[Federal Register Volume 65, Number 233 (Monday, December 4, 2000)]
[Notices]
[Pages 75702-75716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30860]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-00-35-E (Auction No. 35); DA 00-2259]


Notice and Filing Requirements for 422 Licenses in the C and F 
Block Broadband PCS Spectrum Auction Minimum Opening Bids, Upfront 
Payments and Other Procedural Issues For Final Auction Inventory

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the procedures and minimum opening 
bids for the upcoming auction of broadband Personal Communications 
Services (PCS) spectrum and also provides the final inventory of 
licenses to be made available for this auction; we will not add to this 
inventory for the December 12, 2000, auction.

DATES: Auction No. 35 is scheduled for December 12, 2000.

FOR FURTHER INFORMATION CONTACT: Auctions and Industry Analysis 
Division: Audrey Bashkin, Legal Branch, or Craig Bomberger, Auctions 
Operations Branch, at (202) 418-0660; Lisa Stover, Auctions Operations 
Branch, at (717) 338-2888. Commercial Wireless Division: Gary Oshinsky, 
Policy and Rules Branch, at (202) 418-7167 or JoAnn Epps, Licensing and 
Technical Analysis Branch, at (202) 418-0620. Media Contact: Meribeth 
McCarrick at (202) 418-0654.

SUPPLEMENTARY INFORMATON: This is a summary of a Public Notice released 
October 5, 2000. The complete text of the public notice, including 
Attachments A through I, is available for inspection and copying during 
normal business hours in the FCC Reference Center (Room CY-A257), 445 
12th Street, SW, Washington, DC. It may also be purchased from the 
Commission's copy contractor, International Transcription Services, 
Inc. (ITS, Inc.) 1231 20th Street, NW, Washington, 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.......... Upfront Payments and Minimum Opening Bids for 
Auction No. 35
Attachment B.......... FCC Auction Seminar Registration Form Auction 
No. 35
Attachment C.......... Electronic Filing and Review of the FCC Form 175
Attachment D.......... Guidelines for Completion of FCC Form 175 and 
Exhibits
Attachment E.......... Auction-Specific Instructions for FCC Remittance 
Advice (FCC Form 159-July 1997 edititon)
Attachment F.......... FCC Bidding Preference/Remote Software Order 
Form Auction No. 35
Attachment G.......... Bid Increments and Exponential Smoothing
Attachment H.......... Accessing the FCC Network to File FCC Form 175
Attachment I.......... Summary Listing of Documents from the Commission 
and the Wireless Telecommunications Bureau Addressing Application of 
the Anti-Collusion Rules

I. General Information

A. Introduction

    1. By this public notice, the Wireless Telecommunications Bureau 
(``Bureau'') announces the procedures and minimum opening bids for the 
upcoming auction of broadband Personal Communications Services (PCS) 
spectrum in the C and F blocks (Auction No. 35) scheduled for December 
12, 2000. The public notice also provides the final inventory of 
licenses to be made available for this auction; we will not add to this 
inventory for the December 12, 2000, auction.
    2. On March 3, 2000, in accordance with the Balanced Budget Act of 
1997, the Bureau released the Auction No. 35 Public Notice seeking 
comment on reserve prices or minimum opening bids and the procedures to 
be used in Auction No. 35. After the August 29, 2000 release of the C/F 
Block Sixth Report and Order, 65 FR 53624 (September 5, 2000), the 
Bureau released the Auction No. 35 Comment Public Notice, 65 FR 55243 
(September 13, 2000) on September 6, 2000, revising the list of 
licenses available and again seeking comment on reserve prices or 
minimum opening bids and the procedures to be used in Auction No. 35. 
The Bureau received seven comments and two reply comments in response 
to the Auction No. 35 Public Notice, and three comments and two reply 
comments in response to the Auction No. 35 Comment Public Notice.
i. Background of Proceeding
    3. Auction No. 35 will be the fourth auction of C block spectrum 
and the third auction of F block spectrum. In the past, these spectrum 
blocks were designated by the Commission as ``entrepreneurs' blocks,'' 
meaning that participation in auctions of C and F block licenses was 
limited to entities qualifying under the Commission's rules as 
entrepreneurs. The initial C block licenses were awarded through two 
auctions, Auction No. 5, which ended on May 6, 1996, and Auction No. 
10, which concluded on July 16, 1996. Auction No. 11, the initial F 
block auction, ended on January 14, 1997, and also included D and E 
block licenses. Auction No. 22, which concluded on April 15, 1999, made 
available C, E, and F block licenses that had been returned to, or 
reclaimed by, the Commission.
    4. On August 29, 2000, the Commission released the C/F Block Sixth 
Report and Order, revising the service and auction rules for auction of 
C and F block PCS licenses. The Commission decided to reconfigure

[[Page 75703]]

each 30 MHz C block license available in Auction No. 35 and other 
future broadband PCS auctions into three 10 MHz C block licenses. The 
Commission also divided Basic Trading Areas (``BTAs'') into two tiers 
according to the population size, with Tier 1 comprising markets with 
population at or above 2.5 million, based on 1990 census figures, and 
Tier 2 comprising the remaining markets. The Commission decided that 
some licenses would be available to all bidders in ``open'' bidding, 
while other licenses would be available only to entrepreneurs in 
``closed'' bidding. The Commission established open bidding for all C 
and F block licenses available but unsold in Auction No. 22 or any 
subsequent auction. The Commission also established open bidding for 
the following licenses: two of the three reconfigured 10 MHz C block 
licenses in Tier 1, one of the three reconfigured 10 MHz C block 
licenses in Tier 2, the 15 MHz C block licenses in Tier 1, and all F 
block licenses (Tier 1 and Tier 2). The Commission established small 
and very small business bidding credits of 15 percent and 25 percent, 
respectively, for licenses won in open bidding and eliminated bidding 
credits for licenses won in closed bidding. Additionally, the 
Commission removed from its rules the Sec. 24.710 license cap, which 
had prohibited an applicant from winning more than 98 of the licenses 
available in the C and F blocks. Finally, the Commission decided that 
the Commercial Mobile Radio Services spectrum cap would continue to 
apply to C and F block licenses, including those won in Auction No. 35.
ii. Licenses to Be Auctioned
    5. The 422 licenses available in Auction No. 35 cover 195 various 
BTAs and consist of 312 C block 10 MHz licenses, 43 C block 15 MHz 
licenses, and 67 F block 10 MHz licenses. As stated, the BTAs are 
divided into two tiers according to the population size, with Tier 1 
comprising markets with population at or above 2.5 million, and Tier 2 
comprising the remaining markets. There will be 252 licenses open to 
all bidders in ``open'' bidding, while 170 licenses will only be 
available to entrepreneurs in ``closed'' bidding.
    6. The following table contains the Block/Eligibility Status/
Frequency Cross-Reference List for Auction No. 35:

