[Federal Register Volume 66, Number 82 (Friday, April 27, 2001)]
[Notices]
[Pages 21143-21156]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10492]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-01-40-B (Auction No. 40); DA 01-850]


Lower and Upper Paging Bands Auction Scheduled for June 26, 2001; 
Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments 
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 licenses for the lower and upper 
paging bands (Auction No. 40) scheduled for June 26, 2001.

DATES: Auction No. 40 is scheduled for June 26, 2001.

FOR FURTHER INFORMATION CONTACT: Auctions and Industry Analysis 
Division: Erik Salovaara, Legal Branch, or Jeff Crooks, Auctions 
Operations Branch, at (202) 418-0660; Lisa Stover, Auctions Operations 
Branch, at (717) 338-2888. Commercial Wireless Division: Gary Oshinsky, 
Policy and Rules Branch, at (202) 418-7167, or Bettye Woodward, 
Licensing and Technical Analysis Branch, at (202) 418-0620. Media 
Contact: Meribeth McCarrick at (202) 418-0654.

SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 40 
Procedures Public Notice released April 9, 2001. The complete text of 
the

[[Page 21144]]

Auction No. 40 Procedures 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 E--Instructions for FCC Remittance Advice (FCC Form 159)
    Attachment F--Accessing the FCC Network to File FCC Form 175
    Attachment G--Summary of Documents Addressing the Anti-Collusion 
Rules

I. General Information

A. Introduction

    1. By the Auction No. 40 Procedures Public Notice, the Wireless 
Telecommunications Bureau (``Bureau'') announces the procedures and 
minimum opening bids for the upcoming auction of licenses for the lower 
and upper paging bands (``Auction No. 40'') scheduled for June 26, 
2001. On March 7, 2001, in accordance with the Balanced Budget Act of 
1997, the Bureau released the Auction No. 40 Comment Public Notice, 66 
FR 15254 (March 16, 2001) seeking comment on reserve prices or minimum 
opening bids and the procedures to be used in Auction No. 40. The 
Bureau received three comments and four reply comments in response to 
the Auction No. 40 Comment Public Notice.
i. Background of Proceeding
    2. In the Paging Second Report and Order, 66 FR 11616 (March 12, 
1997), the Commission adopted rules governing geographic licensing for 
exclusive channels in the 35-36 MHz, 43-44 MHz, 152-159 MHz, 454-460 
MHz, 929-930 MHz, and 931-932 MHz bands allocated for paging, and 
competitive bidding procedures for granting mutually exclusive 
applications for non-nationwide geographic area licenses in those 
bands. In order to facilitate geographic licensing, the Commission 
dismissed all pending mutually exclusive paging applications and all 
non-mutually exclusive paging applications filed after July 31, 1996. 
In part, the Commission developed a standard methodology for providing 
protection to incumbent licensees from co-channel interference for the 
929-930 MHz and 931-932 MHz paging bands to supplement the existing 
formulas for determining interference contours on other paging bands.
i. Licenses To Be Auctioned
    3. The licenses available in Auction No. 40 include 14,000 lower 
paging bands (35-36 MHz, 43-44 MHz, 152-159 MHz, and 454-460 MHz) 
licenses, as well as 1,514 upper paging bands (929-931 MHz) licenses 
that were unsold in the first paging auction (``Auction No. 26''). The 
lower bands licenses will be awarded in each of the 175 geographic 
areas known as Economic Areas (EAs) and the upper bands licenses will 
be awarded in each of the 51 geographic areas known as Major Economic 
Areas (MEAs). These EAs and MEAs both encompass the United States, Guam 
and Northern Mariana Islands, Puerto Rico and the United States Virgin 
Islands, and American Samoa. The tables contain the block/frequency 
cross-reference list for the paging bands. A complete list of licenses 
available for Auction No. 40 is included as Attachment A of the Auction 
No. 40 Procedures Public Notice.

------------------------------------------------------------------------
                 Block (license suffix)                      Frequency
------------------------------------------------------------------------
               35 MHz Lower Bands Unpaired Paging Channels
------------------------------------------------------------------------
CA......................................................     35.19-35.21
CB......................................................     35.21-35.23
CC......................................................     35.23-35.25
CD......................................................     35.25-35.27
CE......................................................     35.29-35.31
CF......................................................     35.33-35.35
CG......................................................     35.37-35.39
CH......................................................     35.41-35.43
CI......................................................     35.45-35.47
CJ......................................................     35.49-35.51
CK......................................................     35.53-35.55
CL......................................................     35.55-35.57
CM......................................................     35.57-35.59
CN......................................................     35.59-35.61
CO......................................................     35.61-35.63
CP......................................................     35.65-35.68
------------------------------------------------------------------------
               43 MHz Lower Bands Unpaired Paging Channels
------------------------------------------------------------------------
DA......................................................     43.19-43.21
DB......................................................     43.21-43.23
DC......................................................     43.23-43.25
DD......................................................     43.25-43.27
DE......................................................     43.29-43.31
DF......................................................     43.33-43.35
DG......................................................     43.37-43.39
DH......................................................     43.41-43.43
DI......................................................     43.45-43.47
DJ......................................................     43.49-43.51
DK......................................................     43.53-43.55
DL......................................................     43.55-43.57
DM......................................................     43.57-43.59
DN......................................................     43.59-43.61
DO......................................................     43.61-43.63
DP......................................................     43.65-43.67
------------------------------------------------------------------------


------------------------------------------------------------------------
      Block (license suffix)                     Frequency
------------------------------------------------------------------------
              152 MHz Lower Bands Unpaired Paging Channels
------------------------------------------------------------------------
EA...............................  152.230-152.250
EB...............................  152.830-152.850
EC...............................  158.090-158.110
ED...............................  158.690-158.710
------------------------------------------------------------------------
FA...............................  152.015-152.045/158.475-158.505
FB...............................  152.045-152.075/158.505-158.535
FC...............................  152.075-152.105/158.535-158.565
FD...............................  152.105-152.135/158.565-158.595
FE...............................  152.135-152.165/158.595-158.625
FF...............................  152.165-152.195/158.625-158.655
FG...............................  152.195-152.225/158.655-158.685
FH...............................  152.495-152.525/157.755-157.785
FI...............................  152.525-152.555/157.785-157.815
FJ...............................  152.555-152.585/157.815-157.845
FK...............................  152.585-152.615/157.845-157.875
FL...............................  152.615-152.645/157.875-157.905
FM...............................  152.645-152.685/157.905-157.935
FN...............................  152.685-152.705/157.935-157.965
FO...............................  152.705-152.735/157.965-157.995
FP...............................  152.735-152.765/157.995-158.025
FQ...............................  152.765-152.795/158.025-158.055
FR...............................  152.795-152.825/158.055-158.085
------------------------------------------------------------------------
               454 MHz Lower Bands Paired Paging Channels
------------------------------------------------------------------------
GA...............................  454.0125-454.0375/459.0125-459.0375
GB...............................  454.0375-454.0625/459.0375-459.0625
GC...............................  454.0625-454.0875/459.0625-459.0875
GD...............................  454.0875-454.1125/459.0875-459.1125
GE...............................  454.1125-454.1375/459.1125-459.1375
GF...............................  454.1375-454.1625/459.1375-459.1625

[[Page 21145]]

 
GG...............................  454.1625-454.1875/459.1625-459.1875
GH...............................  454.1875-454.2125/459.1875-459.2125
GI...............................  454.2125-454.2375/459.1265-459.2375
GJ...............................  454.2375-454.2625/459.2375-459.2625
GK...............................  454.2625-454.2875/459.2625-459.2875
GL...............................  454.2875-454.3125/459.2875-459.3125
GM...............................  454.3125-454.3375/459.3125-454.3375
GN...............................  454.3375-454.3625/459.3375-459.3625
GO...............................  454.3625-454.3875/459.3625-459.3875
GP...............................  454.3875-454.4125/459.3875-459.4125
GQ...............................  454.4125-454.4375/459.4125-459.4375
GR...............................  454.4375-454.4625/459.4375-459.4625
GS...............................  454.4625-454.4875/459.4625-459.4875
GT...............................  454.4875-454.5125/459.4875-459.5125
GU...............................  454.5125-454.5375/459.5125-459.5375
GV...............................  454.5375-454.5625/459.5375-459.5625
GW...............................  454.5625-454.5875/459.5625-459.5875
GX...............................  454.5875-454.6125/459.5875-459.6125
GY...............................  454.6125-454.6375/459.6125-459.6375
GZ...............................  454.6375-454.6625/459.6375-459.6625
------------------------------------------------------------------------


