is 
especially critical for bidders that have standing high bids and do not 
plan to submit new bids. In past auctions, some bidders have 
inadvertently lost bidding eligibility or used an activity rule waiver 
because they did not re-verify their activity status at stage 
transitions. Bidders may check their activity against the required 
minimum activity level by using the bidding software's bidding module.
v. Stage Transitions
    83. Auction No. 36 will start in Stage One and will advance to the 
next stage (i.e., from Stage One to Stage Two, and from Stage Two to 
Stage Three) when, in each of three consecutive rounds of bidding, the 
high bid has increased on 10 percent or less of the licenses being 
auctioned (as measured in bidding units). However, the Bureau will 
retain the discretion to regulate the pace of the auction by 
announcement. This determination will be based on a variety of measures 
of bidder activity, including, but not limited to, the auction activity 
level, the percentages of licenses (as measured in bidding units) on 
which there are new bids, the number of new bids, and the percentage 
increase in revenue.
vi. Auction Stopping Rules
    84. Auction No. 36 will employ a simultaneous stopping rule. Under 
this rule, 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.
    85. The Bureau retains the discretion to invoke the other versions 
of the simultaneous stopping rule. This modified version will 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 will not keep the auction open under this 
modified stopping rule.
    86. The Bureau also retains the discretion to keep an auction open 
even if no new acceptable bids or proactive waivers are submitted and 
no previous high bids are withdrawn in 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).
    87. In addition, the Bureau reserves the right to declare that the 
auction will end after a specified number of additional rounds 
(``special stopping rule''). If the Bureau invokes this special 
stopping rule, it will accept bids in the final round(s) only for 
licenses on which the high bid increased in at least one of the 
preceding specified number of rounds. The Bureau 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. Before exercising this option, the Bureau is 
likely to attempt to increase the pace of the auction by, for example, 
moving the auction into the next stage where bidders will be required 
to maintain a higher level of bidding activity, increasing the number 
of bidding rounds per day.
vii. Auction Delay, Suspension, or Cancellation
    88. For Auction No. 36, by public notice or by announcement during 
the auction, the Bureau may delay, suspend or cancel the auction in the 
event of natural disaster, technical obstacle, evidence of an auction 
security breach, unlawful bidding activity, administrative or weather 
necessity, or for any other reason that affects the fair and 
competitive conduct of competitive bidding. In such cases the Bureau 
may elect to: resume the auction starting from the beginning of the 
current round; resume the auction starting from some previous round; or 
cancel the auction in its entirety. Network interruption may cause the 
Bureau to delay or suspend the auction. 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
    89. The initial bidding schedule will be announced in the public 
notice listing the qualified bidders, which is released approximately 
10 days before the start of the auction. This public notice 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 conducted in a 
given day. Details regarding round results formats and locations will 
be included in a Qualified Bidder Public Notice.
    90. The FCC has discretion to change the bidding schedule in order 
to foster

[[Page 43359]]

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
    91. The Bureau adopts minimum opening bids for Auction 36, 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.
    92. The Bureau adopts the following proposed formula to calculate 
minimum opening bids for each license:

License population * $0.001 (the result rounded to the nearest hundred 
for results less than $10,000.00 and to the nearest thousand for 
results greater than $10,000.00) with a minimum of no less than 
$1,000.00 per license.

