[Federal Register Volume 66, Number 24 (Monday, February 5, 2001)]
[Notices]
[Pages 8961-8971]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-2949]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-00-37-C (Auction No. 37); DA 01-119]


Notice and Filing Requirements for FM Broadcast Construction 
Permits Auction, 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 certain FM Broadcast construction 
permits and also provides the final inventory of vacant FM allotments 
to be made available for this auction.

DATES: Auction No. 37 is scheduled for May 9, 2001.

FOR FURTHER INFORMATION CONTACT: Auctions and Industry Analysis 
Division: Kenneth Burnley, Legal Branch, or Jeff Crooks, Auctions 
Operations Branch at (202) 418-0660; Barbara Sibert, Auctions 
Operations Branch at (717) 338-2888. Audio Services Division: Lisa 
Scanlan at (202) 418-2700. Media Contact: Mark Rubin at (202) 418-2924.

SUPPLEMENTARY INFORMATION: This is a summary of a Public Notice 
released January 19, 2001. The complete text of the public notice, 
including Attachments A through H, is available for inspection and 
copying during normal business hours in the FCC Reference Center (Room 
CY-A257), 445 12th Street, SW, Washington, DC. It may also be purchased 
from the Commission's copy contractor, International Transcription 
Services, Inc. (ITS, Inc.), 1231 20th Street, N.W. 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--Construction Permits 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 E--Auction--Specific Instructions for FCC Remittance Advice 
(Form 159)
Attachment F--FCC Bidding Preference/Remote Software Order Form
Attachment G--Accessing the FCC Network Using Windows 95/98
Attachment H--Summary Listing of Documents (Anti-Collusion)

I. General Information

A. Introduction

    This public notice announces the procedures and minimum opening 
bids for the upcoming auction of certain FM Broadcast construction 
permits (``Auction No. 37''). On September 25, 2000, the Mass Media 
Bureau (``MMB'') and the Wireless Telecommunications Bureau (``WTB'') 
(collectively, the ``Bureaus'') released the Auction No. 37 Comment 
Public Notice, 65 FR 59841 (October 6, 2000), seeking comment on the 
establishment of reserve prices and/or minimum opening bids for Auction 
No. 37, in accordance with the Balanced Budget Act of 1997. On 
September 29, 2000, the Bureaus released a second Public Notice, 
stating that eight additional vacant FM allotments would be included in 
Auction No. 37 (Auction No. 37 Additional Comment Public Notice, 65 FR 
59841 (October 6, 2000). In addition, the Bureaus sought comment on 
procedures to be used in Auction No. 37. The Bureaus received twenty 
comments and three reply comments in response to the Auction No. 37 
Comment Public Notice and the Auction No. 37 Additional Comment Public 
Notice.

B. Scheduling

    The Auction No. 37 Comment Public Notice announced that Auction No. 
37 would begin on February 21, 2001. In this public notice, the Bureaus 
announce the beginning date of Auction No. 37 has been rescheduled to 
May 9, 2001.

C. Construction Permits To Be Auctioned

    Auction No. 37 will consist of 355 construction permits in the FM 
Broadcast service for stations throughout the United States and Guam. 
These construction permits are for vacant FM allotments, reflecting FM 
channels assigned to the Table of FM Allotments, 47 CFR 73.202(b), 
pursuant to the Commission's established rulemaking procedures, 
designated for use in the indicated community. As stated in the 
Broadcast First Report and Order, 63 FR 48615 (September 11, 1998), 
applicants may apply for any vacant FM allotment, as specified in

[[Page 8962]]

