[Federal Register Volume 67, Number 23 (Monday, February 4, 2002)]
[Notices]
[Pages 5123-5128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2699]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-02-44-A (Auction No. 44); DA 02-200]


Auction No. 44 Fixed, Mobile, and Broadcasting Services Auction 
Scheduled for June 19, 2002; Comment Sought on Reserve Prices or 
Minimum Opening Bids and Other Auction Procedural Issues

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the auction of licenses in fixed, 
mobile, and broadcast services to commence on June 19, 2002, and seeks 
comment on auction procedural issues.

DATES: Comments are due on or before February 6, 2002 and reply 
comments are due on or before February 13, 2002.

ADDRESSES: The Wireless Telecommunications Bureau (``Bureau'') requires 
that all comments and reply comments be sent by electronic mail to the 
following address: [email protected]. The electronic mail containing 
the comments or reply comments must include a subject or caption 
referring to Auction No. 44 Comments. The Bureau requests that parties 
format any attachments to electronic mail as ADOBE 
Acrobat (pdf) or Microsoft Word documents. Copies 
of comments and reply comments will be available for public inspection 
during regular business hours in the FCC Public Reference Room, Room 
CY-A257, 445 12th Street, SW, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Legal questions: Howard Davenport 
(202) 418-0660 or e-mail [email protected]. For general auction 
questions: Craig Bomberger (202) 418-0660 or e-mail [email protected] or 
Kathy Garland (717) 338-2888 or e-mail [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Auction No. 44 
Comment Public Notice released January 24, 2002. The complete text of 
the Auction No. 44 Comment Public Notice, including attachments, is 
available for public inspection and copying during regular business 
hours at the FCC Reference Information Center, Portals II, 445 12th 
Street, SW., Room CY-A257, Washington, DC, 20554. The Auction No. 44 
Comment Public Notice may also be purchased from the Commission's 
duplicating contractor, Qualex International, Portals II, 445 12th 
Street, SW., Room CY-B402, Washington, DC, 20554, telephone 202-863-
2893, facsimile 202-863-2898, or via e-mail [email protected].

I. General Information

    1. By the Auction No. 44 Comment Public Notice, the Bureau 
announces the auction of licenses for Fixed, Mobile, and Broadcasting 
services in the 698-746 MHz (``Lower 700 MHz'') band scheduled to 
commence on June 19, 2002 (``Auction No. 44''). The Lower 700 MHz band 
consists of 758 licenses. Two 12-megahertz blocks consisting of a pair 
of 6 megahertz segments and two 6-megahertz blocks of contiguous, 
unpaired spectrum will be offered in each of six regions known as the 
700 MHz band economic area groupings (700 MHz band EAGs). Additionally, 
one 12-megahertz block consisting of a pair of 6 megahertz segments 
will be offered in each of 734 Metropolitan Statistical Areas 
(``MSAs'') and Rural Service Areas (``RSAs''). The

[[Page 5124]]

Commission adopted the MSA and RSA definitions originally adopted for 
the cellular radiotelephone service, with the following modifications: 
(i) The service areas of cellular markets that border the U.S. 
coastline of the Gulf of Mexico extend 12 nautical miles from the U.S. 
Gulf coastline; and (ii) the service area of cellular market 306 that 
comprises the water area of the Gulf of Mexico extends from 12 nautical 
miles off the U.S. Gulf coast outward into the Gulf. See Reallocation 
and Service Rules for the 698-746 MHz Spectrum Band (Television 
Channels 52-59), Report and Order, FCC 01-364, paragraph 90, note 258 
(rel. January 18, 2002). A complete list of licenses available for 
Auction No. 44 and their descriptions is included as Attachment A of 
the Auction No. 44 Comment Public Notice.
    2. The Balanced Budget Act of 1997 requires the Commission to 
``ensure that, in the scheduling of any competitive bidding under this 
subsection, an adequate period is allowed * * * before issuance of 
bidding rules, to permit notice and comment on proposed auction 
procedures * * *. .'' Consistent with the provisions of the Balanced 
Budget Act and to ensure that potential bidders have adequate time to 
familiarize themselves with the specific rules that will govern the 
day-to-day conduct of an auction, the Commission directed the Bureau, 
under its existing delegated authority, to seek comment on a variety of 
auction-specific procedures prior to the start of each auction. The 
Bureau therefore seeks comment on the following issues relating to 
Auction No. 44.

