[Federal Register Volume 65, Number 251 (Friday, December 29, 2000)]
[Notices]
[Pages 83024-83035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-33346]


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FEDERAL COMMUNICATIONS COMMISSON

[Report No. AUC-00-38-C (Auction No. 38); DA 00-2571]


Auction of Licenses for the 700 MHz Guard Bands Scheduled for 
February 13, 2001; Auction Notice and Filing Requirements for 8 
Licenses in the 700 MHz Guard Bands Minimum Opening Bids and Other 
Procedural Issues

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 eight Guard Band Manager licenses in 
the 700 MHz Guard Bands (``Auction No. 38'').

DATES: Auction No. 38 is scheduled for February 13, 2001.

FOR FURTHER INFORMATION CONTACT: Legal questions contact Howard 
Davenport, Auctions Attorney, at (202) 418-0660. For general auction 
and bidding questions, contact Linda Sanderson, Auctions Project 
Manager, at (717) 338-2888 or Craig Bomberger, Auctions Analyst, at 
(202) 418-0660. Media Contact, Mark Rubin at (202) 418-2924. For 
licensing questions, contact Roger Noel, Chief, Licensing & Technical 
Analysis Branch, at (202) 418-0620.

SUPPLEMENTARY INFORMATION: This is a summary of a public notice 
released November 14, 2000. The complete text of the public notice, 
including attachments, is available for inspection and copying during 
normal business hours in the FCC Reference Center (Room CY-A257), 445 
12th Street, SW., Washington, DC 20554. It may also be purchased from 
the Commission's copy contractor, International Transcription Services, 
Inc. (ITS, Inc.) 1231 20th Street, NW., Washington, DC 20036, (202) 
857-3800. It is also available on the Commission's web site at http://www.fcc.gov.
    List of Attachments available at the FCC.

Attachment A--Licenses to be Auctioned
Attachment B--FCC Auction Seminar Registration Form
Attachment C--Electronic Filing and Review of the FCC Form 175
Attachment D--Guidelines for Completion of FCC Form 175 and Exhibits
Attachment F--FCC Bidding Preference/Remote Software Order Form
Attachment G--Accessing the FCC Network to File FCC Form 175
Attachment H--Summary of Documents Addressing the Anti-Collusion Rules
Attachment I--Incumbent Television Licensees on Channels 59-68

I. General Information

A. Introduction

    1. This public notice announces the procedures and minimum opening 
bids for the upcoming auction of eight Guard Band Manager licenses in 
the 700 MHz Guard Bands (``Auction No. 38''). On October 13, 2000, the 
Wireless Telecommunications Bureau (``Bureau'') released a public 
notice, seeking comment on the establishment of reserve prices or 
minimum opening bids for Auction No. 38, in accordance with the 
Balanced Budget Act of 1997. In addition, the Bureau sought comment on 
a number of procedures to be used in Auction No. 38. The Bureau 
received no comments in response to the Auction No. 38 Comment Public 
Notice 65 FR 63584 (October 24, 2000).
i. Background of Proceeding
    2. The 746-806 MHz band has historically been used exclusively by 
television stations (Channels 60-69). Incumbent analog television 
broadcasters are permitted by statute to continue operations in this 
band until their markets are converted to digital television (``DTV''). 
The Budget Act directed the Commission to reallocate this spectrum for 
public safety and commercial use by December 31, 1997, and to commence 
competitive bidding for the commercial licenses on the reallocated 
spectrum after January 1, 2001. In November 1999, Congress enacted a 
consolidated appropriations statute that revised the latter 
instruction. This legislation accelerated the schedule for auction of 
the commercial spectrum bands. Accordingly, the Bureau held an auction 
that began on September 6, 2000 and concluded on September 21, 2000 
(Auction No. 33).
ii. Licenses to Be Auctioned
    3. The licenses available in this auction consist of the following 
licenses that remained unsold in Auction No. 33.

------------------------------------------------------------------------
     Market No.            Market name            Block       Bandwidth
------------------------------------------------------------------------
MEA012.............  Pittsburgh, PA.........            A         2 MHz
MEA014.............  Columbus, OH...........            B         4 MHz
MEA028.............  Little Rock, AR........            B         4 MHz

[[Page 83025]]

 
MEA034.............  Omaha, NE..............            B         4 MHz
MEA037.............  Oklahoma City, OK......            B         4 MHz
MEA048.............  Hawaii.................            B         4 MHz
MEA049.............  Guam and the Northern              B         4 MHz
                      Mariana Islands.
MEA051.............  American Samoa.........            B         4 MHz
------------------------------------------------------------------------

    The frequency allocation for the ``A'' Block license is 746-747/
776-777 MHz. The frequency allocation for the ``B'' Block licenses is 
762-764/792-794 MHz.