Attachment A; applicants specifying the same FM allotment will be 
considered mutually exclusive and, thus, the construction permit for 
the FM allotment will be awarded by competitive bidding procedures. The 
reference coordinates for each vacant FM allotment are also listed in 
Attachment A.
    One commenter suggests that the Bureaus should treat any allotment 
that has only one bidder as not being mutually exclusive. As stated in 
the Broadcast First Report and Order, all pending mutually exclusive 
applications for broadcast services must be resolved through a system 
of competitive bidding. Accordingly, for a specific FM allotment, if 
the Commission were to receive only one FCC Form 175, Application to 
Participate in an FCC Auction (``short-form application''), and, thus, 
mutual exclusivity would not exist for auction purposes, the auction 
for any such construction permit would cancel.
    National Public Radio requests that the Commission modify its 
auction procedures to permit noncommercial educational broadcast 
applicants to apply for a noncommercial station utilizing any of the FM 
allotments listed in Attachment A without having to compete in an 
auction. However, none of the FM channels included in Auction No. 37 
are reserved exclusively for noncommercial educational use, or are 
otherwise exempt from competitive bidding procedures, if mutually 
exclusive applications are filed.
    Several commenters request that the Bureaus remove certain FM 
allotments from Auction No. 37 due to the pendency of rulemaking 
proceedings concerning the FM allotment, or because of other pending 
challenges regarding the FM channels to be auctioned. The FM allotments 
designated as FM71, FM160, FM189, and FM275 are hereby removed from 
Auction No. 37. A revised Attachment A, reflecting the deletion of the 
four referenced FM allotments, is appended to the Public Notice.
    Two commenters request the inclusion of additional FM channels in 
Auction No. 37. Ganske requests that the Commission include Channel 
224C2 for Sunriver, Oregon, and Satellite requests the inclusion of 
Channel 239A for Big Pine Key, Florida. The rulemaking proceeding to 
add Channel 224C2 at Sunriver, Oregon to the Table of FM Allotments is 
not yet final (MM Docket No. 96-7), and accordingly, FM Channel 224C2 
at Sunriver, Oregon will not be added to the list of FM allotments for 
Auction No. 37. Big Pine Key, Florida will be included in a subsequent 
FM auction. The Auction No. 37 Comment Public Notice inadvertently 
included two allotments for Channel 261A at Corrigan, TX (FM 280 and FM 
281) and two allotments for Channel 291A at Kerrville, TX (FM 289 and 
FM 290). Accordingly, duplicative listings FM 281 and FM 289 will be 
removed from Attachment A.

D. Rules and Disclaimers

1. Relevant Authority
    Prospective bidders must familiarize themselves thoroughly with the 
Commission's rules relating to broadcast auctions, contained in Title 
47, Part 73 of the Code of Federal Regulations.
    Prospective bidders must also be thoroughly familiar with the 
procedures, terms and conditions contained in this Public Notice, the 
Auction No. 37 Comment Public Notice, the Auction No. 37 Additional 
Comment Public Notice, the Broadcast First Report and Order, the 
Broadcast Reconsideration Order, 64 FR 24523 (May 7, 1999) and the New 
Entrant Bidding Credit Reconsideration Order, 64 FR 44856 (August 18, 
1999). Potential bidders must also familiarize themselves with Part 1, 
Subpart Q of the Commission's rules concerning competitive bidding 
proceedings.
    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 98-194 for the Broadcast First Report and 
Order and FCC 99-74 for the Broadcast Reconsideration Order).
2. Prohibition of Collusion
    To ensure the competitiveness of the auction process, the 
Commission's rules prohibit applicants for the same market 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 construction permits in the same 
market 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.
    However, the Bureaus caution that merely filing a certifying 
statement as part of an application will not outweigh specific evidence 
that collusive behavior has occurred, nor will it preclude the 
initiation of an investigation when warranted. In Auction No. 37, for 
example, the rule would apply to any applicants bidding for the same 
market (i.e., Bethel, Alaska, Channel 252C3, Market FM1). Therefore, 
applicants that apply to bid for any FM construction permit in the same 
market would be precluded from communicating after filing the FCC Form 
175 short-form application with any other applicant for a FM 
construction permit in that same market. 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 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 market. By signing their FCC Form 175 
short-form applications, applicants are certifying their compliance 
with 1.2105(c) and 73.5002. In addition, 1.65 of the Commission's rules 
requires an applicant to maintain

[[Page 8963]]

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, 1.65 requires an auction applicant to notify the 
Commission of any violation of the anti-collusion rules immediately 
upon learning of such violation.
    A summary listing of documents from the Commission and the Bureaus 
addressing the application of the anti-collusion rules may be found in 
Attachment H of the Public Notice.
3. Due Diligence
    Potential bidders are solely responsible for investigating and 
evaluating all technical and market place factors that may have a 
bearing on the value of the FM broadcast facilities. The FCC makes no 
representations or warranties about the use of this spectrum for 
particular services. Applicants should be aware that a FCC auction 
represents an opportunity to become a FCC permittee in the broadcast 
service, subject to certain conditions and regulations. A FCC auction 
does not constitute an endorsement by the FCC of any particular 
service, technology, or product, nor does a FCC construction permit or 
license constitute a guarantee of business success. Applicants should 
perform their individual due diligence before proceeding as they would 
with any new business venture.
    Potential bidders are strongly encouraged to conduct their own 
research prior to Auction No. 37 in order to determine the existence of 
pending proceedings that might affect their decisions regarding 
participation in the auction. Participants in Auction No. 37 are 
strongly encouraged to continue such research during the auction.
4. Bidder Alerts
    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 construction permit, and 
not in default on any payment for Commission construction permits or 
licenses (including down payments) or delinquent on any non-tax debt 
owed to any Federal agency. 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, construction permit or license revocations, exclusion from 
participation in future auctions, and/or criminal prosecution.
    As is the case with many business investment opportunities, some 
unscrupulous entrepreneurs may attempt to use Auction No. 37 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 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.
    Information about deceptive telemarketing investment schemes is 
available from the FTC at (202) 326-2222 and from the SEC at (202) 942-
7040. Complaints about specific deceptive telemarketing investment 
schemes should be directed to the FTC, the SEC, or the National Fraud 
Information Center at (800) 876-7060. Consumers who have concerns about 
specific proposals may also call the FCC Consumer Center at (888) CALL-
FCC ((888) 225-5322).
5. National Environmental Policy Act (NEPA) Requirements
    The permittee must comply with the Commission's rules regarding the 
National Environmental Policy Act (NEPA). The construction of a 
broadcast facility is a federal action and the permittee must comply 
with the Commission's NEPA rules for each such facility. The 
Commission's NEPA rules require that, among other things, the permittee 
consult with expert agencies having NEPA responsibilities, including 
the U.S. Fish and Wildlife Service, the State Historic Preservation 
Office, the Army Corp of Engineers and the Federal Emergency Management 
Agency (through the local authority with jurisdiction over 
floodplains). The permittee must prepare environmental assessments for 
broadcast facilities that may have a significant impact in or on 
wilderness areas, wildlife preserves, threatened or endangered species 
or designated critical habitats, historical or archaeological sites, 
Indian religious sites, floodplains, and surface features. The 
permittee must also prepare environmental assessments for broadcast 
facilities that include high intensity white lights in residential 
neighborhoods or excessive radio frequency emission.