------------------------------------------------------------------------
                 Block (license suffix)                      Frequency
------------------------------------------------------------------------
                 929-931 MHz Upper Bands Paging Channels
------------------------------------------------------------------------
A.......................................................        929.0125
B.......................................................        929.1125
C.......................................................        929.2375
D.......................................................        929.3125
E.......................................................        929.3875
F.......................................................        929.4375
G.......................................................        929.4625
H.......................................................        929.6375
I.......................................................        929.6875
J.......................................................        929.7875
K.......................................................        929.9125
L.......................................................        929.9625
AA......................................................        931.0125
AB......................................................        931.0375
AC......................................................        931.0625
AD......................................................        931.0875
AE......................................................        931.1125
AF......................................................        931.1375
AG......................................................        931.1625
AH......................................................        931.1875
AI......................................................        931.2125
AJ......................................................        931.2375
AK......................................................        931.2625
AL......................................................        931.2875
AM......................................................        931.3125
AN......................................................        931.3375
AO......................................................        931.3625
AP......................................................        931.3875
AQ......................................................        931.4125
AR......................................................        931.4375
AS......................................................        931.4625
AT......................................................        931.4875
AU......................................................        931.5125
AV......................................................        931.5375
AW......................................................        931.5625
AX......................................................        931.5875
AY......................................................        931.6125
AZ......................................................        931.6375
BA......................................................        931.6625
BB......................................................        931.6875
BC......................................................        931.7125
BD......................................................        931.7375
BE......................................................        931.7625
BF......................................................        931.7875
BG......................................................        931.8125
BH......................................................        931.8375
BI......................................................        931.8625
BJ......................................................        931.9625
BK......................................................       931.9875
------------------------------------------------------------------------
 (Licenses are not available for each block in every market; 985 upper
  bands licenses were sold in Auction No. 26. See Attachment A of the
  Auction No. 40 Procedures Public Notice to determine what licenses
  will be offered in Auction No. 40.)

B. Rules and Disclaimers

i. Relevant Authority
    4. Prospective bidders must familiarize themselves thoroughly with 
the Commission's rules relating to the paging services, contained in 
title 47, parts 22 and 90 of the Code of Federal Regulations, and those 
relating to application and auction procedures, contained in title 47, 
part 1 of the Code of Federal Regulations.
    5. Prospective bidders must also be thoroughly familiar with the 
procedures, terms and conditions (collectively, ``Terms'') contained in 
the Auction No. 40 Procedures Public Notice; the Auction No. 40 Comment 
Public Notice; the Part 1 Fifth Report and Order, 65 FR 52323 (August 
29, 2000) (as well as prior Commission proceedings regarding 
competitive bidding procedures); the Paging Notice, 61 FR 6199 
(February 16, 1996); the Paging First Report and Order, 61 FR 21380 
(May 10, 1996); the First Paging Reconsideration Order 61 FR 34375 
(July 2, 1996); the Paging Second Report and Order; the Second Paging 
Reconsideration Order and Paging Third Report and Order 64 FR 33762 
(June 24, 1999); and the Third Paging Reconsideration Order, 66 FR 
15041 (March 15, 2001).
    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 at ftp://fcc.gov or the FCC Auctions 
World Wide Web site at http://www.fcc.gov/wtb/auctions. Additionally, 
documents may be obtained for a fee, by calling the Commission's copy 
contractor, International Transcription Service, Inc. (``ITS''), at 
(202) 314-3070. When ordering documents from ITS, please provide the 
appropriate FCC number (for example, FCC 99-98 for the Paging Third 
Report and 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 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 Bureau cautions 
that merely filing a certifying statement as part of an application 
will not outweigh specific evidence that collusive behavior has 
occurred, nor will it preclude the initiation of an investigation when 
warranted.
    8. Commission's anti-collusion rules allow applicants to form 
certain agreements during the auction, provided the applicants have not 
applied for licenses covering the same geographic

[[Page 21146]]

areas. Note that in Auction No. 40, applicants for licenses in 
overlapping EAs and MEAs will not be able to take advantage of these 
rule provisions, even though the licenses are not completely co-
extensive. However, all applicants may enter into bidding agreements 
before filing 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 pursuant to 
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 licenses covering the same geographic areas. By signing their FCC 
Form 175 short-form applications, applicants are certifying their 
compliance with Sec. 1.2105(c) of the Commission's rules.
    9. 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 therefore are 
required to make such notification to the Commission immediately upon 
discovery.
    10. A summary listing of documents from the Commission and the 
Bureau addressing the application of the anti-collusion rules may be 
found in Attachment G of the Auction No. 40 Procedures Public Notice.
iii. Incumbent Licensees and Due Diligence
    11. Incumbent (non-geographic) paging licensees operating under 
their existing authorizations are entitled to full protection from co-
channel interference. Geographic area licensees are likewise afforded 
co-channel interference protection from incumbent licensees. Adjacent 
geographic area licensees are obligated to resolve possible 
interference concerns of adjacent geographic area licensees by 
negotiating a mutually acceptable agreement with the neighboring 
geographic licensee.
    12. Potential bidders are reminded that there are a number of 
incumbent licensees already licensed and operating on frequencies that 
will be subject to the upcoming auction. Geographic area licensees must 
protect such incumbents from harmful interference. See 47 CFR 
22.503(i). These limitations may restrict the ability of such 
geographic area licensees to use certain portions of the 
electromagnetic spectrum or provide service to certain areas in their 
geographic license areas.
    13. In addition, potential bidders seeking licenses for geographic 
areas adjacent to the Canadian and Mexican border should be aware that 
the use of some or all of the channels they acquire in the auction 
could be restricted as a result of current or future agreements with 
Canada or Mexico. Licensees on the lower paging channels must submit a 
Form 601 to obtain authorization to operate stations north of Line A or 
east of Line C because these channels are subject to the Above 30 
Megacycles per Second Agreement with Industry Canada. Although the 
upper paging channels do not require coordination with Canada, the 
U.S.-Canada Interim Coordination Considerations for the Band 929-932 
MHz, as amended assigns specific 929 and 931 MHz frequencies to the 
United States for licensing along certain longitudes above Line A, and 
assigns other specific 929 and 931 MHz frequencies to Canada for 
licensing along certain longitudes along the U.S.-Canada border. In 
addition, the 929 and 931 MHz frequencies assigned to Canada are 
unavailable for use by U.S. licensees above Line A as set out in the 
agreement.
    14. Potential bidders should also be aware that certain 
applications (including those for modification), waiver requests, 
petitions to deny, petitions for reconsideration, and applications for 
review are pending before the Commission that relate to particular 
applicants or incumbent licensees. In addition, certain decisions 
reached in the paging proceeding may be subject to judicial appeal and 
may be the subject of additional reconsideration or appeal. Resolution 
of these matters could have an impact on the availability of spectrum 
in Auction No. 40. In addition, the Commission will continue to act on 
pending applications, requests and petitions, some of these matters may 
not be resolved by the time of the auction.
    15. Potential bidders are solely responsible for identifying 
associated risks, and investigating and evaluating the degree to which 
such matters may affect their ability to bid on, otherwise acquire, or 
make use of licenses available in Auction No. 40.
    16. Potential bidders may obtain information about licenses 
available in Auction No. 40 through the Bureau's licensing databases on 
the World Wide Web at http://www.fcc.gov/wtb/uls. Potential bidders 
should direct questions regarding the search capabilities to the FCC 
Technical Support hotline at (202) 414-1250 (voice) or (202) 414-1255 
(TTY), or via e-mail at [email protected]. The hotline is available to 
assist with questions Monday through Friday, from 7 am to 10 pm ET, 
Saturday, 8 am to 7 pm ET, and Sunday, 12 noon to 6 pm ET. In order to 
provide better service to the public, all calls to the hotline are 
recorded. The Commission makes no representations or guarantees 
regarding the accuracy or completeness of information in its databases 
or any third party databases, including, for example, court docketing 
systems.
    17. 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 database. Potential 
bidders are strongly encouraged to physically inspect any sites located 
in, or near, the geographic area for which they plan to bid.
iv. Bidder Alerts
    18. 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.
    19. 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 licensee in 
this service, subject to certain conditions and regulations. A FCC 
auction does not constitute an endorsement by the FCC of any particular 
services, technologies or products, nor does a FCC license constitute a 
guarantee of business success. Applicants and interested parties should 
perform their own due diligence before proceeding, as they would with 
any new business venture.
    20. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 40 to