II. Auction Structure

A. Auction Inventory

    3. The Bureau offers two options for grouping the 758 licenses in 
the Lower 700 MHz band. The Bureau seeks comment on the following:
    i. Group all 758 licenses together in Auction No. 44, which the 
Bureau proposes to structure as a simultaneous multiple round (SMR) 
auction as described further.
    ii. Include only the 734 MSA/RSA Lower 700 MHz band licenses in 
Auction No. 44 and group the 24 licenses based on 700 MHz EAGs with the 
12 licenses in the 747-762 and 777-792 MHz bands (``Upper 700 MHz'' 
bands) currently scheduled to be auctioned in Auction No. 31. Should we 
group according to this option, the 36 700 MHz EAG licenses from the 
Upper and Lower bands would be auctioned according to the procedures 
established for Auction No. 31, including any modifications to the 
procedures that the Bureau may establish before the auction begins.

B. Simultaneous Multiple Round (SMR) Auction Design

    4. The Bureau proposes to award all licenses included in Auction 
No. 44 in a single, simultaneous multiple-round auction. As described 
further, this methodology offers every license for bid at the same time 
with successive bidding rounds in which bidders may place bids. The 
Bureau seeks comment on this proposal.

C. Upfront Payments and Initial Maximum Eligibility

    5. The Bureau has been delegated authority and discretion to 
determine an appropriate upfront payment for each license being 
auctioned, taking into account such factors as the population in each 
geographic license area, and the value of similar spectrum. As 
described further, the upfront payment is a refundable deposit made by 
each bidder to establish eligibility to bid on licenses. Upfront 
payments related to the specific spectrum subject to auction protect 
against frivolous or insincere bidding and provide the Commission with 
a source of funds from which to collect payments owed at the close of 
the auction. With these guidelines in mind for Auction No. 44, the 
Bureau proposes to calculate upfront payments on a license-by-license 
basis using the following formula:

$0.0125 * MHz * License Area Population with a minimum of $1,000 per 
license.

    6. Accordingly, the Bureau lists all licenses, including the 
related license area population and proposed upfront payment for each, 
in Attachment A of the Auction No. 44 Comment Public Notice. The Bureau 
seeks comment on this proposal.
    7. The Bureau further proposes that the amount of the upfront 
payment submitted by a bidder will determine the number of bidding 
units on which a bidder may place bids. This limit is a bidder's 
``maximum initial eligibility.'' Each license is assigned a specific 
number of bidding units equal to the upfront payment listed in 
Attachment A of the Auction No. 44 Comment Public Notice, on a bidding 
unit per dollar basis. This number does not change as prices rise 
during the auction. A bidder's upfront payment is not attributed to 
specific licenses. Rather, a bidder may place bids on any combination 
of licenses as long as the total number of bidding units associated 
with those licenses does not exceed its maximum initial eligibility. 
Eligibility cannot be increased during the auction. Thus, in 
calculating its upfront payment amount, an applicant must determine the 
maximum number of bidding units it may wish to bid on (or hold high 
bids on) in any single round, and submit an upfront payment covering 
that number of bidding units. The Bureau seeks comment on this 
proposal.
    8. With respect to the 700 MHz EAG licenses, the Bureau notes that 
the populations for the various regions are very similar. That being 
the case, the Bureau seeks comment on whether, instead of applying the 
formula, the upfront payments should be the same for licenses of the 
same bandwidth. That is, each of the A block and B block licenses would 
have the same upfront payment amount and associated number of bidding 
units, and each of the D block and E block licenses would have the same 
upfront payment amount and associated number of bidding units.