E. Auction Specifics

1. Auction Date
    The auction will begin on Wednesday, May 9, 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 will be conducted on each business day until bidding has 
stopped on all construction permits.
2. Auction Title
Auction No. 37--FM Broadcast
3. Bidding Methodology
    The bidding methodology for Auction No. 37 will be a simultaneous, 
multiple-round, ascending auction. Bidding will be permitted only from 
remote locations, either electronically (by computer) or 
telephonically.
4. Pre-Auction Dates and Deadlines
Auction Seminar: March 7, 2001
Short-Form Application Filing Deadline
(FCC Form 175): March 19, 2001; 6:00 p.m. ET
Orders for Remote Bidding Software: March 19, 2001; 6:00 p.m. ET
Upfront Payments (via wire transfer): April 16, 2001; 6:00 p.m. ET
Mock Auction: May 7, 2001
Auction Begins: May 9, 2001
5. Requirements for Participation
    Those wishing to participate in the auction must:
     Submit a short form application (FCC Form 175) 
electronically by 6:00 p.m. ET, March 19, 2001. No other application 
may be substituted for the FCC Form 175.
     Submit a sufficient upfront payment and a FCC Remittance 
Advice Form (FCC Form 159) by 6:00 p.m. ET, April 16, 2001.
     Comply with all provisions outlined in this public notice 
and applicable Commission rules.
6. General Contact Information
    The following is a list of general contact information relating to 
Auction No. 37:


[[Page 8964]]


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

Licensing Information:
    Rules, Policies, Regulations, Licensing Issues, Engineering Issues: 
Audio Services Division, (202) 418-2700

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

Payment Information:
    Wire Transfers, Refunds: FCC Auctions Accounting Branch, (202) 418-
1995, (202) 418-2843 (Fax)

Telephonic Bidding: Will be furnished only to qualified bidders

FCC Copy Contractor:
    Additional Copies of Commission Documents: International 
Transcription Services, Inc., 445 12th Street, SW, Room CY-B400, 
Washington, DC 20554, (202) 314-3070

Press Information: Mark Rubin (202) 418-2924

FCC Forms:
    (800) 418-3676 (outside Washington, DC), (202) 418-3676 (in the 
Washington Area)

FCC Internet Sites:
    http://www.fcc.gov/wtb/auctions http://www.fcc.gov/ftp://ftp.fcc.gov

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

    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, 
new entrant bidding credit eligibility, identification of the 
construction permit(s) sought, the authorized bidders and contact 
persons. To participate in Auction No. 37, no other application may be 
substituted for the FCC Form 175.
    One commenter urges the Bureaus to eliminate the ``ALL'' box in the 
FCC Form 175 for this auction. The Bureaus agree. The capability to 
select the ALL box originated in the context of, and was designed for 
use in, wireless auctions. Use of an ALL box, however, is inappropriate 
in the broadcast context and accordingly, an ALL box will not be 
included in the FCC Form 175 for use in Auction No. 37.

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

    The Commission indicated in the Broadcast First Report and Order, 
that, for purposes of determining eligibility to participate in a 
broadcast auction, the uniform Part 1 ownership standards would apply. 
Therefore, in completing FCC Form 175, all applicants will be required 
to file an ``Exhibit A'' and provide information required by 1.2105 and 
1.2112 of the Commission's rules, thus 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 1.2112 of the 
Commission's rules.