[[Page 21147]]

deceive and defraud unsuspecting investors. Common warning signals of 
fraud include the following:
     The first contact is a ``cold call'' from a telemarketer, 
or is made in response to an inquiry prompted by a radio or television 
infomercial.
     The offering materials used to invest in the venture 
appear to be targeted at IRA funds, for example, by including all 
documents and papers needed for the transfer of funds maintained in IRA 
accounts.
     The amount of investment is less than $25,000.
     The sales representative makes verbal representations 
that: (a) the Internal Revenue Service (``IRS''), Federal Trade 
Commission (``FTC''), Securities and Exchange Commission (``SEC''), 
FCC, or other government agency has approved the investment; (b) the 
investment is not subject to state or federal securities laws; or (c) 
the investment will yield unrealistically high short-term profits. In 
addition, the offering materials often include copies of actual FCC 
releases, or quotes from FCC personnel, giving the appearance of FCC 
knowledge or approval of the solicitation.
    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 proposals regarding Auction No. 40 may also call the FCC 
Consumer Center at (888) CALL-FCC ((888) 225-5322).
v. 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.

A. Auction Specifics

i. Auction Date
    23. The auction will begin on Tuesday, June 26, 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. 40--Paging.
iii. Bidding Methodology
    25. The bidding methodology for Auction No. 40 will be simultaneous 
multiple round bidding. Bidding will be permitted only from remote 
locations, either telephonically or electronically (by computer via the 
Internet or the Bureau's wide area network).
iv. Pre-Auction Dates and Deadlines
    26. These are important dates relating to Auction No. 40:

Auction Seminar--May 3, 2001
Short-Form Application (FCC Form 175)--May 14, 2001; 6:00 p.m. ET
Upfront Payments (via wire transfer)--June 4, 2001; 6:00 p.m. ET
Mock Auction--June 22, 2001
Auction Begins--June 26, 2001
v. Requirements For Participation
    27. Those wishing to participate in the auction must:
     Submit a short-form application (FCC Form 175) 
electronically by 6 p.m. ET, May 14, 2001.
     Submit a sufficient upfront payment and a FCC Remittance 
Advice Form (FCC Form 159) by 6 p.m. ET, June 4, 2001.
     Comply with all provisions outlined in the Auction No. 40 
Procedures Public Notice.
vi. General Contact Information
    28. The following is a list of general contact information relating 
to Auction No. 40:

General Auction Information--General Auction Questions, Seminar 
Registration--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, 
Due Diligence, Incumbency Issues--Commercial Wireless Division, (202) 
418-0620
Technical Support--Electronic Filing, Automated Auction System--FCC 
Auctions Technical Support Hotline, (202) 414-1250 (Voice), (202) 414-
1255 (TTY), Hours of service: Monday through Friday 7 a.m. to 10 p.m. 
ET, Saturday, 8 a.m. to 7 p.m., Sunday, 12 noon to 6 p.m.
Payment Information--Wire Transfers, Refunds--FCC Auctions Accounting 
Branch, (202) 418-1995, (202) 418-2843 (Fax)
Telephonic Bidding--Will be furnished only to qualified bidders
FCC Copy Contractor--Additional Copies of Commission Documents--
International Transcription Services, Inc., 445 12th Street, SW., Room 
CY-B400, Washington, DC 20554, (202) 314-3070
Press Information--Meribeth McCarrick (202) 418-0654
FCC Forms--(800) 418-3676 (outside Washington, DC), (202) 418-3676 (in 
the Washington Area), http://www.fcc.gov/formpage.html
FCC Internet Sites--http://www.fcc.gov, http://www.fcc.gov/wtb/auctions

II. 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 Auction No. 40 Procedures Public 
Notice. The short-form application seeks the applicant's name and 
address, legal classification, status, small business bidding credit 
eligibility, identification of the license(s) sought, the authorized 
bidders and contact persons. All applicants must certify on their FCC 
Form 175 applications under penalty of perjury that they are legally, 
technically, financially and otherwise qualified to hold a license and, 
as discussed in section II.D (Provisions Regarding Defaulters and 
Former Defaulters), that they are not in default on any payment for 
Commission licenses (including down payments) or delinquent on any non-
tax debt owed to any Federal agency.
    30. The Commission determines whether there are mutually exclusive 
applications for any given license by reviewing all of the Form 175's 
submitted to determine whether more than one party has applied for a 
given

[[Page 21148]]

license. In the event that review of all the Form 175's accepted for 
filing determines that only one party has applied for a given 
license(s), those license(s) will be removed from the auction. In such 
cases, the party that applied for the given license(s) will be 
permitted to file a long-form application.
    31. In Auction No. 40, Form 175 will include a mechanism that 
allows an applicant to filter the 15,514 licenses by paging service, 
frequency band, market area, and/or channel block/license suffix to 
create customized lists of licenses. The applicant will make selections 
for one or more of the filter criteria and the system will produce a 
list of licenses satisfying the specified criteria. The applicant may 
apply for all the licenses in the customized list by using the ``Select 
All'' option; select individual licenses separately from the list; or 
create a second customized list without selecting any of the licenses 
from the first list. Applicants also will be able to select licenses 
from one customized list and then create a second customized list to 
select additional licenses.

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

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

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

    33. Applicants will be required to identify on their short-form 
applications any parties with whom they have entered into any 
consortium arrangements, joint ventures, partnerships or other 
agreements or understandings which relate in any way to the licenses 
being auctioned, including any agreements relating to post-auction 
market structure. See 47 CFR 1.2105(a)(2)(viii) and 1.2105(c)(1). 
Applicants will also be required to certify on their short-form 
applications that they have not entered into any explicit or implicit 
agreements, arrangements or understandings of any kind with any 
parties, other than those identified, regarding the amount of their 
bids, bidding strategies, or the particular licenses on which they will 
or will not bid. See 47 CFR 1.2105(a)(2)(ix). As discussed, if an 
applicant has had discussions, but has not reached a joint bidding 
agreement by the short-form deadline, it would not include the names of 
parties to the discussions on its applications and may not continue 
discussions with applicants for the same geographic license area(s) 
after the deadline. Where applicants have entered into consortia or 
joint bidding arrangements, applicants must submit an ``Exhibit B'' to 
the FCC Form 175.
    34. A party holding a non-controlling, attributable interest in one 
applicant will be permitted to acquire an ownership interest in, form a 
consortium with, or enter into a joint bidding arrangement with other 
applicants for licenses in the same geographic license area provided 
that (i) the attributable interest holder certifies that it has not and 
will not communicate with any party concerning the bids or bidding 
strategies of more than one of the applicants in which it holds an 
attributable interest, or with which it has formed a consortium or 
entered into a joint bidding arrangement; and (ii) the arrangements do 
not result in a change in control of any of the applicants. While the 
anti-collusion rules do not prohibit non-auction related business 
negotiations among auction applicants, bidders are reminded that 
certain discussions or exchanges could touch upon impermissible subject 
matters because they may convey pricing information and bidding 
strategies.