D. Activity Rules

    9. In order to ensure that the auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively on a 
percentage of their maximum bidding eligibility during each round of 
the auction rather than waiting until the end to participate. A bidder 
that does not satisfy the activity rule will either lose bidding 
eligibility in the next round or must use an activity rule waiver (if 
any remain).
    10. The Bureau proposes to divide the auction into three stages, 
each characterized by an increased activity requirement. The auction 
will start in Stage One. The Bureau proposes that the auction generally 
will advance to the next stage (i.e., from Stage One to Stage Two, and 
from Stage Two to Stage Three) when the auction activity level, as 
measured by the percentage of bidding units receiving new high bids, is 
approximately twenty percent or below for three consecutive rounds of 
bidding. However, the Bureau further proposes that it retain the 
discretion to change stages unilaterally by announcement during the 
auction. In exercising this discretion, the Bureau will consider a 
variety of measures of bidder activity, including, but not limited to, 
the auction activity level, the percentage of licenses (as measured in 
bidding units) on which there are new bids, the number of new bids, and 
the percentage increase in revenue. The Bureau seeks comment on these 
proposals.
    11. For Auction No. 44, the Bureau proposes the following activity 
requirements:

[[Page 5125]]

    Stage One: In each round of the first stage of the auction, a 
bidder desiring to maintain its current eligibility is required to be 
active on licenses representing at least 80 percent of its current 
bidding eligibility. Failure to maintain the requisite 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 current round activity by five-fourths (5/4).
    Stage Two: In each round of the second stage, a bidder desiring to 
maintain its current eligibility is required to be active on 90 percent 
of its current bidding eligibility. During Stage Two, reduced 
eligibility for the next round will be calculated by multiplying the 
current round activity by ten-ninths (10/9).
    Stage Three: In each round of the third stage, a bidder desiring to 
maintain its current eligibility is required to be active on 98 percent 
of its current bidding eligibility. In this final stage, reduced 
eligibility for the next round will be calculated by multiplying the 
current round activity by fifty/forty-ninths (50/49).
    12. The Bureau seeks comment on these proposals. If commenters 
believe that these activity rules should be changed, they should 
explain their reasoning and comment on the desirability of an 
alternative approach. Commenters are advised to support their claims 
with analyses and suggested alternative activity rules.

E. Activity Rule Waivers and Reducing Eligibility

    13. 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. Activity 
waivers are principally a mechanism for auction participants to avoid 
the loss of auction eligibility in the event that exigent circumstances 
prevent them from placing a bid in a particular round.
    14. The FCC auction system assumes that bidders with insufficient 
activity would prefer to use an activity rule waiver (if available) 
rather than lose bidding eligibility. Therefore, the system will 
automatically apply a waiver (known as an ``automatic waiver'') at the 
end of any bidding period where a bidder's activity level is below the 
minimum required unless: (1) there are no activity rule waivers 
available; or (2) the bidder overrides the automatic application of a 
waiver by reducing eligibility, thereby meeting the minimum 
requirements.
    15. A bidder with insufficient activity may wish to reduce its 
bidding eligibility rather than use an activity rule waiver. If so, the 
bidder must affirmatively override the automatic waiver mechanism 
during the bidding period 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 previously. Once eligibility has been 
reduced, a bidder will not be permitted to regain its lost bidding 
eligibility.
    16. 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 bidding period in which no bids or withdrawals are 
submitted, the auction will remain open and the bidder's eligibility 
will be preserved. An automatic waiver invoked in a round in which 
there are no new valid bids or withdrawals will not keep the auction 
open.
    17. The Bureau proposes that each bidder be provided with five 
activity rule waivers that may be used at the bidder's discretion 
during the course of the auction as set forth previously. The Bureau 
seeks comment on this proposal.

