[Federal Register Volume 67, Number 79 (Wednesday, April 24, 2002)]
[Notices]
[Pages 20124-20142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-9988]


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FEDERAL COMMUNICATIONS COMMISSION

[Report No. AUC-02-31-B (Auction No. 31); DA 02-659]


Auction No. 31, Auction of Licenses in the 747-762 and 777-792 
Mhz Bands Scheduled for June 19, 2002; Further Modification of Package 
Bidding Procedures and Other Procedures

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document modifies package bidding procedures and other 
procedural issues in the 747-762 and 777-792 MHz Bands to commence on 
June 19, 2002.

DATES: Auction No. 31 is scheduled for June 19, 2002.

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. 31 
Further

[[Page 20125]]

Procedures Public Notice released March 19, 2002 as modified by an 
erratum dated April 16, 2002. The complete modified text of the Auction 
No. 31 Further Procedures 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. 31 
Further Procedures 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

A. Introduction

    1. By the Auction No. 31 Further Procedures Public Notice, the 
Wireless Telecommunications Bureau (``Bureau'') announces the 
procedures, minimum opening bids, and aggregate reserve price for the 
upcoming auction of licenses in the 747-762 and 777-792 MHz (``Upper 
700 MHz'') bands scheduled for June 19, 2002 (``Auction No. 31''). In a 
series of prior public notices, the Bureau sought comment on and 
announced various Auction No. 31 procedures. In the present public 
notice, the Bureau sets forth a single set of procedures, minimum 
opening bids, and an aggregate reserve price consolidating prior 
Auction No. 31 procedures public notices.
i. Background of Proceeding
    2. Historically, the 746-806 MHz band has been used exclusively by 
television stations (Channels 60-69). In the Balanced Budget Act of 
1997, Congress directed the Commission to reallocate this spectrum for 
public safety and commercial use by December 31, 1997, and to commence 
competitive bidding for commercial licenses on the reallocated spectrum 
after January 1, 2001. Incumbent analog television broadcasters, 
however, may continue operations until December 31, 2006, and, under 
certain circumstances, may be able to extend their operations beyond 
that date.
    3. In the Upper 700 MHz First Report and Order, 65 FR 3139 ( 
January 20, 2000), the Commission adopted service rules for the 
commercial use of the Upper 700 MHz bands that enable the broadest 
possible use of this spectrum, consistent with sound spectrum 
management. In its service rules, the Commission divided the Upper 700 
MHz bands into one 20-megahertz block (consisting of paired 10 
megahertz blocks) and one 10-megahertz block (consisting of paired 5 
megahertz blocks). The Commission will license the blocks in the Upper 
700 MHz bands over six 700 MHz band Economic Area Groupings (``EAGs''). 
All operations in the Upper 700 MHz bands will be generally regulated 
under the framework of part 27's technical, licensing, and operating 
rules.
    4. In subsequent proceedings, the Commission provided guidance on 
its review of applications for approval of voluntary agreements 
accelerating the transition of incumbent analog television licensees 
and opening these bands for new 700 MHz licensee use, and several 
potential mechanisms to advance the spectrum clearing process. In 
connection with three-way spectrum clearing agreements (which would 
provide for TV incumbents on television Channels 59-69 to agree with 
new 700 MHz wireless licensees to relocate to lower band TV channels 
that, in turn, would be voluntarily cleared by the lower band TV 
incumbents), the Commission also provided guidance on interference 
issues that may arise from a proposal to relocate a broadcast operation 
to a channel below Channel 59, and adopted various procedural changes 
in order to streamline the process of reviewing regulatory requests 
needed to effectuate private band-clearing agreements.
ii. Licenses To Be Auctioned
    5. Twelve licenses in the Upper 700 MHz bands will be available in 
Auction No. 31. These licenses consist of one 20 megahertz license 
(consisting of paired 10 megahertz blocks) and one 10 megahertz license 
(consisting of paired 5 megahertz blocks) in each of six 700 MHz band 
EAGs. These licenses are listed in Attachment A of the Auction No. 31 
Further Procedures Public Notice and are shown in the table here.

                                                                                   Upper 700 MHz Band Licenses
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                                             Pacific                Central/mountain            Great lakes               Southeast                 Mid-atlantic                Northeast
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10 MHz..........................  WX-EAG706-C                   WX-EAG705-C               WX-EAG704-C              WX-EAG703-C              WX-EAG702-C                  WX-EAG701-C
20 MHz..........................  WX-EAG706-D                   WX-EAG705-D               WX-EAG704-D              WX-EAG703-D              WX-EAG702-D                  WX-EAG701-D
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    6. Bidders may bid on individual licenses. In addition, bidders 
will be permitted to create and bid on up to twelve different packages 
of their own choosing during the course of the auction. Bidders will 
not be required to identify or create their packages before the start 
of the auction, but may create their packages as the auction 
progresses.
    7. In the Auction No. 31 Further Modifications Comment Public 
Notice, 67 FR 6925 (February 14, 2002), the Bureau sought comment 
regarding the potential inclusion in Auction No. 31 of 24 additional 
licenses from the 698-746 MHz band (the ``Lower 700 MHz'' band). The 
licenses available for auction in the Lower 700 MHz band consist of 24 
licenses to use spectrum in the 700 MHz band EAGs (four in each of the 
six EAGs) and 734 licenses to use spectrum in Metropolitan Statistical 
Areas/Rural Statistical Areas (``MSA/RSAs''). The Bureau sought comment 
on any potential advantages or disadvantages of enabling bidders in 
Auction No. 31 to create and bid on packages containing 700 MHz band 
EAG licenses from both the Upper and Lower 700 MHz bands. The Bureau 
also sought comment on this issue in a public notice regarding the 
auction of licenses from the Lower 700 MHz band (``Auction No. 44'').
    8. Commenters were divided on whether to include the 24 Lower 700 
MHz band EAG licenses in Auction No. 31. Commenters favoring the 
inclusion of the Lower 700 MHz band EAG licenses in Auction No. 31 
tended to focus on separating the Lower 700 MHz band EAG licenses from 
the 734 Lower 700 MHz band MSA/RSA licenses rather than on combining 
the 24 Lower 700 MHz band EAG licenses with the 12 Upper 700 MHz band 
EAG licenses. Commenters opposing inclusion tended to focus on the 
possibility that

[[Page 20126]]

continuing rule making proceedings in the Lower 700 MHz band might 
delay auction of those licenses and any other licenses grouped with 
them, including the Upper 700 MHz band licenses.
    9. After careful review of the comments, the Bureau concludes that 
it will not include the 24 Lower 700 MHz EAG licenses in Auction No. 31 
with the Upper 700 MHz EAG licenses. The Bureau is not persuaded that 
grouping the MSA/RSA licenses in an auction with the Lower 700 MHz EAG 
licenses will create a disadvantage to small businesses and rural 
telephone companies. We do not agree with those commenters that believe 
that separating the 734 MSAs/RSAs from the 24 EAGs would provide 
greater opportunities for small businesses and rural telephone 
companies. Larger entities that do not qualify for bidding credits 
would continue to be eligible to participate in an auction of the 734 
MSA/RSA licenses. In the Lower 700 MHz Report and Order, 67 FR 5491 
(February 6, 2002), the Commission adopted MSAs/RSAs as the licensing 
area for a portion of the Lower 700 MHz band to promote opportunities 
for a wide variety of applicants, including small and rural wireless 
providers, to obtain spectrum. However, the Commission did not decide 
to restrict eligibility for these licenses to small and rural service 
providers. Because the Commission adopted licensing rules for the Lower 
700 MHz band that provide for open eligibility, the Bureau declines to 
consider license groupings for the purpose of discouraging 
participation in the auction by any particular class of bidders. We 
disagree with those commenters who suggest that grouping the MSA/RSA 
licenses with the EAG licenses in the Lower 700 MHz band may discourage 
many smaller carriers from participating in Auction No. 44. The 
Commission has sought to provide small businesses with an opportunity 
to successfully compete against larger, well-financed bidders by 
defining three tiers of small-businesses that are eligible for bidding 
credits. As the Commission noted in the Lower 700 MHz Report & Order, 
the use of a third small entity definition may result in the 
dissemination of licenses among an even wider range of small business 
entities, consistent with its obligations under section 309(j)(3)(B) of 
the Act.

B. Rules and Disclaimers

i. Relevant Authority
    10. Prospective bidders must familiarize themselves thoroughly with 
the Commission's rules relating to the Upper 700 MHz bands contained in 
title 47, part 27 of the Code of Federal Regulations, and those 
relating to application and auction procedures, contained in title 47, 
part 1 of the Code of Federal Regulations.
    11. Prospective bidders also must be thoroughly familiar with the 
procedures, terms and conditions (collectively, ``Terms'') contained in 
the Commission's rulemakings regarding the Upper 700 MHz bands, 
including the Reallocation and Reconsideration, 63 FR 6669 (February 
10, 1998) and 63 FR 63798 (November 17, 1998); Upper 700 MHz First 
Report and Order; the Upper 700 MHz Memorandum Opinion and Order and 
Further Notice of Proposed Rulemaking, 65 FR 42960 (July 12, 2000); the 
Upper 700 MHz Third Report and Order, 66 FR 10204 (February 14, 2001); 
and the Upper 700 MHz Third Report and Order Reconsideration, 66 FR 
51594 (October 10, 2001); as well as the Commission's rulemakings 
regarding competitive bidding, such as the Part 1 Fifth Report and 
Order, 65 FR 52323 (August 29, 2001).
    12. 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 
Auctions Internet site at http://wireless.fcc.gov/auctions. 
Additionally, documents are 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 or 
may 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]. When ordering documents from Qualex, 
please provide the appropriate FCC number (for example, FCC 00-5 for 
the 700 MHz First Report & Order).
ii. Prohibition of Collusion
    13. 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. A violation could similarly 
occur if the authorized bidders are different individuals employed by 
the same organization (e.g., law firm or consulting firm). 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.
    14. However, the Bureau cautions that merely filing a certifying 
statement as part of an application will not outweigh specific evidence 
that collusive behavior has occurred, nor will it preclude the 
initiation of an investigation when warranted. In Auction No. 31, for 
example, the rule would apply to any applicants bidding for the same 
700 MHz Band EAG. Therefore, applicants that apply to bid for ``all 
markets'' are precluded from communicating with all other applicants 
until after the down payment deadline. However, applicants may enter 
into bidding agreements before filing their FCC Form 175, as long as 
they disclose the existence of the agreement(s) in their 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) of the Commission's rules, 
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).
    15. 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