C. Eligibility

i. Small Business Bidding Credit Eligibility (FCC Form 175 Exhibit C)
    35. In the Paging Second Report and Order, the Commission adopted 
small business bidding credits to promote and facilitate the 
participation of small businesses in competitive bidding for licenses 
in the paging service. In the Second Paging Reconsideration Order and 
Paging Third Report and Order, the Commission subsequently increased 
the size of the bidding credits.
    36. Bidding credits are available to small businesses, or consortia 
thereof, (as defined in 47 CFR 1.2110(c) and 22.217(a)). A bidding 
credit represents the amount by which a bidder's winning bids are 
discounted. The size of the bidding credit depends on the average 
annual gross revenues for the preceding three years of the bidder, its 
affiliates, its controlling interests, and the affiliates of its 
controlling interests:
     A bidder with attributed average annual gross revenues of 
more than $3 million but not more than $15 million for the preceding 
three years receives a 25 percent discount on its winning bids for 
paging licenses;
     A bidder with attributed average annual gross revenues of 
not more than $3 million for the preceding three years receives a 35 
percent discount on its winning bids for paging licenses.
    37. Bidding credits are not cumulative; qualifying applicants 
receive either the 25 percent or the 35 percent bidding credit, but not 
both.
ii. Tribal Land Bidding Credit
    38. 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.
iii. Applicability of Part 1 Attribution Rules
    39. Controlling interest standard. On August 14, 2000, the 
Commission released the Part 1 Fifth Report and Order, in which the 
Commission, inter alia, adopted a ``controlling interest'' standard for 
attributing to auction applicants the gross revenues of their investors 
and affiliates in determining small business eligibility for future 
auctions. The Commission observed that the rule modifications adopted 
in the various part 1 orders would result in discrepancies and/or 
redundancies between certain of the new part 1 rules and existing 
service-specific rules, and the Commission delegated to the Bureau the 
authority to make conforming edits to the Code of Federal Regulations 
(CFR) consistent with the rules adopted in the prt 1 proceeding. Part 1 
rules that superseded inconsistent service-specific rules will control 
in Auction No. 40. Accordingly, the ``controlling interest'' standard 
as set forth will be in effect for Auction No. 40, even if conforming 
edits to the CFR are not made prior to the auction.
    40. Control. The term ``control'' includes both de facto and de 
jure control of the applicant. Typically, ownership of at least 50.1 
percent of an entity's voting stock evidences de jure control. De facto 
control is determined on a case-by-case basis. The following are some 
common indicia of de facto 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.
    41. Attribution for small business eligibility. In determining 
which entities

[[Page 21149]]

qualify as small businesses, the Commission will consider the gross 
revenues of the applicant, its affiliates, its controlling interests, 
and the affiliates of its controlling interests. The Commission does 
not impose specific equity requirements on controlling interest 
holders. Once principals or entities with a controlling interest are 
determined, only the revenues of those principals or entities, the 
applicant and their affiliates will be counted in determining small 
business eligibility.
    42. A consortium of 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 business in Sec. 1.2110(f) and Sec. 22.223(b) 
of the Commission's rules. Thus, each consortium member must disclose 
its gross revenues along with those of its affiliates, its controlling 
interests, and the affiliates of its controlling interests. Although 
the gross revenues of the consortium members will not be aggregated for 
purposes of determining eligibility for small business credits, this 
information must be provided to ensure that each individual consortium 
member qualifies for any bidding credit awarded to the consortium.
iv. Supporting Documentation
    43. Applicants will be required to file supporting documentation to 
their FCC Form 175 short-form applications to establish that they 
satisfy the eligibility requirements to qualify as small businesses (or 
consortia of small businesses) for this auction.
    44. Submission of an FCC Form 175 application constitutes a 
representation by the certifying official that he or she is an 
authorized representative of the applicant, has read the form's 
instructions and certifications, and that the contents of the 
application and its attachments are true and correct. Submission of a 
false certification to the Commission may result in penalties, 
including monetary forfeitures, license forfeitures, ineligibility to 
participate in future auctions, and/or criminal prosecution.

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

    45. Each applicant must certify on its FCC Form 175 application 
that it is not in default on any Commission licenses and that it is not 
delinquent on any non-tax debt owed to any Federal agency. In addition, 
each applicant must attach to its FCC Form 175 application a statement 
made under penalty of perjury indicating whether or not the applicant 
has ever been in default on any Commission licenses or has ever been 
delinquent on any non-tax debt owed to any federal agency. Applicants 
must include this statement as Exhibit D of the FCC Form 175. If any of 
an applicant's controlling interests holders or their affiliates, as 
defined by Sec. 1.2110 of the Commission's rules (as recently amended 
in the Part 1 Fifth Report and Order) have ever been in default on any 
Commission license or have ever been delinquent on any non-tax debt 
owed to any Federal agency, the applicant must include such information 
as part of the same attached statement. Prospective bidders are 
reminded that the statement must be made under penalty of perjury and, 
further, submission of a false certification to the Commission is a 
serious matter that may result in severe penalties, including monetary 
forfeitures, license revocations, exclusion from participation in 
future auctions, and/or criminal prosecution.
    46. ``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. 40, provided that they are otherwise qualified. 
However, as discussed infra in Section III.D.iii, former defaulters are 
required to pay upfront payments that are fifty percent more than the 
normal upfront payment amounts.

E. Installment Payments

    47. Installment payment plans will not be available in Auction No. 
40.

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

    48. Applicants owned by minorities or women, as defined in 47 CFR 
1.2110(c)(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.

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

    49. After the short-form filing deadline (May 14, 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 or proposed service 
areas, change the certifying official or change control of the 
applicant or change bidding credits). See 47 CFR 1.2105. Permissible 
minor changes include, for example, deletion and addition of authorized 
bidders (to a maximum of three) and revision of exhibits. Applicants 
should make these changes on-line, and submit a letter to Margaret 
Wiener, Chief, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau, Federal Communications Commission, 445 12th 
Street, SW., Suite 4-A669, Washington, DC 20554, briefly summarizing 
the changes. Questions about other changes should be directed to Erik 
Salovaara of the Auctions and Industry Analysis Division at (202) 418-
0660.

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

    50. 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

    51. On Thursday, May 3, 2001, the FCC will sponsor a free seminar 
for Auction No. 40 at the Federal Communications Commission, located at 
445 12th Street, SW., Washington, DC. The seminar will provide 
attendees with information about pre-auction procedures, conduct of the 
auction, the FCC Automated Auction System, and the paging and auction 
rules. The seminar will also provide an opportunity for prospective 
bidders to ask questions of FCC staff.
    52. To register, complete the registration form, Attachment B of 
the Auction No. 40 Procedures Public Notice, and submit it by Tuesday, 
May 1, 2001. Registrations are accepted on a first-come, first-served 
basis.

B. Short-Form Application (FCC Form 175)--Due May 14, 2001

    53. In order to be eligible to bid in this auction, applicants must 
first submit a FCC Form 175 application. This application must be 
submitted electronically and received at the Commission no later than 6 
p.m. ET on

[[Page 21150]]

May 14, 2001. Late applications will not be accepted.
    54. There is no application fee required when filing a FCC Form 
175. However, to be eligible to bid, an applicant must submit an 
upfront payment. See Part III.D.
i. Electronic Filing
    55. Applicants must file their FCC Form 175 applications 
electronically. Applications may generally be filed at any time 
beginning at noon ET on May 3, 2001, until 6 p.m. ET on May 14, 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 May 14, 2001.
    56. Applicants must press the ``SUBMIT Application'' button on the 
``Submission'' page of the electronic form to successfully submit their 
FCC Form 175s. Any form that is not submitted will not be reviewed by 
the FCC. Information about accessing the FCC Form 175 is included in 
Attachment C of the Auction No. 40 Procedures Public Notice. Technical 
support is available at (202) 414-1250 (voice) or (202) 414-1255 (text 
telephone (TTY)); the hours of service Monday through Friday, from 7 am 
to 10 pm ET, Saturday, 8 am to 7 pm ET, and Sunday, 12 noon to 6 pm ET. 
In order to provide better service to the public, all calls to the 
hotline are recorded.
    57. Applicants can also contact Technical Support via e-mail. To 
obtain the address, click the Support tab on the Form 175 Homepage.
iii. Completion of the FCC Form 175
    58. 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 Auction No. 40 Procedures 
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 Auction No. 40 Procedures Public Notice 
provide information on the required attachments and appropriate 
formats.
iv. Electronic Review of FCC Form 175
    59. The FCC Form 175 electronic review system may be used to locate 
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 Auction No. 40 
Procedures Public Notice for details on accessing the review system.