----------------------------------------------------------------------------------------------------------------
                                             Eligibility status
          Channel block          ------------------------------------------  Bandwidth         Frequencies
                                         Tier 1               Tier 2           (MHz)
----------------------------------------------------------------------------------------------------------------
C1..............................  [Open].............  Closed.............           15  1902.5-1910, 1982.5-
                                                                                          1990
C2..............................  [Open].............  Closed*............           15  1895-1902.5, 1975-
                                                                                          1982.5
C3..............................  Closed*............  Closed*............           10  1895-1900, 1975-1980
C4..............................  Open...............  Closed*............           10  1900-1905, 1980-1985
C5..............................  Open...............  Open...............           10  1905-1910, 1985-1990
F...............................  Open...............  Open...............           10  1890-1895, 1970-1975
----------------------------------------------------------------------------------------------------------------
Note: Brackets indicate that no licenses of the particular tier/channel block combination will be available in
  Auction No. 35.
*The entrepreneur eligibility restriction does not apply to licenses that were available but unsold in Auction
  No. 22. Tier 2 C2 licenses are classified as closed, but all of the C2 licenses available in Auction No. 35
  were available but unsold in Auction No. 22 and are therefore open to all bidders. Certain C block licenses
  were also available but unsold in Auction No. 22 (as 30 MHz licenses), and the corresponding C3 and C4
  licenses are therefore open to all bidders.

    7. A complete list of licenses available for Auction No. 35 is 
included as Attachment A of the Public Notice. The attachment specifies 
the eligibility status of each license.
    8. AT&T proposes switching the eligibility status of the C3 and C5 
blocks, thereby making all of the C3 licenses open to all bidders. AT&T 
argues that the C3 block should be open rather than the C5 block, 
because that would afford AT&T and other bidders the opportunity to 
obtain 20 MHz of contiguous spectrum. We note that granting AT&T's 
request would be contrary to the Commission's recently adopted rules on 
the location of open and closed blocks of C block spectrum. As the 
Commission indicated in the C/F Block Sixth Report and Order, it placed 
the closed band(s) next to the F block spectrum in order that 
entrepreneurs aggregating newly acquired closed 10 MHz C block licenses 
with F block licenses might enjoy reduced base station facilities costs 
and simplified maintenance requirements. Accordingly, we will not make 
the change requested by AT&T.

B. Rules and Disclaimers

i. Relevant Authority
    9. Prospective bidders must familiarize themselves thoroughly with 
the Commission's rules relating to Broadband PCS, contained in title 
47, part 24, 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. 35 Comment Public Notice; the C/F 
Block Sixth Report and Order; the Part 1 Fifth Report and Order, 65 FR 
52323 (August 29, 2000); the C Block Second Report and Order, 62 FR 
55348 (October 24, 1997); the C Block Reconsideration Order, 63 FR 
17111 (April 8, 1998); the C Block Fourth Report and Order, 63 FR 50791 
(September 23, 1998); part 24, subparts A, B, C, E, H, and I, of the 
Commission's Rules concerning broadband PCS; and part 1, subpart Q, of 
the Commission's Rules concerning competitive bidding proceedings.
    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 and pronouncements, including orders on delegated 
authority or by the Commission relevant to one or more of the licenses 
or otherwise pertaining to this auction. Copies of most Commission 
documents, including public notices, can be retrieved from the FCC 
Internet node via anonymous ftp at 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 00-313 for the C/F Block Sixth 
Report and Order). See also Due Diligence section.

[[Page 75704]]

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 at the 
short-form application filing deadline and ends at the down payment 
deadline after the auction. 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 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 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. In Auction No. 35, for 
example, the rule would apply to any applicants bidding for the same 
BTA. Therefore, applicants that apply to bid for any license in a BTA 
would be precluded from communicating after filing the FCC Form 175 
short-form application with any other applicant for a license in the 
same BTA. 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 FCC 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 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.
    14. 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 of the Public Notice.
iii. Due Diligence
    15. Potential bidders are reminded that private and common carrier 
fixed microwave services (``FMS'') operating in the 1850-1990 MHz band 
(and other bands) are being relocated to available frequencies in 
higher bands or to other media. Bidders should become familiar with the 
status of FMS operation and relocation, and applicable Commission rules 
and orders, in order to make a reasoned, appropriate decision about 
their participation in Auction No. 35 and their bidding strategy.
    16. Potential bidders and interested parties should be aware that 
various proceedings that may relate to the licenses available in 
Auction No. 35 may be pending or subject to further administrative 
review before the Commission, including, for example, waiver requests, 
petitions for reconsideration, and applications for review. In 
addition, certain judicial proceedings that may relate to the licenses 
available in Auction No. 35 are pending or may be subject to further 
review. Resolution of these matters could have an effect on the 
availability of spectrum included in Auction No. 35, and the auction is 
subject to such matters. Some of these matters (whether before the 
Commission or the courts) may not be resolved by the time of the 
auction. The Commission will continue to act on matters before it, but 
it makes no representations as to the resolution of judicial 
proceedings. Potential bidders are solely responsible for identifying 
associated risks, and investigating and evaluating the degree to which 
such matters may affect their ability to bid on or otherwise acquire 
licenses in Auction No. 35.
    17. Potential bidders may obtain information about licenses 
available in Auction No. 35 through the Bureau's licensing databases on 
the World Wide Web at http://www.fcc.gov/wtb/uls. Potential bidders 
should direct questions regarding the search capabilities to the FCC 
Technical Support hotline at (202) 414-1250 (voice) or (202) 414-1255 
(TTY), or via e-mail at [email protected]. The hotline is available to 
assist with questions Monday through Friday, from 7:00 AM to 10:00 PM 
ET, Saturday, 8:00 AM to 7:00 PM ET, and Sunday, 12:00 noon to 6:00 PM 
ET. In order to provide better service to the public, all calls to the 
hotline are recorded. The Commission makes no representations or 
guarantees regarding the accuracy or completeness of information in its 
databases or any third party databases, including, for example, court 
docketing systems.
    18. Further, potential bidders are strongly encouraged to 
physically inspect any sites located in, or near, the geographic area 
for which they plan to bid.
    19. Finally, potential bidders are strongly encouraged to make 
periodic, and continuing, inquiries to the Office of the Secretary and 
other available sources regarding any proceedings that are, or may be, 
pending with respect to the licenses available in Auction No. 35.
iv. Clarification of Payment Issue Relating to Licenses Subject to 
Pending Proceedings
    20. As noted, potential bidders should be aware that certain of the 
licenses included in Auction No. 35 are or may become the subject of 
Commission or judicial proceedings initiated by parties claiming to 
have continuing interests in the licenses, despite their failure to 
meet payment obligations. This public notice clarifies that the 
Commission will return the payments made by winning bidders of licenses 
in Auction No. 35 in the event that such bidders are subsequently 
required to surrender licenses won to prior applicants or license 
holders as a result of final determinations reached in pending 
proceedings. The Commission, however, will not pay interest on the 
returned payments, as it lacks legal authority to do so.
    21. Including contested licenses in the auction helps to fulfill 
the Commission's statutory mandate to hasten the development and 
deployment of new technologies and services and to promote competition 
for the benefit of the public. Returning payments to winning bidders if 
licenses won are later determined to be unavailable due to subsequent 
resolution of other proceedings furthers these vital public interest 
goals by reducing uncertainty in the licensing process and encouraging 
auction