    93. The Bureau concludes that this adopted formula best meets the 
objectives of our authority in establishing reasonable minimum opening 
bids. The Bureau has noted in the past that the reserve price and 
minimum opening bid provision is not a requirement to maximize auction 
revenue but rather a protection against assigning licenses at 
unacceptably low prices and that we must balance the revenue raising 
objective against our other public interest objectives in setting the 
minimum bid level. See Auction of 800 MHz SMR Upper 10 MHz Band, 
Minimum Opening Bids or Reserve Prices, 62 FR 55251 (October 23, 1997). 
For the sake of auction integrity and fairness, minimum opening bids 
must be set in a manner that is consistent across licenses.
    94. As a final safeguard against unduly high pricing, minimum 
opening bids are reducible at the discretion of the Bureau. This will 
allow the Bureau flexibility to adjust the minimum opening bids if 
circumstances warrant. The Bureau emphasizes, however, that such 
discretion will be exercised, if at all, sparingly and early in the 
auction, i.e., before bidders lose all waivers and begin to lose 
substantial eligibility. During the course of the auction, the Bureau 
will not entertain any bidder requests to reduce the minimum-opening 
bid on specific licenses.
iii. Bid Increments and Minimum Accepted Bids
    95. For Auction No. 36 the Bureau adopts a smoothing methodology to 
calculate minimum bid increments. The smoothing methodology is designed 
to vary the increment for a given license between a maximum and minimum 
value based on the bidding activity on that license. This methodology 
allows the increments to be tailored to the activity level of a 
license, decreasing the time it takes for active licenses to reach 
their final value. The formula used to calculate this increment is 
included as Attachment G.
    96. The Bureau adopts the 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 circumstance so dictate. 
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. 36 if circumstances warrant.
iv. High Bids
    97. Each bid will be date- and time-stamped when it is entered into 
the FCC computer system. In the event of tie bids, the Commission will 
identify the high bidder on the basis of the order in which the 
Commission receives bids. The bidding software allows bidders to make 
multiple submissions in a round. As each bid is individually date- and 
time-stamped according to when it was submitted, bids submitted by a 
bidder earlier in a round will have an earlier date and time stamp than 
bids submitted later in a round.
v. Bidding
    98. 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.
    99. Please note that all bidding will take place remotely either 
through the automated bidding software or by telephonic bidding. 
(Telephonic bid assistants are required to use a script when entering 
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. Normally four to five minutes are necessary to 
complete a bid submission.) There will be no on-site bidding during 
Auction No. 36.
    100. A bidder's ability to bid on specific licenses in the first 
round of the auction is determined by two factors: (i) The licenses 
applied for on FCC Form 175; and (ii) 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.
    101. 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.
    102. The bid entry screen of the Automated Auction System software 
for Auction No. 36 allows bidders to place multiple increment bids. 
Specifically, high bids may be increased from one to nine bid 
increments. A single bid increment is defined as the difference between 
the standing high bid and the minimum acceptable bid for a license. The 
bidding software will display the bid increment for each license.
    103. To place a bid on a license, the bidder must increase the 
standing high bid by one to nine times the bid increment. This is done 
by entering a whole number between 1 and 9 in the bid increment 
multiplier (Bid Mult) field in the software. 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

[[Page 43360]]

high bid amount according to the following formula:

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

    Thus, bidders may place a bid that exceeds the standing high bid by 
between one and nine times the bid increment. For example, to bid the 
minimum acceptable bid, which is equal to one bid increment, a bidder 
will enter ``1'' in the bid increment multiplier column and press 
submit.
    104. For any license on which the FCC is designated as the high 
bidder (i.e., a license that has not yet received a bid in the auction 
or where the high bid was withdrawn and a new bid has not yet been 
placed), bidders will be limited to bidding only the minimum acceptable 
bid. In both of these cases no increment exists for the licenses, and 
bidders should enter ``1'' in the Bid Mult field. Note that in this 
case, any whole number between 1 and 9 entered in the multiplier column 
will result in a bid value at the minimum acceptable bid amount. 
Finally, bidders are cautioned in entering numbers in the Bid Mult 
field because, as explained in the following section, a high bidder 
that withdraws its standing high bid from a previous round, even if 
mistakenly or erroneously made, is subject to bid withdrawal payments.
vi. Bid Removal and Bid Withdrawal
    105. In Auction No. 36, 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.
    106. Procedures. Before the close of a bidding round, a bidder has 
the option of removing any bids placed in that round. By using the 
``remove bid'' function in the software, a bidder may effectively 
``unsubmit'' any bid placed within that round. A bidder removing a bid 
placed in the same round is not subject to withdrawal payments. 
Removing a bid will affect a bidder's activity for the round in which 
it is removed; i.e. a bid that is subsequently removed does not count 
toward the bidder's activity requirement.
    107. 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 during the 
auction is subject to the bid withdrawal payments specified in 47 CFR 
1.2104(g). The procedure for withdrawing a bid and receiving a 
withdrawal confirmation is essentially the same as the bidding 
procedure described in ``High Bids,'' Part IV.B.iv.
    108. Calculation. Generally, the Commission imposes payments on 
bidders that withdraw high bids during the course of an auction. 
Specifically, a bidder (``Bidder X'') that withdraws a high bid during 
the course of an auction is subject to a bid withdrawal payment equal 
to the difference between the amount withdrawn and the amount of the 
subsequent winning bid. If a high bid is withdrawn on a license that 
remains unsold at the close of the auction, Bidder X will be required 
to make an interim payment equal to three (3) percent of the net amount 
of the withdrawn bid. This payment amount is deducted from any upfront 
payments or down payments that Bidder X has deposited with the 
Commission. If, in a subsequent auction, that license receives a valid 
bid in an amount equal to or greater than the withdrawn bid amount, 
then no final bid withdrawal payment will be assessed, and Bidder X may 
request a refund of the interim three (3) percent payment. If, in a 
subsequent auction, the winning bid amount for that license is less 
than Bidder X's withdrawn bid amount, then Bidder X will be required to 
make a final bid withdrawal payment, less the three percent interim 
payment, equal to either the difference between Bidder X's net 
withdrawn bid and the subsequent net winning bid, or the difference 
between Bidder X's gross withdrawn bid and the subsequent gross winning 
bid, whichever is less.
vii. Round Results
    109. 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. Reports reflecting bidders' identities and bidder 
identification numbers for Auction No. 36 will be available before and 
during the auction. Thus, bidders will know in advance of this auction 
the identities of the bidders against which they are bidding.
viii. Auction Announcements
    110. 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
    111. As noted in Part II.E., after the short-form filing deadline, 
applicants may make only minor changes to their FCC Form 175 
applications. For example, permissible minor changes include deletion 
and addition of authorized bidders (to a maximum of three) and certain 
revision of exhibits. Filers must make these changes on-line, and 
submit a letter summarizing the changes to: Amy Zoslov, Chief, Auctions 
and Industry Analysis Division, Wireless Telecommunications Bureau, 
Federal Communications Commission, 445 12th Street, S.W., Room 4-A760, 
Washington, D.C. 20554. A separate copy of the letter should be mailed 
to M. Nicole Oden, Auctions and Industry Analysis Division, Room 4-
A337, Wireless Telecommunications Bureau, Federal Communications 
Commission, 445 12th Street, S.W., Washington, D.C. 20554. Questions 
about other changes should be directed to M. Nicole Oden, Auctions and 
Industry Analysis Division at (202) 418-0660.

V. Post-Auction Procedures

A. 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 license, and listing withdrawn bid payments due.
    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

[[Page 43361]]

applicable bidding credits). See 47 CFR 1.2107(b). In addition, by the 
same deadline all bidders must pay any withdrawn bid amounts due 
according to 47 CFR 1.2104(g), as discussed in ``Bid Removal and Bid 
Withdrawal,'' Part IV.B.vi. (Upfront payments are applied first to 
satisfy any withdrawn bid liability, before being applied toward down 
payments.)

B. Long-Form Application

    114. Within ten business days after release of the auction closing 
public notice, winning bidders must electronically submit a properly 
completed long-form application and required exhibits for each 800 MHz 
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

    115. 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

    116. All applicants that submitted upfront payments but were not 
winning bidders for an 800 MHz 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.
    117. 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. If the refund instructions were completed electronically, only 
a written request for the refund is necessary. If not, the request must 
also include wire transfer instructions and a Taxpayer Identification 
Number (``TIN''). Send refund request to: Federal Communications 
Commission, Financial Operations Center, Auctions Accounting Group, 
Shirley Hanberry, 445 12th Street, S.W., Room 1-A824, Washington, D.C. 
20554.
    118. Bidders are encouraged to file their refund information 
electronically using the refund information portion of the FCC Form 
175, but bidders can also fax their information to the Auctions 
Accounting Group at (202) 418-2843. Once the information has been 
approved, a refund will be sent to the party identified in the refund 
information. 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.
Margaret Wiener,
Deputy Chief, Auctions & Industry Analysis Division, Wireless 
Telecommunications Bureau.
[FR Doc. 00-17672 Filed 7-12-00; 8:45 am]
BILLING CODE 6712-01-U