C. Application Processing and Minor Corrections

    60. 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; (ii) those applications rejected; and (iii) those applications 
which have minor defects that may be corrected, and the deadline for 
filing such corrected applications.
    61. As described more fully in the Commission's rules, after the 
May 14, 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 June 4, 2001

    62. 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 June 4, 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. 40 go to a lockbox number 
different from the lockboxes 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 June 4, 
2001, deadline will result in dismissal of the application and 
disqualification from participation in the auction.
i. Making Auction Payments by Wire Transfer
    63. Wire transfer payments must be received by 6 p.m. ET on June 4, 
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/AC 910-1174
OBI Field: (Skip one space between each information item)
``AUCTIONPAY''
TAXPAYER IDENTIFICATION NO.: (same as FCC Form 159, block 12)
PAYMENT TYPE CODE (enter ``A40U'')
FCC CODE 1 (same as FCC Form 159, block 24A: ``40'')
PAYER NAME (same as FCC Form 159, block 2)
LOCKBOX NO. #358405


    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.

    64. Applicants must fax a completed FCC Form 159 (Revised 2/00) 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. 40.'' Bidders should confirm receipt of their upfront 
payment at Mellon Bank by contacting their sending financial 
institution.
ii. FCC Form 159
    65. A completed FCC Remittance Advice Form (FCC Form 159, Revised 
2/00) must be faxed to Mellon Bank with each upfront payment. Proper 
completion of FCC Form 159 (Revised 2/00) is critical to ensuring 
correct credit of upfront payments. Detailed instructions for 
completion of FCC Form 159 are included in Attachment E of the Auction 
No. 40 Procedures Public Notice. An electronic version of the FCC Form 
159 is available after filing the FCC Form 175. The FCC Form 159 can be 
completed electronically, but must be filed with Mellon Bank via 
facsimile.
iii. Amount of Upfront Payment
    66. 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 appropriate upfront payment(s) 
for each auction. In addition, in the Part 1 Fifth Report and Order, 
the Commission ordered that ``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

[[Page 21151]]

any Federal agency, be required to pay upfront payments fifty percent 
greater than non-``former defaulters.''
    67. Bidders' upfront payments will be translated to bidding units 
on a bidding unit for dollar basis. In order to bid on a license, 
otherwise qualified bidders who applied for that license on Form 175 
must make a sufficient upfront payment to have an eligibility level 
that meets or exceeds the number of bidding units assigned to that 
license.
    68. The bidding units for each license will equal the license's 
upfront payment on a bidding unit for dollar basis. The bidding unit 
level for each license will remain constant throughout the auction. The 
specific upfront payments and bidding units for each license are set 
forth in Attachment A of the Auction No. 40 Procedures Public Notice.
    69. In calculating its upfront payment amount, an applicant should 
determine the maximum number of bidding units it may wish to bid on in 
any single round, and submit an upfront payment covering that number of 
bidding units. In order to make this calculation, an applicant should 
add together the upfront payments for all licenses on which it seeks to 
bid in any given round. Bidders should check their calculations 
carefully, as there is no provision for increasing a bidder's maximum 
eligibility after the upfront payment deadline.
    70. At a minimum, therefore, an applicant's total upfront payment 
must be enough to establish eligibility to bid on at least one of the 
licenses applied for on Form 175, or else the applicant will not be 
eligible to participate in the auction. An applicant does not have to 
make an upfront payment to cover all licenses for which the applicant 
has applied on 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.
    71. Former defaulters should calculate their upfront payment for 
all licenses by multiplying the number of bidding units they wish to 
purchase by 1.5. In order to calculate the number of bidding units to 
assign to former defaulters, the Commission will divide the upfront 
payment received by 1.5 and round the result up to the nearest bidding 
unit. NOTE: An applicant may, on its FCC Form 175, apply for every 
applicable license being offered, but its actual bidding in any round 
will be limited by the bidding units reflected in its upfront payment.
iv. Applicant's Wire Transfer Information for Purposes of Refunds for 
Upfront Payments
    72. The Commission will use wire transfers for all Auction No. 40 
refunds. To ensure that refunds of upfront payments are processed in an 
expeditious manner, all pertinent information should 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 June 4, 2001. All refunds will be 
returned to the payer of record as identified on the FCC Form 159 
unless the payer submits written authorization instructing otherwise. 
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
Taxpayer Identification Number
Correspondent Bank (if applicable)
ABA Number
Account Number

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

A. Auction Registration

    73. 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.
    74. All qualified bidders are automatically registered for the 
auction. Registration materials will be distributed prior to the 
auction by two separate overnight mailings, one containing the 
confidential bidder identification number (BIN) required to place bids 
and the other containing the SecurID cards. These mailings will be sent 
only to the contact person at the contact address listed in the FCC 
Form 175.
    75. 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, June 21, 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.
    76. Qualified bidders should note that lost bidder identification 
numbers or SecurID cards can be replaced only by appearing in person at 
the FCC Auction Headquarters located at 445 12th St., SW., Washington, 
DC 20554. Only an authorized representative or certifying official, as 
designated on an applicant's FCC Form 175, may appear in person with 
two forms of identification (one of which must be a photo 
identification) in order to receive replacement codes. Qualified 
bidders requiring replacements must call technical support prior to 
arriving at the FCC.

F. Remote Electronic Bidding

    77. This is the first auction that the Commission will conduct over 
the Internet. Telephonic bidding and access via the Bureau's wide area 
network will also be available, as in prior auctions. Qualified bidders 
are permitted to bid telephonically or electronically, i.e., over the 
Internet or the Bureau's wide area network. In either case, each bidder 
must have their own Remote Security Access SecurID card, which the FCC 
will provide at no charge. Each applicant will be issued at least two 
SecurID cards, and up to a maximum of three cards. For security 
purposes, the SecurID cards are only mailed to the contact person at 
the contact address listed on the FCC Form 175. Please note that the 
SecurID card is tailored to a specific auction, so a SecurID card 
obtained from a source other than the FCC will not work for Auction No. 
40. The telephonic bidding phone number will be supplied in the first 
Federal Express mailing of the confidential bidder identification 
number. Your bidding preference--electronic or telephonic--is specified 
on the FCC Form 175.

G. Mock Auction

    78. All qualified bidders will be eligible to participate in a mock 
auction on Friday, June 22, 2001. The mock auction will enable 
applicants to become familiar with the electronic system prior to the 
auction. Participation by all bidders is strongly recommended. Details 
will be announced by public notice.

IV. Auction Event

    79. The first round of bidding for Auction No. 40 will begin on 
Tuesday,

[[Page 21152]]

June 26, 2001. The initial bidding schedule will be announced in a 
public notice listing the qualified bidders, which is released 
approximately 10 days before the start of the auction.