[[Page 75705]]

participants to bid on licenses regardless of whether they are subject 
to pending proceedings. Retaining payments under the circumstances 
could have a chilling effect on participation in Auction No. 35 and 
would therefore undermine our efforts to encourage more efficient use 
of the spectrum. We note that winning bidders of licenses subject to 
pending proceedings are still required to meet the normal payment and 
construction schedules established by the Commission.
v. Bidder Alerts
    22. 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.
    23. 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 an 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 and interested parties should 
perform their own due diligence before proceeding, as they would with 
any new business venture.
    24. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 35 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 investment is less than $25,000.
     The sales representative makes verbal representations 
that: (a) the Internal Revenue Service (``IRS''), Federal Trade 
Commission (``FTC''), Securities and Exchange Commission (``SEC''), 
FCC, or other government agency has approved the investment; (b) the 
investment is not subject to state or federal securities laws; or (c) 
the investment will yield unrealistically high short-term profits. In 
addition, the offering materials often include copies of actual FCC 
releases, or quotes from FCC personnel, giving the appearance of FCC 
knowledge or approval of the solicitation.
    25. 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 regarding Auction No. 35 may also call the FCC 
Consumer Center at (888) CALL-FCC ((888) 225-5322).
vi. National Environmental Policy Act (``NEPA'') Requirements
    26. Licensees must comply with the Commission's rules regarding the 
National Environmental Policy Act (NEPA). The construction of a 
wireless antenna 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.

C. Auction Specifics

i. Auction Date
    27. The auction will begin on Tuesday, December 12, 2000. The 
initial schedule for bidding will be announced by public notice at 
least one week before the start of the auction. Unless otherwise 
announced, bidding on all licenses will be conducted on each business 
day until bidding has stopped on all licenses.
    28. In response to comments received, the Commission announces that 
bidding for Auction No. 35 will be temporarily suspended during the 
holidays. Beginning Friday, December 22, 2000 through Wednesday, 
January 3, 2001, no bidding will be conducted. Bidding will resume on 
Thursday, January 4, 2001.
ii. Auction Title
    29. Auction No. 35--C and F Block Broadband PCS
iii. Bidding Methodology
    30. The bidding methodology for Auction No. 35 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
    31. The following are important events and deadlines related to 
Auction No. 35:
Auction Seminar: October 20, 2000.
Short-Form Application (FCC FORM 175): November 6, 2000; 6:00 p.m. ET.
Upfront Payments (via wire transfer): November 27, 2000; 6:00 p.m. ET.
Orders for Remote Bidding Software: November 28, 2000; 6:00 p.m. ET.
Mock Auction: December 8, 2000.
Auction Begins: December 12, 2000.
v. Requirements For Participation
    32. Those wishing to participate in the auction must:
     Submit a short-form application (FCC Form 175) 
electronically by 6:00 p.m. ET, November 6, 2000.
     Submit a sufficient upfront payment and a FCC Remittance 
Advice Form (FCC Form 159) by 6:00 p.m. ET, November 27, 2000.
     Comply with all provisions outlined in this public notice.
vi. General Contact Information
    33. The following is a list of general contact information relating 
to Auction No. 35:

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. ET.

Auction Legal Information

Auction Rules, Policies, Regulations

[[Page 75706]]

    Auctions and Industry Analysis Division, Legal Branch (202) 418-
0660.

Licensing Information

Rules, Policies, Regulations
Licensing Issues
Due Diligence
Incumbency Issues
    Commercial Wireless Division, (202) 418-0620.

Technical Support

Electronic Filing Assistance
Software Downloading
    FCC Auctions Technical Support Hotline, (202) 414-1250 (Voice), 
(202) 414-1255 (TTY).
    Hours of service: Monday through Friday 7 a.m. to 10:00 p.m. ET, 
Saturday, 8:00 a.m. to 7:00 p.m., Sunday, 12:00 noon to 6:00 p.m.

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; http://ftp.fcc.gov; http://www.fcc.gov/wtb/auctions.

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

    34. Guidelines for completion of the short-form (FCC Form 175) are 
set forth in Attachment D of the Public Notice. The short-form 
application seeks the applicant's name and address, legal 
classification, status, small and very small business bidding credit 
eligibility, identification of the license(s) sought, the authorized 
bidders and contact persons. 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, 
as discussed in section II.E (Provisions Regarding Defaulters and 
Former Defaulters), that they are not in default on any payment for 
Commission licenses (including down payments) or delinquent on any non-
tax debt owed to any Federal agency.

A. Ownership Disclosure Requirements (FCC Form 175 Exhibit A)

    35. 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 FCC 
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.

B. Consortia And Joint Bidding Arrangements (FCC Form 175 Exhibit B)

    36. 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 construction permits on 
which they will or will not bid. See 47 CFR 1.2105(a)(2)(ix). As 
discussed, if an applicant has had discussions, but has not reached a 
joint bidding agreement by the short-form deadline, it would not 
include the names of parties to the discussions on its applications and 
may not continue discussions with applicants for the same geographic 
license area(s) after the deadline. Where applicants have entered into 
consortia or joint bidding arrangements, applicants must submit an 
``Exhibit B'' to the FCC Form 175.
    37. 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 licenses in the same geographic license area provided 
that (i) the attributable interest holder certifies 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 touch upon impermissible subject 
matters because they may convey pricing information and bidding 
strategies.

C. Eligibility

i. Eligibility for Closed Bidding (FCC Form 175 Exhibit C)
    38. General rule. In order to be eligible to bid for one or more 
closed licenses, an applicant must show on Exhibit C that, as of the 
FCC Form 175 filing deadline, the applicant, its affiliates, persons or 
entities that hold interests in the applicant, and their affiliates, 
have combined total assets of less than $500 million and have had 
combined gross revenues of less that $125 million in each of the last 
two years. Applicants that can make this showing qualify as 
``entrepreneurs'' for purposes of C and F block auctions. See 
Sec. 24.709 of the Commission's Rules.
    39. Grandfather exception. Qualified applicants that were eligible 
for and participated in Auction No. 5 or 10 may bid on closed C block 
licenses in any auction that begins on or before March 23, 2001, even 
if their total assets and gross revenues exceed the financial caps for 
auction participation as an entrepreneur. This exception does not 
extend to F block licenses.
ii. Small Business Bidding Credit Eligibility (FCC Form 175 Exhibit D)
    40. Bidding credits are available to small and very small 
businesses, or consortia thereof, (as defined in 47 CFR 24.720(b)) that 
win licenses in open bidding. A bidding credit represents the amount by 
which a bidder's winning bids are discounted. The size of the bidding 
credit depends on the average annual gross revenues for the preceding 
three years of the bidder, together with its affiliates and controlling 
interests of the bidder and its affiliates:
     A bidder with average annual gross revenues of not more 
than $40 million for the preceding three years (``small business'') 
receives a 15 percent discount on its winning bids for C and F block 
licenses;

[[Page 75707]]