[[Page 20127]]

substantial change that may be of decisional significance to that 
application. Thus, Secs. 1.65 and 1.2105 require 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.
    16. A summary listing of documents from the Commission and the 
Bureau addressing the application of the anti-collusion rules may be 
found in Attachment I of the Auction No. 31 Further Procedures Public 
Notice.
iii. Interference Protection of Television Services
    17. Licensees operating on the spectrum associated with Channels 
60, 61, 62, 65, 66, and 67 must comply with the co-channel and adjacent 
channel provisions of Sec. 27.60 of the Commission's rules. For 
example, a licensee operating on any portion of the 10 megahertz block 
(i.e., between 752 MHz and 762 MHz) that coincides with Channel 61 will 
have to provide co-channel protection to television stations operating 
on Channel 61 and adjacent channel protection to television stations 
operating on Channels 60 and 62 (including digital television (``DTV'') 
stations); and any licensee operating on any portion of the 10 
megahertz block that coincides with Channel 62 will have to provide co-
channel protection to television stations operating on Channel 62 and 
adjacent channel protection to television stations operating on 
Channels 61 and 63. Licensees operating on spectrum between 747 MHz and 
752 MHz (Channel 60), in addition to providing co-channel protection to 
Channel 60 television stations, will have to provide adjacent channel 
protection to television stations operating on both Channel 61 and 59. 
New Upper 700 MHz licensees will also have to comply with any 
additional technical requirements or interference protection 
requirements that may be adopted in the future as a result of pending 
and future rulemaking proceedings. These interference obligations will 
remain in force until the end of the DTV transition period, at which 
time analog TV and DTV broadcasters will be required to vacate both the 
Upper and Lower 700 MHz bands.
(a) Negotiations With Incumbent Broadcast Licensees
    18. The Commission has established a policy of facilitating 
voluntary clearing of the 700 MHz bands to allow for the introduction 
of new wireless services and to promote the transition of incumbent 
analog television licensees to DTV service. The Commission established 
its policies on voluntary clearing for the Upper 700 MHz Band in a 
series of orders. The Commission initially stated that it would 
``consider specific regulatory requests needed to implement voluntary 
agreements'' between incumbent broadcasters and new licensees to clear 
the Upper 700 MHz Band early, if consistent with public interest. 
Subsequently, the Commission established a rebuttable presumption 
favoring the grant of requests that would both result in certain 
specific benefits and avoid specific detriments. These policies were 
later extended to ``three-way'' band clearing arrangements, in which 
non-Channel 59-69 broadcasters were also potential parties. 
Subsequently, the Commission provided certain additional flexibility to 
facilitate voluntary agreements for early clearing and granted a 
request for relief from two specific DTV-related requirements. In 
considering such requests, the Commission will consider whether grant 
of the request would result in public interest benefits, such as making 
new or expanded public safety or other wireless services available to 
consumers or deploying wireless service to rural or other underserved 
communities. The Commission intends to weigh these benefits against any 
likely public interest costs, such as the loss of any of the four 
stations in the designated market area with the largest audience share, 
the loss of the sole service licensed to the local community, the loss 
of a community's sole service on a channel reserved for noncommercial 
educational broadcast service, or a negative effect on the pace of the 
DTV transition in the market. For example, the Commission would 
consider the availability of the licensee's former analog programming 
within the service area, through simulcast of the programming on the 
licensee's DTV channel or distribution of the programming on cable or 
DBS, or the availability of similar broadcast services within the 
service area (e.g., whether the lost service is the only network 
service, the only source for local service, or the only source for 
otherwise unique broadcast service).
(b) Canadian and Mexican Border Regions
    19. There are currently separate agreements with Canada and Mexico 
covering TV broadcast use of the UHF 470-806 MHz band. Such agreements 
do not reflect the additional use or services adopted in the 700 MHz 
First Report & Order for 746-764 and 776-794 MHz bands. While the 
Commission staff has been involved in discussions with both countries 
regarding coordination of interference criteria for the use of these 
bands in the border areas for the additional services, agreements have 
yet to be reached. Therefore, until such agreements have been 
finalized, the Commission found it necessary to adopt certain interim 
requirements for licenses in these bands along the Canada and Mexico 
borders. Accordingly, licenses issued for these bands within 120 km of 
the borders were made subject to whatever future agreements the United 
States developed with those two countries. Because the existing 
agreements for the protection of TV stations in those countries are 
still in effect and must be recognized until they are replaced or 
modified to reflect the new uses, the Commission decided that licenses 
in the border areas will be granted on the condition that harmful 
interference may not be caused to, but must accept interference from, 
UHF TV transmitters in Canada and Mexico. Furthermore, the Commission 
pointed out that modifications may be necessary to comply with whatever 
provisions are ultimately specified in future agreements with Canada 
and Mexico regarding the use of these bands.
iv. Due Diligence
    20. Potential bidders are reminded that there are a number of 
incumbent broadcast television licensees already licensed and operating 
in the 746-764 and 776-794 MHz bands (television Channels 60-62 and 65-
67) that will be subject to the upcoming auction. As discussed 
previously in greater detail, the Commission made clear that geographic 
area licensees operating on the spectrum associated with Channels 60, 
61, 62, 65, 66, and 67 must comply with the co-channel and adjacent 
channel provision of Sec. 27.60 of the Commission's rules. In addition, 
geographic area licensees operating fixed stations in the 746-764 MHz 
band must comply with the relevant provisions for ``base stations'' in 
Secs. 27.60 and 90.309 of the Commission's rules; and licensees 
operating fixed stations in the 776-794 MHz band must comply with the 
relevant provisions for ``control stations'' in those sections of the 
rules.
    21. These limitations may restrict the ability of such geographic 
licensees to use certain portions of the electromagnetic spectrum or 
provide service to certain regions in their geographic license areas. 
To aid potential bidders, the Bureau will shortly issue a Due Diligence 
Announcement listing incumbent

[[Page 20128]]

licensees operating in these bands. The Commission makes no 
representations or guarantees that the matters listed in this Due 
Diligence Announcement are the only pending matters that could affect 
spectrum availability in these services.
    22. Potential bidders are solely responsible for identifying 
associated risks and for 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. 31.
    23. Potential bidders also should be aware that certain 
applications (including those for modification), petitions for 
rulemaking, requests for special temporary authority (``STA''), waiver 
requests, petitions to deny, petitions for reconsideration, and 
applications for review may be pending before the Commission and relate 
to particular applicants or incumbent licensees. In addition, certain 
decisions reached in this proceeding may be subject to judicial appeal 
and may be the subject of additional reconsideration or appeal. We note 
that resolution of these matters could have an impact on the 
availability of spectrum in Auction No. 31. In addition, although 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. To aid potential bidders, the Bureau will issue shortly a Due 
Diligence Announcement listing matters pending before the Commission 
that relate to licenses or applications in these services. The 
Commission makes no representations or guarantees that the listed 
matters are the only pending matters that could affect spectrum 
availability in these services.
    24. In addition, potential bidders may research the licensing 
database for the Media Bureau on the Internet in order to determine 
which frequencies are already licensed to incumbent licensees. 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. 
Furthermore, 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 EAG for which they plan to bid.
    25. Licensing records for the Media Bureau are contained in the 
Media Bureau's Consolidated Data Base System (CDBS) and may be 
researched on the Internet at http://wireless.fcc.gov/mb/databases/. 
Potential bidders may query the database online and download a copy of 
their search results if desired. Detailed instructions on using Search 
for Station Information, Search for Ownership Report Information and 
Search for Application Information and downloading query results are 
available online by selecting the CDBS Public Access (main) button at 
the bottom of the Electronic Filing and Public Access list section. The 
database searches return either station or application data. The 
application search provides an application link that displays the 
complete electronically filed application in application format. An AL/
TC search under the application search link permits searching for 
Assignment of License/Transfer of Control groups using the AL/TC group 
lead application. For further details, click on the Help file.
    26. Potential bidders should direct questions regarding the search 
capabilities of CDBS to the Media Bureau help line at (202) 418-2662, 
or via e-mail at [email protected].
v. Bidder Alerts
    27. 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.
    28. The FCC makes no representations or warranties about the use of 
this spectrum for particular services. Applicants should be aware that 
an FCC auction represents an opportunity to become an FCC licensee in 
this service, subject to certain conditions and regulations. An FCC 
auction does not constitute an endorsement by the FCC of any particular 
services, technologies or products, nor does an FCC license constitute 
a guarantee of business success. Applicants and interested parties 
should perform their own due diligence before proceeding, as they would 
with any new business venture.
    29. As is the case with many business investment opportunities, 
some unscrupulous entrepreneurs may attempt to use Auction No. 31 to 
deceive and defraud unsuspecting investors. Common warning signals of 
fraud include the following:
     The first contact is a ``cold call'' from a telemarketer, 
or is made in response to an inquiry prompted by a radio or television 
infomercial.
     The offering materials used to invest in the venture 
appear to be targeted at IRA funds, for example, by including all 
documents and papers needed for the transfer of funds maintained in IRA 
accounts.
     The amount of investment is less than $25,000.
     The sales representative makes verbal representations 
that: (a) The Internal Revenue Service (``IRS''), Federal Trade 
Commission (``FTC''), Securities and Exchange Commission (``SEC''), 
FCC, or other government agency has approved the investment; (b) the 
investment is not subject to state or federal securities laws; or (c) 
the investment will yield unrealistically high short-term profits. In 
addition, the offering materials often include copies of actual FCC 
releases, or quotes from FCC personnel, giving the appearance of FCC 
knowledge or approval of the solicitation.
    30. 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. 31 may also call the FCC 
Consumer Center at (888) CALL-FCC ((888) 225-5322).
vi. National Environmental Policy Act (``NEPA'') Requirements
    31. 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

[[Page 20129]]

critical habitats, historical or archaeological sites, Indian religious 
sites, floodplains, and surface features. The licensee must also 
prepare environmental assessments for facilities that include high 
intensity white lights in residential neighborhoods or excessive radio 
frequency emission.