A. Auction Structure

i. Simultaneous Multiple Round Auction
    80. All licenses in Auction No. 40 will be awarded in a single, 
simultaneous multiple round auction. Unless otherwise announced, bids 
will be accepted on all licenses in each round of the auction. This 
approach allows bidders to take advantage of any synergies that exist 
among licenses and is administratively efficient.
ii. Maximum Eligibility and Activity Rules
    81. The amount of the upfront payment submitted by a bidder will 
determine the initial maximum eligibility (as measured in bidding 
units) for each bidder. Upfront payments are not attributed to specific 
licenses, but instead will be translated into bidding units to define a 
bidder's initial maximum eligibility (see ``Amount of Upfront Payment'' 
in Part III.D.iii). The total upfront payment defines the maximum 
number of bidding units on which the applicant will be permitted to bid 
and hold high bids. As there is no provision for increasing a bidder's 
maximum eligibility during the course of an auction (as described under 
``Auction Stages'' in Part IV.A.iii), prospective bidders are cautioned 
to calculate their upfront payments carefully. The total upfront 
payment does not affect the total dollars a bidder may bid on any given 
license.
    82. In order to ensure that the auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively 
throughout the auction, rather than wait until the end before 
participating. Bidders are required to be active on a specific 
percentage of their current eligibility during each round of the 
auction.
    83. A bidder's activity level in a round is the sum of the bidding 
units associated with licenses on which the bidder is active. A bidder 
is considered active on a license in the current round if it is either 
the high bidder at the end of the previous bidding round and does not 
withdraw the high bid in the current round, or if it submits an 
acceptable bid in the current round (see ``Bid Increments and Minimum 
Accepted Bids'' in Part IV.B.iii). The minimum required activity level 
is expressed as a percentage of the bidder's maximum bidding 
eligibility, and increases by stages as the auction progresses.
iii. Auction Stages
    84. Auction No. 40 will be conducted in three stages and employ an 
activity rule. In each round of Stage One, a bidder desiring to 
maintain its current eligibility will be required to be active on 
licenses encompassing at least 80 percent of its current bidding 
eligibility. In each round of Stage Two, a bidder desiring to maintain 
its current eligibility will be required to be active on at least 90 
percent of its current bidding eligibility. Finally, in Stage Three, in 
order to maintain eligibility, a bidder will be required to be active 
on 98 percent of its current bidding eligibility. The FCC reserves the 
discretion to further alter the activity percentages before and/or 
during the auction.
    85. The procedures for each stage are:
    Stage One: During the first stage of the auction, a bidder desiring 
to maintain its current eligibility will be required to be active on 
licenses that represent at least 80 percent of its current bidding 
eligibility in each bidding round. Failure to maintain the required 
activity level will result in a reduction in the bidder's bidding 
eligibility in the next round of bidding (unless an activity rule 
waiver is used). During Stage One, reduced eligibility for the next 
round will be calculated by multiplying the bidder's current activity 
(the sum of bidding units of the bidder's standing high bids and valid 
bids during the current round) by five-fourths (5/4).
    Stage Two: During the second stage of the auction, a bidder 
desiring to maintain its current eligibility is required to be active 
on 90 percent of its current bidding eligibility. Failure to maintain 
the required activity level will result in a reduction in the bidder's 
bidding eligibility in the next round of bidding (unless an activity 
rule waiver is used). During Stage Two, reduced eligibility for the 
next round will be calculated by multiplying the bidder's current 
activity (the sum of bidding units of the bidder's standing high bids 
and valid bids during the current round) by ten-ninths (10/9).
    Stage Three: During the third stage of the auction, a bidder 
desiring to maintain its current eligibility is required to be active 
on 98 percent of its current bidding eligibility. Failure to maintain 
the required activity level will result in a reduction in the bidder's 
bidding eligibility in the next round of bidding (unless an activity 
rule waiver is used). In this stage, reduced eligibility for the next 
round will be calculated by multiplying the bidder's current activity 
(the sum of bidding units of the bidder's standing high bids and valid 
bids during the current round) by fifty-fortyninths (50/49).
    Caution: Since activity requirements increase in each auction 
stage, bidders must carefully check their current activity during the 
bidding period of the first round following a stage transition. This is 
especially critical for bidders that have standing high bids and do not 
plan to submit new bids. In past auctions, some bidders have 
inadvertently lost bidding eligibility or used an activity rule waiver 
because they did not re-verify their activity status at stage 
transitions. Bidders may check their activity against the required 
minimum activity level by using the bidding system's bidding module.
iv. Stage Transitions
    86. Auction No. 40 will start in Stage One and it will advance to 
the next stage (i.e., from Stage One to Stage Two, and from Stage Two 
to Stage Three) when, in each of three consecutive rounds of bidding, 
the high bid has increased on 10 percent or less of the licenses being 
auctioned (as measured in bidding units). In addition, the Bureau will 
retain the discretion to regulate the pace of the auction by 
announcement. This determination will be based on a variety of measures 
of bidder activity, including, but not limited to, the auction activity 
level, the percentages of licenses (as measured in bidding units) on 
which there are new bids, the number of new bids, and the percentage 
increase in revenue.
v. Activity Rule Waivers and Reducing Eligibility
    87. In Auction No. 40, each bidder will be provided five activity 
rule waivers that may be used in any round during the course of the 
auction. Use of an activity rule waiver preserves the bidder's current 
bidding eligibility despite the bidder's activity in the current round 
being below the required minimum level. An activity rule waiver applies 
to an entire round of bidding and not to a particular license.
    88. The FCC Automated Auction System assumes that bidders with 
insufficient activity prefer to use an activity rule waiver (if 
available) rather than lose bidding eligibility. Therefore, the system 
will automatically apply a waiver (known as an ``automatic waiver'') at 
the end of any round where a bidder's activity level is below the 
minimum required unless: (i) There are no activity rule waivers 
available; or (ii) the bidder overrides the automatic application of a 
waiver by reducing

[[Page 21153]]

eligibility, thereby meeting the minimum requirements.
    89. 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 bidding system. In this 
case, the bidder's eligibility is permanently reduced to bring the 
bidder into compliance with the activity rules as described in 
``Auction Stages'' (see Part IV.A.iii discussion). Once eligibility has 
been reduced, a bidder will not be permitted to regain its lost bidding 
eligibility.
    90. 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 system) during a round in which no bids are submitted, the 
auction will remain open and the bidder's eligibility will be 
preserved. However, an automatic waiver triggered during a round in 
which there are no new valid bids or withdrawals will not keep the 
auction open.
vi. Auction Stopping Rules
    91. For Auction No. 40, the Bureau will employ a simultaneous 
stopping rule. Under this rule, bidding will remain open on all 
licenses until bidding stops on every license. The auction will close 
for all licenses when one round passes during which no bidder submits a 
new acceptable bid on any license, applies a proactive waiver, or 
withdraws a previous high bid. After the first such round, bidding 
closes simultaneously on all licenses.
    92. The Bureau also will retain discretion to implement a modified 
version of the simultaneous stopping rule. The modified version will 
close the auction for all licenses after the first round in which no 
bidder submits a proactive waiver, a withdrawal, or a new bid on any 
license on which it is not the standing high bidder. Thus, absent any 
other bidding activity, a bidder placing a new bid on a license for 
which it is the standing high bidder will not keep the auction open 
under this modified stopping rule.
    93. The Bureau will retain discretion to keep the 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).
    94. In addition, the Bureau reserves the right to declare that the 
auction will end after a designated number of additional rounds 
(``special stopping rule''). If the Bureau invokes this special 
stopping rule, it will accept bids in the final round(s) only for 
licenses on which the high bid increased in at least one of the 
preceding specified number of rounds. We proposed to exercise this 
option only in circumstances such as where the auction is proceeding 
very slowly, where there is minimal overall bidding activity or where 
it appears likely that the auction will not close within a reasonable 
period of time. Before exercising this option, the Bureau is likely to 
attempt to increase the pace of the auction by, for example, moving the 
auction into the next stage (where bidders will be required to maintain 
a higher level of bidding activity), increasing the number of bidding 
rounds per day, and/or adjusting the amount of the minimum bid 
increments for the licenses.
vii. Auction Delay, Suspension, or Cancellation
    95. 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. Exercise of this 
authority is solely within the discretion of the Bureau, and its use is 
not intended to be a substitute for situations in which bidders may 
wish to apply their activity rule waivers.