F. Information Relating to Auction Delay, Suspension, or Cancellation

    18. For Auction No. 44, the Bureau proposes that, by public notice 
or by announcement during the auction, the Bureau may delay, suspend, 
or cancel the auction in the event of natural disaster, technical 
obstacle, evidence of an auction security breach, unlawful bidding 
activity, administrative or weather necessity, or for any other reason 
that affects the fair and efficient 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. The Bureau emphasizes that exercise of this authority is 
solely within the discretion of the Bureau, and its use is not intended 
to be a substitute for situations in which bidders may wish to apply 
their activity rule waivers. The Bureau seeks comment on this proposal.

III. Bidding Procedures

A. Round Structure

    19. The Commission will conduct Auction No. 44 over the Internet. 
Telephonic Bidding will also be available. As a contingency, the FCC 
Wide Area Network, which requires access to a 900 number telephone 
service, will be available as well. Full information regarding how to 
establish such a connection, and related charges, will be provided in 
the public notice announcing details of auction procedures.
    20. In past auctions, the Bureau has used the timing of bids to 
select a high bidder when multiple bidders submit identical high bids 
on a license in a given round. Given that bidders will access the 
Internet at differing speeds, the Bureau will not use this procedure in 
Auction No. 44. For Auction No. 44, the Bureau proposes to use a random 
number generator to select a high bidder from among such bidders. As 
with prior auctions, remaining bidders will be able to submit higher 
bids in subsequent rounds.
    21. The initial bidding schedule will be announced in a public 
notice to be released at least one week before the start of the 
auction, and will be included in the registration mailings. The 
simultaneous multiple round format will consist of sequential bidding 
rounds, each followed by the release of round results. Details 
regarding the location and format of round results will be included in 
the same public notice.
    22. The Bureau 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 Bureau 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. The Bureau 
seeks comment on this proposal.

B. Reserve Price or Minimum Opening Bid

    23. The Balanced Budget Act calls upon the Commission to prescribe 
methods for establishing a reasonable reserve price or a minimum 
opening bid 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 has 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.

[[Page 5126]]

    24. Normally, a reserve price is an absolute minimum price below 
which an item will not be sold in a given auction. Reserve prices can 
be either published or unpublished. A minimum opening bid, on the other 
hand, is the minimum bid price set at the beginning of the auction 
below which no bids are accepted. It is generally used to accelerate 
the competitive bidding process. Also, the auctioneer often has the 
discretion to lower the minimum opening bid amount later in the 
auction. It is also possible for the minimum opening bid and the 
reserve price to be the same amount.
    25. In light of the Balanced Budget Act's requirements, the Bureau 
proposes to establish minimum opening bids for Auction No. 44. The 
Bureau believes a minimum opening bid, which has been utilized in other 
auctions, is an effective bidding tool.
    26. Specifically, for Auction No. 44, the Commission proposes the 
following license-by-license formula for calculating minimum opening 
bids:

$0.0250 * MHz * License Area Population with a minimum of $1,000 per 
license.

    27. The specific minimum opening bid for each license available in 
Auction No. 44 is set forth in Attachment A of the Auction No. 44 
Comment Public Notice. Comment is sought on this proposal.
    28. If commenters believe that these minimum opening bids will 
result in substantial numbers of unsold licenses, or are not reasonable 
amounts, or should instead operate as reserve prices, they should 
explain why this is so, and comment on the desirability of an 
alternative approach. Commenters are advised to support their claims 
with valuation analyses and suggested reserve prices or minimum opening 
bid levels or formulas. In establishing the minimum opening bids, we 
particularly seek comment on such factors as the amount of spectrum 
being auctioned, levels of incumbency, the availability of technology 
to provide service, the size of the geographic service areas, issues of 
interference with other spectrum bands and any other relevant factors 
that could reasonably have an impact on valuation of the 698-746 MHz 
spectrum. Alternatively, comment is sought on whether, consistent with 
the Balanced Budget Act, the public interest would be served by having 
no minimum opening bid or reserve price.
    29. With respect to the 700 MHz EAG licenses, the Bureau notes that 
the populations for the various regions are very similar. That being 
the case, the Bureau seeks comment on whether, instead of applying the 
formula, the minimum opening bids should be the same for licenses of 
the same bandwidth. That is, the minimum opening bid would be the same 
for each of the A block and B block licenses, and the minimum opening 
bid would be the same for each of the D block and E block licenses.