C. Auction Specifics

i. Auction Date
    32. The auction will begin on Wednesday, June 19, 2002. 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 and packages will be conducted on each business 
day until bidding has stopped on all licenses and packages.
ii. Auction Title
    33. Auction No. 31--Upper 700 MHz Band
iii. Bidding Methodology
    34. The bidding methodology for Auction No. 31 will be simultaneous 
multiple round with package bidding (SMR-PB). The Commission will 
conduct this auction 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 for 
a fee of $2.30 per minute. Qualified bidders are permitted to bid 
telephonically or electronically.
iv. Pre-Auction Dates and Deadlines
    35. These are important dates relating to Auction No. 31:

Auction Seminar--April 30, 2002
Short-Form Application (FCC FORM 175)--May 8, 2002; 6 p.m. ET
Upfront Payments (via wire transfer)--May 28, 2002; 6 p.m. ET
Mock Auction--June 13-14, 2002
Auction Begins--June 19, 2002
v. Requirements For Participation
    36. Those wishing to participate in the auction must:
     Submit a short-form application (FCC Form 175) 
electronically by 6 p.m. ET, May 8, 2002.
     Submit a sufficient upfront payment and an FCC Remittance 
Advice Form (FCC Form 159) by 6 p.m. ET, May 28, 2002.
     Comply with all provisions outlined in this public notice.
     Comply with all rules set forth in the Commission's order 
in WT Docket No. 99-168, Service Rules for the 746-764 and 776-794 MHz 
Bands, and Revisions to part 27 of the Commission's Rules.
iv. General Contact Information
    37. The following is a list of general contact information relating 
to Auction No. 31:

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, 8:00 a.m. to 7p.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--Qualex 
International, Portals II, 445 12th Street, SW, Room CY-B402, 
Washington, DC 20554, (202) 863-2893, (202) 863-2898 (Fax), 
[email protected] (e-mail)
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://wireless.fcc.gov/auctions, http://wireless.fcc.gov/uls

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

    38. Guidelines for completion of the short-form (FCC Form 175) are 
set forth in Attachment E of the Auction No. 31 Further Procedures 
Public Notice. The short-form application seeks the applicant's name 
and address, legal classification, status, small or very small business 
bidding credit eligibility, identification of the license(s) sought, 
the authorized bidders and contact persons. All applicants must certify 
on their FCC Form 175 applications under penalty of perjury that they 
are legally, technically, financially and otherwise qualified to hold a 
license and, as discussed in Section II.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.

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

    39. All applicants must comply with the uniform part 1 ownership 
disclosure standards and provide information required by Sec. 1.2105 
and Sec. 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)

    40. 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. 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. As previously 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.
    41. 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

[[Page 20130]]

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. Bidding Credit Eligibility (FCC Form 175 Exhibit C)
    42. Bidding credits are available to small and very small 
businesses, or consortia, thereof, as defined in 47 CFR 27.502. A 
bidding credit represents the amount by which a bidder's winning bids 
are discounted. The size of a 700 MHz band bidding credit depends on 
the average of the aggregated annual gross revenues for each of 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 
not more than $40 million for the preceding three years receives a 15 
percent discount on its winning bids for 700 MHz band licenses (``small 
business'');
     A bidder with attributed average annual gross revenues of 
not more than $15 million for the preceding three years receives a 25 
percent discount on its winning bids for 700 MHz band licenses (``very 
small business'').
    Bidding credits are not cumulative; qualifying applicants receive 
either the 15 percent or the 25 percent bidding credit, but not both.
ii. Tribal Land Bidding Credit
    43. To encourage the growth of wireless services in federally 
recognized tribal lands the Commission has implemented a tribal land 
bidding credit. See Section V.D. of the Auction No. 31 Further 
Procedures Public Notice.
iii. Applicability of Part 1 Attribution Rules
    44. 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 part 1 proceeding. Part 
1 rules that superseded inconsistent service-specific rules will 
control in Auction No. 31. Accordingly, the ``controlling interest'' 
standard as set forth in the part 1 rules will be in effect for Auction 
No. 31, even if conforming edits to the CFR are not made prior to the 
auction.
    45. 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.
    46. Attribution for small and very small business eligibility. In 
determining which entities qualify as small or very 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 the principals or 
entities with a controlling interest are determined, only the revenues 
of those principals or entities, the affiliates of those principals or 
entities, the applicant and its affiliates, will be counted in 
determining small business eligibility.
    47. A consortium of small or very small businesses is a 
``conglomerate organization formed as a joint venture between or among 
mutually independent business firms,'' each of which individually must 
satisfy the definition of small or very small business in 
Secs. 1.2110(f), 27.502. 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. We note 
that although the gross revenues of the consortium members will not be 
aggregated for purposes of determining eligibility for small or very 
small business credits, this information must be provided to ensure 
that each individual consortium member qualifies for any bidding credit 
awarded to the consortium.
iv. Supporting Documentation
    48. Applicants should note that they will be required to file 
supporting documentation to their FCC Form 175 short-form applications 
to establish that they satisfy the eligibility requirements to qualify 
as small or very small businesses (or consortia of small or very small 
businesses) for this auction.
    49. Applicants should further note that submission of an FCC Form 
175 application constitutes a representation by the certifying official 
that he or she is an authorized representative of the applicant, has 
read the form's instructions and certifications, and that the contents 
of the application and its attachments are true and correct. Submission 
of a false certification to the Commission may result in penalties, 
including monetary forfeitures, license forfeitures, ineligibility to 
participate in future auctions, and/or criminal prosecution.
    50. Small or very small business eligibility (Exhibit C). Entities 
applying to bid as small or very small businesses (or consortia of 
small or very small businesses) will be required to disclose on Exhibit 
C to their FCC Form 175 short-form applications, separately and in the 
aggregate, the gross revenues for the preceding three years of each of 
the following: (i) The applicant, (ii) its affiliates, (iii) its 
controlling interests, and (iv) the affiliates of its controlling 
interests. Certification that the average annual gross revenues for the 
preceding three years do not exceed the applicable limit is not 
sufficient. A statement of the total gross revenues for the preceding 
three years is also insufficient. The applicant must provide separately 
for itself, its affiliates, its controlling interests, and the 
affiliates of its controlling interests, a schedule of gross revenues 
for each of the preceding three years, as well as a statement of total 
average gross revenues for the three-year period. If the applicant is 
applying as a consortium of small or very small businesses, this 
information must be provided for each consortium member.

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

    51. 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

[[Page 20131]]

addition, each applicant must attach to its FCC Form 175 application a 
statement made under penalty of perjury indicating whether or not the 
applicant, its affiliates, its controlling interests, or the affiliates 
of its controlling interest have ever been in default on any Commission 
licenses or have ever been delinquent on any non-tax debt owed to any 
Federal agency. The applicant must provide such information for itself, 
its affiliates, its controlling interests, and the affiliates of its 
controlling interests, as defined by Sec. 1.2110 of the Commission's 
rules (as amended in the Part 1 Fifth Report and Order). Applicants 
must include this statement as Exhibit D of the FCC Form 175. 
Prospective bidders are reminded that the statement must be made under 
penalty of perjury and, further, submission of a false certification to 
the Commission is a serious matter that may result in severe penalties, 
including monetary forfeitures, license revocations, exclusion from 
participation in future auctions, and/or criminal prosecution.
    52. ``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. 31, 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

    53. Installment payment plans will not be available in Auction No. 
31.

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

    54. 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)

    55. After the short-form filing deadline (May 8, 2002), 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 modifications to their FCC Form 175 electronically 
and submit a letter, briefly summarizing the changes, by electronic 
mail to the attention of Margaret Wiener, Chief, Auctions and Industry 
Analysis Division, at the following address: [email protected]. The 
electronic mail summarizing the changes must include a subject or 
caption referring to Auction No. 31. The Bureau requests that parties 
format any attachments to electronic mail as Adobe 
Acrobat (pdf) or Microsoft'' Word documents.
    56. A separate copy of the letter should be faxed to the attention 
of Kathryn Garland at (717) 338-2850. Questions about other changes 
should be directed to Howard Davenport of the Auctions and Industry 
Analysis Division at (202) 418-0660.

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

    57. 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

    58. On Tuesday, April 30, 2002, the FCC will sponsor a free seminar 
for Auction No. 31 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 700 MHz band service 
and auction rules. The seminar will also provide an opportunity for 
prospective bidders to ask questions of FCC staff.
    59. To register, complete the registration form attached as 
Attachment C of the Auction No. 31 Further Procedures Public Notice and 
submit it by Friday, April, 26, 2002. Registrations are accepted on a 
first-come, first-served basis.

B. Short-Form Application (FCC Form 175)--Due May 8, 2002

    60. In order to be eligible to bid in this auction, applicants must 
first submit an FCC Form 175 application. This application must be 
submitted electronically and received at the Commission no later than 6 
p.m. ET on May 8, 2002. Late applications will not be accepted.
    61. There is no application fee required when filing an FCC Form 
175. However, to be eligible to bid, an applicant must submit an 
upfront payment. See part III.D.
i. Electronic Filing
    62. Applicants must file their FCC Form 175 applications 
electronically. Applications may generally be filed at any time 
beginning at noon ET on April 30, 2002, until 6 p.m. ET on May 8, 2002. 
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 8, 2002.
    63. 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 D of the Auction No. 31 Further Procedures Public Notice.
    64. 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 a.m. to 10 p.m. ET, Saturday, 8 a.m. to 7 p.m. 
ET, and Sunday, 12 noon to 6 p.m.ET. In order to provide better service 
to the public, all calls to the hotline are recorded.
    65. Applicants can also contact Technical Support via e-mail at 
[email protected].
ii. Completion of the FCC Form 175
    66. 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 E of the Auction No. 31 Further 
Procedures Public Notice. Applicants are encouraged to begin preparing 
the required attachments for FCC Form 175 prior to submitting the form.