B. Rules and Disclaimers

i. Relevant Authority
    4. Prospective bidders must familiarize themselves thoroughly with 
the Commission's rules relating to the 700 MHz band, contained in title 
47, part 27 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. In particular, bidders should also 
familiarize themselves with the Commission's recent amendments and 
clarifications to its general competitive bidding rules. See Part 1 
Fifth Report and Order, 65 FR 52401 (August 29, 2000).
    5. Prospective bidders must also be thoroughly familiar with the 
procedures, terms and conditions (collectively, ``Terms'') contained in 
this public notice; the Auction No. 38 Comment Public Notice, 700 MHz 
Second Report and Order, 65 FR 17594 (April 4, 2000), 700 MHz First 
Report & Order, 65 FR 3139 (January 20, 2000), 700 MHz Memorandum 
Opinion and Order (MO&O), 65 FR 42879 (July 12, 2000), Reallocation 
Report & Order, 63 FR 6669 (February 10, 1998), and Reallocation MO&O 
63 FR 63798 (November 17, 1998).
    6. The terms contained in the Commission's rules, relevant orders 
and public notices are not negotiable. The Commission may amend or 
supplement the information contained in our public notices at any time, 
and will issue public notices to convey any new or supplemental 
information to bidders. It is the responsibility of all prospective 
bidders to remain current with all Commission rules and with all public 
notices pertaining to this auction. Copies of most Commission 
documents, including public notices, can be retrieved from the FCC 
Internet node via anonymous ftp @ftp.fcc.gov or the FCC Auctions World 
Wide Web site at http://www.fcc.gov/wtb/auctions. Additionally, 
documents may be obtained for a fee by calling the Commission's copy 
contractor, International Transcription Service, Inc. (ITS), at (202) 
314-3070. When ordering documents from ITS, please provide the 
appropriate FCC number (for example, FCC 00-5 for the 700 MHz First 
Report & Order).
ii. Prohibition of Collusion
    7. 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/she is authorized 
to represent in the auction. Also, if the authorized bidders are 
different individuals employed by the same organization (e.g., law firm 
or consulting firm), a violation could similarly occur. At a minimum, 
in such a case, applicants should certify on their applications that 
precautionary steps have been taken to prevent communication between 
authorized bidders and that applicants and their bidding agents will 
comply with the anti-collusion rule.
    8. The Bureau, however, cautions that merely filing a certifying 
statement as part of an application will not outweigh specific evidence 
that collusive behavior has occurred nor will it preclude the 
initiation of an investigation when warranted. In Auction No. 38, for 
example, the rule would apply to any applicants bidding for the same 
MEA. Therefore, applicants that apply to bid for ``all markets'' would 
be precluded from communicating with all other applicants after filing 
the FCC Form 175. However, applicants may enter into bidding agreements 
before filing their FCC Form 175 short-form applications, as long as 
they disclose the existence of the agreement(s) in their Form 175 
short-form applications. 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 upon 
learning of such violation. Bidders are therefore required to make such 
notification to the Commission immediately upon discovery.
iii. Protection of Public Safety Operations
    9. Section 337 (d)(4) of the Budget Act requires that the 
Commission establish rules insuring that public safety services 
licensees using spectrum reallocated pursuant to subsection (a)(1) 
shall not be subject to harmful interference from television broadcast 
licensees. The Conference Report pertaining to that section states that 
the Commission should ensure that public safety service licensees in 
the 746-806 MHz band ``continue to operate free of interference from 
any new commercial licensees.'' To achieve this end, the Commission 
established ``Guard Bands'' in the 746-747 MHz, 762-764 MHz, 776-777 
MHz, and 792-794 MHz bands. The Commission required that entities 
operating in the Guard Bands adhere to the same out-of-band emission 
(``OOBE'') criteria that was adopted for 700 MHz public safety users. 
In addition, these entities must coordinate their frequency use with 
public safety frequency coordinators and also comply

[[Page 83026]]