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

    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 
construction permits 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 market after 
the deadline. Where applicants have entered into consortia or joint 
bidding arrangements, applicants must submit an ``Exhibit B'' to the 
FCC Form 175.
    A party holding a non-controlling, attributable interest in one 
applicant will be permitted to acquire an ownership interest in, form a 
consortium with, or enter into a joint bidding arrangement with other 
applicants for construction permits in the same market 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. New Entrant Bidding Credit (Form 175 Exhibit C)

    To fulfill its obligations under 309(j) and further its long-
standing commitment to the diversification of broadcast facility 
ownership, the Commission adopted a tiered New Entrant Bidding Credit 
for broadcast auction applicants with no, or very few, other media 
interests.
1. Eligibility
    The interests of the bidder, and of any individuals or entities 
with an attributable interest in the bidder, in other media of mass 
communications shall be considered when determining a bidder's 
eligibility for the New Entrant Bidding Credit. The bidder's 
attributable interests shall be determined as of the short-form (FCC 
Form 175) filing deadline--March 19, 2001. Bidders intending to divest 
a media interest or make any other ownership changes, such as 
resignation of positional interests, in order to avoid attribution for 
purposes of qualifying for the New Entrant Bidding Credit must have 
consummated such divestment transactions or have completed such 
ownership changes by no later than the short-form filing deadline--
March 19, 2001.
    Under traditional broadcast attribution rules, those entities or 
individuals with an attributable interest in a bidder include:
     All officers and directors of a corporate bidder;
     Any owner of 5 percent or more of the voting stock of a 
corporate bidder;
     All partners and limited partners of a partnership bidder, 
unless the limited partners are sufficiently insulated; and
     All members of a limited liability company, unless 
sufficiently insulated.
    In cases where a bidder's spouse or close family member holds other 
media

[[Page 8965]]

interests, such interests are not automatically attributable to the 
bidder. The Commission decides attribution issues in this context based 
on certain factors traditionally considered relevant. Bidders should 
note that the mass media attribution rules were recently revised.
    Bidders are also reminded that, by the New Entrant Bidding Credit 
Reconsideration Order, 64 FR 44856 (August 18, 1999), the Commission 
further refined the eligibility standards for the New Entrant Bidding 
Credit, judging it appropriate to attribute the media interests held by 
very substantial investors in, or creditors of, a bidder claiming new 
entrant status.
    Generally, media interests will be attributable for purposes of the 
New Entrant Bidding Credit to the same extent that such other media 
interests are considered attributable for purposes of the broadcast 
multiple ownership rules. However, attributable interests held by a 
winning bidder in existing low power television, television translator 
or FM translator facilities will not be counted among the bidders' 
other mass media interests in determining its eligibility for a New 
Entrant Bidding Credit. A medium of mass communications is defined in 
47 CFR 73.5008(b).
2. Application Requirements
    In addition to the ownership information required on Exhibit A, 
applicants are required to file supporting documentation on Exhibit C 
to their FCC Form 175 short-form applications to establish that they 
satisfy the eligibility requirements to qualify for a New Entrant 
Bidding Credit.
3. Bidding Credits
    Applicants that qualify for the New Entrant Bidding Credit, as set 
forth in 47 CFR 73.5007, are eligible for a bidding credit that 
represents the amount by which a bidder's winning bid is discounted. 
The size of a New Entrant Bidding Credit depends on the number of 
ownership interests in other media of mass communications that are 
attributable to the bidder-entity and its attributable interest-
holders:
     A 35 percent bidding credit will be given to a winning 
bidder if it, and/or any individual or entity with an attributable 
interest in the winning bidder, has no attributable interest in any 
other media of mass communications, as defined in 47 CFR 73.5008;
     A 25 percent bidding credit will be given to a winning 
bidder if it, and/or any individual or entity with an attributable 
interest in the winning bidder, has an attributable interest in no more 
than three mass media facilities, as defined in 47 CFR 73.5008;
     No bidding credit will be given if any of the commonly 
owned mass media facilities serve the same area as the proposed 
broadcast station, as defined in 47 CFR 73.5007, or if the winning 
bidder, and/or any individual or entity with an attributable interest 
in the winning bidder, has attributable interests in more than three 
mass media facilities.
    Bidding credits are not cumulative; qualifying applicants receive 
either the 25 percent or the 35 percent bidding credit, but not both. 
Attributable interests are defined in 47 CFR 73.3555 and Note 2 of that 
section. Bidders should note that unjust enrichment provisions apply to 
a winning bidder that utilizes a bidding credit and subsequently seeks 
to assign or transfer control of its license or construction permit to 
an entity not qualifying for the same level of bidding credit.
    Summit Media Broadcasting contends that the Commission should make 
allowances for small businesses to participate in auctions, such as 
partial payment provisions of the established minimum opening bid, or 
the submission of an accountant or bank report attesting to fund 
availability. However, as recognized by the Commission in the broadcast 
competitive bidding rulemaking proceeding, in the Broadcast First 
Report and Order, the Broadcast Reconsideration Order, and the New 
Entrant Bidding Credit Reconsideration Order, the designated entity 
provision adopted and specified for use in broadcast auctions--the New 
Entrant Bidding Credit--is particularly suitable to promote opportunity 
for participation in competitive bidding for construction permits in 
broadcast auctions.