     A bidder with average annual gross revenues of not more 
than $15 million for the preceding three years (``very small 
business'') receives a 25 percent discount on its winning bids for C 
and F block licenses.
    41. Bidding credits are not cumulative; qualifying applicants 
receive either the 15 percent or the 25 percent bidding credit, but not 
both. No small and very small business bidding credits are provided for 
licenses subject to closed bidding.
iii. Tribal Land Bidding Credit
    42. To encourage the growth of wireless services in federally 
recognized tribal lands the Commission has implemented a tribal land 
bidding credit. See Part V.C.
iv. Applicability of Part 1 Attribution Rules
    43. Controlling interest standard. On August 14, 2000, the 
Commission released the Part 1 Fifth Report and Order, in which the 
Commission, inter alia, adopted a ``controlling interest'' standard for 
attributing to auction applicants the total assets and/or gross 
revenues of their investors and affiliates in determining entrepreneur 
and small business eligibility for future C and F block auctions. The 
Commission observed that the rule modifications adopted in the various 
part 1 orders would result in discrepancies and/or redundancies between 
certain of the new part 1 rules and existing service-specific rules, 
and the Commission delegated to the Bureau the authority to make 
conforming edits to the Code of Federal Regulations (CFR) consistent 
with the rules adopted in the part 1 proceeding. Time may not permit 
conforming edits to the part 24 C and F block rules to be made in 
advance of Auction No. 35; however, the part 1 rules that superseded 
inconsistent service-specific rules will control in Auction No. 35. 
Accordingly, the ``controlling interest'' standard as set forth will be 
in effect for Auction No. 35, even if conforming edits to the CFR are 
not made prior to the auction.
    44. Control. 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.
    45. Attribution for entrepreneur eligibility. For purposes of 
determining which entities qualify as entrepreneurs for closed bidding, 
the Commission will consider the total assets and gross revenues of the 
applicant, its controlling interest holders, the affiliates of the 
applicant, and their controlling interest holders. The Commission does 
not impose specific equity requirements on parties with controlling 
interests. Once principals or entities with a controlling interest are 
determined, only the assets and revenues of those principals or 
entities, the applicant, and their affiliates will be counted in 
determining entrepreneur eligibility. Applicants for closed bidding in 
Auction No. 35 should not include existing C and F block licenses in 
their calculations of total assets; however, all other Commission 
licenses must be included in such calculations.
    46. Attribution for small and very small business eligibility. 
Similarly, in determining which entities qualify as small or very small 
businesses, the Commission will consider the gross revenues of the 
applicant, its controlling interest holders, the affiliates of the 
applicant, and their controlling interest holders. As stated, the 
Commission does not impose specific equity requirements on controlling 
interest holders. 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.
    47. A consortium of small or very small businesses is a 
``conglomerate organization formed as a joint venture between or among 
mutually independent business firms,'' each of which individually must 
satisfy the definition of small or very small business in 
Sec. 24.720(b). 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.
v. Application Showing
    48. Applicants should note that they will be required to file 
supporting documentation to their FCC Form 175 short-form applications 
to establish that they satisfy the eligibility requirements to qualify 
as entrepreneurs and/or small or very small businesses (or consortia of 
small or very small businesses) for this auction.
    49. Applicants should further note that submission of an FCC Form 
175 application constitutes a representation by the certifying official 
that he or she is an authorized representative of the applicant, has 
read the form's instructions and certifications, and that the contents 
of the application and its attachments are true and correct. Submission 
of a false certification to the Commission may result in penalties, 
including monetary forfeitures, license forfeitures, ineligibility to 
participate in future auctions, and/or criminal prosecution.
    50. Entrepreneur eligibility (Exhibit C). Entities applying to bid 
on closed licenses 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 two years and the total assets of 
each of the following: (i) the applicant, (ii) the applicant's 
affiliates, (iii) the applicant's controlling interest holders, and 
(iv) the affiliates of the applicant's controlling interest holders. 
Certification that the gross revenues for each of the preceding two 
years or the total assets do not exceed the applicable limit is not 
sufficient. The applicant must provide separately for itself, its 
affiliates, its controlling interest holders, and their affiliates a 
schedule of gross revenues for each of the preceding two years. As 
stated, entities applying for closed bidding under the grandfather 
exception (47 CFR 24.709(b)(i)) need not meet the total assets and 
gross revenues limits of Sec. 24.709(a) of the Commission's rules. 
Applicants claiming auction eligibility under the grandfather exception 
should note the Commission's clarification of this exception in the C/F 
Block Sixth Report and Order.
    51. Small and very small business eligibility (Exhibit D). Entities 
applying to bid as small or very small businesses (or consortia of 
small or very small businesses) will be required to disclose on Exhibit 
D 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 interest holders, and (iv) the 
affiliates of the applicant's controlling interest holders. 
Certification that the average annual gross revenues for the preceding 
three years do not exceed the applicable limit is not sufficient. A

[[Page 75708]]

statement of the total gross revenues for the preceding three years is 
also insufficient. The applicant must provide separately for itself, 
its affiliates, its controlling interest holders, and their affiliates 
a schedule of gross revenues for each of the preceding three years, as 
well as a statement of total average gross revenues for the three-year 
period. If the applicant is applying as a consortium of very small or 
small businesses, this information must be provided for each consortium 
member.

D. Special C Block Eligibility Restriction Regarding Surrendered C 
Block Licenses

    52. C block licensees that surrendered C block licenses pursuant to 
the disaggregation, prepayment, and/or amnesty/prepayment election 
options the Commission made available in the C Block Second Report and 
Order, as modified by the C Block Reconsideration Order, are ineligible 
to reacquire the spectrum represented by their surrendered licenses 
through auction participation, or by any other means, until March 23, 
2001. This prohibition extends to qualifying members of the licensee's 
control group, and their affiliates. Licensees that surrendered 
licenses pursuant to the ``pure amnesty'' election option remain 
eligible to reacquire the spectrum represented by those surrendered 
licenses through auction participation or a secondary market 
transaction. Applicants that are prohibited from bidding on licenses 
representing previously surrendered spectrum, should not select ``all 
markets'' on their FCC Form 175 application if any of their surrendered 
spectrum is available in Auction No. 35.

E. Provisions Regarding Defaulters and Former Defaulters (FCC Form 175 
Exhibit E)

    53. Each applicant must certify on its FCC Form 175 application 
that it is not in default on any Commission licenses and that it is not 
delinquent on any non-tax debt owed to any Federal agency. In addition, 
each applicant must attach to its FCC Form 175 application a statement 
made under penalty of perjury indicating whether or not the applicant 
has ever been in default on any Commission licenses or has ever been 
delinquent on any non-tax debt owed to any federal agency. Applicants 
must include this statement as Exhibit E of the FCC Form 175. If any of 
an applicant's controlling interests holders or their affiliates, as 
defined by Sec. 1.2110 of the Commission's rules (as recently amended 
in the Part 1 Fifth Report and Order) have ever been in default on any 
Commission license or have ever been delinquent on any non-tax debt 
owed to any Federal agency, the applicant must include such information 
as part of the same attached statement. Prospective bidders are 
reminded that the statement must be made under penalty of perjury and, 
further, 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.
    54. ``Former defaulters''--i.e., applicants, including their 
attributable interest holders, that in the past have defaulted on any 
Commission licenses or been delinquent on any non-tax debt owed to any 
Federal agency, but that have since remedied all such defaults and 
cured all of their outstanding non-tax delinquencies--are eligible to 
bid in Auction No. 35, provided that they are otherwise qualified. 
However, as discussed infra in section III.D.3, former defaulters are 
required to pay upfront payments that are fifty percent more than the 
normal upfront payment amounts.