[[Page 20132]]

Attachments D and E to the Auction No. 31 Further Procedures Public 
Notice provide information on the required attachments and appropriate 
formats.
iii. Electronic Review of FCC Form 175
    67. 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. Attachment D of the Auction No. 31 Further 
Procedures Public Notice provides details on accessing the review 
system.

C. Application Processing and Minor Corrections

    68. After the deadline for filing the FCC Form 175 applications has 
passed, the FCC will process all timely submitted applications to 
determine which are acceptable for filing, and subsequently will issue 
a public notice identifying: (i) Those applications accepted for 
filing; (ii) those applications rejected; and (iii) those applications 
which have minor defects that may be corrected, and the deadline for 
filing such corrected applications.
    69. As described more fully in the Commission's rules, after the 
May 8, 2002, 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 May 28, 2002

    70. In order to be eligible to bid in the auction, applicants must 
submit an upfront payment accompanied by an FCC Remittance Advice Form 
(FCC Form 159). After completing the FCC Form 175, filers will have 
access to an electronic version of the FCC Form 159 that can be printed 
and faxed to Mellon Bank in Pittsburgh, PA. All upfront payments must 
be received at Mellon Bank by 6 p.m. ET on May 28, 2002.
    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. 31 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 May 28, 
2002, deadline will result in dismissal of the application and 
disqualification from participation in the auction.
i. Making Auction Payments by Wire Transfer
    71. Wire transfer payments must be received by 6 p.m. ET on May 28, 
2002. 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.
    Beneficiary: FCC/Account # 910-0171.
    OBI Field: (Skip one space between each information item).
    ``AUCTIONPAY''
    FCC Registration Number (FRN): (same as FCC Form 159, block 11 and/
or 21).
    Payment Type Code: (same as FCC Form 159, block 24A: A31U).
    FCC Code 1: (same as FCC Form 159, block 28A: ``31'').
    Payer Name: (same as FCC Form 159, block 2).
    Lockbox No.: # 358430.

    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.

    72. Applicants must fax a completed FCC Form 159 (Revised 2/00) to 
Mellon Bank at (412) 209-6045 at least one hour before placing the 
order for the wire transfer (but on the same business day). On the 
cover sheet of the fax, write ``Wire Transfer--Auction Payment for 
Auction Event No. 31.'' Bidders should confirm receipt of their upfront 
payment at Mellon Bank by contacting their sending financial 
institution.
iii. FCC Form 159
    73. A completed FCC Remittance Advice Form (FCC Form 159, Revised 
2/00) must be faxed to Mellon Bank in order to accompany 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 F of the 
Auction No. 31 Further 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
    74. In the Part 1 Order, Memorandum Opinion and Order, and Notice 
of Proposed Rule Making, 62 FR 13540 (March 21, 1997), 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 any Federal agency, be required to pay upfront payments fifty 
percent greater than non-``former defaulters.'' For purposes of this 
calculation, the ``applicant'' includes the applicant itself, its 
affiliates, its controlling interests, and the affiliates of its 
controlling interests, as defined by Sec. 1.2110 of the Commission's 
rules (as amended in the Part 1 Fifth Report and Order).
    75. The amount of the upfront payment will determine the number of 
bidding units on which a bidder can bid, where each license is 
associated with a fixed number of bidding units. A bidder's maximum 
eligibility will be established by translating its upfront payment to 
bidding units (one dollar equals one bidding unit). In order to bid on 
a license, otherwise qualified bidders who applied for that license on 
Form 175 must have an eligibility level that meets or exceeds the 
number of bidding units assigned to that license. 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. 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 (i) its initial eligibility, the bidding units 
reflected in its upfront payment; and (ii) its current eligibility, the 
bidding units reflected in its upfront payment less the number of 
bidding units by which its eligibility has been reduced. As an upper 
bound on the upfront payment, an applicant could add together the

[[Page 20133]]

upfront payments for all licenses on which it seeks to bid (either 
individually or in a package) 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.
    76. The specific upfront payments and bidding units for each 
license are set forth in Attachment A of the Auction No. 31 Further 
Procedures Public Notice.
    77. 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.

  Example: Upper 700 MHz Bands Upfront Payments and Bidding Flexibility
------------------------------------------------------------------------
                                                              Upfront
           License or package              Bidding units      payment
------------------------------------------------------------------------
Package A (WX-EAG701-C and WX-EAG701-D).      42,000,000     $42,000,000
WX-EAG702-C.............................      14,000,000     14,000,000
------------------------------------------------------------------------
If a bidder wishes to bid on both Package A and license WX-EAG702-C in a
  round, it must have selected WX-EAG701-C, WX-EAG701-D, and WX-EAG702-C
  on its FCC Form 175 and purchased at least 56,000,000 bidding units
  (14,000,000 + 28,000,000 + 14,000,000). If a bidder only wishes to bid
  on either Package A or license WX-EAG702-C, but not both, purchasing
  42,000,000 bidding units would meet the requirement for either Package
  A or license WX-EAG702-C. The bidder would be able to bid on either
  Package A or license WX-EAG702-C, but not both at the same time. If
  the bidder purchased only 14,000,000 bidding units, it would have
  enough eligibility for license WXEAG702-C or license WX-EAG701-C but
  not for Package A or license WX-EAG701-D.

iv. Applicant's Wire Transfer Information for Purposes of Refunds of 
Upfront Payments
    78. The Commission will use wire transfers for all Auction No. 31 
refunds. To ensure that refunds of upfront payments are processed in an 
expeditious manner, the Commission is requesting that all pertinent 
information as listed be supplied to the FCC. Applicants can provide 
the information electronically during the initial short-form filing 
window after the form has been submitted. Wire Transfer Instructions 
can also be manually faxed to the FCC, Financial Operations Center, 
Auctions Accounting Group, ATTN: Tim Dates or Gail Glasser, at (202) 
418-2843 by May 28, 2002. 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
FCC Registration Number (FRN)
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 Section V.F.

E. Auction Registration

    79. 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.
    80. 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.
    81. 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 Wednesday, June 12, 2002, 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.
    82. 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 replacements. Qualified bidders 
requiring replacements must call technical support prior to arriving at 
the FCC.

F. Electronic Bidding

    83. The Commission will conduct this auction 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. Qualified bidders are permitted to 
bid telephonically or electronically, i.e., over the Internet or the 
FCC's Wide Area Network at $2.30 per minute. In either case, each 
authorized bidder must have its own Remote Security Access SecurID 
card, which the FCC will provide at no charge. Any applicant with only 
one authorized bidder will be issued two SecurID cards, while 
applicants with two or three authorized bidders will be issued three 
cards. For security purposes, the SecurID cards and the FCC Automated 
Auction System User Manual are only mailed to the contact person at the 
contact address listed on the FCC Form 175. Please note that each 
SecurID card is tailored to a specific auction, therefore, SecurID 
cards issued for other auctions or obtained from a source other than 
the FCC will not work for Auction No. 31. The telephonic bidding phone 
number will be supplied in the first overnight mailing, which also 
includes the confidential bidder identification number. Each applicant 
should indicate its bidding preference'electronic or telephonic'' on 
the FCC Form 175.
    84. Please note that the SecurID cards can be recycled, and we 
encourage bidders to return the cards to the FCC. We will provide pre-
addressed envelopes that bidders may use to

[[Page 20134]]

return the cards once the auction is over.

G. Mock Auction

    85. All qualified bidders will be eligible to participate in a mock 
auction on Thursday, June 13, 2002, and Friday, June 14, 2002. The mock 
auction will enable applicants to become familiar with the FCC 
Automated Auction System prior to the auction. Participation by all 
bidders is strongly recommended. Details will be announced by public 
notice.

IV. Auction Event

    86. The first round of bidding for Auction No. 31 will begin on 
Wednesday, June 19, 2002. 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 With Package Bidding
    87. We will auction the twelve Upper 700 MHz band licenses in a 
single, simultaneous multiple-round auction with package bidding. 
Unless otherwise announced, bids will be accepted on all licenses and 
packages in each round of the auction. This approach, we believe, will 
allow bidders in this auction to take advantage of any synergies that 
exist among licenses and will lead to the most efficient outcome 
consistent with our objectives under section 309(j) of the 
Communications Act of 1934.
    88. The simultaneous multiple round auction with package bidding 
auction format (SMR-PB) differs in several important ways from our 
traditional simultaneous multiple round auction (SMR). Briefly and 
generally, the most important structural changes follow. Bids are 
allowed on groups of licenses as well as on individual licenses. All 
bids in the auction, not just those from the current round, are 
considered when determining the provisionally winning set of bids in 
each round. However, the bids of a bidder in one round are considered 
mutually exclusive of its bids from any other round `` that is, all 
bids from a single bidder in the provisionally winning set must be from 
the same round. A major implication of these changes is that bids which 
are not part of the provisionally winning set in a given round can 
become part of the provisionally winning set in later rounds.
    89. As a consequence of these basic structural changes, the SMR-PB 
rules on activity and eligibility, minimum acceptable bids, bid 
withdrawals, and many other auctions specifics are very different from 
the rules under the traditional SMR format. In addition to the complete 
descriptions in this Public Notice, Attachments G and H of the Auction 
No. 31 Further Procedures Public Notice summarize the SMR-PB 
requirements.
ii. Maximum Eligibility
    90. The amount of the upfront payment submitted by a bidder will 
determine the initial maximum eligibility (as measured in bidding 
units) for each bidder. Note again that each license is assigned a 
specific number of bidding units equal to the upfront payment listed in 
Attachment A of the Auction No. 31 Further Procedures Public Notice on 
a bidding unit per dollar basis. The bidding units associated with a 
package are defined as the sum of the bidding units associated with the 
individual licenses comprising the package. The total upfront payment 
defines the maximum number of bidding units on which the applicant will 
be permitted to be active during any given round. As there is no 
provision for increasing a bidder's maximum eligibility during the 
course of an auction, prospective bidders are cautioned to calculate 
their upfront payments carefully. The total upfront payment does not 
affect the dollar amount a bidder may bid on licenses.
iii. Activity and Eligibility Rules
    91. In order to ensure that the auction closes within a reasonable 
period of time, an activity rule is in place that requires bidder 
participation throughout the auction. The activity rule requires each 
bidder to have active bids in each round that account for a specified 
fraction of the bidder's current eligibility, as measured in bidding 
units. Failure to adhere to the rule results in the use of an activity 
rule waiver or the reduction of current eligibility (see Section 
IV.A.iv, ``Activity Rule Waivers and Reducing Eligibility'').
    92. In earlier SMR auctions, a bidder's activity in a round was 
determined by summing the bidding units associated with licenses on 
which the bidder was active. A bidder was considered active on a 
license in the current round if it was either the high bidder at the 
end of the previous bidding round (and did not withdraw the high bid in 
the current round), or if it submitted an acceptable bid in the current 
round (and did not subsequently remove the bid). In a package-bidding 
auction, calculating activity levels in a round is not as 
straightforward because a bidder can submit bids on different packages 
that contain one or more of the same licenses.
    93. Bidding activity is one measure that is used to determine a 
bidder's activity in a round for a package-bidding auction. We define a 
bidder's bidding activity in a round to be the maximum number of 
bidding units the bidder can win considering new bids placed and 
provisionally winning bids renewed in that round. Thus, when a bidder 
submits bids in a round the system will determine the set of bids, 
among the bidder's new bids and renewed provisionally winning bids, 
that contains the most bidding units and has no overlap among the 
licenses. To illustrate this, suppose a bidder submits the following 
bids in round t:

                         Bids Placed in Round t
------------------------------------------------------------------------
             License/package                       Bidding units
------------------------------------------------------------------------
Package A...............................  56,000,000 bu
  WX-EAG701-C (14,000,000 bu)
  WX-EAG702-C (14,000,000 bu)
  WX-EAG703-C (14,000,000 bu)
  WX-EAG704-C (14,000,000 bu)
Package B...............................  42,000,000 bu
  WX-EAG701-C (14,000,000 bu)
  WX-EAG701-D (28,000,000 bu)
------------------------------------------------------------------------


[[Page 20135]]

This set of bids contains five distinct licenses. The sum of the 
bidding units associated with these five licenses is 84,000,000. 
However, since both packages contain license WX-EAG701-C, this bidder 
can not win both packages at the same time. The maximum number of 
bidding units that the bidder can win would be the 56,000,000 
associated with Package A, so the bidder's bidding activity is 
56,000,000 bidding units.
    94. A bidder is also considered to be active if the bidder has 
provisionally winning bids from the previous round. Auction rules state 
that a bidder's bids made in different rounds will be considered 
mutually exclusive, so the bidding units associated with provisionally 
winning bids must be viewed independently from the bidding units 
associated with current round bids. We define a bidder's eligibility 
activity in a round to be the greater of (i) its bidding activity in 
the round and (ii) the bidding units associated with the bidder's 
provisionally winning bids from the prior round. To illustrate how 
eligibility activity will be calculated in a round we continue with our 
example. Suppose this bidder has the following provisionally winning 
bids from round t-1:

                Provisionally Winning Bids from Round t-1
------------------------------------------------------------------------
             License/package                       Bidding units
------------------------------------------------------------------------
License: WX-EAG701-C (14,000,000 bu)....  14,000,000 bu
License: WX-EAG701-D (28,000,000 bu)....  28,000,000 bu
------------------------------------------------------------------------

The number of bidding units associated with this bidder's provisionally 
winning bids is 42,000,000. Recall that the bidder's bidding activity 
for the round is 56,000,000 bidding units. The eligibility activity for 
this bidder in round t is therefore 56,000,000, the greater of its 
bidding activity (56,000,000 bidding units) and the bidding units 
associated with its bids in the provisionally winning set (42,000,000 
bidding units).
    95. We have established an eligibility activity requirement of one-
half. Accordingly, in each round of the auction, a bidder desiring to 
maintain its current eligibility and not use an activity rule waiver is 
required to have eligibility activity equal to at least half of its 
current eligibility. A bidder that fails to meet this eligibility 
activity requirement in a given round and also has no remaining 
activity rule waivers will have its current eligibility reduced for the 
next round to a level consistent with the eligibility activity 
requirement. The bidder's new current eligibility will be its 
eligibility activity in the current round multiplied by the reciprocal 
of the eligibility activity requirement (1/eligibility activity 
requirement)--in this case, two (1/(\1/2\)). Thus, a bidder's 
eligibility in the current round will be the lesser of: (i) its 
eligibility in the previous round or (ii) the product of its 
eligibility activity in the previous round and the reciprocal of the 
eligibility activity requirement.
    96. The Bureau has reserved the right, however, to increase to two-
thirds the proportion of current eligibility on which bidders must be 
active to retain their current eligibility. The two-thirds limit will 
ensure that bidders retain the flexibility to switch from bidding on a 
20 MHz license or package to a 30 MHz package with the equivalent 
population. Any such change will be announced to bidders prior to the 
beginning of the round in which the change takes effect. In the event 
that the Bureau exercises its ability to change the eligibility 
activity requirement to two-thirds, the new current eligibility for a 
bidder not meeting the requirement and having no remaining activity 
rule waivers will be its eligibility activity in the current round 
multiplied by \3/2\ (the reciprocal of the eligibility activity 
requirement).
    97. In the previous example, the bidder has eligibility activity in 
the current round of 56,000,000 bidding units. If this bidder's current 
eligibility is 168,000,000 bidding units and the eligibility activity 
requirement is one-half, the bidder's required activity level is 
84,000,000 bidding units (168,000,000 * \1/2\ = 84,000,000). Since the 
bidder's eligibility activity is less than the required activity level, 
and if the bidder has no remaining activity rule waivers, its current 
eligibility will be reduced so that the bidder will be in compliance 
with the activity requirement. Therefore, the bidder's current 
eligibility for the next round will be 112,000,000 bidding units 
(56,000,000 * (1/\1/2\) = 112,000,000).
    98. Because a bidder's bids from all prior rounds are considered in 
determining provisionally winning bids, it is possible for a bidder to 
become a provisional winner for a license or package even though it 
does not have sufficient eligibility to place a new bid on that license 
or package. In such a case, the bidder will be awarded the license or 
package at the end of the auction if it has made the winning bid, but 
it will not be permitted to place any new bids on the license or 
package during the auction.
iv. Activity Rule Waivers and Reducing Eligibility
    99. Each bidder in the auction 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 eligibility activity in the current 
round being below the required minimum level. An activity rule waiver 
applies to an entire round of bidding and not to a particular license. 
We are satisfied that our practice of providing five waivers over the 
course of the auction provides a sufficient number of waivers and 
flexibility to the bidders, while safeguarding the integrity of the 
auction.
    100. In contrast to our traditional SMR auction format, bidders 
will not have the ability to apply waivers proactively. In our SMR 
auction format, proactive waivers are a means by which bidders can keep 
the auction open without bidding. For Auction No. 31, we have adopted a 
two-round simultaneous stopping rule. Thus, after one round with no new 
bids, the auction will not close. For more information, see Section 
IV.A.vi. ``Stopping Rules,'' infra.
    101. The FCC Automated Auction System assumes that bidders with 
insufficient eligibility activity would prefer to use an activity rule 
waiver (if available) rather than lose bidding eligibility. Therefore, 
the system will automatically apply a waiver at the end of any round 
where a bidder's eligibility 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 eligibility, thereby meeting the minimum requirements.
    102. A bidder with insufficient eligibility 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 Automated Auction 
System. In this

[[Page 20136]]

case, the bidder's eligibility is permanently reduced to bring the 
bidder into compliance with the activity rules as described in the 
previous section. Once eligibility has been reduced, a bidder will not 
be permitted to regain its lost bidding eligibility
v. Auction Stages and Stage Transitions
    103. Our SMR auctions generally are conducted in two or three 
stages, in which the activity requirement is increased between stages. 
In this SMR-PB auction, we have adopted a single stage with a one-half 
activity requirement, although we retain the discretion during the 
auction to increase to two-thirds the proportion of bidding units on 
which bidders must be active to retain their current eligibility. Any 
such change will be announced to bidders prior to the beginning of the 
round in which the change takes effect.
vi. Auction Stopping Rules
    104. For Auction No. 31, we have adopted a two-round simultaneous 
stopping rule. A two-round simultaneous stopping rule means that all 
licenses remain open until two consecutive rounds have occurred in 
which no new bids are accepted. After a round with no new bids, bidders 
will receive a message warning that if no new bids are placed in the 
next round the auction will close. After the second consecutive round 
with no new bids, bidding closes simultaneously on all licenses and 
packages. Thus, unless circumstances dictate otherwise, bidding will 
remain open on all licenses until bidding stops on every license and 
package.
    105. For purposes of the stopping rule, renewed bids are not 
considered new bids; in other words, a round in which the only bids 
that are placed are renewed bids is considered a round with no new bids 
for purposes of the stopping rule.
    106. The computer software used to determine the provisionally 
winning set of bids is run at the end of every round of the auction but 
the last round (i.e., the second consecutive round with no new bids). 
Because ties are broken randomly, this means that if there were ties 
for the provisionally winning set in the previous round, running the 
software at the conclusion of the next round may well result in a 
different provisionally winning set, even if there was no bidding 
activity in the round. Consequently, a provisionally winning bid on a 
license or package may not be a provisionally winning bid one round 
later, even if there are no bids in the intervening round. Bidders have 
the option of using the last and best bidding procedure in order to 
avoid being in a tied set (see Section IV.B.v, ``Last and Best Bids'').
    107. As in previous auctions, the Bureau has retained the 
discretion to keep an auction open even if no new bids are submitted. 
The activity rule would apply as usual, and a bidder with insufficient 
eligibility activity will either lose bidding eligibility or use a 
remaining activity rule waiver. The Bureau has reserved the right to 
declare that the auction will end after a specified number of 
additional rounds (``special stopping rule''). The Bureau would 
exercise this option only in certain circumstances, such as, for 
example, where the auction is proceeding very slowly, there is minimal 
overall bidding activity, or 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, for example, by increasing the number of bidding rounds per 
day, and/or by increasing the amount of the minimum acceptable bids for 
the limited number of licenses where there is still a high level of 
bidding activity. Any such change will be announced to bidders before 
it takes effect.
vii. Auction Delay, Suspension, or Cancellation
    108. By public notice or by announcement during the auction, the 
Bureau may delay, suspend, or cancel the auction in the event of 
natural disaster, technical obstacle, evidence of an auction security 
breach, unlawful bidding activity, administrative or weather necessity, 
or for any other reason that affects the fair and competitive conduct 
of competitive bidding. In such cases, the Bureau, in its sole 
discretion, may elect to resume the auction starting from the beginning 
of the current round, resume the auction starting from some previous 
round, or cancel the auction in its entirety. Network interruption may 
cause the Bureau to delay or suspend the auction. We emphasize that 
exercise of this authority is solely within the discretion of the 
Bureau, and its use is not intended to be a substitute for situations 
in which bidders may wish to apply their activity rule waivers.