with the adjacent channel coupled power out-of-band emission limits. In 
addition, operations in the Guard Bands are restricted to entities that 
do not use a cellular system architecture.
iv. Protection of Television Services
    10. Licensees operating on the spectrum associated with Channels 
60, 62, 65, and 67 must comply with the co-channel and adjacent channel 
provisions of Sec. 27.60 of our rules. For example, an entity operating 
on any portion of the 746-747 MHz Guard Band, which is contained in 
Channel 60, must provide co-channel protection to Channel 60, and 
adjacent channel protection to Channels 59 and 61.
    11. Negotiations with Incumbent Broadcast Licensees. As the 
Commission noted in the 700 MHz First Report & Order: ``The 
Congressional plan set forth in sections 336 and 337 of the 
[Communications] Act and in the 1997 Budget Act is to transition this 
spectrum from its current use for broadcast services to commercial use 
and public safety services.'' Congress also has directed the Commission 
to auction 36 MHz of spectrum, six of which are the subject of this 
auction, allocated for commercial use at least six years before the 
relocation deadline for incumbent broadcasters in this spectrum, while 
adopting interference limits and other technical restrictions necessary 
to protect full-service analog and digital television service during 
the transition to DTV.
    12. In the 700 MHz MO&O, the Commission concluded that voluntary 
band clearing agreements between incumbent broadcast licensees on 
Channels 59-69 and new licensees in the 700 MHz bands, if properly 
structured, will further the broad public interest in intensive and 
efficient use of the spectrum and further the statutory scheme. 
Accordingly, the Commission provided guidance in the 700 MHz MO&O 
regarding its treatment of specific regulatory requests needed to 
implement such voluntary agreements. This guidance includes a 
presumption in favor of approving such regulatory requests in certain 
circumstances and a recognition of the must carry obligation of cable 
systems with regard to broadcasts of digital television programming. 
The Commission established a rebuttable presumption in favor of 
granting regulatory requests that would: (i) Make new or expanded 
wireless service, such as ``2.5'' or ``3G'' services available to 
consumers; (ii) clear commercial frequencies that enable provision of 
public safety services; or (iii) result in the provision of wireless 
service to rural or other underserved communities. The applicant would 
also need to show that grant of the request would not result in any of 
the following: (i) The loss of any of the four stations in the 
designated market area (DMA) with the largest audience share; (ii) the 
loss of the sole service licensed to the local community; or (iii) the 
loss of a community's sole service on a channel reserved for 
noncommercial educational broadcast service.
    13. With respect to regulatory requests for which the presumption 
described is not established, or is rebutted, the Commission has stated 
that it will weigh the loss of broadcast service and the advent of new 
wireless service on a case-by-case basis. In reviewing specific 
requests not subject to the favorable presumption, the Commission would 
consider as a relevant factor in its public interest determination the 
extent to which the station's signal will remain available, after 
implementation of the agreement, to a significant number of its viewers 
in the licensee's service area. For instance, the Commission would find 
it significant if that signal is effectively available to a significant 
number of current viewers through various existing distribution 
channels, such as cable and DBS, and implementation of the voluntary 
agreement would not create additional TV white or gray area.
v. Due Diligence
    14. The FCC makes no representations or warranties about the use of 
this spectrum for particular services. Applicants should be aware that 
an FCC auction represents an opportunity to become an FCC licensee in 
this service, subject to certain conditions and regulations. An FCC 
auction does not constitute an endorsement by the FCC of any particular 
services, technologies or products, nor does an FCC license constitute 
a guarantee of business success. Applicants should perform their 
individual due diligence before proceeding as they would with any new 
business venture.
    15. Potential bidders are reminded that there are a number of 
incumbent broadcast television licensees already licensed and operating 
in the 746-764 and 776-794 MHz bands (television Channels 60-62 and 65-
67), six megahertz of which will be subject to the upcoming auction. As 
discussed in greater detail, the Commission made clear that geographic 
area licensees operating on the spectrum associated with Channels 60, 
62, 65, and 67 must comply with the co-channel and adjacent channel 
provision of Sec. 90.545 of the Commission's rules. In addition, 
geographic area licensees operating fixed stations in the 746-764 MHz 
band must comply with the relevant provisions for ``base stations'' in 
Secs. 90.309 and 90.545 of the Commission's rules; and licensees 
operating fixed stations in the 776-794 MHz band must comply with the 
relevant provisions for ``control stations'' in those sections of the 
rules.
    16. These limitations may restrict the ability of such geographic 
licensees to use certain portions of the electromagnetic spectrum or 
provide service to certain regions in their geographic license areas. 
Listed in Attachment I are the facilities of incumbent television 
permittees and licensees on television Channels 59-68. However, 
prospective bidders should not rely solely on this list, but should 
carefully review the Commission's databases and records before 
formulating bidding strategies. Records relating to these stations are 
available for public inspection during regular business hours in the 
Reference Information Center at the Federal Communications Commission, 
445 Twelfth Street, SW, CY-A257, Washington, DC 20554. The Commission 
makes no representation or guarantees regarding the accuracy or 
completeness of the information in Attachment I. In addition, the 
Commission makes no representations or guarantees regarding the 
accuracy or completeness of information that has been provided by 
incumbent licensees and incorporated into the databases. Potential 
bidders are strongly encouraged to physically inspect any sites located 
in or near the geographic area for which they plan to bid.
    17. Potential bidders should also be aware that certain 
applications (including those for modification), petitions for 
rulemaking, waiver requests, requests for special temporary authority 
(``STA''), petitions to deny, petitions for reconsideration, and 
applications for review may be pending before the Commission that 
relate to the facilities in Attachment I. We note that resolution of 
these pending matters could have an impact on the availability of 
spectrum for licensees in the 746-764 and 776-794 MHz bands. While the 
Commission will continue to act on pending matters, some of these 
matters may not be resolved by the time of auction.
    18. Potential bidders are strongly encouraged to conduct their own 
research prior to Auction No. 38 in order to determine the existence of 
pending proceedings that might affect their decisions regarding 
participation in the auction. Participants in Auction

[[Page 83027]]

No. 38 are strongly encouraged to continue such research during the 
auction.
vi. Bidder Alerts
    19. All applicants must certify on their FCC Form 175 applications 
under penalty of perjury that they are legally, technically, 
financially and otherwise qualified to hold a license, and not in 
default on any payment for Commission licenses (including down 
payments) or delinquent on any non-tax debt owed to any Federal agency. 
Prospective bidders are reminded that submission of a false 
certification to the Commission is a serious matter that may result in 
severe penalties, including monetary forfeitures, license revocations, 
exclusion from participation in future auctions, and/or criminal 
prosecution.
    20. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 38 to 
deceive and defraud unsuspecting investors.
    21. 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 700 MHz proposals may also call the FCC Consumer Center at 
(888) CALL-FCC ((888) 225-5322).
vii. National Environmental Policy Act (NEPA) Requirements
    22. 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
    23. The auction will begin on Tuesday, February 13, 2001. The 
initial schedule for bidding will be announced by public notice at 
least one week before the start of the auction. Unless otherwise 
announced, bidding on all licenses will be conducted on each business 
day until bidding has stopped on all licenses.
ii. Auction Title
    24. Auction No. 38--700 MHz Guard Band.
ii. Bidding Methodology
    25. The bidding methodology for Auction No. 38 will be simultaneous 
multiple round bidding. Bidding will be permitted only from remote 
locations, either electronically (by computer) or telephonically.
iii. Pre-Auction Dates and Deadlines
    26. These are important dates relating to Auction No. 38:

Auction Seminar--January 4, 2001
Short-Form Application (FCC FORM 175)--January 12, 2001; 6:00 p.m. ET
Upfront Payments (via wire transfer)--January 26, 2001; 6:00 p.m. ET
Orders for Remote Bidding Software--January 29, 2001; 6:00 p.m. ET
Mock Auction--February 9, 2001
Auction Begins--February 13, 2001
iv. Requirements for Participation
    27. Those wishing to participate in the auction must:
     Submit a short form application (FCC Form 175) 
electronically by 6:00 p.m. ET, January 12, 2001.
     Submit a sufficient upfront payment and an FCC Remittance 
Advice Form (FCC Form 159) by 6:00 p.m. ET January 26, 2001.
     Comply with all provisions outlined in this public notice.
vi. General Contact Information
    28. The following is a list of general contract information 
relating to Auction No. 38:

    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.-6:00 p.m. ET.
    Auction Legal Information: Auction Rules, Policies, Regulations--
Auctions and Industry Analysis Division, Legal Branch (202) 418-0660.
    Licensing Information: Rules, Policies, Regulations; Licensing 
Issues; Incumbency/Protection 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: 7 a.m.-10:00 p.m. ET, 
Monday-Friday; 8 a.m.-7:00 p.m. ET, Saturday; 12:00 p.m.-6:00 p.m. ET, 
Sunday.
    Payment Information: Wire Transfers, Refunds--FCC Auctions 
Accounting Branch, (202) 418-1995, (202) 418-2843 (Fax).
    Telephonic Bidding: Will be furnished only to qualified bidders.
    FCC Copy Contractor: Additional Copies of Commission Documents--
International Transcription Services, Inc., 445 12th Street, SW Room 
CY-B400, Washington, DC 20554, (202) 314-3070.
    Press Information: Mark Rubin (202) 418-2924.
    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/wtb/auctions, http://www.fcc.gov, ftp://www.fcc.gov.