F. Transfer and Assignment Restrictions on Licenses Won in Closed 
Bidding

    55. C or F block licenses won in closed bidding generally may be 
transferred or assigned only to an entity that meets the entrepreneur 
financial caps or that holds another C or F block license that it 
acquired while meeting the entrepreneur financial caps. This 
restriction ends five years after the date of the initial license grant 
or upon notification by the licensee that it has satisfied its five-
year construction requirement under 47 CFR 24.203(c), whichever comes 
first. Licenses won in open bidding are not subject to this restriction 
and may be transferred or assigned any time after grant to any 
qualified entity.

G. Unjust Enrichment Payments

    56. C or F block licensees that use a small or very small business 
bidding credit, and during the first five years of their license term 
seek to assign or transfer control of a license to an entity that does 
not meet the eligibility criteria for a small or very small business 
bidding credit, or that is eligible for a lower bidding credit, will 
have to reimburse the U.S. Government for a percentage of the amount of 
the bidding credit, plus interest.
    57. In the C/F Block Sixth Report and Order, the Commission decided 
that licensees are not subject to bidding credit unjust enrichment 
payments for early transfer or assignment of licenses won in Auction 
No. 5 or No. 10. We clarify that transfer or assignment of a license 
won in Auctions No. 11, 22, 35, or any other auction using a small or 
very small business bidding credit, will still be subject to any 
applicable bidding credit unjust enrichment payment under the 
Commission's rules.

H. Installment Payments

    58. Installment payment plans will not be available in Auction No. 
35.

I. Other Information (FCC Form 175 Exhibits F and G)

    59. Applicants owned by minorities or women, as defined in 47 CFR 
1.2110(c)(2), may attach an exhibit (Exhibit F) 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 on Exhibit G (Miscellaneous 
Information) to the FCC Form 175.

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

    60. After the short-form filing deadline (November 6, 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 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 to Louis Sigalos, Deputy Chief, Auctions and Industry Analysis 
Division, Wireless Telecommunications Bureau, Federal Communications 
Commission, 445 12th Street, SW, Suite 4-A668 Washington, DC 20554, 
briefly summarizing the changes. Questions about other changes should 
be directed to Audrey Bashkin of the Auctions and Industry Analysis 
Division at (202) 418-0660.

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

    61. 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

[[Page 75709]]

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

    62. On Friday, October 20, 2000, the FCC will sponsor a free 
seminar for Auction No. 35 at the Federal Communications Commission, 
located at 445 12th Street, SW, Washington, DC. The seminar will 
provide attendees with information about pre-auction procedures, 
conduct of the auction, FCC remote bidding software, and the C and F 
block broadband PCS spectrum and auction rules. The seminar will also 
provide an opportunity for prospective bidders to ask questions of FCC 
staff.

B. Short-Form Application (FCC Form 175)--Due November 6, 2000

    63. 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 no later than 
6:00 p.m. ET on November 6, 2000. Late applications will not be 
accepted.
    64. 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
    65. Applicants must file their FCC Form 175 applications 
electronically. Applications may generally be filed at any time 
beginning at noon on October 20, 2000, until 6:00 p.m. ET on November 
6, 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 November 6, 2000.
    66. 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 of the Public Notice. Technical support is available at 
(202) 414-1250 (voice) or (202) 414-1255 (text telephone (TTY)); the 
hours of service Monday through Friday, from 7:00 AM to 10:00 PM ET, 
Saturday, 8:00 AM to 7:00 PM ET, and Sunday, 12:00 noon to 6:00 PM ET. 
In order to provide better service to the public, all calls to the 
hotline are recorded.
ii. Completion of the FCC Form 175
    67. 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 the Public Notice. Applicants are 
encouraged to begin preparing the required attachments for FCC Form 175 
prior to submitting the form. Attachments C and D to this public notice 
provide information on the required attachments and appropriate 
formats.
iii. Electronic Review of FCC Form 175
    68. 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 of the Public Notice for 
details on accessing the review system.

C. Application Processing and Minor Corrections

    69. 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: (1) those applications accepted for filing 
(including FCC account numbers and the licenses for which they 
applied); (2) those applications rejected; and (3) those applications 
which have minor defects that may be corrected, and the deadline for 
filing such corrected applications.
    70. As described more fully in the Commission's rules, after the 
November 6, 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 November 27, 2000

    71. 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. ET on November 27, 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. 35 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 November 27, 
2000, deadline will result in dismissal of the application and 
disqualification from participation in the auction.
i. Making Auction Payments by Wire Transfer
    72. Wire transfer payments must be received by 6:00 p.m. ET on 
November 27, 2000. To avoid untimely payments, applicants should 
discuss arrangements (including bank closing schedules) with their 
banker several days before they plan to make the wire transfer, and 
allow sufficient time for the transfer to be initiated and completed 
before the deadline. Applicants will need the following information:

ABA Routing Number: 043000261
Receiving Bank: Mellon Pittsburgh
BNF: FCC/AC 910-0198
OBI Field: (Skip one space between each information item)
``AUCTIONPAY''
TAXPAYER IDENTIFICATION NO.: (same as FCC Form 159, block 26)
PAYMENT TYPE CODE (enter ``A35U'')
FCC CODE 1 (same as FCC Form 159, block 23A: ``35'')
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.

    73. 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. 35.'' Bidders should confirm receipt of their upfront 
payment at Mellon Bank by contacting their sending financial 
institution.
ii. FCC Form 159
    74. A completed FCC Remittance Advice Form (FCC Form 159) must be

[[Page 75710]]

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 of the Public Notice. 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
    75. In the Part 1 Order, Memorandum Opinion and Order, and Notice 
of Proposed Rule Making, 62 FR 13570 (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 
addition, as required by the Part 1 Fifth Report and Order, the upfront 
payment amount for ``former defaulters,'' i.e., applicants that have 
ever been in default on any Commission license or have ever been 
delinquent on any non-tax debt owed to any Federal agency, will be 
fifty percent more than the normal amount required to be paid. In the 
Auction No. 35 Comment Public Notice, the Bureau proposed upfront 
payments for Auction No. 35. Specifically, the Bureau proposed upfront 
payments using the following formula:

Tier 1

(1) 15 MHz licenses--2.5 % of most recent net high bid for C block 
licenses in same BTA
(2) 10 MHz licenses--1.6 % of most recent net high bid for C block 
licenses in same BTA