B. Bidding Procedures

i. Round Structure
    109. The Commission will use an automated auction system to conduct 
the simultaneous multiple round with package bidding auction format. 
The initial bidding schedule will be announced in the public notice 
listing the qualified bidders, which is released approximately 10 days 
before the start of the auction. 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.
    110. The Bureau will release an additional public notice by April 
30, 2002, explaining the round results process and providing sufficient 
information on our solving and tie-breaking procedures such that 
participants and interested observers will be able to replicate the 
FCC's official round results.
    111. 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.
ii. Reserve Price and Minimum Opening Bid
    112. Congress mandated that the Commission's objectives when 
designing competitive bidding methodologies include ``recovery for the 
public of a portion of the value of the public spectrum resource.'' 
Section 309(j) of the Communications Act, as amended, calls upon the 
Commission to prescribe methods by which a reasonable reserve price 
will be required and/or a minimum opening bid established for licenses 
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.
    113. The Bureau has adopted minimum opening bids for each license 
in Auction No. 31, and the Bureau further established that the minimum

[[Page 20137]]

opening bids for packages will be the sum of the minimum opening bids 
for the licenses comprising the package.
    114. Given the complexities resulting from the presence of 
incumbents and the clearance process, the Bureau specifically sought 
comment on an aggregate reserve in Auction No. 31 equal to $2.6 billion 
in gross bids. As the Bureau noted in the Auction No. 31 Further 
Modifications Comment Public Notice, Congress previously estimated that 
the Upper 700 MHz band licenses, which consist of the previously 
auctioned 700 MHz guard bands licenses and the licenses in Auction No. 
31, will generate $2.6 billion in net revenue. The prior 700 MHz guard 
bands auctions generated nearly $541 million in net revenue. To assure 
that net revenues in Auction No. 31 together with prior net revenues 
will be commensurate with Congress's expectations, the Bureau suggested 
establishing an aggregate reserve price for Auction No. 31 of $2.6 
billion in gross bids. The Bureau notes that there are unavoidable 
uncertainties in estimating the gross bids required to assure 
particular net revenues.
    115. The Bureau adopts the suggested public aggregate reserve price 
equal to $2.6 billion in gross bids. The unique complexities of the 
spectrum clearance process make establishing an aggregate reserve price 
for Auction No. 31 appropriate.
    116. In addition to the aggregate reserve price of $2.6 billion, we 
will maintain the previously-established minimum opening bids on 
licenses and packages. No license or package will be sold if it has not 
received a bid at the minimum opening bid amount. Furthermore, at the 
end of Auction No. 31, if the total gross revenue of the provisionally 
winning set does not equal or exceed $2.6 billion, there will be no 
winning bids and no licenses will be sold.
    117. However, the aggregate reserve will be considered satisfied 
and licenses will be awarded to the winning bidders if total gross 
revenue exceeds $2.6 billion, even if some individual licenses remain 
unsold. The FCC will retain any unsold licenses. For the purposes of 
calculating the total gross revenue of the winning set, any FCC-held 
licenses will be treated as having received a bid at a small amount 
below the minimum opening bid amount. Therefore, in the event that 
there are unsold licenses while the aggregate reserve is met, actual 
gross payments to the Treasury from winning bidders will be less than 
total gross revenues, since the latter figure includes FCC ``bid'' 
amounts for the unsold licenses. During the course of the auction, the 
Bureau will not entertain any requests to reduce the aggregate reserve 
price.
    118. The specific minimum opening bids for each license are set 
forth in Attachment A of the Auction No. 31 Further Procedures Public 
Notice. The minimum opening bids that we have adopted are reducible at 
the discretion of the Bureau. The Bureau emphasizes, however, that such 
discretion will be exercised, if at all, sparingly and early in the 
auction, i.e., before bidders lose all waivers and begin to lose 
substantial eligibility. During the course of the auction, the Bureau 
will not entertain any requests to reduce the minimum opening bid on 
specific licenses.
iii. Minimum Acceptable Bids and Bid Increments
    119. In the Auction No. 31 Further Modifications Comment Public 
Notice, the Bureau sought comment on two potential changes, Options 1 
and 2, to the previously-adopted procedures for calculating minimum 
acceptable bids. In the previously-adopted procedures, the minimum 
acceptable bid for any particular license or package would be the 
greatest of: (i) The applicable minimum opening bid; (ii) the bidder's 
previous high bid on that license/package plus x%, where the Bureau 
would specify the value of x in each round; and (iii) the bidder's 
previous high bid on that particular license/package plus an amount 
based on the increase in the bidder's previous high bid needed to 
create a tie with the provisional winners. If the bidder has not bid on 
a license or an already constructed package, the bidder's previous high 
bid for purposes of calculating part (iii) would be the applicable 
minimum opening bid. As Option 1, the Bureau proposed completely 
replacing part (iii) of the minimum acceptable bid calculation with a 
formula based on ``current price estimates.'' In addition, as a second 
part of Option 1, the Bureau proposed considering all bids submitted 
during the auction both when calculating current price estimates and 
when determining the provisionally winning set of bids. The Bureau 
proposed a much more modest change to part (iii) as Option 2. The 
Bureau proposed changing the mathematical formula applicable only when 
determining minimum acceptable bids on packages created and bid on in 
the same round.
    120. The ``current price estimate'' is a measure, developed by the 
Bureau, which utilizes information from all current and past bids on a 
license and packages containing that license, to approximate a 
``price'' for each license in every round of the auction. The precise 
methodology used to calculate price estimates is described in 
Attachment B of the Auction No. 31 Further Procedures Public Notice. 
Until a bid is placed on a license or on a package containing that 
license, by any bidder in any round, the current price estimate is the 
FCC bid amount, which is slightly below the minimum opening bid. If a 
bid on a single license is part of the provisionally winning set of 
bids in a round, then the current price estimate for that license in 
that round will be equal to the provisionally winning bid. Generally, 
however, if a license is part of a package bid in the provisionally 
winning set, the current price estimate for an individual license is 
calculated using all of the bids placed that involve that license, 
since those bids together yield information on how bidders value that 
license. The set of current price estimates, one for each license, is 
then used as the basis for determining minimum acceptable bids for the 
next round, under part (iii) of the minimum acceptable bid rule. 
Specifically, for individual licenses, the part (iii) minimum 
acceptable bid amount is the current price estimate of the license plus 
z%. For packages, it is the sum of the current price estimates for the 
licenses comprising that package, plus z% of the sum. Initially, the 
Bureau will set z at five, but retains the discretion to adjust the 
amount during the course of the auction, including setting z at less 
than zero, in order to control the pace of the auction.
    121. The Bureau adopts Option 1. Thus, the minimum acceptable bid 
for any license or package will be the greatest of: (i) The minimum 
opening bid; (ii) the bidder's own previous high bid on a license or 
package plus x%, where the Bureau will specify the value of x in each 
round; and (iii) the current price estimate of the license plus z%, or 
for a package, the sum of the current price estimates for the licenses 
in the package plus z%, where the Bureau will specify the value of z in 
each round. The result will be rounded to the nearest thousand dollars. 
Initially, the Bureau will set x at ten, but retains the discretion to 
adjust the amount during the course of the auction.
    122. The Bureau retains an exception to part (iii) for calculating 
the minimum acceptable bid for a ``global'' package--a package 
consisting of all of the licenses available in the auction. After the 
first round of the auction, part (iii) of the minimum acceptable bid 
rule for a global package will always be the revenue generated by the 
provisionally winning bid set in the previous round plus w%, rounded to 
the nearest