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

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

A. Ownership Disclosure Requirements (Form 175 Exhibit A)

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

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

    31. Applicants will be required to identify on their short-form 
applications

[[Page 83028]]

any parties with whom they have entered into any consortium 
arrangements, joint ventures, partnerships or other agreements or 
understandings which relate in any way to the licenses being auctioned, 
including any agreements relating to post-auction market structure. See 
47 CFR 1.2105(a)(2)(viii); and 1.2105(c)(1). Applicants will also be 
required to certify on their short-form applications that they have not 
entered into any explicit or implicit agreements, arrangements or 
understandings of any kind with any parties, other than those 
identified, regarding the amount of their bids, bidding strategies, or 
the particular licenses on which they will or will not bid. See 47 CFR 
1.2105(a)(2)(ix). 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 application and may not continue discussions with applicants for 
the same geographic license area(s) after the deadline. In cases where 
applicants have entered into consortia or joint bidding arrangements, 
applicants must submit an Exhibit B to the FCC Form 175.
    32. 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. Small Business Bidding Credits (Form 175 Exhibit C)

    33. In the 700 MHz Second Report & Order, the Commission adopted 
small business provisions to promote and facilitate the participation 
of small businesses in competitive bidding for Guard Band licenses in 
the 700 MHz band.
i. Eligibility
    34. Bidding credits are available to small businesses and very 
small businesses as defined in 47 CFR 27.502(a). For purposes of 
determining which entities qualify as very small businesses or small 
businesses, the Commission will consider the gross revenues of the 
applicant, its controlling interest holders, and affiliates of the 
applicant and its controlling interest holders. 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 
its affiliates will be counted in determining small business 
eligibility. The term ``control'' includes both de facto and de jure 
control of the applicant. Typically, ownership of at least 50.1 percent 
of an entity's voting stock evidences de jure control. De facto control 
is determined on a case-by-case basis. The following are some common 
indicia of control:
     The entity constitutes or appoints more than 50 percent of 
the board of directors or management committee;
     The entity has authority to appoint, promote, demote, and 
fire senior executives that control the day-to-day activities of the 
licensee; or
     The entity plays an integral role in management decisions.
    35. A consortium of small businesses, or very small businesses is a 
``conglomerate organization formed as a joint venture between or among 
mutually independent business firms'', each of which individually must 
satisfy the definition of small or very small business in Sec. 27.502. 
Thus, each consortium member must disclose its gross revenues along 
with those of its affiliates, controlling interests, and controlling 
interests' affiliates. We note that although the gross revenues of the 
consortium members will not be aggregated for purposes of determining 
eligibility for small or very small business credits, this information 
must be provided to ensure that each individual consortium member 
qualifies for any bidding credit awarded to the consortium.
ii. Application Showing
    36. Applicants must file supporting documentation as Exhibit C to 
their FCC Form 175 short form applications to establish that they 
satisfy the eligibility requirements to qualify as a small business or 
very small business (or consortia of small or very small businesses) 
for this auction. Specifically, for Auction No. 38, applicants applying 
to bid as small or very small businesses (or consortia of small or very 
small businesses) will be required to disclose on Exhibit C to their 
FCC Form 175 short-form applications, separately and in the aggregate, 
the gross revenues for the preceding three years of each of the 
following: (i) The applicant; (ii) the applicant's affiliates; (iii) 
the applicant's controlling interest holders; and (iv) the affiliates 
of the applicant's controlling interest holders. Certification that the 
average gross revenues for the preceding three years do not exceed the 
applicable limit is not sufficient. A statement of the total gross 
revenues for the preceding three years is also insufficient. The 
applicant must provide separately for itself, its affiliates, and its 
controlling 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.
iii. Bidding Credits
    37. Applicants that qualify under the definitions of small business 
and very small business (or consortia of small or very small 
businesses) as are set forth in 47 CFR 27.502, are eligible for a 
bidding credit that represents the amount by which a bidder's winning 
bids are discounted. The size of a bidding credit in the 700 MHz guard 
band auction depends on the average gross revenues for the preceding 
three years of the bidder and its controlling interests and affiliates:
     A bidder with average gross revenues of not more than $40 
million for the preceding three years receives a 15 percent discount on 
its winning bids for 700 MHz Guard Band manager licenses (``small 
business'');
     A bidder with average gross revenues of not more than $15 
million for the preceding three years receives a 25 percent discount on 
its winning bids for 700 MHz Guard Band manager licenses (``very small 
business'').
    38. Bidding credits are not cumulative; qualifying applicants 
receive either the 15 percent or the 25 percent bidding credit, but not 
both. Bidders in Auction No. 38 should also note that unjust enrichment 
provisions apply to winning bidders that use bidding credits and 
subsequently assign or transfer control of their licenses to an entity 
not qualifying for the same level of bidding credit. Finally, bidders 
should also note that there are no

[[Page 83029]]

installment payment plans in Auction No. 38.
iv. Tribal Land Bidding Credit
    39. 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.