Tier 2

(1) 15 MHz licenses--1.25 % of most recent net high bid for C block 
licenses in same BTA
(2) 10 MHz licenses--1.0 % of most recent net high bid for C block 
licenses in same BTA
We adopt the proposed formula for upfront payments (with 
clarification):

Tier 1

(1) 15 MHz licenses--2.5 % of most recent net high bid for 30 MHz C 
block license in same BTA
(2) 10 MHz licenses--1.6 % of most recent net high bid for 30 MHz C 
block license in same BTA

Tier 2

(1) 15 MHz licenses--1.25 % of most recent net high bid for 30 MHz C 
block license in same BTA
(2) 10 MHz licenses--1.0 % of most recent net high bid for 30 MHz C 
block license in same BTA
    76. 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. 35, 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.
    77. In order to be able to place a bid on a license, in addition to 
being qualified for and 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.
    78. 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.
    79. Former defaulters should calculate their upfront payment for 
all licenses by multiplying the number of bidding units they wish to 
purchase by 1.5. In order to calculate the number of bidding units to 
assign to former defaulters, the Commission will divide the upfront 
payment received by 1.5 and round the result up to the nearest bidding 
unit.

    Note: An applicant may, on its FCC Form 175, apply for every 
applicable 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 for 
Upfront Payments
    80. The Commission will use wire transfers for all Auction No. 35 
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: Tim Dates or Gail Glasser, at (202) 
418-2843 by November 28, 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.F.

A. Auction Registration

    81. 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.
    82. 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.
    83. 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, December 8, 2000, should 
contact the Auctions Hotline at (717) 338-2888. Receipt of both 
registration mailings is

[[Page 75711]]

critical to participating in the auction and each applicant is 
responsible for ensuring it has received all of the registration 
material.
    84. 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.

B. Remote Electronic Bidding Software

    85. Qualified bidders are allowed to bid electronically or 
telephonically. If choosing to bid electronically, each bidder must 
purchase its 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, November 28, 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. 
35. 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 of the Public Notice.

C. Mock Auction

    86. All qualified bidders will be eligible to participate in a mock 
auction on Friday, December 8, 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

    87. The first round of bidding for Auction No. 35 will begin on 
Tuesday, December 12, 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
    88. In the Auction No. 35 Comment Public Notice, we proposed to 
award all licenses in Auction No. 35 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 PCS 
licenses through a single, simultaneous multiple round auction. Unless 
otherwise announced, bids will be accepted on all licenses in each 
round of the auction. This approach, we believe, allows bidders to take 
advantage of any synergies that exist among licenses and is most 
administratively efficient.
ii. Maximum Eligibility and Activity Rules
    89. In the Auction No. 35 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.
    90. For Auction No. 35 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. Note again that 
upfront payments are not attributed to specific licenses, but instead 
will be translated into bidding units to define a bidder's initial 
maximum eligibility. The total upfront payment defines the maximum 
number of bidding units on which the applicant will be permitted to 
bid. As there is no provision for increasing a bidder's maximum 
eligibility during the course of an auction (as described under 
``Auction Stages'' as set forth in Part IV.A.4), prospective bidders 
are cautioned to calculate their upfront payments carefully. The total 
upfront payment does not define the total dollars a bidder may bid on 
any given license.
    91. 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.
    92. 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 either if it is 
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. Because these procedures have 
proven successful in maintaining the pace of previous auctions as set 
forth under ``Auction Stages'' in Part IV.A.4 and ``Stage Transitions'' 
in Part IV.A.v., we adopt them for Auction No. 35.
iii. Activity Rule Waivers and Reducing Eligibility
    93. In the Auction No. 35 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 course of the auction.
    94. Based upon our experience in previous auctions, we adopt our 
proposal that each bidder 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.
    95. 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: (1) there are no activity rule waivers 
available; or (2) the bidder overrides the automatic application of a 
waiver by reducing

[[Page 75712]]

eligibility, thereby meeting the minimum requirements.
    96. 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.). Once eligibility has been reduced, a 
bidder will not be permitted to regain its lost bidding eligibility.
    97. Finally, a bidder may proactively use an activity rule waiver 
as a means to keep the auction open without placing a bid. If a bidder 
submits a proactive waiver (using the proactive waiver function in the 
bidding software) during a round in which no bids are submitted, the 
auction will remain open and the bidder's eligibility will be 
preserved. An automatic waiver invoked in a round in which there are no 
new valid bids or withdrawals will not keep the auction open.
iv. Auction Stages
    98. In the Auction No. 35 Comment Public Notice, we proposed to 
conduct the auction in three stages and employ an activity rule. We 
further proposed that, in each round of Stage One, a bidder desiring to 
maintain its current eligibility would be required to be active on 
licenses encompassing at least 80 percent of its current bidding 
eligibility. In each round of Stage Two, a bidder desiring to maintain 
its current eligibility would be required to be active on at least 90 
percent of its current bidding eligibility. Finally, we proposed that a 
bidder in Stage Three, in order to maintain eligibility, would be 
required to be active on 98 percent of its current bidding eligibility.
    99. We conclude that the auction will be composed of three stages, 
which are each defined by an increasing activity rule. We will adopt 
our proposals for the activity rules. Listed are the activity levels 
for each stage of the auction. The FCC reserves the discretion to 
further alter the activity percentages before and/or during the 
auction.
    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).
    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).
    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.

Because the foregoing procedures have proven successful in maintaining 
proper pace in previous auctions, we adopt them for Auction No. 35.
v. Stage Transitions
    100. In the Auction No. 35 Comment Public Notice, we proposed that 
the auction would generally advance to the next stage (i.e., from Stage 
One to Stage Two, and from Stage Two to Stage Three) when the auction 
activity level, as measured by the percentage of bidding units 
receiving new high bids, is below 10 percent for three consecutive 
rounds of bidding in each Stage. However, we further proposed that the 
Bureau would retain the discretion to change stages unilaterally by 
announcement during the auction. This determination, we proposed, would 
be based on a variety of measures of bidder activity, including, but 
not limited to, the auction activity level, the percentages of licenses 
(as measured in bidding units) on which there are new bids, the number 
of new bids, and the percentage increase in revenue.
    101. We adopt our proposal. Thus, the auction will start in Stage 
One. Under the FCC's general guidelines, the auction will start in 
Stage One and it will advance to the next stage (i.e., from Stage One 
to Stage Two, and from Stage Two to Stage Three) when, in each of three 
consecutive 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. We believe that these stage 
transition rules, having proven successful in prior auctions, are 
appropriate for use in Auction No. 35.
vi. Auction Stopping Rules
    102. For Auction No. 35, the Bureau proposed to 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.
    103. The Bureau also proposed a modified version 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.
    104. The Bureau further proposed retaining the discretion to keep 
an auction open even if no new acceptable bids or proactive waivers are 
submitted and no previous high bids are withdrawn in a round. In this 
event, the effect will be the same as if a bidder had submitted a 
proactive waiver. Thus, the

[[Page 75713]]