C. Minimum Acceptable Bids and Bid Increments

    30. In each round, eligible bidders will be able to place bids on a 
given license in any of nine different amounts. The Auctions Bidding 
System interface will list the nine acceptable bid amounts for each 
license. Once there is a standing high bid on a license, the Auctions 
Bidding System will calculate a minimum acceptable bid for that license 
for the following round, as described further. The difference between 
the minimum acceptable bid and the standing high bid for each license 
will define the bid increment. The nine acceptable bid amounts for each 
license consist of the minimum acceptable bid (the standing high bid 
plus one bid increment) and additional amounts calculated using 
multiple bid increments (i.e., the second bid amount equals the 
standing high bid plus two times the bid increment, the third bid 
amount equals the standing high bid plus three times the bid increment, 
etc.).
    31. Until a bid has been placed on a license, the minimum 
acceptable bid for that license will be equal to its minimum opening 
bid. The additional bid amounts for licenses that have not yet received 
a bid will be calculated differently, as explained further.
    32. For Auction No. 44, the Bureau proposes to calculate minimum 
acceptable bids by using a smoothing methodology, as the Bureau has 
done in several other auctions. The smoothing formula calculates 
minimum acceptable bids by first calculating a percentage increment, 
not to be confused with the bid increment, for each license based on a 
weighted average of the activity received on that particular license in 
all previous rounds. This methodology tailors the percentage increment 
for each license based on activity, rather than setting a global 
increment for all licenses.
    33. In a given round, the calculation of the percentage increment 
for each license is made at the end of the previous round. The 
computation is based on an activity index, which is calculated as the 
weighted average of the activity in that round and the activity index 
from the prior round. The activity index at the start of the auction 
(round 0) will be set at 0. The current activity index is equal to a 
weighting factor times the number of new bids received on the license 
in the most recent bidding round plus one minus the weighting factor 
times the activity index from the prior round. The activity index is 
then used to calculate a percentage increment by multiplying a minimum 
percentage increment by one plus the activity index with that result 
being subject to a maximum percentage increment. The Commission will 
initially set the weighting factor at 0.5, the minimum percentage 
increment at 0.1 (10%), and the maximum percentage increment at 0.2 
(20%).
Equations
Ai = (C * Bi) + ( (1-C) * Ai-1)
Ii+1 = smaller of ( (1 + Ai) * N) and M
X i + 1 = Ii + 1 * Yi where,
Ai = activity index for the current round (round i)
C = activity weight factor
Bi = number of bids in the current round (round i)
Ai-1 = activity index from previous round (round i-1), A0 is 0
Ii + 1 = percentage increment for the next round (round i + 1)
N = minimum percentage increment or percentage increment floor
M = maximum percentage increment or percentage increment ceiling
X i + 1 = dollar amount associated with the percentage increment
Yi = high bid from the current round

    34. Under the smoothing methodology, once a bid has been received 
on a license, the minimum acceptable bid for that license in the 
following round will be the high bid from the current round plus the 
dollar amount associated with the percentage increment, with the result 
rounded to the nearest thousand if it is over ten thousand or to the 
nearest hundred if it is under ten thousand.
Examples
License 1
C = 0.5, N = 0.1, M = 0.2

Round 1 (2 new bids, high bid = $1,000,000)

    i. Calculation of percentage increment for round 2 using the 
smoothing formula:
A1 = (0.5 * 2) + (0.5 * 0) = 1
I2 = The smaller of ( (1 + 1) * 0.1) = 0.2 or 0.2 (the maximum 
percentage increment)

    ii. Calculation of dollar amount associated with the percentage 
increment for round 2 (using I2):

X2 = 0.2 * $1,000,000 = $200,000

    iii. Minimum acceptable bid for round 2 = $1,200,000.