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

    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 interests or their affiliates, 
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. If any of 
an applicant's controlling interests holders or their affiliates, as 
defined by 1.2110 of the Commission's rules, 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.
    ``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. 37, provided that they are otherwise qualified. 
However, former defaulters are required to pay upfront payments that 
are fifty percent more than the normal upfront payment amounts.

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

    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 on Exhibit F (Miscellaneous 
Information) to the FCC Form 175.

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

    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.

[[Page 8966]]

III. Pre-Auction Procedures

A. Auction Seminar

    On March 7, 2001 the FCC will sponsor a free seminar for Auction 
No. 37 at the Federal Communications Commission, located at 445 12th 
Street, S.W., Washington, D.C. The seminar will provide attendees with 
information about pre-auction procedures, conduct of the auction, FCC 
remote bidding software, and the broadcast service and auction rules.

B. Short-Form Application (FCC Form 175)--Due March 19, 2001

    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 beginning at 12:00 noon ET on March 7, 2001 
and must be received at the Commission no later than 6:00 p.m. ET on 
March 19, 2001. Late applications will not be accepted.
    There is no application fee required when filing an FCC Form 175. 
However, to be eligible to bid, an applicant must submit an upfront 
payment. See Part III.D, infra.
    Pursuant to procedures established in the Broadcast First Report 
and Order, the Mass Media Bureau will impose a temporary freeze on the 
filing of FM minor modification applications during the period that FCC 
Form 175 applications may be filed for FM Auction No. 37. A public 
notice will be released in this regard.
1. Electronic Filing
    Applicants must file their FCC Form 175 applications 
electronically. For Auction No. 37, applications may generally be filed 
at any time beginning at 12:00 noon ET on March 7, 2001, until 6:00 
p.m. ET on March 19, 2001. 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 March 19, 
2001.
    Applicants must press the ``Submit Form 175'' button on the 
``Submit'' page of the electronic form to successfully submit their FCC 
Form 175. Any form that is not submitted will not be reviewed by the 
FCC. Information about accessing the FCC Form 175 is included in 
Attachment C. Technical support is available at (202) 414-1250 (voice) 
or (202) 414-1255 (text telephone (TTY)); the hours of service are 
Monday through Friday, from 7:00 a.m. to 10:00 p.m. ET, Saturday, from 
8:00 a.m. to 7:00 p.m. ET, and Sunday, from 12:00 noon to 6:00 p.m. ET. 
In order to provide better service to the public, all calls to the 
hotline are recorded.
2. Completion of the FCC Form 175
    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 the public notice provide 
information on the required attachments and appropriate formats.
3. Electronic Review of FCC Form 175
    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

    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 construction permits 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.
    As described more fully in the Commission's rules, after the March 
19, 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 construction permit selections, change the certifying 
official, change control of the applicant, or change New Entrant 
Bidding Credit eligibility).

D. Upfront Payments--Due April 16, 2001

    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 April 16, 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. 37 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 April 16, 
2001 deadline will result in dismissal of the application and 
disqualification from participation in the auction.
1. Auction Payments by Wire Transfer
    Wire transfer payments must be received by 6:00 p.m. ET on April 
16, 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# 910-1211
OBI Field: (Skip one space between each information item)
``AUCTIONPAY''
TAXPAYER IDENTIFICATION NO. (same as FCC Form 159, block 26)
PAYMENT TYPE CODE (enter ``A37U'')
FCC CODE 1 (same as FCC Form 159, block 23A: ``37'')
PAYER NAME (same as FCC Form 159, block 2)
LOCKBOX NO. # 358435

    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.