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).
    105. In addition, we proposed that the Bureau reserve the right to 
declare that the auction will end after a specified number of 
additional rounds (``special stopping rule''). If the Bureau invokes 
this special stopping rule, it will accept bids in the final round(s) 
only for licenses on which the high bid increased in at least one of 
the preceding specified number of rounds. 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. 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, and/or adjusting the amount of the minimum bid 
increments for the licenses.
    106. We adopt all of the proposals concerning the auction stopping 
rules. Auction No. 35 will begin under the simultaneous stopping rule, 
and the Bureau will retain the discretion to invoke the other versions 
of the stopping rule. We believe that these stopping rules are most 
appropriate for Auction No. 35, because our experience in prior 
auctions demonstrates that the auction stopping rules balance the 
interests of administrative efficiency and maximum bidder 
participation. The substitutability among licenses in different 
geographic areas and the importance of preserving the ability of 
bidders to pursue backup strategies support the use of these stopping 
rules.
vii. Auction Delay, Suspension, or Cancellation
    107. In the Auction No. 35 Comment Public Notice, we proposed that, 
by public notice or by announcement during the auction, the Bureau may 
delay, suspend, or cancel the auction in the event of natural disaster, 
technical obstacle, evidence of an auction security breach, unlawful 
bidding activity, administrative or weather necessity, or for any other 
reason that affects the fair and competitive conduct of competitive 
bidding.
    108. 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 Bureau may delay, suspend, or cancel the auction in 
the event of natural disaster, technical obstacle, evidence of an 
auction security breach, unlawful bidding activity, administrative or 
weather necessity, or for any other reason that affects the fair and 
competitive conduct of competitive bidding. In such cases, the Bureau, 
in its sole discretion, may elect to resume the auction starting from 
the beginning of the current round, resume the auction starting from 
some previous round, or cancel the auction in its entirety. Network 
interruption may cause the Bureau to delay or suspend the auction. 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
    109. 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 
also be included in the public notice.
    110. The FCC has discretion to change the bidding schedule in order 
to foster an auction pace that reasonably balances speed with the 
bidders' need to study round results and adjust their bidding 
strategies. The FCC may increase or decrease the amount of time for the 
bidding rounds and review periods, or the number of rounds per day, 
depending upon the bidding activity level and other factors.
ii. Reserve Price or Minimum Opening Bid
    111. Background. The Balanced Budget Act 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 are 
subject to auction (i.e., because there are mutually exclusive 
applications for those licenses), unless the Commission determines that 
a reserve price or minimum opening bid is not in the public interest. 
Consistent with this mandate, the Commission directed the Bureau to 
seek comment on the use of a minimum opening bid and/or reserve price 
prior to the start of each auction. Among other factors, the Bureau 
must consider the amount of spectrum being auctioned, levels of 
incumbency, the availability of technology to provide service, the size 
of the geographic service areas, the extent of interference with other 
spectrum bands, and any other relevant factors that could have an 
impact on the spectrum being auctioned. The Commission concluded that 
the Bureau should have the discretion to employ either or both of these 
mechanisms for future auctions.
    112. In the Auction No. 35 Comment Public Notice, the Bureau 
proposed to establish minimum opening bids for Auction No. 35 and to 
retain discretion to lower the minimum opening bids. Specifically, for 
Auction No. 35, the Commission proposed the following formula for 
minimum opening bids:

Tier 1

(1) 15 MHz licenses--5 % of most recent net high bid for C block 
licenses in same BTA
(2) 10 MHz licenses--3.2 % of most recent net high bid for C block 
licenses in same BTA

Tier 2

(1) 15 MHz licenses--2.5 % of most recent net high bid for C block 
licenses in same BTA
(2) 10 MHz licenses--1.6 % of most recent net high bid for C block 
licenses in same BTA
    113. In the alternative, the Bureau sought comment on whether, 
consistent with the Balanced Budget Act, the public interest would be 
served by having no minimum opening bid or reserve price.
    114. We will adopt minimum opening bids for Auction No. 35, 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. We adopt 
the proposed formula for minimum opening bids (with clarification):

Tier 1

(1) 15 MHz licenses--5 % of most recent net high bid for 30 MHz C block 
license in same BTA
(2) 10 MHz licenses--3.2 % of most recent net high bid for 30 MHz C 
block license in same BTA

[[Page 75714]]

Tier 2

(1) 15 MHz licenses--2.5 % of most recent net high bid for 30 MHz C 
block license in same BTA
(2) 10 MHz licenses--1.6 % of most recent net high bid for 30 MHz C 
block license in same BTA
    115. We conclude that the adopted formula presented here best meets 
the objectives of our authority in establishing reasonable minimum 
opening bids. We have 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. For the sake of auction integrity and fairness, 
minimum opening bids must be set in a manner that is consistent across 
licenses.
    116. As a final safeguard against unduly high pricing, minimum 
opening bids are reducible at the discretion of the Bureau. This 
discretion will allow the Bureau flexibility to adjust the minimum 
opening bids if circumstances warrant. We emphasize, however, that such 
discretion will be exercised, if at all, sparingly and early in the 
auction, i.e., before bidders lose all waivers and begin to lose 
substantial eligibility. During the course of the auction, the Bureau 
will not entertain any bidder requests to reduce the minimum opening 
bid on specific licenses.
iii. Bid Increments and Minimum Accepted Bids
    117. In the Auction No. 35 Comment Public Notice, we proposed to 
use a smoothing methodology to calculate minimum bid increments. We 
further proposed to retain the discretion to change the minimum bid 
increment if circumstances so dictate.
    118. We will adopt our proposal for a smoothing formula. The 
smoothing methodology is designed to vary the increment for a given 
license between a maximum and minimum value based on the bidding 
activity on that license. This methodology allows the increments to be 
tailored to the activity level of a license, decreasing the time it 
takes for active licenses to reach their final value. The formula used 
to calculate this increment is included as Attachment G of the Public 
Notice.
    119. We adopt our proposal of initial values for the maximum of 0.2 
(20 percent of the license value) and for the minimum of 0.1 (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. 35 if circumstances warrant.
iv. High Bids
    120. Each bid will be date-and time-stamped when it is entered into 
the FCC computer system. In the event of tied high bids (identical 
gross bid amounts) for a license during a round, the earliest of the 
tied bids will be the standing high bid at the end of the round. 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
    121. During a bidding round, a bidder may submit bids for as many 
licenses as it wishes (subject to its eligibility), 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.
    122. 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. 35.
    123. A bidder's ability to bid on specific licenses in the first 
round of the auction is determined by three factors: (1) the licenses 
applied for on FCC Form 175, (2) eligibility restrictions on those 
licenses, and (3) 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.
    124. The bidding software requires each bidder to log in 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.
    125. The bid entry screen of the Automated Auction System software 
for Auction No. 35 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.
    126. 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 high bid 
amount according to the following formula:
Amount Bid = High Bid + (Bid Mult * Bid Increment)

    127. 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.
    128. 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

[[Page 75715]]