[[Page 5127]]

Round 2 (3 new bids, high bid = $2,000,000)

    i. Calculation of percentage increment for round 3 using the 
smoothing formula:

A2 = (0.5 * 3) + (0.5 * 1) = 2

I3 = The smaller of ( (1 + 2) * 0.1) = 0.3 or 0.2 (the maximum 
percentage increment)

    ii. Calculation of dollar amount associated with the percentage 
increment for round 3 (using I3):

X3 = 0.2 * $2,000,000 = $400,000

    iii. Minimum acceptable bid for round 3 = $2,400,000.

Round 3 (1 new bid, high bid = $2,400,000)

    i. Calculation of percentage increment for round 4 using the 
smoothing formula:

A3 = (0.5 * 1) + (0.5 * 2) = 1.5

I4 = The smaller of ( (1 + 1.5) * 0.1) = 0.25 or 0.2 (the maximum 
percentage increment)

    ii. Calculation of dollar amount associated with the percentage 
increment for round 4 (using I4):

X4 = 0.2 * $2,400,000 = $480,000

    iii. Minimum acceptable bid for round 4 = $2,880,000.
    35. As stated previously, until a bid has been placed on a license, 
the minimum acceptable bid for that license will be equal to its 
minimum opening bid. The additional bid amounts are calculated using 
the difference between the minimum opening bid times one plus the 
minimum percentage increment, rounded as described previously, and the 
minimum opening bid. That is, I = (minimum opening bid)(1 + 
N){rounded}--(minimum opening bid). Therefore, when N equals 0.1, the 
first additional bid amount will be approximately ten percent higher 
than the minimum opening bid; the second, twenty percent; the third, 
thirty percent; etc.
    36. In the case of a license for which the standing high bid has 
been withdrawn, the minimum acceptable bid will equal the second 
highest bid received for the license. The additional bid amounts are 
calculated using the difference between the second highest bid times 
one plus the minimum percentage increment, rounded, and the second 
highest bid.
    37. The Bureau retains the discretion to change the minimum 
acceptable bids and bid increments if it determines that circumstances 
so dictate. The Bureau will do so by announcement in the Auctions 
Bidding System. The Bureau seeks comment on these proposals.

D. Information Regarding Bid Withdrawal and Bid Removal

    38. For Auction No. 44, the Bureau proposes the following bid 
removal and bid withdrawal procedures. Before the close of a bidding 
period, a bidder has the option of removing any bid placed in that 
round. By using the remove selected bids 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 a withdrawal payment. Once a round closes, a bidder may no 
longer remove a bid.
    39. A high bidder may withdraw its standing high bids from previous 
rounds using the withdraw function in the bidding system. A high bidder 
that withdraws its standing high bid from a previous round is subject 
to the bid withdrawal payment provisions of the Commission rules. The 
Bureau seeks comment on these bid removal and bid withdrawal 
procedures.
    40. In the Part 1 Third Report and Order, 63 FR 2315 (January 15, 
1998) the Commission explained that allowing bid withdrawals 
facilitates efficient aggregation of licenses and the pursuit of 
efficient backup strategies as information becomes available during the 
course of an auction. The Commission noted, however, that, in some 
instances, bidders may seek to withdraw bids for improper reasons. The 
Bureau, therefore, has discretion, in managing the auction, to limit 
the number of withdrawals to prevent any bidding abuses. The Commission 
stated that the Bureau should assertively exercise its discretion, 
consider limiting the number of rounds in which bidders may withdraw 
bids, and prevent bidders from bidding on a particular market if the 
Bureau finds that a bidder is abusing the Commission's bid withdrawal 
procedures.
    41. Applying this reasoning, the Bureau proposes to limit each 
bidder in Auction No. 44 to withdrawing standing high bids in no more 
than two rounds during the course of the auction. To permit a bidder to 
withdraw bids in more than two rounds would likely encourage insincere 
bidding or the use of withdrawals for anti-competitive purposes. The 
two rounds in which withdrawals are utilized will be at the bidder's 
discretion; withdrawals otherwise must be in accordance with the 
Commission's rules. There is no limit on the number of standing high 
bids that may be withdrawn in either of the rounds in which withdrawals 
are utilized. Withdrawals will remain subject to the bid withdrawal 
payment provisions specified in the Commission's rules. The Bureau 
seeks comment on this proposal.