B. Bidding Procedures

i. Round Structure
    96. The initial bidding schedule will be announced in the public 
notice listing the qualified bidders, which will be released 
approximately 10 days before the start of the auction and 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. The Bureau will consider all relevant factors, including but 
not limited to the number of licenses in the auction, when determining 
the number of bidding rounds per day. Details regarding round results 
formats and locations will also be included in the public notice 
listing qualified bidders.
    97. The FCC has discretion to change the bidding schedule in order 
to foster an auction pace that reasonably balances speed with the 
bidders' need to study round results and adjust their bidding 
strategies. The FCC may increase or decrease the amount of time for the 
bidding rounds and review periods, or the number of rounds per day, 
depending upon the bidding activity level and other factors.
ii. Reserve Price or Minimum Opening Bid
    98. Background. The Balanced Budget Act of 1997, codified at 47 
U.S.C. 309(j)(4)(f), 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 unless the 
Commission determines that a reserve price or minimum opening bid is 
not in the public interest. Consistent with this mandate, the 
Commission directed the Bureau to seek comment on the use of a minimum 
opening bid and/or reserve price prior to the start of each auction. 
Among other factors, the Bureau must consider the amount of spectrum 
being auctioned, levels of incumbency, the availability of technology 
to provide service, the size of the geographic service areas, the 
extent of interference with other spectrum bands, and any other 
relevant factors that could have an impact on the spectrum being 
auctioned. The Commission concluded that the Bureau should have the 
discretion to employ either or both of these mechanisms for future 
auctions.
    99. In the Auction No. 40 Comment Public Notice, the Bureau 
proposed to establish minimum opening bids for Auction No. 40 and to 
retain discretion to lower the minimum opening bids. Specifically, for 
Auction No. 40, the Bureau proposed the following formula for minimum 
opening bids:
     For a license being auctioned by MEA, the minimum opening 
bid will be 20% of the average gross high bid received in Auction No. 
26 in the same MEA.
     For a license being auctioned by EA, the minimum opening 
bid will be the EA population multiplied by 20% of the gross average 
dollars per population received in Auction No. 26 for the corresponding 
MEA.

[[Page 21154]]

    100. The Bureau will set a ``floor'' for minimum opening bids at 
$1000 for licenses in the upper paging bands (929-931 MHz) and $500 for 
the licenses in the lower paging bands (35-36 MHz, 43-44 MHz, 152-159 
MHz, and 454-460 MHz).
    101. In the alternative, the Bureau sought comment on whether, 
consistent with the Balanced Budget Act, the public interest would be 
served by having no minimum opening bid or reserve price.
    102. All the parties filing comments and replies addressed the 
minimum opening bids proposed in the Auction No. 40 Comment Public 
Notice. As a preliminary matter, none of the parties contended that 
having minimum opening bids in Auction No. 40 is contrary to the public 
interest. Several parties expressly endorsed the use of minimum opening 
bids as an effective auction tool. Accordingly, pursuant to the 
Balanced Budget Act, the Bureau adopts its proposal to use minimum 
opening bids in Auction No. 40.
    103. All the comments and replies propose that some or all the 
minimum opening bids be lower than those proposed in the Auction No. 40 
Comment Public Notice. One commenter proposes that for lower paging 
bands markets with a population of less than 1 million, the Bureau use 
$200, rather than $500, as an absolute minimum opening bid. Another 
proposes a ``floor price'' of $50, at least for licenses in the lower 
paging bands. A third asserts that minimum opening bids should be set 
based on the filing fee for additional site licenses under the former 
licensing system. One reply comment proposes that the floor be reduced 
to $200 for all licenses.
    104. After reviewing the comments and replies, the Bureau has 
concluded that it should adopt its original proposal and the minimum 
opening bids listed in the Auction No. 40 Comment Paging Notice. The 
specific minimum opening bid for each license is set forth in 
Attachment A to the Auction No. 40 Procedures Public Notice. The Bureau 
believes that parties unable or unwilling to make the proposed absolute 
minimum opening bids most likely will be unable or unwilling to use the 
licenses to provide service to the public. The commenters' observations 
regarding the extent of incumbency, proposals to grant licenses based 
on incumbency, and concerns about the transition from site specific 
licensing to geographic area licensing, were the subject of prior rule 
making proceedings and are not within the scope of auction procedures.
    105. The minimum opening bids for Auction No. 40 are reducible at 
the discretion of the Bureau. Such discretion will be exercised, if at 
all, sparingly and early in the auction, i.e., before bidders lose all 
waivers and begin to lose substantial eligibility. During the course of 
the auction, the Bureau will not entertain any bidder request to reduce 
the minimum opening bid on specific licenses.
iii. Bid Increments and Minimum Accepted Bids
    106. In Auction No. 40, the minimum accepted bid will be set as the 
minimum opening bid or the standing high bid plus a defined increment. 
Bidders will be able to place any of nine higher bids, each higher bid 
being equal to the minimum accepted bid plus one to nine times the 
defined increment. The defined increment will be based on a percentage 
of the standing high bid or, if no standing high bid had been placed, 
on the minimum opening bid. At the outset of the auction, we will use 
twenty percent of the standing high bid or minimum opening bid to 
calculate the increment. We retain the discretion to change the 
percentage used to calculate the defined increment if circumstances so 
dictate and to set a floor for the increment used to calculate the 
minimum acceptable bid at an absolute dollar amount.
    107. Finally, in Stage III of Auction No. 40, we will have 
discretion to use a smaller percentage to calculate the increment used 
in setting acceptable bids higher than the minimum accepted bid. In all 
other respects, such as rounding, the smaller defined increment would 
be calculated in the same manner as the defined increment used to set 
the minimum accepted bid. Some commenters advocated that the Bureau 
should use ten percent (10%) or less should it exercise this discretion 
in Stage III and use a smaller percentage to calculate acceptable bids 
higher than the minimum accepted bid. We conclude that there is no need 
to so restrict our discretion. Advanced notice of the Bureau's decision 
to exercise its discretion with regard to acceptable bids in any manner 
will be announced via the Automated Auction System.
iv. High Bids
    108. An implementation of the Lecuyer pseudo-random generator will 
be used to determine the standing high bidder in the case of tie high 
bids. A random number will be assigned to each bid. The tie bid having 
the highest random number will become the standing high bid. As noted 
in the Auction No. 40 Comment Public Notice, we have adopted this 
method of breaking ties for this auction because, unlike prior 
auctions, bidders in Auction No. 40 will be able to bid via the 
Internet. Breaking ties by reference to the timing of the bids, as in 
prior auctions, is inappropriate in Auction No. 40 because bidders may 
access the Internet at widely varying speeds.
v. Bidding
    109. During a bidding round, a bidder may submit bids for as many 
licenses as it wishes (subject to its eligibility), withdraw high bids 
from previous bidding rounds, remove bids placed in the same bidding 
round, or permanently reduce eligibility. Bidders also have the option 
of making multiple submissions and withdrawals in each bidding round. 
If a bidder submits multiple bids for a single license in the same 
round, the system takes the last bid entered as that bidder's bid for 
the round.
    110. Please note that all bidding will take place remotely either 
through the Automated Auction System 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. In the past, four to five minutes have been 
necessary to complete a bid submission. Due to the large number of 
licenses in Auction No. 40, bidders may require more time to submit 
their bids than in past auctions.) There will be no on-site bidding 
during Auction No. 40.
    111. 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 allow bidders to submit bids 
on only those licenses for which the bidder applied on its FCC Form 
175.
    112. The FCC Automated Auction System requires each bidder to be 
logged in during the bidding round using the bidder identification 
number provided in the registration materials, and the generated 
SecurID code. Bidders are strongly encouraged to print bid 
confirmations after they submit their bids.
    113. In each round, eligible bidders will be able to place 
acceptable bids on a given license in any of ten different amounts. The 
Automated Auction System interface will list as acceptable bids for 
each license a minimum acceptable bid and nine higher bids. Until a bid 
has been placed on a license, the minimum acceptable bid for that 
license will be equal to its minimum opening bid. In the rounds after 
an acceptable bid is placed on a license,