    Applicants must fax a completed FCC Form 159 to Mellon Bank at 
(412) 209-6045 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. 37.'' 
Bidders should confirm the timely transmission and receipt of their 
upfront payment at Mellon Bank by contacting their sending financial 
institution.
2. FCC Form 159
    A completed FCC Remittance Advice Form (FCC Form 159) must be faxed 
to

[[Page 8967]]

Mellon Bank 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 
must be completed electronically and must be filed with Mellon Bank via 
facsimile.
3. Amount of Upfront Payment
    The Bureaus have delegated authority to determine an appropriate 
upfront payment for the FM construction permits being auctioned, taking 
into account such factors as the efficiency of the auction process and 
the potential value of the spectrum. 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 construction permit. See 47 CFR 1.2106.
4. Applicant's Wire Transfer Information for Purposes of Refunds
    The Commission will use wire transfers for all Auction No. 37 
refunds. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that all pertinent 
information as listed below 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 March 19, 2001. 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 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 Section V.E.

E. Auction Registration

    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 short-form applications 
have been accepted for filing and that have timely submitted an upfront 
payment.
    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 
short-form application.
    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, May 3, 2001, should contact 
the Auctions Hotline at (717) 338-2888. Receipt of both registration 
mailings is critical to participating in the auction and each applicant 
is responsible for ensuring it has received all of the registration 
material.
    Qualified bidders should note that lost login codes, passwords, or 
bidder identification numbers can be replaced only by appearing in 
person at the FCC Auction Headquarters located at 445 12th Street, SW., 
Washington, DC 20554. Only an authorized representative or certifying 
official, as designated on an applicant's short-form application, may 
appear in person with two forms of identification (one of which must be 
a photo identification) in order to receive replacement codes. 
Qualified bidders requiring replacement codes must call technical 
support prior to arriving at the FCC to arrange preparation of new 
codes.

F. Remote Electronic Bidding Software

    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, 
March 19, 2001. For security purposes, the software is only mailed to 
the contact person at the contact address listed on the short-form 
application. Please note that auction software is tailored to a 
specific auction, so software from prior auctions will not work for 
Auction No. 37. 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, 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 of the public 
notice.

G. Mock Auction

    All qualified bidders will be eligible to participate in a mock 
auction on Monday, May 7, 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

    The first round of bidding for Auction No. 37 will begin on 
Wednesday, May 9, 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.

E. Auction Structure

1. Multiple Round, Ascending Auction
    In the Auction No. 37 Comment Public Notice, we proposed to award 
the construction permits for FM Broadcast stations in a simultaneous, 
multiple-round, ascending auction. We received no comments on this 
issue. We conclude that it is operationally feasible and appropriate to 
auction the construction permits using this auction design. Unless 
otherwise announced, bids will be accepted on all construction permits 
in successive rounds of bidding.
2. Maximum Eligibility and Activity Rules
    In the Auction No. 37 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.
    For Auction No. 37, we will adopt the maximum eligibility proposal 
for Auction No. 37. The amount of the upfront payment submitted by a 
bidder

[[Page 8968]]

determines the initial maximum eligibility (in bidding units) for each 
bidder. Note again that the upfront payments are not attributed to 
specific construction permits, but instead will be translated into 
bidding units to define a bidder's initial maximum eligibility. The 
total upfront payment defines the maximum number of bidding units on 
which the applicant will 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 total upfront payment does not define the total 
dollars a bidder may bid on any given construction permit.
    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 100 percent of 
their maximum eligibility during each round of the auction.
    A bidder's activity level in a round is the sum of the bidding 
units associated with construction permits on which the bidder is 
active. A bidder is considered active on a construction permit in the 
current round if it is either the high bidder at the end of the 
previous round and does not withdraw the high bid in the current 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 permanent reduction in the 
bidder's bidding eligibility to bring them into compliance with the 
activity rule.
3. Activity Rule Waivers and Reducing Eligibility
    In the Auction No. 37 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.
    Based upon our experience in previous auctions, we adopt our 
proposal and each bidder will be provided five activity rule waivers 
that may be used in any round during the course of the auction. Use of 
an activity rule waiver preserves the bidder's current bidding 
eligibility despite the bidder's activity in the current round being 
below the required minimum level. An activity rule waiver applies to an 
entire round of bidding and not to a particular construction permit. 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.
    The FCC auction system assumes that bidders with insufficient 
activity would prefer to use an activity rule waiver (if available) 
rather than lose bidding eligibility. Therefore, the system will 
automatically apply a waiver (known as an ``automatic waiver'') at the 
end of any round where a bidder's activity level is below the minimum 
required unless: (1) There are no activity rule waivers available; or 
(2) the bidder overrides the automatic application of a waiver by 
reducing eligibility, thereby meeting the minimum requirements.
    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.
    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.
4. Auction Stopping Rules
    For Auction No. 37, the Bureau proposed to employ a simultaneous 
stopping rule. Under this rule, bidding will remain open on all 
construction permits until bidding stops on every construction permit. 
The auction will close for all construction permits when one round 
passes during which no bidder submits a new acceptable bid on any 
construction permit, a withdrawal, or applies a proactive waiver. After 
the first such round, bidding closes simultaneously on all construction 
permits.
    The Bureau also sought comment on a modified version of the 
stopping rule. The modified version of the stopping rule would close 
the auction after the first round in which no bidder submits a 
proactive waiver, a withdrawal, or a new bid on a construction permit 
when it is not the standing high bidder. Thus, absent any other bidding 
activity, a bidder placing a new bid on a construction permit for which 
it is the standing high bidder would not keep the auction open under 
this modified stopping rule.
    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 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).
    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 construction permits on which the high bid increased in at 
least one of the preceding specified number of rounds. We proposed to 
exercise this option only in circumstances such as where the auction is 
proceeding very slowly, where there is minimal overall bidding 
activity, or where it appears likely that the auction will not close 
within a reasonable period of time. 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, and/or 
adjusting the amount of the minimum bid increments for construction 
permits.
    We adopt all of the above proposals concerning the auction stopping 
rules. Auction No. 37 will begin under the simultaneous stopping rule, 
and the Bureau will retain the discretion to invoke the other versions 
of the stopping rule.
5. Auction Delay, Suspension, or Cancellation
    In the Auction No. 37 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.
    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