E. Stopping Rule

    42. The Bureau has discretion ``to establish stopping rules before 
or during multiple round auctions in order to terminate the auction 
within a reasonable time.'' For Auction No. 44, the Bureau proposes to 
employ a simultaneous stopping rule approach. A simultaneous stopping 
rule means that all licenses remain open until bidding closes 
simultaneously on all licenses.
    43. Bidding will close simultaneously on all licenses after the 
first round in which no new acceptable bids, proactive waivers, or 
withdrawals are received. Thus, unless circumstances dictate otherwise, 
bidding will remain open on all licenses until bidding stops on every 
license.
    44. However, the Bureau proposes to retain the discretion to 
exercise any of the following options during Auction No. 44:
    i. Utilize a modified version of the simultaneous stopping rule. 
The modified stopping rule would close the auction for all licenses 
after the first round in which no bidder submits a proactive waiver, 
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 would 
not keep the auction open under this modified stopping rule. The Bureau 
further seeks comment on whether this modified stopping rule should be 
used at any time or only in stage three of the auction.
    ii. Keep the auction open even if no new acceptable bids or 
proactive waivers are submitted and no previous high bids are 
withdrawn. In this event, the effect will be the same as if a bidder 
had submitted a proactive waiver. The activity rule, therefore, will 
apply as usual, and a bidder with insufficient activity will either 
lose bidding eligibility or use a remaining activity rule waiver.
    iii. Declare that the auction will end after a specified number of 
additional rounds (``special stopping rule''). If the Bureau invokes 
this special stopping rule, it will accept bids in the specified final 
round(s) only for licenses on which the high bid increased in at least 
one of a specified preceding number of rounds. The Bureau seeks comment 
on these proposals.

IV. Conclusion

    45. Comments are due on or before February 6, 2002, and reply 
comments

[[Page 5128]]

are due on or before February 13, 2002. Because of the disruption of 
regular mail and other deliveries in Washington, DC, the Bureau 
requires that all comments and reply comments be filed electronically. 
Comments and reply comments must be sent by electronic mail to the 
following address: [email protected]. The electronic mail containing 
the comments or reply comments must include a subject or caption 
referring to Auction No. 44 Comments. The Bureau requests that parties 
format any attachments to electronic mail as Adobe() 
Acrobat() (pdf) or Microsoft() Word documents. 
Copies of comments and reply comments will be available for public 
inspection during regular business hours in the FCC Public Reference 
Room, Room CY-A257, 445 12th Street, SW, Washington, DC 20554.
    46. In addition, the Bureau requests that commenters fax a courtesy 
copy of their comments and reply comments to the attention of Kathryn 
Garland at (717) 338-2850.
    47. This proceeding has been designated as a ``permit-but-
disclose'' proceeding in accordance with the Commission's ex parte 
rules. Persons making oral ex parte presentations are reminded that 
memoranda summarizing the presentations must contain summaries of the 
substance of the presentations and not merely a listing of the subjects 
discussed. More than a one or two sentence description of the views and 
arguments presented is generally required. Other rules pertaining to 
oral and written ex parte presentations in permit-but-disclose 
proceedings are set forth in section 1.1206(b) of the Commission's 
rules.

Federal Communications Commission.
Margaret Wiener,
Chief, Auctions and Industry Analysis Division, WTB.
[FR Doc. 02-2699 Filed 2-1-02; 8:45 am]
BILLING CODE 6712-01-P