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

    40. 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 
(or any of the applicant's controlling interest 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) 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 D of the FCC Form 175. 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.
    41. ``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. 38, 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.

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

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

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

    43. After the short-form filing deadline (January 12, 2001), 
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, 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. A separate copy of the letter should be 
submitted to Howard Davenport, Auctions and Industry Analysis Division, 
Wireless Telecommunications Bureau, Federal Communications Commission, 
445 12th Street, SW, Room 4-A435, Washington, DC 20554. Questions about 
other changes should be directed to Howard Davenport at (202) 418-0660.

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

    44. Applicants have an obligation under 47 CFR 1.65, to maintain 
the completeness and accuracy of information in their short-form 
applications. Amendments reporting substantial changes of possible 
decisional significance in information contained in FCC Form 175 
applications, as defined by 47 CFR 1.2105(b)(2), will not be accepted 
and may in some instances result in the dismissal of the FCC Form 175 
application.

III. Pre-Auction Procedures

A. Auction Seminar

    45. On Thursday, January 4, 2001, the FCC will sponsor a free 
seminar for Auction No. 38 at the Federal Communications Commission, 
located at 445 12th Street, Room CY-B511/418, SW, Washington, D.C. The 
seminar will provide attendees with information about pre-auction 
procedures, conduct of the auction, FCC remote bidding software, and 
the 700 MHz Guard Band service and auction rules. The seminar will also 
provide an opportunity for prospective bidders to ask questions of FCC 
staff.
    46. To register, complete the registration form included as 
Attachment B of this public notice and submit it by 6 p.m. ET, Tuesday, 
January 2, 2001. Registrations are accepted on a first-come, first-
served basis.

B. Short-Form Application (FCC Form 175)--Due January 12, 2001

    47. In order to be eligible to bid in this auction, applicants must 
first submit an FCC Form 175 application. This application must be 
submitted electronically and received at the Commission no later than 
6:00 p.m. ET on January 12, 2001. Late applications will not be 
accepted.
    48. There is no application fee required when filing an FCC Form 
175. However, to be eligible to bid, an applicant must submit an 
upfront payment. See Part III.D.
i. Electronic Filing
    49. Applicants must file their FCC Form 175 applications 
electronically. Applications may generally be filed at any time from 12 
noon ET on January 4, 2001 until 6 p.m. ET on January 12, 2001. 
Applicants are strongly encouraged to file early, and applicants are 
responsible for allowing adequate time for filing their applications. 
Applicants may update or amend their electronic applications multiple 
times until the filing deadline on January 12, 2001.
    50. Information about accessing the FCC Form 175 is included in 
Attachment C. Technical support is available at (202) 414-1250 (voice) 
or (202) 414-1255 (text telephone (TTY)); the hours of service are 7 
a.m. to 10 p.m. ET, Monday through Friday, 8 a.m. to 7 p.m. ET, 
Saturday, and 12 p.m. to 6 p.m. ET, Sunday.
ii. Completion of the FCC Form 175
    51. Applicants should carefully review 47 CFR 1.2105, and must 
complete all items on the FCC Form 175. Instructions for completing the 
FCC Form 175 are in Attachment D of this public notice. Applicants are 
encouraged to begin preparing the required attachments for FCC Form 175 
prior to submitting the form. Attachments C and D to this public notice 
provide information on the required attachments and appropriate 
formats.

[[Page 83030]]

iii. Electronic Review of FCC Form 175
    52. The FCC Form 175 electronic review system may be used to review 
and print applicants' FCC Form 175 information. Applicants may also 
view other applicants' completed FCC Form 175s after the filing 
deadline has passed and the FCC has issued a public notice explaining 
the status of the applications. For this reason, it is important that 
applicants do not include their Taxpayer Identification Numbers (TINs) 
on any Exhibits to their FCC Form 175 applications. There is no fee for 
accessing this system. See Attachment C for details on accessing the 
review system.

C. Application Processing and Minor Corrections

    53. After the deadline for filing the FCC Form 175 applications has 
passed, the FCC will process all timely submitted applications to 
determine which are acceptable for filing, and subsequently will issue 
a public notice identifying: (i) Those applications accepted for filing 
(including FCC account numbers and the licenses for which they 
applied); (ii) those applications rejected; and (iii) those 
applications that have minor defects that may be corrected, and the 
deadline for filing such corrected applications.
    54. As described more fully in the Commission's rules, after the 
January 12, 2001, 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 January 26, 2001

    55. In order to be eligible to bid in the auction, applicants must 
submit an upfront payment accompanied by an FCC Remittance Advice Form 
(FCC Form 159). After completing the FCC Form 175, filers will have 
access to an electronic version of the FCC Form 159 that can be printed 
and faxed to Mellon Bank in Pittsburgh, PA. All upfront payments must 
be received at Mellon Bank by 6 p.m. ET on January 26, 2001.
    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. 38 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 January 26, 
2001 deadline will result in dismissal of the application and 
disqualification from participation in the auction.
i. Making Auction Payments by Wire Transfer
    56. Wire transfer payments must be received at Mellon Bank by 6 
p.m. ET on January 26, 2001. 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/ACCOUNT # 910-0180
OBI Field: (Skip one space between each information item)
``AUCTIONPAY''
TAXPAYER IDENTIFICATION NO. (same as FCC Form 159, block 26)
PAYMENT TYPE CODE (enter ``A38U'')
FCC CODE 1 (same as FCC Form 159, block 23A: ``38'')
PAYER NAME (same as FCC Form 159, block 2)
LOCKBOX NO. # 358420