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
    129. In the Auction No. 35 Comment Public Notice, we proposed bid 
removal and bid withdrawal rules. With respect to bid withdrawals, we 
proposed limiting each bidder to withdrawals in no more than two rounds 
during the course of the auction. The two rounds in which withdrawals 
are utilized, we proposed, would be at the bidder's discretion.
    130. 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 geographic area licenses in combination, we 
conclude that, for Auction No. 35, adoption of a limit on their use to 
two rounds is the most appropriate outcome. By doing so we believe we 
strike a reasonable compromise that will allow bidders to use 
withdrawals. Our decision on this issue is based upon our experience in 
prior auctions, particularly the PCS D, E and F block auctions, and 800 
MHz SMR auction, and is in no way a reflection of our view regarding 
the likelihood of any speculation or ``gaming'' in this auction.
    131. The Bureau will therefore limit the number of rounds in which 
bidders may place withdrawals to two rounds. These rounds will be at 
the bidder's discretion and there will be no limit on the number of 
bids that may be withdrawn in either of these rounds. Withdrawals 
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.
    132. 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. This procedure will enhance 
bidder flexibility during the auction. Therefore, we will adopt these 
procedures for Auction No. 35.
    133. Once a round closes, a bidder may no longer remove a bid. 
However, in later rounds, 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).
    134. Calculation. Generally, the Commission imposes payments on 
bidders that withdraw high bids during the course of an auction. If a 
bidder withdraws its bid and there is no higher bid in the same or 
subsequent auction(s), the bidder that withdrew its bid is responsible 
for the difference between its withdrawn bid and the net high bid in 
the same or subsequent auction(s). In the case of multiple bid 
withdrawals on a single license, within the same or subsequent 
auctions(s), the payment for each bid withdrawal will be calculated 
based on the sequence of bid withdrawals and the amounts withdrawn. No 
withdrawal payment will be assessed for a withdrawn bid if either the 
subsequent winning bid or any of the intervening subsequent withdrawn 
bids, in either the same or subsequent auctions(s), equals or exceeds 
that withdrawn bid. Thus, a bidder that withdraws a bid will not be 
responsible for any withdrawal payments if there is a subsequent higher 
bid in the same or subsequent auction(s). This policy allows bidders to 
most efficiently allocate their resources as well as to evaluate their 
bidding strategies and business plans during an auction while, at the 
same time, maintaining the integrity of the auction process. The Bureau 
retains the discretion to scrutinize multiple bid withdrawals on a 
single license for evidence of anti-competitive strategic behavior and 
take appropriate action when deemed necessary.
    135. In the Part 1 Fifth Report and Order, the Commission modified 
Sec. 1.2104(g)(1) of the rules regarding assessments of interim bid 
withdrawal payments. As amended, Sec. 1.2104(g)(1) provides that in 
instances in which bids have been withdrawn on a license that is not 
won in the same auction, the Commission will assess an interim 
withdrawal payment equal to 3 percent of the amount of the bid 
withdrawals. The 3 percent interim payment will be applied toward any 
final bid withdrawal payment that will be assessed at the close of the 
subsequent auction of the license. Assessing an interim bid withdrawal 
payment ensures that the Commission receives a minimal withdrawal 
payment pending assessment of any final withdrawal payment. The Part 1 
Fifth Report and Order provides specific examples showing application 
of the bid withdrawal payment rule.
vii. Round Results
    136. 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. 35 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
    137. 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 on the Internet.
ix. Maintaining the Accuracy of FCC Form 175 Information
    138. As noted in Part II.J., 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: Louis Sigalos, Deputy 
Chief, Auctions and Industry Analysis

[[Page 75716]]

Division, Wireless Telecommunications Bureau, Federal Communications 
Commission, 445 12th Street, SW, Room 4-A668, Washington, DC 20554.
    139. A separate copy of the letter should be mailed to Audrey 
Bashkin, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau, Federal Communications Commission, 445 12th 
Street, SW, Room 4-A665, Washington, DC 20554. Questions about other 
changes should be directed to Audrey Bashkin at (202) 418-0660.

V. Post-auction Procedures

A. Down Payments and Withdrawn Bid Payments

    140. 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.
    141. Within ten business days after release of the auction closing 
notice, each winning bidder must submit sufficient funds (in addition 
to its upfront payment) to bring its total amount of money on deposit 
with the Government to 20 percent of its net winning bids (actual bids 
less any applicable small and very small business 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 IV.B.6. (Upfront payments 
are applied first to satisfy any withdrawn bid liability, before being 
applied toward down payments.)

B. Long-Form Application

    142. Within ten business days after release of the auction closing 
notice, winning bidders must electronically submit a properly completed 
long-form application and required exhibits for each license won 
through Auction No. 35. Winning bidders that are entrepreneurs and/or 
small or very small businesses must include an exhibit demonstrating 
their eligibility for closed bidding and/or small and very small 
business bidding credits as applicable. See 47 CFR 1.2112(b), 
24.709(c)(2)(i). Further filing instructions will be provided to 
auction winners at the close of the auction.

C. Tribal Land Bidding Credit

    143. A winning bidder that intends to use its license(s) to deploy 
facilities and provide services to federally-recognized tribal lands 
that are unserved by any telecommunications carrier or that have a 
telephone service penetration rate equal to or below 70 percent is 
eligible to receive a tribal land bidding credit as set forth in 47 CFR 
1.2107 and 1.2110(e). A tribal land bidding credit is in addition to, 
and separate from, any other bidding credit for which a winning bidder 
may qualify.
    144. Unlike other bidding credits that are requested prior to the 
auction, a winning bidder applies for the tribal land bidding credit 
after winning the auction when it files its long-form application (FCC 
Form 601). In order for a winning bidder to be awarded a tribal land 
bidding credit, it must provide specific certifications regarding the 
servicing of tribal lands and is subject to specific performance 
criteria as set forth in 47 CFR 1.2110(e).
    145. For additional information on the tribal land bidding credit, 
including how to determine the amount of credit available, see Public 
Notice DA 00-2219, released September 28, 2000, entitled Wireless 
Telecommunications Bureau Announces Availability of Bidding Credits For 
Providing Wireless Services To Qualifying Tribal Lands.

D. Auction Discount Voucher

    146. On June 8, 2000, the Commission awarded Qualcomm, Inc. a 
transferable Auction Discount Voucher in the amount of $125,273,878.00. 
This Auction Discount Voucher may be used by Qualcomm or its 
transferee, in whole or in part, to adjust a winning bid in any 
spectrum auction prior to June 8, 2003, subject to terms and conditions 
set forth in the Commission's Order.

E. Default and Disqualification

    147. 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 its 
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).

F. Refund of Remaining Upfront Payment Balance

    148. All applicants that submitted upfront payments but were not 
winning bidders for a license in Auction No. 35 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.
    149. 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 you have completed the refund instructions electronically, 
then 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, SW, Room 1-A824, 
Washington, DC 20554.
    150. 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. NOTE: Refund processing generally takes up to two weeks to 
complete. Bidders with questions about refunds should contact Tim Dates 
or Gail Glasser at (202) 418-1995.

Federal Communications Commission.
Margaret Wiener,
Deputy Chief, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau.
[FR Doc. 00-30860 Filed 12-1-00; 8:45 am]
BILLING CODE 6712-01-P