[[Page 8969]]

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 their sole discretion, may elect to: 
Resume the auction starting from the beginning of the current round; 
resume the auction starting from some previous round; or cancel the 
auction in its entirety. Network interruption may cause the 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

1. Round Structure
    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 result formats and locations will also be 
included in the public notice.
    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.
2. Reserve Price or Minimum Opening Bid
    The Balanced Budget Act of 1997 calls upon the Commission to 
prescribe methods by which a reasonable reserve price will be required 
or a minimum opening bid established when FCC licenses or construction 
permits are subject to auction (i.e., because they are mutually 
exclusive), unless the Commission determines that a reserve price or 
minimum opening bid is not in the public interest. Congress has enacted 
a presumption that unless the Commission determines otherwise, minimum 
opening bids or reserve prices are in the public interest. In 
conformity with this mandate, the Commission has directed the Bureaus 
to seek comment on the use of a minimum opening bid and/or reserve 
price prior to the start of each auction.
    In the Auction No. 37 Comment Public Notice, the Bureaus proposed 
to establish minimum opening bids for Auction No. 37. The minimum 
opening bid was determined by taking into account various factors 
relating to the efficiency of the auction and the potential value of 
the spectrum, including the type of service and class of facility 
offered, market size, population covered by the proposed FM broadcast 
facility, industry cash flow data, and recent broadcast transactions.
    Several commenters asserted that the minimum opening bids and/or 
upfront payments identified in Attachment A of the Auction No. 37 
Additional Comment Public Notice are excessive and seek reductions 
thereof. In general, most commenters claim that the minimum opening 
bids, as well as the upfront payments, may not accurately reflect the 
value of the proposed FM construction permits, as determined by class 
of facility, market size and anticipated population coverage, and that 
many of the proposals are not consistent with the minimum opening bids 
and upfront payments for similar facilities auctioned in Auction No. 
25.
    After careful consideration of the concerns raised by commenters, 
we have adjusted the minimum opening bids and upfront payments to 
reduce the possibility of unsold construction permits and the 
likelihood that excessive minimum opening bid and upfront payment 
amounts could discourage auction participation. We believe the modified 
minimum opening bids and upfront payments remain sufficient to deter 
insincere bidding. The revised minimum opening bids and upfront payment 
amounts are reflected on Attachment A to the Public Notice.
3. Bid Increments and Minimum Accepted Bids
    In the Auction No. 37 Comment Public Notice, we proposed to apply a 
minimum bid increment of 10 percent. We further proposed to retain the 
discretion to change the minimum bid increment if circumstances so 
dictate.
    We adopt the proposal contained in the Auction No. 37 Comment 
Public Notice. Once there is a standing high bid on the construction 
permit, there will be a bid increment associated with that bid 
indicating the minimum amount by which the bid on that permit can be 
raised. For Auction No. 37, we will use a flat, across-the-board 
increment of 10 percent to calculate the minimum bid increment. The 
Bureaus retain 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.
4. High Bids
    Each bid will be date- and time-stamped when it is entered into the 
FCC computer system. In the event of tie high bids (identical gross bid 
amounts) for a construction permit 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.
5. Bidding
    During a bidding round, a bidder may submit bids for as many 
construction permits 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 
construction permit 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.
    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. 37.
    A bidder's ability to bid on specific construction permits in the 
first round of the auction is determined by two factors: (1) The 
construction permits applied for on FCC Form 175; and (2) the upfront 
payment amount deposited. The bid submission screens will be tailored 
for each bidder to include only those construction permits for which 
the bidder applied on its FCC Form 175. A bidder also has the option to 
further tailor its bid submission screens to call up specified groups 
of construction permits.