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

    57. Applicants must fax a completed FCC Form 159 to Mellon Bank at 
(412) 236-5702 at least one hour before placing the order for the wire 
transfer (but on the same business day). On the cover sheet of the fax, 
write ``Wire Transfer--Auction Payment for Auction Event No. 38.'' 
Applicants are strongly encouraged to confirm timely transmission and 
receipt of their upfront payment at Mellon Bank and can do so by 
contacting their sending financial institution.
ii. FCC Form 159
    58. A completed FCC Remittance Advice Form (FCC Form 159) must be 
faxed to Mellon Bank to accompany each upfront payment wire transfer. 
Proper completion of FCC Form 159 is critical to ensuring correct 
credit of upfront payments. Detailed instructions for completion of FCC 
Form 159 are included in Attachment E to the public notice. An 
electronic version of the FCC form 159 is available after submitting 
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
    59. In the Part 1 Order, Memorandum Opinion and Order, and Notice 
of Proposed Rule Making, the Commission delegated to the Bureau the 
authority and discretion to determine an appropriate upfront payment 
for each license being auctioned. In 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. 38 Comment Public 
Notice, the Bureau proposed upfront payments for Auction No. 38 to be 
the same as the upfront payments used for Auction No. 33. No comments 
were received concerning these upfront payments. We therefore adopt our 
proposed upfront payment amounts for Auction No. 38 as listed on 
Attachment A.
    60. 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. 38, the 
amount of the upfront payment will be translated into bidding units on 
a one-to-one basis, e.g., a $1,000,000 upfront payment provides the 
bidder with 1,000,000 bidding units. The total upfront payment defines 
the maximum number 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 that an 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.
    61. In order to be able to place a bid on a license, in addition to 
having specified that license on the FCC Form 175, a bidder must have 
an eligibility level that meets or exceeds the number of bidding units 
assigned to that license. At a minimum, an applicant's total upfront 
payment must be enough to establish eligibility to bid on at least one 
of the licenses applied for on the FCC Form 175, or else the applicant 
will not be eligible to participate in the auction.
    62. 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

[[Page 83031]]

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.
    63. Any auction applicant that has previously been in default on 
any Commission license or has previously been delinquent on any non-tax 
debt owed to any Federal agency must submit an upfront payment equal to 
50 percent more than that set for each particular license. See 47 CFR 
1.2106. 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 calculating 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 
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
    64. The Commission will use wire transfers for all Auction No. 38 
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 must fax the 
Wire Transfer instructions by January 26, 2001, to the FCC, Financial 
Operations Center, Auctions Accounting Group, ATTN: Tim Dates or Gail 
Glasser, at (202) 418-2843. 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
Tax ID#

(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.

E. Auction Registration

    65. 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.
    66. 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 a portion 
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.
    67. Applicants that do not receive both registration mailings will 
not be able to submit bids. Therefore, any qualified applicant that has 
not received both mailings by noon on Thursday, February 8, 2001, must 
contact the Auctions Hotline at 717-338-2888. Receipt of both 
registration mailings is critical to participating in the auction and 
each applicant is responsible for ensuring it has received all of the 
registration material.
    68. 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 the 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 needing replacement codes must call technical support prior to 
arriving at the FCC to arrange preparation of new codes.

F. Remote Electronic Bidding Software

    69. Qualified bidders are allowed to bid electronically or by 
telephone. If choosing to bid electronically, each bidder must purchase 
their own copy of the remote electronic bidding software. Electronic 
bids will only be accepted from those applicants purchasing the 
software. However, the software may be copied by the applicant for use 
by its authorized bidders at different locations. The price of the 
FCC's remote bidding software is $175.00 and must be ordered by Monday, 
January 29, 2001. 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. 38. If 
bidding telephonically, the telephonic bidding phone number will be 
supplied in the Federal Express mailings of confidential login codes. 
Qualified bidders that do not purchase the software may only bid 
telephonically. To indicate your bidding preference, an FCC Bidding 
Preference/Remote Software Order Form can be accessed when submitting 
the FCC Form 175. Bidders should complete this form electronically, 
print it out, and fax to (717) 338-2850. A manual copy of this form is 
also included as Attachment F in this public notice.

G. Mock Auction

    70. All qualified bidders will be eligible to participate in a mock 
auction scheduled for Friday, February 9, 2001. 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

    71. The first round of bidding for Auction No. 38 will begin on 
Tuesday, February 13, 2001. 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.

A. Auction Structure

i. Simultaneous Multiple Round Auction
    72. In the Auction No. 38 Comment Public Notice, we proposed to 
award eight Guard Band Manager licenses in the 700 MHz guard bands in a 
single stage, simultaneous multiple round auction. We received no 
comment on this issue. We therefore conclude that it is operationally 
feasible and appropriate to auction the 700 MHz Guard Band manager 
licenses through this auction design. Unless otherwise announced, bids 
will be accepted on all licenses in successive rounds of bidding.
ii. Maximum Eligibility and Activity Rules
    73. In the Auction No. 38 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 participating in Auction No. 38. We received no comments on this 
issue.

[[Page 83032]]