[[Page 21155]]

the minimum acceptable bid for that license will be equal to the 
standing high bid plus a defined increment. (If a high bid on a license 
was withdrawn, however, the Commission will specify the minimum 
acceptable bid.)
    114. Finally, bidders are cautioned in selecting their bid amounts 
because, as explained in the following section, bidders who withdraw a 
standing high bid from a previous round, even if mistakenly or 
erroneously made, are subject to bid withdrawal payments.
vi. Bid Removal and Bid Withdrawal
    115. 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 bidding system, a bidder may effectively 
``unsubmit'' any bid placed within that round. A bidder removing a bid 
placed in the same round is not subject to withdrawal payments. 
Removing a bid will affect a bidder's activity for the round in which 
it is removed, i.e., a bid that is subsequently removed does not count 
toward the bidder's activity requirement.
    116. 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).
    117. In previous auctions, we have detected bidder conduct that, 
arguably, may have constituted strategic bidding through the use of bid 
withdrawals. While we continue to recognize the important role that bid 
withdrawals play in an auction, i.e., reducing risk associated with 
efforts to secure various licenses in combination, we conclude that, 
for Auction No. 40, 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.
    118. The Bureau will limit the number of rounds in which bidders 
may place withdrawals to two rounds. These rounds will be at the 
bidder's discretion and there will be no limit on the number of bids 
that may be withdrawn in either of these rounds. Withdrawals during the 
auction will still be subject to the bid withdrawal payments specified 
in 47 CFR 1.2104(g). Bidders should note that abuse of the Commission's 
bid withdrawal procedures could result in the denial of the ability to 
bid on a market. If a high bid is withdrawn, the minimum accepted bid 
in the next round will be the prior round's second highest bid price, 
which may be less than, or equal to, in the case of tie bids, the 
amount of the withdrawn bid. To set additional acceptable bids, the 
second highest bid price also will be used in place of the standing 
high bid in the formula used to calculate the increment between bids. 
The Commission will serve as a ``place holder'' on the license until a 
new acceptable bid is submitted on that license.
    119. Calculation. Generally, the Commission imposes payments on 
bidders that withdraw high bids during the course of an auction. If a 
bidder withdraws its bid and there is no higher bid in the same or 
subsequent auction(s), the bidder that withdrew its bid is responsible 
for the difference between its withdrawn bid and the net high bid in 
the same or subsequent auction(s). In the case of multiple bid 
withdrawals on a single license, within the same or subsequent 
auctions(s), the payment for each bid withdrawal will be calculated 
based on the sequence of bid withdrawals and the amounts withdrawn. No 
withdrawal payment will be assessed for a withdrawn bid if either the 
subsequent winning bid or any of the intervening subsequent withdrawn 
bids, in either the same or subsequent auction(s), equals or exceeds 
that withdrawn bid. Thus, a bidder that withdraws a bid will not be 
responsible for any withdrawal payments if there is a subsequent higher 
bid in the same or subsequent auction(s). This policy allows bidders 
most efficiently to allocate their resources as well as to evaluate 
their bidding strategies and business plans during an auction while, at 
the same time, maintaining the integrity of the auction process. The 
Bureau retains the discretion to scrutinize multiple bid withdrawals on 
a single license for evidence of anti-competitive strategic behavior 
and take appropriate action when deemed necessary.
    120. In the Part 1 Fifth Report and Order, the Commission modified 
Sec. 1.2104(g)(1) of the Commission's rules regarding assessments of 
interim bid withdrawal payments. As amended, Sec. 1.2104(g)(1) provides 
that in instances in which bids have been withdrawn on a license that 
is not won in the same auction, the Commission will assess an interim 
withdrawal payment equal to 3 percent of the amount of the withdrawn 
bids. The 3 percent interim payment will be applied toward any final 
bid withdrawal payment that will be assessed after subsequent auction 
of the license. Assessing an interim bid withdrawal payment ensures 
that the Commission receives a minimal withdrawal payment pending 
assessment of any final withdrawal payment. The Part 1 Fifth Report and 
Order provides specific examples showing application of the bid 
withdrawal payment rule.
vii. Round Results
    121. Information relating to the bids during Auction No. 40 will be 
disclosed after each round of bidding closes, including all bids and 
withdrawals placed in each round, the identity of the bidder placing 
each bid or withdrawal, and the net and gross amounts of each bid or 
withdrawal.
    122. Bids placed during a round will not be published until the 
conclusion of that bidding period. After a round closes the Bureau will 
post the results of the round for public access. Reports reflecting 
bidders' identities and bidder identification numbers for Auction No. 
40 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
    123. The FCC will use auction announcements to announce items such 
as schedule changes and stage transitions. All FCC auction 
announcements will be available by clicking a link on the FCC Automated 
Auction System.
ix. Maintaining the Accuracy of FCC Form 175 Information
    124. As noted in Part II.G., 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: Margaret Wiener, Chief, 
Auctions and Industry Analysis Division, Wireless Telecommunications 
Bureau, Federal Communications Commission, 445 12th Street, SW., Room 
4-A669, Washington, DC 20554.
    125. A separate copy of the letter should be mailed to Erik 
Salovaara, Auctions and Industry Analysis Division, Wireless 
Telecommunications Bureau, Federal Communications Commission, 445 12th 
Street, SW., Room 4-B457, Washington, DC 20554. Questions about other 
changes should

[[Page 21156]]

be directed to Erik Salovaara at (202) 418-0660.

V. Post-Auction Procedures

A. Down Payments and Withdrawn Bid Payments

    126. After bidding has ended, the Commission will issue a public 
notice declaring the auction closed, identifying winning bidders, down 
payments and any withdrawn bid payments due.
    127. Within ten business days after release of the auction closing 
notice, each winning bidder must submit sufficient funds (in addition 
to its upfront payment) to bring its total amount of money on deposit 
with the Government to 20 percent of its net winning bids (actual bids 
less any applicable small business bidding credits). See 47 CFR 
1.2107(b). In addition, by the same deadline all bidders must pay any 
bid withdrawal payments due under 47 CFR 1.2104(g), as discussed in 
``Bid Removal and Bid Withdrawal,'' Part IV.B.vi. (Payments are applied 
first to satisfy any withdrawn bid liability, before being applied 
toward down payments.)

B. Long-Form Application

    128. Within ten business days after release of the auction closing 
notice, winning bidders must electronically submit a properly completed 
long-form application (FCC Form 601) and required exhibits for each 
license won through Auction No. 40. Winning bidders that are small 
businesses must include an exhibit demonstrating their eligibility for 
small business bidding credits. See 47 CFR 1.2112(b), 24.709(c)(2)(i). 
Further filing instructions will be provided to auction winners at the 
close of the auction.

C. Tribal Land Bidding Credit

    129. 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.
    130. 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). When filing the long-form application, the winning bidder 
will be required to advise the Commission whether it intends to seek a 
tribal land bidding credit, for each market won in the auction, by 
checking the designated box(es). After stating its intent to seek a 
tribal land bidding credit, the applicant will have 90 days from the 
close of the long-form filing window to amend its application to select 
the specific tribal lands to be served and provide the required tribal 
government certifications. Licensees receiving a tribal land bidding 
credit are subject to performance criteria as set forth in 47 CFR 
1.2110(e).
    131. For additional information on the tribal land bidding credit, 
including how the amount of the credit is calculated, applicants should 
review the Commission's rule making proceeding regarding tribal land 
bidding credits and related public notices. Relevant documents can be 
viewed on the Commission's web site by going to http://www.fcc.gov/wtb/auctions and clicking on Information on Tribal Land Bidding Credits.

D. Default and Disqualification

    132. 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 spectrum 
associated with 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).

E. Refund of Remaining Upfront Payment Balance

    133. All applicants that submitted upfront payments but were not 
winning bidders for a license in Auction No. 40 may be entitled to a 
refund of their remaining upfront payment balance after the conclusion 
of the auction. No refund will be made unless there are excess funds on 
deposit from that applicant after any applicable bid withdrawal 
payments have been paid.
    134. Qualified bidders that have exhausted all of their activity 
rule waivers, have no remaining bidding eligibility, and have not 
withdrawn a high bid during the auction must submit a written refund 
request. If you have completed the refund instructions electronically, 
then only a written request for the refund is necessary. If not, the 
request must also include wire transfer instructions and a Taxpayer 
Identification Number (TIN). Send refund request to: Federal 
Communications Commission, Financial Operations Center, Auctions 
Accounting Group, Shirley Hanberry, 445 12th Street, SW., Room 1-A824, 
Washington, DC 20554.
    135. Bidders are encouraged to file their refund information 
electronically using the refund information portion of the FCC Form 
175, but bidders can also fax their information to the Auctions 
Accounting Group at (202) 418-2843. Once the information has been 
approved, a refund will be sent to the party identified in the refund 
information. NOTE: Refund processing generally takes up to two weeks to 
complete. Bidders with questions about refunds should contact Tim Dates 
or Gail Glasser at (202) 418-1995.

Federal Communications Commission.
Margaret Wiener,
Chief, Auctions and Industry Analysis Division, WTB.
[FR Doc. 01-10492 Filed 4-26-01; 8:45 am]
BILLING CODE 6712-01-P