[[Page 20138]]

thousand dollars. The Bureau makes this distinction in order to retain 
the ability to ensure that bids for the global package will continue to 
increase even if we employ a percentage z that does not guarantee that 
outcome. Initially, the Bureau will set w at five, but retains the 
discretion to adjust the amount during the course of the auction.
    123. Under our normal SMR auction design, we define a bid increment 
for a license as the difference between the minimum acceptable bid and 
the standing high bid. Under these package bidding procedures, we do 
not have standing high bids. Therefore, bid increments cannot be 
defined and used in the same manner. Minimum acceptable bids will be 
calculated as previously set forth. To maintain consistency with our 
simultaneous multiple round auction design, we will still sometimes 
refer to the minimum acceptable bid as being a bid of one bid 
increment.
    124. For bids higher than the minimum acceptable bid--i.e., multi-
increment bids--we are defining the amount of the additional bid 
increments as v% of the minimum acceptable bid, rounded to the nearest 
thousand dollars, where the minimum acceptable bid is determined as 
previously discussed. Initially, the Bureau will set v at ten, but 
retains the discretion to adjust the amount during the course of the 
auction. Thus, when v equals ten, bidders will be able to place multi-
increment bids of the minimum acceptable bid plus approximately 10%, 
20%, etc., with the maximum bid being approximately equal to the 
minimum acceptable bid plus 80%.
    125. We retain the discretion to change the minimum acceptable bid, 
and to do so on a license-by-license and package-by-package basis, if 
circumstances so dictate. We will notify bidders of any such change 
before it takes effect.
    126. As described in the Auction No. 31 Further Modifications 
Comment Public Notice, the adoption of Option 1 also involves a change 
in the number of rounds of bids being considered when determining the 
provisionally winning set. In contrast to the prior procedures in which 
two rounds of bids were considered, we now will consider every bid made 
in every round of the auction (except for bids that are placed and 
subsequently removed during the same round). Additionally, a set of 
``FCC'' bids on each license in the auction at some small dollar amount 
less than the respective minimum opening bid will also be considered.
iv. Renewed Bids
    127. For each bidder, we will treat the bids it makes in different 
rounds as mutually exclusive. If a bidder does not want a bid from the 
previous round (including a provisionally winning bid) to be considered 
mutually exclusive with bids made in the current round, it can renew 
the bid in the current round.
    128. Without regard to the minimum acceptable bid requirement, a 
bidder may ``renew'' in the current round the highest previous bid it 
made on any license or package; that is, it may resubmit the bid 
without increasing the amount bid. Renewed bids will be treated as 
being made in the current round.
    129. Renewed provisionally winning bids confer bidding activity, 
while non-renewed provisional winners count toward eligibility 
activity. No eligibility or bidding activity will be conferred for 
renewing a non-provisionally winning bid. All bidding, including 
renewals of non-provisionally winning bids, is limited by initial 
eligibility, however.
v. Last and Best Bids
    130. Bidders that wish to drop out of the auction or that believe 
they are about to lose their bidding eligibility will have the 
opportunity before they drop out to make ``last and best'' bids on any 
licenses or packages for which they remain eligible. This is a limited 
exception to the minimum acceptable bid rule and to click box bidding. 
If a bidder chooses this option, it will not be permitted to make any 
further bids during the auction.
    131. A bidder may make up to two sets of last and best bids. The 
two sets of last and best bids must be submitted in a single round, but 
will be treated as mutually exclusive, as are bids placed in separate 
rounds. Once last and best bids are placed, the bidder will not be 
permitted to place new bids or renew previous bids in any subsequent 
round. If a bidder chooses to submit last and best bids, then, for the 
remainder of the auction, those bids will be considered, as will all of 
the bidder's previous rounds of bidding.
    132. The last and best bid amount for any license or package is any 
amount, in thousand dollar increments, greater than or equal to the 
bidder's previous high bid on the license or package and less than or 
equal to the eighth increment above the minimum acceptable bid for that 
license or package in the current round. Also, if the bidder has never 
placed a bid on a package or license, the lower bound on the last and 
best bid amount is equal to the minimum opening bid for that package or 
license.
    133. Each set of last and best bids may consist of bids on any or 
all of the licenses selected on the Form 175 and any or all of the 
packages created by the bidder, consistent with the activity and 
eligibility rules and the twelve package limitation. Bidding activity 
for each of the sets of last and best bids must not exceed current 
eligibility, as determined at the beginning of the round in which these 
bids are placed. In other words, eligibility for the second set of last 
and best bids will not be recalculated based on eligibility activity 
associated with the first set of bids. Last and best bids are 
considered to be new bids in the round in which they are placed. 
However, a last and best bid equal to the bidder's previous high bid 
will be considered as a renewed bid.
vi. Winning and Provisionally Winning Bids
    134. The winning bids are the set of ``consistent'' bids (bids that 
(i) do not overlap and (ii) are made or renewed by an individual bidder 
in the same round) that maximizes total revenue when the auction 
closes, provided that the aggregate reserve has been met. The 
provisionally winning bids are the set of consistent bids that 
maximizes total revenue in a particular round. When determining winning 
and provisionally winning bids, all bids made in every round throughout 
the course of the auction (except for bids that are placed and 
subsequently removed during the same round) will be considered. In 
addition, each license is treated as having a bid placed by the FCC at 
some small amount less than the minimum opening bid. This procedure 
will ensure that a bid on a license or package at the minimum opening 
bid always beats the FCC bid.
    135. Since there can be more than one set of consistent bids that 
produces the maximum revenue, a procedure for randomly selecting among 
these tied sets is used when determining the provisionally winning 
bids. This tie breaking procedure involves two steps: The assignment of 
a selection number to each bid, and the determination of, among all 
tied bid sets, the set that produces the maximum sum of selection 
numbers.
    136. A bid's selection number is the sum of n pseudo-random numbers 
where n is the number of licenses comprising the bid's package. Each 
pseudo-random number is generated by invoking a well-documented and 
well-tested routine developed by Pierre L'Ecuyer. A bid's selection 
number as well as the beginning seed numbers used to produce it will be 
released at the close of each round.

[[Page 20139]]

    137. Once the selection numbers have been generated for each bid, 
the second step of the tie breaking procedure will decide the 
provisionally winning bids. Computer software is used to determine, 
among all tied bid sets, the set that produces the maximum sum of 
selection numbers. Thus, the set of provisionally winning bids is the 
set of consistent bids that maximizes revenue and maximizes the sum of 
selection numbers. Each bid will be assigned a new selection number in 
every round. The solver will not be run after the last round of the 
auction. See Section IV.A.vi, ``Auction Stopping Rules,'' for more 
information on the close of the auction.
    138. The procedure we are adopting for last and best bids, 
described in Section IV.B.v, allows bidders to reduce the likelihood 
that their final bid on a license or package will be part of a randomly 
broken tied set. Generally, in the case of a tie, the bidder(s) whose 
bid is not chosen has the opportunity in the next round to continue 
bidding. However, if the bidder believes that the minimum acceptable 
bid is too high and so would ordinarily cease bidding on that license 
or package, it may use the last and best bid(s) procedure to make final 
bids on licenses and packages, which may be as little as $1,000 more 
than the bidder's highest previous bid on each license or package.
vii. Packages
    139. In addition to bidding on individual licenses, bidders will be 
permitted to create and bid on up to twelve different packages of their 
own choosing during the course of the auction. Bidders will not be 
required to identify or create their packages before the start of the 
auction, but may create their packages as the auction progresses. A 
bidder may modify or delete a package it has created up until the point 
where it has bid on the package and the round has closed. If the bidder 
submits a bid on a package and subsequently removes the bid during the 
same round, the bidder has the option of also deleting or modifying the 
package. However, once a bidder bids on a package and the round closes, 
the package may not be modified or deleted and counts as one of the 
bidder's twelve allowable packages. A bid on an individual license does 
not count as a bid on a package; packages consist of two or more 
licenses.
viii. Bidding
    140. During a bidding round, a bidder may submit new bids or 
renewed bids for as many licenses and packages as it wishes, subject to 
its eligibility, its FCC Form 175 license selection, and the twelve 
package limitation; remove bids placed in the current bidding round; or 
permanently reduce eligibility. Bidders also have the option of making 
multiple submissions in each bidding round. If a bidder submits 
multiple bids for a single license or package in the same round, the 
system overwrites any previous bid with the last bid entered as that 
bidder's bid for the round. Bidders should note that the bidding units 
associated with licenses for which the bidder has removed its bid do 
not count towards the bidder's bidding activity at the close of the 
round.
    141. Bidding is constrained by the eligibility and activity rules, 
which determine both minimum and maximum permissible levels of bidding, 
as measured in bidding units. As previously discussed, minimum bidding, 
as measured in bidding units, is constrained by the activity rules. In 
each round, a bidder desiring to maintain its current eligibility and 
not use an activity rule waiver must be active, based on eligibility 
activity, on licenses associated with enough bidding units to meet the 
activity requirement for the current round. For more details, please 
refer to Section IV.A.iii. ``Activity and Eligibility Rules.''
    142. Maximum bidding, as measured in bidding units, is constrained 
by the eligibility rules. Bidding activity for a round, defined as the 
maximum number of bidding units a bidder can win considering new bids 
and renewed provisionally winning bids placed in that round, cannot 
exceed current eligibility. That is, when a bidder submits a set of 
bids in a round, the system will not accept the set of bids if it 
determines that the bidding activity generated by those bids exceeds 
the bidder's current eligibility. Bidding in a round is further limited 
by the requirement that a bidder's bidding exposure in a round must be 
less than or equal to its initial eligibility. Bidding exposure is the 
maximum number of bidding units a bidder can win considering all the 
bids (new, renewed provisionally winning or non-provisionally winning) 
placed in the round. Similarly, when a bidder submits a set of bids in 
a round, the system will not accept the set of bids if it determines 
that the bidding exposure generated by those bids exceeds the bidder's 
initial eligibility. In either case, if a set of bids is rejected, the 
system will notify the bidder that its bids have not been accepted and 
report which rule is in violation.
    143. Bidders are permitted only to bid on the specific licenses 
they selected on their FCC Form 175. Any packages they create must be 
comprised entirely of licenses selected on their Form 175. The bid 
submission screens are customized using the bidder's Form 175 
information, and will not permit bidding on non-selected licenses (or 
packages of those licenses).
    144. Please note that all bidding will take place remotely either 
through the FCC 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.) There will be no on-site bidding during Auction 
No. 31.
    145. The 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.
    146. In each round, eligible bidders will be able to place new bids 
on a given license or package in any of nine different amounts. Bidders 
must use the drop-down box to select bids from among the nine 
acceptable new bid amounts; to renew any bids (if applicable); or to 
remove any bids made within that same round.
    147. Finally, bidders are cautioned in selecting their bid amounts 
because, as explained in the following section, bidders are not 
permitted to withdraw bids from prior rounds, even if mistakenly or 
erroneously made. As explained previously, when determining winning and 
provisionally winning bids, we consider all bids made throughout the 
course of the auction.
ix. Bid Removal and Bid Withdrawal
    148. Bid ``removal'' is the voiding of a bid made in the current 
round. For the reasons set forth, we permit only the removal of bids 
placed in the current round. The withdrawal or cancellation of bids 
made in previous rounds is prohibited.
    149. At any time 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 the current round. This is not the 
same as withdrawing a bid, which, in our SMR system, can occur in 
rounds subsequent to the round in which the high bid was placed. A 
bidder removing a bid placed in the same round is not subject to 
withdrawal payments. Once a

[[Page 20140]]

round closes, a bidder may no longer remove a bid.
    150. At the close of the auction, if a bid is declared the winner 
and the bidder does not pay the amount due, it is liable for a default 
payment as set forth in the Commission's Rules.
    151. We stated the following in the Auction No. 31 Package Bidding 
Procedures Public Notice, and it still holds true.