    74. For Auction No. 38, we will adopt our proposal that the amount 
of the upfront payment submitted by a bidder determines the initial 
maximum eligibility (in bidding units) for each bidder participating in 
Auction No. 38. Note again that upfront payments are not attributed to 
specific licenses, but instead will be translated into bidding units to 
define a bidder's initial maximum eligibility. The total upfront 
payment defines the maximum number of bidding units on which the 
applicant will initially be permitted to bid. As there is no provision 
for increasing a bidder's maximum eligibility during the course of an 
auction, prospective bidders are cautioned to calculate their upfront 
payments carefully. The upfront payment does not define the total 
dollars a bidder may bid on any given license.
    75. In addition, we received no comments on our proposal for a 
single stage auction. Therefore, in order to ensure that the auction 
closes within a reasonable period of time, we adopt our proposal with 
the following activity requirements: a bidder must either place a valid 
bid and/or be the standing high bidder during each round of the auction 
rather than wait until the end before participating. Bidders are 
required to be active on 100 percent of their maximum eligibility 
during each round of the auction.
    76. A bidder's activity level in a round is the sum of the bidding 
units associated with the licenses on which the bidder is active. A 
bidder is considered active on a license in the current round if it is 
the high bidder at the end of the previous round, or if it submits an 
acceptable bid in the current round. Failure to maintain the requisite 
activity level will result in the use of an activity rule waiver, if 
any remain, or a reduction in the bidder's bidding eligibility to bring 
them into compliance with the activity rule.
iii. Activity Rule Waivers and Reducing Eligibility
    77. In the Auction No. 38 Comment Public Notice, we proposed that 
each bidder in the auction would be provided two activity rule waivers 
that may be used in any round during the course of the auction. We 
received no comment on this issue.
    78. Based upon our experience in previous auctions, we adopt our 
proposal that each bidder be provided two 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 
by providing two 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.
    79. 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 eligibility, thereby meeting the minimum 
requirements.
    80. A bidder with insufficient activity that wants to reduce its 
bidding eligibility rather than use an activity rule waiver must 
affirmatively override the automatic waiver mechanism during the round 
by using the reduce eligibility function in the software. In this case, 
the bidder's eligibility is permanently reduced to bring the bidder 
into compliance with the activity rules. Once eligibility has been 
reduced, a bidder will not be permitted to regain its lost bidding 
eligibility.
    81. 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 will not keep the auction open.
iv. Auction Stopping Rules
    82. For Auction No. 38, 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, or applies a proactive 
waiver. After the first such round, bidding closes simultaneously on 
all licenses.
    83. 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, 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. The Bureau 
further sought comment on whether this modified stopping rule should be 
used unilaterally.
    84. The Bureau further proposed retaining the discretion to keep an 
auction open even if no new acceptable bids or proactive waivers are 
submitted. In this event, the effect will be the same as if a bidder 
had submitted a proactive waiver. Thus, the activity rule will apply as 
usual, and a bidder with insufficient activity will either lose bidding 
eligibility or use an activity rule waiver (if it has any left).
    85. 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, increasing 
the number of bidding rounds per day.
    86. No comments were received on any of these issues, therefore, we 
adopt all of the proposals concerning the auction stopping rules. 
Auction No. 38 will begin under the simultaneous stopping rule, and the 
Bureau will retain the discretion to invoke the other versions of the 
stopping rule. Adoption of these rules, we believe, is most appropriate 
for Auction No. 38 because our experience in prior auctions 
demonstrates that the auction stopping rules balance the interests of 
administrative efficiency and maximum bidder participation.
v. Auction Delay, Suspension, or Cancellation
    87. In the Auction No. 38 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,

[[Page 83033]]

administrative or weather necessity, or for any other reason that 
affects the fair and competitive conduct of competitive bidding.
    88. 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.

A. Bidding Procedures

i. Round Structure
    89. The initial bidding schedule will be announced in the public 
notice listing the qualified bidders, which is released approximately 
10 days before the start of the auction. This public notice will be 
included in the first registration mailing. The round structure for 
each bidding round contains a single bidding round followed by the 
release of the round results. Multiple bidding rounds may be conducted 
in a given day. Details regarding round results formats and locations 
will be included in the public notice.
    90. 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. We 
received no comments, therefore, we adopt the proposal.
ii. Reserve Price or Minimum Opening Bid
    91. Background. The Balanced Budget Act of 1997 calls upon the 
Commission to prescribe methods by which a reasonable reserve price 
will be required or a minimum opening bid established when FCC licenses 
are subject to auction (i.e., because they are mutually exclusive), 
unless the Commission determines that a reserve price or minimum 
opening bid is not in the public interest. Consistent with this 
mandate, the Commission directed the 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 valuation of the 
spectrum being auctioned. The Commission concluded that the Bureau 
should have the discretion to employ either or both of these mechanisms 
for future auctions.
    92. In the Auction No. 38 Comment Public Notice, the Bureau 
proposed to establish minimum opening bids for Auction No. 38 and to 
retain discretion to lower the minimum opening bids. Specifically, for 
Auction No. 38, the Commission proposed calculating the minimum opening 
bid based on information available in the form of a Congressional 
estimate of the value of the spectrum. We received no comments, 
therefore, the Bureau adopts the proposal contained in the public 
notice, and set them forth in Attachment A.
iii. Bid Increments and Minimum Accepted Bids
    93. In the Auction No. 38 Comment Public Notice, we proposed to 
apply a minimum bid increment of 10 percent to calculate minimum bid 
increments. We further proposed to retain the discretion to change the 
minimum bid increment if circumstances so dictate. We received no 
comment on this issue.
    94. We will adopt the proposal contained in the Auction No. 38 
Comment Public Notice. Once there is a standing high bid on a license, 
there will be a bid increment associated with that bid indicating the 
minimum amount by which the bid on that license can be raised. For 
Auction No. 38, we will use a flat, across-the-board increment of 10 
percent to calculate the minimum bid increment. The Bureau retains the 
discretion to compute the minimum bid increment through other 
methodologies if it determines circumstances so dictate. Advanced 
notice of the Bureau's decision to do so will be announced via the 
Automated Auction System.
    95. Bidders will enter their bid as multiples of the bid increment 
(i.e., with a 10 percent bid increment, a bid of 1 increment will place 
a bid 10 percent above the previous high bid, a bid of 2 increments 
will place a bid 20 percent above the previous high bid).
iv. High Bids
    96. Each bid will be date- and time-stamped when it is entered into 
the FCC computer system. In the event of tie 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
    97. During a bidding round, a bidder may submit bids for as many 
licenses as it wishes, (subject to its eligibility), as well as remove 
bids placed in the same bidding round, or permanently reduce 
eligibility. 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.
    98. 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. 38.
    99. A bidder's ability to bid on specific licenses in the first 
round of the auction is determined by two factors: (i) The licenses 
applied for on FCC Form 175; and (ii) the upfront payment amount 
deposited. The bid submission screens will be tailored for each bidder 
to include only those licenses for which the bidder applied on its FCC 
Form 175.
    100. The bidding software requires each bidder to login to the FCC 
auction system during the bidding round using the FCC account number, 
bidder identification number, and the confidential security codes 
provided in the registration materials. Bidders are