[[Page 8970]]

    The bidding software requires each bidder to login to the FCC 
auction system during the bidding round using the FCC account number, 
bidder identification number, and the confidential security codes 
provided in the registration materials. Bidders are strongly encouraged 
to download and print bid confirmations after they submit their bids.
    The bid entry screen of the automated auction system software for 
Auction No. 37 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 construction 
permit. The bidding software will display the bid increment for each 
construction permit.
    To place a bid on a construction permit, 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.
    For any construction permit on which the FCC is designated as the 
high bidder (i.e., a construction permit that has not yet received a 
bid in the auction or where the high bid was withdrawn and a new bid 
has not yet been placed), bidders will be limited to bidding only the 
minimum acceptable bid. In both of these cases no increment exists for 
the construction permit, and bidders should enter ``1'' in the Bid Mult 
field. Note that in this case, any whole number between 1 and 9 entered 
in the multiplier column will result in a bid value at the minimum 
acceptable bid amount. Finally, bidders are cautioned in entering 
numbers in the Bid Mult field because, as explained in the following 
section, a high bidder that withdraws its standing high bid from a 
previous round, even if mistakenly or erroneously made, is subject to 
bid withdrawal payments.
6. Bid Removal and Bid Withdrawal
    In the Auction No. 37 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.
    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, we conclude that, for Auction No. 37, 
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.
    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 construction permits. If a high bid is withdrawn, 
the construction permit will be offered in the next round at the second 
highest bid price, which may be less than, or equal to, in the case of 
tie bids, the amount of the withdrawn bid, without any bid increment. 
The Commission will serve as a ``place holder'' on the construction 
permit until a new acceptable bid is submitted on that construction 
permit.
    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. This procedure will enhance bidder flexibility during the 
auction. Therefore, we will adopt these procedures for Auction No. 37.
    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).
     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 construction permit, 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 bidder 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 construction permit for evidence of anti-competitive strategic 
behavior and take appropriate action when deemed necessary.
    In the Part 1 Fifth Report and Order, 65 FR 52323 (August 29, 
2000), the Commission modified 1.2104(g)(1) of the rules regarding 
assessments of interim bid withdrawal payments. As amended, 
1.2104(g)(1) provides that in instances in which bids have been 
withdrawn on a construction permit 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

[[Page 8971]]

construction permit. 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.
7. Round Results
    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 FCC account numbers 
for Auction No. 37 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.
8. Auction Announcements
    The FCC will use auction announcements to announce items such as 
schedule changes. All FCC auction announcements will be available on 
the FCC remote electronic bidding system, as well as on the Internet.
9. Maintaining the Accuracy of Short-Form (FCC Form 175) Information
    As noted in Part II.A., 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 Division, Wireless 
Telecommunications Bureau, Federal Communications Commission, 445 12th 
Street, S.W., Room 4-A668, Washington, D.C. 20554
    A separate copy of the letter should be mailed to Kenneth Burnley, 
Auctions and Industry Analysis Division, 4-B524, Wireless 
Telecommunications Bureau, Federal Communications Commission, 445 12th 
Street, S.W., Washington, D.C. 20554. Questions about other changes 
should be directed to Kenneth Burnley at (202) 418-0660.

V. Post-Auction Procedures

A. Down Payments

    After bidding has ended, the Commission will issue a public notice 
declaring the auction closed, identifying the winning bids and bidders 
for each construction permit, and listing bid withdrawal payments due.
    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 United States Government to 20 percent of its net 
winning bid (actual bids less any applicable bidding credit). See 47 
CFR 1.2107(b) and 73.5003. 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

    Within thirty days following the release of the FM auction closing 
public notice, winning bidders must submit a properly completed Form 
301, Application for FM Construction Permit, and required exhibits, for 
each construction permit won through Auction No. 37. Winning bidders 
claiming new entrant status must include an exhibit demonstrating their 
eligibility for the bidding credit. See 47 CFR 1.2112(b) and 73.5005. 
Further filing instructions will be provided to auction winners at the 
close of the auction.

C. Auction Discount Voucher

    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.

D. Default and Disqualification

    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 construction permit 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 or construction permits held by the 
applicant. See 47 C.F.R. Sec. 1.2109(d).

E. Refund of Remaining Upfront Payment Balance

    All applicants that submitted upfront payments but were not the 
winning bidder for a construction permit in Auction No. 37 may be 
entitled to a refund of their 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.
    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, 
Gail Glasser, 445 12th Street, S.W., Room 1-A824, Washington, D.C. 
20554
    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.
Lisa Scanlan,
Supervisory Attorney, Audio Services Division, Mass Media Bureau.
[FR Doc. 01-2949 Filed 2-2-01; 8:45 am]
BILLING CODE 6712-01-U