    We believe that by making bids placed in different rounds 
mutually exclusive, we have limited a bidder's exposure risk when 
changing strategies. Moreover, the bid withdrawal procedure was 
designed to allow bidders to back out of failed aggregations--to 
avoid winning some licenses that are worth less to them than the 
amount bid without the other licenses they need to implement their 
business plan. Therefore, since bidders may make package bids on all 
combinations of licenses with significant complementarities, the use 
of withdrawals to mitigate such risk is no longer necessary. 
Moreover, while there is no offsetting benefit from allowing bid 
withdrawals, there would still be potential harm. Withdrawals may be 
used strategically to provide incorrect price signals during the 
auction and lead other bidders to place inefficient bids. Also, when 
withdrawals are permitted, one cannot ensure that the auction will 
proceed at an acceptable pace. Moreover, the harm associated with 
withdrawals is likely to be more severe in auctions with package 
bidding since a single withdrawal of a bid (on either an individual 
license or a package) can affect the entire provisionally winning 
set. Accordingly, we will not permit bidders to withdraw their 
provisionally winning bids.

x. Round Results
    152. Bids placed during a round will not be published until the 
conclusion of that bidding period. After a round closes, the Bureau 
will compile reports of all bids made in that round, the set of bids 
considered when determining the current provisionally winning bids, 
current price estimates, new minimum acceptable bids for all bidders, 
current provisionally winning bids, and bidder eligibility status 
(bidding eligibility and activity rule waivers), and post the reports 
for public access. Reports reflecting bidders' identities and bidder 
identification numbers for Auction No. 31 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.
    153. The Bureau will release an additional public notice by April 
30, 2002, detailing round results reports formats, explaining the round 
results process and providing sufficient information on our solving and 
tie-breaking procedures such that participants and interested observers 
will be able to replicate the FCC's official round results.
    154. In the Auction No. 31 Package Bidding Procedures Public 
Notice, the Bureau stated in a footnote that we would ``make available 
a bidder aid for bidders to be able to determine for themselves what 
bid amount would have been necessary to beat the other bids and become 
a provisional winner in the prior round.'' This bidder's aid tool was 
intended to calculate the ``shortfall and deficit'' amounts which have 
been superceded by current price estimates in part (iii) of the minimum 
acceptable bid rule. The Bureau will not provide such a bidder aid, nor 
will it provide the FCC Auction Tracking Tool software.
xi. Auction Announcements
    155. The FCC will use auction announcements to announce items such 
as schedule changes. All FCC auction announcements will be available by 
clicking on a link in the Automated Auction System.
xii. Default
    156. The Commission adopted a special rule for calculating default 
payments in connection with package bidding in the Upper 700 MHz band. 
In the event a winning bidder defaults on payments due after an auction 
closes or is disqualified after the auction, a default payment will be 
assessed. The default payment will consist of a deficiency portion and 
an additional 25% payment. The special default rule is modeled on the 
default rule used in other auctions. However, there are substantial 
differences, perhaps most significantly in the amount of the additional 
payment. The default rule used in other auctions sets the additional 
payment at three percent (3%) of the lesser of the subsequent winning 
bid and the defaulted bid. In contrast, the default rule for use with 
package bidding in the Upper 700 MHz bands sets the additional payment 
at twenty-five percent (25%) of the lesser of the subsequent winning 
bid and the defaulted bid.
    157. The deficiency portion will make up any loss to the Commission 
that results when defaulted bid(s) are replaced by subsequent winning 
bid(s). If the subsequent winning bid(s) exceed the defaulted bid(s), 
no deficiency portion will be assessed. Even in the absence of a 
deficiency portion, however, an additional 25% payment will be due. 
Where a defaulting bidder held winning bids on individual licenses 
(i.e., not as part of a package), and in a subsequent auction the 
licenses are also won individually, the deficiency portion will be 
calculated by subtracting the subsequent winning bid from the defaulted 
bid. The deficiency portion for such bids will be calculated on a 
license-by-license basis (i.e., in the event of defaults on multiple 
bids, the differences between the amounts originally bid and the 
amounts subsequently bid will not be aggregated to determine a net 
amount owed).
    158. Where a defaulting bidder won licenses in package(s), and in a 
subsequent auction the licenses are won either (a) in the same 
package(s), or (b) in smaller packages or as individual licenses that 
correlate to the defaulted package(s), the deficiency portion will be 
determined on a package-by-package basis. In the event a defaulting 
bidder defaults on more than one such bid, the differences between the 
amount originally bid and the amount(s) subsequently bid will not be 
aggregated to determine a net amount owed. Thus, in this situation, the 
deficiency portion will be calculated in a manner analogous to where 
the licenses are sold individually. However, with regard to each 
individual package, where the licenses are subsequently sold 
individually or as part of smaller packages, the amounts received in 
the subsequent auction will be aggregated in order to determine any 
deficiency.
    159. Where a defaulting bidder or bidders won licenses either 
individually or as part of packages, and in a subsequent auction the 
licenses are won as larger packages or different packages (not 
including the situation described in the preceding paragraph), the 
deficiency portion will be calculated by subtracting the aggregate 
amount originally bid for the licenses from the aggregate amount bid in 
the subsequent auction for the licenses. Thus, in this situation, the 
deficiency portion will not be calculated on a bid-by-bid basis.
    160. If, in a situation requiring that bids be aggregated in order 
to determine the deficiency portion of the default payments for the 
bids, there are multiple defaulting bidders, the default payment (both 
the deficiency portion and the additional 25% payment portion) will be 
allocated to the defaulting bidders in proportion to their share of the 
aggregated default bids.
    161. In the event that a bidding credit applies to any applicable 
bid(s), the Bureau will assess the deficiency portion of the default 
payment using the lesser of the difference between gross bids and the 
difference between net bids. (In the event that a bidder does not have 
a bidding credit, the bidder's gross bid and net bid are the same.) In 
other words, the Bureau will compare (i) the

[[Page 20141]]

sum of the gross defaulted Auction No. 31 bid(s) minus the gross 
subsequent winning bid(s) and (ii) the sum of the net defaulted Auction 
No. 31 bid(s) minus the net subsequent winning bid(s). The Bureau will 
impose the lesser of (i) and (ii) as the deficiency portion.
    162. As noted at the outset, the default payment consists of the 
deficiency portion and an additional 25% payment. The additional 
payment will be 25% of the lesser of the subsequent winning bid(s) and 
the defaulted bid(s). The Bureau will use the same gross or net bid(s) 
that it used to calculate the deficiency portion when assessing the 
additional 25% payment. That is, the Bureau will compare the defaulted 
and subsequent bid(s) according to the methods described for 
calculation of the deficiency portion of the default payment when 
determining whether the defaulted bid(s) or the subsequent winning 
bid(s) is the lesser amount. Should there be no difference between the 
gross or net bid(s) for purposes of assessing the deficiency portion, 
the Bureau will assess the additional 25% payment using the lesser of 
the gross or net bid(s).

V. Post-Auction Procedures

A. Down Payments

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

B. Auction Discount Voucher

    165. On June 8, 2000, the Commission awarded Qualcomm, Inc. a 
transferable Auction Discount Voucher (``ADV'') in the amount of 
$125,273,878.00. This ADV may be used by Qualcomm or its transferee, in 
whole or in part, to adjust a winning bid in any spectrum auction prior 
to June 8, 2003, subject to terms and conditions set forth in the 
Commission's Order. Qualcomm transferred $10,848,000.00 of the ADV to a 
winning bidder in FCC Auction No. 35 and the transferee used its 
portion of the ADV to adjust one of its winning bids in Auction No. 35. 
The remaining portion of Qualcomm's ADV could be used to adjust winning 
bids in another FCC auction, including Auction No. 31.

C. Long-Form Application

    166. 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. 31. Winning bidders that are small or 
very small businesses must include an exhibit demonstrating their 
eligibility for small and very small business bidding credits. See 47 
CFR 1.2112(b). Further filing instructions will be provided to auction 
winners at the close of the auction.

D. Tribal Land Bidding Credit

    167. 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(f). A tribal land bidding credit is in addition to, 
and separate from, any other bidding credit for which a winning bidder 
may qualify.
    168. 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(f).
    169. 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 auctions Web site at http://wireless.fcc.gov/auctions by clicking on the Tribal Land Credits link.

E. Default and Disqualification

    170. 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 
27.501(b). 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 Section IV.B.xii for more detail on 
the default rule for this auction.

F. Refund of Remaining Upfront Payment Balance

    171. All applicants that submitted upfront payments but were not 
winning bidders for a license in Auction No. 31 may be entitled to a 
refund of their remaining upfront payment balance after the conclusion 
of the auction. 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.
    172. At the end of the auction, those bidders who are eligible for 
a refund 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, Taxpayer Identification Number (TIN), and FCC 
Registration Number (FRN). Send refund request to: Federal 
Communications Commission, Financial Operations Center, Auctions 
Accounting Group, Gail Glasser or Tim Dates, 445 12th Street, SW, Room 
1-C863, Washington, DC 20554.
    173. 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.



[[Page 20142]]


Federal Communications Commission.
Magaret Wiener,
Chief, Auctions and Industry Analysis Division, WTB.
[FR Doc. 02-9988 Filed 4-23-02; 8:45 am]
BILLING CODE 6712-01-P