[[Page 83034]]

strongly encouraged to download and print bid verifications after they 
submit their bids.
    101. The bid entry screen of the automated auction system software 
for Auction No. 38 allows bidders to place multiple increment bids, 
which will allow bidders to increase high bids from one to nine bid 
increments. A single bid increment is defined as the difference between 
the standing high bid and the minimum acceptable bid for a license. The 
bidding software will display the bid increment for each license.
    102. 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)

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.
    103. 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), bidders will be limited to bidding only the minimum 
acceptable bid. In this case no increment exists for the licenses, and 
bidders should enter ``1'' in the Bid Mult field. Note that in this 
case, any whole number between 1 and 9 entered in the multiplier column 
will result in a bid value at the minimum acceptable bid amount.
vi. Bid Removal and Bid Withdrawal
    104. In the Auction No. 38 Comment Public Notice, we proposed bid 
removal and bid withdrawal procedures. With respect to bid withdrawals, 
and based on the fact that only eight licenses will be auctioned, we 
proposed that bidders not be permitted to withdraw bids in any round. 
We received no comment on this issue. Therefore the Bureau adopts this 
proposal and will not permit bidders to withdraw bids in any rounds 
during Auction No. 38.
    105. 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. 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. Once a round closes, a bidder may no longer 
remove a bid. No comments were received; therefore, we will adopt these 
procedures for Auction No. 38.
vii. Round Results
    106. 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, 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 FCC account numbers for Auction No. 
38 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
    107. The FCC will use auction announcements to announce items such 
as schedule and bid increment changes. 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
    108. As noted in Part II.F., 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 
revisions to exhibits. Filers must make these changes on-line, and 
submit a letter briefly summarizing these changes to: Louis Sigalos, 
Deputy Chief, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau, Federal Communications Commission, 445 12th 
Street, SW., Room 4-A668, Washington, DC 20554.
    109. A separate copy of the letter should be mailed to Howard 
Davenport, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau, Federal Communications Commission, 445 12th 
Street, SW., Room 4-A435, Washington, DC 20554. Questions about other 
changes should be directed to Howard Davenport, Auctions Attorney, 
Auctions and Industry Analysis Division at (202) 418-0660.

A. Post-Auction Procedures

 A. Down Payments

    110. After bidding has ended, the Commission will issue a public 
notice declaring the auction closed, identifying the winning bids and 
bidders for each license.
    111. Within ten business days after release of the auction closing 
public notice, each winning bidder must submit sufficient funds (in 
addition to its upfront payment) to bring its total amount of money on 
deposit with the Government to 20 percent of its net winning bids 
(actual bids less any applicable bidding credits). See 47 CFR 
1.2107(b).

B. Long-Form Application

    112. Within ten business days after release of the auction closing 
public notice, winning bidders must file: (i) FCC Form 601 and all 
required exhibits electronically via the Universal Licensing System 
(``ULS''); and (ii) FCC Form 602 manually pursuant to Sec. 1.919 of the 
Commission's rules. Winning bidders may file a single application for 
all markets won at auction. Winning bidders that are small businesses 
or very small businesses must include an exhibit demonstrating their 
eligibility for bidding credits. See 47 CFR 1.2112(b). Further, more 
detailed filing instructions will be provided to auction winners at the 
close of the auction.

C. Tribal Land Bidding Credit

    113. 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.
    114. 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).
    115. For additional information on the tribal land bidding credit, 
including

[[Page 83035]]

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

    116. 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

    117. Any high bidder that defaults or is disqualified after the 
close of the auction (i.e., fails to remit the required down payment 
within the prescribed period of time, fails to submit a timely long-
form application, fails to make full payment, or is otherwise 
disqualified) will be subject to the payments described in 47 CFR 
1.2104(g)(2). In such event the Commission may re-auction the license 
or offer it to the next highest bidder (in descending order) at their 
final bid. See 47 CFR 1.2109(b) and (c). In addition, if a default or 
disqualification involves gross misconduct, misrepresentation, or bad 
faith by an applicant, the Commission may declare the applicant and its 
principals ineligible to bid in future auctions, and may take any other 
action that it deems necessary, including institution of proceedings to 
revoke any existing licenses held by the applicant. See 47 CFR 
1.2109(d).

F. Refund of Remaining Upfront Payment Balance

    118. All applicants that submitted upfront payments but were not 
winning bidders for a 700 MHz Guard Band license may be entitled to a 
refund of their remaining upfront payment balance after the conclusion 
of the auction.
    119. Bidders that drop out of the auction completely may be 
eligible for a refund of their upfront payments before the close of the 
auction. However, bidders that reduce their eligibility and remain in 
the auction are not eligible for partial refunds of upfront payments 
until the close of the auction. Qualified bidders that have exhausted 
all of their activity rule waivers, and have no remaining bidding 
eligibility, must submit a refund request which includes wire transfer 
instructions and a Taxpayer Identification Number (``TIN''), to: 
Federal Communications Commission, Financial Operations Center, 
Auctions Accounting Group, Gail Glasser, 445 12th Street, SW., Room 1-
A843, Washington, DC 20554
    120. 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 request to the Auctions Accounting 
Group at (202) 418-2843. Once the request 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. 00-33346 Filed 12-28-00; 8:45 am]
BILLING CODE 6712-01-P